News & market updates

Colombo bourse closed the week up 3.45% as the ASPI rose 0.54% yesterday to 23,654.30, with the market gaining about Rs. 264.8 billion in value for the week and daily turnover over Rs. 8.5 billion; top contributors included JKH, COMB, VONE, CARS and NTB.

Sri Lanka Insurance Corporation General Ltd (SLICGL) was the Official Insurance Partner of the Kedella Art of Living 2025 exhibition (14–16 Nov 2025, BMICH, Colombo), promoting its Home Protect Insurance and the Home Protect Lite five-plan offering and engaging hundreds of visitors.

China's CPI rose to a 34-month high of 0.8% in December while full-year consumer prices were unchanged, even as the PPI fell 1.9% in December and 2.6% for the year, signaling weak demand. Authorities pledged continued support, including possible rate/RRR cuts and 62.5bn yuan in bond funds for a consumer trade-in scheme.

Lanka Realty Investments PLC (ASCO) announced it has acquired a controlling stake in Lee Hedges PLC (SHAW) in a Rs. 4 billion transaction, adding Lee Hedges' ~Rs. 1.76bn in cash and boosting LRI's recurring income and balance-sheet strength.

Sri Lankan exports to Saudi Arabia rose 19% in Jan–Sep 2025 versus the same period in 2024, while total bilateral trade increased 9%. Embassy-led trade promotion, business delegations, product launches (eg Ceylon Biscuits Ltd.) and a new Saudi–Sri Lanka Joint Business Council were cited as drivers.

Trans Asia Hotels PLC and Asian Hotels & Properties PLC appointed Hishan Singhawansa as a Non-Independent Non-Executive Director on their boards. Singhawansa is CEO of Cinnamon Hotels and Resorts and an Executive VP at John Keells Group; the article highlights Cinnamon Life, a $1.2bn integrated resort project.

India will disburse about US$350m (of a US$450m package) to Sri Lanka denominated in Indian rupees, including US$100m in grants, to fund cyclone recovery — rebuilding roads, bridges and rail, housing, health, education and agriculture.

India plans an execution-led economic push with Sri Lanka in 2026 emphasizing investments, connectivity, digital collaboration and concessional financing, backed by a $450m post-Cyclone Ditwah package ($350m concessional lines, $100m grants). Engineering for the India–Sri Lanka grid interconnection is complete and Colombo Dockyard’s revival with Indian support was cited as ongoing commercial engagement.

India has committed $30 million in grants to rebuild cyclone-damaged bridges in Sri Lanka, with the first two inaugurations expected next week. The aid package also includes restoration of the Northern railway line and India airlifted Bailey bridge parts and other relief.

Lanka Realty Investments (ASCO.N0000) acquired a 51% stake in Lee Hedges (SHAW.N0000), buying 13,057,595 shares at Rs216 each. Lanka Realty closed down Rs1 at 46.10 and Lee Hedges closed up Rs23 at 254.

Colombo Stock Exchange closed up, with the ASPI rising 0.97% to 23,520, led by Wealth Trust's strong debut and gains in bank stocks. Top contributors included HNB, Sampath, Commercial Bank, DFCC and Central Finance, with turnover at LKR 12.32 billion.

Central Bank of Sri Lanka forecasts 4-5% economic growth in 2026, citing private credit expansion, a surplus external current account and gross official reserves above US$6.8bn, while warning of risks from Cyclone Ditwah. Inflation is expected to reach the 5% target by H2 2026 and the CBSL prioritises data-driven monetary policy and resilience measures.

US$1.2bn of Port City projects have been approved and are expected to start construction in 2025, with a further US$732mn of investments awaiting approval. Parliament cut Port City tax holidays to between 4–15 years, and officials said most prior investors indicated they will proceed.

President Anura Kumara Dissanayake said compensation for fully damaged houses and construction of new homes will begin on 9 January in Anuradhapura and Kurunegala. The meeting also addressed crop-damage compensation, a loan scheme for affected SMEs requiring bank engagement, and instructions to expedite agricultural payments and business registration.

