Sri Lanka calls proposals for US$500mn dollar loan

COLOMBO (EconomyNext) - Sri Lanka has called proposals from investment banks for a floating or fixed rate loan of up to 500 million dollars, with a tenor of three years or more.

The External Resources Department of the Government of Sri Lanka said interest will be paid half yearly on the loan.

Investment banks should submit bids on multiples of 100 million US dollars for a maximum of 500 million dollars.

A bullet repayment on instalment payments could be requested.

The proposals should be sent before June 25.

Sri Lanka stocks edge down from over 1-wk high

Sri Lanka's stock index slipped on Tuesday from a more-than-one-week high hit in the previous session, with many foreign investors exiting risky assets on speculation over a U.S. rate hike while local investors were cautious ahead of a parliamentary election.

The main stock index ended down 0.49 percent at 7,044.60, slipping from its highest close since June 5 hit on Monday.

"Big-caps dragged the market down. Not many locals are on the buying side. It's not that they don't have money, but it's that they are not willing to buy at this moment," said Dimantha Mathew, research manager at First Capital Equities (Pvt) Ltd.

"We expect the current stagnated situation to continue until the elections are announced."

President Maithripala Sirisena's government has said it would dissolve parliament once some crucial reforms, including an electoral bill, are passed, but is yet to fix a date for the election.

Tuesday's turnover was 860.9 million rupees ($6.43 million), well below this year's daily average of about 1.1 billion rupees.

The market saw net foreign outflows of 258.9 million rupees ($1.93 million), extending net foreign outflow for the past 15 sessions to 2.54 billion rupees. The bourse, however, has seen net inflows of 3.40 billion rupees into equities so far this year.

Analysts said foreign investors have been selling shares amid expectations the U.S. would hike key interest rates sooner than expected.

Shares in Nestle Lanka Plc fell 5.14 percent, while Ceylon Tobacco Company Plc fell 0.67 percent.

Shares in Conglomerate John Keells Holdings Plc, which saw a net foreign outflow of 1.4 million shares on Tuesday, ended 0.67 percent weaker. 

($1 = 133.8000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil Nair)