New appointment fails to boost stock market

Tuesday, 5 July 2016 00:10 - - {{hitsCtrl.values.hits}}

Investor sentiments in the Colombo Stock Market failed to cheer up despite widespread commendation of the appointment of the new Central Bank Governor.

The All Share Index of CSE was down by 32 points and the blue chip S&P SL 20 Index was lower by 12 points. ASI close was its lowest since 7 April. It lost 1.3 % last week, posting its third straight weekly loss. Year to date ASPI Performance stood at -8.9%, while Blue Chip Index projected a decline of -8.6%.

Market turnover was a lacklustre Rs. 227 million, down by 68% from Friday and well below this year’s daily average of Rs. 735.9 million.

The market dipped mainly due to price losses in counters such as CARS.N (Rs. 230.20, -4.38%), DIAL.N (Rs. 10.40, -3.82%), HNB.N (Rs. 207.40, -3.56%), CTC.N (Rs. 1,043.10, -3.03%) and SLTL.N (Rs. 37.50, -2.12%).

Foreigners took the position of net sellers for the day, recording a net foreign outflow of Rs. 59 million for the day. Year to date net foreign outflow stands at Rs. 6.3 billion.

Reuters said the stock market dipped due to worries about the imposition of a capital gains tax on equities and rising interest rates.

“People are still waiting for positive news and not willing to buy, expecting the market to come down further amid uncertainty over tax structures and other policy uncertainties,” said a stockbroker asking not to be named. “High interest rates also weighed on sentiment.”

Shares have shown a falling trend with comments from a minister last week about the imposition of a capital gains tax on equities dampening sentiment which was already hit by high interest rates and policy uncertainty.