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Sri Lankan shares rise on gains in blue chips, foreign buying

First Capital’s Head of Research, Dimantha Mathew, speaks to Reuters Tuesday Nov 03, 2016

Nov 3 Sri Lankan shares closed Thursday at a near-two week high, helped by gains in blue chips and as foreign investors picked up beaten down stocks.

The benchmark index of the Colombo Stock Exchange ended 0.2 percent higher, or 13.05 points, at 6,442.09, its second straight session of gains.  Turnover stood at 217.7 million rupees ($1.47 million), less than a third of this year’s daily average of 721.1 million.

Foreign investors were net buyers for a second straight session, picking up stocks worth 61.5 million rupees. They have net sold 1.3 billion rupees worth of shares so far this year.  “Suddenly, foreign buying has come into the market after the index fell to near 6,400. It’s like the psychological barrier of 6,400 levels has worked,” said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

Shares in Nestle Lanka Plc jumped 4.47 percent while conglomerate John Keells Holdings Plc gained 1.27 percent and the biggest listed lender, Commercial Bank of Ceylon Plc, rose 0.67 percent.

($1 = 147.7000 Sri Lankan rupees)

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Vyas Mohan)

 

Sri Lanka – Budget 2017 Review

The Budget for 2017 focused on simplifying the tax system and removing tax exemptions with the view to enhance revenue while focusing measures to provide educational support and improving healthcare facilities and staff. Government plans on a sustained path of fiscal consolidation as it aims for the first time to achieve a revenue surplus and to reduce budget deficit to 4.6% of GDP for 2017 while the Debt to GDP ratio is expected to improve to 75.0%.

sl-budget-2017

  •  The Government’s vision to enhance revenue has resulted in measures to provide higher focus on removing tax exemptions in order to broad base the taxes and increase taxes in certain areas. Further, simplification of taxes were adopted with removal of cess on 100 items, introducing 3 corporate rates and revising personal income taxes.
  • The Government has focused on measures to provide education support especially for tertiary education while was bringing in laws to streamline private education. Heavy funding has been allocated to enhance healthcare via additional infrastructure and capacity of healthcare education. Government has also targeted to promote PPPs for large investment projects.
  • Significant Capital Market Development measures have been proposed including the Demutualization of CSE, amendment of SEC Act, trading platform for Government Securities, REITs, the introduction of a Commodity Exchange and listing of non-strategic enterprises in the CSE.

Read more>>

 

Sri Lankan shares fall from near 2-wk high ahead of budget

First Capital’s Head of Research, Dimantha Mathew, speaks to Reuters Friday November 04, 2016

Sri Lankan shares fell on Friday from a near two-week high hit in the previous session as investors waited for cues from the national budget scheduled on Nov. 10.

The benchmark index of the Colombo Stock Exchange ended 0.11 percent weaker, or 6.92 points, at 6,435.17, slipping from its highest close since Oct. 21 hit on Thursday.

Turnover stood at 275.7 million rupees ($1.86 million), less than half of this year’s daily average of 718.9 million.

However, foreign investors bought beaten down stocks for a third straight session, picking up shares worth a net 90.6 million rupees. They have net sold 1.21 billion rupees worth of shares so far this year.

“The momentum was short lived,” said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd. “Investors turned to wait-and-see approach again. They are awaiting direction from the budget.”

Shares in Nestle Lanka Plc fell 2.37 percent while Ceylon Tea Services Plc fell 9.20 percent.

Conglomerate John Keells Holdings Plc fell 0.39 percent. The company on Friday reported an 8 percent rise in second quarter net profit.

($1 = 147.9500 Sri Lankan rupees)

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Vyas Mohan)