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Shares end at more than 8-month low

8 December 2015 02:47 am - 0     - {{hitsCtrl.values.hits}}

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REUTERS:  Sri Lankan shares closed at their lowest in more than eight months yesterday on worries that the new Budget proposals would hit earnings of financial firms.

Sri Lankan police detained a former chairman of the country’s stock market regulator yesterday amid an investigation into financial misappropriation, days after detaining another top regulatory official.

The International Monetary Fund yesterday said Sri Lanka’s 2016 Budget raises questions about its ambitious revenue and capital expenditure targets as the government is falling far short of steps needed to improve the tax system.

Investor sentiment was also dented after Prime Minister Ranil Wickremesinghe’s warning last week of lower economic growth in 2016 due to the global slowdown.

The main stock index ended 0.16 percent weaker at 6,858.63, its lowest level since March 31.

The index fell into oversold territory with the 14-day Relative Strength Index at 29.402 versus Friday’s 30.523, Reuters data showed. A level between 70 and 30 indicates the market is neutral while a level of 30 or below indicates the market is oversold.

“It was another very thin trading day,” said SC Securities (Pvt.) Ltd Head of Research Yohan Samarakkody.

“The foreign participation is low, expecting a federal rate hike, while local participation was low due to the festive season and the ongoing investigations,” he said.

Local institutions and retail investors remained on the sidelines, analysts said.

Foreign investors were net sellers of Rs.3.43 billion worth of equities so far this year, but they bought a net Rs.55.5 million worth of shares yesterday.
Turnover was Rs.388.9 million, well below this year’s daily average of Rs.1.1 billion.

Shares of Sri Lanka Telecom PLC dropped 1.90 percent while Cargills (Ceylon) PLC fell 2.43 percent.

The government on November 20 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.

Rating agency Fitch on November 24 said 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. 



Former SEC boss arrested
Sri Lankan police yesterday detained former Securities and Exchange Commission (SEC) Chairman Dr. Nalaka Godahewa amid an investigation into financial misappropriation, days after detaining another top regulatory official, a police spokesman said.

Godahewa served as the SEC Chairman for nearly two years under former President Mahinda Rajapaksa, who was unseated in a bitterly contested election in January, and stepped down after the poll.

Last week the Financial Crimes Investigative Department detained SEC Deputy Director General Dhammika Perera, who was now on compulsory leave.
“They were arrested for criminal breach of trust and criminal misappropriation offences committed under the Public Property Act,” said police spokesman Ruwan Gunasekera.

Police also said they had arrested a third person who managed a fund which is part of the investigation.

A court in Colombo, the capital, remanded the three until December 14, after police had produced them in court.

Police said the three were detained after a seven-month investigation into the suspected misappropriation Rs.5 million in 2013.

The money was allegedly given to a youth organisation headed by Namal Rajapaksa, a parliamentarian and the eldest son of former President Mahinda Rajapaksa, police said.
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See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.

 


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