30 October 2009

CSE - Trading Friday: Stocks Close Flat, Low Activity

30th October 2009, www.lankabusinessonline.com

Sri Lanka stocks closed flat Friday, with retail buyers awaiting positive news on earnings and political developments, while selected financial stocks took a beating, brokers said.

The All Share Index closed at 2,976.93 points down 0.23 points while the Milanka Index of more liquid stocks closed down 0.34 percent (11.30 points) at 3,333.84 points according to provisional Colombo Stock Exchange data.

Turnover stood at 325.6 million rupees.

"The market is expected to remain sluggish and we cannot expect a dramatic run as seen in the recent past," Thakshila Hulangamuwa, vice president at stock brokering house, Asha Phillip Securities said.

"Earnings have not been up to the expectations of the investors and obvious slowdown is the result."

Conglomerate John Keells Holdings closed at 142.00 rupees, up 75 cents, after it reported profits down 43 percent, and Distilleries Company of Sri Lanka closed at 96.00 rupees, down 1.00.

Fixed line heavy weight Sri Lanka Telecom closed at 43.75 rupees, down 25 cents, and Dialog Telekom, a celco, closed at 7.00 rupees, down 25 cents.

"The rate cut proposed by the government has not benefited market at the expected rate as rumors of possible elections have dampened investor sentiment," Hulangamuwa said.

"The next quarter of bank earnings maybe not as flashy as expected."

In banking, Commercial Bank closed at 176.25 rupees down 1.25, Commercial Bank non-voting 120.00, down 2.25, Hatton National Bank 163.75, up 75 cents, DFCC Bank flat 150.00 and NDB 184.00, up 25 cents, and Sampath Bank 185.00, down 1.00.

NAMAL Acuity Value Fund closed at 47.75 rupees, down 2.00, it was issued at 50.00 rupees per unit.

In hotels, Asian Hotels flat 75.00 rupees, Eden Hotel Lanka 25.50 rupees, up 25 cents, Hotel Developers Lanka 112.00 rupees, up 2.00, Sigiriya Village Hotel 39.25, up 75 cents, and Tangerine Beach Hotel 66.00, up 2.00.

Lanka Rupee Weakens Against Euro, Helps Exporters to Europe

30th October 2009, www.lankabusinessonline.com

The Sri Lanka rupee has weakened against the Euro and Sterling since November 2008 increasing the edge of exporters to Europe and helping offset a possible hit from lost trade concessions, Central Bank Governor Nivard Cabraal said.

"It is our contention that Sri Lanka's exporters' competitiveness to the European Union had increased sharply since November 2008," Cabraal told reporters Thursday.

Sri Lanka is facing the prospect of losing preferential access to the European market next year following an adverse report over non-compliance with conventions on civil and political rights of Sri Lankan citizens, weak rule of law or impunity and human rights abuses.

The Central Bank said a duty concession available to some 7,000 goods exported to the EU was around 7.0 percent. For apparel exports the value of the concession was about 78 million Euros the Central Bank said, referring to EU data.

The Central Bank said the rupee had depreciated by 18.5 percent against the Euro from November and 14.0 percent against Sterling.

The Sri Lanka rupee is pegged to the US dollar and other dollar pegged countries, such as China, in the so-called pegged zone would also get a similar benefit.

But assistant governor Nandalaal Weerasinghe said the rupee had also depreciated against the US dollar by about 7.0 percent in the period while key competitors such as Bangladesh central bank had appreciated its currency by about 5.0 percent.

Bangladesh's central bank has had a stronger record in generating low inflation than Sri Lanka's which had experienced 20 percent plus inflation in recent years.

The Indian currency has also appreciated in the period. With the US banking system becoming stronger, and Federal Reserve 'central bank impotence' petering off, the dollar is expected to gradually weaken unless rates are raised in the US.

Exporter competitiveness is determined not necessarily by the nominal exchange rate but the real exchange rate denominated by the difference in domestic inflation.

If a central bank generates a high level of inflation workers find it difficult to live and demand higher wages, pushing production cost above that of a competing country with low inflation.

A high inflation differential makes the currency of a country 'overvalued' against competition, which is measured by a real exchange rate index.

But in the past year Sri Lanka's central bank had been able to keep inflation to around one percent, preventing further overvaluation.

Cabraal said total exports have been rising steadily from April. In addition to low inflation, interest rates were also falling steeply helping exporters. A recovery in foreign markets was also helping bring in orders.

The central bank says apparel firms have orders to fill till mid 2010.

Sri Lanka's e-Society Program at World Bank's Innovation Fair

30th October 2009, www.dailymirror.lk

Sri Lanka’s e-society program that connects the unconnected rural and disadvantaged communities to the world of information and communication through new technologies drew plaudits at the recent Innovation Fair held at the World Bank in Washington, D.C., U.S.A. The Innovation Fair was organized to draw attention of the top management of the World Bank to creative and fresh approaches in global development programs.

The e-Society program was one of the six most distinctive projects from the South Asia region showcased at this inaugural World Bank forum. The program initiated and implemented under the e-Sri Lanka project by the Information Communication Technology (ICT) Agency stood out for its community-driven use of ICT for Development (ICT4D). Encouraging local expertise, the e-society program showed how it has adroitly used ICT to develop programs that have helped rural farmers obtain access to agricultural market information, provide social services and education opportunities to individuals and assist the disabled.

In addition, the program demonstrated how new digital content products developed through e-society grants have harnessed local expertise to provide easier access to knowledge and learning for the vision and hearing impaired persons.

The e-Society Program was also presented at the “Ideas Market” – a forum which presented emerging opportunities in ICTs and social media that would augment the Bank’s development work. “Many senior managers from a number of regions expressed much interest in learning more and replicating the e-Society concept and resulting projects and suggested that workshops be held for Task Managers of the World Bank,” said Sandra Sargent, Operations Officer at the World Bank.

Suggestions were also made for establishing further cross-country and cross-regional collaboration between the ICTA and agencies implementing similar initiatives in other countries.

Galle Film Festival - Sri Lanka's International Film Fest from 2 - 6 December Featuring Local, South Asian Works

29th October 2009, www.hollywoodreporter.com, By Nyay Bhushan, NEW DELHI

Sri Lanka will host the second Galle Film Festival from December 2-6 in the eponymous host town.

GFF is presented in association with the National Film Corporation of Sri Lanka and Sri Lanka Tourism and will open with Sri Lankan director Vimukthi Jayasundera’s "Ahasin Wetei," which was in competition at this year's Venice Film Festival. GFF is a non-competitive festival and hence won't include a jury.
In addition to promoting tourism and film opportunites in the country, GFF's main focus will be on Sri Lankan and South Asian cinema with participating films including, among others, India's “Firaaq” from actress and director Nandita Das. Further programming details are being finalized.

As part of its schedule of fundraisers, event galas and workshops, GFF will include “Shooting For Change” which will include documentaries designed to inspire social change. Also featured will be eight short films produced in August during a 10-day film camp for children, hosted by the U.S. Embassy in Sri Lanka and run by American acting coach Constance Tillotsonm with Sri Lankan directors Anoma Rajakaruna and Kasinathar Gnanadas. The 40 participating children came from post-war Sri Lanka's different ethnic backgrounds.

UK Boosts Sri Lanka's Popularity with 16.9% Arrivals Increase, End Of Country's Conflict Aids Tourism

07th October, 2009, www.eturbonews.com, By eTN Staff Writer

The Indian Ocean island welcomed the highest number of British tourists in 2009 during the month of August, representing an increase of more than 1,000 visitors over August last year. Sri Lanka recorded a 16.9 percent increase in UK arrivals and a 32 percent increase in arrivals for the month across all destinations.

According to the Sri Lanka Tourist Promotion Bureau, forward bookings indicate a strong finish to the year helped by the end of the conflict in the country and the subsequent relaxation of the FCO advice, which has opened up additional major tourist attractions such as Yala National Park, Trincomalee, and Arugam Bay.

Sanjika Perera, UK director of tourism commented: "We are delighted that people have chosen to visit over the last few months, showing the renewed confidence in Sri Lanka as a safe and value for money destination.

"We have worked on a persistent promotional campaign in conjunction with the hotel industry back home and with our airline and tour operator partners in the UK, and the results have been very positive. To have improved visitor figures during the recession shows that the British public are aware of the diversity that Sri Lanka offers and keen to experience an Indian Ocean break, at an attractive price."

Image via lankajournal.com

29 October 2009

Sri Lanka 2009-End Inflation to be 3.5%

29th October 2009, www.lankabusinessonline.com

Sri Lanka's inflation would be 3.5 percent by end-2009 setting the stage for lower interest rates and higher growth as investor confidence in the economy was rising, Central Bank Governor Nivard Cabraal said.

