31 May 2011

Sri Lanka Relaxes Forex Rules Further in June 2011. Fund Transfers between NRFC Accounts to be Allowed

29th May 2010, www.sundaytimes.lk

The Central Bank is further relaxing foreign exchange regulations next month under its current policy of liberalising foreign exchange, as reserves improve and the new rules will include allowing fund transfers between NRFC accounts.

Central Bank Governor Ajit Nivard Cabraal said guidelines for these new regulations to be announced in mid-June are in line with the CB reforms to facilitate foreign exchange transactions and make it easier to do business.

“There are about seven or eight new things happening,” he told the Business Times. Among them are in addition to opening out NRFC accounts to allow internal transfers, students to be permitted to open accounts overseas when on studies and a set of guidelines for local companies to list shares on foreign stock-exchanges.

The last-named proposal (listing shares overseas) was announced last year but no guidelines were issued. The Central Bank has been relaxing foreign exchange regulations over the past 18 months in a bid to prop up the economy in the post-war period.

The last time the Bank announced similar measures was in November where foreigners were permitted to invest in Rupee Denominated Debentures issued by local companies; expediting approvals for companies to borrow from foreign sources; permission for foreign companies to start businesses in Sri Lanka; foreigners on tour or business in Sri Lanka to open accounts in foreign currency; foreign diplomats and their families to transact in foreign currency and Sri Lanka rupees, and permission for insurance companies to invest a part of their assets abroad, among others benefits.

Asked about any forthcoming bond issues, the Governor said the Government has factored in foreign borrowings in the budget and there are many ways to resort to this. “Our options are fairly wide – we can raise Sri Lanka Development Bonds; we can enhance the limits we have in our treasury bonds or we can have international bonds in Dollars or treasury bonds in Euros. We have many options and we have to evaluate carefully which one is the best,” he said.

The Bank has invited proposals from some international investment banks for investment advice on bonds. “This is a highly complex market and needs advice. We will use this advice and also look at the best time, what is the best instrument, what is the best tenor, what is the best quantum,” he said adding the proposed bond issue would be for budget support and debt repayment. The Bank is expected to launch the issue before October.

Related Info :

Foreign Loans for Local Entrepreneurs in Sri Lanka. Procedure for Granting Permission Introduced

Sri Lanka Relaxes Exchange Controls from March 11 in the First Phase of Foreign Exchange Liberalization Plan

Sri Lanka Relaxes Foreign Exchange Regulations. Allows Foreigners to Invest in Corporate Debt & Open Businesses, Locals to Borrow & Invest Overseas

Japanese Fund Management Company in Sri Lanka to Examine Investment Opportunities to Set up Sri Lanka IPO Fund by June 2011

29th May 2011, www.sundaytimes.lk, By Duruthu Edirimuni Chandrasekera

A Japanese fund management company, VEC Investment (Value Ethics Contraction) visiting Sri Lanka this week to examine investment opportunities said that they are setting their sights on forming an initial public offering (IPO) ‘fund’ dedicated to Sri Lanka in a bid to lure Japanese investors into investing in local equities market in addition to listed firms in the Colombo Stock Exchange (CSE).

“We’ll set up a ‘Sri Lanka IPO fund’ by June and we want to facilitate Japanese firms or investors to come into the Sri Lankan share market through this,” Toshiaki Tanaka, President VEC told the Business Times.

He was part of the Tokyo AIM (TAIM) team which is also gauging the potential in the CSE. The team, whose visit was facilitated by local broker New World Securities (NWS), met up with regulators and top corporates.

Mr. Tanaka also said that his company is keen to draw Japanese investor attention to local private placements (PPs) along with the IPOs. “We are preparing to invest in PPs as well and currently we are in discussion with some corporates with regards to PPs,” he added.

Yuki Uchiyama, Corporate Officer, IT Solution VEC, whose specialty is assisting asset management for Japanese IT firms noted that they will bring in many Japanese IT companies to list in the CSE, which will be facilitated by NWS. “Right now the Japanese market is saturated and we want Japanese IT firms to raise money from emerging markets such as Sri Lanka,” he explained. He said the CSE is attractive and also promising for raising capital and this visit has put a positive spin for such business.

Kazunao Sato, Executive Director VEC revealed that they are targeting to invest in logistics such as cold storage business at the Hambantota Port. He added that temperature-controlled warehouse logistic firms from Japan are interested in setting up a logistics plant for refrigeration, storage, etc. “We are also extremely keen to explore tourism and the telco sectors,” he said, explaining that acquisitions, mergers and joint ventures are being discussed pertaining to such investments. He added that currently a similar partnership is being explored through VEC by a Japanese firm for an investment opportunity in a local travel firm.

Mr. Tanaka added that by early next month a high powered investment team is due in the island as a result of the contacts this delegation made along with NWS during the 3-day visit. “Some top officials in major share broking houses, asset management companies will come in to Sri Lanka in two week’s time to discuss business opportunities,” he said.

Yutaka Ito, COO, TAIM joining in the discussion told the Business Times that Sri Lanka’s GDP rate is ‘fantastic’. “Our main mission is to introduce Tokyo Stock Exchange’s (TSE) equity and bond markets to the Sri Lankan investors. TAIM is a good path to raise money for firms in Sri Lanka,” he explained.

He said that listing in Tokyo AIM helps firms to grow their business through access to a wider layer of funding options and an easier way to bring in fresh capital into firms. Mr. Ito explained that TAIM discussed local firms’ listing in Tokyo AIM. He noted that there’re no minimum requirements for market capitalisation or free float for a company to list on Tokyo AIM.

The listing company structure can be arranged on a case-by-case basis. Mr. Ito added that TAIM wants to facilitate Japanese bond investors here through a fixed income market called T-Pro Bond. He also noted that the CSE is not over valued, but foreign participation is important to expand the CSE.

Related Info :

Japan’s Suzuki Keen on Investing in Sri Lanka. Isomi Suzuki Explores Prospects while Taking Part in Law Asia Biz Law Conference in Sri Lanka

100,000 Japanese Tourists to Visit Sri Lanka in 2011 on Visit Sri Lanka Promotion

Sri Lanka Records 43pct Growth in Tourism upto May 2011

29th May 2010, www.sundayobserver.lk, By Shirajiv Sirimane

Sri Lanka claimed the highest growth rate in tourism in the region recording 43% of growth when the Asian region as a whole recorded a tourism growth rate of 13% up to May 2011.

Deputy Minister of Tourism, Lakshman Yapa Abewardana speaking at the Sri Lanka Tourism Awards 2010 said that since the defeat of terrorism in 2009, the tourism industry in Sri Lanka has gathered momentum and grown steadily.

The industry has flourished, so has the enthusiasm of key stake holders to invest more and contribute more and to be a part of this drive forward.

"This year's awards will move beyond the traditional sectors to recognize specialized products and services valued by the visitors" said Hon. Lakshman Yapa Abewardana in his address to the gathering. "Sri Lanka Tourism Award is therefore is held to identify, recognize and reward excellence in the travel and tourism industry and promote the delivery of service standards and encourage true Sri Lankan travel trade" "We have established a regular dialogue with all stakeholders.

This will continue in the coming year. In that journey wish to recognize the performance of stakeholders every year"

Sri Lanka Tourism Awards - 2010 saw the enthusiastic participation of key stakeholders of tourism industry in Sri Lanka among whom, many were award nominees. This year's Tourism Awards saw an enhancement of the categories to make sure that as many contributors as possible would be recognized for their commitment.

