Shares end slightly higher on foreign buying; tax bill weighs

Reuters: Stocks edged higher on Thursday led by shares of diversified companies as foreign buying continued, while concerns over a proposed tax bill weighed on overall investor sentiment. The Colombo stock index ended 0.08% firmer at 6,702.53, edging up from its lowest close since 19 June hit on Wednesday.

Foreign investors net bought Rs. 22.1 million ($144,161.77) worth of shares, extending their year-to-date net inflow to Rs. 21.7 billion worth of equities.

“The overall market is stagnating at the same levels as the investors are awaiting specially the local investors are awaiting clarity on the inland revenue act,” said Dimantha Mathew, Head of Research, First Capital Holdings PLC.

It will take a few weeks for the uncertainty to settle, he added.

Brokers said local investors have been waiting for some clarity on the proposed Inland Revenue Act, which some companies expect will result in higher cost of production.

The IMF, which has long urged Sri Lanka to boost tax revenue through modernisation and simplification of its fiscal system, has urged the government to submit to parliament a new Inland Revenue Act.

Turnover was Rs. 539.3 million, well below this year’s daily average of Rs. 926.5 million.

Shares of CT Holdings Plc rose 5.96%, while Melstacorp Ltd. gained 1.49% and Hemas Holdings ended 0.61% higher.