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FINANCIAL CHRONICLE™ » DAILY CHRONICLE™ » Sri Lanka Newspapers - 25/12/2011

Sri Lanka Newspapers - 25/12/2011

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1Sri Lanka Newspapers - 25/12/2011 Empty CSE to introduce new global index in March Sun Dec 25, 2011 12:47 am


Global Moderator

In a bid to attract foreign investment, the Colombo Stock Exchange (CSE) is on target towards introducing the global index under the Standard & Poor’s (S&P) banner by the end of first quarter next year, CSE sources said.

“We are looking at introducing a global index by March- April next year and we already are working on this target,” a CSE source told the Business Times. He added that a team from S&P was in Colombo to meet key stakeholders recently.

He highlighted the main reason to introduce such an index was to have a globally recognized brand which will give credibility to the index, in particular to large foreign investors. He also said that S&P, together with the CSE, will develop criteria for inclusion in this index and that the existing indices such as the Milanka and All Share Index will continue to be available.

He also said that the systems at the exchange will be upgraded and modernized within a year. The CSE has also hired Mckinsey Consulting to do a study of the capital markets in the country and recommend a way forward and action plan to develop the capital markets. He also said that the CSE has hired the National Stock Exchange of India (NSE) to act as a consultant to implement a risk management system and a delivery versus Payment (DVP) settlement system. “By implementing DVP, both the ownership transfer and payment for securities will occur simultaneously, thus minimizing risk. The implementation of DVP and risk management practices is to be completed in mid-2012 and will be a first step towards transforming the CSE into a modern exchange on par with the most developed global exchanges,” he noted.

He said that the strategy for implementation of risk plans at the CSE envisions an extensive consultation process with market participants, custodians, investors and regulators. For the successful completion of the process brokers and other participants would have to take steps to convert to the new settlement mechanism and risk management practices.

This would entail meeting necessary technical requirements, streamlining of back office operations, participating in related training and adopting of certain procedures in particular with respect to the maintaining of liquid assets for margining requirements.

2Sri Lanka Newspapers - 25/12/2011 Empty F&G maturity default trial next month Sun Dec 25, 2011 12:52 am


Global Moderator

The Colombo District Court action against Finance & Guarantee Co (F&G), a registered finance company now controlled by the Union Bank goes to trial on January 13. In this case the plaintiffs maintain they placed deposits of over two million rupees which the company solicited. The company then defaulted pleading late notice of upliftment, renewed the deposits for a further year, without notice to the depositors and once again defaulted maturity payment in 2011, plaintiffs alleged.

With a new strategic direction and expansion plan in place, F&G commenced business operations under the new management of the Union Bank on November 24, Union Bank officials said. The bank together with an international foreign investment Fund ShoreCap acquired over 98 % of the voting shares of the F&G and infused new capital to resurrect one of Sri Lanka's oldest finance companies.

3Sri Lanka Newspapers - 25/12/2011 Empty Edna Group signs deal with Dialog Axiata Sun Dec 25, 2011 1:00 am


Global Moderator

Edna Group of Ceylon has tied up with Dialog Enterprise to provide mobile communication solutions to the group, which includes Dialog BizConnect; an APN (Access Point Network) solution, allowing sales teams to give real time updates from the field. Dialog BizConnect APN (Access Point Network) Solution by Dialog Enterprise, the business solutions arm of Sri Lanka’s premier mobile service provider Dialog Axiata PLC will enhance productivity and efficiency of organizations by giving real time updates from the field, while on the go.

Dialog BizConnect allows real time sales updates from across the Island and also allows optimum cost leadership in other business support services like inventory management and dispatch services paving the way for better resource management with the organization, according to a Dialog Axiata press release.

“This agreement also covers a complete mobile voice and BlackBerry solution system which will allow the Edna Group management and staff to have seamless voice and data communication services powered by Dialog’s island wide coverage. The new solution further includes an online billing monitoring portal which enables the tracking of billing and usage patterns and report generation. As such, the solutions that are implemented at Edna Group by Dialog Enterprise will help reduce costs and increase operational efficiencies of the company,” it said.

