Sri Lanka's stock market hit a new record high on Friday as institutional and high net worth investors bought large-cap oil palm shares on hopes of strong earnings in a booming global commodity market. Oil palms sector index hit a record high with conglomerates Bukit Darah and Carsons Cumberbatch gaining 27.5 percent and 4 percent on hopes of better prices for oil palms in the world.
Both of the firms produce palm oil in Malaysia and sell globally. The island's main share index hit an all-time intraday high of 7,656.90 before closing 1.24 percent or 93.01 points firmer at a new closing high of 7,586.63. Foreign investors sold a net 96.5 million rupees' worth of shares on Friday, extending the total net foreign outflow to 4.8 billion rupees so far in 2011, after selling a record net 26.4 billion in 2010.
The bourse has been Asia's best performer with a 14.3 percent gain in 2011 after being the top performer last year with a 96 percent return. Heavy retail buying has pushed it deeper into the overbought region with 14-day relative strength index at 86.3. Turnover was 3.8 billion rupees ($34.2 million), more than this year's daily average 3.9 billion rupees and the last year's 2.4 billion rupees.
Traded share volume was 96.3 million, against a five-day average of 113.6 million. The 30-day and 90-day average trading volumes were 100.9 million and 70.5 million respectively. Last year's daily average volume was 69.2 million. The bourse is trading at a forward price-to-earnings (P/E) ratio of 17.2, one of the highest among emerging markets, compared with 12.8 in Asian markets and 11.7 in global emerging markets, Thomson Reuters StarMine data showed. The rupee closed weaker at 111.03/06 a dollar from Thursday's 110.98/111.00 as the central bank moved down the dollar trading band to 110.50/111.10 from 110.40/111.00 amid heavy importer dollar demand and stock-related outflows, dealers said.
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