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Friday November 13th, 2026

Sri Lanka Insurance ‘CCC+’ rating confirmed, new Grand Hyatt investment to weaken RBC

ECONOMYNEXT – Fitch Ratings has confirmed a ‘CCC+’ rating of state-run Sri Lanka Insurance Corporation saying proposed ‘super gains tax’ will reduce profits and a 6 billion rupee investment in Grand Hyatt will reduce risk based capital ratios.

Sri Lanka Insurance had strong risk based capital (RBC) ratios of of 434 percent for life and 241 percent for non-life which were above industry average and regulatory requirements.

“Fitch believes SLIC’s additional investment of LKR6 billion in the Grand Hyatt project, as directed by the Sri Lankan government, will weaken the RBC ratios,” the rating agency said.

“…[H]owever, the impact will be manageable because of the insurer’s large total available capital base.”

SLIC had invested two billion rupees out of the six by May 2021.

The Grand Hyatt project was one of several private firms expropriated by the government in 2011, undermining Sri Lanka’s investment framework.

Fitch Affirms Sri Lanka Insurance Corporation’s IFS Ratings at ‘CCC+’/’AA(lka)’

Fitch Ratings – Colombo/Sydney – 24 Nov 2021: Fitch Ratings has affirmed the Insurer Financial Strength (IFS) Rating of Sri Lanka Insurance Corporation Limited (SLIC) at ‘CCC+’. Fitch typically does not apply Outlooks to ratings in the ‘CCC’ category or below.

The agency has simultaneously affirmed SLIC’s National IFS Rating at ‘AA(lka)’ with a Stable Outlook.

KEY RATING DRIVERS

SLIC’s ratings reflect its ‘Favourable’ business profile and its high exposure to sovereign-related investments, equity securities and non-core subsidiaries. The ratings also factor in the insurer’s capital position and financial performance that are better than that of the domestic insurance industry.

Fitch assesses SLIC’s business profile as ‘Favourable’ compared with other Sri Lankan insurance companies because of the leading business franchise, diversified participation and stable business lines across life and non-life insurance sectors, and the large domestic operating scale. SLIC was Sri Lanka’s second-largest life and non-life insurer, based on gross premiums in 1H21 and the largest in terms of total assets. In light of the market rankings, Fitch scores SLIC’s business profile at ‘b-‘ under our credit-factor scoring guidelines on the international rating scale.

SLIC’s high exposure to sovereign and sovereign-related investments caps its investment and asset risk score on the international rating scale at ‘cc’ under Fitch’s credit-factor scoring guidelines. The insurer’s Fitch-calculated risky assets ratio on the international rating scale was 529% in 2020 (2019: 275%), an increase due mainly to the downgrade of the Sri Lankan sovereign rating to ‘CCC’ from ‘B-‘ on 27 November 2020.

SLIC’s regulatory risk-based capital (RBC) ratios of 434% for life and 241% for non-life at end-1H21 were well above the industry average and the 120% regulatory minimum.

Fitch believes SLIC’s additional investment of LKR6 billion in the Grand Hyatt project, as directed by the Sri Lankan government, will weaken the RBC ratios; however, the impact will be manageable because of the insurer’s large total available capital base. The insurer had already invested LKR2 billion out of the total additional requirement of LKR6 billion in May 2021.

Fitch’s Prism Model score dropped one level to ‘Somewhat Weak’ in 2020, from ‘Adequate’ in 2019, due mainly to the increased investment risks on the international rating scale as a result of the downgrade of the sovereign rating. Fitch views SLIC’s Prism Model score as commensurate with the international IFS Rating.

Fitch expects the government’s proposal on 12 November 2021 to introduce a 25% one-off tax on companies with taxable income over LKR2 billion for the fiscal year ended 31 March 2021, if implemented, may put pressure on near-term earnings and limit capital accumulation.

In addition, the government’s proposed introduction in 2022 of the 2.5% social security contribution on annual turnover exceeding LKR120 million, may affect earnings.

