The Colombo Stock Exchange (CSE) has adopted the United Nations Women’s Empowerment Principles (WEPs) as part of its commitment to promoting gender equality and women’s empowerment in the workplace, marketplace and community.
The WEPs are a set of Principles offering guidance to businesses on how to promote gender equality and women’s empowerment. Established by UN Global Compact and UN Women, the WEPs are informed by international labour and human rights standards and grounded in the recognition that businesses have a stake in, and a responsibility for, gender equality and women’s empowerment. WEPs are a primary vehicle for corporate delivery on gender equality dimensions of the 2030 agenda and the United Nations Sustainable Development Goals.
Commenting on the development, the Chief Executive Officer of CSE Rajeeva Bandaranaike stated “Creating an empowering and inclusive environment for women to rise to their potential both in the workplace and community has always been a priority for the CSE. Over the years, CSE has remained strongly focused on creating an enabling culture for women working within the organization by ensuring that workplace related policies are gender sensitive and equal. We have a sound women representation in our workforce and more importantly, we see that representation translating into a strong presence of women in our management. CSE also works with local and international organizations to advocate for the greater participation of women in the Sri Lankan workforce, in corporate leadership and in entrepreneurship. The WEPs will provide a platform for CSE to further strengthen our women empowerment initiatives internally and in the community.”
The seven WEPs are built around establishing high-level corporate leadership for gender equality, treating all women and men fairly at work, respecting and supporting human rights and nondiscrimination, ensuring the health, safety and well-being of all women and men workers, promoting education, training and professional development for women, promoting equality through community initiatives and advocacy, implementing enterprise development, supply chain and marketing practices that empower women and measuring and publicly reporting on progress to achieve gender equality.
Conclusion of phase 1 of private placement of Ordinary Shares of JKH to ADB
Following is the text of a letter addressed by JKH Deputy Chairman/Group Finance Director Gihan Cooray to the CSE’s Chief Regulatory Officer Renuke Wijayawardhana.
Further to the announcements to the Colombo Stock Exchange on 22 November 2021 and 22 December 2021 regarding the Private Placement of up to a maximum cumulative amount of the Sri Lankan Rupee (“LKR”) equivalent of USD 80 million to Asian Development Bank (“ADB”), through the issuance of up to a maximum of 122,500,000 new ordinary shares of the Company in two phases (Phase 1 & Phase 2), we wish to inform that Phase 1 of the Private Placement of ordinary shares of the Company to ADB was concluded on 19 January 2022.
Accordingly, 65,042,006 ordinary shares (“Initial Placement Shares”) of the Company were allotted to ADB at a price of LKR 154.50 per share on 19 January 2022 for a consideration of the LKR equivalent of USD 50 million. The Initial Placement Shares results in a post-issue dilution of 4.70 per cent in Phase 1 of the transaction.
Additionally, in terms of Phase 2, the Company has issued 39,025,204 non-tradable/non-transferable options (“Options”), which will entitle ADB to subscribe for additional new ordinary shares of the Company (“Option Shares”), for an investment amount of up to a maximum of the LKR equivalent of USD 30 million.
Therefore, the maximum number of ordinary shares that would potentially be issued under the entire transaction, assuming all Option Shares are subscribed for, will be 104,067,210, thereby capping the post-issue dilution on the conclusion of both phases to a maximum of 7.31 per cent.
The salient details of the Options are as morefully detailed in the Shareholder Circular dated 29 November 2021. Based on the subscription date of the Initial Placement Shares, the Option Exercise Period will be from 19 October 2022 to 18 January 2023.
Bangladesh – Sri Lanka Preferential Trade Agreement: Gains and policy challenges
By Asanka Wijesinghe and Chathurrdhika Yogarajah
0espite enhanced trade partnerships in South Asia, intra-regional trade is far from reaching its theoretical potential. Similar production patterns and competitive sectors can be the causes. However, bilateral discussions to further lower trade costs continue. The ongoing Bangladesh-Sri Lanka discussions on a preferential trade agreement (PTA) will benefit from knowing the potential gains from reducing bilateral trade costs. In addition, knowledge of products with higher potential for export gains will help optimise the economic benefits from a trade deal.
Bangladesh – Sri Lanka Trade:
The Current Status
In 2018, when discussions on a PTA began to firm up, Sri Lanka’s exports to Bangladesh were USD 133 million, while imports from Bangladesh were USD 37 million. Despite the low trade volume, Sri Lanka’s exports to Bangladesh have grown (Figure 1). In addition, Sri Lanka records a bilateral trade surplus with Bangladesh, which is encouraging given the country’s trade deficit concerns. However, weak growth of exports from Bangladesh to Sri Lanka can be seen from 2001 to 2016 (Figure 1).
The current trade deals between the two countries are still partially restrictive. Both countries keep a sensitive list of products that are not eligible for tariff cuts. Sri Lanka maintains a list of 925 products sanctioned by SAFTA (South Asian Free Trade Area) while Bangladesh keeps 993 products. Sri Lanka’s sensitive list covers USD 6.2 million or 23.8% of imports from Bangladesh. The sensitive list of Bangladesh covers USD 77.6 million or 62% of imports from Sri Lanka. Thus, the elimination of sensitive lists may benefit Sri Lanka more.
Figure 1: Trade Intensity between Bangladesh and Sri Lanka
Source: Authors’ Illustration using Trademap Data.
