Bourse slips ahead of tax raising budget

Reuters - Sri Lankan shares closed lower on Thursday before the presentation of the national budget, where the South Asian island nation imposed new taxes on motor vehicles, telecoms, banks and liquor in a bid to boost revenues.

The budget deficit for the current year slipped to 5.2 percent of gross domestic product.

The Colombo stock index closed 0.47 percent weaker at 6,567.07, its lowest close since Sept. 15.

Turnover was 1.56 billion rupees ($10.16 million), more than this year’s average of around 952.4 million rupees.

“Investors waited for the budget. Some expected measures negative to stocks. But we have not seen any such measures,” said Prashan Fernando, CEO at Acuity Stockbrokers.

Finance Minister Mangala Samaraweera on Wednesday announced tax concessions worth a monthly 1.5 billion rupees ($9.8 million) to reduce the cost of living and boost consumption.

Shares in Hatton National Bank lost 1.9 percent, while large cap Nestle Lanka Plc closed 1.2 percent weaker.

Foreign investors sold shares worth net 32.8 billion rupees in the session, but they have been net buyers of shares worth 18.1 billion rupees so far this year.