Sri Lankan stocks dip, rupee steady against dollar

CEAT Kelani Holdings Managing Director Ravi Dadlani (right) and Lanka Ashok Leyland CEO Umesh Gautham exchange the OEM agreement

Apr 27, 2009 (LBO) – Sri Lanka shares shed some of last week’s gains to close down across the board Monday due to profit taking, as the rupee remained steady against the dollar, brokers and traders said. Conglomerate John Keells Holdings, which has interests in transport, finance, property development, retail and food processing sectors, gained 50 cents, to close at 68.50 in Monday’s trade.

Mobile giant Dialog Telekom, subsidiary of Telekom Malaysia, lost 25 cents to close at 5.25, while fixed line operator Sri Lanka Telecom lost 1.00 rupee to close at 38.00.

Tokyo Cement was down 3.25 rupees to close at 131.00, while diversified Hayleys lost 4.00 rupees to close at 101.00.

“The government’s announcement of not using heavy weapons further in the war had no impact, it did not influence the market,” said Thangarajah.

The government earlier in the day made a declaration hinting the war was on the verge of ending, saying military engagements against the Tamil Tigers have reached a stage where the use of heavy artillery weapons and aerial bombardment would not be required.

Government forces have cornered remnants of the Tiger guerrillas in small strip of land on the north-east coast.

In Monday’s trade, foreigners bought 36.1 million rupees, while foreign selling amounted to 18.7 million, resulting an inflow of 17.4 million rupees.

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The rupee, which has fallen sharply in recent days, was at 120.10/40 levels in spot trade, dealers said. The market was around 120.30/50 rupees in mid-morning trade, but dipped to 119.80/120.00 by late afternoon trade. A state bank said it was not offering at higher levels.

The All Share Price Index of the Colombo stock exchange fell 1.77 percent (32.68 points) to end at 1,812.35 while the Milanka index of liquid stocks went down 2.08 percent (40.93 points) to close at 1,930.34, according to provisional stock exchange data.

Turnover was 171.7 million rupees.

“Profit taking was seen across the board,” said Mohandas V Thangarajah of First Guardian Equities.

“The market is going through expected profit taking,” said Thakshila Hulangamuwa of stock brokering firm, Asha Phillip Securities.

“The profit taking could last for a couple of days and then the market could rebound.”

Last week, investors drove up share prices on a wave of optimism brought about by news that government forces are on the verge of ending the island’s long-drawn ethnic war.

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