June 30, 2011 / 12:37 PM / 7 years ago

Sri Lanka stocks at 7-month lows; rupee gains

 * Bourse retreats after early gain on selling pressure
 * Foreigners sell net 234.1 million rupees worth shares
 * Rupee firmer on cbank lowering dlr trading band
 COLOMBO, June 30 (Reuters) - Sri Lankan stocks fell to a
near seven-month low in thin trade on Thursday on selling
pressure due to month-end settlements while speculative trading
continued amid margin calls that forced selling and low
liquidity. 	
 Sri Lanka's main share index slipped 0.76 percent or
52.21 points to 6,825.94, its lowest since Jan. 6. The index
gained 0.5 percent in early trade, but selling pressure on
forced sales amid low liquidity weighed down on the index. 	
 It had shed 7.6 percent in June alone, but is still up 2.86
percent so far this year. It was the Asia-Pacific's top
performer in 2010 and 2009 with 96 percent and 125 percent
returns, respectively. 	
 Forced selling by brokers continued in line with the policy
of the regulator Securities and Exchange Commission (SEC) to
recover credits, while over 6 billion rupees has been locked up
in the two recent initial public offerings. 	
 Foreign investors were net sellers of 234.1 million rupees
worth of shares on Thursday, and have sold a net 7.4 billion
rupees in 2011 after a record 26.4 billion in 2010.	
 The day's turnover was 1.9 billion Sri Lanka rupees ($17.3
million), well below last year's average of 2.4 billion and this
year's daily average of 2.85 billion.	
 Traded volume was 72 million, lowest since May 6, against a
five-day average of 92.6 million. The 30-day and 90-day average
trading volumes were 187.6 million and 104.7 million,
respectively. Last year's daily average was 67.9 million.  	
 The rupee closed firmer at 109.49/50 a dollar from
Wednesday's 109.58/60 as the central bank lowered its dollar
trading band by 10 cents for the second day to 108.90/109.50
from 109.00/60 despite heavy importer dollar demand, dealers
said. 	
  FACTORS TO WATCH:	
 - Whether foreign investors will buy shares in large
volumes. 	
 - Whether Sri Lanka can achieve an 8.5 pct growth target
amid rising global oil prices and inflation.	
 - The extent of the rupee's appreciation. 	
        	
 DATA	
 Colombo Stock Exchange:	
 Stock Market Volume (Shares)	
 Current Volume                     Average Volume 30 Days	
 72,013,517                         187,570,797	
	
 Yield and Price of Sri Lanka's sovereign bonds:	
         Maturing year   Tenure    amount      Reuters yield	
  2012       5-yr    $500 mln     2.648-2.218	
  2014       5-yr    $500 mln     4.499-4.211	
2020      10-yr  $1,000 mln    6.2843-6.1408	
	
 * For Sri Lankan treasury securities benchmarks and data,
please click and 	
 * For interbank lending rate or call money rate or
 	
 * For secondary market rates, please see <0#LKBMK=>.	
($1 = 109.600 Sri Lanka Rupees)	
	
 (Reporting by Ranga Sirilal; Editing by Shihar Aneez & Sunil
Nair)	
 	
 
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