Sri Lankan shares hit over 1-year high, rupee up as Rajapaksa assumes office

[COLOMBO] Sri Lankan shares hit their highest level in more than a year on Tuesday, while the rupee rose to a three-month peak, as former wartime defence chief Gotabaya Rajapaksa assumed his presidential duties.

The benchmark stock index, which rose 0.75 per cent in the early trade, ended 0.22 per cent firmer at 6,142.76, its highest close since Aug 9, 2018.

The bourse rose 1.53 per cent last week, and it is up 1.49 per cent for the year. 

"There were some sort of profit taking after a surge on Monday. But still we see foreigners are on the selling side in a lower volume. The index might move sideways until investors see how the new president is going to convert his manifesto into action," said Atchuthan Srirangan, a senior research analyst at First Capital Holdings. 

The rupee ended 0.1 per cent firmer at 179.25/50 per dollar, its highest since Aug 21.

It closed at 179.40/80 on Monday and is up 1.87 per cent so far this year.

Foreign investors bought government securities on a net basis for the fourth time in six weeks, buying a net 2.2 billion rupees worth of government securities in the week ended Nov 13.

Mr Rajapaksa assumed office as the seventh president of the island nation on Tuesday after he won elections over the weekend.

He made national security his top priority after being sworn in on Monday.

Majority of Sinhala Buddhists voted for him after he campaigned on promises to make the nation safer in the aftermath of the Easter bombings earlier this year.

The election outcome was positive for Sri Lanka and reduced political uncertainty, which should boost economic growth, Standard Chartered Bank said in a note. But the political establishment faced twin economic challenges of boosting growth and improving debt sustainability, it added.

REUTERS