Stock market unimpressed by 2018 budget say analysts

By Hiran H.Senewiratne

The 2018 budget has not been found to be attractive by the stock market as certain proposals are not clear enough for market investors.

The budget places a substantial emphasis on the SME sector and lower income categories but certain sectors, such as banking and telecom, will be negatively impacted by the budget, analysts said.

The budget imposed new taxes on motor vehicles, telecom, banks and liquor in a bid to boost revenue as the budget deficit for the current year slipped to 5.2 percent of the gross domestic product.

'The Rs. 200,000 levy on each cellular tower that mobile companies maintain  would have a major impact on mobile companies, market analysts said.

Finance Minister Mangala Samaraweera imposed taxes on telecom towers and text messages and introduced a debt repayment levy of 20 cents per Rs. 1,000  bank transaction with effect from April 1 next year. 'This also impacts the banking sector, stock market analysts said.

Amid those developments the day's turnover at the CSE stood at Rs. 1.3 billion despite both indices going down. The All Share Price Index declined by 41.04 points and S and P SL20 index by 32.01 points.

There were no crossings but big parcel transactions took place  in the retail market. Softlogic Life Insurance, formerly Asian Alliance,  transacted a  28.13 million share parcel for Rs. 582 million and each share value was Rs. 20.20. During the day 28.14 million share volumes were traded,

In Lion Brewery, out of 979,000 shares 942,000 shares changed hands in two different parcels and Sampath Bank contributed Rs. 16 million to the market and 49,000 shares changed hands. During the day 38.64 million share volumes changed hands in 3374 transactions.

Meanwhile, JKSB reporting yesterday's CSE trade said -

ASPI: 6,511.55 (-41.04 pts; -0.63%); Val T/O: Rs. 1.29bn (US$8.39mn); Vol T/O: 38.6mn; Trades: 3,374

Advance/decline ratio: 67/115; Top gainer: BLUE.X (+25.00%) ; Top loser: AINV.N (-20.00%)


• The ASPI ended lower amid healthy turnover levels. AAIC and LION led market activity and collectively amounted to 86% of total turnover.

• Banks, Finance and Insurance was the most actively traded sector (-0.83%)

• Healthcare was the best performing sector (+0.11%)

• Telecommunications was the worst performing sector (-2.69%)

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