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Tuesday June 18th, 2024

Sri Lanka among best performing stock markets after Venezuela, Hanoi

ECONOMYNEXT – Sri Lanka stocks have risen the most in the world in 2021 after Venezuela in local currency and is just behind Vietnam and Bermuda in US dollar terms among stock markets tracked by Bloomberg, a financial news and data provider.

Venezuela stock market index was up 30.77 percent to 1.74 million by January 15, Bloomberg data show, behind 14.18 percent for the Colombo’s All Share Price Index.

Venezuala had soared becoming a top performer in past years.

The ASPI’s 3.91 percent gain on January 15 was the highest daily rise among markets tracked by Bloomberg.

Colombo stocks were up 9.72 percent in US dollar terms. There is no comparable data for Venezuela, which has seen steep currency falls after record money printing over several years, despite being a top oil producer.

Vietnam’s Hanoi Stock Exchange Index was up 11 percent in local currency and 11.15 percent in US dollar terms.

The State Bank of Vietnam has not printed money for stimulus since a 2008 crisis and has been operating a system slightly tighter than a currency board, building up forex reserves.

The International Monetary Fund has advised the State Bank of Vietnam to reduce mopping up inflows, which the SBV has ignored and has continued up to now, analysts say.

The strong currency has led to the Trump administration labeling it as currency manipulator which undervalues the Dong, a false charge usually laid against strong exporters with stable currencies by the US Treasury.

Vietnam has pointed out that its policy on the Dong is for domestic stability and not for trade advantages.


Vietnam monetary policy for stability not trade PM tells Trump after false US charges of Dong ‘manipulation’

The comic bundling the Vietnam dong with the Swiss franc, perhaps the strongest currency in the world has highly entertained classical economists.

The Dong has appreciated slightly in recent days.

Bermuda stocks were up 9.92 percent in Bermudian dollars and also 9.92 percent in US dollars.

Bermuda has a currency-board-like arrangement against the US dollar since 1972 with a one-to-one parity, when it switched the anchor currency from the Sterling to US dollar when the Bank of England floated, as the Bretton Woods collapsed from US money printing.

Bermuda had a true or orthodox currency board from 1915 without a ceiling policy rate until the Bermuda Monetary Authority law of 1969.

In practice its currency had also not depreciated since 1972, with operations similar to a currency board, though the BMA is no longer considered by experts as being a true or orthodox currency board.

Due to monetary stability it is a financial centre and over 12,000 foreign companies are registered there.

Chile’s General Index was up 9.35 percent in local currency but only 5.9 percent in US dollars. The country which has one of the most market oriented economies in South America has seen some monetary instability in recent years.

Bangladesh’s Dhaka Broad Index was up 8.31 percent in local currency and 8.29 percent in US dollars. The second index DSE 30 was up 12.42 percent.

Vietnam’s Ho Chi Minh Stock Exchange was up 8.18 percent in dong and 8.33 percent in US dollars.

Vietnam is also one of the fastest growing countries after controlling Coronavirus along with other countries close to China such as Cambodia (439 cases zero deaths, Bhutan 842 cases, 1 death, Mongolia 1,517 cases 2 deaths and Taiwan (855 cases 7 deaths).

Sri Lanka is also actively tracing and isolating cases but there has been a steady trickle of deaths and cases.

Dubai’s DFM General Index was up 8.10 percent, and also 8.10 percent in US dollar terms. The UAE monetary authority is also a quasi-currency board with a fixed exchange rate. (Colombo/Jan17/2021)

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Sri Lanka’s Ceylon Chamber links up with Gujarat Chamber

ECONOMYNEXT – The Ceylon Chamber of Commerce has signed an agreement with the Southern Gujarat Chamber of Commerce and Industry (SGCCI) to increase trade cooperation between India and Sri Lanka.

The MOU was signed by CCC CEO Buwanekabahu Perera, SGCCI President Ramesh Vaghasia, in the presence of Dr Valsan Vethody, Consul General for Sri Lanka in Mumbai, India.

“With the signing of the MoU, … the Ceylon Chamber of Commerce and SGCCI aim to facilitate trade between the two countries via initiatives such as trade fairs and delegations, business networking events, training programmes,” the Ceylon Chamber said in a statement.

“This partnership will open doors for Sri Lankan businesses to explore opportunities in Surat’s dynamic market and enable the sharing of expertise and resources between the two regions.”

Established in 1940, SGCCI engages with over 12,000 members and indirect ties with more than 2,00,000 members via 150 associations. It promotes trade, commerce, and industry in South Gujarat.

The region’s commercial and economic centre Surat has risen to prominence as the global epicenter for diamond cutting and as India’s textile hub, and is ranked the world’s 4th fastest growing city with a GDP growth rate of 11.5%

Surat’s economic landscape is vibrant and diverse. As India’s 8th largest and Gujarat’s 2nd largest city, it boasts the highest average annual household income in the country.

The nearby Hazira Industrial Area hosts major corporations like Reliance, ESSAR, SHELL, and L&T. (Colombo/Jun18/2024)

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Sri Lanka telecommunications bill some clauses ruled unconstitutional by SC: Speaker

ECONOMYNEXT – Sri Lanka’s Supreme Court has found a number of clauses in a proposed amendment to the Telecom Telecommunications Amendment bill unconstitutional, speaker Mahinda Yapa Abeywardana said.

“Clause No 8, proposed section 9A 2 of the bill is inconsistent with Article 12 1 of the constitution, however this inconsistency shall cease if word ‘may’ will be replaced with word ‘shall’ as set out in the determination of the supreme court.”

“Clause No 9 is inconsistent with Article 12 1 of the constitution and only can be passed with special majority required under paragraph 2 of the Article 84. However, the inconsistency shall cease if clause is amended as set out in the determination of the supreme court.

Clause No 12, proposed section 17 10 of the bill is inconsistent with Article 12 1 of the constitution and can only be passed with special parliament majority required under Article 84 paragraph 2. However, the inconsistency shall cease if clause is amended as set out in the determination of the supreme court.”

Sections of clauses 13, 18, 20, 33 and 35 were also in violation of the constitution, and could only be passed by a special majority of parliament. (Colombo/Jun18/2024)

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Sri Lanka to exempt one house from imputed rent wealth tax: President

ECONOMYNEXT – Sri Lanka will exempt one house from a proposed wealth tax outlined in an International Monetary Fund program, President Ranil Wickremesinghe said.

About 90 percent of the people’s houses are likely to be exempt from the proposed tax, he said.

“[O]ne house will be exempt from this,” President Wickremesinghe told parliament Monday.

“It is going to have a very high threshold and I do not think the vast majority of the people in this country should even be worried about their house

“Don’t worry your house will be safe.”

The IMF program document however did not mention an exemption on one house, but did mention an exemption threshold.

Taxing houses and thrift in general could have detrimental effects on people’s well-being housing stock and their willingness to remain in the country without migrating, critics say.

Related Sri Lanka to tax imaginary rents on houses under IMF deal

The mechanism of imputed rents was used because rates on houses was assigned to provincial councils and courts could strike it down.

Opposition legislator Harsha de Silva said the Samagi Jana Balwegaya welcomed President Wickremesinghe’s statement. (Colombo/June18/2024)

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