Shares end little changed; turnover slumps

Reuters - Shares ended little changed on Friday, hovering near eight-month lows, while turnover slumped as investors kept to the sidelines on concerns over recent tax proposals.

The Colombo stock index ended 0.02 percent down at 6,252.12, and lost 1.17 percent during the week, marking its third straight weekly fall.

The bourse hit its lowest close since 7 April on Wednesday on caution over the budget tax proposals, including revisions in corporate and withholding taxes.

The Government aims to boost its 2017 tax revenue by 27 percent to 1.82 trillion rupees year-on-year, and meet a commitment given to the International Monetary Fund (IMF) in return for a $1.5 billion loan in May.

“Investors are worried and staying on the sideline with the uncertainty haunting the markets,” said First Capital Equities (Pvt) Ltd Head of Research Dimantha Mathew.

Analysts said the increase in various taxes and fees would reduce disposable income and challenge consumption-led growth.

Turnover was 110.5 million rupees ($745,614.04), the lowest since 17 March 2014 and well below this year’s daily average of 695.1 million rupees.

Foreign investors bought a net 19.6 million rupees worth of shares on Friday, but have been net sellers of 1.25 billion rupees worth of shares so far this year.

Shares of Ceylon Cold Store PLC fell 7.35 percent while conglomerate John Keells Holdings PLC fell 0.89 percent and Dialog Axiata PLC fell 1.92 percent.