Shares end up second straight session

Reuters: Shares rose for the second straight session on Wednesday as investors bought diversified shares such as market heavyweight John Keells Holdings Plc, brokers said.

However, trading was dull as investors turned cautious ahead of an imminent loan deal with the International Monetary Fund and uncertainty over a tax policy.

Foreign investors were net buyers of Rs. 92.4 million ($631,794.87) worth of equities on Wednesday, but were net sellers of Rs. 3.05 billion worth of shares so far this year. The benchmark stock index ended up 0.55% at 6,423.13, its highest since 2 February.

“We have not seen any serious buying coming in. It’s retail and speculative buying. Everybody is still waiting to see the direction on the tax implementation and the IMF deal,” a stockbroker said requesting not to be named.

Sri Lanka will raise Value Added Tax (VAT) to 15% from 11% on 2 May, a Treasury official said last week, as the island nation reaches the final stages of negotiating an IMF loan. Clarifying a contradictory statement by President Maithripala Sirisena, the Junior Finance Minister on Wednesday said the Government has exempted some sectors to ease the indirect tax burden.

High interest rates and lower-than-expected earnings in the March quarter dented investor sentiment.

The 14-day relative strength index ended at 74.059 on Wednesday, compared with Tuesday’s 71.893, Reuters data showed. A level between 70 and 30 indicates the market is neutral.Turnover stood at Rs. 577.4 million, less than this year’s daily average of Rs. 783.4 million.

Shares in John Keells Holdings Plc rose 1.97 percent while Ceylon Tobacco Company Plc gained 0.73%.

The markets will be closed on Thursday for a Buddhist religious holiday and will resume trading on Friday.