Upcoming budget, positive indicators, great for CSE
If the new government’s upcoming budget proves favourable, the Colombo stock market will reach an unprecedented high in the coming weeks, stock market analysts say.
This will back improved valuations, more foreign interest, and a rising stock market, analysts said. “People are looking for better cost management in government spending which the incumbent government has shown, and strong tourist numbers are a positive sign for the stock market.”
Analysts noted that the IMF’s third tranche is still pending, and foreign investors are keenly awaiting the bond exchange’s participation rate, while local investors are hopeful for greater foreign involvement and potential price enhancements.
The Colombo Stock Exchange (CSE) indices rose by more than 2 per cent as investor confidence surged during the first trading session of the New Year on Wednesday.
Stockbrokers said that with the Export Development Board (EDB) targeting US$18.2 billion in revenue for this year, things are looking positive for the manufacturing industries. Data show that exports are expected to surpass $16.2 billion in 2024.
As a part of its five-year plan, the EDB is slated to attract $45 billion in export revenue.
The Ministry of Finance has reported that despite the slow growth during the latter half of last year, the Board of Investment signed 41 new projects, and extended 33 existing ones. “All these are positive indicators for the stock market,” a stockbroker said. He added that there is a public expectation for enhanced efficiency in government spending, and the strong influx of tourist arrivals is witnessed as a favourable indicator for the stock market.
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