Shares down on foreign selling

Reuters:Sri Lanka’s stock market fell on Monday as foreign investors sold large cap shares like John Keells Holdings  and Hatton National Bank amid uncertainty after the Head of the Securities and Exchange Commission (SEC) resigned last week.

The island nation’s main share index closed 1.51 or 91.94 points down at 5,995.92, the lowest since 28 November.

The bourse saw a net foreign outflow of Rs. 233.1 million on Monday, for a total of 1.66 billion over the last 10 days. Thus far in 2011, offshore investors have sold 18 billion, and 26.4 billion in 2010.  

“Foreign selling on large-cap stocks and year-end selling pressure pulled the market down,” a stockbroker said on condition of anonymity.  



Others brokers said the resignation of the SEC Head also prompted some institutional and foreign investors to cash in their positions.  

On Thursday, SEC Chairperson Indrani Sugathadasa stepped down “to uphold her principles,” barely a month after her Deputy was moved amid broker complaints about tougher regulation.  

The day’s turnover was Rs. 1.58 billion ($ 13.87 million), less than last year’s average of 2.4 billion and this year’s 2.4 billion.  

Top conglomerate John Keells Holdings PLC, which saw foreign selling of 1.1 million shares, fell 3.63 per cent to Rs. 162.10, while Hatton National Bank PLC fell 3.33 per cent to Rs. 145 after a foreign investor offloaded 54,000 shares.   

Total volume was 35.7 million shares, against a five-day average of 81.9 million. The 30-day and 90-day average trading volumes were 60 million and 102.2 million. Last year’s daily average was 67.9 million.

The bourse has fallen 11.61 per cent since 1 October. It fell to Asia’s 15th-best performer with a year-to-date loss of 9.64 per cent after being at the top until June. It gave Asia’s best returns in 2009 and 2010.  

On Monday, the bourse was in neutral territory with the 14-day relative strength index at 39.9, above the lower neutral range of 30. Gainers outnumbered losers by 176 to 33 on Monday, Thomson Reuters data showed.  

The rupee closed flat at 113.89/90 rupees a dollar for the ninth straight session, dealers said.  

The Central Bank on Monday sold around $10 million to defend the currency, dealers said, extending its total dollar sales to $ 230 million since the three per cent devaluation on 22 November.