Mar 31, 2016 (LBO) – Sri Lanka’s Central Bank said in a statement that the Hongkong and Shanghai Banking Corporation (HSBC) will cease to operate as a Primary Dealer from tomorrow.
HSBC will, however, continue to function as a Dealer Direct Participant in scripless securities and transact in scripless securities on behalf of customers and maintain customer accounts in LankaSecure, the Central Bank said.
Mar 31, 2016 (LBO) – Sri Lanka’s gross domestic product (GDP) growth is expected to rise to 5.3 percent in 2016 as private sector investment picks up once fiscal reforms are committed , a new Asian Development Bank (ADB) report says.
“Fiscal consolidation is to be put back on track by a revision of the 2016 budget,” said Tadateru Hayashi, Senior Country Economist at ADB’s Sri Lanka Resident Mission.
“IMF support, once agreed, will protect against expected pressures from external imbalances as it builds international confidence and facilitates fiscal consolidation and tax reform. A national development strategy will facilitate investment, both domestic and foreign.”
Inflation is expected to increase moderately under monetary tightening, picking up to 4.5 percent in 2016, and further to 5.0 percent in 2017 as growth picks up.
Though domestic demand remains restrained, the depreciation of the rupee will exert upward pressure on import prices, the report says.
“In addition, dissipation of the base effect of several energy price cuts in 2015 will add to the upward movement in inflation in 2016,”
“Balance of payments will continue to be under pressure with weak exports as a result of the global slowdown and slack workers’ remittances from the Middle East affected by low oil prices.”
The expected renewal of GSP+ concessions from the European Union in 2016 is a positive factor for exports, with receipts from tourism also growing, following the trend since the end of the conflict.
The report says, this would help maintain the current account balance at -2.0 percent in 2016, and see it improve to -1.8 percent in 2017 as exports pick up.
A low revenue ratio has been a major challenge to Sri Lanka’s fiscal consolidation process and to maintain social expenditure and public investments.
A tax to GDP ratio of 12 percent is the lowest among the countries with a similar level of development, it said.
However, it is encouraging to note that the government has taken steps in the right direction to enhance revenue in the proposed amendments to the 2016 budget.
The report notes that to further improve the tax system, it is necessary to strengthen policy analysis and build the capacity of decision-making.
The ASPI gained sharply due to price gains in index heavy stocks like Carson Cumberbatch, Commercial Bank, Ceylon Tobacco Company, Aitken Spense and Ceylinco Insurance. Crossings were recorded in Aitken Spence, Renuka Foods (Voting) and Sunshine Holdings. Foreign investors were net sellers during the day. The All Share Price Index gained 30.9 points to close at 6,071.9(+0.5%), while the S&P SL20 Index gained 16.2 points to close at 3,204.4 (+0.5%). Total turnover for the day stood at 690.9 million rupees. Foreign purchases amounted to LKR 216.1mn (USD 1,493.6k), whilst foreign sales amounted to LKR 255.1mn (USD 1,763.1k). This resulted in a net foreign outflow of LKR 39.0mn being recorded at the end of the day’s trading. (March 31, 2016 4.15 p.m)
USD/LKR in the spot next market strengthened to 147.70/148.00, dealers said after hitting a high of 149.10/20 Thursday.
In Oil – Brent crude prices were down 0.53 percent to USD 39.05 per barrel. (March 31, 2016 08.15 a.m)
Asian shares were up on Thursday followed by gains in the US markets. MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS rose 0.4 percent. Australian stocks added 1.3 percent. Japan’s Nikkei was up 0.7 percent. New Zealand’s S&P/NZX 50 Index rose 0.4 percent. The Kospi index in Seoul swung between gains and losses. (March 31, 2016 7.40 a.m)
Mar 31, 2016 (LBO) – Sri Lanka’s statistics office said unemployment rate for the fourth quarter of 2015 has been estimated as 4.3 percent against the 5.0 percent reported for the third quarter of 2015.
Releasing Sri Lanka’s Labour Force Survey results for the last quarter of 2015, Census and Statistics Department said estimated economically active population is about 8.9 million in the fourth quarter of which 64.5 percent are males and 35.5 percent are females.
Labour force participation rate for the fourth quarter is 53.6 percent and this is 75.4 percent for males and 35.2 percent for females.
Labour force population expressed as a percentage of the working age population (age 15 years and over) is the labour force participation rate.
The estimated employed population is about 8.6 million for this quarter, of which, about 47.2 percent engaged in Services sector, 27.5 percent in Agriculture sector and 25.3 percent in Industry sector.
Highest employment share is in service sector and this pattern is same for both male and female.
The lowest employment share is for industry sector. Also the survey reveals that about 68 percent of the employed population works more than 40 hours per week.
The Department has released labour force statistics of fourth quarter of 2015, based on a sample of 6250 housing units.
The field work of the survey for the fourth quarter was carried out in October, November and December of 2015 covering the whole country.
http://www.cse.lk/cmt/upload_cse_announcements/4161459413908_.pdf
HAYCARB PLC
Company ID: - HAYC
Date of Announcement: - 31.Mar.2016
Rate of Dividend: - Rs. 2.00 per share (Not liable to 10% dividend tax) / Interim Dividend
Financial Year: - 2015/2016
XD: - 11.Apr.2016
Payment: - 25.Apr.2016
Share Transfer Book Open
RICHARD PIERIS AND COMPANY PLC
Company ID: - RICH
Date of Announcement: - 31.Mar.2016
Rate of Dividend: - Rs. 0.50 per share / Interim Dividend
Financial Year: - 2015/2016
XD: - 11.Apr.2016
Payment: - 22.Apr.2016
Share Transfer Book Open
Mar 30, 2016 (LBO) – Sri Lanka plans to issue international sovereign bonds up to three billion dollars in 2016, the Central Bank said, in a request for proposals to appoint lead managers or book runners.
“As per the approved Sovereign Bond programme of the Government of Sri Lanka (GOSL), Central Bank of Sri Lanka (CBSL) intends to issue International Sovereign Bonds (ISBs) up to USD 3,000 million in the international capital market in 2016,” a statement said.
“The issuances in single or multiple tranches would be in US Dollar and Chinese Renminbi (Panda / Dim Sum) with a fixed coupon and medium to long term maturities where non-resident investors will be eligible to invest at the primary issuance,” it said.
Banks and investment houses that have acted as Lead Managers/Book Runners for emerging market bond issuances in aggregate amounting to a minimum of 20,000 million dollars in 2015 are eligible to submit proposals.
In February an official said Sri Lanka may go to international markets to raise up to 1.5 billion dollars this year after gauging the outcome of meetings with the International Monetary Fund.
Sri Lanka will hold discussions with the IMF in March and April on a support facility for its balance of payments, and for an endorsement of the government’s plan for fiscal consolidation.
Sri Lanka raised 1.5 billion dollars in a 10-year sovereign bond issue in October with a coupon of 6.85 percent for budgetary financing and to increase foreign reserves.This was Sri Lanka’s ninth US Dollar benchmark as well as the largest offering in the international bond market since 2007.
After ending a war with Tamil Tiger separatists in 2009, the island has increasingly gone to international markets for its borrowing program.
CENTRAL FINANCE COMPNAY PLC
Company ID: - CFIN
Date of Announcement: - 30.Mar.2016
Rate of Dividend: - Rs. 1.00 per share / Second Interim Dividend
Financial Year: - 2015/2016
XD: - 08.Apr.2016
Payment: - 22.Apr.2016
Share Transfer Book Open
SRI LANKA TELECOM PLC
Company ID: - SLTL
Date of Announcement: - 30.Mar.2016
Rate of Dividend: - Rs. 0.89 per share / First and Final Dividend
Financial Year: - 2015
Shareholder Approval: - Required
AGM: - 12.May.2016
XD: - 13.May.2016
Payment: - 24.May.2016
Share Transfer Book Open
LANKA CERAMIC PLC
Company ID: - CERA
Date of Announcement: - 30.Mar.2016
Rate of Dividend: - Rs. 5.00 per share / Second Interim Dividend
Financial Year: - 2015/2016
XD: - 08.Apr.2016
Payment: - 22.Apr.2016
Share Transfer Book Open
Mar 29, 2016 (LBO) – Sri Lanka should open up more sectors for the proposed Indo-Lanka Economic and Technology Cooperative Agreement or ETCA, a head of regional think tank said.
A former telecoms regulator and founding Chair of LIRNEasia Professor Rohan Samarajiva said at a seminar that the construction industry is a one sector that should be opened up for both countries.
“I disagree with this ETCA. I think we should open up more than two sectors. I think we should open up construction,” Samarajiva said.
As per the professional associations, ship building and ICT are the two sectors that have been included by Sri Lanka for the proposed framework agreement.
“Don’t think of people only coming here; you should go there. Everybody talks about Indians coming here,” he said.
“Commercial Bank has gone to Myanmar and Bangladesh. ‘Virtusa’ is a company which has got establishments on the Indian side. ‘Damro’ can go, he can make money but you people can’t.”
He was speaking to a group of professionals at a seminar organized by the Chamber of Construction Industry yesterday.
Samarajiva used his experience as a case in point to explain to the audience the motive for opening up for competition.
“When we were going to reform the Telcom sector, there were so many people who said fix the problems first. But we didn’t do that,” he said.
“We just opened the market; we committed to the gap; we got the investments; we created competition; now the pressure was on and we did certain things and SLT reformed.”
He said the idea behind creating a legal framework of this nature between two countries is to reduce the uncertainty and discretion when dealing with business activities.
