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CSE investor sentiment hit by Russia-Ukraine tensions; crude oil prices reach $ 100 per barrel

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By Hiran H.Senewiratne

CSE investor sentiment was affected yesterday by the global tensions stemming from the Russia-Ukraine crisis. Consequently, global crude oil prices reached more than US $ 100 per barrel, which would heap an additional burden on the Sri Lanka economy, stock market analysts said.

The stock market was halted for 30 minutes yesterday by another circuit breaker due to the S&P SL20 index dropping over 5 per cent from the previous day’s close. This is the fourth time the market halted over the past four days.

The stocks had risen steadily for several years and are going through a correction, amid macro-worries. Power cuts, fuel shortages and forex crises have eroded investor confidence this week. The increase in global fuel prices would create further inflationary pressures on the economy, stock analysts said.

Yesterday the All- Share Price Index decreased by 560.7 points and S and P SL20 went down by 197.5 points. Turnover stood at Rs 3.7 billion with two crossings. Those crossings were reported in Guardian Capital Partners, which crossed 4.4 million shares to the tune of Rs 138 million and its shares traded at Rs 32.30 and Renuka Hotel PLC 800,000 shares crossed to the tune of Rs 70.4 million, its shares traded at Rs 88.

In the retail market top seven companies that mainly contributed to the turnover were, Expolanka Holdings, Rs 767 million (eight million shares traded), Browns Investments Rs 317 million (239,000 shares traded), LOLC Holdings Rs 205 million (239,000 shares traded), LOLC Finance Rs 169 million (8.9 million shares traded), Hayleys PLC Rs 157 million (1.5 million shares traded), Royal Ceramic Rs 150 million (2.7 million shares traded) and Access Engineering Rs 118 million (4.7 million shares traded) During the day 169 million share volumes changed hands in 43000 share transactions.

First Capital said the bourse headed to the red zone with a steep fall one more time during the week amid the escalation of uncertainties. CSE halted twice for 30 minutes while S&P SL20 index fell initially by 5.0 per cent and then by 7.5 percent following major panic selling by investors, resulting in the ASPI recording an intraday decline of nearly 800 points.

It is said that high net worth and institutional investor participation was noted in Hayleys, LOLC Holdings and Royal Ceramics. Mixed interest was observed in Expolanka Holdings, LOLC Holdings and Royal Ceramics, while retail interest was noted in Browns Investments, SMB Leasing and Industrial Asphalts.

Meanwhile, the US dollar rate was quoted at Rs 203.35, which was the CBSL’s controlled price. The actual market price would be Rs 250 or above and the US dollar would touch more than Rs 300 towards the end of the year, financial analysts said.



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Dialog Smart Home Enables Seamless Home Automation via Range of Intuitive Solutions 

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Dialog Axiata PLC, Sri Lanka’s premier connectivity provider, introduced a range of convenient and integrated solutions via ‘Dialog Smart Home’ to enable intelligent automation and intuitive control of homes.

The newly introduced range of future-fit smart home solutions by Dialog Smart Home ranges from Home Automation, Home Security & Surveillance and Home Connectivity, and are designed to enable any home to work as one harmonious system where all elements work in tandem together to create a truly intelligent home.

The Home Automation solutions offer homeowners seamless and convenient control of their electronic appliances through their smartphones anytime, anywhere. With the Smart Touch Wall Switches, Smart Power Strips and Smart Fan Controllers, homeowners can take control of existing light bulbs, table fans, rice cookers, chargers, ceiling fans and more appliances. Additionally, the Artificial Intelligence (AI) powered TeDi Alexa Solution enables users to control connected smart devices including TVs, air conditioners, home security systems and more through voice commands.

Home Security & Surveillance solutions transform basic cameras into high-powered CCTV solutions. Baby and house monitoring smart cameras can be placed inside homes to keep a 360-degree eye on children and pets. The Indoor Security Camera has the ability to sound a siren and notify users if a stranger enters their home. Dialog Smart Home has also partnered with Singer to offer customers world-renowned Dahua CCTV solutions.

The Home Connectivity solutions offers consumers Wi-Fi extenders to facilitate uninterrupted internet connectivity across the house to fit the homeowner’s lifestyle and requirements.