SLIC’s underwriting profitability, however, is supported by its scale advantages and prudent underwriting practices. The insurer has consistently maintained its Fitch-calculated non-life
combined ratio below 100% for the past six years. The ratio improved to 88% in 2020 (2019: 95%) before normalising to 98% in 1H21. The improvement in 2020 was due mainly to reduced non-life insurance claims following Covid-19 lockdowns. SLIC’s three-year average return on equity of 10% was satisfactory.

RATING SENSITIVITIES

Factors that could, individually or collectively, lead to negative rating action/downgrade:

IFS Rating

– A further increase in SLIC’s investment and asset risks on a sustained basis;

– Significant weakening in SLIC’s business profile, for instance, due to a weaker franchise, operating scale or business risk profile;

– Deterioration in the Fitch Prism Model score to well below ‘Somewhat Weak’ for a sustained period;

– Failure to maintain underwriting profitability for a sustained period.
National IFS Rating

– Significant weakening in SLIC’s business profile, for instance, due to a weaker franchise, operating scale or business risk profile;

– Deterioration in the RBC ratio below 350% for life and 200% for non-life for a sustained period;

– Deterioration in the non-life combined ratio well above 100% for a sustained period.

Factors that could, individually or collectively, lead to positive rating action/upgrade:

IFS Rating

– Significant reduction in SLIC’s investment and asset risks on a sustained basis;

– Sustained maintenance of SLIC’s ‘Favourable’ business profile;

– Maintenance of the Fitch Prism Model score well into the ‘Somewhat Weak’ level on a sustained basis.
National IFS Rating

– Significant reduction in SLIC’s investment and asset risks on a sustained basis while maintaining its ‘Favourable’ business profile and capitalisation at current levels.

Sri Lanka stocks close down 0.60-pct, dragged by HNB and LOLC

ECONOMYNEXT – Sri Lanka’s Colombo Stock Exchange closed down on Friday, CSE data showed, with the benchmark All Share Price Index moving down 0.60 percent.

The ASPI was down 133.22 points at 22,024.18, while the more liquid S&P SL20 was down 1.06 percent, or 67.55 points, at 6,298.02.

The ASPI ended the week up 784.53 points from last Friday.

Positive contributors to the ASPI were Dialog Axiata (up 0.40 percent at 50.20 rupees), Distilleries Company of Sri Lanka (up 0.52 percent at 58.30 rupees), Aitken Spence (up 3.60 percent at 151.00 rupees), Ceylon Tobacco Company (up 1.05 percent at 1,828.50 rupees), and LOLC Finance (up 1.96 percent at 5.20 rupees).

Hatton National Bank (down 1.88 percent at 403.75 rupees), Richard Pieris and Company (down 6.21 percent at 27.20 rupees), LOLC Holdings (down 2.17 percent at 405.00 rupees), Sampath Bank (down 1.91 percent at 154.00 rupees), and Singer (Sri Lanka) (down 2.40 percent at 77.30 rupees) were top negative contributors.

Market turnover was 3.23 billion rupees. Capital goods led turnover with 869.21 million rupees. (Colombo/Nov13/2026)

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Sri Lanka MP slams budget speech for omitting Tamil national question

ECONOMYNEXT – A Sri Lanka legislator has voiced strong disappointment that the President’s budget speech failed to make a single mention of the Tamil national question.

“It is very unfortunate that in His Excellency the President’s speech, there has not been a single word mentioned about the Tamil national question. Not a single word,” Shanakiyan Rasamanickam said.

“A budget speech generally, is a policy direction of the government for the next year. The budget speech is not only a statement of the country’s fiscal position or the economy’s position. It is the country’s, the government’s, plan, or what the government plans to do the following year. That’s a policy statement.”

Former presidents would at least mention the Tamil question even if it was not resolved, he said.

Former President Ranil Wickremesinghe in his speech, in his policy statement, he would mention: “The Tamil national question must be resolved,” Rasamanickam said.

Former Presidents Maithripala Sirisena and Gotabaya Rajapaksa also mentioned that the national ethnic question must be resolved, he added.

“Every President, every country’s Head of State, in their policy statements, have acknowledged the fact that there is an unresolved national issue, the Tamil national question, that it needs to be resolved. Various governments have proposed various mechanisms; none of them have succeeded, but at least it was mentioned.”

