Sri Lanka stocks fall as West Asia tensions rise, oil prices weigh

Monday July 20, 2026 2:42 pm ECONOMYNEXT – Sri Lanka’s Colombo Stock Exchange continued its downward slide to close down on Monday with selling pressure mounting as the situation in West Asia escalated. “With the ongoing hostilities and rising oil prices, we see significant nega…

Monday July 20, 2026 2:42 pm

ECONOMYNEXT – Sri Lanka’s Colombo Stock Exchange continued its downward slide to close down on Monday with selling pressure mounting as the situation in West Asia escalated. “With the ongoing hostilities and rising oil prices, we see significant negative sentiment coming in,” First Capital Holdings PLC’s Chief Research and Strategy Officer Dimantha Mathew said. “There’s no reason for sentiment to have changed, as the fund flow continues to shift from equities to fixed income amidst the higher interest rates.” The All Share Price Index closed down 0.80 percent, or 170.60 points, at 21,234.81; while the S&P SL20 closed down 0.72 percent, or 43.39 points, at 5,956.29. Turnover was 2.63 billion rupees. 184 companies were in negative, 60 positive, and 43 neutral. Top negative contributors were Dialog Axiata (down 1.10 rupees at 43.10), Commercial Bank (down 2.75 rupees at 201.00) and Richard Pieris (down 2.30 rupees at 28). (Colombo/Jul20/2026)

(L-R) Anjali Goonetilake, Chief Manager – Marketing, Sampath Bank; Actress Manel Wanaguru; Dulantha Sumathipala, Director, NAPCO; Hiroshan Waduge, Director, MUSE; Sudari Gunasekara, Managing Director, MUSE; Darshin Pathinayake, Chief Business Intelligence Officer; Sampath Bank

Monday July 20, 2026 2:21 pm

ECONOMYNEXT – Sri Lanka’s Sampath Bank digital commercial ‘Wewata Jeewayak’, for its CSR initiative, has won runner-up at the Sumathi Awards 2026. “The commercial highlighted the resilience of Sri Lanka’s farming communities while drawing attention to the importance of preserving the nation’s agricultural heritage and sustaining rural livelihoods for future generations,” the bank said. “The recognition reflects the impact of Wewata Jeewayak, a long-standing initiative through which Sampath Bank continues to support farming communities by restoring and revitalising village irrigation tanks across the country.” The commercial reinforced the importance of safeguarding the resources that sustain Sri Lanka’s agricultural sector and the communities that depend on them, the bank said. (Colombo/Ju20/2026)

Monday July 20, 2026 1:49 pm

ECONOMYNEXT – Fitch Ratings has given Sri Lanka DFCC Bank’s proposed 10 billion rupee Basel III subordinated debentures an expected ‘BBB+(EXP)(lka)’ rating. “We use DFCC’s National Long-Term Rating as the anchor for this instrument, because it reflects the bank’s standalone financial strength and best indicates the risk of the bank becoming non-viable,” the ratings agency said. The proposed debentures will mature in five years and will be listed on the Colombo Stock Exchange. The full statement is reproduced below: Fitch Rates DFCC Bank’s Proposed Basel III Subordinated Debt ‘BBB+(EXP)(lka)’ Fitch Ratings – Colombo/Singapore – 20 Jul 2026: Fitch Ratings has assigned DFCC Bank PLC’s (A(lka)/Stable) proposed Basel III-compliant subordinated unsecured debentures of up to LKR10 billion an expected National Long-Term Rating of ‘BBB+(EXP)(lka)’. The proposed debentures will mature in five years and will be listed on the Colombo Stock Exchange. The bank plans to use the proceeds to strengthen its Tier 2 capital base and to support balance sheet growth. The bank expects the proposed debentures to qualify as Basel III-compliant regulatory Tier 2 capital. The debentures include a non-viability clause whereby they will convert to ordinary voting shares upon the occurrence of a trigger event, as determined by the Governing Board of the Central Bank of Sri Lanka. The final rating is subject to the receipt of final documentation conforming to information already received. Key Rating Drivers DFCC’s Sri Lankan rupee-denominated subordinated debt is rated two notches below the bank’s National Long-Term Rating anchor. This reflects our baseline notching for loss severity on this type of debt and expectations of poor recoveries. There is no additional notching for non-performance risk, as the notes do not incorporate going-concern loss-absorption features. We use DFCC’s National Long-Term Rating as the anchor for this instrument, because it reflects the bank’s standalone financial strength and best indicates the risk of the bank becoming non-viable. We reviewed DFCC’s ratings with no rating action on 8 September 2025. See our latest rating action commentary, Fitch Upgrades 10 Sri Lankan Banks’ National Ratings and Affirms Five after Scale Recalibration, published on 21 January 2025, for the key rating drivers and sensitivities. Rating Sensitivities Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade A downgrade of the bank’s National Long-Term Rating would lead to a downgrade of the expected rating. Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade An upgrade of the bank’s National Long-Term Rating would lead to an upgrade of the expected rating. (Colomno/Jul20/2026)

