30 September 2010

Sri Lanka's Norochcholai Power Plant Gets Coal from Indonesia to Add Electricity to Grid by December

30th September 2010, www.dailynews.lk, By Dinesh De Alwis

A cargo vessel with coal on board to generate electricity for the Norochcholai Coal Power Plant will arrive in Sri Lanka by October end. The cost of the first shipment of 65,500 MT of coal from Indonesia will be US$ 7 million.

Space has been allocated to store coal at Norochcholai. It has been estimated that one million tons of coal are needed to generate 300 Mw electricity during the year, Power and Energy Minister Patali Champika Ranawaka said.

Nearly 95 percent of the first phase (300Mw) Power Plant has been completed.

The other five percent will be completed within the next three months. Pre-testing for generating electricity are being carried out by experts.

By December this year, the Ministry hopes to add coal power electricity to the national grid. The project which was delayed over a decade was started by President Mahinda Rajapaksa in 2006. Construction of the 900 MW power plant is carried out by China National Machinery Import and Export Corporation and built in three phases costing Rs 45 billion.

Related Info:
Sri Lanka to Focus on Renewable Energy. 300MW from Norochcholai Coal Power Plant by Year End

Sri Lanka's Micro Exports Cars to Nepal

30th September 2010, www.dailynews.lk, By Harshini Perera

Micro Cars Limited will be exporting ten cars, of the Micro MX7 model as an initial shipment to Nepal. There will be 150 cars in line with the first year commitment from Micro to Nepal which will include Micro cars as well as mini vans in the future.

The cars are sold in Nepal with the franchise of a Nepal distributor who is financially strong, well-informed about the car market and who can deliver a good after service facility, Micro Cars Limited Chairman/CEO Dr Lawrence Perera said at the shipment of cars to Nepal yesterday.

He said the Micro MX7 will be exported at US $10,000 without export taxes which is generally priced at Rs 2.2 million in Sri Lanka.

The car will be priced at Rs 2.3 million in Nepal. The company uses 40 to 50 percent import component in vehicle manufacturing while 35 percent is from the local component. It encourages the local repairers and manufacturers.

“We have come to a proposal with the Transport Ministry to test ten Micro buses to be used in the public transportation system as an initial test.

“The car market in Sri Lanka is around 20,000 a year but we as a local company could only take 10 percent of the market share,” he said.

“We have a larger market share of 80 percent in the SUV jeep segment while the small car segment is 10 to 12 percent and 15 percent for medium cars. The best selling vehicle is SUVs and four new models will be launched in the future,” Dr Perera said.

Image: Economic Development Minister Basil Rajapaksa inspecting a car to be exported to Nepal while Micro Cars Limited Chairman/CEO Dr Lawrence Perera looks on. Picture by Chaminda Hittetiya

Sri Lanka Limits Equity Warrants in Line with International Benchmarks

29th September 2010, www.lankabusinessonline.com

Sri Lanka is capping equity warrants to 15 percent of a company's capital, limiting the term to two years ahead and would also require firms to maintain a minimum public float, a top regulatory official said.

"These rules are in line with international benchmarks and is similar to rules in India and Malaysia," deputy director general of the Securities and Exchange Commission Malik Cader said after addressing a group of senior business executives at the LBR- LBO chief executive officers forum in Colombo.

An equity warrant gives a holder the right to buy a new share in a company (exercised) at a future date at a specific price and is similar to a derivative contract.

Crudely valued, a warrant is worth at least the difference between the current price of an ordinary share and the specified price at which it is exercised. But any exercised warrants would dilute the value of the ordinary share.

If the market price of the ordinary share is lower than exercise price at the exercise date, the warrants would expire without diluting the capital. The uncertainty makes warrants, which are similar to a derivative contract, highly speculative.

Unless a firm is on track to make increasingly higher profits every year, a warrant would be worthless.

Warrants are usually give free as a sweetner when companies issues fresh shares to existing shareholder to raise additional capital through a 'rights' issue.

Though warrants have been issued in Sri Lanka for years, amid the current boom, warrant issues have increased with Environmental Resources Investments, a firm which has bought into several other operating businesses, being a prolific issuer.

The market valuation of warrants can be skewed in a firm which is closely held by insiders, whose underlying shares can also be suffering the same fate, compounding the problem. Illiquid companies are favourite targets of price manipulators.

Cader said firms in the main board of the Colombo Stock Exchange would have to maintain a 25 percent public float to issue warrants and those on the second board would have to maintain at least 10 percent.

The regulator will also shortly release a consultation paper on devising minimum public floats, which though required at the time of listing are not maintained later.

Sri Lanka to Call EOI for Commodities Exchange

29th September 2010, www.lankabusinessonline.com

Sri Lanka will shortly call for international expressions of interest to set up a commodities exchange, and the successful bidder will have to assist in developing a regulatory framework, a top official said.

"We are going to call for expressions of interest (EOI) to set up a commodities exchange," deputy director general of the Securities and Exchange Commission Malik Cader told senior executives at the LBR-LBO chief executive officers forum in Colombo.

"It will be an international tender, we want to very transparent on that. There is a lot of interest from big players."

The EOI will be called before the end of the year, Cader said.

The successful bidder would also help develop a regulatory framework.

"It will be another SEC like thing," Cader said. "We need to do the regulatory framework; we want a full package of the whole thing."

Commodities exchange trade notional spot as well as futures contracts. The contracts however can be settled in cash or physically.

The exchange will also have to be linked with facilities like warehouses for physical delivery, Cader said.

Sri Lanka has the opportunity to even develop an international contract in tea, provided a benchmark blend can be agreed upon. Such a contract if priced in a currency like the dollar can even be traded on other exchanges.

Trading a contract on other exchanges provide access to larger pools of liquidity. In March 2010 Chicago Mercantile Exchange launched dollar a crude palm oil contract in partnership with Malaysia with final settlement tied to the Malaysian Ringgit contract.

Domestic currency denominated contracts have less international appeal as currency fluctuations have to be separately accounted and provided for.

29 September 2010

Sri Lanka $1bn Bond Issue Closes in 14 Hours Attracting $6.3bn Bids

28th September 2010, www.island.lk

* 362 investors throw in more than US$ 6.3 billion

* Yield at 6.25 percent, lower than issues in 2007, 2009

Central Bank’s Public Debt Department Superintendent C. J. P. Siriwardena said the global is
sue of the US$ 1 billion sovereign bonds closed within 14 hours after opening at 9 a.m. Hong Kong time on Monday (27), attracting bids amounting to more than US$ 6.3 billion.

The 10 year bonds yielded 6.25 percent through competitive bidding in an issue managed by jointly HSBC, Royal Bank of Scotland, Bank of America Merrill Lynch and Bank of Ceylon. The three foreign banks have also been appointed as sovereign ratings advisors to the government for the next four years.

"There are two things that make this bond issue different from the previous sovereign bond issues. The first being the extension of the yield curve from five years to ten, while the second, the size, US$ 1 billion from the previous issues of US$ 500 million. Investor response was overwhelming," Siriwardena told The Island Financial Review.

"The fact that investors picked up the issue at 6.25 percent is also a reflection of their confidence in Sri Lanka’s economy.

Inflation is benign, the exchange rate is stable, reserves are strong and the economy has shown strong growth during the first and second quarters (7.1 percent and 8.5 percent), this is why they accepted the bonds at this rate for ten years," he said.

The proceeds from this sovereign bond issue would be utilized for infrastructure development activities carried out by the government and also to restructure the existing government debt portfolio by retiring high cost domestic debt and short term foreign currency denominated debt.

A sovereign bond issue for US$ 500 million, after the end of the conflict last year, was 13 times oversubscribed and was priced at 7.4 percent. This issue was the second since October 2007, which was also for US$ 500 million priced at a much higher rate of 8.25 percent.

