Bourse hits 3-week low on economic woes

By Shihar Aneez

Sri Lankan stocks fell to a near three-week low on Tuesday on worries over a delayed $1.9 billion IMF loan and lack of foreign interest in the post-war bourse.
The rupee closed flat at 114.90/95, with the central bank mopping up dollars at 114.90 rupees for a seventh straight week.
The bourse fell 0.32 percent, or 7.78 points, to 2392.11, its lowest close since June 17. It hit a one-year high on June 22. “Investors are waiting for directions on economic front with low foreign participation and negative global share markets,” said Mohandas Thangarajah, a broker at First Guardian Equities.
Foreign trades showed a net outflow of 286.5 million rupees on Tuesday, after notching an inflow of 1.4 billion rupees before the government declared the end of a 25-year war on May 18.
Sri Lanka’s request for a $1.9 billion IMF loan, to stave off a balance of payments crisis and weather the global recession, remains a drag on the bourse.
A central bank official told Reuters on Tuesday an IMF mission had arrived for discussion on post-war developments. Revenue fell 10 percent in the first four months of the year, while expenditure overshot by 28 percent year-on-year as the world economic crisis pushed borrowing costs higher, the government said on Tuesday.
The stock market has lost 2.44 percent in the last six sessions but still up 59.2 percent in 2009, and 25.4 percent since May 18.
Heavyweight Sri Lanka Telecom fell 1.06 percent to 46.75 rupees, while top private lender Commercial Bank of Ceylon closed 1.49 percent weaker at 132 rupees, calculated on a weighted average, bourse data showed.
Daily turnover was 211.8 Sri Lankan rupees ($1.8 million), less than a half of the last year’s daily average of 464 million and the lowest since May 14, a bourse official said.
The interbank lending rate or call money rate edged up to 10.303 percent from Friday’s 9.901 percent. Markets were closed on Monday for a Buddhist religious holiday. (Reuters)