manusath-derana

Sri Lanka stocks, rupee firmer ahead of presidential race

October, 9, 2019

(Reuters) - ** Sri Lankan stocks closed firmer on Tuesday led by blue chips while local investors picked up retail shares, amid foreign selling from the Indian Ocean island’s risky assets before the start of presidential poll campaign. The rupee currency also ended firmer.

** Local investors picked up select shares after the former wartime defence chief Gotabaya Rajapaksa, who is seen as a strong leader among the 35 candidates, on Monday filed nominations to contest in Sri Lanka’s presidential election scheduled for Nov. 16. ** Analysts said some shares gained on Tuesday on speculation that those companies may do better if Rajapaksa wins the presidency. However, overall investors were cautious as they waited for policies of the political parties.

** Rajapaksa faced a legal case challenging his Sri Lankan citizenship, but Sri Lanka’s Appeal Court on Friday dismissed the petition, removing a major barrier he faced in contesting the poll.

** Rajapaksa will start his campaign on Wednesday, while another strong candidate Sajith Premadasa, the housing minister who has the backing of most of the rural poor, will kick off his campaign on Thursday.

** The benchmark stock index ended 0.53% firmer at 5,738.90, rising for the third straight session to further move away from its lowest level since July 22 hit on Thursday. The bourse fell 1.42% last week. So far this year, the index has dropped 5.2%. ** Equity market turnover was 300.9 million rupees ($1.67 million), less than half of this year’s daily average of about 653.3 million rupees. Last year’s daily average was 834.0 million rupees. ** Foreign investors were net sellers of 92 million rupees worth of shares on Tuesday, extending the year-to-date net foreign outflow to 3.2 billion rupees of equities, according to index data.

** Meanwhile, the rupee ended 0.9% firmer at 180.25/40 per dollar compared with Monday’s close of 180.85/95. The currency is up 1.3% so far this year.

** Foreign investors bought government securities on a net basis for the first time in seven weeks, buying 522 million rupees worth of government securities on week ended Oct 2. ** The foreign outflows, which are one of the major reasons behind the rupee’s recent weakness, may not abate until after a parliamentary election in 2020, some analysts said. ** The central bank does not release foreign trade numbers on a daily basis, but weekly data in the past five weeks through Sept. 25 has shown a steady outflow. ** Sri Lanka has seen a net foreign outflow of 54.8 billion rupees through Oct. 2, according to central bank data.