February 16, Colombo (LNW)::Several spells of showers will occur in Eastern and Uva provinces and in Polonnaruwa, Matale and Nuwara-Eliya districts.
Showers or thundershowers may occur at a few places in Western and Sabaragamuwa provinces and in Galle and Matara districts after 2.00 p.m.
Fairly strong winds about (30-40) kmph can be expected at times in eastern slopes of the central hills and in Northern, North-central, North-western, Uva and Eastern provinces and in Hambantota district.
The public is kindly requested to take adequate precautions to minimize damages caused by temporary localized strong winds and lightning during thundershowers.
President Ranil Wickremesinghe said the finalisation of debt restructuring could be completed by the first half of the year, which is going beyond the earlier anticipation for it to be completed within the first quarter
President Wickremesinghe said in Parliament last week that “Sri Lanka expects to implement a debt restructuring framework within the first six months of 2024, expressing confidence that the nation was recovering from its worst financial crisis in decades.” The Sri Lankan economy is clearly showing signs of recovery from the severe economic crisis, with improvements in our foreign exchange positions and current account deficits. But a significant challenge remains in managing the country’s large sovereign debt and inequities of the partial coverage of the domestic debt optimisation program. Therefore we need to show some tangible progress in the debt rescheduling.
To achieve durable economic stability and put the economy on a sustainable growth path, the massive sovereign debt needs to be rescheduled. High on the agenda is the private creditors. In a notice dated 12 April 2022, the Ministry of Finance articulated that holders of ISBs desiring to receive LKR in lieu of the due amount should indicate their preference. It is understood that this provision extends the option for bondholders to receive LKR-denominated bonds in Sri Lanka as a complete and conclusive settlement of their ISB holdings. Alternatively, those opting not to convert their holdings to LKR denominated bonds can pursue settlement in USD directly with the GOSL. Considering that the shortage of USD that led to the default, settling a portion of the debt in LKR emerges as a viable alternative. Furthermore, settling in LKR at the prevailing exchange rate might prove advantageous for the GOSL, potentially mitigating the risk of a higher settlement in the event of LKR depreciation against the USD. To reduce the LKR burden, the Government can issue these bonds with a 10-year tenure with restrictions on its trading.
Settlement of obligations
Moreover, this proposition, offered in pari passu to all ISB holders, not only mitigates the challenges associated with settling obligations in USD but also streamlines the resolution process for remaining USD ISB holders. By settling a portion of the liability in LKR denominated bonds, there will be a substantial reduction in the overall forex settlement amount for the Government. Early restructuring of external debt will enable the Government to promptly re-establish its presence in the international debt market. Moreover, where foreign bondholders opt to receive LKR-denominated bonds, such transactions can be facilitated through an Inward Investment Account (IIA) subsequently to facilitate the transaction at the maturity stage. To deter immediate liquidation of bonds by such investors in the local market and subsequent remittance of foreign currency, the government may consider imposing extended tenures (e.g. up to 10 years or 15) for these IIA account holders to repatriate funds out of Sri Lanka.
LKR in lieu of USD
Allowing investors to channel funds via an IIA also provides them with the flexibility to liquidate the LKR-denominated bonds should they opt not to retain the Government bonds and instead pursue alternative investment avenues, such as local real estate or investments in the Colombo Stock Exchange. Also it could be argued that an issue of a haircut or inability to pay in LKR does not arise when a bondholder is willing to accept LKR in lieu of USD, given that the GOSL possesses the financial capacity to fulfil its obligations in LKR. In instances where a bondholder expresses willingness to accept LKR, mandating a haircut or refusing settlement in LKR could potentially lead to legal action against the GOSL, both domestically and internationally. Such litigation could have widespread ramifications, potentially triggering a cascade of legal challenges that will further delay the rescheduling by years. Depriving the financial system access to global funding lines.
Key takeaways
1.) Forex liability of the Government will decrease substantially when payment is made in local currency.
