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Today at 9:30 am by Rana

» දෙවන කාර්තුවේ ඉහළ වර්ධනය සමඟින් කොමර්ෂල් බැංකුව තවත් ශක්තිමත් වෙයි
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» අද වෙන්දේසියේ දී බිල්පත් පොළී නගී
Yesterday at 10:11 pm by nihal123

» ලක්‍ෂ්මන් සිල්වා DFCC බැංකුවේ ප‍්‍රධාන විධායක නිලධාරි තනතුරට
Yesterday at 12:29 pm by nihal123

» HOPL.N0000 ( Horana Plantations PLC)
Yesterday at 9:21 am by yellow knife

» පෑන් ඒෂියා බැංකුවේ ප්‍රාථමික අලෙවි කටයුතු මාස 06 කට අත්හිටුවයි
Tue Aug 15, 2017 1:16 pm by nihal123

» LIOC.N0000 (Lanka IOC PLC)
Mon Aug 14, 2017 2:37 pm by The Invisible

Mon Aug 14, 2017 9:33 am by yellow knife

» Plantation sector updates
Sun Aug 13, 2017 4:51 pm by The Invisible

» අධිකරණ ඇමතිට ආණ්ඩු පක්ෂයෙන්ම විශ්වාස භංගයක්?
Sun Aug 13, 2017 7:52 am by smallville

» සොහොන් කොතේ නම 'අකැප' ඇෆ්ගන් කතුන්
Sat Aug 12, 2017 2:59 pm by Ethical Trader

» කොරියානු අර්බුදය හමුවේ ශ්‍රී ලංකාවේ සූදානම
Sat Aug 12, 2017 2:42 pm by Ethical Trader

» TJL.N0000 (Textured Jersey Lanka PLC.)
Sat Aug 12, 2017 2:10 pm by Ethical Trader

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Sat Aug 12, 2017 9:10 am by Ethical Trader

» මැක්‍රෝන් සිය බිරිඳට 'ජනාධිපති ආර්යා' නිල තත්වය නොදෙන ළකුණු
Fri Aug 11, 2017 10:39 pm by jiggysaurus

» Video of the day...
Fri Aug 11, 2017 4:24 pm by Rana

» Cartoon of the day...
Fri Aug 11, 2017 1:58 pm by Rana

» LWL.N0000 (Lanka Walltiles PLC)
Fri Aug 11, 2017 11:25 am by pjrngroup

» RICH N.0000 Richard Pieris and company PLC
Fri Aug 11, 2017 11:08 am by Ethical Trader

» විසිපන්දහසේ දඩය අනුමතයි - දඩ මුදල වැඩි කෙරුණු රථවාහන වැරදි මෙන්න
Thu Aug 10, 2017 9:29 pm by jiggysaurus

» ජනපති අගමැති ඇතුළු "සම්මුති ආණ්ඩුව වෙනුවෙන්" රවී ඇමති පුටුව අතහරි...
Thu Aug 10, 2017 7:13 pm by smallville

» KFP.N0000(Keels Food Products PLC)
Thu Aug 10, 2017 7:11 pm by pjrngroup

» රවී කරුණානායක ඉල්ලා අස්වෙයි
Thu Aug 10, 2017 7:11 pm by smallville

Thu Aug 10, 2017 6:06 pm by Rana

» 10 Billion Dollar Companies Secretly Going Bankrupt !
Thu Aug 10, 2017 5:06 pm by කිත්සිරි ද සිල්වා

Thu Aug 10, 2017 3:25 pm by The Invisible

» ඇමති රවී විශේෂ ප්‍රකාශයක් කරමින් ඉවත් වෙන්න සූදානම්
Thu Aug 10, 2017 12:54 pm by කිත්සිරි ද සිල්වා

» කැබිනට් රැස්වීමට නැහැ ; ඇමති රවී අස් වෙයිද? නැද්ද?
Thu Aug 10, 2017 9:53 am by Ethical Trader

» How cricket found – Rajgama heros !
Thu Aug 10, 2017 12:54 am by කිත්සිරි ද සිල්වා

