August 22, 2017 / 11:34 AM / a year ago

Sri Lankan shares fall to lowest close in four months

COLOMBO, Aug 22 (Reuters) - Sri Lankan shares fell to their lowest close in more than four months on Tuesday as persisting uncertainty over a proposed tax reform bill dragged down blue chips.

The Colombo stock index fell 0.39 percent, or 25.21 points, to 6,395.32, its lowest close since April 18.

The index shed 4.1 percent since July 27 through Tuesday and has fallen in 16 out of 18 sessions due to lacklustre corporate earnings in the June quarter and speculation that the new tax reform bill might impose a tax on stock trading.

“Market slipped a bit with lower-than-expected results and overall negative sentiment on tax worries,” said Hussain Gani, deputy CEO at Softlogic Stockbrokers.

“Investors are awaiting clarity on the tax bill.”

Junior Finance Minister Eran Wickramaratne said on Thursday concerns over tax on trading stocks would be addressed before the proposed bill is passed in the parliament. The bill is expected to be presented in the parliament on Friday.

However, foreign investors bought into the island nation’s risky assets in the session.

Foreign investors bought shares worth a net 78.4 million rupees ($512,586) on Tuesday, extending the year-to-date net foreign inflow to 27.8 billion rupees worth of shares.

Turnover was 419.4 million rupees, less than half of this year’s daily average of around 866.5 million rupees.

Shares of conglomerate John Keells Holdings Plc fell 0.7 percent, while Melstacorp Ltd lost 1.7 percent and Hemas Holdings Plc ended 1.4 percent weaker. ($1 = 152.9500 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Amrutha Gayathri)

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