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Sri Lanka shares hit one-week closing low; rupee steady

August, 18, 2019

Reuters - Sri Lankan shares on Friday hit their lowest close in a week as investors remained on the sidelines and sought more clarity after the main opposition party, seeking to capitalise on public clamour for a decisive leader, named a hardline former defence chief as presidential candidate.

** The benchmark stock index ended down 0.38% at 5,894.51, its lowest close since Aug. 8. The index posted a loss of 0.82% this week, its first weekly decline in eight. ** Sri Lankans, angered by the government’s inability to prevent the Easter Sunday terror attacks that killed more than 250 people, wanted a strongman back in power who can guarantee their safety and bring back economic growth.

** The market was expecting to hear a list of policies from former defence chief Gotabaya Rajapaksa as well as the ruling party’s presidential candidate, dealers said.

* Gotabaya, 70, served under his older brother, ex-president Mahinda Rajapaksa, and is widely seen as the frontrunner in a presidential election that must be held before Dec 9. Gotabaya is immensely popular among Sri Lanka’s powerful Sinhala Buddhist majority, who credit him with ending the island nation’s 26-year-long civil war in 2009 and believe Colombo needs a seasoned hand after the April 21 bombings. ** Foreign investors, who exited from risky assets for the two straight sessions ever since Gotabaya was nominated, bought a net 6.2 million rupees worth of shares on Friday. ** The market had gathered strength earlier this week amid speculations of the wartime defence chief contesting for presidency, dealers said. ** So far this year, the index dropped about 2.6%.

** Turnover was 333.4 million rupees ($1.88 million), nearly half of this year’s daily average of about 655 million rupees so far. Last year’s daily average came in at 834 million rupees.

** The benchmark index was dragged lower by large-caps Ceylon Tobacco Company, which ended down 7.15%, and top mobile phone service provider Dialog Axiata, which closed 0.9% weaker.

** The rupee ended steady at 177.15/25 per dollar. The currency was down 0.2% for the week, but is up nearly 3% so far this year.

** Foreign investors sold a net 729 million rupees worth of government securities in the week ended Aug. 7, extending the year-to-date net foreign outflow to 28 billion rupees, central bank data showed.