Related Info :

Sri Lanka Tourism Industry to Continue Its Growth Momentum. Impressive Performance in First Quarter 2011

Sri Lanka Offers Land for Hotels at Government Estimated Price and Scraps Earlier Price of Rs 20mn an Acre. Attracts Projects worth $ 573mn

Sri Lanka Tourism: Arrivals & Statistics

Sri Lanka Offers IT BPO Companies Tax Holidays upto 12 Years. Australian Business Consultancy Firm CAMMS Sees Sri Lanka as the Next Big Opportunity

24th may 2011, www.itnews.com.au

The Sri Lankan Government has offered Australian companies and Government departments a tax holiday of up to twelve years if they choose the war-torn country for IT and business process outsourcing.

Recovering from a 25-year civil war between the dominant Sinhalese and separatist Tamil movement that ended dramatically in 2009, the Sri Lankan Government has pulled out all the stops to boost employment and the country’s economy.

Foreign ownership laws have been relaxed across several key verticals in a bid to attract Western investment that might otherwise flow to India or China.

The Information and Communication Technology Agency of Sri Lanka has offered Australian companies setting up IT or BPO outsourcing “no restrictions on repatriation earnings” – a principle the agency says is enshrined in Sri Lanka’s constitution.

It has also lowered corporate tax rates from 35 to 28 percent, comparable to Australia’s company tax rate of 30 percent.

Under a new scheme proposed for the IT and BPO industries, businesses can be exempted from tax for up to twelve years when they commit to employing a large number of Sri Lankan workers.

The Information and Communication Technology Agency of Sri Lanka has funded a delegation representing 15 Sri Lankan ICT companies to visit Sydney and Melbourne for a series of events, including the CeBIT conference next week in Sydney.

Agency chief executive Reshan Dewapura said the small nation expects its IT industry to be a billion dollar export powerhouse employing 100,000 within five years.

“We are excited to extend a warm invitation to Australian companies to realise the significant opportunities that exist here, including generous tax holidays,” he said.

How one South Australian company took up the opportunity

Adelaide-based CAM Management Solutions (CAMMS), a provider of Business Intelligence software and consulting, set up a Global Service Provisioning Centre in Sri Lanka three years ago, just prior to the end of the civil war.

The company employs over 100 staff in the facility to fulfil contracts for the likes of the South Australian and Northern Territory governments.

According to Joe Collins, managing director at CAMMS, it wasn’t tax sweeteners that piqued his interest in the region.

The company struggled to find the skills at home required to keep up with its plans for growth.

Investing in the facility amid the closing stages of the civil war, Collins saw "a country with huge potential, using resources in a non-productive way.

"It’s a much more relaxed place now," he said. "Now that the Government no longer needs to focus [on] war, it’s naturally more amenable to business. It has better priorities than buying bullets.

“We saw Sri Lanka as the next big opportunity to support our growth – and it was exactly half way between our offices in Australia and the UK. Our company was growing very rapidly, and we were struggling to find the right people to keep up our R&D needs in Australia while supporting the needs of our customers.”

Collins developed a business relationship with a Sri Lankan investment agent to facilitate recruitment and the establishment of the centre.

“We considered the outsourcing or joint venture approach,” he said, “but in the end we decided to establish a company there."

Rather than "outsource the hack work", Collins wanted the service centre to work hand-in-hand with employees in Australia and the UK.

"We are very open and proud of our service centre," he said. "We wanted the Global Service Delivery Centre to be an extension of us, to work jointly on projects. The company policy is to up-skill staff at the centre, to disseminate our corporate knowledge.”

During the past three years, CAMMS' Sri Lankan scope has grown from R&D to 24-hour helpdesk, eTraining, marketing and product development around such complex areas as business intelligence and knowledge management.

“If you keep at it, the same rules apply as at home – you just need good staff and you need strong leaders," Collins said.

Collins said the Sri Lankan office has shortened CAMMS’ cycle of product development, improved its responsiveness and ability to scale and raised the standard of its customer service.

“It allows our Australian staff to focus on the core business of selling products and providing high level support to our Australian clients.”

The only challenge, Collins said, is that Sri Lankan Government initiatives are getting noticed by some very large multinationals. Already, sweeteners have attracted investment from the likes of Microsoft, Motorola, SAS and Nokia.

“When big American companies come in and set-up 1000-man offices, there will be more demand for staff,” he said.

But he has no regrets.

"We were lucky, in some respects, that we got in early. I’d say I still would have done it without any tax agreements. It’s cost-effective, and it solved a problem we had around the availability of skilled people, and how to keep them.”

Related Info :

Sri Lankan IT & BPO Industry to Grow by 26pct in 2011. SLASSCOM Launches Careers Initiative for Capacity Building

Sri Lanka's First Shariah Insurance Plan Launched by Amana Takaful

24th May 2011, www.dailymirror.lk

Amana Takaful has announced the launch of Sri Lanka’s first Sharia’h compliant unit linked Insurance Plan. The product, branded “Amana Takaful Prosper”, is the first of its kind, where the customer will be able to obtain a Takaful (insurance) cover as well as enjoy a choice of Sharia’h compliant investment options.

“We felt the time was right for us to make available this option for all Sri Lankans as part of our expansion plans of product offerings in the backdrop of a peaceful environment and apt economic conditions. The appetite for investment by the public and private entities has increased. On the other hand, developments in the Islamic Banking sphere and the expected changes conducive to Islamic finance will augur well for such a product. All these developments have been combined in this offering that caters to the needs of all Sri Lankans.”, said Reyaz Jeffrey, General Manager/ Chief Executive Officer, Amana Takaful Life.

“Prosper offers a 3 unique funds, namely the Safe fund and the Volatile fund, which consist of varying degrees of investments in Mudarabah deposits and White listed equity and a Growth fund, which a has a balanced mix of the two, enabling policy holders to make investment choices based on individual risk appetites, all the while offering a Life and Accident Takaful cover”, said Jeffrey adding that it is always prudent to have a spread of financial solutions to build and protect ones financial and personal needs.

“Prosper is structured in a highly transparent manner so that charges and fees are visible to its participants and the policy holder is able to monitor the performance of his funds via the unit price that will be published daily. In keeping with the Takaful principle, we have also ensured that the entry charges are kept low, so that policy holders would derive maximum benefit.”

A Unit Linked Insurance Plan is a special Life product that gives more emphasis for investment and enables a policy holder to plan for his retirement, education of a child or any other financial requirement that one foresees. Based on one’s financial capacity, he or she can choose to make a single investment or make regular payments in order to build his required fund all the while enjoying the benefits of a Takaful (insurance) cover. Additionally, the policy holder makes the choice on the investment of funds and can switch between funds to benefit from market performance.

Where required, besides switching funds, clients can choose to make part withdrawals after 3 years to facilitate any interim financial requirements.

All Equity investments are in accordance to the whitelist screening criteria, which is now gaining popularity. Amana Global, a subsidiary of Amana Takaful, recently made public the whitelist and its basis, in a move to make the whitelist more transparent and allow all Sri Lankans to benefit from it.

“What is special in this policy is the expertise that has been brought together to offer the best protection, advice and solutions to the customers. We have NDB Aviva Wealth Management acting as the fund manager and Deutsche Bank as its custodian and Administrator. NDB Aviva Wealth Management is Sri Lanka’s largest private sector fund manager having over LKR 45 Billion under its portfolio and Deutsche Bank who have many Global and Asian awards for custodianship and cash management services amongst many others. These expertise combined with Amana Takaful’s expertise in Takaful, is a unique and strong combination that will mark amilestone in Sri Lankan Financial markets history.” said Ehsan Zaheed Director/CEO of Amana Takaful PLC.

Amana Takaful is the pioneer of the Takaful way of insurance and has carved itself a strong market over a decade of operations in Sri Lanka. With plans to establish a regional footprint for Takaful in South Asia, the group recently established Amana Takaful Maldives, a fully-fledged licensed operation in the Maldives. Recently, the Maldivian company also sought a listing on the Maldivian Stock Exchange making history in the country. It will make its Initial Public Offering (IPO) in June.