This year’s budget made allocations for the Office of Missing Persons, and the Office of Reparations.

“But the domestic mechanism is a mechanism that the victim community has rejected. So you all are allocating money to a mechanism where the victim community is not going to be part of.”

Last year’s budget 1 billion was allocated to be spent on the Trincomalee and Jaffna airports.

“Where was that 1 billion for the Trincomalee and Jaffna airports spent last year?”

“The trajectory of this government, Honourable Deputy Speaker, is worrying to me. It’s really worrying to me. Because if the objective is to say that there is no Tamil national question, if the objective is to say that you all have resolved any ethnic issue that this country faced, then Honourable Deputy Speaker, then I think the Tamil people will teach this government a very, very, very harsh lesson in the future.” (Colombo/Nov13/2026)

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Sri Lanka sells extra Rs6.5bn Treasury bills after auction

ECONOMYNEXT – Sri Lanka has sold 6,500 million rupees of treasury bills offered on tap at an average rate of 9.95 percent, the public debt management office said, bringing the total of bills sold in the week to 85.562 billion rupees.

The issue offered 90 billion.

Total market subscription was 6.5 billion rupees.

The debt office sold a 12-month bill at 9.95 percent.

On Wednesday (11) the debt office raised 79 billion rupees of 3, 6 and 12 month bills after offering 90 billion.

Read more
Sri Lanka Treasury bill yields hold broadly steady, less bills sold

The settlement date is November 13. (Colombo/Nov13/2026)

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Access Engineering Sept quarter group net profit surges 200-pct to Rs4.75bn

ECONOMYNEXT — Sri Lanka’s Access Engineering PLC recorded a group net profit attributable to equity holders of Rs. 4.75 billion for the quarter ended September 30, surging 200 percent from Rs. 1.58 billion a year earlier, interim accounts showed.

Basic earnings per share rose to Rs. 4.08 for the September quarter, up from Rs. 1.58 previously.

Quarterly group revenue expanded 36 percent to Rs. 20.39 billion from Rs. 14.94 billion, underpinned by condominium property handovers — reflected in inventories dropping Rs. 7.69 billion since March to Rs. 35.71 billion — alongside strong automobile sales and steady civil engineering execution.

Cost of sales rose at a slower 27 percent to Rs. 14.34 billion, lifting gross profit by 64 percent to Rs. 6.05 billion and expanding gross margins to 29.7 percent from 24.7 percent.

Other income jumped 144 percent to Rs. 259.9 million, while administrative expenses rose 75 percent to Rs. 1.14 billion, leaving operating profit up 64 percent at Rs. 5.16 billion.

However, finance costs more than doubled, rising 107 percent to Rs. 1.18 billion on elevated group borrowings of Rs. 43.74 billion, partly offset by finance income climbing 302 percent to Rs. 42.2 million.

Share of results from equity-accounted investees rose 122 percent to Rs. 26.7 million, pushing pre-tax profit up 56 percent to Rs. 4.05 billion.

Income tax swung to a net reversal of Rs. 186.6 million from an expense of Rs. 804.1 million, boosted by deferred tax assets on unrelieved losses from a 100 percent enhanced capital allowance claimed by 60 percent-owned radiopharmaceutical subsidiary Access Medical Tracers (Private) Limited.

Total period profit rose 136 percent to Rs. 4.24 billion, with non-controlling interest declining 24 percent to Rs. 164.9 million following last year’s buyout of minority shareholders in Harbour Village (Private) Limited.

No separate exchange gain or loss was itemized in quarterly earnings, though foreign currency translation via associates recorded a Rs. 17.4 million loss in other comprehensive income, alongside USD 16.6 million in corporate guarantees.

Notes also flagged an expected Rs. 1.45 billion recovery from the terminated South Asia Commercial and Logistics Hub project, a Rs. 225 million post-quarter legal settlement already provided for, and a Supreme Court appeal over a 2011/12 PAYE tax ruling.

Group assets stood at Rs. 132.4 billion as of September 30, with net asset value per share at Rs. 46.70, as the Employees’ Provident Fund raised its stake to 5.69 percent.

