Shares post near 3-mth closing low on policy uncertainties

REUTERS: Sri Lankan shares fell for a 10th session in 11 and posted their lowest close in nearly three months yesterday, due to worries about the imposition of a capital gains tax on equities and rising interest rates, brokers said. The benchmark Colombo stock index ended 0.51 percent weaker at 6,254.77, its lowest close since April 7. It lost 1.3 percent last week, posting its third straight weekly loss.

“There is a very little confidence in the economy. People are still waiting for positive news and not willing to buy, expecting the market to come down further amid uncertainty over tax structures and other policy uncertainties,” said a stockbroker asking not to be named. “High interest rates also weighed on sentiment.” Shares have been on a falling trend with comments from a minister last week about the imposition of a capital gains tax on equities dampening sentiment which was already hit by high interest rates and policy uncertainty.

Turnover was Rs.227.3 million yesterday, the lowest since February 11 and well below this year’s daily average of Rs.735.9 million. Overseas funds offloaded shares worth a net Rs.58.7 million, extending the year-to-date net foreign outflow to Rs.6.3 billion worth of equities. Shares of Ceylon Tobacco Co PLC fell 0.66 percent, while ACL Cables Plc fell 50 percent and Carson Cumberbatch PLC fell 3.96 percent.