October 7, 2019 / 12:42 PM / 10 days ago

Sri Lanka stocks, rupee firmer as presidential frontrunner files nomination

COLOMBO, Oct 7 (Reuters) - ** Sri Lankan stocks and rupee closed firmer on Monday after presidential frontrunner Gotabaya Rajapaksa, who faced uncertainty over his candidature, filed a nomination early in the day.

** Investor confidence returned after the former wartime defence chief, who is seen as a strong leader among the 35 candidates, filed nominations to contest in Sri Lanka’s presidential election scheduled for Nov. 16.

** However, investors were cautious as they waited for policies of the political parties.

** Rajapaksa faced a legal case challenging his Sri Lankan citizenship, but Sri Lanka’s Appeal Court on Friday dismissed the petition, removing a major barrier he faced in contesting the poll.

** The benchmark stock index ended 0.33% firmer at 5,708.92, further moving away from its lowest level since July 22 hit on Thursday. The bourse fell 1.42% last week. So far this year, the index has dropped 6%. ** Equity market turnover was 277.5 million rupees ($1.54 million), less than half of this year’s daily average of about 655.2 million rupees. Last year’s daily average was 834.0 million rupees. ** Foreign investors were net sellers of 17 million rupees worth of shares on Monday, extending the year-to-date net foreign outflow to 3.1 billion rupees of equities, according to index data.

** Meanwhile, the rupee ended 0.3% firmer at 180.85/95 per dollar compared with Friday’s close of 181.35/50. The currency is up 0.97% this year.

** The International Monetary Fund cut its forecast for Sri Lanka’s 2019 economic growth to 2.7% from 3.5%, as the Easter Sunday attacks on hotels and churches earlier this year dented tourism and broader business activity. ** Foreign investors bought government securities on a net basis for the first time in seven weeks, buying 522 million rupees worth of government securities on week ended Oct 2. ** The foreign outflows, which are one of the major reasons behind the rupee’s recent weakness, may not abate until after a parliamentary election in 2020, some analysts said. ** The central bank does not release foreign trade numbers on a daily basis, but weekly data in the past five weeks through Sept. 25 has shown a steady outflow. ** Sri Lanka has seen a net foreign outflow of 54.8 billion rupees through Oct. 2, according to central bank data. ** For a report on global markets, click ** For a report on major currencies, click ($1 = 180.7500 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Bernard Orr)

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