28 August 2009

Hambantota Port to be Completed within One and a Half Years

28th august 2009, firstlanka.com

The first phase of the construction of the Hambantota Port will be completed within the next one and half years. Nearly 40 percent of the work have been completed up to now.

According to these sources, the depth of the port is 17 metres. After the completion the port will provide industrial and other services.

The port will also be a major commercial hub in the south.It will also generate more employment opportunties.

Hambantota Port (Harbour) on Google Maps

Colombo Stock Exchange Records Highest Gains since May 2008

27th August 2009, www.news.lk

On Thursday, the benchmark All Share Price Index (ASPI) of the Colombo Stock Exchange climbed more than 1% to its highest level since May 2008 due to high investor interest in blue chip stocks and hotel stocks. The ASPI which tracks the movements of all stocks gained 35.00 points or 1.37% to close the day at 2,588.04 points while the Milanka Price Index which tracks the most liquid stocks was up by 30.93 points or 1.07% to close the day at 2,935.15 points.

The market turnover for the day was Rs.1,146.56 million, the highest daily market turnover since 19 June 2009.

Your browser may not support display of this image.Heavily traded stocks for the day, in terms of volume were Hotel Services, Nawaloka Hospitals, Hotel Reefcomber, Dialog Telekom, John Keells Holdings, Seylan Bank (Non Voting), Tokyo Cement (Non Voting), John Keells Hotels, Janashakthi Insurance and Stafford Hotels.

The highest contributor to the market turnover was John Keells Holdings (JKH) contributing Rs.224.69 million with six negotiated deals (crossings). The JKH share gained Rs.0.75 or 0.55% to close the day at Rs.136.00, while trading at a high of Rs.136.75 and a low of Rs.135.00.

The second highest contributor to the market turnover was Hotel Services contributing Rs.126.96 million with three negotiated deals (crossings). The share gained Rs.2.25 or 12.33% to close the day at Rs.20.50, while trading at a high of Rs.21.00 and a low of Rs.18.50.

Index heavyweight Sri Lanka Telecom gained Rs.0.75 or 1.80% to close the day at Rs.42.50 after international credit rating agency Standard & Poor's revised its outlook on the corporate credit ratings on Sri Lanka Telecom to stable from negative.

Top mobile phone operator by market share Dialog Telekom was up by Rs.0.25 or 4.76% to close the day at Rs.5.50 with over two million shares traded.

In the hotels sector, Amaya Leisure gained the most with an increase of 13.73% or Rs.5.25 to close the day at Rs.43.50 while Tangerine Beach Hotels was up by 12.45% or Rs.7.50 to close the day at Rs.67.75. Heavy retail trading was seen in Stafford Hotels with 865,800 shares trading between Rs.23.75 and Rs.26.00 gaining Rs.2.75 or 11.96% to close the day at Rs.25.75. John Keells Hotels gained Rs.1.00 or 7.69% to close the day at Rs.14.00 with 934,000 shares traded.

In the banking sector, Commercial Bank gained Rs.3.25 or 2.21% to close the day at Rs.150.25 with 558,300 shares traded. Pan Asia Bank gained Rs.0.50 or 3.64% to close the day at Rs.14.25 with 740,100 shares traded. National Development Bank closed flat at Rs.166.00.

The top gainers for the day were Environmental Resources Investments (Share Warrants w0001) up by Rs.2.50 or 15.15% to close at Rs.19.00, Amaya Leisure up by Rs.5.25 or 13.73% to close at Rs.43.50, M T D Walkers up by Rs.10.50 or 13.68% to close at Rs.87.25 and Tangerine Beach Hotels up by Rs.7.50 or 12.45% to close at Rs.67.75.

The top losers for the day were Sierra Cables down by Rs.0.10 or 5.88% to close at Rs.1.60, Nestle Lanka down by Rs.25.00 or 5.75% to close at Rs.410.00, Ceylon Tobacco Company down by Rs.7.75 or 4.23% to close at Rs.175.50 and Asia Capital down by Rs.0.25 or 3.45% to close at Rs.7.00.

Sri Lanka Growth Rate - An Indication of Stability

27th August 2009, www.news.lk

Within three months of ending a three decade old cruel terrorist war that increased defence expenditure many a fold annually, Sri Lanka has gained a remarkable growth rate and economic stability is endorsed by the confidence of both local and foreign investors, Financial Analysts claim.

The business sector in the country has rapidly picked up with investor confidence gathering momentum and trade chambers expressing willingness to join the nation's development efforts.

The tourism sector seems to be heading towards an unmeasurable success with many local and foreign investors ready to invest in hotel expansion projects.

These investors, tourism sources said were eager to invest in the North and East where new areas of tourist promotion have been earmarked.

Meanwhile, the Chief of the Central Bank of Sri Lanka, Ajith Nivard Cabraal this week claimed that the countrty's foreign reserves have reach higher, a view endorsed in parliament by State Finance Minister, Ranjith Siyambalapitiya.

Giving a boost to the nation's new development efforts, investment promotion visits overseas undertaken by Ministers Anura Priyadharshana Yapa and Dr.Sarath Amunugama in the recent past yeilded results with a number of foreign investors scheduled to visit Colombo for talks.

In the bid to increase foreign exchange to the country, Foreign Employment Promotion Minister, Keheliya Rambukwella has explored the possibility of obtaining a large number of overseas employment opportunities for Sri Lankans in the West Asiia and countries outside that region reaching to the West and South East Asia.

The construction industry in the country has gathered a number of local investors with more construction work now in place in the once war torn areas in the northern front.

In these development and reconstruction process, thousands of direct and indirect employment opportunities have been created to reduce the unemployment rate in the country.

In addition, several projects are undertaken by ministries that create self employment projects to increase the income of the people.

26 August 2009

Two Sri Lankan Elephants Featured in ‘Asian Elephant Day’ at Washington National Zoo

26th August 2009, www.dailymirror.lk

The two elephants of Sri Lankan lineage were featured prominently in the 'Asian Elephant Day' celebration recently held at the Washington National Zoo (WNZ).

The event was sponsored by the Friends of the National Zoo, or FONZ, and the Embassy of Sri Lanka. Royal Kingdom of Thailand Ambassador Don Pramudwinai and representatives of the Embassy of India also took part.

The WNZ has three Asian elephants. Shanthi, was given to the zoo from the children of Sri Lanka in 1977. Shanthi gave birth in 2001 to Kandula, now the zoo’s second elephant of Sri Lankan lineage. The third elephant, Ambika, is from India.

“This celebration highlights the Smithsonian Institution’s efforts in the field of wildlife conservation in Asia, with special emphasis on the protection of elephants,” said Sri Lanka’s ambassador to the United States, Jaliya Wickramasuriya at this event.

Sri Lanka, has established the Pinnawela Elephant Orphanage near Kegalla to care for a herd of up to 75 elephants. Many are calves found abandoned in the wild. The Sri Lanka Department of Wildlife Conservation estimates that today there are between 3,160 and 4,405 elephants in Sri Lanka, with up to 2,870 in protected areas.

The Government of Sri Lanka has also established a network of national parks that protect elephants and their habitat. Tourists may observe elephants in the Yala, Wasgomuva, Udawalawe, Minneriya and Kaudulla national parks. The habitat is generally tropical and subtropical moist broadleaf forests.The celebration also featured free hot and iced Ceylon tea for all the zoo’s visitors and traditional dances by the Sri Lankan Youth Dance Group of the greater Washington area. SriLankan Airlines and embassy staff also distributed tourist information.

Northern Roads in Sri Lanka Reopened to Link the South

26th August 2009, firstlanka.com

The country soon become opened for road transport country wide after decades with the re-opening og main roads in the North to link the south.
The road running from Medawachchiya via Mannar, Madhu and Vavuniya is reopened after a decade being the shortest route to the Madhu Church from the South, the Ministry of Highways said.

Sources added that many highways in the north were shut down for the past decade or more paralysing links with the South due to LTTE terrorism. The road was reopened under the guidance of the Chairman of the “Uthuru Wasanthaya” Task Force and Senior Presidential Advisor and Parliamentarian Basil Rajapaksa.

The work was carried out on the instructions of President Mahinda Rajapaksa.

Passikuda in Trincomalee to be Developed as a Tourism Zone

26th August 2009, www.news.lk

The Tourism Promotion Bureau has implemented a programme to develop the attractive places in the country to locate them as tourism zones. Under the new programme Passikuda in Trincomalee will be developed further into tourist attraction.

Accordingly a number of new tourist hotels will be constructed in the area. to accomodate tourist traffic.

The Government has allocated a land extent of 100 acres for this expansion sceme. Several investors have already agreed to begin a hotel project. Nearly 7 hundred rooms will be constructed in these hotels. A Tourist Police station will also be set up in the area.

