Says stable policy decisions essential to boost economic activities
A section of top private sector representatives yesterday expressed confidence in having an improved post-election business environment but stressed the need for stable policy decisions to help boost economic activities.
Acknowledging business activities have been below expected levels in the past few months, the senior representatives shared with Mirror Business that the current regime continuing will help increase the momentum and performance of the local business landscape.
“Majority of the activities are at a standstill. All our members expected a growth in their businesses following the change in regime but that has not happened. Things could be a lot better and we hope after the elections in August 17 business will grow.
“We are confident in that because then the focus on businesses will be on moving on to the next level at a faster pace,” said National Chamber of Commerce (NCC) President Thilak Godamanna in a brief interview.
Sharing similar sentiments, Rohan Masakorala, Joint Apparel Association Forum’s (JAAF) Logistics Sub-Committee Chairman and Shipper’ Academy Colombo CEO said: “There are a lot of things happening and waiting to happen, but majority are taking a laid back approach. And this has been the case since January. After the elections on August 17 we hope for more stability so we can get back to the momentum we were operating in. It is stability and direction that we are essentially looking for.
He added that regardless of which regime will take over after upcoming elections; good governance is what is most expected.
“There is lot of potential for the country to develop. Politics has done a lot of damage to this country and its people and we hope the next five years will not take us on the same route,” asserted Masakorala.
Speaking from a regulator point of view, Securities and Exchange Commission (SEC)Chairman Thilak Karunaratne opined that the current regime continuing “will be good” for the business environment and help businesses to take off.
“If in case, though highly unlikely, the previous regime comes back, it will not be just bad for businesses, but bad for the whole country. There is a lack of stability and that is obvious as it is a minority government. If the Government changes again there will be a big turmoil. As a regulator we will be faced with a lot of challenges,” stressed Karunaratne. With regard to the current sentiments he said the market is doing “fairly well” and investors are expecting a positive result. “If it meets their expectation, the market will take off,” he added.
Meanwhile, Colombo Stock Brokers Association Chairman Dihan Dedigama noted that refraining from implementing ad-hock taxes will be much appreciated as the imposing of the super gains tax by the January budget is still a pressing concern to businesses.
“For the last six months, though the environment has been good no one has done anything major as they are waiting for the end of the election before they make any decision. After the August 17, I hope we can take the leap and move forward. Foreign investors are also waiting to see proper direction.
“The impact for us is purely on a policy decision point of view where it is about how and when the new government comes in, will it prioritise in having stable policies and private sector performance,” noted Dedigama.
Shares end high on stability hopes
REUTERS: Sri Lankan shares closed at their highest level in about eight weeks yesterday on strong foreign inflows for a second session as hopes of political stability after Aug. 17 parliamentary polls and better earnings lifted sentiment, brokers said.
The main stock index ended 0.18 percent, or 12.99 points up at 7,212.62, its highest since May 29.
Turnover was at Rs.2.21 billion ($16.5 million), boosted by foreign buying. This was the highest turnover since July 3 and more than double of this year’s daily average of Rs.1.06 billion.
Foreign investors were net buyers of Rs.930.7 million yesterday, but they have been net sellers of Rs.478.4 million worth of shares so far this year.
“Investors are buying because they are confident of getting a stable government after the elections,” Danushka Samarasinghe, research head at Softlogic Stockbrokers said.
Samarasinghe expects Sri Lankan companies to post strong results this quarter.
Analysts also said hopes over political stability after Aug. 17 parliament election also helped sentiment. They expect next month’s election to help strengthen President Maithripala Sirisena’s political position.
Conglomerate John Keells Holdings Plc rose 0.64 percent, while Hemas Holdings Plc rose 4.12 percent, pushing the overall index up.