Bourse at one-week high; JKH boosts turnover

Reuters: Sri Lanka’s stock market gained for a second day on Friday to an over-one-week high, with market heavyweight John Keells Holdings boosting turnover, while the Central Bank kept the rupee steady by selling over $ 20 million.

The day’s turnover was at a near three-week high of Rs. 1.15 billion ($ 10.10 million), with Keells accounting for around 50 per cent of it. Keells fell 1.2 per cent.

Keells trade boosted the overall sentiment of the market, which has seen a dull trade as investors stayed away for the past three weeks due to a lack of credit and big investors wound up their books for the year ahead of holidays.

The island nation’s main share index closed 1.07 per cent or 63.23 points firmer at 5,982.58, its highest close since 13 December.

A credit limit imposed by the SEC along with the resignation of its Head and Deputy and a three per cent currency devaluation have dampened the market. Investors are waiting for direction from the new SEC Head on credit limits but that is not expected until next year.

Last month brokers, who complained that tougher regulation was hurting stock market prices, met President Mahinda Rajapaksa to urge him to intervene in his capacity as Finance Minister to revive the slumping bourse.

Since 1 October, the bourse has fallen 11.8 per cent.

The bourse saw a net foreign inflow of Rs. 216.7 million on Friday and foreigners have sold 18 billion thus far in 2011, and a record 26.4 billion in 2010.

The Colombo Stock Exchange has fallen to Asia’s 12th-best performer with a year-to-date loss of 9.84 per cent after being at the top until June. It delivered Asia’s best returns in 2009 and 2010. The rupee closed flat at 113.89/90 rupees a dollar for a 23rd straight session with the Central Bank selling more than $ 20 million to defend it, dealers said.

The Central Bank on Tuesday said it could continue to maintain the rupee exchange by selling dollars from the foreign reserves as it expected large dollar inflows in the coming months.

The bank has spent around $ 560 million to keep the exchange rate steady since a three per cent devaluation on 21 November. It spent almost $ 2 billion this year until the end of September holding back depreciation pressure.