Reuters – Sri Lankan shares fell for a fourth straight session on Tuesday, posting their lowest close in more than six weeks, on continued worries over 2018 budget policies which imposed taxes on cash-rich telecom and banking sectors to boost revenue.
The Colombo stock index ended 0.82 percent weaker at 6,457.90, its lowest close since Sept. 29.
“Until the market digests the budget policies fully, there could be some decline,” said Hussain Gani, deputy CEO at Softlogic Stockbrokers.“Some areas like tax on telecom towers need to be clarified.”
Foreign investors, however, net bought shares worth 369 million rupees ($2.40 million), extending the net foreign inflow into equities to 19.1 billion rupees so far this year.
Finance Minister Mangala Samaraweera imposed new taxes on motor vehicles, telecoms, banks and liquor in a bid to boost revenues in its 2018 budget outlined on Thursday, as the budget deficit for the current year slipped to 5.2 percent of the gross domestic product.
Samaraweera imposed taxes on telecom towers and text messages, and introduced a debt repayment levy of 20 cents per 1,000 rupee bank transaction with effect from April 1 next year.
Analysts said the release of the government gazette notification on new Inland Revenue Act will also weigh on the market over the next few days.
Turnover was 670.3 million rupees on Tuesday, less than this year’s average of around 954.6 million rupees. Top private lender Commercial Bank of Ceylon fell 2.3 percent, while market heavyweight and top conglomerate John Keells Holdings closed 2.1 percent weaker.