Holiday mood at Bourse as turnover dips to 7-month low

Tuesday, 30 December 2014 02:20 - - {{hitsCtrl.values.hits}}

Reuters: Stocks fell in thin trade on Monday from a five-week closing high in the previous session, as many investors were away for year-end holidays, while fresh defections ahead of the 8 January presidential poll hurt sentiment, stockbrokers said. The main stock index fell 0.29%, or 21.44 points, to 7,287.59. It had marked its highest close since 21 November in the previous session. Turnover fell to a seven-month low of Rs. 349.7 million ($2.67 million), less than a quarter of this year’s daily average of Rs. 1.42 billion, stock exchange data showed. Net foreign inflows into stocks were Rs. 50.4 million, extending net inflows to Rs. 21.88 billion so far this year, exchange data showed. “Demand was very weak due to the holiday season. Foreign investors are also on holidays, so we don’t see large volume share trading,” said a stockbroker. “The tight election between the two main candidates is also hurting sentiment. Some foreign investors are asking which listed companies could be hit if the opposition candidate wins next month’s election.” Eight legislators from the main Muslim party defected from President Mahinda Rajapaksa’s ruling United People’s Freedom Alliance on Sunday. Since Rajapaksa announced snap elections last month, 23 legislators, including former Health Minister Maithripala Sirisena, who is challenging Rajapaksa’s bid for a third term, have defected. Two Opposition legislators have joined the ruling party. Political analysts see a tight race between Rajapaksa and Sirisena, whose New Democratic Front has promised to eliminate rampant corruption and reduce prices of essential goods and fuel by cutting taxes. Rajapaksa has promised good governance and media freedom if he wins. Top fixed-line phone operator Sri Lanka Telecom fell 3.7% to Rs. 49.50, while Commercial Leasing and Financial Plc lost 6.38% to Rs. 4.40.

Rupee forwards fall on importer dollar demandReuters: Rupee forwards fell on Monday due to importer dollar demand, while dealers said unusual year-end demand for the greenback offset inflows from remittances and weighed on the local currency. Three-day forwards, or spot-next, ended at 132.15/30 per dollar, down from Friday’s close of 131.99/132.04. “We haven’t seen any moral suasion from the central bank. But we saw some directions from the Central Bank by selling dollars to some select banks,” said a currency dealer. “There has been unusually strong importer demand this month. But today, volumes are low because of the holiday season.” Rupee forwards have been maintained at around 132.00 throughout December as the Central Bank defended the currency through moral suasion. Four-day forwards closed at 132.15/30 per dollar, down from Friday’s close of 132.02/06. The spot currency was not traded. Dealers said unusually high imports towards the end of 2014 amid lower interest rates and a stable exchange rate have put pressure on the rupee.