Shares at three-month low; rupee edges up

Thursday, 10 May 2012 00:33 - - {{hitsCtrl.values.hits}}

Reuters: Sri Lanka’s stock market fell to a three-month low on Wednesday, a seventh straight decline, after the Treasury Department ordered an investigation of a share sale involving The Finance Company PLC (TFC), traders said.

A Sri Lanka Securities and Exchange Commission (SEC) official told Reuters that it is continuing its investigation on the share sale.

“We are continuing our investigations to find out about the conflict of interest,” said an official at the SEC asking not to be named, adding that “finding out about insider trading is also part of the investigation”.

The Rs. 400 million ($ 3.1 million) deal in which State-owned National Savings Bank bought a 13 per cent stake in The Finance Company at Rs. 49.75 per share though it was traded at Rs. 30 in the market was suspended by President Mahinda Rajapaksa, who is also the Finance Minister.

The deal went through the market on 30 April and settlement was due on 3 May.

Shares in The Finance Company fell 2.37 per cent to Rs. 28.80 a share on Wednesday, while the main share index fell 0.73 per cent, or 38.81 points, to 5,256.79, its lowest level since 16 February.

The stock market is down more than 13 per cent this year.

The day’s turnover was Rs. 544 million, well below this year’s daily average of Rs. 1.2 billion.

Despite the fall, the market saw a foreign inflow of Rs. 278.9 million extending the net foreign inflow so far this year to Rs. 21.7 billion.

The rupee ended slightly firmer at 127.65-95 against the dollar from Tuesday’s close of 127.80/128.00 as mild importer demand for the greenback was offset by exporter dollar sales.

The rupee gained 1.6 per cent last week after the Treasury Secretary warned of resumed market intervention if the currency dropped beyond “tolerable” levels.