News & market updates

Fitch assigned a 'AAA(lka)' National Long-Term Rating to Hayleys PLC's proposed unsecured senior redeemable debentures of up to LKR7 billion. Fitch noted subsidiary debt-to-consolidated-EBITDA rose to 2.9x in 3QFY26 (limit 2.5x) but expects it to moderate toward 2.5x in FY27, otherwise ratings risk.

A US-Israel strike on Iran and ensuing Strait of Hormuz disruption sent Brent crude up over 7% (above US$90) and led the Ceylon Petroleum Corporation to raise diesel prices (Auto +Rs4, Super +Rs6), threatening Sri Lanka's fuel supplies, tea exports and imports of construction materials.

Construction PMI climbed to 75 in January, the sector's second-highest reading, signaling strong expansion. New Orders rose to 77.8 and the Employment Index to 54.2 as firms reported increased project starts, higher hiring and inventory build-up amid longer supplier lead times.

The Cabinet approved establishing a National Housing Operational Committee and allocated around Rs. 100 billion for new house construction in 2026. The committee will coordinate and standardise housing programs across ministries, councils, NGOs and private groups to streamline delivery and monitoring.

The EU has allocated an additional €1 million (over Rs 370 million) to support humanitarian relief and basic services for communities affected by Tropical Cyclone Ditwah in Sri Lanka, adding to prior €2.35m and other EU partner assistance.

PMI Construction Total Activity Index rose to 75.0 in January 2026, its second-highest reading on record. New projects and orders drove higher activity, employment and inventory build-up, though firms reported skilled labour shortages and lengthened supplier delivery times.

Portugal's Foreign Minister Paulo Rangel called for a 'new era' of structured economic partnership with Sri Lanka, highlighting cooperation in renewable energy (solar and wind), tourism, infrastructure/public works and digital development. Both countries agreed to reactivate their Joint Cultural Commission, and Portugal said it will advocate constructive engagement on Sri Lanka's GSP+ review in 2027.

Colombo stocks rose with the ASPI up 0.33% to 23,781.23, led by blue-chip gains from JKH, HAYL, MELS, AEL and LMF. Banking counters faced selling pressure after Q4 results while capital goods drove turnover (27%); foreigners were net buyers of Rs.194m.

Cabinet approved awarding the consultancy contract for Phase II of the Anuradhapura North Water Supply Project to M/s. Nippon Koei Ltd. JV for JPY 82.39 million (Rs. 332.01 million) to supervise construction. The GoSL- and JICA-funded project will source water from Yaan Oya Reservoir and extend safe drinking water to several Anuradhapura divisions.

Home Lands has reserved a more-than three-acre land parcel at Port City Colombo for USD 40.1m (≈LKR 12.5bn) and plans a USD 300m mixed-use development of twin 40-storey towers with over 600 units. The company says the independent investment underscores its financial strength and confidence in Port City as an SEZ.

Hayleys PLC's Advantis unit has formed a joint venture with Sarens to supply and operate heavy-lift cranes and engineered lifting services in Sri Lanka, with the JV's first contract the 50MW Haywind wind farm in Mannar. The partnership will invest in crane and transport assets and provide end-to-end turbine installation and logistics.

The Land Valuation Indicator for Colombo District rose 10.6% year-on-year in 2H 2025; Residential LVI +12.4%, Commercial +11.3% and Industrial +8.0%. LVIs also recorded moderate semi-annual increases versus 1H 2025, with commercial and residential gaining more.

US Embassy Chargé d’Affaires Jayne Howell told an AmCham forum that deeper US engagement with Sri Lanka will depend on reciprocal trade, two-way FDI and predictable, transparent rules to attract American capital. She highlighted Port of Colombo expansion to 15m containers by 2027 and SelectUSA pathways for Sri Lankan firms to invest in the US.

Global debt hit a record $348 trillion at end-2025, rising by nearly $29 trillion over the year as governments added more than $10 trillion, the IIF said. The shift toward sovereign borrowing raised government debt to about $106.7tn, left emerging markets with large 2026 rollover needs, and heightens interest-rate and funding risks.

Hayleys PLC's logistics arm Hayleys Advantis has signed a strategic joint venture with Belgium-based Sarens to provide heavy-lift crane and engineered transport services for the 50MW Haywind wind power project in Mannar, including transport and installation of turbines.

