The indecisive political atmosphere prevailing in the country will not have a profound effect on overall market conditions, a senior investment advisor attached to the SC Securities said.
There will also be no impact on the economy or to company fundamentals whichever party comes to power or secure majority votes at any elections.It is also too early to predict whether the performance of businesses will have an impact or taxes will be increased or decreased due to the different policy initiatives of the political party who won the recently concluded local government elections.
The official said relaxing or changing some existing regulations or direct taxes imposed on companies will however have a considerable impact on the overall economy and market activities. Commenting on direct taxes imposed on companies, he noted that the present government imposed a number of direct taxes on companies compared to the previous government, which had a negative impact on overall performance of corporate institutions.
The official also stressed the need of coming up with proactive polices to attract large inflows of foreign funds into the Colombo Stock Exchange to achieve desired targets, both in the capital market and Sri Lankan economy.
In the meantime, the Colombo Stock Exchange recently announced that the record breaking foreign investment in the Sri Lankan stock market has continued into 2018, with Rs 4 billion in net foreign inflows.
January 2018 posted a new record for the first month of any given year recording Rs. 10.7 billion in foreign purchases in the market, while foreign investors made sales worth Rs. 6.7 billion, which has established a record breaking start to the year in terms of net foreign purchases.
Meanwhile, the Sri Lankan rupee also hit a record low rate of 155.90 against the dollar Wednesday on heavy demand for dollars from importers.
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