Bourse, Rupee up ahead of Avurudu holidays

Friday, 12 April 2013 01:21 - - {{hitsCtrl.values.hits}}

Reuters: The Sri Lankan rupee scaled to a new one-year closing high on Thursday on continued inward remittances and exporter conversions ahead of the traditional new year, dealers said.

The rupee edged up to 125.35/40 to the dollar, its highest close since April 9, 2012, from Wednesday’s close of 125.40/50.

The rupee has been on the rise since mid-March on inflows from remittances and exporter dollar sales ahead of the traditional new year, which most Sri Lankans will celebrate on April 13 and April 14. Currency dealers expect the currency to appreciate further in the coming weeks due to an expected inflow of $500 million from a bond sale by state-run Bank of Ceylon.

The currency has risen 1.73 percent this year after falling 10.7 percent in 2012.

The main stock index gained 0.33 percent, or 19.07 points, to 5,813.37, its highest close since Feb. 15.

Analysts said hopes of falling interest rates boosted sentiment, though the market saw thin trade as many investors were on holiday ahead of the traditional new year.

Treasury Secretary P.B. Jayasundera on Tuesday said Sri Lanka’s interest rates should fall in May-June as the borrowing needs of loss-making state energy firms recede.

Stockbrokers said the broad market expects the central bank to slash the key monetary policy rates at its April monetary board meeting. The April monetary policy rates will be announced at 0200 GMT on Tuesday.

Turnover was at an over-two-week low of 940.5 million rupees, less than this year’s daily average of 1 billion rupees.

Foreign investors were net buyers of 479.5 million rupees worth of shares, extending the year-to-date net foreign inflow to 6.45 billion Sri Lanka rupees ($51.46 million). Last year, the bourse saw a net inflow of $303 million.