Sri Lanka rupee edges higher; stocks rise for third session

Reuters: ** The Sri Lankan rupee closed a tad firmer on Wednesday helped by banks’ dollar sales, while stocks ended marginally higher for the third straight day in thin trade. 

** Many investors were on holiday in a three-day week due to two long weekends. Both Monday and Friday in this week are public holidays. 

** The currency ended at 174.55/65 to the dollar, higher than Tuesday’s close of 174.60/75. The markets were closed on Monday for a public holiday in lieu of traditional new year that fell on Sunday. 

** Traders expect lower trade in both currency and stock markets in the three-day week. 

** The island nation’s currency gained 0.26 percent last week, and 4.8 percent so far this year, as exporters converted dollars amid stabilising investor confidence after the country repaid a $1 billion sovereign bond in mid-January. 

** Sri Lanka was plunged into political turmoil in October last year when President Maithripala Sirisena abruptly removed Prime Minister Ranil Wickremesinghe and then dissolved parliament. A court later ruled the move was unconstitutional, and Wickremesinghe was reinstalled as premier. 

** Investor sentiment took a big hit as a result of the 51-day political crisis, leading to credit rating downgrades and an outflow of foreign funds from government securities. 

** The rupee dropped 16 percent in 2018, and was one of the worst-performing currencies in Asia due to heavy foreign outflows. 

** Foreign investors sold a net 2 billion rupees worth of government securities in t=(he week ended April 10, the second weekly fall in six weeks, the latest central bank data showed. 

** The Colombo Stock Exchange index ended 0.2 percent firmer at 5,603.35. 

** The benchmark stock index fell 0.6 percent last week, recording its first weekly fall in three. The index has declined 7.4 percent so far this year. 

** Turnover came in at 188.8 million rupees ($1.08 million), less than a third of this year’s daily average of 599.1 million rupees. Last year’s daily average came in at 834 million rupees. 

** Foreign investors bought a net 46.4 million rupees worth of shares on Wednesday, but the market has seen a year-to-date net foreign outflow to 6 billion rupees worth of equities. 

($1 = 174.5000 Sri Lankan rupees) 

(Reporting by Shihar Aneez; Editing by Rashmi Aich)