Sri Lank stocks flat, surge in foreign buying, rupee weakens
ECONOMYNEXT – Sri Lanka stocks closed flat on Tuesday with foreign buying surging in HNB and John Keells Holdings, with the rupee weakening sharply against the US dollar in early trade before recovering, brokers and dealers said.
The rupee closed at 155.65/70 rupees against the US dollar in the spot market, after trading at 155.80 earlier in the day due to importer demand, dealers said. The dollar closed at 155.60/65 rupees the previous day.
Yields in the secondary bond market fell slightly ahead of the weekly Treasury bill auction, with foreigners buying small quantities, dealers said.
A seven-year bond maturing in 2024 saw its yield fall to 10.15/25 percent from 10.20/35 percent the previous day. An eight-year bond maturing in 2026 saw its yield fall to 10.25/35 percent from 10.30/40 percent the previous day.
The Colombo All share index closed 7.10 points higher, gaining 0.11 percent to 6,554.83. The S&P SL20 index of more liquid stocks closed flat, down 0.20 points to 3,681.05.
Market turnover was 2.5 billion rupees, up from 540 million rupees the previous day.
Net foreign buying was 1.2 billion rupees, compared to net selling of 37.8 million rupees the previous day. Foreign buying in HNB was 757.9 million rupees, and 588 million rupees in JKH.
"There is always demand for these shares among foreign investors looking for long term value," says Shiyam Subaulla, Senior Vice President at Asia Securities.
It’s unclear who the local sellers were, or why they sold.
"Broadly, foreign and local investors tend to take different views on the market. Where locals see uncertainty, foreigners tend to see opportunity. They will pick up good stocks whenever liquidity is available," Subaulla said.
HNB closed 1 rupee lower at 240 and JKH fell 10 cents to 162 rupees.
Dialog (gaining 20 cents to 14 rupees), Asian Hotels and Properties (up 2 rupees to 54.20) and Aitken Spence Hotel Holdings (up 2.30 rupees to 32.30) contributed to the benchmark index’s gain.
Ceylon Tobacco (down 9.80 rupees to 1,050.20) and Taprobane Holdings (down 30 cents to 5.50 rupees) weighed down the index.
Off-market negotiated trades, or crossings, amounted to 2 billion rupees and was 81 percent of market turnover.
Five crossings in HNB amounted to 1.3 billion rupees.
There were three crossings each in JKH (525.5 million rupees) and Amana Takaful (76 million rupees), and two crossings in Commercial Bank (135 million rupees).
Commercial Bank gained 20 cents to close at 135.30 rupees and Amana Takaful was unchanged at 70 cents.
In terms of volume East West Properties was the most actively traded closing 50 cents lower at 23 rupees.
Browns Investments gained 10 cents to 2.70 rupees and Browns Capital closed 20 cents higher at 3.50 rupees. (COLOMBO, March 13, 2018)