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Thursday July 18th, 2024

Coca Cola Sri Lanka returns to re-usable glass bottles in currency crisis

ECONOMYNEXT – Coca Cola Beverages Sri Lanka Ltd said it is putting a family sized glass bottle back in the market to encourage re-usable packaging and also make it easier on the purse as the country suffers the worst currency crises in the history of its intermediate regime central bank.

The ‘Big Buddy Pack’ branded 750 milliliter glass bottle is priced at 180 rupees, compared to 150 rupees for a 400lm PET bottle and 380 rupees for a 1.5 litre pack at supermarkets.

Whenever Sri Lanka’s central bank prints money to keep interest rates down operating a policy rate, collapses the currency and triggers high inflation destroying people’s real income, consumers move to smaller packs.

The so-called ‘sachet’ market was largely came into being during a period of high inflation in the 1980s as firms looked for ways for consumers to continue to access their favorite brands. The sachet market also tends to expand when the consequences of mistargeted rates hit consumers.

Sri Lanka’s rupee collapsed from 200 to 360 to the US dollar in 2022, in latest in serial currency crises since flexible (discretionary) inflation targeting with output gap targeting (stimulus) began, triggering monetary instability, critics say.

Mistarget interest rates are then compensated with depreciation (flexible exchange rate)

Annual inflation is now running at around 70 percent. Food prices which respond faster to money printing are up over 90 percent over a year.

“There is shrinkage in consumer spending and people are making choices,” Managing Director of Coca Cola (Sri Lanka and Maldives) Panjak Sinha said launching the product.

“It’s affordable in these trying times and is differentiated with a unique refillable glass bottle, paper labels and aluminum cap.

“The Big Buddy Bottle will allow consumers of Coca-Cola, especially the millennial generations who grew up enjoying Coke in glass bottles, to take a trip down memory lane and once again immerse in this unique glass bottle experience.”

Despite the latest bout of monetary instability, the firm has no plans to leave the country.

“There is a lot of resilience in the Sri Lankan market and consumers have a passion to live in the moment,” Sinha said.

“We are a solid market citizen in Sri Lanka and we will not be leaving and we will continue investing, because we are here to stay.”
The firm said it had invested 99 million US dollars in the country over a decade and has built distribution network with 80,000 plus outlets.

Coca-Cola entered Sri Lanka in 1961, with a Sri Lanka based, bottler, Pure Beverages Company Ltd, which was bought over by F&N. (Colombo/Oct21/2022)

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Sri Lanka to conduct threat assessments for presidential candidates

ECONOMYNEXT – Sri Lanka’s President Ranil Wickremesinghe has submitted a cabinet paper proposing security measures for presidential candidates and former presidents, following the recent attack on former US President Donald Trump during a campaign rally in the USA.

“This proposal suggests the appointment of a committee to conduct threat assessments and provide necessary security for Presidential candidates as well as former Presidents,” a statement from his media division said.

The committee will include the Secretary of the Ministry of Public Security as Chair, the Chief of Defence Staff, the Inspector General of Police, the Chief of National Intelligence, and the Senior Deputy Inspector General of Police/Elections.

A Deputy Inspector General of Police will be appointed to oversee all security arrangements.

The committee and the designated officer will work closely with the Election Commission to ensure seamless coordination of security arrangements, the PMD said.

After today, July 17, Sri Lanka’s Election Committee is empowered to announce a date for the presidential polls due to be held this year.

Minister of Foreign Affairs M U M Ali Sabry has said the election will be held on October 5 or 12.

Members of the Samagi Jana Balawegaya (SJB) have said that the government should be accountable for the security of Opposition Leader Sajith Premadasa, the SJB’s presidential candidate. (Colombo/Jul17/2024)

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Sri Lanka rupee closes flat at 303.80/304.00 to US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed almost flat at 303.80/304.00 to the US dollar on Wednesday, from 303.70/304.00 to the US dollar on Tuesday, dealers said, while bond yields were down.

A bond maturing on 15.12.2026 closed at 10.60/75 percent, down from 10.82/92 percent.

A bond maturing on 15.12.2027 closed at 11.60/38 percent, down from 11.65/75 percent.

A bond maturing on 01.05.2028 closed at 11.72/78 percent, down from 11.80/90 percent.

A bond maturing on 15.09.2029 closed at 12.05/10 percent, down from 12.05/20 percent. (Colombo/Jul17/2024)

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Sri Lanka stocks close down, John Keells, Hemas, Hayleys push turnover

ECONOMYNEXT – The Colombo Stock Exchange closed down on Wednesday, data on its site showed.

The broader All Share Index closed down 0.41 percent, or 48.44 points, at 11,830; while the more liquid S&P SL20 Index closed down 0.52 percent, or 17.91 points, at 3,456.

Turnover was 1.2 million. A big part of this (Rs597mn) came from John Keells Holdings Plc (down at 194.25).

“There was foreign buying interest on John Keells and Hemas,” Softlogic Stockbrokers said.

“We saw foreign interest in selective counters persist.”

Hemas Holdings Plc contributed Rs143mn to the turnover, and the share closed down at 81.10.

Hayleys Plc contributed Rs156mn to the turnover, and the share closed up at 101.50.

The three crossings made up 67 percent of the turnover.

The capital goods counters, with all the bluechips, was the leading sector contributing to the day’s turnover.

With the exception of Hayleys and a couple of other companies, the counter saw most stocks close down or flat.

Sentiment around the banking counters also remained negative.

“The volatility in investor sentiments persisted. There are a lot of spectators in the market over the last few weeks, despite some positive news coming in.”

Treasury bill and bond rates have also dropped.

The top contributors to the ASPI were Melstacorp Plc (up at 86.00), SMB Finance Plc (up at 0.70), and TeeJay Lanka Plc (up at 40.00).

There was a net foreign inflow of 392 million. (Colombo/Jul17/2024)

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