ECONOMYNEXT – Sri Lanka shares edged up on Wednesday on dull sentiments over rising protests against tax hikes, which is also expected to hit corporate earnings in the face of reduced consumption, analysts said.
“The President’s address in Parliament assured that the country would be seeing tough times in the road to recovery and that taxes are here to stay,” an analyst said.
Protests were staged against the tax hikes on Wednesday in capital Colombo citing it is “unfair” and does not comply with cost of living especially since income has not reflected inflationary hikes.
If protests resurface, investors could pull down investor momentum towards shares, the analyst said.
“The investors are looking at a positivity towards the IMF, there is no concrete confirmation on that but they are looking at a positive direction with the IMF,” the analyst said.
All Share Price Index (ASPI) edged up by 0.13% or 11.59 points 8,987.45
“Investors are willing to invest if macroeconomic conditions come into place and there are further developments to an assured IMF deal,” an analyst said.
President Wickremesinghe said that Sri Lanka had reached the final stage of negotiations with the International Monetary Fund and that a basic agreement last September was agreed for and now there is the debt sustainability program.
The Central Bank expects the IMF deal to be finalized by the end of the first quarter or fist month of second quarter.
Sri Lanka got assurances from India, Paris Club and China towards debt restructuring in order to secure 2.9 billion dollars for an IMF loan.
The IMF has so far only accepted the letter of debt re-structuring sent by India.
However, the IMF has still not approved restructuring assurances from Paris Club and China.
China’s Exim Bank has given Sri Lanka a two-year moratorium on its defaulted loans and will discuss additional re-structuring within the ‘window’, the Chinese Foreign Ministry spokesperson Mao Ning said last week,
“The international support demonstrates that we are on the right path,” President Wickremesinghe said.
John Keells Holdings has been receiving high amounts of foreign buying after announcements with regard to the opening of Cinnamon Life in 2025.
The most liquid index S&P SL20 closed down at 0.09 percent or 2.63 points to 2,782.56.
The market saw a turnover of 1.1 billion rupees today, comparatively lower to the year’s daily average of 1.9 billion rupees, and significantly lower than the 2022 average turnover of 2.9 billion rupees.
The bourse saw a net foreign inflow (NFI) of 291 million rupees.
Top losers during the closure was HNB, LOLC, DFCC.