By Hiran H.Senewiratne
The CSE lost its winning streak in terms of the benchmark index, but investors remained bullish propelling the turnover to a healthy Rs. 6.billion with over 252 million shares traded yesterday.
However, during the day the market was volatile and remained negative. During the latter part of the day the market was dragged down by index heavy LOLC Group company, Commercial Leasing and Finance, stock market analysts said.
Commercial Leasing and Finance shares witnessed heavy selling pressure and its share price depreciated by 18 percent or Rs 11.10, thus contributing 157 negative points to the All- Share Price Index. Its shares started trading at Rs 61.90 at the end of the day, its price dropped to Rs 50.80.
Amid those developments both indices indicated mixed reactions. All Share Price Index went down by 157.58 points and S and P SL20 was up by 10.68 points. Turnover stood at Rs 6.48 billion with two crossings. Those two crossings were reported in HNB, which crossed 700,000 shares to the tune of Rs 105 million and its shares traded at Rs 150 and NDB 400,000 shares crossed for Rs 28.2 million, its shares traded at Rs 70.50.
In the retail market top seven companies that mainly contributed to the turnover were, Browns Investments Rs 1.2 billion (85.3 million shares traded), Expolanka Holdings Rs 825 million (2.9 million shares traded), Commercial Leasing and Finance Rs 754 million (14.5 million shares traded), Vallibel One Rs 520 million (6.9 million shares traded), LOLC Finance Rs 285 million (11 million shares traded), Softlogic Life Insurance Rs 238 million ( 5.7 million shares traded) and LOLC Holdings Rs 150 million (153,000 shares traded) During the day 252 million share volumes changed hands in 49000 transactions.
It said high net worth and institutional investor participation was noted in LOLC Holdings. Mixed interest was observed in Expolanka Holdings, Vallibel One and Brown & Company, while retail interest was noted in Browns Investments, Softlogic Capital and Lanka Orix Finance.
After witnessing a strong first half, the ASPI reversed its intra-day gains, led by a pull-back in heavyweights Commercial Leasing and Finance and LOLC Finance and closed out the session with modest losses, while the more liquid S&P SL20 index held steady ground to continue its upward trend for the eleventh consecutive session and supported by price gains in Expolanka, LOLC, Vallibel One and Browns.
Softlogic General Insurance will go for an IPO. It will open on December 16 and will issue 120 million shares at Rs 7.90 per share value to raise Rs. 948 million.
Yesterday, the US dollar rate was quoted at Rs 201.93, which was an artificially controlled price of the Central Bank to prevent price escalations in essential imported items. At present the actual US dollar rate is sky-rocketing, which is about to touch more than Rs 250.
Sri Lanka still ‘under test’ before it can receive crucial second tranche from IMF
by Sanath Nanayakkare
International Monetary Fund (IMF) staff concluding their visit to Sri Lanka yesterday reaffirmed their support to Sri Lanka to move out of the ongoing economic crisis, but did not specify an exact timeline for releasing the second tranche of its Extended Fund Faculty (EFF) arrangement to Sri Lanka.
The IMF mission team led by Peter Breuer and Katsiaryna Svirydzenka that visited Colombo from September 14 to 27, is yet to be convinced that it has received a robust programme from the Sri Lankan authorities where they indicate how they would be addressing the persistent revenue shortfall besides outlining progress in foreign debt restructuring which would give Sri Lanka a breather to balance its financing requirements as it starts to repay its foreign debt.
“We had constructive and productive discussions with the Sri Lankan authorities on economic performance and policies underpinning the first review under the IMF Extended Fund Facility (EFF) arrangement. The people of Sri Lanka have shown remarkable resilience and the authorities have made significant progress on important reforms. The discussions will continue towards reaching a staff-level agreement in the near term that will maintain the reform momentum needed to allow Sri Lanka to emerge from its deep economic crisis, Peter Breuer said.
“The objectives of the IMF-supported program will continue to focus on restoring macroeconomic stability and debt sustainability, while protecting the poor and vulnerable, safeguarding financial stability and stepping up structural reforms to address corruption vulnerabilities and unlock Sri Lanka’s growth potential, he said.
However, the press briefing given by the IMF team yesterday signaled that they needed to see more economic and financial policies to support the approval of the First Review of the program under the EFF arrangement.
“Sri Lanka has made commendable progress in implementing difficult but much-needed reforms. These efforts are bearing fruit as the economy is showing tentative signs of stabilization. Inflation is down from a peak of 70 percent in September 2022 to below 2 percent in September 2023, gross international reserves increased by $1.5 billion during March-June this year, and shortages of essentials have eased. Despite early signs of stabilization, full economic recovery is not yet assured. Growth momentum remains subdued, with real GDP contracting by 3.1 percent in the second quarter on a year-on-year basis and high-frequency economic indicators continuing to provide mixed signals. Reserve accumulation has slowed in recent months, he said.
