Shares recover after four sessions of losses

Reuters: Shares edged up on Wednesday following four straight sessions of losses, as investors shrugged off the impact of a proposed increase in Value Added Tax to pick up battered shares, amid high turnover.

The Bourse hit a more than seven-week low on Tuesday as selling pressure on stocks that were expected to take a hit from the proposed tax increase weighed on sentiment.

The Government proposed last week to raise the Value Added Tax (VAT) to 15% from 11%.

The benchmark Colombo stock index ended 0.34% higher at 6,451.61.

“Market is up with the renewed interest from the institutional and high net worth investors,” said Yohan Samarakkody, Head of Research at SC Securities Ltd.

“Investors have capitalised on the oversold counters and the fundamentals have not changed.”

Turnover stood at Rs. 1.43 billion ($9.81 million), well above this year’s daily average of Rs. 744.5 million.

Foreign investors net bought Rs. 28.9 million worth of equities on Wednesday. They have net sold Rs. 2.1 billion worth of shares so far this year.

Shares of conglomerate John Keells Holdings Plc rose 1.14% while Ceylon Insurance Plc jumped 5.30% and Sri Lanka Telecom Plc rose 2.70%.

The biggest listed lender Commercial Bank of Ceylon Plc rose 0.07%.