Sri Lankan business confidence rises amidst appointment of the newly elected President

The business community of Sri Lanka has expressed hope that the new president of the country will move forward with open market reforms, create a favourable environment for local industries, and attract foreign direct investment. On Sunday afternoon, Sri Lankan Election Chief Mahinda Deshapriya confirmed opposition candidate Gotabaya Rajapaksa winning Saturday's presidential election.

Kosala Wickramanayake, Current President of the International Business Council, commented that the business community hoped that Rajapaksa would accelerate the growth of infrastructure projects, attract more foreign direct investment, and provide a stable policy climate. "The international business community welcomes the change," Wickramanayake said.

Meanwhile, Kantha Karunaratne, Chairman and Managing Director of Imperial Teas Group and Chairman of Colombo Tea Traders Association, commented that exporters would look to new leadership to reduce operating costs, increase access to credit, eliminate unfair taxes and provide policy assistance to make local exports competitive on the international market.

"The business community recognises people's choice, and we are ready to work with the new leadership to grow the country's economy," said Karunaratne. According to Siri Hettige, University of Colombo's emeritus professor of sociology, the new president "will have to bridge the widening inequality between communities and bring about economic reforms to industrialise the country."

Rajapaksa won more than 6.9 million, or 52 per cent of the vote, beating his ruling party rival Sajith Premadasa, who won more than 5.5 million, or 42 per cent of the vote. Rajapaksa promised to serve all groups irrespective of their ethnicity and religious identity after the final election results announced, declaring him the winner.  The Business Chambers congratulated Gotabaya Rajapaksa, Sri Lanka's 7th-elected Executive President, and expressed confidence that he would work towards the nation's prosperity.

OSL Take: The Colombo Stock Exchange (CSE) experienced a bullish sentiment for the second consecutive day after the presidential election, which was primarily contributed by JKH and CCS. The All Share Price Index (ASPI) benchmark index closed for the day at the peak of 6,129, adding 107 points throughout the year. Parcel trades made in JKH, CARG, COMB, and HNB reflect a 10 per cent increase in turnover above a 2-month average. Net sellers amid intense international activity tended to be foreigners.

The secondary bond market encountered a bullish feeling with intense buying pressure across the board, resulting in the yield curve turning downwards with the results of the presidential election. The Sri Lankan rupee ended at 179.50/60 higher, while the gold yields eased pushed by buying, brokers, and dealers. The rupee closed on Friday to the greenback at 180.25/30 on the spot market.

The fact that the CSE has achieved a daily turnover crossed Rs.2.4 billion mark in the Sri Lankan stock market– a new record for the first month of any given year, indicates the growing foreign investments in the country. Foreign investors who have not yet invested in Sri Lanka could take a look at the performance of the country’s economy and its international relations to invest in the Sri Lankan economy.