"Orders were received from 362 investors globally. By geographic distribution, 52.5 percent of the bonds were allocated to investors in the United States, 25 percent to investors in Europe and 22.5 percent to investors in Asia. By investor type, 85 percent of the bonds were allocated to Fund and Asset Managers and the balance to Pension Funds, Insurance companies and banks," the Central Bank said in a statement last afternoon.

"The Offering is of 144A / Reg. S format and the bonds will mature in October 2020. The bonds are rated B+ by two international rating agencies, Standard & Poor’s and Fitch Ratings and will be listed on the Singapore Exchange.

"The current coupon rate of 6.25 percent for the 10 year sovereign bond is significantly lower than the cost of borrowings as compared to previous two international offerings in 2009 and 2007," the Central Bank said.

Related Info:
$6.3bn Orders for $1bn 10yr Sri Lanka Dollar Bonds

Sri Lanka UDA Debenture Issue Closes after Rs11bn Bids

28th September 2010, www.island.lk

The UDA’s Rs. 5 billion debenture issue to raise funds for the resettlement of 65,000 families living in unauthorised constructions in Colombo was oversubscribed yesterday with managers to the issue state banking giant Bank of Ceylon deciding to close subscription after bids applications amounting to almost Rs. 11 billion were received. The bid was open until subscriptions amounting to Rs. 10 were received.

Bank of Ceylon Chairman Dr. Gamini Wickremasinghe told The Island Financial Review that the issue was closed four days from opening after strong investor demand.

"Thirty percent of the issue was open to foreigners while local investors too showed a lot of interest with many of them coming in at the final stages. We could not accept their applications because by late afternoon we had decided to close the issue," he said.

Dr. Wickremasinghe said that local investors would get a good deal by investing in the five year debentures, as deposit interest rates, already low, could come down further during the months ahead.

Investors had three investment options: the first pays a gross return of 11 percent with interest paid annually, the second option pays a gross return of 10 percent with monthly interest payments while the third option has a floating rate of interest at the Treasury bill rate + 0.75 percent with interest paid bimonthly.

"These five year debentures would be better than fixed deposits and benefit those who rely on monthly interest income," Dr. Wickremasinghe said.

Bank of Ceylon Deputy General Manager P. A. Lionel told The Island Financial Review that applications had amounted to Rs. 9.4 billion last morning (28) after totalling 8.2 billion the previous day (27).

The UDA would use the funds to build housing units for 65,000 families within the next three and half years. The land, freed from this exercise, would be leased out for commercial and development activities.

Related Info:
Sri Lanka's UDA Debentures Open on Sept 23. 30% of Rs 10bn 5yr Bond Open to Foreign Investors

28 September 2010

$6.3bn Orders for $1bn 10yr Sri Lanka Dollar Bonds

27th September 2010, www.bloomberg.com, By Anusha Ondaatjie and David Yong

Sri Lanka received more than $6.3 billion of orders for a global sale of $1 billion in bonds to help repay debt and rebuild after the end of three decades of civil war.

The October 2020 securities were sold to yield 6.25 percent, or 373 basis points more than similar-maturity U.S. Treasuries, according to data compiled by Bloomberg. The securities were marketed to investors at an indicative yield of 6.5 percent, according to two investors briefed about the sale. Bank of America Corp., HSBC Holdings Plc and Royal Bank of Scotland Group Plc managed the issue, assisted by Bank of Ceylon.

“They came in against a positive backdrop for emerging- market bonds,” said Jetro Siekkinen, a money manager in Helsinki at Aktia Asset Management, who oversees $7.8 billion bonds and bought some of the new debt. “The spread is attractive in this yield-hungry environment.”

Global investors plowed a record $27.9 billion of funds into emerging-market debt this year through Aug. 25, according to Barclays Capital Plc, citing data compiled by EPFR Global. Dollar debt sold by developing nations has rallied 13 percent this year, JPMorgan Chase & Co’s EMBI Global Index shows.
GDP, Stock Gain

Sri Lanka’s gross domestic product expanded 8.5 percent in the three months ended June 30 from a year earlier, the most since 2002, the statistics department said Sept. 16. The $42 billion economy may grow as much as 8 percent in 2010, the central bank said Sept. 21, having previously forecast a 7 percent expansion.

The Colombo All-Share Index of shares has more than tripled since the end of a 26-year civil war in May 2009, the best performance among benchmark stock indexes. The local rupee has strengthened 2.7 percent to 111.90 per dollar over the same period, according to data compiled by Bloomberg.

The central bank said in a statement today the oversubscription reflected “high global investor confidence based on the recent progress and the future prospects in the Sri Lankan economy since the end of the conflict.”

The bank said orders were received from 362 investors globally, with 85 percent of the bonds allocated to fund managers and the balance going to pension funds, insurance companies and banks.

S&P upgraded Sri Lanka’s credit rating one level to B+ from B on Sept. 14, four levels below investment grade. Fitch raised its rating outlook to positive from stable on Sept. 21. The latest debt sale is Sri Lanka’s third global offering, following $500 million issues of five-year bonds in October 2007 and October 2009.

Sri Lanka’s debt has returned 42 percent since May 18, 2009, according to JPMorgan Chase & Co.’s EMBI Global Index. That’s when government forces defeated Tamil Tiger rebels. The return compares with a 19 percent gain in China, 24 percent in Brazil and 27 percent in Russia.

To contact the reporters on this story: David Yong in Singapore at dyong@bloomberg.net; Gabrielle Coppola in New York at gcoppola@bloomberg.net

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net.

Related Info:
Sri Lanka Dollar Bond Receives Bids over $2.5bn at Likely Yield of 6.375pct

Sri Lanka Hambantota Port Proposals Extended until October 15th

28th September 2010, www.dailynews.lk, By Indunil Hewage

Accepting project proposals for setting up new ventures in the Hambantota port has extended upto October 15. Project applications will be evaluated within a week after accepting the proposals.

The closing date for accepting applications was September 30. Hambantota Port Chief Engineer Agil Hewageegana said investors have requested a time extension from the Port for submitting their documentation.

Currently, 54 local and foreign investors have taken the required documentation.

Mass scale local cement manufacturing companies have also taken the documentation to submit their proposals.

It is expected that more local ventures, foreign ventures and foreign ventures collaborating with local companies will be set up in the 140 acre land.

Related Info:
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Sri Lanka Hambatota Magampura Port Draws Dubai & Singapore Service Providers

Sri Lanka Dollar Bond Receives Bids over $2.5bn at Likely Yield of 6.375pct

28th September 2010, www.dailynews.lk

Sri Lanka has received bids of more than $2.5 billion for its 10-year dollar bond, and the deal looks set to price tighter than the expected 6.5 percent, sources said on Monday.

Sri Lanka is the latest emerging sovereign to venture into bond markets as investors’ risk appetite has returned with a vengeance this month, and its offer has met with solid demand.

Fund managers reported that the book size was at $2.5 to $3 billion so far, compared with the expected $1 billion to be sold.

Books have closed in Europe and Asia.

Sources had earlier told Reuters the deal would price around 6.5 percent. Sri Lanka plans to use the bond’s proceeds to fund the budget and to pay short-term debt.

“Given the books are at these levels already and the U.S. is yet to put in (orders), 6.375 percent (yield) looks likely,” one fund manager in London said. Asian orders had been around $1 billion. The Sri Lankan central bank had said earlier it planned to issue $1 billion of sovereign bonds. A source with knowledge of the deal said Colombo would likely cap the issue at $1 billion.

This will be the island’s third global debt issue since 2007, when it issued a maiden $500 million, five-year bond.

The government sold another $500 million, five-year bond in 2009. Bank of America, Merrill Lynch , HSBC Holdings Plc and Royal Bank of Scotland Group Plc are managing the sale.

“We are seeing considerable interest for emerging market bonds, and Sri Lanka will play right into that,” said Scott Bennett, who manages $1.5 billion in Asian fixed income as head of Asian Investment at Aberdeen Asset Management in Singapore.

