Sri Lanka stocks becalmed

May 06, 2011 (LBO) – Sri Lankan stocks closed flat Friday despite the previous day’s rebound after four days of falls with brokers saying recent credit limits imposed by regulators was keeping the market stagnant. The main All Share Price Index closed at 7,319.15, up 0.03 percent (1.98 points) while the more liquid Milanka index fell 0.16percent (10.47 points) to close at 6,736.88, according to stock exchange provisional figures.

Turnover was 1.7 billion rupees.

“Credit non availability is a major reason for market stagnation during recent weeks,” Sarath Rajapaksa, director of Capital Trust Securities.

“Investors must have freedom to buy what they want. But in our market they (regulators) decide what we buy. This is not a free market economy.”

The credit restrictions were imposed by regulators after the market shot to record highs amid fears of a speculative bubble.

NDB Securities head of research Waruna Singapulli said that the market could rally during the next four weeks with the release of corporate earnings.

Lanka Aluminium Industries was heavily traded, closing at 94.80 rupees, up 18.20 rupees. The regulator imposed a 10 percent price band on the stock from May 09, 2011 to May 13, 2011.

Alufab up 14.40 to 159.20 rupees.

Asian Alliance shot up 20.90 rupees to 145.10 in speculative trade.

Asiri Central Hospitals closed at 275.50 .up 55.40.