Bourse edges up as foreign investors return

Reuters: Shares rose slightly on Tuesday and posted their highest close in nearly two weeks as investors picked up beverage and telecom stocks, and foreign investors returned to the market following a communal violence last week, dealers said.

Foreign investors bought a net Rs. 1.2 billion ($ 7.71 million) worth of shares, extending the year-to-date net foreign inflow to Rs. 7.3 billion worth of equities.

Analysts said local and foreign investors returned to the market a week after a wave of anti-Muslim attacks by Sinhalese Buddhist hardliners in the central highlands district of Kandy.

The Colombo stock index ended 0.11% firmer at 6,554.83. “It is a positive sign that both locals and foreigners are buying after a long wait,” said Dimantha Mathew, head of research, First Capital Holdings.

Turnover was Rs. 2.5 billion on Tuesday, the highest since 26 February and more than double of this year’s daily average of around Rs. 960.4 million.

Shares in Asian Hotels and Properties Plc ended up 3.8%, Dialog Axiata Plc gained 1.5% and Singer Sri Lanka Plc rose 2.7%.

Rupee down on importer dollar demand

Reuters: The rupee ended weaker on Tuesday due to importer dollar demand while late exporter sales of greenback capped the fall, dealers said.

The rupee which traded at 155.83 during the day closed at 155.70/75 per dollar, compared with Monday’s close of 155.50/70. It hit a record low of 155.90 per dollar on 14 February.

“There was exporter conversions when the rupee touched 155.80 levels,” said a currency dealer.

“The (depreciation) pressure is there due to the seasonal importer demand.”

The rupee has weakened 1.47% so far this year after declining 2.5% last year and 3.9% in 2016.

It is expected to be pressured by continued importer demand for dollars ahead of the traditional New Year in April, dealers said.

A gradual depreciation in the rupee and higher volatility this year are expected on account of debt repayments by the government, dealers added.

The International Monetary Fund on Friday said Sri Lanka’s economy remains vulnerable to adverse shocks due to its large public debt and low external buffers. The government must repay an estimated Rs. 1.97 trillion ($ 12.68 billion) in 2018 - a record high - including $ 2.9 billion of foreign loans and a total of $ 5.36 billion in interest.

Foreign investors sold government securities worth a net Rs. 3.2 billion in the week ended 7 March, Central Bank data showed. Dealers also said a communal violence in the central district of Kandy weighed on sentiment.

Police said on Friday they were investigating whether 10 suspected ringleaders of a wave of attacks on Muslims by Sinhalese Buddhists had outside funding or foreign help.

After five days of violence, police said the situation has calmed down and the curfew lifted since Saturday in Kandy.