Shares end in red as telcos weigh; rupee firmer

Reuters: Sri Lankan shares closed at their lowest in more than six years yesterday, ending weaker for a seventh straight session, dragged down by telecommunication and banking stocks. 

The market awaits for some positive news from the third and final vote on the 2019 budget scheduled for April 5, market sources said. 

The Colombo Stock Exchange index ended down 0.29 percent at 5,513.67, its lowest close since Dec. 19, 2012. 

The benchmark stock index slipped 1.36 percent last week, recording its seventh consecutive weekly drop. The index has declined 8.64 percent so far 
this year.

Turnover was Rs.311.5 million (US$1.76 million), less than half of this year’s daily average of Rs.669.2 million. Last year’s daily average of Rs.834 million. 

Foreign investors sold a net Rs.36.6 million worth of shares yesterday, extending the year-to-date foreign outflow to Rs.6.1 billion worth of equities so far this year. 
The latest budget aims to increase government spending by 13 percent in 2019, during which presidential election must be held, while it has set an ambitious goal to reduce a large fiscal deficit. 

The stability of Prime Minister Ranil Wickremesinghe’s government has been questioned by the opposition since he was reinstated after a 51-day political crisis. 
The rupee ended firmer at 177.40/60 to the dollar on greenback selling by some banks on behalf of inward remittances and exporter conversions. It had closed at 178.10/20 on Monday. 

The rupee has climbed 2.93 percent this year as exporters converted dollars and foreign investors purchased government securities amid stabilising investor confidence after the country repaid a US$1 billion sovereign bond in mid-January. 

Worries over heavy debt repayment after the 51-day political crisis resulted in a series of credit-rating downgrades, which dented sentiment as the country struggled to repay its foreign loans. 

Sri Lanka is struggling to repay its foreign loans, with a record US$5.9 billion due this year, including US$2.6 billion in the first three months. 

The rupee dropped 16 percent in 2018, and was one of the worst-performing currencies in Asia due to heavy foreign outflows. 

Foreign investors bought a net US 3.5 billion worth of government securities in the week ended March 19, the third net inflow in five weeks, turning year-to-date net foreign buying to US 1.8 billion, the latest Central Bank data showed.