Bourse falls to lowest close in four months

Wednesday, 23 August 2017 00:00 - - {{hitsCtrl.values.hits}}

Reuters: 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%, or 25.21 points, to 6,395.32, its lowest close since 18 April.

The index shed 4.1% since 27 July 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 Softlogic Stockbrokers deputy CEO Hussain Gani.

“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 Rs. 78.4 million ($ 512,586) on Tuesday, extending the year-to-date net foreign inflow to Rs. 27.8 billion worth of shares.

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

Shares of conglomerate John Keells Holdings Plc fell 0.7%, while Melstacorp Ltd lost 1.7% and Hemas Holdings Plc ended 1.4% weaker.