Markets

Sri Lanka shares close lower on weak macroeconomic sentiments

Friday January 13, 2023 6:44 pm

ECONOMYNEXT – Sri Lanka shares edged down on Friday on weak macroeconomic sentiments on constant delays on the International Monetary Fund (IMF) loan that was supposed be acquired by the first quarter of 2023, analyst said.

“Bourse closed the week on a negative note as investor sentiment weaken over a possible delay in Debt restructuring talks with bilateral creditors and a downgrade of Sri Lankan banks’ ratings by Fitch,” First Capital Market Research said in it’s daily note.

“Accordingly, selling spree emerged on major banks where COMB largely dragged the index down.”

The main All Share Price Index (ASPI) closed at 0.86 percent or 71.47 points lower at 8,262.58.

The index has already lost 1.9 percent within the first two weeks of trade.

Standard Chartered report said that the debt restructuring could be pushed back to end-2023 due to delays in the IMF programme.

“IMF board approval for Sri Lanka’s Extended Fund Facility (EFF) programme has been delayed as negotiations with bilateral lenders take longer than expected. We now expect board approval to happen in Q2-2023 (versus Q1 previously) given delays in securing financing assurances from bilateral creditors,” the report said.

Market has been falling since the year started due to the proposed 65 percent electricity tariff hike while the government also hiked various excise duties.

The most liquid index S&P SL20 closed 0.86 percent or 21.84 points lower to 2,528.08.

First quarter of 2023 is expected to be negative with the taxations going in to effect from January 1st and there are talks of a hike in electricity tariffs, which has gained Cabinet approval and is waiting for recommendations by the Public Utilities Commission of Sri Lanka.

Whereas the second quarter was expected to be more positive with the anticipation of IMF getting through and with the interest rates expected to ease as the taxes starts to generate funds.

Sri Lanka is expecting a further contraction in the economy after a negative growth in 2022, Cabinet Spokesperson Bandula Gunawardena said at the Weekly Cabinet Press Briefing.

The market witnessed a turnover of 1.5 billion rupees, lower than this month’s 2.0 billion rupees average daily turnover. It is also comparatively much lower than 2022’s daily average turnover of 2.9 billion rupees.

The market saw a net foreign inflow of 109 million rupees. The net foreign inflow for the first two weeks of January is 200 million rupees. The total foreign inflow of 2022 was 31 billion rupees.

Commercial Bank pushed the index down to close at 1.8 percent lower at 50.2 rupees.
Browns Investment fell 3.1 percent to close at 6.3 rupees and Lanka IOC closed 1.9 percent lower at 177.5 rupees a share. (Colombo/Jan13/2023)

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ICT

Sri Lanka’s Dialog Axiata hopes to hold prices despite rising costs

Friday January 27, 2023 6:35 am

ECONOMYNEXT – Sri Lanka’s Dialog Axiata hopes to hold prices despite higher taxes, rising costs like energy, officials said as the country goes through the worst currency crisis in the history of its intermediate regime central bank.

High inflation following a collapse of the currency has reduced real incomes of customers.

“There are many factors to consider, especially with the last price increase we did in last year did not resulted in a significant increase in revenue” Pradeep De Almeida · Group Chief Technology Officer at Dialog Axiata said at the launch of its Future zone at Lotus tower.

In September,2022 following an electricity tarrif hike dialog increased its tariffs on Mobile, Fixed Telephone, Broadband Plans and Value Added Services (Prepaid and Postpaid) by 20 percent while tariffs on all Pay Television Services were raised 25 percent.

Value Added Tax (VAT) was also raised by the government from 12 percent to 15 percent on all Telecommunications and Pay TV services.

“Even though we increase the prices we only saw around 8-9 percent increase in revenue,” Almeida said.

“That is because many users cut off their usage to limit the spending”.

Dialog will increase efficiencies and manage costs in an attempt to avoid prices increases for customers, he said.

Over the 24 months to December 2022, Sri Lanka;s central bank has generated inflation of 76 percent, based on the Colombo Consumer Price Index official data shows. Following the currency collapse, more power tariff hikes are planned.

“We are trying to mainly bear the cost from our side. We are getting a massive support from our parent company Telekom Malaysia International,” Navin Peiris, Group Chief Enterprise Officer at Dialog told EconomyNext.

“Therefore as of now, there is no plan to increase prices”. (Colombo/Jan 26/2023)

Markets

Sri Lanka shares fall at market close on profit taking

Thursday January 26, 2023 7:43 pm

ECONOMYNEXT – Sri Lanka shares fell on Thursday as profit taking entered the market mainly on financial and diversified sectors, brokers said.

The main All Share Price Index (ASPI) fell 0.13 percent or 11.50 points to close at 8,926.56.

“The market was trading on dull trade mainly due to profit taking,” an analyst said.

“Also we saw investors taking a sideline as quarterly reports started to come”.

The earnings in the first quarter of 2023 are expected to be negative with revised up taxes and an imminent electricity tariff hike.

Earnings in the second quarter are expected to be more positive with the anticipation of IMF loan and possible reduction in the market interest rates as the tax revenue has started to generate funds.

The central bank’s policy decision was expected and investors have been eying on IMF deal with hopes of rapid economic recovery from the current unprecedented economic crisis, however since the market gained in the last sessions profit taking has come about, analysts said.

The market has been on a rising trend on the hopes of a faster IMF deal. However, the central bank government said the IMF deal is likely in the quarter or in the first month of the second quarter.

The most liquid index S&P SL20 fell 0.33 percent or 9.21 points to 2,798.

LOLC had seen some attention by investors as the firm disposed 90,256,750 shares held with Agstar PLC at 15-17.50 rupees a share.

The market witnessed a turnover of 1.2 billion rupees, lower than the month’s daily average of 1.9 billion rupees.

Expolanka dragging the market down closed 2.36 percent down at 186.7 rupees a share. Sampath bank fell 1.41 percent to close at 42 rupees a share while Royal Ceramic Lanka closed 2.59 percent dwn at 30.1 rupees a share.

(Colombo/Jan26/2023)

Bonds & Forex

Sri Lanka bonds yields steady at close

Thursday January 26, 2023 6:29 pm

ECONOMYNEXT – Sri Lanka bond yields were steady at close on Thursday, dealers said, while a guidance peg for interbank transactions by the Central Bank remained steady.

A bond maturing on 01.05.2024 closed at 31.00/20 percent unchanged from the last close.

A bond maturing on 15.05.2026 closed at 26.60/90 percent, up from 28.50/70 percent on Wednesday.

A bond maturing on 15.09.2027 closed at 28.60/85 percent, up from 28.50/60 percent at the last close.

The three months bill closed at 29.75/30.25 percent unchanged from the last close.

The Central Bank’s guidance peg for interbank US dollar transactions appreciated by another 2 cents to 362.14 rupees against the US dollar.

Commercial banks offered dollars for telegraphic transfers at 360.49 rupees on Thursday, data showed. (Colombo/Jan 26/2022)