“What we must care about is whether the people get good quality services. I think it will be done by creating incentives for companies to become more competitive,” Samarajiva said.
“We know that all export industries are under pressure. They have to improve their productivity.”
Samarajiva however stressed that the agreement should be well negotiated and crafted well.
USD/LKR one week forward quoted at 148.90/149.00, after closing at 148.20/30 Monday, dealers said. The spot is still holding at 143.90 (March 29, 2016 12.40 p.m)
ASPI trading at 6,026.21, down 35.84 points or 0.59 percent with losses in index heavy stocks like John Keells Holdings and Hemas Holdings. (March 29, 2016 11.30 a.m)
Asian shares were down on Tuesday followed by losses on Wall Street and pressure on the US dollar. Australian shares slumped 0.3 percent after a long week-end Easter holiday. Japan’s Nikkei was also down 0.8 percent following the release of mixed economic data before the market opened. MSCI’s broadest index of Asia-Pacific shares outside Japan edged up 0.05% after wavering for most of the early session. (March 29, 2016 08.30 a.m)
Crude oil extended overnight losses with Brent LCOc1 down 0.2 percent at $40.19 a barrel, while U.S. crude CLc1 fell 0.2 percent to $39.33. (March 29, 2016 08.30 a.m)
The Colombo Stock Exchange (CSE) and the Maldives Stock Exchange (MSE), in association with the Capital Market Development Authority of Maldives (CMDA), acting under the MOU signed between the two exchanges conducted a roadshow for potential Maldivian Issuers and Investors. The forum hosted by the Capital Market Development Authority of Maldives was held on the 28th and 29th of March 2016 at the Maldives Monetary Authority Building in Male.
The forum presented the CSE as a secondary listing destination for Maldivian companies and promoted the Sri Lankan capital market to investors. The event marked the first Issuer Forum conducted by CSE on foreign soil. Over 30 representatives from 20 potential Issuers from the Maldives and 7 investment banks from Sri Lanka were present at the event.
The Issuer Forum comes against the backdrop of a strategic initiative by CSE to introduce a Multi-Currency Board to list and trade companies incorporated and operating outside Sri Lanka. The necessary approvals for the board have been obtained by the Central Bank and the CSE is awaiting approval from the Securities & Exchange Commission of Sri Lanka (SEC).
Minister of Economic Development in Maldives Hon. Mohamed Saeed, Chairman of CSE Mr. Vajira Kulatilaka, CEO of CMDA Mr. Ahmed Naseer and CEO of MSE Mr. Hassan Manik spoke at the event. Mr. Rajeeva Bandaranaike, the CEO of CSE made a presentation on the benefits of listing and addressed the common concerns on a public listing by potential issuers while Mr. Renuke Wijayawardhane, COO of CSE made a presentation on listing criteria and requirements.
The Forum also featured a Sri Lankan listed company, where Chairman/MD of Softlogic Holdings PLC Mr. Ashok Pathirage and Head of Strategy Mr. Chintaka Ranasinghe shared the experience of Softlogic Holdings using the Sri Lankan capital market to fund their growth.
Hon. Mohamed Saeed, Minister of Economic Development in Maldives making remarks as the Chief Guest at the Issuer Forum commended Sri Lankan listed companies for effective capital market engagement and called on Maldivian Companies to embrace the many opportunities available in the Sri Lankan capital market. Minister Saeed also went on to state that Maldivian Companies strengthened through regional economic corporation is vital to economic development in the Maldives.
Chairman of CSE Mr. Vajira Kulatilaka said that engaging Maldivian Companies has long been an objective at CSE and that reaching out to them first, represents the trust and confidence placed in the Maldives and its business sector. He stated “We have recently implemented a number of investment and policy measures to give the exchange world-class status. The CSE offers a unique opportunity to raise capital in one of the fastest growing economies in Asia, through an exchange that on average performed better than most major global indices in recent years.”
Sharing his thoughts at the panel discussion, the CEO of CMDA Mr. Ahmed Naseer urged Maldivian Companies to make use of the opportunity to gain a perspective on investing in the Sri Lankan capital market and to embrace the best practices maintained by listed companies in Sri Lanka.
The CEO of MSE Mr. Hassan Manik pointed out that listing on the CSE would provide Maldivian listed companies an opportunity to achieve proper values for their shares. He noted that at present, shares of listed Maldivian companies do not have correct values, which is caused by the lack of liquidity in the market.
Chairman/Managing Director of Softlogic Holdings PLC Mr. Ashok Pathirage noted that sourcing capital is just one benefit of listing on the CSE and outlined that listing also fosters good corporate governance, paves the way for an optimized company structure and helps in growing the organization through attracting quality talent.
Commenting on the process of listing foreign companies, the CEO of CSE Mr. Rajeeva Bandaranaike noted that initially only non-resident foreign investors would be permitted to buy and sell securities through the proposed Multi-Currency Board.
CSE representatives held one-to-one meetings with companies listed on MSE on 27th March. Sri Lankan investment banks also had the opportunity to meet the Maldivian companies that were present at the forum on 28th and 29th of March. (Media Release)
Mar 29, 2016 (LBO) – In his latest book ‘Throwing Rocks at the Google Bus,’ media theorist Douglas Rushkoff argues that the free market isn’t written in stone and a path to a more resilient way of doing business involves understanding the steady-state economy.
He reminds us to stop using the market as an excuse for society’s ills — the market was created, and it can change.
“All I ask is that people at the very least acknowledge that the venture capital/startup/financially-driven operating system is a choice, not a preexisting condition of nature.”
“The market is a construction. God didn’t make the market.”
Rushkoff argues that growth has become an end in itself, the engine of the economy, and human beings have come to be understood as impediments to its functioning
This growth is primarily driven by continuous development of new technologies and the opening up of new markets. But can these trends continue?
Although some of these arguments may not apply to Sri Lanka, as we have not fully developed our markets, the likelihood that markets saturate may be relevant to the political economy.
Rushkoff says: “This is one of the primary legacies of the industrial age, when the miraculous efficiency of machines appear to offer us a path to infinite growth — at least to the extent that human interference could be minimized.”
Rushkoff is not the first to rethink the simplicity that markets are perfect, all externalities are priced in, and people are driven by rational motives. That capital accumulation has become problematic has become a central debate in recent years — a feature built into the current neoliberal model.
A new way of economic thinking eschews the occasional startup whose value explodes in favor of what Rushkoff calls the steady-state economy. The one edict that should govern all businesses: “Does this make my customers rich? If I’m making other people wealthy, then I am supporting the ecosystem that will keep my business alive.”
Right now, major economies are set up to ask the entire opposite question: Does this make our investors rich? Instead of valuing and rewarding the creation of a sustainable economy, we value growth above all other things.
Venture capital infuses companies with enough cash that they can expand astronomically and make their founders incredibly wealthy. Look at Twitter, currently besieged by open letters about how to improve its business as its stock tanks.
This is the prime example of an economy with the wrong priorities—and the mistakes founders can make by giving into a mindset that growth is the only meaningful goal of business.
“Their $500-million a quarter in revenue company is considered a failure by Wall Street. If you make $2 billion a year on 140-character messages, that is such a home run,” he says.
Instead, stock holders are demanding more growth, in order to increase the stock price so they can sell; they’re not interested in owning part of a company whose technology has been the underpinning of so much global change, they’re interested in making a profit on the market.
“Technology is making us work harder and we earn less. It’s not going well.”
Twitter is just one company, but multiply this attitude across the entire economy and things get scary: To continue growing at a rate that will satisfy their investors, companies are forced to find more and more extractive modes of generating revenue.
“This is why you see Bernie Sanders and Donald Trump alike rising. People are doubly disillusioned. Technology is making us work harder and we earn less. It’s not going well. …But then the double anger is that these companies rose on the pretense of being on our side,” says Rushkoff.
It seems theory is being re-written along with economic philosophy.
And to do that requires rejecting the idea that the market is a rule of nature that can’t be changed.
CEOs need to find ways to operate their company without acquiescing to shareholder demand for constant growth. You (and Milton Friedman) might argue that that is, in fact, the only thing a company should be doing, but in making that argument, you’re buying into a system that doesn’t need to exist the way it currently: “You can’t ignore the development of the modern marketplace.
The rules, Rushkoff argues, were made not by God, but by aristocrats around the 11th century, intent on preventing the peasants from creating a vibrant economy not controlled by the ruling class. Today, the rules can be whatever we want them to be. Rushkoff doesn’t want a revolution, just a rethinking. “They worked really well for 700 years of colonial expansion,” he says, “but they could use a tweak or two.”
He writes in the book that CEOs he talks to are exhausted by being forced into the short term thinking of quarterly growth, and says that as people are reading the book, they’re relieved, because the solutions within give them a path to a better business model: “I’m getting emails from CEOs from Fortune 50-sized companies saying, ‘I can use this, it’s going to work.’
Because these CEOs have been looking for ways to reconfigure to this slow-growth, new normal economy that we’re actually in without getting fired or sued.”
So just remember, human beings made this system, and human beings can change it. And one thing we all can agree on is that the system isn’t working: “Big business and small business, extreme libertarians and Bernie Sanders people all are looking toward the same solution. … We’re realizing that we don’t really care about our ideologies as much as about the fact that we’ve let a system get out of control.”
Mar 29, 2016 (LBO) – Sri Lanka’s monetary board held interest rates unchanged after a monthly monetary policy meeting, surprising some market participants who expected a rate increase.
