Shares slip from 13-week closing high; rupee weaker

Reuters: Shares slipped yesterday after nine straight sessions of gains to a 13-week closing high, while the rupee closed slightly weaker. The benchmark stock index ended 0.12% weaker at 5,957.27, slipping from its highest close since 29 July hit on Tuesday. The index rose 1.2% last week and 2.2% in the previous nine sessions, but is down 1.57% for the year.

Beverage stocks were among the top losers, with Nestle Lanka PLC shedding 2.3%, Distillers Company of Sri Lanka PLC down 1.7% and Commercial Bank PLC declining 0.82%. Investors are cautious ahead of Presidential Elections next month. 

The rupee ended 0.03% weaker at 181.50/60 per dollar, compared with Tuesday's close of 181.45/65. The currency is up 0.6% so far this year. Foreign investors were net sellers of riskier assets for the sixth straight session yesterday.

They sold net Rs. 48 million ($ 264,628) worth of shares, extending the year-to-date net foreign selling to Rs. 4.22 billion of equities, according to index data. Equity market turnover was Rs. 651.97 million, in line with this year's daily average of about Rs. 664.6 million. Last year's daily average was Rs. 834.0 million.

Foreign investors bought government securities on a net basis for the first time in three weeks, buying a net Rs. 1.97 billion worth of government securities in the week ended 23 October. Total foreign outflows from government securities through 23 October stood at Rs. 53.63 billion, according to Central Bank data.

Sri Lanka's Central Bank left its key rates unchanged on 11 October after loosening policy earlier this year, although growth is likely to remain subdued as the economy faces rising global risks.

Presidential candidate Gotabaya Rajapaksa released his election manifesto on Friday pledging a tax overhaul that would reduce tax to 8% from the current 15%, abolish a tax for professionals and simplify many other taxes. Rajapaksa faces a stiff challenge from Housing Minister Sajith Premadasa, who will announce his policy framework today. Analysts said investors were waiting for Premadasa's policies to assess the possible impacts on tax, subsidies and private businesses.