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Business & Economy

Sri Lanka stocks at 1-week high

COLOMBO: Sri Lankan stock market hit a one-week high, led by market heavyweight John Keells Holdings after it said it plans to build a multi-million dollar luxury resort.
The main share index rose 0.77 percent, or 46.33 points, to 6062.38, the highest close since July 4.
Keells, Sri Lanka’s biggest conglomerate, said late on Wednesday it had submitted a plan to the government to build the luxury resort worth more than $650 million that would include hotels, shops and apartments.
Two hours after the trading started, Investment Promotion Minister Lakshman Yapa Abeywardena said Keells had been given approval for a $850 million deal to build the resort.
Shares in Keells ended 2.61 percent higher at 252 rupees.
“Keels deal gave a boost to the market. It’s a positive news that the market was awaiting and market is up on Keells in thin trade,” a stockbroker said.
Capital Alliance Research said in a note the Keells disclosure to the bourse lacks detail as it was not clear whether the deal has secured a casino license or joint venture partner and the structure of the deal.
“If the mixed development does not have a casino, the development is likely to be value destructive,” Capital Alliance said.
The index hit a near 10-week low on Tuesday due to concerns over rupee’s weakening trend and possible foreign outflows.
Foreign investors were net buyers of 6.95 million rupees ($ 53,100) worth of shares on Thursday and they have been net buyers of 15.75 billion rupees in stocks in 2013.
Turnover on Thursday was 241.8 million rupees, well below this year’s daily average of about 1 billion rupees.
Stockbrokers said concern over the further weakening of the rupee has dented investor sentiment, with many investors waiting for clear directions on the currency.
The Sri Lankan rupee spot ended flat at 130.60 per dollar at a near eight-month low, but currency dealers said spot-next eased on exporter dollar conversions.
Currency dealers said none of the banks were trading spot after the central bank, through state banks, guided the market to hold the rupee at 130.60 rupees.
The spot next which traded high of 131.10 during the day due to the importer dollar demand closed at 130.90/131.00 per dollar from Wednesday’s close of 131.00/10.

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