Sri Lanka Equity Forum
Dear Reader,

Registration with the Sri Lanka Equity Forum would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
Sri Lanka Equity Forum

Discussion Forum for Stock Market Investors in Sri Lanka

සිංහල පරිවර්තනය
Submit Post
Submit Post
Market Place

Add an ad

View all ads

Latest topics

» AEL going up short term for gota coming is only chance for trading
by sanjulanka Yesterday at 11:32 pm

» ගෝඨාභය නෙමෙයි පුටින් ආවත් market එක ගොඩ ගන්ඩ බෑ
by Eng Krishantha Yesterday at 11:11 pm

» NEST going to run?
by player Yesterday at 8:32 pm

» POSITIVE NEWS TO AEL...FOREIGN ATTRACTION GOES TO AEL..
by rukshan1234 Yesterday at 8:19 pm

» Central Bank Reduces Its Policy Interest Rates
by Trader321 Yesterday at 3:54 pm

» Market gonn hit with the CB rate cut :
by Trader321 Yesterday at 3:09 pm

» Positive News
by Promoney Yesterday at 2:38 pm

» Chevron will go down further in fundamentals
by player Sat Aug 24, 2019 9:18 pm

» Questionnaire on the stock market investor behavior in the Sri Lankan share market
by gayani2018 Sat Aug 24, 2019 9:41 am

» Capital trust recommended to buy AEL ..Target Price Rs.24.50
by Eng Krishantha Sat Aug 24, 2019 1:45 am

» when you invest in a company call that company and ask some thing
by ThilinaM Fri Aug 23, 2019 3:47 pm

» read this carefully - thease dumb investment advisors will advise when gsp received teejay operation would be better
by ThilinaM Fri Aug 23, 2019 1:21 pm

» Rocell undervalued
by ThilinaM Fri Aug 23, 2019 12:36 pm

» Friends I read a book traders are loosers
by ThilinaM Fri Aug 23, 2019 12:34 pm

» Scared of silence of MS and next 2 Fridays
by samaritan Fri Aug 23, 2019 9:11 am

» The Central Bank of Sri Lanka Reduces its Policy Interest Rates
by TraderCSE Fri Aug 23, 2019 7:50 am

» AAIC - Profit over one billion!!!!!
by wisdom79 Fri Aug 23, 2019 7:44 am

» Why AAIC Should trade above RS.50/-
by wisdom79 Fri Aug 23, 2019 7:43 am

» CIND බලාගෙනයි
by ThilinaM Thu Aug 22, 2019 3:50 pm

» PAP (Pan Asia Power PLC) Dealings Directors
by Capton KIng Cool Thu Aug 22, 2019 8:54 am

» JKH will touch 175 very soon
by soileconomy Thu Aug 22, 2019 7:27 am

» EMER...?????
by roshan1039 Thu Aug 22, 2019 12:16 am

» What is your trading preference?
by biglivetrade Wed Aug 21, 2019 4:24 pm

» RENUKA HOLDINGS Target 50.00
by ThilinaM Wed Aug 21, 2019 1:34 pm

» CIND , 10% guaranteed return
by Bakka1988 Wed Aug 21, 2019 12:51 pm

» lOFC definitely will hit 6/-
by Winner123 Wed Aug 21, 2019 11:18 am

» ASHO අර්ජුන් මහේන්ද්‍රගේ බෑන විකුණනවද කොහෙද
by Bakka1988 Wed Aug 21, 2019 11:11 am

» PAP (Pan Asia Power PLC) Apointiment of Director Mr.Sangith Senaka Kakiriwargodage.
by samaritan Wed Aug 21, 2019 10:03 am

» SEC charges four stockbrokers over market manipulation
by player Wed Aug 21, 2019 9:40 am

» Sri Lankan Billionaire Dhammika Perera may Spend Rs. 10 Billion for a Presidential Campaign without any Risk! His Daily Casino Profits said to be over Rs. 50 Million
by nuwanmja Wed Aug 21, 2019 9:39 am

