31 July 2010

Experts Endorse Reclaiming of 500Acres from sea off Galle Face, Colombo, Sri Lanka for a Commercial City

04th July 2010, sundaytimes.lk, By Bandula Sirimanna

Hydraulic experts have endorsed the feasibility of reclaiming 500 acres of land from the sea off the coast at Galle Face in Colombo to construct a new commercial city based on a presidential directive. Malith Mendis, Chief Executive / Director of the Lanka Hydraulic Institute (LHI), told the Business Times that although an indepth study has not been carried out by the LHI or any other institute, there is unlikely to be a major impact on the environment such as beach and land erosion.

He noted that the impact of coastal currents would be minimal adding that the LHI has designed the massive 100-foot high breakwater for the new Colombo South Harbour project to withstand waves of 30-feet high, and it will not be affected by the Galle Face new city project. He revealed that according to LHI studies on the Colombo South Harbour, the reclaiming of the sea area will not be harmful to the environment. However he has not ruled out the long term impact on marine resources.

Economic Development Ministry sources said the 2km x 2km sea stretch will be reclaimed by filling to construct a modern city with skyscrapers, apartment blocks, shopping malls and other public needs, in a 3-year project ending in 2012.

“The Sri Lanka Ports Authority is to handle the project to create a new ‘port city”, a senior official said.
The LHI will be entrusted with the task of providing hydrographic and modelling services, and the Moratuwa University will be involved in the planning, he added. Work on the port city project will begin by the end of this year. All infrastructure facilities will be provided at the new city reducing problems such as congestion, traffic jams, lack of space for parking and pollution.

The plan was first announced by President Mahinda Rajapaksa during the recent May Day rally.
A senior ministry official said a feasibility and environment impact assessment study will be conducted before embarking on the project while the need to offer tax holidays and a 30-year lease on land to attract foreign investors is being considered. Relevant agreements for the construction of the new city will be signed in the next few months.

Related Info:
Sri Lanka to Reclaim 2km of Sea to Create a Modern City of 500acres in Colombo

Emirates to Operate Daily Flights betweet Male and Colombo, Sri Lanka

31st July 2010, www.lankabusinessonline.com

Emirates is to increase the frequency of flights between Sri Lanka and the Maldives to cater to increasing tourist traffic, a statement said.

Emirates is to add three extra flights to Malé from August 1, resulting in the airline operating daily flights between Malé and Colombo and increasing its services from four to five flights a week.

The additional flights take Emirates’ services to the Maldives to 19 a week, making the Dubai-based airline one of the most active international carriers serving the country.

"As tourism and economies revive in the region, there is increasing demand for seats on the Malé-Colombo sector," said Majid Al Mualla, Senior Vice President - Commercial Operations West Asia & Indian Ocean.

Emirates flights EK652 and EK 654 will depart Malé at 16:30 and arrive in Colombo at 18:30. On Wednesdays and Fridays, EK654 will continue on to Dubai from Colombo.

The return flight EK653 - operating on Monday, Tuesday, Thursday, Saturday and Sunday - will depart Colombo at 21:35 and arrive in Malé at 22:35.

These flights will be served by Emirates’ Airbus A330-200 aircraft in a three-class configuration, with 12 seats in First Class, 42 seats in Business Class and 183 seats in Economy Class.

Emirates has served the Maldives since April 1987, and also operates 14 flights a week from Malé to Dubai, the airline’s home base.

Cairn to Drill Sri Lanka's 1st Oil Wells in Mannar Basin in January. International Oil Exploration Tenders to be Called on more Blocks

30th July 2010, www.dailymirror.lk, By Sandun A. Jayasekera

Cairn Sri Lanka (Pvt) Ltd a subsidiary of Cairn India (Pvt. Ltd) will begin drilling the first three oil wells in the Mannar Basin in January, the Petroleum Ministry said today.

Petroleum Resources Minister Susil Premajayantha said Cairn Sri Lanka was calling for bidders globally to undertake sub contracts for the eight-year three-stage oil exploration project, which is estimated to cost of US$172 million or Rs.18 billion.

The Minister said Cairn (India) had conducted three-dimensional seismic surveys and based on the results were now able to begin the drilling in the Mannar Basin. Cairn Sri Lanka will use its parent company know how, machinery and manpower for the excavation of test wells off Jaffna.

Minister Premajayantha said the Petroleum Resources Development Committee (PRDC) on behalf of Sri Lanka had signed six contractual agreements with Cairn Sri Lanka. The Indian company had paid a signature bonus of US$ One million for each contract which deals with current movements, seismic survey, data processing and structural evolution.

“The government has been successful in its tender procedure whereas the Indian company has consented to go for oil exploration in block SL 2007-01-001 in the Mannar Basin on very generous terms. Under the tender agreement Cairn Sri Lanka will pay US$50 million when the oil production resumes at the end of successful oil exploration. The royalty payable by the Indian company to Sri Lanka on the total production is 15 per cent in addition to the local taxes on their income. The Indians must also purchase 15 per cent of the shares of the National Oil Company that will be formed after the last phase of the project.

The agreement that runs for eight years has been planned in such a way that Sri Lanka will gradually enhance its royalty until the full ownership of the oil production is reached,” Minister Premajayantha said.

“In the first part of the bidding in 2007, Sri Lanka offered three blocks -- M2, M3 and M4 in the Mannar Basin when it called for international tenders after an international road show. Cairns (India) won a bid as the only Indian company able to meet the conditions of the tender and asked for block M2,” the minister said.

He said five blocks in the Mannar Basin -- M1, M2, M3, M4 and M5 situated off the North West coast have been lined up for this year’s international tenders.

“The decision on conducting an international road show will be taken at the next ‘Petroleum Resources Development Committee’ meeting.

Sri Lanka has identified and demarcated 12 blocks -- three in the Cauvery Basin (off North East coasts of Sri Lanka), eight in the Mannar Basin (off Western and North Western Coasts) and one in the Southern Basin (off Hambanthota) for oil exploration and will call for international tenders for all blocks except M2.

Related Info:
Petroleum Resources Development Secretariat (PRDS) - Sri Lanka

The Current Status of Oil Exploration of Sri Lanka and Future Opportunities (PRDS - July 2008)

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

30th July 2010, www.lankabusinessonline.com

The Sri Lankan government has decided to change its coal-based power generation plan and not go for more coal plants and instead shift towards renewable energy, power minister Patali Ranawaka said. The previous generation plan envisaged adding about 200 megawatts a year of coal based power plants, he said.

A 300MW coal power plant being built by the Chinese in north-western Puttalam is expected on come on stream before the end of the year and will later be expanded to a total of 900MW.

Another coal power plant is to be built by an Indian company in Sampur, near the north-eastern Trincomalee harbour.

"After the Sampur power plant comes by 2014 we will not go for any more coal power plants," Ranawaka told a news conference.

"We want to exploit clean, renewable energy sources and reduce our emissions. Also, fossil fuel reserves are being exhausted."

The short-term priority is to reduce the cost of operating expensive diesel and heavy-fuel based thermal power plants which now provide the base load power by converting to less costly fuel, he said.

Ranawaka said a US survey showed the island has a potential of about 20,000MW of wind power.

"Now our capacity is 2,500MW. If we can harness 4-5,000MW of wind power we can simply double our capacity."