"We are having inflation of one percent and we intend to keep it that way," Cabraal told reporter Thursday.

"Inflation would be about 3.5 percent at the end of the year."

Cabraal said the economy had stabilized, interest rates were falling foreign reserves were rising towards five billion US dollars and sovereign credit ratings were improving.

Sri Lanka is recovering from a 30-year war which ended in May and government spending has been kept in check with tax revenues falling.

A deal with the International Monetary Fund (IMF) which limits state spending and borrowings from domestic sources has raised confidence in the economy, generating strong foreign inflows to government securities markets.

The Central Bank has been steadily sterilized liquidity. Though excess liquidity in the market had been high credit growth in the banking sector has been negative, keeping inflationary pressures low.

Sri Lanka, the Best Location for Tourism Investments

29th October 2009, www.dailymirror.lk

Having entered a new era after the restoration of total peace in the country, Sri Lanka has become the best location for tourism investments with the opening of the North and East ,said Vipula Wanigasekera, General Manager of Sri Lanka Convention Bureau (SLCB),addressing the conference delegates from the Middle East led by HP Procurve.

The delegates had their regional meetings at the Heritance Ahungalle where the Convention Bureau made a presentation on Investment potential, tourist attractions and Sri Lanka’s different dance forms. The delegates expressed their total satisfaction with a pledge not only to come back with their families and friends for holidays but also to look into investment possibilities which they believe, must be pursued before the ‘word goes around’.

SLCB continues its strategy to woo Corporate meetings into Sri Lanka through overseas corporate opinion makers which the SLCB reckons as more credible than any other communication mode. Now we are able to achieve several communication objectives when you have opportunities to address such conferences also by having certain value additions to their programs such as entertainment etc. We also take the full advantage of these events to show them the attractions in diversity as they do not have sufficient time to take round trips when they attend conferences of this nature.

The whole idea is to send them back with a pleasant memory so that their experiences can trigger further visits whether they are Corporate Meetings, Incentives or holidays says Wanigasekera.

CSE - Trading Thursday: Shares Close 0.95% Lower

29th October 2009, www.lankabusinessonline.com

Sri Lankan shares closed down 0.9 percent Thursday as investors took defensive positions and opted to stay out of the market, while the banking and hotel sector stocks took a hit, brokers said.

The All Share Index closed at 2,977.16 points down 28.56 points while the Milanka Index of more liquid stocks closed down 0.82 percent (27.54 points) at 3,345.14 points according to provisional Colombo Stock Exchange data.

Turnover stood at 353.3 million rupees.

"The market has defensive position after last month's bull run," Nikita Tissera, research manager at SC Securities said.

"The market hasn't totally recovered from the Galleon scandal, even though the group announced the liquidation of its hedge fund portfolio has being largely complete."

Conglomerate John Keells Holdings closed at 141.75 rupees, down 2.25, and Distilleries Company of Sri Lanka, a unit of unlisted tea company Stassens Group, closed at 97.00 rupees, down 75 cents.

In banking, Commercial Bank closed at 177.50 rupees down 2.00, Hatton National Bank 163.00 down 2.00, DFCC flat 150.00 and NDB 183.75 down 50 cents.

Fixed line heavy weight Sri Lanka Telecom closed at 44.00 rupees, down 75 cents, and Dialog Telekom, a celco, closed flat at 7.25.

Brokers said some funds were waiting to pick up bargains in the case the market dips further.

Lanka Cement closed at 26.25 rupees, down 1.00, and forestry company Tochwood Investments closed at 86.50 rupees, down 2.25 on small value trades.

In hotels, Serendib Hotels closed at 36.75 rupees, down 4.00, and Sigiriya Village Hotels closed at 38.50 rupees, down 1.75.

Aitken Spence Hotels closed at 225.00 rupees, down 3.75, Asian Hotels 75.00 rupees, down 2.00, Browns Beach Hotel 60.25 rupees, down 4.00, and Hotel Developers Lanka 110.00 rupees, down 5.00.

In plantations Udapussellawa closed at 30.00 rupees, up 1.50, Maskeliya 18.50 rupees, down 50 cents, Malwatte valley 29.50 rupees, down 50 cents, Namunukula 26.00 rupees, down 1.00, and Agalawatte 19.75 rupees, down 25 cents.

Aureos Exits from MIT Stake in Sri Lanka in a $30m Sale to London Stock Exchange

29th October 2009, www.dailymirror.lk

Aureos Capital, an emerging markets private equity investor, has exited from its 13 per cent stake in Sri Lankan trading software company MillenniumIT through a $30m buy-out by the London Stock Exchange Group.

MillenniumIT is a technology solutions provider serving the global capital markets industry. Its software is used by exchanges, depositories, brokerages and regulatory bodies in the US, Europe, Africa and the Asia-Pacific region.

Aureos invested in MillenniumIT at the time of its inception in 1996 through the funding of its management buy-out of the Open Systems Division of ComputerLand Sri Lanka. Sev Vettivetpillai, the CEO of Aureos Advisers, said, “after 13 years of working closely with and supporting MillenniumIT we now look forward to watching its continued success under its new owners. The backing of the London Stock Exchange will help MillenniumIT extend its global franchise and build on its strong track record”. Last month, Aureos invested $10m in Costa Rican IT corporation ITS InfoComunicacion. Aureos specializes in providing expansion and buy-out capital to unlisted mid-cap businesses across Asia, Africa and Latin America.

Investment from UK to Develop Agri-Forestry in Sri Lanka

28th October 2009, firstlanka.com

The Board of Investment of Sri Lanka granted investment approval for Asia Plantation Capital Limited to grow cash crops and forestry. Dhammika Perera, Chairman / Director General signed the agreement on behalf of the BOI and formally presented the BOI Certificate of Registration to Mr. Arjuna Dissanayake, Director of Asia Plantation Capital.

The venture is an initial investment of Rs. 28 million, sponsored by Oxigen Plantations Limited, UK. The project will provide employment for a workforce of 150. The agri-forestry project would focus on growing Maize as the main crop while growing seasonal crops such as Sesame and Soya. The plantation is established in a 300 acre land in Polonnaruwa.

Arjuna Dissanayake said that most plantations in the area work with rain water and the company expects to set up their own irrigation system. The irrigation system will allow Asia Plantation Capital to harvest 3 crops per year. He also stated that Maize has a high local demand and that the company in addition expects to export to the European. Arjuna Dissanayake, Director signed the agreement on behalf of Asia Plantation Capital.

28 October 2009

Taprobana 4x4 Challenge - 2009, Sri Lanka’s Premier 4x4 Event will be Flagged Off at Puttlam on 28th October


Taprobana 4x4 Challenge, which was earlier called the “4x4 Challenge”, is now renamed “Taprobana 4x4 Challenge” and will be flagged off at Puttlam on 28th October and will run along the mainland and will have the longest water crossing transport stage ever witnessed in a 4x4 event in Sri Lanka.

The 2.8 km Distance between the Kalpitiya Town and the Mainland, Serakkuliya will be the crossing point depending on the tides for the given day. Organized by the Four Wheel Drive Club (FWDC), this year’s event is scheduled for a Grand Finale on the 1st of November 2009 at Kandakulliya Beach in Kalpitiya.

Sri Lanka Central Bank Mops Up Liquidity in a Record Operation

28th October 2009, www.lankabusinessonline.com

Sri Lanka's central bank is engaged in a record mop up of excess liquidity in the banking sector generated foreign from dollar borrowings, surpassing a previous high in 2007.

Sri Lanka raised 500 million US dollars through a sovereign bond earlier this month.

Inflows from an October 2007 sovereign bond pushed excess liquidity to 33.9 billion rupees on November 01, according to Central Bank data.

But excess liquidity in the inter-bank market has been high after a balance of payments crises ended in March with a float of the rupee and a deal with the International Monetary Fund in July raised confidence in government credit worthiness.

Foreign investors have pumped hundreds of millions of dollars into high yielding government bonds, after the rupee was re-pegged at 114.90 levels to the US dollar after the float broke an expansionary sterilized intervention cycle.

On Monday and Tuesday the Central Bank mopped up 44 billion rupees of liquidity from the inter bank money markets, by selling its own securities.

The monetary authority paid 8.47 percent to mop up 34.1 billion rupees overnight, 8.99 percent to mop up 8.5 billion rupees for 14 days and 9.03 percent to mop up 1.5 billion rupees for 30 days.

Another 885 million rupees was parked via a standing facility at 8.0 percent.

