Aug 14, 2008 (LBO) – Sri Lankan stocks lost more ground Thursday, dragged down mainly by the fall in the price of heavyweight Dialog Telekom after it reported sharply lower profit for the June quarter, brokers said. The All Share Price Index closed down 0.65 percent (15.98 points) at 2,435.25 while the more liquid Milanka fell 0.95 percent (27.26 points) to 2,857.32.
Turnover was 246 million rupees.
“The market was down mainly because of Dialog,” said Sujeeva Pieris of
Bartleet Mallory Stock Brokers. “The results were out and looked bad.”
Dialog’s net profit fell 78 percent to 537 million rupees in the June quarter from a year ago although group revenue grew 13 percent to 9.2 billion rupees, amid cuts in mobile call rates.
Dialog, a unit of Telekom Malaysia, said customer spending was hit by inflation and its own costs rose 28 percent in the past year.
Dialog, the second most actively traded stock, fell 7.69 percent or one rupee to 12 rupees, according to the volume weighted average price, with over 1.7 million shares traded.
The other heavyweight stock which dragged the market down was John Keells Holdings, which fell 1.20 percent (1.25 rupees) to 102.75 with 220,100 shares traded.
Pieris said trading was likely to remain sluggish apart from movements in individual stocks based on company performance.
The market has turned bearish with raging inflation and high interest rates weakening corporate profitability.
“Trading was mostly by retail investors,” he said. “We did not see much institutional or high net worth individual activity.”
Hotel Developers (Lanka), which owns the Hilton Colombo, was the most the actively traded stock with 436,100 shares changing hands purely on speculation, brokers said.
It closed up 6.83 percent (4.75 rupees) at 74.25.
Some trading was also seen in Richard Pieris & Co which gained 5.23 percent (2.25) to close at 45.25 rupees, again based on quarterly results.
The Richard Pieris group said June quarter net profit rose 413 percent to 309 million rupees from a year ago.
This was mainly because of high tea, rubber and oil palm prices, steady growth in supermarkets and profits from the sale of land during quarter, it said.