Seven out of 13 economists expected the Central Bank to raise rates to tackle high credit growth and pressure on the Rupee, according to a poll done by Reuters.
Private sector credit growth was 25.7 per cent in January 2016 compared to 25.1 per cent in December 2015 and 27.0 per cent in November 2015.
“Going forward, the growth of monetary aggregates is expected to decelerate gradually over the remainder of the year, reflecting the impact of the upward movement in market interest rates, while the envisaged fiscal consolidation path is expected to support the moderation of monetary expansion,” the Monetary Board said in a statement.
In terms of inflation, the increasing trend witnessed in CCPI based core inflation continued into February 2016 as well, with core inflation registering 5.7 per cent, on a year-on-year basis, in comparison to 4.6 per cent in the previous month.
“Going forward, with the policy measures already adopted by the Central Bank, inflation is expected to remain in low- to mid-single digit levels during the remainder of the year,” the statement said.
The full statement is below:
According to provisional estimates of the Department of Census and Statistics (DCS), the Sri Lankan economy grew by 4.8 per cent, in real terms, in 2015 compared to 4.9 per cent in the previous year. The expansion of the economy in 2015 was mainly supported by services related activities, which grew by 5.3 per cent during 2015. Agriculture and industry related activities also contributed positively to the growth during the year, expanding by 5.5 per cent and 3.0 per cent, respectively. The growth in 2015 was largely driven by an increase in consumption demand, while investment activities witnessed a deceleration.
Headline inflation (year-on-year) based on the Colombo Consumer Price Index (CCPI, 2006/07=100) increased to 2.7 per cent in February 2016, compared to 0.9 per cent in January 2016, mainly due to the dissipation of the base effect. Annual average headline inflation also edged up to 0.9 per cent in February 2016 from 0.7 per cent in the previous month.
In line with these movements, year-on-year headline inflation, based on the National Consumer Price Index (NCPI, 2013=100), also increased to 1.7 per cent in February 2016 from negative 0.7 per cent recorded in the previous month, and was 2.6 per cent on an annual average basis. Meanwhile, the increasing trend witnessed in CCPI based core inflation continued into February 2016 as well, with core inflation registering 5.7 per cent, on a year-on-year basis, in comparison to 4.6 per cent in the previous month. Going forward, with the policy measures already adopted by the Central Bank, inflation is expected to remain in low- to mid-single digit levels during the remainder of the year.
On the external front, the deficit in the trade account narrowed by 9.1 per cent, year-on-year, in January 2016 as the decline in expenditure on imports has been greater than the decline in 2 earnings from exports. Earnings from tourism are estimated to have increased by 19.4 per cent in February 2016, while workers’ remittances, which declined by 0.5 per cent during 2015, recorded an increase of 8.0 per cent during January – February 2016. Gross official reserves, which stood at US dollars 7.3 billion at end 2015, are estimated to have decreased to US dollars 6.6 billion by end February 2016, mainly due to debt service payments and the supply of foreign exchange to the domestic foreign exchange market largely to cover the demand arising from foreign investors who moved their funds away from the government securities market. Meanwhile, the Sri Lanka rupee remained broadly unchanged against the US dollar thus far during 2016.
In the monetary sector, market interest rates have risen, reflecting the tightening monetary conditions and the transmission of policy actions of the Central Bank. The year-on-year growth in broad money (M2b), which responds to monetary policy actions with a time lag, remained high at 19.1 per cent in January 2016 in comparison to 17.8 per cent recorded at end 2015. Private sector credit growth was 25.7 per cent in January 2016 compared to 25.1 per cent in December 2015 and 27.0 per cent in November 2015. In absolute terms, private sector credit grew by Rs. 43.6 billion during January 2016. Going forward, the growth of monetary aggregates is expected to decelerate gradually over the remainder of the year, reflecting the impact of the upward movement in market interest rates, while the envisaged fiscal consolidation path is expected to support the moderation of monetary expansion.
Considering the above, the Monetary Board, at its meeting held on 29 March 2016, was of the view that the current monetary policy stance is appropriate and decided to maintain the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank unchanged at 6.50 per cent and 8.00 per cent, respectively.
http://www.cse.lk/cmt/upload_cse_announcements/5261459229939_.pdf
http://www.cse.lk/cmt/upload_cse_announcements/9171459247518_.pdf
Proportion: - Voting - One (01) share for every 21.9467 existing shares held
Qty Offered: - 1,833,838
Financial Year: - 2015
Shareholder Approval: - Required
Dates to be notified
Share Transfer Book Open
Date of Announcement: - 29.Mar.2016
Rate of Dividend: - Rs. 2.50 per share (Subject to dividend tax of 10%) / Final Dividend
Financial Year: - 2015
Shareholder Approval: - Required
Dates to be notified
Share Transfer Book Open
USD/LKR one week forward quoted at 147.55/75, dealers said. (March 28, 2016 12.10 p.m)
“There are no quotes for bonds,” dealers said. Last week bids for bonds of 2020, 2021, 2022 and 2015 were rejected. (March 28, 2016 11.30 a.m)
Asian stock markets were higher on Monday with signs of a steady recovery in the US economy. Japan’s Nikke was up 0.77 percent. The Chinese indices also followed suit and edged higher this Monday, with benchmark Shanghai Composite index up 0.64 percent and Shenzhen’s CSI300 also gaining 0.63 percent while China A50 shares advance 0.37 percent. Markets in Hong Kong and Australia are closed for the Easter holiday. Meanwhile, stocks in Taiwan were 0.2 percent lower. On Friday, data showed that the U.S. economy grew at a 1.4 percent in the fourth quarter, compared with a previous estimate for 1 percent. (March 28, 2016 09.00 a.m)
Mar 28, 2016 (LBO) – Asian Development Bank announced the first auction of a 12.5 million US dollar tranche of re-finance funds for Sri Lankan banks to provide loans for small and medium enterprises in Colombo, Monday.
“This is the first time ADB is disbursing funds in this manner where funds will be allocated through an auction to the financial institutions that submit the highest bids,” Donald Lambert, senior finance specialist said.
“So far we have received 5 bids and we are expecting more before it closes at 1300 hrs today.”
Lambert says after today’s auction the banks can draw down on the funds from end of June.
Initially the funds will be loaned to the Sri Lankan government at the 6-month London Interbank Offered Rate plus 50 basis points.
The government signed the loan agreement with ADB to borrow 100 million US dollars to implement a small and medium enterprise credit line project in February 2016.
The project agreements of the SME credit line was signed with the ADB and 10 local financial institutions: Peoples Bank, Bank of Ceylon, Commercial Bank, Sampath Bank, Hatton National Bank, DFFC, Regional Development Bank, National Development Bank, Nations Trust Bank and the Seylan Bank.
The ADB will have bi-annual auctions every March and September for the next four years.
Fifty percent of the loans have to be given to businesses from out of the district Colombo, for working capital without collateral, to women, and new clients.
Mar 24, 2016 (LBO) – Sri Lanka’s Prime Minister has ordered an investigation into the sudden power failure reported recently at the Colombo Stock Exchange.
“Every stock exchange should have back-up power to operate. Today foreign investors asked us how they invest in a market where there is no power to operate,” Premier Ranil Wickremesinghe said.
“That is our biggest issue now. They are more concerned on that; not on our proposed taxes (Capital Gains Tax). This tax is even there in London.”
A power outage resulted in a temporary trading halt of 17 minutes at CSE on 16 March 2016 and the trading was halted at 9.58 am in the morning and restored at 10.15 am.
However, the CSE said trading and all other operations at the CSE have continued for the rest of the day with no interruption.
ASPI closed at 6,092.45, down 18.95 points or 0.31 percent with gains in some index heavy stocks. The main index saw gains in Carson and Cumberbatch and John Keela Holdings. Turnover was 488 million rupees with 71 counters closing positive and 51 negative. (Mar 24, 2016 3.00 p.m)
Asian stocks markets were down for a second day as oil prices dropped below the 40 US dollars a barrel, foreign media reports said. The MSCI Asia Pacific Index fell 0.5 percent to 128.10 Thursday morning while Japan’s Topix index slipped 0.6 percent.. South Korea’s Kospi index dropped 0.3 percent and Australia’s S&P/ASX 200 Index lost 1.1 percent.. Markets in China and Hong Kong have yet to start trading. (Mar 24, 2016 7.30 a.m)
http://www.cse.lk/cmt/upload_cse_announcements/6831458800965_.pdf
Mar 23, 2016 (LBO) – Sri Lanka is currently looking at one billion US dollars worth currency swap agreement with China, Prime Minister Ranil Wickremesinghe told Parliament Wednesday.
“We have several issues with regard to the foreign exchange reserves. We already have a swap with India and now we are going to have another one billion swap with Chinese Central Bank,” Wickremesinghe said.
Sri Lanka received a 700 million US dollars currency swap from the Indian Central Bank earlier this month.