The central bank has run out of Treasury bills, after it sold down its Treasury bill stock as and withdrew money printed during the balance of payments crisis in a contractionary sterilization cycle after the float of the currency.

Unlike sterilizing excess liquidity through interest bearing Treasuries where the cost is borne by the Treasury, issuing its own securities is a costly exercise for a central bank as the corresponding dollar foreign assets in its reserves yields low rates.

The problem comes up when a pegged exchange rate central bank maintains foreign reserves far above its domestic money issue.

The Central Bank is expected to use a swap transaction to reduce the negative carry.

Critics have pointed out that the problem underscores an inherent flaw in pegged exchange central banks which were largely designed by the US Federal Reserve to promote the dollar as a 'reserve currency', and get cheap finance for the US government and its economy.

Though pegged central banks are designed to give the illusion that 'monetary independence' is possible in reality any loosening results in a balance of payments crisis while tightening through liquidity mop ups and a build up of foreign reserves 'crowds out' the domestic economy.

Central Banks that have accumulated large foreign reserves and maintained pegs have had to permanently maintain interest rates above that of the reserve currency, unlike currency boards, where rates are neutral.

CSE - Trading Wednesday: Stocks Close Up

28th October 2009, www.lankabusinessonline.com

Sri Lanka stocks closed up 0.2 percent, reversing a losing streak, with hotel stocks among the gainers, a day after the country's president ordered a lending rate cut in state banks, brokers said.

The benchmark Colombo All Share Index close up 0.29 percent (8.65 points) at 3,005.7 and the Milanka Index of liquid stocks closed down 0.1 percent (-4.93 points) at 3,372.6 points.

Hotel and travel sector stocks were among the gainers. Sri Lanka's president Mahinda Rajapaksa ordered state banks to give new loans to hotel projects at rates of around 8.0 to 12.0 percent.

Asian Hotels and Properties closed at 77.0 rupees up2.0, Aitken Spence Hotels at 230.0 up 1.75, Galadari 16.0 up 0.25, Mahaweli Reach 19.00 up 0.25, Ruhunu Hotels, 13.0 up 0.25.

Royal Palm closed at 63.00 up 6.00, Hotel Sigiriya closed at 54.00 up 2.25, Serendib Hotels closed at 59.0 up 1.50, while Connaisance lost 2.00 rupees to close at 48.00 and Hunas Hotels closed at 50.25.

Index heavy diversified firm John Keells Holdings closed at 144.0 up 2.25, Sri Lanka Telecom 44.75 up 0.75, Dialog closed flat at 7.50.

Commercial Bank closed at 179.75 up 0.50 while HNB fell 2.75 to close at 165.0

At Wednesday's Treasuries auction the 3-month bill yield fell 60 basis points to 8.50 percent, the 6-month yield fell 41 basis points to 9.35 percent and the 12-month yield fell 34 basis points to 9.88 percent.

The World Spice Food Festival, Colombo’s Biggest Food Festival, Organized by Sri Lanka Tourism Development Authority (SLTDA) in November

28th October 2009, www.sltda.lk

Culinary skills of some of the world’s best master chefs will be seen at the World Spice Festival, 2009 across Colombo’s reputed hotels, restaurants and cafes flown by courtesy of Sri Lankan Airlines.

Following the success of the first Spice Festival in 2005, the Sri Lanka Tourism Development Authority and the HSBC have come together to present this year’s World Spice Food Festival incorporating a “Global Spice Food Village’ to enhance the event that will showcase the culinary expertise from around the world.

The Festival will be an ideal opportunity for tourists who are in transit or holidaying here to enjoy a variety of delectable cuisine ranging from Cuban American, Moroccan, Arabian, Italian, Spanish/Portugese, Chinese Szechuan/Cantonese, Chinese Seafood, Thai, Indonesian Balinese, Korean, Malaysian, Singapore, Japanese, Indian, Pakistan and Sri Lankan specialties.

The above Food festival Scheduled to be held from 6th - 14th November 2009, with the public event “Global Spice Food Village” to be held from 6 to 8th November 2009.

Each designated hotel and restaurant will conduct a food festival for one week with a guest chef taking you through a speciality cuisine. A number of city hotels are enthusiastically looking forward to ensure that the master chefs will be on hand to showcase culinary delights from their part of the globe.

Participating hotels, cafes and restaurants at the “Global Spice Food Village” will be Hilton Colombo, Galle Face Hotel, Galadari, Trans Asia, Cinnamon Grand, Taj Samudra, Ceylon Continental, Holday Inn, Mount Lavinia, Waters Edge, Raja Bojun, Siam House, The Mango Tree,Sizzle Grill, Regina Margharita and Nihon Bashi

Spices and condiments that are used around the world for therapeutic and taste enhancement of food will be on display under one roof to enable visitors to enlighten themselves on the intricacies in producing quality meals.

Visit Official World Spice Food Festival Website

Customs to Implement ASYCUDA World (AW) System in Sri Lanka

28th October 2009, www.dailynews.lk, By Ramani Kangaraarachchi

Sri Lanka Customs will implement the ASYCUDA World (AW) System which is the latest UNCTAD ASYCUDA software from January 1, Customs Director General S.A.C.S.W Jayathilake said at the introductory seminar on AW at Cinamon Lakeside Hotel yesterday.

He said the implementation of AW application which provides door to door facility through IT, is the main topic discussed at present. Sri Lanka Customs has come to a stage where the total package of Customs imports and exports clearance including various controls and facilitation have to be done through one system.

However, procedures and applications need much simplification according to international standards and the compliance level of all stakeholders.

The best method to implement AW will be discussed with past experience, Jayathilake said. Speed, low cost and transparency are the key factors for the success of the system and maintaining the right balance with trade and policies will continue to be the challenge, he said.

He said, effective planning and monitoring, consultation with all stakeholders, proper coordination and commitment and latest technology would help overcome this challenge, but the system must be reviewed from time to time to improve efficiency.

Customs Director, PA Dias said AW is a web based system with several additional features and Sri Lanka Customs is planning to expand the electronic lodgement to 100 percent from the present 25 percent. Priority has been given for submission of electronic manifests and the necessasity of hard copies will be minimized under the new system.

Customs Superintendent M.R Rajmohan said the re-engineered e-Customs process will have a number of benefits such as ability to submit 100 percent electronic cusdecs, avoid key-in at Long room, availability of fully automated E-processing for green entries, reducing number of cusdec from five to two, and reduce the number of manifest copies from seven to one and availability of customs third eye supervision.

UNCTAD-ASYCUDA Regional Coordinator for Asia Pacific, Renaud Masenet also made a presentation on e-Customs.

Photo: Customs Director General S.A.C.S.W Jayathilake

State Banks Lower Interest Rates in Sri Lanka on Loans to Customers to a Minimum of 8% and a Maximum of 12% from Today

28th October 2009, www.dailynews.lk, By Sanjeevi Jayasuriya

All State banks will bring down their interest rates on loans granted to customers to a minimum of eight percent and a maximum of 12 percent with effect from today.

Following the Central Bank’s reduction of interest rates to very low level of 3-4 percent and having stability in the interest rates, the country’s economic revival should accelerate.

The banking system will move to a low interest rate regime, Finance Ministry Secretary Dr. P.B. Jayasundara told theDaily News.

The Central Bank policy rate 7 percent will be a benchmark in the short-term interest rates to medium-term where Treasury Bills and Treasury Bonds rate would decline and the lending in other sectors will be in line with the reduced interest rates, he said.

The activities of the State banks were reviewed and instructions were given to the bank heads by President Mahinda Rajapaksa at a meeting held yesterday, at Temple Trees, Colombo.

The State banks will offer development oriented interest rates in the range of 8 to 12 percent in line with inflation.

The lending will be mainly for housing. The State banks will lend to public servants and the entire pending loan applications will be accommodated and would be cleared by mid December.

The State banks have the liquidity and they are in a position to do this due to 500 million bond issue that cleared the outstanding loans by the Government. The priority will be given to sectors such as agriculture, tourism, construction, livestock, fisheries and small and medium scale enterprises and these sectors will benefit under the low interest regime, he said.

The banks have funds to lend and help economic revival and provide stimulus to overall economic activities.

An outcome of the meeting was the suspension of the penal rate imposed on the non-performing loans. The removal of the penal rates would bring down cost of funds. Low interest rates would also apply to the outstanding balances of the existing loans, he said.

Banks are expected to notify customers about the amended loan installments due from them in terms of the reduced interest rates.

The President also decided to convene another meeting before November 30 to review the progress achieved in implementing the decisions taken at yesterday’s meeting.

