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Saturday March 2nd, 2024

Sri Lanka has cancelled 216 LCs for 14,000 vehicles after March 2020 import ban: trade group

ECONOMYNEXT – Sri Lanka has canceled 216 letters of credit involving 14,000 vehicles after a vehicle import ban imposed on March 2020, the island’s motor traders said appealing for the vehicles to be imported amid state proposal to import luxury SUVs for members of parliament.

When Sri Lanka banned vehicle imports in March 2020 LCs of 10,780 motor cycles, 2,640 trishaws and 537 cars specially ordered to suit Sri Lanka’s market conditions were blocked.

Sri Lanka’s current administration has ordered luxury vehicles to be given to parliamentarians which were initially put on hold after a public outcry.

Ceylon Motor Traders Association said it agreed with Minister Keheliya Rambukwelle’s statement that cancelling LCs affected the credibility of banks in Sri Lanka.

Sri Lanka has ‘regime uncertainty’ or sudden policy changes and state interventions, sometimes based on Keynesianism which worsens uncertainty and leads to expropriation or losses of private businesses.

“The vehicle import ban imposed last year has taken a toll on vehicle buyers by constricting the market at a time when the need for personal transportation is more acute,” Ceylon Motor Traders Association said.

“To make matters worse, the resulting imbalance of demand vs. supply has caused prices of used vehicles skyrocket within a short time span, and has led to unscrupulous activities at the expense of the consumer, such as odometer tampering.”

The vehicles which were halted were valued at 5.2 billion rupees and included those of the general public and state workers such as doctors who held permits, the CMTA said.

If SUVs are allowed to parliamentarians, CMTA said vehicles of others should also be allowed. (Colombo/June15/2021)

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Sri Lanka eyes SOE law by May 2024 for better governance

ECONOMYNEXT – Sri Lanka is planning to pass a Public Commercial Business (PCB) Act improve governance of state-owned enterprise by May 2024 as part of an anti-corruption efforts following an International Monetary Fund assessment.

Sri Lanka’s state enterprises have been used by politicians to give ‘jobs of the boys’, appropriate vehicles for personal use, fill board of directors and key positions with henchmen and relatives, according to critics.

Meanwhile macro-economists working for the state also used them to give off-budget subsides or made energy utilities in particular borrow through supplier’s credits and state banks after forex shortages are triggered through inflationary rate cuts.

The government has taken billons of dollars of loans given to Ceylon Petroleum Corporation from state banks.

There have also been high profile procurement scandals connected to SOEs.

An SOE Reform Policy was approved by Sri Lanka’s cabinet of ministers in May 2023.

The Public Commercial Business (PCB) Act has now been drafted.

A holding company to own the SOEs will be incorporated and an Advisory Committee and Board of Directors will be appointed after the PCB law is approved, the statement said. (Colombo/Mar01/2024)

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Sri Lanka rupee closes at 308.80/90 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 308.80/90 to the US dollar Friday, from 309.50/70 on Thursday, dealers said.

Bond yields were broadly steady.

A bond maturing on 01.02.2026 closed at 10.65/75 percent up from 10.50/70 percent.

A bond maturing on 15.09.2027 closed at 11.90/12.05 percent from 11.90/12.10 percent.

A bond maturing on 01.07.2028 closed at 12.15/35 percent down from 12.20/25 percent.

A bond maturing on 15.07.2029 closed at 12.25/40 percent up from 12.30/45 percent.

A bond maturing on 15.05.2030 closed at 12.30/45 percent down from 12.35/50 percent.

A bond maturing on 01.07.2032 closed at 12.50/13.00 percent from 12.55/13.00 percent. (Colombo/Mar1/2024)

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Sri Lanka stocks close up 0.37-pct, Expo to de-list

ECONOMYNEXT – The Colombo Stock Exchange closed up 0.37 percent on Friday, and SG Holdings, the parent company of Expolanka Holdings Plc, said it was taking the company private.

Expolanka is the largest listed company on the Colombo Stock Exchange.

“Expolanka Holdings PLC has, at the Board Meeting held on 1st March 2024, considered a request from its principal shareholder and resolved to initiate the de-listing of the Company’s shares from the Official List of the Colombo Stock Exchange subject to obtaining necessary shareholder approval and regulatory approvals,” the company said in a stock exchange filing.

As per arrangements with SG Holdings Global Pte Ltd, the Company’s majority shareholder, it will purchase its shares from shareholders who may wish to divest their shareholding in the Company at a purchase price of Rs 185.00 per share. The share closed up at 150.50.

The broader All Share Index closed up 0.37 percent, or 39.47 points, at 10,691; while the S&P SL20 Index closed down 0.64 percent, or 19.59 points, at 3,037.

Turnover stayed above the 1 billion mark for the sixth consecutive day, registering 1.4 billion.

Crossings in Melstarcorp Plc (135mn) up at 89.50, Hatton National Bank Plc (64mn) up at 158.00, Hemas Holdings Plc (53mn) up at 75.00 and Central Finance Company Plc (26mn) up at 103.50, added significantly to the day’s turnover.

“The upward trend is continuing, with more retail buying also coming in, the number of trades was more than 10,000 today,” a market participant said. “Investors are looking for undervalued stocks and buying in quantities.” (Colombo/Mar1/2024).

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