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IMF programme is now more likely than not : First Capital

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Analyzing the economic indicators and the forecasts, we believe there seems to be an 85% probability that Sri Lanka may consider moving into an IMF programme as soon as possible, First Capital Research says in its Mid-Year Outlook report.

First Capital Research expected that :Sri Lanka may negotiate an IMF program within 3Q2021.

Though there are rumours of negotiations, so far such a program has not materialized, but the government has obtained the Rapid Funding Facility of USD 787Mn from the IMF,” the report said.

“Considering current situation of the economy, the economic indicators seem to be slightly worse than our initial estimates (For eg: Jun-2021 Foreign Reserves dipped to USD 4bn, six months earlier than our expectations),” it said.

It further said: “With the heavy debt burden and lower foreign reserves, two out of the three rating agencies have indicated potential downgrades. Foreign Currency debt repayment for the next 12 months amounts USD 7.0Bn compared to USD 2.8Bn of reserves as at Jul 2021.”

“Though there is an improvement, the Balance of Payments is still in deficits, further deteriorating the foreign reserve position. We expect foreign reserves to fall to dangerously low levels of USD 3.5Bn by Dec 2021 and USD 3.0Bn by Jun 2022,”

“Moody’s Rating for Sri Lanka currently stands at Caa1. The Outlook was recently changed to “Under Review”. Similarly, S&P Global has a rating of CCC+ for Sri Lanka and the agency recently downgraded the Outlook to Negative.”

“Fitch, however, has affirmed the rating for Sri Lanka at CCC. Fitch does not provide “Outlook” for countries with ratings of CCC and below.”

“As Sri Lanka is in the 2nd year of 10%+ budget deficit, potentially with an IMF programme coming in there is a significant possibility for tax rates to be revised upwards.”

As the risk rises in the system supported by an increase in rates, we recommend to further reduce the equity portfolio to 50% or aggressively shift the portfolio to defensive counters.”

“Banking (mainly COMB, HNB, SAMP, NDB), selected dollar income companies (HAYC, TJL, WIND & LVEF – others have surged in price and cannot be highlighted as defensive anymore, Eg: EXPO, HAYL, MGT), dividend yielding counters (CTC, NEST, LLUB) and Life Insurance companies are the preferred defensive counters.” First Capital Research said.



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Sri Lanka to receive ‘a lot of positive news’ after President’s visit to India: Deputy Foreign Minister

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Indian Deputy High Commissioner Dr. Satyanjal Pandey paid a courtesy call on Deputy Minister of Foreign Affairs and Foreign Employment Arun Hemachandra at the latter’s office recently

By Sanath Nanayakkare

Foreign Affairs and Foreign Employment Deputy Minister Arun Hemachandra recently told Ada Derana TV that Sri Lanka would receive a lot of positive news after President Anura Kumara Disanayake’s visit to India.He made this comment during a talk show with TV anchor Mahieash Johnney in a zoom call.

Mahieash asked the deputy foreign minister several questions related to the President’s visit to India from December 15 to 17, which is set to take place following an invitation from the Indian government.

The following are some comments made by the deputy foreign minister during the programme.

“As a country, we do believe in maintaining good bilateral relations. Sri Lanka is an island nation. Our country is situated in an important geographical location on the world map. So, as a country, we do need a very strong foreign relations and we should have a very strong diplomatic service as well. Based on that, what we believe is that the NPP government should have a very strong foreign policy and we are committed to having one. In the past, as a country, we did not have a similar thing because most of the rulers were making use of the foreign diplomatic service as well as the foreign policy which was supposed to be nation-oriented or country-oriented, but were not practiced in that way.”

“As the NPP-led government, we are committed to a very strong foreign policy. We have to understand one thing. India being a very close neighbour, India being a very strong neighbour and India being a country that helped Sri Lanka during the crisis time without any conditions, we have to maintain a very close relationship with India. And, we have to understand that our country should have a very strong, non-aligned foreign policy, so as a country, we need to understand that it is an art of balancing. We have to consider India’s national security which is their utmost concern. We should focus on that also because being a very strong country, they focus on that. But also, we have to have a very strong country oriented and people-oriented foreign policy, so the NPP government is committed to having such a policy, so there is nothing to worry about that.”

When asked about Sri Lanka’s wish to join BRICS as a means of economic development and about US president-elect Donald Trump’s threat to impose 100% tax on BRICS’s exports into his country if they created a new currency to replace the US dollar, Hemachandra said said,” Our application to join BRICS has not been rejected. It is still under consideration. As a country, we have joined the new development bank – which is the banking body of BRICS, so the process is still on the move.

