Sizeable moderation in trade deficit – CBSL
External Sector Performance – February 2023
• Import expenditure declined notably, compared to the reduction in export earnings in February 2023 (y-o-y), resulting into sizeable moderation in the trade deficit.
• Workers’ remittances and earnings from tourism continued to improve in February 2023.
• Gross official reserves strengthened further by end February 2023, compared to recent months.
• The exchange rate appreciated notably in March 2023 following the greater flexibility that was allowed in the determination of the exchange rate.
• The Colombo Stock Exchange (CSE) and foreign investment in the government securities market recorded net inflows during February 2023.
• The Extended Fund Facility (EFF) from the International Monetary Fund (IMF) of US dollars 3 billion was approved and the first tranche was disbursed in March 2023.
The deficit in the merchandise trade account narrowed significantly to US dollars 39 million in February 2023, from US dollars 780 million in February 2022, mainly reflecting the impact of significant moderation of import expenditure due to subdued aggregate demand conditions. The cumulative deficit in the trade account during January-February 2023 was US dollars 449 million, a sizeable decline from US dollars 1,636 million recorded over the same period in 2022. The major contributory factors for this are shown in Figure 1.
Overall Exports: Despite recording a marginal growth compared to January 2023, earnings from merchandise exports declined by 10.2 per cent in February 2023, year-on-year, to US dollars 982 million. Exports earnings recorded below US dollar 1 billion level for the second consecutive month. While the decline in earnings was observed across all main categories, industrial exports mainly contributed to the overall contraction. Cumulative export earnings during January-February 2023 declined by 10.7 per cent over the same period in the last year.
Industrial Exports: Earnings from the exports of industrial goods declined in February 2023, compared to February 2022, with a substantial share of the decline being contributed by garments. Reduced demand from major markets for garments due to unfavourable economic conditions globally mainly contributed for this outcome. Earnings from rubber products continued to decline due to the lower exports of household rubber gloves. Similarly, earnings from the exports of petroleum products
1 The CBSL classification of exports and the classification of exports based on the Standard International Trade Classification Revision 4, are presented in Annex II and Annex III, respectively. also declined due to the drop in volumes of bunker and aviation fuel exports despite the higher aviation fuel prices. In contrast, earnings from machinery and mechanical appliances (mainly, electronic equipment); and gems, diamonds, and jewellery increased in February 2023.
Agricultural Exports: Earnings from the export of agricultural goods marginally declined in February 2023, compared to a year ago, since the increase in earnings from spices and tea was offset by the decline in earnings from coconut related products (primarily, fibres and desiccated coconut). Export earnings from spices improved due to higher export volumes of cloves; cinnamon; and nutmeg and mace. Increased earnings from tea exports were mainly due to price increases as the volumes registered a decline.
Mineral Exports: Earnings from mineral exports declined in February 2023, compared to February 2022, mainly due to the decline in exports of titanium ores.
Overall Imports: Expenditure on merchandise imports was almost halved in February 2023 at US dollars 1,021 million, compared to February 2022, recording the lowest imports since May 2020. All major import sectors declined while the decline in expenditure on intermediate goods was significant. Meanwhile, cumulative import expenditure during January-February 2023 also declined by 37.1 per cent over the corresponding period in 2022.
Consumer Goods: Expenditure on the importation of consumer goods declined in February 2023, compared to February 2022, driven by lower expenditure on both food and non-food consumer goods. Decline in expenditure on non-food consumer goods was broad-based but the drop in imports
2 The CBSL classification of imports and the classification of imports based on the Standard International Trade Classification Revision 4, are presented in Annex IV and Annex V, respectively.
Venora Lanka Power Panels to set up assembly plant in Australia
By Hiran H.Senewiratne
Sri Lanka- based, export- oriented manufacturer, Venora Lanka Power Panels (Pvt) Ltd, with a state of the art electric panel factory at the Export Processing Zone, Biyagama, will set up an assembly plant in Australia.
“Once we set up the electric panel assembly plant in Australia, we will export all our panels from Sri Lanka and that plant will do 30 percent value addition to the product to supply that market, the company’s chairman/ Managing Director, engineer Sagara Gunawardena told The Island Financial Review.
Gunawardena said that the company is a value- addition assembly plant and he would be investing AUS $ 2 million for the project to be set up in Melbourne and hire 100 engineers and other professionals. He explained that the venture has enormous potential.
Venora Lanka provides power panels to mega projects in Sri Lanka and exports to Bangladesh, Maldives, Kenya, Ethiopia, Seychelles and Myanmar. Panel assembling is strictly in compliance with IEC 61439 standards, it was explained.
Gunawardena added: ‘I firmly believe that, being a truly customer focused organization, every employee and every process in the organization has to be aligned behind delighting customers. Therefore, at a time when the country is facing a major dollar crisis, my company would be aiming at bringing dollars into the country, while providing employment for local professionals, especially engineers.
‘At Venora Lanka we do not try to change customers’ mindsets. Instead, we take time to understand what they really want and focus our brand on delivering that. Venora is values- driven first and cost- driven second – creating a unique brand proposition.
‘Since the US dollar rate has come down, it is our concern that importers and suppliers do not change their prices, which is really affecting the manufacturing sector.
Company sources added: ‘The company has several wings of operation, such as local and overseas projects, switch board assembling, telecommunication infrastructure installations, earthing, lighting and surge protection, incorporating world renowned brands.
