CSE near 6-week high as trade turnover zooms; rupee falls

Tuesday, 18 June 2019 00:00 - - {{hitsCtrl.values.hits}}

REUTERS: Sri Lankan shares ended marginally higher on Monday, hovering near a six-week high hit last week, as trade turnover touched a more than four-month high amid continued foreign fund outflows, while the rupee ended weaker on dollar demand from importers.

The benchmark stock index ended 0.02% firmer at 5,384.93, steadying near its highest close since 3 May hit on Thursday. The bourse rose 1.61% last week but it has fallen 11.03% 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.

Monday’s stock market turnover was Rs. 2.18 billion ($12.34 million), its highest since 11 Feb and more than four times this year’s daily average of about Rs. 545.6 million. Last year’s daily average was Rs. 834 million.

Foreign investors sold a net Rs. 27.9 million worth of shares on Monday, extending the net foreign outflow for the past six days to Rs. 416.3 million. The year-to-date net foreign outflow now stands at Rs. 5.94 billion.

The rupee ended at 176.75/85 per dollar, compared with Friday’s close of 176.70/90, market sources said.

Analysts expect the rupee to weaken further as money flows out of stocks and government securities. The rupee fell 0.14% last week but is up 3.31% 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.