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.

Blue Arc Manufacturing and the BOI signed an agreement to establish Sri Lanka’s first containerized substation assembly factory to manufacture and export skid and containerized substations. Units will be assembled and IEC-tested in Sri Lanka for Australian mining, tunneling and construction projects, using local labour and modular, IoT-capable designs.

Sri Lanka's total exports rose 4.22% year-on-year to US$1,401.78 million in February 2026. Services exports grew strongly (up 14.68% to an estimated US$334.9m) while merchandise exports edged up 1.32%, and Jan–Feb total exports were up 7.56% to US$2,896.31m.

Sri Lanka's merchandise exports rose 1.32% to $1,066.88m in February 2026, driven by coconut products, food & beverages and electrical/electronic components; tea, rubber and apparel exports declined.

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.

Hela Apparel has sought shareholder approval to sell Hela Clothing for $9m and up to 100% of Hela Brands for $8m (combined up to $17m) to a strategic investor. Proceeds will be used to partly settle group liabilities and improve liquidity; an EGM is set for 3 April and approvals are required.

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).

Supply chain and shipping disruptions from the Middle East conflict are likely to keep Sri Lanka's import and energy costs elevated into Q2–Q3. Shipping routings add up to 21-day transit delays and bunker fuel costs have risen nearly 150%, while insurance and war-risk surcharges have also increased.

Fitch warned a prolonged Iran conflict could lift Brent to an adverse scenario averaging $128/bbl in Q2 2026 and $100/bbl for the year, heightening downside risks to Asia‑Pacific sovereign credit profiles through higher inflation, weaker growth and strained fiscal balances.

MAS Holdings said two subsidiaries, Texco Ltd and Noyon Lanka, have become bluesign System Partners, bringing 75% of MAS's wet-processing facilities into alignment with bluesign's chemical-management standards under its Plan for Change 2030 roadmap.

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.

Middle East war and near-closure of the Strait of Hormuz have caused port congestion that left hundreds of used cars (including luxury models) stranded or delayed into Sri Lanka, forcing diversions, offloads at alternative ports and higher freight and storage costs for exporters.

The Central Bank of Sri Lanka kept the Overnight Policy Rate at 7.75% and said low inflation (1.6% y/y in Feb) provides space to absorb higher energy costs, forecasting inflation will reach 5% in Q2-2026. It noted USD 7.3bn reserves, some rupee depreciation pressure and risks to tourism, trade and remittances.

Monetary Policy Board kept the Overnight Policy Rate unchanged at 7.75%. Inflation was 1.6% y-o-y in Feb 2026 and is expected to reach 5% in Q2-2026; the board cited higher global energy prices, Middle East conflict risks, and FX reserves of USD 7.3bn as key considerations.

ADB raised Sri Lanka's allocation for this year to $480m (up from $380m) and will promptly release $200m. The Cabinet has approved plans to secure $620m for five sub-programs covering trade/industrial development, MSME finance, water/sanitation rehabilitation, resilience and agricultural value-chain support.

ADB announced a financial support package including fast-disbursing budget support and reactivated trade and supply-chain finance (including for oil imports) to help developing member countries manage economic fallout from the Middle East conflict. The bank will use countercyclical resources and monitor energy, inflation and financial conditions.

The Cabinet approved expansion of a concessional loan scheme offering youth loans at a 4% annual rate via state banks, allocating Rs. 500 million in the 2025 Budget and an additional Rs. 750 million in the 2026 Budget to support young entrepreneurs in agriculture and industry.

Deloitte Sri Lanka urged Sri Lankan consumer companies to deepen their understanding of tax and regulatory frameworks and form strategic partnerships to succeed in cross-border expansion, with India highlighted as a key market. Panelists stressed due diligence, ESG standards, FTAs and risks like permanent establishment when entering new markets.

The ASPI rose 3.47% (706.26 pts) to 21,071.23, recovering Rs. 244 billion on reports of a possible de‑escalation in the Middle East; the S&P SL20 gained 3.91% to 5,909.23. Market turnover exceeded Rs. 4.2 billion with gains led by Commercial Bank, Sampath Bank, John Keells and Colombo Dockyard while foreigners were net sellers.

ADB announced a financial support package to help its developing member countries mitigate economic and financial impacts from the Middle East conflict, including fast-disbursing budget support and reactivated trade and supply-chain finance for oil imports. The bank will mobilize countercyclical lending and TSCFP support to address energy price volatility, supply disruptions, inflationary pressures and risks to tourism and trade.

Fitch warns APAC sovereign credit profiles face heightened downside from a prolonged Iran conflict as higher oil prices and supply disruptions raise inflation, weaken growth and worsen public finances; an adverse scenario assumes Brent at about $128/bbl in 2Q26 and $100/bbl for 2026. Net fossil-fuel importers (e.g. India, Korea, Pakistan, the Philippines, Maldives, Thailand) would be hardest hit, while supply-chain and fertiliser disruptions could amplify inflation and food-security risks.

Prym Intimates (William Prym Group) opened a new manufacturing facility in Hung Yen, Vietnam that began operations on 3 March 2026, its fourth global plant. The site supplements existing plants in Sri Lanka, China and Indonesia to strengthen production capacity and supply-chain flexibility for intimate apparel brands.

A Rs. 520 million, three-storey textile training complex at the Sri Lanka Institute of Textile & Apparel (SLITA) opened in Ratmalana. The facility includes a 150-computer CAD lab, art and fashion studio, auditorium and library to strengthen skills for the export-oriented garment sector.

MAS Holdings' subsidiaries Texo and Noyon have become bluesign® System Partners, bringing 75% of MAS's wet-processing facilities into alignment with the bluesign standard for responsible chemical management.

ASPI fell 1.33% to 20,364.97 as the market reacted to Middle East tensions and rising crude oil prices. Market turnover was Rs.2.37bn, the market has lost over Rs.1.1tn since 28 Feb, primary negative contributors were DOCK, JKH, RIL, DIAL and CFIN, while JKH, SINS and DIAL saw largest foreign outflows and PKME, WIND and TAP largest inflows.

The SLID-KPMG Audit Committee Forum (9 Mar 2026) urged audit committees to oversee ESG reporting under SLFRS S1/S2; panellists from Aitken Spence, MAS, Lion Brewery and DFCC discussed governance, data controls, implementation and sustainable financing.

Asia shares fell while US 10-year Treasury yields hit an eight-month high of 4.415% as the Gulf war escalated and Brent oil traded around $112.62 a barrel, lifting inflation and pushing markets to price out rate cuts.

Sri Lanka Bottled Water Association has asked President Dissanayake to revoke or suspend CAA Gazette No.2430/15 that sets MRPs for bottled water (e.g., Rs.70 for 500–999ml, Rs.100 for 1–1.499L). The group says rising fuel, PET, shipping and electricity costs make the fixed prices unsustainable for small and medium producers.