A government company will be set up to exploit renewable energy sources like wind and hydro-power.

In the recent past Sri Lanka has paid a heavy price for deviating from the long term generation plan of Ceylon Electricity Board.

The plan advocated coal power nearly two decades earlier but political decision making delayed coal plants.

Analysts say other than large hydro plants most other renewal plants are expensive.

Petroleum is usually expensive because governments heavily tax oil while some renewables a sustained with public subsidies.

Most renewables are also not 'firm energy' in that they are less reliable, subject to uncertainties of weather, power sector analysts say.

In Sri Lanka for example mini-hydro come in and out of the system as and when there is water and the CEB effectively has to maintain an extra buffer.

This makes the real cost higher than the actual cash tariff paid to mini hydros. But mini hydros are also not paid a capacity charge.

Wind and solar energy plants are paid high tarriffs, compared to coal, despite being uncertain.

Dendro or wood based energy however could be more certain, as it also has an element of storage, but industry analysts fear whether supply of wood could be made reliable enough.

A small trial plant which was operated by an independent producer has also not inspired confidence among analysts.

The current generation plan envisages alternative renewable component of about 15 percent of total capacity.

Higher levels of energy which is not 'firm' especially if they are produced through a large number of small plants - especially those that cannot be centrally dispatched or brought in an out of the grid as required - may increases stresses on the national power supply.

Related Info:
Sri Lanka Tests 1st Coal Power Plant in Sept. 300MW out of 900MW Norochcholai Plant to National Grid by 2011

Norochcholai on Google Maps

30 July 2010

Japan to Consider Free Trade Agreement with Sri Lanka

30th July 2010, www.lankabusinessonline.com

Japan is willing to consider a request by Sri Lanka for a free trade deal between the two countries, a foreign affairs ministry statement said.

"The government of Japan will be prepared to engage in the necessary consultations with regard to a Free Trade Agreement between Sri Lanka and Japan," it quoted Masayuki Naoshima, Japan’s Minister of Economy, Trade and Industry as saying in Tokyo.

Naoshima was responding to a request by visiting Sri Lankan external affairs minister Gamini Peiris and Basil Rajapaksa, minister of economic development.

They visiting ministers asked Japan to consider entering into a Free Trade Agreement with Sri Lanka given the "vast opportunities" now available in Sri Lanka for investment and trade, the statement said.

Sri Lanka's 30-year ethnic war ended in May 2009, resulting in an immediate economic revival with economic growth forecast at seven per cent this year.

Japan has also been one of Sri Lanka's biggest donors and lenders, helping to fund infrastructure like ports and highways.

400-Herd of Elephants at Minneriya National Park, North-East Sri Lanka

30th July 2010, www.news.lk

The Minneriya National Park has become a popular tourist destination. The number of foreigners visiting the Minneriya National Park is on the increase and more than 120 foreigners visit the park each day and this number doubles during the weekends. A similar increase is also shown in the number of local tourists visiting the Park.

The daily income of the park has increased to Rs 300,000, and steps are being taken to popularize the park and further increase the income.

A prominent tourist attraction to the park is the possibility of citing of elephants and the Park officials say that more than 400 herds of elephants can be seen on the banks of Minneriya wewa during this season. These herds of elephants come to the banks of the
Minneriya to have fresh grass.

Spread over 8890 hectares, the park is located 182 Km away from Colombo. The Government declared it as a national park in 1997.

Sri Lanka Invited Top 10 Banks to Raise $1bn Sovereign Bond

29th July 2010, www.news360.lk, By Prasanna C Rodrigo

Sri Lanka has invited top 10 banks in the Bloomberg League table to submit proposals to raise US$ 1 billion by a planned sovereign bond issue , which is due after august this year.

C.J.P. Siriwardena, Assistant Governor of the Central Bank told www.news360.lk the invitations were sent during last week.

Among the Banks invited ranks Barclays Capital, Deutsche Bank, JP Morgan, UBS, Credit Suisse, CITI, Merrill Lynch, BNP Paribas, HSBC and RBS.

Siriwardena said “The banks will have to submit proposals by Monday”

The Central Bank is hoping to select at least 3 banks to be the lead managers for the issue.

The Bank plans to go in for a 7 to 10 year tenor bond.

Siriwardena earlier said “This time we want to increase the yield curve” and added that at present market conditions, the interest rates would be around 6%, even for a 10 year bond.

Sri Lanka on 2 previous occasions successfully raised funds via sovereign dollar bond issues, each amounting to US$ 500 million.

One was in 2007 and the next was in 2009.

The public Debt department says the confidence on the Sri Lankan economy among international investors at present ranks high which makes it ideal to raise dollar bonds.

The debt office says the 2007 bond which was sold at a yield rate of 8% is now trading at 4.03%.

While the 2009 bond is trading at a rate of 5.18% and it was also sold at a higher rate of 7.40% in 2009.

When the yield goes down the price of the bond goes up, which makes it attractive for buyers.

29 July 2010

Sri Lanka's CSE Reduces Broker Fees. ASPI Crosses 5,000 Point

29th July 2010, www.dailynews.lk, Charumini De Silva

The changes of the market microstructure of the CSE including transaction costs will be active from August 1st.

The crossing threshold will be increased from Rs 10 million to Rs 20 million. The tick size on transactions will be reduced to 10 cents across the board. The threshold for negotiable brokerage will be reduced from Rs 100 million to Rs 50 million.

The minimum brokerage floor will be 0.20 percent.

The biggest beneficiaries of this reduction will be investors transacting less than Rs one million.

Speaking to the Daily News Business Capital Trust Securities, Director Sarath Rajapaksa said this initiative was long overdue.

The revised transaction costs will stimulate trading in the capital market.

The tick size on transactions being reduced to 10 cents across the board will encourage frequent trading. There will be more trading after August. This will also enable large increase in commissions and improve stockbroker’s income, he said. Lanka Securities Chief Operating Officer Kosala Gamage said this regulatory reform was very meaningful as the capital market is performing outstandingly and the country’s economy is stabilizing fast.

“The Government and the regulatory bodies should address to increase the liquidity levels of the market,” he said.

The trading will increase rapidly as frequent tradings will take place after the reforms in the CSE. The foreign investors are pleased with the political and economic stability where the foreign investor confidence has shown a positive trend in the trading.

This will increase the number of foreign and local investor participation in the CSE. These developments in the capital market will affect the country’s economy favourably, he said. Asha Philip Securities Ltd Director/CEO Dimuthu Abeysekera said the revised transaction costs will bring down the stockbroker’s revenue significantly. The stock broking companies started recovering themselves only after the restoration of peace. It would have been better if the regulators give more time to stabilize.
ASPI crosses 5,000 level

The All Share Price Index (ASPI) of the Colombo Stock Exchange (CSE) closed above the 5,000 level for the first time in history yesterday.

The ASPI closed the day at the 5,138.9 gaining 139.8 points (2.8 percent).

The Milanka Price Index (MPI) gained 159.5 points (2.8 percent) to close the day at 5.828.7 also recording the highest level in history. The total turnover recorded during the day was Rs 3.2 billion.

The market capitalization at the end of trading was Rs 1.68 trillion is the highest market capitalization recorded in the history of the CSE.

