The Investor Sentiment - Equity and investments forum for Sri Lankans
Search
 
 

Display results as :
 


Rechercher Advanced Search

Latest topics
» Cricket !
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyToday at 8:20 am by කිත්සිරි ද සිල්වා

» Happy Father's Day !
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyYesterday at 9:03 am by කිත්සිරි ද සිල්වා

» DPL.N0000 (Dankotuwa Porcelain PLC)
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyYesterday at 7:12 am by NIRMALSG

» Thread for News on CSE and SL Economy
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptySat Jun 15, 2019 7:44 am by ruwan326

» Re: Financial reports Q1-2019
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyFri Jun 14, 2019 8:57 pm by dhanurrox

» SAMP.N0000 (SAMPATH BANK PLC)
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyFri Jun 14, 2019 8:11 am by puliyanam

» SEYB.N0000 ( SEYLAN BANK PLC )
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyThu Jun 13, 2019 8:11 pm by ruwan326

» NTB.N0000 (NATIONS TRUST BANK PLC)
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyThu Jun 13, 2019 8:08 pm by ruwan326

» PABC.N0000 (Pan Asia Banking Corporation PLC)
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyThu Jun 13, 2019 8:06 pm by ruwan326

» NDB.N0000 (NATIONAL DEVELOPMENT BANK PLC)
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyThu Jun 13, 2019 7:58 pm by ruwan326

» HNB.N0000 ( Hatton National Bank PLC)
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyThu Jun 13, 2019 7:57 pm by ruwan326

» HDFC.N0000 (HOUSING DEVELOPMENT FINANCE CORPORATION BANK OF SRI LANKA)
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyThu Jun 13, 2019 7:48 pm by ruwan326

» DFCC.N0000 ( DFCC BANK PLC )
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyThu Jun 13, 2019 7:45 pm by ruwan326

» COMB.N0000 ( COMMERCIAL BANK OF CEYLON PLC )
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyThu Jun 13, 2019 7:43 pm by ruwan326

» මිල සූත්‍රය වැරදුණාද, වැරැද්දුවාද?
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyThu Jun 13, 2019 9:21 am by ruwan326

» අනං මනං! #/+?.<>
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyThu Jun 13, 2019 8:07 am by ruwan326

» Should CSE be like this? Whose FAULT is it?
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyWed Jun 12, 2019 5:21 pm by Yin-Yang

» CCS.N0000 ( Ceylon Cold Stores)
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyTue Jun 11, 2019 9:15 pm by ruwan326

» Access Engineering AEL Technical Analysis
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyTue Jun 11, 2019 9:10 am by Jimmy

» DOCK.N0000 (COLOMBO DOCKYARD PLC)
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyMon Jun 10, 2019 11:13 pm by hammurabi

» MCPL.N0000
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptySun Jun 09, 2019 12:15 pm by ruwan326

» Tourism sector
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptySun Jun 09, 2019 6:53 am by NIRMALSG

» LOFC Initiating Coverage - STRONG BUY - 29 03 17 - FC Research
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyFri Jun 07, 2019 5:42 am by stockback

» Easter Sunday Attack and Sri Lanka
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyThu Jun 06, 2019 9:13 am by ruwan326

» Dividend Announcement
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyTue Jun 04, 2019 4:13 pm by Rana

» In the Meantime, Within Our Shores !
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyMon Jun 03, 2019 2:14 pm by කිත්සිරි ද සිල්වා

» What to Analyse
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptySun Jun 02, 2019 7:11 am by Leon

» Tolerance at its Best !
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyThu May 30, 2019 10:50 am by Yin-Yang

» විශ‍්‍රාම ගැන්වීමේ වයස් සීමාව ඉහළ දැමීමට මහ බැංකුවෙන් යෝජනාවක්
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyTue May 28, 2019 8:03 am by කිත්සිරි ද සිල්වා

» සදහම් අටුවාව
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyTue May 28, 2019 7:07 am by ruwan326

