Stocks soar to 3-year high
- Speculative trading raises concerns say analysts
Reuters: Stocks edged up for the fifth straight session on Friday to hit a three-year high, led by large cap Ceylon Tobacco Co Plc, while block deals in market heavyweight John Keells Holdings Plc boosted the turnover.
Analysts said investors’ sentiment was boosted by the low interest rates, but increasing speculative trading in fundamentally-weak shares could dent the healthy growth the index has seen this year.
The main stock index ended up 0.05%, or 3.27 points, at 7,008.02, its highest close since 18 August 2011.
The index has gained 18.56% so far this year.
“Now the speculative run has started,” said Dimantha Mathew, Manager Research at First Capital Equities Ltd. “Heavy retail activity on retail-favourite speculative counters are moving up now after the fundamental and mid-cap shares moved up over the last few months.”
Analysts said speculative share trading could sharply increase the market risk. The index plummeted more than 20% after it hit a record peak in February 2011 mainly due to speculative trading.
Ceylon Tobacco Co, which led the gains in the index, rose 1.26% to Rs. 1,203.30, while Bukit Darah Plc rose 2.97% to Rs. 700.20.
Shares of investment firm and broker Taprobane Holdings Plc jumped 15.56% to Rs. 5.20 in heavy volume, which stockbrokers cited as a speculative move. It jumped 66.7% on Thursday.
Market heavyweight John Keells Holdings, which fell 1.49% to Rs. 245, accounted for 38.7% of the days turnover. Foreign investors sold 2.5 million John Keells shares.
Friday’s turnover was Rs. 2.7 billion ($ 20.7 million), well above this year’s daily average of Rs. 1.2 billion.
The Bourse saw a net foreign outflow of Rs. 487.6 million on Friday, but foreign investors were net buyers for Rs. 7.08 billion worth of shares so far this year.
Rupee ends firmer; seen stable for 2014Reuters: The rupee rose against the dollar on Friday as exporter dollar sales outpaced late importer demand, while dealers expect the currency to be stable throughout the year after the Central Bank Chief’s comments. |