News & market updates

Government plans to invest Rs. 382 billion in the education sector over 2027–2031 and will prioritise greater funding for vocational education in the 2027 Budget. The 2026 education allocation was Rs.303 billion (Rs.160b general, Rs.122b higher, Rs.20b vocational); officials also noted a proposed Digital Transformation Project and school rehabilitation works.

Sri Lanka welcomed 9,122 tourists in the first 15 days of July 2026, bringing cumulative 2026 arrivals to over 1.23 million (YTD arrivals 2% below last year). India remained the top source market with 314,163 visitors year-to-date.

Asian stocks fell after a major selloff in semiconductor and AI-related stocks, with Japan's Nikkei plunging about 6% to below 65,000 and China's Shanghai Composite and Hong Kong's HSI also sliding. US equity futures pointed to further losses and the yen weakened toward 162.5 per dollar.

Intex and InMac trade shows will be held 5–7 August 2026 at BMICH, Colombo, hosting over 300 international companies to help drive Sri Lanka's apparel export target of $8bn by 2030. The events will showcase fibres, fabrics, garment machinery, automation and seminars on sustainability and digital transformation.

Nojili Group CEO L.A.D. Palitha completed a business development visit to Myanmar (11–17 June 2026) to explore collaboration in gemstones, jewellery, tourism and investment. Meetings in Yangon and participation in the UMTA Travel Fair focused on eco-, cultural- and heritage-tourism and trade partnerships.

Sri Lanka's High Commissioner and the Federation of Malaysian Sri Lankan Organisations agreed to strengthen engagement to promote tourism and investment, exploring direct Malaysia–Northern Province air links and projects including hotels, golf, leisure and theme-park developments.

David Pieris Group will launch a five-day Social Empowerment Drive in Batticaloa from 15–19 July 2026. Activities include a public five-day trade fair featuring group companies, skills and entrepreneurship programs, traffic awareness, vehicle emission testing and Green Climate Action initiatives.

FACETS Sri Lanka 2027, the 34th annual international gem and jewellery exhibition, will be held 4–6 January in Colombo and will bring over 100 exhibitors and buyers from the USA, Europe, the Middle East, India, China and other markets. Organisers say the event aims to boost SME exporters, sustainable sourcing and market access for Sri Lankan gem and jewellery businesses.

Colombo's ASPI fell 1.7% this week while turnover hit a 65-week low of about Rs. 722.64 million; top drags on the index included John Keells (JKH), PKME and NDB. Banking led turnover (notably Sampath Bank) and activity was concentrated in capital goods, food & beverage and energy names.

Rights issue · 1:10 at Rs 32.00

Rights issue (1:10) at LKR 32/share

Sri Lanka gazetted an immediate ban on importing goods wholly or partly produced with forced labour on July 10, 2026, to avert a threatened 12.5% U.S. tariff under Section 301. Exporters—especially apparel, textiles and agricultural producers—now face stricter certification, higher compliance costs and potential supply-chain delays.

Sri Lanka's rupee closed at 336.15/25 to the US dollar in the spot market on Friday, while selected government bond yields edged slightly higher on several tenors (e.g., 15.09.2027 at 10.35/40%, 15.10.2030 at 11.60/65%).

The Exporters Association of Sri Lanka urged the government to publish clear, risk‑based operational guidelines and hold stakeholder consultations for newly gazetted regulations banning imports linked to forced labour, warning that unclear procedures could raise compliance costs, delay shipments and disrupt legitimate trade.

The Exporters Association of Sri Lanka urges the government and Customs to publish clear, risk-based implementation guidelines and consult stakeholders for the newly gazetted import ban on goods produced with forced labour to avoid uncertainty, higher costs and shipment delays.

Asian markets plunged on July 17 as a global technology-led selloff drove Japan and Taiwan down as much as 6% and pushed the Nikkei into correction territory (over 10% below its June 25 high). Market watchers cited rising yields, profit-taking in AI/semiconductor names and unwind of leveraged positions.

World Bank Country Manager Gevorg Sargsyan said Sri Lanka must strengthen export competitiveness and productivity to sustain its recovery, noting manufacturing value-added per worker is under half of Vietnam and labour productivity fell in 2024. He urged lower business costs, expanded market access and higher‑quality FDI; the Exporters' Association elected new office bearers at its AGM.

Oil prices rose as US-Iran hostilities intensified and Iran signalled the possibility of closing the Red Sea route, with Brent up $0.70 to $84.93/bbl and WTI up $0.81 to $79.76/bbl.

Sri Lanka sold Rs12,000 million of treasury bills on tap at average rates of 10.13%, 10.27% and 10.20%, bringing total bills sold this week to Rs132 billion.

Sri Lanka's rupee was quoted at 336.26/30 to the US dollar on Friday, while government bond yields were broadly steady; near-dated and medium-term maturities were quoted around 11.10%–11.85%.

Treasury expects Sri Lanka's sovereign rating to be upgraded from CCC+ to B- by early 2027 amid fiscal consolidation. Officials said talks are underway with three major rating agencies and the government plans to return to markets to raise $1.5bn in 2027-28.

Western Province cut entertainment tax rates for cinemas, sports and concerts in the Colombo Municipal Council area — cinema admissions cut to 7% from 10%, international sporting events to 14% from 15%, and foreign-artist concerts to 10% from 15%. A 5% concessional rate and exemptions for certain charity/veteran-artist events are retained.

The government advanced energy infrastructure ahead of Budget 2027, ordering Delft, Analaitivu and Nainativu to be developed as Green Energy Islands and reviewing 14 petroleum projects including eight new storage tanks at Kolonnawa and Muthurajawela. Major grid works reviewed include a second 220 kV underground cable to Colombo, multiple transmission projects, a STATCOM at Padukka, rooftop solar integration, and the planned resumption of JICA-backed projects with 2027 funding.

Commercial Bank of Ceylon Plc's Rs.20 billion Basel III-compliant Tier 2 debenture offer was oversubscribed on opening day, receiving applications for more than 200 million debentures and prompting the bank to close the offer. The bank may issue up to a further 100 million debentures in additional tranches and is awaiting Central Bank approval to include the issue as Tier 2 capital; basis of allotment will be notified to the CSE.

Secondary bond-market yields remained broadly steady with selected maturities trading between 10.53% and 12.10% and healthy transaction volumes. Money-market net liquidity surplus was Rs.143.41bn (SDFR deposits Rs.86.65bn), overnight rates ~8.95–8.98%, and USD/LKR closed at 336.20/336.30 (volume $37.02m).

Softlogic Finance (CRL.N0000) reported a financial year profit of approximately Rs.150 million and says its Capital Adequacy Ratio is about 61%. The company notes assets >Rs.7.5bn, a lending portfolio ~Rs.6.7bn, deposits >Rs.3.8bn and zero non-performing loans on new originations.

HNB General Insurance appointed Lakshman Silva as Non-Executive/Nominee Director and Sandra De Zoysa as Independent/Non-Executive Director to its board. The appointments are intended to strengthen governance and drive digital/CX transformation as the insurer scales its platforms and customer service architecture.

Arcasia Investment & Trading Ltd and ATX Partners agreed to acquire a 50.16% stake in Industrial Asphalts and will make a voluntary offer of LKR0.40 per share to remaining shareholders. The consortium bought ~1.8807bn shares at LKR0.40; shares last traded at LKR0.70 and assets were LKR0.47/share (end‑March 2026).