ECONOMYNEXT – Sri Lanka has sold 14,000 million rupees of treasury bills offered on tap at average rates of 9.22 percent, 9.60 percent and 9.91 percent, the public debt management office said, bringing the total of bills sold this week to 154 billion rupees.

Total market subscription was 88,289 million rupees.

The debt office sold a 3-month bill at 9.22 percent.

The debt office sold a 6-month bill at 9.60 percent.

The debt office sold a 12-month bill at 9.97 percent.

On Wednesday (19) the debt office raised 140 billion rupees of 3, 6 and 12 month bills.

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Sri Lanka Treasury bill yields continue drop, Rs140bn sold

All 3 bills were later offered on tap. (Colombo/Aug20/2026)

ECONOMYNEXT – Sri Lanka’s Colombo Stock Exchange closed down on Thursday trading, CSE data showed, with the benchmark All Share Price Index moving down 0.05 percent.

The ASPI was down 10.95 points at 21,405.62, while the more liquid S&P SL20 was down 0.02 percent, or 1.13 points, at 6,019.25.

Positive contributors to the ASPI were Aitken Spence (up 1.25 percent at 141.50 rupees), Dialog Axiata (up 0.43 percent at 46.70 rupees), Central Finance Company (up 0.89 percent at 227.75 rupees), and Commercial Development Company (up 2.71 percent at 37.90 rupees).

John Keells Holdings (down 0.50 percent at 19.80 rupees), Citizens Development Business Finance (down 3.35 percent at 37.50 rupees), and Digital Mobility Solutions Lanka (down 0.63 percent at 159.00 rupees) were top negative contributors.

Market turnover was 1.5 billion rupees. Banks led turnover with 490.6 million rupees.

Arcasia Investment & Trading and ATX Partners will launch their voluntary offer to acquire all ordinary shares of Industrial Asphalts (Ceylon) on August 21 at 40 cents a share.

The voluntary offer, which is scheduled to close on September 12, values the total share capital of 3.75 billion shares at approximately 1.5 billion rupees under full acceptance.

Industrial Asphalts (Ceylon) shares closed up 16.67 percent at 0.70 rupees. (Colombo/August20/2026)

ECONOMYNEXT – Sri Lanka’s Arcasia Investment & Trading and ATX Partners will launch their voluntary offer to acquire all ordinary shares of Industrial Asphalts (Ceylon) (IAC) on August 21, at 40 cents a share.

The voluntary offer, which is scheduled to close on September 12, values the total share capital of 3,749,411,250 shares at approximately 1.5 billion rupees (1,499,764,500) under full acceptance.

The offer follows agreements signed on July 7, where IAC director Ramanan Govindasamy agreed to sell his 48.03 percent stake (1.8 billion shares) and Srikumar Balasubramaniyam agreed to sell his 2.13 percent stake (80 million shares) to the joint offerors at 40 cents a share.

Upon Govindasamy and Balasubramaniyam tendering their combined 50.16 percent stake, the voluntary offer will automatically convert into a mandatory offer under the Company Take-overs and Mergers Code and become unconditional as to acceptances.

Under the equal purchase agreement, Arcasia and ATX Partners will each buy 50 percent of the total shares tendered under the offer.

The joint offerors stated in the offer document that they intend to continue IAC’s current business in its ordinary course as an investment holding company with interests in the bitumen space, with plans to expand its portfolio in the medium to long term. No major changes to operations or redeployment of fixed assets are anticipated.

IAC director Ramanan Govindasamy will resign from his employment with the company, with his resignation becoming effective ipso facto upon the transfer of his shares to the offerors. 

The employment of all other IAC staff is expected to continue under current management guidelines.

The acquisition is fully backed by local banking institutions. Seylan Bank PLC has confirmed that Arcasia has the necessary financial resources of 749.88 million rupees (LKR 749,882,250) to settle its half of the acquisition. DFCC Bank PLC has provided a parallel confirmation of 749.88 million rupees (LKR 749,885,250) for ATX Partners.

Arcasia Investment & Trading, incorporated in 2019, is owned by Pinnaduwage Aravinda De Silva (85 percent) and Priyangi Anushaka Wijenayake (15 percent), who both serve as directors. 

The company recorded a net profit after tax of 123.14 million rupees for the financial year ending March 31, 2026, driven by 128.80 million rupees in other income.

