Stock market falls for 8th session; tax proposals weigh

Thursday, 24 November 2016 00:01 - - {{hitsCtrl.values.hits}}

Reuters: Shares extended falls to an eighth session on Wednesday, posting their lowest close since 7 April, as investor sentiment was hit by budget tax proposals, including revisions in corporate and withholding taxes.

The government aims to boost its 2017 tax revenue by 27% to 1.82 trillion rupees year-on-year, and 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 down 0.21% at 6,242.68. It has fallen 2.77% over the past eight sessions after the budget was presented on 10 November.

The index was in oversold territory, with the 14-day relative strength index at 15.978 versus Tuesday’s 16.929, Thomson Reuters data showed. A level between 30 and 70 indicates the market is neutral.

“Market is down in low trade as investors are on wait-and-see mode,” said Dimantha Mathew, head of research at First Capital Equities Ltd.

Foreign investors sold a net 100.7 million rupees ($678,571.43) worth of shares on Wednesday, extending the year-to-date net foreign outflow to 1.27 billion rupees.

Analysts said the increase in various taxes and fees would reduce disposable income and challenge consumption-led growth.

Turnover was 284.9 million rupees, well below this year’s daily average of 698.6 million rupees.

Shares of Lion Brewery Plc fell 6.81%, while Hemas Holdings Plc declined 5.00% and Ceylon Tobacco Company Plc fell 1.24.

Discover Kapruka, the leading online shopping platform in Sri Lanka, where you can conveniently send Gifts and Flowers to your loved ones for any event including Valentine ’s Day. Explore a wide range of popular Shopping Categories on Kapruka, including Toys, Groceries, Electronics, Birthday Cakes, Fruits, Chocolates, Flower Bouquets, Clothing, Watches, Lingerie, Gift Sets and Jewellery. Also if you’re interested in selling with Kapruka, Partner Central by Kapruka is the best solution to start with. Moreover, through Kapruka Global Shop, you can also enjoy the convenience of purchasing products from renowned platforms like Amazon and eBay and have them delivered to Sri Lanka.