ASPI closed at 6,073.50, down 15.07 points or 0.25 percent ith losses in some index heavy stocks. The main index was dragged down by losses in Carson and Cumberbatch with the stock closing at 260.00 rupees, down 31.70 rupees and Distilleries Company closing at 230.00 rupees, down 3.40 rupees. Turnover was 1.2 billion rupees with 72 counters closing positive and 62 negative. Foreign purchases amounted to 822.8 million rupees whilst foreign sales were 1,128.3 million rupees. This resulted in a net foreign outflow of 305.5 million rupees. Market capitalization stood at 2,595.9 billion rupees with YTD performance of the ASPI is -11.9 percent. (Mar 23, 2016 3.30 p.m)
Over 6 million shares of Singer Sri Lanka was traded in three separate tranches were sold at Rs. 114.30 rupees per share in a 690 million deal, Colombo Stock Exchange showed. (Mar 23, 2016 10.40 a.m)
ASPI trading at 6,101.94, up 13.37 points or 0.22 percent with gains in Sri Lanka Telecom and Dialog Axaita, brokers said. Turnover is at 743 million rupees. Dialog is trading at 10.30 ruppes, up 0.20 rupees and Sri Lanka Telecom at 39.90 rupees, up 0.90 rupees. (Mar 23, 2016 10.00 a.m)
Mar 23, 2016 (LBO) European markets recovered from early losses after deadly attacks in Brussels killed 31 people and injured more than 230.
France’s CAC and Germany’s DAX index fell 2 percent early on, but recovered by close. The CAC closed up 0.09 percent and the DAX up 0.42 percent. The FTSE closed up 0.12 percent.
In other markets, China’s CSI ended down 0.73 percent, S&P 500 down 0.09 percent and NASDAQ up 0.27 percent.
Safe havens like gold and U.S. Treasuries climbed amid a drop in oil prices.
On Wednesday, Brent Crude was down 0.67 percent to 41.51 dollars a barrel, Gold was at 1245.25, down 0.25 percent, after rallying from a low of 1061.10 at the end of the year.
Wall Street spent most of the session lower as investors wrestled with the fallout of the attacks in Belgium.
Banks have become a proxy for market sentiment in 2016, bearing the brunt of the selloffs since the beginning of the year, said Tom Cassidy, chief investment officer at Univest Wealth Management.
Apple Inc. shares AAPL, gained 0.8 percent despite some analysts saying the iPhone product event on Monday was underwhelming.
Travel-related stocks, financials and consumer staples were weaker.
Wireless carriers offered free calls and texts in and out of Brussels after the attacks, with companies such as AT&T, Verizon, T-Mobile, Sprint, Virgin Mobile USA and Boost Mobile participating.
http://www.cse.lk/cmt/upload_cse_announcements/481458712267_.pdf
http://www.cse.lk/cmt/upload_cse_announcements/4111458715671_.pdf
The Colombo Stock Exchange (CSE) won the award for “The Most Innovative Use of Training and Development” at the recently concluded World HRD Congress in Mumbai, India. Attracting participation from organizations representing over 100 countries, the Global HR Excellence Awards recognize organizations and HR professionals for excellence in HR strategy and people management.
Diverse training needs and unique operational requirements call for the Training and Development process at CSE to take an innovative approach – one that embraces technology, collaboration and employee engagement. The award is a timely recognition of CSE’s efforts to enhance functional processes to reflect the strategic importance of HR.
Commenting on the award, Mr. Rajeeva Bandaranaike, CEO of CSE stated “We are pleased to receive global recognition for our work in training and developing our employees, who are our greatest asset. The award recognizes the breadth and depth of our innovative approach to employee development and endorses our continued commitment towards prioritizing HR as a driver for growth. At CSE we continuously strive to drive exceptional business outcomes through innovative and sustainable HR practices.”
Prashanthi Sabesan, Head of HR at CSE said “In approaching training and development innovatively we have established processes and means by which every employee has the opportunity to be exposed to knowledge received through foreign trainings regardless of their seniority. We have empowered the workforce to identify their individual training needs, through which targeted programs can be customized when bridging skill gaps of an individual employee, rather than approaching it in a generalized manner. Our adoption of technology has also contributed in effectively disseminating knowledge and in enhancing the skills of our workforce.”
The World HRD Congress offers networking opportunities and unique in-depth approaches to understanding important workplace issues that affect an organization’s viability in today’s fast-paced business environment.
ASPI trading at 6,058.96, down 1.17 points or 0.02 percent with gains seen in some finance and banking sector stocks, brokers said. (Mar 21, 2016 10.00 a.m)
Asian stocks were down on Monday morning with the drop in global crude oil prices. The MSCI Asia Pacific declined 0.4 percent to 412.76 in Hong Kong. The Shanghai Composite Index rose 0.8 percent with Chinese policy makers loosening controls in the stock market. In Hong Kong’s the Hang Seng Index of mainland stocks traded almost flat while Japanese markets are closed for a holiday. (Mar 21, 2016 08.00 a.m)
Mar 21, 2015 (LBO) – The main priority for policy makers worldwide should be to support a robust and balanced global recovery, a Sri Lankan economist said.
This involves promoting cooperation in reforming the international financial system, and ensuring sufficient resource flows to developing economies, Saman Kelegama, executive director of the Institute of Policy Studies of Sri Lanka said.
“The global economic slowdown, if it continues, is likely to result in a return of the debt crisis for more developing countries,” he said.
“There is a need to devise principles for the path of adjustment to reduce excessive debt that strike a social and developmental balance between financing, debt restructuring, and pace for policy reform.”
Asia is giving the lead for the growth dynamics of the world but also house a large segment of the global poor and has a large infrastructure deficit.
In this regard, he says for infrastructure funding the newly established Asia Infrastructure Investment Bank too should be utilized together with the Asian Development Bank to bridge the infrastructure deficit in Asian countries.
He was speaking at the sixth Asian Development Forum hosted by Sri Lanka in Colombo recently.
Kelegama also emphasized the necessity for promoting inclusive and sustainable industrialization.
Industrialization has been slow in some Asian nations with innovation lagging behind that of the West as human resources and skills need to be further developed to sustain the competitiveness of their products.
“Industrialization is essential for reducing income, productivity, technology, and skill gap with more advanced economies since there are limits to growth and development in agriculture dependent and service economies,” he said.
“Many resource rich economies like United States and Sweden closed income gaps with more advanced economies at that time through industrial development.”
Small economies like Switzerland, Singapore, and Taiwan did the same through industrialization.
Needless to say, he said that industrialization cannot be left to domestic and global market forces alone.
“Successful development cannot be gained by autarky nor with full integration in to world markets dominated by advanced economies, but if strategic integration in trade, investment, and finance designed to use foreign markets, technology, and finance in pursuit of national development,” said Kelegama.
“To achieve those human resources need to be developed with emphasis on skills, innovation capacity, and management.”
Sri Lanka’s Finance Minister Ravi Karunanayake along with Bambang Susantono, vice President, Asian Development Bank, a former Indonesian deputy transport minister also made keynote address at the event.
The Asian Development Forum was established through cooperation between Japan and the Republic of Korea, and the past host countries include Japan, the Republic of Korea, Thailand and Indonesia.
ASPI was down after two straight sessions of gains mainly due to price declines in stocks such as Sri Lanka Telecom, Lanka Orix Leasing Company, John Keells Holdings, brokers said. The ASPI lost 10.4 points to close at 6,057.8 while the S&P SL20 Index lost 6.63 points to close at 3,167.5. Total turnover was 919.5 million rupees. Foreign purchases amounted to 169.6 million rupees whilst foreign sales amounted to 546.2 million rupees resulting in a net foreign outflow of 376.5 million rupees. (Mar 18, 2016 5.00 p.m)
ASPI trading at 6,055.82, down 12.35 points or 0.20 percent with losses in Sri Lanka Telecom, brokers said.
Singapore, Mar 18, 2016 (LBO) – With Sri Lanka never defaulting on sovereign debt, rupee bonds were an attractive proposition within the bond offerings in Asia, presenters said at the Sri Lanka Investment Summit held in Singapore this week.
Although devaluation of the yuan, and increase in Fed rates led to capital outflows, those outflows appear to be stabilizing, Central Bank Governor Arjuna Mahendran told the audience.
The Sri Lankan bond market is trading at discount to regional peers after a foreign fund cut their exposure to the Sri Lankan market. Now there is an opportunity for investors to get in, market participants said.
“The higher yields are a response to those capital outflows, which now it seems are stabilizing. And we hope that stability will continue,” Mahendran said.
“My hunch is that as evidence mounts that the growth in bank lending results in a stronger supply side, then you will see a diminishing of those spreads, particularly as FDIs start coming in to the country.”
“The trigger really is getting the safety net from the International Monetary Fund,” he added.
But foreign investors worry about liquidity in the market. And the capital outflow, mainly due to Franklin Templeton cutting their exposure, led to a one-notch rating downgrade by Fitch.
“In frontier markets the dirty word is liquidity,” Ranjan Hulugalle, the chairman of Lanka Business Online said, moderating the session on Sri Lanka’s debt markets.
“But today we are not going to run away from it,” he said, posing the question on whether the Sri Lankan market offered liquidity to investors.
The bond market had double the value of Sri Lanka’s stock market, with much higher turnover and liquidity, according to Nirgunan Tiruchelvam, director research of Religare Capital Markets.
“Before 1977 there was no yield curve in the country. Since then there has been an extensive set of reforms that has created a vibrant market.”
As a frontier market, Sri Lanka also offers investors added benefits. Frontier markets have little correlation with US treasuries, and their risk-adjusted returns are superior to many other asset classes, said Thiruchelvam.
With seven-year bonds yielding 12 percent, and the one-year hedging cost at around 5.5 to 6 percent, investors would get a clean six percent return if bonds were held to maturity, Kasun Palisena, CEO of Perpetual Treasuries, noted.
There were added returns from trading opportunities, he said.
“What we do is we have a trading book. The volatility in the market always creates an opportunity for you to make capital gains,” Palisena said.