ATX Partners, incorporated in February 2024, is owned equally by directors Asanth Shamil Sebastian and Sharad Sridharan. For the financial year ended March 31, 2026, ATX Partners reported a net profit after tax of 566.72 million rupees, with total assets of 4.09 billion rupees, primarily comprised of investments in listed shares. (Colombo/Aug20/2026)

ECONOMYNEXT – Women in Tech Sri Lanka is expanding IT education, career guidance and professional opportunities beyond Colombo to boost youth potential in areas like Trincomalee.

Two sessions with university students and young people preparing to enter the professional world were held in the eastern city, led by Sanali Kaushalya, Country Director of Women in Tech Sri Lanka.

“Empowerment cannot remain concentrated in Colombo. We need to ensure that young people across Sri Lanka have the opportunity to learn, connect, develop and lead,” said Kaushalya.

The sessions focused on emerging technologies, artificial intelligence, innovation, leadership, career development and the future of work.

One session was conducted with the Faculty Career Guidance Cell, Faculty of Applied Science, Trincomalee Campus of Eastern University Sri Lanka for final-year students from the Department of Computer Science (DCS) and Department of Physical Science (DPS).

The discussion helped students see how their studies can turn into careers in a tech-driven job market.

A university degree is only the beginning of a technology career, Kaushalya said, and graduates must continuously develop their technical knowledge alongside communication, adaptability, creativity, problem-solving and networking skills to remain competitive in a rapidly evolving industry.

Another session was held at ESOFT Metro Campus Trincomalee, focusing on career development, emerging technologies, professional growth and skills.

The events highlighted the significant talent and ambition that exists outside Colombo, Women in Tech Sri Lanka said, adding that greater access to industry exposure, mentorship, professional networks and knowledge was essential to help them.

The organisation said it believes expanding access to technology education and professional networks can contribute to creating a more inclusive and geographically diverse technology ecosystem. (Colombo/Aug20/2026)

ECONOMYNEXT – Sri Lanka’s Singer Finance plans a rights issue of 76,648,787 ordinary voting shares at 39.20 rupees per share, according to a market filing.

The proportion in which the shares are to be used is 8 new ordinary voting shares for every 29 existing ordinary voting shares.

The company said the proceeds will be used to “improve the Capital Adequacy Ratios of the company and for lending purposes.”

The current stated capital of the company as of June 30, 2026, stands at 4,004,555,574 rupees, represented by 277,851,853 ordinary voting shares. 

Shares were trading at 49.00 rupees, up 1.45 percent. (Colombo/August20/2026)

Fitch Ratings – Fitch Ratings has affirmed Sri Lanka-based Hatton National Bank PLC’s (HNB) National Long-Term Rating at ‘AA-(lka)’. The Outlook is Stable. Fitch has also affirmed HNB’s outstanding Sri Lankan rupee senior unsecured debt at ‘AA-(lka)’ and outstanding Sri Lankan rupee subordinated debt at ‘A(lka)’.

Key Rating Drivers
Intrinsic Profile Drives Rating: HNB’s National Long-Term Rating reflects its own financial strength, which is highly influenced by exposure to the sovereign’s weak credit profile with ‘CCC+’ Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs). The bank’s rating also reflects its predominantly domestic operations and direct and indirect sovereign exposure, and also factors in HNB’s strong domestic franchise as Sri Lanka’s fourth-largest commercial bank.

Sovereign Profile Shapes OE: The sovereign’s credit profile continues to drive our assessment of Sri Lankan banks’ operating environment (OE) score of ‘ccc+’. The sector is primarily exposed to the domestic economy and has a sizeable exposure to the sovereign through government securities and lending to the broader public sector, which makes banks vulnerable to changes in the sovereign’s financial health. Fitch expects conditions to remain broadly supportive; however, external headwinds may exert pressure on the domestic OE and, thereby, sector performance.

Rising Share of Overseas Lending: HNB’s business model remains centered on retail and SME/emerging corporates lending at 55% of gross loans at end-2025 (2024: 54%). Offshore lending was a key driver of HNB’s corporate loan growth, similar to that of its private counterparts, and contributed nearly half of the segment’s incremental net lending in 2025 and 1Q26. Lending to overseas entities increased further in 1Q26 from 7% of loans at end-2025 (2024: 2%), and we expect it to continue rising as the bank deploys its excess foreign-currency liquidity.