“As Dialog Axiata is a leader in innovation and also has the largest geographical coverage in Sri Lanka, they were naturally the first choice for Edna,” Lal Ekanayake, Group Director at Edna Group of Companies said. “The solutions offered by Dialog Enterprise leads to costs savings to the Edna Group which is essential to stay ahead of the curve in today’s fiercely competitive market.”


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

The CGR will receive two M8 locomotives by March next year to improve cargo transportation CGR General Manager B.A.T Ariyarathne said.

The two Indian locomotives which are currently being manufactured will reach the island early next year.

The CGR will use them to improve cargo transportation and to increase revenue, he said.

The CGR expects to increase revenue share from goods transportation to reduce operational loss.

Ariyarathne said that purchasing of 15 locomotives that the CGR planned five years ago, will be further delayed due to financial constraints. Tenders were called four years ago and General Motors company USA was short listed. However, these GM locomotives are expensive and funds allocated by the Treasury are not sufficient to purchase them and now the deal has reached a deadlock, he said.

Ariyarathne said that as a result, the CGR cannot improve train services on the upcountry track upto Badulla. Only GM locomotives have been successfully operated on this track. All other engines have failed to operate on this track.

The CGR prefers to purchase GM locomotives as they have a proven track record. Today the CGR has 22 varieties of locomotives and as a result the maintenance of the fleet has become extremely complex and is a cause for frequent breakdowns, train delays and other operational issues.

We have to deal with over 70,000 spare parts from different companies in different countries annually, he said.

Ariyarathne said that the CGR has an alternative plan to improve upcountry train services using specially designed power sets that are now being manufactured in China.

5Sri Lanka Newspapers - 25/12/2011 Empty Toyota to boost production by 20 percent Sun Dec 25, 2011 1:33 am


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

Toyota is set to lose its position as the world’s biggest carmaker to General Motors due to loss of production. Toyota has said it plans to increase production by 20 percent next year as it is trying to recover lost ground due to the March earthquake in Japan and the recent floods in Thailand.

The company aims to produce 8.48 million vehicles in 2012, and increase sales by a quarter to 8.65 million. Earlier this month, the carmaker halved its profit forecast for this year. It now expects a net profit of 180b yen ($2.3b £1.5b) for the year ending March 31, 2012, compared with its previous forecast of 390b made in August. (BBC)


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

Sri Lanka Telecom Mobitel, Sri Lanka's National Mobile Service Provider announced the reappointment of Lalith de Silva as the company's Chief Executive Officer. No stranger to the mobile telecommunications industry in Sri Lanka, De Silva was also Mobitel's first CEO to assume duty following the acquisition of the company by Sri Lanka Telecom in 2002 and was instrumental in laying the foundation for the company's rapid technological and market growth. Hailed as a global ICT and project management specialist, De Silva brings with him a vast bank of experience gained as a senior consultant at SLT, a Board Director at SriLankan Airlines and Senior Advisor at Saudi Telecom.

Lalith de Silva
Enjoying a successful year decorated with numerous awards and high growth, his appointment comes at a crucial juncture not just in the history of Mobitel, but also in Sri Lanka.

Mobitel's timely introduction of the latest in mobile technology to Sri Lanka is testimony to the telecommunication service provider's vision of leading Sri Lanka towards an Info-Com and knowledge rich society through its service offerings. Mobitel was the first in Asia to launch a Super 3.5G HSPA network and the first in Sri Lanka to demonstrate HSPA+MIMO and 4G/LTE.

Constantly striving to create unparalleled communication solutions and implement new technology to boost the country, Mobitel has taken giant strides to make ICT technology affordable and accessible to everyone. The appointment of an ICT specialist of the calibre of De Silva also further reinforces Mobitel's vision alignment with the ICT development goals of the nation.

deleted Welgama, Chairman SLT and Mobitel, Speaking on the appointment said, with proven expertise as an inspirational leader with high performing team building skills, I am confident that Lalith together with the able support of the forward thinking, dynamic and highly committed team at Mobitel, would be able to steer the Mobitel brand towards even greater heights in the Sri Lankan Mobile ICT landscape.

