Sri Lanka's share market fell to near three-week low, extending the losses for a fifth straight session with volume slumping to a 21-month low ahead of a regulator meeting, which is expected to decide on a credit ruling that has hampered the market since October. Large investors and funds stayed mostly inactive and retail investors cashed shares in thin volume to generate funds to buy other stocks.
The main share index ended 0.97 percent, or 57.58 points, weaker at 5,872.94, its lowest since December 21. It has fallen 3.32 percent in the last five straight sessions, the second worst performer after Vietnam so far for the year among major markets in Asian countries.
"The Securities and Exchange Commission (SEC) is meeting on Tuesday and the market expects a decision on the credit ruling," a stockbroker said on condition of anonymity. Investors have been awaiting guidance on credit limits from Tilak Karunaratne, the new head of the SEC, after the curbed credit ruling resulted in resignation of two top regulator officials with fretted stockbrokers complained President Mahinda Rajapaksa that the ruling had largely discouraged most investors.
"The SEC will discuss the credit issue at the meeting scheduled on Tuesday as in the last meeting and the chairman has to decide on that, though I can't say if it will be finalised on Tuesday firmly," said a SEC official on condition of anonymity. Foreign investors were net sellers of 43.5 million rupees worth of shares, extending the net foreign outflow to 197.9 million so far for this year, after 19.1 billion in 2011.
Commercial Bank of Ceylon, which accounted for a third of the day's turnover with a foreign selling of 1.12 million shares, ended flat at 100 rupees a share, while market heavyweight John Keells Holdings ended 0.48 percent weaker at 167.00 despite foreign buying of over 450,000 shares.
Volume was 11.5 million shares, lowest since 1 April 2010. Last year's daily average was a record 102.7 million. Turnover was 434.5 million Sri Lanka rupees ($3.81 million) far below last year's average of 2.3 billion rupees.
The index lost 8.5 percent in 2011 and was Asia's 10th-best performer after being top in the region until June. It was Asia's best in 2009 and 2010. The rupee closed flat at 113.89/90 to the dollar for a 33rd straight session since a 3 percent devaluation effective November 21, with the central bank selling around $15 million to defend it, dealers said.
On Tuesday, the central bank governor said the rupee can be "flexible" in future given pressure on Sri Lanka's balance of payments and declining reserves, but added the bank would not allow "volatile" moves. The bank has spent more than $820 million on keeping the exchange rate steady since November 21. It spent a net $1.79 billion in the first 10 months of last year on keeping depreciation pressure at bay.
Comments
Comments are closed.