Department of Archaeology to Launch 51 New Projects

26th August 2009, www.news.lk

The Department of Archaeology has taken steps to launch 51 new projects this year to excavate and preserve ancient sites with archeological values.
The project has been designed with the assistance of the Haritha Gammana Project of the Environment Ministry, Archaeology Department sources said.

Initial steps have been taken to implement these projects with an allocation of Rs. 10 million for conservation of the ‘Ritigala Banda Pond’, a large stepped tank, intended for ritual bathing under the approval of Ministry of Environment and Natural Resources, sources added.

Colombo Stock Market Continued its Positive Momentum

25th August 2009, www.news.lk

The Colombo Stock Market continued its positive momentum with the market indices recording gains for the second consecutive day due to high investor interest in selected blue chip stocks and mid cap stocks.

The All Share Price Index (ASPI) gained 16.98 points or 0.67% to close the day at 2,547.44 points while the Milanka Price Index was up by 22.91 points or 0.80% to close the day at 2,891.86 points.

The turnover for the day was Rs.540.40 million compared with Rs.627.00 million recorded on the previous day.

Heavily traded stocks for the day, in terms of volume were Lanka Cement, Seylan Bank (Non Voting), Nations Trust Bank, Nawaloka Hospitals, Piramal Glass Ceylon, Environmental Resources Investments (Share Warrants), John Keells Holdings and Dialog Telekom.

The highest contributor to the market turnover was John Keells Holdings (JKH) contributing Rs.110.98 million. The JKH share gained Rs.0.25 or 0.19% to close the day at Rs.135.00, while trading at a high of Rs.136.00 and a low of Rs.135.00.

Lanka Cement continued to attract investor interest with over one million shares trading between Rs.32.00 and Rs.34.75 gaining Rs.0.50 or 1.54% to close the day at Rs.33.00.

Retail trading was seen in Coco Lanka with over three hundred thousand shares trading between Rs.29.00 and Rs.30.50 gaining Rs.1.00 or 3.45% to close the day at Rs.30.00.

Index heavyweight Sri Lanka Telecom lost Rs.0.50 or 1.18% to close the day at Rs.41.75 while Dialog Telekom closed flat at Rs.5.25.

In the hotels sector, Taj Lanka Hotels gained the most with an increase of Rs.2.00 or 10.00% to close the day at Rs.22.00 while Tangerine Beach Hotels was up by Rs.3.00 or 5.36% to close the day at Rs.59.00. Asian Hotels and Properties was up by Rs.2.50 or 4.17% to close the day at Rs.62.50. Galadari Hotels gained Rs.0.50 or 3.64% to close the day at Rs.14.25.

Among the banking shares to attract investor interest during the day were Nations Trust Bank, Seylan Bank (Non Voting) and Sampath Bank. Nations Trust Bank recorded a turnover of Rs.31.57 million with a negotiated deal (Crossing). However, the share closed flat at Rs.30.50.

Seylan Bank (Non Voting) gained Rs.0.50 or 6.90% to close the day at Rs.7.75 with 1,079,600 shares traded. Sampath Bank lost Rs.1.25 or 0.92% to close the day at Rs.135.00.

The top gainers for the day were M T D Walkers up by Rs.8.25 or 11.62% to close at Rs.79.25, Asia Capital up by Rs.0.75 or 11.54% to close at Rs.7.25, Tess Agro up by Rs.0.10 or 11.11% to close at Rs.1.00 and Vidullanka up by Rs.2.50 or 10.00% to close at Rs.27.50.
The top losers for the day were Beruwela Walk Inn down by Rs.7.75 or 11.92% to close at Rs.57.25, Hotel Sigiriya down by Rs.3.00 or 4.62% to close at Rs.62.00, Asiri Hospitals down by Rs.2.75 or 4.04% to close at Rs.65.25 and Amaya Leisure down by Rs.1.25 or 3.18% to close at Rs.38.00.

25 August 2009

Sri Lanka Central Bank in an Unusual Deal with a US Fund Manager Swaps Domestic Asset to Foreign

25th August 2009, www.lankabusinessonline.com

Treasury bills, a key domestic asset component at Sri Lanka's central bank, plummeted following an unusual deal with a US fund manager which effectively swapped them for hard currency.

According to official data released Monday the Central Bank's Treasury bills stock which represented money printed for the government during a balance of payments crisis, fell to 75 billion rupees from 131 billion Friday or a fall of about 490 million US dollars.

Sri Lanka central bank Governor Nivard Cabraal said last week that the country was issuing 4 to 6 year government bonds to a US fund manager converting bills in the monetary authority's balance sheet.

He said the fund manager brought in about 875 million US dollars to the country.

The unusual deal effectively swaps a domestic asset (T-bills) to a foreign asset (a dollar inflow which will be re-invested in dollar assets) to cover the country's monetary base.

Sri Lanka's monetary base is about 270 billion rupees.

Sri Lanka's central bank also has provisional advances (a form of direct monetizing of the government deficit or printing money) which are outstanding from the government.

In a pegged exchange rate environment such financing causes high inflation or exchange rate pressure.

The Central Bank said following the deal, its gross official reserves would top three billion US dollars, indicating that foreign reserve cover would overtake the monetary base. The rupee is now pegged at around 114.80 to the US dollar.

Sri Lanka also has a 2.6 billion US dollar standby loan with the International Monetary Fund. A first tranche of 322 million US dollars has already been disbursed.

Six Senses Spas to Set Up an Up-Market Resort in Sri Lanka with Aitken Spence

24th August 2009, www.lankabusinessonline.com

Aitken Spence, one of Sri Lanka's top hotel firms, has resumed talks with Six Senses Spas, an international spa chain, on building an up-market resort on the south-west coast, a senior official said.

Aitken Spence Hotels managing director Malin Hapugoda said the project is to come up near Ahungalla, in Beruwala, a prime beach resort where it has two properties, Heritance and Neptune.

"They (Six Senses) are keen to re-look at it and now we're having talks to restart the project," he told LBO.

He said the project had been mooted several years ago but shelved because of the island's ethnic conflict.

But the 30-year war ended in May when government forces defeated the Tamil Tigers and there was an immediate revival in tourist arrivals, with economic growth also expected to pick up.

Aitken Spence already has a tie-up with Six Senses which operates spas in the firm's Heritance Kandalama hotel in the north-central region and at the Tea Factory, a hill-country hotel.

The new project with Six Senses, originally billed as Evason Hideaway, Ahungalla, is for a combination of beach villas and several villas on stilts on a private island in the nearby backwaters of the Madhu Ganga river.

"Next to Heritance Ahungalla we have 10 acres and 27 acres on an island in Madhu Ganga, very close to Ahungalla, where we had planned a very up-market resort there with Six Senses," Hapugoda said.

"Plans for the project had been finalised but it was stalled due to the situation in the country."

Construction was originally scheduled to have commenced in 2010.

Sri Lanka Deploys more Troops to Speed Up Mine Clearing in North

24th August 2009, www.bloomberg.com

Sri Lanka said it is deploying more troops to speed up mine clearing in former conflict zones in the north and allow more than 280,000 mostly Tamil refugees to leave transit camps and return home.

“We do not want to take a risk as the government is responsible for ensuring the safety of internally displaced people,” Army Commander Lieutenant General Jagath Jayasuriya said, according to the Defense Ministry’s Web site yesterday.

The army will have to recruit between 25,000 and 50,000 new personnel as it has to maintain security in the north after the defeat of the Liberation Tigers of Tamil Eelam in May ended a 26- year civil war, Jayasuriya said.

Sri Lanka’s government is being pressed by the U.S. and United Nations to speed up the return of refugees who have been held in camps since the LTTE was defeated. Rains flooded centers earlier this month, prompting international aid officials to warn of outbreaks of disease.

“De-miners have to dig nine inches to determine whether each patch of land is mined,” the ministry cited Jayasuriya as saying in a newspaper interview. He didn’t give any date for the operation being completed.

Ninety percent of displaced people have returned to their homes in the Mannar district in the northwest, the Ministry of Defense said yesterday without giving detailed figures. About 3,000 people have been resettled in the northern Jaffna region and 4,000 in the east, it said.

Tamil Homeland

The army defeated the LTTE’s last units in a battle near the northeastern port of Mullaitivu, killing leader Velupillai Prabhakaran and his commanders and ending its fight for a separate Tamil homeland in the north and east. Kumaran Pathmanathan, the man appointed to replace Prabhakaran, was arrested Aug. 5 in an unidentified Southeast Asian country and brought to Sri Lanka’s capital, Colombo, for questioning.

President Mahinda Rajapaksa’s government says it needs to ensure security in the war zones. LTTE terrorists are masquerading as civilians and living among the refugees in camps, Defense Minister Gotabhaya Rajapaksa said in an interview with Sri Lanka’s daily Island newspaper last week.