Takaful Plans (Life Takaful Policies) facilitate risk sharing amongst a pool of participants as against the conventional norm of risk transfer. The manager of the plan, in this instance Amana Takaful, is only a manager of the funds and is entitled to a fixed fee for the service, making it more equitable and transparent.

According to Moody’s Investors Service of the US, from US$ 5.3 Billion in 2008 as mentioned in the Ernst & Young World Takaful Report of 2010,globally Takaful is growing fast and is estimated to reach a staggering US$ 7.4 billion by the year 2015. World over there are approximately 80 Takaful operators with an additional 200 Takaful windows. Furthermore, according to Bank Negara of Malaysia the global Takaful growth rate stands at 20 percent.

Related Info :

Islamic Development Bank Buys 10pct in First Sri Lankan Commercial Islamic Bank, Amana Bank with Bank Islam Malaysia, AB Bank Bangladesh, Akbar Brs

Shariah Compliant Share List from Sri Lankan Stock Broker Lanka Securities

Heraymila of Saudi Arabia's Al Mashal Group Invests in Sri Lanka

India's ICRA to Offer Credit Rating Services in Sri Lanka

24th May 2011, www.dailymirror.lk

India’s rating major ICRA Limited (ICRA) is poised to offer credit rating services in Sri Lanka, following the licence granted to ICRA Lanka Limited (ICRA Lanka), a wholly-owned subsidiary of ICRA, by the Securities and Exchange Commission of Sri Lanka.

The Lankan venture was incorporated early this year and will be offering its services in the local market, using parent ICRA’s accumulated experience in the areas of credit rating, grading and investment information.

Speaking on the occasion, P.K. Choudhury, Vice-Chairman and Group CEO, ICRA, said, “Sri Lanka, for us, holds a lot of promise at this juncture. With decades-long war now over, the country appears poised to move up on a higher growth trajectory. From our perspective, the time is just right for ICRA to enter the country and contribute towards the development of the nation’s capital markets and also participate in that growth.”

Elaborating on the subject, Naresh Takkar, Managing Director & CEO, ICRA, said the macro environment in Sri Lanka has improved considerably during the last two years and he was optimistic that growth rates would move up significantly. He underscored the fact that Lankan economy had reported growth rates of around 6% even during difficult periods, and pointed to last year’s 8% to justify his optimism. Takkar added that given the need, potential and willingness to develop Sri Lanka’s capital markets for faster growth, the prospects for the ratings business are bright.

According to W Don Barnabas, the Colombo-based Director of ICRA Lanka, optimism abounds in Sri Lanka as the country being able to achieve steep growth rates in the years ahead. He feels this growth will be driven, inter alia, by the development of the capital markets.

“But,” he adds, “although we have a relatively developed, though small, equity market, the debt market is still in its infancy. There is great scope to develop this market, and that augurs well for the ratings business in Sri Lanka.” Commenting on the current status of the ratings business in Sri Lanka, Don Barnabas said there is large scope to add to the width and depth of the ratings market.

In Sri Lanka, while the government debt market made some significant strides in the recent past, the total size of the government debt and corporate bond markets remains very small in relation to GDP, as compared with most other Asian nations. But it is well recognized and accepted by policymakers in Sri Lanka that an expanded bond market would improve the efficiency of the domestic capital market by lowering spreads, extending maturities, and raising the return on long-term investments. Further, it would also contribute positively to mobilizing long-term investments, a requirement for high and sustainable economic growth rates. In this context, it is significant that Sri Lanka is one of the first countries in the region to have deregulated its markets and built up infrastructure to facilitate efficiency in the financial markets.

Related Info
:

Sri Lanka Credit Counselling Centre Sees Lower Loan Defaults with Reduction in Interest Rates

Sri Lankan Banks to Accept Movable Property as Collateral against Loans from June 1st. CRIB to Maintain the Registry

UAE Foreign Trade Minister Lubna Al Qasimi Meets Sri Lankan Minister for Trade & Industry to Discuss Trade & Investment

23rd May 2011, www.wam.ae

Foreign trade Minister Sheikha Lubna Al Qasimi discussed here today at the ministry with Sri Lankan Minister for Trade and Industry Rashad Badi Al-Din, the bilateral relations and ways to boost them in the areas of trade and investment.

The two sides discussed ways to bolster business communities in both countries to benefit from potential opportunities. They praised the progress of the bilateral relations, especially in the field of trade, citing that the trade between the two countries grew by 9.3 per cent last year to $364 million.

Sheikha Lubna stressed the keenness of the UAE to boost the trade with Sri Lanka, indicating that both countries enjoy a variety of cooperation opportunities. She referred to the importance of encouraging the private sector in both countries to benefit from the economic opportunities.

For his part, the Sri Lankan minister stressed the keenness of his country to boost joint cooperation, and benefit from the successful UAE developmental experience.

Related Info :

UAE Foreign Trade Minister to Visit Sri Lanka with a High Powered Business Delegation

23 May 2011

Sri Lanka Acuity Partners & Ceylon Guardian Investment Trust to Set up a Firm to Run Mutual Funds

22nd May 2011, www.lankabusinessonline.com

Sri Lanka's Acuity Partners, an investment bank, and Ceylon Guardian Investment Trust is setting up a joint venture firm to run mutual funds (unit trusts), targeting domestic and international markets.

The new firm called Guardian Acuity Asset Management, will launch funds which will invest in equity and fixed income, Guardian said in a statement.

Acuity Partners is a joint venture between Sri Lanka's Hatton National Bank and DFCC Bank. Ceylon ¬Guardian Investment Trust is part of the listed Carsons Cumberbatch group which manages 33 billion rupees including a Sri Lanka country fund based overseas.

"The post war economic development in Sri Lanka will see increasing per capita income and savings rates amongst the people which would translate to a demand of a wide variety of savings and investment options…," the firm said in a statement.

The firm said it wanted to structure investment products to match different risk and return profiles of savers.

Related Info :

NAMAL Acuity Value Fund Declares First Dividends

Guardian Fund Bets on Sri Lanka Banks, Retail, Leisure & Construction Sector Stocks

Sri Lankan Economy Grows Fastest in last Five Quarters. 6.2pct in Last Quarter

Sri Lanka Vehicle Imports in March up by 51.1pct. Three Wheelers & Motorcycles Dominate

22nd May 2010, ww.thesundayleader.lk

The number of vehicle registrations in March increased by 55.1% year on year (YoY) to 45,945. That included a 19.9% YoY increase of motorcycle registrations to 22,028 and a 72.2% YoY increase in three wheeler registrations to 12,166.

Meanwhile the number of vehicle registrations in the first quarter of the year increased by 65.1% YoY to 121,155. That included a 26.9% YoY increase in motorcycle registrations to 59,534 and a 92.8% YoY increase in three wheeler registrations to 31,027.

Related Info :

Sri Lanka Vehicle Imports up by 75.9pct in 2010 amidst Strong Economic Growth

Sri Lanka Vehicle Sales to Double in 2011 following Rate Cut

Sri Lanka Vehicle Registrations Up 74pct from January - October 2010 after Import Duty Reduction

John Keells Holdings Posts Highest Ever Profit After Tax of Rs9.06bn with a Revenue of Rs60.5bn

21st May 2011, www.island.lk

John Keells Holdings (JKH), the diversified conglomerate, has posted the highest ever profit after-tax in the company’s history for the financial year ended March 31,2011 with a group revenue of Rs.60.5 billion, up 26% from a year earlier, and an after-tax profit of Rs.9.06 billion, up 63% from the previous year.

The group’s pre-tax profit was Rs.10.6 billion, with JKH and Dialog Axiata being the only two companies to reach this mark up to now. Analysts said that it was possible that the Carsons group too would achieve this benchmark in the financial year ended March 31, 2011.

In results filed with the Colombo Stock Exchange on Friday, JKH said that Rs.8.25 billion of these earnings translating to earnings per share of Rs.13.24, was attributable to equity holders of the parent.

