Sri Lanka motor shares weaken after duty hike

Apr 26, 2011 (LBO) – Sri Lankan shares closed mixed Tuesday with motor companies weakening after an impot duty hike that will increase prices of cars and reduce sales, brokers said. The main All Share Price Index was barely changed, closing at 7,349.17, up 0.05 percent (3.69 points) while the more liquid Milanka index fell 0.27 percent (18.73 points) to close at 6,836.54, according to stock exchange provisional figures.

Turnover was 1.4 billion rupees.

Motor sector shares once again fell, albeit on small volumes, after Monday’s government announcement raising import duty on several models of cars.

Lanka Ashok Leyland, which imports buses from India, was the only motor sector share traded Tuesday that did not fall with the import duty hike not affecting buses. The share closed higher, at 4,579.50 rupees, up 624.70 or almost 16 percent.

Diesel & Motor Engineering, agents for German luxury car manufacturer Mercedes Benz, Cherokee of the US and heavy vehicles and car manufacturer TATA Motors, closed at 1,595.20 rupees, down 23.10.

United Motors, agents for Mitsubishi and Malaysia’s Viva, closed at 155.40 rupees, down 8.20.

Colonial Motors, which imports Land Rover and KIA vehicles, closed at 281.20 rupees, down 5.40

Most motor company shares had risen last year after the government slashed import duties on vehicles which led to higher sales that are now likely to slow down.

Commercial Bank was heavily traded, closing at 266.30 rupees, down 3.60 with two crossings or private deals of 1.4 million shares at 270 rupees each.