31 January 2010

Hemas Hotels Prepare for Rejuvenation as Sri Lanka Prepares for a Better Tourism Climate after the War

31st January 2010, www.sundaytimes.lk

Hotels coming under the Hemas Group, like many other mega leisure companies, are undergoing a change in terms of re-development, upgrades and investment as Sri Lanka prepares for a better tourism climate after the war.

Hemas Holdings Group Director Abbas Esufally, who in charge of the group’s hotel and leisure activities, told the Business Times that the Club Hotel Dolphin at Waikkal, just past Negombo, will be upgraded to a 4-star property from a current 3 ½ star hotel, at a cost of Rs 500 million. “Work will begin this summer (March-October) on the renovation and part of hotel will be closed for this purpose,” he said adding that plans are also underway to revive the pact with Bangkok-based Minor Group and its Anantara brand of hotels.

“We want to go back to the plans that were put on hold due to the uncertainty (owing to the war),” Mr Esufally said, adding that the plan is to re-name the hotels in line with the Anantara brand. Hotel Serendib will be the first to come under the new plan and will be re-named accordingly.

The group is also looking at developing the Hemas land bank with unused properties in the south and hill country and considering investments in the East. In Kandy, the group plans to re-design a Yoga /Spa retreat on 32 acres of land which had a Geoffrey Bawa-architectural plan but was not proceeded with due to the country’s turbulence. “It’s easier to invest and manage boutique hotels because there is less marketing required and the returns are quicker,” he pointed out.

JKH Expands Leisure Sector. Sri Lanka’s Biggest Conglomerate Shows Profit Gains

31st January 2010, www.sundaytimes.lk

John Keells Holdings (JKH), Sri Lanka’s biggest conglomerate, showed profit gains in several sectors including leisure, transportation, financial services and information technology for the third quarter ended December 31, 2009, including plans to expand in the leisure sector with new projects and refurbishing existing hotels.

According to the interim report released this week, net profit for the period under review was Rs.863 million, a 21% decrease compared to the Rs.1.09 billion in the corresponding period of the previous year. Similarly, the net profit for the nine months ended 31 December 2009 stood at Rs.2.83 billion, a 29% fall compared to Rs.3.96 billion in the corresponding period of 2008 which included the capital profit of Rs.1.21 billion on the sale of the investment in Associated Motorways (AMW).

The consolidated income statement shows that revenue increased by 9% in the nine months ended 31 December 2009 to Rs.34 billion from Rs.31.1 billion the previous year. Gross profit also increased by 9% to Rs.7.3 billion from Rs.6.7 billion the previous year.

Other operating income increased by 55% during the same period to Rs.3.2 billion but there were increases in distribution and administrative expenses as well as other operating expenses.

In a statement, JKH Chairman Susantha Ratnayake said the improved performance in the third quarter under review is only an early indication of the potential the Group offers in a new environment. The leisure sector saw a significant improvement in the third quarter compared to the corresponding period of the previous year with profits before tax increasing by 174% to Rs.333 million from Rs.122 million in 2008.

Mr. Ratnayake said this improvement in performance was mainly from the Sri Lankan city hotels and resort hotels. During the quarter, JKH acquired four acres of land next to the former Hotel Bayroo which gives a contiguous block of 10 acres on the prime Beruwala beach front to construct a 190 room hotel. Mr. Ratnayake added that the South Wing of the Cinnamon Grand Hotel in Colombo, comprising of 254 rooms will be refurbished during the next few months.

7,000 Swedish Tourists to Visit Sri Lanka During the Winter Season

31st January 2010, www.skyscrapercity.com

Sweden is yet another new market for the already growing list of inbound tourist markets for Sri Lanka with around 7,000 Swedish charter tourists expected to visit the island during the forthcoming winter season.

According to the Sri Lanka Tourism Promotion Bureau (SLTPB), Swedish charter tour groups have already prioritized to include the Sri Lankan market for winter 2010. Three of the largest charter tour operators in the Scandinavian country will start flying their customers Sri Lanka by the 28th of November 2010. The major tour groups in Sweden, Apollo, Fritidsresor and Ving will transport tourists twice a week to Sri Lanka.

Chairman of the SLTPB Bernard Goonetilleke has identified the Scandanavian market as a growth market for the future with enormous potential. “They have shown tremendous interest in Sri Lanka over the last year,” he said in the press release. “We see the potential for this market to be a strong contender for the top spot in inbound tourism to Sri Lanka.”

The main attraction for the Swedes are the pristine beaches, nature and national parks. The SLTPB estimates that each package will costs between SEK 10,000 to SEK 11,300 (between US$1,350 to US$1,500) per person for two weeks at half-board for a double room.

The SLTPB stated that currently Swedish production house Meter Film and Television are in the island on invitation from the SLTPB and are now in Koggala shooting for internationally acclaimed reality show ‘High School Reunion’.

The reality programme will showcase the unique facets of the country and down south in particular.

High School Reunion will be aired on Kanal 5 rated amongst the top five most watched TV channels in Sweden with an 85% viewer ship rate.

Sri Lanka's Wildlife Sanctuaries Reopened. Kumana, a Bird Sanctuary and Lahugala, a Wildlife Park Famed for Elephants

30th January 2010, news.xinhuanet.com

Two of Sri Lanka's renowned wildlife sanctuary sites were reopened on Saturday after years of closure because of the conflict between the government troops and Tamil Tiger rebels, a government official said.

Ananda Wijesuriya, director of the Wildlife Conservation Department said the two sites were opened to the public on Saturday were located at southeastern and eastern parts of the island.

Kumana, a bird sanctuary and a main eco-tourism attraction, is 312 km southeast of the Colombo while Lahugala, a wildlife park/ sanctuary reserve, is 318 km east of the capital.

They have been shut for tourists since 2005 when the fighting between the two sides escalated.

Both areas were under security clouds due to clashes until May last year when the rebels were defeated.

"After the end of the war we received security clearance," Wijesuriya said.

The end to the civil conflict has made Sri Lanka a major tourism attraction, the tourism authority said.

Galle Literary Festival 2010 is on - 28 January to 1 February 2010

28th January 2010, www.galleliteraryfestival.com

The Festival is upon us – our writers are en route, our performers in final rehearsals and our volunteers checking the best winds for kite flying on the ramparts of Galle Fort. The advance box offices are now closed in Galle and Colombo, as we prepare to move to the Festival site.

So come there directly and decide what to do on the day.

After Mohammed Hanif explodes mangoes, hear Wendy Cope’s two cures for love. Listen to Gillian Slovo’s version of growing up in the South Africa of Apartheid or Sybil Wettasinghe’s account of a childhood near Galle. Investigate the history of the conspiracy theory with Antony Beevor and hear the life sentence that Ian Rankin meted out to Inspector Rebus. Gather in the square for the best of Sri Lanka’s dance and drumming.

