Shares up; eyes on IMF loan deal
Sri Lankan shares ended slightly firmer on Tuesday as investors turned cautious ahead of an imminent loan deal with the International Monetary Fund and uncertainty over a tax policy.
The benchmark stock index ended up 0.09 percent, or 5.54 points, at 6,387.85, hovering near its 10-week closing high of 6,401.32 points, that was hit on Friday.
Foreign investors were net buyers of 178.8-million-rupees ($1.22 million) worth equities on Tuesday, but these investors were net sellers of 3.14 billion rupees worth of shares so far this year.
“Investors are waiting for a clear sense of direction in terms of tax policies and IMF deal,” a stockbroker said requesting not to be named.
“There are a few confusions because of some inconsistent statements on value added tax.”
Sri Lanka will raise value added tax (VAT) to 15 percent from 11 percent on May 2, a treasury official said last week, as the island nation reaches the final stages of negotiating an IMF loan.
However, local media quoted President Maithripala Sirisena as saying he would not have any tax increase that would be a burden for the public and stockbrokers.
High interest rates and lower-than-expected earnings in the March quarter dented investor sentiment.
The index remained in ‘overbought’ zone on Tuesday for a fourth straight session.
The 14-day relative strength index ended at 71.893 on Tuesday, compared with Monday’s 71.547, Reuters data showed. A level between 70 and 30 indicates the market is neutral.
Turnover stood at 753 million rupees, just below this year’s daily average of 786.4 million rupees.
Shares in Bukit Darah Plc rose 3.09 percent while Asiri Hospital Holdings Plc gained 3.60 percent. (Reuters)