2.) Issuance of long-term LKR bonds will not impact short term cash flows of the Government.
3.) Pari-passu for all ISB holders will make the issue transparent and acceptable to all parties.
4.) Government will be hedged against the depreciation of the LKR.
5.) Re-establish the GOSL presence in the international market to attract fresh capital.
6.) Strengthening of the balance sheets of the banking sector.
7.) Converting ISB holders’ investments to LKR via a restricted IIA, eliminates possibility of immediate disposal by foreign shareholders in the local market.
8) Would facilitate the restructuring of the total debt very much faster
https://www.businesstimes.com.sg/international/sri-lanka-targets-debt-restructuring-framework-first-6-months-2024-says-president#:~:text=SRI Lanka expects to implement,worst financial crisis in decades.
February 15, Colombo (LNW): The Committee on Public Finance (CoPF) at its inaugural meeting held under the Chairmanship of MP Dr. Harsha de Silva has summoned the Director General of the Fiscal Policy Department of the Finance Ministry to inquire into the delays in establishing a gaming regulator.
Despite the agreed upon deadline of 31 December 2023 for the regulator’s establishment, it remains unresolved, the CoPF observed during the meeting. It was also revealed that the committee has received no responses to its follow-up inquiries.
Stressing the vital role of a gaming regulator in both attracting investment and recouping billions of lost revenue, COPF members emphasises the urgency of this legislation. They highlighted that inadequate regulations result in substantial losses for the Government coffers.
Consequently, the Finance Ministry representative indicated a need for additional expertise to construct a robust revenue model similar to Singapore’s.
The CoPF instructed the Director General to provide details on physical and online casinos, including tax amounts and requested a proposed plan to recover outstanding taxes. The Committee granted a two-week extension for it, while expecting completion of the legislation by 31 March as agreed.
The Committee also approved the Secured Transaction Bill, paving the way for the implementation of the Secured Transactions Act of 2023 in Sri Lanka.
This Act establishes clear rules for securing transactions involving movable property, ensuring creditors’ rights are protected and prioritised.
It mandates the creation of the Secured Transactions Registration Authority to oversee registration and maintenance of security rights, aiming to streamline the process and provide SMEs with better access to credit for growth.
In essence, this legislation enables individuals to use movable assets, like household appliances or business equipment, as collateral to secure loans for business development. It fosters increased credit availability for SMEs while ensuring the integrity of transactions through the registry authority, guarding against fraudulent activities.
The Committee also took into consideration Order under Subsection (4) of Section 3 under Strategic Development Projects Act No. 14 of 2008 and the Regulations under the Imports and Exports Control Act, No. 1 of 1969. Following consideration, the Committee approved the said Order and Regulation.
February 15, Colombo (LNW): The Ceylon Petroleum Storage Terminals (CPSTL) signed an agreement with US-based petroleum products distributor ‘Shell-RM Parks’ today (12 Feb.).
The relevant agreement was signed at the CPSTL Head Office, pertaining to the storage and distribution of fuel in Sri Lanka.
As per the newly signed agreement, CPSTL is now able to store and distribute ‘Shell-RM Parks’ petroleum products in Sri Lanka.
On 08 June 2023, the Government of Sri Lanka signed an agreement with RM Parks Inc., in collaboration with Shell Plc for a long-term contract for the importation, storage, distribution, and sale of petroleum products in Sri Lanka.
“US-based petroleum company RM Parks in a collaboration with Shell PLC signed the agreement to enter the Sri Lanka petroleum business. RM Parks will be the 4th supplier to enter the domestic market and will operate under the Shell branding.”
A US-based company has reached a principle agreement to lay a new fuel pipeline between Colombo Port and the Kolonnawa terminal ahead of the signing agreement to begin its retail fuel distribution in Sri Lanka.
Under the agreement, RM Parks-Shell Company will make an initial investment of US$ 50 to 60 million for the project which is expected to begin after it enters into the retail fuel distribution business.