President Anura Kumara Dissanayake ordered officials to develop mechanisms to register unregistered SMEs and to accelerate access to a 3% interest credit scheme for Ditwah-hit businesses. He also instructed housing reconstruction to begin from 9 January and expedited crop compensation payments.

Access Engineering PLC completed piling work for Home Lands’ Bayfonte Marina in Negombo one month ahead of schedule, deploying five piling machines to finish the high-quality work; piling completion allows the project construction to proceed in full swing.

Parliament approved amendments to the Colombo Port City law capping tax holidays at 15 years for billion-dollar investments and imposing shorter, rule-based terms for smaller projects. The law defines investment bands (A $1bn; B $500m; C $100m; D $25m) and offers reduced rates for secondary projects, while officials note currency instability and broader fiscal/IMF policies could still affect investment appetite.

Korea Exim Bank pledged $50,000 in humanitarian aid to Sri Lanka via the Korea Red Cross to support relief and recovery after Cyclone Ditwah; total Republic of Korea assistance to Sri Lanka now amounts to $550,000.

The Maha Bodhi Society of India donated Rs. 10 million to the 'Rebuilding Sri Lanka' Fund to support restoring livelihoods and rebuilding after Cyclone Ditwah.

British Sri Lankan Muslim organisations handed over a collective donation of £25,000 (Rs 10.5 million) to Sri Lanka’s National Rebuilding and Disaster Recovery Initiative after Cyclone DITWA. Representatives said over £250,000 was raised by British Sri Lankan Muslim organisations in the UK to support relief and recovery efforts.

The Cabinet approved awarding a Rs. 699.58 million (without tax) contract to NEM Construction Ltd to build an underground concrete way beneath the Mahaiyawa railway line on the Kandy–Jaffna (A-009) road. Three bids were received and NEM was selected as the most responsive and lowest bidder by the High-Level Standing Procurement Committee.

Cabinet approved calling for EOIs to lease 24 former ministerial bungalows on 30-year PPP leases. An officers' committee recommends repurposing them for embassies, diplomatic missions, high-end hotels, restaurants and other investment projects to ensure productive use.

Government bond yields in Sri Lanka fell overall through 2025 on fiscal consolidation, deflation and renewed demand, but episodic shocks—US reciprocal tariffs, the Iran–Israel conflict—and Cyclone Ditwah (Rs.500bn supplementary estimate) caused intermittent yield spikes and increased uncertainty for 2026.

Sri Lanka will spend more than US$350m to rebuild railway tracks damaged by Cyclone Ditwah, with the Nanu Oya–Badulla line estimated at about US$127m and other sections (Rambukkana–Kadugannawa $74m, Kotawella–Nanuoya $68m) contributing to the total.

A Rs699.58 million (tax excluded) contract to build a concrete underpass bridge at Mahaiyawa on the A09 in Kandy was awarded to NEM Construction; the cabinet approved the award after a standing procurement committee selected NEM from three bidders.

Sri Lanka's budget deficit will rise 1.4 percentage points to 6.5% of GDP in 2026 after an extra 500 billion rupees of Cyclone Ditwah relief and recovery spending. Capital expenditure is raised to 5.0% of GDP and authorities warned of rupee depreciation and exchange-rate policy concerns.

President Anura Kumara Dissanayake instructed Ministry Secretaries to fully and efficiently utilize 2026 budget allocations, including Rs. 1,400 billion for capital expenditure and Rs. 500 billion for cyclone reconstruction. He noted IMF EFF constraints (govt can spend about 13% of GDP, with at least 4% for capex) and urged timely project implementation.

President Anura Kumara Dissanayake said the 2026 Budget allocates Rs. 1.4 trillion for capital expenditure plus Rs. 500 billion for Cyclone Ditwah reconstruction, with overall expenditure kept within a 13% of GDP limit and at least 4% for capital spending. He instructed ministry secretaries to ensure optimal and timely utilisation of these funds.