Market welcomes PM’s statement

Friday, 6 November 2015 00:34 - - {{hitsCtrl.values.hits}}

Lanka Securities said yesterday that the Colombo bourse welcomed the economic policy direction set by the Premier Wickramasinghe and closed in the positive territory on Thursday. “Prime minister’s speech which was delivered near to the session close managed to lift the index from the 7,000 mark to close the day at 7,017.39 with a gain of 13.82 index points or 0.20%. S&P SL20 index bagged 9.50 index points (+0.25%) to end at 3,794.11,” it said.

“Though the investor reactions to policy speech can only be seen in full in the next session, it is expected that the positive policy reforms introduced to address economic issues would be well-received by the investors,” Lanka Securities added.

SC Securities said “Colombo equities demonstrated an upward trend today, with the announcement of basic economic reforms by the Prime Minister, in the parliament.”

Reuters said stocks ended firmer on Thursday led by blue chips, and stockbrokers expect the market to react positively to the Prime Minister’s medium-term economic policy statement, which focused on raising revenue through reforms.

The main stock index ended 0.2% higher at 7,017.39.

The day’s turnover was Rs. 779.8 million ($5.51 million), less than the year’s daily average of Rs. 1.1 billion.

Prime Minister Wickremesinghe, outlining the Government’s economic priorities ahead of the 2016 Budget announcement, said the Government would minimise tax holidays and aim to garner more revenues from the rich through direct taxes, a move that could be praised by the International Monetary Fund.

“All in all, it looks positive. This is what people have been waiting for,” said Dimantha Mathew, a research manager at First Capital Equities Ltd., adding that he expected the market to react positively to the Prime Minister’s statement.

The next trigger for the markets would be the budget scheduled for 20 November, analysts said.

Shares in Hemas Holdings Plc rose 3.13% while conglomerate John Keells Holdings Plc gained 1.40%.

Foreign investors, who have been net sellers of Rs. 3.71 billion worth of equities so far this year, bought a net Rs. 16.5 million worth shares on Thursday.