However, there is still a disconnect with the corporate debt market. Discussions were on with authorities to allow leveraging in the corporate debt market.
“Most of our clients are stock focused. When there is a shift of funds, they go into the banking system. One of the concerns I see is the corporate debt market,” said R. Muralidaran, managing director of Bartleet Religare Securities.
“The transaction cost is high, and there is no repoing facility available. If you were to allow the repoing activity then ofcourse the secondary market on corporate debt would be very active,” he said.
Palisena said government securities generated more liquidity after leveraging was allowed.
“The government securities market took off due to the leverage factor, because you can leverage up to 10 times of your capital,” he said.
GUARDIAN CAPITAL PARTNERS PLC
Company ID: - WAPO
Date of Announcement: - 18.Mar.2016
Rate of Dividend: - Rs. 0.25 per share (Would not be subject to the dividend tax 10%) / First Interim Dividend
Financial Year: - 2015/2016
XD: - 31.Mar.2016
Payment: - 08.Apr.2016
Share Transfer Book Open
CEYLON INVESTMENT PLC
Company ID: - CINV
Date of Announcement: - 18.Mar.2016
Rate of Dividend: - Rs. 1.50 per share (Would not be subject to a 10% WHT) / First Interim Dividend
Financial Year: - 2015/2016
XD: - 31.Mar.2016
Payment: - 08.Apr.2016
Share Transfer Book Open
Mar 16, 2016 (LBO) – The European Commission co-signed two new support programmes worth 38 million Euros in the field of rural development and trade with Sri Lanka, a EU statement said.
“Now our focus is on providing long-term support towards poverty reduction and local economic development,” Neven Mimica,
EU Commissioner for International Cooperation and Development who arrived for a three day visit to the country on Tuesday said.
“We have a new opportunity to support governance and reconciliation efforts and help address the root causes of the conflict in Sri Lanka.”
According to the EU 30 million Euros will be spent on integrated rural development in the most vulnerable districts of the central and uva Provinces.
“The programme aims to improve livelihoods and household incomes, as well as access to drinking water and healthcare services for the most vulnerable of the population in Sri Lanka,” the statement said.
Another 8 million Euro will go towards trade related assistance to help Sri Lanka reap the benefits of further integration into the global and regional trading system.
“It will help the country develop relevant policies, and improve their market access, competitiveness and compliance with international standards.”
ASPI close down 6,068.17, down 46.80 points or 0.78 percent with gains in telecom and some index heavy stocks, brokers said. Turnover was 1.5 billion rupees. Dailog Axaita closed at 10.20 rupees, up 0.20 rupees and Sri Lanka Telecom closed at 40.90 rupees, up 1.40 rupees. John Keells Holding closed at 151.20 rupees, up 1.00 rupees with over 2.1 million shares traded. (Mar 17, 2016 3.40 p.m)
USD/LKR one week forward at 145.45/55, dealers said. The spot did not trade below 143.90, seen as the Central Bank’s desired level. (Mar 17, 2016 11.00 a.m)
ASPI trading at 6,035.99, up 14.62 points or 0.24 percent with gains in Dialog Axaita, brokers said. (Mar 17, 2016 10.00 a.m)
Asian shares showed gains early on Thursday followed by Wall Street gains with S&P 500 closing at its highest level this year, media reports said. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 2.1 percent while Japan’s Nikkei advanced 1.4 percent. China’s Shanghai was up 0.6 percent and South Korea’s Kospi rose 1.2 percent. Australian stocks added 0.8 percent on Thursday morning. (Mar 17, 2016 0830 a.m)
Mar 16, 2016 (LBO) – The European Union has noted progress made by Sri Lanka on GSP+ criteria and supports renewed application, a senior EU official said.
With the election of the new government Sri Lanka intends to apply for tariff preferences provided under the special incentive arrangement for sustainable development and good governance (GSP+) of the European Union.
“Now is the correct time – it is visible that democracy and reconciliation are top priorities of the newly elected government,” Neven Mimica, European Commissioner for International Cooperation and Development told reporters in Colombo Tuesday.
“So it is the common will of the EU to grant this.”
However he says that it is the government’s decision when to apply for the GSP+ trade benefit from the European Union.
“We will work together for an early application. The approval process takes about 10 – 12 months.”
“The process is on track and a meeting will take place in April when a delegation from the EU comes.”
He was speaking at the ceremonial inauguration of the delegation premises of the European Union to Sri Lanka and the Maldives.
In Singapore Harsha de Silva, deputy minister of Foreign Affairs, told investors at the Sri Lanka Investment Summit held on Tuesday that he was 100 percent confident that Sri Lanka could obtain GSP plus status this year.
Meanwhile, the European Commission co-signed two new support programmes worth 38 million Euros.
“Now our focus is on providing long-term support towards poverty reduction and local economic development. We have a new opportunity to support governance and reconciliation efforts and help address the root causes of the conflict in Sri Lanka,” Mimica said.
30 million Euros will go to the programme ‘Integrated Rural Development in the Most Vulnerable Districts of the Central and Uva Provinces’ with the aim to improve livelihoods and household incomes, as well as access to drinking water and healthcare services for the most vulnerable of the population.
8 million Euros will go towards trade related assistance to help Sri Lanka reap the benefits of further integration into the global and regional trading system which will help the country develop relevant policies, and improve their market access, competitiveness and compliance with international standards.
During his visit, Commissioner Mimica will hold a series of high-level meetings, including with President Maithripala Sirisena, the Prime Minister, the Minister of Foreign Affairs and other senior members of the Government while also meeting with civil society representatives, including those working on women’s empowerment, child rights, disappeared people and media freedom.
Mar 16, 2016 (LBO) – Sri Lanka’s gross official reserves were estimated at 6.6 billion US dollars by today, Special Assignments Minister Sarath Amunugama said.
Speaking at a media briefing Amunugama said it is sufficient for 4 months of imports.
“It is recommended to keep at least 3 months of imports. So we are at a comfortable level now,” Amunugama said.
The Minister said current gross official reserves include 1.1 billion US dollars support received from the Asian region.
Sri Lanka received a 700 million US dollars currency swap from the Indian Central Bank on 08 March 2016 for just four months and another 400 million US dollars from SAARC (South Asian Association for Regional Co-operation).
“After receiving those two funds, our foreign reserves went up from 5.5 billion US dollars to 6.6 billion US dollars,”
Sri Lanka had reserves over 7 billion US dollars but pumped funds to defend the rupee against the US dollar.
“To repay our loans and interests we had to intervene into the foreign exchange market. We need to balance both imports and exports.” he said.
Amunugama expects that Sri Lanka will receive 1.5 billion US dollars on a Stand-By Arrangement by mid this year.
Sri Lanka is also eyeing World Bank, ADB and Japanese funds after receiving the IMF support.
Amunugama further stated that Sri Lanka’s estimated budget deficit for 2016 narrowed to 5.4 percent from earlier 5.8 percent after adjusting for recent amendments to budget proposals.
Sri Lanka expects to reduce the budget deficit to 3.0 percent of GDP by 2020.
ASPI closed at 6,021.37, up 50.97 points or 0.85 percent with gains in banking and finance companies, brokers said. JKH was the top contributor of 25 percent to turnover, aided by three crossings on the stock at a price range of 150-151 rupees with a total of 1.56mn shares changing hands during the day. Active trading was seen in banking stocks with Commercial Bank closing 0.20 lower at 120. 00 ruees and Sampath Bank closing 4.90 lower at 224.90 rupees. Foreigners were on the selling side today posting a net foreign outflow of 221 million rupees. Price gainers outnumbered price losers 115 to 37. (Mar 16, 2016 5.00 p.m)
Trading at Colombo Stock Exchange was halted for a few minutes this morning due to sudden power outage, brokers said. “However power was later restored.” ASPI is now trading at 5,972.79, higher 2.39 points or 0.04 percent. (Mar 16, 2016 10.20 a.m)
With effect from March 1, 2016, Carl Cruz assumed duties as Chairman of Unilever Sri Lanka, taking the helm from his predecessor, Shazia Syed who has returned to Pakistan to assume her duties as the Chief Executive Officer of Unilever Pakistan.
Carl arrived in Sri Lanka from the Philippines, where he last served as the Vice President of Customer Development for Unilever Philippines. Under his leadership, the function was transformed into an execution and talent powerhouse for the business, while simultaneously achieving sustainable double digit growth.
Joining Unilever immediately after graduating from university in 1992, Carl began his career in General Trade before eventually becoming the company’s first General Trade Development Manager. In 1999 as the Sales Development and Trade Marketing Manager, he setup Unilever’s Category Management and Retail Solutions capability which was critical in attaining thought leadership in the Philippines Retail Trade Industry. In his 24 years with the organization Carl has gained an extensive breadth and depth of experience in Customer Development and Marketing in the Philippines, Thailand and India.
Speaking about the business he has inherited, Cruz said, “Sri Lanka is an important market for us and these are exciting times for the country. Over the last two years, the Unilever Sri Lanka teamhas worked diligently to ensure the growth of the business and delivered exceptional results. We have the right mindset and ambition to capitalize on the current situation. I look forward to energizing our team, building on the gains we have made and bringing to life our vision of improving the lives of Sri Lankan consumers.”
CIC HOLDINGS PLC
Company ID: - CIC
Date of Announcement: - 16.Mar.2016
Rate of Dividend: - Rs. 1.00 per share (Voting & Non-Voting) / Second Interim Dividend
Financial Year: - 2015/2016
XD: - 29.Mar.2016
Payment: - 07.Apr.2016
Share Transfer Book Open
Mar 15, 2016 (LBO) – Sri Lanka’s government officially informed the Chinese investors of resuming the construction of the Port City project in capital Colombo, yesterday one year after its suspension, a foreign news agency reported.
