Oct 15, 2013 (LBO) – Sri Lanka stocks closed 0.16 percent with foreign buying surging, mainly into the rights issue of John Keells Holdings and the rupee weakened, brokers and dealers said. John Keells Hotels closed 30 cents lower at 11.00 rupees.
The rupee weakened slightly to 131.05/15 against the US dollar in late trading in the spot market, after opening at 130.85/90, after the monetary policy rate cut on Tuesday, dealers said.
A policy rate cut can weaken a currency either due foreign bond holders selling out to make capital gains on falling bond yields in the short term or in the longer term through longer term liquidity injections made to keep a lower policy rate.
Bullish sentiments drove the secondary bond market with a more liquid five year bond trading at 11.10/13 percent, down from 11.30/42 percent a day earlier, dealers said with money market interest rates in a 21-month low.
The overnight call money market rate, for interbank borrowings not backed by gilts, reached 8.30 percent and the overnight repo rate, for gilt-backed interbank borrowings reached 7.61 percent on Monday.
A month earlier these rates stood at 8.53 percent and 8.35 percent respectively. The Colombo benchmark All Share Price Index closed 9.36 points higher, up 0.16 percent, after reaching an intraday high of 5,972.55 on Tuesday, provisional data showed.
The S&P SL20 closed 12.54 points higher at 3,301.28, up 0.38 percent.
Turnover reached 2.5 billion rupees, up from 233.26 million a day earlier, with shares of 118 firms making gains against 73 losers.
Foreigners bought shares worth 1.18 billion rupees, up from 30.29 million rupees a day earlier, 490 million rupees, up from 18.08 million rupees the previous day.
Nestle Lanka closed 67.20 rupees higher at 1,969.00 rupees.
JKH closed 2.50 rupees higher at 217.50 rupees and featured in two crossings.
Shares pertaining to the JKH rights issue closed 24.80 rupees higher at 64.80 rupees and featured in five crossings and more than 16.5 million shares trading.
Aitken Spence closed 2.70 rupees higher at 116.00 rupees and NDB Capital Holdings closed 26.20 rupees higher at 489.80 rupees.
Dialog closed 10 cents higher at 8.90 rupees and Sampath Bank closed 3.70 rupees higher and featured in one crossing and Textured Jersey closed 40 cents higher at 15.20 rupees.
Lanka Ceramic closed 5.00 rupees higher at 125.00 rupees and featured in a single crossing.
Speculative trading continued in Touchwood, closing flat at 4.80 rupees with more than 8.1 million shares changing hands.
Ceylon Tobacco closed 34.40 rupees lower at 1,129.50 rupees and Carson Cumberbatch closed 8.70 rupees lower at 391.40 rupees.
Hatton National Bank closed 5.00 rupees lower at 150.00 rupees and Sri Lanka Telecom closed 60 cents lower at 39.10 rupees.