Sri Lanka stocks slump; money rates spike despite cash injections

Sri Dharanee Performance Arts Theatre

March 24, 2008 (LBO) – Sri Lankan stocks slumped Monday with trades in index heavy Sri Lanka Telecom dominating turnover as speculation swirled about an imminent sale by major shareholder NTT Communications of Japan. Brokers said speculators were yet to get back in full swing following a weekend extended by two religious holidays.

The All Share Price Index closed down 13.11 points or 0.52 percent at 2,523.07 while the Milanka, which tracks the more liquid stocks, was down 6.78 points or 0.21 percent at 3,189.06

Turnover was boosted to 399.8 million rupees with large quantities of SLT, The Good Hope Company, and Lanka Cement changing hands.

“SLT was the main contributor to turnover with shares traded between 40 and 41 rupees,” said Sujeewa Peiris, sales manager at Bartleet Mallory Stock Brokers.

Most of the trades were done at 40.25, down 25 cents.

Altogether almost 7.3 million SLT shares were traded.

“Turnover stands around this level mainly because of SLT,” said Peiris. “There’s still speculation alive that the NTT stake will be sold any moment and news over the weekend of the CEO stepping down and an interim CEO being appointed.”

NTT, which owns 35.2 percent of the SLT, wants to sell all or part of its stake to Malaysia’s Usaha Tegas group which owns Maxis, Malaysia’s top mobile firm.

Lanka Cement, another firm around which there is much speculation, accounted for the third highest turnover with 375,500 shares traded.

The stock closed down 75 cents at 14.75 rupees according to the volume weighted average price.

The firm has a defunct plant in northern Jaffna which is being eyed by cement majors like India’s Birla group and the Swiss Holcim.

In the interbank markets overnight money spiked from 14.00/15.00 levels early Monday to 16.00/17.00 levels despite a 3 billion rupee injection by the Central Bank from its 12.00 percent discount window.

The monetary authority later gave more cash from its 19.00 percent window, dealers said.

The spot dollar was around 107.80 levels.

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