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Thursday, 15 September 2016 00:00 - - {{hitsCtrl.values.hits}}
Reuters: Shares closed marginally lower on Wednesday, posting their lowest closing level in nearly six weeks, as a government proposal to raise the value added tax (VAT) hurt market sentiment.
The government on Wednesday said the cabinet has approved a proposal to increase the VAT to 15% from 11% with some amendments, a move halted by the Supreme Court earlier. The hike is expected to be implemented after parliamentary approval later this month.
The benchmark Colombo stock index ended 0.24% lower at 6,492.74, its lowest close since 4 August.
“Investors are worried about the VAT hike. Profit-taking was also there,” said First Capital Equities Ltd senior research analyst Atchuthan Srirangan.
Turnover stood at Rs. 749.9 million ($5.15 million), in line with this year’s daily average of Rs. 747.2 million.
Foreign investors, who have been net sellers of Rs. 2.29 billion worth of shares so far this year, were net buyers of Rs. 407.3 million worth of equities on Wednesday.
Shares of Distilleries Company of Sri Lanka Plc fell 4.38%, while Ceylon Tobacco Company Plc dropped 1.21%.
Reuters: The rupee ended 0.2% weaker on Wednesday as importer dollar demand surpassed exporter sales of the U.S. currency, dealers said.
The spot rupee ended at 145.70/85 per dollar, against Tuesday’s close of 145.38/43. One-week forwards were at 145.90/146.05, compared with the previous day’s close of 145.60/70.
The spot rupee is usually managed by the central bank and market participants use the forward market levels for guidance on the currency.
“The rupee is under pressure on importer demand and some other outflows,” a currency dealer said, asking not to be named.
Dealers said seasonal importer demand would pick up from mid-October.
The central bank has largely not intervened to defend the rupee ever since a dual-tenure sovereign bond issue raised $1.5 billion in July.
