Shares post over 13-week closing high; rupee firmer

Friday, 1 November 2019 00:00 - - {{hitsCtrl.values.hits}}

Reuters: Shares rose on Thursday to close at their highest in more than 13 weeks as investors took positions two weeks ahead of presidential polls, analysts said.

Sajith Premadasa, the Housing Minister and one of the two presidential front-runners, announced his election manifesto, which is seen by analysts as a “broader policy framework”.

His close rival Gotabaya Rajapaksa has pledged a tax overhaul that would reduce tax to 8% from the current 15% and abolish many taxes. Many political analysts Reuters spoke to said the tight race between the two presidential candidates was still on.

The benchmark stock index ended 0.55% firmer at 5,990.24, its highest close since 29 July. The index rose 1.2% last week, but is down 1% for the year.

Financial and telecom stocks were among the top gainers, with Hatton National Bank Plc rising 2.9%, Sri Lanka Telecom Plc ending 2.2% firmer and Dialog Axiata Plc adding 0.8%.

The rupee ended 0.25% firmer at 181.05/30 per dollar, compared with Wednesday’s close of 181.50/60. The currency is up 0.86% so far this year.

Foreign investors were net sellers of riskier assets for the seventh straight session yesterday.

They sold net Rs. 102 million ($ 563,380) worth of shares, extending the year-to-date net foreign selling to Rs. 4.32 billion of equities, according to index data.

Equity market turnover was Rs. 1.28 million ($ 7,069.87), well above this year’s daily average of about Rs. 667.6 million. Last year’s daily average was Rs. 834 million.

Meanwhile, 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.