ASI survives; volume slumps to two-year low

Reuters: Sri Lanka’s stock market ended the week a tad firmer on Friday but the turnover slumped to a two-year low as negative sentiments after a top regulator official was transferred kept cautious investors on the sideline.

The island nation’s main share index edged up 0.14 per cent or 9.08 points to 6,406.52.

The day’s turnover was Rs. 430.8 million ($ 3.9 million), lowest since 14 December 2009, and well below last year’s average of 2.4 billion and this year’s 2.5 billion.

Analysts said investors are concerned about proper future regulations of the market after removal of the Securities and Exchange Commission Director General.

The bourse has fallen 7.4 per cent since 1 October through Tuesday.

               It fell to Asia’s sixth-best performer with a year-to-date loss of 3.46 per cent after being on the top for most of 2011 and in 2009 and 2010.

Traders said investors were confused about a proposed law that will allow the Government to take over the properties of 37 firms be taken over by the State.

Pelwatte Sugar Industries PLC, one of the listed firms in the proposed act, fell 1.9 per cent as it announced to the bourse that it would delay a Rs. 305 million rights issue.

The bourse witnessed a net foreign outflow of Rs. 3.2 million on Friday, and thus far in 2011, offshore investors have sold 16.9 billion, and a record 26.4 billion in 2010.

On Friday, the bourse was at neutral territory with the 14-day relative strength index was at 41.7 from Thursday’s 41.8, above its lower neutral range of 30.

Losers outperformed gainers by 97 to 75 on Friday, Thomson Reuters data showed.

Friday’s total volume was 27 million, lowest since 15 December, against a five-day average of 63.3 million. The 30-day and 90-day average trading volumes were 68.3 million and 104.5 million. Last year’s daily average was 67.9 million.

The rupee fell to 110.18/20 from Thursday’s 110.17/18 on importer dollar demand as a State bank through which the Central Bank controls the exchange rate sold dollars at Rs. 110.20, dealers said.