Friday Nov 15, 2024
Friday Nov 15, 2024
Friday, 31 August 2018 00:10 - - {{hitsCtrl.values.hits}}
Reuters: Shares ended higher on Thursday, moving away from their lowest close in 17 months hit earlier this week, as reports that the main State-owned pension fund would return to the equity market boosted sentiment.
The Employees’ Provident Fund, which had halted equity investments in 2015, is set to resume buying and selling shares, local papers reported on Wednesday, citing Central Bank Governor Indrajit Coomaraswamy’s remarks at an event.
The Colombo stock index ended 0.53% higher at 6,076.68 on Tuesday, moving further away from its lowest close since 28 March 2017. The bourse posted its third gain in 14 sessions.
The day’s turnover was at Rs. 337.9 million ($ 2.09 million), less than half of this year’s daily average of Rs. 814.4 million.
“Market is still on positive sentiment after the Central Bank Governor’s comment. That gave some confidence to local investors, but we don’t expect the positive sentiment to last long,” said First Capital Holdings PLC Assistant Manager – Research Atchuthan Srirangan.
“Foreign selling is continuing – which is a worrying sign.”
Foreign investors sold a net Rs. 76.9 million of shares on Thursday, extending the net foreign selling so far this year to Rs. 4.1 billion worth of shares.
Shares in Commercial Leasing and Finance PLC ended 20% firmer, while Ceylinco Insurance PLC ended 5% up, and the biggest listed lender, Commercial Bank of Ceylon PLC closed 0.9% higher.
The Central Bank had left its key policy rates unchanged, as expected, on 3 August, citing its goals of stabilising inflation and fostering sustainable economic growth.
The economy is unlikely to grow more than 4% in 2018, falling short of an earlier estimate of 5%, Coomaraswamy said early this month.
Rupee weakens further to fresh record low
Reuters: The rupee dropped to an all-time low on Thursday, marking its eighth straight session of setting fresh record lows, as dollar demand from importers remained strong amid sluggish inflows.
The rupee, which hit a fresh record low of 161.50 early in the day, closed steady at 161.40/50 per dollar, compared with Wednesday’s close.
The local currency surpassed its earlier record of 161.43 hit in the previous session. The rupee has declined 1.1% so far this month and 5.2% so far this year.
“There was importer dollar demand continuously today also. There were some remittances but the importer demand was high,” a dealer said, requesting anonymity.
The rupee will be under depreciation pressure with the year-end seasonal importer demand, dealers said.
Absence of dollar conversions by exporters, and outflows from equities and government securities also pushed the rupee lower, said analysts.
Exporters are holding on to dollars as they expect the local currency to decline further, dealers said.
The Sri Lankan currency is also hurt by weakness in the Indian rupee. India is Sri Lanka’s biggest trading partner and the country’s currency, which hit a fresh record low on Thursday, is one of the worst performers in Asia this year.
Foreign investors sold government securities worth a net Rs. 7.5 billion Sri Lankan ($ 46.5 million) in the week ended 21 August, bringing the outflow so far this year to Rs. 47.4 billion, Central Bank data showed.
