Economy

Sri Lanka mulls import permits after Mercantilist gold tax kills export competitiveness

Monday April 23, 2018 3:07 pm

ECONOMYNEXT – Sri Lanka’s jewellery industry is calling for tax-free import quotas for gold, a report said, after authorities slapped a 15 percent Mercantilist tax hitting the exporters, as the rupee fell to a new historic low, hitting exports and sales to tourists.

Sri Lanka’s Daily Mirror newspaper quoted M L Gammanpila, a Director General of the state National Gem and Jewellery Authority that is in talks with the Finance Ministry to start an import quota system.

Gammanpila said the agency was assessing the gold requirement for exports.

The newspaper said jewellers had complained that Sri Lanka’s jewellery was now about 15 t 20 percent more expensive than competing countries like Thailand and it will hurt exports and also sales to tourists.

The impact of import duties hitting exports is called ‘effective protection’.

Ironically Finance Minister Managala Samaraweera in one of his earliest speeches after taking over, said he will bring down effective protection.

A jewellery industry representative who was not named said, sales to tourists may be amount to as much as 100 million dollars a year.

The Finance Ministry slapped a 15 percent tax on gold, in a knee-jerk Mercantilist reaction after official gold imports soared.

The tax came as the rupee fell to a historic low after central bank printed tens of billions of rupees to cut rates on top of a seasonal demand for extra cash.

It is also following a strategy of targeting a real effective exchange rate index, resulting steady depreciation of the rupee over 2017 and 2018, on top of a currency collapse in 2015/2016.

Sri Lanka’s gold inflows are suspected to be smuggled to India for a profit.

Analysts say the latest ‘own goal’ by the finance ministry against the jewellery industry underlines the need to reform the central bank or abolish it altogether in favour of a currency board.

Without reforming the central bank and its trigger happy domestic operations department, no free trade regime will succeed, analyst have pointed out. (Sri Lanka central bank has to be restrained for free trade to succeed: Bellwether)

The central bank and its trigger happy domestic operations department stands against Sri Lanka’s ambitions to be a hub of the Indian Ocean, analysts have said.

Sri Lanka’s claims to be a financial hub of the Indian Ocean is also nonsense with a money printing, depreciating central bank operating a downward crawling peg generating balance of payments crises every few years, analysts have said.

Gold trading is a fairly large sector in regional financial centres, ranging from Dubai to Hong Kong. India is believed to the world’s largest consumer of gold.

India had slapped a Mercantilist 10 percent tax as the rupee in 2013 as the rupee collapsed from 54 to the US dollar in January 2013 to 63 in August in a Mercantilist bid to ‘narrow the current account deficit’, triggering a smuggling epidemic.

The jewellery industry in Sri Lanka also warned that ‘illegal practices’ may happen, an oblique warning that gold will now be smuggled into Sri Lanka.

Mercantilists believe that current account or trade account deficits trigger currency falls rather than money printing.

Sri Lanka’s central bank has had a much worse monetary policy than India. At the time of independence from British rule the Sri Lanka (the Ceylon) and Indian rupees were at parity.

At the time the Indian rupee was the ‘dollar of Asia’ and was used in countries as far as the Middle East, which were linked to the British Empire, while most of South Asia was also using rupees or were hard pegged.

But after the Reserve Bank of India was nationalised and money was printed to finance Nehru’s 5-year plans, the inflating Indian rupee was dumped by many countries.

Sri Lanka’s rupee was at 4.77 to the US dollar, when a currency board which kept the rate fixed, was abolished creating a money printing central bank in 1951 that gave a license to politicians to deficit spend.

Soon after its creation draconian exchange controls were imposed and not just gold, but all imports were progressively restricted. A permit raj also proliferated in both countries.

Sri Lanka’s rupee had since been debauched to 156 to the US dollar with three civil wars. The Indian rupee is now down to about 55 to the US dollar. (Colombo/Apr23/2018)

Bonds & Forex

Sri Lanka rupee closes at 332.53/59 to US dollar spot, bond yields edge up

Monday November 9, 2026 5:05 pm

ECONOMYNEXT – Sri Lanka’s rupee closed at 332.53/59 to the US dollar spot on Monday, from 332.55/60 the previous day, while bond yields closed higher, dealers said.

A bond maturing on 15.09.2029 closed at 190/98 percent, up from 10.85/95 percent.

A bond maturing on 01.08.2030 closed at 11.07/12 percent, up from 11.05/10 percent.

A bond maturing on 01.02.2031 closed at 11.30/40 percent, up from 11.10/15 percent.

A bond maturing on 15.12.2032 closed at 11.65/70 percent, up from 11.55/65 percent.

A bond maturing on 01.11.2033 closed at 11.95/12.00 percent, up from 11.90/95 percent.

A bond maturing on 15.10.2034 closed at 12.10/15 percent, up from 12.05/12 percent.

