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Thursday February 29th, 2024

Sri Lanka shares down after violent clashes amid political unrest 

ECONOMYNEXT – Sri Lanka stocks slipped on Thursday (14), reverting from a three-session gaining streak as political unrest and clashes between protesters and security forces weighed on sentiment, brokers said.

The main All Share Price Index (ASPI) closed 0.64% or 47.43 points down at 7,318.24.

“The political unrest from the last evening dipped the market. However it stabilised with the news of the protesters handing back the state buildings as it was seen as an indication that the protest was easing,” a market analyst said.

“Again towards the end, we saw a dip with the announcement of the curfew. So overall, this scenario is keeping investors away on a wait and see approach.”

On Wednesday, protesters demanding Prime Minister Ranil Wickremesinghe’s resignation occupied his office after over four hour agitation amid repeated tear gassing. Later in the night, some protesters clashed with security forces when they attempted to occupy Parliament Speaker Mahinda Yapa Abeywardena’s official residence. Over 100 people were injured in the both clashes.

On Saturday, Sri Lanka saw protesters storming the President’s official residence in Colombo, demanding his resignation by force after he refused to quit as a failed president.

President later officially announced that he will step down on July 13 and a new President is expected to be appointed on July 20. The President, however, sent his resignation letter only on July 14 via email from Singapore.

The more liquid S&P SL20 index fell 1.18% or 28.00 points to 2,337.22.

Sri Lanka is facing the worst fuel crisis in its post-independent era.

The turnover was 625 billion rupees, a fifth of this year’s daily average turnover of 3.23 billion rupees.

“The lower turnover in the market is a clear indication that the investors are staying away and it will be the case so for the next few days until this political side is settled,” the analyst said.

The main ASPI has lost 0.32% in July so far after falling 9.3% in June, reversing a 6% gain in May. It lost 23% in April followed by a 14.5% fall in March.

The market has lost 40.1% so far this year after being one of the world’s best stock markets with an 80% return last year when large volumes of money were printed.

Sri Lanka’s sovereign debt default on April 12 has already led the country to be rated with restricted/selective default rating by rating agencies, which has weighed on investor sentiment.

Foreigners bought a net of 5.4 million rupees. The total foreign outflow so far this year is 938 million rupees.

Investors are also concerned over the steep fall of the rupee from 203 to 370 levels so far in 2022.

Expolanka led the ASPI fall. It dipped 3.1% to close at 173.5 rupees a share.

LOLC fell 2.7% to 389.3 rupees a share, while Sampath Bank closed 1.3% weaker at 29.9 rupees a share. (Colombo/July14/2022)

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Sri Lanka’s RAMIS online tax collection system “not operatable”: IT Minister

ECONOMYNEXT – Sri Lanka’s online tax collection system RAMIS is “not operatable”, and the Ministry of Information Technology is ready to do for an independent audit to find the shortcomings, State IT Minister Kanaka Herath said.

The Revenue Administration Management Information System (RAMIS) was introduced to the Inland Revenue Department (IRD) when the island nation signed for its 16th International Monetary Fund (IMF) programme in 2016.

However, trade unions at the IRD protested the move, claiming that the system was malfunctioning despite billions being spent for it amid allegations that the new system was reducing the direct contacts between taxpayers and the IRD to reduce corruption.

The RAMIS had to be stopped after taxpayers faced massive penalties because of blunders made by heads of the IT division, computer operators and system errors at the IRD, government officials have said.

“The whole of Sri Lanka admits RAMIS is a failure. The annual fee is very high for that. This should be told in public,” Herath told reporters at a media briefing in Colombo on Thursday (29)

“In future, we want all the ministries to get the guidelines from our ministry when they go for ERP (Enterprise resource planning).”

President Ranil Wickremesinghe’s government said the RAMIS system will be operational from December last year.

However, the failure has delayed some tax collection which could have been paid via online.

“It is not under our ministry. It is under the finance ministry. We have no involvement with it, but still, it is not operatable,” Herath said.

“So, there are so many issues going on and I have no idea what the technical part of it. We can carry out an independent audit to find out the shortcomings of the software.”

Finance Ministry officials say IRD employees and trade unions had been resisting the RAMIS because it prevents direct interactions with taxpayers and possible bribes for defaulting or under paying taxes.

The crisis-hit island nation is struggling to boost its revenue in line with the target it has committed to the IMF in return for a 3 billion-dollar extended fund facility. (Colombo/Feb 29/2024) 

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Sri Lanka aims to boost SME with Sancharaka Udawa tourism expo

ECONOMYNEXT – Sri Lanka is hosting Sancharaka Udawa, a tourism industry exhibition which will bring together businesses ranging from hotels to travel agents and airlines, and will allow the small and medium sector build links with the rest of the industry, officials said.

There will be over 250 exhibitors, with the annual event held for the 11th time expected to draw around 10,000 visitors, the organizers said.

“SMEs play a big role, from homestays to under three-star categories,” Sri Lanka Tourism Promotion Bureau Chairman, Chalaka Gajabahu told reporters.

“It is very important that we develop those markets as well.”

The Sancharaka Udawa fair comes as the Indian Ocean island is experiencing a tourism revival.

Sri Lanka had welcomed 191,000 tourists up to February 25, compared to 107,639 in February 2023.

“We have been hitting back-to-back double centuries,” Gajabahu said. “January was over 200,000.”

The exhibition to be held on May 17-18, is organized by the Sri Lanka Association of Inbound Tour Operators.

It aims to establish a networking platform for small and medium sized service providers within the industry including the smallest sector.

“Homestays have been increasingly popular in areas such as Ella, Down South, Knuckles and Kandy,” SLAITO President, Nishad Wijethunga, said.

In the northern Jaffna peninsula, both domestic and international tourism was helping hotels.

A representative of the Northern Province Tourism Sector said that the Northern Province has 170 hotels, all of which have 60-70 percent occupancy.

Further, domestic airlines from Colombo to Palali and the inter-city train have been popular with local and international visitors, especially Indian tourists. (Colombo/Feb29/2024)

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Sri Lanka rupee closes at 309.50/70 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 309.50/70 to the US dollar Thursday, from 310.00/15 on Wednesday, dealers said.

Bond yields were slightly higher.

A bond maturing on 01.02.2026 closed at 10.50/70 percent down from 10.60/80 percent.

A bond maturing on 15.09.2027 closed at 11.90/12.10 percent from 11.90/12.00 percent.

A bond maturing on 01.07.2028 closed at 12.20/25 percent.

A bond maturing on 15.07.2029 closed at 12.30/45 percent up from 12.20/50 percent.

A bond maturing on 15.05.2030 closed at 12.35/50 percent up from 12.25/40 percent.

A bond maturing on 01.07.2032 closed at 12.55/13.00 percent up from 12.50/90 percent. (Colombo/Feb29/2024)

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