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Friday November 13th, 2026

Sri Lanka CAL Investment Grade Fund’s ‘BBf(lka)’/’S4(lka)’ rating affirmed: Fitch

ECONOMYNEXT – Fitch Ratings has maintained the National Fund Credit Quality Rating of Capital Alliance Investment Grade Fund, which invests in Sri Lankan government securities, at ‘BBf(lka)’ and its National Fund Market Risk Sensitivity Rating at ‘S4(lka)’.

“The National Fund Market Risk Sensitivity rating reflects Capital Alliance Investment Grade Fund’s moderate to high sensitivity to interest-rate and spread risk,” Fitch said.

The fund size has increased to around LKR55 billion as of end-March 2025, Fitch said.

The full statement is reproduced below:

Fitch Affirms Capital Alliance Investment Grade Fund at ‘BBf(lka)’/’S4(lka)’

Fitch Ratings – Shanghai/London – 16 Apr 2025: Fitch Ratings has affirmed Capital Alliance Investment Grade Fund’s National Fund Credit Quality Rating at ‘BBf(lka)’ and its National Fund Market Risk Sensitivity Rating at’S4(lka)’.

KEY RATING DRIVERS

The fund invests directly and indirectly in Sri Lankan government securities, as well as financial institutions and non-bank financial institutions (NBFIs). Fitch’s recent recalibration of the Sri Lankan national rating scale and ratings upgrades on 10 Sri Lankan banks and 10 Sri Lankan NBFIs have a positive impact on the fund’s rating headroom.

NATIONAL CREDIT QUALITY

The fund’s National Fund Credit Quality Rating considers both its actual and prospective credit quality. Its weighted-average rating factor (WARF), Fitch’s proprietary measure of fund credit risk, was 5.2 at end-March 2025, within the ‘BBBf(lka)’ rating range of 2.1-6.1. However, we recognise that the fund’s investment guidelines allow an increase in its exposure to lower-rated assets to the level, which could lead the WARF to move to the ‘BBf(lka)’ range.

A fund’s WARF is a function of the credit ratings of the securities held in a fund’s portfolio and their remaining term to maturity, weighted by market value. Fitch bases the WARF on the agency’s ratings where available. We assume, for the purpose of the WARF calculation, that securities that are not publicly rated by any globally recognised rating agencies carry ‘CCC(lka)’ ratings.

MODERATE TO HIGH SENSITIVITY TO MARKET RISKS

The National Fund Market Risk Sensitivity rating reflects Capital Alliance Investment Grade Fund’s moderate to high sensitivity to interest-rate and spread risk. The fund’s weighted-average maturity was nine months and its weighted-average life was 16 months at end-March 2025. The asset manager adjusts the fund’s duration based on market developments. The investment guidelines allow the fund to have a longer duration.

FUND PROFILE

Capital Alliance Investment Grade Fund is an open-end fixed income fund that mainly invests in Sri Lankan banks and non-bank financial institutions. The fund seeks to obtain a high level of current income, targeting a competitive return consistent with liquidity and preservation of capital.

The fund was launched in 2013 and is domiciled in Sri Lanka. It is authorised and regulated by the Sri Lankan Securities and Exchanges Commission. The fund’s assets are segregated with the trustee, Deutsche Bank AG, Colombo Branch, a subsidiary of Deutsche Bank AG (A-/Stable/F2). The fund size has increased to around LKR55 billion as of end-March 2025.

INVESTMENT MANAGER

We regard Capital Alliance Investments Limited as a suitably qualified, competent and capable investment manager for the fund. The manager was founded in 2011 and is majority owned by Capital Alliance Limited, with a minority holding by Sri Lanka Insurance Corporation Limited. The manager was the country’s second-largest investment manager, with a market share of about 21% and total assets under management of LKR132 billion in unit trust funds as of end-January 2025.

RATING SENSITIVITIES

Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade

The National Fund Credit Quality Rating could be downgraded if the portfolio suffers negative rating migration or if the fund’s strategy changes to invest in more lower-quality securities. The rating is also sensitive to exposures that are not publicly rated by a globally recognised rating agency and where Fitch may have more conservative credit views than other rating agencies. The National Fund Market Risk Sensitivity Rating could be downgraded if the fund’s investment strategy changes to allow it to increase duration risk significantly.

Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade

The National Fund Credit Quality Rating could be upgraded if the fund adjusts its investment guidelines to focus only on higher-quality securities. The National Fund Market Risk Sensitivity Rating could be upgraded if the fund’s investment strategy facilitates a shorter duration. (Colombo/Apr17/2025)

Sri Lanka budget ignores provincial polls while stripping council powers: MP

ECONOMYNEXT – A Sri Lankan opposition legislator has criticized the government’s 2027 budget speech for failing to mention or allocate provisions for long-delayed Provincial Council elections, while accusing the administration of stripping away devolved powers.

“Previous governments had a policy on their policy statement: they would mention the Provincial Council elections,” Illankai Tamil Arasu Kachchi (ITAK) MP Shanakiyan Rasamanickam told parliament during the budget debate.

“Not a single word about the Provincial Council election! About the Provincial elections, you haven’t mentioned a word, but what have you mentioned? You are taking away the powers of the Provincial Council.”

Rasamanickam pointed out that the government was taking over six provincial hospitals — Mullaitivu, Mannar, Kilinochchi, Vavuniya, Avissawella, and Gampaha — while continuing to delay the polls.

The 2027 national budget presented by President Anura Kumara Dissanayake proposed to transfer to
the central Government the District General Hospitals of Mannar, Mullaitivu, Vavuniya, Kilinochchi, Gampaha and Avissawella, which are administered by the Provincial Councils, out of the 20 District General Hospitals.

“You are taking away power that was given to the Provincial Council, whilst not having Provincial Council elections,” he said.

“Last year, powers given to the provinces regarding environmental policies — you’ve taken it back, with no consent of the Provincial Council.”

He also criticized the budget speech for making no mention of land release issues in the North and East, a new constitution, or the government’s pledge to abolish the executive presidency.

“In this budget, I must also mention, not only the Provincial Council election, about the new constitution — not a single word about the constitution! What is happening to your plans and proposals of abolishing the executive presidency? Where is the new constitution?” Rasamanickam questioned.

The legislator further raised concerns over proposed legislation, including the Protection of the State from Terrorism Act (PSTA) and the Organized Crime Bill, arguing they were more repressive than the existing Prevention of Terrorism Act (PTA) they are meant to replace.

“The trajectory of this government is worrying to me. It’s really worrying to me,” Rasamanickam said.
“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 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 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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