The government said last week it is installing a drainage system at the Manik Farm camp in Vavuniya, where most refugees are held. The project is scheduled to be completed by Sept. 15, Mahinda Samarasinghe, the disaster management and human rights minister, said.

Displaced people should be given the choice of leaving the camps, Eric Schwartz, the U.S. assistant secretary of state for population, refugees and migration, said in Washington last week.

Human Rights Watch last week appealed for the refugees to be allowed to live with friends and host families to avoid deteriorating conditions at the centers.

“The government has detained people in these camps and is threatening their health and even their lives by keeping them there during the rainy season floods,” Brad Adams, the New York- based group’s Asia director, said. “This is illegal dangerous and inhumane.”

To contact the reporter on this story: Paul Tighe in Sydney at ptighe@bloomberg.net.

Sri Lanka Offers Pakistan an Exclusive Industrial Zone

23rd August 2009, Aug 23, www.lankabusinessonline.com

Sri Lanka has offered an industrial zone exclusively for Pakistan in a bid to promote inward investment from South Asian and Middle East regions, a media report said.

The Sunday Times newspaper quoted visiting chief of a regional business chamber, Tariq Sayeed as saying the offer had been made by Sri Lanka's industrial development minister Kumara Welgama.

Sayeed, head the SAARC Chamber of Commerce and Industry, a body set up after the formation of the South Asian Association of Regional Corporation, which is made up of Afghanistan, Bangladesh, Bhutan, India, Nepal, Pakistan, Maldives and Sri Lanka.

The offer comes soon after a Chinese company was handed over an exclusive industrial estate by the island's investment promotion agency.

The SAARC organization had been trying to promote regional trade which had been blocked by high tariff and non-tariff barriers after gaining independence from Britain.

Along with other Asian nations the South Asia suffered 'foreign exchange shortages' after sterling currency boards were broken and money printing central banks were set up.

This led to exchange controls, trade controls, import licensing and other restrictions on the freedoms of the billions of people in the region.

Many inefficient local business lobbies which produced poor quality goods, managed to corner captive domestic markets and sell overpriced goods to a population already made poor by high inflation by incompetent central banks.

Sayeed was quoted as saying that he will promote Pakistani firms to set up joint ventures in Sri Lanka and promote trade and investment links using the benefits of a South Asian Free Trade Arrangement (SAFTA).

Multilateral trade liberalization has however been slow in South Asia.

India has led trade liberalization in recent years, striking bi-lateral deals such as the Indo Lanka Free Trade Agreement. At one time Sri Lanka was a leader in economic liberalization but India and Maldives are now ahead.

Attempts to expand the deal into a Comprehensive Economic Partnership Agreement covering services have been stalled by rising protectionist power of some businesses that have strong political connections in Sri Lanka.

The Sunday Times said Sayeed wanted to remove non-tariff barriers to trade and liberalize trade in services to achieve intra-regional trade of 20 billion US dollars by 2010.

Sri Lanka to Maintain 10 % Limit on Foreign Purchases of Rupee Debt

By Anusha Ondaatjie, 21st August 2009, www.bloomberg.com

Sri Lanka will refrain from raising the 10 percent limit it has on foreign purchases of rupee debt at least until end-2010 to shield local financial markets from volatility, the central bank said.

An exodus of funds triggered by the global credit-market crisis caused a drop in the island-nation’s international reserves to an eight-year low of $1.27 billion in March. A $2.6 billion bailout loan by the International Monetary Fund last month and an end to the 26-year old civil conflict in May has revived investor interest in the South Asian country. Money managers based abroad bought $875 million of local-currency bonds this week, the central bank said yesterday.

“We will accept future flows very carefully to make the 10 percent limit as there’s no budgetary pressure with concessionary loans coming in,” C.J.P. Siriwardena, head of the public debt department at the Central Bank of Sri Lanka, said in a telephone interview from the capital Colombo. “We had a bad experience last year which we somehow managed.”

Foreign holdings of local debt plunged to $19 million last year from as high as $700 million as funds pulled out of emerging-market assets to tide over a worldwide credit crunch. Policy makers in November 2007 doubled the limit to 10 percent of the country’s outstanding treasury debt and also allowed purchases of rupee-denominated treasury bills for the first time in May 2008.

Sri Lanka plans to call for bids from investment banks to jointly manage a sale of $500 million of dollar-denominated debt overseas, central bank Governor Nivard Cabraal said Aug. 19.

Overseas investors’ holdings have increased to about 6 percent, or $1.2 billion, after the purchases this week, Siriwardena said.

To contact the reporter on this story: Anusha Ondaatjie in Colombo at anushao@bloomberg.net.

U.S. Government Encourages U.S. Companies to Make Sri Lanka their Next Business Stop

13th August 2009, www.lankaweb.com

WASHINGTON — The U.S. Government is encouraging U.S. companies and financiers to “make Sri Lanka Your Next Business Stop.”

The U.S. Trade Representative and U.S. Commerce Department have announced an Oct. 13-14 conference in Colombo for U.S. investors interested in Sri Lanka.

“This private-public conference will provide U.S. firms a unique opportunity to be among the first investors in the newly opened regions of Sri Lanka’s Northern and Eastern Provinces,” said a recent announcement made by the Export.gov, the U.S. government’s export promotion and finance internet portal.

Participants, the annoucement further said, “will meet one-on-one with Sri Lankan government officials to discuss specific investment opportunities. Targeted industries include IT (internet technology), healthcare, tourism & leisure, infrastructure, diamonds/gems & jewelry, manufacturing, processed food and education.”

The trade initiative is the result of a cooperative effort by the Office of the U.S. Trade Representative, U.S. Department of Commerce and the Embassy of Sri Lanka in Washington.

The US Trade Representative and Commerce Department promote U.S. trade activities and advise on trade policy for American companies. They have been active in promoting U.S. investment as a means of bolstering Sri Lanka’s post-conflict economy.

The full details of the conference announcement may be viewed at the Export.gov, internet portal: http://www.export.gov/articles/eg_main_020086.asp

Embassy of Sri Lanka
Washington, D.C.

22 August 2009

We may have to adjust our clocks. Today, if possible.

18th August 2009, www.prlog.org

"There is no time like the present", or so the saying goes. But earlier today it turned out that the present isn't what it used to be as scientists from the University of Edinburgh announced that our international time zones are actually 20 minutes fast.

The reason? A geographical mistake that pegged Britain's position in the Atlantic some 240 miles too far east back when the original time zones were designed.

The mistake was discovered by post-doctoral Research Assistant Dr Tomas Domingues during routine historical analysis into how the horizon has shifted in regions of the United Kingdom over the millenia.

"I ran the numbers and it just didn't add up", says Dr Domnigues. "The equations wouldn't balance unless I moved all of the British Isles 240 miles to the left. So I'm afraid I have no choice but to inform the world that we all need to adjust our clocks. Today, if possible."

Dr Domingues' paper, "Shifting Sands of Time: How the United Kingdom ended up in the wrong place", lists a bewildering array of numbers that prove beyond a doubt his assertions are true. But why did no-one notice this before?

"I guess it was hiding in plain sight", says Domingues. "It's just not the sort of thing anyone thought to question."

The "TwitterSphere" is abuzz with the news, including Australian celebrity Rove McManus (http://twitter.com/rove1974) who tweeted "Scientists discover Britain is 240 miles west of where it was thought, so current time zone is 20 mins ahead".

The new time zone has been labelled "New Scottish Time", in honour of its place of discovery. Dr Domingues hopes that his paper will stimulate discussion about exactly what time it is.

For more information, contact Dr Tomas Domingues at tomas.domingues@gravityrail.com or on +44 7 901 666 578.

or Judy Adlington on at jadlingt@staffmail.ed.ac.uk or on +44 (0) 131 650 2624

# # #

The University of Edinburgh is one of the top Universities in the Northern British Isles for geographic studies.

Full Article

21 August 2009

Peru, Indonesia and Sri Lanka lead Ten Best Performing Indexes

By Shiyin Chen, 19th August 2009, www.bloomberg.com

Investors should buy emerging-market stocks amid declines this month because valuations aren’t expensive even after their gains this year, according to Credit Suisse Group AG.

Shares in developing nations are trading at about 12.7 times reported earnings, just 5 percent higher than the levels seen at the start of previous rallies, Credit Suisse analysts Sakthi Siva and Kin Nang Chik said in a report. Global emerging market stocks may offer an “upside potential” of 25 percent in the next 12 months, they added.

The MSCI Emerging Markets Index has slipped 4.2 percent from this year’s high set on Aug. 3, trimming gains so far in 2009 to 46 percent. Indexes in developing nations account for all 10 of the world’s best performers this year, led by Peru, Indonesia and Sri Lanka, Bloomberg data show.