JKH also announced to the CSE that it would be paying a third interim dividend of Re.1 per share on top of two interim dividends each of Re.1 per share already paid to give shareholders a return of Rs.3 per share for the year under review.

Asked why the company was not increasing its dividend payout in the context of the superior performance, a senior official company said that several projects, many of them with long gestation periods, are being looked at and the directors thought it best that the previous year’s dividend level is maintained.

``Otherwise you raise shareholder expectations that may be difficult to satisfy,’’ he said. ``We had that experience when we paid a special dividend of Rs. 2 per share a couple of years ago and many shareholders believed this would continue.’’

He said that although the dividend level was the same as in the previous year, the company was doing a share sub-division under which every three shares would be sub-divided into four.

"Once the sub-division is done, our share price would necessarily go down but shareholders, in terms of the share price of their increased shareholding, will have a substantial capital appreciation convertible to cash if they so desire," he said.

The Employees Provident Fund has increased its stake in JKH from 5.7% at the end of last year to 7.1% as at March 31, 2011 while the Insurance Corporation too owns 1.8%, same as what it held at the end of last year.

Analysts did not discount the possibility of the state sector seeking a place on the JKH board should the collective holding reach a substantial level of around 15%.

Mr. S.E. Captain remains the biggest individual shareholder of JKH with his personal holding together with those of connected parties topping 20%.

In the year under review, transportation continued to be the biggest cash cow for the group posting a pre-tax profit of Rs.3 billion for the year, up from Rs.2.3 billion a year earlier.

Leisure contributed Rs.2.5 billion, up from the previous year’s Rs.1 billion, financial services Rs.1.3 billion, up from Rs.868 million, property Rs.831 million, up from Rs.378 million, consumer foods and retail Rs.579 million, up from Rs.288 million and IT Rs.114.4 million, up from Rs.13.6 million a year earlier.

Related Info :

Sri Lanka John Keells Raised Stake in Union Assurance to 95.6pct

Business Today Top 20 Sri Lankan Companies 2009-2010. JKH, HNB & BUKI Make Top 3. Sri Lanka an Exciting Place to Invest in 2011 - Hari Selvanathan

John Keells OnThree20 Luxury Apartment Complex at Union Place Colombo to Start Soon

Sri Lankan Banks to Accept Movable Property as Collateral against Loans from June 1st. CRIB to Maintain the Registry

22nd May 2010, www.sundaytimes.lk, By Bandula Sirimanna

Machinery, furniture, vehicles, electrical or electronic appliances regarded as movables in banking parlance and which were not accepted as security for loans, could now be furnished as collateral from June 1, according to a ruling by the Ministry of Finance.

A gazette notification is being prepared for this purpose compelling banks to accept movable property and an announcement to this effect will be made on Wednesday May 25. Currently only immovables like house and property are accepted as collateral while jewellery was the only exception as movable property.

A senior official of the Finance Ministry said this is intended to help the poor, small and medium entrepreneurs and those engaged in self employment who are unable to furnish immovable property as a security against credit facilities.

Though there are no regulations against presenting movable property as security against loans, banks and other financial institutions were reluctant to accept these and preferred land and real estate as collateral.

The official said that this is because Sri Lanka does not currently have a mechanism for the registration of security interests in movable assets and determining priority in a security giver’s collateral. In the absence of such mechanism, lenders find it risky to accept movable property as collateral for advances, he said.

When contacted to obtain more information on this initiative, Credit Information Bureau of Sri Lanka (CRIB) General Manager, Gamini Karunaratne told the Business Times, that under the Secured Transaction Act No.49 of 2009, CRIB is assigned as the implementing agency for establishing an on-line registry for movable assets as collaterals when granting credit. The CRIB, will introduce a state-of-the-art ‘Secured Transaction Registry' (STR) from June 1, paving the way for people to borrow using moveable property as security. Under this initiative, small and medium entrepreneurs and the poor are the main beneficiaries. CRIB has introduced special software for the new secured transaction registry.

The STR will promote economic activities in the country, especially in equipment, receivables, agricultural consumer financing and reduce the dependency of lending institutions on immovables as security for credit facilities, he added.

Details maintained in the registry are public information and accessible to the public. Registration of notices and other tasks can also be performed online by users who have been registered with the Bureau. The registry is concerned exclusively with providing notice of the existence of a relationship between a secured party (financer) and a debtor, as it relates to particular movable collateral. The registry will give secured parties confidence in the system, and will result in increased business activity and vast improvement in the economic condition of the country as a whole, Mr Karunaratne said.

There are two main purposes to be served by this STR registry. It must provide notice to prospective creditors of the possible existence of a security interest in the collateral of a debtor. Discovery of a notice by a prospective creditor merely warns the prospective creditor to inquire further before making commitments to the debtor. Secondly, the date of registration may serve as a date by which priority is measured, in the event of competing claims to the same collateral. "Prospective creditors who are offered equipment, inventory, accounts and documents of title as collateral must search registries to ascertain the existence of claims to the collateral," Mr. Karunaratne said.

The establishment of a Secured Transaction Registry (STR) in Sri Lanka was initiated by the Asian Development Bank in March 2003. The Credit Information Bureau (CRIB) was earmarked in 2004 to house the prospective Registry. In September 2009, the Secured Transaction Bill was presented in Parliament and certified as the Secured Transaction Act No. 49 of 2009. The Act now remains to be gazetted by the Ministry of Finance to become operative.

Related Info :

Sri Lanka Banks to Lend against Moveable Property from June as CRIB Sets up Secured Transaction Registry

CRIB Develops Secured Transaction Registry on Movable Assets by Deploying Locally Developed Software

Sri Lanka Credit Counselling Centre Sees Lower Loan Defaults with Reduction in Interest Rates

Upward Revision of Sovereign Ratings on Sri Lanka Expected with Favourable Recommendations from Three Major Rating Agencies

22nd May 2010, www.sundaytimes.lk

Sri Lanka expects an upward revision in sovereign ratings with favourable recommendations from officials from three major rating agencies who are expected to visit the island before the end of this month to review the current country rating.

They will hold meetings with Central Bank (CB) officials, politicians, financial experts, diplomats, foreign lending agencies, etc and report their findings to the rating committee, a senior CB official said.
CB Deputy Governor Dharma Dheerasinghe, who is also the head of the country’s high level Sovereign Rating Committee, told the Business Times that teams of analysts from Standard & Poor (S&P), Fitch and Moody would be visiting the island separately to prepare individual reports to review the ratings which will be forwarded to their top level committees to make the final decision.“The committee meetings will be held in London and New York in July and we are also visiting them to present our case,” he said.

The committee made up of top CB, Finance Ministry and private sector representatives had been appointed to develop a strategy to push Sri Lanka's sovereign rating to investment grade. It is charged with devising a strategy of taking Sri Lanka’s current speculative B+ (Fitch) and B (S&P) rating to an investment grade 'BBB-' or higher over the next four years. Dr. Dheerasinghe noted that "S&P may raise the ratings on Sri Lanka on evidence of more comprehensive fiscal or structural economic reforms”.

At the moment the country’s rating is B+ and “we hope that it will be upgraded by these committees based on the reports of these analysts,” he said adding that they expect an upgrade in the sovereign rating to minimum grade of BBB –or higher.

However an economic expert who wished to be anonymous told the Business Times that S&P may lower the rating if Sri Lanka deviates substantially from the IMF program’s framework, or if expectations on the recovery in growth prospects and revenue improvements disappoint."With inflation pressures mounting in Asia, Sri Lanka is ranked among countries that have lower risks of social unrest because of popular governments, higher growth and lower unemployment mitigating such risks caused by rising prices,” he revealed.