Sri Lanka in for a Construction Boom over Next 5yrs Driven by Reconstruction and Rehab Requirements

29th July 2010, www.lankabusinessonline.com

Post-war reconstruction and rehabilitation requirements in Sri Lanka and the general economic revival are expected to trigger a construction sector boom over the next five years, a report by a brokerage said.

Listed cement manufacturers, cable companies and those making PVC pipes and tile are expected to get more business and benefit from the building boom, NDB Stockbrokers said in a report on the construction industry.

"We expect the construction sector growth to surpass the expected growth in Goss Domestic Product of 7-8 percent over the next five years."

Over 700 billion rupees worth of construction-related projects are planned by the government during 2010-2012, according to the Ministry of Finance and Planning.

Sri Lanka's 30-year ethnic war by Tamil separatists in the north and east ended in May 2009, resulting in an immediate economic revival and anticipation of higher growth, with GDP forecast to grow seven percent this year.

Infrastructure destroyed or neglected by war are being repaired or upgraded and new facilities being built.

"Although certain contracts may be awarded to foreign principles, a substantial part of the work would be re-assigned (by way of sub contracts) to local contractors," the brokers said.

"In addition to the large scale projects initiated by the state, we estimate construction projects worth a similar amount, will be initiated by the private and informal sector."

NDB Stockbrokers said the rapid growth of the construction industry could create problems such as increased prices of raw materials like steel, cement and sand.

"In addition, the skilled labour force in Sri Lanka may be insufficient considering the expected growth in the construction projects."

The brokers said they expect the value of construction projects awarded to local contractors, including subcontracts, will increase annually by about 50-60 percent over the next three years.

"In addition to contractors, main suppliers to the construction industry such as cement, cable, PVC pipes and tile manufacturers are expected to benefit from the revival in the sector.

"Certain companies that are listed in the Colombo Stock Exchange are expected to benefit and we expect exceptional growth in profits," the report by NDB Stockbrokers said.

The construction sub segment of the industry segment recorded an average growth of 7.5 percent over the last three years.

However, growth in the building construction sector slowed in 2009 owing to the economic downturn and high lending rates.

Growth in the residential construction sector was also hindered by problems faced by developers like the Ceylinco Group when an unlisted finance subsidiary collapsed.

"Sri Lanka's residential property sector was not immune to the slowdown in the global markets," the brokers said.

"Sale of apartments slowed down considerably over the last two years, while very few new projects were developed."

Even the projects that were underway were affected and were slowed down.

But NDB Stockbrokers said future prospects in the building construction sector were improving with the housing construction sector expected to "rebound strongly" over the next five years.

The recovery of the northern and eastern regions, worst hit by war, is expected to generate "significant" construction and resettlement requirements, the report said.

Sri Lanka's Asian Hotels and Properties Double Qtr Profits

29th July 2010, www.bloomberg.com

Asian Hotels and Properties Plc., a Colombo-based hotel and property management company, posted profit of 188 million rupees ($1.7 million) in the first quarter ended June 30, compared with 54 million rupees a year earlier, according to a statement to the Colombo Stock Exchange.

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

Sri Lanka's Hemas Power Earnings up on Hydro Power

29th July 2010, www.lankabusinessonline.com

Sri Lanka's Hemas Power said net profit for the June 2010 quarter shot up 967 percent to 80 million rupees from a year ago on a sharp increase in earnings from hydropower.

Sales of the company, a unit of the Hemas Holdings group, fell five percent to 729 million rupees owing to lower thermal power revenue, a stock exchange filing said.

"The reduction arose manly from an 11 percent reduction in revenue at Heladhanavi," Hemas Power managing director Kishan Nanayakkara said.

"However, the excellent performance of the hydropower sector reflecting a 405 percent increase in revenue between comparative quarters helped to nullify this impact to some degree."

Revenue from thermal power fell to 669 million rupees in June 2010 from 755 million the year before while revenue from hydro power rose to 53 million from 11 million rupees.

Profit from thermal power rose to 42 million from seven million rupees while profit from hydro power shot up to 40 million from six million rupees a year ago.

Nanayakkara said the revenue reduction at Heladhanavi stemmed from a tariff cut and lower power generation owing to a

maintenance overhaul.

"Almost half of our net profits for the quarter derived from the hydropower sector," he said.

"Though hydropower is seasonal, the fact that it now influences our net profits considerably signifies the positive impact of

our effort to spread the portfolio balance between the hydropower and thermal sectors."

Lower finance costs at the Heladhanavi plant and the interest income earned from investments also helped to increase the

company’s profits.

Nanayakkara said the firm's Giddawa Hydro Power plant made a net profit of 16.0 million rupees for the quarter and its Upper

Agra Oya Hydro Power plant a net profit of 25.0 million rupees.

"The power generation at both hydropower plants was considerably higher than the anticipated generation levels during the

quarter."

The firm is building another hydro power plant called the Magalganga project.

"We anticipate that the forthcoming quarter also to be a reasonably good one although our two hydropower plants will move in

to the dry-season until the forthcoming North-East monsoon season which begins in October or in November," Nanayakkara said.

Sri Lanka's KIK Exports Quality Electrical Panel Boards to Asian, African & Middle Eastern Countries

28th JUly 2010, www.island.lk

KIK Lanka Limited, manufacturer of electrical panel boards for large industrial establishments is getting a surge of orders from Asian, African and Middle Eastern markets.

" We are continuously getting orders to manufacture and supply electrical panel boards that are needed for large scale industrial institutions, business establishments and building complexes in Asian, African and Middle Eastern countries, and the company was able to earn a large amount of foreign exchange for Sri Lanka," said KIK Group of Company, Chairman, Chartered Engineer Lalith Kahatapitiya.

"KIK Lanka Limited was established in 1997 as a Board of Investment approved industrial institution in the Free Trade Zone, Katunayake. At present, KIK Lanka Limited is manufacturing and supplying electrical panel boards that are needed for large scale industrial institutions, business establishments and building complexes in Sri Lanka as well.

"There is great demand for our products in India. We opened a sales office in India in 2000 and we received orders from companies such as Motorola, Nokia, Hyundai, Reynolds, Nissan and Reliance. We were able to successfully complete those orders to their complete satisfaction.

"The ability of our organization to complete the orders received on a timely and competent manner depends on the dedication and confidence of our trusted workers. I value their contribution very much," Kahatapitiya said.

KIK Lanka Limited, Sales Promotion Manager, Rohan Jayasinghe said, "There are industrial organizations manufacturing electrical panel boards in Asian, African and Middle Eastern countries, and our organization has to compete with them. The quality, timely supply, guaranteed after sales service and competitive pricing gives us an edge."

28 July 2010

Sri Lanka's Hambantota Harbour 1st Phase Completes with Filling of Water by President Mahinda Rajapakse

28th July 2010, www.colombopage.com

The Secretary of the Ministry of Ports and Aviation Ranjith Silva says that the construction work of the first phase of the Hambanthota harbour project is almost complete.

The Secretary said that the filling of water to the harbour will be initiated by the President Mahinda Rajapaksa on August 15.

He also said that the harbour operations will ceremoniously commence in November.

Hambanthota harbour was constructed inland close to a major shipping route six to ten nautical miles south of Hambantota. It is Sri Lanka's second largest harbour. The port will be operated by the Sri Lanka Ports Authority.

The first phase of the port project will provide bunkering, ship repair, ship building, and crew changes facilities.

