Sri
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," Fernando said.
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.
Courtesy Reuters
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