Last year Sri Lanka received a B1 sovereign rating from Moody’s with a stable outlook and officials are confident there would be an upgrade given the government’s improved fiscal performance for 2010, with the deficit reaching 7.9% of GDP, slightly lower than the 8 % target. S&P had given Sri Lanka a long term foreign currency rating of B+ and a long term local currency rating of BB-, both upward revisions from 2009. Fitch has affirmed Sri Lanka’s long term local and foreign currency issuer default rate at B+, revising the outlook from stable to positive.

Related Info :

Sri Lanka to Sell $1bn 10yr Sovereign Dollar Bond in September to Fund Infrastructure & Retire Expensive Loans. Roadshows in London/Singapore/New York

Sri Lanka Rating Upgrade Expected in the Next Review in May

Barclays Recommends Sri Lanka’s Debt over Vietnamese Dollar Bonds with Sri Lanka's Improving Rating & Economy

State of the Art Cancer Care Facility in Sri Lanka by a Leading Indian Provider Health Care Global. Local Investment is Sought

22nd May 2010, www.sundaytimes.lk, By Chanaka de Silva

HealthCare Global Enterprises Ltd (HCG), which says its one of the leading cancer care facilities in India, is seeking investment or partnerships to set up a state of the art facility here in Sri Lanka.

Health Care Global Director Marketing Dinesh Madhavan told the Business Times that, “We are looking for Government partnership or a joint venture with a local partner. We have found that there is large requirement for bone marrow transplants and Thalassemia treatment for patients in Sri Lanka. Usually these patients would have to travel to India to receive treatment. Once our facility is set up it will enable patients here to receive treatment conveniently and at a much lesser cost.”

Commenting on the type of investment sought, Mr Madhavan said they require the local party to put up the land and building whilst they will provide the technical knowhow medical expertise and equipment. The total investment is estimated at US$6.2 million of which their contribution will be $2.8 million. HCG with its headquarters in Bangalore is believed to be South Asia's largest cancer care provider, and is the only dedicated cancer care network with quality care across 18 centres. The centre treats over 30,000 new patients a year.

“For over five years HCG has been defining the future of cancer care in India by designing, building and managing cancer centres with a steadfast vision: to transform cancer care environment by bringing core clinical services to one central place. The intent of this single place is to help patients achieve longer, better lives - and to improve one cancer care centre at a time. HCG manages a network of 19 hospitals across South Asia, making it the largest cancer care network of hospitals,” the company said.

Mr Madhavan, during a exploratory visit to Colombo, said the company is also approaching the Sri Lankan Ministry of Health to facilitate doctors and medical persons to visit HCG Bangalore for training purpose. Further Indian doctors will visit Sri Lanka periodically to conduct medical consultation camps and continuous medical education in the months to come.

The facilities available for the patients at HCG are the latest in use today. They are Medical Oncology, Surgical Oncology, Radiation Oncology, Cyber knife , Hemato Oncology, Maxillo Facial Department, Pediatric Oncology, Gynec Oncology, Bone marrow transplant,Nuclear Medicine Department, Radiology Department, a 24/7 Blood Bank with cell component and Pheresis facility, Triesta Sciences, State-of-the-Art Cancer Bio Marker Research and Diagnostics laboratory with a Laser Capture Microscope, Biological Safety Cabinet /Cytotoxic drug mixing cabinet: For chemo drug mixing and Dialysis Unit. Besides the above the ultra modern imaging facilities available are X-Ray,Ultra Sound,CT Scan, HD 128 Slice PET CT ,PET MRI, Cyclotron, Magneton Skyra 3 Tesla MRI, Myocardial Blood Flow, Dotonac Scan, Doppler, and Full Field Digital Mammogrphy.

Related Info :

Fortis Healthcare Acquires 28.6pct of Lanka Hospitals from Distilleries for Rs3.9bn

Fortis Oasis Cardiac Centre at Oasis Hospital. Sri Lankan Private Hospital in Rs200mn Expansion Targets Medical Tourism

Sri Lankan Plant Used to Cure Breast Cancer by Indigenous People

21 May 2011

Chartered Institute for Securities & Investment Sri Lanka Branch Appoints Advisory Council to Help Capacity Building Initiatives in Financial Services

20th May 2011, www.lankabusinessonline.com

The Sri Lanka branch of the Chartered Institute for Securities & Investment (CISI) has appointed the chairman of the Colombo bourse, Nihal Fonseka, as head of its new advisory council.

A CISI statement said the advisory council will help the professional body for those who work in the securities and investment industry establish a market for its qualifications Linkand contribute to the country’s capacity building initiatives in financial services.

“As more and more people in Sri Lanka start to invest in stocks and other securities it is important that there are enough qualified people to provide them sound advice as such people are in short supply at the moment," said Nihal Fonseka, who is also chief executive of DFCC Bank.

"This is crucial for the sustainability of the market. The entry of CISI is very welcome in this context.”

The institute, which opened an office in Colombo in March 2011, offers professional qualifications for individuals in capital markets, investment banking, wealth management, investment management, investment operations and Islamic finance.

“With the Sri Lankan financial market growing at a rapid pace, there is the need to develop a pool of skilled individuals who can meet the demand from financial firms and stockbrokers as the market expands," said Simon Culhane, CISI chief executive.

"Those who successfully complete a CISI qualification will have the necessary foundation knowledge to work in the international and domestic securities and investment houses.”

The other members of the CISI Sri Lanka advisory committee are Nandika Buddhipala, Chief Financial Officer, Commercial Bank, Channa De Silva, Managing Director, LR Global Lanka Asset Management, Ajith Devasurendra, Managing Director, Taprobane Group, Hareendra Dissa Bandara, Director – Financial Services Academy, Securities & Exchange Commission, Indrajith Fernando, Chief Executive, Bartleet Transcapital, S Jayavarman, Chief Executive, National Asset Management Limited, and Madu Ratnayake, Vice President, Virtusa Corporation.

Related Info :

Sri Lanka to Promote Finance BPO Services with Investment Professionals Body Tying up with IT Trade Group

Sri Lanka to Spend Rs253bn on Northern Province Infrastructure Improvement

20th May 2011, www.colombopage.com

Sri Lanka plans to spend over 253 billion rupees within the next two years to develop the war-torn Northern Province, most of it on improving economic infrastructure, the Central Bank revealed.

In a presentation at the 60th Anniversary Oration Friday on 'Promoting Financial Inclusiveness in the North and the East, the Experience of the Past Two Years' the Governor of Sri Lanka's Central Bank Ajith Nivard Cabraal highlighted the need to develop the conflict-affected Northern and Eastern provinces.

In 2011 alone, the government has planned major investments in the North worth 50.93 billion rupees, nearly 40 percent of that for the development of National, Provincial, and Rural Roads.

The estimated cost of development under the government's Northern Spring plan from 2011 - 2013 amounts to 251.583 billion rupees.

The Governor said the effects of the "War on Terror" were felt, not only in the North and the East, but also by the entire economy.

Cabraal revealed that Sri Lanka faced well-disguised, but serious "economic interventions" to indirectly pressurize Sri Lanka to halt or dilute the final humanitarian effort.

He cited the threat of withdrawing European Union tariff concession GSP+ facility at sensitive times and the deliberate delay in the approval of IMF-SBA in March/April 2009 as examples of such attempts.

However, he said the cost of Sri Lanka's "War on Terror" was a vital investment as Sri Lanka spent only about 4% of its GDP per annum on defence over the 4 years, 2006 to 2009 indicating the restraint and thrift in waging the counter terrorism effort.

The Governor pointed out that when the war ended in 2009, the education and health services were at a basic level in the Northern and Eastern Provinces and roads, highways, and railways were virtually non-existent in many parts of the Provinces.

Transport facilities were marginal and banking and financial services were highly limited, in the region, he pointed out.

The government's programs to develop the two provinces include rapid de-mining, speedy resettlement of the displaced, quick restoration of livelihood, extensive infrastructure restoration, and upgrade, sustained investment in the North and the East and new initiatives by the Banking Sector.

