Stocks slip in low volume trade, turnover; rupee weaker

Tuesday, 21 June 2011 00:48 - - {{hitsCtrl.values.hits}}

Reuters: Sri Lanka’s stock market fell on Monday in low turnover and volumes, weighed down by lack of liquidity amid margin calls and investors locking large amount of money in two Initial Public Offerings, while the rupee edged down on importer dollar demand.

Sri Lanka’s main share index edged down 0.13 per cent, or 9.35 points, to 7,040.68, retreating from 1.17 per cent gain in early trades.

Analysts said the day’s activities were dominated by speculative trading on a selective set of second-tier counters amid margin calls in-line with the regulator Securities and Exchange Commission’s policy of ending all broker credit transactions by end 2011.

Over six billion rupees of cash has been locked in the recent IPOs by conglomerate ExpoLanka Holdings, which started trading on 13 June, and Softlogic Holdings, which is yet to start trading on the stock exchange, bourse data showed.

The bourse on Monday approved a $ 10.95 million initial public offering by textile firm Textured Jersey Lanka, a firm jointly owned by Pacific Textiles Holdings and unlisted Brandix Lanka. Foreign investors were net buyers of Rs. 7.5 million worth of shares on Monday, but they have sold a net Rs. 6.22 billion worth shares in 2011 after a record 26.4 billion in 2010.

The day’s turnover was Rs. 1.7 billion ($ 15.5 million), the lowest since 13 May, and well below last year’s average of 2.4 billion and this year’s daily average of 2.91 billion.

Traded volume was 116.7 million, against a five-day average of 197.1 million. The 30-day and 90-day average trading volumes were 180.4 million and 105.2 million, respectively. Last year’s daily average was 67.9 million.

The bourse is still Asia’s best performer in 2011 with a 6.1 per cent gain, after bringing in the region’s top return of 96 percent last year.

The rupee closed a tad weaker at 109.56/60 a dollar from Friday’s 109.55/58 on importer dollar demand, dealers said. It hit a 31-month high of 109.30 a dollar on 9 June, its highest since 30 October 2008, Reuters data showed.

On Friday the Central Bank said it will maintain the currency steady with little volatility.