State Revenue and Finance Minister Ranjith Siyambalapitiya, Secretary to the President Lalith Weeratunga, Treasury Secretary Dr. P.B. Jayasundera, Chairmen of all State banks and several other senior officials attended the meeting.

Sri Lankan Gems in China, As A Large Number of Gem and Jewellery Companies Participate in International Trade Fairs

28th October 2009, www.dailynews.lk

Thirty four gem and jewellery companies will participate in trade fairs in China in November this year.

This is the first time a large number of gem and jewellery companies have decided to participate in international trade fairs in China, a senior official of the National Gem and Jewellery Authority told Daily News Business.

The first trade fair, the China International Jewellery Fair, Beijing will be held from November 5 - 9 with the participation of 18 Gem and Jewellery companies from Sri Lanka. The second trade fair, the China Gold, Jewellery and Gem Fair in Shanghai will be held from November 26 to 29 with the participation of 16 gem and jewellery companies from Sri Lanka.

China has been recognized as a potential and lucrative market for Sri Lankan gems and jewellery.

Sri Lankan Business Delegation in Jeddah, Headed by Sri Lanka Export Development Board

28th October 2009, firstlanka.com

A twenty eight member Sri Lankan business delegation headed by the Sri Lankan Export Development Board has embarked on a visit to Jeddah on 24.10.2009, organized by the Consulate General of Sri Lanka in Jeddah.

The business delegation from various sectors will explore the market potentials for further enhancing the export of Sri Lankan products in the Kingdom of Saudi Arabia.

The group will visit the Jeddah Chamber of Commerce and Industry and arrangements have been made to meet Jeddah based reputed Business community at Chamber of Commerce premises.

They will also visit leading Supermarket chains such as Bin Dawood and Hyper Panda in addition to other reputed companies in Jeddah in order to establish business relationships.

The Consulate General has made arrangements for the delegation to meet Jeddah based Sri Lankans from commercial organizations at the Consulate and to hold discussions with a view to obtain their assistance in trade related matters.

This is the first time a Sri Lankan business delegation comprising of such a large number of participants is visiting Jeddah. It is expected that the visit will help to increase trade opportunities for Sri Lankan products in Saudi Arabia.

It is noteworthy to mention that the visit has been organized by Consulate General based on the directives given by Hon. Rohitha Bogollagama, Minister of Foreign Affairs at the Conference for Heads of Missions of Middle Eastern countries which was held in Dubai last year.

27 October 2009

CSE - Trading Tuesday: Stocks Close Lower in Broad Sell-off

27th October 2009, www.lankabusinessonline.com

Sri Lanka stocks closed lower for a second day Tuesday, falling 0.9 percent in a broad sell-off that saw while buyers were awaiting earnings reports, brokers said.

The All Share Index closed at 2,989.05 points down 34.9 points while the Milanka Index of more liquid stocks closed down 1.19 percent (21.7 points) at 3,378 points according to provisional Colombo Stock Exchange data.

Brokers said stocks could be expected to react to earnings in the near term, with the third quarter reporting season just starting, and investors paying more attention to fundamentals following an extended rally that saw the market double so far this year.

Aitken Spence Hotel Holdings closed at 227.0 rupees, down 7.75, Carson Cumberbatch closed at 345.0 down 5.00, Asiri Surgical at 11.00 down 0.50 and Bogala Graphite at 18.50 down 0.75.

In banking, Commercial Bank closed ay 180.0 rupees down 1.25, HNB 167.75 down 1.25, DFCC 149.0 down 1.50 and NDB 185.00 down 2.75.

Dialog Telekom closed flat at 7.25 rupees and Sri Lanka Telecom at 44.00 down 1.00.

Diversified John Keells Holdings closed at 141.50 rupees down 2.50 and Distilleries closed flat at 99.00, Chevron Lubricants closed flat at 182.0.

Colombo Dockyard was down 1.50, closing at 117.25.

Carbon Trading by Analog Forestry Sustainable in Sri Lanka

27th October 2009, www.island.lk

Carbon Conservation Company, a firm set up to offer ‘carbon footprint consultancy and an ecologically responsible alternative to current carbon offset trading’, announced the formal launch of its first vintage of voluntary carbon credits. Company CEO Subramaniam Eassuwaren invited ‘concerned companies and individuals who wish to obtain carbon offsets that are more than mere licences to pollute’ to consider investing in the company’s ‘sustainable carbon credits’.

The firm specialices in helping companies calculate their impact on the environment including their carbon and water footprints. After helping them monitor their footprints, they then offer the companies ecologically sound credits to offset what they cannot reduce.

They are now working with several boutique eco hotels to reduce their carbon footprints while also advising individuals and organisations on how to manage their lands in an environmentally sound manner.

Conservation Carbon Company (CCC) carbon credits are earned through a special process known as Analog Forestry, which helps preserve biodiversity and benefits local communities even as it sequesters carbon through the planting of trees. Analog Forestry is the brainchild of Dr. Ranil Senanayake, a famous biologist, conservationist and champion of the world’s rainforests, who is celebrated for the discovery of several new plant and animal species and who founded the International Analog Forestry Network in 1996. Dr. Senanayake serves in a senior capacity on the board of CCC.

Aircraft Components to be Manufactured by Aero Sense Technologies in a BOI Enterprise in Sri Lanka

26th October 2009, www.news.lk

The Board of Investment of Sri Lanka granted investment approval for Aero Sense Limited to manufacture aircraft components for international aircraft and helicopter manufacturers. Dhammika Perera, Chairman / Director General signed the agreement on behalf of the BOI and formally presented the BOI Certificate of Registration to K. J Westman, Director of Flinth Industrial Park.

The company representing a US $ 1 million investment will manufacture 14 aircraft components for international aircraft and helicopter manufacturers. They will be establishing a state-of-the-art production facility at the Flinth Industrial Park at Kadawatha. Mr. Westman stated the main reason for Aero Sense Technologies to establish the production plant in Sri Lanka was because of the services offered by the Flinth Industrial Park.

The parent company to Aero Sense (Pvt) Limited, here in Sri Lanka is Aero Sense Technologies LLC, US. The US based Aero Sense Technologies is owned by Aero Sense Inc., US, Swedcord Development AB, Sweden and Sveritec Limited, UK.

Aero Sense Technologies capability and product technologies for the Aerospace Industry includes production of Position transducers for aircraft flight controls, Single and multi-channel linear and rotary position transducers, Inductive proximity transducers and sensors, Pressure transducers and switches for hydraulic controls, Transducers for servo systems, Force sensors for pilot control inputs, surface control and control rod load detection, Pressure transducers for fuel systems and steering and braking systems. Aero Sense provides complete transducer engineering design and development & support services. The company is dedicated in providing robust, cost effective, reliable and innovative engineering solutions for the aviation industry. Aero Sense adherence to disciplined engineering and proven processes ensures creation of the best value and services for customers.

26 October 2009

CSE - Trading Monday: Sri Lankan Stocks Fall 1.0-pct

26th October 2009, www.lankabusinessonline.com

Sri Lankan stocks closed down 1.0 percent Monday as buyers stayed in the sidelines, awaiting September quarter earnings season which has just begun, brokers said.

The All Share Price Index closed down 1.07 percent (32.60 points) to end at 3,024.02, while the Milanka Index of more liquid stocks lost 1.01 percent (34.64 points) to close at 3,4399.36, according to provisional stock exchange data.

Turnover was 330.0 million rupees.

"Investor were cautious and were looking for a hint of the future direction of the market," Nikita Tissera, research manager at SC Securities, a stock brokering firm, said.

"The direction of the September quarter earnings would give the market some much needed guidance."

Troubled Seylan Bank reported a growth in profits in September. The stock traded at 39.00 rupees, down 2.75.

"The banking sector results just started with Seylan Bank and it looks positive so far. We expect the good results to continue in the quarter but asset quality remains a concern," Tissera said.

National Development Bank closed at 187.75 rupees, down 1.25, and Commercial Bank of Ceylon closed at 181.25 rupees, down 3.25.

Sampath Bank closed at 189.75 rupees, up 4.75, and Hatton National Bank closed at 169.00 rupees, up 75 cents.

Dialog Telekom a unit of Telekom Malaysia closed flat at 7.25 rupees, and Sri Lanka Telecom closed at 45.00 rupees, down 1.00.

Diversified John Keells Holdings closed at 144.00 rupees, down 50 cents, and Distilleries Company of Sri Lanka closed at 99.00 rupees, down 3.25.

