Sri Lanka stocks slump; losses in JKH, Janashakthi Insurance

July 22, 2008 (LBO) – Sri Lankan shares slumped 1.76 percent Tuesday, dragged down by losses in heavyweights like John Keells Holdings (JKH), as investors digested the news about a court ruling against the conglomerate’s lucrative bunker business. Debutant Janashakthi Insurance fell further as did several index-heavy stocks.

The All Share Price Index shed 41.94 points to close at 2,338.63 while the more liquid Milanka slumped 2.32 percent (65.96 points) to 2,777.73. Turnover was 150 million rupees.

JKH, the third most actively traded stock, closed down 4.84 percent or five rupees at 98.25 after dipping to 95 following a supreme court ruling that affects its bunkering subsidiary, Lanka Marine Services.

JKH opened at 103.25 when trading resumed Tuesday after the previous day’s suspension to disseminate news of the court order.

The supreme court judgement ordered Lanka Marine Services (LMS) to return land on which it has its bunker fuel tanks to the Sri Lanka Ports Authority and also cancelled the tax holiday given to LMS and ordered it to pay back taxes.

JKH said in a stock exchange filing that it was considering the options available to ensure to continuity of the business at LMS and also assess the financial impact of the judgment on the two entities.

Janashakthi Insurance, the mostly actively traded stock, fell further after the losses on Monday’s debut, closing at 9.75 rupees, down 9.30 percent.

Dialog Telekom was down 50 cents at 13.25 rupees, Carsons lost 7.50 percent or 300 rupees to close at 3,700, Distilleries ended down 6.41 percent at 84 rupees and Commercial Bank was down two rupees at 120.25.