Shares steady at 1-month low

Thursday, 20 October 2016 00:00 - - {{hitsCtrl.values.hits}}

Reuters - Sri Lankan shares ended steady at their lowest close in a month on Wednesday as investors cautiously awaited directions from next month’s national budget and a flurry of corporate results.

The benchmark index of the Colombo Stock Exchange ended 0.02 percent firmer at 6,444.39, hovering at its lowest close since Sept. 20 hit in the previous session.

“Everybody is waiting for the budget and (and to see) if the government will impose capital gain tax on equities,” said Hussain Gani, deputy CEO at Softlogic Securities.

“Institutional investors are holding their positions (given their) experience of many surprises in the last year budget.”

Stockbrokers said the market was also gradually factoring in political concerns after the head of Sri Lanka’s anti-corruption body resigned on Monday, a few days after President Maithripala Sirisena implied that the agency was favouring the rival party of his prime minister.

This is likely to delay one of the promises of Sirisena’s coalition government to eliminate corruption and implement rule of law, and might also hurt business confidence, analysts said.

Turnover stood at 483.4 million rupees ($3.29 million), less than this year’s daily average of around 741 million rupees.

Foreign investors, who have sold a net 2.1 billion rupees worth of shares so far this year, bought a net 147 million rupees worth equities on Tuesday. Top conglomerate John Keells Holdings Plc ended 0.67 percent firmer.

Sri Lanka’s quarterly earnings season started last week but the bulk of locally listed firms will not report until late October or early November.