Sri Lanka stocks extend losses

COLOMBO (EconomyNext) – Sri Lanka’s stock market slide worsened Monday following Friday’s crash on earnings fears after big firms were slapped with a one-off 25 percent ‘super gain’ tax in the government budget.

The benchmark All Share Price Index was down 1.8 percent (125 points) by mid-day at7,054.67, led by losses in John Keells Holdings, Dialog Axiata, Commercial Bank, Haton National bank and Hmas Holdings.

Analysts said investors feared a slew of new taxes announced in the interim budget ahead of parliamentary polls set for after April could hit corporate earnings.

The new taxes are meant to raise revenue to fund a big pay hike for state workers and cuts in import taxes to reduce the cost of living.

Investors also anticipate interest rates to go up again although the central bank has held rates and inflation is low.

On Friday the benchmark ASPI suffered its steepest fall in almost four years Friday, with 83 billion rupees wiped out of stock values.

The 196.46 point drop in the All Share Price Index was the benchmark’s biggest daily fall since the 14 February 2011 plunge of 204 points.

(Updated)

Correction – Correcting reference to total stock value lost to 83 billion rupees (not 101 billion) in penultimate paragraph.

 

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