Shares hit near two-week closing low; rupee down

Reuters: Shares fell to their lowest close in nearly two weeks on Monday, as investors waited for more clarity after the main Opposition party named a hard-line former Defence Chief as its presidential candidate, to capitalise on public clamour for a decisive leader. 

The benchmark stock index ended down 0.43% at 5,869.07, its lowest close since 6 August. The index posted a loss of 0.82% last week, its first weekly decline in eight.  The market expects to hear a list of policies from former Defence Chief Gotabaya Rajapaksa as well as the ruling party’s presidential candidate who is yet to be announced, dealers said. 

Gotabaya, 70, served under his older brother, ex-President Mahinda Rajapaksa, and is widely seen as the front runner in a Presidential Election that must be held before 9 December. 

Gotabaya is immensely popular among the powerful Sinhala Buddhist majority, who credit him with ending the island nation’s 26-year-long civil war in 2009 and believe Colombo needs a seasoned hand after the 21 April bombings. 

Foreign investors exited from risky assets for the third session in four since Gotabaya was nominated. They sold a net Rs. 19 million worth of shares on Monday. The market had gathered strength early this month amid speculations of the wartime Defence Chief contesting for presidency, dealers said. So far this year, the index has dropped about 3%. 

Turnover was Rs. 622.6 million ($3.51 million), lower than this year’s daily average of about Rs. 655 million so far. Last year’s daily average came in at Rs. 834 million. 

The benchmark stock index was dragged by top fixed-line phone operator Sri Lanka Telecom and Asian Hotels & Properties Plc, which lost 1.7% and 7.9% respectively, bourse data showed. 

The rupee ended weaker at 177.30/50 per dollar, compared to Friday’s close of 177.15/25. The currency was down 0.2% for the last week, but is up nearly 2.9% so far this year. 

Foreign investors bought a net Rs. 0.61 million worth of Government securities in the week ended 13 August. But the market has suffered year-to-date net foreign outflow of Rs. 28 billion, Central Bank data showed.