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Monday December 5th, 2022

Sri Lanka’s Expolanka shares jump over 16-pct on expansion plan

ECONOMYNEXT – Sri Lanka’s index-heavy Expolanka Hpldings, which has a network of logistic units in US, EU, Asia and Africa; shares gained over 16 percent after it announced it is looking to acquire logistic companies abroad on expansion plans.

The shares closed gaining 16.19 percent or 22.75 rupees up at 163.25 rupees a share on Friday.

It previously closed at 140.50 rupees a share.

Expolanka on Thursday announced that it has submitted proposals in response to calls for expressions of interest for the acquisition of certain logistic companies in international markets keeping in line with its expansion plans.

“The Board wishes to emphasize however that such expressions of interest have not been accepted to date,” the firm said in a stock exchange filing.

“Moreover, any finality to such transactions, if they are proceeded with, will be dependent on standard preacquisition procedures such as due diligences as well as corporate and regulatory approvals.”

Following the news, Colombo Stock Exchange market that has been on muted sentiments shot up, boosted mainly by Expolanka.

Expolanka wants to strengthen it’s logistic footprint in the North American trade lane, in Europe and intra-Asia, it said in its 2021 Annual report.

It has generated a turnover of 648 million rupees out of the 1.6 billion rupees total turnover today.

The company’s market capitalization stands at 319 billion rupees.

Last year Expolanka was one of the top performing companies as freight and shipping prices steeply rose in the global market, the shares of the company too hit the roofs.

Over 99 percent of the total 694 billion rupees revenue generated in 2021 had been from its logistic business.


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Sri Lanka’s shares gain in mid market trade

ECONOMYNEXT – Sri Lanka’s shares edged up in mid day trade on Monday (05), continuing the positive run for seven straight sessions on news over a possible debt restructuring from Paris Club, analysts said.

All Share Price Index gained by 0.69% or 60.10 points to 8,829, while the most liquid shares gained by 0.96% or 26.59 points to 2,801.

“The market was pushed up over the news of a potential 10 year debt moratorium,” analysts said.

The Paris Club group of creditor nations has proposed a 10-year debt moratorium on Sri Lankan debt and 15 years of debt restructuring as a formula to resolve the island nation’s prevailing currency crisis. 

Related – Paris Club proposes 10-year moratorium in 15-year Sri Lanka debt re-structure: report

The market generated a revenue of 2.1 billion rupees.

Top gainers during 1130 hours were Expolanka, Browns Investment and LOLC.  (Colombo/Dec05/2022)


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Sri Lanka bond yields slightly down

ECONOMYNEXT – Sri Lanka’s bond yields were slightly down at open on Monday while t- bills were inactive, dealers said.

The Central Bank’s guidance peg for interbank transactions was at 363.18 rupees against the US dollar, appreciated from 363.19 rupees on Friday.

“Only one bond is being quoted today, and the rest remaining unquoted” a dealer said.

A bond maturing on 15.05.2026 quoted at 29.30/30.00 percent down from 29.50/75 percent at Friday’s close.(Colombo/ Dec 03/2022)

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Sri Lanka should prioritize RCEP , not small FTAs: economist

ECONOMYNEXT – Sri Lanka should make joining the Regional Comprehensive Economic Partnership (RCEP) a priority instead of trying to negotiate multiple smaller deals, an economist has said.

“We do not have the bandwidth in government and the technical resources to do multiple trade agreements,” Anushka Wijesinghe an economist who has been involved in trade told a business forum in Colombo.

“I think RCEP should be number one priority, rather than three or four tiny bilateral goods agreements.”

Sri Lanka is trying negotiate a free trade deal with China and expand an existing one with India.

Data show that Sri Lanka has been able to boost exports with FTAs.

Sri Lanka has high tariff protection which ultimately backfire.

Sri Lanka has protectionist business interests their profits from overpriced goods have had priority over ordinary consumers and overall economic efficiency that comes from free trade.

Sri Lanka also has monetary instability, which has worsened under flexible inflation targeting, with a series of currency crises coming in rapid successions.

Forex shortages from mis-targeted interest rates under flexible or discretionary monetary policies have discredited free trade and liberalization in general and strengthened the hands of economic nationalists, analysts say.

The country also has monetary instability, which makes life difficult not only for investors but all economic agents.

Over the past two decades Sri Lanka’s exports have not grown as much as competitors. (Colombo/Dec05/2022)

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