Massive Elephant Conservation Drive in Sri Lanka to Protect Remaining Wild Elephants in Forests Islandwide

26th October 2009, www.spot.lk

A massive wild elephant conservation program to protect the remaining 6,000 wild elephants in forest areas islandwide has been launched by the Wildlife Department.

Accordingly, the Department is expected to keep a close tab on elephants moving from their original territories to other areas where there are human settlements. Department statistics reveal that a record number of 3,800 wild elephants are currently living in the Wayamba forest areas and in the Mahaweli Zone.

Wildlife Department, Elephant Conservation Program, Deputy Director W.S.K. Pathiratna told the Sunday Observer that nearly 160 wild elephants who lived in various forest areas had died during the year.

Records also show that nearly 225 elephants had died during 2008.

It is reported that most of these deaths occurred not due to natural causes, but as a result of human-elephant conflicts.

According to the senior official, shootings, train accidents, getting entangled in death traps and electrified fences are the main reasons for the untimely deaths of many elephants.The Department also revealed that a large number of elephants in war-affected areas had lost their lives in the past, but this situation has drastically changed, especially with the cessation of the war.Environment Minister Patali Champika Ranawaka said due to various measures taken by his Ministry through the `Elephant Conservation Program’, the untimely deaths of elephants have been controlled to a great extent.

Picture courtesy: www.freeelephantpictures.com

Sri Lankan Tourism Has Tremendous Potential in Germany, the United Kingdom, the Middle East and Japan

26th October 2009, www.dailynews.lk, By Charumini de Silva

The Sri Lankan tourism industry has tremendous potential to grow further with the dawn of peace. The opening up of the North and the East has brought positive hopes to the Sri Lankan tourism as two-thirds of the coastline, which was formerly under the control of terrorists, has been liberated making it accessible to tourists.

"It is essential for Sri Lanka to promote tourism with professionally designed awareness programs to penetrate the market. During the past three decades, the travel advisories of several western countries gave a negative picture of the country and since peace has been established, it is important to spread awareness among the travellers to the effect that the country is now free of terror and safe to travel," a Senior Travel Consultant, Rob Murrer told Daily News Business.

He said Sri Lanka is a beautiful country with a very rich culture and a historical background. There are many places of interest for travellers to explore. Another plus factor is that the travellers have the opportunity to enjoy the hot and cold climates with the minimum of travel and waste of time. This country is a paradise where travellers would love to spend their holidays, but the tourist industry needs strong marketing programs to promote tourism. Participating in international exhibitions, distribution of professionally designed brochures, approaching multinational companies, leading travel agencies and chambers, holding road shows and e-commerce is essential to promote Sri Lankan tourism, he said.

He said that there should be a target market to approach. There was a tremendous market from Germany, the United Kingdom, the Middle East and Japan.

As a start, Sri Lanka could focus on these markets and gradually the country would be able to capture the other markets. A lot of tourists visit the country to enjoy nature and the tranquil beaches, as they need to relax because of their busy lifestyles. With the opening of the North and the East to tourism, the Sri Lanka Tourism Promotion Bureau has to play a vital role to promote tourism industry by introducing activities such as surfing, wildlife safaris, eco-tourism, snorkelling and adventure, Murrer said.

Another Tourism Consultant Ans Peeters said there are various sectors that could be easily promoted through and Ayurvedic medicine is one of them as it has a great demand from the tourists. Sri Lanka could also enter the market by becoming a paradise for shoppers, as there is high demand for Sri Lankan apparel all over the world.

25 October 2009

Deutsche Bank to provide Mobile Authorisation in Sri Lanka for the International Air Transport Association (IATA)

24th October 2009, www.dailymirror.lk

Deutsche Bank announced that it is the first provider to successfully implement mobile authorisation for the International Air Transport Association (IATA) in Sri Lanka, a global trade organisation for airlines and airline agents.

Leveraging on the latest mobile push technology, this advanced web-based mobile authorisation feature allows corporate users to benefit from mobility in electronic-transactional authorization via easy access to transactional information with their smart-phone without the constraints of geography and time. The authorisers, in turn, will benefit from real-time access to information on pending transactions and responses on authorisation results.

First to be launched in Sri Lanka, Deutsche Bank’s mobile authorisation is the only authorisation option in the market with a non-repudiation support feature. Stringent security measures are in place to ensure the secure delivery and confirmation of transaction authorisations. This integrated mobile technology is available via db-direct internet, the bank’s web-based platform, which is part of db channel and information solutions. This is an addition to db direct internet’s two existing modes of authorisation, online and remote token authorisation.

The International Air Transport Association (IATA) is Deutsche Bank’s first client in Sri Lanka to experience the mobile authorisation solution. As an intermediary between airlines and cargo and airline agents, IATA is responsible for the Billing and Settlement Plan (BSP) in Sri Lanka. Deutsche Bank has been the local BSP Clearing and Settlement Bank for IATA since 2005.

Asanka Ranhotty, head of cash management corporates for Deutsche Bank in Sri Lanka said, “We understand that corporate executives responsible for authorising payments need to access electronic transactional information while on the move. Mobile authorisation allows our clients access to electronic transactional information at their convenience. This is key in today’s business environment where optimising working capital and managing liquidity efficiently take precedence. As pioneers in mobile authorisation, we expect more clients to upgrade to this enhanced value-added feature.”

Deutsche Bank was recently named Best Transaction Bank and Best Cash Management Bank in Sri Lanka, and Best Transaction Bank and Best Cash Management Specialist for Corporates in Asia Pacific, in The Asset Triple A Transaction Banking Awards 2009.

24 October 2009

Highest Earning by Textile and Garment Exports Recorded in August 2009 - Central Bank of Sri Lanka

23rd October 2009, firstlanka.com

The Central Bank claimed that textile and garment exports rebounced by 8.5 percent, year-on-year. It recorded 324 million US dollars in August 2009 which is the highest earning by the sector during the year.

Sri Lanka exports showed a steady month on month rise with a recovery seen in the key apparel sector. The Central Bank further noted that food and beverages and other industrial exports were also improving. Tea exports had grown 2.8 percent in August from a year earlier.

The average export price had reached 4.34 US dollars a kilo in 2009. According to the Central Bank total exports in August were 710 million, and had been growing from April.

Sri Lanka Not Claiming Full Duty Free Access to US Under Its Generalized System of Preferences (GSP) Programme

23rd October 2009, www.lankabusinessonline.com

Sri Lankan exporters are not making enough use of duty free access to the United States under its Generalized System of Preferences (GSP) programme, officials said.

"It is necessary to educate our exporters about the duty free access to the US," said Gomi Senadheera, Sri Lanka's Director-General of Commerce. "There is much potential."

He said if exports eligible for duty free access makes use of the access the "opportunities for market expansion are very high."

There are a large number of products covered by GSP which are not exported to the US, he said.

Total two-way trade between Sri Lanka and the United States totalled 2.3 billion dollars in 2008, with US imports of two billion dollars and US exports of 283 million dollars.

The main US exports to Sri Lanka were aircraft, cereals, industrial machinery, electrical machinery and plastics.

US imports from Sri Lanka are mainly apparel, rubber, precious stones and industrial machinery.

Officials said that in 2008, US imports from Sir Lanka qualifying for GSP preferences were valued at 153 million dollars.

The US is the largest single market for Sri Lankan exports as much as 80 percent of which consists of apparel and textile products.

But a conference on US trade and investments in the island was told recently that according to trade statistics nearly 17 million dollars worth of GSP eligible goods from Sri Lanka had entered the US market in 2007 without claiming duty free benefits.

In 2008, the value of such Sri Lankan exports had risen to 18.7 million dollars.

This was because of lack of awareness among importers and exporters of the zero duty concessions offered under the US GSP programme and insufficient documentation, trade officials said.

The total value of US imports from Sri Lanka under the GSP programme was 172.05 million dollars in 2008 accounting for 9.1 percent of total US imports from the island.

The value of such imports in the first seven months of 2009 was 68.5 million dollars.

Java Sri Lanka Kandy 2009 - First Ever Software Exhibition In Kandy, Sri Lanka

23rd October 2009, colombotoday.com

IT enthusiasts in their numbers converged at ‘Java Sri Lanka Kandy 2009’ - the first ever software exhibition in the hill country capital that opened today (Oct. 23).

The three-day event is taking place at IJTS, No. 321, Peradeniya Road from 8.00 am to 7.00 pm each day.

Central province chief minister Sarath Ekanayake was the chief guest at the opening of this software and educational event.

The Institute of Java and Technological Studies (IJTS) is organizing the event in collaboration with After A/L Future Seekers, with Sri Lanka Telecom as the strategic partner.

High quality ecommerce application software and standalone industrial software products developed by skilled young professionals are on display until October 25.

