March 7, 2019 / 12:06 PM / 4 months ago

Sri Lanka shares, rupee end steady on dollar bond sale

COLOMBO, March 7 (Reuters) - Sri Lankan shares and the rupee closed steady on Thursday as the island nation launched the sale of U.S. dollar-denominated sovereign bonds and orders topped $3 billion. ** The sale is crucial for the island nation to boost investor sentiment which was dented by rating downgrades by all three rating agencies after a political crisis in October. ** The rupee closed unchanged at 178.40/60 per dollar. Market sources said they expected inflows from the sovereign bond sale will help boost the rupee. ** 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 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. ** The Colombo Stock Exchange index closed 0.01 percent firmer at 5,752.35, hovering around its lowest close since Nov. 27, 2013 hit on Wednesday. ** The benchmark stock index fell 1.43 percent last week. It declined 2.9 percent in February, its second straight monthly fall. ** Turnover was 637.1 million rupees ($3.57 million), less than last year’s daily average of 834 million rupees. ** Foreign investors sold a net 329.3 million rupees worth of shares on Thursday, extending the year-to-date net foreign outflow to 6.1 billion rupees worth of equities. ** 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. ** For a report on global markets, click ** For a report on major currencies, click ($1 = 178.5000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)

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