Sri Lankan stocks at near 9-week low on tax concerns

November 25, 2013 1:33 PM

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Sri Lankan stocks at near 9-week low on tax concerns

COLOMBO: Sri Lankan stocks fell on Monday to hit a near nine-week closing low while turnover hit a more than four-month low on concerns over lack of clarifications about taxes in the 2014 budget proposals presented last week.

The main stock index closed down 0.29 percent, or 17.05 points, at 5,775.67, its lowest close since Sept. 18.

The day's turnover was 193.5 million rupees ($1.48 million), its lowest since July 17, and well below this year's daily average of around 853.3 million rupees.

Sri Lankan President Mahinda Rajapaksa, who is also the finance minister, unveiled a 2014 budget that aims to spur growth, shrink the budget deficit and expand the stock exchange in Colombo.

Many analysts said though the budget seems to be ensuring fiscal consolidation, it is expected to raise the cost of goods and services because of high taxes. On Monday, thousands of Marxist opposition members protested against the tax hikes.

Analysts and stockbrokers also said they were awaiting more clarifications on budget proposals.

The banking sector index fell 0.46 percent on Monday. The government also slapped a 2 percent nation-building tax on banks and the financial sector with effect from January.

Shares in large-cap firm Bukit Darah PLC fell 1.30 percent to 659.80 rupees while conglomerate John Keells Holdings PLC fell 0.50 percent to 217.80 rupees.

Foreign investors were net sellers of 12 million rupees worth of shares, but they have been net buyers of 22.59 billion rupees so far this year.

Source: brecorder.com

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