COLOMBO |
Jan 2 (Reuters) - Sri
Lankan stocks gained in heavy volume on Wednesday to a near 12-week high as a
fall in fixed income yields prompted investors to turn to more risky assets,
while the rupee ended up after the central bank said it would maintain a
flexible exchange rate.
The main share index
closed 0.72 percent, or 40.79 points firmer, at 5,683.79, its highest close
since Oct. 12, Reuters data showed.
Analysts said the
positive sentiment was due to easing interest rates and a rosy central bank
outlook for 2013.
Treasury bill yields
eased between 9-33 basis points to nine-month lows at a weekly auction, in line
with a surprise cut in interest rates last month.
The central bank in
its policy announcement relaxed restrictions on foreign exchange trading with
effect from Wednesday including a three-month limit on forward booking and it
raised commercial banks' net opening positions.
The central bank also
said it expected a 7.5 percent economic growth in 2013, while it will maintain
a flexible exchange rate for the rupee.
Shares of Commercial
Bank of Ceylon, which accounted for 85 percent of the day's turnover of 1.68
billion rupees ($13.16 million), rose 0.97 percent to 104 rupees.
Foreign investors were
net sellers of 17.15 million rupees worth of shares after being net buyers of a
record 38.63 billion rupees worth shares last year.
The rupee closed
firmer at 127.40/45 to the dollar compared with Tuesday's close of 127.70/75,
on bank selling, dealers said.
Sri Lanka Forex
Association, a body which represents currency dealers, welcomed the central
bank moves to boost foreign exchange trade. ($1 = 127.7000 Sri Lanka rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Robert Birsel)
