Sri Lankan shares decline in thin trade, CTC slips

Jan 16 (Reuters) - Sri Lanka's main stock index fell to a one-week low on Friday, led by Ceylon Tobacco Company Plc even as investors waited for clarity in economic policy from the new government led by President Maithripala Sirisena.

The main stock index closed down 0.48 percent, or 35.99 points lower, at 7,513.86, its lowest since Jan. 8.

Ceylon Tobacco Company, which lost 3.05 percent, dragged down the overall index, stockbrokers said. Lanka IOC Plc fell 4.50 percent.

Sirisena, who ousted former president Mahinda Rajapaksa in the Jan. 8 poll, has promised a 100-day programme to restore democracy and the economy before he dissolves parliament for a general election after April 23.

Analysts said the market was closely monitoring the new government's bureaucratic appointments to check if they were in line with its pledge of good governance and transparency.

"If the markets and the public feel that the new appointments are a mere change of hats, political risk for the new government would increase. In such a situation, markets also could react," an analyst said on condition of anonymity.

Business confidence could be dented if people with tainted governance records and lack of integrity take up public office and the political survival of the new administration "would be at stake and lead to much deeper uncertainty," the analyst said.

Foreign investors, who had bought a net 22.07 billion rupees worth of stocks last year, bought a net 120.8 million rupees worth shares on Friday.

The day's turnover stood at 997.1 million rupees ($7.60 million), well below last year's daily average of 1.42 billion rupees, stock exchange data showed.

($1 = 131.2500 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)

Sri Lanka names international banker Mahendran as central bank chief

Jan 15 (Reuters) - Sri Lanka's newly elected leader, Maithripala Sirisena, appointed international banker Arjuna Mahendran as head of the central bank, with immediate effect, the government said on Thursday.

Mahendran, an Oxford-educated graduate, has nearly 30 years of experience in the financial services industry across Asia, serving in both private companies and public sector bodies.

He holds an MA in Philosophy, Politics, and Economics from Oxford and his most recent position was chief investment officer at Dubai-based Emirates NBD's wealth management arm.

Mahendran was the former head of the island nation's state-run Board of Investment under the government headed by current Prime Minister Ranil Wickremesinghe between 2001 and 2004.

The veteran banker was the managing director of HSBC in Asia from 2008 to 2013 before moving to Emirates NBD Wealth Management. He has also worked at international lender Credit Suisse.

Former Central Bank Governor Ajith Nivard Cabraal, a political appointee since 2006, resigned on Friday after Rajapaksa lost his bid to be re-elected president for a third term.

Under Cabraal, Sri Lanka achieved annual average growth of 6.8 percent for an economy now worth $76 billion a year, and inflation held in single digits for more than 70 straight months.

Some independent economists and opposition politicians, however, say some macroeconomic data have been massaged in recent years to present a rosier picture, attract investors and get lower rates on foreign loans. Cabraal rejected those claims.

Sirisena's coalition government, headed by the pro-business United National Party, has said it will audit the economic numbers before deciding on economic policies. 

(Reporting by Shihar Aneez; Editing by Clarence Fernandez)