Stock market rebounds to 1-week closing high after Govt. drops tax plan

Tuesday, 29 August 2017 00:43 -     - {{hitsCtrl.values.hits}}

cvxcvReuters: Shares ended slightly firmer on Monday, recovering from a more-than-four-month closing low hit last week, as investors bought battered shares after the government’s decision to drop a proposed tax on profits from share trading.

However, the day’s turnover touched its lowest in more than five months. It was Rs. 210.3 million ($ 1.38 million), lowest since 13 March, and well below this year’s daily average of around Rs. 859.2 million.

The junior finance minister on Thursday said Sri Lanka will not go ahead with a proposed tax on profits from share trading that was planned as part of a major tax reform bill.

The bill is expected to be presented in the parliament on 6 September.

The Colombo stock index ended 0.05% higher at 6,412.37, its highest since 21 August.

The index fell 0.42% last week recording its sixth weekly fall.

It shed 4.3% since July 27 through Thursday, and has fallen in 18 of 20 sessions on lacklustre corporate earnings in the June quarter and speculation that the new reform bill may impose a tax on stock trading.

“Sentiment is improving though the turnover is low. We see an improvement in the buying interest,” said Dimantha Mathew, head of research, First Capital Holdings.

“The positive sentiment has returned after the minister cleared doubts over the taxes and also due to longer-than-expected correction.”

Foreign investors bought shares worth a net Rs. 42.1 million ($ 275,433) on Monday, extending their year-to-date net inflows to Rs. 28 billion.

Shares of conglomerate John Keells Holdings Plc ended 0.3% higher, while Commercial Leasing & Finance Plc closed 3.6% higher and Union Bank Plc ended 4.2% firmer.