The results of the latest LMD-NielsenIQ Business Confidence Index (BCI) survey – which was carried out in the first week of May – paints a gloomy picture for business with sentiment plummeting following the surge in COVID-19 cases since the end of April.
THE INDEX The BCI plunged by 49 basis points to 89 in May from the previous month to register a five month low. This in effect reverses the moderate gains witnessed for most of the year to date.
This marks the highest fall since April last year when the government imposed an islandwide curfew. It also places the index at the same level it was a year ago and below its average for the last 12 months (110). prior to the curfew – the BCI stood at a healthy 145 points, which was some 20 notches above the all-time average.
Nielsen’s Director – Consumer Insights Therica Miyanadeniya said: “Predictions of the possibility of a third wave unfolding after the Avurudu season has become a stark reality. The country is reeling from the effects of unchecked crowds in and around retail outlets as well as carefree celebrations and fiestas in various parts of the island during the season.”
The LMD report further said: The impact of the third wave of the COVID-19 pandemic on the local economy is expected to be less severe than the previous waves “due to the selective nature of mobility restrictions and the ongoing vaccination drive,” according to the Monetary Board of the Central Bank of Sri Lanka.
To this end, the monetary authority highlighted the need for continued fiscal and monetary support to ensure the recovery is not derailed.
Meanwhile, the Central Bank’s accommodative monetary policy stance, rupee liquidity and the introduction of priority sector lending targets are expected to underpin Sri Lanka’s economic recovery by promoting lending to sectors that are in need.
The most pressing issue for business continues to be the impact of the COVID-19 pandemic, followed by inflation and political instability.
As for the nation, the spread of the virus continues to be perceived as the main issue. The economy and poverty are also considered to be major concerns.
In the May edition of LMD, we noted that the rise in COVID-19 cases following the festive period and imposition of new restrictions could undermine business sentiment. This has proved to be true, LMD report said.
U.S. confident SL would ensure required facilitation for U.S. investors
Sri Lankan government has pledged to address the pending policy issues and I am confident that once the pandemic subsides, concrete efforts will begin to improve ease of doing business and ensure the required facilitation for US investors, Martin Kelly, Charge d’ Affairs of the Embassy of the United States of America in Sri Lanka said recently speaking at the Sri Lanka Invest Forum 2021 held virtually through June 7-9, 2021
“Sri Lanka was among the first countries in the region to open its economy and offers the highest standards of living among other advanced indicators in South Asia. Over the last seventeen years, the country continued to transition from an agriculture commodity based economy to become world leader in textile and apparel, a major exporter of IT and communication related services and of course a world class destination for international tourists,” he said.
“Promoting trade and investment opportunities is one of the embassy’s top priorities, and a vital component of our efforts to encourage private sector led development and toward stronger ties between the two countries,” he said.
Kelly said that the government of Sri Lanka has promoted pro-business policies including tax benefits, to attract the U.S. and other foreign direct investments.
ComBank donates ICU beds to Kegalle Teaching Hospital
Commercial Bank Chairman Justice K. Sripavan and Managing Director S. Renganathan with representatives of the Bank and the Kegalle Hospital
The Commercial Bank of Ceylon has donated three Intensive Care Unit (ICU) beds to the Teaching Hospital Kegalle, which receives over 80,000 admissions and 350,000 clinic visits, annually. The donation was made following a request from the hospital and will help it to provide seamless healthcare services to prevent non-pandemic related morbidities and mortalities while also treating patients who are COVID-19 positive.
The CSR Trust of the Bank has already gifted medical equipment and gear including Personal Protection Equipment (PPE) kits, face masks, surgical masks, hand sanitisers, Slit lamps, pulse oximeters, multipara monitors and oxygen concentrators to over 16 government hospitals. Commercial Bank also made a monetary donation to the National COVID-19 Healthcare and Social Security Fund set up by the government last year.
Trading activity gets slower among retail investors
Lankem Ceylon Rights Issue undersubscribed.
By Hiran H.Senewiratne
Stock trading at the Colombo Stock Exchange (CSE) was marginally positive yesterday and the number of retail investor participation was lower compared to previous trading days. Index heavy LOLC group which accounted for more than 30 percent of the turnover, contributed 20 points to the All Share Price Index, stock market analysts said.
Both indices moved upwards. All Share Price Index was up by 35.75 points and S&P SL20 up by 2.01 points. Turnover stood at Rs 1.74 billion sans a single crossing. In the retail market top six companies that mainly contributed to the turnover were LOLC Rs 510 million (1.28 million shares traded), Expolanka Holdings Rs 197 million (4.1 million shares traded), Melstacorp Rs 137 million (2.6 million shares traded), Browns Investments Rs 71.5 million (11.3 million shares traded), Windforce Rs 68.2 million (3.5 million shares traded) and Hayleys Holdings Rs 54.8 million (730,000 shares traded).
Index heavy LOLC, which contributed 20 points to the All Share Price Index, appreciated its share price by Rs 18.75 or 4.85 percent. Its share price started trading at Rs 386.25 and at the end of the day it moved up to Rs 405.
A pioneer in renewable energy, Vidullanka PLC has successfully completed raising additional capital of Rs. 253 million to fuel its expansion drive in the solar power sphere.
Lankem Ceylon Plc, Rs. 677 million worth Rights Issue has been undersubscribed. When the issue closed the Company managed to draw only subscriptions for 17.6 million shares worth Rs. 352.3 million. The original plan was to issue 33.85 million shares at Rs. 20 each aiming at raising Rs. 677 million. The basis was one new ordinary share for every one share held. Funds were to be raised to augment working capital requirements.
During the day 67.9 million share volumes changed hands in 17564 share transactions.
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