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Monday June 3rd, 2024

Sri Lanka rupee ends weaker, gilt yields fall

ECONOMYNEXT – Sri Lanka rupee closed marginally weaker at 185.80/95 to US dollar in the spot market on Wednesday while bond yields eased after the monetary policy rate cut and stocks gained, dealers and brokers said.

Rupee closed at 185.75/85 to the greenback on Tuesday.

In equities the Colombo’s All Share Price Index advanced 0.41 percent or 20.89 points to close at 5,090.41.

The S&P SL20 index of more liquid stocks climbed 0.45 percent or 9.98 points to 2,205.66.

The market turnover was 967.5 million rupees with 90 stocks gaining and 54 falling.

Net foreign sales in the market today was 181.2 million rupees.

Crossing in the market contributed 19 percent to the market turnover amounting to 187 million rupees in Hemas Holdings, John Keells Holdings and Cargills counters.

LOLC Holdings PLC contributed most to ASPI spike, gaining 5.80 rupees a share to trade at 125.90 rupees.

Other stocks that pushed ASPI were, John Keells Holdings stocks which gained a rupee to trade at 114.00 rupees a share, and Ceylon Cold stores shares up 9.80 cents to trade at 699.90 rupees a share.

On the other end, Ceylon Tobacco Company stocks dropped 23.70 rupees (2.43 percent) rupees to trade at 951.00 rupees a share.

In the secondary government securities market, gilt yields were down in active trading, dealers said.

Dealers said the maturities ranging from 2022 to 2024 were seen liquid in the market for the day.

Sri Lanka’s Central Bank cut its monetary policy rate by 100 basis points bringing the rate at which money is injected to the banking system at 5.50 percent and the rate at which excess money is withdrawn to 4.50 percent.

Central Bank said that it arrived at this decision with a view to inducing a further reduction in market lending rates, thereby encouraging the financial system to aggressively enhance lending to productive sectors of the economy, which would reinforce support to COVID-19 hit businesses as well as to the broader economy, given conditions of subdued inflation.

However, market dealers said they did not witness such a large fall in bond yield rates in comparison to the rate cut.

A 2-year bond maturing on 15.12.2022 closed at 5.50/53 percent on Thursday, down from 5.75/80 percent at Wednesday’s close.

A bond maturing on 15.01.2023 closed at 5.60/63 percent, easing from 5.85/90 percent at Wednesday’s close.

A bond maturing on 15.09.2024 closed at 6.28/34 percent, down from 6.42/47 percent at Wednesday’s closing.

A bond maturing on 01.05.2025 closed at 6.45/53 percent on Thursday, slipping from 6.58/66 percent at Wednesday’s closing.

A bond maturing on 01.02.2026 closed at 6.60/70 percent, down from 6.68/78 percent.

A bond maturing on 15.10.2027 closed at 6.75/83 percent, easing from 6.90/7.00 percent at Wednesday’s end. (Colombo/July09/2020)

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Water levels rising in Sri Lanka Kalu, Nilwala river basins: Irrigation Department

Sri Lanka Navy assisting in rescue operations (Pic courtesy SL Navy)

ECONOMYNEXT – Sri Lanka’s Irrigation Department has issued warnings that water levels in the Kalu and Nilwala river basins are rising and major flooding is possible due to the continuous rain. People living in close proximity are advised to take precautions.

“There is a high possibility of slowly increasing prevailing flood lowline areas of Kiriella, Millaniya, Ingiriya, Horana, Dodangoda, Bulathsinhala, Palinda Nuwara and Madurawala D/S divisions of Ratnapura and Kalutara Districts, up to next 48 hours,” it said issuing a warning.

“In addition, flood situation prevailing at upstream lowline areas of Ratnapura district will further be prevailing with a slight decrease.

“The residents and vehicle drivers running through those area are requested to pay high attention in this regard.

“Disaster Management Authorities are requested to take adequate precautions in this regard.”

The island is in the midst of south western monsoon.

DMC reported that 11,864 people belonging to 3,727 families have been affected due to the weather in Rathnapura, Kegalle, Kilinochchi, Jaffna, Mullaitivu, Kalutara, Gampaha, Colombo, Galle, Matara, Hambantota, Puttalam, Kurunegala, Kandy, Nuwara Eliya, Anuradhapura, Polonnaruwa, Badulla, Moneragala, and Trincomalee districts.

Meanwhile, the Meteorology Department stated that showers are expected on most parts of the island today.(Colombo/June3/2024)

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UNP gen secy defends call for postponing Sri Lanka poll, claims opposition silent

The UNP party headquarters in Pitakotte/EconomyNext

ECONOMYNEXT — United National Party (UNP) General Secretary Palitha Range Bandara has defended his call for postponing Sri Lanka’s presidential election by two years, claiming that his proposal was not undemocratic nor unconstitutional.

Speaking to reporters at the UNP headquarters Monday June 03 morning, Bandara also claimed that neither opposition leader Sajith Premadasa nor National People’s Power (NPP) leader Anura Kumara Dissanayake have spoken against his proposal.

“I have made no statement that’s undemocratic. My statement was in line with provisions of the constitution,” the former UNP parliamentarian said.

He quoted Section 86 of Chapter XIII of the constitution which says: “The President may, subject to the provisions of Article 85, submit to the People by Referendum any matter which in the opinion of the President is of national importance.”

Sections 87.1, 87.2 also elaborates on the matter and describes the parliament’s role, said Bandara.

“I spoke of a referendum and parliament’s duty. Neither of this is antidemocratic or unconstitutional. As per the constitution, priority should be given to ensuring people’s right to life,” he said.

“Some parties may be against what I proposed. They may criticse me. But what I ask them is to come to one position as political parties and make a statement on whether they’re ready to continue the ongoing economic programme,” he added.

Bandara claimed that, though thee has been much criticism of his proposal for a postponement of the presidential election, President Wickremesinghe’s rivals Premadasa and Dissanayake have yet to remark on the matter.

“I suggested that [Premadasa] make this proposal in parliament and for [Dissanayake] to second it. But I don’t see that either Premadasa nor Dissanayake is opposed to it. To date, I have not seen nor heard either of them utter a word against this. I believe they have no objection to my proposal which was made for the betterment of the country,” he said. (Colombo/Jun03/2024)

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300 of 100,000 trees in Colombo considered high risk: state minister

ECONOMYNEXT – Trees in Sri Lanka’s capital Colombo are being monitored by the municipal council, Army and Civil Defense Force as the severe weather conditions continue, State Minister for Defense Premitha Bandara Tennakoon said.

“Within the Colombo Municipal Council city limits, there are 100,000 trees. Of these, around 300 are considered high risk,” Tennakoon told reporters at a media conference to raise awareness about the current disaster management situation.

Not all trees required to be cut down he said. “We can trim some of the branches and retain them.”

The problem was that buildings in the vicinity of the tree had cut branches on one side, causing it to become unbalanced, the minister said.

New laws would be brought in so provincial/municipal institutions could strengthen enforcement of building codes.

“We don’t have a single institution that can issue a warning about a tree. Not one to tell us what trees can or cannot be planted near a road.

“Trees should be suitable for the area. Some trees have roots that spread and damage roads, buildings. When the roots can’t go deep, they tend to topple over.

“Now Environment Day is coming up, and anyone can go plant a tree by the road. We have to take a decision about this. We have to enforce laws strongly in future.” (Colombo/June3/2024)

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