SMEs and entities serving domestic and foreign markets worst hit in COVID-19 crisis
By Lynn Ockersz
SMEs and businesses serving domestic and foreign markets were the worst-hit sectors at the height of the COVID-19 pandemic, a survey titled ‘An Initial Assessment of the Impact of COVID-19 on Employers’, carried out by The Employers’ Federation of Ceylon (EFC) reveals.
‘While the hospitality and food service sector recorded the highest economic losses in terms of revenue, foreign exchange earnings and investment, exporters employing more than 250 employees lost all their earnings, the survey report goes on to disclose. Commenting on the latter finding, the assessment states that, ‘Since large scale companies account for about 95% of total export earnings, the impact on the balance of trade will be devastating.’
The survey report was presented to the media on July 30 at the EFC auditorium, Rajagiriya by a panel of experts headed by Director General EFC Kanishka Weerasinghe. The survey period was April-May 2020 and covered 100 firms, employing 125,000+ employees. Highlights of the report were presented by Advisor HR & Coordinator Research of the EFC Dinesh Ruwan Kumara. The EFC intends using the study findings to ‘inform policy makers about the interventions necessary to help companies to manage the crisis and grow out of it.’
In his opening remarks EFC DG Weerasinghe said, among other things, that the pandemic was ‘like shifting sands’ and that the world needs to ‘prepare for future pandemic waves’ and their aftermath. He added that the adverse fallout from the crisis on local companies was contained by the EFC-formulated Tripartite Agreement on Wages. The latter ensured that local livelihoods were retained and helped guard against ‘mass unemployment’. The EFC has submitted a 10 point policy to the government on issues growing out of the pandemic and their containment.
Some other crucial findings of the survey are:
* More than half of all responding companies were faced with serious cash flow problems in meeting day-to-day expenses. The cash flow of about 18% of the companies was sufficient only for one month while another 39% stated that they could survive for about three months.
* Subjective estimates of job losses by responding companies averaged at 7% and 9% for executive and non-executive staff respectively, across the sample. The highest job losses among non-executive staff were reported in the finance and insurance and manufacturing (15%) subsectors, followed by hospitality and food services (11%), agriculture (6%), and wholesale and retail trade (5%). Among executive staff, the highest job losses were reported in manufacturing(10%), finance and insurance (8.3%) and information and communication (7.5%).
*All responding companies identified workforce protection to be the most important coping strategy at organizational level, while Work from Home(WfH) was the second most important measure, particularly in sub-sectors dominated by office-type occupations in the service sector.
* Labour market-related policies were identified by respondents as the most important area that the government needs to address. Sri Lanka’s existing labour laws do not provide for pandemic-like situations, leaving a huge gap in institutional mechanisms to manage crises of this kind.
* Among monetary and fiscal policy remedial measures, employers suggested the reduction of interest rates, extension of debt moratoria and granting credit and other financial support for firms to re-start operations.
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Unlimited music streaming platform in Sri Lanka
SLT-Mobitel, the nation’s ICT and Telecommunications Service Provider recently partnered with Spotify, to mark their launch in Sri Lanka. Spotify is a paid premium music streaming app which allows subscribers to listen to music to their hearts content. Both, SLT-Mobitel Post-Paid and Pre-Paid customers will now be able to enjoy Spotify by activating a monthly recurring subscription or one-time subscription plan and access unlimited music streaming and downloading facilities.
The subscription charges will get added to the user’s customary billing, where payment will be deducted in real time. Starting from the payment date, the user will be able to access Spotify and download their favourite songs, for the next 30 days. Users who sign up for their first monthly subscription will receive an additional one month, courtesy of Spotify. The one-month subscription plan is not applicable with one-time subscription plans. SLT-Mobitel data rates, depending on the user’s respective broadband charges, will apply.
Spotify also has some exciting features that will provide SLT-Mobitel customers with the opportunity to listen to ad-free music, access millions of uninterrupted music under one platform, play any song they like, anywhere they go, and also be able to enjoy their music offline.
SLT-Mobitel customers can select their preferred premium package under four categories; Individual, Duo, Family, Student. Each category has recurring and non-recurring plans. After one month of free streaming, the package will activate once the offer period terminates. While both, the Individual and Student premiums are limited to one account user, the Duo package offers two accounts and the Family premium is accessible through six accounts. To view Spotify plans, users can log on to https://spoti.fi/3aLWvce
Sri Lanka using ‘sovereign power’ over economy: CB Governor
by Sanath Nanayakkare
Anyone conversant with the elements of a political economy would know that Sri Lanka is using its ‘sovereign power’ to manage the different dynamics of the economy in a sustainable manner, Professor W. D Lakshman Governor of the Central Bank said on Wednesday.
