Sri Lanka plantation stocks battered after wage decree
ECONOMYNEXT- Plantation stock prices in Sri Lanka were hammered following the government’s decision to increase the minimum wage of estate sector workers by 200 rupees to 1,000 rupees, amid a fall in Colombo stocks, provisional data showed.
Amid thin trading, Maskeliya Plantations share fell 8 percent to 9.10 rupees, while Balangoda Plantations fell 3.48 percent to 11.10 rupees and Kotagala Plantations, which had fallen as much as 5.80 percent in early trading, pared off with a 1.45 percent fall to 6.80 rupees at end of the day’s trade.
Of 21 plantation stocks being traded, 11 fell while 4 gained. The wage increase would hit the tea industry firms the hardest.
Plantation industry officials were seeking clarity over the government’s order to hike the minimum wage to 1,000 rupees. Usually plantation companies and trade unions negotiate wage revisions every two years.
Estates have been struggling to move the wage model to reflect productivity, instead of the current attendence-based model, where if a worker shows up to work for 20 days, they are paid the minimum wage.
Co-Cabinet Spokesperson and Plantations Minister Ramesh Pathirana said that plantation firms will be provided with free fertilizer, tax cuts and credit support to balance out the wage increase.
The benchmark All Share Price Index (ASPI) closed 0.46 percent or 27.64 points down at 5,940.99, while the more liquid S&P SL20 Index had closed 0.63 percent or 17.95 points down at 2,812.01.
The ASPI reached a high of 5,976.17 in the early minutes of trading, before falling throughout the day to a low of 5,927.45 by early afternoon, before recovering towards end of trade.
Index-heavy John Keells Holdings closed 2 rupees down at 164 rupees a share, contributing most to the ASPI fall.
Distilleries Company of Sri Lanka closed 50 cents down at 17 rupees a share and Ceylon Tobacco Company closed 9.80 rupees down at 1,070.10 rupees a share, also pushing the main index down.
Prices of 30 stocks gained, while 93 fell. The day’s turnover was 2.8 billion rupees, dominated by a 2.64 billion rupee foreign-to-foreign negotiated trade (crossing) in Softlogic Life Insurance. (Colombo/Dec16/2020)