Sri Lanka stocks close flat; rupee pegged

Mar 05, 2014 (LBO) – Sri Lanka’s stocks close flat Wednesday with index heavy stocks ending on thinner gains and the rupee was kept pegged at 130.60/65 preventing an appreciation, brokers and dealers said. The Colombo benchmark All Share Price Index closed 0.19 points lower at 5,936.43. The S&P SL20 closed 4.45 points lower at 3,216.97, down 0.14 percent.

Turnover was 281.18 million rupees, down from 371.32 million rupees a day earlier with 81 stocks closed up against 75 going down.

In forex markets the rupee was prevented from appreciating and kept pegged at 130.60/65 to the US dollar dealers said.

There is a large policy rate gap between the rupee and its de facto anchor currency the US dollar, which makes it easy to keep the currency steady or appreciate.

Many other countries which have narrower policy rate gap but more complementary money market and exchange rate policies have stronger currencies, analysts have said.

Analysts have said a policy of buying official inflows, including when the currency is under pressure and periods sterilized forex sales involving contradictory monetary and exchange policy had made the rupee a third world type inflationary ‘crawling peg’.

In equity markets foreign investors bought 83.68 million rupees worth shares while selling 63.85 million rupees of shares.

Touchwood Investments closed 30 cents lower at 2.40 rupees attracting most number of trades during the day.

Dialog Axiata closed 20 cents lower at 9.00 rupees and Commercial Leasing and Finance closed 20 cents lower at 4.00 rupees.

Ceylinco Insurance closed 46.90 rupees lower at 1,301.10 rupees and Commercial Bank ended 1.00 rupee lower at 114.00 rupees.

Ceylon Tobacco Company closed 14.20 rupees higher at 1,120.00 rupees and SLT closed 50 cents higher at 44.80 rupees.

A I A Insurance Lanka closed 2.00 rupees higher at 270.00 rupees and JKH closed 10 cents lower at 220.00 rupees.

JKH’s W0022 warrants closed 10 cents lower at 63.20 rupees and its W0023 warrants closed 10 cents higher at 66.00 rupees.

Nestle Lanka ended flat at 2,000.00 rupees and Distilleries also closed flat at 205.00 rupees.

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