By: Staff Writer

September 03, Colombo (LNW): The Securities and Exchange Commission of Sri Lanka (SEC) has taken a significant step towards strengthening its market surveillance role by acquiring a world class state-of-the-art market surveillance system from NASDAQ, a leading global technology company.

This acquisition aligns with the SEC’s commitment to ensure a fair, transparent, and efficient securities market in Sri Lanka. The parties are continuing commercial discussions to deepen their relationship.

SEC and NASDAQ signed the contractual agreement on 30 August 2024 in Colombo. The ceremony was attended by key officials from the SEC, including SEC Chairman Faizal Salieh, Commission Member Anton Godfrey, Director General Chinthaka Mendis, Deputy Director General Tushara Jayaratne, and Director – Legal Rishdha Zarook and Chief Digital Officer Madura Wanigasekara, and representatives from NASDAQ.

The system will undergo extensive testing and is expected to be fully operational within five months of signing the agreement.

Commenting on this landmark decision, SEC Chairman Faizal Salieh said: “The acquisition of this market surveillance system is a major milestone in our regulatory journey.

As Sri Lanka’s capital market evolves, it is fundamentally necessary to keep our regulatory market oversight mechanisms abreast with global standards and expectations.

Our partnership with NASDAQ equips us with world-class technology to monitor the market, enforce regulations in a timely manner, and foster a more transparent and investor-friendly market environment.”

NASDAQ’s market surveillance platform is world renowned for its advanced capabilities in market monitoring and regulatory compliance and will provide the SEC with cutting-edge technology to detect and respond to market anomalies, potential fraud, and other forms of market manipulation and abuse.

The system’s sophisticated algorithms, customisable alert and report generation capabilities, visualisation tools and real-time data analytics with market replays, will enable the SEC to proactively safeguard market participants and enhance the overall stability and credibility of Sri Lanka’s capital market.

 The system is scalable to support increasing market activity, capable of processing large volumes of data, and can integrate AI and machine learning to enhance its detection capabilities.

By adopting this platform, the SEC joins an elite group of market regulators who have prioritised the use of cutting-edge technology to maintain market fairness and transparency.

By: Staff Writer

September 03, Colombo (LNW): The economic crisis in Sri Lanka was exacerbated by weak government revenue, a problem that has been worsening over the past three decades, the finance ministry elaborated.

A significant factor was the ill-timed tax cuts in late 2019, which led to the country’s credit rating downgrades and, eventually, a sovereign debt default.

By 2021, government revenue had declined to 8.3% of GDP, while public expenditure remained high at 20% of GDP, ministry sources said .

This imbalance forced the government to finance its budget deficit, which stood at 11.7% of GDP, through inflationary monetary financing (money printing).

Consequently, urgent revenue measures were needed to phase out this practice and control inflation, which peaked at 70% in 2022 and severely impacted the poor, it added. .

The government’s macroeconomic reform program included fiscal consolidation as a key component, aiming for a primary budget surplus of 2.3% of GDP by 2025.

To achieve this, government revenue needs to increase to 15.1% of GDP by 2025. In Sri Lanka, where natural resources are limited, taxes are the primary source of government revenue, contributing about 80%.

Contrary to popular belief, revenue from exports, tourism, and other external inflows goes to private enterprises, not the government. Non-tax revenue from state enterprises is minimal due to their consistent losses, making taxes crucial for government revenue.

Improving tax compliance and administration is essential but takes time to show results. Although such measures were implemented alongside tax rate increases, the immediate revenue increase was primarily due to higher tax rates.

The IMF does not consider gains from better tax administration as a reliable short-term revenue measure.

With urgent cash flow needs, such as mandatory payments on interest, salaries, and welfare, the government had to rely on specific revenue measures rather than hope for gains from reducing tax leakages.

Several tax administration and compliance improvements were implemented, including digitizing tax processes, mandatory information sharing between government agencies, and upgrading the Inland Revenue Department’s management information system.

These measures led to a 128% growth in active tax files in 2023 compared to 2022. As the tax base expands, the government hopes to gradually reduce tax rates without compromising revenue targets.

The government has also taken steps to curtail public expenditure, focusing on maintaining fiscal discipline and transparency.

Measures include restricting new hires, overtime payments, fuel consumption, and foreign travel. Digitization initiatives, such as the Integrated Treasury Management Information System (ITMIS), and zero-based budgeting for the largest ministries, aim to eliminate waste and improve efficiency. 

Despite these efforts, the non-discretionary nature of most public expenditure, coupled with the need for increased spending in priority areas, means that the government must continue to expand its revenue base from the record low of 8.3% of GDP to at least 15% of GDP to support long-term sustainable economic growth.

September 03, Colombo (LNW): The Sri Lankan Rupee (LKR) happens to be steady against the US Dollar today (03) in comparison to yesterday, as per the official exchange rates released by the Central Bank of Sri Lanka (CBSL).

Accordingly, the buying price of the US Dollar has dropped to Rs. 294.65 from Rs. 294.78, and the selling price to Rs. 303.83 from Rs. 303.84.

September 03, Colombo (LNW): As the global economy evolves, the demand for energy continues to rise, pushing countries towards more sustainable resource use.

The era of oil and coal-fired power generation is drawing to a close, making way for cleaner energy sources. Sri Lanka, in line with this global shift, is actively working to diversify its energy mix.

In a significant move towards this transition, Sri Lanka has recently completed the first phase of the Sobadhanavi Combined Cycle Power Plant.

This state-of-the-art facility, which is both LNG (Liquefied Natural Gas) ready and Hydrogen capable, marks a major milestone in the country’s journey towards clean energy.

Currently, the plant contributes a dependable capacity of 220 megawatts to the national grid, with plans to increase this output to 350 megawatts upon completion of the next phase by early next year.

Chief Operations Officer of Lakdhanavi Limited, Kithsiri Egodawatta, outlined the ambitious plans for the plant’s expansion.

“We have successfully installed a power generation capacity of 220 megawatts. The next phase will see the installation of a Steam Turbine and a Heat Recovery Steam Generator. This technology will allow us to harness exhaust heat from the gas turbine to generate additional energy, enabling us to produce another 130 megawatts. By February or March next year, we aim to fully realise the plant’s potential, bringing total power generation to 350 megawatts.”

Currently operating on diesel, the Sobadhanavi plant incorporates cutting-edge technology to enhance efficiency, resulting in lower generation costs compared to other diesel-based plants.

Importantly, the facility is poised to transition to LNG power generation as soon as LNG becomes available in the country. The cost benefits of this switch are substantial, with LNG power generation being only one-third the cost of diesel.

Egodawatta also discussed Sri Lanka’s current energy mix, noting that the country relies on renewable sources, primarily hydropower, for 50-55 per cent of its energy needs. The remainder is supplied by thermal power, with coal being the dominant source, supplemented by diesel and furnace oil.

He emphasised that LNG serves as a transitional fuel in the shift from thermal power to cleaner energy options, with hydrogen as the next frontier. “Our equipment is already capable of using hydrogen to some extent, which makes it even more environmentally friendly. When hydrogen is burned, it produces only water, making it an ideal clean energy source.”

The strategic location of the Sobadhanavi plant in the Western Province, where energy consumption is highest, is expected to stabilise the national grid and reduce transmission costs.

“By positioning the plant close to the area of highest demand, we significantly lower transmission expenses, which is crucial for improving the overall efficiency of our power system,” Egodawatta explained.

This development is a key step in Sri Lanka’s efforts to modernise its energy infrastructure, reduce transmission losses, and ultimately lower costs.