Bourse edges up on banks; low interest rates

Wednesday, 20 August 2014 23:09 - - {{hitsCtrl.values.hits}}

Reuters: Stocks rose on Wednesday, hovering near three-year highs, led by bank and finance companies as low interest rates and earning hopes helped boost appetite for risky assets despite an overbought market. The main stock index ended up 0.27%, or 18.51 points, at 6,999.97, its highest close since 9 September 2011. The index has gained 18.4% so far this year. “Mostly it’s retail activity today. There was some interest in banking and finance sectors on earnings hopes,” said Dimantha Mathew, Manger Research at First Capital Equities Ltd. Turnover was Rs. 1.79 billion ($ 13.75 million), more than this year’s daily average of Rs. 1.19 billion. The Bourse saw net foreign outflow of Rs. 14.17 million on Wednesday. But foreign investors were net buyers of Rs. 7.48 billion worth of shares so far this year. Shares in Commercial Leasing & Finance Plc rose 4.65% to Rs. 4.50, while Commercial Credit and Finance Plc rose 15.05% to Rs. 32.10. Shares in Commercial Bank of Ceylon Plc rose 0.55% to Rs. 145, while Sampath Bank Plc gained 1.86% to Rs. 229.80. Nestle Lanka Plc, which led the gains in the overall index, rose 1.31% to Rs. 2,170. The Central Bank rejected all 91-day Treasury bill bids at an auction, while the yields in 182-day and 364-day Treasury bills fell one to two basis points at a weekly auction on Wednesday.

Rupee edges down on foreign outflows

Reuters: The rupee fell on Wednesday due to heavy dollar demand from banks to facilitate selling in shares by a US-based fund, but dealers said moral suasion by the Central Bank capped the depreciation. The rupee ended at 130.19/23 per dollar after declining to 130.22 earlier in the day. It had closed at 130.13/14 on Tuesday. US-based fund Janus sold shares in conglomerate John Keells Holdings Plc, resulting in a net foreign outflows of Rs. 4.52 billion ($ 34.7 million) on Tuesday, the worst net foreign selling on the Colombo Bourse since 25 March 2010. “Rupee is weaker, but the Central Bank’s moral suasion prevented heavy depreciation,” said a currency dealer asking not to be named. Three other dealers confirmed the Central Bank’s move but an official at the Central Bank International Operations Department told Reuters that there was no moral suasion. “No moral suasion, state banks purchased for their requirement,” the official said.