Shares edge up in dull trade ahead of long weekend

Friday, 1 December 2017 00:00 - - {{hitsCtrl.values.hits}}

(Reuters) - Shares ended slightly firmer on Thursday ahead of a long weekend, edging up from a more than two-month closing low hit early in the week in thin trade as investors awaited direction on political and economic fronts.

The Colombo Stock Index ended 0.1 percent up at 6,411.84, edging up from its lowest close since 15 September, on Tuesday. The index fell 0.3 percent during the week recording its fourth straight weekly fall, but is up 3 percent in the year.

Currency, bond, and stock markets will be closed on Friday for a public holiday. Normal trading will resume on Monday. Analysts said political worries over a delay in local government polls and a lack of clarity over the budget and two other key policy measures weighed on sentiment.

Shares in Ceylon Cold Stores PLC rose 2.2 percent while Commercial Leasing and Finance PLC ended 7.4 percent up. “The market is stagnant with the year coming to an end. We expect the market to remain stagnant during the month with most funds and investors closing their books,” First Capital Holdings Head of Research Dimantha Mathew said.

Turnover was Rs. 451.1 million ($2.94 million) on Thursday, about half of this year’s daily average of Rs. 944.4 million.

Foreign investors were net sellers of equities worth Rs. 4.1 million on Thursday. They have been net buyers of Rs. 18.2 billion worth of shares this year.

Analysts said domestic investors were concerned about political stability as coalition partners in President Maithripala Sirisena Government had decided to contest separately in delayed local council polls, which have yet to be scheduled.

Finance Minister Mangala Samaraweera imposed new taxes on motor vehicles, telecoms, banks and liquor in the 2018 Budget presented this month, with a final budget vote scheduled for 09 December.

Analysts said market participants were seeking more clarity on those taxes and that there could be some amendments before the final vote.

The government also released gazette notifications on the Inland Revenue Act and the Exchange Control Act, with investors waiting for clarification on the new legislation.