Shares end at 17-month high; rupee slips

Reuters: Shares closed at a 17-month high on Friday, helped by positive sentiment surrounding tax cuts by the country’s new government, while the rupee ended a tad weaker.

The Government said on Wednesday it had decided to reduce Value-Added Tax to 8% from 15% from 1 December, and abolish some other taxes as well, in its attempt to boost economic growth that has fallen to a near two-decade low. 

Sri Lanka’s Central Bank left its key interest rates unchanged on Friday, as widely expected. 

The benchmark stock index .CSE closed up 0.17% at 6,211.97, its highest since 25 June 2018. The bourse gained 1.5% last week, and is up 2.64% for the year.

The rupee LKR=LK ended 0.14% weaker at 180.85/181.00 per dollar, compared to Thursday’s close of 180.60/80, Refinitiv data showed. It is up 0.6% so far this year.

Foreign investors were net sellers for 24 sessions out of 26.

They sold a net Rs. 472.7 million ($2.63 million) worth of shares on Friday, extending the net selling so far this year to Rs. 10.74 billion worth of equities, according to index data.

Equity market turnover was Rs. 1.61 billion, more than this year’s daily average of about Rs. 725 million. Last year’s daily average was Rs. 834 million.

Foreign investors were net buyers of Government securities on a net basis for the fifth straight week, purchasing a net Rs. 0.21 million worth of Government securities in the week ended 20 November.

Total foreign outflows from Government securities through 20 November stood at Rs. 48 billion, according to Central Bank data.