Three ships can be harboured into the port in the first stage. The first ship is to anchor there in November.

The Harbour, being built at a cost of US $ 437 million for the first phase is a joint venture between China Harbor Engineering and Syno Hydro Corporation. The Government of China is to provide 85% of financial assistance.

More Japanese Tourists to Visit Sri Lanka on Eco-Tourism, Religious and Other Specialized Areas

28th July 2010, lankapuvath.lk

Prof. G.L.Peiris, Minister of External Affairs and Mr.Basil Rajapaksa, Minister of Economic Development who are currently on a visit to Japan met with Mr.Akira Kanai, Chairman of the Japan Association of Travel Agents (JATA) on Tuesday (27).

At the meeting, the Sri Lankan Ministers informed that the Sri Lanka Tourism Authority is now concentrating on new areas of interest for tourists visiting Sri Lanka, which are mainly, eco-tourism, religious tourism and certain specialized areas such as ayurveda.

The Ministers also emphasized that since the UK and US travel advisories on Sri Lanka have now been relaxed, they wish to invite a team of JATA officials to visit Sri Lanka and experience first-hand the present situation. They also requested the visiting team to give any advice on areas that require improvement in the tourism sector.

Mr. Kanai was of the view that the Japanese public need more awareness on Sri Lanka as a travel destination, and that Japanese visitors are very concerned about Japanese food and Japanese language when visiting a destination and these are the areas that need attention when attracting Japanese tourists to Sri Lanka.

The Ministers also met with Mr.Hajime Ishii, Member of the House of Councillors and Vice President of the Democratic Party of Japan (DPJ) at the party headquarters along with other parliamentarians. The Sri Lankan Ministers exchanged views on Japan-Sri Lanka relations and common political achievements. They also agreed to continue the strong bilateral relations between the two countries both at state and political party level.

The Ministers also met with Ambassador Yasushi Akashi, Special Representative of the Government of Japan on Peace Building, Rehabilitation and Reconstruction. The Ministers briefed Mr.Akashi on the current developments in Sri Lanka.

27 July 2010

Sri Lanka's First Foreign Broker, India Infoline Ltd (IIFL) Receives Approval by CSE

26th July 2010, srilankastockpicks.blogspot.com

India Infoline Ltd (IIFL) has recently received provisional membership approval from the Colombo Stock Exchange (CSE) Sri Lanka for stock broking, becoming the first foreign broker to receive this.

IIFL’s Sri Lankan subsidiary is taking steps to set up systems and infrastructure for commencing stock broking services in Sri Lanka within a short time.

IIFL Ceylon will offer the entire range of financial services such as investment banking and institutional equities among others. IIFL aims to leverage upon its strengths in technology, particularly the proprietary internet trading platform, and its acclaimed research capabilities to effectively cater to domestic and foreign institutional investors in Sri Lanka.

Priyani Ratna-Gopal, Country Head, Sri Lanka for IIFL, said: “Sri Lanka has emerged as a highly promising destination for growth and investments. IIFL’s proven experience and strength will help in setting up the broking and investment banking business in Sri Lanka at a fast pace and participate in its growth.”

To commemorate this occasion, IIFL is organising the first ever Global Investors’ Conference in Sri Lanka titled ‘Discover Sri Lanka’ with more than 50 leading global investors and the top 25 Sri Lankan corporates in attendance. Also attending the conference will be senior members of the Sri Lankan Government.

This event marks an exciting time in Sri Lanka’s history. The country has already undergone a huge transformation since the end of the long-standing civil conflict just over one year ago. With a stable Government and progressive policies in place, Sri Lanka is expected to witness rapid economic growth.

Sri Lanka’s economic situation in the past was not as bad despite the heavy conflict, with average GDP growth of 4.8% over the past three decades (1980-2009). This is now expected to accelerate to a much higher sustainable level of 6-7% on increased investments from the private sector and Government spending.

The current low level of interest rates combined with growing confidence and positive outlook are good enough to kick-start the investment cycle.

The banking system also remains in relatively good shape, with unleveraged bank balance sheets, diversified loan books, reasonable asset quality and adequate capitalisation levels.

‘Discover Sri Lanka’ aims to bring together high quality global capital and the best of Sri Lankan corporates and senior members of the Government in order to fuel growth in the island nation.

Sri Lanka's Asian Alliance Brings Online Travel Insurance, Alliance Travel Assist

25th July 2010, www.dailymirror.lk

“Alliance Travel Assist Insurance”, another innovative initiative by Asian Alliance Insurance (AAI) enables insurance to be bought online at the convenience of your home or office. This pioneering effort offers “real time” customer services to AAI’s potential and existing policyholders.

The market feed back coupled with the demand for an augmented product by customers, post introduction of “Alliance Travel Assist”, resulted in an enhanced insurance solution fulfilling the dynamic needs of today’s customers. This extended product is designed subsequent to careful analysis and research of the varied customer needs and market trends. Customers now have a choice of five different covers which cater to a varied range of needs pertaining to foreign travel.

Additionally, “Alliance Travel Assist” is made further distinctive due to the enhanced benefits offered within the five different covers. With this uniquely augmented policy customers now have the opportunity to enjoy the benefits such as; Personal acident cover, Emergency dental cover, Loss of passport, driving license or NIC abroad , Location and forwarding of baggage and personal effect, Advance money, Advance of bail bond and Emergency return home following death of a close family member.

According to Mr. Dilupa Pathirana, Manager - Brand and Channel Development of AAI, “travel insurance is a complicated subject, and most customers are in the habit of purchasing travel insurance just before their journey; outcome being an expensive, not suitable travel insurance policy, and lot of time wasted on the road meeting travel agents, etc. Alliance Travel Assist is a simple yet comprehensive travel insurance solution that can be obtained online at convenience. The objective of introducing this online facility is to eliminate the waste in terms of money, effort and time consumed to buy travel insurance”.

Those who plan to travel abroad can now log on to AAI website, obtain quotation/s, pay premiums and purchase travel insurance policies, print out the policy document, etc. which exclude a visit to the travel agency/company. “Alliance Travel Assist” can also be obtained at leading travel agents.

The Assistant General Manager – Marketing of AAI, Ms. Nadi Dharmasiri added, “we are continuously striving to make the lives of our valued customers easier, and we recognized the need of simplifying the processes of obtaining travel insurance policies, thus we tried the easiest manner and succeeded. While our traditional channels of obtaining travel insurance polices are still operating, this is yet another endeavor to enhance the convenience of obtaining travel insurance.

Alliance Travel Assist – the travel insurance policy introduced by Asian Alliance Insurance, provides its customers peace of mind while they are away from home on business or leisure. The insurance cover is operative 24 hours of the day protecting the policy holder from many unforeseen and unfortunate events such as sudden illness or injuries, loss of baggage etc. from the time they leave home and until they return. For more information on Alliance Travel Assist you could visit the AAI Website, www.asianalliance.lk.

26 July 2010

Sri Lanka MBSL Midcap Index Passes 10000 Points. Measures Performance of Medium Size Companies on CSE

26th July 2010, www.lankabusinessonline.com

An index of stocks by the Merchant Bank of Sri Lanka has been rising in tandem with the rest of the market in a post-war boom and crossed the 10,000 points mark, a statement said.

