News & market updates

Gulf escalation and shipping disruptions have hit Sri Lanka's tourism, tea and apparel sectors, pulling the bourse down 12.7% through March 20; plantation and apparel stocks plunged (Namunukula -30.6%, Agalawatte -22%, Teejay Lanka -20.6%) while Sunshine benefits from higher palm oil prices.

Sri Lanka has held preliminary talks with Emirates and Qatar Airways to position Mattala Rajapaksa International Airport (HRI) as an alternative hub. The government hopes the move could revive tourism hit by Middle East conflict-related flight cancellations, though airline interest is described as preliminary.

IMF says Sri Lanka’s reform programme has made very significant progress: economy grew ~5% in 2025, inflation about 1.6% and reserves are rising with debt restructuring nearly complete. The IMF warned Middle East tensions could hurt trade, remittances and tourism and will send a review mission Mar 26–Apr 9.

Oil prices fell as European nations and Japan offered to help secure the Strait of Hormuz and the U.S. signalled moves to boost supply; Brent was $107.29/bbl and WTI $94.22.

The International Maritime Organization called for a provisional 'safe maritime corridor' in the Gulf to evacuate stranded merchant ships and seafarers after an emergency meeting that condemned Iranian attacks.

Colombo Stock Exchange closed up Friday with the ASPI +1.85% at 20,639.73, though the market is down 4.85% from last Friday. Turnover was Rs.4.39bn led by capital goods; top contributors included Sampath Bank, Hayleys, Colombo Dockyard, Melstacorp and John Keells, and Lanka Realty Investments said it will sell 57,204,262 shares to subsidiary Lee Hedges.

President Anura Kumara Dissanayake said the government will prioritise the export sector and intervene fully to overcome current challenges, highlighting difficulties in securing fuel supplies. He met leading exporters and industry representatives to discuss measures to minimise the sector's economic impact.

Lanka IOC's Lanka OIC unit (LIOC.N0000) is part of the India–UAE–Sri Lanka tripartite plan to renovate the Trincomalee oil tank farm to expand storage; Sri Lanka has allocated about Rs.32 billion over 3 years and aims to raise storage from ~25–35 days to ~60 days.

The APSEZ–John Keells–Sri Lanka Ports Authority Colombo West International Terminal (CWIT) handled one million TEUs in its first year after opening in April 2025. CWIT is a fully automated deep-water terminal with about 3.2m TEU annual capacity and a 1,400m quay.

Oil prices rose after Iran attacked multiple Middle East energy facilities, with Brent up $3.69 (3.44%) to $111.07 and WTI up $2.29 (2.38%) to $98.61, driven by regional escalation and damage to LNG and oil sites.

Colombo market rebounded as the ASPI rose 1.09% (222.54 pts) to 20,640.63 on turnover of Rs.5.27bn, while foreign investors were net sellers of Rs.191.2m. Banking led turnover (34%) driven by HNB crossings of Rs.607.7m; top movers included DOCK, RIL, AEL, MELS and ACL.

Colombo Stock Exchange ASPI rose 1.65% (335.95 pts) to 20,754.04, led by capital goods and banking. Colombo Dockyard jumped 8.74% and Access Engineering rose 4.46%; Ambeon Holdings announced a 1-for-4 share subdivision and Ceylon Land & Equity reported transfer of 241m rights.

Sri Lanka's economy grew 4.8% in Q4 2025 and 5.0% for the full year, supported by lower inflation and exchange rate stability. Industry expanded 7.8% in 2025 while agriculture rose 1.4% and services 3.3%, with falling interest rates and some private credit expansion.

Sri Lanka's economy expanded 5.0% in 2025, with GDP at constant prices rising to Rs. 13,128,577 million. Industry led growth at 7.8% while services grew 3.3% and agriculture 1.4%; authorities cited easing interest rates, a relatively stable exchange rate and stronger construction, manufacturing, financial services, IT and tourism activity.

Sri Lanka's economy expanded 5.0% in 2025, with Q4 growth slowing to 4.8% (from 5.4% in Q3). Industry led the expansion (7.8%) driven by construction, mining and manufacturing, while services grew 3.3% and agriculture 1.4%.