Monday July 20, 2026 10:51 am

ECONOMYNEXT – Sri Lanka’s Colombo Stock Exchange was trending down on Monday, as the US continued to bomb Iran’s civilian infrastructure, and the West Asian country retaliated with strikes in Gulf countries. The All Share Price Index was down 0.72 percent, or 154.92 points, at 21,250.49; S&P SL20 was down 0.66 percent, or 39.48 points at 5,960.20. Turnover was 325 million rupees. Dialog Axiata (down 1.10 rupees at 43.10), Cargills (down 25 rupees at 605) and Commercial Bank (down 1.75 rupees at 202) weighed down the ASPI. The US said it had completed a ninth consecutive night of attacks on Iran. Iran’s IRGC claimed attacks on US military facilities in Kuwait and aircraft at Jordan’s Aqaba airport. (Colombo/Jul20/2026)

Monday July 20, 2026 10:26 am

ECONOMYNEXT — A high-level Sri Lankan delegation has met with US maritime regulators in Washington DC to discuss ocean shipping oversight and invite American officials to visit the island to highlight its position as a central Indian Ocean shipping hub. The delegation, which visited the United States in June, met with Federal Maritime Commission (FMC) Chair Laura DiBella and the commission’s legal team. The meeting was set up through Dustin Bickel, the Indo-Pacific coordinator at the US Embassy in Colombo, on the sidelines of the US Forum on Indian Ocean Ports and Supply Chains. The Sri Lankan group included Deputy Minister Janitha Ruwan Kodithuwakku, Presidential Special Envoy Hanif Yusoof, Sri Lanka Ports Authority (SLPA) Chairman Dr. Parakrama Dissanayake, and Shippers Academy CEO Rohan Masakorala, alongside Aritha Wickramasinghe and Shiran Dissanayake. During the talks, officials discussed how the FMC regulates international ocean transport and manages supply chain reliability. “The delegation extended an official invitation to Chair DiBella to visit Sri Lanka to showcase the nation’s role as a key Indian Ocean logistics hub,” the statement said. The visit was part of a US State Department-funded initiative aimed at strengthening trade ties across the Indo-Pacific region. As part of the tour, the Sri Lankan team also visited the Port of Baltimore. Officials studied automated systems and digital logistics tools to gather insights for modernizing operations at the Port of Colombo. (Colombo/Jul20/2026)

Monday July 20, 2026 9:32 am

ECONOMYNEXT – Sri Lanka’s rupee was quoted at 336.20/30 to the US dollar in the spot market on Monday, from 336.15/25 Friday, while bond yields edged up, dealers said. The telegraphic transfer rate for the dollar was 331.80 buying, 340.80 selling; the euro was 376.9467 buying, 390.8637 selling; and the pound was 445.4833 buying, 459.5289 selling. A bond maturing on 15.12.2029 was quoted flat at 11.10/20 percent. A bond maturing on 01.03.2030 was quoted at 11.30/40 percent. A bond maturing on 15.05.2030 was quoted at 11.40/50 percent. A bond maturing on 01.08.2030 was quoted at 11.55/60 percent. A bond maturing on 15.10.2030 was quoted flat at 11.60/65 percent. A bond maturing on 15.12.2032 was quoted flat at 11.95/12.05 percent. A bond maturing on 15.01.2033 was quoted at 11.97/12.15 percent. A bond maturing on 15.10.2034 was quoted at 12.12/20 percent. A bond maturing on 01.07.2037 was quoted at 12.60/70 percent. (Colombo/Jul20/2026)

Sunday July 19, 2026 8:30 am

ECONOMYNEXT – Foreign holdings in Sri Lanka rupee bonds hit a fresh near three-year high in the week ended on July 16 as offshore investors bought a net US$ 23.2 million worth of government securities, Central Bank data showed, amid a stable rupee currency. Foreigners bought a net 7,666 million rupees (US$23.2 million at 1$=330 rupees) in the week, which boosted foreign holdings in rupee bonds to 176,561 million rupees, the highest since July 27, 2023, the Central Bank data showed. The latest inflow boosted foreign investment in rupee bonds so far this year to US$106.6 million. The island nation witnessed a net inflow of over Rs.55.2 billion rupees (US$167.2 million) in the last four weeks after the rupee started to stabilize. The rupee currency’s selling rate fell to as low as 354 against the U.S. dollar on May 21 before recovering and gaining to the 340 level. The rupee had been steady for more than three years before the latest depreciation with the Central Bank citing higher oil and vehicle imports amid a lingering conflict in the Middle East. The rupee has fallen 7.8 percent through July 16 this year. Globally, investors are cautious about economic growth due to the impact of the latest Middle East escalation. The island nation enjoyed a total inflow of around 71.5 billion rupees (around US$234.4 million) into rupee bonds last year. Analysts said Sri Lanka’s deflationary policies in the past helped inflows amid curtailed imports. However, the island nation has seen an uptick in inflation in the last three months after nearly 50 percent hike in fuel prices gradually. The government reduced the fuel price in the last week of June. The Central Bank raised its key monetary policy rate by 100 basis points in May to curb inflationary pressure stemming from higher demand. Before the May rate hike, the Central Bank kept its key policy rates steady since May 2025 after reducing them by 825 basis points over 24 months since June 2023 and foreign investors have been buying rupee bonds despite slight depreciation in the local currency. (Colombo/July 19/2026)