The MBSL Midcap index of 25 stocks, which was launched in 1999 and is revised annually, provides a clear direction for growth-oriented stocks, the bank said.

The index is now at 10,029.78 points.

The stocks are selected on three criteria: market capitalization of medium-scale entities, liquidity of the stock and profitability during the last two years.

The MBSL Midcap Index is on an upward momentum, indicating a wider range compared to the All Share Price Index and Milanka Price Index, the statement said.

"Market earnings potential in the new era of positive momentum and the increase in tourism were driving most of the medium market capitalisation companies while sector-based favourable conditions have been driving most of the equities in the Colombo Stock Exchange."

Sri Lanka's 30-year ethnic war by Tamil separatists in the north and east ended in May 2009, leading to an economic upturn and a boom in the stock market, which is ranked as one of Asia's best-performing bourses this year.

The Midcap index has risen by 115 percent in the year to June 1, 2010 compared with a rise of 122 percent in the overall ASPI and 121 percent in the more sensitive Milanka index.

"The midcap index has moved on a lower percentage to the ASPI and Milanka index," the MBSL statement said.

"This is an indication for strong midcap companies to have growth prospects for the future and from the business opportunities arising from the eastern and northern provinces."

Sri Lanka Discusses CEPA with Business Chambers. Comprehensive Economic Partnership Agreement with India to be Finalised by Year End

25th July 2010, www.island.lk

The Ministry of Industry and Commerce has instructed the Department of Commerce to hold discussions on the Comprehensive Economic Partnership Agreement with India with all business chambers before the deal is finalised later this year.

Industry and Commerce minister Rishad Bathiudeen has instructed the Director General of the Department of Commerce to begin discussions on the much-debated CEPA with India with all chambers of commerce and industries in the country so that views of the business community and industrialists could be taken into account before the government finalises the agreement.

Bathiudeen reiterated this point when he met a delegation from the Federation of Chamber of Commerce and Industry of Sri Lanka (FCCISL) early last week at the ministry.

He stressed that any partnership agreement related to trade should be beneficial to Sri Lanka and it should be the objective of the deliberations with the chambers.

President FCCISL Kosala Wickramanayake invited the minister as Guest of Honour at the Machinery Exhibition to be held from August 27 onwards targeting the needs of the small industries of Sri Lanka.

On behalf of the government, the minister requested the FCCISL members to support the development livelihoods of the resettle IDP’s through SME Industries with the coordination of the regional chambers that are linked to the FCCISL. The FCCISL is a federation of chambers with sixty regional chambers with around 12,500 members country-wide.

Sri Lanka Produces 30pct more Tea 1st Half of the Year

25th July 2010, www.news.lk

Sri Lanka is on track for a record tea crop. Sri Lanka, one of the world’s biggest black tea exporters, produced nearly 30 percent more tea in the first half of the year. Tea is Sri Lanka’s biggest cash crop and is sold in overseas markets as “Pure Ceylon Tea”. The industry suffered a setback last year due to a drought and fall-out from the global commodities crash of 2008. But this year tea output for the six months to June rose 27.8 percent compared to the same period last year to 166.9 million kilos.

The Sri Lanka Tea Board said favourable weather, better fertilizer use and an absence of labour unrest all helped has contributed to the increase in production. Board’s Director General, H.D. Hemaratne aid strong demand from key buyers in Russia and the Middle East helped Sri Lankan tea exports earn 399 million dollars for the four months to April, compared to 300 million dollars earned in the same period in
2008.

Tea production in June 2010 alone was up 18 percent at 29.5 million kilos compared to the same month a year earlier.

Sri Lanka Gold Reserves now $700mn

26th July 2010, www.dailynews.lk, Jayasiri Munasinghe

The Central Bank has been able to amass record gold reserves with the Central Bank taking steps within the past 10 months to purchase 21 metric tons of Gold - an increase from the paltry two to three tons of gold in its vaults not so long ago.

This is an unprecedented feat and a great victory according to Senior Deputy Governor of the Central Bank Dharma Dheerasinghe.

He said the value of the gold reserves currently held by the Central Bank is 700 million US dollars (Rs. 75 billion).

The Senior Deputy Governor said there was a trend showing an escalation of gold prices in the world market on a daily basis. At such a time the success of the Central Bank in raising its gold deposits was an indication of the country’s economic strength.

He also said that the Central Bank which has been successful in accumulating such a large gold reserve will at no time barter it away in a way that would be disadvantageous or unprofitable to the country.

While succeeding in expanding its gold reserve base the Central Bank has also been able to earn Rs 10 billion from its overseas investments - a special feature being that what the CB had earned from its overseas investments for the whole of last year was equalled in January alone this year. He said they expect to earn over Rs. 20 billion from overseas investments by the end of this year. The Senior Deputy Governor said by enhancing the country’s foreign reserves in this manner they have been able to cover up six months of imports.

“Two or three years ago our foreign reserves were so low we were able to meet only about two weeks of imports.Being able to rescue the country from such a situation is indeed a great victory,” he added.

Sri Lanka's Etisalat Spends $163mn on Expansion and 3G Upgrade

20th July 2010 www.dailymirror.lk

Sri Lanka's Etisalat unit said it was spending 163 million US dollars to expand its network into war ravaged north of the country and improve its broadband services in urban areas.

The expansion will see 480 new base stations taking the total to 1580, which the firm says will be the largest in the island.

"We are investing 163 million US dollars (18.5 billion rupees) to expand base stations and bring HSPA 28.8 megabits per second.

"We are bringing coverage investment, distributed all over the country with special emphasis on the North and the East," chief executive Duminda Ratnayaka said.

Ratnayaka said expansion of its broadband services will see HSPA (high speed packet access) technology with 28.8 megabits per second speeds.

Over 500 third generation (3G) base stations will be built on existing locations.

Alcatel-Lucent has been chosen as the vendor.

UAE-based Etisalat bought the Sri Lanka unit from Millicom Cellular International when it exited Asia.

The firm says the expansion will be funded by debt at 'attractive terms' as the firm was virtually debt free and its parent is rated A+ by Fitch Ratings.
"We are virtually a debt free company,' deputy chief executive Riyaz Rasheed said.

"Given our status as a debt free we have managed to finalize the funding."

The firm said its subscriber base was now close to 3.0 million.

Ratnayaka said a recent floor price set by the regulator was beneficial to "both the consumer and operator."

"The operator has to have a healthy business to ensure that good services are delivered to the consumer," Ratnayaka said.

Sri Lanka's Bharti Airtel unit has petitioned courts over the move. Sri Lanka's 15 million subscriber market is shared between Dialog Axiata, Sri Lanka Telecom Mobitel, Airtel, Hutch and Etisalat.

Sri Lanka Domestic Aviation to Takeoff. 13 Firms Apply for Clearance

19th July 2010 www.dailymirror.lk

Thirteen firms that applied to start domestic air services in Sri Lanka after the end of a 30-year war are awaiting the final nod from the island's aviation ministry and the president's office, an official said.

Director general of Sri Lanka's civil aviation authority H M C Nimalsiri said domestic, foreign and joint ventures between local and overseas firms had applied to fly within the island.
"We have sent the applications for approval to the aviation ministry and the President's office," he said.

"To import aircraft to Sri Lanka approval of the Presidential office is needed. Within 60 days of approval these companies can start operations." Sri Lanka's leisure industry has called for domestic air services to take high-end tourist to resorts away from Colombo.

