Bourse gains to near 8-week high on JKH

Wednesday, 9 April 2014 00:00 -     - {{hitsCtrl.values.hits}}

REUTERS: The Sri Lankan share index rose to a near eight-week high on Tuesday, led by top conglomerate John Keells Holdings PLC amid foreign buying in the island nation’s risky assets. The main stock index ended 0.39%, or 23.78 points, firmer at 6,072.16, its highest close since 13 February. “Lower interest rate is driving the market,” a stockbroker said on condition of anonymity. The stock market is gradually attracting investors who are looking for higher returns as the deposit rates in banks and financial companies are not beyond 6-6.5%, the broker said. Analysts, however, said foreign investor sentiment is yet to recover after the United Nations on 27 March announced it would probe alleged war crimes by the island nation. The bourse has suffered Rs. 5.16 billion in foreign outflows in the eight sessions since 28 March due to the exit of a large foreign fund. The day’s turnover was Rs. 645.1 million ($ 4.93 million) turnover, well below this year’s daily average of Rs. 995.6 million. The bourse saw net foreign inflows of Rs. 93.6 million, though foreigners have net sold Rs. 9.29 billion worth of shares so far this year. Shares in John Keells Holdings rose 1.88% to Rs. 238.80 a share while Commercial Leasing and Finance PLC gained 5.26% to Rs. 4.00. The United Nations has launched an inquiry into war crimes allegedly committed by both Sri Lankan state forces and Tamil rebels during a conflict that ended in 2009, saying the Government had failed to investigate properly. 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 waiting for a clear direction.

 Rupee recovers on inflows, exporter dollar sales

Reuters: The rupee ended firmer on Tuesday due to remittances from migrant workers and exporter dollar sales ahead of the festive season, but a State bank greenback buying capped the appreciation in the local currency, dealers said. The spot rupee which strengthened 0.1% to 130.55 during the day ended at 130.57/63 per dollar, firmer from Monday’s close of 130.68/70. “If not for the State (bank) buying, rupee would have strengthened further. There were inflows and the demand we have seen last week was not there,” said a currency dealer. Dealers said the rupee is likely to trade between 130.50 and 130.80 in the short to medium term and could appreciate further if the Central Bank does not intervene. Sri Lanka sold a $ 500 million, five-year sovereign bond at a yield of 5.125% and the Central Bank Head on Tuesday said the entire bond proceed will be absorbed to its foreign currency reserves. The local currency had been steady at 130.70 per dollar for the six sessions through Wednesday, as dealers were reluctant to trade due to moral suasion by the Central Bank, before it appreciated on seasonal inflows. Depreciation pressure is seen easing due to expected inflows from remittances that will prompt dollar selling by banks. The currency has gained 0.38% since 25 February, but has lost 0.14% so far this year, Thomson Reuters data showed.