(Colombo) REUTERS: Sri Lanka shares fell for the fourth straight session yesterday to hit a two-week low on foreign outflows, while rupee ended steady buoyed by dollar inflows into two new sovereign bonds launched a day ago, market sources said.
The island nation raised US $2 billion via 5-year and 10-year sovereign bond sales launched on Monday, its Central Bank said yesterday, tapping global capital markets for the second time in three months.
The currency touched a high of 176.05 early in the day and ended steady at 176.45/55 per dollar, compared with Monday’s close as the exporter dollar sales offset the importer greenback demand, market sources said. The rupee is up 3.4 percent for the year.
Analysts, however, still expect the rupee to weaken further as money flows out of stocks and government securities.
The rupee dropped 16 percent in 2018 and was one of the worst-performing currencies in Asia.
Foreign investors bought a net Rs.879.6 million worth of government securities in the week ended June 19, but the island nation’s net foreign outflow was at Rs.20.7 billion so far this year, Central Bank data showed.
Meanwhile, Sri Lankan benchmark stock index fell for the fourth straight session yesterday and ended 0.22 percent weaker at 5,342.49, its lowest closing level since June 11. It fell 0.38 percent last week and is down 11.73 percent so far this year.
Foreigners sold on a net basis for the 11th session out of the last 12, the bourse data showed.
The Central Bank cut its key interest rates on May 31 to support a faltering economy as overall business and consumer confidence slumped following deadly bomb attacks in April.
Sri Lanka is unlikely to hit its full-year economic growth target of 3-4 percent following the bombings, junior Finance Minister Eran Wickramaratne told Reuters last month. A Reuters poll has forecast growth to slump to its lowest in nearly two decades this year.
Yesterday’s stock market turnover was Rs.1.6 billion (US$9.07 million), nearly three time this year’s daily average of about Rs.552.8 million. Last year’s daily average was Rs.834 million.
Foreign investors sold a net Rs.174 million worth of shares yesterday, extending the year-to-date net foreign outflow to Rs.6.23 billion.