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Friday, 8 March 2019 00:00 - - {{hitsCtrl.values.hits}}
Reuters: Sri Lankan shares and the rupee closed steady on Thursday as the island nation launched the sale of US dollar-denominated sovereign bonds and orders topped $3 billion.
The sale is crucial for the island nation to boost investor sentiment which was dented by rating downgrades by all three rating agencies after a political crisis in October.
The rupee closed unchanged at 178.40/60 per dollar. Market sources said they expected inflows from the sovereign bond sale will help boost the rupee.
The Colombo Stock Exchange index closed 0.01% firmer at 5,752.35, hovering around its lowest close since 27 November 2013 hit on Wednesday.
The benchmark stock index fell 1.43% last week. It declined 2.9% in February, its second straight monthly fall.
Turnover was Rs. 637.1 million ($3.57 million), less than last year’s daily average of Rs. 834 million.
Foreign investors sold a net Rs. 329.3 million worth of shares on Thursday, extending the year-to-date net foreign outflow to Rs. 6.1 billion worth of equities.
Foreign investors exited from government securities for the second straight week in the week ended 27 February, with net sales of Rs. 3.4 billion, the Central Bank’s latest data showed.
Sri Lankan Finance Minister Mangala Samaraweera on Tuesday presented the 2019 Budget, which raises spending while setting an ambitious goal to reduce the country’s large fiscal deficit.
The IMF last week agreed to extend Sri Lanka’s $1.5 billion loan program by one year and has reached staff level agreement to disburse the sixth tranche of the loan.
The rupee has climbed 2% so far this year as exporters converted dollars and foreign investors purchased government securities amid stabilising investor confidence after the country repaid a $1 billion sovereign bond in mid-January.
Worries over heavy debt repayment after the 51-day political crisis that resulted in a series of credit rating downgrades dented investor sentiment as the country struggled to repay its foreign loans.
The rupee dropped 16% in 2018, and was one of the worst-performing currencies in Asia due to heavy foreign outflows.
