Friday Sep 20, 2024
Friday Sep 20, 2024
Saturday, 6 June 2015 00:00 - - {{hitsCtrl.values.hits}}
Reuters: Shares closed steady in thin trade on Friday led by market heavyweight John Keells Holdings Plc, rising from a six-week low hit the previous session, but concerns over political uncertainty before elections to Parliament hit sentiment.
President Maithripala Sirisena’s Government has said it would dissolve Parliament once some crucial reform bills are passed, but has yet to fix a date for the election.
The main stock index ended 0.03% higher at 7,122.73, edging up from its lowest close since 23 April hit on Thursday.
“The market is very slow with the political uncertainty. This trend will continue till the elections are over,” said Dimantha Mathew, Research Manager at First Capital Equities Ltd.
“Keells bounced back today on the lack of foreign selling after heavy selling we have seen last few days.”
Analysts said foreign investors sold shares amid expectations the US would hike key interest rates sooner than later. Foreign investors were however net buyers on Friday for the first time in three sessions, buying Rs. 22.9 million ($171,023.15) worth of shares after offloading a net Rs. 1.55 billion worth shares in the past eight sessions.
The Bourse, however, has seen net inflows of Rs. 4.38 billion in equities so far this year.
Despite political uncertainty, stockbrokers said better corporate earnings would help the market gain.
Turnover was Rs. 517.7 million, the lowest since 20 April and less than half this year’s daily average of about Rs. 1.12 billion.
Political uncertainty has been a drag on the market, though the trend reversed after the Central Bank cut key monetary policy rates to record lows on 15 April.
On Friday, losses in Ceylon Tobacco Company Plc, which fell 1.37%, were outpaced by gains in conglomerate John Keells Holdings which rose 2.09%, helping the overall index end steady.
Reuters: Rupee forwards ended steady on Friday on hopes expected inflows would help stabilise the currency while a State-run bank sold ample dollars to keep the spot currency at current levels, dealers said.
One-week forwards, which were actively traded, ended steady at 134.10/20 per dollar, while three-month forwards, which have been actively traded over the last few weeks in the absence of spot, ended at 135.70/90, little changed from Thursday’s close of 135.70/136.00. The spot rupee also ended steady at 133.90 per dollar as a State-run bank, through which the Central Bank usually directs the market, sold dollars at 133.90 for a fourth straight day, dealers said.
“Dollars are being well offered by the state bank. Though exporters are not converting largely, we see the forwards are holding steady,” a currency dealer said asking not to be named.
“As far as the Central Bank can offer ample dollars, the rupee will be stable. Going forward, the stability will depend on the inflows the country is going to get, though the Government expects heavy inflows.”
On Monday, the spot currency started to trade after nearly six months after the island nation raised nearly $1 billion from bond sales last week.
Sri Lanka raised $650 million last Thursday through an international sovereign bond sale and $388 million from development bonds.
Dealers said exporters may start selling dollars as inflows from the dollar bond sale would help boost the rupee.
The Central Bank, with effect from Monday, imposed a 5% penalty on exporters who hold dollars for more than 90 days, and a 2% monthly penalty thereafter, currency dealers said.
Exporters have been reluctant to convert dollars into the local currency as it is cheaper to manage costs with rupee loans in a lower interest rate environment.
