Bourse hits 1 month low

Monday, 15 November 2010 23:31 - - {{hitsCtrl.values.hits}}

COLOMBO (Reuters) - Sri Lanka’s benchmark share index faltered on Monday in thin trade volume as investors stayed in the sideline looking for directions from 2011 budget amid shortage of funds in the market.

Sri Lanka’s main share index fell 92.85 points or 1.41 percent to 6,507.21, its percentage highest fall since 26 October. It is Asia’s best performer in 2010 with a 92.2 percent gain.

The Banking sector led the fall on the first day of a shorter week with traders expecting market fall in thin volume to continue due to two holidays this week.

Both money and share markets will be closed for a public holiday on Wednesday and the stock market will be closed on Friday on a government request to mark swearing in celebration of President Mahinda Rajapaksa’s second six-year term. Analysts and traders expect a lackluster trading in the rest of the week.

The bourse is trading at the highest forward price-to-earnings ratio in Asia and global emerging markets at 20.3 times, compared with 13.6 and 12.7 respectively, Thomson Reuters StarMine data showed. The CSE’s 14-day relative strength index is at 43.8, between the neutral limit of 30-70.

Foreign investors have sold a net 25.7 billion rupees in shares this year, but on Monday bought a net 67.4 million rupees. Turnover was 760.1 million rupees ($6.8 million), more than the 2009 daily average of 593.6 million rupees, but well below the year-to-date daily average of 2.45 billion.

The rupee closed flat at 111.68/70 rupees a dollar as dollars pumped by the Central Bank offset importer demand, currency dealers said.

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