Casino ban-hit JKH drags stock market down

Friday, 30 January 2015 01:05 -     - {{hitsCtrl.values.hits}}

Reuters: Shares fell on Thursday from a near two-week closing high the previous session, led by John Keells Holdings Plc after the new government cancelled approval for it to help build a casino, brokers said. Prime Minister Ranil Wickramasinghe on Thursday said the new government had blocked three casinos approved by the previous administration, including a $400-million project by Australian gaming mogul James Packer’s Crown Resorts Ltd and John Keells Holdings Water Front properties. Shares of top conglomerate Keells fell 3.72%. The new Government aims to cut its 2015 fiscal deficit to 4.4% of gross domestic product, better than a target of 4.6% set by the previous administration. The main stock index ended 0.25%, or 18.78 points weaker at 7,376.51, edging down from its highest close since 16 January hit on Wednesday. “The market fell on Keells with the government banning casinos,” Reshan Wediwardana research analyst at First Capital Equities Ltd. “The market will definitely come down in coming days mainly on panic selling of Keells, Dialog, Sri Lanka Telecom and Nestle as the budget imposed taxes on these firms.” Finance Minister Ravi Karunanayake in the new Government’s supplementary budget imposed a super gain tax of 25% on companies or individuals who earned more than Rs. 2 billion profits in 2013/2014, while announcing a raft of tax reductions and state sector pay rises to boost consumption. Wediwardana said an increase in consumers’ disposable income might help the market in the long run. Turnover was Rs. 1.27 billion ($ 9.61 million), less than last year’s daily average of Rs. 1.42 billion, exchange data showed. Foreign investors were net buyers of Rs. 122.5 million worth of shares on Thursday, but they have been net sellers of Rs. 331.1 million worth of shares this month. They bought a net Rs. 22.07 billion worth of stocks last year.