“The starting point of this rally was more depressed global emerging market valuations,” the analysts wrote. “With August seasonally the worst month for global emerging markets, we suggest buying on the dips in August.”

Emerging-market shares are trading at about 1.9 times book value, “marginally below” their historical averages, the Credit Suisse analysts said. Dividend yield of 2.7 percent is higher than their long-term averages, they added.

Economic Growth

Investors should buy emerging market stocks and sell equities in developed nations short because emerging economies will have faster economic growth and their shares are cheaper, Societe Generale SA said this week.

The MSCI Emerging Markets Index trades at 13.86 times the bank’s 12-month earnings forecast, below the 15.89 multiple for MSCI’s EAFE Index of developed stocks, wrote Rebecca Cheong, senior equity derivatives strategist for Societe Generale in New York. Emerging economies may expand by 4.8 percent next year, compared with 3 percent for developed nations and 2.2 percent for the U.S., economists at the French bank estimate.

“Even after production improves from historically low levels, healthy consumer demand will still be needed for a real recovery, which has not yet” occurred in developed markets, Cheong wrote. “With little hope of immediate strong export pick- up, countries will need to rely on internal growth, which is more favorable for emerging-market countries based on recent retail numbers.”

To contact the reporter on this story: Shiyin Chen in Bangkok at schen37@bloomberg.net

Sri Lanka to call for bids from investment banks to jointly manage $500 Million of Debt Abroad

By Anusha Ondaatjie, 19th August 2009, www.bloomberg.com

Sri Lanka plans to call for bids from investment banks to jointly manage a sale of $500 million of dollar-denominated debt overseas, Central Bank Governor Nivard Cabraal said.

“The timing and structure of the issue will be decided in conjunction with the managers,” Cabraal said in a telephone interview from the bank’s Colombo headquarters.

Sri Lanka is selling debt to rebuild roads, schools and hospitals in the country’s northern region after defeating the separatist Liberation Tigers of Tamil Eelam in May. Cabraal said July 21 a $2.6 billion International Monetary Fund loan will likely improve the island’s credit rating and help make borrowing costs cheaper.

Sri Lanka’s government in 2007 sold $500 million of bonds due in October 2012 at a yield of 8.25 percent, 397.2 basis points higher than U.S. Treasuries of similar maturity. The debut overseas bond sale, which was arranged by HSBC Holdings Plc, JPMorgan Chase & Co. and Barclays Capital, drew demand for more than three times the amount on offer.

Sri Lanka tapped HSBC and JPMorgan to arrange meetings last month with investors in the U.S., India, Hong Kong and Singapore to highlight renewed prospects in the island.

The IMF’s aid package and improved investor confidence with the end of the civil war have helped attract foreign capital and eased local borrowing costs, the central bank said July 23.

Standard & Poor’s on May 21 cut the island’s rating outlook to negative from stable because of depleting foreign-exchange reserves and delays in receiving the IMF bailout. S&P rates the nation’s long-term foreign-currency debt at ‘B’, five levels below investment grade. Fitch Ratings downgraded its outlook on Sri Lanka in February.

The nation’s reserves have climbed 71 percent in four months and are above the level stipulated in the loan agreement with the IMF, the central bank said Aug. 4.

Sri Lanka Keeps Interest Rate at Three-Year Low to Boost Growth

By Anusha Ondaatjie, 18th August 2009, www.bloomberg.com

Sri Lanka’s central bank kept its benchmark interest rates at a three-year low to help stoke an economic revival after the end of the island’s 26-year civil war.

The Central Bank of Sri Lanka held the reverse repurchase rate unchanged at 11 percent for a second straight month and maintained the repurchase rate at 8.5 percent, according to a statement on the Colombo-based bank’s Web site today.

Governor Nivard Cabraal last month raised the central bank’s 2009 growth forecast to as much as 4.5 percent from an earlier estimate of 2.5 percent, citing increased investments and reconstruction projects. Cabraal on July 21 predicted inflation this year at 5 percent.

“The central bank will probably watch inflation next month in keeping with a cautious monetary policy stance,” said Anushka Shah, an economist at Citigroup Global Markets in Mumbai.

Consumer prices in the capital, Colombo, rose 1.1 percent in July from a year earlier after gaining 0.9 percent in June.

Cabraal said July 31 there is “space for interest rates to come down further,” helping the government reduce the budget deficit in accordance with a $2.6 billion International Monetary Fund loan agreement.

Sri Lanka plans to raise $500 million from overseas investors to help rebuild the war-torn island after the IMF loan shored up the nation’s finances, Cabraal said.

The IMF’s aid package and improved investor confidence with the end of the civil war have helped attract foreign flows and eased local borrowing costs, the central bank said July 23.

Budget Deficit

The central bank had this year reduced the repurchase rate by 2 percentage points and lowered the reverse repurchase rate from 12 percent.

In return for the IMF loan, Sri Lanka has agreed to reduce its budget deficit to 5 percent of gross domestic product by 2011 and maintain flexibility in the exchange rate in order to build foreign reserves to cover 3 1/2 months of imports and bolster the economy.

Cabraal expects an average $150 million to be spent by the government, companies and foreign aid agencies each month over the next several years to rebuild roads, schools and hospitals in the country’s northern region, which was the last bastion of the rebel Liberation Tigers of Tamil Eelam.

The IMF expects Sri Lanka’s economy to grow more than 3 percent this year and accelerate in 2010.

“Easing interest rates remains essential in order to spur consumer demand, given the central bank’s ambitious growth forecast,” said Bimanee Meepagala, an analyst at Eagle NDB Fund Management Co. in Colombo.

To contact the reporter on this story: Anusha Ondaatjie in Colombo at anushao@bloomberg.net.

Vietnamese investment to flow into North and East of Sri Lanka

14th August 2009, firstlanka.com

Vietnamese investment will shortly flow into North and East of the country following discussions between Investment Promotion Minister,Naveen Dissanayake and Vietnamese Deputy Foreign Minister, Dao Viet Trung.

Minister Dissanayake stressed the need to attract more Vietnamese investment into the once strife torn North and East where permanent normalcy have been now restored.

The two ministers agreed to expand economic relations and business opportunities between the two countries.

They proposed to increase the current bilateral trade between Sri Lanka and Vietnam which was at present at a modest point and noted there was considerable scope to expand and upgrade such ties.

At present the two nations are in a double taxation agreement.An Investment Protection Agreement is due to be signed shortly.

Vietnam has experience in rebuilding and investing in conflict hit regions as Vietnam was a nation badly hit by the American war.

Courtesy: Government Information Department.

17 August 2009

East gathers tourist momentum in Pasikudah and Arugam Bay

17th August 2009, www.news.lk

Tourist flow to the Eastern sector has increased rapidly with the scenic Pasikudah tourist location being a key attraction,tourism sector said.

The number tourists visiting the East over the past two months has increased rapidly,they added.

The Arugam Bay location,once the joyful hum of tourists have revived its glory again with tourist flowing in.

Sri Lanka Tourism has planned many new projects in the East and North under the tourism development scheme after LTTE terrorism was defeated.

Higher prices for Sri Lanka’s rubber exports

17th August 2009, www.news.lk

Sri Lanka’s rubber exports this month fetched a higher price in the international market. It is the highest since December last year, claimed Plantation Industries ministry sources.

Sheet rubber has increased from Rs. 125 to Rs. 225 per kilo while crepe rubber has increased from Rs. 225 to Rs. 229 per kilo.

This is an overall price increase of nearly 30 percent.

According to the Rubber Development Department, 97,375 kg crepe and 30,565 kg of sheet rubber were offered for sale at yesterday’s auctions.

Sri Lanka produced two types of rubber for the international market in the form of finished goods and raw (material) rubber.

Sri Lanka’s main buyer is Pakistan while the European Union, Singapore and USA are among the other buyers.

Foreign exchange earnings through rubber exports amounted to Rs. 76 billion last year.

75% completed of Hambantota Harbour Project

17th August 2009, www.news.lk

The first phase construction work of the Hambantota harbour is nearing completion with over 75% work successfully completed at present, Sri Lanka Ports Authority sources said.

The port project is scheduled to be completed by 2010, one year ahead of the scheduled time period. The project is expected to be completed in four phases and would take 15 years for the completion of the entire project.

After completion the harbor will facilitate 33 vessels to anchor at once and modern technology will be utilized to handle the operational work of the harbour.

A key aspect of the new economic cooperation between Sri Lanka and China was the agreement by China to fund the Hambantota Port Development and related development at a cost of US $ 450 million. There was an additional agreement to fund the new oil refinery costing US $ 1 billion.

