Friday Dec 13, 2024
Friday Dec 13, 2024
Saturday, 26 May 2012 01:52 - - {{hitsCtrl.values.hits}}
Reuters: Sri Lanka’s stock market fell to a near 22-month closing low on Friday with many investors awaiting clarification on a new rule from the island nation’s Securities and Exchange Commission (SEC) amid economic and political worries.
The main share index fell 0.19 per cent, or 9.45 points, to 5,009.67, its lowest close since 9 August, 2010.
The bourse extended losses for the fifth straight session in thin trade, ending the week 4.1 per cent down.
Analysts said many investors were waiting for clarity on the new SEC rule issued on Wednesday barring employees of broker firms from selling shares for six months after their purchase.
SEC spokesman Tushara Jayarathne said the regulator would issue a directive on the new rule on Monday.
“Investors want to see where the market is heading,” said a stockbroker on condition of anonymity. “People will wait to decide whether to come in or not due to the regulations and the economic worries.”
The SEC’s decision followed a move by the state-run National Savings Bank last week to default on a Rs. 400 million ($3.07 million) deal on The Finance Company, bought at Rs. 49.75 when it was trading at Rs. 30.
On Friday, Dr. Harsha de Silva, an opposition legislator said the defaulted deal was the tip of the iceberg and there may have been many irregularities, and the opposition would press for a proper investigation.
Stockbrokers and analysts said the new SEC rule will hit the market as it covered all brokers.
Uncertainty over the rupee, concern over rising interest rates, and slowing economic growth also held back investors, analysts said.
However, foreign investors continued to buy shares and brokers attributed that to a weaker rupee.
Foreign investors bought a net 38.3 million rupees worth of shares, extending the total net inflows into the stock market to Rs. 22.3 billion this year. Turnover was Rs. 185 million against this year’s daily average of Rs. 1.04 billion.
The index was at an over-sold region on Friday with the 14-day Relative Strength Index at 24.286, below the lower neutral range of 30, Reuters data showed. It is one of the worst performers among Asian markets with a 17.53 per cent loss this year.
The rupee fell to 130.90/131.00 against the dollar from Thursday’s close of 130.50/70 on importer demand for dollars.
