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Monday June 3rd, 2024

Sri Lanka shares close at a two month high as DDR fears ease

ECONOMYNEXT – Sri Lanka’s shares gained to a near two month high on Thursday, as investor sentiment improves after the Central Bank’s policy rate cuts stimulated interest in banking counters and financial sectors, an analyst said.

The main All Share Price Index was up 0.68 percent or 62.79 points to 9,279.28, the highest since April 20, while the most liquid index S&P SL20 was up 0.29 percent or 7.61 points to 2,642.42.

The market gained due to lowered policy rates and low inflation stimulating buying interest and driving the sentiment up.

“Banking counters have seen some attraction on the buying front due to decreased fears in domestic debt restructuring” an analyst said.

From the total generated revenue, the banking sector generated 1.8 billion rupees.

The central bank cut the key policy rates by 250 basis points to spur faltering economic growth as inflation was decelerating faster than projected.

Sri Lanka’s inflation in the 12 months to May 2023 has eased to 25.2 percent from 35.3 percent a month earlier, according to a revised Colombo Consumer Price Index calculated by the state statistics office.

All the conditions made with the International Monetary Fund (IMF) will be completed before next September, which was initially supposed to be for May, Finance State Minister, Ranjith Siyambalapitiya said.

Sri Lanka needs more revenues, and restructuring debt by September was essential for debt to be made sustainable, an IMF mission said after a visit to the island.

Sri Lanka’s state enterprise unit is expecting to make the first divestures in the fourth quarter of 2023, Director General, Suresh Shah said.

A government procurement is now evaluating bids for transaction advisors to planned divestitures, Shah told a forum organized by the central bank.

Transaction advisors are required to value the companies. They will also prepare a data room for prospective bidders to conduct due diligence, he said.

Investors had been expecting lowered interest rates, and as expectations were met, the market has been continuously green, while selling pressures arose only on June 6 and June 7.

Sri Lanka’s debt restructure will take place based on the existing debt sustainability analysis, using the original projections made by the International Monetary Fund, Central Bank Governor Nandalal Weerasinghe said, despite economic indicators improving faster than expected.

Sri Lanka has brought inflation down faster than predicted in an International Monetary Fund macroeconomic framework, and the exchange rate has also appreciated.

The market generated a net foreign outflow of 132 million rupees, so far the total outflow for the year is 1.06 billion rupees.

The market generated revenue of 2.8 billion rupees, the highest turnover since 31 March, while the daily turnover average was 1 billion rupees.

Top gainers during trade were Ceylinco Insurance, Sampath Bank, and Vallible One. (Colombo/ June 15/ 2023)

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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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