Minister of Ports, Dilan Perera in an interview said that the Ministry of Ports has under taken five mega development projects including Colombo South Harbour Project, Oluvil, Galle and Kankesanturai harbour projects.

“Hambantota might be the second biggest city in Sri Lanka. It is an entirely new place which consists of a new port, airport, highways and a huge amount of commercial buildings,” Ports Minister said in an interview with the ‘dailynews’ paper.

Meanwhile the Minister noted that a comprehensive plan has been drawn up to develop the Galle harbor with a separate area dedicated for Yacht Marena. He said that the UNESCO Plan will also be taken into consideration when implementing the new changes to the Galle development project.

Speaking on the current development programs that are underway in the southern region Minister Perera said that work is being done in the aviation sector as well.

“The new airport in the Southern Province will be a reality very soon.”

The arrival and departure lounge in the Bandaranaike International Airport (BIA), Colombo has already been completed and a range of new features have been added to the airport. The entire BIA is looking much better than what it was. It has been able to cater to more aircraft now. When the second airport comes up in Weeravila, more airlines and tourists will come to Sri Lanka,” he said.

Minister Perera said that the amalgamation of sea cargo and air cargo could immensely benefit for the speedy development of the country.

Hambantota Port (Harbour) on Google Maps

Sri Lankan tea attracts demand for high quality

16th August 2009, firstlanka.com

The high quality owing to lower quantity of chemical residual in Sri Lankan tea has greatly contributed to win the international market and position Sri Lanka as a country producing top quality tea, a local news papers reported quoting the Chairman of the Sri Lanka Tea Research Institute (SLTRI), Dr. Jerry Jayawardane.

Dr. Jayawardena disclosed that as a result of high quality of Sri Lankan tea the country is receiving a high acclaim from America, Europe and Japan for our products.

At the beginning of this year, the price per a kilogram of tea was recorded at Rs.280 at the tea auction in Colombo. The current competitive price of a kilogram of Up Country tea is recorded at Rs. 335.56, Chairman Jayawardena noted.

The price was Rs. 330.72 for Middle Country grown tea and Rs. 405.64 for Low Country grown tea, he added.

Accused Ponzi Duo From Sarasota Arrested in Sri Lanka

16th August 2009, www.theledger.com

Sarasota's John and Marian Morgan -- who fled the country in July to avoid federal contempt charges in connection with a get-rich-quick banking scheme -- have been arrested by authorities in Sri Lanka.

The couple were picked up on separate charges of running a fraudulent banking scheme, charges originating in the island nation off the southeast coast of India.

The Sri Lankan government is now reaching out to U.S. officials in an effort to figure out what to do next with the Morgans. The choices include extraditing them to the United States or prosecuting them first under Sri Lankan law.

Full Story

Malaysia keen to invest in Sri Lanka

14th August 2009, firstlanka.com

Trade between Sri Lanka and Malaysia has shown a rapid increase from last year and investing opportunities in the South Asian island nation by Malaysian investors seemed to gather momentum,trade sources revealed.

With the crushing of LTTE terrorism in the country, Malaysian investors have shown greater interest to come into Sri Lanka, sources said.

Both Colombo and Kuala Lumpur governments have opened trade and investment doors with a view for experise and exchange of technical know- how and cooperation.

Malaysia has already invested Us dollars 300 million from 2007 and the quantum increased to 400 million US $ last year.

Malaysian investors have described that Sri Lanka was now a potential investment market and the country’s economy looked quite stable and sound under the stewardship of President Mahinda Rajapaksa.

The Sri Lanka- Malaysia Business Council will meet shortly to further enhance trade ties and investment opportunities in the two nations.

Aitken Spence, Sri Lanka’s biggest operator of resorts, plans to expand its hotel and shipping businesses as war ends

14th August 2009, www.bloomberg.com

Aitken Spence Plc., Sri Lanka’s biggest operator of resorts, plans to expand its hotel and shipping businesses as the end of a 26-year-old civil war heralds an economic revival in the island nation.

Spence, which runs 27 properties in Sri Lanka and overseas, is “looking at” building a hotel on the northeastern coast, Deputy Chairman J.M.S. Brito said in a telephone interview from his Colombo headquarters. The company also aims to extend its marine agency network to include the area’s deepwater Trincomalee harbor, so far closed to commercial lines, he said.

Tourist arrivals to Sri Lanka’s white-sand beaches, ancient Buddhist sites and hill resorts rose for the first time this year in June, a month after the government defeated the separatist Tamil Tiger rebels. The central bank last month lifted its 2009 growth forecast for the economy to as much as 4.5 percent from an earlier 2.5 percent estimate, citing an increase in investments and

reconstruction projects

“With its vast portfolio of properties, Spence is well poised to gain from the no-war scenario, despite the global downturn,” said Bimanee Meepagala, an analyst at Eagle NDB Fund Management Co. in Colombo. “Tourism and shipping will be the main drivers.”

Spence shares have more than doubled this year, compared with a 67 percent gain in the benchmark Colombo All-Share Index.

Tourist Rush

Sri Lanka’s hotels may be fully booked from December to April, the peak period in winter, Ajit Gunewardene, deputy chairman of John Keells Holdings Plc., Spence’s larger rival in the country, said in an Aug. 5 interview.

Sri Lanka, which receives about 500,000 tourists each year, aims to attract 2.5 million visitors by 2016, President Mahinda Rajapaksa said in June. Tourism is the nation’s fourth-biggest revenue earner.

“The prospects are very good and not just in tourism,” Brito said yesterday. “We are seeking opportunities in the north and east.

We’ve had a very good August and the trend is for tourist arrivals to keep picking up.”

HSBC Private Bank in June forecast Sri Lanka’s $41 billion economy will bounce back from its weakest growth in six years and become the “Hong Kong of India” as the end of the civil war boosts business opportunities. Sri Lanka is poised to raise its growth and income levels as it rebuilds after the war, the World Bank’s Sri Lanka Director Naoko Ishii said on July 17.


The Board of Investment of Sri Lanka expects foreign direct investments to quadruple to $4 billion by 2012, led by investments in ports, tourism, telecommunication and textiles.

Aitken Spence has beach resorts and a tea factory converted into a hotel in the hills of central Sri Lanka and runs resorts in the Indian Ocean archipelago of the Maldives, Oman and India.

The group, which reported a 24 percent dip in fiscal first- quarter profit, has added power generation and freight services to the marine insurance agency it started about 140 years ago. Spence joined China Merchants Holdings (International) Co. last month as the sole bidder for a new $400 million terminal at Sri Lanka’s main Colombo port.

To contact the reporter on this story: Anusha Ondaatjie in Colombo at anushao@bloomberg.net.

Dialog Telekom to invest $ 10 m on Northern towers

13th August 2009, www.lankanewspapers.com

Dialog Telekom will invest USD 5-10 million this year to construct 60 new towers in identified areas in the liberated regions in the Northern Province, said CEO Dialog Telekom Dr Hans Wijesuriya. He was speaking at a press conference at the Cinnamon Grand Hotel after commissioning its services from Dialog s Network Operation Centre in Colombo to Mankulam, Pooneryn, Elephant Pass, Thunukkai and Madhu areas in addition to Kilinochchi and Mullaitivu with developments under way to expand coverage to other parts of the province.

Mobile coverage from Dialog now reaches these areas without any problem, he said. Dialog will continue to provide a clarity service for their customers and expand without looking at the customer base, he said.

Director General, Telecommunication Regulatory Commission, Priyantha Kariyapperuma said that two towers will be constructed in Jaffna and Kilinochchi and the Kokavil Tower destroyed by the LTTE will be reconstructed within 120 days. The 172-metre heigh Kokavil tower will be the tallest tower in the country. The foundation stone will be laid by Minister Anura Priyadarshana Yapa on August 19, he said.

All other mobile service operators will also be allowed to share the infrastructure to broadcast and telecast their programs using these towers.

The 120-metre Kilin-ochchi tower will be completed with Sri Lanka Telekom (SLT) and the areas will be identified shortly to have one or two towers in each area. He said that all three companies extended their fullest support to this initiative.

Chief Signals Officer of the Sri Lanka Army, Brigadier Prasad Samarasinghe said that the newly liberated area is getting mobile coverage for the first time and communication will be the most important once resettlement is completed. The Sri Lanka Army will continue to give its fullest support.

12 August 2009

The Microfinance Industry Report - Sri Lanka

05th August 2009, www.microcapital.org

PAPER WRAP-UP: The Microfinance Industry Report-Sri Lanka by Roshini Fernando

Produced by the Banking with the Poor Network, this microfinance industry report on Sri Lanka gives an overview of the country while providing the most recent information available regarding the financial sector, regulators, microfinance activities, microfinance providers, access to financial services, meso level support for the microfinance sector and government policy donor support for microfinance.

