Shares rise for fourth session; rupee edges lower

COLOMBO (Reuters) - Sri Lankan shares rose for the fourth straight session yesterday to a more than 12-week closing high, a day after the central bank kept its key policy rates steady.
The Central Bank left key interest rates unchanged on Thursday as expected, after cutting them in May to support the economy as tourism and investment plummeted in the wake of deadly suicide bombings in April. 

The benchmark stock index .CSE gained 0.16 percent to 5,569.94, its highest close since April 18. 

The index rose 1 percent for the week, its third consecutive weekly gain, as investor sentiment was buoyed by the government’s decision to launch a US$2.2 billion Japan-funded Light Railway Transit (LRT) project and some other stalled infrastructure projects, brokers said. So far this year, the index is down about 8 percent.

Shares in Dialog Axiata Plc jumped 4.21 percent, Ceylon Cold Stores Plc ended 4.72 percent firmer, Hatton National Bank Plc closed up 3.76 percent and Lion Brewery Plc rose 3.64 percent. 

Stock market turnover was Rs.365 million (US$2.08 million), below this year’s daily average of about Rs.540.8 million. Last year’s daily average came in at Rs.834 million. 

Foreign investors sold a net Rs.2.2 million worth of shares yesterday, extending the year-to-date net foreign outflow to Rs.7.29 billion, index data showed. 

The government’s launch of central highway and light railway projects helped lift hopes that the country’s transformation would result in a faster economic growth rate, stockbrokers said. 
Sri Lanka is unlikely to hit its full-year economic growth target of 3-4 percent following Easter Sunday bombings and a Reuters poll has forecast growth to slump to its lowest in nearly two decades this year. 

Meanwhile, the currency closed a tad weaker at 175.45/55 per dollar, compared with Thursday’s close of 175.35/45, as importer demand for the greenback surpassed dollar selling by banks. The rupee rose 0.37 percent for the week, and is up 4.08 percent so far this year. 

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

The island nation raised US$2 billion via 5-year and 10-year sovereign bond sales last month, tapping global capital markets for the second time in three months. 

Foreign investors bought a net Rs.2.68 billion worth of government securities in the week ended July 10, but the market has seen a year-to-date net foreign outflow to 19.73 billion rupees, the Central Bank data showed.