Shares end lower on profit-taking; rupee weakens     Follow

(Colombo) REUTERS: Shares closed weaker yesterday as investors locked in profits after the recent rally in financial and industrial stocks, while the rupee edged down on importer dollar demand.

The benchmark stock index ended down 0.54 percent at 5,917.15, from its highest close since July 30. The index posted gains of 0.82 percent last week.

Dealers, however, said the market was expecting further gains after the main opposition party named hardline former defence chief Gotabaya Rajapaksa as presidential candidate, seeking to capitalise on public clamour for a decisive leader.

Sri Lanka stock market ended firmer on Tuesday after Gotabaya launched his presidential bid. All financial markets were closed on Wednesday for a Buddhist religious holiday.
Foreign investors exited from risky assets for the second day since Gotabaya was nominated, selling Rs. 36.1 million worth of shares yesterday after offloading Rs. 1.55 billion worth shares in the previous session.

Gotabaya, 70, served under his older brother, ex-president Mahinda Rajapaksa, and is widely seen as the frontrunner in a presidential election that must be held before Dec 9. Gotabaya is immensely popular among Sri Lanka’s powerful Sinhala Buddhist majority, who credit him with ending the island nation’s 26-year-long civil war in 2009 and believe Colombo needs a seasoned hand after the April 21 bombings.

The market had already gathered strength amid speculations of the wartime defence chief contesting for presidency, dealers said.

So far this year, the index dropped about 2.2 percent.

Turnover was Rs. 1.08 billion (US$6.1 million), more than this year’s daily average of about Rs. 654 million so far. Last year’s daily average came in at Rs. 834 million.
Shares of top lender Commercial bank of Ceylon lost 2.8 percent, while the market heavyweight John Keells Holdings ended down 1.5 percent.

The rupee ended at 177.15/25 per dollar, compared with Tuesday’s close of 176.90/177.00.

The rupee dipped 0.08 percent so far this week, but is up nearly 3 percent this year.

The Central Bank left key interest rates unchanged on July 11 as expected, after cutting them in May to support the economy as tourism and investment plummeted in the wake of deadly suicide bombings in April.

Foreign investors sold a net Rs. 729 million worth of government securities in the week ended Aug. 7, extending the year-to-date net foreign outflow to Rs. 28 billion, Central Bank data showed.


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