Colombo stock market flat as investors remain cautious

COLOMBO  (Reuters) - Sri Lanka’s benchmark share index ended flat in thin volumes after it slipped in intraday trade on Friday for a second session as cautious investors sold shares fearing a further dip.

Sri Lanka’s main share index, dipped 0.85 percent or 56.3 points intraday, but ended nominally firmer by 4.78 points at 6,626.86.

It still remains Asia’s best performer in 2010 with a 95.7 percent gain as the island’s economy rebuilds after the end of the civil war in May 2009. It has shed 8.1 percent since hitting an all-time high of 7,207.75 on 4 October.

The 14-day relative strength index (RSI) of the CSE is at 44.5, between the neutral limits of 30 and 70, Thomson Reuters data showed.

Sri Lanka’s share index is trading at the highest forward price-to-earnings ratio in Asia and global emerging markets at 21.1 times, compared with 13.5 for all of Asia and 12.5 for global emerging markets, Thomson Reuters data showed.

Market turnover was 1.8 billion rupees ($15.8 million), well below this year’s daily average of 2.4 billion. Foreign investors sold a net 349.5 million rupees in shares and they have overall sold 19.8 billion this year. The rupee edged up to 111.80/85 a dollar from Thursday’s 111.82/85, on thin dollar sales by exporters amid importer demand for dollars, dealers said.