S.Lanka shares fall on economic woes, rupee down

By Shihar Aneez

COLOMBO, Jan 6 (Reuters) - Sri Lankan shares fell 0.74
percent on Tuesday for a second straight day as earnings and
economic woes undermined a short war-driven boost, forcing
investors to sell their shares amid profit-taking.

The rupee closed down.
The Colombo All-Share index .CSE fell 11.50 points to
1549.47, its second fall in the year.

It hit a near one-month high after government troops
captured Tamil Tiger rebels' de facto capital of Kilinochchi on
Friday, giving hope to investors for an end of a 25-year war.

"But economic worries still remain as the main barrier of
boosting investor confidence," said Hussain Gani, associate
director at Asia Securities. "We also saw some profit-taking
after some shares rose sharply on Friday after Kilinochchi's
capture."

The market surged 5 percent on Friday after the military
captured the Tamil Tiger's self-proclaimed capital. It lost
40.8 percent in 2008.

Analysts have said foreign and institutional investors are
expecting something substantially more than a military victory
to return to the local bourse, which has been hit by poor
earnings, high borrowing costs, and global woes.

Top conglomerate John Keells Holdings JKH.CM fell 1.96
percent to 50 rupees, calculated on a weighted average, while
market heavyweight and No. 1 fixed-line phone operator Sri
Lanka Telecom SLTL.CM fell 0.76 percent to 32.75 rupees.

Development lender DFCC Bank DFCC.CM fell 3.33 percent to
58 rupees, while alcohol manufacturer Distilleries Company of
Sri Lanka DIST.CM shed 1.37 percent to 54 rupees.

Ceylico Insurance CINS.CM, owned by Ceylinco
Consolidated, jumped 8.57 percent to 190 rupees in a block
trade. Its holding company Ceylinco Consolidated announced a
credit card scam on Dec. 22 in one of its non-listed companies.
Analysts estimate the amount to be around 26 billion rupees.
($228.8 million).

The market turnover was 53 million rupees ($0.47 million),
less than an eighth of last year's daily average of 464 million
rupees.

The rupee LKR= fell 0.1 percent to 113.70/80 per dollar,
down from Monday's 113.60/65 on importer demand, traders said.

It traded at 113.80/114.00 level early in the trade, but
retreated on a state bank intervention.

"A state bank, which normally represents the central bank,
sold dollars at 113.75 to direct the market," said a currency
dealer. "With this intervention, the rupee settled around
113.70/80 level."

The rupee hit its all-time low of 114.15 per dollar on
Monday during the trading, while it hit a life closing low of
113.85/114.00 on Friday. It has fallen 0.66 percent so far for
the year.

The interbank lending rate or call money rate CLIBOR
edged down to 12.573 percent from Monday's 12.884 percent.

For secondary market rates, please see <0#LKBMK=>.
(Editing by Bryson Hull)