All banks and non financial sector institutions expect interest rates and inflation to go down with the opening of the corporate debt market to foreign investors.
"We are quite sure that with the opening of the corporate bond market, large international conglomerates will look at Sri Lanka positively. With this development, the rupee is expected to strengthen further against the dollar," NDB Bank Treasury Vice President Murray Ferdinand said.
The budget proposal for year 2011 enables foreign investors to invest in bond ,equity and all types of fixed income funds offered by bank and other financial entities through a bank account specified by the Controller of Exchange and would improve domestic and foreign investor participation.
Major local blue chip companies like JKH, Aitken Spence and several others will also look beyond Sri Lanka to make their presence felt. ‘This is a healthy sign because we will get enough and more liquidity into the country. This will help to control inflation and to reduce the borrowing interest rates in the country,’ Ferdinand said.
Further, removal of debit tax will be beneficial to the unit trusts where the managers can take advantage of alternate investment opportunities available in the financial market without incurring the annualized cost of the debit tax.
This prudent move by the government will increase the country’s per capita income. Therefore, the New Year would be a crucial year for the country where the debt market is concerned, financial analysts said.
source - www.island.lk
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