As of 2007, the total population of Sri Lanka is at 20 million with an annual population growth rate of 1.10 percent. The population below poverty line (Poverty Head Count Index) is at 15.2 percent with GNP per capita at USD 1,599 and a 7.1 percent GNP growth rate.

The commercial banks dominate the financial system in Sri Lanka with 23 commercial banks operating in the country. The Bank of Ceylon and the People’s Bank are the largest state-owned banks in terms of asset size and outreach. The introduction of modern technology is a means to improve service quality and stay ahead the competitive banking landscape. Competition has also encouraged financial deepening as formal financial institutions seek to reach lower income clients.

There country has received a substantial amount of foreign aid that was channeled to the microfinance sector following the tsunami that struck Sri Lanka in 2004. The report notes that while many donors have worked through established microfinance institutions, some funded the establishment of multi-sectoral livelihood programs that included microfinance components. Unfortunately, these were largely unsustainable in the long-term and had some detrimental effects on the sector in the short-term through their mix of grants and subsidized loans and the resulting damage done to the established credit culture.

As a result, regional microfinance institution BRAC of Bangladesh managed to rapidly scale up to become a major player among NGO-MFIs. BRAC has achieved an outreach of 75,000 microfinance clients in 4 years.

Sri Lanka has an absence of a cohesive regulatory and supervisory system for the microfinance sector. The report views this as one of the barriers to future growth of the sector. Also, with donors leaving the microfinance sector in Sri Lanka funding becomes a challenge, especially for NGO-MFIs that are restricted by law from accepting public deposits. They are also further restricted from obtaining off-shore debt and equity funding due to prevailing exchange control restrictions. Local funding is difficult to access as local banks and other funding agencies are still reluctant to lend to or invest in the microfinance sector (due to the perception of high risk).

Sri Lanka’s microfinance sector is served by a range of institutions as follows:
Type of institution & Number of outlets
• Regional Development Banks - 215 branches
• Other licensed specialized banks, Sanasa Development Bank - 36 branches
• Samurdhi Bank Societies - 1,038 societies
• Co-operative Rural Banks & Women’s Development Co-operatives - 1,684
• Sanasa/Thrift and Credit Co-Operative - 3,794 active societies
• Other MFIs (NGOs/LLCs/companies limited by guarantee) - 2,500
• Total (excluding banks & other financial institutions) - 9,267

Sectoral distribution of outlets regarding microfinance in Sri Lanka is heavily concentrated in rural areas. Almost 90 percent of the 7,141 outlets are located in rural areas. Less that 10 percent of outlets are located in urban areas with only 1 percent in the estate sector.

The annual interest rates on loans in Sri Lanka range roughly from 6 percent to a maximum of 36 percent (some NGO-MFIs). Loans are given for periods ranging from 1 month to 5 years (usually for housing loans). A small number of institutions report longer term loans going up to 10-12 years (CRB and Sanasa societies).

By Roshini Fernando, GTZ-ProMIS and Tharmini Kularajasingam, BWTP Network, published by the Banking with the Poor Network, Spring 2009, available at:

Hutchison Telecommunications sells it's stake in Israel to focus on its Southeast Asian businesses

By Tal Barak Harif and Mark Lee, 12th August 2009, www.bloomberg.com

Hutchison Telecommunications International Ltd., controlled by Hong Kong billionaire Li Ka- shing, agreed to sell its 51 percent stake in Israel’s Partner Communications Ltd. to Scailex Corp. for $1.4 billion to focus on its Southeast Asian businesses.

Scailex, an investment company owned by Israeli entrepreneur Ilan Ben Dov, will buy 78.9 million shares for 67 shekels ($17) each, the Israeli company said in a statement. Partner, the Middle East country’s second-biggest provider of mobile-phone services, rose 0.6 percent to 67.37 shekels as of 12:23 p.m. in Tel Aviv trading.

Li, 81, will use the $1 billion pre-tax profit from selling Hutchison Telecom’s biggest unit to increase investments in faster-growing phone markets including Indonesia and Vietnam. The agreement with Scailex comes two years after the Hong Kong company’s sale of a controlling stake in India’s Vodafone Essar Ltd., which generated profit of $8.9 billion.

“Mr. Li has rarely been wrong when it comes to selling his assets,” said Allan Ng, who rates Hutchison Telecom shares “sell” at BOC International Holdings Ltd. in Hong Kong. “He has a very good grasp of timing in these types of transactions.”

Hutchison Telecom, whose shares were suspended today, fell 1.5 percent to close at HK$1.98 in Hong Kong trading yesterday, trimming the stock’s gain this year to 69 percent. The benchmark Hang Seng Index has advanced 42 percent.

First-Half Loss

The company today posted a first-half loss of HK$285 million ($37 million), compared with a profit of HK$1.17 billion a year earlier, as it increased spending in Indonesia. Hutchison Telecom was expected to post a loss of HK$29 million, the median of three analysts’ estimates in a Bloomberg survey.

Partner, which offers mobile-phone services under the Orange brand in Israel, accounted for 58 percent of Hutchison Telecom’s sales of HK$23.7 billion last year, according to the parent’s earnings announcement in March.

“After Israel goes, their focus will shift toward Indonesia, Vietnam and Sri Lanka,” Lisa Soh, who rates Hutchison Telecom shares “underperform” at Macquarie Group Ltd. in Hong Kong, said before the announcement. “Assuming a transaction is concluded, expectations would be for the company to pay a special dividend.”

Limited Potential

Hutchison Telecom sees limited growth potential in Israel, Chief Executive Officer Dennis Lui said on a conference call.

Scailex expects its purchase of the Partner stake to be completed in three months, after all the regulatory approvals are obtained, it said in the statement.

“Our concern is that it seems Ben Dov is overpaying,” Gilad Alper, a Ramat Gan-based analyst at Excellence Nessuah Invesment House Ltd., wrote in an e-mailed note today. “Getting decent returns on his investment in an ex-growth environment will be very difficult,” according to the analyst, who has a “market perform” recommendation on Partner.

Israel had a mobile-phone penetration rate, which measures the number of subscriptions versus a nation’s population, of 128 percent at the end of 2007, compared with Vietnam’s 27 percent, according to data from the Geneva-based International Telecommunication Union.

Ben Dov is the importer and distributor of Samsung Electronics Inc. products in Israel and had no other major interests in the domestic telecom industry before the Partner agreement.

Hutchison Telecom paid most of the $10.7 billion proceeds from the sale of its 67 percent stake in a venture with India’s Essar group through special dividends to shareholders, after deciding against acquiring other phone carriers.

Hutchison Telecom, with units in Israel, Indonesia, Sri Lanka, Thailand and Vietnam, said it will increase capital spending to HK$7 billion this year, from HK$5.1 billion in 2008, as it expands its networks in Indonesia and Vietnam.

To contact the reporters on this story: Tal Barak Harif at tbarak@bloomberg.netMark Lee in Hong Kong at wlee37@bloomberg.net

Sri Lankan stocks may offer better returns - Investor Jim Rogers

11th August 2009, www.bloomberg.com

Sri Lankan stocks may offer better returns as the end of the 26-year civil war frees up government spending for investments in infrastructure and agriculture, investor Jim Rogers said.

The island-nation’s benchmark index has gained 33 percent in the past three months, the second-best performance worldwide as the army defeated the Liberation Tamil Tigers of Eelam in May. The Colombo All-Share Index was the region’s third-worst performer in the past two years as record spending on defense strained government finances, and the country sought an International Monetary Fund loan.

“When you spend a lot of money on bullets, you don’t get much return,” Rogers, chairman of Rogers Holdings, said in a phone interview yesterday. “If governments can spend money on infrastructure and developing productive assets, then Sri Lanka’s strengths will become even stronger given that the war is over.”

The Ministry of Finance has said it will focus next year’s budget on rebuilding areas liberated from the Tamil rebels, where voting in the first elections in a decade began on Aug. 8.

“This is a structural change for the country,” said Singapore-based Samir Mehta, a fund manager at Silver Metis Capital Management Pte. “If the political process of integrating the minority Tamils is handled well, the economy could grow at above 10 percent per annum for the next decade.”

The nation’s central bank raised its 2009 growth forecast to as much as 4.5 percent in July from an earlier estimate of 2.5 percent after the separatists’ defeat. Sri Lanka plans to raise $500 million from overseas investors to help rebuild the nation, central bank Governor Nivard Cabraal said in an interview on July 31.

‘Capital is Ready’

“The capital is ready for coming into the country,” Ajit Gunewardene, deputy chairman of John Keells Holdings Plc, said in an interview on Aug. 5. “I don’t think there is going to be a shortage of investors.”

