Bourse closes little changed; tax bill weighs on market

Reuters - Sri Lankan shares closed little changed on Wednesday as local investors wait to see the real impact of the new tax bill, brokers said.

The Colombo stock index ended 0.07% weaker at 6,372.70. It fell 0.2% last week, its eighth straight weekly drop.

“Market is holding on with some crossings (block deals) in blue chips,” said Atchuthan Srirangan, a senior research analyst with First Capital Holdings PLC.

“Local investors are staying away as they are waiting to see the clarity on the new tax bill, while foreign investors are selling.”

The parliament passed tax reforms on Thursday that should simplify the tax system, widen the tax base and increase government revenue, as agreed with the International Monetary Fund in exchange for a $1.5 billion, three-year loan.

Foreign investors, who have been net buyers of Rs. 27.6 billion ($180.45 million) worth equities so far this year, net sold Rs. 35.8 million worth of shares on Wednesday.

Turnover was Rs. 627.3 million, less than this year’s daily average of around Rs. 862.1 million.

Shares of diversified conglomerate Hemas Holdings Plc fell 1.6%, Lanka ORIX Leasing Co Plc ended 1.4% weaker, Commercial Bank of Ceylon Plc dropped 0.7% and Dialog Axiata Plc ended down 1.7%.

After market hours diversified conglomerate Hayleys Plc said it had agreed to purchase 61.73% of Singer Sri Lanka Plc for Rs. 10.9 billion.

The stock exchange had halted trading in Hayleys and Singer shares pending the announcement.