Stock market rise for third session on foreign buying, window dressing

Reuters: Shares rose for a third straight session on Thursday, closing at their highest in more than one week, helped by foreign investor buying and quarter-end window dressing, stockbrokers said.

The Colombo stock index closed 0.31% firmer at 6,040.18, its highest close since 21 March.

On Monday, it had closed at its lowest since 15 March 2016 after the Central Bank tightened its monetary policy on Friday by 25 basis points to contain high inflationary expectations.

Stockbrokers said rising interest rates have kept most investors on the sidelines. Yields on treasury bills rose 6-16 basis points at a weekly auction on Wednesday.

“Local buying demand is increasing and the market is moving up on blue chips. Buying interest from the retail side is slowly improving,” said Dimantha Mathew, head of research, First Capital Equities Ltd.

“Local buying interest has now started to improve but the foreign side is still dominating.”

Foreign investors net bought shares worth Rs. 200 million ($ 1.32 million) on Thursday, raising the year-to-date net foreign inflow to Rs. 4.58 billion in equities.

Turnover stood at Rs. 1.18 billion, well above this year’s daily average of Rs. 718.3 million.

Shares of Nestle Lanka Plc jumped 4.46%, Ceylon Theatres Plc rose 10.30%, Ceylon Cold Stores Plc gained 0.82%, and Commercial Bank of Ceylon Plc, the country’s biggest listed lender, ended up 0.93 %.

Rupee steady as late importer dollar demand offsets inward remittances

Reuters: The rupee ended steady on Thursday as importer dollar demand in late trades offset inward remittances and selling of the greenback by exporters, dealers said.

Rupee forwards were active, with two-week forwards closing unchanged at 152.55/65 per dollar.

“Still we see importer demand. But the pressure on the rupee will ease with remittances and exporter dollar sales in the coming weeks ahead of the traditional new year in April,” said a currency dealer who did not wish to be named.

Dealers said the rupee has been under pressure due to dollar demand to meet increased seasonal imports ahead of the traditional new year that is celebrated on 13-14 April.

The Central Bank on Monday raised the spot rupee reference rate by 10 cents to 151.70. It had raised the reference rate by 25 cents on 20 March.

On Friday, the Central Bank raised interest rates for the first time in eight months, saying tighter policy was a precaution against a build-up of inflationary pressures.

Analysts said the rate hike, a move that was also aimed at easing pressure on the rupee, could help stabilise the domestic currency that has been hurt by rising imports and outflows due to rupee bond sales by foreign investors.

Foreign investors net bought government securities worth Rs. 70 million ($ 461,285) in the week ended 22 March, but they have net sold Rs. 63.2 billion of such instruments so far this year.