Thursday Dec 12, 2024
Thursday Dec 12, 2024
Friday, 17 May 2019 00:00 - - {{hitsCtrl.values.hits}}
Reuters: Sri Lankan shares rose on Thursday, snapping their 10-session losing streak to recover from its lowest close in nearly seven years as investors bought beaten down shares.
The rupee edged higher for the second session after four straight days of losses, but traders said sectarian violence was still denting investor sentiment. Most investors have shied away from the market since the 21 April bombings that killed more than 250 people in coordinated attacks on churches and luxury hotels. Islamic State claimed responsibility.
The International Monetary Fund (IMF) on Tuesday approved the disbursal of a $164 million tranche of a loan program, bringing the total disbursed to more than $1.16 billion.
Sri Lanka’s budget and current account deficits could widen more than forecast because of the Easter Sunday bombings but the island’s economy should still grow 3.5% this year, as previously expected, the IMF added on Thursday.
Sri Lanka’s economic growth is expected to slump to its lowest in nearly two decades this year, a Reuters poll showed last week. Tourism, foreign investment and overall business activity have all dropped after the bombings.
The benchmark stock index ended 1% firmer on Thursday at 5,251.79, edging up from its lowest close since Aug. 30, 2012, which it hit on Wednesday.
Turnover was Rs. 552.4 million ($3.14 million), less than this year’s daily average of around Rs. 555.8 million.
Last year’s daily average was Rs. 834 million.
Foreign investors sold a net Rs. 358 million worth of shares on Thursday, extending the year to date net foreign outflow to Rs. 4.7 billion worth of equities.
The rupee closed slightly firmer on dollar-selling by exporters and banks. The rupee gained 0.2% to close at 175.90/176.10 per dollar, compared with Wednesday’s close of 176.20/40, market sources said.
Analysts expect the currency to weaken as money flows out of stocks and government securities.
The rupee gained 0.6% last week and is up 3.8% for the year. Exporters had converted dollars as investor 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 sold a net Rs. 10.8 billion worth of government securities in the week ended 8 May, extending net foreign outflow to Rs. 20.8 billion so far this year, Central Bank data showed.
