Profit taking drags S.Lanka shares from record highs

Sri Lankan shares hit a record high on Wednesday, but closed weaker after rising for six sessions in a row, as investors booked profits in blue chips ahead of year-end holidays.

The All-Share Price Index .CSE of the Colombo Stock Exchange rose 1.82 percent to an all-time high of 3,340.56 in intra-day trade, before closing down 0.45 percent or 14.82 points at 3,266.00, from a record high close.

The index has more than doubled this year.

Market heavyweight John Keells Holdings JKH.CM, which had been driving the market throughout last few days, fell 1.16 percent weaker to 170 rupees, while top private lender Commercial Bank of Ceylon COMB.CM fell 1.85 percent to 185.50 rupees.

"Profit taking mainly in John Keells dragged the market," said Hussain Gani, associate director at Asia Securities. "But investor sentiment is still positive due to high foreign buying last week".

The bourse data showed net foreign buying last week had hit about 2.3 billion rupees, boosting sentiment and this continued this week also.

But, foreign trade from the end of last year to Wednesday turned into a net outflow of 126.3 million rupees, driven by a net foreign selling of shares worth 493.9 million rupees.
The day's turnover was at 1.3 billion rupees ($11.37 million), driven by local buying and well above last year's daily market average of 464 million rupees.

Analysts said the investors were taking positions, expecting good earnings, ahead of elections.

The presidential poll is scheduled for Jan. 26 and it will be followed by parliamentary election due by April.

Analysts and traders said the broader market is still waiting for directions from the economic policies of the main presidential candidates Mahinda Rajapaksa and Sarath Fonseka. For Sri Lanka's political risks, see [ID:nSGE5BE023]

The Sri Lankan market remains one of 2009's best performers worldwide with a 117.3 percent year-to-date return.

The Sri Lankan rupee LKR= closed weaker at 114.35/40 per dollar, compared with Tuesday's close of 114.33/38 due to importer demand for dollars, dealers said.

The interbank lending rate or call money rate CLIBOR edged down to 9.003 percent from Tuesday's 9.006 percent.