“Some critics are saying that we adopt a so-called modern monetary theory. That’s not the case. In fact, Sri Lanka is using its sovereign power in a number of economic aspects to honour its external debt repayment commitments as well as to reduce its debt burden in the medium term as well as achieve resilient growth in the medium to long term, he said.
“We make policy decisions to boost our gross foreign reserves, meet our external debt servicing, to facilitate monetary expansion, to boost our GDP growth, to strengthen our current account balance and manage our domestic and external economic variables in a sustainable manner. This is not a modern monetary theory. This is an age-old tool used by central banks around the world when the circumstances demand it, he said.
“Certain trade-offs will be necessary when dealing with an economy which has a big fiscal gap to bridge. There are efforts to push Sri Lanka towards the IMF again which would in turn have influence on our policymaking. We have taken policy measures to stabilize the economy and we have adequate reserve levels to meet our debt repayments. Meanwhile, we are in negotiations with overseas central banks and multilateral agencies to further boost our reserve level and it would materialise within a matter of weeks,” he noted.
“One of the tools the Central Bank has introduced is in respect of repatriation of export proceeds into Sri Lanka and conversion of such proceeds into Sri Lankan rupees in order to strengthen the foreign exchange situation of the country,” he said.
The Governor made these remarks while delivering the keynote speech at a webinar organised by the Veemansa Initiative led by its Managing Director Luxman Siriwardene – the former Executive Director of Pathfinder Foundation.
The webinar revolved round the topic ‘External debt situation in Sri Lanka: Are we heading for a resolution or crisis?’
Professor Sirimal Abeyratne, Prof. Sumanasiri Liyanage, Dr. Nishan de Mel and Dr. Ravi Liyanage were the other speakers on the panel.
CSE on the rebound; indices close positive
By Hiran H.Senewiratne
CSE produced signs of a rebound yesterday with both indices closing positive, though turnover remained low. Central Bank Governor W.D Lakshman’s recent statement on managing foreign reserves gave some boost to the market yesterday, stock market analysts said.
The index experienced a zigzag movement within the early hours of trading; thereafter, it recorded a slight up-trend as it reached its intraday high of 7,439. Later, the market witnessed a down-trend at mid-day, followed by a sideways movement and closed at 7,372, gaining 43 points during the month of February, market sources said.
It is said the banking sector dominated turnover with a contribution of considerable parcel trades in Sampath Bank, Commercial Bank and HNB.
Further, the Commercial Bank’s impressive quarterly results during the recent turbulent period also built investor confidence. Commercial Bank was able to register a18 percent net interest income when other banks were reporting a decline. Its share price increased by Rs. 3 or 3.5 percent. On the previous day, its shares started trading at Rs. 85 and at the end of the day they moved up to Rs. 88. Due to the positive growth results, the bank announced a Rs. 4.40 dividend per share, plus a Rs. 2 script divergent for every share.
Further, Sampath Bank shares also appreciated in both crossing and retail. In crossings its shares appreciated by Rs. 1.At the end of the day they moved up to Rs. 154.50. In the retail market, its shares moved up by Rs. 2 or 1.3 percent. Previously, its shares fetched Rs. 154 and at the end of yesterday they moved up to Rs. 156.
Amid those developments, both indices moved upwards. The All Share Price Index went up by 104.48 points and S and P SL20 rose by 67.78 points. Turnover stood at Rs. 3 billion with four crossings. Those crossings were reported in Sampath Bank, where 3.9 million shares crossed for Rs. 602.2 million, its share price being Rs. 154.50, HNB 375,000 shares crossed for Rs. 39.4 million, its shares traded at Rs. 105, Pan Asia Power 9.5 million shares crossed for Rs. 33.2 million, its shares traded at Rs. 3.50 and Access Engineering 1.2 million shares crossed for Rs. 28.2 million; its shares traded at Rs. 24.
In the retail market top five companies that mainly contributed to the turnover were, Expolanka Rs. 450 million (10 million shares traded), JKH Rs. 205 million (1.3 million shares traded), Browns Investments Rs. 199 million (34.9 million shares traded), Sampath Bank Rs. 191 million (1.2 million shares traded) and Dipped Products Rs. 137.7 million (2.8 million shares traded). During the day 101 million share volumes changed hands in 18046 transactions.
During the day, Expolanka, the biggest contributor to the turnover, saw its share price appreciating by Rs. 6.20 or 15 percent. Its share price quoted on the previous day was Rs. 41 and at the end of trading yesterday it moved up to Rs. 47.
Sri Lanka’s rupee quoted wider at 193.50/195.50 levels to the US dollar in the spot next market on Thursday while bond yields remained unchanged, dealers said. The rupee last closed in the spot market at 194.50/195.00 to the dollar on Wednesday.