» TPL.N0000 (TALAWAKALE PLANTATIONS )
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyMon May 27, 2019 8:04 am by yellow knife

» බැරි වෙලා වත් අනික් පැත්ත උනොත්...?
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyFri May 24, 2019 3:42 pm by smallville

» Sri Lanka at Cross Roads: Time to Learn, Unlearn and Relearn - Prof Rohan Gunaratna
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyFri May 24, 2019 3:10 pm by puliyanam

» Songs to listen
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyFri May 24, 2019 11:26 am by yellow knife

» Dhammika Perera non-committal on common candidate speculation
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyThu May 23, 2019 2:54 pm by කිත්සිරි ද සිල්වා

» Films - To Watch List
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyWed May 22, 2019 10:04 am by කිත්සිරි ද සිල්වා

» Japan, India in Deal at ‘Belt And Road’ Colombo Port: Nikkei
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyTue May 21, 2019 2:06 pm by Ethical Trader

» Presidential poll between 15 Nov-7 Dec
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyTue May 21, 2019 11:31 am by bjmd

» Flying is the Safest mode of Transport
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyTue May 21, 2019 7:07 am by කිත්සිරි ද සිල්වා

» My Port Folio Bleeding But Its just the Begining Of..
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptySat May 18, 2019 7:40 pm by serene

» Sri Lanka mulls 25-pct ownership limit in finance companies
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyFri May 17, 2019 3:40 pm by Backstage

» Searing Heat in China Is Causing Havoc for Rubber Makers
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyFri May 17, 2019 2:43 pm by Backstage

» Israeli spyware breached WhatsApp security
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyWed May 15, 2019 7:47 am by කිත්සිරි ද සිල්වා

» Is Burka prohibted ?
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyWed May 15, 2019 7:30 am by කිත්සිරි ද සිල්වා

» Thread for General News Local/Foreign
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyTue May 14, 2019 11:49 am by CK

» Fed Rate hike , Rs Devaluation PART 2 : Should CSE be like this? Whose FAULT is it?
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyFri May 10, 2019 7:15 pm by Backstage

» NEST.N0000
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyThu May 09, 2019 7:54 pm by ruwan326

» Sweden-based Tundra Fund says Colombo bourse at lowest levels since 2009
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyWed May 08, 2019 5:43 pm by serene

» Telenor and Dialog Axiata's parent in talks to merge Asian businesses
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptyMon May 06, 2019 1:50 pm by Backstage

» සුබ පාස්කූ මංගල්ලයක් වේවා !
Sri Lanka political crisis hikes debt rollover risk: Fitch EmptySun May 05, 2019 6:51 pm by Backstage

June 2019
SunMonTueWedThuFriSat
      1
2345678
9101112131415
16171819202122
23242526272829
30      

Calendar Calendar

Disclaimer


Information posted in this forum are entirely of the respective members' personal views. The views posted on this open online forum of contributors do not constitute a recommendation buy or sell. The site nor the connected parties will be responsible for the posts posted on the forum and will take best possible action to remove any unlawful or inappropriate posts.
All rights to articles of value authored by members posted on the forum belong to the respective authors. Re-using without the consent of the authors is prohibited. Due credit with links to original source should be given when quoting content from the forum.
This is an educational portal and not one that gives recommendations. Please obtain investment advises from a Registered Investment Advisor through a stock broker

Sri Lanka political crisis hikes debt rollover risk: Fitch

Go down

Sri Lanka political crisis hikes debt rollover risk: Fitch Empty Sri Lanka political crisis hikes debt rollover risk: Fitch

Post by The Invisible on Wed Oct 31, 2018 9:31 am

ECONOMYNEXT - Sri Lanka's political crisis triggered by appointing Mahinda Rajapaksa as Prime Minister would make it more difficult for the island to refinance foreign debt, Fitch Ratings said.

"Prolonged political upheaval accompanied by deterioration of policy continuity could undermine investor confidence and make it more challenging for the government to meet its large external financing needs in 2019-2022," Fitch said

"The outcome of the power struggle and possible implications for the sovereign rating (B+/Stable) remain uncertain."

