COLOMBO, Nov 28 (Reuters) – Sri Lankan shares and rupee ended higher on Thursday, a day after the government said it has decided to reduce value-added tax to 8% from 15% with effect from Dec. 1, along with plans to abolish some other taxes as well.
** The gains also come a day ahead of the central bank’s key monetary policy rate decision, which is likely to be left steady at a policy review on Friday, a Reuters poll indicated.
** The benchmark stock index jumped 1.34% to 6,201.12, its highest since June 25, 2018. The bourse gained 1.6% last week, and is up 1.10% for the year.
** Analysts said positive sentiment surrounding tax cuts by the country’s newly elected president helped.
** “The market expects a booming consumer demand due to the tax cut,” said Dimantha Mathew, head of research at brokerage First Capital Holdings.
** The rupee ended 0.11% firmer at 180.60/80 per dollar, compared to Wednesday’s close of 181.80/181.10, Refinitiv data showed. It is up 0.5% so far this year.
** Foreign investors were net sellers for 23 sessions out of 25.
** They sold a net 821.2 million rupees ($4.56 million) worth of shares on Thursday, extending the net selling so far this year to 10.3 billion rupees worth of equities, according to index data.
** Equity market turnover was 2.78 billion rupees, more than this year’s daily average of about 721 million rupees. Last year’s daily average was 834 million rupees.
** Meanwhile, foreign investors were net buyers of government securities on a net basis for the fifth straight week, purchasing a net 0.21 million rupees worth of government securities in the week ended Nov. 20.
** Total foreign outflows from government securities through Nov. 20 stood at 48 billion rupees, according to central bank data.
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$1 = 180.0000 Sri Lankan rupees
Reporting by Shihar Aneez; Editing by Shounak Dasgupta
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