The Galle Literary Festival takes place in and around Galle Fort, the site of many landings on Sri Lanka’s southern coast. The Festival is both intimate and international, bringing together writers and audiences from around Sri Lanka and the world. You can walk through the Fort, from a literary conversation to an open air performance; or head from a long gourmet meal to the beach. The Festival includes four full days of events, a special Children’s Festival and this year an extra day dedicated to schoolchildren from Galle.

See you very soon,

Sunila Galappatti
Festival Director

Incredible Offers from SriLankan Airline on 62nd Independence. Only 62% of the Fare of Packages to a Range of Destinations.

27th January 2010, www.thebottomline.lk

As the whole of Sri Lanka celebrates the 62nd anniversary of Independence this year, so does SriLankan Airlines, joining into celebrate this joyous occasion with everyone born during that epoch making year, 1948.

It was the year when Ceylon gained freedom from the colonial yoke and a fledgling nation was born. This was a nation full of hope and promise with dreams of a glorious future.

If you were born in 1948, well then it’s celebration time with the “Incredible 62 Independence Extravaganza” from SriLankan Airlines.

All you need to do is to pay only 62% of the current fare of all outbound packages to a range of destinations. And mind you, this includes economy class return airfare, two night accommodation on twin sharing basis on bed and breakfast with return airport transfers.

All yours to choose from Bangalore (Rs.16,119), Chennai (Rs.13,019), New Delhi (Rs.24,799), Mumbai (Rs.27,279), Bangkok (Rs.26,039), Beijing (Rs.49,599), Hong Kong (Rs.47,119), Kuala Lumpur Special (Rs.24,179), Kuala Lumpur (Rs.29,139), Singapore Special (Rs.27,899), Singapore (Rs.31,619), Maldives (Rs.37,819) and Dubai (Rs.42,159).

Do bear in mind that ticketing has to be completed prior to February 4 with travel valid until March 31, 2010.

“You don’t have to be born in 1948 to enjoy this offer. You can go a step further and treat your parents, an old school teacher, an uncle, aunt or any special person celebrating his or her 62nd birthday this year,” said General Manager SriLankan Holidays Amith Sumanapala.

What better way to show your love and affection than with this special Independence cum birthday offer. For details call the SriLankan Holidays Office, your nearest travel agent or call us on +94 (0) 1 9733 3838.

Bon voyage and happy birthday with ‘Incredible 62 Independence Extravaganza’ from SriLankan Airlines.

28 January 2010

Macquarie's Matthews Sees Sri Lankan Stocks Rising 30%

26th January 2010, www.bloomberg.com

Mark Matthews, a strategist with Macquarie Capital, talks with Bloomberg's Susan Li about the outlook for Sri Lanka's economy and equity market.

Matthews also discusses his investment strategy for Asian stocks, the risk of an asset bubble in China, and the outlook for the yuan, yen and Japan's economy.

See Video: http://www.bloomberg.com/apps/news?pid=sid2vid&sid=anPf6Eo4D.Rg

Sri Lanka Election Results Make Policy Direction a certainty. No More Wait and See for Investors

28th January 2010, www.lankabusinessonline.com

Sri Lanka's policy direction is clearer after a President Rajapaksa was returned to power with a bigger majority allowing investors to emerge from any 'wait and see' attitude, a top official said.

"The mandate means we have a clear path chartered for the next six years," Central Bank governor Nivard Cabraal said.

"We have eliminated the war. We have obtained a mandate from the people. We have put forward a plan of action in the Mahinda Chinthana (Rakapaksa's platform)."

Though parliamentary elections are due before April 2010, Cabraal said the policy path is already set.

"The presidential elections has made certain of the outcome of the parliamentary elections," Cabraal said.

"There is no need to wait and see. Investors could set their plans in motion, notwithstanding the elections."

Cabraal said the government was committed to a fiscal consolidation of bringing down the budget deficit. For 2009 the government set a 7.0 percent target and 6.6 percent for 2010.

And in 2010 the government was planning a 6.6 percent target.
The mandate would strengthen the government's hand to act on the basis of a report of a taxation commission that is being prepared.

"We have committed ourselves to a certain consolidation path," he said. "We are not digressing. We are looking forward to the taxation commission."

Cabraal said following the report from the taxation commission a changes will be made to taxes on a pre-determined path.

"There will be a cohesive plan," he said. "We want to give some certainty to economic agents to act."

Cabraal had earlier said that taxes on banks would be reduced on phased basis over several years to allow them to build up capital. Effective income taxes on banks are now nearly 60 percent.

24 January 2010

Sri Lanka's Largest Cement Silo Project Underway at an Investment of $ 100mn

January 24th 2010, www.sundaytimes.lk

A US $100 million project to produce the largest ever cement silos in the country commenced early this month in Colombo, according to officials.

“About two weeks ago the construction of the plant at D.R. Wijewardena Mawatha, in Colombo for the joint venture between Lanka Cement Ltd. (LCL) and the UK based AML products Ltd began,” Sisira Paranagama, Chairman LCL told the Business Times.


He noted that production in this plant which is on a one acre land will commence by the end of the year, while the expected output for a month is 10,000 metric tones of silos. “This is only for the first stage. We plan to enhance the capacity in the medium term,” he added. Mr. Paranagama noted that the silos will especially be used for Uthuru Wasanthaya - the Northern development programme which aims to develop the North and the East.

“Road development, canals and bridge building will be concentrated at first (in the Northern development) with the initial production from this plant,” he said, explaining that this project will facilitate a large cost savings to businessmen in Colombo and the North.

“This is mainly because we can price this product at a concessionary rate. We will decide the price when the production begins, depending on the macro situation at the time, but it will be priced at a lower rate than the price (at the time),” he said.

22 January 2010

Human-Elephant Conflict: Farmers in Sri Lanka to be Trained to Tackle Wild Elephants

22nd January 2010, firstlanka.com

Rural farmers living close to forest areas inhabited by wild elephants are to be taught to manage human animal conflicts through a new model dairy pilot project.

Its promoters Exetel, an Australian IT firm that runs a Call Centre in Sri Lanka and the Sri Lanka Wildlife Conservation Society, said they are to set up a model dairy farm in Wasgamuwa in Central Sri Lanka.

The 300,000 dollar farm will be used to demonstrate good livestock management practices among villages and assist in the supply of state veterinary services.

The farm is also expected to reduce human-elephant conflicts in the area, by introducing more compatible agricultural practices.

Agriculture is the country’s main rural industry, with most rural farmers surviving on the cultivation of cash crops such as sugar cane, which is also attractive as food to wild elephants. Sri Lanka’s agriculture sector loses about 10 million dollars a year due to crop damages caused by elephants.

Livestock and elephants can co-habit however, Exetel said, and could help ease the conflict, while providing farmers with an income.