The sale comes a week after Standard & Poor’s raised the country’s sovereign credit rating by a notch to B-plus from B, citing growth prospects and government efforts to narrow the budget deficit.

Related Info:
Sri Lanka's $ 1bn 10yr Sovereign Bond May Yield 6.5pct and Expected to be Comfortably Oversubscribedeld

IBGL Invests Rs600mn in Sri Lanka Cinnamon Tea Production

28th September 2010, www.dailynews.lk, By Ramani Kangaraarachchi

International Business Galaxy Ltd (IBGL) will invest Rs 600 million to meet the huge demand for cinnamon tea around the world. IBGL Chairman Ajintha Wickramanayake told Daily News Business the company will go for a private placement to meet this challenge shortly.

He said two million shares at the rate of Rs 300 each will be issued to the public in a revolutionary manner.

“We can teach people how to generate income through our products utilizing funds at a time investors look for new avenues to invest their money after the recession,” he said.

The shareholders will be paid dividends at gross profit level and not at the net profit levels like in other companies.

As such shareholders have placed lot of confidence on the company and they will get higher return as a result.

It is significant that the company has allocated 20 percent from the profits to original shareholders.

Wickramanayake said IBGL offers creative and unique food and beverage products with health benefits using Sri Lanka commodities which is essential to people worldwide.

“The return on investment for the shareholders is definite and fast. IBGL is one of the first to take this opportunity to explore and produce this superlative product,’ he said.

Sri Lanka has still not recognised the commercial opportunities of Cinnamon and Green and Black tea.

The Ceylon Cinnamon with Green and Black Tea is prophylactic and a blood purifier and is one of the best beverages available in the world,” he said.

Sri Lanka Offers Opportunity to Foreign Companies as China Becomes Expensive - President Rajapaksa to Wall Street Journal

22nd September 2010, online.wsj.com, By Gabriella Stern

NEW YORK -- Sri Lanka's president said Wednesday that rising labor costs in China present an opportunity for his South Asian country to attract foreign companies seeking an alternative low-cost manufacturing base.

President Mahinda Rajapaksa, in New York for the United Nations General Assembly, told The Wall Street Journal that the once war-torn country has enjoyed a 15-month period of peace during which his government has focused on rebuilding roadways and

railroads in the ravaged North and East, expanding the availability of electricity and clean water, and providing homes, among other things.

He said Sri Lanka--with a literate population, relatively low labor costs, and a sizeable corps of trained accountants--is drawing the interest of outsourcing firms, including major Indian business-process outsourcing companies seeking ways to expand outside India, where wages also have been rising.

In addition, European and U.S. retailers are increasingly turning to Sri Lanka to produce apparel at costs below those in China, Mr. Rajapaksa added. His country faces a labor shortage in the apparel sector as a result of this interest, he added.

Ashroff Omar, chief executive of apparel exporter Brandix Lanka Ltd., said it currently costs about $150 a month to employ a "trained" Sri Lankan apparel worker, compared with $400 in China. In a couple of years, he said, the cost in China will be about $600, compared with around $200 in Sri Lanka.

Mr. Omar and about two dozen business leaders and government ministers accompanied President Rajapaksa to the U.S.

Tourism is growing in his country, as Indian travelers gravitate to a peaceful Sri Lanka, and interest among European tourists--particularly Scandinavians--picks up, Mr. Rajapaksa said. Agriculture and fisheries are also key drivers of economic growth.

President Rajapaksa acknowledged that Sri Lanka still suffers from a lingering perception that it remains a war zone, but said there have been "no incidents" for more than a year and foreign governments have generally removed advisories warning travelers to stay away.

The country's economy grew 8.5% in the second quarter, compared with 7.1% year-on-year growth in the first quarter, according to Fitch Ratings. Inflation, at just under 6%, is under control, Sri Lanka's president said. The International Monetary Fund recently said a Central Bank of Sri Lanka rate cut was appropriate policy and projected a continuation of single-digit inflation for the year.

The president said his biggest worry is "protectionism" by other Asian countries at a time when Sri Lanka hopes to tap into the region's unprecedented economic expansion.

Sri Lanka, with a population of 20 million, emerged from a three-decade civil war in May 2009 with the defeat of the Tamil Tigers.

Email gabriella.stern@dowjones.com

Sri Lanka Tea Earnings Top and Tea Futures Considered

26th September 2010, www.island.lk, By Steve A. Morrell

The Sri Lanka Tea Board ( SLTB), through their crop results analysis last week said production returns to end August at 221.2 million; was approximately 39.3 million kilos above last year, the same period.

John Keels Weekly Tea Market report recorded that apart from crop successes, forex earnings would move up to ‘never before’ levels, and the year would end with Tea earning Over 1.3 Billion Dollars in foreign exchange. (Forex).

Brokers’ reports received by us confirmed this forecast and universally what they said was positive impacts of Ceylon Tea would continue to influence the Tea world quite considerably. They were however cautious labeling ‘Ceylons, the best’, tag line, but although reality was that that was not so ‘We will get there’, they said.

SLTB analysis indicated low growns continued to dominate production. Low growns as recorded in these columns quite often, are mostly small holdings held by the rural ‘Appuhamys, and Menikes’, approximately 400,000 in number, who produce greater volume to ensure Sri Lanka retains upper level status.

High grown volumes were recorded at 53.7 million kilos to end August. Mid grown elevation Tea mostly located in Matale, and the lower reaches of Nawalapitiya and Pupuressa, had production returns of 38.2 million kilos.

The Tea Board report further said orthodox teas including Bio, Instant, Reclaimed, and CTC production was 206.8 million kilos. Green tea also included in the auctions, was 2.2 million kilos.

These returns were significant to forecast tea successes.

However an interesting feature last week, as informed by Ceylon Tea Brokers PLC, Tea market report, was that ‘Tea Futures", would soon be an integral part of Tea marketing strategy.

Quoting from ‘Tea Futures’, the report said The Tea Board of India was speculating the introduction of futures trading in Tea mid way in their 12th five year plan. Roshini Sen Deputy Chairman Tea Board informed the media futures trading in Tea was eagerly awaited by the industry at large, but lack of uniformity was delaying its application.

India produces approximately 979 million kilos annually, second only to China who produce 1.3 billion kilos . Sen Said Tea futures would not only support prices, but provoke transparency to the existing price mechanism. India’s per capita consumption in Tea was modest at 750 Grams per annum, followed by Pakistan, and Germany (700 grams).

The UK consumption figure was 2 billion cups per annum.

Lanka Commodity Brokers said ‘Although we like a situation where the market strengthens progressively more realistic assessment would no doubt make us realize it cannot go on indefinitely’.

The report said low grown Teas last week, were lower as prices fell. Demand from Turkey Saudi Arabia, and Iran was selective.

Russian buying interests were sustained.

Top sellers included Waltrim, in Lindula, Tymawr, (Frotoft) in the upper reaches on the Nuwara Eliya, road ,Laxapana, at the foot of the peak wilderness. And Glentilt in the Maskeliya sub district. Also included are Lovers Leap, (Pedro) on the Nuwara Eliya town border, and Mahagastota, also in Nuwara Eliya.

Sri Lanka Turtle Conservation Project Helps Community Projects

26th September 2010, www.island.lk, By Ifham Nizam

The Turtle Conservation Project (TCP) of Sri Lanka established in the early nineties by a group of young volunteers with the aim of conserving marine turtles is also helping a number of community based projects.

With the assistance of UNDP’s Small Grants Programme/GEF, a large number of people are now involved in handling a number of successful projects. TCP Head Thushan Kapurusinghe told The Island’s Financial Review that they are in the process of setting up an Information and Tourist Centre.

He says such activities were possible due to the ongoing community based projects that fetch a large income to once marginalized families.

Few years ago most of the coastal communities in Rekawa exploited marine and coastal resources for their survival. Turtle egg poaching, slaughtering turtles for meat; coral mining and mangrove destruction are direct threats to both fauna and the environment.