Theoretically, bilateral alliances deepen trade by removing weaknesses in existing multilateral trade arrangements. A trade deal between Bangladesh and Sri Lanka can simplify trade regulations further. In addition, Bangladesh needs alternative preferential access as graduation from Least Developed Country (LDC) status will take away preferential access to its key markets. For Sri Lanka, increasing bilateral participation in production value chains, especially in the textiles sector, might be an economic motivation. Financial support extended by Bangladesh to manage Sri Lanka’s foreign currency pressures might be a political motivation for a trade deal.
Eliminating sensitive lists can lead to trade creation, although it may not happen due to political and economic reasons. When it comes to tariff cuts, both countries will act defensively as certain products in the sensitive lists are vital for employment and revenue generation. Thus, the success of a trade deal depends on how many products with high export potential are under its purview. In this direction, a group of products with specific characteristics can be identified as an offensive list. For example, Sri Lanka’s offensive list includes products that Bangladesh imports from anywhere in the world, produced by Sri Lanka with a capacity for expansion. Sri Lanka has a comparative advantage in exporting that good, and Bangladesh already has a tariff on the product.
Export Gains from Tariff Elimination
If tariffs on the sensitive lists are eliminated, there will be modest export gains for Bangladesh and Sri Lanka in absolute terms. Sri Lanka will gain USD 24.7 to 49.7 million of exports to Bangladesh, while Bangladesh will gain USD 2.1 to 4.5 million of exports to Sri Lanka. Potential export gains are given in a range due to assumptions on elasticity values used in the partial equilibrium model. Elimination of sensitive lists will generate a higher tariff revenue loss to Bangladesh, ranging between USD 13.5 million to USD 19.1 million. By contrast, Sri Lanka’s revenue loss will be slight at USD 1.4 million to USD 1.9 million.
Whatever the arrangement, it is crucial to include the products with high export potential in the offensive lists (See Table 1 for the major products). Out of 39 products in Bangladesh’s offensive list, 21 are intermediate goods, while 18 are consumption goods. Similarly, 75 out of 115 products in Sri Lanka’s offensive list are intermediate goods. Tariff cuts on intermediate products may induce fragmented production between two countries, which would harness country-specific comparative advantages. Major intermediate goods in the offensive lists are dyed cotton fabrics, cartons, boxes, and cases, plain woven fabrics of cotton, denim, natural rubber, and smoked sheets of natural rubber (Table 1).
The ex-ante estimates predict modest gains for Sri Lanka and Bangladesh in absolute terms, even after completely removing the sensitive list. But complete removal is politically challenging for both countries. Moreover, Bangladesh as an LDC may expect special and differential (S&D) treatment. Thus, the outcome can be a limited PTA in line with weaknesses in existing trade agreements governing South Asian trade. The impact on trade of regional trade agreements in force is negative primarily due to stringent general regulatory measures, including rules of origin (ROO), sensitive lists, and prolonged phasing-in. Given that the estimated modest economic gains of a Bangladesh-Sri Lanka PTA do not justify a trade deal that requires substantial resources for negotiations,the PTA should have fewer regulatory measures and tariff concessions for the products on the offensive lists to maximise the economic benefits of a PTA between the two countries.
Link to the full Talking Economics blog: https://www.ips.lk/talkingeconomics/2022/01/20/bangladesh-sri-lanka-preferential-trade-agreement-gains-and-policy-challenges/
Asanka Wijesinghe is a Research Economist at IPS with research interests in macroeconomic policy, international trade, labour and health economics. He holds a BSc in Agricultural Technology and Management from the University of Peradeniya, an MS in Agribusiness and Applied Economics from North Dakota State University, and an MS and PhD in Agricultural, Environmental and Development Economics from The Ohio State University. (Talk with Asanka – email@example.com)
Chathurrdhika Yogarajah is a Research Assistant at IPS with research interests in macroeconomics and trade policy. She holds a BSc (Hons) in Agricultural Technology and Management, specialised in Applied Economics and Business Management from the University of Peradeniya with First Class Honours. She is currently reading for her Master’s in Agricultural Economics at the Postgraduate Institute of Agriculture, Peradeniya. (Talk with Chathurrdhika: firstname.lastname@example.org)
Expolanka boosts bourse by adding 21.7 points to ASPI
By Hiran H.Senewiratne
CSE trading started in negative territory yesterday due to heavy profit- takings but after 1 pm the market began to recover, triggered by index heavy counter Expolanka, which gained by adding 21.7 points to the All-Share Price Index. The stock market yesterday produced a creditable recovery to finish on a positive note after early losses amid a relatively low but healthy turnover level. The Expolanka share price appreciated by 2.5 per cent or Rs 9.50. Its shares started trading at Rs 386 and at the end of the day they shot up by Rs 9.50.
Amid those developments both indices moved upwards. The All -Share Price Index went up by 42.8 points and S and P SL20 rose by 7 points. Turnover stood at Rs 4.9 billion with a single crossing. The crossing was reported in Expolanka, which crossed 100,000 shares to the tune of Rs 39.5 million and its shares traded at Rs 395.
In the retail market, top seven companies that mainly contributed to the turnover were, Expolanka Rs 715 million (1.8 million shares traded), Browns Investments Rs 336 million (19.9 million shares traded), ACL Cables Rs 261 million (2.1 million shares traded), LOLC Finance Rs 231 million (8.1 million shares traded), JKH Rs 193 million (1.2 million shares traded), Expack Corrugated Cartons Rs 162 million (seven million shares traded) and Softlogic Capital Rs 161 million (11.3 million shares traded). During the day 154 million share volumes changed hands in 37000 transactions.
Yesterday, the US dollar was quoted at Rs 202.91, which was the controlled price of the Central Bank. The actual price would be more than Rs 250, market sources said.
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