Sri Lankan stocks fall on profit taking, earnings fears

May 16, 2008 (LBO) – Sri Lankan stocks ended lower Friday with investors taking profits, ahead of a four day holiday, amid continuing worries about future corporate earnings, brokers said, as a suicide blast occurred a block away from the stock exchange. A Tamil Tiger suicide bomber rammed a police bus killing nine people and wounding 95 in the heart of Colombo’s commercial district of Fort two hours before the market closed, initially rattling the market which then recovered.

The All Share Price Index fell half a percentage point (13.21 points) to 2,596.64 while the more liquid Milanka Price Index fell 0.44 percent (13.79 points) to 3,156.18.
Turnover was 175.5 million rupees.

“We’re heading for a long weekend because of the Vesak holidays, so people looked for profit taking opportunities,” said Geeth Balasuriya of HNB Stockbrokers.

“That’s one reason why the index is down, apart from earnings worries.”

Market heavyweight Dialog Telekom lost 25 cents (1.76 percent) to close at 14.75 rupees with 228,300 shares traded while Sri Lanka Telecom closed steady at 48.75 with 1.3 million shares changing hands.

“Investors are not bullish on the financial performance of the two telecom stocks, especially Dialog Telekom,” said Balasuriya.

The stock, which has a heavy weighting on the index, was the main contributor towards the market dropping this week.

Dialog was down 75 cents during the week, or around 15 points on the index.

Investors are worried about company earnings with inflation raging at 25 percent and sky-high interest rates which have pushed up manufacturing and borrowing costs while hitting consumer buying power.