Sri Lanka stocks rise on President peace
[February 15, 2006 - 9.35 GMT]
Lankan stocks rose in early trade yesterday as comments by President
Mahinda Rajapaksa about reining in armed groups and exploring UK-style
devolution for the Tamil Tigers boosted sentiment.
The Colombo All-share <.CSE> was up 0.6
percent at 2,172.21 points by 0422 GMT, after rising around 0.89 percent
shortly after the open. Rajapaksa told Reuters in an interview on Monday
that he would rein in armed groups the Liberation Tigers of Tamil Eelam
(LTTE) say are attacking them -- a central rebel demand ahead of crunch
talks in Switzerland planned on Feb. 22-23.
He said he was looking at how to devolve
power to Tamils within a unitary state along the lines of the model
Britain has used. However, he also ruled out Tamil Tiger demands for a
separate homeland in the island's north and east.
"The market is up with the President
declaring a UK-style solution for Sri Lanka's two-decade-old war," said
Susil Fernando, investment adviser at
DFCC Stock Brokers in Colombo.
"With the president ruling out a separate
state, the investors saw it as a good statement and the ideas are on the
correct path," he said.
The government and Tigers agreed last week
to hold talks in or near Geneva to discuss how to underpin a 2002
ceasefire that has come under severe strain from a series of deadly
attacks that have raised the spectre of a return to civil war.
"The market is also up due to rising
confidence among retail investors in the market about the peace talks,"
Investors were snapping up second-tier
stocks seen to have lagged in recent weeks, such as Merchant Bank of Sri
Lanka <MBSL.CM>, which rose 3.7 percent to 21 rupees, and Pelawatte
Sugar <SUGA.CM>, which climbed 2.5 percent to 20.50 rupees.
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Date: February 15, 2006 - 9.35 GMT