Shares down for sixth session; Brexit woes weigh

REUTERS: Sri Lankan shares fell for a sixth straight session yesterday as investors turned cautious after the UK last week voted to leave the European Union (EU). The benchmark Colombo stock index ended down 0.81 percent at 6,318.21, its lowest close since April 11. Sterling fell more than 2 percent, the euro took a hammering and stocks dropped again yesterday as Brexit drove investors to seek safety in the yen, gold and low-risk government debt.

“Market is down with the post-Brexit effects. There are no foreigners or big investors in the market. It’s all in the hands of retailers,” said SC Securities (Pvt.) Ltd Head of Research Yohan Samarakkody. Local negatives like high interest rates and lack of clarity on the proposed capital gains tax also had an impact on the market, he said. Sri Lanka’s Cabinet on June 15 approved a proposal to reintroduce capital gains tax, especially on land sales. Overseas funds offloaded Rs.142.6 million worth of equities yesterday, extending the year-todate net foreign outflow to Rs.6.17 billion worth of shares. Turnover stood at Rs.566.2 million, less than this year’s daily average of around Rs.747.2 million. Shares in Bukit Darah Company PLC fell 9.92 percent while Sri Lanka Telecom PLC fell 2.11 percent. Biggest-listed lender Commercial Bank of Ceylon PLC lost 0.90 percent.