December 31, 2008 / 1:49 PM / 10 years ago

S.Lanka shares end 2008 down more than 40 pct

 By Shihar Aneez
 COLOMBO, Dec 31 (Reuters) - Sri Lankan shares ended the year more than 40
percent down but gained slightly during the last trading session of 2008 on
Wednesday, and the rupee inched up in limited trade as a state bank quoted
firmer rates.
 The Colombo All Share index .CSE gained 1.25 percent on Wednesday, up
18.49 points to 1,503.02. The rupee LKR= edged up to 112.90/113.10 per dollar
from Tuesday's 113.10/113.20. It has fallen 3.85 percent in the past 12 months
and hit a record low of 113.80/114.00 on Monday.
 The central bank has allowed the rupee to depreciate on a gradual and
limited basis since Oct. 30, after preventing a maximum possible appreciation of
around 9 percent in the first half of the year due to high dollar inflows into
the island nation.
 "There was dull trade and a state bank, which usually represents the central
bank, bought dollars at 113.00 level, directing the market," said one currency
dealer.
 The central bank on Tuesday said the government's exposure to foreign
exchange risk has significantly declined, but analysts said the state was
desperate for dollars after spending a third of its reserves to protect the
rupee. [nLU274573]
 The Columba All Share index lost 40.8 percent in the year due to poor
earnings, high borrowing costs, global economic woes as well as a civil war
between the Sri Lankan state and Tamil Tiger rebels, but has fared better than
some of its regional rivals. [nSP235321].
 "The market was a little optimistic after the government's stimulus package
and confidence was restored by the central bank on a stability issue in a listed
bank," said Shivantha Meepage, a research analyst at HNB Stockbrokers.
 The central bank on Monday said it had decided to dissolve Seylan Bank's
SEYB.CM board of directors with immediate effect to maintain the stability of
the financial system. The move followed a liquidity crunch prompted by a credit
card scandal at non-listed Golden Key Credit Card Company [nCOL416535].
 Ceylinco Insurance CINS.CM, a company belonging to the same parent group
of Seylan Bank, Ceylinco Consolidated, rose 6.86 percent to 187 rupees, while
shares in Seylan Bank itself jumped 40.74 percent to 28.50 rupees.
 Ceylinco Consolidated reported a credit card scandal last week in one of its
non-listed companies. Analysts estimate the amount involved to be around 26
billion rupees ($228.8 million).
 Market heavyweight and the country's No.1 fixed-line phone operator, Sri
Lanka Telecom SLTL.CM, rose 3.33 percent to 31 rupees, as calculated on a
weighted average.
 Sri Lanka unveiled a 16 billion rupee stimulus package to cushion the
economy from the reverberations of the global economic crisis, officials said on
Wednesday. [nCOL385873]
 Market turnover was 208.5 million rupees, more than half of last year's
daily average of 400 million rupees. The bourse officials said the daily market
turnover for 2008 was 464 million rupees.
 Foreign inflows into the bourse have risen over 25 percent to a record high
of 14 billion rupees this year, officials said.
 Sri Lanka's annual inflation measured by consumer prices fell to an 18-month
low of 14.4 percent in December, falling sixth straight month after hitting a
record high in June, the government said on Wednesday.
 The central bank governor said on Wednesday that interest rates will decline
next year alongside falling inflation, while growth should hold at 6 percent
with the help of government efforts to prop up the economy. [nCOL36357].
 The interbank lending rate or call money rate CLIBOR edged up to 13.294
percent from Tuesday's 13.124 percent.
 For secondary market rates, see <0#LKBMK=>.

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