The nation’s hotels may be fully booked from December to April as tourists return to the island, Gunewardene said. Tourist arrivals in Sri Lanka grew 8 percent in June, the first increase this year, according to the monthly statistical bulletin by the Sri Lanka Tourism Development Authority.

John Keells, which gets about 49 percent of its revenue from transport and tourism, has gained 69 percent in Colombo trading since the war ended May 16. Other stocks have more than doubled, including Ceylinco Housing & Real Estate Co. and Bogawantalawa Tea Estates Plc, leading a rally that has made the benchmark index Asia’s second-biggest gainer after Indonesia.

Trading Volumes Jump

Trading on Sri Lanka’s $7 billion stock exchange, Asia’s smallest, jumped fivefold in May, and average trading increased to 751 million rupees ($6.5 million) from 147 million rupees in April, according to CT Smith Stockbrokers Pvt. in Colombo.

Still, earnings at companies haven’t kept pace, said Talaal Maruzook, an analyst at CT Smith. Overseas investors have also sold shares worth 1.48 billion rupees in the three months ended July 31, his firm’s report showed.

“The ending of the war is a catalyst, but development will take some more time,” Maruzook said in an interview yesterday. Only about 10 percent of the 235 companies listed on the exchange are traded regularly, he estimated. “Even though turnover has picked up, it’s still low and earnings are only marginally up compared with the sharp gains in stock prices.”

Mark Mobius, chairman of Templeton Asset Management Ltd., said he’s looking for private equity or strategic investment opportunities in Sri Lanka as trading volumes remain low.

“The biggest challenge in the public market is liquidity,” Mobius, who oversees about $25 billion of emerging market assets, said in an e-mailed response to questions yesterday. Templeton Asset Management plans to double its emerging-market assets within two years, Mobius had said in an interview on July 29.

To contact the reporter on this story: Arush Chopra in Mumbai achopra16@bloomberg.net; Pooja Thakur in Mumbai at pthakur@bloomberg.net

10 August 2009

Rs 175 mn investment by a Nepal conglomerate in Sri Lankan hotels

09th August 2009, www.lankabusinessonline.com

A Nepal conglomerate has paid 175 million rupees to buyout the Sri Lanka's listed Hayleys group from two hotels it held jointly with the Jetwing leisure group, a media report said.

The Sunday Island newspaper said the Hayleys unit Carbotel, which is part of the listed Haycarb division of the group is expected to make a 71 million capital gain from the deal.

The profits will be brought to the books with the second quarter results.

On July 30, Hayleys said it had sold a 49 percent stake in Seashells Hotels and a 50 percent stake in Royal Heritage Hotels, which owned 'Vil Uyana' a specialist eco-resort built around an artificial wetland.

The stakes were bought by Cinnovation, a unit of Nepali conglomerate Chaudhary Group owned by Binod Chaudhary.

The firm already controls Taj Samudra hotel in Colombo, though Taj Asia, a joint venture with India's Tata group.

Prospects for Sri Lanka's leisure industry is looking up with the end of a 30-year war with Tamil Tigers in May.

A senior Jetwing official said they were looking to manage hotels in Nepal and strengthen links with the Chaudhary group.

Jetwing manages and part owns Lighthouse Hotel with the Hayleys group. It also manages listed Hunas Hotels, another Hayleys group firm.

$25 million investment from the US discussed

09th August 2009, www.sundaytimes.lk

Investment proposals under discussion from the US, is expected to generate over US$ 25 million in investments in Sri Lanka, said a statement from the Sri Lanka Consul General’s Office, Los Angeles.

Sri Lanka’s Consul General in Los Angeles, Ananda Wickramasinghe, and the Board of Investment, launched an investment promotion campaign in the West Coast of USA, in July.

“It is expected that all of the investment projects discussed during one-on-one meetings, as well as during the dialogue sessions would bring over US$25 million of foreign investment to Sri Lanka at its realisation, which would assist generation of employment opportunities for several hundred Sri Lankan workers,” the statement added.

Through the promotional campaign Sri Lanka has identified several investment projects in the areas of shrimp farming, manufacture and regional distribution of automobile spare parts for Japanese vehicles, a 100 acre organic eco-park, a television assembling plant, a residential development project, a Call Centre, a manufacturing facility for telephone equipments and a dairy farm.

Sri Lanka Aitken Spence eyes tourism projects in the north and east

07th August 2009, www.lankabusinessonline.com

Sri Lanka's Aitken Spence said it was eyeing tourism projects in the north and east of the island after the end of an internal conflict though group earnings dropped as arrivals slumped both at home and in the Maldives.

"We are vigorously looking at opportunities in all sectors to partner in the development of the North and East provinces," managing director J M S Brito said in a statement.

"Concerted destination marketing and infrastructure development in targeted tourism hotspots would give reasons for the industry to be bullish about Sri Lanka’s tourism prospects, in spite the recession curbing global travel."

A 30-year war with Tamil Tiger separatists ended in May when its leadership was wiped out by the military. Eastern Sri Lanka in particular, has some of the most beautiful beach stretches in the island, including Arugam Bay, a top surfing destination.

Group profits dropped 24.1 percent to 293.8 million rupee for the June quarter, while revenues dropped 20.0 percent to 5.0 billion rupees.

Aitken Spence is the largest foreign resort operator in the Maldives.

"A sharp drop in tourist arrivals to the Maldives due to the global recession had a negative effect on the tourism sector earnings in the first quarter," Brito said.

"With aggressive promotions in alternative markets, especially in East Asia, we hope to further diversify our markets in the future."

It also has operations in Sri Lanka, India and Oman.

Aitken Spence is also in shipping and power generation.

At pre-tax level the tourism sector lost 188.7 in the June quarter against a 25.0 million loss last year. Profits in shipping, classified as cargo logistics, increased to 134 million from 88.9 million.

A sector classified as 'strategic investments' which is mostly power generation, earned 384 million rupees, down from 484.8 million rupees.

Another sector classified as 'services sector' showed an increase to 156.9 million from 57.1 million rupees. Services include fees for power sector operations and maintenance (O & M), money transfer services, insurance, an agency for OTIS elevators and building management.

O & M revenues had increased after a contract with Caterpillar Power Ventures for the Ambilipitiya 100 MegaWatt plant ended last July.

08 August 2009

Online Attack Silences Twitter

07th August 2009, bits.blogs.nytimes.com

The meltdown that left 45 million Twitter users unable to access the service on Thursday came in two waves and was directed at a single blogger who has voiced his support for the Republic of Georgia in that country’s continuing conflict with Russia.

Facebook’s chief security officer, Max Kelly, told CNet that the attack was aimed at a user known as Cyxymu, who had accounts on Facebook, Twitter, LiveJournal and other sites affected by Thursday’s cyberassault.

In an interview with The Guardian, the blogger said he believed the strike was an attempt to silence his criticism on the behavior of Russia in the conflict over the South Ossetia region in Georgia, which began a year ago on Friday.

How did a targeted attack against a single user manage to cripple Twitter for almost an entire day?

The assault was two-pronged, said Beth Jones, a security analyst with Internet security firm Sophos.

Early Thursday, the attackers sent out a wave of spam in the name of Cyxymu. The technique, known as a “joe job,” is intended to discredit a Web user by making him appear as though he is the source of a large amount of junk e-mails.

“They’re literally designed to smear someone’s online reputation,” said Ms. Jones. “These hackers wanted to make him look responsible for millions of spam e-mails that went out yesterday morning.”

The messages contained links to Cyxymu’s accounts on several social networks and Web sites, including LiveJournal, Twitter and Facebook.

The next leg of the attack, Ms. Jones said, was a distributed denial of service (DDOS) attack designed to knock Cyxymu off the Web.

The hackers used a botnet, a network of thousands of malware-infected personal computers, to direct massive amounts of junk traffic to Cyxymu’s pages on Twitter, LiveJournal, YouTube and Facebook in an attempt to disable them, Ms. Jones said. The impact on everyone else was “collateral damage.”

Twitter was overwhelmed by the attack and its site was paralyzed for hours. Facebook, certain Google Web sites and LiveJournal had better defenses, but still faced temporary problems.

It’s possible that Cyxymu was targeted because the user was so active online, Ms. Jones said. “They knew where to find him,” she said. “Some of the others might not have been so overt.”

The attacks coincided with the one-year anniversary of the Russia-Georgian conflict. “When the conflict started a year ago, there were various denial-of-service attacks coming from both sides, attacking Web sites.”

07 August 2009

Madhu Feast begins on grand scale

06th August 2009, firstlanka.com

The grand Madhu Festival will begin today, 06th August, on a solemn holy note. It is expected that a large number of devotees from all parts of the country would pay homage as this would be the first Madhu festival after the end of terrorism.

