Home / Front Page/ Stocks snap 5-day rally on foreign outflows; rupee falls

Stocks snap 5-day rally on foreign outflows; rupee falls

Comments / {{hitsCtrl.values.hits}} Views / Saturday, 15 June 2019 02:16


Reuters: Shares snapped a five-day rally to end a tad weaker on Friday, slipping from a near six-week high hit in the last session, as foreign fund outflows from equities continued, while the rupee fell on persistent dollar demand from importers. 

The benchmark stock index ended 0.07% weaker at 5,383.72, edging down from its highest close since 3 May hit on Thursday. But it rose 1.61% for the week. The bourse fell 11.05% this year so far. 

The Central Bank cut its key interest rates on 31 May to support a faltering economy as overall business and consumer confidence slumped following deadly bomb attacks in April.  Sri Lanka is unlikely to hit its full-year economic growth target of 3-4% following the bombings, Junior Finance Minister Eran Wickramaratne told Reuters last month. A Reuters poll has forecast growth to slump to its lowest in nearly two decades this year. 

The Government’s pension fund has resumed investing in risky assets as the stock market is “extremely undervalued at the moment and is considered a good time to go in”, the Central Bank Governor said last month at its monetary policy meet. 

Friday’s stock market turnover was Rs. 1.14 billion ($6.45 million), more than twice this year’s daily average of about Rs. 530.3 million. Last year’s daily average was Rs. 834 million. Foreign investors sold a net Rs. 61.4 million worth of shares on Friday extending the net foreign outflow for the past five days to Rs. 388.4 million. The year-to-date net foreign outflow was at Rs. 5.91 billion. 

The rupee ended at 176.70/90 per dollar, compared with Thursday’s close of 176.60/70, market sources said. Analysts expect the rupee to weaken further as money flows out of stocks and Government securities. 

The rupee fell 0.14% for the week but is up 3.34% for the year. Exporters had converted dollars as investors’ confidence stabilised after a $ 1 billion sovereign bond was repaid in mid-January. The rupee dropped 16% in 2018 and was one of the worst-performing currencies in Asia. 

Foreign investors bought a net Rs. 311 million worth of Government securities in the week ended 12 June, but the island nation’s net foreign outflow was at Rs. 21.6 billion so far this year, Central Bank data showed.

Share This Article

Facebook Twitter


1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.


Today's Columnists

Economy, business community and the Prime Minister

Friday, 20 September 2019

The speech made by Prime Minister Ranil Wickremesinghe as the Chief Guest of the Sri Lanka Economic Summit 2019 deserves very careful consideration by the country due to several reasons. This will no doubt be his last speech on economic policy to be

Sri Lanka needs to invest more on soft infrastructure

Friday, 20 September 2019

Developing countries like Sri Lanka will have to prepare for further downside risks in 2020 with the growing debt problems and the growth problems in Europe and the slowdown in Asia. Slower growth is already visible in weakening global trade and comm

Origins, rise and irrelevance of SLMC

Friday, 20 September 2019

Andreas Johansson’s ‘Pragmatic Muslim Politics: The Case of Sri Lanka Muslim Congress,’ Switzerland: Springer, 2019, is the latest piece of academic research on SLMC, based on Parliamentary Hansards, official party documents and information rec

Questions about Speaker’s candidacy for the presidency?

Friday, 20 September 2019

It is rather unfortunate that Mr. Karu Jayasuriya has issued a statement (17 September), as the Speaker, ‘that he is willing and ready to contest the Presidential Election, on the request of some organisations and individuals, including Maha Sangha

Columnists More