Saturday Nov 16, 2024
Saturday Nov 16, 2024
Tuesday, 21 June 2016 00:24 - - {{hitsCtrl.values.hits}}
Reuters: Shares edged down on Monday as investor sentiment took a hit on continued foreign fund outflows and rising interest rates, brokers said.
Investors were also concerned over a Government proposal to reintroduce capital gains tax, brokers said.
Overseas funds offloaded a net Rs. 137.8 million worth of equities on Monday, extending the year-to-date net foreign outflow to Rs. 5.77 billion worth of shares.
The benchmark Colombo stock index ended 0.08% weaker at 6,461.12. The Bourse shed nearly 1% last week.
“The market is very slow and nothing much is happening. Market is hovering here and there and investors’ interest doesn’t seems to be on either side,” said Dimantha Mathew, Head of Research at First Capital Equities Ltd.
“Interest rates have started to impact the market. But investors are not selling either thinking the rates could come down a bit with expected inflows.”
Turnover stood at Rs. 381.9 million ($2.62 million), well below this year’s daily average of around Rs. 756.7 million.
On Thursday, the Bourse fell 1% as concerns over a Government decision to reintroduce Capital Gains Tax kept investors on the sidelines.
Cabinet approved a proposal to reintroduce the tax on Wednesday, especially on land sales, with a Cabinet Spokesman saying no decision had been taken on whether the tax would apply to capital gains in the share market.
Shares in Commercial Leasing & Finance Plc fell 5.13%, while People’s Leasing Plc fell 2.05% while biggest listed lender Commercial Bank of Ceylon Plc fell 0.31%.
Treasury bill yields rose between one and four basis points at a weekly auction on Wednesday. They have risen between six and 40 basis points since the Central Bank left key policy rates steady for on 20 May.
The average prime lending rate edged up 24 basis points to 10.47% in the week ended 10 June. Stockbrokers have said rising interest rates could be detrimental to risk assets if they jump beyond 12%.
