By: Staff Writer

Colombo (LNW): The Ceylon Petroleum Corporation (CPC) has reported its fuel cost breakdown as of 18th February 2023, reporting a profit for Petrol 92 and Auto Diesel.

Minister of Power and Energy Kanchana Wijesekera revealed that a profit of Rs. 16.21 has been earned per litre of Petrol 92, while a profit of Rs. 3.25 has been earned for Auto Diesel.

A profit of Rs. 109.44 has been earned per litre of Petrol 95 and a profit of Rs. 11.64 for Lanka Super Diesel.

Minister Wijesekera pointed out that, however, a loss of Rs. 21.49 has been incurred per litre of Kerosene

He has assured that the Ceylon Petroleum Corporation (CPC) is on a path towards achieving financial stability.

Participating in a media briefing held at the Presidential Media Centre themed ‘Collective path to a stable country’, Wijesekera expressed confidence in the government’s program, led by President Ranil Wickremesinghe, to promote financial stability in both the Electricity Board and the Petroleum Corporation.

Furthermore, the Petroleum Statutory Corporation has established contracts with two new agencies for a consistent supply of fuel since September last year.

These agencies are scheduled to commence fuel supply by the end of this month, and the first fuel shipment is expected to arrive in Sri Lanka at the same time. Around 150 fuel stations have been registered by these agencies so far, ensuring reliable fuel availability.

After the arrival of their ship in Sri Lanka, fuel distribution was initially carried out under the name of Ceypetco.

However, future distribution will be conducted under their own company name. To address outstanding debts, including those owed to Indian and Iranian creditors as well as fuel suppliers, the Ministry of Finance has imposed a tax of Rs.50 per liter of fuel during distribution.

The Petroleum Corporation has successfully repaid all loans owed to the Bank of Ceylon and the People’s Bank, resulting in its strengthened financial position.

Despite this, the restructuring process of the Petroleum Corporation will continue as planned. The revised draft for the restructuring of the Electricity Board has been forwarded to legislators, and once received, it will be submitted to the Attorney General and subsequently presented to the Cabinet for recommendations. There is a possibility of passing a new act in this regard.

By: Staff Writer

Colombo (LNW): The Travel Agents Association of India (TAAI), the largest tourism organization in India, is returning to Sri Lanka after 18 years with its airline partner SriLankan Airlines for their 67th Convention from 06-09 July 2023 in Colombo.

The convention, Indian travel trade’s premier annual event, is expected to invigorate Indian outbound travel to Sri Lanka following several years of setbacks, the national carrier said in a media release.

The association plays a leading role in shaping India’s outbound tourism and represents all stakeholders in the Indian travel industry including airlines, tour operators, hotels and transport companies.

This year’s convention is expected to draw approximately 450 agents and 50 international travel media personalities, some of whom are booked to fly to Sri Lanka on SriLankan Airlines.

Renowned for generating widespread coverage and tourism footfall for the host country every year, the event will certainly help encourage Indian travellers to visit neighbouring Sri Lanka.

A main theme of the 2023 TAAI convention is to strengthen regional tourism, which SriLankan Airlines said coincides with its regional hub strategy, with its prime location in the Indian Ocean extending connections to multiple countries to the north, east and west of India.

Dimuthu Tennakoon, Head of Worldwide Sales & Distribution of SriLankan Airlines commented on the airline partnering with TAAI stating, “India holds a special place in the history of SriLankan Airlines for many reasons, and this is reflected in the fact that nearly 40 per cent of our current operations are concentrated to India.

We want to continue growing our presence in India with a strategic focus on leisure and MICE travellers and will introduce more flights and cities to our Indian service in the future. It is therefore exciting to collaborate with TAAI on their biggest calendar event, which serves as a strong starting point for a renewed future of travel between India and Sri Lanka.”

The convention is likely to boost the image of Sri Lanka as a safe, convenient and comfortingly familiar vacation spot among Indian travel industry players and travellers. An image, a reality, that SriLankan Airlines said it takes the initiative to promote through its communications in India.

As Sri Lanka gets ready to welcome the guests of the TAAI convention, SriLankan Airlines vowed to continue in its role as the present-day maker of journeys between Sri Lanka and India, in a travel tradition dating back millennia.

By: Staff Writer

Colombo (LNW): Fitch Ratings has warned of risks in Sri Lanka’s domestic debt restructuring plan but noted that it resolves uncertainties around its impact on the local banking sector.

The Sri Lankan Government’s proposal for treatment of domestic debt marks a significant step towards resolving uncertainties around the impact of the sovereign’s debt restructuring on the local banking sector, but complications may arise from a number of factors, Fitch Ratings said.

The proposal excludes banks’ holdings of Sri Lankan rupee-denominated treasury securities, which will alleviate some of the pressure on their already stressed capital positions from weakening loan quality and the rupee’s depreciation.

Fitch’s base case did not expect treasury bills held by banks to be subject to restructuring, but assumed banks’ treasury-bond holdings would be.

