Bourse dips to over 2-month closing low

Wednesday, 29 November 2017 00:00 - - {{hitsCtrl.values.hits}}

Reuters: Shares touched a more than two-month closing low on Tuesday, dragged down by financials, even as investors waited for clarity on new taxes and key legislations amid political uncertainty.

The Colombo stock index ended 0.19% lower at 6,405.22, its lowest close since 15 September. The index fell 1.1% last week, but is up 3% in the year so far.

Shares in Sampath Bank Plc fell 1.5%, while Commercial Bank of Ceylon Plc ended 0.7% weaker and Colombo Cold Stores Plc dropped 2.9%, dragging down the index.

Turnover stood at Rs. 238.9 million ($1.55 million) on Tuesday, a quarter of this year’s daily average.

“It’s a very slow day with low turnover level, as market is very dull with lower investor confidence,” said Dimantha Mathew, Head of Research at First Capital Holdings.

Foreign investors net bought equities worth Rs. 35.8 million on Tuesday, extending the year-to-date net foreign inflow to Rs. 18.4 billion worth of stocks.

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.

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 9 December.

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.