Sri Lanka company earnings seen recovering, interest rates falling

Colombo Stock Exchange Board

ECONOMYNEXT – Sri Lankan corporate earnings are likely to recover as their interest costs fall and consumer demand and economic activity picks up, First Capital has said in their mid-year economic outlook.

Dimantha Mathew, Head of Research First Capital, said they expect the dip in interest rates and possible rise in consumer demand to boost earnings.

The lower interest regime is seen to continue over the next 9-12 months resulting in most companies recording lower finance cost from the third quarter of 2019 and beyond, he told a forum where the outlook was presented.

The lower interest rate environment and forthcoming elections are expected to boost consumer demand and economic activity, resulting stronger sales growth for most companies.

It would also provide opportunity to improve credit demand as well, Mathew said, noting that a considerable improvement in listed company earnings is seen over the next few quarters.
(COLOMBO, 03 October 2019)

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