Budget worries drag down shares

27 November 2015 04:26 am - 0 - {{hitsCtrl.values.hits}}

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REUTERS: Sri Lankan shares closed at their lowest in four-and-a-half months yesterday on worries earnings of financial firms would fall after the new budget proposals announced last week were implemented.
The main stock index ended 0.67 percent, or 46.62 points, weaker at 6,963.37, its lowest close since July 9, and below its psychological barrier of 7,000.
“Selling pressure continues after the budget, especially on the banking shares, and it will gradually settle,” said a stockbroker asking not to be named.
“Heading for the December holiday season, we are not expecting big activities.”
Rating agency Fitch said on Tuesday that Sri Lanka’s 2016 budget provides no clear plan for fiscal consolidation over the medium term and the absence of such a framework will put more pressure on the fiscal deficit.

“Fitch believes there are risks to government being able to meet its fiscal deficit target, especially considering the trend in revenues in recent years,” the rating agency said.
The government on Friday announced a raft of steps, including the removal of a 0.3 percent share transaction levy, to stimulate trading in the share market and increase liquidity.
Shares of conglomerate John Keells Holdings Plc fell 1.33 percent, while Ceylon Cold Stores Plc dropped 3.34 percent.
Turnover was Rs. 620.2 million ($4.34 million), lower than this year’s daily average of Rs.1.1 billion.
Foreign investors, who have been net sellers of Rs. 3.78 billion worth of equities so far this year, bought shares worth a net Rs.108.6 million yesterday.
Fitch said on Monday that it maintained a negative outlook on the telecom sector based on uncertainty over proposals to increase taxes, which are likely to lower profitability and increase leverage, if implemented.
Sri Lanka’s stock and foreign exchange markets were closed on Wednesday for a Buddhist religious holiday.

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Budget worries drag down shares

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