The Green turtle (Chelonia mydas), Leatherback turtle (Dermochelys coriacea), Olive ridley turtle (Lepidochelys olivacea), Loggerhead turtle (Caretta caretta) and the Hawksbill turtle (Eretmochelys imbricata) are among the most sighted species coming to local beaches.

TCP Secretary Lalith Ekanayake says: "We realised the chain connection between the coastal communities and coastal resources, which heavily depended on each other.

As a solution, we implemented community livelihood, community infrastructure development, environment restoration and awareness programmes including a turtle night watch nature tourism initiative in Rekawa village".

Prior to the implementation of the innovative concept which is referred as ‘Community Based Ecosystem Conservation Approach’ (CBECA), all the turtle eggs have been poached in Rekawa and turtles killed for meat. But today, all those egg collectors are employed as turtle nest protectors and trained as tourist guides, he says.

In addition, community based organizations (CBOs) have been established for various alternative livelihoods such as ornamental fish breeding group, Batik group, sewing group, farming group, coir mat group etc. as a solution for destructive income generating practices and these people are currently engaged in their local business very successfully.

All turtle nests are protected on –site by the local community and hatchlings are released to the sea.

The Rekawa beach was declared as Sri Lanka’s first marine turtle sanctuary by the Department of Wildlife Conservation in 2006 as a result of TCP’s dedicated work with the community in Rekawa.

TCP’s CBECA is a multi-pronged approach with seven main components: livelihood development, infrastructure development, environmental restoration and management, awareness/capacity development, partnership building/networking, knowledge management and sharing and utilization of traditional knowledge and culture.

On-site marine turtle nest protection in Rekawa and Kosgoda. There was no law enforcement along the Rekawa beach prior to the TCP’s arrival in 1993. In 1996, TCP established its pioneering community-based in-situ marine turtle nest protection programme with the aim of not only protecting marine turtles but also supporting local people who depend on the coastal resources for their livelihood.

This project was implemented in collaboration with the Department of Wildlife Conservation, the University of Peradiniya, the National Aquatic Resources Agency (NARA) and the University of Ruhuna.

Mangrove restoration

Mangroves provide important habitats for many fauna, including marine turtles. They are being harmed by threats such as cutting for firewood, shrimp-farming, tourism development and in some areas mangroves were also destroyed or damaged by the 2004 Asian tsunami.

TCP initiated a mangrove planting project with community participation in 2004 in Kalpitiya. "This project has proved successful, and the mangroves are growing really well at the moment. The project also provides benefits to local communities as mangroves improve fisheries such as fish harvest, crabs and shrimps etc. giving lagoon fishermen a greater source of income. The project employed local community members to plant the mangroves," he says.

Coastal vegetation restoration

Coastal vegetation has been shown to play a vital role in marine and coastal ecosystem function. In particular, Green turtles prefer to deposit their eggs under the vegetation cover. Coastal vegetation has been cleared to provide space for tourism and hotel development, and the 2004 tsunami destroyed a great deal of vegetation along the coastal belt.

TCP has started restoring vegetation in many locations around the coast of Sri Lanka.

"We are the first institution who convinced the Department of Wildlife about the eclaration of Rekawa beach as Sri Lanka’s first Marine Turtle Sanctuary by providing scientific data and evidence," Ekanayake said. TCP helped the Wildlife Department in demarcating the sanctuary boundaries and in displaying the boundary signboards.

"We also gave extensive training to local people, often those who used to be involved in stealing the turtle eggs and destroying coastal habitats, and employed them as nest protectors. Currently there are 32 villagers employed as nest protectors in Rekawa and Kosgoda sites,’ he added.

The 2004 tsunami was a severe blow to the two villages situated in the southern coast claiming life and property leaving them shattered and broken mentally, physically and materially.

Many lost all their possessions and savings of a lifetime. Fishermen lost their boats and fishing equipment and sales were also low as people living inland stopped eating fish for months in the belief that fish would have consumed human flesh.

The Tsunami destroyed turtle nests and coastal vegetation, leaving nest protectors and tour-guides unemployed. Tourism also collapsed and people in Kosgoda and Rekawa lost their livelihood.

TCP lost the lives of three nest protectors in Kosgoda. The office building worth two million LKR and research equipment was also destroyed by the tsunami, hampering TCP work in the two villages.

However, the giant waves couldn’t stop the dedicated efforts of TCP and with the assistance of many individuals and institutions TCP was able to recover from the natural disaster within a short period of time.

"Our leader won ‘the best environmentalist of the year’ award presented by the Sri Lanka Association for the Advancement of Science (SLAAS) in 2004,’he said.

TCP’s turtle night watch programme was selected as one of the ‘top ten’ eco friendly destinations in the world in January 2008. In addition, the World Travel and Tourism Council (WTTC) selected TCP’s turtle night watch programme as a finalist of the best practice in conservation category in April, 2008.

TCP received ‘Tourism for Tomorrow’ Highly Commended Award from the Virgin Holydays Responsible Tourism Awards in November, 2008. TCP also won the Green Employment Award presented by the Ministry of Environment and Natural Resources, in June 2009.

The BBCSaving Planet Earth documentary film on TCP Sri Lanka is one of the best evidences to support TCP’s recognition.

27 September 2010

Sri Lanka Offers Best Long Haul value to UK Travellers According to Post Office's Research

27th September 2010, www.telegraph.co.uk

Britain's long-haul travellers will find that their pound will stretch furthest in Sri Lanka, Mexico and the Far East this winter, according to new research into holiday costs.

Australia and Hong Kong were the least cost-effective destinations featured in the survey, which also revealed significant rises in the price of food, drinks and supermarket goods in Thailand and South Africa.

The Post Office's annual Long-Haul Holiday Report compares the cost of 10 essential holiday purchases – such as an evening meal, a cup of coffee and sun cream – in 22 destinations.

In Sri Lanka, the 10 items cost just £46.85, compared with £155.48 in the Australian capital, Sydney.

Research released this week by Hayes and Jarvis, a tour operator specialising in long-haul trips, also suggested that Sri Lanka is among the best-value destinations for a package holiday, with a one-week break in November costing £799 on average, bettered only by Egypt (£649) and the Dominican Republic (£729).

Sri Lanka has witnessed a sharp rise in visitors following the end to hostilities between government forces and Tamil separatists in the north and east of the island. Nearly 400,000 foreign tourists visited in the first eight months of 2010, an increase of 47 per cent on the previous year.

Thailand – the cheapest destination in the Post Office's 2009 report – fell to sixth in the survey, thanks in part to the strength against the pound of the Thai baht, which is worth 11.6 per cent more than last year. The 10 items cost £52.85 in Phuket, up by 16 per cent on last year.

Mexico and Kenya finished second and third in the survey. UK sales of the Mexican peso and the Kenyan shilling have risen by 5 and 11 per cent, respectively, while the Kenyan Tourism Board has reported a 7 per cent rise in British visitors.

Malaysia and Indonesia finished fourth and fifth in the survey, with the 10 items costing British visitors £51.89 and £52.39.

Sean Tipton from Abta, the travel association, emphasised the importance of prices on the ground, particularly with air travel becoming more expensive. The latest rises in APD, due in November, will add up to £240 to the cost of long-haul flights from the UK for a family of four.

"Long-haul travel can initially look unattractive, with air fares costing more than travelling to Europe," Mr Tipton said.

"But many long-haul destinations are cheaper than the Mediterranean, with even a weak pound still going a very long way."

Elsewhere, prices in Australia, Canada and Brazil have all risen sharply, and sterling's recent weakness against the rand means that tourists visiting South Africa can expect to pay about 28 per cent more for food, drink and other holiday essentials this winter.

