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Sri Lanka shares end near one-week closing low


Sri Lankan shares ended weaker for a second straight session on Wednesday, to hit their lowest close in nearly one week, with foreign investors selling domestic shares as uncertainty over budget proposals continued to keep sentiment subdued.

The Colombo stock index ended down 0.36 percent at 6,327.30, moving away from its highest close since Nov. 15 hit on Monday. The bourse gained 1.17 percent last week, recording its first weekly gain in four weeks.

Foreign investors sold a net 105.6 million rupees ($711,590.30) worth of shares on Wednesday extending the year-to-date net foreign outflow to 1.9 billion rupees worth of shares.  Turnover was 830.1 million rupees, compared with this year’s daily average of 699.03 million rupees.

Despite recent gains, investors are concerned that proposed increases in various taxes and fees would reduce disposable income and challenge consumption-led growth.

“Market is moving sideways as there is no clear direction and not much of retail (investor) participation,” said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

“The positive sentiment was short-lived and uncertainty over budget proposals and lack of positive sentiments very bad for investor climate.”

The government aims to boost its 2017 tax revenue by 27 percent to 1.82 trillion rupees year-on-year to meet a commitment given to the International Monetary Fund in return for a $1.5 billion loan in May.

Brokers said investors were concerned about the sustainability of rates after the central bank on Tuesday kept key rates unchanged.

Shares of Colombo Cold Stores Plc fell 1.12 percent while the biggest-listed lender Commercial Bank of Ceylon Plc ended steady.

($1 = 148.4000 Sri Lankan rupees)

(Reporting by Ranga Sirilal; Editing by Sherry Jacob-Phillips)