S.Lanka shares dip again on profit-taking

By Ranga Sirilal and Shihar Aneez

COLOMBO, July 3 - Sri Lanka's stock market <.CSE> fell to a more than two-week low on Friday led by retail profit-taking and muted foreign interest in the post-war bourse.

The rupee <LKR=> closed flat, with the central bank for the sixth straight week preventing appreciation by mopping up dollars at 114.90 rupees.

The bourse fell 0.37 percent or 9.02 points to 2399.89, its lowest close since June 17. It hit a one-year high on June 22.

"Foreigners are concerned on the exchange rate movement, while local investors are concerned on interest rates," said Prashan Fernando, director at Acuity Securities. "Both concerns could be addressed only if the IMF loan comes in."

Sri Lanka's request for a $1.9 billion International Monetary Fund loan, to stave off a balance of payments crisis and weather the global recession, remains a drag on the bourse.

"We don't have a date for an executive board meeting at present on Sri Lanka," Caroline Atkinson, director for external relations at IMF told reporters in Washington on Thursday.

Western diplomats have privately said it has gotten tied up in post-war wrangling, after Sri Lanka angered Western nations by rejecting their calls to slow its final offensive and also beat back an effort to probe possible war crimes.

The bourse fell 2.12 percent for the week but still up 59.7 percent in 2009 and 25.8 percent since the government declared victory in the war on May 18.

Top conglomerate John Keells Holdings <JKH.CM> closed 2.02 percent weaker at 133.25 rupees a share, calculated on a weighted average, while Distilleries Company of Sri Lanka <DIST.CM> fell 1.96 percent to 87.75 rupees.

Daily turnover was 235.5 Sri Lankan rupees , around half of the last year's daily average of 464 million. The 2009 daily average turnover has jumped 62.6 percent to 424 million since the end of the war.

The interbank lending rate or call money rate <CLIBOR> edged up to 9.901 percent from Thursday's 9.862 percent.

For secondary market rates, please see <0#LKBMK=>.