More Info:
Sri Lanka and Mexico 'best for long-haul value' - Telegraph

Sri Lanka's $ 1bn 10yr Sovereign Bond May Yield 6.5pct and Expected to be Comfortably Oversubscribed

27th September 2010, www.lankabusinessonline.com

Sri Lanka has opened subscriptions for a billion US dollar 10-year sovereign bond which may sell for around 6.5 percent days after the International Monetary Fund gave 212 million US dollars to the Central Bank to beef up already high reserves.

A Bloomberg newswires report said the bond may yield around 6.5 percent.

A source familiar with the sale said there is strong interest for the bond, which is expected to be "comfortably oversubscribed", with bids collected as global markets open westwards.

Sri Lanka has been on a road show arranged by the Bank of America, HSBC Holdings and Royal Bank of Scotland group which is assisted by state-run Bank of Ceylon to sell the bond.

Fitch Ratings Monday gave a 'B+' rating with a 'positive' outlook for the bond. Fitch lifted the outlook on Sri Lanka's sovereign credit rating from 'stable' to 'positive' ahead of the bond sale and Standard & Poors' upgraded its rating to 'B+' from 'B'.

Moody's issued a 'B1' rating for the first time.

Agencies said the ratings could improve if the government improves is budgeting and the central bank keeps inflation low and the economy stable.

Sri Lanka's statistics office estimated economic growth at 8.5 percent for the second quarter and stocks are up over 100 percent so far this year.

Related Info:
Sri Lanka Road Show to Sell $1bn Sovereign Bond Late September

Moody's Gives Sri Lanka B1 Sovereign Rating with a Stable Outlook

Sri Lanka President Meets Top US Business Leaders to Outline Investment Opportunities in Sri Lanka

27th September 2010, www.dailynews.lk

While on his official visit to New York City for the United Nations General Assembly, President Mahinda Rajapaksa met with leading American business leaders at a luncheon to outline emerging opportunities for investment in Sri Lanka.

Business executives from a variety of industries, including the aerospace and defence community, the hospitality and tourism industry, and beverage industry attended the luncheon held at New York City’s Helmsley Hotel. Executives from the Coca Cola Co, the Boeing Co, Google, Hilton Hotels & Resorts and Starwood Hotels & Resorts were among the nearly 100 Business leaders, analysts, representatives of Chambers of Commerce and industry present.

Amidst his busy schedule President Rajapaksa mingled with the American Business leaders meeting and greeting each person individually and requesting them to focus new interest in Sri Lanka as an investment opportunity.

Members of the US business community shared the view of a key representative of the pharmaceutical industry giant Pfizer Inc., that this forum has the potential to grow into a US-Sri Lanka business council to bring together companies and government.

“Companies like Pfizer want to invest in emerging markets like Sri Lanka,” the Pfizer representative said, noting that the business luncheon allowed corporate executives to meet government officials and Sri Lankan business leaders.

“It is a great way to start a dialogue,” he said. External Affairs Minister Prof G L Peiris in his keynote address said Sri Lanka boasts an economy with strong fundamentals and a market poised for continued growth and international investment.

Noting the nation’s promising economic future, Prof Peiris said “Sri Lanka is today, without any exaggeration, one of the world’s best destinations for investment. We are on the threshold of an economic renaissance in Sri Lanka.”

U.S. Chamber of Commerce Asia Department Executive Director Esperanza Gomez Jelalian noted the Chamber’s support for Sri Lanka.

Sri Lanka Ornamental Fish Exports to Rise with Help from German Pet Industry Experts

27th September 2010, www.dailynews.lk

Sri Lanka is to increase its ornamental fish share in the world market in spite of various challenges such as GSP plus concession withdrawal.

The country's ornamental fish share in the world market is 3 percent now. Plans have been made to increase the world market share with foreign expert assistance in the ornamental fish industry, Association of Live Tropical Fish Exporters of Sri Lanka, President Sathyendra Wijayapura said.

A 40 member German pet industry delegation is now in Sri Lanka.

They hope to assist the local ornamental fish industry in identifying lucrative areas.

The delegation is also exploring opportunities of breeding reptiles and exporting them to foreign countries as it brings a large amount of foreign exchange to Sri Lanka in addition, he said.

Tea Lounge & Education Centre Opened In Colombo, Sri Lanka by Russels Tea

27th September 2010, www.dailynews.lk, By Ramani Kangaraarachchi

The first tea lounge and the tea education centre in Colombo was opened at Elvitigala Mawatha Colombo by Russels Tea on Saturday in the presence of several tea giants in Sri Lanka. Akbar Brothers Director Joseph Sinnaiah said it is very timely that this type of tea education centre is opened in Colombo as tea is the main foreign exchange earner for Sri Lanka. He said that it should be a subject in schools. "The country has opened for tourism and this centre will give immense value to build the image of Sri Lanka in the future," he said.

Six leading tea companies in the country namely Akbar Brothers, Bogawanthalawa Plantation, Ranfer Pvt Ltd, Empire Teas, Amazon Teas and Imperial Tea Exporters have joined in this venture.

Jetwing Hotels Chairman Hiran Cooray has planned to promote the centre as a tourist stop-over.

Sixty types of local and foreign tea grades and samples from countries like China, Taiwan and Kenya are on display. The history of James Taylor and his life style in Sri Lanka is also displayed at the centre.

The Tea Pride magazine an educational book published by Russels Tea Managing Director Russel Perera was one of the highlights at the ceremony. This will be available in hotels and with travel agents. This was designed to attract tourists and local visitors.

The first book was presented to Akbar Brothers Director Joseph Sinnaiah.

Image: Russels Tea Managing Director Russel Perera presenting the Tea Pride magazine to Akbar Brothers Director Joseph Sinnaiah.

26 September 2010

Sri Lanka Needs Micro finance to Empower Rural Micro Entrepreneurs for Sustainable Development

26th September 2010, www.sundayobserver.lk, By Lalin Fernandopulle

Micro finance is essential for Sri Lanka to empower rural youth and make them micro entrepreneurs for sustainable economic development, said Deputy General Manager, Marketing and Retail Banking and Chairman, Banking with the Poor Network, HNB, Chandula Abeywickrema.

He said micro finance has contributed in a major way to alleviate poverty in the country by empowering the poor with access to capital and making them micro entrepreneurs.

Over 70 percent of the population lives in rural areas which has less access to finance for their livelihood development.

Micro finance provides capital for sustainable livelihood.

"Access to finance through the banking network is low in Sri Lanka due to the high risk and transaction costs.As a result the need for micro finance in Sri Lanka has grown and its contribution to poverty reduction and sustainable economic development in the country is commendable" Abeywickrema said.

He said micro finance is not merely providing credit to those who don't have access to finance but educating them to become micro entrepreneurs and support the rural economy.Micro entrepreneurs contribute to maintain social order and sustain the rural economy.

"The education system in Sri Lanka does not make youth employable. The reason for youth frustration and uprising is that they are not included in the economic fabric of the country. Making youth employable is one of the aims of micro finance", Abeywickrema said.

The roots of micro finance in Sri Lanka could be traced back to the Co-operative Societies and the Sanasa Movement which have been promoting self-employment in the country.

Both has played a salient role in promoting micro finance in the country.

Alleviating poverty and improving the living condition of people has been a pressing need in many countries across the world.Micro finance is a means by which developing countries have been able to reduce poverty by generating income and creating employment in the rural sector.

Micro finance started in Bangladesh with the Gramin Banking concept introduced by Professor Muhammad Yunus in 1976.

Abeywickrema said field officers are vital to drive a successful micro finance program in the country.Field officers support and share the vision of the micro entrepreneur."Passion, patience and commitment are pillars on which micro finance is based on.The loan recover rate of micro finance is high compared to the banking sector", he said.

Poverty alleviation, income generation, employment creation, financial education, creation of multiple income generating revenues for banks and rural economic development and the benefits of micro finance.

Financial inclusion, a developed notion of micro finance provides access to savings, credit, remittances and insurance.

