Sri Lankan stocks weaken further

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

July 01, 2008 (LBO) – Sri Lankan shares sagged further Tuesday as investors remained cautious because of deteriorating economic conditions and uncertainty caused by the ethnic war. The All Share Price Index fell 0.73 percent (17.88 points) to end at 2,439.96 while the more liquid Milanka was down 1.23 percent (36.63 points) to 2,952.15. Turnover was 318 million rupees.

The indices were dragged down by drops in index-heavy stocks.

“The main dips came in the heavyweights,” said a broker.

Dialog Telekom fell 25 cents to 14 rupees and Sri Lanka Telecom also dropped 25 cents to 45 rupees. John Keells Holdings lost one rupee to end at 109

“Investors are taking a very cautious approach owing to concerns about the economy and the war. With interest rates being high, they also have an investment alternative.”

Nations Trust Bank was the main focus of trading with 4.9 million shares changing hands as a high-net-worth individual sold out, brokers said.

NTB ended up one rupee at 35.

Some 143,000 shares in Hotel Services (Ceylon) were done with the stock closing up a rupee at 143.

Brokers said the market could revive if there was any positive news on either the economic or war front.

Investors are concerned that soaring inflation and high interest rates could erode corporate profitability, and that the war against the Tamil Tigers is dragging on with no end in sight.

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