The Colombo stock market edged down for a third straight session on Thursday as investors sold shares on growing concerns of rising interest rates.
The rupee ended a tad weaker in dull trade.
The ASI fell 0.44 per cent or 21.97 points to 4,924.61, its lowest since 14 June.
“There is no buying power due to lack of liquidity as the interest rates are rising,” Reuters quoted a stock broker as saying.
Softlogic Stockbrokers said the increase in the T-Bill rates seems to have hastened the market plunge as the broader index marked its fifth consecutive stay in the red.
“The climbing interest rates continue to weigh on the movement of the bourse with an increasing number of investors switching to fixed income investments,” it added.
The ASPI dipped as much as 40.3 points, hitting an intra-day low of 4,906.31 points, before experiencing a mild recovery to settle at 4,924.61 points. Losses in market favorites; Aitken Spence, John Keells Holdings and Distilleries Company of Sri Lanka contributed to the decline.
The S&P SL20 heavy weights proved to be quite active, positioning themselves amongst the top five performers for the day.
Following some interest in Dialog Axiata last week, the counter secured the day’s sole off-market deal as 7.5 million shares were seen crossed at Rs. 6.20 each. The deep market slump led the counter to shed 31.1% from its 52-week high of Rs. 9, taking the counter to now trade at a forward PER of 9.0X on 2012E earnings. The leading mobile operator went on to see two further sizeable deals totalling to 3.6 million shares taking place on board at Rs. 6 each. A few mid-sized deals executed in Chevron Lubricants in the market, propelled the counter to place second in the top turnover list. Selling pressure in the counter led its share price to slip 0.4% to close at Rs. 169.
Softlogic Stockbrokers also said further buying interest was visible in the non-voting share of Commercial Bank of Ceylon following active foreign play yesterday as the counter saw a deal carrying 238.8k shares picked up on board at Rs. 73. The share gained 0.5% to close at Rs. 74 whilst similar interest in DFCC Bank led the counter to gain 4.5% at its close of Rs. 109.90.
Two notable quantities in John Keells Hotels amounting to 208,500 shares were also seen picked up in the market at Rs. 12 each whilst 133,200 shares of Expolanka Holdings changed hands at Rs. 5.90 in a single on board deal. Further accumulation in Nestle (Lanka) led the counter to appreciate Rs. 26.6 to close at Rs. 1,200.1 whilst a total of 38,300 shares changing hands in Carsons Cumberbatch.
Meanwhile Reuters said the rupee closed flat at 133.75/85 to the dollar, edging down from Wednesday’s close of 133.70/80.
Dealers said though the depreciation pressure on the local currency has slightly eased on exporter demand, heavy oil bills may threaten the stability of the rupee.
The Central Bank has taken several stringent policy measures this year aimed at cutting imports, including raising policy rates and restricting credit growth, though a prolonged drought has increased oil imports for thermal power.
The rupee has lost 17.5% since November, when the Government allowed a three per cent devaluation. The sharp fall drove the annual inflation rate to a 41-month high in June, data showed on Friday.
source - www.ft.lk
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