Abeywickrema said the micro finance industry should be regulated and added that the government is in the process of introducing regulations for the sector. "Reducing the transaction cost, increasing the number of field officers and making financial services available, accessible and affordable are some of the major challenges of micro finance", he said.

The Asia Micro Finance Forum (AMF) hosted by HNB will be held in Colombo from October 12-15.The conference will focus on the future direction of the micro finance industry in Asia.

AMF is organised by the Banking with the Poor Network based in Singapore and it is the largest Asia based micro finance network.The Forum which takes place once in two years was held last in Vietnam in 2008.

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CSE 100% Gain Year to Date Makes Sri Lankan Bourse an Attractive Investment Hub

25th September 2010, www.island.lk

The Colombo bourse has doubled in value since the beginning of the year posting a 100% gain year-to-date prompting a leading stock broking firm to call it "an attractive investment hub."

Acuity Stockbrokers said in a research report that the CSE has outperformed the market by giving a 100% year-to-date return backed by a positive economic outlook and lowered interest rates offered by banks further boosting investor interest.

"We expect the current momentum to continue with investor interest in key growth sectors and fundamentally strong stocks driving the market during the week ahead," the report said.

Acuity expected increased participation from foreigners and institutional investors saying that foreign investors, retailers, institutional investors and high net worth individuals had together driven the CSE to new heights.

The market opened last Monday without the price bands and continued its upward movement with the ASPI up 6.7% from the previous week while the Milanka gained 7.49% week-on-week topping the 7,000-point barrier.

Turnover averaged Rs.5.64 billion a day gaining 5.5% week-on-week with market capitalization up 6.86% to Rs.2,272 billion.

The banking and finance sector continued to dominate total turnover with a 43% share with the closing sector indices up by 10%, Acuity said.

Gainers in this sector included Seylan, NTB, DFCC, HNB, Pan Asia, LOLC and Vallibel Finance.

Next came the diversified sector with 18% of market turnover with JKH contributing Rs.3 billion to the week’s business volume. The counter closed at Rs.300, up nearly 4% from a week earlier.

Seylan Bank was another major contributor to turnover – Rs.1.73 billion with the share price up 21% to close at Rs.59.20.

Vallibel Finance was the most traded stock during the week with 61 million shares changing hands followed by Dialog with 37.2 million shares. Sierra Cables, SMB Leasing, Nawaloka and Seylan also showed heavy volume, Acuity said.

Foreign investors were net sellers with a net outflow for the week of Rs.202.8 million. Foreign purchase for the week amounted to Rs.2.45 billion and sales Rs.2.65 billion.

"Foreign trading levels increased last week with buying up 22% and selling 42%,’’ Acuity said.

Colombo Pharmacy was the top gainer for the week, up Rs.224% from a week earlier to close at Rs.2,915 a share against the previous week’s Rs.900.10.

25 September 2010

Sri Lanka Sovereign Strategy Brings Results, Says Central Bank

24th September 2010, www.island.lk

The Central Bank last afternoon said the medium term sovereign rating strategy brought positive results.

"Sri Lanka’s sovereign credit rating has been upgraded by the international rating agencies, Standard & Poor’s (S&P) and Fitch Ratings, who have recently assigned improved credit ratings to the country. A third rating agency, Moody’s Investors Service, has also assigned a comparable credit rating to Sri Lanka, as given below.

* On 14 September 2010, Standard & Poor’s (S&P) upgraded Sri Lanka’s long-term foreign currency sovereign credit rating to B+ and the long term local currency rating to BB- with a stable outlook.

* On 21 September 2010, Fitch Ratings affirmed Sri Lanka’s long term foreign and local currency Issuer Default Ratings (IDR) at B+ while upgrading the outlook to "Positive".

* On 22 September 2010, Moody’s Investors Service assigned a B1 foreign currency issuer rating with a stable outlook.

Given the many positive developments in the country during the post-conflict period, these rating upgrades have been expected. The improved macroeconomic fundamentals, prudent monetary policy, fiscal consolidation, planned structural

improvements of the economy, and high economic growth prospects will further support the enhancement of Sri Lanka’s sovereign credit rating in the near to medium term," the Central Bank said in a statement.

"These upgrades could be viewed as an outcome of the strategy towards upgrading Sri Lanka’s sovereign rating over the medium term. For this purpose the CBSL recently appointed a high level Sovereign Rating Committee (SRC), comprising senior officials

of the Ministry of Finance and Planning (MOFP), CBSL, and some private sector leaders. The SRC has been assigned to make regular reviews on the developments of the economy and have negotiations with the rating agencies through Rating Advisors towards upgrading the country’s sovereign rating," it said.

The Central Bank has also upgraded the forecast for economic growth to between 7.5 and 8 percent given the robust 8.5 percent growth in GDP during the second quarter of the year, from 7.1 percent the previous quarter. Sri Lanka’s economy grew by 3.5 percent in 2009.

All three ratings agencies said the government’s fiscal performance would have to improve if ratings are to be improved in future. The budget deficit for 2009 ballooned to 9.9 percent of GDP from an estimated target of 7 percent.

Related Info:
S&P Raises Sri Lanka’s Ratings. B+ for Foreign Currency Debt with a Stable Outlook

Fitch Affirms Sri Lanka's LTIDR B+. Revised Outlook to Positive from Stable

Moody's Gives Sri Lanka B1 Sovereign Rating with a Stable Outlook

Sri Lanka Exports to India increased by 45pct to an All Time High Record

24th September 2010, www.news.lk

Sri Lanka’s exports to India have increased by 45 % during the first seven months of this year, Indian High Commissioner Ashok K. Kantha said revealed at a luncheon meeting with local media heads, the Indian High Commissioner has also said that there has been a significant increase in trade between the two countries following implementation of Free Trade Agreement between the two countries.

According to reports Sri Lanka’s exports to India have increased by 45% during the first seven months and India’s exports to Sri Lanka have also increased by 41%. If the current trend continues, 2010 will be an all time high record in trade relations between the two countries.

Related Info:

Sri Lanka Exports to India up 10 fold as Indo-Lanka Free Trade Agreement Marks 10 Yrs

Indo-Sri Lanka FTA - Detailed Information - The Board of Investment of Sri Lanka (BOI)

Sri Lanka Urban Bond Raises Rs4.6bn at Opening. 30pct of the Rs 10bn Issue Open to Foreign Investors

24th September 2010, www.lankabusinessonline.com

A five-year bond issued by Sri Lanka's Urban Development Authority (UDA), a state agency, to raise 10 billion rupees which opened Thursday has drawn 4.6 billion rupees, a stock exchange filing said.

The UDA is issuing 50 million debentures at 100 rupees each, to be doubled if oversubscribed, to raise cash to resettle squatters occupying prime property in Colombo city owned by government and to free land for private sector commercial development.

The stock exchange filing by state-run Bank of Ceylon, which is managing the issue, said a total of 37 applications for 46,255,900 debentures had been received so far.

The bonds are to be listed on the main board of the Colombo Stock Exchange.

Officials have said 30 percent of the issue is open to foreign investors.

The money raised will be used to build alternative homes for unauthorized dwellers in 800 acres of high value state land in Colombo city.

Investors could chose between three interest options: 11.0 percent annual, 10 percent monthly or a floating rate of Treasury bill plus 75 basis points every six months.

The UDA said it would be able to build around 20,000 houses if 5.0 billion rupees was raised and around 65,000 if 10,000 billion rupees was raised.

P A Lionel, head of investment banking at Bank of Ceylon has said commitments for over 5.0 billion rupees had already been received before the issue opened and they were open to offers for 10 billion rupees.

Related Info:
Sri Lanka's UDA Debentures Open on Sept 23. 30% of Rs 10bn 5yr Bond Open to Foreign Investors

Sri Lanka Taj Hotels Rebraded and Upgared. Taj Samudra, Taj Vivanta Bentota & The Gateway Hotel Airport Garden Seeduwa Seen a Dramatic Turn Around

24th September 2010, www.lankabusinessonline.com

India's Taj group is looking for opportunities in Sri Lanka's war-torn eastern coast and a city hotel it controls will also need 30 to 35 million US dollars to be upgraded to fit the group's new brand portfolio, officials said.

