Shares end 8-day losing streak

REUTERS: Sri Lankan shares snapped an eight-day falling streak to end slightly higher yesterday, but concerns over recent tax proposals continued to weigh on sentiment. The bourse hit its lowest close since April 7 on Wednesday on caution over the budget tax proposals, including revisions in corporate and withholding taxes. The government aims to boost its 2017 tax revenue by 27 percent to Rs.1.82 trillion year-on-year, and meet a commitment given to the International Monetary Fund in return for a $1.5 billion loan in May. The benchmark index of the Colombo Stock Exchange ended up 0.17 percent at 6,253.28. The bourse has fallen 2.77 percent over the past eight sessions through Wednesday after the budget was presented on Nov. 10. The index was in oversold territory, with the 14-day relative strength index at 19.845 versus Wednesday’s 15.978, Thomson Reuters data showed. A level between 30 and 70 indicates the market is neutral. “Bargain-hunting was there but no big level of buying interest was seen... as investors are cautious due to rising interest rates,” said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

Foreign investors sold a net Rs.5.6 million ($37,800) worth of shares yesterday, extending the year-to-date net foreign outflow to Rs.1.27 billion. Analysts said the increase in various taxes and fees would reduce disposable income and challenge consumption-led growth. Turnover was Rs.516.9 million, less than this year’s daily average of Rs.698.6 million. Shares of Ceylon Cold Store Plc jumped 14.54 percent while conglomerate John Keells Holdings Plc rose 0.55 percent and Lanka ORIX leasing Plc fell 1.86 percent.