The island's air force also operates a commercial service to Jaffna and charters to airstrips especially in the east. The military has VIP transport aircraft which it bought during a 30-year war which ended last year.

25 July 2010

Sri Lanka to Issue $1bn International Sovereign Bonds

23rd July 2010, www.news.lk

Sri Lanka government Thursday approved the issue of international sovereign bonds in the international capital market under the supervision of the Central Bank upto USD 1000 million.

Government spokesman Mass Media and Information minister Keheliya Rambukwella told media that the government under the supervision of Sri Lanka Central Bank will issue International Sovereign Bonds in the international Capital Market at appropriate, longer term maturity during the year 2010.

He said that the Monetary Board having assessed the borrowing needs, resource availability and implication of the borrowing programme on the domestic interest rate structure, was agreeable to the issuance of international sovereign bonds upto the value of US$ 1000 million.

“The Appropriation Act No 7 of 2010,has authorized a gross domestic and foreign borrowings limit of Rs. 980 billion for 2010.It consists of Rs. 456 billion provided for repayment of loans and the balance Rs. 524 billion as new borrowings to meet other financing needs including domestically financed capital projects." The minister said So far in the year the government has borrowed Rs 389 billion and the borrowings for the rest of the year could go upto Rs 591 billion without exceeding statutory limits.

Belgium's Jetairfly (TUI) Flies to Sri Lanks in Collaboration with a Hotel Chain

25th July 2010, www.nation.lk, By Santhush Fernando

Belgium-based tour giant and one of Europe’s largest charter airlines - ‘Jetairfly’ partnering with the local hotel chain, is to commence flights to Colombo on October 30, 2010 and will lure more Western tourists during the upcoming winter season.

In terms of outbound travel, it is the biggest tour operator in Belgium and offers more than 50 tour destinations covering several continents. Jetairfly is part of world’s largest charter airline - Thomson Airways (Thomsonfly) which, in turn, is a subsidiary of TUI Travel PLC and has included Sri Lanka into its winter catalogue, promoting the island nation as its newest destination.

With the launch of ‘Jetairfly’, direct flight from Brussels to Colombo and Male from October 30, the airline expects to expand the tourist traffic in the coming winter season. ‘Jetairfly’ will fly to Sri Lanka every Saturday and is the only direct flight operating between Colombo and Brussels. It is also the newest addition to the flights which are coming to Sri Lanka from Europe.

‘It was way back in 2001 that we took the decision to re-introduce Sri Lanka to our tour catalogue and to have a direct flight from Brussels to Colombo,’ says the Communication Manager of Jetairfly, Hans Vanhaelemeesch.

‘The Pearl of the Indian Ocean remained one of our most valuable distant destinations in the past decade. The end of the conflict with the Tigers in May 2009 has given the island a new impetus, and prompted Jetairfly and Jetair to invigourate their programme of tours and beach holidays to Sri Lanka. For this winter, Jetairfly will propose direct flights to Sri Lanka and the Maldives.

For the Belgian tourist, three tour packages, namely; Voyage ‘initiatique ideal’, ‘Beauté naturelle inégalée’ and ‘Sri Lanka Classique’ have been introduced.

CEO of Jetairfly NV, Bart Brackx, said,”despite the economic crisis, the Belgian travel market is expanding and as a tribute to avid Belgian traveller we are introducing Sri Lanka as our newest South Asian destination”.

In the first six months of 2010, over the corresponding period of the previous year, the tourist arrivals from Belgium have gone up by almost 60 percent, an official of the Sri Lankan Embassy in Brussels said.

Since March 2004, Jetairfly has flown to more than 70 airports in the Mediterranean, Red Sea, Caribbean, and Africa. The airline’s home base is Brussels Airport, but flights also operate from the Liege Airport, Ostend-Bruges International Airport and Brussels South Charleroi Airport. The airline carries hundreds of thousands of passengers annually and is the second largest airline in Belgium.

Jetairfly is an airline with its headquarters in Ostend, Belgium and was formerly known as TUI Airlines Belgium. It the largest leisure fleet in Europe: together with seven other airlines which are linked together by the virtual alliance of TUI Airlines, which is part of the TUI Travel PLC Group, the largest tourism group in the world and a FTSE 100 international leisure travel group listed on the London Stock Exchange. TUI Airlines groups Jetairfly, Arkefly (Holland), Corsairfly (France), TUIfly (Germany), Thomson Airways (United Kingdom), TUIfly Nordic (Sweden) and Jet4you (Morocco) with a fleet of more than hundred aircraft.

Sri Lanka's Elephant House Rebrands to Reflect New Market Realities

23rd July 2010, www.tops.lk

Elephant House, soft drinks and ice cream, has completed its corporate rebranding efforts. The changes effective immediately, will continue to operate under the legal name Ceylon Cold Stores PLC. All future business activity shall refer to the company as Elephant House the company said.

John Keells Consumer Foods Sector, President Jitendra Gunaratne said, this is an incredibly dynamic time in our company's history to launch Elephant House's new corporate identity, which better represents the brand's iconic status and aspirations going forward.

"While the corporate identity has changed to reflect new market realities and consumer behaviour, the best of the company - the passion, commitment and high standards of the Elephant House team members - remain the same," he said.Gunaratne, said 'through this launch they plan to take yet another step to the future in strengthening the Elephant House brand values and continuing to offer exciting products to our consumers.'

This move was backed by extensive consumer research that complemented the Elephant House brand values.

Elephant House's positioning now reconnects the brand with its 'goodness' roots while it reaches out to a younger consumer demographic. The announcement, which caps off a year of substantial growth and change for the brand, is accompanied by strategically designed packaging for its soft drinks, ice cream, and dairy milk product portfolios.

Elephant House will embark on an aggressive plan to expand their presence in the ice cream and soft drinks markets to compliment its market leadership in the respective markets. "We're investing in new machinery and technology, Frozen Confectionery Head, Neil Samarasinghe said.

24 July 2010

Diving in Sri Lanka. Hundreds of Fabulous Dive Sites and Famous Ship Wrecks

24th July 2010, www.divesrilanka.com

Welcome to Sri Lanka, a beautiful paradise island with hundreds of fabulous dive sites. Come dive the dozens of famous ship wrecks dating back to the colonial era and also visit coral reefs, under sea caves & rock formations all around our island.

For millennia, paths of travelers from strange lands beyond and yonder have fallen across a small island of paradise in the Indian ocean that will one day be known as Sri Lanka. Traders and invaders have come and gone; remnants of their legacy evident only by the infusion to the islands culture and the derelict remains of their transportation, once mighty symbols of trade, commerce and imperial power, now mere echoes from the past resting beneath the waves of the coastal seas. These are the ancient ship wrecks of Sri Lanka, testimonials of a rich and long cultural history and portals from the present to a bygone era that once were.

Based on historical records there are over 200+ estimated ship wrecks around the coast of Sri Lanka. Many have been located and the search continues to this day using advanced resonance scanning technology. Five hundred years of trade, commerce, conflict and war from the times of the Portuguese, Dutch and the British resulted in vast amount of shipping traffic all around the coast of Sri Lanka and thus the reason for the proportionately high number of wrecks.

