Shares, rupee fall; new leader’s policy direction awaited

(Colombo) REUTERS: Sri Lankan shares closed at a more than one-week low yesterday on profit-taking in banking and beverage shares, while the rupee ended weaker as investors awaited for some policy direction and clarity over the country’s newly-elected president. 

Gotabaya Rajapaksa, the new President, appointed his brother Mahinda Rajapaksa, the current Prime Minister, as the interim government’s new Finance Minister. 

The benchmark stock index ended down 0.58 percent at 6,083.74, its lowest close since November 15 and further moving away from its highest close since August 9, 2018 hit last week. The bourse gained 1.6 percent last week, and is up 0.52 percent for the year. 

Analysts said the investors are awaiting to see new policies of the government.

“The market came off due to profit taking. Investors are anxiously waiting for directions and policy clarity from the new president,” said Softlogic Securities Deputy Chief Executive Officer Hussain Gani. President Rajapaksa has appointed a 15-member Cabinet and is expected to appoint junior ministers today. That will follow the appointments of officials to head state-owned firms, government officials say.

The rupee ended 0.47 percent weaker at 180.85/181.05 per dollar, slipping from Friday’s close of 180.00/20, Refinitiv data showed. It is up 0.96 percent so far this year. 
Foreign investors were net buyers for the first time in 13 sessions yesterday. 

They bought a net Rs.74.8 million worth of shares yesterday, but they have been net sellers of Rs.9.18 billion worth of equities so far this year, according to index data. 
Equity market turnover was Rs.662.6 million, less than this year’s daily average of about Rs.709.3 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, the Central Bank data said.