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Monday April 15th, 2024

Sri Lanka’s shares end over two month high on positive macroeconomic sentiments

ECONOMYNEXT – Sri Lanka’s shares closed up at over two months high as investors showing interest ahead of the Central bank policy review, an analyst said.

The main All Share Price Index was up 1.39 percent or 119.86 points to 8,755.17,  the most liquid index S&P SL20 was up 2.37 percent or 58.03  points to 2,566.92.

“The market is seeing a rebound as investors are hoping for favorable outcomes at the Policy Review Meeting, hoping for lowered inflation, cut in market rates and interest rates and a stance and more clarity on domestic debt restructuring assurances and optimization,” an analyst said.

Sri Lanka’s inflation in the 12-months to April 2023 has plunged to 35.3 percent from 50.3 percent a month earlier according a revised Colombo Consumer Price Index calculated by the state statistics office.

Sri Lanka is making progress in an International Monetary Fund agreement but improvements have to be made, State Minister for Finance Shehan Semasinghe said.

“Fresh funds and investment will come through the domestic debt restructuring assurances and optimization,” 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 and the market is reacting before any clear indicators are given.

The market generated a turnover of 940 million rupees, below the market’s yearly average of 1.3 billion rupees.

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.

Top gainers were Vallibel One, Expolanka and Commercial Bank.

“There was selective interest in banking counters due to positivity in other macro indicators,” an analyst said.

There was a foreign inflow of 75 million rupees, while the net foreign outflow was 121 million rupees, bringing the total net foreign outflow to 2 billion rupees. (Colombo/May23/2023)

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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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