FAQ: Diving in Sri Lanka

Which regions in Sri Lanka can I dive? When is the best to dive there? Sri Lanka is an island! Which means you can dive almost every where! But we have two major seasons which dictates which side of the island we can dive. These are the West Coast Season (November-April) and East Coast Season (May-October).

Look at this Dive Calendar for more information on dive regions and when to dive

What type of diving do you get in these regions? We have several popular regions for diving.

Kalpitiya - Rocky/Coral Reefs including the Bar Reef Marine Sanctuary (Snorkel)
Negombo - Rocky/Coral Reefs and great marine life
Colombo - Rocky/Coral Reefs and Ship Wrecks
Beruwala -Deep rocky outcrops and Coral
Bentota - Rocky outcrops and Coral
Hikkaduwa - Rocky outcrops, Coral Reefs and Ship Wrecks. Can Snorkel in Lagoon
Unawatuna,- Rocky reefs and Ship Wrecks
Weligama, Shallow Rocky/Coral Reefs
Tangalla - Not explored and documented by us yet
Basses - Fantastic limestone reef with ship wrecks and amazing fish life
Trincomalee - Rocky/Coral Reefs
Batticaloa - Rocky/Coral Reefs and shallow & deep Ship Wrecks

Are the dive shops qualified and to standard? The major dive centers located in reputed hotels and run by PADI certified professionals with years of diving international dive experience but with intimate knowledge of local dive sites.

Are there shore dives? How do you access dive sites?
Shore dives are a rarity. Operators generally have small boats (for about 6 divers). Some do have larger boats for about 15 divers. Most dives are before noon and, depending on the operator, could mean a two tank dive or a trip back to the shore to reload for the second dive. The boat trips are pretty quick ranging from 10 minutes to 45 minutes depending on the location.

All most all major dive operators have an on board supply of pure Oxygen in the unlikely event of a Decompression Illness emergency. The boats are also equipped with radio and cell phones to activate Emergency Medical Services if required. The dive objective could change depending on what you encounter on the way! Sometimes the visibility is so good that you would see interesting rock formations on the way and wish to dive then and there, or the boat could bump into a Whale Shark or Manta Ray and everyone will forget all about diving and snorkel with the beast for the rest of the morning!

Can I get my PADI certifications in Sri Lanka?
Most of the reputed dive centers offer certifications up to Instructor. The Open Water, Advanced and Rescue Diver courses may take about 3 to 4 days each at costs ranging from EURO 350 to EURO 450.

Sri Lanka Stock Market to See threefold Rise. World’s 2nd Best Market this Year

23rd July 2010, www.bloomberg.com

Sri Lanka’s stock market, the world’s second-best performer this year, may see a near threefold rise in share sales in the second half from the first six months amid rising investor demand, according to National Development Bank Plc.

“The recent high oversubscriptions of new issues show the liquidity that is available,” Vajira Kulatilaka, head of investment banking at NDB Bank, the nation’s largest non- government corporate lender, said by telephone today. “Now that the war is over, there is a lot of hope and good sentiment.”

The South Asian island’s Colombo All-Share Index has climbed 45 percent this year and is the best performer after Mongolia among benchmarks tracked by Bloomberg as the end of the island’s civil war spurred an economic recovery. Five Sri Lankan companies announced plans to raise $7.6 million in initial share sales in the first half. Colombo-based retailer Odel Ltd.

this month received demand for 63 times the 250.5 million rupees ($2.2 million) offered.

Kulatilaka said he’s working with companies in finance, power, engineering and agriculture industries that may seek listings worth about 2 billion rupees this year. NDB Investment Bank Ltd., the lender’s investment banking unit, is arranging the 630 million rupee initial share sale of Sri Lanka’s PC House Ltd., a computer distributor. The firm in 2005 arranged the country’s biggest IPO for Dialog Axiata Ltd., the biggest mobile-phone operator.

Sri Lanka is aiming to accelerate economic growth to 7 percent in 2010, the fastest pace in four years. Gross domestic product rose 7.1 percent in the three months ended March 31 from a year earlier, after gaining 6.2 percent in the previous quarter.

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

Related Info:
How to Invest in Colombo Stock Exchange (CSE) - Stocks and Shares in Sri Lanka

Sri Lanka in Brief - A Handy Guide by Ceylon Chamber of Commerce

24th July 2010, www.dailynews.lk

The Ceylon Chamber of Commerce has just released the 27th edition of its booklet, "Sri Lanka in brief" containing valuable bits of information about the country to the business community.

Developed by the Chamber's Foreign Trade and Information Division, the booklet has become a popular publication and serves as an excellent source of reference material for both local and international businessmen. The booklet can also be used by businessmen travelling abroad as a tool to promote the country.

The latest version contains concise information on geography, population, economy, key imports and exports, major trade partners, investment, infrastructure, the stock exchange, trade agreements, business registration, list of banks, tourism and tourist destinations, shipping and aviation details, ports, diplomatic representations (both local and overseas), double taxation and relief, registration of motor vehicles and telecommunication services.

Beira Enviro Solution Yarn from Plastic Waste Plant Opens in Horana, Sri Lanka

24th July 2010, www.dailynews.lk

The Beira Enviro Solution Limited, a subsidiary of the Beira Group is an innovative project approved by the Board of Investment of Sri Lanka. First Lady Shiranthi Rajapaksa opened the factory.

The plant is an investment of Rs 300 million that will manufacture high quality yarn using plastic waste as raw material. The yarn produced will be used in the manufacturing of a range of brushes for sanitary maintenance industry by the Beira Group.

BOI has actively promoted projects protect the environment and reduce wastage.

Beira Group Chairman Tasleem Moosajee said they operate with the motto “A bottle from you is a brush for us”.

This is a 100 percent local product and provides a solution to protect the environment from plastic waste.

The plant has obtained the Green Certificate from the US and follows the ILO guidelines.

The Beira Group expects to introduce and produce more cleaning material that is manufactured using local raw material.

Beira Group produces brushes, brush backs and fibers to tailor-made specifications. The Beira Group is competing with world leading brush making countries like China, Vietnam, Australia and Europe.

The Beira Group is part of Moosajees Limited.

French Students in Social Tourism Program in Sri Lanka

23rd July 2010, www.island.lk

A special group of 101 French students under 18 years, along with 04 professors have arrived in Sri Lanka on the 11th of July

2010. This particular group was organized by the Connaissance de Ceylan and it is partly sponsored by the LEVALLOIS Municipality, a city near Paris.

With the dawn of peace, this is the first time that a group of this nature has come to visit the island. Apart form doing a round tour in Sri Lanka, they were engaged in different social work in social centers down South such as Boussa, Kathaluwa, Ahangama.

The importance of this group is that it helps cultivate a new tourism segment called social tourism in Sri Lanka where the participants are engaged in various social responsibility programs in the host country.

With such arrivals, Sri Lanka will soon be known as an ideal destination not only for authenticity, bio and cultural diversity and sandy beaches but also for ‘social tourism’, providing ample opportunity to meet Sri Lankan population and get to know their social life style. This new segment will build social exchanges between the visitor and the host and provide excellent credibility to the destination.

Colombo Stock Exchange to be Demutualised. Transaction Costs to be Reduced from August

18th July 2010, www.nation.lk, By Asela Gunawardena

Stock Brokers hailed the move to demutualise the Colombo Stock Exchange (CSE) and termed it as a step in the right direction. The Cabinet has approved the proposal to demutualise the CSE, an initiative which is expected to make the CSE a more dynamic capital market.

