Sri Lanka's stock market .CSE had its biggest one-day fall in a year on Tuesday, over jitters about the potential loss of an EU trade pact and the U.S. arrest of one of the bourse's largest investors for insider trading.
The All-Share Price Index of the Colombo Stock Exchange tumbled 3.24 percent or 99.74 points to 2983.17, its lowest since Sept. 30. It has not fallen that much on a percentage basis since Oct. 10, 2008.
It has fallen five straight sessions, while hitting a record intraday high of 3157.11 points on Thursday.
"Both the potential loss of trade concession from EU and an insider trading scam are heavily weighing on investor confidence," an analyst told Reuters on condition of anonymity.
The European Union on Monday published the findings of an investigation, which has found Sri Lanka in breach of global human rights laws and EU sources said the country is likely to lose concessions worth more than $100 million for its top exports to Europe.
Billionaire Galleon Group hedge fund founder Raj Rajaratnam and executives from other U.S. companies were charged on Friday with the largest hedge fund insider-trading scheme ever in the United States.
Udayasiri Kariyawasam, the chairman of the Securities and Exchange Commission of Sri Lanka on Tuesday said the SEC "will be cooperating with U.S. authorities for the probe if necessary."
Sri Lankan-born Rajaratnam is one of the biggest single investors on the Colombo Stock Exchange and has large stakes in some of Sri Lanka's blue chip shares. On Monday, shares plunged 3.8 percent, before recovering to close 1.56 percent weaker.
Market heavyweight John Keells Holdings JKH.CM, in which Rajaratnam has an 8.6 percent stake, fell as high as 5.8 percent to 140 rupees a share. It fell 3.26 percent on Monday.
Shares of Commercial Bank of Ceylon COMB.CM closed 3.6 percent weaker at 180.25 rupees, National Development Bank NDB.CM fell 3.55 percent to 190 rupees, and DFCC Bank DFCC.CM lost 4.4 percent to 152 rupees.
Turnover was 763.6 million rupees ($6.6 million), well above last year's daily turnover of 464 million rupees.
Analysts said the trend would be temporary and the market should recover after another two sessions as the prices of blue chips may fall to an attractive level.
Higher economic growth hopes, more market liquidity, a $2.6 billion IMF loan, an upgraded rating outlook and foreign inflows have overall boosted investor confidence since the end of a 25-year war against the Tamil Tiger rebels in May.
With a return of over 98 percent so far this year, the CSE is still the second-best performing bourse in the world after Peru's Lima's stock market .
Sri Lankan parliament on Tuesday approved 33 billion rupees extra fund for defence spending, which analysts said would put pressure on its budget deficit target of 7 percent, as agreed with International Monetary Fund (IMF) for a $2.6 billion loan.
The rupee LKR= closed flat at 114.80/85 a dollar with the central bank buying dollars at 114.80 for the tenth straight week amid appreciation pressure on the currency, dealers said.
The interbank lending rate or call money rate CLIBOR edged down to 9.013 percent from Monday's 9.044 percent.
reuters
Sri Lankan shares have fallen sharply as the fallout from the arrest of Sri Lanka-born billionaire Raj Rajaratnam continues to shake investor confidence.
The European Union's warning on Monday that the country could lose special trading rights because of its human rights record also weighed on shares.
The Colombo Stock Exchange lost a further 3.1% after Monday's 1.6% fall.
Mr Rajaratnam was arrested in New York on Friday, charged with making millions of dollars from illegal trades.
Investors fear that Mr Rajaratnam will be forced to sell his extensive holdings in Sri Lankan companies, which could cause their shares to fall in value.
US prosecutors claim that Mr Rajaratnam and five other investors secured inside information regarding firms including Google, AMD and Hilton Hotels.
The others charged in the case were Rajiv Goel at Intel Capital, Robert Moffat at IBM, Anil Kumar at McKinsey & Co, and Danielle Chiesi and Mark Kurland of New Castle Partners.
The insider trading is said to have taken place between January and July 2007.
Meanwhile, a year-long inquiry by the EU revealed "significant shortcomings" in Sri Lanka's human rights efforts.
As a result, the European Commission said it would ask the 27 EU member states if it should suspend trade privileges.
The EU is Sri Lanka's largest export market, with textiles alone earning the country $3.5bn (£2.1bn) in 2008.
bbc
Sri Lanka’s stocks fell the most in nine months on concern Raj Rajaratnam’s arrest on insider trading charges may prompt investors to cash out of funds and companies linked to the billionaire.
