Shares end at 17-month high; rupee slips

(Colombo) REUTERS: Sri Lankan shares closed at a 17-month high yesterday, helped by positive sentiment surrounding tax cuts by the country’s new government, while the rupee ended a tad weaker.

The government said on Wednesday it had decided to reduce value-added tax to 8 percent from 15 percent from Dec. 1, and abolish some other taxes as well, in its attempt to boost economic growth that has fallen to a near two-decade low.  Sri Lanka’s Central Bank left its key interest rates unchanged yesterday, as widely expected.

The benchmark stock index closed up 0.17 percent at 6,211.97, its highest since June 25, 2018. The bourse gained 1.5 percent last week, and is up 2.64 percent for the year.
The rupee ended 0.14 percent weaker at 180.85/181.00 per dollar, compared to Thursday’s close of 180.60/80, Refinitiv data showed. It is up 0.6 percent so far this year.
Foreign investors were net sellers for 24 sessions out of 26.

They sold a net Rs.472.7 million worth of shares yesterday, extending the net selling so far this year to Rs.10.74 billion worth of equities, according to index data.

Equity market turnover was Rs.1.61 billion, more than this year’s daily average of about Rs.725 million. Last year’s daily average was Rs.834 million.

Meanwhile, foreign investors were net buyers of government securities on a net basis for the fifth straight week, purchasing a net Rs.0.21 million worth of government securities in the week ended November 20.

Total foreign outflows from government securities through November 20 stood at Rs.48 billion, according to the Central Bank data.