Sri Lankan rupee sinks further; share prices dip over security worries

Oct 17, 2006 (LBO) – Sri Lankan rupee sank further breaching the 107.00 mark amidst profit taking by banks on Tuesday, while share prices fell 0.60 percent as the volatile security situation kept investors away, dealers said. The rupee touched an all time low to close at 107.10 to the greenback, from Monday’s close of 106.80, as most banks bought dollars on the forward market to cover import bills.

The currency opened lower at 107.30 and climbed to an intra day high of 107.80 amidst profit taking, with dealers quoting 106.78-107.80 on large volumes.

In the equity markets, the benchmark All Share Price index shed 0.61 percent or 15.13 points to close at 2,453.93 on sales of 141.71 million rupees, according to Colombo Stock Exchange figures.

The market lost its last week’s momentum with Monday’s Tamil Tiger suicide attack in Habarana which left nearly 100 sailors dead.

Despite the grim security news, foreign investors picked up stocks worth 35.79 million rupees over sales of 6.36 million rupees.

Among decliners were Sri Lanka Telecom down 1.1 percent to 21.50 rupees, John Keells Holdings down 0.7 percent to 143.25 rupees.

Elsewhere, shares of Confifi Hotels Holdings slipped 7-percent to 120.00 rupees, while another unit of the firm Riverina Hotels dipped 9.5 percent to 56.00 rupees, over speculation that a deal between Confifi and JKH had fallen through.

JKH was in talks with the family controlled Confifi Group for a possible acquisition. Call rates in brokers markets was flat at 12.50 percent amid sustained deficit of around 2.9 billion rupees.