Sri Lankan rupee extends gains; foreign interest boost stocks

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

August 24, 2006 (LBO) – The Sri Lankan rupee firmed up against the U.S. dollar Thursday, while share prices rose on foreign investors’ interest in selected bluechip stocks, dealers said. The broader All Share Price index inched up 0.48 percent to 2,138.05, while the liquid Milanka Price Index added 0.77 percent to 2,726.44 on sales of 798.38 million rupees, according Colombo Stock Exchange figures.

Foreign investors dominated the day’s trading buying stocks worth 628.13 million on sales of 547.06 million rupees.

Among the gainers were Sri Lanka Telecom, up 2.7 percent to 19.25 rupees, Lanka Milk Foods rose 6.9 percent to 28.00 rupees while Distilleries Company of Sri Lanka moved up 0.5 percent to 46.00 rupees.

In terms of volumes, NDB Bank topped the list on trades of 2.7 million shares at 150.00 rupees (down 0.2 percent). Brokers said the counter was boosted by few one-off foreign trades.

Buying interest was also seen in conglomerate John Keells Holdings, which dipped 0.2 percent to 127.25 rupees on volumes of 1.7 million shares and Caltex Lanka Lubricants, which fell 1.7 percent to 70.25 rupees on volume of 266,700 shares.

In the foreign exchange market, the rupee extended its gains against the greenback to close at 103.54, as exporters continued to cash in their dollar proceeds.

The dollar opened at 103.69 from Wednesday’s close of 103.75 and hit a low of 103.46 during mid-day trade.

Traders expect the currency to trade within the same range Friday, helped by foreign banks selling dollars.

Call rates in brokers market remained at 11.10 percent over a liquidity surplus of 5.13 billion rupees. Secondary market bond market, however was very quiet with yields for three year maturities staying at 11.12 percent, four-year at 11.35 percent and five-years at 11.42 percent.

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