Wednesday, 12 June 2013
"But the bottom line is that more needs to be done to educate and help individual investors. It should become common knowledge that investing in an individual stock and trading may be fun, but it may also be dangerous to their wealth.”- Steven M. Davidoff
(Adds stocks, rupee close, details)
COLOMBO, June 11 (Reuters) - Sri Lanka's rupee dropped to the lowest close in nearly six months on Tuesday, weighed down by banks' demand for dollars to settle bond-related sales and importer buying of the U.S. currency, dealers said.
The rupee, which hit 127.80 per dollar in intraday trade, ended at 127.75/85, its lowest close since Dec. 19. It had closed at 126.55/60 on Monday.
"We see some small-time bondholders pulling back with the U.S. treasury yields moving upward," a currency dealer said. "They are also concerned over interest rates further coming down after the central bank's comments." Dealers also said importers were buying dollars on concerns that the local currency may depreciate further.
The central bank governor, after holding key policy rates steady on Friday, said the monetary authority would issue guidelines to direct banks to cut lending rates and narrow the gap with the inflation rate. The rupee has weakened 0.2 percent so far this year following a 10.7 percent depreciation in 2012 as the central bank allowed for a flexible exchange rate regime in February 2012.
Sri Lanka's main stock index fell 0.59 percent, or 37.49 points, to 6,303.79, its lowest close since May 16, led by a decline in large caps despite foreign buying. Foreign investors were net buyers of shares for a 23rd straight session and the bourse saw a net foreign inflow of 213.1 million rupees ($1.68 million), extending the year-to-date inflows to 16.17 billion rupees.
Foreign inflows accounted for 47.8 percent of the day's turnover of 750.6 million rupees, less than this year's daily average of 1.04 billion rupees. Shares in large cap Ceylon Tobacco Company Plc fell 1.32 percent to 972.00 rupees.
($1 = 126.7750 Sri Lanka rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Jacqueline Wong and Jijo Jacob)