Colombo Stock Exchange to stay shut subsequent week as Lanka struggles to fight foreign exchange disaster

The Colombo Stock Exchange will stay quickly closed for every week from Monday to supply buyers a possibility to have “more clarity and understanding” of the present financial situations in crisis-hit Sri Lanka that might assist them “to make informed investment decisions,” it was introduced on Saturday.

“The stock market will remain temporarily closed for a period of five business days from April 18, 2022,” the Securities and Exchange Commission of Sri Lanka (SEC) mentioned in a press launch.

Sri Lanka is dealing with its worst financial disaster since gaining independence from the UK in 1948. The financial disaster additionally triggered a political turmoil within the island nation with residents holding nationwide avenue protests for weeks over prolonged energy cuts and lack of gas, meals and different every day necessities and demanding ouster of President Gotabaya Rajapaksa.

The Board of Directors of the Colombo Stock Exchange (CSE) in a communication on Friday known as upon the SEC to quickly shut the inventory market citing the current scenario within the nation, the discharge mentioned.

Many different stakeholders of the securities market, together with the Colombo Stock Brokers Association, have additionally sought the non permanent closure of the market on the identical grounds.

The SEC mentioned it fastidiously thought of the grounds which were adduced by them and has evaluated the impression the current scenario within the nation may have on the inventory market, specifically the power to conduct an orderly and honest marketplace for buying and selling in securities.

“The SEC is of the view that it would be in the best interests of investors as well as other market participants if they are afforded an opportunity to have more clarity and understanding of the economic conditions presently prevalent, in order for them to make informed investment decisions,” the discharge mentioned.

Therefore, performing when it comes to the related provisions, the SEC determined to direct the CSE to quickly shut the inventory marketplace for a interval of 5 enterprise days commencing from April 18, it mentioned.

Sri Lanka is on the point of chapter, saddled with dwindling overseas reserves and USD 25 billion in overseas debt due for reimbursement over the following 5 years. Nearly USD 7 billion is due this 12 months solely.

The authorities introduced Tuesday that it’s suspending repayments of overseas debt, together with bonds and government-to-government borrowing, pending the completion of a mortgage restructuring programme with the International Monetary Fund (IMF).

President Rajapaksa has defended his authorities’s actions, saying the overseas change disaster was not his making and the financial downturn was largely pandemic pushed by the island nation’s tourism income and inward remittances waning.