7 December 2019 12:20 am
The index touched its highest level since June 25, 2018 on Monday, lifted by hopes of booming economic activity after the new government last week cut some key taxes
Sri Lankan shares closed weaker for third straight session yesterday, weighed down by foreign sell-offs and profit-taking, while the rupee ended firmer.
The Sri Lankan rupee rose 0.17 percent to 181.10/30 per dollar, compared to Thursday’s close of 181.40/50, Refinitiv data showed. It is up 0.8 percent so far this year.
The benchmark stock index closed down 0.18 percent at 6,149.57, its lowest since Nov. 27. The bourse fell 1 percent last week, and is up 1.61 percent for the year.
The index touched its highest level since June 25, 2018 on Monday, lifted by hopes of booming economic activity after the new government last week cut some key taxes.
Analysts said the recent tax reduction has already been factored in and the market was waiting to see the impact of the new policy. They said investors sold shares that rose on hopes the new government will encourage an economic boom led by construction.
The government on Nov. 27 reduced value-added tax to 8 percent from 15 percent starting Dec. 1, and abolished some other taxes as well in its attempt to boost economic growth that has fallen to a near two-decade low.
Emerging Asia Economics, in a note on Monday, said the tax cut decision would provide a significant boost to the economy, but put increased strain on the country’s fragile public finances, with a possible loss of US$ 2 billion in revenue.
Foreign investors were sellers yesterday in the equity market for the 27th session out of last 30.
They sold a net Rs. 86 million (US$ 477,778) worth of shares yesterday, extending the year-to-date foreign outflow to Rs. 10.9 billion, according to index data.
Equity market turnover was Rs. 404.3 million, less than this year’s daily average of about Rs. 727 million. Last year’s daily average was Rs. 834 million.
Foreign investors were net sellers of government securities on a net basis for the first week in seven, selling a net Rs. 4.2 billion worth of government securities
in the week ended Dec. 4.
Total foreign outflows from government securities through Nov. 27 stood at Rs. 47.9 billion, according to Central Bank data.
- REUTERS