Sri Lankans in Melbourne, Australia engaged in a protest demanding for the President’s resignation at Melbourne Federation Square on Easter Sunday, today (17).
Category: News
“Galle GotaGoGama” removed tents are back after lawyers intervene
The tents which were enacted in Galle, dubbed the ‘GotaGoGama’ Galle branch, have been restored after legal intervention.
A tense situation arose on Sunday (17) morning when Police attempted to remove the temporary structure set up in the Galle Town in support of the Occupy Galle Face Protest in Colombo.
Food and water for protestors was accumulated at the tents which were removed by the Police.
"GotaGoGama Galle" protesters install more bigger tents after Police removed their tents this morning pic.twitter.com/FptN0I4mHs
— NewsWire 🇱🇰 (@NewsWireLK) April 17, 2022
Occupy Galle Face protest on for 8th-day
Sri Lankans continue to occupy the Galle Face stretch opposite the President’s Office demanding the immediate resignation of the President, Prime Minister, and the Government.
They have already rejected an offer by the Prime Minister for a sit down and discuss their issues.
A large number of people including artists and master blaster Sanath Jayasuriya joined the ongoing protest at Galle Face, the main beachfront in the capital Colombo, outside Sri Lankan President’s Office for the 8th day.
The Occupy Galle Face protest is continuing in the Galle Face Green area in the capital city of Colombo as the Island nation is facing its worst economic crisis since independence with food and fuel shortages, soaring prices, and power cuts.
Sri Lankans are protesting against the government’s handling of the economic situation, an the protesters have been accusing Rajapaksa’s government of corruption and misrule.
GotaGoGama branch set-up in Galle
The Occupy Galle Face protest in Colombo is gaining more support from many other parts of Sri Lanka and as well as across the world.
Over in the southern coastal city of Galle, a branch of the GotaGoGama (Gota Go Village) was opened on Friday (15) evening in support of the Galle Face Protest.
The people in Galle told News 1st that since they are unable to travel to Colombo due to the fuel shortage, they decided to extend their support from their hometown.
Sri Lankans are protesting against the government’s handling of the economic situation, the protesters have been accusing Rajapaksa’s government of corruption and misrule.
President chairs meeting on current situation
Several discussions were held on Saturday (16) under the auspices of President Gotabaya Rajapaksa regarding the current situation in the country.
The President’s Media Division (PMD) said the first discussion was between Finance Minister Ali Sabri, PC, Central Bank Governor Dr. Nandalal Weerasinghe, Secretary to the President Gamini Senerath, Presidential Advisor Lalith Weeratunga, and Secretary to the Ministry of Finance K.S. M. M. Siriwardena.
The President held another discussion with the participation of officials from the Ministries of Finance, Energy, and Health, said the PMD.
Analysis: Sri Lanka bondholders brace for big losses in debt restructuring
(Reuters) – Sri Lanka’s creditors face losing a third to half of their investment in the country’s dollar bonds, after the government announced it would restructure $11 billion worth of debt, the first such financial shake-up in its modern history.
Formal debt talks haven’t started but analysts are already crunching the numbers to estimate what kind of haircuts could be inflicted on bondholders.
Mired in economic crisis, Sri Lanka has halted all external debt payments and is prioritising its remaining hard currency reserves to buy food and fuel..
The country of 22 million has been hit by nationwide street protests and shortages of everything from power to medicines, and its dollar bonds trade at deeply distressed levels of around 40 cents in the dollar.
With markets factoring in an International Monetary Fund (IMF) loan programme as part of the debt overhaul, a $1 billion bond maturing on July 25 LK080475284= is valued at around 45 cents in the dollar, Refinitiv data showed.
Citi projects that, across the bonds maturing between 2022 and 2030, Sri Lanka may seek a coupon haircut of around 50%, a reduction of at least 20% in face value and maturity extensions between 10-13 years.
“Assuming an 11% exit yield, we estimate that the recovery value on the dollar bonds in such a scenario could range in the low to mid 40s,” Citi strategist Donato Guarino said, referring to the interest rate at which the new securities will trade on the day of the debt exchange.
Step-up coupons – interest payments that increase over time – could also play a role “to give the government more time to recover” after the restructuring, Guarino added, noting these were used in Ecuadorean and Argentine debt restructurings.
Tellimer analysts assumed in their base case scenario a 30% haircut. They assign a recovery value near 60 cents on the dollar for the bonds, with a 8% exit yield.
They also flagged an alternative scenario with a 42-cent recovery value and a 16% exit yield.
UNWELCOME SURPRISES?
Tellimer senior economist Patrick Curran considers a 50% haircut a “worst case” scenario, with a recovery value as low as 30 cents for a 16% exit yield.