Sri Lanka's budgets which had improved recently may be hit whatever the outcome of the crisis.

"..[T]he newly appointed Prime Minister Mahinda Rajapaksa, who served as president from 2005-2015, oversaw an aggressive Chinese-financed infrastructure drive and sharp increase in public debt during his second term from 2010-2015," he said.

"His return to prominence could pose risks to fiscal consolidation, although he has yet to state his policy priorities.

"Wickramasinghe, if he hangs on, might also be tempted to adopt a more populist fiscal stance, given the political pressure he has faced since the ruling coalition suffered heavy losses in local government elections in February."

The full statement is reproduced below:

Fitch Ratings: Sri Lanka's Political Standoff Lifts Refinancing Risk

Fitch Ratings-Hong Kong/Singapore-30 October 2018: The Sri Lankan president's sudden replacement of the prime minister on 26 October highlights tensions within the coalition government and creates uncertainty over further progress on reform and fiscal consolidation, says Fitch Ratings.

Prolonged political upheaval accompanied by deterioration of policy continuity could undermine investor confidence and make it more challenging for the government to meet its large external financing needs in 2019-2022.

The outcome of the power struggle and possible implications for the sovereign rating (B+/Stable) remain uncertain.

Ranil Wickramasinghe, who was sacked as prime minister, has called for a parliamentary vote to demonstrate his support, while members of his party have said they will consider impeachment proceedings against President Maithripala Sirisena on grounds that he exceeded his constitutional authority in replacing the prime minister.

The president has responded by suspending parliament until 16 November and, in the meantime, appears set to name a new cabinet. The ultimate shape of the government and its policy stance may not crystallise until parliament resumes.

We last affirmed Sri Lanka's sovereign rating in February 2018. At the time, we noted that potential negative rating sensitivities included deterioration of policy coherence and credibility, a derailment of the IMF support programme or a reversal of fiscal improvements leading to a failure to stabilise government debt ratios.

The IMF-led programme might help to anchor policy if there is a change in leadership, while the benefits of some recent structural reforms are likely to persist. For example, a VAT hike has pushed up the revenue-to-GDP ratio and narrowed the fiscal deficit, while the Inland Revenue Act, implemented from April 2018, is likely to increase revenue further.

Moreover, there is no indication that the central bank's autonomy will be undermined by the political upheaval. The central bank has been key to improved economic management under the IMF programme, with greater currency flexibility supporting foreign-currency reserves.

However, the newly appointed Prime Minister Mahinda Rajapaksa, who served as president from 2005-2015, oversaw an aggressive Chinese-financed infrastructure drive and sharp increase in public debt during his second term from 2010-2015.

His return to prominence could pose risks to fiscal consolidation, although he has yet to state his policy priorities.

Wickramasinghe, if he hangs on, might also be tempted to adopt a more populist fiscal stance, given the political pressure he has faced since the ruling coalition suffered heavy losses in local government elections in February.

Sri Lanka's public debt-to-GDP ratio is already 77.6%, which is well above the 62.9% median for sovereigns rated 'B' or lower.

The next test of the government's commitment to the targets set out under its IMF programme will be the 2019 budget, which is due to be delivered on 5 November.

A delay to the budget or slippage on targets could further undermine near-term investor sentiment, and might also jeopardise compliance with IMF targets under the IMF-supported programme, which is in any case due to expire in mid-2019.

The government is also behind schedule on introducing automatic electricity pricing - a structural benchmark under the IMF programme - which could see continued delays under the political upheaval.

Policy decisions that derail the IMF programme or lead to a loss of investor confidence could increase external financing challenges.

The external debt stock is equivalent to around 60% of GDP, and almost 30% of this (around USD15 billion) matures in 2019-2022. Moreover, almost half of public debt is denominated in foreign currency, which may create pressure if the rupee continues to weaken; it has lost 12% against the US dollar this year.
The Invisible
The Invisible

Posts : 883
Join date : 2016-11-28
Age : 39

Back to top Go down

Back to top


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