As a result, the two provinces in 2009 have recorded the highest nominal growth rate of all provinces, at 14.1%. Although on a low base, it is encouraging, the Governor noted.

"From the Central Bank's point of view, our main challenge was the quick restoration of livelihood while ensuring Financial Inclusiveness in the North and the East," he said.

Under this goal many vocational training centers have been established by both public and private organizations.

To promote agriculture, restrictions on fishing have been removed and a large number of boats, motors, and nets have been distributed to the fishermen in North and East. Thousands of cattle, goats, and poultry have also been distributed to households.

In the financial sector a large number of new bank branches have been established and the existing ones in the North and the East have been re-established. The Central Bank has started several new credit lines and added to the existing schemes in the North and the East to assist the people to get back on their feet, the Governor said.

Reminding that in 2010, the Sri Lankan economy recorded an impressive overall growth of 8%, a significant increase from the average 5% seen over the last decade, Cabraal said the Government and the Central Bank are focused on ensuring that the benefits of rapid economic growth percolate down to grass root levels.

He highlighted that poverty in the country has come down to 7.6% in 2009/2010 from 15.2% in 2006/2007, as per the Poverty Head Count index.

The head of the Central Bank expected the range of investments made in these Provinces to result in a growth rate of around 13% per annum in these Provinces, from 2011 onwards for the next 5 years.

Related Info :

60th Anniversary Oration - Promoting Financial Inclusiveness in the North & the East – The Experience of the Past Two Years - Ajith Nivard Cabraal Governor Central Bank of Sri Lanka. (20th May 2011).

Sri Lanka to Develop Northern Kankesanturai Port with Indian Aid

Iranamadu Reservoir Project to Solve Water Problem of Sri Lanka's North

Sri Lanka's Ceylon Tea Brand under Lion Logo to be Protected against Misuse & Counterfeits

20th May 2011, www.lankabusinessonline.com

Sri Lanka's Tea Board aims to hire an international agency for global surveillance of the island's Ceylon tea brand under the 'Lion' logo to prevent its misuse and sale of counterfeits, an official said.

The planned action comes in the wake of the island launching new logos for Ceylon tea to protect the island's best known brand under the Geographical Indicators (GI) international trade regime and promote it as ozone friendly.

"In the past, the Sri Lanka Tea Board has played a defensive role and had been reacting to abuses (of the brand)," said Hasitha De Alwis, the Tea Board's director of promotion.

"The new tea promotional and marketing committee had decided to be proactive to (protect Ceylon tea's brand and GI recognition)," he said.

"We intend to assign an international agency to do global surveillance of the 'Lion' logo violations and origin counterfeiting."

The Tea Board and Sri Lankan exporters have long complained about the misuse of the Ceylon tea name and sale of teas from other origins in the guise of pure Ceylon tea.

De Alwis said local registration of the new Ceylon tea GI logos and its planned international registration will increase its protection and discourage misuse of the brand by use of other origin teas in packaging.

The new GI logos denote seven specific agro-climatic regions where tea is grown; Nuwara Eliya, Dimbula, Uva, Udapussella, Kandy, Ruhuna and Sabaragamuwa in the central hills and southern region.

"The registration of agro-climatic regional names and logos in world markets while giving Ceylon tea and growing regions a high level of protection will add value and help earn a premium price," De Alwis said.

Sri Lanka aims to use the new logos to market Ceylon tea as a premium product just like French champagne, Scotch whisky and Basmathi rice.

It decided to protect the Ceylon tea name and seven major regional tea growing area names as certification marks under the GI of the Trade Related Aspects of Intellectual Property Rights (TRIPS) within the World Trade Organisation regime.

De Alwis also said Sri Lanka is the only country qualified to use the 'ozone friendly' logo for tea after it gave up using Methyl Bromide, an ozone depleting substance in tea production.

Related Info :

Intellectual Property Protection for Ceylon Tea under Global Geographical Indicators Rules

Sri Lanka Registers Ozone Friendly Ceylon Tea Logo being the First Country in the World to Produce Ozone Friendly Tea

Sri Lanka Tea Council Chairman Merrill J Fernando Proposes a 10 Year Plan to Take Ceylon Tea to Its Pristine Glory

Several Global Players Respond to Sri Lanka Commodity Exchange

20th May 2011, www.lankabusinessonline.com

Sri Lanka's securities regulator has got responses from several 'big global players' for a request for proposal to set up an exchange to trade spot and futures contracts in commodities and other assets, an official said.

"The response is very encouraging and it reflects the growth potential of the country and the interest some of the big global players," Malik Cader, director general of Sri Lanka's Securities and Exchange Commission told LBO.

Cader said there were "over half a dozen" response from big foreign players from several regions but declined to name individual parties as a process of selection involving a technical evaluation and tender board was under way.

The deadline for proposals to set up 'multi-asset' class exchange ended in April 29 and the egulator has also called for applications for a consultant to assist in evaluating proposals with a closing date of May 27.

Sri Lanka already has a stock exchange which also deals in listed debt.

Related Info :

Sri Lanka Calls for Proposals to Set up a Multi Asset Commodities Exchange for Spot & Forward Markets

Sri Lanka Tops Returns for Equity Markets around the World in 2010

Sri Lanka Performs better than BRIC Economies. Smart Money Highlights Investing in Smaller Emerging Markets

Colombo Stock Exchange to Start Gold ETF Trading in 2011

20 May 2011

Global Energy Secures First Private Refinery Deal in Sri Lanka. A Plant Twice the Size of State Run Sapugaskanda Refinery to be Built in Trincomalee

15th march 2011, www.thebottomline.lk, By Santhush Fernando

US-based Global Energy & Industrial Operations, Inc. has secured the first private oil refinery deal in Sri Lanka, under which a plant twice the size of the current state-run Sapugaskanda Refinery will be built in Trincomalee.

Although the project was earlier earmarked for Hambanthota and anticipated to process 150,000 bpd (barrels per day), it had been shifted to Trincomalee due to environmental concerns while production capacity had been brought down to 100,000 bpd.

The Bottom Line on March 13, 2011, exclusively reported that Global Energy & Industrial Operations, Inc. has signed a Memorandum of Understanding (MoU) to set up a 150,000 BPD (Barrels Per Day) refinery in the emerging port city of Hambantota.

The Bottom Line learns that the Company had requested a guarantee from the government that it (CPC) will purchase 50 percent of the output (which is the gap between Sri Lanka’s requirement and the production capacity of the out-dated Sapugaskanda plant run by Ceylon Petroleum Corporation) while the remaining half would be intended for export.

The project is to kick start end 2011, with the financial closure expected by December. Although the project developers were negotiating with the banks it is learnt that, the venture faces several financial constraints.

However it is learnt that the Petroleum Industries Ministry would request modifications to GE&IO’s original proposal that the government purchases refined products at Singapore plats plus a premium of US $ 2.1 per barrel.

Earlier the refinery estimated to cost between US $ 1.5 to 2bn (Rs. 166.5 to 222bn), was projected to be thrice the size of the CPC Refinery and was mainly intended to refine crude oil for the export market, with Hambantota being poised to become a mega global hub in energy, shipping and aviation.

“It is highly commendable that this project was finally given the green light by authorities, as Sri Lanka’s energy security was facing a grave threat with authorities turning a blind eye to modifying the outdated Sapugaskanda refinery,” an energy expert told The Bottom Line on grounds of anonymity.

However, he lamented that it was unfortunate that the line ministry was not kept informed that when GE&IO singed an MoU on a petroleum industry-related project.

“Even the Ministry Secretary Titus Jayawardene was not aware of these developments.
How can the ministry take a proper decision on whether to go ahead with the US $ 2.2bn Sapugaskanda Project if it is not aware that an MoU was signed with a private party? The Ministry or the CPC cannot gamble with funds because these are public moneys which the country must repay later on. If the private refinery is coming up, it is good because we may not have to find a staggering amount such as Rs. 244.2bn (US$ 2.2bn),” he added.

