ECONOMYNEXT – The Sri Lanka rupee gained sharply against the US dollar on Tuesday on export dollar sales, as gilt yields edged higher and stocks closed 0.52 percent lower amidst foreign buying in banking stocks, brokers and dealers said.
The rupee closed at 158.30/45 rupees to the US dollar in the spot market on export conversions and banks selling greenbacks, dealers said. The US dollar closed at 158.70/90 rupees the previous day.
The rupee fell to an all-time low of 160.20 rupees against the greenback last week before recovering on news that China Merchant Port Holdings Limited (CM Port) had paid Sri Lanka the final tranche of 584 million US dollars for its lease of the southern Hambantota Port.
Better monetary policy than earlier and easing global oil prices were also contributing to easing the pressure on the currency, dealers said.
Market liquidity has improved in recent days to around 2 billion rupees on Tuesday, suggesting the central bank was not intervening in the forex market, they said.
Gilt yields edged upwards on thin trading volumes in the secondary bond market.
A five-year bond maturing in 2023 closed at 10.41/11.00 percent in two-way quotes, up from 10.41/48 percent the previous close.
A ten-year bond maturing in 2028 closed at 10.65/77 percent, up from 10.66/74 percent the previous day.
In equities, the Colombo All Share index closed 0.52 percent lower, down 32.08 points to 6,188.05, and the S&P SL20 of more liquid stocks fell 0.68 percent, down 23.17 points to 3,397.89.
Market turnover was 541.2 million rupees, recovering from 176 million rupees the previous day, with 40 stocks making gains and 96 declining.
John Keells Holdings (down 2 rupees to 148 million rupees), Sri Lanka Telecom (down 1.50 rupees to 24.20 rupees) and HNB (down 5.10 rupees to 225 rupees) weighed down the benchmark index.
Net foreign selling was 26.3 million rupees, compared to selling of 18 million rupees on Monday.
Foreign selling in John Keells Holdings was 73 million rupees, according to Asia Securities.
Foreign buying in Sampath Bank was 25 million rupees, followed by 15 million rupees in HNB and 13 million rupees in NDB Bank.
Sampath Bank closed 1.40 rupees lower at 304.10 rupees and NDB Bank was down 30 cents to 122.50 rupees.
Five crossings, or off-market negotiated trades, amounted to 302 million rupees composed of three deals in John Keells Holdings (199.8 million rupees) and three in Commercial Bank (102.3 million rupees).
Commercial Bank gained 70 cents to 123.80 rupees. (COLOMBO, 26 June 2018)