Shares hit over 1-year high, rupee up as Rajapaksa assumes office

20 November 2019 09:01 am - 0     - {{hitsCtrl.values.hits}}


REUTERS:  Sri Lankan shares hit their highest level in more than a year yesterday, while the rupee rose to a three-month peak, as former wartime defence chief Gotabaya Rajapaksa assumed his presidential duties.

Rajapaksa assumed office as the seventh president of the island nation yesterday after he won elections over the weekend.

Rajapaksa made national security his top priority after being sworn in on Monday. Majority of Sinhala Buddhists voted for him after he campaigned on promises to make the nation safer in the aftermath of the Easter bombings earlier this year.

The election outcome was positive for Sri Lanka and reduced political uncertainty, which should boost economic growth, Standard Chartered Bank said in a note. But the political establishment faced twin economic challenges of boosting growth and improving debt sustainability, it added.

The benchmark stock index, which rose 0.75 percent in the early trade, ended 0.22 percent firmer at 6,142.76, its highest close since Aug. 9, 2018. The bourse rose 1.53 percent last week, and it is up 1.49 percent for the year. 

“There were some sort of profit taking after a surge on Monday. But still we see foreigners are on the selling side in a lower volume. The index might move sideways until investors see how the new president is going to convert his manifesto into action,” said Atchuthan Srirangan, a senior research analyst at First Capital Holdings. 

The rupee ended 0.1 percent firmer at 179.25/50 per dollar, its highest since Aug. 21. It closed at 179.40/80 on Monday and is up 1.87 percent so far this year.

Foreign investors were net sellers of riskier assets for the ninth straight session yesterday.

They sold a net Rs. 255.8 million (US$1.43 million) worth of shares on yesterday, extending the net foreign outflow from the equities market to Rs. 8.3 billion for the year, according to index data.

Equity market turnover was Rs. 1.4 billion well above this year’s daily average of about Rs. 699.6 million. Last year’s daily average was Rs. 834 million.

Meanwhile, foreign investors bought government securities on a net basis for the fourth time in six weeks, buying a net Rs. 2.2 billion worth of government securities in the week ended Nov. 13.

Total foreign outflows from government securities through Nov. 13 stood at Rs. 48 billion, the Central Bank data said.



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