Access Engineering shares closed at 80.00 rupees at the end of September and are currently trading around 85.80 rupees. (Colombo/Nov13/2026)

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Sri Lanka private sector says timely implementation of Budget 2027 key

ECONOMYNEXT – Private sector body, The Ceylon Chamber of Commerce, said it was encouraged by the broad direction of Budget 2027, noting that it reinforces Sri Lanka’s commitment to economic transformation while maintaining policy continuity, macroeconomic stability, and fiscal discipline.

“This continuity is particularly important as the country seeks to transition from economic stabilisation to a more durable, investment-led growth trajectory.”

The chamber also noted several areas where the Budget could have placed greater emphasis to strengthen the country’s growth prospects.

“In particular, there is a need for a stronger focus on attracting Foreign Direct Investment (FDI), accelerating factor market reforms, particularly in land and labour, and fast-tracking public procurement reforms to improve the efficiency and speed of project implementation.

“More targeted and actionable proposals could have been introduced to unlock the potential of sectors with significant growth opportunities, including tourism, agriculture, IT/BPO and logistics.”

The chamber said the budget contains positive measures aimed at enhancing competitiveness, and external sector resilience, while presenting opportunities for focus on sectors that can accelerate growth.

“A number of the key structural reforms identified in last year’s Budget have been carried forward and strengthened, providing greater certainty and predictability to businesses and investors.

“These include the continued implementation of the Trade National Single Window (TNSW), the phased removal of para-tariffs, the rollout of the Digital ID framework, efforts to expand market access through new Free Trade Agreements (FTAs), the strengthening of one-stop-shop investment facilitation mechanisms, progress on Customs reforms, the expansion of Bandaranaike International Airport (BIA), enhanced financing support for SMEs, and reforms relating to the management of State-Owned Enterprises.”

The CCC said that more than 20 proposals submitted by it have been reflected in Budget 2027.

These include measures to strengthen investor facilitation through the establishment of a professionally managed investment promotion agency; continued efforts to improve trade facilitation and export competitiveness; the Government’s consideration of a successor programme with the International Monetary Fund (IMF); accelerated progress on key legislative reforms; the expansion of digital government services; and the promotion of cashless payments and broader digital adoption. The Budget has also captured several priorities relating to energy security, including the accelerated deployment of Battery Energy Storage Systems (BESS) and investments in fuel storage infrastructure, initiatives to optimize underutilized agricultural land, measures to support the expansion of the digital economy and the IT/BPO sector, and tax reforms to support exporters, including the acceptance of newly VAT-registered exporters as eligible exporters.

“The inclusion of these priorities reflects the value of sustained public-private dialogue and demonstrates increasing alignment between national policy objectives and the needs of a competitive, export-oriented economy.

“The priority now must be effective and timely implementation to translate policy commitments into investment, competitiveness, exports and sustainable growth.” (Colombo/Nov13/2026)

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Sri Lanka stocks trend lower day after budget reading

ECONOMYNEXT – Sri Lanka’s Colombo Stock Exchange was trending lower on Friday, CSE data showed, with the benchmark All Share Price Index moving down 0.66 percent.

The ASPI was down 146.78 points at 22,011, while the more liquid S&P SL20 was down 0.94 percent, or 59.99 points, at 6,306.

Positive contributors to the ASPI were Access Engineering (up 1.30 percent at 85.80 rupees), LAUGFS Gas (up 3.31 percent at 49.90 rupees), Ceylon Tobacco Company (up 1.13 percent at 1,830 rupees), Ceylon Cold Stores (up 0.80 percent at 126 rupees), and Namunukula Plantations (up 1.79 percent at 68.10 rupees).

LOLC Holdings (down 1.03 percent at 409.75 rupees), Hatton National Bank (down 0.61 percent at 409 rupees), Sunshine Holdings (down 3.81 percent at 30.30 rupees), and Sampath Bank (down 1.91 percent at 154 rupees) were top negative contributors.

Market turnover was 1.55 billion rupees. Capital goods led turnover with 459.57 million rupees. (Colombo/Nov13/2026)

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