Elevated Risk Appetite: HNB’s risk profile reflects its aggressive loan growth and exposure to the weak sovereign. The bank’s loan book grew 42% in the 15 months to end-March 2026, driven mainly by the corporate segment. We expect loan growth to moderate in the near to medium term as the bank adopts a more cautious approach to new lending amid OE-related challenges. Sovereign exposure via investment holdings dropped to 32% of assets at end-2025, from 42% at end-2023, but remains large and weighs on our risk profile assessment.

Asset-Quality Risks to Persist: HNB’s impaired (stage 3) loan ratio improved further in 1Q26 from 5.7% at end-2025 (2024: 9.4%), supported by its expanding loan book, despite a modest increase in new defaults. Fitch expects credit impairments to rise over the near to medium term on account of prevailing economic challenges, but the impaired loan ratio is still likely to decline due to continued loan growth.

Growing exposure to overseas entities in high-risk markets could also pose risks to asset quality, given the large size of individual exposures, particularly if foreign-exchange movements affect borrowers’ ability to service foreign-currency obligations.

Higher Credit Costs Pressure Earnings: We expect profitability to moderate over the near to medium term, driven by a combination of higher impairment charges and margin compression due to the recent policy rate hike. We project a further decline in the operating profit/risk-weighted asset ratio from 5.7% at end-1Q26 (2025: 6.8%, 2024: 9.9%), mainly due to normalisation of credit costs after impairment reversals in 2025. HNB’s net interest margin stood at 5.2% in 1Q26 (2025: 5.0%, 2024: 5.8%) as it redeployed maturing high-yield government securities to loans at lower interest rates.

Above Average Capitalisation: HNB’s common equity Tier 1 ratio dipped to 16.8% at end-1Q26 (2025: 18.7%), excluding 1Q26 profits, due to dividend distributions and sustained credit growth. Nonetheless, the ratio remains the highest among peers.

We expect the bank’s capital support for HNB Finance PLC (A(lka)/Stable), together with higher regulatory risk weights on gold-backed lending, to have only a modest impact on its capital ratios. We believe HNB’s excess capital position also leaves scope for selective inorganic expansion in the medium term, as indicated by its past interest in acquiring a bank in Bangladesh.

Rising Loan/Deposit Ratio: Aggressive balance-sheet growth in 2025 and 1Q26, funded partly through the deployment of excess liquidity, increased the loan/deposit ratio to 82.1% at end-1Q26 from 69% at end-2024, bringing it closer to pre-crisis levels. We expect the ratio to rise further over the near to medium term in line with the bank’s growth appetite, which could reduce liquidity headroom. Nevertheless, the funding profile remains anchored by local customer deposits, and we see early signs of improvement in access to foreign-currency term funding.

Rating Sensitivities
Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade
HNB’s National Rating is sensitive to a change in the bank’s creditworthiness relative to other Sri Lankan issuers. A downgrade of the National Rating is most likely to stem from a deterioration in Sri Lanka’s sovereign rating, through its influence on the OE for banks.

A deterioration in the bank’s key credit metrics beyond our base-case expectations relative to peers would also lead to increased downward pressure on the National Rating, which is driven by its intrinsic financial strength independent of any sovereign rating changes.

Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade
HNB’s National Rating is sensitive to a change in its creditworthiness relative to other Sri Lankan issuers. Upside to the National Rating is limited in the near term, due to our assessment of the sovereign rating and OE. That said, an improvement in Sri Lanka’s sovereign rating may lead to an upgrade of the bank’s National Rating.

OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS
Senior Debt

HNB’s outstanding senior unsecured debentures are rated at the same level as its National Long-Term Rating, in accordance with Fitch’s criteria. This is because they rank equally with the claims of the bank’s other senior unsecured creditors.

Subordinated Debt

HNB’s Basel III-compliant Sri Lankan rupee subordinated debt is rated two notches below the National Long-Term Rating anchor. This reflects Fitch’s baseline notching for loss severity for this type of debt and our expectation of poor recoveries. There is no additional notching for non-performance risks, as the notes do not incorporate going-concern loss-absorption features.

OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES
The senior and subordinated debt ratings will move in tandem with the bank’s National Long-Term Rating.

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.