Colombo Stock Exchange looking bright

COLOMBO (News 1st) - The Colombo Stock Exchange ended on a positive note today (July 05), with the market witnessing a net foreign inflow of Rs. 85.3mn, reversing the outflows witnessed continuously for two weeks. Yesterday (July 04), the market reached its highest gain in more than eight months with the stock index jumping 1.8% to its highest gain since November 1st last year. Foreigners sold Rs. 3.5mn worth of shares yesterday, extending the year-to-date net foreign outflows to Rs. 7.01 billion. During the first four months of 2019, the Colombo stock exchange reported a net outflow of US$ 24mn. Meanwhile, the Cabinet this week gave approval for the Government to revise the Fiscal Management (Responsibility) Act No. 3 of 2003 to increase responsibility in not meeting deficit targets. The new regulations propose to make the Government legally responsible to declare why they have deviated from fiscal targets and outline how recovery can be mapped out. Sri Lanka’s fiscal targets, particularly deficit targets are routinely missed, partly due to natural and man-made disasters. The Government missed deficit targets in both 2017 and 2018 due to drought, slower than expected growth and other issues. Recently, the finance ministry said that Sri Lanka's budget deficit increased by Rs. 112.8bn to Rs. 363.4bn during the 1st quarter of this year, when compared with the 1st quarter of last year, due to increased government expenditure. State expenditure increased by 10.1 % to Rs. 962bn in the first four months of 2019, compared to Rs. 873 billion in the same period of 2018, mainly due to the increase in recurrent expenditure.