Reclassification of ComBank shares lifts DFCC Bank June earnings

Reclassification of investments in the shares of Commercial Bank, from the earnings to comprehensive income, helped DFCC Bank PLC to lift its June quarter earnings but the impact from narrowing margins, loss of cash flows from moratoria, heavy provisions against possible loan defaults and overall muted business volumes, weighed on the company’s core banking performance.

Sri Lanka’s Rs.100mn Angel Fund accepts applications from startups

The Angel Fund, an initiative of the Lankan Angel Network (LAN), established with the support of ecosystem development partner Ford Foundation, has begun accepting applications from early-stage startups in Sri Lanka with regional and global growth potential which are not limited to the tech industry.

Special gazette outlines ministries and functions

President Gotabaya Rajapaksa yesterday published a special gazette notification on the ministries and their specific functions. The ministers are expected to be sworn-in on Wednesday.

EDB gets new Director General

The Export Development Board (EDB) yesterday announced the appointment of Chitranjali Dissanayake as the new Director General (DG) with effect from August 4, 2020.

China exports see unexpected spike in July

China saw another surprise jump in exports last month as the global economy slowly reopened after virus lockdowns, data showed yesterday, but there were warnings that while the country is expected to get back on track by year’s end overseas shipments would likely struggle.

Sri Lanka’s national milk output tumbles in 2019

Sri Lanka’s national milk output tumbled in 2019 amid an outbreak of foot and mouth disease in certain parts of the country and closure of several large-scale farms operating with imported cows, leading to an increase in cost of production and lower profit margins for farmers with no improvement in quality.

Central Bank liquidity facility extended to pharmaceutical suppliers

The Central Bank (CB) has decided to expand its liquidity facility for the construction sector to include the government contractors and suppliers in the pharmaceutical sector, to let them borrow at concessionary rates against the unsettled bills from the government.

Apparel exports down by 30% in first half

Sri Lanka’s apparel exports contracted by US$ 785 million or 30 percent year-on-year (YoY) during the first half of 2020 hit by COVID-19 pandemic related economic malaise, Sri Lanka Apparel Exporters Association’s (SLAEA) data showed.

ADB forecasts 22% drop in worker remittances

The Asian Development Bank (ADB) forecasts a 21.9 percent drop in worker remittance inflows to Sri Lanka this year, under the worst-case scenario, driving many remittance recipient households into poverty.

Asian markets sink as dour US data reinforces worries over virus

Asian markets struggled and the dollar extended losses yesterday as data showing the US suffered its worst quarter on record highlighted the impact of the virus on the global economy.

Pro-rate wages pact likely to be further extended: EFC

The tripartite agreement applicable to all industries that was extended till September is likely to be further extended as private sector businesses that were dealt a crippling blow by the pandemic have appealed for further assistance in dealing with their workforce.

JKH 1Q succumbs to pandemic-related biz disruptions

John Keells Holdings PLC (JKH) succumbed to the pandemic-induced business disruptions during the April-June 2020 quarter (1Q21), as the lockdowns, which remained for half of the quarter, erased nearly a third of its revenues, plunging the group deep into red.

Slowdown in worker remittances puts dampener on growth: Moody’s

The slowdown in worker remittances resulted from the pandemic could weigh on economic growth of countries heavily dependent on the foreign income flow as it could cut into the incomes, consumption and thereby the investments of recipient economies raising their credit risk, cautioned Moody’s Investors Service.

Freight rates spike seen cooling off

The freight rates out of Colombo, which hit an all-time high during the islandwide lockdown, are observed to be tapering down close to pre-COVID-19 levels, the Sri Lanka Logistics and Freight Forwarders Association (SLLFFA) said.

Decline in private sector credit decelerates in June

The decline in the private sector credit in June decelerated from May indicating that the banking sector is ramping up fresh credit to the private sector under both the Central Bank’s refinance credit scheme and from their own funds.

Vying to become safe tourist destination

A woman sunbather sitting along a beach in the Gulf emirate of Dubai yesterday, while the Burj al-Arab hotel is seen behind.