Sri Lanka JKH Hotel to Raise Rs3.6bn to Expand as the Country Expects a Surge of Tourists After the End of a 30-Year War

21st January 2010, www.lankabusinessonline.com

The leisure unit of Sri Lanka's John Keells Holdings group is making a 3.6 billion rupee cash call to spruce up its hotels and build new ones as the country expects a surge of tourists after the end of a 30-year war.

The company said it was issuing 364 million new shares at 10 rupees each to shareholders in proportion of one for every three shares held.

"The proceeds of the Rights Issue will be utilised to fund the refurbishment of hotels in Sri Lanka as well as for new hotel projects and for the acquisition of land for new resort hotels," the group said in a statement.

JKH has earlier said it was planning to invest nearly 6.0 billion rupees during the next three years to refurbish its hotels and build new ones.

It is planning a 190 room hotel in Beruwela on which design work would be finished by next April.

The hotel is expected to cost around 1.7 billion rupees, and will be a 4-star rated hotel coming under the group's mid-market 'Chaaya' brand.

JKH has a 10-acre long stretch in Beruwala, after it bought land from Sri Lanka's Confifi group next to an existing property. JKH's Beach Hotel Bayroo, in Beruwala was damaged during the 2004 Indian Ocean Tsunami.

JKH closed its 80 room Club Oceanic Hotel in the Eastern coast of Trincomalee, to refurbish it at a cost of 400 million rupees as a 4-star rated property.

Bentota Beach Hotel, would also be refurbished towards the end of next year at cost of 800 million rupees. The 115 room property would be 5-star rated.

"If tourism arrivals increase we will be ready with rooms," Gunewardene told a forum organized by Leopard Capital, a private equity group in Colombo last year.

"Cambodia saw an exponential growth after the unrest ended. Arrivals grew from 557,000 in 200 to 2.1 million in 2008".

Sri Lanka’s annual visitors in 2009 grew from 447,890 as opposed to the 438,000 visitors from the year earlier.

By 2011 JKH would be ready to start a 100 room 5-star hotel at its existing land in Ahungalle in the south west coast. The project may cost 1.6 billion rupees.

It could also build another 4-star 120 room hotel in the East Coast on its existing or acquired property. JKH had access to property in Kuchchaveli as well as in Nilaveli.

Sri Lanka Upgraded to Middle Income Country Status

21st January 2010, asiantribune.com, By Sugeeswara Senadhira

Sri Lanka received a major recognition as a middle income country. The International Monetary Fund (IMF) has upgraded Sri Lanka into its Middle Income Emerging Markets by its latest listing on January 11, 2010.

Sri Lanka will now be recognised as a country with a 'Middle Income Emerging Market' status with The International Monetary Fund (IMF) graduating Sri Lanka from the list of Poverty Reduction and Growth Trust (PRGT) eligible countries on 11 January 2010, the Central Bank said in a press release today.

This upgrade would facilitate Sri Lanka to project itself strongly in international financial and capital markets, states the Central Bank.

A country graduates from PRGT only if it, (i) has enjoyed income per capita well above the International Development Association (IDA) threshold for a number of years, (ii) has the capacity for durable and substantial access to international financial markets, and (iii) does not face serious short-term vulnerabilities.

According to the Central Bank, the Executive Board of the IMF has taken into account the following specific factors in considering of Sri Lanka’s graduation.

i. The strong economic performance in recent years that has substantially lifted Sri Lanka’s per capita Gross Domestic Product (GDP) to US dollars 2,014 by 2008, well above the prevailing IDA threshold, and its per capita Gross National Income (GNI) has not been on a declining trend for the last 5 years. The strong growth performance has signalled substantial resilience to shocks, including shocks to oil prices, and to the expiration of the Multi-Fibre Agreement.

ii. The availability of an IMF Stand-by Arrangement facility as approved in July 2009 to cushion the impact of the global crisis. Further, the economic developments under the programme have been stronger than expected, with GDP growth expected to return to almost pre-crisis levels in 2010, while exports have been showing signs of recovery.

iii. The country’s public external debt being projected to decline gradually over the medium term. Although debt dynamics remain sensitive to currency depreciation and export shocks, the timely implementation of fiscal consolidation, as envisaged in the Stand-by Arrangement programme, will be crucial to ensure that the public debt remains on a sustainable path.

iv. The country’s ability to access international capital markets in the past years and its
ability to meet the market access criterion. Oversubscription of the recently issued five-year sovereign bond reflected the progress made under the Fund-supported program, and signalled good prospects for continued access to international capital markets.

Sri Lanka 400kw Solar Project with Japanese Government

20th January 2010, www.thebottomline.lk

The Minister of Power and Energy John Seneviratne, is to sign the Memorandum of Understanding with the Japanese government for the construction of a 400 kW grid connected solar power generation plant at Buruthankanda, Hambantota, under a grant from Japan.

The Government of Japan has provided a grant of Japanese Yen 860 million (approximately Rs. 1,075 mn) to the project which will be implemented by the Sri Lanka Sustainable Energy Authority.

To address the issues on climate change and to access the clean energy, the government hopes to reduce dependence on fossil fuels for electricity generation in Sri Lanka. Development of renewable energy sources is now at a very important stage, with only hydropower being the only significant renewable energy sources for the electricity generation.

A massive 55 to 60 percent of the power supply was generated by diesel, while the share of hydroelectricity averaged between 40 and 45.

Electricity costs in Sri Lanka are among the highest in the world with all users paying high cost for industrial, commercial and domestic uses and driving away the investors. Average electricity tariff rates to industrial sector is from Rs 7.00 to 7.50 in Sri lanka; Indonesia 1.52 – 3.90; Malaysia 2.63 – 10.52; Singapore 4.32 – 6.78; Thailand 2.89 – 7.01, according to the Central Bank’s Annual Report of 2004.

The installed capacity in the country was 2,544 MW (Hydro and thermal combined) in 2006.

Demand for electricity in Sri Lanka is said to increase by about 10 percent annually.
Presently the daily electricity requirement of the country stood at 1.9 GW out of which one third was contributed by hydropower projects and the rest by thermal power plants.

SL Gem Export Bring Rs45bn in 2009

17th January 2010, www.nation.lk

Gem, diamond and jewellery export earnings in 2009 amounted to a massive Rs. 45 billion exceeding the estimated target, according to National Gem and Jewellery Authority Chairman / Chief Executive Officer Hasitha Tillekeratne.

A number of steps were taken under ‘Mahinda Chintana’ ‘to develop the gem industry and discovering new markets helped prevent Sri Lanka’s gem industry from being adversely affected by the global recession resulting in the collapse of markets in Europe, Japan and the USA.

The new markets for Sri Lankan gems are in India, China, Russia, Turkey, Taiwan and Oman.

The national budgets for the past two years granted a number of dividends, thus ensuring the industry’s stability.

In addition to helping the business community, steps have been taken to raise the living standards of traditional gem prospectors, introduce them to new technology, minimise accidents and give maximum compensation to accident victims.

