Sri Lankan bourse falls

Sri Lanka's stock market lost in thin volume on Friday with foreign selling as lack of credit kept investors on the sidelines ahead of the December monetary policy rates announcement, while the central bank held the rupee steady.
The central bank after the market closed kept policy rates unchanged for a 11th straight month as expected. The island nation's main share index lost 0.82 percent or 48.63 points to 5,892.69, lowest since November 25. The day's turnover was 462.6 million Sri Lanka rupees ($4.06 million), far below last year's average of 2.4 billion and this year's 2.4 billion. Volume slumped to 5-day average of 511.2 million rupees, the lowest weekly average this year.
Credit for share buying has been a concern since the Securities and Exchange Commission curbed the amount brokerages could extend sharply, although brokers expect the regulator under a new chief to accommodate more lending. The market is going through a typical year-end bout of pre-holiday slowness.
Market heavyweight John Keells Holdings, which fell 1.1 percent to 174.80 rupees, led the overall market fall. The bourse saw a net foreign outflow of 21.6 million rupees on Friday, and foreign investors have sold 18.2 billion thus far in 2011, and a record 26.4 billion in 2010.
Total volume was 17.1 million shares, lowest since November 11. The 30-day and 90-day average trading volumes were 48.7 million and 94.2 million. Last year's daily average was 67.9 million. The Colombo Stock Exchange is Asia's 12th-best performer with a year-to-date loss of 11.2 percent after being at the top until June. It delivered Asia's best returns in 2009 and 2010. The rupee closed flat at 113.89/90 rupees a dollar for a 18th day despite heavy dollar demand, as the central bank spent $30 million defending it, dealers said.
Two traders Reuters spoke with said the dollar demand came from importers as well as a foreign bank, which had facilitated some offshore clients' sale of Sri Lankan treasury securities. Since a 3 percent devaluation on November 21, the bank has spent around $440 million to hold the exchange rate steady. It spent almost $2 billion this year until the end of September holding back depreciation pressure.