He highlighted the possibility that the debt overhaul might not be as swift as hoped.
“While bondholders will receive some downside protection if negotiations drag out if interest is capitalised, prolonged delays will also make for a more onerous starting point and political risk will raise exit yields, potentially eroding recovery values,” Curran added.
Ratings agency S&P Global has said debt talks could be complicated and take “many months” to complete.
On Wednesday, it lowered Sri Lanka’s foreign currency rating to “CC” from “CCC” – two notches above the level denoting default – while Fitch cut its rating to “C” from “CC”. .
JPMorgan analysts say the debt servicing moratorium is expected to pave the way for an IMF programme but warn a restructuring might be “more comprehensive” than what has been announced.
As of now, the debt service suspension only covers about 55% of public debt, Citi calculates, noting the latest IMF report hints at a “tough programme ahead”.
The fund recommends tax reforms, and possibly, curbs on public-sector wages and capital expenditure.
Asset managers BlackRock (BLK.N) and Ashmore (ASHM.L) are among the top holders of Sri Lanka’s international bonds. They are part of a fledgling creditor group, with White & Case acting as legal adviser.
Bondholders are in wait and see mode until the government picks a financial adviser, one creditor said, speaking on condition of anonymity.
“The group’s idea so far is to be reactive, not proactive,” the source said.
Sri Lanka stock market shut after default announcement
Sri Lanka’s securities regulator has directed the Colombo Stock Exchange to be shut for five days after the island announced a suspension of debt repayments and domestic gilt yields soared as attempts were made to reduce money printing.
The Securities and Exchange Commission of Sri Lanka believed “it would be in the best interests of investors as well as other market participants if they are afforded an opportunity to have more clarity and understanding of the economic conditions presently prevalent, in order for them to make informed investment decisions.”
The Board of the Colombo Stock Exchange has made a request on April 15, to temporarily “close the stock market citing the present situation in the country.”
Sri Lanka’s central bank printed over two trillion rupees from 2020 to keep interest rates down, blowing the balance of payments apart driving up inflation and stock prices (asset price inflation).
When margin credit is available at low rates, the present value of long term assets go up. When rates eventually correct, prices come down to earth.
However there had also been strong inflationary expectations in the stock market where the rupee was expected to fall steeply after the money printing, keeping export and similar stocks up.
Stocks have stumbled in recent weeks as a monetary meltdown began and attempts are underway to arrest the slide.
Economists and analysts had warned that Sri Lanka was heading for dollar debt default and monetary meltdown and fuel shortages after ‘flexible’ inflation targeting, a pseudo domestic anchor with a reserve collecting peg, began trigger external instability and growth shocks.
Bar Association raises concerns over attempts to disrupt peaceful protests
The Bar Association of Sri Lanka today said it views any attempts to disrupt a peaceful protest by the people with grave concern.
Responding to the measures taken by the police to move its trucks to the vicinity of Galle Face Green where a peaceful protest by thousands of people is ongoing, President of the BASL, President’s Counsel Saliya Peiris said any attempt to disrupt in whatever manner what is a peaceful protest by the people of this country will have grave repercussions for the country, its democracy, its economy and the rule of law.
The Bar Association of Sri Lanka in a statement said the trucks have now been removed after it was highlighted in the social media and brought to the notice of the authorities.
“The BASL views with grave concern any attempt to disrupt in whatever manner, what is a peaceful protest by the people of this country. Any such attempt will have grave repercussions for the country, its democracy, its economy and the rule of law,” it said.
The BASL called upon the Government to desist from taking any steps whatsoever to disrupt what is a legitimate exercise of the freedom of dissent of the people.
Fitch downgrades SriLankan’s govt-guaranteed USD 175 Mn bonds to “C”
Fitch Ratings has downgraded the rating on state-run SriLankan Airlines Limited’s USD 175 million government-guaranteed bonds, due in June 2024, to ‘C’ from ‘CC’.
The move comes after the Sri Lankan government suspended foreign debt payments.
The rating action on the bonds follows the downgrade of Sri Lanka’s Long-Term Foreign-Currency Issuer Default Rating to ‘C’ from ‘CC’, and the downgrade of its foreign-currency bonds issued on international markets to ‘C’ from ‘CC’, the rating agency said.
Fitch said the national carrier’s bonds are rated at the same level as its parent, the state of Sri Lanka, due to the unconditional and irrevocable guarantee provided by the state.
SriLankan Airlines largely operates as a regional airline with a few long-haul flights. As of December 2021, the company has a fleet consisting of wide- and narrow-bodied aircraft in the Airbus A330 and A320 family respectively.
In 2019, SriLankan Airlines issued a USD 175 million bond to roll over a similar-sized issue that matured in June 2019.