The highest record of gem land auctions were held last year to provide lands for mining while projects were launched to protect infertile state lands where gem deposits are yet to be identified.

Plans have been drawn up to search for gems from the river beds of Mahaweli, Kalu Ganga and other major rivers through environmentally-friendly techniques, says the NGJA Chairman who observed that the supreme court and the appeal court dismissed cases filed by some Non-Governmental Organisations (NGO) against the NGJA’s plans. He expressed regret that certain media organisations, which gave big publicity to NGO allegations, failed to report the court proceedings.

He assures that all steps have been taken to minimise environmental damage and the National Gem and Jewellery Authority had detected and foiled a number of instances of unauthorised gem mining.

18 January 2010

Janus Buys Stake of JKH of Sri Lanka. 12.23 pct of John Keells Holdings Bought after the Exit of Raj Rajaratnam and His Galleon Asset Management Group

15th January 2010, www.lankabusinessonline.com

Janus Capital Management, a US based fund said they had bought 12.23 percent of Sri Lanka's John Keells Holdings, shortly after Raj Rajaratnam and his Galleon asset management group started to sell out of the firm.

Janus Capital said they were holding the JKH stake on behalf of clients and had no economic interest in the share in the form of either dividends or eventual sale proceeds.

But the firm had the right to hold of shares held for clients.
Janus said it had 74.9 million shares or 12.23 percent out of a total of 613.1 million shares.

13 January 2010

Sri Lanka SAGT Terminal Handles Record High Volume of Containers

13th January 2010, www.lankabusinessonline.com

Sri Lanka's privately owned South Asia Gateway Terminals at Colombo port handled a record high volume of containers despite a global economic slump which reduced shipping volumes worldwide, data released by the firm showed. Volumes at SAGT were up 1.4 percent to a new annual high of 1,749,796 TEUs (twenty foot equivalent units or containers), analysts said.

Volumes rose 26.5 percent in December to 155,691 TEUs from a year earlier. It was also higher than the November volumes of 153,793 TEUs.

Total volumes at SAGT have largely been growing this year, although domestic import/export volumes have been hit by a slump in trade due to the global recession affecting trading markets.

In 2009, SAGT transshipment volumes increased by 4.83 percent but domestic volumes dropped by 8.18 percent over the previous year.

The bulk of SAGT's business consists of low margin transshipment traffic, which accounted for 78 percent of SAGT's throughput in 2009.

The South Asia Gateway Terminal is one of two terminal operators at the Colombo port and is 42.2 percent owned by listed John Keells Holdings.

The other is state owned Jaya Container Terminal (JCT), the port's main transshipment facility, has seen a slowdown in volumes.

Colombo port's total container handling in September, the latest month for which figures are available, were down 4.7 percent to 319,818 TEUs from a year ago.

The JCT, which handles much of the island's export and import boxes, was hurt by a sharp contraction in trade, as demand for exports and imports were reduced by a recessions.

Colombo is South Asia's main hub port, where cargo is shipped on feeder vessels to and from smaller ports in the.

11 January 2010

Rail Track in Northern Sri Lanka to be Back on Track. Agreement Signed with an Indian Company

11th January 2010, www.news.lk

The Transport Ministry today entered into an agreement with an Indian Company for the reconstruction of the railway track from Omanthai to Pallai, Transport Minister Dallas Alahapperuma told a media briefing at his Ministry.

The General Manager of Railways, P. P. Wijesekara, Mr. S.L. Gupta, and the High Commissioner of India , Ashok K. Khan signed the contract.

The Minister said the total cost of this project was 185 Million US Dollars and the contractor was IRCON International Limited , a Company under the Ministry of Railways in India.

The Minister further noted that the distance of the rail track reconstruction would be 90 km in extent. The reconstruction work is expected to be completed in 30 months and after the reconstruction the maximum speed limit on this track would be 120 Kmph. There are six crossing stations between these two destinations.

US$ 10mn Sail-Cloth Plant Opens in Sri Lanka

11th january 2010, www.island.lk, By Mario Andree

A BOI approved company specialising in manufacturing sail-cloth opened a US$ 10 million factory last Friday aimed at granting 200 jobs.

Dimension Polyant Lanka opened its manufacturing plant at Divulpitiya under a BOI license to manufacture Industrial textiles and Sails aimed at the export market.

Dimension Polyant Gmbh/Germany currently operates plants in USA, Germany, and Australia, all specialising in the manufacture of sail-cloth.

The Sri Lankan operation is expected to contribute significantly to the company’s stake in the sail-cloth industry and meet the superior standards of the large international sail-sport market.

Tea Trails, Luxury Livings in the Hills of Sri Lanka

www.teatrails.com

In central Sri Lanka, just 4 hours from Colombo by car to the Castlereagh Lake, lies the Bogawantalawa Valley, known as the Golden Valley of Tea and home to old Ceylon, replete with rolling green hills, plantation bungalows, high tea and exquisite service.

Here in solitude, at an elevation of 4000 feet above sea level, lies Ceylon Tea Trails, 4 classic colonial bungalows built for British tea estate managers in the days of the Raj. These historic houses have been restored by Dilmah Tea with the co-operation of Bogawantalawa Tea Estates, to offer guests the unique experience of life on a working tea estate. Bungalow sizes range from 4 to 6 rooms; 20 luxurious rooms and suites in all.

You set your own pace while at Tea Trails. Unwind in our beautiful gardens, visit a factory for a gentle education in the art of Ceylon Tea or spend an adventure-filled day biking, trekking and white-water rafting. We promise you an unforgettable holiday that will rejuvenate your spirit in the heart of the magical world of Ceylon tea.

More Info:
Ceylon Tea Trails

10 January 2010

New York Times Lists Sri Lanka as No.1 Place to Visit in 2010

10th January 2010, www.nytimes.com

New York Times lists Sri Lanka as the number one place to visit in 2010 -out of 31 places from all over the world- and says "The island has a pristine coastline with miles of sugary white sand..."

1. Sri Lanka

For a quarter century, Sri Lanka seems to have been plagued by misfortune, including a brutal civil war between the Sinhalese majority and Tamil minority. But the conflict finally ended last May, ushering in a more peaceful era for this teardrop-shaped island off India’s coast, rich in natural beauty and cultural splendors.

The island, with a population of just 20 million, feels like one big tropical zoo: elephants roam freely, water buffaloes idle in paddy fields and monkeys swing from trees. And then there’s the pristine coastline. The miles of sugary white sand flanked by bamboo groves that were off-limits to most visitors until recently are a happy, if unintended byproduct of the war.

Among the most scenic, if difficult stretches to reach, is Nilaveli Beach in the Tamil north. While a few military checkpoints remain, vacationers can lounge on poolside hammocks under palm trees or snorkel in its crystal-clear waters. Or they can order cocktails at the Nilaveli Beach Hotel (www.tangerinehotels.com/nilavelibeach), a collection of recently renovated bungalows with private terraces.

