Reuters – Sri Lankan shares ended slightly higher on Wednesday in dull trade, as investors stayed on the sidelines awaiting clarifications on new taxes in the national budget and key legislations unveiled earlier this month, analysts said.
The Colombo stock index ended 0.09 percent firmer at 6,464.44. It lost 1 percent last week.
Large caps led the gains, with Ceylon Beverage Holdings Plc jumping 17.8 percent and Lion Brewery Ceylon Plc up 5.6 percent.“Investors are waiting for clarifications on the budget, Inland Revenue Act, and Exchange Control Act,” said Atchuthan Srirangan, senior research analyst at First Capital Holdings PLC.
“There was interest in blue chips. The index has yet to find a direction after the budget.”
Finance Minister Mangala Samaraweera imposed new taxes on motor vehicles, telecoms, banks and liquor in the 2018 budget presented on Nov. 9 to boost revenues, as the budget deficit for the current year slipped to 5.2 percent of the gross domestic product.
The final budget vote is scheduled for Dec. 9 and the market expects some amendments that could help give it some direction.
Analysts said market participants have sought more clarity on these taxes and that there could be some amendments to these proposals before the final vote.
The government also released gazette notifications on the Inland Revenue Act and the Exchange Control Act, with investors waiting for clarifications on the new legislations.
Foreign investors net bought equities worth 20.7 million rupees ($134,678) on Wednesday, extending the net foreign inflow to 19.7 billion rupees so far this year. The day’s turnover, which hit a more-than two-week low, stood at 324.3 million rupees, around a third of this year’s average of around 952.5 million rupees.