Sri Lankan stocks edged down on Friday from a more-than-two week high on retail selling as liquidity was tight with large amounts of money locked in private placements and public issues, but debutant Vellibel One boosted volume and turnover. Sri Lanka's main share index edged down 0.1 percent or 6.43 points to 6,911.9, from its highest close since June 23.
"Activity levels were moderate with the index ending lower on sustained selling across most sectors with the market debutant, Vallibel One dominating the day's turnover," John Keells Stockbrokers said in a note. Vallibel One, a holding company for diversified businesses, which closed 22.8 percent higher than its initial public offering price, accounted for 57.8 percent of the day's turnover and 45.8 percent of the total traded volume. The SEC has said there may be over 30 billion rupees of liquidity locked in private placements and initial public offerings since February this year.
Since June 1, the index had shed 6.43 percent mainly due to forced selling, in line with the policy of the regulator Securities and Exchange Commission (SEC) to recover credits, aiming to eliminate all credit dealing by end 2011. Shares are still up 4.16 percent so far this year. It was the top performer in the Asia-Pacific region in 2010 and 2009 with 96 percent and 125 percent returns, respectively.
The day's turnover was 2.4 billion Sri Lanka rupees ($21.9 million), in line with last year's average of 2.4 billion and this year's daily average of 2.8 billion. Net foreign outflow stood at 30.1 million rupees on Friday, and offshore investors have sold 7.31 billion rupees in 2011 after a record outflow of 26.4 billion in 2010. Traded volume was 91.4 million, against a five-day average of 64.9 million.
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