News & market updates

Colombo Stock Exchange opened higher, ASPI up 0.71% to 21,571.61, led by consumer durables and apparel with Teejay Lanka contributing Rs.546.8 million to morning turnover. Commercial Bank and Nations Trust Bank were top positive contributors; National Development Bank was the top negative contributor.

APB felicitated members who have risen to CEO roles in the banking sector, including HDFC Bank CEO Hemal Chaminda Lokugeegana. The event at Cinnamon Life highlighted APB's focus on professional development, networking and leadership-building for the banking industry.

Union Bank opened its second Leasing Hub in Negombo, providing faster, one-stop leasing solutions and aiming to support growth in the bank's leasing portfolio.

Pointlabs Technologies launched 'Anya', Sri Lanka's first AI-powered voice concierge for Standard Chartered Priority customers on 18 March 2026, offering voice-enabled travel and lifestyle recommendations, bookings, itinerary management and real-time concierge support.

Sri Lanka's ASPI fell 2.05% to 21,419.94 on Thursday amid uncertainty over US‑Iran talks and Brent crude rising above $100. Hatton National Bank, Melstacorp, Commercial Bank and C T Holdings were top negative contributors; Commercial Bank announced scrip dividend allocations of 14,236,941 voting and 984,260 non‑voting shares.

Gold held steady at $4,503.29/oz as investors awaited clearer signs on Middle East ceasefire talks; crude oil rose above $100/bbl and markets have priced out Fed easing this year.

Sri Lanka's rupee weakened to 313.90/314.25 per USD and bond yields opened higher (e.g. 15.09.2029 at 9.75/85% and 01.06.2033 at 10.90/11.00%); the ASPI fell 1.32% to 21,580.25.

Asian stocks struggled as Middle East ceasefire talks and widening conflict sent Brent crude to $103.35/bbl, stoking a surge in oil prices. The move lifted the dollar, pushed out expectations of Fed rate cuts and left MSCI Asia ex-Japan lower amid heightened market caution.

Central Bank Governor Nandalal Weerasinghe said imposing forex or trade controls is not the right response to Middle East conflict fallout, with the central bank keeping interest rates on hold and the government raising fuel prices to balance external and domestic demand. He added remittances remain strong, tourism is down, and the CB is using repo operations to mop up excess liquidity while warning that permanent sterilization is needed to avoid excess imports and pressure on the rupee.

CBSL Governor Nandalal Weerasinghe said the central bank does not see justification to grant a financial moratorium or suspend the parate law for MSMEs at this stage. He added the banking sector is healthy and current indicators do not point to a spike in NPLs.

Opposition Leader Sajith Premadasa called for immediate suspension of the parate law and a targeted relief package to save MSMEs, warning rising fuel prices and higher borrowing costs threaten about 4.5 million MSME entrepreneurs who contribute around 52% of the economy. He urged structured debt restructuring and direct Treasury support for affected businesses.

ADB will provide $100m in additional budget support, raising its planned 2026 budget support for Sri Lanka to $480m; it is also fast-tracking a $200m emergency loan and scaling its annual program to over $1bn to back infrastructure, reforms and human capital.

CSE extended its rebound as the ASPI rose 3.79% (797.62 pts) to 21,868.85, with market value gaining Rs.284.1 billion in the session and recouping about 48% of the Rs.1.1 trillion loss since the Middle East conflict began. Commercial Bank, Hatton National Bank, Melstacorp, John Keells and Hayleys led gains; turnover topped Rs.6.4bn and foreigners were net sellers (Rs.525m).

The Central Bank of Sri Lanka held the policy rate at 7.75% and said gross official reserves stand at $7.3bn, providing buffers against external shocks. It projects headline inflation around 2% in March and expects inflation to converge to the 5% target by Q2 2026, while warning risks from Middle East energy volatility could change the outlook.

CBSL Governor said the IMF mission (26 Mar–9 Apr) may seek a staff-level agreement to combine the Fifth and Sixth reviews of Sri Lanka’s $2.9bn EFF, potentially unlocking about $700m, and that recent external shocks (Middle East conflict, energy prices) could require significant program adjustments. He noted gross official reserves of $7.3bn and that detailed discussions on external sector and targets are pending.