The Colombo All-Share Index slumped 3.2 percent to 2,983.17 at the close, extending a 1.6 percent decline yesterday, making Sri Lanka the world’s worst-performing stock market today. John Keells Holdings Plc, the nation’s biggest listed company, and National Development Bank Ltd., both partly owned by Rajaratnam and his funds, retreated the most in at least six months.
Rajaratnam is one of the country’s biggest investors, holding the second-largest stake in John Keells, whose assets range from tea plantations to hotels. Redemption requests totaled $1.3 billion, the Wall Street Journal reported yesterday. The firm has assets of $3.7 billion, including about $1 billion from Rajaratnam and employees, according to two people familiar with his hedge fund firm.
“People are wondering whether the redemptions will create selling in local shares,” said Bimanee Meepagala, an analyst at Eagle NDB Fund Management Co., the biggest non-state fund in Sri Lanka. “The drop is way too steep as there should be buyers to take up any volumes given the country’s bright prospects.”
John Keells fell 5.4 percent to 140 rupees. National Development lost 3.6 percent to 190 rupees, and DFCC Bank Ltd. dropped 4.4 percent to 152 rupees.
Rajaratnam’s Holdings
Sri Lankan-born Rajaratnam, 52, was arrested on Oct. 16 for alleged insider trading and released on $100 million bail. He spoke to his employees yesterday, telling them in a 10-minute speech that he will fight the charges. His funds also hold stakes in People’s Merchant Bank Plc, DFCC Bank and Commercial Bank of Ceylon Plc, data compiled by Bloomberg showed.
A $2.6 billion International Monetary Fund loan that was approved in July boosted confidence and investment in Sri Lanka after government troops defeated the Tamil Tiger rebels in May. The IMF raised the South Asian island’s 2009 growth forecast on Sept. 22 to 3.5 percent from a July estimate of 3 percent. The All-Share index reached a record high on Oct. 13.
Eagle’s Meepagala said there were some investor concerns after the European Union said yesterday it may consider suspending some trade benefits it granted to Sri Lanka because of “significant shortcomings” in three human rights areas. The country is still threatened by separatist forces five months after the defeat of the Liberation Tigers of Tamil Eelam, President Mahinda Rajapaksa said yesterday, according to a government Web site.
bloomberg
The All-Share Price Index of the Colombo Stock Exchange tumbled 3.24 percent or 99.74 points to 2983.17, its lowest since Sept. 30. It has not fallen that much on a percentage basis since Oct. 10, 2008.
It has fallen five straight sessions, while hitting a record intraday high of 3157.11 points on Thursday.
"Both the potential loss of trade concession from EU and an insider trading scam are heavily weighing on investor confidence," an analyst told Reuters on condition of anonymity.
The European Union on Monday published the findings of an investigation, which has found Sri Lanka in breach of global human rights laws and EU sources said the country is likely to lose concessions worth more than $100 million for its top exports to Europe.
Billionaire Galleon Group hedge fund founder Raj Rajaratnam and executives from other U.S. companies were charged on Friday with the largest hedge fund insider-trading scheme ever in the United States.
Udayasiri Kariyawasam, the chairman of the Securities and Exchange Commission of Sri Lanka on Tuesday said the SEC "will be cooperating with U.S. authorities for the probe if necessary."
Sri Lankan-born Rajaratnam is one of the biggest single investors on the Colombo Stock Exchange and has large stakes in some of Sri Lanka's blue chip shares. On Monday, shares plunged 3.8 percent, before recovering to close 1.56 percent weaker.
Market heavyweight John Keells Holdings JKH.CM, in which Rajaratnam has an 8.6 percent stake, fell as high as 5.8 percent to 140 rupees a share. It fell 3.26 percent on Monday.
Shares of Commercial Bank of Ceylon COMB.CM closed 3.6 percent weaker at 180.25 rupees, National Development Bank NDB.CM fell 3.55 percent to 190 rupees, and DFCC Bank DFCC.CM lost 4.4 percent to 152 rupees.
Turnover was 763.6 million rupees ($6.6 million), well above last year's daily turnover of 464 million rupees.
Analysts said the trend would be temporary and the market should recover after another two sessions as the prices of blue chips may fall to an attractive level.
Higher economic growth hopes, more market liquidity, a $2.6 billion IMF loan, an upgraded rating outlook and foreign inflows have overall boosted investor confidence since the end of a 25-year war against the Tamil Tiger rebels in May.
