8 November 2019 12:01 am
REUTERS: Sri Lankan shares ended weaker yesterday, falling for a fourth straight session to their two-week low, as investors booked profits ahead of the presidential vote on Nov. 16.
The country’s main Tamil party yesterday announced their support for Sajith Premadasa, the Housing Minister and one of the two presidential front-runners, giving him an edge over his rival Gotabaya Rajapaksa.
There are growing concerns over giveaways promised by the two top presidential candidates after officials and a credit rating agency warned that their pledges could push the country deeper into debt.
The International Monetary Fund approved the release of sixth tranche of a US$ 1.5 billion loan programme for Sri Lanka, but asked the authorities to show fiscal discipline.
Sajith Premadasa has promised free housing for all, free school uniforms and meals for students, and free fertilizer for farmers among other things.
Gotabaya Rajapaksa has vowed to cut a 15 percent Value Added Tax by nearly a half and abolish some taxes as a way to reignite consumption.
The benchmark stock index ended 0.41 percent weaker at 5,932.07. Last week, the index rose 1.6 percent in its fourth straight weekly gain, but is down 1.99 percent
this year.
Political analysts say the leading candidates are locked in a tough fight, although Sajith Premadasa has been gaining at grass-root level due to his poverty elimination policies and support from minorities.
Diversified and banking stocks were among the top losers, with Hemas Holdings PLC falling 3.6 percent, Vallibel One PLC 4.6 percent, Hatton National Bank PLC 1.1 percent, conglomerate John Keells Holdings PLC 0.39 percent, Sampath Bank PLC 1.6 percent.
The rupee ended 0.11 percent weaker at 180.70/181.00 per dollar, compared with Wednesday’s close of 180.50/80. The currency is up 1.1 percent so far this year.
Foreign investors were net sellers of riskier assets for 11 out of 12 sessions on Thursday.
They sold a net Rs.13.3 million worth of shares yesterday, extending the net foreign outflow so far this year to Rs.5.78 billion worth of equities, according to index data.
Equity market turnover was Rs.599.7 million, less than this year’s daily average of about Rs.680.5 million. Last year’s daily average was Rs.834 million.
Meanwhile, foreign investors bought government securities on a net basis for a second time in four weeks, buying a net Rs.1.55 billion worth of government securities in the week ended Oct. 30.
Total foreign outflows from government securities through Oct. 30 stood at Rs.52.08 billion, the Central Bank data said.
The Central Bank left its key rates unchanged on Oct. 11 after loosening policy this year, although growth is likely to remain subdued as the economy faces rising global risks.