According to China’s state media, Xinhua Sri Lanka’s Ministry of Ports and Shipping, in an official letter to the CHEC Port City Colombo (Pvt) Ltd, said that the company could resume the construction of the project immediately.
“At its meeting held on March 9, 2016, the Cabinet of Ministers has granted approval for the project to resume immediately,” the letter said.
“Accordingly the suspension effected by my letter dated March 6, 2015, is hereby withdrawn with effect from today (Monday).”
Earlier, Sri Lanka’s Prime Minister Ranil Wickremesinghe said that the country plans to have a ‘unique financial and business district’ in Colombo when the sea reclamation project by a Chinese firm is resumed.
The much talked project was under water for a long period of time as the new administration questioned project approvals by the last regime.
The builders of Sri Lanka’s Chinese-funded port city project told LBO in an earlier interview they were awaiting a positive reply from the government after the suspension of work citing environment concerns by the administration which came in to power in January.
The 1.4 billion US dollar Port City is to be constructed between the Southern edge of the new Colombo South Port and the Fort Lighthouse.
The total area of sea to be reclaimed is 252 hectares.
The Port City is expected to boost the local economy by generating millions of dollars upon its completion and generate over 80,000 jobs.
The project includes a marina and yacht club, a central boulevard, a sea view apartment complex and a five-star hotel, shopping and entertainment center, office space, a mini golf course, and many other modern facilities.
Produced below is the statement issued by the CHEC Port City Colombo in lieu of the Government approval on resuming work for Colombo Port City.
Highlights
– Agreement with IMF possible mid April: Governor Central Bank
– GDP growth seen at 6.5 pct, budget deficit at 5.9 pct vs 6.0: Governor
– USD10 mln investment going into East, says Brandix
– Initial discussion on FTA with Japan: Finance Minister
Singapore, Mar 15, 2016 (LBO) – The Sri Lanka Investment Summit, organized by FinanceAsia, opened at the Four Seasons Hotel in Singapore on Tuesday, well attended by international investors and local delegates.
Finance Minister Ravi Karunanayake told the audience during the morning session that the island offered better growth prospects than other regions. Trade agreements with India and China, and a possible free trade agreement with Japan, were key selling points he said.
“The US offers one to two percent growth. Africa offers three percent, while Asia offers five to seven percent. We are on the cusp of significant growth,” Karunanayake said.
“We just had initial discussions on a free trade agreement with Japan,” he added.
With funds such as Franklin Templeton represented at the summit, some of the attendees told Lanka Business Online tourism and infrastructure looked attractive for investment.
Felicia Untoro, an official of Airbus Helicopters, said the company was looking at a financing partner in Sri Lanka.
“Sitting at the right point in the cycle, the sequencing of reforms, and the communication of reforms and the execution of reforms is something investors would pay attention to,” Hasan Jafri, founder of a Singapore-based advisory firm, said.
“It’s a professional discussion. Anybody who sits in for the first time would be be drawn in,” Anil Changaroth, the secretary to Singapore-Sri Lanka Business Association said.
In his presentation on monetary policy, Governor of the Central Bank Arjuna Mahendran told the audience economic growth was projected at 6.5 percent this year, while inflation could be contained at 3 to 5 percent. Support from the IMF could help Sri Lanka’s efforts to reduce its BOP deficit, he added.
“We hope that by the middle of April we will have an agreement with them (IMF), which will trigger more multilateral lending.”
The balance of deficit was projected at 138 million dollars for this year, from 1.5 billion dollars deficit last year, while the budget deficit could reduce to 5.9 percent from 6.0 percent, he said.
Commenting on interest rates which have increased in recent months, he said steps had been taken to tackle ‘exuberant” credit growth running at over 25 percent.
“Rates are still quite low by historic standards, and we are hopeful that the strengthening supply side would prevent us from tightening much further,” Mahendran said.
Hasitha Premaratne, CFO, Brandix Lanka, said the company had just laid the foundation for a 10 million dollar investment in the east of the island which will produce 3,500 jobs.
Sponsors of the inaugural investment summit are Standard Chartered, Perpetual Treasuries and Asia Securities. Further sessions continue in the afternoon.
Mar 15, 2016 (LBO) – Sri Lanka’s economy has grown 4.8 percent in 2015 against the 4.9 percent growth recorded in the previous year, the statistics department said.
The Gross Domestic Product (GDP) of Sri Lanka for the year of 2015 (January to December) has reached up to 8,622,825 million rupees.
The GDP value reported for the year 2014 was 8,228,986 million rupees resulting a positive growth rate of 4.8 percent for the year 2015.
However, the economic growth rate of the country for the year 2014 has been revised from 4.5 to 4.9 percent. The GDP value at current prices for the year 2015 has been estimated as 11,183,220 rupees.
In 2015, all the three major economic activities have expanded showing a significantly higher growth rates.
It reported 5.5 percent, 3.0 percent and 5.3 percent growth rates respectively for Agriculture, Industries and Services activities.
The four major components of the economy: Agriculture, Industry, Services and Taxes less subsidies on products has contributed by 7.9 percent, 26.2 percent, 56.6 percent and 9.3 percent respectively in the year 2015.
Among the sub activities of Agriculture, ‘Growing of rice’ and ‘Growing of vegetables’ have reported a very high growth rates: 23.3 percent and 24.9 percent respectively and ‘Animal production’ and ‘Growing of oleaginous fruits; including coconut’ reported 8.0 percent and 5.1 percent growth rates respectively during the year of 2015, compared to the year 2014.
Meanwhile ‘Growing of tea’ and ‘Marine fishing’ suffered slight falls in the growth rates and reported growth rates of these two economic activities were -2.6 percent and -1.5 percent respectively during the year 2015.
Among the industrial activities, the sub activities of ‘Manufacture of food, beverages and tobacco’, ‘Manufacture of Rubber products’, ‘Manufacture of furniture’ and ‘Electricity, gas, steam and air conditioning supply’ with higher share to the GDP, have shown a considerable growth rates of 5.6 percent, 4.7 percent, 6.7 percent and 7.8 percent respectively, during the year of 2015.
In addition both the ‘Mining and quarrying’ and ‘Construction’ activities have reported a decline of 0.9 percent each, over the period under consideration.
During the year of 2015, the performance of Services sector was underpinned specially by the sub activities of ‘IT programming consultancy and related activities’, ‘Financial service activities’ and ‘Real estate activities’ which reported significantly higher growth rates of 21.1 percent, 15.8 percent and 9.6 percent respectively compared to the previous year.
It was revealed that the GDP at constant price for the 4th quarter of 2015 has been estimated as 2,387,136 million rupees registering 2.5 percent growth rate compared to the 4th quarter of 2014. GDP growth rates for the1st, 2nd and 3rd quarters of the year 2015 have been reported as 4.4 percent, 7.0 percent and 5.6 percent respectively.
During the 4th quarter of 2015, the Agriculture activities have reported a slight decline by 0.5 percent. In the meantime Industrial and Services activities have recorded positive growth rates of 1.9 percent and 2.7 percent respectively.
ASPI closed 5,970.40, down 9.03 points or 0.15 percent with losses recorded in some banking and finance sector stocks like Commercial leasing Company, Lanka Orix Leasing and Commercial Bank, brokers said. Turnover was 731 million rupees. Foreign investors aligned on to the selling side recording a net foreign out-
flow of 16.6 million rupees. Price losers outnumbered gainers by 68 to 49 counters. (Mar 15, 2016 4.20 p.m)
ASPI trading at 5,968.78, down 10.65 points or 0.18 percent with losses in Commercial bank and Hemas Holdings, brokers said.
Asian stock markets opened negative on Tuesday ahead of a Bank of Japan meeting later today. MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.7 percent, backing off a 2-1/2-month high on Monday. Japan’s Nikkei was down 21 points while China’s Shanghai was down 19.00 points and Hong Kong’s Hang Seng was also down 120 points. The Bank of Japan is expected to announce its policy decision between 0230-0430 GMT on Tuesday, followed by the U.S. Federal Reserve on Wednesday and the Bank of England and the Swiss National Bank on Thursday.
http://www.cse.lk/cmt/upload_cse_announcements/131458011068_.pdf
ASPI closed at 5,979.43, down 40.52 points or 0.67 percent with losses in index heavy stocks like John Keells Holdings, Hatton National Bnak and Dialog Axaita. (Mar 14, 2016 4.00 p.m)
ASPI trading at 5,990.27, down 29.68 points or 0.49 percent with losses in John Keells Holdings and Dialog Axaita. (Mar 14, 2016 11.30 a.m)
Asian shares were up Monday backed by gains on Wall Street and firmer crude oil prices and strong data from China, foreign media said. Asia-Pacific broadest index outside Japan, MSCI was up 0.4 percent, while Japan’s Nikkei was up 1.5 percent. China’s Shanghai was up 40.87 points and Hong Kong’s Hang Seng was up 165.69 points. The Bank of Japan’s two-day policy meeting begins on Monday with policymakers were set to discuss this week whether to exempt 90 billion US dollar in short-term funds from the BOJ’s newly imposed negative interest rate. The U.S. Federal Reserve and the Bank of England are also seen standing pat at their respective meetings later this week. Meanwhile, Chinese data released on Saturday showed few bright signs in key parts of the economy. (Mar 14, 2016 08.30 a.m)
New Delhi, Mar 13, (LBO) – Prime Minister Narendra Modi said Asia, which is the most dynamic region in the world, brings a ray of hope for global economic recovery.