» MGT - Collect n keep
by samaritan Wed Aug 21, 2019 8:05 am

» Browns investments
by Winner123 Tue Aug 20, 2019 9:35 pm

» ASHO will hit moon. Deal with SLTB
by Bakka1988 Tue Aug 20, 2019 9:11 pm

» GLASS (piramal glass ceylon plc) from
by MarketWch Tue Aug 20, 2019 10:20 am

» Elcection Commisioner( MACO)
by Capton KIng Cool Tue Aug 20, 2019 8:59 am

» Presidential election will be held on 16 th of November to 7th of December
by rukshan1234 Mon Aug 19, 2019 11:30 pm

» Which Trading System Or Strategy Is The Most Profitable?
by Teller Mon Aug 19, 2019 8:13 pm

» NEST will touch Rs2000 soon
by Bakka1988 Mon Aug 19, 2019 5:41 pm

» Gotabaya Rajapaksha will named after 10th August. Aspi will move above 6500
by samaritan Mon Aug 19, 2019 11:59 am

» CFVF.N0000 - Target price Rs.60- Donnt sell
by Trader321 Mon Aug 19, 2019 10:06 am

» CFVF.N0000 - Really started Again ..........
by Trader321 Mon Aug 19, 2019 9:59 am

» LOLC Holding( LOLC N.0000)
by Capton KIng Cool Mon Aug 19, 2019 8:45 am

» LOLC Holding( LOLC N.0000) MICRO FINACE In Cambodia
by Capton KIng Cool Mon Aug 19, 2019 8:43 am


You are not connected. Please login or register

Sri Lanka Equity Forum » Stock Market Talk » Sri Lanka: Nivard warns economy in vulnerable position

Sri Lanka: Nivard warns economy in vulnerable position

Go down  Message [Page 1 of 1]

MalcolmTurnbull


Equity Analytic
Equity Analytic
By Charumini de Silva

Former Central Bank Governor Ajith Nivard Cabraal last week warned that the country’s economic dashboard was signifying a vulnerable condition ahead, insisting improved fiscal management would mitigate any turmoil.

Having served the Central Bank for nine long years, he outlined the analogy between a vehicle dashboard and an economy dashboard at a Rotary Club West luncheon meeting held in Colombo.Untitled-2

Highlighting that the dashboard was a useful technique to navigate through the journey, Cabraal pointed out that the outlook of the economic dashboard at present signified an alarming situation.

“My look at the economic dashboard doesn’t tell me a good story. It is telling me to panic,” he said.

According to Cabraal, the five major displays of the economic dashboard – real economy, monetary sector, fiscal sector, external sector and financial sector – had not been given attention by the current economic managers.

He pointed out that although the real economy was at benign levels, if there was a high inflation rate in the economy, in sympathy all the other rates would increase simultaneously.

Denying all allegations on maintaining an artificial currency during his tenure, Cabraal reasoned that it was a result of prudent management of economic fundamentals and said they took great pains to ensure that.

“At the time we were in office, we used to ensure that total depreciation of the currency was managed prudently, not artificially. People say we controlled it artificially. You can control the foreign exchange or rupee for nine weeks, but you cannot control it for nine years. The fundamentals were well managed for the currency to behave in such a manner,” he explained.

He said the economy was in a vulnerable situation today not because debt had gone up, but because the rupee had depreciated drastically.

“Along with the rupee depreciation, overall foreign debt and interest rates have gone up, as a result the interest cost has increased to great heights. Those are going to be very difficult facets to manage in an economy,” he added.

He said except three-month Treasury bill rates which are at 9.7%, all the other interest rates had escalated to double digit levels at present.

Noting that the total debt when he took office was Rs. 2,222 billion, or debt to GDP was 91%, he emphasised that over the period of time, with many development projects, the debt had increased to Rs.7,494 billion.

“Now although there is an increase of about Rs. 4,000 billion in debt, as a percentage to the GDP it was down to 70%. That’s the trick. If you can increase the income, you can tolerate debt. Managing the fiscal deficit is a fundamental requirement of managing the economy,” he noted.

