Stock market gains; economic policy statement boosts sentiment

Saturday, 7 November 2015 01:05 - - {{hitsCtrl.values.hits}}

Reuters: Stocks rose to their highest in more than a week on Friday as the Prime Minister’s medium-term economic policy statement, which focused on raising revenue through reforms and suspending retrospective taxes, helped boost sentiment.

The main stock index ended 0.6% higher at 7,059.48, its highest close since 29 October.

The day’s turnover stood at Rs. 1.75 billion ($12.41 million), much higher than this year’s daily average of Rs. 1.1 billion.

“Everybody reacted very positively to the Prime Minister’s statement. This gives an indication that the Budget will be very favourable,” said Reshan Kurukulasuriya, Chief Operating Officer of Richard Pieris Securities Ltd.

Prime Minister Wickremesinghe, outlining the country’s economic priorities ahead of the 2016 Budget, said the Government would minimise tax holidays and aim to garner more revenues from the rich through direct taxes.

The Prime Minister’s announcement that a proposal to impose a retrospective tax targeting corporates would be annulled helped boost investor confidence, analysts said.

In September, Parliament approved finance bills to raise Rs. 80 billion in revenues, including from a Super Gains Tax to be paid by corporates that earned more than Rs. 2 billion in the last financial year.

Analysts said the next trigger for the markets would be the Budget, scheduled for 20 November.

Shares in conglomerate John Keells Holdings Plc gained 2.48% while Sri Lanka Telecom Plc rose 3.20% and Nestle Lanka Plc rose 2.44%.

Foreign investors, who have been net sellers of Rs. 3.71 billion worth of equities so far this year, bought a net Rs. 16.5 million worth shares on Friday.