And about the statement made by the U.S. president-elect Donald Trump, we don’t know how practical it is for them to impose such tariff. But then again, we have to understand that BRICS was something inevitable because it was something which couldn’t be rejected , so there was a need for BRICS and that was one reason BRICS kept on growing. So, we have not opted out, we have not changed our decision on BRICS. The particular application is still on the move, and we are looking forward to positive updates from them.”

When asked whether new trade agreements, concessions etc. could emerge from the meetings President Anura Kumara Disanayake will be having during his Indian tour, the deputy minister replied,”

“The President’s first official overseas visit will be to India. We believe that we also should continue that tradition as India being a very close and strong neighbour. We believe that we should start from that point. We should understand that there are many pending agreements to be signed. There are still many agreements which are being discussed. I cannot comment on everything here, but then, we are discussing with India regarding many things that were discussed in the past.

So, it is a new administration. It is a new government. So, we should take decisions based on the people’s and the country’s benefit. So, there are many things that are being reviewed. And many things are being discussed. So, the country will have a lot of positive news after the President’s visit to India. We believe that we should maintain very strong diplomatic relations with India, and they are also committed to help us. This morning also I met the Deputy High Commissioner of India who made a courtesy call at my office. We discussed many things. But we have to mention that the decisions will be purely based on the country’s benefit and the people’s mandate,” the deputy foreign minister said.

During his visit, President Dissanayake is expected to meet Indian President Droupadi Murmu, Prime Minister Narendra Modi, and other senior officials. Discussions are expected to focus on strengthening ties and exploring cooperation across multiple sectors.

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Fems makes history at SLIM Brand Excellence Awards 2024

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Fems, Sri Lanka’s leading and progressive feminine hygiene brand, clinched an unparalleled victory, becoming the first feminine hygiene brand in Sri Lanka to win the prestigious Gold award for Product Brand of the Year at the SLIM Brand Excellence Awards 2024. The brand secured a total of three major awards, maintaining its winning streak since 2023.

Fems captured the coveted Product Brand of the Year Gold award competing against established brands across all consumer categories. Fems also won Silver awards for Innovative Brand of the Year and CSR Brand of the Year.

Shiyan Jayaweera, Director Marketing, Hemas Consumer Brands, said, “These prestigious awards validate Fems’ unwavering commitment to empowering women and breaking barriers in an often-overlooked category. As a leading feminine hygiene brand, Fems will continue to pioneer conversations around the category to meet our consumer’s evolving needs by delivering innovation and increased social awareness to create a meaningful impact in their lives.”

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British Council launches ‘Youth-Led Green and Inclusive Businesses’ project in universities

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One of the facilitators for the programme Hasanka Padukka

The British Council inaugurated its flagship project, Youth-Led Green and Inclusive Businesses, in partnership with four state universities, University of Peradeniya, University of Kelaniya, University of Sri Jayewardenepura and University of Uva-Wellassa during an event held recently. This initiative is designed to equip university students with the knowledge, skills, and confidence to lead transformative changes in their workplaces and enterprises, fostering sustainable and environmentally conscious business practices.

The event featured a speech by British Council Country Director, Orlando Edwards, who emphasized the organisation’s commitment to empowering Sri Lanka’s youth as catalysts for green innovation and social inclusion. “At the British Council, we believe that the future lies in the hands of our youth. They are not just the leaders of tomorrow but are making significant impacts today. This belief drives our commitment to support and empower young people around the world to lead initiatives that address critical issues like sustainability and inclusivity,’’ said the Country Director.

Adding further significance to the occasion, Chamindry Saparamadu, the Director General of the Sustainable Development Council of Sri Lanka, said ‘‘Youth can be powerful agents of transformative change. They have fresh perspectives and insights that could be harnessed to offer innovative solutions to our pressing development problems. The efforts of the British Council—in equipping the next generation of our business leaders with the knowledge and skills for business value creation beyond profit—through green and inclusive business development is indeed commendable.’’ She highlighted ongoing efforts to create a cohesive sustainable development framework across sectors, and how programmes such as this align with Sri Lanka’s strategic goals.

Representatives from participating universities expressed their enthusiasm for the collaboration and underscored their commitment to integrating the programme into their extracurricular initiatives. “This partnership is a step towards transforming our students into leaders who can seamlessly blend sustainability and inclusivity into their future careers,” said Prof. Dilukshi Senaratne, Director of the Career Guidance Unit of University of Kelaniya.

The Youth-Led Green and Inclusive Businesses project will engage students through innovative workshops, mentorship programmes, and practical learning opportunities, empowering them to tackle pressing challenges such as climate change, resource efficiency, and equitable growth.

This collaboration between the British Council and state universities marks a pivotal step in fostering a greener, more inclusive future for the country.

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