Shares touch near 9-week closing high; rupee gains

Reuters: Sri Lankan shares ended firmer for a fourth straight session on Wednesday, hitting their highest close in near nine weeks, while the rupee edged up on banks’ dollar sales, market sources said. 

The benchmark stock index ended up 0.38% at 5,411.55, its highest close since 3 May. The index rose 0.16% last week and posted its first monthly gain for the year in June. However, the bourse is down 10.59% so far this year.  Foreigners sold on a net basis for 17 sessions in 18, the bourse data showed. Tuesday’s stock market turnover was Rs. 644.4 million ($3.66 million), more than this year’s daily average of about Rs. 543.3 million. Last year’s daily average was Rs. 834 million. 

Foreign investors sold a net Rs. 338.6 million worth of shares on Tuesday, extending the year-to-date net foreign outflows to Rs. 7 billion. 

Meanwhile, the currency closed firmer at 176.00/10 per dollar, compared with Tuesday’s close of 176.30/40, market sources said. The rupee rose 0.17% last week, and is up 3.75% so far this year. 

The rupee dropped 16% in 2018 and was one of the worst-performing currencies in Asia. 

The island nation raised $2 billion via 5-year and 10-year sovereign bond sales last week, tapping global capital markets for the second time in three months. Foreign investors bought a net Rs. 2.26 billion worth of government securities in the week ended 26 June, but the island nation’s net foreign outflow was at Rs. 18.4 billion so far this year, the Central Bank data showed. 

The Central Bank cut its key interest rates on 31 May 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% 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.