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Monday December 11th, 2023

Sri Lanka shares fall to near 3-1/2-month low; budget policy impacts weigh

Colombo Stock Exchabge

ECONOMYNEXT – Sri Lanka shares slipped over 2 percent to their near three-and-a-half month low on Wednesday dragged down by index heavyweights as investors gradually absorbing the impacts of the budget 2023 policies, brokers said.

Less than expected quarterly earnings in September quarter has dented the bourse, analysts said.

“Earnings report of big counters are not so impressive this time and that’s bringing the market down,” an analyst said.

The main All Share Price Index (ASPI) closed 2.47 percent or 204.48 points lower at 8,087.04, its lowest since August 3.

Analysts said, even though the overall budget will not have a direct impact on the market, certain policies such as fuel surcharge tax can affect the power and energy sectors and overall manufacturing sector.

President Ranil Wickremesunghe announced a surcharge tax at the point of importation, on diesel, petrol and crude oil to pay some loans of the state-run fuel retailer.

The budget saw policies that will increase the cost of doing businesses across the board, but relieving the government from depending on excess money printing, analysts say.

The market witnessed a turnover of 1.6 billion rupees, just above half of \this year’s daily average turnover of 3.1 billion rupees.

The market saw a foreign outflow of 137 million rupees. But the market has seen a total net foreign inflow of 18.1 billion rupees so far for this year.

Analysts said, a bearish sentiment can be expected in the banking and financial sector until a clear direction is been given by the government on local debt restructuring.

The market has been on a falling trend as investors awaited for cues on policies from the 2023 budget.

Investors are also concerned over the impact of local debt restructuring on risky assets, analysts have said, as the market is waiting for a debt restructuring decision between the government and its creditors ahead of an IMF loan approval.

The more liquid index S&P SL20 closed 3.19 percent or 81.08 points lower at 2,464.20.

The ASPI has fallen 5.9 percent so far in November after losing 13.4 percent in October. It has lost 33.9 percent year-to-date after being one of the world’s best stock markets with an 80 percent return last year when large volumes of money were printed.

LOLC Holding, dragging the market down, fell 8.9 percent to close at 347.2 rupees a share.

The market heavy weight Expolanka fell 6.7 percent to close at 132.7 rupees’ while Browns Investments closed down 8.93 percent at 5.1 rupees.

The listed companies have shown reasonable profits in their third quarter of the year, however, analysts say the disposable income of the general public due to proposed tax hikes is the main reason for the negative expectations over the December earnings. (Colombo/Nov16/2022)

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Sri Lanka wants university research to lead to commercially viable products

ECONOMYNEXT – Sri Lanka’s ministry of industries wants to ensure commercially-ready products and services are produced by university research, by facilitating partnerships with factories and entrepreneurs.

After a currency crisis, Sri Lanka’s government is in a drive to boost its trade balance by increasing exports.

“Our export basket hasn’t changed recently, partly because our small and medium entrepreneurs don’t have sufficient research and development facilities (like the multinationals) to innovate their products for the export market,” Additional Secretary of the Ministry of Industries, Chaminda Pathiraja said.

“At the same time, state universities and research institutes produce a large amount of research findings yearly, which end up sitting in those institutions; they don’t reach the industry,” Pathiraja said at a press briefing to announce a program on commercialization of new products and research, to be held tomorrow at the Waters Edge.

The networking forum will bring innovators and manufacturers together to focus on the commercialization of research for the value added tea, coir, spice, dairy products, gem and jewellery and packaging products industries.

“We want to encourage collaboration, through programs like our University Business League etc, so that the research output can be commercialized, and what is produced by our factories can increase in quantity and quality. We must focus on the export market.”

The objective of this program, he said, was to reduce the gap in acquiring innovators’ ideas and skills by the investors, and ultimately boost the manufacturing sector’s efficiency in alignment with the export market.

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Sri Lanka rupee opens at 327.00/50 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee opened at 327.00/50 to the US dollar on Monday, from 327.00/30 Friday, dealers said.

On the Colombo Stock Exchange, both indices opened up: The All Share Price Index 0.28 percent at 10,823, and the S&P SL20 0.35 percent at 3,113.85.

Bond yields were up.

A bond maturing on 01.08.2026 was quoted at 14.05/20 percent from 14.05/15 percent.

A bond maturing on 15.01.2027 was quoted at 14.05/20 percent from 14.10/25 percent.

A bond maturing on 01.07.2028 was quoted at 14.20/50 percent from 14.20/35 percent.

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Sri Lanka promoting Buddhist tourism from Vietnam, ASEAN

ECONOMYNEXT – Sri Lanka is planning to boost Buddhist tourism by linking temples in the country with those in East Asia, Foreign Minister Ali Sabry said after to welcoming a delegation of monks from Vietnam.

President Ranil Wickremesinghe, and Minister Sabry have initiated a temple-to-temple program where 100 Sri Lanka temples will be linked with counterparts in the Association of South East Asian Nations region.

“Tourism development will get a lot of growth with the temple-to-temple program,” Minister Ali Sabry said.

Along with the delegation of monks, five travel agents from Vietnam were also invited.

Under the first phase of the Temple-to-temple programs, several monks from Sri Lanka had received invitations from Indonesia, Malaysia, South Korea and Vietnam the Foreign Ministry said.

The Temple-to-Temple diplomacy program will be extended to Singapore, Japan, Thailand and Cambodia during the second phrase of the program.

Sri Lanka is targeting 2.3 million tourists in 2023, after getting about 1.5 million this year. (Colombo/Dec10/2023)

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