An international airport in Matara, on the island’s southern shore, is under construction, which will make the gorgeous beaches near the seaside village of Galle easier to get to. Decimated by the tsunami in 2004, the surrounding coastline is now teeming with stylish guesthouses and boutique hotels.

Unawatuna, a crescent-shaped beach a few miles south of Galle, may be furthest along. Higher-end hotels there include Thambapanni Retreat (www.thambapanni.biz), which features four-poster beds, yoga and an ayurvedic spa. The Sun House (www.thesunhouse.com), in Galle, looks like a place where the Queen of England might stay, with its mango courtyard and colonial d├ęcor. One stylish place tucked within Galle’s city walls is the Galle Fort Hotel (www.galleforthotel.com), a refurbished gem merchant’s house run by a couple of Aussies. — Lionel Beehner

Top Ten Private Islands. Taprobane Island of Sri Lanka Comes First

21st November 2009, www.thenational.ae

The romantic notion of a secluded, palm-fringed, white-sand island has entered the dreams of most every traveller. Kitty Melrose picks some of the most spellbinding winter sanctuaries around.

1 Taprobane Island

Arriving at this fantasy island on the back of an elephant at low tide is undisputedly grand. It's just 200 metres off Weligama Bay on Sri Lanka's southern coast, but nothing stands between its shores and the South Pole.

The island was bought in the 1920s by Count de Mauny, an eccentric friend of the British royal family who build a lone octagonal house set on less than one hectare of tropical gardens. Now owned by the hotelier Geoffrey Dobbs, the whole island is available for rent. The residence is a stunning piece of colonial architecture with five elegant bedrooms with sea views, an infinity pool and breezy open living spaces surrounded by large verandas and terraces. Excursions to Buddhist temples and tea plantations can be arranged.

Taprabane Island (www.taprobaneisland.com; 00 94 91 438 0275) can accommodate up to ten people and costs from US$ 1,160 (Dh4,260) per night, including taxes.

09 January 2010

Sri Lanka on Google Maps - Areas of Development Activities, Cultural, Religious and Leisure

Adamas Peak : Religious/Cultural

Anuradhapura : Religious/Cultural/Leisure

Arugam Bay : Leisure (Surfing)

Batticaloa : Investment/Leisure (Beach)

Colombo : Investment / Commerce

Galle : Cultural/Leisure (Beach)

Hambantota Magampura Port (Harbour) : Investment












Hikkaduwa : Leisure (Beach)

Jaffna : Religious/Cultural/Investment/Leisure

Kalpitiya : Investment/Leisure (Sea)














Kandy : Religious/Cultural/Leisure/Investment

Kataragama : Religious/Leisure

Kumana - Yala East National Park : Leisure (Wildlife)

Maankulam : Investment

Mannar : Investment/Leisure

Mattala (New Airport) : Investment

Negombo : Leisure (Beach)

Nilaveli : Leisure (Beach)












Norochcholai : Investment/Energy

Nuwara Eliya : Leisure

Pasikuda and kalkuda : Investment/Leisure (Beach)

Polonnaruwa : Religious/Cultural/Leisure

Pulmoddai : Investment

Sigiriya : Cultural/Leisure










Sinharaja Forest Reserve : Nature

Trincomalee : Investment/Leisure (Beach)

Wilpattu National Park : Leisure (Wildlife)

Yala National Park : Leisure (Wildlife)

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Tourist Arrivals in Sri Lanka up 2.1 pct in 2009. 2010 Arrivals to Exceed Previous High in 2004

09th January 2010, www.island.lk, By Devan Daniel

Tourist arrivals for 2009 recorded a positive growth, with arrivals increasing by 2.1 percent over 2008. Since the war against the LTTE ended last May arrivals, recording negative figures since then, began to recover.

Data released by the Sri Lanka Tourism Development Authority showed that arrivals improved to 447,890 in 2009 from 438,475 in the previous year, with December recording the highest number of arrivals at 56,862, a 16.2 percent increase from December 2008.

The highest number of arrivals was recorded in 2004 with 566,000 tourists visiting the country.

According to the Central Bank the positive trend in tourist arrivals would continue this year and total arrivals are expected to surpass figures for 2004.

In December 2009, arrivals from Western Europe increased 15.6 percent to 19,962 with arrivals from the UK improving by 12.1 percent to 8,726, France by 31.6 percent to 1,833 and Germany by 13.2 percent to 3,614.

Arrivals from South Asia increased by 22.1 percent to 15,339 in December while the number of arrivals from India increased by 49.6 percent to 10,418.

For the entire year, India was the biggest source of tourist arrivals with 83,634 although slipping 1.9 percent from 2008. Arrivals from South Asia fell by 1.5 percent to 126,205 compared to 2008.

Arrivals from Western Europe increased 1.8 percent to 170,123 in 2009. Tourists from France doubled from 2008 levels to 15,886. Arrivals from the UK increased by a marginal 0.3 percent to 81,594 and arrivals from Germany fell 3.2 percent to 29,654.

Arrivals from the Middle East increased 41.5 percent to 23,741 and arrivals from East Asia increased by 7.5 percent to 48,329.

The number of visitors from Eastern Europe fell by 10.6 percent to 26,310 with arrivals from Russia dropping by 25.1 percent to 11,834.

Kandy World Heritage City Foundation for Planning and Execution of Development Projects in Kandy, Sri Lanka

08th January 2010, www.news.lk

The Ministry of Cultural Affairs and National Heritage has taken steps to establish the Kandy World Heritage City Foundation with a view to achieve several objectives, the ministry sources revealed.

According to the Ministry, the objectives of this project are,

01. To increase production, to develop the economy and to generate employment opportunities by planning and executing development projects within the relevant area;

02. To undertake a comprehensive study of the projects identified from the master plan for development of the designated area;

03. To undertake action to raise funds from local and/or foreign sources for any definite projects or programmes and many more additional objectives.

The establishment of a Foundation called “Kandy World Heritage Foundation” with a view to ensuring planning and execution of development projects already identified and expected to be identified in future in respect of development and conservation activities within the Kandy Municipal Council in the city of Kandy which is one of the world heritage cities would be boon in the development and conservation activities of the relevant area.

Club Hotel Dolphin Wins ITS Red Star Award. The First Time a Sri Lankan Hotel Nominated for the Prestigious Award

06th January 2010, www.thebottomline.lk

Club Hotel Dolphin, managed by Serendib Leisure Management, a subsidiary of Hemas Holdings Plc, brought honor to Sri Lanka by winning the ITS Red Star Award under the ITS program managed by the REWE Group, Germany. This is the first time a Sri Lankan hotel had been nominated for this prestigious award.

