Business

‘Biz sector closely monitoring govt. initiatives and prioritizing wealth-creation via capital markets’

Published

2 years ago

2024/09/27

Thilina Walpola

Tania Polonnowita Wettimuny: ‘Cautiously optimistic’

By Ifham Nizam

In the wake of Sri Lanka’s economic upheaval, businesses have been watching closely with a view to finding out how government initiatives are shaping the future, Tania Polonnowita Wettimuny, Group Managing Director of IAS Holdings (Pvt) Ltd, told The Island Financial Review. She was speaking on the current economic situation of the country, providing her expert insights into the new governmental policies and their impact on the local business landscape.

Wettimuny added: ‘It is also important to look at wealth- creation through the capital market. Sri Lanka’s capital market is highly undervalued. For example, in India some blue chip companies trade at 40 – 50 times of their earnings in the capital market, whereas Sri Lankan blue chip companies trade at 5 to 8 times of their earnings. If the correct value is created through the capital market, we can easily attract foreign investment into the country.

‘The government’s ongoing negotiations with the IMF are essential in restoring macroeconomic stability.

‘However, the public sector shouldn’t expect salary hikes, tax deductions or benefit increases soon. The IMF program is narrowly focused on stabilizing debt and correcting macroeconomic imbalances, meaning businesses, particularly Small and Medium Enterprises (SMEs), will likely continue to feel the pressure.

‘Until we see a stable government post-parliament dissolution, SMEs will remain a central focus. Yet, the reality is, without low interest rates, investment will be difficult to encourage.

‘With the economy in flux, different sectors may face contrasting fortunes. For now, the focus remains on SMEs, but this could evolve once a stable government is in place. A more pressing issue is the potential rise in interest rates following the debt restructuring, which could further challenge growth.

‘The challenge lies in attracting foreign investment in the short term, given our debt default status. The solution is enhancing productivity and efficiency within the country, particularly among SMEs.

‘It is too early to gauge the readiness of businesses to adapt to new policies. The policies need to be reviewed thoroughly before any concrete conclusions can be drawn. However, the business community remains cautiously optimistic. Even though it is too early to predict, we, the business community, are confident that the government will take the necessary steps to support economic recovery and growth in the upcoming months.

‘While the path ahead may be fraught with challenges, the collaboration between the government and the business sector is essential. By working together, we can build a robust framework that supports sustainable growth and prosperity for all stakeholders involved. The anticipation of these initiatives provides a sense of optimism as we prepare for the future.

‘Sri Lanka needs a robust tax policy to attract Foreign Direct Investment (FDI), a critical component of economic recovery. Tax mechanisms similar to those used in India, Dubai and Singapore, which have been successful in attracting foreign capital are needed.’

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Business

ADB approves $100 million loan to boost skills development and jobs for youth in Sri Lanka

Published

6 hours ago

2026/10/2

Thilina Walpola

The Asian Development Bank (ADB) has approved a $100 million results-based loan to help Sri Lanka transform its technical and vocational education and training (TVET) system, equip more young people with industry-relevant skills, and strengthen the country’s competitiveness and inclusive growth.

The Skills Development System Transformation Program will support the Government of Sri Lanka’s efforts in improving the quality and relevance of skills training, strengthening links between training providers and industries, and expanding employment opportunities for youth. The program will increase women’s employment opportunities in nontraditional jobs in fields including automotive technology, engineering, information and communications technology, construction, and renewable energy.

“A skilled workforce is essential to Sri Lanka’s long-term economic transformation and competitiveness,” said ADB Country Director for Sri Lanka Shannon Cowlin. “This program will help create stronger pathways from education to employment by making training more responsive to industry needs, expanding opportunities for young people and women, and ensuring that graduates have the skills required by a modern and evolving economy.”

Though Sri Lanka’s economy is recovering, it faces skills shortages in priority sectors, high youth unemployment, and low female labor force participation. Many employers report difficulty finding workers with the skills needed in a changing economy.

Aligned with the Government of Sri Lanka’s Technical and Vocational Education and Training Sector Strategic Framework 2026–2035, the nationwide program will be implemented from 2027 to 2031 and is expected to directly benefit more than 100,000 young people through improved access to quality, employment-oriented training.

Business

USD 40.84m pipeline to secure aviation fuel supplies to BIA

Published

6 hours ago

2026/10/2

Thilina Walpola

By Ifham Nizam

The government has cleared a USD 40.84 million and Rs. 8,548.75 million contract to build a dedicated aviation fuel pipeline from Muthurajawela to Bandaranaike International Airport (BIA), alongside a massive new fuel storage facility with a capacity of 92,000 cubic metres.

Energy Minister Anura Karunatilaka said the project represented a major investment in strengthening the infrastructure underpinning Sri Lanka’s aviation fuel supply and ensuring more reliable fuel availability at the country’s main international airport.

‘This project will provide the infrastructure required to strengthen the reliability and continuity of aviation fuel supplies to Bandaranaike International Airport, Karunatilaka said.

The contract has been awarded to China Petroleum Pipeline Engineering Company Limited, following an international competitive procurement process in which three bids were received.

The project will see a new aviation fuel storage tank complex constructed at Muthurajawela, together with the associated infrastructure required for handling and transferring aviation fuel.

Business

CSE activity up, turnover weak at Rs. 1.4 billion

Published

6 hours ago

2026/10/2

Thilina Walpola

By Hiran H Senewiratne

Trading activity on the Colombo Stock Exchange (CSE) gathered pace yesterday as global fuel prices began to show signs of easing, according to market analysts.In this context, both indices moved upwards. All Share Price Index up by 67.97 points while S and P SL20 up by 8.30 points.

Turnover stood at Rs 1.4 billion with seven crossings. Those crossings were reported in Sampath Bank 1.7 million shares crossed to the tune of Rs 238 million and its share price traded at Rs 140, Access Engineering two million shares crossed to the tune of Rs 159 million and its share price traded at Rs 79.50, LOLC one million shares crossed to the tune of Rs 129 million and its share price traded at Rs 129, HNB 100,000 shares crossed to the tune of Rs 38.4 million and its share price traded at Rs 384, JKH 1.9 million shares crossed to the tune of Rs 35 million and its share price traded at Rs 18.60, Hayleys 100,000 shares crossed to the tune of Rs 22.50 million and its share price traded at Rs 225 and Richard Pieris 847,000 shares crossed to the tune of Rs 22 million and its share price traded at Rs 25.50.

In the retail market top seven companies that have mainly contributed to the turnover were Sampath Bank Rs 114 million (813,000 shares traded), JKH Rs 100 million (5.3 million shares traded) LB Finance Rs 49 million (325,000 shares traded), HNB Finance Rs 30 million (27 million shares traded), HNB Rs 27 million (70000 shares traded), NTB Rs 25 million (82000 shares traded ) and Lanka IOC Rs 21 million (666,000 shares traded). During the day 65 million shares volumes changed hands in 10433 transactions.

The Banking and manufacturing sector counters performed well. In the banking sector Sampath Bank let the market while manufacturing sector especially JKH also significantly performed well. With the fuel revision Land IOC also a significant stock at the floor.

Meanwhile, First Capital Treasuries said that Ramesh Schaffter resigned as a Non-Independent Non-Executive Director with effect from October 1, to facilitate the restructuring of the company’s board.

Yesterday the Central Bank announced the US Dollar rate as against rupee. The rupee was quoted flat at Rs 330.65/80 to the US dollar in the spot market , while bond yields dropped, dealers said.