Sri Lanka shares end down; econ woes, budget proposals weigh
COLOMBO, Dec 8 (Reuters) – Sri Lankan shares fell for a third straight session on Tuesday as concerns about the new budget proposals and the prime minister’s recent warning about slowing economic growth weighed on sentiment, dealers said.
Market players were also uneasy after the Sri Lankan police on Monday detained a former chairman of the country’s stock market regulator amid an investigation into financial misappropriation, days after detaining another top regulatory official.
The International Monetary Fund on Monday said Sri Lanka’s 2016 budget raises questions about its ambitious revenue and capital expenditure targets as the government is falling far short of steps needed to improve the tax system.
Investor sentiment was also dented after Prime Minister Ranil Wickremesinghe’s warning last week of lower economic growth in 2016 due to the global slowdown.
The main stock index ended down 0.14 percent at 6,849.09, its lowest close since March 31.
"Thanks to a block deal today the turnover is healthy but we are not seeing too much of activity going into the holiday season," said a stockbroker, asking not to be named.
Foreign investors were net sellers of 3.42 billion rupees worth of equities so far this year, but they bought a net 12.8 million rupees worth of shares on Tuesday.
A block trade in CIC Holdings Plc, which rose 9.20 percent, accounted for 52 percent of the day’s turnover of 982 million rupees ($6.86 million).
Shares of Ceylon Tobacco Company Plc and Distillers Company of Sri Lanka Plc fell nearly 2 percent each while Sri Lanka Telecom Plc eased 0.86 percent.
The government on Nov. 20 announced a raft of measures, including the removal of a 0.3 percent share transaction levy, to stimulate trading in the share market and increase liquidity.
Rating agency Fitch on Nov. 24 said Sri Lanka’s 2016 budget provides no clear plan for fiscal consolidation over the medium term and the absence of such a framework will put more pressure on the fiscal deficit.