CSE end at 11-week high; foreign buying boosts turnover

Saturday, 6 July 2019 01:15 - - {{hitsCtrl.values.hits}}

Reuters: Sri Lankan shares extended gains yesterday to hit their highest close in 11 weeks, boosted by foreign inflows into equities, while the rupee ended weaker.

Foreigners bought on a net basis for the first time in 12 sessions, purchasing a net Rs. 85.3 million worth of shares yesterday, but the bourse saw net foreign outflows to Rs. 6.92 billion so far this year, the index data showed. The Sri Lankan Government's decision to launch a $ 2.2 billion Japanese-funded Light Railway Transit (LRT) project and some other stalled infrastructure projects also boosted investor sentiment, brokers said.

The benchmark stock index ended up 0.12% at 5,515.81, its highest close since 18 April.

The index rose 2.67% for the week, notching its second consecutive weekly gain. However, the bourse is down 8.87% so far this year.

Stock market turnover yesterday was Rs. 505 million ($ 2.87 million), less than this year's daily average of about Rs. 545.5 million. Last year's daily average came in at Rs. 834 million.

The Government's launch of central highway and light railway (www.ft.lk/top-story/Govt-flags-off-2-2-b-Light-Railway-Transit-project/26-681279 projects, www.ft.lk/front-page/Cabinet-approves-cable-car-project-in-Nuwara-Eliya/44-681272) helped lift hopes that the country's transformation would result in a faster economic growth rate, stockbrokers said.

Sri Lanka is unlikely to hit its full-year economic growth target of 3-4% following Easter Sunday bombings and a Reuters poll has forecast growth to slump to its lowest in nearly two decades this year.

Meanwhile, the currency closed a tad weaker at 176.10/15 per dollar, compared with Thursday's close of 176.00/25, as importer dollar demand surpassed banks' greenback sales. The rupee rose 0.17% for the week, and is up 3.69% 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 five-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.