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Tuesday June 18th, 2024

Sri Lanka rupee ends firmer, bond yields flat

ECONOMYNEXT – Sri Lanka rupee closed firmer at 185.80/90 to US dollar in the spot market on Friday while bond yields remained unchanged and stocks closed lower, dealers and brokers said.

Rupee closed at 186.05/15 to the greenback on Thursday.

Liquidity in the overnight money market was 165.50 billion rupees on Friday, down from 173.32 billion rupees at the previous day’s end.

In equities the Colombo’s All Share Price Index fell 1.14 percent or 58.14 points to end at 5,050.90.

The S&P SL20 index of more liquid stocks fell 1.73 percent or 38.57 points to 2,190.75.

The market turnover was 1.48 billion rupees with 28 stocks gaining and 128 falling.

Net foreign buying in the market was 393 million rupees.

Crossings or negotiated traded in Commercial Bank and Hatton National Bank too contributed to the market turnover. Five crossings Commercial bank crossings amounted to 406.9 million rupees while two crossings on HNB amounted to 166 million rupees.

John Keells Holdings contributed most to the fall of ASPI, dropping 3.80 rupees to trade at 115.60 rupees a share.

Sampath Bank shares traded 2.90 rupees down at 122.10 rupees while CT Holdings stocks fell 5.00 rupees to trade at 139.50 rupees a share, also contributing to the ASPI’s plunge.

In the secondary government securities market, gilt yields were flat from yesterday’s closing in moderate trading, dealers said.

Dealers said that high liquidity was seen in 2024 maturity.

A 2-year bond maturing on 15.12.2022 closed at 5.75/80 percent on Friday, easing from 5.80/85 percent at Thursday’s close.

A bond maturing on 15.01.2023 closed at 5.88/93 percent, down from 5.90/95 percent at Thursday’s close.

A bond maturing on 15.09.2024 closed at 6.40/45 percent, down from 6.42/47 percent at yesterday’s closing.

A bond maturing on 01.05.2025 closed at 6.52/60 percent on Friday, down from 6.57/65 percent at yesterday’s closing.

A bond maturing on 01.02.2026 closed at 6.70/80 percent, stable from 6.70/78 percent.

A bond maturing on 15.10.2027 closed at 6.90/7.00 percent, Unchanged from 6.90/7.00 percent at Thursday’s end. (Colombo/July03/2020)

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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 exempt on one house, but did mention a 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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