Sri Lanka shares extend losses; rupee weakens

Business

Reuters – Sri Lankan shares ended lower for a sixth straight session on Monday, posting their lowest close in more than six years, dragged down by diversified shares such as conglomerate John Keells Holdings Plc. ** The market awaits cues from the third and final vote on the 2019 budget scheduled for April 5, market sources said. ** The Colombo Stock Exchange index ended down 0.19 percent to 5,529.67, its lowest close since Dec. 24, 2012. ** The benchmark stock index dropped 1.36 percent last week, recording its seventh straight weekly drop. The index has declined 8.64 percent so far this year. ** Turnover was 268.4 million rupees ($1.51 million), well below last year’s daily average of 834 million rupees. ** Foreign investors sold a net 53.8 million rupees worth of shares on Monday, extending the year-to-date foreign outflow to 6.1 billion rupees worth of equities so far this year. ** The government aims to increase spending by 13 percent in 2019, during which the elections must be held, while it has set an ambitious goal to reduce a large fiscal deficit. ** The stability of Prime Minister Ranil Wickremesinghe’s government has been questioned by the opposition since he was reinstated after a 51-day political crisis. ** The rupee ended slightly weaker at 178.10/20 to the dollar on greenback demand by some banks. It had closed at 178.00/10 on Friday. ** The rupee has climbed 2.53 percent 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 resulted in a series of credit-rating downgrades, which dented investor sentiment as the country struggled to repay its foreign loans. ** Sri Lanka is struggling to repay its foreign loans, with a record $5.9 billion due this year, including $2.6 billion in the first three months. ** The rupee dropped 16 percent in 2018, and was one of the worst-performing currencies in Asia due to heavy foreign outflows. ** Foreign investors bought a net 3.5 billion rupees worth of government securities in the week ended March 19, the third net inflow in five weeks, turning year-to-date net foreign buying to 1.8 billion rupees, the latest central bank data showed.

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