The ITS brand has the largest selection of hotels amongst the Tour Operators of the travel and tourism division of REWE Group. The focus of the ITS program is on three-to-four star hotels. The ITS Red Star Award is awarded to the best and most popular 60 hotels worldwide. The selection for the award mainly focuses on three key factors - referrals from their guests, consistent high standards of service delivery, and high levels of guest satisfaction. By winning this award, Club Hotel Dolphin has been recognised as the very best in the country.

This club-concept hotel is located in the seaside hamlet of Waikkal and is just a half hour’s drive from the international airport and 90 minutes north of Colombo. This sprawling hotel boasts a total of 150 rooms - 98 deluxe main rooms that are equipped with AC, cable TV, DVD player, Tea/Coffee making facilities, hair dryer, piped music and telephone, and 50 individual cottages that are additionally equipped with a mini bar, and 2 suites.

The hotel has two pools – one of which is the largest pool in Sri Lanka. This is the hub of all the action and animation at the hotel. Guests are offered a wide choice of activities such as tennis, squash, volleyball, badminton, darts, archery, croquette and mini golf. The animation team keeps guests occupied with activities such as water aerobics, a club dance, bingo nights, karaoke evenings, fire limbos and animation shows. For those who prefer something more tranquil, a relaxing spa treatment or a lazy afternoon by the ‘quiet pool’ is available. Guests can also take an interesting tour of the Negombo churches that were built during the colonial period, or opt to visit Colombo on a shopping spree.

REWE Group is a multi-national company. The travel arm – REWE Touristik - is one of the largest German Tour Operators and is an important partner of the Serendib Leisure Group.

Image: S. Anandaraj, Chief Operations Officer of Serendib Leisure Management presenting the ITS Red Star Award to the General Manager of Club Hotel Dolphin, Chamin Wickremasinghe. Also in the picture is the Assistant Manager of the Hotel, Jude Silva.

05 January 2010

Sri Lanka's Benchmark ASPI Passed 3500 Point Mark for the First Time

05th January 2010, www.lankabusinessonline.com

Sri Lanka's benchmark All Share Price Index (ASPI) passed the 3,500 point mark for the first time Tuesday, on strong retail buying with blue chip stocks continuing to make gains, brokers said.

The ASPI ended at 3,519.94, up 38.30 points while the more liquid Milanka closed at 4,025.66, up 1.61 percent (63.91 points), according to provisional stock market data.

Turnover was 1.54 billion rupees.

"Investors were picking blue chips ahead of presidential elections and the sentiment is at an all-time high," Nikita Tissera, research manager at stock brokering house SC Securities said.

"We may see some of the retail interest turning to mid-cap stocks in the near future."

Conglomerate John Keells Holdings closed at 180.00 rupees, up 1.00, and alcohol manufacturer Distilleries Company of Sri Lanka closed at 114.00 rupees, up 4.75 with over 1.5 million shares changing hands.

Selected hotel sector stocks were heavily traded, brokers said.

John Keells Hotels closed at 26.00 rupees, up 1.75 with nearly 2.0 million shares changing hands, and Hotel Services closed flat at 19.00 rupees, with 3.0 million shares traded.

Aitken Spence Hotels closed at 294.75 rupees, up 6.25, Galadari Hotels closed at 16.50 rupees, up 1.00, Hotel Developers closed at 121.50 rupees, up 3.50 and Hunas Falls Hotels closed at 52.25 rupees, up 4.00.

"The high occupancy rates in the leisure industry prompted a run on hotel stocks today," Tissera said.

Commercial Bank of Ceylon closed at 193.00 rupees, up 2.25, Hatton National Bank closed at 179.75 rupees, up 7.25, Sampath Bank closed at 220.25 rupees, up 1.00 and Seylan Bank closed at 38.75 rupees, down 25 cents.

National Development Bank closed at 211.50 rupees, up 2.00 and DFCC Bank closed at 172.50 rupees, up 2.00.

Sri Lanka's largest celco Dialog Telekom closed flat at 7.00 rupees, and fixed line operator Sri Lanka Telecom closed at 44.00 rupees, down 1.00.

Brokers said there was heavy speculative trading on forestry company Touchwood Investment. It closed at 95.00 rupees, up 9.25 with over 1.55 million shares changing hands, and Lanka Cement closed at 24.25 rupees, up 1.25.

ADB Fund Northern Road Connectivity Project in Sri Lanka

05th January 2010, www.lankabusinessonline.com

The Asian Development Bank said the first batch of bidding documents for a road project it is funding in northern Sri Lanka is expected to be available this month. The proposed Northern Road Connectivity Project will cover repairs to about 120 km of national highways in the northern and north-central provinces and about 141 km of provincial roads in the north.

It also includes building or repairing bridges in the two provinces.

The ADB will lend about 130 million dollars for the project, the biggest in the bank’s aid pipeline for the island this year.

Roads in northern Sri Lanka were badly damaged or neglected because of the island’s 30-year ethnic war which ended in May 2009 when government forces defeated Tamil Tiger separatists.

The ADB said in a statement procurement to be financed under the project will be carried out in accordance with ADB's procurement guidelines.

The bank has said it is refocusing its aid to Sri Lanka to cover rebuilding of the north and east where infrastructure was destroyed or neglected because of the war which was fought mainly in those areas.

Sri Lanka's Main Tamil Party Backs Opposition Presidential Candidate, Ex-General

05th January 2010, www.lankabusinessonline.com

Sri Lanka's main minority Tamil party on Monday backed the main opposition presidential candidate, Sarath Fonseka, who as army chief led the offensive that crushed Tamil rebels last year, officials said.

Fonseka, a former four-star general who quit in November following differences with his political boss President Mahinda Rajapakse, pledged in a letter to end a state of emergency if he was elected in the January 26 vote.

The moderate Tamil National Alliance (TNA) agreed to back Fonseka's campaign after he signed a three-page programme that he hopes to implement in the island's former war zone, a party official said.

"We have decided to support General Fonseka, but a formal announcement will be made on Tuesday," said the TNA official, who declined to be named. The TNA has 21 seats in Sri Lanka's 225-member parliament.

In his letter, a copy of which was seen by AFP on Monday, Fonseka promised to free Tamil detainees within a month if no charges had been brought against them.

The former military chief, who is credited with leading the military drive against the separatist Tamil Tigers, also promised to establish a completely civilian administration.

"Full restoration of all institutions of civil administration from the office of village headman upwards will be free from military, police and political interference," the letter to the TNA said.

TNA was at one time seen as a proxy of the Tamil Tigers who were crushed in May with the elimination of the rebels' military leadership after 37 years of fighting.
Fonseka pledged to end the state of emergency which had been in force since March 1983, largely to deal with Tamil rebels as well as militants among the majority Sinhalese.

The emergency gives sweeping powers to security forces to arrest and detain suspects for long periods without trial. France has led international calls on Sri Lanka to end the emergency after the ethnic conflict ended in May.

Rajapakse called the January poll in a bid to capitalise on the victory over the separatist Liberation Tigers of Tamil Eelam (LTTE) who launched their campaign for a Tamil homeland in 1972.

