Wednesday, 27 November 2013 00:21
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Reuters: Stocks fell for a third straight session on Tuesday to hit a near 10-week closing low, as investors turned to high-yielding debentures, stockbrokers said, while concerns over lack of clarifications about taxes in the 2014 Budget proposals weighed on the sentiment.
The main stock index closed down 0.48%, or 27.66 points, at 5,748.01, its lowest close since 18 September.
“The debt market with some debentures is attracting investors who otherwise would have invested in stocks,” said Prashan Fernando, CEO at Acuity Stockbrokers. “Those debentures are with a higher return than fixed-deposits and the returns are tax free.”
Lack of clarity in 2014 Budget proposals unveiled by President Mahinda Rajapaksa, who is also the Finance Minister, also continued to weigh on the sentiment.
The Budget aims to spur growth, shrink the budget deficit and expand the stock exchange in Colombo.
The day’s turnover was Rs. 464.7 million ($3.54 million), above half of this year’s daily average of around Rs. 850 million.
The banking sector index fell 0.86% to a near 10-week low on Tuesday, which analysts attributed to a Budget proposal of a 2% nation-building tax on banks and the financial sector with effect from January.
The market heavyweight and top conglomerate John Keells Holdings PLC fell 0.83% to Rs. 216.
Foreign investors were net sellers of Rs. 29.8 million worth of shares. They have been net buyers of Rs. 22.56 billion so far this year.
