Sri Lanka stocks down, rupee stronger

CEAT Kelani Holdings Managing Director Ravi Dadlani (right) and Lanka Ashok Leyland CEO Umesh Gautham exchange the OEM agreement

Sept 23, 2013 (LBO) – Sri Lanka stocks fell 0.54 percent Monday losing some of gains from a surge on Friday the rupee strengthened, brokers and dealers said. Analysts say unsterilized dollar sales will be required to keep the rupee from weakening as the liquidity is turned into import demand through either through state spending or secondary credit to others borrowers through the banking system.

The central bank could also build foreign reserves, and prevent the money being loaned out by killing the rupees through outright sales of its domestic asset portfolio.

The benchmark Colombo All Share Price Index closed 31.25 points lower at 5,782.85, down 0.54 percent on Monday, provisional data from the stock exchange showed.

The S&P SL20 closed 2.57 points lower at 3,215.03, down 0.08 percent.

Turnover was 485.8 million rupees, down from 849.66 million rupees the previous day.

Stocks surged 113.36 points to close 5,814.10 last Friday which some brokers said was due to positive sentiments after the US Fed did not end a money printing program this month as expected.

In early trade on Monday the All Share Price Index surged to 5,829.84 points but failed to maintain the momentum with 140 shares losing ground against 71 shares gaining by the day’s end.

The slide was led by Carson Cumberbatch which closed 25 rupees lower at 375 rupees.

CTC closed 25.30 rupees lower at 1,066.70 rupees.

LOLC closed down 1.90 rupees to 51.10 rupees, with ICRA, a rating agency lowering the outlook on group’s A- rating to negative.

The rupee strengthened in the spot market to 131.90/95 to the US dollar during late trading on Monday from Friday’s close of 132.15/20.

Dealers said sentiments remained positive. Over the last two day nearly 80 billion rupees of excess liquidity has been created in money markets by Central Bank purchases of dollars from bond sale by a state banks.

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