Rupee flat at two-year high; shares at two-week low

Reuters: Sri Lanka’s rupee currency closed flat on Tuesday at a two-year high amid upward pressure due to high exporter conversion of dollars, but the Central Bank’s lower dollar trading band kept the currency steady.

The rupee closed flat at 110.90/92 a dollar, its highest since 11 December 2008.



This was due to a State bank, through which the Central Bank directs the market, buying dollars at 110.90, currency dealers said. The rupee has risen three per cent in 2010.

The main share index .CSE fell 51.22 points or 0.8 per cent to 6,385.60, to its lowest close since 30 November. Asia’s best performer in 2010 has risen 88.6 per cent, ahead of second-ranked Indonesia’s .JKSE 45.6 per cent. It has fallen 11.4 percent since hitting a record high on 4 October, mainly on a liquidity shortage, and has slowed down with year-end settlements and the impending holidays.

The day’s turnover was at Rs. 1.2 billion ($11.3 million), over two times the 2009 daily average of Rs. 593.6 million, but less than half of this year’s average of Rs. 2.45 billion.

Foreign investors have sold a net Rs. 25.3 billion in shares this year and on Tuesday bought a net Rs. 28 million. The bourse is trading at a forward price-to-earnings ratio of 20, the highest in Asia, compared with all-Asia’s 12.7 and global emerging markets’ 11.7, Thomson Reuters StarMine data showed.

The CSE’s 14-day relative strength index is at 41.4, between the lower and upper neutral limit of 30 and 70. Volume hit 62.3 million shares on Tuesday, against an average volume of 59.2 million and 53.4 million in the past five and 30 days respectively. The 90-day average volume is 67.8 million.