Bourse hits near 3-month closing low

Reuters: Shares extended falls into a third session on Wednesday and closed at their lowest in nearly three months, dragged down by healthcare and diversified conglomerates.

The Colombo Stock Index ended down 0.15% at 6,380.91, its lowest close since 13 September. It fell 0.03% last week, recording its fourth straight weekly drop, but has gained about 2.5% so far this year.

Shares in Asiri Hospitals Plc fell 3.9%, while conglomerate John Keells Holdings Plc ended 0.3% weaker.

“The market slipped a bit with foreign selling,” said Hussain Gani, deputy CEO at Softlogic Stockbrokers.

“Local (investor) participation was very much silent and we will expect this trend to continue with the year-end holidays.”

Foreign buying accounted for 70% of the day’s turnover, which was Rs. 1.2 billion ($ 7.83 million), compared with this year’s daily average of Rs. 944.4 million.

Foreign investors, who have been net buyers of Rs. 18.6 billion worth of shares so far this year, were net sellers of equities worth Rs. 152.3 million.

Worries over a delay in local council polls and a lack of clarity over the budget and two other key policy measures weighed on sentiment, said analysts.

Meanwhile, the Election Commission said on Monday that the council polls would be held before 17 February.

Investors are concerned about political stability as coalition partners in President Maithripala Sirisena government had decided to contest separately in the council polls.

Finance Minister Mangala Samaraweera imposed new taxes on motor vehicles, telecoms, banks and liquor in the 2018 budget presented last month, with a final budget vote scheduled for 9 December.

Analysts said market participants were seeking more clarity on those taxes and that there could be some amendments before the final vote.

The Government also released gazette notifications on the Inland Revenue Act and the Exchange Control Act, with investors waiting for clarification on the new legislation.

Rupee ends firmer on dollar remittances

Reuters: The rupee closed stronger on Wednesday on dollar sales by exporters and year-end remittances, dealers said.

The spot rupee ended at 153.25/35 per dollar, compared with Tuesday’s close of 153.30/40.

The rupee has lost 2.4% so far this year, but currency dealers say the dollar demand has slightly waned, lending support to the rupee.

The market has been waiting for more clarity over a foreign exchange management act introduced by the Government last month.

Central Bank Governor Indrajit Coomaraswamy said the new act would decriminalise offences related to foreign exchange trading and impose fines instead.

Foreign investors bought equities net worth Rs. 18.6 billion ($ 121.37 million) this year, as of Tuesday’s close. They bought government securities net worth Rs. 49.2 billion as of 29 November, official data showed.