Sri Lanka shares dip on profit-taking: Rupee flat

(Reuters) - Sri Lankan shares fell on Tuesday, snapping two straight gains, due to profit-taking on low-volume retail trading, while the rupee closed flat on state-bank dollar buying, traders said.
The Colombo All-Share Price Index fell 0.35% or 7.68 points to 2192.79.
“The market is consolidating with volatility,” said Geeth Balasuriya, head of research at Acuity Stockbrokers. Balasuriya also said investors are looking for another boost from a proposed International Monetary Fund (IMF) loan after the end of a 25-year war last month.
The bourse is still up 46% so far this year on the war-end hopes and optimism.
Market heavyweight and top fixed-line phone operator Sri Lanka Telecom closed 3.49 percent weaker at 41.50 rupees a share, calculated on a weighted average in thin volumes.
Distilleries Companies of Sri Lanka shares fell 4.29% to 78 rupees while top conglomerate John Keells Holdings ended flat at 112 rupees. Conglomerate Aitken Spence, which posted 10.8 percent net profit rise for the last financial year, jumped 7.15% to 599 rupees.
Analysts say strategic buying was seen after the court ruling that annulled the sale of state-owned Sri Lanka Insurance Corp. to privately-held Distilleries. Analysts said an individual investor who had lost controlling stake after the ruling was seen buying shares.
Turnover was 293.30 million Sri Lankan rupees ($2.55 million), below last year’s daily average of 464 million rupees. The 2009 daily average turnover, which was 260.7 million rupees until May 15, has now jumped to 363.5 million rupees with more than 14 billion rupees since May 18 after the military declared victory in a 25-year war.
The rupee closed flat at 114.90/95 a dollar with compared to Monday’s close.
“One state bank was continuously buying dollars. It should be for the central bank to build up its reserve,” a dealer said. Cental Bank officials said they are buying dollars from the market to prevent rupee appreciation. Traders said concerns over a delay in the IMF loan have eased for the time being on expectation of post-war donor fund inflows. The rupee hit a record low of 120.80/121.10 on April 23, as the central bank stopped preventing depreciation amid discussions on the IMF loan. The interbank lending rate or call money rate edged down to 10.089 percent from Monday’s 10.145%.