Numerous energy experts and think tanks have time and again emphasised that Sri Lanka needs to properly implement its energy policy in transparent and investor-friendly manner, if the country was to emerge as a global player in the energy industry.

Meanwhile, the Rs. 244bn Sapugaskanda Oil Refinery Expansion and Modernisation (SOREM) project has been in the limbo since 2007 as Iranian and Sri Lankan authorities failed to agree on an exact modus operandi to implement the project. “Rather than the CPC, already embroiled in a major financial crisis, bearing a staggering cost of US$ 2.2 to upgrade Sapugaskanda, it is more prudent and commendable that a private party was allowed to proceed with an alternative, at an estimated cost of nearly half of the former,” he added.

Related Info :

Global Energy to Set up a 150,000 bpd Refinery in Hambantota Magampura Port City

Sri Lanka May Get $1.5bn from Iran to Expand Refinery

Colombo Port already the Gateway to the Indian Sub Continent. Hub Port Status Secured by the Capacity to Handle Ultra Large Container Vessels

15th May 2011, www.thebottomline.lk

The Hub Port status is not under threat despite numerous port development projects taking place in the region. The vision for the Colombo port has become a reality through the Colombo South Terminal and it is the only port in the region that can accommodate ultra large carriers of 18,000 teus coming on stream in 2013, says Dr. Parakrama Dissanayake, Chairman of Aitken Spence Maritime Ltd. and former Chairman of the Sri Lanka Ports Authority.


The question that is being frequently posed is whether the Colombo port’s position as the gateway to the Indian Sub Continent market is under threat, says Dr. Parakrama who points out that the question is being raised particularly with the launch of Vallarpadam port in Cochin, India, where Indian Prime Minister Manmohan Singh himself opened the port facility.

The Vallarpadam port, managed by Dubai Ports International and in the First Phase, it will have a quay length of 600 metres with a design capacity of handling one million teus (twenty-foot equivalent units) per annum.

The project was formally launched with the laying of the foundation stone by Prime Minister Manmohan Singh. The ceremony was attended by Thomas Jacob, Chairman, The Kochi Port Trust (KoPT); Sultan Ahmed Bin Sulayem, Executive Chairman Dubai Ports; Minister of Shipping T. R. Baalu; Chief Minister for Kerala, Oommen Chandy and Governor of Kerala R. L. Bhatia.
Construction is expected to be completed in four years and commercial operations to begin within a year of completion.

Colombo, already the gateway For this question that comes up all the time, Dr. Parakrama’s answer is that Colombo has already emerged as the gateway to the Indian sub continent. He is of the view that Sri Lanka should graduate from the concept of a hub and the country should have the vision of emerging as a logistical hub, not only for South East Asia but also for the Middle East.

“Why I say Middle East is that we see that the shipping lines plying between Asia and Middle East and when large vessels ply from Asia to the Middle East, we are talking in terms of a deviation. So we need to try and attract those vessels to try and discharge containers in Colombo and feeder these containers into the Middle East. That way the shipping lines can save a huge cost by not deploying large vessels.”

He also observed that as the bunker costs were already high, shipping lines would prefer to deploy smaller vessels to carry those cargoes.

Right draft
“Having said that, we have the right draft and the right capacity to handle ultra large container vessels coming on stream. We need to be mindful of the recent developments. The Maersk Line has already ordered ten vessels with the capacity of 18,000 teus each. These are the largest vessels ever built and they are called Triple-E Class vessels with a draft of 16 metres handling 23 containers across,” said the Aitken Spence Maritime chief who is also the Chairman of Ace Cargo Ltd. and Director, Aitken Spence Plc.

The government of Sri Lanka had obviously geared itself to handle those large vessels by way of the Colombo South Terminal,” pointed out Dr. Parakrama and noted that the construction of the Colombo South Terminal would start soon. Already, the party that had secured the contract, the consortium comprising the Aitken Spence and China Merchant Holdings, had commenced the soil investigation.

2.6m TEUs per annum “This new terminal will be able to accommodate ultra large container vessels such as the Maersk Triple-E Class vessels, and this would be the only terminal in this region that will be able to handle this type of large vessels. The ultra large vessels will come on stream in 2013 and the Colombo South Terminal will also be completed by that time to accommodate those huge carriers,” observed Dr. Parakrama.

“The terminal will have a depth of 18 metres and we can go to about 21 metres. In a way one could say that we have had the vision and we have been able to convert that vision into reality through the Colombo South Terminal,” he said.

The construction of the breakwater is in progress and the construction of the Colombo South Terminal will begin soon. The length of this terminal is 1,200 metres, with the capability of handling 2.6 million TEUs per annum.

Related Info :

New Indian Port No Threat to Sri Lanka

Sri Lanka New Colombo South Port Terminal Eyes Indian Cargo for 2.4mn TEU Capacity

Dr Parakrama Dissanayake to Address Terminal Operators Conference in China, the Largest Global Annual Event in Ports Industry

Sri Lanka's Game Changing Next Port of Call. Standard Chartered Highlights Ports Development in Sri Lanka Driving Economic Growth & Boosting Revenue

17 May 2011

ICT Export Value Survey for 2010 by Export Development Board to Identify Current Export Value of IT/BPO Industry. Fifth Largest Export Earner in 2007

16th May 2011, www.island.lk

In the prevailing globalised business environment, the IT/BPO industry is emerging as one of the significant contributors to the Sri Lankan export market. However, due to the volatile and changing nature of the industry, much of the export revenue that is generated has not been clearly highlighted and recognised.

To address this gap, the Sri Lanka Export Development Board (EDB) together with the IT/BPO industry, has now launched the second ICT Export Value Survey for 2010, to identify the current export value of the industry, the board said in a statement yesterday (17).

The EDB carried out the first ICT Export Value Survey for 2006/2007. The survey identified 178 IT/ ITES export companies. It also identified the value of the IT/BPO exports to be US$ 173 million in 2006 which grew by 23% to US$ 213.2 million in 2007. The IT/BPO exports in 2007 depicted that its contribution as the fifth largest export earner for Sri Lanka. This finding also gives weight to the industry’s increasing potential of ultimately being one of the topmost players in the Sri Lankan export market.

Janaka Ratnayaka, Chairman and Chief Executive of the EDB, said, "There is a need to continuously measure the growth of the IT/BPO industry and its contribution to the country’s economy as the government has recognized the industry to be one of the key players in the Sri Lanka economy". The survey will show how far the industry has moved towards achieving its export revenue target of US $1 billion by the year 2015.

PricewaterhouseCoopers Sri Lanka, which carried out the initial survey in 2007, has been appointed to conduct the 2010 survey as well.

In addition to ascertaining the export value for the IT/BPO industry in 2010, the current survey will also capture the current status, developments and challenges in other operational areas of the industry. These include the service offerings, workforce, infrastructure, communications, markets, quality certifications and stakeholder support. Further, in light of the end of the war, it is expected that the IT/BPO industry would have appreciably changed and grown since the initial survey was conducted, and therefore the current survey is expected to capture and explore such changes.

The survey will commence in May 2011, with a selection of companies in the industry, being directly interviewed. The survey steering committee, formed by representatives of the EDB, the IT/BPO industry, the Information and Communication Technology Agency of Sri Lanka, Board of Investment and SLASSCOM, encourage the IT/BPO industry to provide their fullest support and cooperation for this survey. The survey results will be the basis for Government policy decisions in the future regarding the ICT industry. Further, a summary report will be generated from the survey, on the ICT export industry in Sri Lanka, which can be used for global and regional comparisons and also as a baseline for planning industry strategy, the EDB statement said.

