Sri-Lankan market outlook

VALUEPICK · 1 Sri-Lankan market outlook Sat May 14, 2016 5:38 am

VALUEPICK

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Depreciation of Rupee has slowed down. It has some support now. Foreigners were selling bonds in the past. They are buying bonds and treasuries now. They also buy selected stocks that they like. We can expect more foreign inflow from next month onward such as IMF aid and other supports. Some export companies benefited lot thanks to higher USD during first three months of this year and end of last year. Gradually rupee is strengthening against USD and imports companies should benefit over export companies especially during second half of this year.

We are seeing good weather as well. Rain has come again. We can expect another record Yala grain harvest, higher other agri output and higher hydro power generation etc. Agriculture sector should benefits more. Food inflation should come down. In addition, we can expect another record tourist numbers in 2016/17.

Further, we should see more activity in the infrastructure group. Overall some companies should report attractive earnings in the coming financial year as well due to above developments.

worthiness · 2 Re: Sri-Lankan market outlook Sat May 14, 2016 1:44 pm

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It is believed that latter part of the fiscal year brings forth better economic atmosphere. Global complexities goes on forever arresting the growth of emerging nations. Balancing the exchange rate at moderate level benefits capital market, imports, exports & other economic indicators. Stock market concerned still the outflow from the market is much higher. Overall economical turnaround heavily depends on strict implementation of painful monetary/administrative policies basically protested by public.

VALUEPICK · 3 Re: Sri-Lankan market outlook Sat Jun 04, 2016 11:54 am

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Finally, IMF loan has confirmed. Some had doubt about this.

http://www.reuters.com/article/sri-lanka-markets-idUSL4N18V21D

Sri Lankan rupee forwards firm up on dollar selling by state bank

Sri Lankan rupee forwards rose on Friday as a state-owned bank sold dollars to select trades amid importer demand for the U.S. currency, dealers said.

Dollar/rupee forwards, known as spot next, were at 147.35/45 per dollar at 0531 GMT compared with Thursday's close of 147.75/90.

Spot next, which acts as a proxy for the spot currency, indicates the exchange rate for the day following conventional spot settlement, which is five days ahead for Friday's trade.

"The demand is there, but a state bank is selling (dollars) at 147.35 to select trades and there are no other sellers in the market," a currency dealer said.

Two state-run banks, through which the central bank usually directs the market, sometimes sell dollars to curb falls in the rupee.

Central bank officials were not available to comment on whether the selling was prompted by the monetary authority.

There was little impact on the rupee from Finance Minister Ravi Karunanayake's announcement on Tuesday that Japan would lend $4.2 billion to Sri Lanka through a loan and bond financing, in the next two years.

The spot currency was not traded on Friday.

The spot rupee reference rate has been pegged at 145.75, dealers said. Sri Lanka's central bank had fixed the spot rate at 143.90 per dollar until May 2.

Dealers said the rupee would continue to face pressure despite foreign inflows into government securities and expectations of further inflows, unless the inflows are large enough to boost reserves.

Foreign investors were net buyers of 7.23 billion rupees ($49.28 million) in the week ended May 25, central bank [size=16]data Sri-Lankan market outlook Icon1

showed.[/size]

The government is in the process of borrowing up to $3.5 billion from foreign sources via syndicated loans, sovereign bonds, and Islamic bonds, Karunanayake said last week.

The Sri Lankan stock index was 0.07 percent weaker at 6,519.41 as of 0534 GMT on a turnover of 158.2 million rupees ($1.07 million). ($1 = 147.2000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath