Bourse rises to 5-week closing high in thin trade

Saturday, 27 December 2014 00:05 - - {{hitsCtrl.values.hits}}

Net foreign inflow of Rs. 193 m on Boxing Day

Reuters: Stocks closed at its highest in five weeks Friday in thin trading, led by large caps such as Ceylon Tobacco Company Plc even as investors stayed away amid holiday season and political uncertainty before the 8 January presidential polls. The main stock index rose 0.63%, or 45.78 points, to close at 7,309.03, its highest close since 21 November. The day’s turnover fell to a near two-week low of Rs. 438.1 million ($ 3.32 million), less than a third of this year’s daily average of Rs. 1.43 billion, stock exchange data showed. Shares in Ceylon Tobacco Company Plc rose 3.7% in low trade while Sri Lanka Telecom Plc rose 2.8% also in low trade. Net foreign inflows into stocks were Rs. 192.9 million, extending net inflows to Rs. 21.83 billion so far this year, exchange data showed. “Market turnover is up on block deal of Dialog Axiata and Lanka IOC; if you take out that the turnover is very low as many investors and stockbrokers are still on Christmas holiday,” said Reshan Wediwardene, Research Analyst at First Capital Equities Ltd. Analysts said low volume trading was seen in illiquid stock. Shares in Lanka IOC Plc rose 1.55% while Dialog Axiata Plc ended 0.74% weaker. President Mahinda Rajapaksa’s United People’s Freedom Alliance lost its two-thirds majority in Parliament for the first time in more than four years after two ruling party legislators, including a Cabinet Minister, defected to join the Opposition on Monday. Fifteen legislators, including former Health Minister Maithripala Sirisena, who is challenging Rajapaksa’s bid for the third term, have defected after the President announced snap elections last month. Two Opposition legislators have left to join the ruling party. Political analysts see a tight race between Rajapaksa and Sirisena, whose New Democratic Front has promised to eliminate rampant corruption and reduce prices of essential goods and fuel by cutting taxes. Rajapaksa said on Tuesday he would ensure good governance and media freedom if he bags a third term.

Rupee forwards end little changed on tepid demand

Reuters: Rupee forwards closed little changed on Friday, with dealers saying they expect the local currency to remain flat until year-end due to lacklustre demand in the holiday season. The three-day forwards, or spot-next, which started to trade on Monday after nearly four weeks, ended the day at 131.99/132.04 per dollar, compared to Wednesday’s close of 131.99, dealers said. Both the currency as well as stock markets were closed on Thursday for Christmas. “It seems the Central Bank is comfortable with spot next trading,” said a currency dealer asking not to be named. Four-day forwards closed little changed at 132.02/06 per dollar compared with Wednesday’s close of 131.99/132.05. Dealers said unusually high imports towards the end of 2014 amid lower interest rates and a stable exchange rate have put pressure on the rupee. The spot currency was not traded after the Central Bank capped the currency at a predetermined level to prevent volatility, traders said. Central Bank Governor Ajith Nivard Cabraal said last week that he expected the rupee to be stable during this month. Overseas investors sold a net Rs. 706 million worth of Government securities during the week ended 24 December, extending the net foreign outflow in the month so far to Rs. 6.38 billion.