With a return of over 98 percent so far this year, the CSE is still the second-best performing bourse in the world after Peru's Lima's stock market .
Sri Lankan parliament on Tuesday approved 33 billion rupees extra fund for defence spending, which analysts said would put pressure on its budget deficit target of 7 percent, as agreed with International Monetary Fund (IMF) for a $2.6 billion loan.
The rupee LKR= closed flat at 114.80/85 a dollar with the central bank buying dollars at 114.80 for the tenth straight week amid appreciation pressure on the currency, dealers said.
The interbank lending rate or call money rate CLIBOR edged down to 9.013 percent from Monday's 9.044 percent.
reuters
Sri Lankan shares have fallen sharply as the fallout from the arrest of Sri Lanka-born billionaire Raj Rajaratnam continues to shake investor confidence.
The European Union's warning on Monday that the country could lose special trading rights because of its human rights record also weighed on shares.
The Colombo Stock Exchange lost a further 3.1% after Monday's 1.6% fall.
Mr Rajaratnam was arrested in New York on Friday, charged with making millions of dollars from illegal trades.
Investors fear that Mr Rajaratnam will be forced to sell his extensive holdings in Sri Lankan companies, which could cause their shares to fall in value.
US prosecutors claim that Mr Rajaratnam and five other investors secured inside information regarding firms including Google, AMD and Hilton Hotels.
The others charged in the case were Rajiv Goel at Intel Capital, Robert Moffat at IBM, Anil Kumar at McKinsey & Co, and Danielle Chiesi and Mark Kurland of New Castle Partners.
The insider trading is said to have taken place between January and July 2007.
Meanwhile, a year-long inquiry by the EU revealed "significant shortcomings" in Sri Lanka's human rights efforts.
As a result, the European Commission said it would ask the 27 EU member states if it should suspend trade privileges.
The EU is Sri Lanka's largest export market, with textiles alone earning the country $3.5bn (£2.1bn) in 2008.
bbc
Sri Lanka’s stocks fell the most in nine months on concern Raj Rajaratnam’s arrest on insider trading charges may prompt investors to cash out of funds and companies linked to the billionaire.
The Colombo All-Share Index slumped 3.2 percent to 2,983.17 at the close, extending a 1.6 percent decline yesterday, making Sri Lanka the world’s worst-performing stock market today. John Keells Holdings Plc, the nation’s biggest listed company, and National Development Bank Ltd., both partly owned by Rajaratnam and his funds, retreated the most in at least six months.
Rajaratnam is one of the country’s biggest investors, holding the second-largest stake in John Keells, whose assets range from tea plantations to hotels. Redemption requests totaled $1.3 billion, the Wall Street Journal reported yesterday. The firm has assets of $3.7 billion, including about $1 billion from Rajaratnam and employees, according to two people familiar with his hedge fund firm.
“People are wondering whether the redemptions will create selling in local shares,” said Bimanee Meepagala, an analyst at Eagle NDB Fund Management Co., the biggest non-state fund in Sri Lanka. “The drop is way too steep as there should be buyers to take up any volumes given the country’s bright prospects.”
John Keells fell 5.4 percent to 140 rupees. National Development lost 3.6 percent to 190 rupees, and DFCC Bank Ltd. dropped 4.4 percent to 152 rupees.
Rajaratnam’s Holdings
Sri Lankan-born Rajaratnam, 52, was arrested on Oct. 16 for alleged insider trading and released on $100 million bail. He spoke to his employees yesterday, telling them in a 10-minute speech that he will fight the charges. His funds also hold stakes in People’s Merchant Bank Plc, DFCC Bank and Commercial Bank of Ceylon Plc, data compiled by Bloomberg showed.
A $2.6 billion International Monetary Fund loan that was approved in July boosted confidence and investment in Sri Lanka after government troops defeated the Tamil Tiger rebels in May. The IMF raised the South Asian island’s 2009 growth forecast on Sept. 22 to 3.5 percent from a July estimate of 3 percent. The All-Share index reached a record high on Oct. 13.
Eagle’s Meepagala said there were some investor concerns after the European Union said yesterday it may consider suspending some trade benefits it granted to Sri Lanka because of “significant shortcomings” in three human rights areas. The country is still threatened by separatist forces five months after the defeat of the Liberation Tigers of Tamil Eelam, President Mahinda Rajapaksa said yesterday, according to a government Web site.
bloomberg
