Bonds & Forex

Sri Lanka’s Ceylon Dollar Bond Fund rating confirmed at ‘B+f’

Saturday March 4, 2017 7:31 am

ECONOMYNEXT – Fitch Ratings said it was confirming a ‘B+f’ rating of Ceylon Dollar Bond fund which invests in dollar denominated government, bank and corporate debt.

The fund is invested in four bond rated ‘B+’.

The full statement is reproduced below:

Fitch Affirms Ceylon Dollar Bond Fund at ‘B+f/S5’

Fitch Ratings-London/Colombo-28 February 2017: Fitch Ratings has affirmed Ceylon Dollar Bond Fund’s International Fund Credit Quality Rating at ‘B+f’ and Fund Market Risk Sensitivity Rating at ‘S5’. The fund is managed by Ceylon Asset Management (CAM).

KEY RATING DRIVERS

The affirmation of the ‘B+f’ International Fund Credit Quality Rating is driven by the weighted-average rating factor (WARF), the fund’s rating distribution and its investment guidelines. The fund has a limited investment space, as it only invests in US dollar bonds issued by the government of Sri Lanka (B+/Stable), licensed banks in Sri Lanka and Sri Lankan corporates that are rated by an international rating agency.

This restricts potential investments to 15 listed issuances totalling around USD10bn as well as Sri Lanka Development Bonds (SLDBs) of around USD4bn. SLDBs are unlisted, unrated US dollar bonds issued by the government domestically.

The affirmation of the Fund Market Risk Sensitivity Rating is driven by the market risk factor as well as Fitch’s consideration of qualitative factors, such as the fund manager’s ability to extend duration above current levels if it sees fit. The rating also reflects Fitch’s conservative assumptions about potential volatility in emerging market debt.

ASSET CREDIT QUALITY

The fund’s portfolio comprises of four bonds – all rated ‘B+’ – that have been issued by the entities detailed above and is mainly exposed directly to government and to government-guaranteed debt. The fund currently has a large cash balance (19% of portfolio), which the manager expects to invest in the near-term and maintain around 5%-6% of the portfolio in short term US-dollar fixed deposits in a licensed commercial bank in Sri Lanka.

CONCENTRATION

The portfolio is concentrated and has a large exposure to Sri Lankan sovereign risk. The concentration risk is a structural feature given the limited opportunities in the fund’s investment universe. Fitch has conducted stress tests on the target portfolio. Based on its analysis, Fitch believes the fund has considerable capacity to withstand negative rating migration in its investments before it would be downgraded to the ‘CCC’ category.

PORTFOLIO SENSITIVITY TO MARKET RISK

The Fund Market Risk Sensitivity Rating is based on an analysis of the fund portfolio’s interest-rate and spread duration. Based on the fund’s market risk factor alone, it could achieve a ‘S4’ Fund Market Risk Sensitivity Rating. However, in affirming the rating at ‘S5’, Fitch has also taken into consideration wider market conditions – such as potential volatility in emerging market debt – in its rating decision as well as recognising that the fund manager does have discretion to extend duration above current levels if it sees fit.

According to Fitch’s criteria, funds rated ‘S5’ are considered to have high sensitivity to market risk. On a relative basis, total returns or changes in net asset value are expected to experience extreme variability across a range of market scenarios due to substantial exposure to interest-rate, credit spread and other risk factors.

The fund currently has a weighted-average life of 1.3 years due to the large cash balance it maintains in short-term deposits. The fund will rely on secondary market liquidity to meet large redemption requests. However, it has access to an overdraft facility of up to 10% of assets under management and requires 14 days’ notice on redemptions above 3% of the fund. On the asset side, it holds only a limited proportion of outstanding debt issues, all of which are listed on the Singapore Exchange.

FUND PROFILE
The fund is regulated by the Securities and Exchange Commission of Sri Lanka under the Unit Trust Code, 2011. Deutsche Bank Sri Lanka, a branch of Deutsche Bank AG (A-/RWN/F1), is the trustee.
THE ADVISOR

Fitch considers CAM suitably qualified, competent and capable of managing the fund. The investment committee has relevant experience and the company has sufficient sources of information on which to base its decision-making process. Fitch considers the systems supporting the fund’s investment activities to be satisfactory.