Demutualisation will transform the CSE to a ‘for profit’, shareholder owned corporation providing financial benefits from share ownership in an exchange to stockbrokers from being a not-for-profit member controlled organisation.

Commenting on the demutualisation, CSE Chairman, Nihal Fonseka, in the CSE Annual Report 2009, highlighted the aspect of demutualisation saying, “To be fair by the members, there has been broad agreement among members that this should be the way (demutualisation) forward and the modalities of effecting the structural change are under consideration by the SEC,” Fonseka said.

Speaking to The Bottom Line, The CEO of J B Securities (Pvt) Ltd, Murtaza Jafferjee said that demutualisation of the CSE was about 11 years over due in his view and it would assist growth of the CSE.

When contacted by The Bottom Line, Director/CEO, Asha Phillip Securities Ltd, Dimuthu Abeysekara too welcomed the move to demutualise the CSE.

However, with regard to the reduction of transaction fees, he pointed out that brokers were finding it difficult to survive during the tough years of 2007 and 2008 and thus questioned the timing of the reduction in the backdrop of low activity levels witnessed from 2007 to 2008, “The reduction of transaction fees must accompany measures such as the listing of derivatives”, he pointed out.

Transaction costs of trading shares at the CSE will be reduced with effect from August 1.

Sri Lanka's Richard Pieris to Enter Leisure Business. Business and Agriculture Tourism on the Cards

18th July 2010, www.nation.lk, By Indika Sakalasooriya

Sri Lanka’s plantation-rich Richard Pieris Company PLC (RPC) will shortly enter the leisure business aimed at developing five hotels, RPC’ Swiss based Chairman, Dr. Sena Yaddehige told The Bottom Line.

“If we have a joint-venture partner to come with us for the development cost we will go immediately in a big way. If not, we would go slowly. But definitely we will go into the leisure sector in the near future,” Dr. Yaddehige said. As he elaborated, RPC is looking at developing five hotels including one city hotel.

“We have earmarked four sites out of Colombo and one in the heart of Colombo which will be developed into a 100 room city hotel. The land and the building we are planning the hotel belongs to a friendly party. We expect to renovate the building and to build the hotel,” he remarked.

The investment for the city hotel alone is estimated at Rs.1.1 to 1.2 billion and RPC expects to fund the project though both internally generated funds as well as bank borrowings.

Yaddehige further said that at the moment RPC is in the process of obtaining approval for the hotel from relevant authorities and it has already got the nod from the Board of Investment (BoI).

“This hotel will be designed as a business hotel under the 3to 4 star category,” he added.

Asked about the other four sites where the conglomerate is planning to put up hotels without disclosing the exact locations, Yaddehige said that the group owns prime land almost everywhere in the country out of which a few are located in key tourist attractions.

“We have a 50 acre land in Tangalle between lagoon and the sea. And we have lands in Dambulla and Trincomalee. Now we are looking at the possibility of acquiring a land in Kalpitiya,” he said.

Touching on the type of hotels the firm intends building in the selected locations, he said, “the concept today is high margin top end hotels; then they have to be boutique hotels”.

RPC also expects to enter into agriculture tourism in the near future as the bungalows in the group’s plantations are now under renovation.

“We have very fine ten plantation bungalows. We even have one original bungalow designed by Geoffrey Bawa. We will be converting these into boutique hotels once our entrance to the leisure sector is sealed,” he said.

As to whether the group has the expertise in managing hotels, Yaddehige responded negatively, but said that there ‘won’t be a better time than this for us to intrude into the business given the country’s positive macro-economic outlook.’

Richard Pieiris Group is a diversified conglomerate with interests in plantation, retail, plastics and logistics. With a recent history of a nearly Rs.9 billion debt burden, the firm seems to be now in a recovering process with the buoyancy in the international commodity markets and coming down of interest rates locally.

22 July 2010

Logan Rockefeller to Invest $25mn in Sri Lanka. Intends to Bring Significant Portfolio Investments

22nd July 2010, www.dailynews.lk, By Charumini De Silva

The Logan Rockefeller Global entered Sri Lanka with the opening of Logan Rockefeller Global Lanka Asset Management Company yesterday.

The company also announced their sister company LR Global Strategic Investments will invest Rs 2.5 billion in Sri Lanka.

LR Global Lanka Asset Management Company Managing Director Channa de Silva said the company intends to bring significant portfolio investments to Sri Lanka.

It will support companies to list in the market making sizable investments, pre-Initial Public Offering (IPO) as well as secondary market investments in the stock market, he said. “The company is committed to build one of the best investment teams in Sri Lanka and will work strongly with other frontier markets too,” de Silva said.

The Managing Director said the company will get listed in the Colombo Stock Exchange (CSE) within a period of one year. We hope to set up at least five to six companies in motion in the short and medium terms.

LR Global New York Managing Partner, Don LaGuardia said Sri Lanka has shown optimistic outcomes during the post war era. The political stability, low interest rates and high foreign remittances are some of the key factors we selected Sri Lanka.

We expect that the country’s gross Domestic Production (GDP) to be increased gradually.

“We are here for long-term investment opportunities. There are significant possibilities especially for the frontier markets.

With the optimism and opportunities available we expect more foreign investors to Sri Lanka,” he said.

LaGuardia said we intend to raise capital locally and introduce more retail trading by attracting foreign investors to widen the market activities.

This will provide a better chance for the Sri Lankan Diaspora to contribute to the country’s economy. At present the capital market is lucrative and we hope that this initiative of the company will be a successful venture.

Image: From left: LR Global Lanka Asset Management Managing Director Channa de Silva, LR Global Lanka Asset Management Company, Chairman Allen Pathmarajah and LR Global New York Managing Partner Don LaGuardia at the launch.
Picture by Sumanachandra Ariyawansa

Forbes Ranks Sri Lanka Beaches Among Top 10 in Asia. Tangalle Bay to Weligama and Bentota Beaches Highlighted

21st July 2010, www.lankabusinessonline.com

A beach stretch from Tangalle Bay to Weligama in Sri Lanka's south and Bentota in the southwest have been named among the top 10 in Asia by Forbes, a business magazine.

The beaches were judged by a panel which included Graham Uden, a photographer based in Hong Kong and John Borthwick, a Sydney-based travel writer and photographer.

"Sri Lanka has beautiful beaches on its southwest coast, from the southern tip up towards Colombo," Frobes quoted Uden as saying.

"It's a beautiful coastline with rugged rocks, plus sandy beaches and coconut groves. There are fisherman that stand on poles. They stand there for hours, just fishing from these poles."

A 30-year war which hit the tourism industry only ended last year. The island attracted 447,000 tourists including business visitors and regional tourists who are not necessarily interested in beaches.

Most beaches even in relatively popular areas are not crowded and

"What characterizes these beaches is that they are undeveloped, tranquil and remote," the Forbes quoted Borthwick as saying.

Sri Lanka is expecting 600,000 tourists this year and 2.5 billion by 2016. The New York Times has named Sri Lanka the number one holiday destination for the year.

More Info:
Asia's Best Beaches - Forbes

Images:
Tangalla Bay to Weligama Beach, Sri Lanka

Bentota Beach, Southwest Sri Lanka
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