A bond maturing on 15.08.2036 closed at 12.40/50 percent, up from 12.30/40 percent. (Colombo/Nov9/2026)

Markets

Sri Lanka stocks close up 1.37-pct, banks lead turnover

Monday November 9, 2026 3:29 pm

ECONOMYNEXT – Sri Lanka’s Colombo Stock Exchange closed up on Monday, CSE data showed, with the benchmark All Share Price Index moving up 1.37 percent.

The ASPI was up 291.72 points at 21,531.37, while the more liquid S&P SL20 was up 1.67 percent, or 100.96 points, at 6,146.34.

Positive contributors to the ASPI were Commercial Bank of Ceylon (up 2.86 percent at 216.00 rupees), Hatton National Bank (up 1.52 percent at 399.75 rupees), Asiri Hospital Holdings (up 12.86 percent at 31.60 rupees), Tokyo Cement Company (up 5.22 percent at 84.70 rupees), and Access Engineering (up 3.93 percent at 81.90 rupees).

Carson Cumberbatch (down 4.24 percent at 712.00 rupees), Richard Pieris and Company (down 2.43 percent at 28.10 rupees), LOLC Holdings (down 0.62 percent at 400.00 rupees), Renuka Holdings (down 2.63 percent at 37.00 rupees), and Chevron Lubricants Lanka (down 0.61 percent at 204.25 rupees) were top negative contributors.

Market turnover was 3.33 billion rupees. The S&P/CSE Banks Industry Group led turnover with 667.76 million rupees.

The session saw heavy crossings, according to Raynal Wickremeratne, Head of Research and Strategy at NDB Securities. Significant crossings included Keells (23 million rupees), Distilleries Company (27.7 million rupees), Sunshine Holdings (30.6 million rupees), Commercial Bank (32.4 million rupees), Ceylon Tobacco Company (35.6 million rupees), Hatton National Bank (39.5 million rupees), Prime Lands (40.5 million rupees), and HAS Holdings (41.5 million rupees).

In corporate news, Hayleys Retail Holdings Ltd announced it has partnered with supply chain software provider Blue Yonder to build and scale an AI-native grocery supermarket chain across Sri Lanka. (Colombo/Nov09/2026)

Information Technology

Sri Lanka’s Hayleys Retail to launch supermarket chain with Blue Yonder

Monday November 9, 2026 3:12 pm

ECONOMYNEXT — Hayleys Retail Holdings Ltd has selected supply chain software provider Blue Yonder to build its grocery retail operations from the ground up, the two companies said in a joint statement.

Hayleys Retail, a member of Sri Lanka’s diversified conglomerate Hayleys Group, plans to open several stores in the near future to serve consumers across the country. The agreement marks Blue Yonder’s first retail customer in Sri Lanka.

“Our entry into supermarket retail is about bringing that same commitment to quality and reliability closer to everyday Sri Lankan consumers,” Mohan Pandithage, Chairman and Chief Executive of Hayleys PLC said.

“With Blue Yonder, our teams will have AI-driven insight to deliver a seamless, consistent shopping experience across every store,” he said.

Hayleys, which accounts for approximately 5 percent of Sri Lanka’s export income and operates across 17 business sectors, is entering the large-scale supermarket space by drawing on its group strengths in manufacturing, logistics, and services.

The company selected Blue Yonder to connect its data across merchandising and shelf space, deploy artificial intelligence agents to catch operational issues early, and scale its business into a national network without changing platforms.

The rollout will begin with merchandise operations to manage suppliers, items, costs, and pricing, followed by machine learning capabilities to forecast demand and balance store inventory during seasonal peaks.

“Hayleys Retail is choosing one where AI is the foundation rather than an add-on—connected data and agentic AI built into core merchandising operations, and planning that learns as the business grows,” Antonio Boccalandro, President, APAC at Blue Yonder said.

The retailer plans to use the platform to automate routine store tasks and adjust inventory according to real-time sales and local market trends as its store footprint grows. (Colombo/Nov09/2026)

Stocks & Companies

Sri Lanka’s Citrus Leisure extends Lotus Tower management pact

Monday November 9, 2026 1:16 pm

ECONOMYNEXT – Sri Lanka listed hospitality firm Citrus Leisure said it has extended an agreement to manage consumer-facing and entertainment spaces at the Colombo Lotus Tower, which includes revolving restaurant Blue Orbit, until June next year.

The initial agreement signed between Citrus Leisure and Colombo Lotus Tower Management Company (Private) Limited (CLTMC) is due to expire on December 11.

“The Board of Directors of CLTMC at meeting held on 2nd November 2026 has resolved to extend the term of the Management Agreement and continue the existing Management Agreement until 30th June 2027, to which the company has given its concurrence,” the company said in a market filing.

