Shares hit 2-wk closing low; blue chips weigh

Reuters: shares closed at their lowest in two weeks on Wednesday as foreign investor outflows and losses in blue chips led by market heavyweight John Keells Holdings Plc weighed on sentiment.

The Colombo stock index closed 0.4% weaker at 6,299.01, its lowest close since 30 November.

“There was a lot of foreign activities, which boosted the day’s turnover. We will not see any sentimental change until the next year,” said Prashan Fernando, CEO at Acuity Stockbrokers.

Foreign investors sold a net Rs. 556.1 million ($ 3.75 million) worth of shares on Wednesday, with the year-to-date net foreign inflow in shares declining to Rs. 469.9 million.

Turnover was Rs. 1.19 billion ($ 8.02 million), higher than this year’s daily average of Rs. 750.3 million.

Investors were concerned over proposed increases in various taxes and fees in the 2017 budget, which was passed on Saturday, that would reduce disposable income and challenge consumption-led growth, brokers said.

The government aims to boost its 2017 tax revenue by 27% to Rs. 1.82 trillion year-on-year to meet a commitment given to the International Monetary Fund in return for a $ 1.5 billion loan in May.

Shares of John Keells Holdings Plc fell 1.36%, while top fixed line phone operator Sri Lanka Telecom lost 3.14%.