CAM is 21%-owned by Sri Lanka Insurance Corporation Limited (SLIC, B+/Stable), 69% by Ceylon Capital Trust (Pvt) Ltd and 10% by Commercial Credit and Finance PLC (CCF). Fitch believes CAM has shareholder support, but a key challenge will be demonstrating sustained growth in assets under management. The Ceylon Dollar Bond Fund is a key component of its growth strategy.
CAM has been managing funds since 1999. The current management team has been in place since 2005 and SLIC and CCF invested in the business in 2010 and 2013, respectively.

RATING SENSITIVITIES

The ratings may be sensitive to changes in the fund’s credit quality or market risk profile. The International Fund Credit Quality Rating may be downgraded if Fitch downgrades the rating of the Sri Lankan sovereign or the ratings of the banks in which the fund has invested assets, especially the banks whose issues are not government guaranteed. An upgrade of the assets in the fund’s portfolio could lead to an upgrade of the fund.

Changes in exchange-control regulations that could increase the fund’s transfer and convertibility risks or a weakening in the liquidity inherent in the fund or changes to liquidity provisions – such as the manager’s ability to borrow against the fund’s net assets or its ability to delay redemptions – would be viewed as negative.

To maintain the bond fund ratings, CAM will provide Fitch with portfolio information, including details of the portfolio’s holdings and credit quality. Fitch closely monitors the credit composition of the portfolio, the credit counterparties used by the manager and the overall market risk profile of the investments.

Markets

Sri Lanka stocks close up 1.37-pct, banks lead turnover

Monday November 9, 2026 3:29 pm

ECONOMYNEXT – Sri Lanka’s Colombo Stock Exchange closed up on Monday, CSE data showed, with the benchmark All Share Price Index moving up 1.37 percent.

The ASPI was up 291.72 points at 21,531.37, while the more liquid S&P SL20 was up 1.67 percent, or 100.96 points, at 6,146.34.

Positive contributors to the ASPI were Commercial Bank of Ceylon (up 2.86 percent at 216.00 rupees), Hatton National Bank (up 1.52 percent at 399.75 rupees), Asiri Hospital Holdings (up 12.86 percent at 31.60 rupees), Tokyo Cement Company (up 5.22 percent at 84.70 rupees), and Access Engineering (up 3.93 percent at 81.90 rupees).

Carson Cumberbatch (down 4.24 percent at 712.00 rupees), Richard Pieris and Company (down 2.43 percent at 28.10 rupees), LOLC Holdings (down 0.62 percent at 400.00 rupees), Renuka Holdings (down 2.63 percent at 37.00 rupees), and Chevron Lubricants Lanka (down 0.61 percent at 204.25 rupees) were top negative contributors.

Market turnover was 3.33 billion rupees. The S&P/CSE Banks Industry Group led turnover with 667.76 million rupees.

The session saw heavy crossings, according to Raynal Wickremeratne, Head of Research and Strategy at NDB Securities. Significant crossings included Keells (23 million rupees), Distilleries Company (27.7 million rupees), Sunshine Holdings (30.6 million rupees), Commercial Bank (32.4 million rupees), Ceylon Tobacco Company (35.6 million rupees), Hatton National Bank (39.5 million rupees), Prime Lands (40.5 million rupees), and HAS Holdings (41.5 million rupees).

In corporate news, Hayleys Retail Holdings Ltd announced it has partnered with supply chain software provider Blue Yonder to build and scale an AI-native grocery supermarket chain across Sri Lanka. (Colombo/Nov09/2026)

Information Technology

Sri Lanka’s Hayleys Retail to launch supermarket chain with Blue Yonder

Monday November 9, 2026 3:12 pm

ECONOMYNEXT — Hayleys Retail Holdings Ltd has selected supply chain software provider Blue Yonder to build its grocery retail operations from the ground up, the two companies said in a joint statement.

Hayleys Retail, a member of Sri Lanka’s diversified conglomerate Hayleys Group, plans to open several stores in the near future to serve consumers across the country. The agreement marks Blue Yonder’s first retail customer in Sri Lanka.

