Rupee down on importer dollar demand; Shares end flat

(Reuters) - Sri Lanka's rupee fell on Friday on heavy dollar demand from importers, while the stock market closed flat amid thin volumes ahead of a long weekend.

The rupee closed weaker at 111.15/20 a dollar from Thursday's close of 111.00/03 on heavy dollar demand by importers which offset exporters' dollar sales, dealers said. The rupee has risen 2.87 percent in 2010.

Sri Lanka's stock market closed flat with the main share index narrowly moving 0.50 points or 0.01 percent up to 6,360.84, from its lowest close since 29 November. Asia's best performer in 2010 has risen 87.9 percent, ahead of second-ranked Indonesia's 41.3 percent. It has fallen 11.8 percent since hitting a record high on 4 October, mainly on a liquidity shortage, and has slowed down with year-end settlements and the impending holidays. The day's turnover was Rs. 582.9 million ($5.2 million), its lowest since 11 November and less than the 2009 daily average of Rs. 593.6 million.

Foreign investors have sold a net Rs. 25.3 billion in shares this year and on Friday they sold a net Rs. 44.7 million.

The bourse is trading at a forward price-to-earnings ratio of 19, the highest in Asia and global emerging markets, compared with all-Asia's 13.3 and global emerging markets' 12.3, Thomson Reuters StarMine data showed. The CSE's 14-day relative strength index is at 39.7, towards the lower neutral limit of 30.

Volume hit 35.6 million shares on Friday, against an average volume of 28.1 million and 52 million in the past five and 30 days respectively. The 90-day average volume is 64.9 million.

Both money and share markets will be closed on Monday for a Buddhist religious holiday. Normal trading will resume on Tuesday.