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Shares fall for 5th session; rupee slightly weaker

Comments / {{hitsCtrl.values.hits}} Views / Saturday, 23 March 2019 00:27


REUTERS: Shares fell for the fifth straight session on Friday and posted their lowest close in more than six years, dragged by telecom stocks, but foreign investors’ buying capped the decline. 

The market now awaits cues from the third and final vote on the 2019 Budget, market sources said. The Colombo Stock Exchange index fell 0.56% to 5,540.05, its lowest close since 24 December 2012. The benchmark stock index fell 1.36% for the week, its seventh straight weekly drop. It has declined 8.46% so far this year. 

Turnover was Rs. 522.7 million ($2.94 million), less than last year’s daily average of Rs. 834 million. Foreign investors bought a net Rs. 141.7 million worth of shares on Friday, but they have been net sellers of Rs. 6 billion worth of equities so far this year. 

Parliament last week passed the second reading of the 2019 Budget that raises spending while setting an ambitious goal to reduce a large fiscal deficit. 

The final vote is scheduled for 5 April. The stability of Prime Minister Ranil Wickremesinghe’s Government has been questioned by the Opposition since he was reinstated after a 51-day political crisis. 

The rupee ended slightly weaker at 178.00/10 to the dollar on greenback demand by some banks. It had closed at 177.90/178.10 on Thursday. The rupee has climbed 2.58% this year as exporters converted dollars and foreign investors purchased government securities amid stabilising investor confidence after the country repaid a $1 billion sovereign bond in mid-January. 

Worries over heavy debt repayment after the 51-day political crisis that resulted in a series of credit-rating downgrades dented investor sentiment as the country struggled to repay its foreign loans. 

The rupee dropped 16% in 2018, and was one of the worst-performing currencies in Asia due to heavy foreign outflows. 

Foreign investors bought a net Rs. 1.16 billion worth of Government securities in the week ended 13 March, the second net inflow in four weeks, but they have sold a net Rs. 1.7 billion this year, the latest Central Bank data showed.

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