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Tuesday June 18th, 2024

Sri Lanka shares gain over 2-pct on positive sentiments

Colombo Stock Exchabge

ECONOMNYNEXT – Sri Lanka stocks jumped more than two percent at close on Thursday rebounding from the previous fall with renewed hopes on International Monetary Fund (IMF) loan as China engage in debt restructuring discussions, analysts said.

All Share Price Index (ASPI) gained 2.49 percent or 214.47 points to 8,843.05, its highest since February 10.

“Market was quite positive as yesterday market closed on an oversold territory which is why today was a rebound and turnover was decent,” an analyst said.

“There is also hope that IMF will be finalized by March because China is engaging in debt restructuring negotiations.”

The government also announced that a yearlong power interruption will from February 16 as the power regulator giving the approval to tariff hike by the Ceylon Electricity board.

However, analysts said it didn’t heavily influence investor sentiments.

Sri Lanka postponed Postal voting for the March 9 Local Government polls due to reasons beyond the control of the Election Commission (EC).

Net foreign earnings were 262,466 rupees on Thursday. However, they have bought a net 4.1 billion worth of shares so far this year.

Even though the discussions have started the island nation is still need the assurance from China for the IMF loan approval from the global lender’s Board.

The loan was originally expected in December last year, but now it is expected in the second quarter, government officials who are aware of debt restructuring say.

The island nation’s main business body, Ceylon Chamber of Commerce, has urged the IMF to proceed with the re-structuring undertakings already given by India and the Paris Club while requesting China for full assurances.

India and the Paris Club has given specific assurances to re-structure the sovereign debt defaulted Sri Lanka’s external borrowing. China has offered a two-year moratorium and re-structure debt during that time, but some countries including the United States have asked China to specific assurances.

The most liquid index S&P SL20 closed 2.78 percent or 73.57 points up at 2,718.31.

The market saw a turnover of two billion rupees today, slightly higher than this year’s daily average of 1.8 billion rupees, but less than the 2022 average turnover of 2.9 billion rupees.

Top gainers were Ceylinco insurance, LOLC Finance and Melstacorp. (Colombo/Feb16/2023)

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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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