‘Venora Lanka Power Panels is the first Sri Lankan company to receive the licence, in accordance with the UK Trade Mark Act 1994, to use the trade mark “Best Enterprise”. It won a global award at the event, ‘Golden Awards for Quality and Business Prestige’, held in Geneva, Switzerland, in 2015.
‘Within a short span of time, with the perfect blend of progressive thinking and expertise, Venora Group has expanded to consist of, Venora International Projects, Venora Telecom, Venora Industrial Solutions and Venora Lanka Power Panels (BOI approved). Further, Venora has established its overseas presence through Venora Engineering Kenya and Venora Engineering Myanmar.’
Share market moves into positive territory; indices up
By Hiran H. Senewiratne
CSE trading got off to a positive note yesterday but during the last session of the day the momentum slowed. However, the market is now moving towards positive territory following the Central Bank announcement of a downward trend in interest rates, market analysts said.
Amid those developments the market witnesses improvements in both indices and in the turnover.
The All- Share Price Index up by 12.8 points and S and P SL 20 rose by 6.97 points. Turnover stood at Rs 710 million with one crossing. The crossing was reported in JKH which crossed 430,000 shares to the tune of Rs 60.2 million; its shares traded at Rs 140.
In the retail market top seven companies that mainly contributed to the turnover were; JKH Rs 212 million (1.5 million shares traded), Access Engineering Rs 44.7 million ( three million shares traded), Lanka IOC Rs 34.5 million (264,000 shares traded), Browns Investments Rs 28.6 million (5.3 million shares traded), LOLC Finance Rs 23.8 million (4.7 million shares traded), Capital Alliance Rs 22.9 million (615,000 shares traded) and First Capital Holdings Rs 19.2 million (574,000 shares traded). During the day the 31.4 million shares volumes changed hands in 9000 transactions.
Yesterday, the Central Bank’s US dollar buying rate was Rs 285.16 and the selling rate Rs 298.85.
Ceylinco Life appoints new COO and Deputy COO to strengthen leadership pipeline
Ceylinco Life has announced the appointments of Ranga Abeynayake and Samitha Hemachandra as Chief Operating Officer and Deputy Chief Operating Officer respectively, following the creation of the two positions as part of the Company’s leadership pipeline for the next decade and beyond.
Abeynayake has been with Ceylinco Life for 25 years and is an Executive Director and the Company’s Deputy Chief Financial Officer, while Hemachandra has been with the Company for 23 years and is the General Manager – Marketing.
“These appointments add further strength and depth to the management structure and look at our leadership requirements for the next 10 to 15 years,” Ceylinco Life Chairman R. Renganathan said. “Transparent and long-term succession planning is extremely important in the financial services sector, ensuring seamless continuity and consistency for all stakeholders.”
Ceylinco Life Managing Director and CEO Thushara Ranasinghe added: “Ranga Abeynayake and Samitha Hemachandra have been part of the management team that achieved market leadership for Ceylinco Life in 2004 and maintained that leadership to this date, unbroken for 19 years. They represent the core values and the vision and mission of the Company, and will be fully supported by the Board of Directors and the management team as they are groomed for key leadership positions.”
A Fellow Member of the Institute of Chartered Accountants of Sri Lanka and of the Institute of Certified Management Accountants of Sri Lanka, Ranga Abeynayake counts over 25 years of experience in handling key management positions in the areas of Finance, Risk Management, Strategic Planning, Treasury Management and Project Planning. He holds a Master of Business Administration (MBA) from the Postgraduate Institute of Management (PIM) of the University of Sri Jayewardenepura. Abeynayake previously served as Chairman/Non-Executive Director of Citizens Development Business Finance PLC., and currently serves as a Non-executive Director of Ceylinco Insurance PLC and as a Director of Serene Resorts Limited.
A Fellow (FCIM) and Chartered Marketer of the Chartered Institute of Marketing (CIM) – UK, and of the Certified Management Accountants (CMA) – Australia, Mr Samitha Hemachandra counts over 20 years of work experience in Brand Management, Customer Relationship Management, Marketing Management and Strategic Planning. He has been directly involved in designing, developing and implementing many integrated marketing campaigns for Ceylinco Life. Mr Hemachandra holds a Master of Business Administration (MBA) from the University of Western Sydney – Australia. He is a past Chairman of the Marketing and Sales Forum of the Insurance Association of Sri Lanka (IASL) and has been a member of the judging panel of the SLIM Brand Excellence awards for many years.
He is currently a Director of Ceylinco Healthcare Services Ltd., and a Non-executive Director of Citizens Development Business Finance PLC (CDB), which are subsidiary and associate companies of Ceylinco Life.
Adjudged Sri Lanka’s ‘Brand of the Year’ and ‘Service Brand of the Year’ by the Sri Lanka Institute of Marketing (SLIM) and ‘Best Life Insurer in Sri Lanka’ by World Finance for the ninth consecutive year in 2022, Ceylinco Life was conferred the ‘Peoples Life Insurance Service Provider of the Year’ title at 2023 SLIM Kantar Peoples Awards for the 17th consecutive year. Ceylinco Life has been the country’s leading life insurer for more than half of the 35 years it has been in existence. The Company was also ranked the ‘Most Valuable Life Insurance Brand in Sri Lanka’ by Brand Finance and certified a ‘Great Workplace’ in Sri Lanka for the third consecutive year in 2022. Ceylinco Life has close to a million lives covered by active policies and provides innovative life insurance solutions which offer protection while de-risking the goals and ambitions of the Company’s policyholders.
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