Sri Lankan shares post over 6-wk closing low on VAT hike concern

Reuters: Sri Lankan shares posted their lowest closing level in more than six weeks on Thursday, as a government proposal to raise the value added tax (VAT) weighed on markets.

The government on Wednesday said the cabinet has approved a proposal to increase the VAT to 15 percent from 11 percent with some amendments, a move halted by the Supreme Court earlier. The hike is expected to be implemented after parliamentary approval later this month.

The benchmark Colombo stock index ended 0.31 percent weaker at 6,472.47, its lowest close since Aug. 1. It fell 0.34 percent for the week, its fourth straight weekly loss. Both the stock and foreign exchange markets will be closed on Friday for a holiday.

"It was a very dull day as investors are waiting for directions. But the VAT decision was a bit of a concern for investors," said Yohan Samarakkody, head of research at SC Securities (Pvt) Ltd.

Turnover stood at 301.2 million rupees ($2.07 million), less than half of this year's daily average of 744.6 million rupees.

Foreign investors were net sellers of 19.9 million rupees worth of shares on Thursday, extending the net foreign outflow so far this year to 2.31 billion rupees worth of equities.

Shares of Ceylon Tobacco Company Plc dropped 1.2 percent, while conglomerate John Keells Holdings Plc dropped 0.5 percent.

Sri Lanka Telecom Plc fell 1.6 percent, while Dialog Axiata Plc declined 0.9 percent.

($1 = 145.4000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)

Dialog Axiata seeks buyers for 30% stake

Axiata Group, Malaysia’s biggest mobile-phone operator, is seeking to trim stakes in some of its overseas operations in deals that could raise as much as $700 million.

The Kuala Lumpur based company is seeking a buyer for about 11 percent of Indonesian unit PT XL Axiata, which has a market value of $2.2 billion, according to the people.

It is also selling as much as 30 percent each of listed Sri Lanka unit Dialog Axiata Plc and closely held Cambodian subsidiary Smart Axiata sources said, asking not to be identified because the information is private.

www.dailynews.lk

Sri Lanka police arrests Entrust Securities officials over Rs4.2bn fraud

ECONOMYNEXT - Sri Lanka's financial crimes police have arrested five persons connected to Entrust Securitas, a regulated primary dealer in government bonds, over a 4.2 billion rupees fraud, a media report said.

Sri Lanka's Daily Mirror newspaper said Dharmapriya Bandara Dassanayake (Chairman), Chanuka Ratwatte (managing director), Romesha Dushanthi Senarath (Executive Director), Sanjeewa Dayaratne and Niloshan Romelo Mendis (Director).

The five persons were remanded by court until September 28.

Entrust Securities is now managed by state-run National Savings Bank. The firm is alleged to have mis-appropriated funds of a provident fund in state-run Ceylon Electricity Board, and several funds of the Central Bank of Sri Lanka, which is the regulator.

Sri Lankan shares edge down on VAT hike concern

Reuters: Sri Lankan shares closed marginally lower on Wednesday, posting their lowest closing level in nearly six weeks, as a government proposal to raise the value added tax (VAT) hurt market sentiment.

The government on Wednesday said the cabinet has approved a proposal to increase the VAT to 15 percent from 11 percent with some amendments, a move halted by the Supreme Court earlier. The hike is expected to be implemented after parliamentary approval later this month.

The benchmark Colombo stock index ended 0.24 percent lower at 6,492.74, its lowest close since Aug. 4.

"Investors are worried about the VAT hike. Profit-taking was also there," said Atchuthan Srirangan, a senior research analyst with First Capital Equities (Pvt) Ltd.

Turnover stood at 749.9 million rupees ($5.15 million), in line with this year's daily average of 747.2 million rupees.

Foreign investors, who have been net sellers of 2.29 billion rupees worth of shares so far this year, were net buyers of 407.3 million rupees worth of equities on Wednesday.

Shares of Distilleries Company of Sri Lanka Plc fell 4.38 percent, while Ceylon Tobacco Company Plc dropped 1.21 percent. 

($1 = 145.5000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)