De Silva talking about his appointment and aspirations for the company said "Returning to Sri Lanka after many years I am delighted to see the transformation of our nation not only in terms of infrastructure and economic development, but also in terms of its people and their social and spiritual progression. We are now a free and United Nation under a strong and visionary leader.

From an industry perspective, within a short span of six years, our mobile penetration has grown from less than 20 percent to the current level of over 90 percent. Internet penetration too has grown by ten fold.

It is certainly a promising time for the country and I consider it both a privilege and a pleasure to have the opportunity to once again lead the Mobitel team and help contribute towards the further development of our nation.


Global Moderator

The all new Camry 2012 has made its Sri Lankan debut at a special Motor show held at the Sri Lanka Business and Convention Centre in Colombo recently revealing its sophisticated, sporty design, spacious interior, improved driving dynamics and a quieter ride.

Introduced 20 years ago the Camry has evolved over six generations to become the benchmark in the midsize luxury segment, said Yoshiaki Kato, Managing Director of Toyota Lanka in an interview with Business Times on the sidelines of Camry 2012 Motor show.

From its debut to the world in 1982, Camry has established its position in the global market and has become the 2nd best-selling car in the Toyota line up next to Corolla, he said. Focused on bold design and dynamic driving, the all-new 2012 Camry ushers into a new "Era Sedan Concept", an era that stands for "emotional" and "rational", he added. Toyota's engineers have made it their obsession to improve the design, ride handling and driving dynamics of the car, Mr. Kato said.

He revealed that Toyota Lanka, a fully owned subsidiary of Toyota Japan plans to expand its network in the outstations beyond the Western Province with an initial investment of Rs. 2 billion. The company will set up its branches in Galle, Matara, Kandy,Kurunegala and Anuradhapura. The company’s immediate plan is to expand its reach in Ratmalana and Battaramulla and operate a service and spare part facility in Maharagama in addition to its main facility in Wattala.

8Sri Lanka Newspapers - 25/12/2011 Empty Heladiv launches Tea Club Sun Dec 25, 2011 1:34 am


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

Heladiv Foods launched the Heladiv Tea Club (HTC) at the newly built shopping precinct at Old Dutch Hospital Building last week.

Rohan Fernado
The HTC comprising a tea saloon, a dessert bar and a boutique was commissioned by Minister of Plantation Industries Mahinda Samarasinghe. Minister Samarasinghe said that the value of serving a quality cup of tea to a foreigner will prove the local identity.

The importance of upcoming trends like tea cafes absorb the essence of the rapid phase of development, which has resulted in a boom in tourist arrivals.

HVA Chairman Rohan Fernado, said HTC is a peerless concept that will serve as a place where a person can relax and unwind while enjoying a favourite beverage. Customers are facilitated to purchase regular or gift tea and even place orders for delivery.

A variety of products ranging from fruit tea, flavoured green tea to ice tea are available to cater to different consumer demands.

The company has incurred around Rs. 10m for its establishment.

According to Fernando, it is the expectation of the company to enhance worldwide operations through establishing at least three similar cafes in Australia, India and Canada by 2012.

The company is examining the potential to introduce similar establishments in major cities throughout Sri Lanka.

Heladiv Foods PLC, subsidiary of HVA Group, being the first public listed tea exporter in Sri Lanka caters to novel trends in the global tea industry, induced by the tag line; " Inspired by Innovation".

Being an international tea brand, Heladiv intends to capture the market through customer value creation via innovation. Holding the franchise rights to the brand "Heladiv" registered in more than 40 countries worldwide, the company is currently in a joint venture with a Chinese group operating 22 tea saloons in China.

