Shares little changed; near 9-week high

Reuters: Shares ended little changed on Friday, hovering near their highest in over nine weeks hit in the previous session as investors awaited direction on the political front and cues from earnings, stockbrokers said.

The main stock index closed 0.01% down at 7,212.47, near its highest close since 3 March hit on Thursday. It has gained 4.52% since the Central Bank cut key rates on 15 April, while yields on t-bills have fallen 44-57 basis points since then.

“Market is holding on the back of expected earnings,” said a stockbroker asking not to be named.

“Overall, bigger institutions and investors want to wait and see while some are taking profit. Others want to buy.”

Turnover stood at Rs. 631.7 million, less than this year’s daily average of around Rs. 1.07 billion.

Analysts said the market could be dull until the perception of political uncertainty is addressed, with many investors in a wait-and-watch mode before the parliamentary elections.

Sri Lanka’s Parliament passed reforms last week to reduce some of the president’s powers, although they were far fewer than President Maithripala Sirisena had promised.

Shares of Ceylon Beverage Holdings Plc ended steady at Rs. 750.50, while Cargills (Ceylon) Plc ended down 0.02%. Leading mobile phone operator Dialog Axiata Plc fell 0.1%.

Rupee forwards fall slightly on importer dlr demand 

Reuters: Rupee forwards closed slightly weaker on Friday as importer dollar demand outpaced selling of the greenback by exporters and banks, while the local currency was expected to face pressure amid lower interest rates, dealers said.

Actively traded two-month forwards ended at 135.55/60 per dollar, compared with Thursday’s close of 135.25/40. One-month forwards ended steady at 134.70/90 per dollar as the Central Bank defended their levels through moral suasion, dealers said.

“There was importer dollar demand from two private banks. The rupee will be under pressure due to rise in imports in a lower interest rate regime,” said a currency dealer asking not to be named.

The market expects the currency to remain under pressure due to higher imports and lower interest rates, dealers said.

The Central Bank said in a statement on Friday that the rupee had depreciated 1.5% against the US dollar through 5 May.

On Wednesday, the central bank allowed a 30 cent, or 0.23%, fall in the spot rupee LKR=LK to 133.30 per dollar, followed by a 10-cent cut to 133.00 on 30 April, until when the spot currency was held at 132.90 since February.

Dealers said the spot rupee did not trade on Friday as well due to moral suasion by the Central Bank.

The Central Bank has been keeping the spot rupee and all forwards up to two-month steady through moral suasion. Central Bank officials were not available for comment.