Shares hit 4-1/2-month closing low

Reuters: Shares closed at their lowest in more than four months on Wednesday, with foreign investors selling risky assets in lacklustre trade, while the daily turnover got a boost from block trades.

The Colombo stock index resumed trade after a holiday, ended down 0.38% at 6,361.03, its lowest close since 17 April.

The country’s stock and foreign exchange markets were closed on Friday and Tuesday for religious holidays.

The Bourse ended 0.3% lower last week, its seventh straight weekly fall. As of Wednesday’s close, it has shed more than 4.6% since 27 July.

Shares of Sri Lanka Telecom Plc ended 3.3% down, while Trans Asia Hotel Plc closed 9.4% lower and the biggest-listed lender Commercial Bank of Ceylon Plc ended 0.4% weaker.

Foreign investors net sold Rs. 263.8 million ($1.73 million) worth of shares, but they have net bought Rs. 27.4 billion worth equities so far this year.

“Another slow day. Investors are looking for direction and staying away,” said Dimantha Mathew, head of research, First Capital Holdings.

Mathew said investors are waiting to see the clarity on taxes following the Inland Revenue Bill.

The bill, Sri Lanka’s major tax reform since independence from Britain in 1948, seeks to expand the tax net and stamp out evasion. It is expected to be presented in the parliament on 7 September.

Turnover stood at Rs. 1.5 billion ($ 9.83 million), well above this year’s daily average of around Rs. 862.4 million.