Bourse dips in thin trade

Saturday, 17 January 2015 03:00 - - {{hitsCtrl.values.hits}}

Reuters: Sri Lanka’s main stock index fell to a one-week low on Friday, led by Ceylon Tobacco Company Plc even as investors waited for clarity in economic policy from the new government led by President Maithripala Sirisena. The main stock index closed down 0.48%, or 35.99 points lower, at 7,513.86, its lowest since 8 January. Ceylon Tobacco Company, which lost 3.05%, dragged down the overall index, stockbrokers said. Lanka IOC Plc fell 4.50%. Sirisena, who ousted former president Mahinda Rajapaksa in the 8 January poll, has promised a 100-day program to restore democracy and the economy before he dissolves parliament for a general election after 23 April. Analysts said the market was closely monitoring the new Government’s bureaucratic appointments to check if they were in line with its pledge of good governance and transparency. “If the markets and the public feel that the new appointments are a mere change of hats, political risk for the new government would increase. In such a situation, markets also could react,” an analyst said on condition of anonymity. Business confidence could be dented if people with tainted governance records and lack of integrity take up public office and the political survival of the new administration “would be at stake and lead to much deeper uncertainty,” the analyst said. Foreign investors, who had bought a net Rs. 22.07 billion worth of stocks last year, bought a net Rs. 120.8 million worth shares on Friday. The day’s turnover stood at Rs. 997.1 million ($ 7.60 million), well below last year’s daily average of Rs. 1.42 billion, stock exchange data showed.

Rupee forwards end weaker on importer dollar demand Reuters: Rupee forwards ended slightly weaker on Friday due to importer dollar demand, while exporters awaited clarity on economic policy from the newly elected government, led by President Maithripala Sirisena. Four-day forwards, which were actively traded, closed down at 132.35/45 per dollar compared with Tuesday’s close of 132.25/35. The market was closed for a special holiday on Wednesday in view of Pope Francis’ visit to Sri Lanka, while it was shut for a Hindu religious holiday on Thursday. “There was importer dollar demand while the exporters awaited to see the policies of the new government,” a currency dealer said. Sirisena announced an interim cabinet on Monday and said he would carry out reforms to fight corruption in the 100 days to a parliamentary election. The market is expecting a flexible exchange rate with more foreign grants under Sirisena’s rule as opposed to the fixed and controlled exchange rate regime under the previous government. The spot currency was not traded on Friday. Sri Lankan spots traded in a band between 130.00 and 131.75 rupees throughout 2014 following the Central Bank’s move to limit volatility in the currency and ensure a stable exchange rate.