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Sri Lanka shares hit 1-week closing high after govt drops tax plan
August 28, 2017 / 11:37 AM / in 3 months

Sri Lanka shares hit 1-week closing high after govt drops tax plan

COLOMBO, Aug 28 (Reuters) - Sri Lankan shares ended slightly firmer on Monday, recovering from a more-than-four-month closing low hit last week, as investors bought battered shares after the government’s decision to drop a proposed tax on profits from share trading.

However, the day’s turnover touched its lowest in more than five months. It was 210.3 million rupees ($1.38 million), lowest since March 13, and well below this year’s daily average of around 859.2 million rupees.

Junior finance minister on Thursday said 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 on Sept. 6.

The Colombo stock index ended 0.05 percent higher at 6,412.37, its highest since Aug. 21.

The index fell 0.42 percent last week recording its sixth weekly fall.

It shed 4.3 percent since July 27 through Thursday, and has fallen in 18 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.

“Sentiment is improving though the turnover is low. We see an improvement in the buying interest,” said Dimantha Mathew, head of research, First Capital Holdings.

“The positive sentiment has returned after the minister cleared doubts over the taxes and also due to longer-than-expected correction.”

Foreign investors bought shares worth a net 42.1 million rupees ($275,433) on Monday, extending their year-to-date net inflows to 28 billion rupees.

Shares of conglomerate John Keells Holdings Plc ended 0.3 percent higher, while Commercial Leasing & Fiance Plc closed 3.6 percent higher and Union Bank Plc ended 4.2 percent firmer.

$1 = 152.9000 Sri Lankan rupees Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sherry Jacob-Phillips

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