Shares end at 11-week high; rupee edges down

COLOMBO (Reuters) - Banking and beverage stocks pushed Sri Lankan shares to a near 11-week peak yesterday after one of the presidential front-runners released his policy manifesto, while the rupee closed tad weaker.

Earlier in the day, former wartime defence chief Gotabaya Rajapaksa unveiled his policy statement, pledging a tax overhaul that would reduce value added tax to 8 percent from the current 15 percent, abolish a tax for professionals on their salary and simplify many other taxes.

Rajapaksa faces a stiff challenge from Housing Minister Sajith Premadasa, who will announce his policy framework on Nov. 1. Analysts had said investors were waiting to see their views on tax, subsidies and private businesses.

he benchmark stock index .CSE firmed 0.32 percent to 5,935.26, its highest close since Aug. 13, 2019, and extended a winning streak to a seventh straight session. The index posted a weekly gain of 1.2 percent, but is down 1.93 percent so far this year.

The rupee ended 0.08 percent weaker at 181.25/45 per dollar, compared with Thursday’s close of 181.10/25. The currency is up 0.74 percent so far this year.

Foreign investors were net sellers of riskier assets for the third time in six sessions.

They sold a net Rs. 26 million (US$ 143,448.28) worth of shares, extending the year to date net foreign selling to Rs. 3.96 billion of equities, according to index data.

Equity market turnover was Rs.638.7 million, less than this year’s daily average of about Rs.665.6 million . Last year’s daily average was Rs.834.0 million. 

Meanwhile, foreign investors sold government securities on a net basis for the eighth time in nine weeks, selling a net Rs.724.9 million worth of government securities in the week ended Oct. 16.

Total foreign outflows from government securities through Oct. 16 stood at Rs.55.6 billion, as per Central Bank data.

Sri Lanka’s Central Bank left its key rates unchanged on Oct. 11 after loosening policy earlier this year, although growth is likely to remain subdued as the economy faces rising global risks.