The listed Taj Samudra hotel in Sri Lanka's capital Colombo has 300 rooms.

"It will take 30 to 35 million US dollars to re-do this property," executive director finance of Taj Resorts and Hotels, Anil Goel said.

The group is now evaluating the property to decide where to place it on the group's new portfolio of brands, he said.

Listed Taj Samudra is majority controlled by the Taj group.

Taj also owns a 50 percent stake in Taj Exotica, a 160 room resort in Sri Lanka's South West coast, which has been re-branded as 'Taj Vivanta Bentota' from this week.

It also manages a 130-room hotel near Sri Lanka's only international airport. The Taj Airport Garden hotel, owned by Sri Lanka's Hirdramani group will be put under 'The Gateway Hotel' brand from January 2011.

Its owners are upgrading 40 rooms and building 100 new rooms to increase capacity.

Taj is now evaluating the Colombo property to decide which brand to place it under.

Chief executive Raymond Bickson said the group has been scouting opportunities in the war-torn eastern province of Sri Lanka which has long undeveloped stretches of beach.

Goel said all three properties in Sri Lanka have seen a "dramatic turnaround" in the past few months which had made the group more confident about investing in Sri Lanka.

He said room rates have moved up from around 60 US dollars a day to near 100 dollars and is trending up, unlike during the war years. Occupancy was up.

"Unfortunately we could not command the rates (during the war years)," Goel said.

"There is no correlation between investment vis-a-vis the return from the market."

India itself sends more tourists to Sri Lanka than any other country. Up to August 2010, arrivals were up 46 percent to 397,000. Indian visitors were up 63 percent to 73,400.

24 September 2010

Sri Lanka Solid Tyre Maker Loadstar's Parent Solideal Bought by Camoplast

24th September 2010, www.lankabusinessonline.com

Canada's Camoplast Incorporated will acquire Luxemburg-based Solideal which is the parent of Sri Lanka's Loadstar a solid rubber tyre maker, the Quebec based company has said.

Loadstar is Sri Lanka's top rubber goods exporter with five plants spread around the country, established in partnership with the island's Jinasena group and Solideal, a family owned company.

Solideal also has factories in China, the company said. The firm is an original equipment manufacturer for top brands of construction and material handling equipment in Japan, Europe and USA. The firm makes tyres, rubber tracks and wheels.

Camoplast, based in Quebec, also designs and makes tyres, rubber tracks and undercarriages. It had research facilities in Canada and Korea, and factories in the US, Canada, Korea and Europe.

"The integrated company will operate under the name of Camoplast Solideal Inc. with a significant participation of the current shareholders of Solideal in the ownership of the company," Camoplast said in a statement.

"Solideal and Camoplast brands will continue to be managed independently."

The firm said the deal will go through in October following regulatory approvals.

"The pooling of our two companies’ strengths will add value to our stakeholders: customers, employees, shareholders and suppliers," Paul Gaines, chief executive officer of Solideal group said.

Sri Lanka is a key location for the manufacture of tyres for materials handling equipment accounting for up to 80 percent of global production according to some estimates.

Sri Lanka President Tells UN, We are on Course for Peace & Prosperity. Sri Lanka to be One of Top 30 Countries for Doing Business by 2014

23rd September 2010, www.bloomberg.com

Sri Lankan President Mahinda Rajapaksa said he has set the nation on a course toward political reconciliation with the Tamil minority and economic recovery following a three-decade civil war.

“The entire focus of our nation is now on building a lasting peace, healing wounds, ensuring prosperity and guaranteeing the rights of the whole nation to live in harmony,” Rajapaksa said in a speech today to the United Nations General Assembly in New York.

Sri Lankan soldiers defeated the Liberation Tigers of Tamil Eelam in May last year, ending their struggle for a separate homeland. The war killed more than 100,000 and has left about 76,000 Tamils displaced.

“No nation on earth can wish Sri Lanka’s Tamil community more good fortune than Sri Lanka itself,” Rajapaksa said. “Sri Lanka has already returned over 90 percent of the internally displaced persons to their original villages that were previously riddled with landmines and provided the essential infrastructure necessary to resume normal life.”

The economy expanded 8.5 percent in the three months ended June 30 from a year earlier, the fastest pace since 2002, the statistics department said on Sept. 16.

Rajapaksa said the aim of his second term in office, which begins in two months, was to make Sri Lanka “one of the top 30 countries for doing business by 2014” and to double per capita income by 2016.

To contact the reporter on this story: Bill Varner at the United Nations at wvarner@bloomberg.net

To contact the editor responsible for this story: Mark Silva in Washington at msilva34@bloomberg.net

Sri Lanka to Tap Turkish Construction Expertise

23rd September 2010, www.news.lk

The participation of Turkish entrepreneurs in the rapidly expanding construction work in Sri Lanka was a key aspect of the discussions between President Mahinda Rajapaksa and Turkish President Abdullah Gul at the United Nations yesterday (22).

President Gul was told of the major development initiatives being taken by Sri Lanka that require infrastructure development, and considerable investment in housing, especially in the post-conflict situation. The major advances that Turkey had made in the construction sector could help Sri Lanka in this work.

Sydney Morning Herald Nominates Bogawantalawa Best Places to Have a Cup of Tea

23rd September 2010, www.island.lk

The ‘The Sydney Morning Herald’ has identified Bogawantalawa Valley as one of the top ten places in the world to have a cup of tea. Bogawantalawa Valley has been rated with locations such as The Ritz London, Trans-Siberian Railway Russia, Yueyang China, Temple-strewn Uji district in Japan and the historical Inca Trail in Peru.

The Sydney Morning Herald’, the oldest newspaper in Australia that is famous for maintaining high standards of journalism, in their recently conducted survey, referring to the Golden Valley of Tea in Sri Lanka stated "To get in among the action take to the trails in the Bogawantalawa Valley, where you can walk or cycle between old planters’ villas and pluck a few leaves for yourself."

Out of about 450 tea exporters in Sri Lanka only 3 have their own tea plantations. BTE is one of them. This has ensured cost effectiveness, adherence to quality standards and has eliminated the usual interruptions that take place during conventional method of export.

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Sri Lanka Could Generate $100mn in Carbon Trading

23rd September 2010, www.island.lk

A new venture is to commence operations in Sri Lanka to help businesses minimise their environmental footprint and take advantage of carbon gains. According to officials, Sri Lanka’s potential for carbon trading could generate US$ 100 million a year.

With the consequences of global warming and climate change becoming apparent, carbon and environmental management have moved up the corporate agenda. This is driven by a combination of actual, and threatened, regulation, consumer pressure and an underlying desire to cut costs.

"At a time when Sri Lanka is looking at accelerating her development, it is imperative that we not only maximize the potential of our beautiful and bountiful environment but also protect it for our future generations.

As Sri Lanka looks to develop into a hub of ethical manufacturing and eco tourism, we need to equip our local businesses to take advantage of our huge carbon potential. Our companies and our products will need to be aware of their carbon impact in order to compete in the new Green Economy", said " Subramaniam Eassuwaran" one of the founder directors.

With a strong mix of both international expertise and Sri Lankan minds, the Carbon Consulting Company (CCC) was formed by two young entrepreneurs, Subramaniam Eassuwaran ( Deputy Chairman of Eswaran Brothers Exports) and Fazal Fausz (Managing Director of Rainco Pvt Ltd), under the guidance of Nobel Laureate, Professor Mohan Munasinghe.

Professor Mohan Munasinghe, who needs no introduction and is a director of CCC, will be actively involved in advising companies on how best to reduce carbon emissions and implement world class environmental management strategies.

