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Sri Lankan shares flat near 2-mth closing low; financials fall
November 29, 2017 / 11:38 AM / 12 days ago

Sri Lankan shares flat near 2-mth closing low; financials fall

COLOMBO, Nov 29 (Reuters) - Sri Lankan shares ended largely unchanged on Wednesday, hovering near an over two-month closing low hit in the previous session, as gains in diversified shares offset losses in financials.

The Colombo Stock Index ended 0.31 points up at 6,405.53, near its lowest close since Sept. 15 hit on Tuesday. The index fell 1.1 percent last week, but is up 3 percent in the year so far.

Analysts said political worries over a delay in local government polls and a lack of clarity over the budget and two other key policy measures continued to weigh on sentiment.

Market heavyweight John Keells Holdings Plc ended 0.5 percent up while top private lender Commercial Bank of Ceylon Plc, which accounted for over 50 percent of the day’s turnover, ended 1.3 percent lower.

“There was foreign selling in Commercial Bank. Investors are concerned over possible hit on profitability due to a new tax in the budget,” said Jaliya Wijeratne, CEO at First Capital Equities.

“Investors are waiting for some direction and for the political and economic uncertainties to get cleared.”

Turnover stood at 799.7 million rupees ($5.20 million) on Wednesday, less than this year’s daily average of 946.6 million rupees.

Foreign investors net sold equities worth 216.5 million rupees on Wednesday. They have been net buyers of 18.2 billion rupees worth of shares so far this year.

Last week, a court issued a stay order on a legislation that cleared the island nation’s Election Commission to hold local government polls in which the coalition partners of the government have decided to contest separately.

Finance Minister Mangala Samaraweera imposed new taxes on motor vehicles, telecoms, banks and liquor in the 2018 budget presented earlier this month, with the final budget vote scheduled for Dec. 9.

Analysts said market participants have sought more clarity on these taxes and that there could be some amendments to these proposals before the final vote.

The government also released gazette notifications on the Inland Revenue Act and the Exchange Control Act, with investors waiting for clarification on the new legislations. ($1 = 153.7500 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Vyas Mohan)

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