» උ.කොරියාව, ඇමෙරිකාවේ 'ගුවාම්' දූපතට පහර දෙයි ද?
Wed Aug 09, 2017 5:54 pm by Ethical Trader

» බැඳුම්කර ගනුදෙනුවලින් පර්පෙචුවල් ට්‍රෙෂරීස්‌ සියයට 400ක්‌ ලාභ ලැබුවා
Wed Aug 09, 2017 3:07 pm by Ethical Trader

» කන්දත් නැහැ -පොලිසියේ රස්සාවත් නැහැ
Wed Aug 09, 2017 1:35 pm by Yin-Yang

» ASPI Status Update
Wed Aug 09, 2017 11:31 am by Ethical Trader

» Obituary Notice.
Wed Aug 09, 2017 8:58 am by කිත්සිරි ද සිල්වා

» Sri Lanka lagging in stock market development in the region’
Tue Aug 08, 2017 11:10 pm by Backstage

Tue Aug 08, 2017 11:01 pm by Backstage

» ඖෂධීය ගබඩාවක්. ගුණයෙන් අනුනයි
Tue Aug 08, 2017 10:30 pm by Backstage

» පැහැරගැනුණු නිරුපිකාව ගැලවේ: 'මැදපෙරදිගට විකිණීමේ තැතක්'
Tue Aug 08, 2017 6:55 pm by Ethical Trader

» ඩොලරය-සාපෙක්ෂව-රුපියල-සියයට-2.5කින්-අවප්‍රමාණයට
Mon Aug 07, 2017 8:14 pm by nihal123

» හිල්ටන් හෝටලයට වෙන්න යන දේ මෙන්න. සේවකයන්ටත් 4% ක කොටස්
Mon Aug 07, 2017 8:13 pm by nihal123

» "ඉවත් වන්න" - ඇමති රවීට ජනපති දන්වයි
Sun Aug 06, 2017 9:01 am by malanp

» කෝටි 15-20 වටිනා මොනවද මේ මොනාක්‌ රෙසිඩන්සිස්‌?
Sat Aug 05, 2017 2:47 pm by nihal123

» Chinese-backed Port City to attract $13 b in investment from 2018
Fri Aug 04, 2017 6:44 pm by කිත්සිරි ද සිල්වා

» Buddha is Black Too !
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» බොට්ස්වානා බුදුපිළිමය සොරුන් ගෙන ගිහින්!
Fri Aug 04, 2017 5:57 pm by Ethical Trader

» Laughter the Best Medicine
Fri Aug 04, 2017 4:30 pm by කිත්සිරි ද සිල්වා

» Flying is the Safest mode of Transport
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» රාජ්‍ය සමාගම් දෙකක් කොටස් වෙළෙඳපොළට
Fri Aug 04, 2017 7:19 am by soileconomy

Thu Aug 03, 2017 6:07 pm by කිත්සිරි ද සිල්වා

» FLCH.N0000 (F L C Holdings PLC)
Thu Aug 03, 2017 5:21 pm by Rana

August 2017

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Underperforming SOEs To Add Over Rs 1.5T To CSE

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Underperforming SOEs To Add Over Rs 1.5T To CSE

Post by sashimaal on Sun Dec 04, 2016 10:43 am

Listing of underperforming State Owned Enterprises (SOEs) on the country’s bourse – Colombo Stock Exchange (CSE) is slated to add a minimum of Rs 1.5 trillion to the burgeoning market capitalization of Rs 2.69 trillion.

Presenting Budget 2017 Finance Minister Ravi Karunanayake implied that his government has been proactive in improving the performance of both strategic and non-strategic SOEs by infusing professionalism and operational independence.

“… in fact instead of becoming a drain Rs.50 million on the government coffers, they have contributed Rs. 65 billion as levies and dividends so far in 2016, which is an increase of almost 50 percent over 2014…. As stated by the Honorable Prime Minister, we will facilitate SOEs to become viable business entities. To that end, we will ensure that SOEs will be able to have cost reflective pricing structures and operational autonomy. In this background government will also enter into performance contracts with selected SOEs with regard to key performance indicators.”

