Shares fall from 7-month closing high; economic policy awaited

cseSri Lankan shares fell on Thursday after hitting their more than seven-month closing high in the previous session, with investors booking profit as they waited for the Prime Minister Ranil Wickremesinghe led government to announce its economic policies after the parliamentary election victory.

Wickremesinghe’s centre-right United National Party (UNP) is expected to form a stable government along with President Maithripala Sirisena’s centre-left Sri Lanka Freedom Party (SLFP), to help pass promised reforms.

The main stock index was 0.44 percent weaker at 7,465.93 as of 0618 GMT, after closing its highest peak since Jan. 16 on Wednesday.

Turnover stood at 353.3 million rupees ($2.64 million) in early trade on Thursday.

“Market has been continuously moving up so there could be some selling pressure. The 7,500 level is seen as a technical barrier,” said Dimantha Mathew, a research manager at First Capital Equities (Pvt) Ltd.

“Big Players are staying away, probably to see how the government is formed.”

Wickremesinghe is expected to continue as the prime minister of a centre-right government that would seek to revive stalled reforms to make the government more open and accountable.

The Sri Lankan rupee was steady at 133.90 per dollar in thin trade, despite demand for the greenback from importers. A state-owned bank kept its dollar-selling rate at 133.90.

On Wednesday, the state-owned bank cut the currency’s peg against the dollar by 10 cents to allow the exchange rate to appreciate to 133.90.

Currency dealers said the central bank offered a 30 billion rupee reverse repo auction to absorb excess liquidity, a move seen to prevent imports and depreciation pressure.

“The central bank offered a reverse repo auction for the first time since March 2014. This is to absorb the excess liquidity to arrest the import pressure,” said a currency dealer asking not to be named. (Reuters)

 

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