23 October 2009

CSE : Trading Friday - Shares End On High Note

23rd October 2009, www.lankabusinessonline.com

Sri Lankan stocks bounced backed strongly Friday, as retailer's regained confidence to hold their investments and were upbeat on future company performance, but trading was low, brokers said.

The All Share Price Index closed up 2.13 percent (63.75 points) to end at 3,056.62, while the Milaka Index of more liquid stocks gained 2.02 percent (68.13 points) to close at 3,434.00, according to provisional stock exchange data.

Turnover was 398.3 million rupees.

"The market is slowly recovering and investor sentiment is also improving but turnover levels still remain low," Waruna Singappulli, head of research at NDB Stockbrokers said.

"We can expect investor sentiment to further strengthen in the coming days which will help turnover levels to hit levels seen during the last few weeks."

Sri Lanka's bourse took a beating this week after Sri Lankan-born billionaire fund manager; Raja Rajaratnam was arrested by US regulators for alleged insider dealing.

Rajaratnam was a big investor in the Colombo bourse with large stakes in blue chips such as Commercial Bank, DFCC Bank and National Development Bank, through his Galleon Fund.

He also has supposedly bought a big stake in conglomerate John Keells Holdings (JKH) with his personal funds, brokers said.

JKH, whose share price was pummeled earlier in the week on news of Rajaratnam's arrest, closed at 144.50 rupees, up 4.25.

National Development Bank closed at 189.00 rupees, up 3.50, and DFCC Bank closed at 153.00 rupees, up 4.25.

Commercial Bank of Ceylon closed at 184.50 rupees, up 6.00, and Sampath Bank closed at 185.00 rupees, up 2.75.

Dialog Telekom a unit of Telekom Malaysia closed flat at 7.25 rupees with almost 1.5 million shares changing hands, and Sri Lanka Telecom closed at 46.00 rupees, up 2.00.

Distilleries Company of Sri Lankan closed at 101.00 rupees, up 2.50.

Friends of Sri Lanka’ Rescues GSP Plus Trade Status for Sri Lanka

23rd October 2009, www.island.lk

A section of European Parliament yesterday thwarted an attempt by some members to suspend Sri Lanka’s GSP plus trade status.

The ‘Friends of Sri Lanka’ in the European Parliament blocked the move in a hurriedly moved Urgency Resolution debated in Strasbourg on Thursday (22 October), Foreign Ministry sources told The Island last night. Sources said that the EU action had coincided with the US State Department move against Sri Lanka targeting the country over the conduct of her armed forces during the war against the LTTE.

The resolution on Sri Lanka was adopted at the European Parliament with 60 members voting for it, zero against and 3 members abstaining .

Sources said that they had also managed to drop critical references to the IDPs as well as the Tissanayagam issues.

The EU resolution was initiated against the backdrop of a report by the European Commission on Sri Lanka’s GSP+ status, which, released on Monday (19 October), concluded that Sri Lanka had failed to fully implement some of the UN convention relevant to the scheme. Although direct reference to GSP+ was removed, the resolution still emphasised the importance that trade would play in Sri Lankan reconstruction.

Geoffrey Van Orden MEP, Chairman of the ‘Friends of Sri Lanka’ group, who participated in the inter-party negotiations on the compromise urgency text, said: "The Friends of Sri Lanka have consistently advocated that it is trade, not aid,that provides the best route to economic recovery and improvement". He has also called on the European Commission to reconsider its findings on Sri Lanka’s GSP+ status and has urged the Sri Lanka government to engage with the Commission on issues of concern.

The Friends of Sri Lanka group also called for greater international humanitarian assistance and urged the international community and the EU Commission in particular, to provide additional support for urgent mine clearance action in northern Sri Lanka. It also called for Sri Lanka now to accede to the Ottawa Mine Ban Treaty.

Earlier this month, in collaboration with the Embassy of Sri Lanka, the group hosted a photographic exhibition in the European Parliament entitled: "Sri Lanka: Facets of Post Conflict Development" which highlighted the reconstruction work currently being undertaken by the government in northern Sri Lanka.

While supporting calls for Colombo to strictly adhere to human rights standards, the resolution welcomed the introduction of the Victim and Witness Assistance and Protection Bill in the Sri Lankan Parliament and was happy to note that the Sri Lankan government has developed a National Plan of Action for the Encouragement of Human Rights (NHRAP).

The resolution also recognised that local elections in northern Sri Lanka had been conducted peacefully and called on all Tamil leaders in Sri Lanka to seriously engage in a political settlement and to renounce terrorism once and for all.

22 October 2009

CSE - Trading Thursday: Sri Lankan Shares Down 0.85-pct

22nd October 2009, www.lankabusinessonline.com

Sri Lankan shares failed to hold onto morning gains Thursday as retailers with weak finances sold to meet margin calls, while some investors were seen taking profits from yesterday's gains, brokers said.

The All Share Price Index closed down 0.85 percent (25.73 points) to end at 2,992.87, while the Milanka Index of more liquid stocks dropped 0.75 percent (25.39 points) to close at 3,365.87, according to provisional stock exchange data.

Turnover was 293.0 million rupees.

"This is a temporary setback ignited by panicked retailers who lack the will and finances to hold," Manjula Kumarasinghe, director at stock brokering house SKM Lanka Holdings said.

"These liquid shares will be taken by the bargain hunters that have the financial strength to hold it medium to long term."

Conglomerate John Keells Holdings which took a beating this week closed flat at 140.25 rupees, and Distilleries Company of Sri Lanka closed at 98.50 rupees, down 3.00.

Commercial Bank of Sri Lanka closed at 178.50 rupees, down 2.75, and DFCC Bank closed at 148.75 rupees, down 4.50.

Brokers said some investors took profits from yesterday gains.

National Development Bank closed at 185.50 rupees, down 2.50, and Sampath Bank closed at 182.25 rupees, down 2.75.

Seylan Bank closed at 40.00 rupees, down 50 cents.

Celco giant Dialog Telekom, a unit of Telekom Malaysia closed flat at 7.25 rupees with 1.82 million shares changing hands, and fixed line operator Sri Lanka Telecom closed at 44.00 rupees, down 1.00.

Tokyo Cement closed at 225.25 rupees, down 4.75, and retailer favorite Lanka Cement closed at 28.50 rupees, down 1.00.

Colombo Dockyard closed at 178.00 rupees, down 3.00, and Sathosa Motors closed at 131.50 rupees, up 5.00.

Virtusa Named to Deloitte's Technology Fast 500 List

22nd October 2009, www.dailynews.lk

Virtusa Corporation has been named to Technology Fast 500, Deloitte LLP's ranking of 500 of the fastest growing technology, media, telecommunications, life sciences and clean technology companies in North America. This marks Virtusa's inclusion on the list for the second time in three years. Rankings are based on percentage of fiscal year revenue growth during the five year period from 2004-2008.

"Virtusa's inclusion in the Deloitte Technology Fast 500 speaks volumes about not only our corporate culture and leadership, but also our ability to deliver IT solutions that provide positive business outcomes for customers," said Virtusa Chairman Kris Canekeratne. "Today's business environment demands agile, efficient, and cost-effective lean IT solutions. Our growth is a direct result of our ability to deliver business solutions that meet and exceed our customers' goals and objectives," he said.

"Technology Fast 500 recognizes innovative companies that have broken down barriers to success and defied the odds with their remarkable five-year revenue growth," said Deloitte LLP, Vice Chairman and U.S. Technology, Media and Telecommunications leader, Phil Asmundson. "We congratulate Virtusa on this accomplishment," he said.

In September, Virtusa ranked as one of the Boston Business Journal's "100 Fastest Growing Public Companies" in the Boston area. The company also recently earned a spot on Everything Channel's Fast Growth 100 list for the fastest growing integrators in the IT industry.

Excon 2009, International Construction Expo to be Held in Sri Lanka at the of October

22nd October 2009, www.dailynews.lk, By Sanjeevi Jayasuriya

The downward trend in the interest rates and low inflation is a boost for many industries, particularly the construction industry where finances play a vital role. The macro economic environment is favourable for trade, investment and tourism and Sri Lanka needs to capitalize on this situation for economic development, said Export Development and International Trade Minister, Prof. G.L. Peiris.

"We need to focus on the service sector where the country has the potential to develop. The construction industry should use modern technology to showcase to the world the inherent potential of the industry. The industry possesses all the capabilities of other countries, but lack capital. We need to address this issue," he said.

The Chamber of Construction Industry Sri Lanka will conduct Sri Lanka's first ever international construction expo 'Excon 2009' from October 30 - November 1 at the Sirimavo Bandaranaike Memorial Exhibition Centre.

