Fundalyse

The food in the background is tempting to eat, however, you could be a person who doesn’t eat junk food and avoid them religiously. So this is not a fast-food advertisement. Imagine your doctor or fitness guru advised you that to stay fit that you need to avoid junk. Eat more of this every day and you could risk ending up being junk. in other words, you are what you eat. ⁣
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Sri Lanka is facing a similar fate of being rated to junk status when it comes to paying our debts in a few months. Our country has been sick according to independent rating agencies that the whole world relies on. Earlier this month, one of the top three credit rating agencies downgraded Sri Lanka’s bonds [the type of bonds Arjun Mahendran & Co. loved] to junk status or highly speculative status and today S&P Global Ratings reiterated the same to Sri Lanka by slamming B- staying just above CCC [not Colombo City Center] because we have not been earning the required cash inflows, a partially closed economy and enjoying low taxes in the middle of a pandemic. ⁣
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What does this mean to investors who have invested in our Sri Lankan bonds? It means if you bought these bonds, you have a risk of Sri Lanka not paying you what is owed to you. Why? Because Sri Lanka owes Rs. 2 trillion to the world and these rating agencies and debt holders think that Sri Lanka doesn’t have that kind of money in the treasury to pay by September and October. This is the largest debt repayment in our history and couldn’t have been a worse timing after being attacked by extremists last year followed by a global pandemic. If you were to buy our future bonds to raise money to pay off the upcoming debt, using our food analogy, it better look good and be damn tasty now. ⁣
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What does it mean to us? We could head to a similar fate as the Greeks [Greek Debt Crisis] did which lasted for 10 years; austerity measures, loss of income and increase in poverty and humanitarian crisis, crash in stock market and real estate market, higher taxes and interest rates, hyperinflation leading to adverse social effects. It's like the end of the world. ⁣
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Yes. If you didn't know, the stock market has its unique animal kingdom represented by humans. It's not the usual animal kingdom that you're familiar with since it involves no lions and no pride rock.⁣
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Using animals to illustrate in the stock market are the emojis of investing. While you use the eggplant, water drops, and heart emojis to represent subtly how you feel and what is require to be done, investors and traders use animals to represent themselves as well and what the current market environment and feelings are. Think of it as a mascot you would wear and cheer and live and die by.⁣
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Follow us to find out what are these animals and what they represent in a world where money doesn't sleep. ⁣
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