CCC has formed a strategic alliance with the Carbon Neutral Company of the UK. They have been appointed as not only a reseller of carbon credits, but also as a third party verifier. The Carbon Neutral Company, a pioneer, is one of the world’s leading providers of carbon reduction solutions. CCC is also accredited by the UK Governement’s Carbon Trust as a product "Footprint Expert".

The Managing Director of The Carbon Neutral Company, Jonathan Shopley will be in Sri Lanka in the first week of October to address a select gathering of CEOs on the theme; "The Carbon Phenomenon : Adding Business Value" at a forum organized by the Ceylon Chamber of Commerce.

"The Carbon Consulting Company has been created with the sole purpose of helping organizations reduce their environmental impact and maximize their CSR and marketing opportunities. We have seen many industry leaders take the first steps towards making this happen and our mission is to help these leaders develop the knowledge base and expertise required for the coming low carbon economy", said Eassuwaren.

"We don’t believe in using carbon credits as a license to pollute! We also help clients devise strategies to reuse and recycle the waste and we have brought emissions down by 20% in some cases." said Fausz.

The Carbon Consulting Company has also concurrently established the Conservation Carbon Company. Conservation Carbon was established with the mandate to use environmental finance mechanisms to help protect some of Sri Lanka’s most threatened ecosystems. Dr. Ranil Senanayaka, a founder, is a brilliant ecologist. With the best scientific minds and concerned businessmen joining hands, both companies intend making a difference to the environment and making a positive impact on the country.

It is estimated that Sri Lanka could generate more than US$ 100 million through carbon credit sales a year.

As at July 2008, about 40 projects, including the Upper Kotmale hydropower plant, were at different stages of obtaining their emission reduction certificates.

These projects have the potential of reducing carbon emissions by about 2.4 million metric tonnes a year, generating approximately US $ 36 million in carbon credit sales. Today, only eleven of these have been approved, officials said.

Sri Lanka has hundreds of statutes on conservation but they are far from being implemented, as economic activities tend to take precedence over the environment.

According to the IUCN, Sri Lanka, in a study published in 2009, with an annual loss of 33,000 ha of forest cover, was one of the eight hottest hotspots in terms of habitat loss in the world.

Sri Lanka is home to rich natural wealth in abundant fauna and flora. Approximately 40 percent of the indigenous inland vertebrates are endemic to the island and 30 percent of the indigenous flowering plant species are endemic too. Change in climatic conditions directly affect the distribution, abundance and life cycles of most species.

According to the 2007 Red List of Threatened Fauna and Flora of Sri Lanka, 72 flowering plant species were extinct. Sixty percent of them had been endemic species.

Twenty one amphibians found their way to the extinct list as well, and these species were all endemic to Sri Lanka’s wet zones.

33 percent of vertebrate species are nationally threatened.

23 September 2010

Moody's Gives Sri Lanka B1 Sovereign Rating with a Stable Outlook

22nd September 2010, www.lankabusinessonline.com

Moody's Investors Service said it had given a 'B1' sovereign rating for Sri Lanka with a 'stable' outlook on the end of a war, low inflation and efforts to contain budget deficit, despite having high levels of debt.

"The stable outlook also considers Sri Lanka's small size, partial dollarization, and relatively modest gross domestic savings," Aninda Mitra, Moody's lead sovereign analyst for sri Lanka said in a statement.

"We therefore place more forward-looking credit emphasis on an improvement in fiscal management, which is an area where reforms are planned, but a track record is awaited."

He said the rating agency expected the "re-integration of the northern and eastern regions into Sri Lanka's economy will sustain a higher growth rate with single-digit inflation without destabilizing the external current account position."

In second quarter of 2010 Sri Lanka's economy grew by 8.5 percent, according to the country's statistics office.

"The outlook also reflects considerable scope for fiscal reforms and high likelihood of foreign investment inflows against lingering risks posed by a large government debt overhang and remaining, though, diminishing, external financing risks," Mitra said.

The end of Sri Lanka's civil conflict and a structural improvement in its economic prospects were important considerations for the ratings decision, Moody's said.

The rating agency said monetary management was "reasonably strong" relationships with official creditors and bilateral partners were strong setting the stage for a sustained rebound in the economy.

The agency had noted "moderate" rankings for rule of law and government effectiveness by the World Bank.

Fitch Ratings lifted the outlook for Sri Lanka 'B+' speculative rating to 'positive' from stable Tuesday and Standard & Poors' upgraded the underlying rating to 'B+' earlier. Sri Lanka is now in the market for a billion US dollar sovereign bond.

Government officials are taking part in an investor meeting in New York this week.

Moody's said government financial strength was low, with a large debt and debt service largely due to a war, but investor interest was improving. Sri Lanka's national debt is about 80 percent of the economy.

"There are also proposed fiscal reforms which are expected to lower future budget deficits," Moody's said.

"Moreover, the country's improving growth prospects and a downshift in local interest rates will also support the government's debt dynamics."

Ratings could be upgraded if budgets improve and inflation is low and less volatile, foreign reserves and foreign direct investment improves, Moody's said.

But ratings could be downgraded if there is no progress in improving budgets, there is loss of inflation control and foreign currency liquidity worsens, or recent political instability worsens local or foreign investor confidence.

Related Info:

S&P Raises Sri Lanka’s Ratings. B+ for Foreign Currency Debt with a Stable Outlook

Fitch Affirms Sri Lanka's LTIDR B+. Revised Outlook to Positive from Stable

22 September 2010

Sri Lanka's Raigam Promotes Tourism in the Saltern in Kuchchaveli

22nd September 2010, www.dailynews.lk

Raigam will exploit opportunities in tourism industry with their saltern in Kuchchaveli. Raigam Group Chairman and CEO, Dr Ravi Liyanage told Daily News Business that there is a good potential and capacity to promote tourism coupled with the saltern.

“Many migratory birds from countries such as Australia and Malaysia are attracted to the salt pans because of the accumulating of Artemia. These feeding beds will attract many local and foreign tourists who enjoy bird watching. Under the Nagenahira Navaodaya Program, Kuchchaveli Tourism Development Zone is planned to be set up with the construction of 80 tourists hotels. This zone is mapped to be located in front of the saltern. Therefore, it will attract high profiled tourists to the area,” Liyanage said.

Kuchchaveli is best known for roaming wild elephants which can be another tourist attraction.

Raigam will exploit that opportunity by setting up cottages for tourists to promote elephant watching.

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Fitch Affirms Sri Lanka's LTIDR B+. Revised Outlook to Positive from Stable

22nd September 2010, www.dailynews.lk

Fitch Ratings yesterday affirmed Sri Lanka’s Long-term foreign and local currency Issuer Default Ratings (IDRs) at ‘B+’, and simultaneously revised the Outlook to Positive from Stable. Fitch also has affirmed Sri Lanka’s Short-term IDR at ‘B’ and Country Ceiling at ‘B+’.

The Outlook revision is in large part a reflection of Sri Lanka’s economy benefitting from the end of a war in 2009, from a more disciplined policy framework put in place under the Stand-By Arrangement (SBA) with the IMF, and from an improved external liquidity position bolstered by the IMF program.

Fitch believes these developments support the prospects for Sri Lanka to achieve sustained medium-term growth, without a resurgence in inflation or another bout of external liquidity stress (as experienced over end-2008 to early-2009). Foreign exchange reserves stood at USD5.8bn at end- July 2010, well above the low of USD1.1bn in March 2009, bolstered by USD1.0bn of IMF funds.

Sri Lanka has made headway in rebuilding and integrating the two war-torn Northern and Eastern provinces into the rest of the local economy, which is helping to boost Sri Lanka’s productive capacity, particularly in the agriculture and tourism sectors.

This is highlighted by real GDP growing 8.5 percent yoy in Q210, from a 7.1 percent yoy rise in Q110. Fitch is forecasting real GDP growth to average 7.2 percent in 2010-2012, versus an average of 5.1 percent over the last 20 years.

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