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Sri Lankan shares edge down; volume slumps to 32-mth low after budget
November 11, 2016 / 11:55 AM / in a year

Sri Lankan shares edge down; volume slumps to 32-mth low after budget

COLOMBO, Nov 11 (Reuters) - Sri Lankan shares closed slightly weaker on Friday while volume slumped to a 32-month low after budget proposals on Thursday to revise corporate and withholding taxes to boost revenue.

The government aims to boost its 2017 tax revenue by 27 percent to 1.82 trillion rupees ($12.36 billion) year on year, to meet a commitment given to the International Monetary Fund in return for a $1.5 billion loan in May.

“There is nothing much to see in the budget. It has failed to give the expected boost to the market,” said Danushka Samarasinghe, research head at Softlogic Stockbrokers.

“Increases in various taxes, including the corporate tax, will now add to the continuing negative momentum and also increases in various fees and taxes will reduce disposable income of the people. This will challenge the consumption-led growth.”

Turnover was 112.4 million rupees, the lowest since March 17, 2014, and well below this year’s daily average of 711.3 million rupees.

The benchmark index of the Colombo Stock Exchange ended 0.08 percent, or 5.19 points, weaker at 6,415.59. It fell 0.4 percent for the week.

Foreign investors bought stocks for an eighth straight session, picking up a net 1.6 million rupees. They have net sold 882.95 million rupees worth of shares so far this year.

Shares of Hemas Holdings Plc fell 4.66 percent while Nestle Lanka Plc declined 1.61 percent and Dialog Axiata Plc dropped 0.88 percent.

$1 = 147.3000 Sri Lankan rupees Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu

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