Turmeric sold at exorbitant prices due to massive shortage

Sri Lanka is currently facing a massive shortage in turmeric in the country leading traders to sell the processed spice via informal channels at prices that are over five fold higher than the government imposed maximum retail price (MRP).

First half tea production hits 20-year low

Sri Lanka’s tea output in the first half of 2020 hit a 24-year low amid severe drought, particularly in the first quarter, impacting the Low-Country tea production, which accounts for about 60 percent of the national tea output.

Fitch-rated firms here estimated to lose Rs.30bn in revenue to pandemic

Fitch Ratings has estimated that the Sri Lankan corporates rated by it could lose up to 7 percent or Rs.30 billion in revenues during the financial year ending in March 2021 from a year earlier, with the COVID-19 pandemic taking a toll on industries and businesses leaving only a few unscathed, before staging a recovery in the following year.

Lankan banks’ operating environment deteriorates

Fitch Ratings Lanka yesterday reminded that the operating conditions for the banking sector have weakened, exerting further pressure on banks’ ratings, after the rating agency downgraded the country rating in April, citing heightened public and external debt sustainability challenges caused by the pandemic-induced economic difficulties and the tax cuts late last year.

Merchandise exports rebound in June as exporters rise up to occasion

Sri Lanka’s merchandise exports recovered strongly in June, staging what looks like a V-shaped recovery in most of the sectors, as the country’s exporter community responded to the call to ramp up their contribution to support the economy and employment.

Iran proposes to operate direct flights to Sri Lanka

The Ambassador of the Islamic Republic of Iran, Hashem Ashjazadeh called on the Chairman of Civil Aviation Authority of Sri Lanka (CAASL) Upul Dharmadasa at the Civil Aviation Authority recently.

China’s 2Q GDP grows 3.2%, beats expectations

China’s economy returned to growth in the second quarter after a deep slump at the start of the year, but unexpected weakness in domestic consumption underscored the need for more policy support to bolster the recovery after the shock of the coronavirus crisis.

Right balance between credit growth and system stability urged

The extremely dovish monetary policy and liquidity injections into the system may be required to resuscitate the pandemic-hit economy, but that should not undermine the strength and stability of the financial institutions as excessive credit could increase credit risks of the system, specially at a time when certain rules on capital, liquidity and supervisory requirements are relaxed, according to ICRA Lanka.

Funding sources broadened, loans offered to lure more forex into Special Deposit Account

Sri Lanka broadened the funding sources that can be collected into the Special Deposit Account (SDA) and made possible cash-backed loans against such deposits, in a further attempt to lure foreign currency deposits, as the Monetary Board and government work together to bolster the country’s foreign currency reserves.

SL Police gets Rs.340mn Japanese grant to reinforce anti-narcotic activities

Based on a request by the Government of Sri Lanka (GoSL), the Government of Japan has agreed to provide a Japanese yen 200 million (approx. Rs.340 million) grant, under the Japanese non-project grant aid scheme, for provision of the necessary equipment to strengthen the investigation and detection capacities of drugs and related anti-narcotic activities of Sri Lanka Police.

Local value addition industries not denied of imports, says CB

It is inaccurate to say that import controls have hamstrung the local manufacturers and will impinge economic growth, as those who are engaged in domestic value addition industries can continue to import the required inputs, while essential industries such as agriculture and pharmaceuticals among others have also been freed from any restrictions, the Central Bank (CB) said.

CB approves Rs.60bn in loans for COVID-hit biz

The Central Bank of Sri Lanka (CBSL) had approved 22,306 loans amounting to Rs. 60, 250 million under the Saubagya COVID-19 renaissance facility as of yesterday with approval given for 2,066 new loans, amounting to Rs. 6,978 million during the week ended July 10, 2020.

CB expects economy to rebound in second half

The Central Bank (CB) anticipates a strong economic rebound in the second half of this year from the expected contraction in the second quarter due to COVID-19 related lockdown, although the growth projection of 1.5 percent could be subject to revisions in future.

Committee makes proposals to address irregularities in finance and leasing businesses

In view of the recent developments in the finance leasing business, Central Bank Governor Prof. W.D. Lakshman appointed a three-member committee to examine and report on the irregularities and illegal activities of the finance and finance leasing businesses and to make recommendations to curtail such activities.