Fonseka and Rajapakse have been at loggerheads since the end of the conflict. Fonseka quit after accusing the government of sidelining him and falsely suspecting him of trying to stage a coup.

04 January 2010

Colombo Port Bunkering Facilities Expanded

04th January 2010, www.dailymirror.lk

Sri Lanka Ports Authority (SLPA) said yesterday a number of steps have been taken to expand the operations of oil tankers at the Colombo Port.

The New North Pier developed as a multipurpose berth to handle oil tankers launched its first handling of such operations on Wednesday with the vessel MT Heaven.

SLPA said these new measures were according to the instructions by President Mahinda Rajapaksa and under supervision of Minister of Ports and Aviation Chamal Rajapaksa, Minister of Port Development Dilan Perera, Chairman of SLPA Dr. Priyath Bandu Wickrama and Jaya Container Terminals, which acts as a 100% share holder of SLPA.

A new oil pump pipe line system has been constructed with all affiliated facilities from the New North Pier up to the South Jetty for oil transportation. With this latest project all extra berthing facilities will be provided for the oil tankers reaching Colombo for bunkering purposes.

The new process will further elevate the oil transportation, in a more efficient and productive manner, from Colombo Port to the oil storage tanks of the Colombo oil Banks managed by the Jaya Container Terminals.

It is a specialty that all constructions of the project are planned and carried out by the engineers and the staff of SLPA. It is expected to boost the flow of foreign exchange to Sri Lanka through a competitive bunkering service at Colombo Port following the completion of the whole project.

Currently, steps have also been taken to construct two new oil storage tanks at the Colombo oil bank premises to boost the capacity in order to improve the bunkering facilities at Colombo Port. The projects will further assist the developments at the Colombo Port as a maritime and logistics hub in the entire region.

Sri Lankan Economy to Grow by 7-9% Says Central Bank Monetary and Financial Sector Policies for 2010

04th January 2010, www.sundaytimes.lk

Sri Lanka’s economy is expected to grow by 3.5% in 2009 while the gradual recovery of the global economy and the end to the conflict is expected to provide a strong impetus to the domestic economy in 2010 and beyond, the Central Bank (CB) said today (Monday).

The CB unveiled its monetary and financial sector policies for 2010 and beyond earlier when CB Governor Ajith Nivard Cabraal stated that the economy is posed to record a higher growth of around 7 to 9% in the medium-term.

Some of the highlights of the presentation were plans to set up an Export/Import (EXIM) Bank to provide financial assistance to exporters and importers and promote the country’s international trade in goods, services and investment. Mr. Cabraal said the capital currently contemplated is US$200 million.

Mr. Cabraal also spoke on initiating the transformation of the existing framework of the Employees’ Provident Fund (EPF) to a banking model. This would establish a sound risk return profile to generate a positive real rate of return over the long term. The CB will also initiate enrolling of the ‘informal sector’ labour force and self-employed persons amounting to 500,000 by 2012 and two million by 2015.

On the external front, exports and imports are projected to increase in the medium term, thereby generating higher economic activities in the economy. Despite the expected increase in workers’ remittances and higher inflows to the services account, the current account is expected to record a deficit less than 3% in the medium term.

On the fiscal front, the overall budget deficit is expected to reduce over the medium term. The improvement in the financial position of both the government and public corporations is expected to release resources to the private sector.

The balance of payments (BOP) is projected to record a surplus of US$700 million in 2010. The private sector is expected to make a substantial recovery in 2010.

An improvement in the financial operations of major public corporations including the Ceylon Petroleum Corporation (CPC) and the Ceylon Electricity Board (CEB) is expected. The performance of public corporations would depend to some extent on the price of crude oil and fertilizer in the international markets.

Inflation is expected to be contained within single digits in 2010. On an annual average basis, inflation is projected to be about 5 to 10% by end 2010.

The public sector will need to function in line with stipulated norms. Any substantial increase in credit to the public sector could put the vulnerable recovery in the private sector at risk by exerting upward pressure on market interest rates. Also, an undue increase in the overall money supply caused by accommodating increases in credit to all sectors could endanger the projected low inflation environment in the ensuing period.

The CB stated that the move of the Department of Census and Statistics (DCS) to update the existing Colombo Consumer Price Index (CCPI) in 2010, based on the findings of the Household Income and Expenditure Survey – 2006/2007, is a welcome move. The entire publication can be found on the CB website at www.cbsl.gov.lk (NG).

Sri Lanka Stocks up 2.84-pct, Foreign Funds Beginning to Enter the Asia’s Best Performing Bourse

04th January 2010, www.lankabusinessonline.com

Sri Lankan stock closed the first day of trading for the year up 2.84 percent Monday with retail investors chasing diversified, manufacturing and banking sector stocks, brokers said.

The Colombo all share price index (ASPI) ended at 3,481.64, up 96.09 points while the more liquid Milanka closed at 3,961.75, up 2.92 percent (112.37 points), according to provisional stock market data.

Turnover was 1.15 billion rupees.

Brokers said foreign funds were beginning to enter the market which had a bull run last year and ended 2009 as Asia’s best performing bourse, and the world’s second-best performing after Russia.

"The bourse is attracting new funds,” said Thakshila Hulangamuwa, vice president at stock brokering firm Asha Phillip Securities.

The flow of new money could help sustain the latest gains, he said.

John keels Holdings (JKH) was heavily traded, brokers said.

JKH closed at 179.00 rupees, up 7.50 with 1.32 million shares changing hands, brokers said.

Ceylon Tobacco Company closed at 200.00 rupees, up 15.00, Distilleries Company of Sri Lanka closed at 109.00 rupees, up 3.75 and Colombo Dockyard closed at 283.50 rupees, up 38.75.

Sampath Bank closed at 219.25 rupees, up 15.00 rupees, Seylan Bank closed at 39.00 rupees, up 2.00 and Commercial Bank of Ceylon 190.75 rupees, up 1.25.

National Development Bank ended at 209.25 rupees, up 3.25, and DFCC Bank at 170.50 rupees, up 3.50.

Sampath Bank in a stock exchange filing dismissed a media report over the weekend that it planned to go for a 4.0 billion rupee 'rights issue'.

It said it is not planning a rights issue at present.

Sri Lanka Hemas Buys Hydro Power Plant of 2.6MW in Nuwara Eliya District

04th January 2010, www.lankabusinessonline.com

Sri Lanka's Hemas Power said it has bought a 2.6 megawatt (MW) hydro-power plant in the Nuwara Eliya district in the central hills from Senok Mark Hydro for 198.5 million rupees.

Under the deal, Hemas Power has bought 9.92 million shares, Senok Mark Hydro’s total issued share capital, at 20.00 rupees a share, Hemas said in a stock exchange filing.

Hemas Power is a unit of Hemas Holdings which has business interest in healthcare, consumer goods, shipping and power.