Prime Lands Residencies PLC has acquired the Otters Club car park in Colombo 7 to develop 'The Elizabeth', a ground-plus-23-storey residential tower on about one acre. The development will integrate the historic Otters Club on floors 4–5 and is now open for reservations.

The Central Bank of Sri Lanka said Colombo District's Land Valuation Indicator rose 10.6% YoY to 261.9 in H2 2025, with Residential LVI up 12.4% to 273.1, Commercial up 11.3% to 260.6 and Industrial up 8.0% to 251.9. The overall LVI also rose 2.1% versus H1 2025.

Altair has attracted flagship showrooms from global automotive brands—TATA, JAECOO and OMODA are operational while BYD, DENZA and KIA will open shortly—enhancing the development's retail profile and involving corporate groups John Keells Holdings, Hayleys and DIMO.

Prime Lands Residencies PLC (PLR.N0000) has secured the Otters Club car park in Colombo 7 to develop 'The Elizabeth', a ground-plus-23-storey residential tower on about one acre and has opened reservations.

DFCC Bank reported record results for the year ended 31 Dec 2025: Group core business PAT of LKR 11.2 Bn and Bank PAT of LKR 16.03 Bn including a disposal gain. Total assets rose 22% to LKR 857 Bn and the loan book grew to LKR 516 Bn.

Economist Talal Rafi urged a disciplined shift from stabilisation to growth, calling for trade and productivity-driven reforms alongside fiscal discipline and reserve accumulation. He noted debt-to-GDP has fallen to near 100%, IMF growth at ~2.9% (this year)/3.1% (next) and reserves projected to rise to ~$8.8bn by year-end.

Colombo stocks closed in red, with the ASPI down 0.39% (92.40 pts) to 23,690.62 and the S&P SL20 down 0.71% to 6,681.12 on turnover of nearly Rs.3.7bn. Price losses in John Keells, Melstacorp and Nations Trust Bank were key negatives while ACL Cables, Access Engineering and Dialog were top turnover names.

Overseas Realty (Ceylon) PLC reported Group Profit Before Tax of Rs. 9,266 million for the year ended 31 Dec 2025, with Group revenue of Rs. 11,944 million, a 49% increase year-on-year. Growth was driven by higher apartment sales, increased rental income and a Rs. 3,223 million fair value gain on investment properties, while LKR depreciation caused a Rs. 511 million net exchange loss.

Colombo Dockyard (DOCK.N0000) has appointed Capt. (Retd.) Jagmohan, Biju George and Ruchir Agrawal as Non-Executive/Non-Independent Directors after Mazagon Dock Shipbuilders acquired a majority stake; Jagmohan will serve as Chairman.

Emirates will hold a recruitment roadshow in Colombo on 10 March 2026 to hire Workshop Technicians as part of a global drive to onboard 17,300 staff across 350 roles; attendees will be briefed on roles, remuneration, benefits and can apply online.

Cabinet approved procurement of 75 motor graders from United Tractors and Equipment Ltd for Rs. 1,424.25 million (exclusive of VAT) to support government infrastructure development programs.

Sri Lanka’s export earnings in January 2026 rose 13.71% y/y to US$ 1,532.6 Mn. Merchandise exports increased 10.66% (US$ 1,165.02 Mn) and services grew 24.59% (US$ 367.55 Mn), with strong gains in tea, coconut products, electrical/electronics and ICT/BPM, while apparel and gems/jewellery fell.

Prime and Melwa acquired a four-acre marina-front land parcel in Port City Colombo for $57.6m to build an ultra-luxury apartment development with estimated total turnover of about $250m. The USD-denominated project will be developed by joint venture Prime Melwa Port City Ltd. and is expected to finish within four years.

IMF Resident Representative Dr. Martha Woldemichael said sustaining reform momentum is critical for Sri Lanka to move from crisis stabilisation to transformation, noting four of eight EFF reviews completed and about $1.74bn disbursed. She urged trade liberalisation, digitalisation, labour-market reform, fiscal credibility and Central Bank independence to bolster investor confidence; reserves stood at $6.8bn and inflation was 2.3% YoY in Jan 2025.