Sri Lankan shares, rupee gain ahead of tax cuts

(Reuters) – Sri Lankan shares ended higher on Wednesday, helped by gains in beverage and banking shares, while the rupee ended firmer on hopes of tax cuts by the new government. ** After the market closed, Cabinet Spokesman Bandula Gunawardana said the government has decided to reduce value-added tax to 8% from 15% with effect from Dec. 1. ** Sri Lanka’s central bank is likely to leave its key interest rates on hold at a policy review on Friday, a Reuters poll indicated, while it waits for the new government’s economic policies after the election of a president on Nov. 16. ** The benchmark stock index ended up 0.39% at 6,118.87, further moving away from its lowest close since Nov. 15 hit on Monday. The bourse gained 1.6% last week, and is up 1.10% for the year. ** Analysts said investors are awaiting for some policy directions from the country’s newly elected president, Gotabaya Rajapaksa. ** The rupee ended 0.39% firmer at 180.80/181.10 per dollar, compared to Tuesday’s close of 181.50/90, Refinitiv data showed. It is up 0.6% so far this year. ** Foreign investors were net sellers for 22 sessions in 24. ** They sold a net 176.7 million Sri Lankan rupees ($981,667) worth of shares on Wednesday, extending the net selling so far this year to 9.45 billion rupees worth of equities, according to index data. ** Equity market turnover was 1.3 billion rupees, more than this year’s daily average of about 711.6 million rupees. Last year’s daily average was 834 million rupees. ** Meanwhile, foreign investors were net buyers of government securities on a net basis for the fifth straight week, purchasing a net 0.21 million rupees worth of government securities in the week ended Nov. 20. ** Total foreign outflows from government securities through Nov. 20 stood at 48 billion rupees, central bank data said.

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