Its generation unit consists of Heladhanavi, a 100 mega watt thermal power plant, and a two-mega watt mini-hydro power plant in Kandy, also in the central hills.

Sri Lanka is heavily dependent on fossil-fuels for its power needs and is trying to increase renewable energy sources like hydro-power.

In August 2009, Hemas Holdings floated its power generation business to build a 1.6 MW mini hydro plant in Kandy to move away from costly fossil-fuel thermal power.

Sri Lanka to Be Regional Air & Ocean Traffic Hub

01st January 2010, www.bloomberg.com, By Ed Johnson

Sri Lankan President Mahinda Rajapaksa issued a New Year’s message pledging to develop the country into a regional hub for ocean and air traffic and a knowledge-based society.

After defeating the Liberation Tigers of Tamil Eelam and ending the civil war, the government will be “even more focused on diverting our energies to development,” Rajapaksa said in a statement today.

“We shall build on the foundation already laid in the construction of harbors, airports, extensive road networks and the marked increase in IT literacy in Sri Lanka,” he said.

Rajapaksa’s government has vowed to reunite the country after ending the LTTE’s fight for a separate Tamil homeland in the north and east of the island nation. The end to the conflict is boosting agriculture and tourism; the Central Bank forecasts the economy will grow as much as 6 percent in 2010 after expanding 3.5 percent last year.

Rajapaksa has called a presidential election for Jan. 26.

To contact the reporter on this story: Ed Johnson in Sydney at ejohnson28@bloomberg.net.

Sri Lanka Central Bank’s Decision Vindicated, Inflation Rises

30th December 2009, www.bloomberg.com, By Anusha Ondaatjie

Sri Lanka’s inflation accelerated to a nine-month high in December, vindicating the central bank’s decision to pause its policy of cutting interest rates.

Consumer prices in the capital, Colombo, rose 4.8 percent from a year earlier after gaining 2.8 percent in November, the statistics agency said on its Web site today. That was more than the median 4.2 percent forecast in a Bloomberg News survey of six economists.

Policy rates are appropriate to support growth and are likely to remain at current levels “in the near future,” Central Bank of Sri Lanka Governor Nivard Cabraal said last month. The Colombo-based bank wants to help boost growth to as much as 6 percent in 2010 from 3.5 percent this year.

“The central bank may have to start raising rates in the second quarter of next year,” Danushka Samarasinghe, research manager at Asia Securities Ltd. in Colombo, said before the report. “The growth target won’t be threatened with prices rising as consumption and investment will keep going up.”

The central bank has cut lending rates five times this year to revive growth as inflation plunged from a record high in June 2008 to a five-year low in September.

On Dec. 14, Cabraal maintained the reverse repurchase rate at 9.75 percent, a five-year low, and kept the repurchase rate at 7.5 percent.

Cabraal said in October he expects consumer prices to rise as much as 5 percent this year, and between 5 percent and 6 percent in 2010.

Faster Growth

Gross domestic product expanded 4.2 percent in the third quarter from a year earlier, the fastest pace this year, after gaining 2.1 percent in the three months to June 30, the statistics department said Dec. 18.

Sri Lanka’s exports in October declined 4.9 percent, the least this year, as orders increased for the South Asian island’s tea and rubber.

The recovery in exports from Sri Lanka, which makes garments for Marks & Spencer Group Plc and Gap Inc., may falter as the European Union plans to withdraw trade concessions on alleged human rights violations by President Mahinda Rajapaksa’s government.

Sri Lanka will maintain fiscal and monetary stimulus through 2010 to bolster the economy, Deputy Finance Minister Sarath Amunugama said Nov. 9.

The International Monetary Fund, which granted Sri Lanka a $2.6 billion loan in July to rebuild roads and schools, expects the island’s economic growth and credit demand to pick up from this year.

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

Sri Lanka Stocks, Asia’s Best Performers, On High

30th December 2009, www.bloomberg.com, By Anusha Ondaatjie

Sri Lanka’s stocks, Asia’s best- performing in 2009, may extend gains as the end of a 26-year civil war and low interest rates help boost economic growth, the island’s biggest fund manager said.

The Colombo All-Share Index, which rose 0.9 percent to a record of 3,385.55 today, may climb to 3,500 in two months, said Bimanee Meepagala, an analyst at Eagle NDB Fund Management Co., the nation’s biggest non-state fund. The gauge has jumped 125 percent this year, the world’s second-best gainer after Russia.

“The market was re-rated on post-war optimism,” said Meepagala, who manages the equivalent of $236 million. “Strong economic growth and corporate earnings will help the market continue its upward momentum.”

Sri Lanka’s $41 billion economy is expected to grow as much as 6 percent next year from an estimated 3.5 percent expansion in 2009, the central bank said in October. President Mahinda Rajapaksa quashed an uprising by Tamil separatists in May and the island has drawn the interest from investors including Templeton Asset Management Ltd.’s Mark Mobius and Jim Rogers, author of books including “Adventure Capitalist.”

The central bank has cut lending rates five times this year to a five-year low as inflation plunged from a record high in June 2008. Rajapaksa has called a presidential election for Jan. 26, two years before his mandate expires, as he seeks to capitalize on the end of the war with the Liberation Tigers of Tamil Eelam in May.

Economic Growth

Gross domestic product expanded 4.2 percent in the third quarter from a year earlier, the fastest pace in 2009, after gaining 2.1 percent in the three months to June 30, the statistics department said Dec. 18. Sri Lanka’s exports in October declined 4.9 percent, the least this year, as orders increased for the South Asian island’s tea and rubber. Tourist arrivals in Sri Lanka have increased since June.

“There are still some big macroeconomic challenges but what we’ve seen at the end of the civil war was a fundamental shift in the circumstances,” said Peter Taylor, a fund manager at Aberdeen Asset Management Ltd. in Singapore, which overseas about $25 billion in Asian assets. “We still find some good value in the banking sector.”

Aberdeen holds shares of Commercial Bank of Ceylon Plc , the country’s biggest non-state lender, and John Keells Holdings Plc, which has the largest weighting on the benchmark index.

Selling by Raj Rajaratnam, the billionaire Galleon Group LLC founder accused of insider trading, won’t cause an “overhang” on the Colombo Stock Exchange “as there are plenty of buyers in the market,” Eagle NDB’s Meepagala said.

Mobius, Rogers

Mobius, chairman of Templeton Asset, said last month he’s seeking private equity or strategic investments in Sri Lanka after the end of the war. Rogers also said in August the nation’s stocks may offer better returns as the government is expected to spend more on infrastructure and agriculture.

The International Monetary Fund, which granted Sri Lanka a $2.6 billion loan in July, expects the island’s economic growth and credit demand to pick up.

John Keells Holdings, also Sri Lanka’s biggest diversified company, and Aitken Spence Plc, the island’s largest operator of resorts, are also likely to post gains in earnings next year, Meepagala said.

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