Bank holdings of Sri Lanka Development Bonds (SLDBs), which are foreign-currency denominated but governed by local law, will be affected, as anticipated, and an impact on international sovereign bonds (ISBs) as well is still expected.

However, these together account for only about 5.5% of banks’ combined assets, a much smaller share than treasury securities (26.4% for Fitch-rated domestic banks). The proposal also includes a restructuring of foreign-currency bank loans to the government (less than 1% of combined assets for Fitch-rated banks), though without detailed plans.

“The Government has outlined three treatment options for SLDBs. We expect banks will generally opt for the choice involving conversion of such debt into local currency-denominated instruments; banks have so far opted to convert maturing SLDBs to rupee-denominated treasury bonds since the announcement of suspension of foreign debt servicing in April 2022,” Fitch Ratings said.

Fitch said that provisioning should help to moderate the hit to bank capital from the debt treatment. Fitch-rated Sri Lankan banks have already made provisions of 35% or higher for ISBs, with SLDBs being subject to lower provisioning due to the possibility of obtaining rupee-denominated treasuries.

Nonetheless, worsening impaired loans (end-May 2023: 13.3% of system loans, from 1Q22: 8.4%) in line with the economic stress associated with the sovereign default and the unwinding of forbearance provided during the Covid-19 pandemic are already exerting pressure on banks’ thin capital buffers.

“We do not believe a restructuring of the sovereign’s local-currency obligations is likely to trigger a loss of depositor confidence in the banking system, based on the proposed plans.

However, funding stress remains a negative sensitivity for bank ratings. Fitch-rated Sri Lankan banks’ national ratings remain on Rating Watch Negative (RWN) to reflect the potential for the banks’ creditworthiness relative to other entities on the Sri Lankan national ratings scale to deteriorate.

This reflects heightened near-term downside risks to credit profiles from capital and funding stress,” Fitch Ratings said.

Fitch Ratings said that a downgrade of the sovereign’s ‘CC’ Long-Term Local-Currency Issuer Default Rating would not automatically drive a downgrade in Sri Lankan bank ratings.

By: Staff Writer

Colombo (LNW):Government’s raising funds via treasury bonds continues under the present administration unabated and it is amounting to over 1 trillion of rupees in almost a year.

The Central Bank on behalf of the Government issued Rs. 1.4 trillion worth of Treasury Bonds between 18 April 2022 and 15 March 2023.

Maturities of Treasury Bonds issued ranged from a low of 2 years and a high of 10 years. The Weighted Average Yield before tax was a high 33.01% for a two year bond issued on 15 November 2022.

Offered amount was Rs. 50 billion and Rs. 56 billion worth of bids received of which only Rs. 9 billion were accepted.

A similar yield was fetched for a 2 year bond issued on 15 December 2022. Of the Rs. 67.4 billion bids received for RTs. 50 billion issue, Rs. 32.2 billion were accepted.

Prior to the CBSL increasing policy rates (by 7% in March), the WAY ranged from 12.25% (3 year bond) to 15.42% (10 year bond) for issuances in March. Thereafter the unprecedented rise began with 20.21% in April onwards.

Of the bonded-domestic debt of $ 24 billion, EPF holding of $ 8.8 billion or 36.5% is included. Banks holding $ 10.7 billion or 44.4% are excluded. Others holding $ 4.6 billion or 19.2% are excluded except for the ETF.

Asia Securities Research said the impact of the DDO on the Yield Curve (YC) is expected to be positive and significant.

The following are some of the expected outcomes of the DDO on the YC: The YC will shift downwards as the DDO risk premium is eliminated for the banking sector rupee denominated bonds.

The YC will flatten or become upward sloping as the inflation rate decreases amid anticipated policy rate adjustments by the CBSL in 2H2023E. This will lower the short-term interest rates and increase the demand for long-term bonds, Asia added.

The bond exchange program is not applicable to all bond holders.Banking Sector and Non-Bank Financial Institutions (NBFIs): They are excluded from the program to avoid systemic risks and ensure financial system stability.

Insurance Companies and Primary Dealers: They are excluded from the program to maintain market efficiency.

Private rupee-denominated Bond Holders: These are individual or corporate investors who hold rupee denominated bonds. They are also excluded from the DDO.

Bartleet Religare Securities Equity Research said the expected outcomes of the DDO include a potential decline in interest rates reducing the gap between market rates and policy rate.

It attributed two significant factors. Firstly, the reduced risk premia on government bonds from the debt restructuring measures are likely to create a more favourable environment for investors. As the perceived risk associated with government debt decreases, investors may demand lower interest rates, to a downward trend in borrowing costs.

Secondly, the current rate of inflation can also exert downward pressure on interest rates. As inflation moderates, the Central Bank will have flexibility to implement monetary policies aimed at reducing interest rates, stimulating economic growth, and encouraging investment.

Prime Minister Dinesh Gunawardena expressed his gratitude to Seychelles for introducing Air Seychelles’ direct flights to Colombo, stating that it would lead to a rapid increase in tourist arrivals. The Prime Minister made these remarks during a meeting with Seychelles High Commissioner Lalatiana Accouche at Temple Trees on June 3.

