Plenty of action in CSE when right building blocks are in place
View(s):With currency stability, manageable levels in interest rates and a lower tax regime, there will be an improvement in the business climate, State Minister of Money and Capital Market and State Enterprise Reforms Ajith Nivard Cabraal said.
“There will be plenty of action in the market when the building blocks are in place. What we are trying to do is put the building blocks in place,” he said at the “Twenty 21 and Beyond” investor forum by Softlogic Stockbrokers on Tuesday. “Local investors and the business community have faith in a turnaround of the economy and in Sri Lanka’s fortunes, as the new government has already set these in motion. The government will implement in the future favourable measures and policies.”
He reiterated that the government needs to have a ‘holding operation’ now, “till we get back to normal.”
He said that in order to attract foreign investment, government bonds can be an instrument. “Foreigners have a concern of the currency depreciation and the Central Bank is working on a swap where depreciation pressure is addressed. A more resilient and an exuberant private sector can withstand shocks,” Mr. Cabraal added. He said the key priorities now are stabilising the rupee which fell from Rs. 131 to Rs. 185 against the US$ between 2015 to 2019, reducing interest rates and taxes. “Though Sri Lanka and the rest of the world were impacted by the COVID-19 pandemic, this is important to do.”
He said that imports will be restored when the macro setting is normal, adding that now exports have bounced back to near-normal, remittances were back on track, and a lower oil bill will reimburse the low tourism earnings.
He urged the capital market to get 1 per cent of the Rs. 10 trillion deposits in banks and finance companies. “Then the market will get Rs. 100 billion in captive funds which is the true potential of the stock exchange, and stakeholders must harness it.”
Gihan Cooray, Deputy Chairman, John Keells Holdings in his presentation said that the local hotel sector is slowly recovering through domestic tourism while the Colombo hotels are receiving revenue from the food and beverage sector and from banquets.(DEC)