Reuters: Sri Lankan shares and the rupee closed steady on Thursday as the island nation launched the sale of U.S. 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.
** Sri Lankan Finance Minister Mangala Samaraweera on Tuesday presented the 2019 budget that 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 programme by one year and has reached staff level agreement to disburse the sixth tranche of the loan.
** The rupee has climbed 2 percent 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 percent in 2018, and was one of the worst-performing currencies in Asia due to heavy foreign outflows.
** The Colombo Stock Exchange index closed 0.01 percent firmer at 5,752.35, hovering around its lowest close since Nov. 27, 2013 hit on Wednesday.
** The benchmark stock index fell 1.43 percent last week. It declined 2.9 percent in February, its second straight monthly fall.
** Turnover was 637.1 million rupees ($3.57 million), less than last year’s daily average of 834 million rupees.
** Foreign investors sold a net 329.3 million rupees worth of shares on Thursday, extending the year-to-date net foreign outflow to 6.1 billion rupees worth of equities.
** Foreign investors exited from government securities for the second straight week in the week ended Feb. 27, with net sales of 3.4 billion rupees, the central bank’s latest data showed.
($1 = 178.5000 Sri Lankan rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)
