Stocks, rupee firmer as presidential frontrunner files nomination

8 October 2019 09:51 am - 0     - {{hitsCtrl.values.hits}}

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(Colombo) REUTERS: Sri Lankan stocks and rupee closed firmer yesterday after presidential frontrunner Gotabaya Rajapaksa, who faced uncertainty over his candidature, filed a nomination early in the day.


Investor confidence returned after the former wartime defence chief, who is seen as a strong leader among the 35 candidates, filed nominations to contest in Sri Lanka’s presidential election scheduled for November 16.


However, investors were cautious as they waited for policies of the political parties.


Rajapaksa faced a legal case challenging his Sri Lankan citizenship, but Sri Lanka’s Appeal Court on Friday dismissed the petition, removing a major barrier he faced 
in contesting the poll.

The benchmark stock index ended 0.33 percent firmer at 5,708.92, further moving away from its lowest level since July 22 hit on Thursday. The bourse fell 1.42 percent last week. So far this year, the index has dropped 6 percent. 


Equity market turnover was Rs.277.5 million, less than half of this year’s daily average of about Rs.655.2 million. Last year’s daily average was Rs.834.0 million.


Foreign investors were net sellers of Rs.17 million worth of shares yesterday, extending the year-to-date net foreign outflow to Rs.3.1 billion of equities, according to index data.
Meanwhile, the rupee ended 0.3 percent firmer at 180.85/95 per dollar compared with Friday’s close of 181.35/50. The currency is up 0.97 percent this year.


The International Monetary Fund cut its forecast for Sri Lanka’s 2019 economic growth to 2.7 percent from 3.5 percent, as the Easter Sunday attacks on hotels and churches earlier this year dented tourism and broader business activity. 


Foreign investors bought government securities on a net basis for the first time in seven weeks, buying Rs.522 million worth of government securities on week ended October 2. The foreign outflows, which are one of the major reasons behind the rupee’s recent weakness, may not abate until after a parliamentary election in 2020, some analysts said. 


The Central Bank does not release foreign trade numbers on a daily basis, but weekly data in the past five weeks through Sept. 25 has shown a steady outflow. 


Sri Lanka has seen a net foreign outflow of Rs.54.8 billion through October 2, according to the Central Bank data.

 

 

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