"Excon 2009 is designed to enhance the capabilities and the competitiveness of the domestic construction industry with special focus on the SME sector. We strongly advocate sustainable construction industry to achieve grassroot level development," said the Chamber of Construction Industry Sri Lanka Chief Executive Officer/ Secretary General, Dakshitha Thalgodapitiya.

The Chamber has identified the inability to access credit and obtain various bond and guarantees required by the industry as one of the major impediments for this sector to enhance its capacities, he said.

To overcome the non availability of easy access to obtaining bonds and guarantees the Chamber is at present in the process of formulating a conceptual framework of bonds and guarantees scheme where the Chamber envisages to play the role of a surety agent as available in many other developed and developing countries, he said.

The surety agent is essentially independent from the owner, surety and the contractor where it will evaluate the contractors ability to do bonded work and facilitate communication between the contractor and surety underwriting the contract bonds. The Chamber will use Excon 2009 to launch its surety agency with leading insurers in the country, he said.

Unilever Sets Up Rs 4bn Manufacturing Plant in Sri Lanka

21st October 2009, firstlanka.com

The Board of Investment of Sri Lanka granted investment approval to Unilever Sri Lanka Limited to set up a state-of-the-art manufacturing plant at the Horana Export Processing Zone. Dhammika Perera, Chairman / Director General signed the agreement on behalf of the BOI and formally presented the BOI Certificate of Registration to Mr. Amal Cabraal, Chairman of Unilever Sri Lanka.

The Rs. 4 billion investment agreement signed with Unilever Sri Lanka Limited is to establish its main manufacturing facility at Horana Export Processing Zone. The new state-of-the-art “green” manufacturing facility, established in a 26 acre area, will cater to the local demand and may also serve as a regional sourcing hub for Unilever.

As of today, Unilever Sri Lanka has 70 years of manufacturing history in this country and produces 95% of all the products it markets in Sri Lanka. This significant investment reflects Unilever’s commitment to its markets in Sri Lanka. The investment will ensure that Unilever will continue to provide Sri Lankan consumers with their favourite brands while adding substantially to the nation’s economy.

“By building the new production facility, we will contribute towards Sri Lanka’s industrial and economic success. We will be able to remain competitive and the new production facility provides scope for expansion of the business” stated Mr. Amal Cabraal.

“The decision to choose the BOI Zone in Horana as the site for the new facility was made in keeping with the Government’s 300 Enterprise Programme designed to spread development across the country” Unilever Sri Lanka has delivered outstanding results on all fronts of the business despite many challenges and has achieved seven consecutive years of double digit growth and maintained its overall market dominance.

Today Unilever Sri Lanka is home to 26 strong brands that are leaders in all the categories that they operate in. With the local consumer being at the heart of the business the company has products ideally suited to the Sri Lankan consumer. The company manufactures fast moving consumer goods such as home care personal care and foods at the local manufacturing facilities, reporting to the regional business groups for innovation and business results. Unilever Sri Lanka provides employment to 1100 people directly and many thousands more indirectly through its dedicated suppliers, distributors and service providers. Amal Cabraal, Chairman and Shrihan Perera, National Finance Director signed the agreement on behalf of Unilever Sri Lanka Limited.

New Cargo Terminal at BIA Doubles Capacity

21st October 2009, firstlanka.com

A new terminal for export air cargo will open at Colombo’s Bandaranaike International Airport in January 2010 to double capacity at the airport, SriLankan Airlines sources said.

SriLankan is the main handling agent for all airlines that operate to BIA, and is looking forward to a steady growth in its operations with the dawn of peace in the country.

SriLankan is the main handling agent for all airlines that operate to BIA, and is looking forward to a steady growth in its operations with the dawn of peace in the country.

SEC Buys Surveillance System to Monitor Growing Market

21st October 2009, www.lankabusinessonline.com

Sri Lankan markets watchdog, the Securities and Exchange Commission (SEC), inked a 20 million dollar deal with Millennium Information Technologies (MIT) to buy an automated surveillance system.

"Presently we have a manual system. The new system will be implemented in the first quarter of 2010," Udayasri Kariyawasam, chairman of the SEC said.

Hardware and software costs are included in the 20 million rupee price tag. The hardware would be sourced from Sun Micro Systems, he said.

"The systems maintenance contract is two million rupees annually," Anush Amarasinghe, chief operating office, MIT, said. "There is a warranty period for the product."

Kariyawasam said the online surveillance system has the ability to detect suspicious trades and keep tabs on brokers.

The new system can check trading histories and to track previous transactions and identify patterns, Kariyawasam said.

"This is a tailor-made system for the SEC and has been in the pipeline for the last two to three years," Kariyawasam said.

"When we handle a big volume it's difficult to monitor the market."

He said the system would automatically generate information needed to track the market. Presently SEC investigation unit officials have to manually search the data.

"In future the system will generate the information for us to analyze," Kariyawasam said.

MIT was selected in an international tendering process opened by the SEC last year.

"MIT was not the only bidder. There were international bids and a couple of bids from India," said Channa De Silva, director general of the SEC.

The Colombo Stock Exchange electronic trading platform was also designed and built by MIT.

Amarasinghe said 17 to 18 stock exchanges, that include the London Stock Exchange and India are presently running similar systems, of which 2-3 platforms are using MIT surveillance systems.

21 October 2009

CSE - Trading Wednesday: Sri Lankan Shares Bounce Back

21st October 2009, www.lankabusinessonline.com

Sri Lankan shares made a strong recovery to edge back over 3,000 points in late afternoon trade Wednesday as panicky investors calmed down on news a US hedge fund whose founder faces fraud charges had claimed adequate liquidity, brokers said.

The All Share Price Index closed up 1.19 percent (35.43 points) to end at 3,018.60, while the Milanka Index of more liquid stocks dropped 1.92 percent (63.91 points) to close at 3,391.26, according to provisional stock exchange data.

Turnover was 951.3 million rupees.

The ASPI plunged over four percent in mid-morning trade, dragged down by losses in blue chips.

Brokers said investors, who sold in panic as they overreacted to the insider dealing charges against Raj Rajaratnam, the Sri Lankan-born co-founder of the Galleon hedge fund, calmed own after its Galleon Asia unit claimed high liquidity status, brokers said.

Investors had feared the fund, which has invested in blue chips listed on the Colombo bourse, would face high withdrawals.

"Galleon Asia made a statement claiming a status of high liquidity," Nikita Tissera, manager research at SC Securities said.

"The fund affirmed that so far they had no such calls to withdraw money yet. However the exposure to Galleon in the Colombo Stock Exchange is very limited."

Conglomerate John Keells Holdings recovered to close at 140.25 rupees, up 25 cents, and Distilleries Company of Sri Lanka closed at 101.50, up 1.75.

Commercial Bank of Ceylon closed at 181.25 rupees, up 1.00, and Hatton National Bank closed at 165.25 rupees, up 8.75.

National Development Bank closed at 188.00 rupees, down 2.00, and Seylan Bank closed at 40.50 rupees, down 25 cents.

Sampath Bank closed flat at 185.00 rupees.

Celco giant Dialog Telekom closed at 7.25 rupees, up 25 cents, and Sri Lanka Telecom closed at 45.00 rupees, up 75 cents.

Retailer favorite Touchwood Investment closed at 90.75 rupees, up 1.00, and Lanka Cement closed at 29.50 rupees, up 75 cents.

Sri Lanka's first ever closed fund, NAMAL Acuity Value Fund closed at 47.00 rupees, down 1.75. At the Initial Public Offering each unit of the fund was issued at 50.00 rupees.

India Offered Sri Lanka US$2.6bn If IMF Refused

21st October 2009, www.dailymirror.lk, By Kelum Bandara and Yohan Perera

Indian Prime Minister Manmohan Singh had directly told the International Monetary Fund that his government would give Sri Lanka US$2.6 billion if the IMF did not approve the standby facility requested by the country, parliament was told yesterday.

Deputy Finance Minister Sarath Amunugama said this was the type of friendship Sri Lanka had nurtured especially with its regional neighbours and that the country would never forget the assistance received from countries like India and Pakistan.

“I want to place this on record. Indian Finance Minister Pranab Mukherjee telephoned the Indian representatives of the IMF and asked them to canvass for the approval of this loan to Sri Lanka.

Dr. Singh had himself said that in case the IMF does not approve the loan, India will not hesitate to provide the required funds,” Dr. Amunugama said.

He said a mega development boost was to be seen in post conflict Sri Lanka.