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CBSL implements extraordinary measures to support banking sector

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The Central Bank of Sri Lanka, considering the prevailing macroeconomic conditions and its impact on the banking sector, has decided to implement the following regulatory measures to support the banking sector to facilitate effective financial intermediation and the flow of credit to the economy, whilst ensuring the soundness of the banking sector.

• Sri Lankan banking sector maintains a Capital Conservation Buffer (CCB) of 2.5% to ensure that banks have an additional layer of usable capital that can be drawn down during stress times. An industry wide flexibility is granted for banks to drawdown the CCB (up to 2.5%), if needed, subject to restrictions on distribution to shareholders/ repatriation of profits and submission of a capital augmentation plan to rebuild CCB during a period up to three years.

• The current deadline for licensed banks to meet the enhanced minimum capital requirement (31.12.2022) is extended up to 31.12.2023. Licensed banks which are unable to meet the minimum capital requirement by 31.12.2022, need to submit their capital augmentation plan, including plans to consolidate or merge with suitable financial institutions, by 31.12.2022 and these licensed banks too shall refrain from distribution of dividends/ repatriation of profits until the minimum capital requirement is met.

• Licensed banks are encouraged to move to approaches such as The Standardised Approach (TSA) or alternative TSA for computation of risk weighted assets for operational risk for the purposes of computing the Capital Adequacy Ratio, subject to supervisory review.

• Licensed banks are given the flexibility to stagger the unrealised mark to market loss on Government Securities denominated in LKR on account of the recent interest rate hike for Capital Adequacy purposes until Q2 of 2024, subject to conditions.

• Licensed banks are granted flexibility on the treatment for Other Comprehensive Income (OCI) for Capital Adequacy purpose in line with the International Standards.

• The deadline for licensed banks to submit the document on Internal Capital Adequacy Assessment Process (ICAAP) for 2022, to the Central Bank of Sri Lanka is extended by one month, until 30.06.2022.

• As a short-term measure to support licensed banks to adjust their liquidity profiles, licensed banks are provided with the flexibility to operate maintaining the Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) not lower than 90% up to 30.09.2022. Furthermore, the Central Bank of Sri Lanka, on 06 May 2022 decided to restrict certain discretionary payments of licensed banks, such as declaring cash dividends and repatriation of profits, until the financial statements for the year 2022 are audited by its External Auditor, engaging in share buy backs, increasing management allowances and payments to the Board of Directors until 31 December 2022 with a view to strengthening the liquidity and capital positions of licensed banks under these exceptional circumstances.

The above measures were introduced with the aim of providing the licensed banks with more flexibility and opportunities to operate in these challenging conditions and support economic recovery, while taking measures to improve their safety and soundness. The Central Bank of Sri Lanka will periodically review the implementation of these policy measures and expects licensed banks to avail these measures in the best interest of the customers and the economy at large, while supporting the banking sector to remain resilient.

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CEAT official tyre supplier for locally assembled Tata Ace HT 

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CEAT Kelani Holdings has been appointed as the official tyre supplier for Tata Ace HT series compact trucks which are assembled in Sri Lanka by DIMO in collaboration with India’s largest automobile manufacturer TATA Motors.

 CEAT RHINO PLUS TL tyres in the size of 155R12 8PR, manufactured at the CEAT Kelani plant in Kelaniya are used for the TATA Ace HT series vehicles, popularly known in Sri Lanka as “DIMO Batta” under this project. The locally manufactured CEAT RHINO PLUS TL tyre features a zig zag pattern on its circumference and ribs with lateral notches that contribute towards uniformity and better wear and tear on local roads.

 Commenting on this latest OEM agreement of the company, CEAT Kelani Holdings Managing Director Mr. Ravi Dadlani said: “As a brand that has been at the forefront of local value addition in Sri Lanka, CEAT is excited to contribute further to the process through its association with this assembly operation. This is particularly relevant in the prevailing situation in the domestic market. We are able to provide high-quality tyres engineered for local conditions at competitive prices and ensure uninterrupted supply, while at the same time helping to conserve foreign exchange.”

In January this year, CEAT was appointed as an OEM for a range of heavy-duty trucks, tippers and light commercial vehicles assembled in Sri Lanka by Lanka Ashok Leyland PLC (LAL), a joint venture company of Ashok Leyland India. In November 2021 the brand was chosen as the OEM for Bolero City Pik-up vehicles assembled in Sri Lanka by Mahindra & Mahindra India in collaboration with Ideal Motors.

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