Economic

Central Bank new Governor Nivard Cabraal on Saturday ruled out Sri Lanka going to the International Monetary Fund (IMF) to seek financial support to manage the debt servicing challenge saying the Government will rely on “homegrown workable solution”.

The Colombo stock market sustained its positive sentiment though turnover remained below recent average for the second consecutive day.

The more active S&P SL20 index gained by 1% or 34 points and the benchmark All Share Price Index improved by 0.5% or 42 points. Turnover was Rs. 2 billion, lower compared to Wednesday’s Rs. 2.5 billion but volume improved to 100 million shares from 88.7 million shares on Wednesday.

Former top stock John Keells Holdings (JKH) maintained its recent uptick with share price gaining by 2% to Rs. 134.25 though on thin volume. Most valued and profitable Expolanka led contribution to index gain as well as in turnover.

Asia Securities said the indices closed on a positive note for the second consecutive session mainly on price gains in EXPO, while other heavyweight stocks such as JKH, HAYL, and MELS also moved higher during the session indicating some positive bias in the market.

The Planters’ Association of Ceylon (PA) has renewed its warning that shortage of suitable fertiliser will force Sri Lanka to miss its export earnings target for 2021 and called for a sustainable solution to the worsening crisis.

Earlier this year, the Export Development Board (EDB) set a target of $ 1.47 billion in export earnings from tea for 2021, but the industry expects there to be a gradually widening shortfall of around 30-40% moving into the end of 2021 and beyond, primarily due to the decline in harvest as a result of fertiliser unavailability, the PA, which represents the Regional Plantation Companies (RPCs), pointed out.

In the first seven months of 2021 (up to end July), Sri Lanka has recorded export earnings of $ 766 million from tea, an increase of 9% compared with the same period of 2020. However, this increase was off a low base, influenced greatly by improved weather conditions in 2021, as compared with a severe drought which impaired production 2020. However, when considering a more valid comparison with the corresponding period of 2019, the 2021 performance shows a 4% reduction.

In addition to the target for 2021, Ceylon Tea will also be unable to meet its target of $ 1.8 billion in export earnings by 2025, unless a solution is provided, the Planters’ Association said.

“It is unfortunate that that the export earnings generated by the tea industry, which has sustained Sri Lanka for more than a century, is unable to contribute to its fullest potential at a time the country is in dire need of it,” PA Media Spokesperson Dr. Roshan Rajadurai said.

The Central Bank has reminded commercial banks not to encourage the grey market for foreign exchange dealings.

It said the August gain came primarily from the High Grown sector which recorded 4.9 million kilos, highest since 2013 and a sharp 20.7% more than 2020 quantity.

Headline inflation as measured by the Year-on-Year change based on the National Consumer Price Index (NCPI) has been compiled as 6.7% marginally down from 6.8% in July. Core inflation, which reflects the underlying inflation by excluding volatile items of food, energy and transport groups in the economy as measured by the Year-on-Year change based on NCPI for the month of August 2021, increased to 4.7% from 4.4% reported in month of July 2021.

Inter-terminal trucking is being expedited at the Colombo Port in a bid to improve efficiency.

The Fabric and Apparel Accessories Manufactures Association (FAAMA) last week expressed confidence in achieving the $ 800 million turnover target for the year, with the industry’s order books for the October-December quarter being full.

Ahead of the winter season and a one-year break from physical engagement at global trade fairs, Sri Lanka Tourism has set out plans to undertake a series of promotional activities at top travel events in France, the United Kingdom and Germany this year.

Dialog Axiata PLC, Sri Lanka’s premier connectivity provider, has partnered Samsung Sri Lanka to enable all Samsung Galaxy S21 flagship series users to experience the power of 5G through their devices on Dialog’s 5G trial network, the first of its kind in South Asia.

The Colombo stock market produced a welcome recovery in terms of sentiments yesterday though trading level was below recent average.

The Central Bank (CB) has issued new directives on classification, recognition and measurement of credit facilities in licenced banks effective 1 January 2022.

New Central Bank Governor Nivard Cabraal yesterday met with top importers and exporters in person.

The Cabinet of Ministers at its meeting on Tuesday has approved a plan to develop the Galle Port with an investment of $ 175 million under a Public-Private Partnership.

State-owned entity suffers Rs. 2.2 b monthly loss due to Govt. failure to allow price hike in LPG
Raises questions over Govt. deal with LAUGFS and recently formed LPG buying firm Siyolit Ltd.
State-owned LPG provider Litro is in crisis due to sabotage, a trade union formed to save it has warned.

The Colombo stock market gathered more strength yesterday helping a positive finish to the week reversing the trend suffered in the previous two.

Says move due to declining revenue and rising expenditure owing to COVID pandemic
Finance Minister Basil Rajapaksa said in P’ment early this month Govt. revenue loss was Rs. 1.6 t
As per CBSL data, first half revenue up 7% to Rs. 714.5 b; expenditure higher by 7% to Rs. 1.5 t

DHL Express, the world’s leading international express services provider, has announced an upward price adjustment of 4.9% effective 1 January 2022.