Bourse steady ahead of holiday

Tuesday, 29 July 2014 00:01 - - {{hitsCtrl.values.hits}}

Reuters: Stocks ended little-changed on Monday in thin trade ahead of a holiday, but sentiment was still positive on expectations of strong corporate earnings after market heavyweight John Keells Holdings’ upbeat earnings. The main stock index ended 0.01%, or 0.63 points, higher at 6,784.27. It has gained 6.4% so far this month. The Bourse and the foreign exchange markets will be closed on Tuesday for the Muslim Eid festival and normal trading will resume on Wednesday. “Bit of a dull day because it is in between two holidays,” said Dimantha Mathew, Manager of Research at First Capital Equities Ltd. in Colombo. Turnover was Rs. 493 million ($ 3.8 million), the lowest since 26 June and well below this year’s daily average of about Rs. 1.09 billion. Foreign investors were net buyers of Rs. 118.4 million worth of shares on Monday, extending the year-to-date net foreign inflow in shares to Rs. 10.71 billion. Analysts said profit-taking could be seen as some shares are overheated but expect corporate earnings to be better. The index has been in the overbought region since 3 July, having risen 14.74% so far this year as local investors moved funds from fixed income to riskier assets because of low interest rates. Shares of Good Hope Plc, which moved up the index, jumped 24.67% to 1,870 rupees on just two trades, while Cargills (Ceylon) Plc rose 3.20% to Rs. 154.80. Conglomerate John Keells Holdings Plc, which posted a 35% growth in its June quarter profit, fell 0.29% to Rs. 238. Analysts said investors sold the stock, saying it was overheated. Rupee edges down on importer dollar demand Reuters: The rupee ended slightly weaker on Monday as late importer dollar demand outpaced inward remittances and exporter dollar sales, dealers said. Dealers said dollar buying by two State banks at Rs. 130.21 prevented sharp gains in the local currency in early trade. The rupee ended at 130.22/24 per dollar compared with Friday’s close of 130.20/25. “There were import demand but still the appreciation trend was intact,” said a currency dealer. Finance Secretary P.B. Jayasundera said on Wednesday that Sri Lanka was building up its foreign exchange reserves while keeping its currency stable as the island nation sees more dollar inflows. Jayasundera said though technically the Government had the luxury of allowing the rupee to appreciate, the authorities did not want that to happen. The Central Bank has absorbed more than $750 million so far this year, which Jayasundera attributed to a rise in inflows from exports, tourism and remittances. Dealers had been expecting the rupee to appreciate due to weak growth in imports and private sector credit, despite multi-year low interest rates. Private sector credit growth hit a more than 4-1/2-year low of 2.2% in May on the year, compared with 3.3% a month earlier. May imports fell 17.6% on year to $1.28 billion. Both the stock and foreign exchange markets will be closed on Tuesday for the Muslim Eid festival and normal trading will resume on Wednesday.