The Central Bank held the OPR at 7.75% in its 2nd MPC review for 2026, leaving SDFR/SLFR and reserve requirements unchanged. Weekly T‑bill yields rose (91d 7.64%, 182d 7.95%, 364d 8.32%) in an undersubscribed auction; secondary bond market volatile and the rupee firmed slightly to ~Rs.313.8/314.5 with gross official reserves at $7.3bn.

Sri Lanka has cleared key steps in its third APG mutual evaluation on AML/CFT, with an on-site assessment set for 26 Oct–6 Nov and the final report due July 2027; amendments to three AML/terrorist financing laws have been gazetted and await Parliamentary approval.

Unit Trust industry reported AUM of Rs. 609 billion in February, up 4% YoY, with equity-related fund flows doubling to Rs. 68 billion. Fixed-income AUM fell 4.4% YoY; the industry added 2,623 unit holders (up 69.8% YoY) to reach 149,573 investors.

Union Bank opened its second Leasing Hub in Negombo to provide faster, one-stop leasing solutions and support growth of the bank’s leasing portfolio.

Mahindra Ideal Finance Ltd's debut LKR 1,000 million Tier-2 debenture issue was oversubscribed on day one. The five-year issue (maturing 2031) includes Type A fixed 12.00% and Type B floating (364-day T-bill + 3.50%) tranches, with proceeds to expand lending and strengthen Tier-2 capital.

The SEC and CSE convened a forum titled "Defining the Future of State-Owned Enterprises through Capital Market Integration" to encourage SOEs to use capital markets for funding; over 45 SOEs attended and the CSE promoted its Catalyst Board as a flexible entry point. Speakers highlighted benefits such as greater transparency, alternative debt and equity instruments, ESOPs and reduced reliance on Treasury funding.

People’s Bank launched the 'PrimeScore Privilege Loan', offering salaried individuals loans up to Rs.10 million at interest rates from 10% p.a. with no guarantor required. The facility is for borrowers with A1–A3 credit grades and includes quick processing and an online application option.

Senior leaders from Sri Lanka’s banking sector met in Colombo on 17 March at the 'Fraud Management Deep Dive 2026' to address rising fraud risks in digital payments and evolving regulatory expectations. Discussions highlighted AI-driven threats, the need for enterprise-wide fraud management, and technology solutions such as BPC’s AI-powered SmartVista.

Trade Finance Association of Bankers held its 29th AGM and elected Rajaratnam Naguleswaran (Assistant VP, DFCC Bank PLC) as President for 2026/2027. He outlined five priorities: technical excellence, digital trade finance, export/SME support, enhanced risk management and stronger member engagement.

Sri Lanka's Central Bank said it will stick to a flexible exchange rate, intervening only to manage excess day-to-day FX volatility, and has bought about US$700 million in the first two months to bolster reserves.

Central Bank Governor Nandalal Weerasinghe warned IMF programme conditions may change significantly at the upcoming fifth/sixth reviews as IMF staff visit Colombo Mar 26–Apr 9, citing Cyclone Ditwah and a >35% jump in energy prices that raised reconstruction costs and inflationary pressure. Completion of the combined reviews would unlock about US$700m in IMF tranches.

Sri Lanka sold 39.94 billion rupees of an offered 80 billion rupees at Wednesday's Treasury bill auction while yields rose across maturities (3M 7.64%, 6M 7.95%, 12M 8.32%). Sales by maturity: 3M sold 14.88bn of 20bn offered; 6M sold 7.39bn of 25bn; 12M sold 12.65bn of 35bn.

Colombo Stock Exchange jumped as ASPI closed up 3.79% at 21,868.85 and the S&P SL20 rose 3.81% to 6,134.23. Top positives included Commercial Bank, HNB, Melstacorp, John Keells and Hayleys; turnover was Rs.6.41bn with highest activity in food, beverages & tobacco.

Sri Lanka's rupee weakened, closing at 313.80/314.50 to the US dollar, while government bond yields were broadly steady (e.g., 15.02.2028 at 9.35/65%). Some longer-dated yields edged down — 15.12.2029 to 9.80/95% and 01.06.2033 to 10.80/90%.

The unit trust industry reported assets under management of Rs. 609 Bn in February, up 4.0% year-over-year and largely unchanged month-on-month. Equity-related fund flows doubled YoY to Rs. 68 Bn while fixed-income funds fell 4.4% YoY; unit holders rose 26.4% YoY to 149,573.