Shares fall for second day ahead of IPOs

COLOMBO (Reuters) - Sri Lanka’s benchmark share index fell 1.3 percent on Tuesday for a second day as investors cashed in to raise money for upcoming initial public offerings and booked year-end profits, analysts said.

Sri Lanka’s main share index fell 87.17 points or 1.31 percent to 6546.16. It is still Asia’s best performer in 2010 with a 93.4 percent gain as the island’s economy rebuilds after the end of a civil war in May 2009.

It has shed 9.2 percent since hitting an all-time high of 7,207.75 on Oct 4. Foreign investors were net buyers of 89 million rupees worth’ of shares but this year still have sold a net 22.9 billion rupees’ worth.

The bourse is trading at the highest forward price-to-earnings ratio in Asia and global emerging markets at 20.1 times, compared with 13.6 and 12.8 respectively, Thomson Reuters data shows. The CSE’s 14-day relative strength index is at 53.3, between the neutral limits of 30 and 70.

The diversified sector led the fall with conglomerate John Keells Holdings losing 2.02 percent to close at 295.9 rupees. Banking shares also fell, with top lender Commercial

Bank shedding 1.92 percent to move to 260 rupees.

Turnover was 11.2 billion rupees ($100.7 million), nearly 19 times the 2009 daily average and well above this year’s daily average of 2.4 billion.

The rupee  closed flat at 111.70/72 a dollar from Thursday’s close.