Shares fall to 3-mth low ahead of monetary policy

REUTERS: Sri Lankan shares ended yesterday weaker at a three-month low in thin trade ahead of a monetary policy announcement by the Central Bank, as the prime minister’s plan for improving the investment climate failed to cheer the market.

Sri Lanka’s Central Bank was expected to keep its key interest rates steady later yesterday, a few days ahead of the national budget and the government’s five-year policy.

Sri Lanka will introduce concessions on investments and a lower tax regime in its budget to boost faltering investment, generate jobs and remove obstacles to growth for start-up companies, Prime Minister Ranil Wickremesinghe said in an economic policy statement on Thursday.

However, investors continued to await the budget, as well as the Central Bank’s key policy rates and corporate earnings.

“The lower volume and sideways trade will continue until the budget,” said Softlogic Stockbrokers Deputy Chief Executive Hussain Gani. “Institutional investors are waiting to see if there would be capital gains tax, as the government proposed some time back, while others are waiting in case of surprises that could have an impact on stocks.”