Citrus Leisure Plc opened its revolving restaurant at the Lotus Tower in December 2023.

The company signed a 3-year agreement with CLTMC in May 2023 to provide services in the management of (l) the banquet hall 1 on the 25th floor, (2) the banquet hall 2 on the 26th floor, (3) the revolving restaurant on the 27th floor, (4) the 6 suites situated on the 28th floor and the kitchen in the basement floor of the Colombo Lotus Tower.

The 350-meter or 1,150-feet tower, the tallest in South Asia, was built at a cost 104.3 million US dollars with 80 percent of the money borrowed from Exim Bank of China.

Located in the commercial heart of Colombo, the tower has been called a symbolic landmark of Sri Lanka as well as a colossal white elephant and has been mired in controversy for years. (Colombo/Nov9/2026)

Markets

CIC Holdings Sept quarter net profit rises 20-pct to Rs1.7bn

Monday November 9, 2026 11:50 am

ECONOMYNEXT — Sri Lanka conglomerate CIC Holdings recorded a net profit of 1.66 billion rupees for the quarter ended September 30, rising 20.3 percent from 1.38 billion rupees in the same quarter last year, interim accounts showed.

The group posted basic earnings per share of 0.87 rupees for the September quarter, up from 0.73 rupees a year earlier.

Quarterly revenue grew 3.4 percent to 20.89 billion rupees from 20.20 billion rupees, supported by broad-based growth across industrial solutions, livestock, and healthcare segments, which counterbalanced relative demand moderation in agricultural inputs.

Cost of sales rose 5.3 percent to 15.20 billion rupees, outpacing revenue growth and causing gross profit to contract marginally by 1.2 percent to 5.68 billion rupees.

Results from operating activities dropped 7.3 percent to 2.66 billion rupees from 2.87 billion rupees, impacted by higher operating overheads.

Selling expenses expanded 6.8 percent to 2.15 billion rupees, and general and administrative expenses climbed 5.8 percent to 1.07 billion rupees, while other operating income dropped 29.6 percent to 117.40 million rupees.

However, operating profits were cushioned by an impairment reversal on trade receivables of 85.83 million rupees, turning around from an impairment provision of 23.38 million rupees in the corresponding quarter last year.

Net finance costs climbed 35.4 percent to 712.25 million rupees from 526.01 million rupees.

The increase was driven by a 30.8 percent rise in finance expenses to 771.46 million rupees, primarily reflecting higher interest expenses on loans to finance elevated working capital and inventory requirements.

The quarter’s bottom line was strongly bolstered by CIC’s equity-accounted investment in John Keells Holdings PLC (JKH).

Share of profit from equity-accounted investees surged more than fourfold to 590.50 million rupees from 257.87 million rupees, driven by JKH’s strong profit expansion during the period.

The group also recognized a gain on bargain purchase of 55.59 million rupees during the quarter resulting from additional share purchases in JKH where the proportionate net asset value exceeded acquisition cost, compared to no such gain a year earlier.

With associate income gains offsetting operating margin contraction and higher borrowing costs, group pre-tax profit held virtually flat at 2.59 billion rupees, down 0.11 percent.

Income tax expense fell 29.4 percent to 606.24 million rupees from 858.71 million rupees, driving total group profit for the period up 14.1 percent to 1.98 billion rupees.

Total group assets stood at 108.58 billion rupees as of September 30, up from 99.75 billion rupees at the end of March 2026.

Group net asset value per share increased to 25.52 rupees from 22.10 rupees a year earlier.

CIC Holdings’ ordinary voting shares closed at 27.80 rupees at the end of September.(Colombo/Nov09/2026)

Markets

Sri Lanka stocks trend up; ASPI gains 0.78-pct

Monday November 9, 2026 10:40 am

ECONOMYNEXT – Sri Lanka’s Colombo Stock Exchange was trading higher on Monday, CSE data showed, with the benchmark All Share Price Index moving up 0.78 percent.

The ASPI was up 165.73 points at 21,405.38, while the more liquid S&P SL20 was up 0.61 percent, or 37.04 points, at 6,082.42.

Positive contributors to the ASPI were Commercial Bank (up 1.55 percent at 213.25 rupees), Ceylon Cold Stores (up 2.61 percent at 128.00 rupees), Asiri Hospital Holdings (up 10.00 percent at 30.80 rupees), Hemas Holdings (up 1.27 percent at 32.00 rupees), and Ambeon Holdings (up 6.02 percent at 37.00 rupees).

Namunukula Plantations (down 3.92 percent at 63.70 rupees), LOLC Holdings (down 0.62 percent at 400.00 rupees), and Chevron Lubricants Lanka (down 0.12 percent at 205.25 rupees) were top negative contributors.

Market turnover was 428.31 million rupees. Capital goods led turnover with 82.53 million rupees. (Colombo/Nov09/2026)