Speaking further Peter Breuer said: “Sustaining the reform momentum is critical to put the economy on a path towards lasting recovery and stable and inclusive economic growth. The authorities have met the program’s primary balance targets and remain committed to this important pillar of the program so as to support their efforts to restore debt sustainability. However, revenue mobilization gains – while improved relative to last year – are expected to fall short of initial projections by nearly 15 percent by year end, in part due to economic factors.
“The onus of fiscal adjustment would fall on public expenditure if there were no efforts to recoup this shortfall. This could weaken the government’s ability to provide essential public services and undermine the path to debt sustainability. To increase revenues and signal better governance, it is important to strengthen tax administration, remove tax exemptions, and actively eliminate tax evasion.
“Against continued uncertainty, it also remains important to rebuild external buffers through strong reserves accumulation. Building on the Central Bank of Sri Lanka’s success in controlling inflation, refraining from monetary financing will help keep inflation in check. Other challenges include maintaining cost recovery in electricity pricing.
“The government has made steady progress on structural reforms. Key legislations passed in Parliament, including the new Central Bank Act and the Anti-Corruption Act, could improve governance if implemented effectively. The IMF Governance Diagnostic report would inform future reform measures to strengthen governance when published.
“A new welfare benefit payment scheme was enacted with new eligibility criteria that aims to improve targeting, adequacy, and coverage of social safety nets. To ensure financial stability, steps were taken on conducting bank diagnostics, developing a roadmap for addressing banking system capital and liquidity shortfalls and improving the bank resolution framework.
“The authorities have also made headway on regaining debt sustainability through the execution of the domestic debt restructuring and advancing discussions with external creditors. As Sri Lanka is restructuring its public debt which is in arrears.
“Executive Board approval of the first program review requires the completion of financing assurances reviews. These financing assurances reviews will focus on whether adequate progress has been made with debt restructuring to give confidence that it will be concluded in a timely manner and in line with the program’s debt targets.
“Discussions are on-going, and the authorities are continuing to make progress on their plans for revenue mobilization targets, anti-corruption efforts, and other important structural reforms.”
The IMF team held meetings with President and Finance Minister Ranil Wickremesinghe, Central Bank of Sri Lanka Governor Dr. P. Nandalal Weerasinghe, State Minister Shehan Semasinghe, Chief of Staff to the President Sagala Ratnayaka, Secretary to the Treasury K M Mahinda Siriwardana, and other senior government and CBSL officials, during the visit. The IMF team also met with parliamentarians, representatives from the private sector, civil society organizations, and development partners.
‘Imposing minimum room rates on five star hotels could ruin tourism sector’
By Hiran H.Senewiratne
The imposing of a minimum room rate on five star hotels on the basis of a recent gazette notification is actually killing the industry. Room rates, accordingly, could henceforth rise to between 80 percent and 100 percent, top travel and tourism industry expert Chandana Amaradasa said.
“The minimum room rate of a five star hotel currently comes to about US $ 65 but with the new gazette notification it would go up to US $ 170 per day. But our competitors, such as, Thailand, Malaysia and Vietnam are maintaining a minimum room rate of US$ 80 to US$ 85, Amaradasa told The Island Financial Review.
Amaradasa said that the tourism industry is just picking- up and ‘this type of move is detrimental to the entire sector because these room rates are normally determined by demand and supply and not by gazette notifications.
Amaradasa added: ‘At present, Colombo five star hotels are mainly patronized by Indian tourists, corporate clients and MICE tourists. This will not only impact hotel revenue but the outside supply chain as well. Nowhere in the world is the tourism industry regulated in this manner and this would enable our competitors, such as, Vietnam and Thailand to attract tourists.
“As a long term consequence, some of the airlines could also pull out of Sri Lanka and hotels will halt recruiting new staff and training them with the limiting of their revenue sources.’
ADL’s journey continues: Unveiling new offices in Indonesia and Malaysia for tech excellence
Axiata Digital Labs (ADL), the renowned technology hub of Axiata Group Berhad, is proud to announce the grand opening of two new offices in Indonesia and Malaysia. These strategic expansions, respectively, mark significant milestones in the company’s journey since it’s inception in 2019. This signifies ADL’s unwavering commitment to revolutionizing the telecommunications industry and propelling the global rate of digital transformation.
The inauguration of these state-of-the-art offices exemplifies the dedication ADL has towards expanding its footprint and harnessing the power of innovation across Southeast Asia. As the first CMMI 2.0 Level 3 IT organization in Sri Lanka and an ISO-certified company, ADL is well-positioned to lead the charge in transforming traditional telcos into techcos through its groundbreaking Axonect Product Suite.
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