Bourse rebounds from 3-week lows

Friday, 19 December 2014 01:12 - - {{hitsCtrl.values.hits}}

Reuters: Stocks rose on Thursday for the first time in six sessions, with telecoms leading the recovery, but stockbrokers said gains may not be sustainable due to political worries ahead of the 8 January presidential poll. The main stock index ended 0.43% firmer at 7,230.52, recovering from its lowest close since 28 November in the previous session. Stockbrokers said the market rose due to some optimism after President Mahinda Rajapaksa and a few top Government officials met leaders from the private sector at a forum on Wednesday to explain the Government’s economic progress. But brokers said the gains were not sustainable because there was no fundamental reason. “The index will continue to move sideways until there is a clear direction from the election,” said a stockbroker. Analysts said some institutional and high net worth investors were active, with turnover at Rs. 1.36 billion, stock exchange data showed. That was slightly less than this year’s daily average of Rs. 1.42 billion. The Bourse saw net foreign outflows of Rs. 74.4 million this session, but net inflows so far this year stood at Rs. 21.7 billion, exchange data showed. Top mobile phone service provider Dialog Axiata gained 3.08%, while No. 1 fixed-line telephone operator Sri Lanka Telecom added 2.66%. Trading is expected to be sluggish due to political uncertainty ahead of the presidential polls next month, with the index seen falling through December-end. Political analysts see a tight race between President Mahinda Rajapaksa and his former Health Minister Maithripala Sirisena, the consensus candidate of a united opposition. Both candidates are yet to announce their policies. Eleven legislators from Rajapaksa’s United People’s Freedom Alliance, including Sirisena, defected after he announced snap elections last month. Two opposition legislators have defected to Rajapaksa’s party. Speculation over more defections also weighed on sentiment, analysts said. JKH secures $ 445 m funding for Waterfront John Keells Holdings Plc said yesterday that it has secured $ 445 million funding for its and country’s biggest private sector project “Waterfront.” In a short filing to the CSE, JKH said its subsidiary Waterfront Properties Ltd., has entered into a US$ 445 million syndicated project development facility with Standard Chartered Bank. In his review accompanying second quarter results in November JKH Chairman said construction of the ‘Waterfront Project’ was in progress with demand for both the residential and commercial spaces continuing to be promising. The Waterfront’ is $ 650 million integrated resort which is scheduled to be completed by early 2018. Korea’s largest builder Hyundai Engineering & Construction Co Ltd. won the contract worth $ 339.30 million for Waterfront. Rupee forwards end steady; CB sees stable currency in Dec Reuters: Rupee forwards closed steady for a fourth straight session on Thursday, as the Central Bank’s moral suasion forced banks to cap trading at 132.00 per dollar. Central Bank Governor Ajith Nivard Cabraal said the rupee would be stable during this month. “There is no change in our outlook and we expect it will be stable,” Cabraal told Reuters. “We have seen upward and downward movements in the rupee, but they are not at any threat level.” The four-day forwards or spot-next-next, which were actively traded, closed at 131.98/132.05 per dollar, little changed from Wednesday’s close of 131.99/132.02. The spot currency and three-day forwards, or spot-next, were not traded after the Central Bank capped the currency at predetermined levels to prevent volatility, traders said. “There was dull trade and we expect the sluggishness to continue until the end of this month because of the year-end season,” a currency dealer said. Overseas investors sold a net Rs. 3.75 billion worth of Government securities during the week that ended on 10 December. They sold a net Rs. 43.9 billion ($ 334.86 million) worth in the 11 weeks through to 10 December, data from the Central Bank showed.

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