He claimed that the Government has printed Rs. 238 billion during the first three months of the year to endure short-term difficulties, whereas when the previous regime was fighting a war the total money printed at the highest level was only Rs. 70 billion.

“When you look at the economic dashboard there is Rs. 238 billion the Government has borrowed as at 24 March from the Central Bank.”

However, he emphasised that when it comes to meeting external obligations, it is important to have sufficient dollars in the Central Bank to function.

He pointed out that from $ 2.6 billion in 2006 the reserves were built up steadily to $ 8.2 billion till they left office in 2014. However, the current Governor Dr. Indrajit Coomaraswamy had recently said that the reserves were down to $5.1 billion.

“This to my mind tells that we are in difficult situation,” he added.

In addition, Cabraal noted that the short-term debt which was $6.6 billion in 2014 had now increased to $7.7 billion.

“No wonder why Dr. Coomaraswamy says that they need to sell Hambantota Port. He realises that he doesn’t have the flexibility or the ability to print the dollars the same way he does with rupees. Therefore, it is crucial to keep a very close tab on your dollars and cash flows,” he said.

He went on to say that the story did not end with the dashboard because the dashboard didn’t make the journey, but steering also contributed to make it to final destination.

“Today what needs to be concerned about is how you manage that and I hope the country will do and hopefully Sri Lanka will prosper once again,” Cabraal said.



Cabraal claims GDP recalculation a mistake
The Government’s decision to recalculate Gross Domestic Product (GDP) was termed a ‘huge mistake’ by former Central Bank Governor Ajith Nivard Cabraal, insisting that it traded away the credibility of the Central Bank and Census and Statistics Department.

He pointed out that according to the old method the average GDP growth accounts to 7%, while the new method comes to 6.8%, which is merely 0.2% which is not much of an impact to anybody.

Cabraal charged that Treasury bills and Treasury bonds which were at $3.4 billion as at 31 December 2014 had dropped significantly to $1.2 billion at present, adding that it was more alarming than a mere 0.2% revision of the GDP which cost the credibility of the entire system.

“It is not only the physical change; the reason was that we lost our credibility. By recalculating we disturbed the serenity of the Central Bank and Census and Statistic Department. In retrospect, I think we made a huge mistake,” he stressed.





Sri Lanka needs international investors, absurd to chase them away: Cabraal


Stating that domestic savings were not sufficient for the country to move on to the next level of development, former Central Bank Governor Ajith Nivard Cabraal emphasised the importance of attracting sufficient foreign money to come in order to boost the economy.

He said that knowing the real state of the economy, it was absurd to chase away longstanding international investors from the market place.

“Templeton, one of the largest investment funds in the world which has assets over $9 80 billion, was described as corrupt institute. For them $ 1.5 billion is nothing. When they are investors of a country you don’t call them cons and rouges.”

He highlighted that the FDIs which accounted for $1,635 million in 2014 had also plunged drastically to $449 million last year.



Repaying Golden Key depositors with taxpayers’ money illegal, claims Cabraal


Former Central Bank Governor Ajith Nivard Cabraal asserted that the Government’s decision to repay Golden Key depositors, a company that was not regulated by the Central Bank, from taxpayers’ money was illegal.

“There is no compulsion of the taxpayers to pay for a company that was not regulated by the Central Bank or the Government. Payments that have been made to Golden Key depositors in my view are illegal,” he pointed out.

Justifying his method of repayment for the depositors, Cabraal said that they recommended taking the money off the people who were directors of that company and using those funds to pay back the depositors, but not from taxpayers’ money.

- See more at: http://www.ft.lk/article/607676/Nivard-warns-economy-in-vulnerable-position#sthash.FKrN3xuD.dpuf

anges


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
specialist on greek bonds

ranferdi

ranferdi
Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
Market is slowly taking off... Pathetic bunch trying to push back as usual.. The economic terrorism...

http://::::THIS EMAIL DOESNT WORK.. PLEASE CONTACT ME ON FB ACCO

Sponsored content


Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum