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Wednesday February 28th, 2024

Sri Lanka Port City Economic Zone to have offshore banking, stock exchanges

ECONOMYNEXT – Sri Lanka’s Colombo Port City Special Economic Zone will have offshore banks for which regulations will be made by the President and licensed and also stock exchanges which will be regulated by an Economic Commission that will administer the area, according to a draft law.

Licenses for offshore banking will be issued Sri Lanka’s Banking Act by the Finance Minister with the concurrence of the of President on a recommendation of the Colombo Port City Economic Commission, which administers the special economic zone.

The concurrence of the Monetary Board of the central bank will also be sought.

The President will also make regulation for offshore banking in consultation with the Minister of Finance and Monetary Board.

The Commission may also revoke a license after hearing is granted to the licensee. The concurrency of the Monetary Board will be sought.

According to the draft law offshore banking businesses may:

a)accept savings, time and demand deposits from any authorised person or a non-resident in any
designated foreign currency;

(b) borrow any sum in a designated foreign currency from any non-resident;

(c) extend accommodation to any non-resident in any designated foreign currency;

(d) engage in any transaction in any designated foreign currency with any other offshore unit;

(e) engage in any other transaction in a designated foreign currency, with a non – resident;

(f) engage in any other transaction as may be envisaged under this Act;

(g) engage in any transaction permitted under the Foreign Exchange Act, No. 12 of 2017; or

(h) engage in any other transaction in any designated foreign currency, authorised by the Commission
with the concurrence of the Monetary Board.

The Colombo Port City will also regulate any stock exchange set up in the area using the Securities and Exchange Commission Act.

The SEC Act will remain in force until the Port City Commission issues its own regulations. Concurrence of the SEC will be sought to apply the rules.

The Colombo Port City will be fully dollarized and workers will be paid in foreign currency and get tax free salaries.

Unlike other financial centres such as Hong Kong (near orthodox currency board), Singapore modified currency board, Dubai (currency board like system), Cayman Islands (currency board like system) Sri Lanka itself has a highly unstable soft-peg which is frequently subject to currency crises.

Related

Sri Lanka’s Port City Economic Commission to by-pass key laws, give own tax breaks

Sri Lanka Port City Special Economic Zone to be dollarized

Though Port City, will be fully dollarized and therefore incapable of running into currency crises, it is not clear what the effect will be on sovereign rating ceilings on entities operating within the area. (Colombo/Mar29/2021)

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Sri Lanka stocks close up, retail activity coming in

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

The broader All Share Index closed up 55.29 points, or 0.52 percent at 10,678; while the S&P SL20 Index closed up at 3,056 points, up 0.06 percent, or 1.73 points.

Turnover was at 1.2 billion.

Market participants said that “retail activity is also picking up.”

Hemas Holdings Plc saw large volumes being traded, contributing 90 million to the day’s turnover. The share closed up at 75.00.

Kapruka Holdings Plc announced that it had purchased 197,015 ordinary voting shares of its subsidiary Kapruka e-Commerce (Pvt) Ltd for 13.2 million rupees at 67 a share. The proceeds will be used by Kapruka e-Commerce “to fulfill the IPO objective of launching Kapruka Partner Central, the company said. The share closed down at 6.80.

E B Creasy and Company Plc announced a disposal of investment in its subsidiary, Lanka Special Steels Limited (LSSL) in accordance with the restructuring process of the E B Creasy Group. The Board resolved “to divest its 100% stake represented by 2,138,657 shares in its subsidiary Lanka Special Steels Limited (LSSL), to subsidiary company Laxapana Batteries PLC (Laxapana) for a total consideration of Rs694mn which will be settled in installments. Shares of E B Creasy and Company Plc closed up at 22.00.

Sectors that attracted investor interest were Capital Goods (376mn), Food, Beverage and Tobacco (181mn), and Banks (166mn).

Positive contributors to the indices in the day included Hayleys Plc (up at 82.00), Chevron Lubricants Lanka Plc (up at 104.00), Vallibel One Plc (43.30), and Cargills (Ceylon) Plc (up at 349.75) whose Chairman Ranjith Paige donated 3 million rupees to the ‘Children of Gaza Fund’ earlier today. (Colombo/Feb28/2024).

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Sri Lanka Education Ministry asks schools to keep children out of sun

ECONOMYNEXT – Sri Lanka’s Education Ministry has warned school officials against exposing children to the sun as the Natural Hazards Early Warning Centre issued a heat index advisory.

“As extreme hot weather may rise further today, tomorrow and the next day (Feb 28, 29 and March 1), avoid keeping school students outdoors in high temperatures,” the ministry said in a statement.

With temperatures expected to increase in the next few days, “students in any school in the island will not participate in outdoor sports training activities or sports events”. The Ministry of Education has advised all schools to refrain from engaging in any other external activity.

Instructions have been forwarded to the provincial and regional education authorities to inform principals, and “to proceed according to the series of instructions issued by the Ministry of Health”.

According to the Department of Meteorology forecast, the heat index, the temperature felt on the human body, is expected to increase up to the ‘Caution’ level at some places in the North-western, Western and Southern provinces and Ratnapura District.

A ‘Caution’ level denotes ‘fatigue is possible with prolonged exposure and activity. Continuing activity could result in heat cramps.

ACTION REQUIRED
Job sites: Stay hydrated and takes breaks in the shade as often as possible.
Indoors: Check up on the elderly and the sick.
Vehicles: Never leave children [or pets] unattended.
Outdoors: Limit strenuous outdoor activities, find shade and stay hydrated.
Dress: Wear lightweight and white or light-colored clothing.
(Colombo/Feb28/2024)

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Sri Lanka focused on national unity: FM at UN Human Rights Council

ECONOMYNEXT – Sri Lanka’s Minister of Foreign Affairs Ali Sabry has urged members of the UN Human Rights Council not to allow short-term political gains or “domestic vote bank politics” to overtake the work of the Council.

Sabry addressed the high-level segment of the 55th Session of the Council through a pre-recorded video statement on Tuesday.

“In my address to HRC55 via a video message, I underlined Sri Lanka’s continuing focus and tangible steps taken in the interest of national unity and reconciliation, reaffirmed Sri Lanka’s commitment to engaging in constructive Human Rights processes while rejecting politicized and unilateral measures that infringe upon the sovereignty of Member States,” Sabry said on X (twitter).

“I stressed the fact that the manner in which the Council approaches the humanitarian crisis in Gaza will be a litmus test to its credibility as the foremost international human rights body, and reiterated the importance of avoiding double standards being practiced in the pursuit of political agendas.”

The Foreign Minister reiterated Sri Lanka’s rejection of the HRC resolutions 46/1 and 51/1 and the external evidence gathering mechanism established by these resolutions, saying that such mechanisms are counterproductive, the Ministry of Foreign Affairs said in a statement.

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Sri Lanka loses vote at UN Human Rights Council

The 55th Session of the Council takes place in Geneva from February 26 – April 5. During this Session, the UN High Commissioner for Human Rights will present an oral update on Sri Lanka on March 4, as mandated by the HRC Resolution 51/1. (Colombo/Feb28/2024)

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