The Madhu festival will continue till the 16th of this month. The first prayer service will be conducted at 11.00 am today. Another prayer service is scheduled to be held at 4.30 pm.

The Administrator of the Madhu Church Reverend Father Freddy Desmond Clark said all arrangements were set in motion to conduct religious observances as usual.

Meanwhile, Police have beefed up security of pilgrims who will flock to worship Madhu shrine. Police headquarters said the devotees are not allowed to stay in the Madhu shrine premises from today to the 11th. Pilgrims will be allowed to stay in the shrine premises from 12th to the end of the festival.

Sri Lanka seasonal teas fetch high prices

06th August 2009, www.lankabusinessonline.com

Prices of Sri Lankan teas grown in the central highlands that showed the 'Uva' seasonal flavour shot up sharply at this week's Colombo auctions, brokers said.

Teas grown in the Uva and Udapussellawa regions of the island's central hills are much sort after by overseas buyers during the quality season usually in August and September.

Brokers Asia Siyaka Commodities said buyers for Japan, the European continent and the UK were active for seasonal teas from the estates of regional plantations companies at the auctions this week.

"There was more general demand in the ex-estate catalogues with seasonal teas continuing to attract special inquiry," they said in a market report.

The best Uva 'BOP' type teas moved up 50 to 100 rupees a kilo following quality, the brokers said.

Corresponding 'BOPF' type teas rose 50 rupees a kilo and more but teas that were of pooerer quality fell in price.

Forbes & Walker Tea Brokers said prices of low grown teas, cultivated by small farmers in the south, mostly fell at this week's auctions.

First Lankan immigrant to USA dies

04th August 2009, www.dailymirror.lk

Rajah Rutnam, who was the first Sri Lankan immigrant to the USA and the eldest son of late Dr. James T. Rutnam and Evelyn Wijeyaratne Rutnam passed away at the age of 75 on 30th July 2009.

He migrated to the United States from Sri Lanka (formerly Ceylon) in February 1953 at the age of 19 and was the first Ceylonese immigrant to America under the Mc.Carren Act of 1952. He joined the United States Marine Corps, served in Okinawa and was honourably discharged as Staff Sergeant after ten years of active duty. In 1964 he established the first Sri Lankan Restaurant in California, Rajah's Elephant Walk in Hollywood.

A talented artist, he published the first Sri Lankan newspaper in California. He was a Founder Committee Member, Past President and Life Member of the SLAASC (the Sri Lanka America Association of Southern California).

He was the Vice President of the Asian Pacific Organisation, Director of Sri Lanka Trade, Tourism and Cultural Information Services, and an active participant in many Country Oriented Cultural Festivals.

Colombo-Palaly Helitours tickets sold out

By Shirajiv Sirimane, 02nd August 2009, www.sundayobserver.lk

Tickets for the Colombo Palaly sector operated by Sri Lanka Air Force Heli tours have been sold out until next week.

Air Commodore, Air Force Dayal Wijeratne said that they operate three flights a week on Monday, Wednesday and Friday and the response from the public has been very good.

Sri Lanka Air Force has also taken the initiative to launch three additional flights to Jaffna in view of the Nallur festive season. Two private airline operators Expo Aviation and Deccan also operate flights to Jaffna and they have all agreed to offer a return air ticket at Rs.17, 500 for the season.

Heli Tours tickets could be purchased from the Air Force office opposite TransAsia hotel and very soon they would be sold on the net and thought travel agents.

In action Heli tours will operate a weekly fights to both Trincomaleeand Sigiriya mainly to attract local and international tourists.

05 August 2009

Kandy Esala Perahera - Randoli Perahera on final night today

05th August 2009, www.news.lk

The grand cultural pageant of the historic Dalada Maligawa will come to an end tonight when the colorful Randoli Perahera will parade the street for the final tonight.

This pageant is described as the most colorful,glamorous and grandeur event in Asia that has a long standing history of Buddhist value.

The final event will be followed by the water cutting ceremony and the day perahera tomorrow.

The final journey of the Randoli Perahera will commence at 7.42 pm to be joined by other peraheras' of the four Devales to parade the streets in Kandy and return to the historic Sri Dalada Maligawa.

04 August 2009

2 million devotees expected at Nallur Kandasamy Kovil festival in Jaffna, Sri Lanka

03rd August 2009, www.colombopage.com

Sri Lanka's Tourism Ministry has set up plans to provide air travel facilities for pilgrims attending the annual Nallur Kandasamy Kovil festival in Jaffna, the government announced today.

According to the Tourism Ministry sources, the Ministry in cooperation with the Commercial Division of the Sri Lanka Air Force has made arrangements to provide air service to the peninsula.

This year's festival that began on July 27 and continues till August 19 has drawn thousands of devotees daily and the government expects a crowd of over 2 million from the country as well as from abroad from the Diaspora community.

Travel to the Jaffna peninsula by the land has just been allowed for the buses. Private transport using the main Kandy � Jaffna A9 highway is not allowed yet. The Sri Lanka Transport Board has deployed additional buses for the convenience pilgrims in the Jaffna peninsula. The government has deployed additional police to maintain law and order during the historic festival. The nighttime curfew that has been imposed has been lifted during the festival for the convenience of the devotees.

A massive water fount has sprung up in premises of the Most Sacred Madhu Church

03rd August 2009, www.colombopage.com

Ahead of the beginning of annual festival of the Most Sacred Madhu Church a massive water fount has sprung up in the church premises.

Upul Wickramarathna, the chief hydro scientist of the North Central Province said the fount produces about 7000 liters of water per minute.

According to Wickramarathna this was the first time that such a large water fount was found in the country.

The scientist confirmed that the water is suitable for consumption.

Indian assistance to build vocational training centers in Northern Sri Lanka for displaced youth

03rd August 2009, www.colombopage.com

Sri Lanka's Institute for Construction Training and Development (ICTAD) has entered into an agreement with the Construction Industry Development Council (CIDC) of India, a joint body of Government of India and the Indian construction industry to reconstruct the infrastructure in the war-devastated North and the East.

According to a memorandum of cooperation signed by the two institutes a steering group would be set up to develop a plan for Sri Lanka. Nissanka N. Wijeratne, Secretary, Ministry of Construction, and Engineering Services would chair the group.

P. R. Swarup, Director General of CIDC has told the Hindu newspaper that the recognizing the vital role of infrastructure development in human rehabilitation programmes, the CIDC has decided to develop a plan for the country.

According to Swarup, the CIDC will design and establish vocational skill training centers in Jaffna, Vavuniya, Trincomalee and Batticaloa to facilitate the rehabilitation of displaced Tamil civilians by providing skill training in construction trades.

The joint effort plans to train over 70,000 displaced youth in construction industry as supervisors, laboratory technicians, masons, carpenters, plumbers, and welders.

The ICTAD sees the measure as a way to provide the youth opportunities to rebuild their own homes and other infrastructure facilities in the region.

Sri Lanka expects a boom in inbound travel in the coming years

By P Krishna Kumar, New Delhi, 01st August 2009, www.hospitalitybizindia.com

Sri Lanka expects a boom in inbound travel in the coming years, as the civil war that was raging for over two decades, has come to an end. Sri Lankan Tourism estimates that the number of inbound travellers will double in the next two years and will reach one million in 2011. According to Romesh Jayasinghe, Sri Lanka’s High Commissioner to India, the Sri Lankan government has chalked out both short and long-term plans in order to develop the tourism infrastructure in areas, which were occupied by the LTTE. He was speaking to the media while launching ‘Meet in Sri Lanka Campaign’ by Sri Lanka Convention Bureau and Sri Lankan Airlines in New Delhi recently.

Jayasinghe said, “We hope our tourism footfalls to double after places in the eastern and northern part of the country become accessible to the tourists. Sri Lanka’s eastern part was open to tourists since 2007. The northern part was cut off and was inaccessible for civilians till recently. Now civilians can visit these places. Tourists can experience the best beaches in the country’s east, including Trincomalee harbour,” Jayasinghe said.

Jayasinghe informed that the country has invested heavily in tourism infrastructure and products, including world class hospitality schools, to serve the tourism industry. “We are looking forward to strengthen our tourism sector with the support of various stakeholders.”

Speaking to Hospitality Biz, Prema Cooray, Chairman, Sri Lanka Tourism, said that a major plan is afoot to develop three places in the eastern part of the country. They are Trincomalee, Passekudah in Batticaloa, and Arugam Bay. He said, “Recently, 13 hotel developers have come forward and identified Passekudah, which will see major developments. When asked about the impact of global trends on tourism footfalls to the island nation last year, the Chairman informed that there was a ‘dip in tourist arrivals.’ “It could be either due to financial slowdown or the civil war in the country. Sri Lanka will observe 2011 as Visit Sri Lanka year,” he informed