Sri Lanka stocks close weaker

Nov 08, 2010 (LBO) – Sri Lankan shares closed weaker Monday, with trading dull except for a private deal in Commercia Bank, as investors waited for the government budget, brokers said. The All Share Price Index closed at 6,640.19, down 0.27 percent (18.26 points) while the more liquid Milanka index rose 0.15 percent (10.94 points) to close at 7,210.56, according to stock exchange provisional figures.

Turnover was 1.16 billion rupees.

“It was a dull day, with the main interest on Commercial Bank,” said a broker. “Most investors are waiting for the budget.”

An off-the-floor private deal of 500,000 shares of Commercial Bank was done at 280 rupees a share. The stock closed at 276, up 1.10 rupees.

Brokers said the market was taking a breather after rising on anticipation of incentives for business in the government budget for 2011 to be presented on November 22.

“The market had run up a lot on expectations of tax cuts and other reforms in the budget,” said the broker.

“Also this is a traditionally slow month ahead of the December holidays. Most investors will be going on holiday and will be closing their books for the year-end. We’re heading towards a slow period unless there are budget surprises.”

There was also interest in non-voting shares of Tokyo Cement, which is seen doing well with a construction boom anticipated with the end of the island’s 30-year ethnic war in May 2009.

Brokers said investors were buying the stock expecting better quarterly earnings now that the construction sector has revived after a slump.

Tokyo Cement non-voting share closed at 33.50 rupees, up 50 cents with almost 1.5 million shares traded.