Stocks, rupee end higher ahead of presidential polls
The benchmark stock index ends 0.72 firmer at 6,023.02 Foreign investors remain net sellers of riskier assets for seventh straight session
REUTERS - Sri Lankan shares rose yesterday, touching their twoweek high as investors picked up shares of beverage makers and diversified companies ahead of Saturday’s presidential vote, which is seen as a tight race between the two main candidates.
Sri Lankans will elect a new president on Saturday in a ‘finely balanced’ race between the early favourite, former defence chief Gotabaya Rajapaksa, and government minister Sajith Premadasa, who has gained momentum in recent weeks.
Though Rajapaksa, backed by majority Sinhala Buddhists, had early lead in the poll, the momentum has now tilted in favour of Premadasa who is backed by all communities in Sri Lanka, political analysts say. There are no official opinion polls in Sri Lanka.
New York-based political risk analysis group Eurasia in a note on Thursday said Premadasa’s main advantage is his ability to assemble a voting coalition that likely contains most ethnic minority voters as well as a significant share of the Sinhala Buddhists.
The country’s main Tamil party last week announced its support for Premadasa, giving him an edge over Rajapaksa.
There are concerns over giveaways promised by the two top presidential candidates after officials and a credit rating agency warned that their pledges could push the country deeper into debt.
Premadasa has promised free housing for all, free school uniforms and meals for students, and free fertilizer for farmers among other things.
Rajapaksa has vowed to cut in half a value-added tax of 15 percent and abolish some taxes as a way to reignite consumption.
Capital Economics in a note said neither candidates’ plans are compatible with the terms of Sri Lanka’s loan deal with the IMF.
The benchmark stock index ended 0.72 firmer at 6,023.02. The bourse rose 1.53 percent for the week, but it is down 0.48 percent for the year.
The rupee ended 0.11 percent firmer at 180.10/30 per dollar, compared with Thursday’s close of 180.30/40. The currency is up 1.4 percent so far this year.
Foreign investors were net sellers of riskier assets for a seventh straight session yesterday.
They sold a net Rs.303.9 million (US$ 1.68 million) worth of shares yesterday, extending the net foreign outflow from the equities market to Rs.7.63 billion for the year, according to index data.
Equity market turnover was Rs.917.6 million, more than this year’s daily average of about Rs.688 million. Last year’s daily average was Rs.834 million.
Meanwhile, foreign investors bought government securities on a net basis for the third time in five weeks, buying a net Rs.1.88 billion worth of government securities in the week ended Nov. 6.
Total foreign outflows from government securities through Nov. 6 stood at Rs.50.2 billion, Central Bank data said.