Shares fall for third straight day; blue chips drag

REUTERS: Sri Lankan shares fell for the third straight session yesterday, hitting their lowest close in more than four months, as investors sold heavyweights amid continuing uncertainty over a proposed tax reform bill.

The Colombo stock index fell 0.19 percent, or 12.05 points, to 6,383.27, its lowest close since April 18.The index shed 4.3 percent since July 27 through yesterday and has fallen in 17 out of 19 sessions due to lacklustre corporate earnings in the June quarter and speculation that the new tax reform bill might impose a tax on stock trading.

“Things are very slow. Even foreign side is slow as everybody is waiting for the tax bill to settle things,” said First Capital Holdings Head of Research Dimantha Mathew.

Junior Finance Minister Eran Wickramaratne said on Thursday concerns over tax on share trading would be addressed before the proposed bill is passed. The bill is expected to be presented in parliament tomorrow.

Foreign investors bought shares worth a net Rs.114.6 million yesterday, extending the year-to-date net foreign inflow to Rs.27.9 billion worth of shares.

Turnover was Rs.808.2 million, less than this year’s daily average of around Rs.863.3 million.

Shares of conglomerate John Keells Holdings PLC fell 0.9 percent, while both Melstacorp Ltd and Cargills (Ceylon) PLC lost 1.7 percent.