Shares hit over four-month closing low

REUTERS: Sri Lankan shares yesterday hit an over four-month closing low as gains in telecom shares were offset by losses in diversified stocks.

Analysts, however, said the market saw some buying in the latter part of the day after the government said it dropped a proposed tax on profits from share trading that was planned as part of a major tax reform bill.

Junior Finance minister said that Sri Lanka will not go ahead with a proposed tax on profits from share trading that was planned as part of a major tax reform bill.

The bill is expected to be presented in the parliament today. The Colombo stock index ended little changed, 0.01 percent down at 6,382.54, its lowest close since April 18.

The index shed 4.3 percent since July 27 through yesterday and has fallen in 18 out of 20 sessions on lacklustre corporate earnings in the June quarter and speculation that the new reform bill may impose a tax on stock trading.

“We have seen some local interest coming in to market with the minister clarifying on tax on stock trading,” said Dimantha Mathew, head of research at First Capital Holdings.

Foreign investors bought shares worth a net Rs.43.8 million (US$286,461.74) yesterday, extending the year-to-date net inflows to Rs.27.9 billion.

Turnover was Rs.476 million, less than this year’s daily average of around Rs.860.8 million.

Shares of Nestle Lanka Plc fell 0.6 percent while conglomerate John Keells Holdings Plc ended 0.1 percent lower. Shares of Dialog Axiata Plc rose 0.9 percent.