Sri Lanka markets quiet at noon; state names sell dollars

July 30, 2007 (LBO) – Sri Lanka stocks were down 0.8 percent by noon Monday while the rupee traded around 111.78 to the dollar with state names intervening in the market, dealers said. The action had been initiated by East West Group chairman Nahil Wijesuriya, the newspaper said.

In cash markets, overnight repo rates moved between 14.50 to 15.00 percent while call was higher at 15.00 to 15.50 with liquidity being short.

The rupee had been coming under pressure in the last two months and the Central Bank said last week that the balance of payments surplus had come down to 160 million from 250 million two months ago.

However a 400 million dollar government bond issue is expected to shore up reserves as well as help a high budget deficit originally projected at 9.2 percent of GDP but now claimed to be around 7.6 percent.

By 12.00 noon the Colombo All share Index was down 21 points with Distilleries falling by 2.25 to 87.25 rupees, Sri Lanka Telecom down 50 cents to 33.50 and Dialog down 50 cents to 22.00 and John Keells Holdings flat at 128.25.

News reports over the weekend said a Distilleries subsidiary, Periceyl, had been raided by Sri Lanka Customs over the valuation of spirits imported to the country.

The Sunday Times newspaper also reported that a tenant of an apartment complex built by the listed company Asian Hotels Corporation, has gone to courts alleging that promised facilities had not been given.