Sri Lanka Gross Foreign Reserves at US$4.5bn

21st October 2009, www.lankabusinessonline.com

Sri Lanka's gross official foreign reserves topped 4.5 billion US dollars by October 13, and end-August reserves were at 3,890.1 million US dollars, the Central Bank said.

During the year 212.7 million US dollars had flowed into government Treasury bills and 797.5 million US dollars into Treasury bonds.

Official reserves with the balances of the Asian Clearing Union (ACU), a clearing arrangement involving regional currencies, were 4,045.2 million US dollars.

The Central Bank said based on past 12-month's average imports of 888 million US dollars a month, the gross official reserves were equal to 4.4 months of imports and with ACU funds reserves were equal to 4.6 months of imports.

The Central Bank said it had bought 2,529.3 million US dollars from the forex markets this year.

CSE - Trading Tuesday: Sri Lankan Shares End Down

20th October 2009, www.lankabusinessonline.com

Sri Lankan shares ended sharply lower Tuesday, sinking below 3,000 points, on panic selling on fears about losing market access to Europe and fraud charges against a US fund manager with stakes in the island's firms.

The All Share Price Index closed down 3.24 percent (99.74 points) to end at 2,983.17, while the Milanka Index of more liquid stocks dropped 4.34 percent (150.98 points) to close at 3,327.35, according to provisional stock exchange data.

Turnover was 763.7 million rupees.

The fall in share prices was initially triggered by the arrest on insider dealing charges Friday of billionaire US hedge fund manager Raj Rajaratnam, the Sri Lankan-born co-founder of the Galleon fund, who has big stakes in blue chips.

A European Union report Monday that said Sri Lanka was in breach of commitments to be eligible for the GSP Plus trade deal giving duty free access to EU markets also spooked investors.

"The combination of Rajaratnam's arrest and negative news on the GPS Plus concessions sparked panic retail selling which pulled the market down," said Waruna Singappuli, head of research at NDB Stockbrokers.

"Some positive news in expected in the third quarter interim results which should help the market as well as the second tranche of the International Monetary Fund facility."

This is the first time the market has taken such a sharp dip in the near past, brokers said.

Brokers said investors had been unnerved by the possibility Sri Lanka might lose duty free access to EU markets after the European Commission report criticised the government's human rights record.

The EU report said the EU might temporarily withdraw the GSP Plus trade deal which could erode the competitiveness of Sri Lankan exports and cause local exporters to lose European orders.

That report came soon after the arrest in the US of Rajaratnam.

Conglomerate John Keells Holdings closed at 140.00 rupees, down 8.00, or 5.41 percent, and Commercial Bank of Ceylon closed 122.50 rupees, down 3.75 rupees. Rajaratnam has stakes in both firms.

Media reports said the Galleon Group hedge fund was facing heavy investor withdrawal requests after Friday's arrest of Rajaratnam.

They said the fund was moving to unload some of its technology stocks and other holdings to raise cash.

Index heavy stocks, Dialog Telekom closed at 7.00 rupees, down 25 cents, and Sri Lanka Telecom closed at 44.25 rupees, down 75 cents.

"The negative reports on the GSP Plus concessions are impacting market sentiments," Thakshila Hulangamuwa, vice president at stock brokering house Asha Philip Securities said.

"Panic selling on the blue chip counters is weighing down heavily on the bourse."

Distilleries Company of Sri Lanka closed at 99.75 rupees, down 4.25 and Tokyo Cement closed at 224.00 rupees, down 25.75.

Hatton National Bank closed at 156.50 rupees, down 12.50, and Sampath Bank closed at 185.00 rupees, down 5.00.

Diversified Hayleys which has a significant exposure to exports, closed at 151.00 rupees, down 6.75.

19 October 2009

Singapore Urges investors - Explore Opportunities in Sri Lanka

19th October 2009, www.google.com, AFP

Singapore is urging local businessmen to explore investment opportunities in Sri Lanka following the defeat of the Tamil separatist insurgency there, a report said here Monday.

"Our business community should take an interest in what's happening, assess the risk and be aware there is a new situation," Foreign Minister George Yeo was quoted by the Singapore Straits Times as saying during a visit to war-scarred Jaffna.

"We have historical ties with Sri Lanka and it is an asset that may achieve some value," he told Singapore media Sunday at the end of a four-day trip to the island.

Yeo said he had a sense of "cautious optimism about Sri Lanka's future" as it emerges from four decades of war between the central government and the Liberation Tigers of Tamil Eelam (LTTE).

Government forces overran the Tigers' last jungle holdout in northeast Sri Lanka in mid-May, ending their struggle for an independent Tamil homeland, one of Asia's longest-running ethnic conflicts.

But Yeo said there were still latent problems to be resolved in the wake of the conflict.

"The key question is whether national reconciliation is achieved... The LTTE is destroyed but the underlying problem is not resolved, which is the contradictions between Sinhalese, Tamils and, to a lesser extent, Muslims."

About nine percent of Singapore's multi-ethnic population are Indian, and many of them are Tamils, while Tamil is one of Singapore's official languages.

Singapore's trade with Sri Lanka totalled 1.49 billion Singapore dollars (1.07 billion US) in 2008, just 0.42 percent of the city-state's total trade last year.

Singapore's total foreign direct investment abroad stood at 260 billion US dollars as of 2007.

Hambantota Port Tender for Support Services

19th October 2009, www.island.lk, By Devan Daniel

Proposals are pouring in from the private sector about setting up support services at the Hambantota Port and officials said the SLPA would soon call for official tenders.

"We have received so many proposals from the business community about setting up support services at the Hambantota Port that we have decided to officially call for tenders in a few months time," a senior official of the Sri Lanka Ports Authority (SLPA)told the Island Financial Review.

Food, freshwater, transportation, hospitality and healthcare, apart from ship repairs and bunkering facilities, are some of the areas in which support services would be required and present opportunities for businesses to claim a stake in the development activities the port would generate.

However, regional businesses are concerned that they would be crowded out by ‘bigger’ companies from Colombo.

According to the Sri Lanka Ports Authority about US$ 120 million has already been spent on the Hambantota Port and the first phase of the construction is expected to be completed four months ahead of schedule by January 2011 at a cost of about US$ 360 million.

Hambantota Port (Harbour) on Google Maps

8km Tourism zone in Trinco, Sri Lanka; Bidding for Blocks of Land Begins End of October

18th October 2009, www.nation.lk, By Rohan Abeyawardena

The Tourism Ministry has come up with a massive project prepared by the Urban Development Authority, to meet the severe demand for land to build new hotels in the Trincomalee District due to increasing inflow of tourists, with the ending of the war.

Tourism Ministry Secretary George Michael said yesterday that approximately 500 to 600 acres of state land along an eight-kilometre stretch of the Kuchchaveli coast has been set aside for the new tourism development project in the East.

The plan includes in addition to hotels, public and recreational areas and new access roads. The development of public areas will be undertaken by the Tourism Development Authority, the successor to the Tourist Board, Michael said
Recently the government ordered a halt to haphazard alienation of state land there, which were allegedly taking place with much corruption.

According to the Ministry Secretary, the bidding for the blocks of land between five to 10 acres each would begin as early as end of this month. While the proposals and the conceptual designs will be evaluated by the TDA, the allocation of land to each project will be done by the GA and the Land Commissioner.

Planners have envisaged the construction of 10 rooms per acre on average. There are now moves by the industry to expand in other areas in the East such as Kalkudah and Pasikudah, but according to Michael there are no problems in those two areas as there are plenty of private lands there.

Meanwhile, the clamour of the hotel industry to get a waiver on the no liquor rule on the last Poya Day of the year, which falls on December 31, has been rejected by the authorities. So, all hotels having 31st night celebrations can serve liquor only after midnight with the dawning of the New Year.
The clamour of the hoteliers in Negombo to have a Hikkaduwa type promotional carnival to promote tourism there has got the go ahead and the Ministry Secretary said it would be held before Christmas.

Sri Lanka's Longest Bridge in Arippu, Wanni

18th October 2009, www.news.lk

Chief Presidential Advisor Basil Rajapaksa said the proposed bridge at Arippu would be the longest bridge in the liberated areas of the Wanni. The bridge costing Rs.400 million will be 240 metres-in length and 7.35mtrs in width.

The LTTE blasted the temporary bridge at Arippu to prevent the security forces from entering the area during military operations in 1990 and 1991. The area was strategically important to the LTTE for smuggling arms and ammunition across the lagoon.

He pointed out that after resettlement of the displaced, the bridge would provide easy access to Vavuniya, Mannar, Kilinocchi, Mullaithivu and Jaffna as well as to accelerate the development in the Northern Province.