3 Min Read
COLOMBO, July 12 (Reuters) - Sri Lankan stocks ended steady on Wednesday as gains in consumer staple shares were offset by industrial stocks led by John Keells Holdings Plc, while concern over a proposed tax bill weighed on overall sentiment.
The Colombo stock index ended 0.03 percent weaker at 6,748.15, slipping from its highest close since Jan. 7, 2016, in the previous session.
"There was some trade by institutional investors. Other than that, the day was quiet," said Prashan Fernando, CEO at Acuity Stockbrokers.
However, Fernando said the market could see a rising trend if yields in fixed-asset income falls, as the central bank expected on Wednesday.
The monetary authority expects a further fall in T-bill yields due to less pressure from government borrowing and a proposed new auction system, the bank's deputy governor, Nandalal Weerasinghe, said.
The bourse saw net foreign outflows for the first time in 13 sessions, with net selling of 27.9 million rupees ($181,700) worth of shares. But foreign investors have been net buyers of 22.8 billion rupees worth of equities this year.
The day's turnover was 557.9 million rupees, off this year's daily average of 909.9 million rupees.
Analysts said new foreign investors have been buying Sri Lankan shares since the Pakistani bourse was upgraded to emerging market status from frontier market.
In May, index provider MSCI announced changes to its indexes as a result of its semi-annual market reclassification, including reclassifying Pakistan, and the addition of 57 securities and removal of 28 securities from its All-Country World Index.
Brokers said domestic investors had been waiting for some clarity on proposed inland revenue legislation, which some companies expect would result in higher costs of production.
The IMF, which has long urged Sri Lanka to boost tax revenue through modernisation and simplification of its fiscal system, has urged the government to submit to parliament a new Inland Revenue Act.
Shares of conglomerate John Keells Holdings Plc closed 0.6 percent lower, gains were led by Bukit Darah Plc which rose 4.3 percent. ($1 = 153.5500 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Robert Birsel)