Sri Lankan bourse at one-week high

25 Dec, 2011

Sri Lanka's stock market gained for a second day on Friday to a more-than one-week high, with market heavyweight John Keells Holdings boosting the turnover, while the central bank kept the rupee steady by selling over $20 million.
The day's turnover was at a near three-week high of 1.15 billion Sri Lanka rupees ($10.10 million), with Keells accounting for around 50 percent of it. Keells fell 1.2 percent. Keells trade boosted the overall sentiment of the market, which has seen a dull trade as investors stayed away for the past three weeks due to a lack of credit and big investors wound up their books for the year ahead of holidays.
The island nation's main share index closed 1.07 percent or 63.23 points firmer at 5,982.58, its highest close since December 13. A credit limit imposed by the SEC along with the resignation of its head and deputy and a 3 percent currency devaluation have dampened the market. Investors are waiting for direction from the new SEC head on credit limits but that is not expected until next year.
Last month brokers, who complained that tougher regulation was hurting stock market prices, met President Mahinda Rajapaksa to urge him to intervene in his capacity as finance minister to revive the slumping bourse. Since October 1, the bourse has fallen 11.8 percent.
The bourse saw a net foreign inflow of 216.7 million rupees on Friday and foreigners have sold 18 billion thus far in 2011, and a record 26.4 billion in 2010. The Colombo Stock Exchange has fallen to Asia's 12th-best performer with a year-to-date loss of 9.84 percent after being at the top until June. It delivered Asia's best returns in 2009 and 2010.
The rupee closed flat at 113.89/90 rupees a dollar for a 23rd straight session with the central bank selling more-than $20 million to defend it, dealers said. The central bank on Tuesday said it can continue to maintain the rupee exchange by selling dollars from the foreign reserves as it expects large dollar inflows in the coming months. The bank has spent around $560 million to keep the exchange rate steady since a 3 percent devaluation on November 21. It spent almost $2 billion this year until the end of September holding back depreciation pressure.

Read Comments