According to the Minister, government was inclined towards listing non-strategic SOEs not with the motive of privatizing but broadbasing the ownership of public enterprises.

“We will also list non-strategic enterprises such as Hyatt, Grand Oriental Hotel, Waters Edge, West Coast, Manthai Salt, Hambanthota Salt and Hilton during 2017. Broad basing the ownership, it is expected that such listing will allow the government to raise at least USD 1,000 million, to settle our existing uneconomical, questionable and high cost debt that we inherited from the previous regime. We will also inform the Parliament of any other planned listing that may be undertaken during 2017,”

Although the exact model of listing is to be finalized in 2017, the listing is a step in the right direction expected to at least both increase state revenue and market capitalization by a minimum of Rs. 1.5 trillion. Colombo Stock Exchange (CSE) has 295 companies representing 20 business sectors with a market capitalization of Rs. 2,691.66 billion as at 1 December 2016.

Beyond carrying out regulatory functions, the state itself is a major participant in the market through its large stateowned enterprise (SOE) sector and public service, which in turn has impacted competitiveness in a number of sectors and labor market dynamics. SOEs have a significant market share in many sectors, including areas where there is not a strong apparent rationale for public intervention. This is most striking in the finance sector, where major SOEs make up close to half of the market. At the same time, there is a weak framework for public-private partnerships and relatively few cases of PPPs; infrastructure development over the past 10 years has been driven by direct public spending. Finally, the state plays an outsized role as an employer. There is strong demand for public-sector jobs as public-sector workers enjoy the advantages of formal employment and other benefits such as a pension. Moreover, the evidence suggests that there is a salary premium for public-sector workers and that this premium has grown between 2006 and 2012. Workers, particularly educated women, are queuing for public-sector employment.

There are 55 major SOEs enterprises covering a wide range of sectors. The 10 most important SOEs, which account for about 90 percent of the asset base of all major SOEs, are financial institutions (Bank of Ceylon, People’s Bank, National Savings Bank, and Sri Lanka Insurance Corporation), major public utilities (Ceylon Petroleum Corporation, Ceylon Electricity Board, and the National Water Supply and Drainage Board) and logistics/transport service providers (Sri Lanka Ports Authority, Airport and Aviation Services, and Sri Lankan Airlines). There are other smaller SOEs in banking, public utilities and logistics as well. Finally, the government has major SOEs in other sectors, including construction, livestock, lotteries, media, marketing and distribution, plantations, pharmaceuticals, industrial estates, mineral extraction, general trading and timber sales. Major SOEs accounted for nearly 17 percent of GDP in 2013.

SOEs play a significant role in Sri Lanka’s fiscal balance. Transfers from the budget to public enterprises have averaged about 3 percent of total expenditures (around 50 billion LKR), mainly driven by direct transfers and on lending to the Ceylon Electricity Board (CEB). The total debt of the 55 major SOEs accounted for approximately 4.8 percent of total public debt in 2013. This number reflects reductions in debt thanks to conversions of debt to government equity and capital infusions to strategic State-Owned Business Enterprises (SOBEs), which have regularly occurred and were particularly large in 2013.

Moreover, SOEs account for a significant share of lending. The two largest banks in the country continue to lend a significant share of their funds to SOEs, including several that are loss-making or non-revenue-generating enterprises.

In 2013, Bank of Ceylon (the largest bank by asset base and lending portfolio, holding 20 percent of market share) lent 38 percent of its total portfolio to SOEs (primarily to Ceylon Petroleum Corporation, Sri Lanka Ports Authority and Road Development Authority); and People’s Bank (the second largest bank with 15.6 percent market share) lent 28 percent of its total portfolio to SOEs (with high exposure to Ceylon Electricity Board, Ceylon Petroleum Corporation, and Ceylon Fertilizer Company Ltd). Since these banks account for a large share of the banking industry, this high SOE exposure could reduce funding available to the private sector and expose the banking sector to systemic risks given the precarious financial positions of the concerned SOEs. ... 5t-to-cse/
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