The issue was fully guaranteed by the government and Fitch Ratings gave the bond a given provisional rating of ‘B(EXP)’ in line with the sovereign rating.
-Agencies
Private Jets & UL Cargo flights linked to Uganda – What’s going on?
SriLankan Airlines on Thursday (14) said it received an air cargo order to transport about 102 tons of printed material from Colombo to Entebbe International Airport in Uganda in February 2021.
The consignment was purely commercial in nature and brought in much-needed foreign revenue to the airline and country at the time. SriLankan wishes to emphasize that this cargo order was undertaken for commercial reasons only, it added.
The details of the cargo consignment were withheld due to contractual obligations as per air cargo industry standards said the statement.
However, in response to concerns raised following the statement the national carrier tweeted to say that the Ugandan government ordered Ugandan currency notes from a global security printer who operates several factories worldwide, including one in Sri Lanka, exporting to global markets.
It went on to note that SriLankan aircraft which were underutilised at this time (2021) during the pandemic were chartered by a UK based freight forwarder.
A tweet by the Airline Pilot’s Guild of Sri Lanka on the 23rd of February 2021, revealed that SriLankan Airlines operated three consecutive cargo flights to Entebbe in Uganda.
Sri Lankan Airlines said what is now being misunderstood is the Airline Pilots Guild proud announcement of this achievement of using unutilized pax aircraft.
HOWEVER…….
Multiple events between Uganda and Sri Lanka in recent times sparked serious concerns among Sri Lanka’s social circles.
The most recent of these events was when Sri Lankan Prime Minister Mahinda Rajapaksa travelled to Tirupati, India on pilgrimage, in a private jet.
This particular jet was leased for a very high price, and it arrived at the Ratmalana Airport for the Prime Minister to travel to India, from the Entebbe International Airport in Uganda.
Startling details of this particular jet were revealed by the Frontline Socialists Party in late 2021.
The Frontline Socialists Party on the 28th of December 2021 said that the private jet used by the Prime Minister to travel to India on pilgrimage had a flight history that is a cause for concern.
“The T7 – JSG has a very interesting flight history,” said Pubudu Jagoda, the Academic Secretary of the FSP, and the flight path detailed by him is as follows.
10th December 2021 : Arrives at the Katunayake Airport from India.
10th December 2021 : Flies to Jomo Kenyatta International from Katunayake Airport.
14th December 2021 : Travels to multiple locations in Kenya
14th December 2021 : Flies to Bukoba Airport, Tanzania
15th December 2021 : Flies to Kampala Airport (Entebbe International Airport) from Tanzania
16th December 2021 : Arrives at Colombo International Airport, Ratmalana.
Pubudu Jagoda said that after reaching Sri Lanka on the 16th of December, the private jet had flown to Cochin and Chennai in India on two separate occassions, before reaching the country once again.
23rd December 2021 : Flies to Thirupathi
24th December 2021 : Returns to Sri Lanka
27th December 2021 : Flies to New Delhi India.
Jagoda pointed out that the around Rs. 32 Million was spent for this priate jet, and raised concerns as to why the Prime Minister of Sri Lanka would resort to using a private jet, when he could have easily used a passenger plane.
UGANDA TO BE BLACKLISTED
Uganda’s financial industry risks being blacklisted by international systems for failure to put in place measures that can effectively prevent financial crimes like money laundering.
This is a requirement by the Financial Action Task Force (FATF), a global inter-governmental organisation on the initiative of the G7countries to develop policies to combat money laundering and terrorism financing.
Uganda was put on the ‘Grey List’, a list that shows the performance of countries regarding the safety or level of risk of their financial systems.
This came after the FATF declined to adopt Uganda’s Money Laundering and Terror financing risk assessment report done by the Ministry of Finance, the Financial Intelligence Authority (FIA) and some NGOs in 2018.
This was what the European Union based on to blacklist Uganda’s financial sector.
To avoid being downgraded to the “Blacklist”, Uganda must submit a revised report by May 2022, showing improvements responding to the gaps that were cited in the current report.
CONCERNS MOUNT IN SRI LANKA
Former Parliamentarian Hirunika Premachandra, the National Organizer of the Samamgi Vanitha Balavegaya told reporters on Friday (15) that rumour has it that all the money looted from the people were moved to Uganda.
She said based on the calculations of the weight of the currency that was supposedly airlifted by SriLankan Airlines Cargo, approximately 10 Million US Dollars have been moved out.
The Former MP also said that from 1986 to 2021 the Foreign Reserves of Uganda were around 1.5 Billion US Dollars, however in 2021 that figure has moved upto over 4.4 Billion US Dollars.
Concerns are mounting in the country over the transactions taking place between Sri Lanka and Uganda, an African country with so many issues concerning finances and monetary security.