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Monday December 11th, 2023

Sri Lanka shares gain for 9th session in high turnover

ECONOMYNEXT – Sri Lanka stocks gained for the ninth consecutive session on Tuesday (09) and generated the highest turnover in five months, pushed up by energy sector shares mainly Lanka IOC as the country allowed the energy firm to open 50-filling stations across the island in a move to avoid a future fuel crisis, dealers said.

The turnover was 5.3 billion rupees, more than this year’s average daily turnover of 3.06 billion rupees. The highest since March 25.

Lanka IOC contributed around 40% or 1.99 billion to the market turnover.

The main All Share Price Index (ASPI) rose 0.91% or 77.03 points to 8,500.00. It has risen 10.6% in the last nine sessions.

“The market is continuing to move on Lanka IOC and we think some investors may move to equities from fixed deposits,” a top market analyst said.

However, there’s selling in market heavyweights as well.

On Tuesday Sri Lanka announced a 75 percent electricity tariff hike.

Investors say the move will add to the woes of manufacturing firms.

The government tabled an interim budget on Tuesday, revising the budget presented last year as the country is going through an unprecedented economic crisis.

President Ranil Wickremesinghe in the Parliament on August 3 revealed the plans on a 4-year IMF loan programme, debt restructuring, fiscal reforms, and dealing with loss-making state-owned enterprises.

On Friday, he said Sri Lanka will have to deal with the IMF as the country is expected to bring in heavy taxes and other revenue methods to show IMF.

Sri Lanka has already declared sovereign debt default on April 12 this year and failed to pay its first sovereign debt in May amid a deepening economic crisis which later turned into a political crisis and led to the change in the president, cabinet, and government.

The more liquid S&P SL20 index moved up, closing at 0.35% or 9.73 points stronger at 2,803.88.

Sri Lanka is facing its worst fuel and economic crisis in its post-independent era and the economy is expected to contract 7% this year.

The main ASPI gained 9.9 percent in August so far after gaining 5.3% in July. It lost 9.3% in June, 23% in April, and 14.5% in March.

The market index has lost 30.4% 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.

Net foreign inflow was 74 million rupees on Tuesday while the total net foreign outflow so far this year is 847 million rupees.

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

Aitken Spence which pushed the ASPI, closed 8.3% up at 113.8 rupees a share, and Chevron Lubricants closed 13.8% up at
107.8 rupees a share, Lanka IOC while gained 5.7 to 138.8 rupees. (Colombo/Aug 09/2022)

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Sri Lanka’s ousted utilities regulatory chief convinced he’ll be president

ECONOMYNEXT — Sri Lanka’s former public utilities regulatory chief Janaka Ratnayake, who was removed in May following a parliamentary vote, has confirmed that he intends to run for president.

Speaking to reporters on Sunday December 10 in the wake of an hours-long island-wide power outage the previous evening, Ratanayake said he will be the definite winner at a future presidential poll.

“I announced [my intention to run] officially on December 07, my birthday. I’m definitely coming as a presidential candidate. That’s not all, I’m the definite president at a future presidential election,” he said.

Ratnayake, in his first media appearance in months, was responding to questions about newspaper advertisements published on December 07 announcing his future candidacy.

Sri Lanka’s parliament on May 24 opted to remove the former chairman of the Public Utilities Commission of Sri Lanka (PUCSL), with 123 members voting in favour. This marked the first time a head of an independent government commission was sacked by Sri Lanka’s parliament.

Power & Energy Minister Kanchana Wijesekara, who had been at loggerheads with the regulatory chief, said at the time that the official had acted obstinately without the concurrence of fellow commission members.

The minister levelled five charges against Ratnayake, the first twoof  which were based on a February 10 verdict by the Court of Appeal rejecting an application filed by the offiical against an electricity tariff hike. Opposition legislators slammed the decision saying it undermined independent commissions.

Ratnayake’s presidential ambitions have been known for some time. A day before parliament voted to remove him, he told reporters: “If I can change the country, I will definitely join politics, because my intention is to serve the people and what is right.”

Ratnayake had blocked delayed a tariff hike in early 2023, resulting in losses to the state-run Ceylon Electricity Board (CEB), Minister Wijesekara claimed at the time. The PUCSL had als onot enabled tariff hikes for nine years, requiring its governing law to be changed, Wijesekera said.

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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.
(Colombo/Dec11/2023)

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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.
(Colombo/Dec11/2023)

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