The new pipeline will replace the existing line which has experienced several leaks over the past few years.
In addition to the laying of the pipeline, the company will install fenders in the jetty replacing tyres which are used to prevent the collision of vessels and also invest in a fire control system in the harbour.
The company is set to sign an agreement this month to enter the fuel distribution business in Sri Lanka and begin operations in June.
Power and Energy Minister Kanchana Wijesekera has held an online meeting with RM Parks-Shell Company to discuss agreements, policy, logistics and timeline to begin operations in Sri Lanka.
The company’s technical officials recently visited the Ceylon Petroleum Storage Terminal Limited (CPSTL) tank farm.
February 15, Colombo (LNW): Sri Lanka Tourism Promotion Bureau (SLTPB) is gearing up to introduce a fresh tourism brand — the Buddhist Trail, to tap into the rich cultural and religious heritage of the country.
The initiative aims to highlight Sri Lanka’s deep-rooted Buddhist heritage and promote it as a prominent pilgrimage destination in a global scale.
“Sri Lanka, as a Buddhist country, holds immense potential to establish a unique tourism brand that resonates globally,” SLTPB Chairman Chalaka Gajabahu told journalists yesterday.
At the developmental stage, the Buddhist Trail project aims to emulate the success of similar initiatives like India’s Buddhist tourism circuit and the Ramayana Trail.
Gajabahu outlined the modality of the Buddhist Trail, highlighting its focus on significant Buddhist sites countrywide.
With rich heritage, breath-taking landscapes and profound spiritual significance, Sri Lanka can emerge as a leading destination for Buddhist pilgrimages and cultural exploration on the global tourism map,” he added.
Noting that countries such as India, Japan, South Korea, Indonesia, Malaysia, Thailand, Vietnam, China and Cambodia are among the primary target markets due to their historical and cultural ties with Buddhism, he underscored promoting the Buddhist Trail, which extends beyond Asia to include traditional source markets in Europe, US and Australia.
”The decision to include Europe, US and Australia stems from the growing interest in Buddhist philosophy and spirituality among Western tourists.
By capitalising on this trend, Sri Lanka Tourism aims to diversify our offerings and attract a broader spectrum of visitors seeking spiritual enlightenment and cultural immersion,” he explained.
Sri Lanka is planning to boost Buddhist tourism by linking temples in the country with those in East Asia, Foreign Minister Ali Sabry said
President Ranil Wickremesinghe, and Minister Sabry have initiated a temple-to-temple program where 100 Sri Lanka temples will be linked with counterparts in the Association of South East Asian Nations region.
“Tourism development will get a lot of growth with the temple-to-temple program,” Minister Ali Sabry said.Along with the delegation of monks, five travel agents from Vietnam were also invited.
Under the first phase of the Temple-to-temple programs, several monks from Sri Lanka had received invitations from Indonesia, Malaysia, South Korea and Vietnam the Foreign Ministry said.
The Temple-to-Temple diplomacy program will be extended to Singapore, Japan, Thailand and Cambodia during the second phrase of the program.
February 15, Colombo (LNW): People’s Leasing and Finance PLC recorded profit After Tax (PAT) reached Rs. 2,141 million for the 9 months, for the third quarter of fiscal year 2023/24 contributing Rs. 1,039 million, with an increase of 30.8% compared to the corresponding period in the previous fiscal year, officils of the company said.
Commenting on the financial performance, People’s Leasing & Finance CEO Shamindra Marcelline stated: “We have strategically navigated through evolving market conditions to achieve exceptional profitability and profit growth while fortifying our balance sheet and mitigating impairment risks.
With the emerging economic recovery, PLC is positioned to seize opportunities and sustainably deliver value to stakeholders.”
This growth, attributed to the reversal of impairment charges and other losses, underscores PLC’s commitment to financial excellence and strategic financial management.
Despite a moderated Interest Income for the period, PLC recorded a commendable rise of 2.8% in Net Interest Income for Q3 of financial year 2023/24.
