ECONOMYNEXT – Sri Lanka’s shares closed higher in trade on Friday, over positive macro-sentiments encouraging investors to redeem their interest towards buying, an analyst said.
The main All Share Price Index was up 0.72 percent or 62.19 points to 8,753.80, while the most liquid index S&P SL20 was up 0.68 percent or 16.87 points to 2,487.29.
Sri Lanka’s inflation in the 12-months to May 2023 has eased to 25.2 percent from 35.3 percent a month earlier according to a revised Colombo Consumer Price Index calculated by the state statistics office.
Prior to the Monetary Policy investors were quite optimistic that inflation is to lower and interest rates will decrease and since exp, an analyst said.
Sri Lanka Central Bank is waiting for the government proposal on the domestic debt restructuring (DDR), the central bank governor Nandalal Weerasinghe said amid uncertainty over DDR and speculations over instability in the banking sector.
“On debt restructuring, the borrower is the ministry of finance’s treasury. Certainly we will announce what the strategy will be. We are waiting for a government proposal,” Weerasinghe said.
Sri Lanka’s investors are waiting on assurances to be made on debt restructuring and optimization, Central Bank Governor Nandalal Weerasinghe said, “It is up to the government to clear the uncertainty, because from our side we have done that part.”
The central bank cut the key policy rates by 250 basis points to spur a faltering economic growth as inflation was decelerating faster than it projected.
The speculation of DDR has hit the market and the risk premium has kept the market lending rates well above the central bank’s policy rates. The government has yet to present its plans on DDR.
Weerasinghe said the central bank has done its best to reduce the risk premium through bringing down the market lending rates while keeping the policy rates unchanged.
Sri Lanka’s President Ranil Wickremesinghe has discussed progress of International Monetary Fund program and debt restructuring during a visit of Deputy Managing Director Kenji Okamura, statement said.
“The discussion primarily focused on the progress of the IMF program between Sri Lanka and the IMF,” a statement from President’s office said.
“Attention was also paid to the on-going debt restructuring negotiations.”
However Officials from IMF have said Sri Lanka has to focus on expanding taxes.
“We discussed the importance of fiscal measures, in particular revenue measures, for a return to macroeconomic stability,” Deputy Managing Director Kenji Okamura said in a statement.
The finance ministry this week issued rules requiring everyone above 18 year of age to register to pay income tax.
“I was encouraged by the authorities’ commitment to negotiate a debt strategy in a timely and transparent manner.
The market generated a revenue of 738 million rupees, while the daily average was 1 billion rupees.
Top gainers in trade were Vallibel One, LOLC Finance and Browns Investment. (Colombo/June02/2023)
Most vehicle owners top up their fuel tanks, go back to their places empty the fuel to cans etc., and come back for more fuel. Genuine and needy users are marginalized with reports of thuggery. The QR code program does not seem to be a success. Why????????