High Commissioner Accouche, who recently presented her credentials to President Ranil Wickremesinghe in a vibrant ceremony in Kandy, expressed her admiration for the beauty of Sri Lanka. She mentioned that a significant number of Sri Lankan professionals, including judges, engineers, and teachers, are working in Seychelles, and their contributions are highly valued by her country.

In response, the Prime Minister requested the High Commissioner to explore the possibility of creating more employment opportunities for Sri Lankans in fields such as nursing and healthcare.

The introduction of Air Seychelles’ flights from Seychelles to Colombo was celebrated with a water cannon salute upon its arrival at the Bandaranaike International Airport (BIA). The inaugural ceremony included a traditional Kandyan dance performance, showcasing Sri Lanka’s unique hospitality.

The High Commissioner stated that two weekly flights will operate between the two countries, greatly benefiting tourism and people-to-people connectivity. She emphasized that this initiative will raise awareness about Sri Lanka as a distinctive travel destination, attracting more tourists and fostering bilateral and business partnerships between the two nations.

The number of dengue cases diagnosed across the country since January has surpassed 50,000, according to the National Dengue Control Unit. As of yesterday (4), a total of 640 cases were reported in the last three days of this month alone. Since the beginning of the year, 9,916 cases have been recorded, with June reporting the highest number of cases. Tragically, there have been 31 reported deaths related to dengue this year.

To address this alarming situation, 43 dengue high-risk zones have been identified. The total number of reported infected individuals stands at 49,960 as of yesterday, with the Western Province accounting for 24,930 cases, approximately 49.8% of the overall figure.

Medical professionals emphasize the importance of eliminating mosquito breeding sites to reduce the number of infections. Additionally, they advise individuals experiencing fever persisting for more than 24 hours to seek prompt medical attention from qualified doctors. Delays in diagnosis and treatment after dengue infection can lead to an increase in fatalities.

Doctors further recommend avoiding the use of painkillers other than paracetamol for fever management. It is crucial for the public to heed these guidelines and take necessary precautions to mitigate the spread of dengue and prevent further loss of life.

Three Cassowary birds are set to arrive in Sri Lanka today (5) as part of an animal exchange program. The birds, consisting of two females and one male, will be transported by air from Thailand to their new home.

Thilak Premakantha, the Director General of the Zoological Department, confirmed the upcoming arrival of the Cassowary birds. Presently, the Dehiwala Zoo already houses two male Cassowary birds. With the addition of the incoming birds, the zoo will have a more balanced gender representation among these magnificent creatures.

Cassowaries are large, flightless birds known for their striking appearance and unique features. They primarily subsist on a diet of fruits, contributing to the preservation and dispersal of various plant species.

Initially scheduled to be transported to Sri Lanka on Monday via SriLankan Airlines, the plans had to be revised due to air conditioning issues. As a result, alternative arrangements were made, and the Cassowary birds will now be transported by Malaysian Airlines.

The arrival of these rare and fascinating birds through the animal exchange program reflects the continuous efforts of Sri Lanka’s authorities in promoting wildlife conservation and enriching the diversity of the country’s zoological collections. The new additions are expected to captivate visitors with their beauty and contribute to the educational and conservation initiatives of the Dehiwala Zoo.

In a significant development, an official delegation from Israel recently met with senior officials from the Sri Lanka Export Development Board (EDB) to discuss avenues for promoting trade and economic cooperation between the two nations. The fruitful discussion took place last Thursday and aimed to strengthen bilateral ties.

Representing Israel were Mr. Ophir Kariv, Head of Bureau at the Economic Affairs Division of the Ministry of Foreign Affairs, and Ms. Hagar Sapiro-Tal, First Secretary of the Embassy of Israel in India, with accreditation for Sri Lanka.

The meeting focused on exploring mechanisms to enhance bilateral trade, with valuable insights shared on trade opportunities available in Israel. The Israeli delegation expressed their satisfaction regarding the informative webinar organized by the Sri Lanka Embassy in Israel and the EDB, in collaboration with the Israel–Sri Lanka Chamber of Commerce and Israel–Asia Chamber of Commerce, held on June 19, 2023. The webinar played a vital role in informing Sri Lankan exporters about the Israeli market, generating growing enthusiasm among them.

In light of this enthusiasm, senior EDB officials expressed their intention to conduct sector-specific webinars and facilitate inward and outward business-to-business (B2B) missions in collaboration with Israeli authorities. Furthermore, the EDB directors provided an overview of the capabilities of the Sri Lankan export sector, categorized by sectors and markets, to the visiting Israeli representatives.

The representatives from Israel highlighted potential collaboration opportunities in sectors such as Health-tech, Biotech, and Agro-tech. Israel’s advanced scientific and technological capabilities make these sectors particularly promising for joint ventures and partnerships between the two countries.

The meeting concluded on a positive note, with both sides expressing their commitment to further explore and harness the immense potential for trade and economic cooperation between Israel and Sri Lanka. The outcomes of this discussion are expected to lay the foundation for future collaborations and boost bilateral trade to the mutual benefit of both nations.