People’s Leasing focuses on enhancing credit quality and promoting collections has yielded positive results, with Impairment Reversal for the nine months ended 31 December 2023, amounting to Rs. 114 million.
Notably, Impairment Reversal for Q3 2023/24 surged by 94.4% compared to the corresponding period in the previous year.
With a continued focus on right-sizing its balance sheet and loans and receivables portfolio, People’s Leasing and Finance has demonstrated strength in navigating a positive business environment with changing market dynamics.
As of 31 December 2023, the Total Asset Base stood at Rs. 156,007 million, while the Total Loans and Receivables Portfolio amounted to Rs. 102,275 million.
In addition, the People’s Leasing & Finance Group reported a notable increase of 23.2% in PAT for the nine months ended December 31, 2023, reflecting positive growth momentum.
The Group’s Total Assets and Loans and Receivables portfolio remain substantial, further solidifying PLC’s position as a leading player in Sri Lanka’s non-banking financial services sector.
With its robust financial performance and strategic adaptability, People’s Leasing & Finance remains dedicated to driving substantial contributions to the economic prosperity of Sri Lanka, upholding its esteemed legacy as a dependable financial partner.
People’s Leasing & Finance PLC – a subsidiary of People’s Bank, and a publicly listed limited liability company on the Main Board of the Colombo Stock Exchange (CSE) – operates with a diverse portfolio of five subsidiaries.
February 15, Colombo (LNW): In a significant development, the Weighted Average Yield Rates (WAYR) of Treasury Bills, spanning both 91 and 182-day maturity periods, have descended to single-digit figures, the Central Bank of Sri Lanka (CBSL) disclosed.
This notable achievement was observed at the Treasury Bill auction convened yesterday (14 Feb).
This marks a significant milestone as the WAYR of Treasury Bills has now entered single-digit territory for the first time since March 4, 2022.
President Director General (Community Affairs) Rajith Keerthi Thennakoon announces the initiation of an “Odapana” loan scheme: asserts the scheme, implemented in response to President Ranil Wickremesinghe’s directives, aims to address the financial challenges encountered by small and medium-scale rice mill owners, rice storekeepers and rice hoarders, particularly exacerbated by the economic crisis and the COVID-19 pandemic.
Opposition leader Sajith Premadasa declares an agreement to tackle infrastructure sector challenges, including economic, social, and political issues for upland and lowland estate communities: pledges to protect their rights, formalising the commitment by signing a social contract with various political parties and estate representatives.
Former President Chandrika Bandaranaike Kumaratunga refuted claims of endorsing any candidate ahead of the upcoming presidential election: asserts she has not made any endorsements thus far: dismisses rumours suggesting her acceptance of a leadership role within the Podu Jana Eksath Peramuna council.
Prof. Jayantha Jayawardena who was previously ousted from the Sri Lanka Medical Council under ex Health Minister Keheliya Rambukwella’s tenure has been reinstated as an SLMC member: The reinstatement was made by current Minister Ramesh Pathirana: The reappointment ensures Jayawardena’s tenure for five years as per the ordinance, unless voluntarily resigned or removed.
A fundamental rights petition reaches the Supreme Court requesting an order to direct the Constitutional Council to approve the President’s recommendation to appoint the current President of the Court of Appeal, Nissanka Bandula Karunaratne, as a Supreme Court judge: Petitioner Sarith Maheeputhra Pathirathne argues that the Council’s rejection of the President’s recommendation is arbitrary and unreasonable: The Council cited inability to verify Justice Karunaratne’s suitability due to allegations against him: Faiszer Musthapha PC will support the petition.
The Committee on Public Finances questions the Director-General of Fiscal Policy about the delay in establishing a gaming regulator, crucial for attracting investment and recovering lost revenue: emphasises the urgency of creating this legislation due to significant revenue losses: grants a two-week extension to provide details on casinos and a plan to recover outstanding taxes, expecting legislation completion by March 31st.
