Capital market expects pro-business agenda in budget 2016

21 September 2015 02:45 am Views - 1401

By Shabiya Ali Ahlam
The local capital market stakeholders yesterday expressed hopes for a pro-investment and business agenda in the upcoming budget for 2016, as the current year, despite being a rather eventful one, was marred by uncertainty.

Speaking to Mirror Business, analysts said that as investor sentiments were impacted with the presidential election, general election and the recent UNHRC session in Geneva where Sri Lanka came under fresh spotlight. 

However, it is expected that greater emphasis of the upcoming budget would be on putting economic development as top priority. “We expect a pro-invest and business budget. We expect a five-year focus, one that prioritises the overall economic growth, with emphasis on ways of reducing trade deficit, growing investments and creating private sector jobs as promised in the current government’s manifesto. 

If this is achieved, the capital market would take it as appositive one, even if there is nothing specific for its development,” said Softlogic Securities COO and Head of Research Danushka Samarasinghe. With the loan and leasing segment expected to slow down following the recent directive by the Central Bank, Asia Securities Manager Research and Banking Sector Analyst Srimal Liyanage stressed the need for the government to focus on promoting economic development in a manner that would not only help grow businesses but also boot SMEs. “Overall the budget should focus on improving the efficiency of systems including tax. Emphasis should be on minimising corruption, improving ease of doing business, promoting foreign direct investments and exploring ways on establishing Sri Lanka as a financial hub,” stated Liyanage. “The government should also continue and increase investments in infrastructure and further project loans for mega projects will benefit the banking sector,” he added.

Meanwhile, a senior and well reputed private sector representative professed that the upcoming budget must look at its list of advantages and set its plans around them.

“If it is services we need to ensure we have the skill set to run it, if we don’t then we have to provision for it so we can deliver accordingly. Doing so will bring much of the current account and the balance of payment adjustment,” he opined. Pointing out that Sri Lanka cannot look at borrowing as an option to fuel its growth, the economy must look at the way in which the existing infrastructure could be put to good use while new projects are built to the nation’s competitive advantage.

“Efficient capital and zero tolerance against wastage are essential. That clearly means inefficient state-owned enterprises (SOEs) should not be running and that is something we should look for in the budget. Failing to address such issues will put the nation in a huge turmoil in the near future,” he cautioned.