Shares end little changed; rupee rises

(Colombo) Reuters: Sri Lanka’s share index ended little changed yesterday, hovering near its 5-1/2-year low, as investors awaited direction from the third and final vote on the 2019 budget, market sources said. 

Parliament last week passed the second reading of the 2019 budget that raises spending while setting an ambitious goal to reduce the country’s large fiscal deficit. The final vote is scheduled for April 5. 

Prime Minister Ranil Wickremesinghe-led government’s political stability has been questioned by the opposition since he was reinstated after a 51-day political crisis. 

The Colombo Stock Exchange index fell 0.02 percent to 5,614.98, hovering near its lowest close since September 9, 2013 hit on Wednesday.

The benchmark stock index fell 1.85 percent last week, recording its sixth straight weekly drop. It has declined 7.2 percent so far this year. 

The turnover was Rs.251.4 million, well below last year’s daily average of 
Rs.834 million.

 
Foreign investors sold a net Rs.40.8 million worth of shares yesterday, extending the year-to-date net foreign outflow of Rs.5.97 billion worth 
of equities. The rupee ended firmer at 178.25/40 to a dollar on greenback inflows and weak dollar demand, compared to Friday’s close of 178.40/55. Inflows from a sale of US $ 2.4 billion sovereign bonds were expected to boost the rupee. 

The rupee has climbed 2.4 percent so far 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 that resulted in a series of credit-rating downgrades dented investor sentiment as the country struggled to repay its foreign loans. 

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 Rs.1.16 billion worth of government securities in the week ended March 13, the second net inflow in four weeks, but they have sold a net Rs.1.7 billion so far this year, the Central Bank’s latest data showed.