Sri Lanka shares fall to over 5-year closing low; rupee gains

Reuters: Sri Lankan shares fell on Wednesday to a more than five-year closing low in thin trade, a day after the country proposed in its 2019 budget higher spending and set an ambitious target to cut fiscal deficit, analysts said. 

** The rupee closed firmer on inward remittances and dollar selling by exporters. 

** 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 Colombo Stock Exchange index closed 0.33 percent weaker at 5,751.60, its lowest close since Nov. 27, 2013, as investors sold large caps. 

** The benchmark stock index fell 1.43 percent last week. It declined 2.9 percent in February, its second straight monthly fall. 

** Turnover was 385.1 million rupees ($2.16 million), less than half of last year’s daily average of 834 million rupees. 

** Foreign investors sold a net 317.8 million rupees worth of shares on Wednesday, extending the year-to-date net foreign outflow to 5.8 billion rupees worth of equities. 

** The rupee ended firmer at 178.40/60 per dollar, compared with Tuesday’s close of 179.00/25. 

** 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. 

** 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. 

($1 = 178.2500 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)