Stock market falls for 3rd session to over 4-mth closing low

Thursday, 17 November 2016 00:01 - - {{hitsCtrl.values.hits}}

Reuters: Shares fell to a more than four-month closing low in thin volume on Wednesday as investor sentiment was dented by the budget tax proposals last week, including revisions in corporate and withholding taxes, to boost revenue.

The government aims to boost its 2017 tax revenue by 27% to Rs. 1.82 trillion ($ 12.36 billion) year on year, to meet a commitment given to the International Monetary Fund in return for a $ 1.5 billion loan in May.

The benchmark index of the Colombo Stock Exchange ended 0.89%, or 57.13 points, weaker at 6,349.03, its lowest close since 7 July. It fell for a third straight session and was in the over sold territory, with the 14-day relative strength index at 26.347 versus Tuesday’s 36.333, Thomson Reuters data showed. A level between 30 and 70 indicates the market is neutral.

“The budget proposals are still not clear and there are some concerns that some of the proposals could be reversed as in the last year,” said a stockbroker asking not to be named.

Foreign investors offloaded shares worth a net Rs. 79.6 million, their second straight session of selling. They have sold a net Rs. 1.09 billion of shares so far this year. Analysts said the increase in various taxes and fees would reduce the disposable income of people and challenge the consumption-led growth

Turnover was Rs. 514.1 million, less than this year’s daily average of Rs. 706.4 million.

Shares of Commercial Bank of Ceylon Plc, the country’s biggest listed lender, fell 4.66%, while Dialog Axiata Plc declined 5.41% and Sri Lanka Telecom Plc dropped 0.27%.