Related Info :

Sri Lanka an Attractive Location for Finance & Accounting Outsourcing FAO BPO Operations. Has World’s Second Largest Pool of CIMA Professionals

Sri Lanka IT/BPO Sector Targets Niche Markets in Finance & Accounting, Telco, Travel and Aviation

Sri Lankan IT & BPO Industry to Grow by 26pct in 2011. SLASSCOM Launches Careers Initiative for Capacity Building

Sri Lanka Banks to Lend against Moveable Property from June as CRIB Sets up Secured Transaction Registry

16th May 2011, www.lankabusinessonline.com

Sri Lankan banks will soon be able to lend against moveable property with a new initiative by the Credit Information Bureau (CRIB), an official said.

The CRIB plans to set up a 'secured transaction registry' from June 01, 2011 that will enable registration of moveable assets against which banks can give loans, its chairman Gamini Karunaratne said.

"We aim to enable small and medium entrepreneurs and poor people to borrow," he told Vimasuma.com, our sister news website.

"By allowing people to borrow using moveable property like furniture and vehicles for the first time we can bring SMEs and the poor into the formal banking economy from the informal sector," Karunaratne said.

"It is a revolutionary change in our lending environment."

Sri Lankan banks usually lend only against collateral like fixed assets like land and buildings as they can be traced through land registries.

"In developed countries banks can lend against moveable assets if they are registered," Karunaratne said.

He said the software for the registry was made in Sri Lanka by CRIB software developers instead of being imported enabling considerable saving of foreign exchange.

Related Info :

CRIB Develops Secured Transaction Registry on Movable Assets by Deploying Locally Developed Software

Sri Lanka Credit Counselling Centre Sees Lower Loan Defaults with Reduction in Interest Rates

16 May 2011

High Returns on Unit Trusts of Sri Lanka Attract New Funds

16th May 2011, www.dailynews.lk, By Charumini de Silva

During the first quarter the unit trust industry attracted a total of Rs 1.3 billion new funds. The majority were for the income funds and equity funds, Unit Trust Association of Sri Lanka (UTASL) Treasurer, P.Asokan told Daily News Business.

“It is important to change the traditional mind set of the public from savings to investments. Majority of the people are unaware of the unit trust concept. They invest their funds more in fixed deposits and bank savings. With the interest rates brought down drastically, people are now looking at alternative investment methods,” he said.

Increasing collections especially from small scale investors apart from large scale investors to the unit trust industry is vital for their long-term objectives.

He said many of the people depend on the income of interest rates that they get for their deposits. With reduced interest rates the public should look at long-term investment opportunities such as unit trust for higher returns.

“We are confident that the industry will have the capability to record strong growth supported by corporate earnings growth. Although the price levels of some equities have not increased mainly due to market speculators investing in illiquid equities; the investors who are keen on fundamentally good stocks can enjoy a high and a sustainable dividend yield for their long-term investments,” Asokan said.

“As industrialists we suggest the Government to introduce such incentives or to invest part of the EPF and ETF funds in unit trusts as members handle the risk and the return on investments are higher,” he said.

Related Info :

Sri Lanka Unit Trusts Manage Rs22bn in Assets. Public Awareness a Must for Participation in the Economic Growth

IPOs on CSE Must Allocate 40pct Shares to Retail Investors, Sri Lanka's Markets Regulator Decides. 10pct Offer to be Made to Unit Trust Funds

How to Investing in Unit Trusts - Introduction to Sri Lankan Unit Trust Industry

Sri Lanka Private Sector Credit Grows by 32pct in G1 2011

16th May 2011, www.island.lk

Outstanding credit to the private sector from the domestic banking system increased 32 percent to Rs. 1.43 trillion by the end of March 2011 from Rs. 1.08 trillion a year ago, latest Central Bank data showed.

The domestic banking sector created new loans amounting to Rs. 97.9 billion during the first quarter of 2011 while Central Bank loans to the government during the quarter amounted to Rs. 19.9 billion.

Total outstanding credit to the government had increased a marginal 0.4 percent to Rs. 659.2 billion while loans from the Central Bank declined by 3.9 percent to Rs. 96.8 billion by the end of March 2011 from a year ago.

Credit to public corporations increased by 25.4 percent to Rs. 121.5 billion.

Related Info :

Sri Lanka Bank Lending to Private Sector up 27.8pct in 2010. New Loans Rs290bn. Reduction in Current Interest Margin of 4.5pct Urged

Sri Lanka Banking Sector Profits Up in 2010

Sri Lanka Banks' Exposure to Stocks to be Limited for Banking Sector Stability

Sri Lanka Budget Deficit Shrinks to 1.9pct of GDP for First TwoMonths of 2011 as Government Fscal Discipline Improves

16th May 2011, www.island.lk

Government fiscal discipline seems to improve with latest data showing that the budget deficit contracted nearly 3 percent during the first two months of 2011 to Rs. 106.5 billion from Rs. 109 billion a year earlier, as revenue growth out paced expenditure growth. Also encouraging is the increase in long term government investments.

As a percentage of GDP, the fiscal deficit for the first two months of 2011 is estimated at 1.9 percent, a steady improvement from 2.25 percent a year earlier.

After the budget deficit ballooned to 9.9 percent of GDP in 2009, resulting in a temporary halt of the US$ 2.6 billion IMF standby facility arrangement, government fiscal discipline showed much improvement recording a deficit of 7.9 percent in 2010, a little better than the 8 percent IMF target.

Poor fiscal discipline over the years has made it difficult to maintain low inflation. The Central Bank said it was in precarious position in 2009 long before the actual deficit numbers came out and think tank the Institute of Policy Studies said fiscal indiscipline was the bane of macroeconomic stability in Sri Lanka.

According to Central Bank data released a few days ago, government revenue growth during the first two months of 2011 has outpaced expenditure growth, resulting in a slight, but significant, contraction of the deficit.

Total revenue was up 24.74 percent to Rs. 135.4 billion from Rs. 108.6 billion a year earlier. Tax revenue increased by 23.16 percent to Rs. 126 billion, non-tax revenue was up 51.78 percent to Rs. 8.5 billion. Grants increased by 14.28 percent to Rs. 800 million from Rs. 700 million a year earlier.

Total government expenditure increased by 11.16 percent to Rs. 241.9 billion from Rs. 217.6 billion a year ago. Current expenditure grew 9.15 percent to Rs. 198 billion while capital expenditure or long term investments increased 20.99 percent to Rs. 43.8 billion.

Earlier this year the IMF said the Sri Lankan government was in a position to absorb the flood related expenditure within its budget. The government was also expected to increase domestic fuel prices, which it has already done, in order to breakeven the Ceylon Petroleum Corporation and Ceylon Electricity Board (CEB). This means inflation would spike but the government would be able to sustain better fiscal control and medium to long term macroeconomic stability.

"It is a tough choice. Will the government sacrifice medium to long term stability for short term relief, or sacrifice giving the people relief today for a more stable economy tomorrow? It is a very tough choice and requires a tight-rope kind of balancing act," an analyst told The Island Financial Review.

"This is where the government has to take good governance, accountability and transparency seriously, so that people can better understand the choices they face," he said.

Meanwhile, total outstanding government debt increased by 10.56 percent Rs. 4.71 trillion as at end February 2011, from Rs. 4.26 trillion a year ago. Total domestic debt grew 7.25 percent to Rs. 2.66 trillion while foreign debts increased 15.16 percent to Rs. 2.05 trillion.

Related Info :

Sri Lanka Budget Deficit Falls to 7.9pct of GDP in 2010 - Annual Report of the Central Bank of Sri Lanka

Sri Lanka’s January Exports Up 72.4pct. Garment Exports to Europe Up 143.5pct without EU GSP+ and Trade Deficit Contracts 10pct

Sri Lanka Trade Deficit Doubles During First Nine Months of 2010
Related Posts Plugin for WordPress, Blogger...