Shares slip from 18-month high; John Keells drags

Tuesday, 4 July 2017 00:00 - - {{hitsCtrl.values.hits}}

Reuters: Stocks ended slightly weaker on Monday, down from an 18-month high hit in the previous session, as investors sold blue chip shares such as John Keells Holdings Plc, brokers said.

Analysts said concerns over a proposed tax bill weighed on overall investor sentiment.

But foreign investors continued to snap up the island nation’s risky assets.

The Colombo stock index ended down 0.21% at 6,733.06, slipping from its highest close since 7 January, 2016, hit on Friday.

The Bourse climbed 0.47% last week, and gained 1.09% in June.

Foreign investors, however, net bought Rs. 189.1 million ($ 1.23 million) worth of shares on Monday, extending their year-to-date net inflow to Rs. 22.4 billion worth of equities.

“A few selected big caps brought the market down, especially the selling in Keells,” said Dimantha Mathew, head of research, First Capital Holdings Plc.

“Local participation is still low, but foreign investors are seen to continue and drive up the volumes.”

Brokers said local investors have been waiting for some clarity on the proposed inland revenue legislation, which some companies expect will result in higher cost of production.

The IMF, which has long urged Sri Lanka to boost tax revenue through modernisation and simplification of its fiscal system, has urged the Government to submit to parliament a new Inland Revenue Act.

Turnover was Rs. 640.9 million, less than this year’s daily average of Rs. 926.4 million.

Shares of conglomerate John Keells ended 0.17% weaker, while Sri Lanka Telecom Plc closed down 1.87%.