Bourse down on retail selling, liquidity concerns

Saturday, 15 October 2011 00:00 - - {{hitsCtrl.values.hits}}

Reuters : Sri Lanka’s stock market fell to a 15-week low on Friday on retail selling with turnover and volumes slumping due to low investor participation amid a liquidity crunch, while foreign investors again bought heavyweight John Keells Holdings.

The island nation’s main share index closed 0.55 per cent or 36.08 points down at 6,549.91, lowest since 27 June. It is Asia’s fifth-best performer with a year-to-date loss of 1.3 per cent after being on the top for most of 2011.

Foreign investors bought over 418,000 shares in conglomerate and institutional favourite Keells, bringing total foreign buying over the last four sessions to nearly four million shares, bourse data showed. Keells lost 0.4 per cent on Friday.

Offshore investors also offloaded 600,000 shares in Distilleries Company of Sri Lanka, which closed steady.

The bourse witnessed a net foreign outflow of Rs. 37.5 million on Friday, after a total inflow of 650.1 million in the previous four sessions. Thus far in 2011, offshore investors have sold 16.7 billion, and sold a record 26.4 billion in 2010.

“The market is still falling as it had risen mainly due to a lot of speculative shares,” said a stockbroker on condition of anonymity. “Now those shares are coming down after some punters took the shares up and dumped at high prices.”

Losers outperformed gainers by 133 to 65 on Friday, Thomson Reuters data showed.

Turnover was at Rs. 992.6 million ($ 9 million), its lowest since 5 July and less than last year’s average of 2.4 billion and this year’s 2.6 billion.

Friday’s total volume was 50.7 million, lowest since 23 September, against a five-day average of 67.2 million. The 30-day and 90-day average trading volumes were 146.1 million and 135.3 million. Last year’s daily average was 67.9 million.

The rupee closed steady at 110.18/20 a dollar for a 11th straight day, as a State bank continued dollar sales at 110.20 rupees in spite of heavy importer dollar demand, dealers said.