Stock market gains on foreign buying; Thai Group’s deal lifts mood

Reuters: Shares rose on Thursday as a stake buy in Commercial Credit and Finance Plc by a unit of Thailand’s Group Lease Plc lifted the mood while foreign investors bought domestic stocks and turned net buyers so far in the year.

Group Lease Holdings Pte Ltd, a subsidiary of Thailand’s Group Lease Plc purchased 95.4 million shares or 29.99% in Commercial Credit And Finance Plc, Asia Securities, which was directly involved in the deal, said in a disclosure to the bourse.

The transaction was valued at Rs. 10.59 billion ($ 71.31 million), according to a statement by Group Lease Holdings Pte Ltd.

Foreign investors bought a net Rs. 11.7 billion ($ 78.79 million) worth of shares on Thursday, reversing the year-to-date net foreign outflow to Rs. 996.68 million worth of net investment in shares.

Turnover was Rs. 12 billion, its highest since 16 March 2012, compared with this year’s daily average of Rs. 748.9 million.

Shares of Commercial Credit and Fiance Plc, however, ended 5.90% weaker.

The Colombo stock index ended 0.17% at 6,337.82, edging up from its lowest close since 2 December hit on Wednesday. The bourse gained 1.17% last week, recording its first weekly gain in four weeks.

“It was a fairly dry year, but today’s trade will give a bit of confidence to the investors,” said Kanishka Perera Head of Research at Asia Securities.

“There could be a slight boost to the turnover levels in the coming days and this shows that still there is investor confidence in the market.”

The deal, according to brokers, is a positive as it assures investors of continuing foreign appetite towards Sri Lanka at a time of worries over the proposed increases in various taxes and fees affecting growth.

The government aims to boost its 2017 tax revenue by 27% to Rs. 1.82 trillion year-on-year to meet a commitment given to the International Monetary Fund in return for a $ 1.5 billion loan in May.

Shares of conglomerate John Keells Holdings Plc rose 2.58% while Hemas Holdings Plc rose 2.08%.

Rupee ends steady; exporter dollar sales offset bank demand

Reuters: The rupee ended steady on Thursday as exporter dollar sales offset demand for the greenback from state banks and foreign banks, dealers said.

Rupee forwards SLKR were active, while spot-next forwards were trading at 148.90/95 per dollar, unchanged from Wednesday’s close.

“The (dollar) selling was there, but demand from state bank was also there at the same time,” said a currency dealer, requesting anonymity.

“It looks like state (bank) intervention to keep the currency at these levels and they (Central Bank) don’t want the rupee to appreciate also after they raised the spot reference.”

Central Bank officials were not available for comment.

On Tuesday, the Central Bank raised the spot reference rate by 20 cents to 147.50 per dollar, dealers added.

The spot rupee was hardly traded, but was quoted at 148.50/149.00.

Pressure on the rupee is expected to ease when seasonal inward remittances begin, and importer dollar demand weakens ahead of the year-end festival season, dealers said.

However, a few dealers expect the rupee to be under pressure on fears that US President-elect Donald Trump’s economic policies will lead to a stronger greenback and trigger foreign fund outflows.

Foreign investors have net sold Rs. 42.1 billion worth of government securities in the seven weeks ended 30 November, ahead of an expected Fed rate hike in December.