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Sri Lanka shares barely changed, heavy trading in Indian Oil unit

Sept 05, 2008 (LBO) - Sri Lankan share indices closed barely changed with heavy trading seen in LIOC, the local unit of Indian Oil Corp.
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, as its earnings outlook improves on falling oil prices, brokers said.

To receive instant alerts from LBO on your Dialog mobile type 'lbo' and send to 678

The All Share Price Index went up 0.03 percent (0.78 points) to 2,398.30 while the Milanka weakened slightly, down 0.

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02 percent (0.49 points) to 2,761.16.

Turnover was 173 million rupees.

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LIOC was the most actively traded stock and the most active in terms of volumes with over two million shares changing hands.

The stock ended up 4.95 percent or 1.25 rupees at 26.50.

Chevron Lubricants Lanka ended up 1.



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57 percent or 1.75 rupees at 113 rupees.

"This week investor interest revolved around a few selected stocks like Chevron and LIOC mainly on anticipation they will benefit from falling oil prices," said Angelo Ranasinghe, head of research at Bartleet Mallory Stock Brokers.

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"Both Chevron and LIOC improved during the week. We saw a sharp drop in global oil prices during the week.

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"

Oil prices have plunged to 107.55 dollars a barrel from record highs above 147 dollars in early July because of worries over slower demand in a weakening global economy.

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Ranasinghe said that if oil continues to fall the overall stock market sentiment could also improve.

"It would help most businesses, especially manufacturing companies, as it could bring down costs."

Ranasinghe also said investors might be interested in plantations companies most of which have been posting strong quarterly earnings on high commodity prices.

Many plantations companies are trading at relatively low price:earnings multiples, he said.

Prices of some of the top blue chips like John Keells Holdings, Dialog Telekom, Distilleries and Commercial Bank have fallen, Ranasinghe said.

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Dialog is down because of poor quarterly results and increased competition in the mobile phone sector.

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Distilleries has been hit by uncertainty over an anticipated court ruling over the privatization of group company Sri Lanka Insurance Corporation.

JKH has been hit by fears over the loss of its existing bunker fuel business with the land on which its subsidiary Lanka Marine Services has storage tanks being returned to the port.

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