The Cabinet approved emergency procurement of 300,000 tons (±10%) of coal for the Norochcholai (Lakvijaya) power plant and authorised flexible procurement of petroleum, LP gas and coal for three months. The coal contract was awarded to India's Taranjot Resources Ltd. amid shipping and insurance disruptions linked to Middle East unrest.

Colombo Stock Exchange has lost over Rs. 1.1 trillion in value since the Middle East war began, with the ASPI down 2.49% (521.17 pts) to 20,418.09 yesterday. Panic selling hit retail investors, with COMB, HAYL, DOCK, NDB and AEL among 227 decliners and net foreign selling of Rs.104.7m.

Andre Fernando, Group Managing Director of MAC Group, assumed duties as Chairman of the Sri Lanka Logistics and Freight Forwarders Association (SLFFA) effective March 6, 2026. He cited the impact of the Middle East conflict on trade and urged industry modernization and adoption of digital logistics technologies.

JAAF chairman Felix Fernando says Sri Lanka's apparel exports were just over US$5.0bn in 2025 and urges a deliberate strategy to reach US$8bn through geographic diversification, higher-value positioning, trade facilitation, digital integration and a stronger investment climate.

Colombo West International Terminal (CWIT) handled one million TEUs in its first year, the fastest any Port of Colombo terminal has reached that mark. CWIT — a roughly $800m joint project involving Adani Ports, John Keells Holdings and the Sri Lanka Ports Authority — is a fully automated deep‑water terminal with about 3.2m TEU annual capacity.

India is negotiating six FTAs with Australia, Sri Lanka, Peru, Chile, the Eurasian Economic Union and Israel to expand market access, with talks at various stages and multiple negotiation rounds held since 2015–2026.

Colombo Stock Exchange closed down 2.41% as investors feared a fuel shortage, with the ASPI down 505.48 points to 20,433.78 and the S&P SL20 down 1.94% to 5,770.59. Top negative contributors were Commercial Bank (193, down 5.50), Hayleys (205, down 8.50) and Colombo Dockyard (108.75, down 10.75).

CBSL PMIs show expansion: Manufacturing PMI rose to 56.8 in February (from 56.1 in January) and Services PMI was 54.4 (down from 64.5), with a positive three‑month outlook ahead of festive demand but supply‑chain risks cited due to Middle East conflicts.

The Ceylon Chamber urged the government to temporarily limit non-essential foreign currency outflows and allow licensed bunkering firms to procure fuel independently, potentially in foreign currency, to protect exports and tourism amid the Middle East crisis. It also recommended prioritising IMF tranche continuity, dynamic fuel pricing, faster fuel and fertiliser procurement, and measures to support tourism and trade efficiency.

Government declared Wednesdays a weekly holiday for public sector employees effective tomorrow (18) to reduce fuel consumption; essential services (healthcare, ports, water, customs) are exempt and four committees will oversee energy and key sectors. Private sector asked to follow where feasible and state events suspended.

Sri Lanka services PMI fell to 54.4 in Feb 2026 from 64.5 in January, still indicating expansion. Growth was driven by professional and personal services, with accommodation, food & beverage and education expanding and employment rising.

Former Ceylon Petroleum Corporation Chairman Mohamed Uvais urged the government to cut fuel taxes to help stabilise prices, noting fuels were already increased by Rs.25 across categories and warning that disruptions could affect up to 35% of global oil transport.

Celeste announced an equity partnership with Sri Lankan music duo Bathiya and Santhush (BNS) as the quick-commerce and online supermarket celebrates six years and over 135,000 customers. The brand offers 24/7, 30-minute deliveries via UberEats and PickMe Market.

Sri Lanka's Manufacturing PMI was 56.8 in February 2026, indicating continued expansion, while the Services PMI was 54.4, also signaling expansion compared with the previous month.

President Anura Kumara Dissanayake said the government will implement energy-management measures, including a QR system for daily fuel allocations, to ensure uninterrupted economic activity and essential services amid disruptions from the Middle East conflict; a committee was tasked to report required fuel allocations by end of today.