Bourse down as foreigners exit

Saturday, 29 March 2014 00:06 - - {{hitsCtrl.values.hits}}

Reuters: Foreign investors pulled out from the Bourse in heavy volume on Friday, a day after a UN resolution approved an international probe into the country’s war crimes.

The Bourse saw a net foreign outflow of Rs. 2.77 billion ($ 21.19 million) worth of shares, the highest single-day outflow since 6 February, extending the net foreign outflow so far this year to Rs. 6.9 billion. “Investors are a bit more worried about the economic impact and growth due to the resolution,” a stockbroker said on condition of anonymity. The United Nations on Thursday launched an inquiry into war crimes allegedly committed by both Sri Lankan State forces and Tamil rebels during the conflict that ended in 2009, saying the Government had failed to investigate properly. Stocks fell on Friday from a more-than-five-week high hit in the previous session, led by large-cap shares. The main stock index ended 0.34%, or 20.45 points, weaker at 5,972.17. Analysts said the outcome of the resolution was expected, but investors’ sentiment has been dented over concerns it could hurt the country’s economy. Several potential buyers of risky assets are awaiting a clear direction. Two stockbrokers said a foreign fund sold 12.5 million shares of conglomerate John Keells Holding PLC on Friday. The stock still ended up 0.99% at Rs. 225. Top contributors to the day’s fall were Ceylon Tobacco Company PLC, which fell 2.92%, and Ceylinco Insurance PLC, which fell 5.14%. Turnover was Rs. 3.29 billion, the highest since 6 February and more than thrice of this year’s daily average volume.

Rupee steady; UN resolution weighs

Reuters: The rupee ended steady on Friday despite importer dollar demand, helped by moral suasion by the Central Bank, but dealers said a UN resolution for a probe into alleged war crimes may hurt the local currency in the medium term. The United Nations on Thursday launched an inquiry into war crimes allegedly committed by both Sri Lankan State forces and Tamil rebels during the conflict that ended in 2009, saying the Government had failed to investigate properly. Foreign long-term bond holders may shift to short-term Government securities due to the uncertainty, a currency dealer said asking not to be named. “There is a risk of possible sanctions if Sri Lanka does not cooperate on investigations, though we don’t see anything happening immediately,” the dealer said. The spot rupee closed steady at 130.70/75 per dollar. Dealers said the Central Bank had asked banks to keep the rupee at the 130.70 per dollar level to reduce volatility. The importer dollar demand was from state banks, possibly for oil bills. There were bids at 130.70 for spots without offers, dealers said. Central Bank officials were not immediately available for comment. Central Bank Governor Ajith Nivard Cabraal said last week the rupee would be stable throughout this year due to increasing inflows from exports and remittances. Dealers said lack of credit demand for imports will help reduce downward pressure on the rupee. The currency gained 0.25% in the 22 sessions through Friday, Thomson Reuters data showed. It has fallen 0.08% so far this year. The rupee has trended up since 27 February amid weak demand for dollars from importers, said dealers. They expect the currency to trade in a range of 130.50-130.75 in the near term.