Bourse up on telecom buying, rupee flat

By Ranga Sirilal
COLOMBO, (Reuters) - Sri Lankan shares nudged higher on Tuesday, led by telecoms stocks as leading fixed-line operator Sri Lanka Telecom moved closer to a higher bid price. The rupee ended little changed.

The Colombo All-Share index closed 0.38 percent firmer, or 9.92 points, at 2,617.74.

The market had risen 2.3 percent last week, boosted by a $297 million stake sale in Sri Lanka Telecom went through at a large premium.

Sri Lanka Telecom rose 1.55 percent to 49 rupees calculated on a weighted average.

Malaysian mobile network operator Maxis Communications, which had bought 35.19 percent holding last week, has offered to buy the remainder. The deadline for the mandatory offer has not been yet announced.

Public shareholders own 15.31 percent, but it is not clear whether the government will sell its 49.5 percent holding.

Susil Fernando, investment advisor at DFCC stockbrokers, said the bid was driving telecom stocks, but there was little activity elsewhere.

Leading mobile operator Dialog Telekom, which makes up more than 15 percent of the index, closed 1.52 percent up at 16.75 rupees, while dairy product manufacturer, Nestle Lanka rose 2.56 percent to 260 rupees.

The main index is up 3 percent in 2008, recovering from a slide of almost 7 percent in early January when the government scrapped a shaky truce with Tamil Tiger rebels.

Market turnover was 222.12 million rupees ($2.1 million), half of last year’s average daily turnover of 400 million rupees.

The rupee closed barely changed at 107.60/62 per dollar, with traders saying the central bank had intervened to rein in the rupee.

The rupee had hit a 14-month-high of 107.40/50 on March 10.

Dealers said banks sold dollars to cover short positions in the rupee, as a sharp rise in money market call rates made borrowing funds expensive and the state banks were seen buying dollars.

Call rates or interbank lending rate rose to 19.897 percent from Monday’s 19.584 percent.