“Our entry into supermarket retail is about bringing that same commitment to quality and reliability closer to everyday Sri Lankan consumers,” Mohan Pandithage, Chairman and Chief Executive of Hayleys PLC said.

“With Blue Yonder, our teams will have AI-driven insight to deliver a seamless, consistent shopping experience across every store,” he said.

Hayleys, which accounts for approximately 5 percent of Sri Lanka’s export income and operates across 17 business sectors, is entering the large-scale supermarket space by drawing on its group strengths in manufacturing, logistics, and services.

The company selected Blue Yonder to connect its data across merchandising and shelf space, deploy artificial intelligence agents to catch operational issues early, and scale its business into a national network without changing platforms.

The rollout will begin with merchandise operations to manage suppliers, items, costs, and pricing, followed by machine learning capabilities to forecast demand and balance store inventory during seasonal peaks.

“Hayleys Retail is choosing one where AI is the foundation rather than an add-on—connected data and agentic AI built into core merchandising operations, and planning that learns as the business grows,” Antonio Boccalandro, President, APAC at Blue Yonder said.

The retailer plans to use the platform to automate routine store tasks and adjust inventory according to real-time sales and local market trends as its store footprint grows. (Colombo/Nov09/2026)

Stocks & Companies

Sri Lanka’s Citrus Leisure extends Lotus Tower management pact

Monday November 9, 2026 1:16 pm

ECONOMYNEXT – Sri Lanka listed hospitality firm Citrus Leisure said it has extended an agreement to manage consumer-facing and entertainment spaces at the Colombo Lotus Tower, which includes revolving restaurant Blue Orbit, until June next year.

The initial agreement signed between Citrus Leisure and Colombo Lotus Tower Management Company (Private) Limited (CLTMC) is due to expire on December 11.

“The Board of Directors of CLTMC at meeting held on 2nd November 2026 has resolved to extend the term of the Management Agreement and continue the existing Management Agreement until 30th June 2027, to which the company has given its concurrence,” the company said in a market filing.

Citrus Leisure Plc opened its revolving restaurant at the Lotus Tower in December 2023.

The company signed a 3-year agreement with CLTMC in May 2023 to provide services in the management of (l) the banquet hall 1 on the 25th floor, (2) the banquet hall 2 on the 26th floor, (3) the revolving restaurant on the 27th floor, (4) the 6 suites situated on the 28th floor and the kitchen in the basement floor of the Colombo Lotus Tower.

The 350-meter or 1,150-feet tower, the tallest in South Asia, was built at a cost 104.3 million US dollars with 80 percent of the money borrowed from Exim Bank of China.

Located in the commercial heart of Colombo, the tower has been called a symbolic landmark of Sri Lanka as well as a colossal white elephant and has been mired in controversy for years. (Colombo/Nov9/2026)

Markets

CIC Holdings Sept quarter net profit rises 20-pct to Rs1.7bn

Monday November 9, 2026 11:50 am

ECONOMYNEXT — Sri Lanka conglomerate CIC Holdings recorded a net profit of 1.66 billion rupees for the quarter ended September 30, rising 20.3 percent from 1.38 billion rupees in the same quarter last year, interim accounts showed.

The group posted basic earnings per share of 0.87 rupees for the September quarter, up from 0.73 rupees a year earlier.

Quarterly revenue grew 3.4 percent to 20.89 billion rupees from 20.20 billion rupees, supported by broad-based growth across industrial solutions, livestock, and healthcare segments, which counterbalanced relative demand moderation in agricultural inputs.

Cost of sales rose 5.3 percent to 15.20 billion rupees, outpacing revenue growth and causing gross profit to contract marginally by 1.2 percent to 5.68 billion rupees.

Results from operating activities dropped 7.3 percent to 2.66 billion rupees from 2.87 billion rupees, impacted by higher operating overheads.

Selling expenses expanded 6.8 percent to 2.15 billion rupees, and general and administrative expenses climbed 5.8 percent to 1.07 billion rupees, while other operating income dropped 29.6 percent to 117.40 million rupees.

However, operating profits were cushioned by an impairment reversal on trade receivables of 85.83 million rupees, turning around from an impairment provision of 23.38 million rupees in the corresponding quarter last year.

