 www.tamileelamnews.com TNS Corner Colombo - Sri Lankan shares fell 0.64 percent on Friday as investors worried about the slowing down of the economic growth, high interest rate in the country, country’s inflation skyrocketing to 28.2 percent and escalating war between the Liberation Tigers of Tamil Eelam (LTTE) and the Sri Lankan Security Forces (SF).
The Colombo All-Share index .CSE fell 15.52 points to 2,404.54, making its fifth straight session of losses and its lowest close since June 19, which was itself a five and half-month low.
"With high inflation and high interest rates, investors feel increased finance costs will result in poor corporate earnings," said Shivantha Meepage, a research analyst at HNB Stockbrokers.
"Investors are cautious and waiting for positive news, mainly on the economic front. Good news on the war front also could boost the market." The market had risen 2 percent between June 20 and 23 on speculation a visit by an Indian delegation was linked to efforts to restart peace talks to end a 25-year civil war. But that proved incorrect and the market has surrendered the gains.
"High inflationary expectations stopped investors buying shares," said Geeth Balasuriya, assistant research manager at HNB stockbrokers in Colombo.
"If there is a military buildup and sharp increase in weapons imports and a deterioration of the rupee, it will have a spiraling effect on inflation," said an analyst in Colombo.
There is a gloomy prospect for the Sri Lankan economy. Sri Lanka’s high inflation rate, high interest rate, depreciating rupee, share prices falling down, repeatedly rising fuel prices, the high interest rates, wide range of corruptions in the government, mismanagement of the public funds, heavy tax increases on goods, the escalation of the violence and more importantly threat of looming war are all causing great impacts on the economy of the war ravaged nation of Sri Lanka, a analyst in Colombo said.
© Copyright 2000 - 2008 by TamilEelamNews.com |