Shares slip from 1-month high; financials lead

Reuters: Sri Lankan shares fell on Monday, after closing at their highest level in over a month in the previous session, led by financial stocks on concerns that the new budget proposals would hit their earnings.

The day’s turnover stood at Rs.1.07 billion ($7.5 million), more than double the average daily turnover of Rs. 412.3 million in the final two weeks of December, helped by block deals in Singer Industries Plc SINI.CM.

The main stock index .CSE fell 0.39 percent, or 26.88 points, to close at 6,867.62, slipping from its highest close since 1 December hit on Thursday.

The market was closed on Friday for the New Year holiday.

“The banking sector is down as investors are expecting the new tax structure from the budget to hit banking profitability,” said  First Capital Equities Research Manager Dimantha Mathew.

“Retail and institutional investors were silent and nobody is willing to take a risk and enter the market,” he said.

The index fell 5.5 % in 2015, Thomson Reuters data showed. In terms of U.S. dollar value, Sri Lanka’s market capitalisation fell 13.9 % but it performed better than the other stock index in Asia such as Malaysia .KLSE, Thailand .SETI, Indonesia .JKSE and Singapore .STI.

Foreign investors sold a net Rs. 878.1 million worth of equities on Monday. They sold a net Rs. 4.43 billion worth of equities in 2015, compared to a net foreign inflow of Rs. 22.07 billion previous year.

Shares in Ceylinco Insurance Plc CINS.CM fell 4.8 %, while top lender Commercial Bank of Ceylon COMB.CM fell 0.9 %.

Singer Industries, which accounted for about 62 % of the day’s turnover, fell 6.3 %.

Diversified shares also fell, with Aitken Spence Plc SPEN.CM and John Keells Holdings Plc JKH.CM losing 5.9 % and 0.5 %  respectively.