December 12, 2019 / 1:26 PM / a month ago

Sri Lanka shares snap six-day losing streak, rupee ends firmer

COLOMBO, Dec 12 (Reuters) - Sri Lankan shares gained for the first time in seven sessions on Thursday, helped by large-cap LOLC Holdings Plc, while the rupee ended higher.

** The benchmark stock index closed up 0.65% at 6,099.66, recovering from a near four-week closing low in the previous session. The bourse fell 1% last week, but is up 0.8% for the year so far. ** Shares in LOLC Holdings jumped 12% after a speculation that the company was going to sell its stake in a unit in Cambodia. The company said it has been in the process of exploring possibilities of a sale of whole or part of its holding in Prasac Micro Finance Institution Limited, Cambodia. ** The index touched its highest level since June 25, 2018 on Dec. 2, lifted by hopes of booming economic activity after the new government cut some key tax rates. ** However, foreign investors were net sellers in the equity market for 30 sessions out of 33, offloading 7.7 billion rupees ($42.78 million) worth of shares.

** They sold a net 54.1 million rupees worth of shares on Thursday, extending the year-to-date foreign outflow to 11.3 billion rupees, according to index data. ** The Sri Lankan rupee ended 0.14% firmer at 180.80/181.00 per dollar, compared to Tuesday’s close of 181.05/20, Refinitiv data showed. The markets were closed on Wednesday for a Buddhist religious holiday. The currency is up 1% so far this year.

** Analysts said the tax reduction has already been factored in and the market was waiting to see the impact of the new policy. They said investors sold shares that rose on hopes the new government will encourage an economic boom led by construction.

** Analysts and research firms have said the tax cut decision would provide a boost to the economy, but put increased strain on the country’s fragile public finances. ** Equity market turnover was 440.9 million Sri Lankan rupees, less than this year’s daily average of about 724 million. Last year’s daily average was 834 million rupees.

** Foreign investors were net sellers of government securities on a net basis for the first week in seven, selling a net 4.2 billion Sri Lankan rupees worth of government securities in the week ended Dec. 4.

** Total foreign outflows from government securities through Nov. 27 stood at 47.9 billion rupees, according to central bank data.

** For a report on global markets, click ** For a report on major currencies, click ($1 = 180.0000 Sri Lankan rupees) (Reporting by Shihar Aneez; Editing by Maju Samuel)

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