Mr Modi delivered the opening keynote at the three-day high-level conference in New Delhi themed “Advancing Asia: Investing for the Future.”
The conference is co-hosted by The International Monetary Fund (IMF) and the Government of India. He was addressing a gathering of senior officials, corporate executives, academics, and civil society representatives from more than 30 countries spanning Asia and the Pacific.
Mr Modi said, with three out of every five persons living in Asia, accounting for a third of global output and trade, with 40 percent of global FDI and being the most dynamic region in the world, no doubt, the 21st century will be Asia’s century.
Asia’s habit of prudent and frugal saving and investing habits, sound work ethics, ability to bring social stability built on family and grooming of women leaders across the continent make Asia distinctly different to rest of the world.
Prime Minister Modi put India’s contribution to a historical perspective by citing the propagation of Buddhism throughout Asia, non-violent national freedom movement which catalyzed similar movements in other countries and millennium old history of Maritime trade.
“India has dispelled the myth that democracy and inclusive economic growth cannot go hand in hand,” Mr Modi further stated.
New Delhi, Mar 13, 2016 (LBO) – “Structural reforms, typically ones that increase competition, foster innovation, and drive institutional change, are the way to raise potential growth,” said Raghuram Rajan, Governor of Reserve Bank of India (RBI).
Rajan was speaking at a three-day high-level conference in New Delhi themed “Advancing Asia: Investing for the Future.” The conference is co-hosted by The International Monetary Fund (IMF) and the Government of India. He was addressing a gathering of senior officials, corporate executives, academics, and civil society representatives from more than 30 countries spanning Asia and the Pacific.
He said in the context of overhang from pre Global Financial Crisis debts, slowing down of population growth in developed economies and declining production, the monetary stimulus may not drive the economies to desired levels of growth.
He also noted the political risks of relying on structural changes.
“With everyone looking for growth, but limited political room for structural reforms and substantial time lags before they pay off, every country is looking for alternatives.”
To underscore the political risks on reforms as against quick fix monetary measures, Rajan cited the outrageous quote on Eurozone economic policy and democracy by Jean-Claude Juncker the former Luxembourg prime minister; “We all know what to do, we just don’t know how to get re-elected after we’ve done it”
Rajan noted that governments are under tremendous pressure to up the growth rates. The pressure is arising from government commitments such as debt and social security entitlements. He observed that growth is also necessary for inter-generational equity, social harmony and to avoid unemployed becoming unemployable due to slow growth over a long period of time.
With regard to Emerging Market Economies (EMEs) Rajan observed “Growth is also extremely important for emerging markets and developing countries, where populations are typically younger, poorer, and social safety nets thinner.”
In this context the Central Banks tend to go beyond normal monetary policy tools and employ unconventional policy tools such as quantitative easing to jump-start economic growth and spur demand. However, Rajan questioned the possible uncertain effects of the unconventional monetary policies and the potential of such unconventional policies to propel the economy towards anticipated objectives.
While expressing his concerns over spillover effect of monetary policy Rajan called for an international conversion.
“Given the constraints and political difficulties under which international organizations operate, it may be appropriate to start with a group of eminent academics with reasonable representation across the globe, and have them measure and analyze the spillovers, and grade policies.”
Rajan concluded his speech emphasizing the need for rethinking global financial systems.
“The international community has a choice. We can pretend all is well with the global financial non-system and hope that nothing goes spectacularly wrong. Or we can start building a system for the integrated world of the twenty first century. I do hope we can consider some initial steps.”
Mar 12, 2016 (LBO) – Sri Lankan and international delegates will congregate at the Sri Lanka Investment Summit in Singapore on Tuesday, with the island positioning itself as one of the fastest growing economies in Asia, the organizers said.
The conference is expected to bring together Sri Lanka’s financial sector specialists and regional portfolio managers and institutional investors. The event is organized by FinanceAsia.
The conference will feature a keynote address by Ravi Karunanayake, the minister of finance, and presentation by Arjuna Mahendran governor, Central Bank of Sri Lanka. The Deputy Ministers Harsha de Silva and Eran Wickramaratne are also billed to speak.
Some of the sessions will be moderated: on equity investments moderated by Chate Benchavitvilai, head of Frontier Market Research, Credit Suisse, on debt capital markets moderated by Ranjan Hullugalle, chairman, Lanka Business Online, and CEO insights moderated by Jim McCabe, CEO, Standard Chartered Sri Lanka.
Sponsors of the inaugural investment summit are Standard Chartered, Perpetual Treasuries and Asia Securities. Lanka Business Online will provide key coverage of the event.
New Delhi, Mar 12, 2016 (LBO) – Christine Lagarde, Managing Director of the International Monetary Fund (IMF) and Minister Arun Jaitley agreed today to establish a capacity development center in New Delhi.
“I would like to thank Prime Minister Modi, Minister Jaitley and the Indian Government for offering to host the center and for their substantial financial commitment,” Lagarde said.
“This will be the first center that fully integrates training and technical assistance and is a model for our future capacity development work.”
The South Asia Regional Training and Technical Assistance Center (SARTTAC) is expected to become the focal point for planning, coordinating, and implementing the IMF’s capacity development activities in the region on a wide range of areas, including macroeconomic and fiscal management, monetary operations, financial sector regulation and supervision, and macroeconomic statistics.
The Center will help address existing training needs and respond to the demand for IMF training in India, Bangladesh, Bhutan, Maldives, Nepal, and Sri Lanka, while bringing the region’s training volume on par with those of other regions.
SARTTAC will offer courses and seminars for policymakers and other government agencies from the six aforementioned countries. It will build upon the IMF’s in-depth experience with capacity development by drawing on the experiences of the IMF’s Regional Technical Assistance Centers and Regional Training Centers, which have a proven track record of delivering technical assistance on economic institution building.
Funding will come from contributions by regional member countries and development partners. The Australian Agency for International Development, the Republic of Korea and India have pledged financial support for the Center.
http://www.cse.lk/cmt/upload_cse_announcements/3681457688838_.pdf
Mar 11, 2016 (LBO) – Sri Lankan stocks closed up 1.46 percent after two consecutive days of losses with gains in index heavy stocks, brokers said.
The Colombo benchmark All Share Price Index (ASPI) closed at 5,862.35, up 85.88 points or 1.46 percent. The S&P SL20 closed 50.54 points at 3,143.46 up 1.63 percent.
Turnover was 2.5 billion rupees, up from 1.8 billion rupees Wednesday with 147 stocks closing positive against 22 negative.
The main index showed gains Sri Lanka Telecom with the stock closing at 35.00 rupees, up 1.80 rupees and John Keells Holdings closed at 152.90 rupees, up 2.10 rupees.
Hemas Holdings closed at 76.00 rupees, up 2.50 rupees.
In banking Hatton Nation Bank closed at 194.50 rupees, up 6.10 rupees and Commercial Bank closing at 117.20 rupees, up 0.10 rupees.
There was a continued net foreign inflow of 83 million rupees, down from Wednesday’s 245 million rupees.
ASPI closed at 6,019.95, up 71.72 points or 1.21 percent with gains in Sri Lanka Telecom and Commercial Bank, brokers said. (Mar 11, 2016 3.30 p.m)
ASPI now trading at 6,001.07, up 52.84 points 0.89 percent with continued gains in index heavy and banking stocks, brokers said. (Mar 11, 2016 12.30 p.m)
ASPI trading at 5,993.10, up 44.87 points or 0.75 percent with gains in index heavy stocks like John Keells Holdings and Carsons, brokers said. (Mar 11, 2016 11.30 a.m)
USD/LKR one week quoted at 145.20/25, dealers said. (Mar 11, 2016 11.13 a.m)
March 10, 2016 (LBO) – “This is the best time to invest in Sri Lanka,” Minister of Finance Ravi Karunanayake urged at the successful Investment and Business Conclave 2016 organised by the Ceylon Chamber of Commerce, raising the question ‘Why is it the best time to invest in Sri Lanka?’
Admitting that everything is not ‘hunky-dory,’ Ranjith Fernando of the Urban Development Authority (UDA) said though Sri Lanka is still struggling, the international community is ready to help make changes, and the government is on the right track with ‘Yahapalanaya’ which translates to “a just government.”
Fernando stressed on the value of transparency, and Karunanayake said taxes in Sri Lanka have been lowered to match some of the lowest tax rates in the world.
Although tax incentives are attractive, it is not the only reason to invest in Sri Lanka, they said.
The work environment and ethical standards as well as the preferential access to two very large and fast growing markets are further reasons. Minister of Public Enterprise Kabir Hashim highlighted that Sri Lanka has highly skilled workers who are educated and speak fluent English.
The Investment and Business Conclave which concludes today was put together in about two months with the support of Sri Lanka’s foreign missions. This was a commendable feat, an official of the foreign ministry said.
More than 125 foreign participants from 27 countries and 130 Sri Lankan corporate executives were seen mingling at the conference.
Khazanah and Temasek models
Minister Kabir Hashim said Sri Lanka is studying successful models in the world and will localize them to suit Sri Lanka. The main models looked at are the Khazanah model of Malaysia and the Temasek model of Singapore.