Net finance costs climbed 35.4 percent to 712.25 million rupees from 526.01 million rupees.

The increase was driven by a 30.8 percent rise in finance expenses to 771.46 million rupees, primarily reflecting higher interest expenses on loans to finance elevated working capital and inventory requirements.

The quarter’s bottom line was strongly bolstered by CIC’s equity-accounted investment in John Keells Holdings PLC (JKH).

Share of profit from equity-accounted investees surged more than fourfold to 590.50 million rupees from 257.87 million rupees, driven by JKH’s strong profit expansion during the period.

The group also recognized a gain on bargain purchase of 55.59 million rupees during the quarter resulting from additional share purchases in JKH where the proportionate net asset value exceeded acquisition cost, compared to no such gain a year earlier.

With associate income gains offsetting operating margin contraction and higher borrowing costs, group pre-tax profit held virtually flat at 2.59 billion rupees, down 0.11 percent.

Income tax expense fell 29.4 percent to 606.24 million rupees from 858.71 million rupees, driving total group profit for the period up 14.1 percent to 1.98 billion rupees.

Total group assets stood at 108.58 billion rupees as of September 30, up from 99.75 billion rupees at the end of March 2026.

Group net asset value per share increased to 25.52 rupees from 22.10 rupees a year earlier.

CIC Holdings’ ordinary voting shares closed at 27.80 rupees at the end of September.(Colombo/Nov09/2026)

Markets

Sri Lanka stocks trend up; ASPI gains 0.78-pct

Monday November 9, 2026 10:40 am

ECONOMYNEXT – Sri Lanka’s Colombo Stock Exchange was trading higher on Monday, CSE data showed, with the benchmark All Share Price Index moving up 0.78 percent.

The ASPI was up 165.73 points at 21,405.38, while the more liquid S&P SL20 was up 0.61 percent, or 37.04 points, at 6,082.42.

Positive contributors to the ASPI were Commercial Bank (up 1.55 percent at 213.25 rupees), Ceylon Cold Stores (up 2.61 percent at 128.00 rupees), Asiri Hospital Holdings (up 10.00 percent at 30.80 rupees), Hemas Holdings (up 1.27 percent at 32.00 rupees), and Ambeon Holdings (up 6.02 percent at 37.00 rupees).

Namunukula Plantations (down 3.92 percent at 63.70 rupees), LOLC Holdings (down 0.62 percent at 400.00 rupees), and Chevron Lubricants Lanka (down 0.12 percent at 205.25 rupees) were top negative contributors.

Market turnover was 428.31 million rupees. Capital goods led turnover with 82.53 million rupees. (Colombo/Nov09/2026)

Bonds & Forex

Sri Lanka rupee at 332.54/58 to US dollar spot, bond yields steady

Monday November 9, 2026 10:35 am

ECONOMYNEXT – Sri Lanka’s rupee was quoted at 332.54/58 to the US dollar spot on Monday, stronger from 332.55/60 Friday, while bond yields held broadly steady, dealers said.

A bond maturing on 15.09.2029 was quoted at 10.90/95 percent, up from 10.85/95 percent.

A bond maturing on 01.08.2030 was quoted at 11.00/10 percent, down from 11.05/10 percent.

A bond maturing on 01.02.2031 was quoted at 11.10/20 percent, up from 11.10/15 percent.

A bond maturing on 15.12.2032 was quoted at 11.58/68 percent, up from 11.55/65 percent.

A bond maturing on 01.06.2033 was quoted at 11.80/95 percent, up from 11.80/85 percent.

A bond maturing on 15.10.2034 was quoted at 12.08/15 percent, up from 12.05/12 percent.

A bond maturing on 15.08.2036 was quoted flat at 12.30/40 percent.

The telegraphic transfer rate for the dollar was 328.05 buying, 337.05 selling; the euro was 363.3528 buying, 377.1336 selling; pound was 437.5954 buying, 451.7038 selling.

On the Colombo Stock Exchange the All Share Price Index was up 0.78 percent, or 165.42 points, at 21,405; while the S&P SL20 was up 0.58 percent, 35.19 points, at 6,080.

90,000 million rupees Treasury bills are to be issued through an auction on November 11. (Colombo/Nov9/2026)