Shares close at 13-week high; rupee weaker

Wednesday, 30 October 2019 00:51 - - {{hitsCtrl.values.hits}}

COLOMBO (Reuters): Shares closed at 13-week highs on Tuesday, led by financial and diversified stocks, while the rupee closed weaker on dollar demand from importers.

Presidential candidate Gotabaya Rajapaksa released his election manifesto on Friday pledging a tax overhaul that would reduce the value-added tax to 8% from the current 15%, abolish a tax for professionals and simplify many other taxes.

Rajapaksa faces a challenge from Housing Minister Sajith Premadasa, who will announce his policy framework on Friday. Analysts said investors were waiting for Premadasa’s policies to assess the possible impacts on tax, subsidies and private businesses.

The benchmark stock index rose for a ninth straight session, closing 0.31% higher at 5,964.25, its highest since 29 July. The index posted a weekly gain of 1.2% last week, but is down 1.46% so far this year.

Shares in Carsons Cumberbatch Plc rose 7.9%, while Dialog Axiata Plc ended up 0.8% and LOLC Holdings Plc closed 1.96% firmer.

The rupee ended 0.06% weaker at 181.45/65 per dollar, compared with Monday’s close of 181.35/60. The currency is up 0.63% so far this year.

Foreign investors were net sellers of riskier assets for the fifth time in eight sessions.

They sold net Rs. 11 million ($ 60,512) worth of shares, extending the year-to-date net foreign selling to Rs. 4.17 billion of equities, according to index data.

Equity market turnover was Rs. 639.7 million ($ 3.53 million), less than this year’s daily average of about Rs. 664.6 million. Last year’s daily average was Rs. 834.0 million.

Foreign investors bought government securities on a net basis for the first time in three weeks, buying a net Rs. 1.97 billion worth of government securities in the week ended 23 October.

Total foreign outflows from government securities through 23 October stood at Rs. 53.63 billion, according to Central Bank data.

Sri Lanka’s Central Bank left its key rates unchanged on 11 October after loosening policy earlier this year, although growth is likely to remain subdued as the economy faces rising global risks.