Taking Singapore Airlines as an example of which 49 percent is owned by the government of Singapore, while the airline is managed by the balance 51 percent of private owners, the minister said Sri Lanka wants investments in which the government would have an equity stake but operations are to be managed by the investor. He also urged investors to pursue a partnership with the private sector and SOE’s.
“Sri Lanka has not had a luxurious budget to make known to the rest of the world all the benefits of investing in Sri Lanka” Head of Board of Investments (BOI), Upali Jayasuriya, said. Hence the reason that foreign investors may be hearing of these incentives for the first time.
Jayasuriya assured investors that should they address the BOI directly, he would issue a written ruling on the incentives that are on offer for those who are look to invest in Sri Lanka.
Although some participants seemed sceptical, many participants from Asian countries with worse traffic jams and more environmental pollution than Sri Lanka appeared to be receptive to the ideas presented.
Blue Ocean vs Red Ocean
Pierre Pringiers, Chair of Camso Loadstar shared his story of success and 30 years of experience in Sri Lanka. Investors enjoy the first mover advantage and low competition at this point in time as Sri Lanka is a ‘Blue ocean’ as opposed to a ‘Red ocean,’ referring to W. Chan Kim and Renée Mauborgne’s concepts.
Pringiers shared how he located his plant in the Weligama, Mirissa area long before the Southern expressway was built, while everyone tried to deter him by stating that it’s over 150km away from Colombo.
The initiative paid off, once the highway came into existence and travel time was cut down to a mere hour and half from Colombo to Weligama. “It is a greenshoot for something that will become big” was Pringiers opinion of investing in Sri Lanka.
The city today is the result of unplanned development. Which is why the ‘Metropolis Act is to come into legislature within the next 2 months’ said Ranjith Fernando. All 9 provinces of Sri Lanka will undergo change, while there will be a re-planning of the cities in the Western region with the assistance of Singapore.
Further there will be development of specific areas such as Trincomalee in the East Coast with Singapore looking into developing the city and port and a joint venture operation between Singapore, Japan, India and the government of Sri Lanka to promote tourism in the East coast said minister Malik Samarawickrama.
Kandy, a walking city
The historical city of Kandy is also to be extended due to overcrowding and it is to be made into a ‘walking city’. Samarawickrama urged investments on a PPP or Joint Venture basis.
Traffic in Colombo will ease with the implementation of the Mass transport initiative. Chair of the UDA stated that a ‘light railway’ will be implemented in Colombo with the assistance of Japan, as it is the most cost effective solution.
Further, government offices will be relocated to the Battaramulla area making Colombo the Commercial Capital, and also clearing up large areas of land, in central locations.
A booklet will be published by the UDA which will indicate all the land available and land will be leased on a 99 year basis. “Water, electricity and drainage to be supplied to developers of these lands on government expense,” Fernando said.
Dollar denominated board
Further, with the SEC Act coming into place, the Securities and Exchange Commission of Sri Lanka will have powers to regulate and thereby create a level playing field stated chairman of the Colombo Stock Exchange, Vajira Kulathilaka.
A dollar denominated board, was one of the options they were exploring, he added.
The Colombo Stock Exchange will be brought to a world-class level. BOI will be a ‘One-Stop-Shop’ where the BOI will not be the regulator but the facilitator. Also the BOI will work 16 hours a day from 6.00 am to 10.00 pm local time in order to better serve investors, Jayasuriya said.
ASPI trading at 5,921.25, up 58.90 points or 1.00 percent with gains in index heavy stocks like JKH and Hemas Holdings, brokers said. Turnover is 2 billion rupees. (Mar 10, 2016 1.00 p.m)
Mar 10, 2016 (LBO) – Standard & Poor’s Ratings Services on Thursday revised the outlook on its ‘B+’ long-term sovereign credit ratings on Sri Lanka to negative from stable on rising fiscal and external imbalances .
“We also affirmed the long-term rating and the ‘B’ short-term credit rating and left our transfer and convertibility risk assessment on Sri Lanka unchanged at ‘B+’,” Standard & Poor’s said in a statement.
The full text of the statement is reproduced below.
Sri Lanka Outlook Revised To Negative On Rising Fiscal And External Imbalances; ‘B+/B’ Ratings Affirmed
OVERVIEW
RATING ACTION
On March 10, 2016, Standard & Poor’s Ratings Services revised the outlook on its ‘B+’ long-term sovereign credit ratings on the Democratic Socialist Republic of Sri Lanka to negative from stable. We also affirmed the long-term rating and the ‘B’ short-term credit rating and left our transfer and convertibility risk assessment on Sri Lanka unchanged at ‘B+’.
RATIONALE
The negative outlook reflects rising pressure on Sri Lanka’s external liquidity resulting from a weaker trade balance and remittances, and short-term capital outflows that have eroded its reserve buffers. The outlook also reflects the country’s weakened public finances. We expect sizable and rising projected fiscal deficits to push borrowings higher in 2016-2019. In our view, the authorities face significant challenges in effectively addressing the rising imbalance due to institutional constraints and a fragmented political landscape.
The rating constraints on Sri Lanka are the country’s weak external liquidity and a high general government net debt burden (at 72% of GDP in 2015). Sri Lanka’s general government dedicates a higher share of its revenues to interest payments and it is among the highest in the world (39% in 2015). With GDP per capita at US$4,000 (2016), Sri Lanka’s level of prosperity is low. Another credit weakness lies in what we consider as an uncertain commitment and capacity to fiscal consolidation following the Aug. 17, 2015, parliamentary elections and the 2016 budget delivered on Nov. 20, 2015. Institutional capacity remains low by international standards and poses risks to the effectiveness and predictability of Sri Lanka’s policy choices. These rating constraints weigh against Sri Lanka’s robust growth prospects, which are above average for sovereigns at similar levels of development.
Sri Lanka’s weakening external liquidity has been driven, inter alia, by the following trends:
We expect external liquidity (measured by gross external financing needs as a percentage of current account receipts [CAR] plus usable reserves) will average 122% over 2016-2019, compared with 111% in 2014-2015. We also forecast that the country’s external debt (net of official reserves and financial sector external assets) will be about 143% of CAR this year but will rise gradually to a little below 146% by 2019.
The risks associated with Sri Lanka’s weak external settings had previously been mitigated by growing reserve buffers that buttressed the country’s external resilience. We estimate, however, that Sri Lanka’s gross international reserves (excluding gold deposits) were US$5.5 billion as of January 2016 (over two months coverage of current account payments), compared with an average of US$8.2 billion in 2014 (3.5 months of current account payments). These reserves include a fully drawn contingent currency-swap facility of US$1.1 billion with the Reserve Bank of India (RBI; due for repayment in March 2016) and the US$2.15 billion proceeds from bonds issued in May and October 2015 (both maturing in 2025)
We believe the attendant risks could be mitigated by extending the maturity of the currency-swap facility with the RBI, increasing a US$1.6 billion facility with the People’s Bank of China, and a US$400 million financing facility for South Asian Association for Regional Cooperation member country Central Banks. Securing external liquidity support from the IMF could also ease rising external funding pressure. Other factors that mitigate Sri Lanka’s external risks include its low banking sector external borrowings and some exchange rate flexibility (the rupee fell about 9% in 2015, although this has yet to translate into higher export demand).
Fundamental weaknesses remain in the government’s fiscal metrics. We project annual growth in general government debt to average 6.2% of GDP for 2016-2019. In view of Sri Lanka’s robust nominal GDP growth, we expect net general government debt to remain near current levels of close to 70% of GDP through 2019. Should the rupee depreciate further against the U.S. dollar, the net debt ratio may rise further, given about 60% of government debt is denominated in foreign currencies. In addition, we expect only slow progress in reducing debt-servicing costs, which we project to account for more than 40% of government revenue in 2016. This is the second-highest ratio among all 131 sovereigns that Standard & Poor’s currently rates, second only to Lebanon (see “Sovereign Risk Indicators,” published Dec. 14, 2015; a free interactive version is available at spratings.com/sri).
The gaps we observe in Sri Lanka’s policymaking capacity partly reflect the political uncertainty associated with two elections within seven months. We believe this hinders responsiveness and predictability in policymaking and weighs particularly on business confidence, investment plans, and overall growth prospects. Elsewhere, we believe the Central Bank of Sri Lanka’s (CBSL) ability to sustain economic growth while attenuating economic or financial shocks has improved somewhat. Although CBSL is not independent of other policymaking institutions and we continue to consider monetary policy credibility and effectiveness as a weakness, the central bank is building a record of credibility, shown in reducing inflation through the use of market-based instruments to conduct monetary policy.
Sri Lanka’s growth outlook continues to be underpinned by government investment (including rebuilding the war-torn northern districts), rising tourist arrivals, and declining inflation, which we expect to remain in the single digits.
We continue to expect Sri Lanka’s growth prospects to be favorable. We believe the country will most likely maintain growth in real per capita GDP of 5.5% per year over 2016-2019 (equivalent to 6.2% real GDP growth). Stronger growth, in our view, would require an improved business environment and a pick-up in export markets.
Combining our view of Sri Lanka’s state-owned enterprises and its small financial system (banks’ loans to the private sector account for only a third of GDP), we view the government’s contingent liabilities as limited.
OUTLOOK
The negative outlook indicates that we could lower our rating on Sri Lanka in the next 12 months if we see no tangible signs of a substantial and sustained reversal of the weakening of external and fiscal credit metrics we currently project.
We may revise the outlook back to stable if Sri Lanka’s external and fiscal indicators improve significantly, or if we conclude that the strength of Sri Lanka’s institutions and governance practices is on a significant and sustained improving trend.