Sri Lanka Telecom makes weak debut

The privatisation is Sri Lanka's biggest ever floatation

Sri Lanka Telecom, the biggest floatation in the country's history, has made a muted debut on the country's stock exchange.

The 12% stake in the fixed-line monopoly was sold by the government in November for $34m as part of its extensive privatisation programme.

Local investors took up most of the initial public offering, with strong buying by state pension funds, but foreign investors bought just 16% of the shares on offer.

"Volumes on Sri Lanka Telecom is low," said Sanjeewa Maddumage of HNB Stockbrokers, adding foreign trading in the shares was weak.

"It looks like most investors are holding on to the shares," he said.

Bourse boost

Sri Lanka Telecom shares finished up one rupee from their issue price of 15 rupees, helping lift the Colombo all-share index up 0.31% to 844.2 points.

The listing of Sri Lanka Telecom raised the capitalisation of the Colombo bourse by about 16% to $2bn.

The Colombo stock exchange was one of the best performing in the world in 2002, ending up 31% as the peace process between the government and Tamil Tiger separatists brings an end to 19 years of civil war.

Japan's Nippon Telegraph and Telephone (NTT) owns 35.2% of Sri Lanka Telecom.