Stocks end at over 5-week high on local buy­ing; ru­pee slips

Daily Mirror (Sri Lanka) - - PROVINCIAL -

(Colombo) REUTERS: Sri Lankan shares rose for the fourth straight session yes­ter­day to hit a more than five-week clos­ing high on local buy­ing, off­set­ting con­tin­ued for­eign sell­ing in equities, while the ru­pee ended slightly weaker on dol­lar de­mand from im­porters.

The bench­mark stock in­dex ended 0.81 per­cent firmer at 5,378.73, its high­est close since May 7. It fell 0.24 per­cent last week and de­clined 11.13 per­cent this year so far. The Cen­tral Bank cut its key in­ter­est rates on May 31 to sup­port a fal­ter­ing econ­omy as over­all busi­ness and con­sumer con­fi­dence slumped fol­low­ing deadly bomb at­tacks in April.

Sri Lanka is un­likely to hit its full-year eco­nomic growth tar­get of 3-4 per­cent fol­low­ing the bomb­ings, ju­nior fi­nance min­is­ter Eran Wick­re­mer­atne told Reuters last month. A Reuters poll has fore­cast growth to slump to its low­est in nearly two decades this year.

The gov­ern­ment’s pen­sion fund has re­sumed in­vest­ing in risky as­sets as the stock mar­ket is “ex­tremely un­der­val­ued at the mo­ment and is con­sid­ered a good time to go in”, the Cen­tral Bank gov­er­nor said last month at its mone­tary pol­icy meet.

Yes­ter­day’s stock mar­ket turnover was Rs.254.8 mil­lion, less than this year’s daily av­er­age of about Rs.527.3 mil­lion. Last year’s daily av­er­age was Rs.834 mil­lion ru­pees.

For­eign in­vestors sold a net Rs.26.8 mil­lion worth of shares yes­ter­day, ex­tend­ing the year-to-date net for­eign out­flow to Rs.5.74 bil­lion.

The ru­pee ended at 176.45/60 per dol­lar, com­pared with Tues­day’s close of 176.30/60, mar­ket sources said.

An­a­lysts ex­pect the ru­pee to weaken further as money flows out of stocks and gov­ern­ment se­cu­ri­ties.

The ru­pee fell 0.03 per­cent last week but is up 3.48 per­cent for the year. Ex­porters had con­verted dol­lars as in­vestors’ con­fi­dence sta­bilised af­ter a US $ 1 bil­lion sov­er­eign bond was re­paid in mid-jan­uary.

The ru­pee dropped 16 per­cent in 2018 and was one of the worst-per­form­ing cur­ren­cies in Asia.

For­eign in­vestors sold a net Rs.3.5 bil­lion worth of gov­ern­ment se­cu­ri­ties in the week that ended on June 4, ex­tend­ing the is­land na­tion’s net for­eign out­flow to Rs.21.9 bil­lion so far this year, the Cen­tral Bank data showed.

Newspapers in English

Newspapers from Sri Lanka

© PressReader. All rights reserved.