General
Sri Lanka’s Laugfs hikes 12.5kg cylinder price by Rs145
ECONOMYNEXT – Sri Lanka’s shares edged up at close on renewed buying interest, an analyst said.
The main All Share Price Index was up 1.96 percent or 218.22 points to 11,374.64, while S&P SL20 was up 2.56 percent or 80.62 points to 3,234.27.
Over the past sessions, favorable performance indications combined with anticipations on lowered rates and better economic outlooks on investment was moving the market towards profit taking and selling interest, an analyst said.
Gainers during trade were Commercial Bank, John Keells Holdings and Sampath Bank.
Sri Lanka’s central bank said it was holding policy rates, but will direct banks to cut lending rates, as they were too far above the policy rate.
A team from the International Monetary Fund will be in Sri Lanka from September 14 to 27 to conduct the first review of an Extended Fund Facility arrangement, a spokesperson said.
The review will be conducted on June data.
Officials have said Sri Lanka has over-achieved key IMF quantitative performance criteria though tax revenues, which is an indicative target has fallen short.
Sri Lanka will negotiate in parallel with the International Monetary Fund and external creditors with the expectation of completing debt restructuring in the October to November 2023 period, Central Bank Governor Nandalal Weerasinghe said.
An IMF team is due to come to Sri Lanka in September. Review and communications make take place up to October to November.
“First we have to come to an agreement with official creditors on the terms. That will have to happen before the next review,” Governor Weerasinghe said.
Sri Lanka has to complete domestic debt restructuring, which is currently held up over enacting a tax law.
“My understanding is that they have to have an assurance that creditors would have an understanding with the authorities – agreeing to the terms and conditions of the debt restructuring what is expected now.
“Like the DDO implementation that we are doing now. The implementation can even happen next year.”
Sri Lanka also has met several structural benchmarks, some of which are under World Bank and Asian Development Bank prior actions.
Analysts say that, investors are adopting wait and see approaches before investing to see the outlook of the review which indicates economic stability and appearance.
Central bank governor Nandalal Weerasinghe dismissed concerns over Sri Lanka purportedly failing to meet a number of commitments made to the International Monetary Fund (IMF) ahead of a September review, arguing that the authorities have made “good progress” in meeting quantitative targets.
The market generated a turnover of 3.3 billion rupees above the yearly average at 2 billion rupees. Majority of the revenue came from the 1.3 billion rupees from the capital goods sector.
The market generated a net foreign outflow of 1 billion rupees while the yearly average stands at 1.4 billion rupees. (Colombo/Sept04/2023)
