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Wednesday July 24th, 2024

Sri Lanka’s shares down on potential delays in DDR and DDO

ECONOMYNEXT – Sri Lanka shares closed lower on Monday as selling pressure increased following lack of improvement and obscure direction on domestic debt restructuring and optimization, an analyst said.

“The market is down on the lack of direction in domestic debt restructuring and debt optimization,” an analyst said.

The main All Share Price Index (ASPI) was down 1.40 percent or 121.96 points at 8,575.11, while the most liquid index, S&P SL20, was down 2.09 percent or 51.84 points at 2,428.92.

“The market is seeing more selling pressures as investors are taking a stance until more clarity is given on domestic debt restructuring assurances and interest rates are high,” an analyst said.

Sri Lanka’s government is to disclose the stance on domestic debt restructuring towards the end of May, which is why investors have adopted a wait and see approach.

Analysts said the low volumes seen in the market are due to the debt restructuring concerns, and investors are waiting for the monetary policy review for the next month.

Sri Lanka’s banks said assurances have been received that the stability of the sector cannot be risked in a planned domestic debt overhaul, to make the defaulted debt sustainable under a program with the International Monetary Fund.

Sri Lanka’s banks have sought clarity on a proposed domestic debt restructure, questioning whether there is a non-voluntary element in the plan, and have also called for transparent discussions with all banks.

A news article circulating says, non-agreement on the percentage of haircut that the external creditors would take in Sri Lanka’s debt restructuring has taken the Central Bank to the drawing board which has led to the delay in announcing the debt restructuring strategy. 

Further the government plans to lift import controls on 100 items that were banned during forex shortages in the past two years, which had been hurting small and medium-sized industries, State Minister for Finance Shehan Semasinghe said.

“Stocks went down due to selling pressures resulting from relaxed import restrictions, which are expected to reduce the monopolistic powers held by domestic retailers,” an analyst said.

The main reason for the market’s negative sentiment is the loss of monopoly as import restrictions ease, an analyst said.

The top losers during trading were Commercial Bank, Sampath Bank and Hatton National Bank. 

Sri Lanka’s central bank has terminated the cash margin requirement on import letters of credit that was imposed over the previous 12 months to limit imports, as liquidity injection triggered forex shortages and a currency collapse.

In an order issued under the monetary law, the central bank imposed a 100 percent cash deposit margin on 843 imports on May 19, 2022, and February 16, 2023, to discourage imports.

Sri Lanka had controlled imports of 3,000 items denoted by HS codes out of a total of 8,000 during the past two years.

The controls were then brought down to 1,000 as they were hurting small and medium-sized industries that depended on inputs.

“By the beginning of next month, we will be able to lift controls on another 100 items,” Minister Semasinghe told parliament.

The market generated revenue of 518 million rupees, while the daily average turnover was 1.2 billion rupees.

The market generated a foreign inflow of 31 million rupee and the net foreign outflow was 20 million rupees. (Colombo/May 29, 2023)

 

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Sri Lanka presidential candidate cash deposits not updated in 43 years: MP

MP Dullas Alahapperuma

ECONOMYNEXT — The cash deposits Sri Lanka’s presidential candidates are required to pay have not been revised in 43 years, opposition MP Dullas Alahapperuma said, calling for a significant increase in order to save money and to prevent proxy candidates.

Alahapperuma told parliament on Wednesday July 24 that, as per the Presidential Elections Act No. 15 of 1981, a candidate nominated by a recognised political party has to deposit only 50,000 rupees while an independent candidate, or a candidate nominated by any other party or by an elector, must pay only 75,000 rupees.

The MP said the cabinet of former president Gotabaya Rajapaksa had approved an amendment to the act to increase these amounts.

“The election commission proposed that this be increased to 2.5 million rupees for political parties and 3 million for independent candidates. This was a pertinent proposal. There were 35 candidates who contested the last election,” he said.

The Act notes that “Where the number of votes polled by any candidate does not exceed one-eighth of the total number of votes polled at the election, the deposit made in respect of such candidate shall be declared forfeit and shall be transferred by the Commissioner from the deposit account to the Consolidated Fund, and in every other case the deposit shall be returned to the person who made the deposit, as soon as may be after the result of the election is declared.”

At the 2019 presidential election, said Alahapperuma, the deposits made by all candidates besides the top two contenders were transferred to the Consolidated fund.

“The number of candidates might be 80 or 85 this election. Many candidates have no basis for contesting, and it costs a vast sum of money to print ballots and other expenses, not to mention the time consumed for counting votes. This is not just to prevent proxy parties from contesting but also to save a lot of national wealth,” he said.

Leader of the House Susil Premajayantha responding to Alahapperuma said, however, that it would not be possible to pass the proposed amendment in time for the 2024 presidential election.

“The election commission made this proposal some time ago. But we know that to gazette a bill, we need to first draft the bill, the cabinet has to decide on it, send it back to the Legal Draftsman, and receive clearance from the Attorney General. So there is no time to bring this amendment for the upcoming presidential election. You can propose it at the next one,” he said. (Colombo/Jul24/2024)

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Sri Lanka deaf driver license project to be expanded islandwide

ECONOMYNEXT – A pilot project that allowed hearing-impaired persons to obtain light-vehicle driving licenses has been successful and will be rolled out island-wide, Sri Lanka’s Motor Traffic Department said.

The project was implemented in the Gampaha District initially where 50 licenses were provided to drivers who qualified.

The project was expanded to the Kurunegala District, where 150 drivers obtained licences. The drivers were given a probation period.

“Actually, this was a very successful project. It has been almost a year and we haven’t received a single complaint yet,” Motor Traffic Department Commissioner – Driving Licence Wasantha Ariyarathna told reporters on Wednesday.

“We plan to roll it out to all 25 districts islandwide.”

The issuance of driver’s licenses to hearing impaired persons will be done on a bi-annual renewal basis.
(Colombo/Jul24/2024)

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Sri Lanka election commission to announce poll date before weekend

File photo of polling booth

ECONOMYNEXT — Sri Lanka’s Election Commission will announce the date of the election before the end of this week, commission chairman R M L Ratnayake told a private news network.

Ratnayake told the privately owned NewsFirst Wednesday July 24 morning that the gazette notification in this regard would be published before the weekend.

“As I stated before, we will announce the date before the end of this week. There is no backtracking at all. We have selected a date that is nearest and most suitable after September 17 for the election,” he said.

Ratnayake told the media at a press conference on July 16 that the commission will publish the notice announcing nomination and election dates before the end of July.

“Our first task is to publish the notice on the election. From the day the notice is published, nominations have to be accepted between 16 and 21 days. The election should be held within four to six weeks of from the day of accepting nominations,” said Ratnayake.

“The candidates must have enough time to do their campaigns after handing over nominations. Time is also needed to cast postal votes and carry out other duties. The election date should also be convenient for the voters. For the acceptance of nominations, we have to consider cultural factors unique to a country like Sri Lanka. Some people consider things like the Rahu period. So we have to find a date that is suitable for everyone,” he said.

Ratnayake said the election commission intends to issue the notice before the end of July.

“This notice will contain the nominations date and the election date. We plan to then hold the election on the most suitable day after September 17.

“Some people had suggested that we have delayed this to end July to the benefit of one party or another. I want to point out that we can delay we can extend it to August 20 if needed,” he said. (Colombo/Jul24/2024)

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