The second phase of the ‘Aswesuma’ welfare benefits scheme commences today, aiming to select 400,000 more beneficiaries: Applications can be submitted online or through Divisional Secretariats within a month: The government plans to increase the beneficiary base to 2.4 million individuals, allocating Rs. 205 billion.
Education Minister Premajayantha confirmed that the 2025 school term will start in January as usual: asserts the Advanced Level exam, postponed to January 2024, is being adjusted to take place earlier: adds results for the 2023 A/L exam are expected between May and June, preceding the Ordinary Level exam later this year: The 2024 A/L exam is rescheduled for 2025, with the new school term of 2024 starting on February 19.
The weighted average yield rates (WAYR) of treasury bills with a maturity period of both, 91 days and 182 days, come down to single-digits at the treasury bill auction: CBSL asserts that this happened for the first time since 04 March 2022.
Sri Lanka completes a commanding 3-0 series win defeating Afghanistan by 7 wickets in the third and final ODI at the Pallekele International Cricket Stadium: Chasing a target of 266, SL comfortably reached the mark in 35.2 overs, with seven wickets in hand.
February 15, Colombo (LNW): A Fundamental Rights petition has been lodged in the Supreme Court, urging an order to direct the Constitutional Council to ratify the recommendation put forth by the President for the appointment of the incumbent President of the Court of Appeal, Nissanka Bandula Karunaratne, as a Supreme Court judge.
Sarith Maheeputhra Pathirathne, an Attorney-at-Law, filed the petition, citing the members of the Constitutional Council, including Prime Minister Dinesh Gunawardena, Speaker Mahinda Yapa Abeywardena, Opposition Leader Sajith Premadasa, Nimal Siripala de Silva, and Sagara Kariyawasam, among others, as respondents.
The petitioner contends that the decision of the Constitutional Council to reject the President’s recommendation, endorsed by the Chief Justice, to fill a Supreme Court vacancy with the most senior judge of the Court of Appeal, is arbitrary and unreasonable.
The petition highlights that during a meeting held on January 19, the Constitutional Council voted against the President’s recommendation. Consequently, as per Article 41 E (4) of the Constitution, the recommendation failed to garner majority approval.
The Council cited inability to verify Justice Karunaratne’s suitability for the appointment to the Supreme Court, citing allegations of bench-fixing tactics in a writ petition against his arrest by Pastor Jerome, as per the Attorney General.
The petitioner argues that the Council’s actions constitute a failure in its constitutional duty, characterised by arbitrary decision-making.
Casting doubt on the nominee and obstructing his career progression based solely on oral submissions and public allegations is deemed irrational and unjust.
President’s Counsel Faiszer Musthapha is set to support the petition.
February 15, Colombo (LNW): The ‘DP Tree Book’ mobile app was officially launched during the Earth Summit 2024 at the Bandaranaike Memorial International Conference Hall (BMICH) in Colombo yesterday (14) under the patronage of MP Dhammika Perera, Chairman of the Dhammika and Priscilla Perera Foundation.
With Sri Lanka facing the imminent threat of extinction for 1496 tree species, the DP Tree Book app aims to address this crisis by enabling users to tag and map replanted trees on Google Maps.
This innovative approach will facilitate the tracking and quantification of reforestation efforts for endangered plant species.
Expressing his vision for the initiative, MP Perera articulated his goal of planting 10 million trees from the endangered species pool, emphasising the importance of collective action in this endeavor.
Commenting on the app’s development, Mr. Perera stated, “The reason for developing this app is that I personally planted 500,000 trees between 2000 and 2019, documented in a book called ‘Tree Book’. However, in an analog system, it’s challenging to monitor the treatment of these trees. Hence, a digital solution was devised to facilitate this process. Our aim is to unite the entire nation to plant 10 million endangered trees.”
The launch event saw the participation of esteemed members of the Maha Sangha, environmentalists, and other stakeholders, highlighting the widespread support and collaboration for this critical environmental initiative.
