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Monday April 15th, 2024

Sri Lanka stocks gain to two-month high on positive sentiments

ECONOMYNEXT – Sri Lanka’s stocks gained to close at a two months high on Thursday on strong positive sentiments as the deal of the extended loan facility from the International Monetary Fund (IMF) reaching is expected to be finalized by the end of the month, brokers said.

“There are strong expectations on the International Monetary Fund and Monetary Policy,” an analyst said.

“The market is running on speculation and the sentiment is getting stronger showing more buying interest and a smooth gradual uptrend.”

Analysts said significant interest in banking, the non-financial sector and the retail sector was seen, due to potential conclusions on the IMF agreement and a rate cut along with the finalization of the loan.

The All Share Price Index (ASPI) gained 1.21 percent, or 111.15 points, to reach 9,333.83.

The loan from the IMF was originally expected in December of last year, but it is now expected in the second quarter.

As creditors of the island nation, India and the Paris Club have given specific assurances to restructure the sovereign debt of Sri Lanka’s external borrowing.

Meanwhile, China has given a two-year moratorium and promised to restructure debt, but Sri Lanka has sought a more specific assurance in line with the IMF deal.

China has not yet given such assurances and has instead called for relief from the World Bank, Asian Development Bank, and the IMF, which are considered “senior debt” under current resolution frameworks and are insulated.

The market saw a Net foreign inflow of 47.9 million rupees and so far for 2023, the market has recorded a total Net foreign inflow of 3.1 billion rupees.

The most liquid index, S&P SL20, closed 0.83 percent, or 23.22 points, up at 2,828.48.

The market saw a turnover of 1.4 billion rupees on Thursday, lower than this year’s daily average of 1.8 billion rupees and the 2022 average turnover of 2.9 billion rupees.

The top gainers were Hatton National Bank, Sampath Bank and Commercial Bank. (Colombo/Mar 01/2023)

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Sri Lanka to discuss two contentious points with bondholders: report

ECONOMYNEXT – Sri Lanka and sovereign bondholders are to discuss two matters in the near future which the two sides failed to reach agreement at March talks in London, a media report quoting a top aide to President Wickremesinghe as saying.

Sri Lanka and bondholders had discussed four matters on restructuring international sovereign bonds in late March and agreement had been reached on two, President’s Chief of Staff Sagala Ratnayake was quoted as saying on state-run ITN television.

A restructuring proposal by bondholders was not in line with IMF requirements, and Sri Lanka had sent a counter proposal, he said.

The matters will be discussed at round of talks in the near future.

Sri Lanka was optimistic of reaching an agreement with the bondholders before June, officials have said.

According to matters already in the public domain, sovereign bond holders are keen to get a bond tied to dollar gross domestic product, as they feel IMF growth projections are too low.

In past re-structuring so-called value recovery instruments, a type of warrant, gave their owners extra payments if a country did better than expected and were tied to items like oil prices.

Bondholders had initially proposed bond which would have a lower hair cut initially, and it will have additional hair cuts if growth is low (about 3.1 percent) as projected in an IMF debt sustainability analysis. (Colombo/Apr15/2024)

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BIMSTEC Secretary General visits Sri Lanka, discusses regional cooperation

ECONOMYNEXT – The Secretary General of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), discussed measures to enhance regional cooperation, during his visit to the island last week.

Ambassador Indra Mani Pandey, Secretary General of BIMSTEC visited Sri Lanka from 07 – 12 April 2024, following his assumption of office as Secretary General of BIMSTEC in January this year.

The Secretary General “met with senior officials of relevant Ministries/Agencies to discuss measures to enhance regional cooperation under various BIMSTEC initiatives,” the Foreign Ministry said in a statement.

Several BIMSTEC countries have bilateral trade agreements, such as Sri Lanka and India, Thailand and Myanmar, Sri Lanka and Thailand, but no collective regional agreement to enable intra-regional leverage.

During the visit, Secretary General Pandey held discussions with Ministry of Foreign Affairs officials and paid courtesy calls on the President and the Minister of Foreign Affairs.

Secretary General Pandey participated at an event on “Regional Cooperation through BIMSTEC” organized by the Lakshman Kadirgamar Institute (LKI) on 9 April. (Colombo/April15/2024)

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Sri Lanka rupee closes weaker at 299.00/10 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 299.00/10 to the US dollar in the spot forex market on Monday, from 298.50/55 on Wednesday, dealers said, while bond yields were broadly steady.

A bond maturing on 15.12.2026 closed stable at 11.30/35 percent.

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

A bond maturing on 15.12.2028 closed at 12.10/20 percent up from 12.10/15 percent.

A bond maturing on 15.09.2029 closed stable at 12.20/40 percent. (Colombo/Apr15/2024)

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