Sri Lankan stocks close down

Mar 12, 2008 (LBO) – Sri Lankan stocks continued to fall in thin trade Thursday as fears the ethnic war could drag on longer than thought added to concerns over poor company earnings, brokers said.

The All Share Price Index edged down 0.22 percent (3.66 points) to end at 1,634.25 while the more liquid Milanka was down 0.29 percent (4.87points) to close at 1,687.71.

Turnover was 46.9 million rupees.

Brokers said investor sentiment was dampened by the realization that the military campaign against the Tamil Tigers could be prolonged.

The government had earlier said a quick victory was in sight but now says the army’s advances had been slowed by the presence of civilians held hostage by the rebels despite repeated international appeals for their release.

“Investors are taking a cautious approach to invest in the market amidst macro uncertainties,” said Geeth Balasuriya of Acquity Stockbrokers.

“This is why market turnover is at these low levels.”

Speculative trading by retail investors in Ceylinco Group subsidiary Seylan Merchant Bank was high after reports of a takeover by the government-owned leasing giant, People’s Leasing.

Commercial Bank with 10.6 million rupees was the highest contributor to the day’s mediocre turnover.

Commercial Bank was down two rupees to close at 80.

Lanka Cement with 665,000 shares changing hands headed the day’s volumes list. Lanka Cement shares closed flat at 10.50 rupees.

John Keells Holdings was up 1.25 rupees to close at 57.

Mobile giant Dialog Telekom closed flat at 4.70 rupees while fixed line heavy weight Sri Lanka Telecom closed flat at 33.75.