Sri Lanka shares slip from near 3-wk high on profit taking

FIRST CAPITALā€™S SENIOR RESEARCH ANALYST ATCHUTHAN SRIRANGAN, SPEAKS TO REUTERS.

Sri Lankan shares ended slightly weaker on Tuesday, ending a four-session run of gains, to slip from a near three-week high as investors booked profits, brokers said.

The Colombo stock index ended 0.28 percent or 17.72 points down at 6,350.40, slipping from its highest close since Nov. 15 hit on Monday. The bourse gained 1.17 percent last week, recording its first weekly gain in four weeks.

Despite recent gains, investors are concerned that proposed increases in various taxes and fees would reduce disposable income and challenge consumption-led growth.

“The market is going to be volatile for some time,” said Atchuthan Srirangan, a senior research analyst with First Capital Equities (Pvt) Ltd.

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

Brokers said investors were concerned about the sustainability of rates after the central bank on Tuesday kept key rates unchanged.

Foreign investors bought a net 36.9 million rupees ($248,000) worth of shares on Tuesday. They have been net sellers of 1.79 billion rupees worth of shares this year.

Turnover was 492.97 million rupees, compared with this year’s daily average of 698.4 million rupees.

Shares of Commercial Leasing and Finance Plc fell 8.33 percent while Dialog Axiata Plc fell 0.95 percent.

($1 = 148.8000 Sri Lankan rupees)

(Reporting by Ranga Sirilal)