An Echelon Media Company
Friday January 21st, 2022
Markets

Sri Lanka stock index slips from record high close amid new tax speculation from budget

ECONOMYNEXT – Sri Lanka stock index slipped 0.19 percent to close lower on Friday (12) amid speculations over some new taxes that could hit earnings, brokers said.

Sri Lanka’s Finance Minister Basil Rajapaksa targeted rich individuals, big firms including banks and telecommunication, and the licensing fee to boost the faltered revenue that was needed to help pandemic-hit economic recovery.

The 2022 budget targeted a deficit of 8.8 percent GDP or 1.6 billion rupees of GDP.

Finance minister said a 25 percent one-off retrospective surcharge will apply for 62 large companies and analysts say the move will have an adverse impact” on the companies which will be subjected to the tax.

“In the near term, there will be a one-time impact on profitability and the downside is that the companies might cut back on their dividend payment for the rest of the financial year,” a Colombo-based analyst said.

Analysts expect telecom, banks and manufacturing sectors to be hit due to the tax.

“There may be a one time pull back on those stocks,” the analyst said.

The Colombo benchmark All Share Price Index (ASPI) hit an intraday high of 10,773 points aftermarket opened but dipped immediately to remain volatile through the day to close at 10,666.

The S&P SL20 index of more liquid stocks, fell 0.11 percent or 4.03 points to close at 3,621.25.

The day’s turnover was 5.1 billion rupees, above this year’s average daily turnover of over 4 billion
rupees.

Foreign investors, however, sold a net of 38.7 million rupees worth of shares, extending the net foreign
inflow to 46.11 billion rupees so far this year.

Brokers had expected foreign investors to exit after Moody’s Investor Service downgraded Sri Lanka’s
sovereign credit rating last week to near default category.

The fall was led by Commercial Leasing and Finance, Expolanka and Browns Investment.

Commercial Leasing and Finance slipped 3.42 percent to close at 70.60 rupees.

Expolanka fell down 0.76 percent to close at 195.75 rupees a share while Browns Investment down 1.71
percent to close at 11.50 rupees.

The bourse saw 88 stocks gaining against 108 falling on Friday (Colombo/Nov 12/2021)

Tags:

Leave a Comment

Your email address will not be published. Required fields are marked *

Your email address will not be published. Required fields are marked *

Comments

Leave a Comment

Your email address will not be published. Required fields are marked *

Your email address will not be published. Required fields are marked *