Friday Nov 15, 2024
Friday Nov 15, 2024
Saturday, 18 June 2016 00:00 - - {{hitsCtrl.values.hits}}
Reuters: Sri Lankan shares edged up on Friday from a more than seven-week closing low hit in the previous session as investors picked up beaten down shares of companies such as conglomerate John Keells Holdings Plc .
The gains were however capped by concerns over a government proposal to reintroduce capital gains tax, brokers said.
Turnover hit a 19-week low as investor sentiment took a hit on continued foreign fund outflows and rising interest rates, dealers said.
The benchmark Colombo stock index ended 0.47 % higher, or up 30.22 points at 6,465.99, edging up from its lowest close since 27 April hit on Thursday.
It lost nearly 1 % on the week.
“After yesterday’s panic selling, the market recovered on valued stocks like Keells and Commercial,” said First Capital Equities Ltd Senior Research Analyst Atchuthan Srirangan.
Shares in conglomerate John Keells Holdings Plc rose 1.27 %, while Commercial Leasing & Finance Plc jumped 5.41 % and the biggest listed lender Commercial Bank of Ceylon Plc gained 1.27 %.
“But retailers are still on the sidelines waiting to see the real impact of the capital gains tax, even though there was some clarity that the tax is on property and not on stocks,” he added.
On Thursday, the bourse fell 1 % as concerns over a government decision to reintroduce capital gains tax kept investors on the sidelines.
Sri Lanka’s cabinet approved a proposal to reintroduce the tax on Wednesday, especially on land sales, with a cabinet spokesman saying no decision had been taken on whether the tax would apply to capital gains in the share market.
Turnover stood at Rs. 261.7 million ($1.80 million), the lowest since 11 February and well below this year’s daily average of around Rs. 760.1 million.
Overseas funds offloaded a net Rs. 44.9 million worth of equities on Friday, extending the year to date net foreign outflow to Rs. 5.64 billion worth shares.
Treasury bill yields rose between 1 and 4 basis points at a weekly auction on Wednesday. They have risen between 6 and 40 basis points since the central bank left key policy rates steady on 20 May.
The average prime lending rate edged up 24 basis points to 10.47 % in the week ended 10 June. Stockbrokers have said rising interest rates could be detrimental to risk assets if they jump beyond 12 %.