9Sri Lanka Newspapers - 25/12/2011 Empty Litro Gas records Rs. 2b profit Sun Dec 25, 2011 1:34 am


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

During the first year of its operation, Litro has recorded a net profit of Rs.2 b.

President Mahinda Rajapaksa commended the performance of the State-owned Litro Gas Company at a meeting held recentlyat the Kerawalapitiya storage complex to review the progress of the company.

The State formed the Litro Gas company following the takeover of 51 percent shares of Shell Gas Lanka and 100 percent shares of Shell Terminals that ended the ownership of Shell Lanka in the country's LP gas market in November 2010.

The President said the government is proud of this significant achievement by a State-owned venture and attributed the company's success to far-sighted and efficient management practises.

The government's policy is to maintain the State sector competitively with the private sector and the government has taken measures to transform unprofitable State bodies into profitable ventures, President Rajapaksa said.

He pointed out that the Shell Company, which was recording a loss of Rs. 600 m at the time it was acquired and has been transformed into a profit-making State venture within a year. The company has paid Rs. 800 m as taxes to the government.

The President assured that the Litro Gas Company will be maintained as a profitable body without creating any burden to the company.

Litro Gas company has released 300,000 new gas cylinders to the market last year and sales of Litro have increased by 11 percent, Chairman, Gamini Senarath said. The company is to set-up a gas distribution centre in Hambantota as well.

Sellers and distributors of Litro Gas Company were also felicitated at the ceremony.


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

The American Society of Transportation and Logistics (AST&L) will collaborate with the Shippers' Academy Colombo (SAC) to certify and endorse transport and logistics courses, said Shippers Academy CEO Rohan Masakorala. The CTL (Certified in Transportation and Logistics) Certification Program began in 1948. ASTL also offers the Professional Designation in Logistics and Supply Chain Management (PLS), the Distinguished Logistics Professional (DLP), and the Global Logistics Associate (GLA).

Laurie Denham, President ASTL and CEO Shippers’ Academy Colombo CEO, Rohan Masakorala
ASTL's mission is to facilitate education and certification in of transportation, logistics, and supply chain management. ASTL's membership of shippers, carriers, educators, students, consultants and third-party logistics individuals are dedicated to continuing education and are committed to raising professional standards in the industry.

In 2010 the ASTL and the Singapore Shippers' Academy came into agreement to certify courses and to develop curriculum to suit the needs of the industry with ASTL international certification.

ASTL works with many universities in the United States and a well established certifying authority for the Chinese logistics industry.

With its connection to the Singapore Shippers' Academy they have now expanded their scope to Sri Lanka, and in 2011 it was agreed to collaborate to certify and endorse courses conducted by the Shippers' Academy Colombo.

Laurie Denham, President ASTL and CEO Shippers' Academy Colombo CEO, Rohan Masakorala, agreed to collaborate in this joint arrangement to develop professionalism in the field of transport and logistics in Sri Lanka.

At the Transcomp 2011 annual sessions, held in Atlanta, Georgia, USA, in association with the National Industrial Transportation League (NITL).

CEO, Shippers' Academy said that, this would be a new opportunity for the local logistics industry with the new initiative to bring in American certification to the emerging maritime economy of Sri Lanka.

The American Society of Transportation and Logistics is a professional organisation founded in 1946.


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

The main challenge faced by the Asian region is maintaining inclusive growth in the years ahead. The most immediate is responding to swelling inflation pressures, which can be complicated by subsequent capital inflows. We note that capital has so far been flowing into the region at a manageable pace, but global economic uncertainty means policy-makers need to be prepared for greater volatility in capital flows, said Country Director of the ADB in Sri Lanka Rita O` Sullivan in an exclusive interview with Sunday Observer.

Rita O' Sullivan
Q. What are the areas that ADB is willing to assist Sri Lanka under the new Country Assistance Plan (CAP)?

Answer: The recently approved ADB’s Country Partnership Strategy (CPS) for Sri Lanka covers from 2012 to 2016.

The goals and objectives of the government’s Development Policy Framework (DPF) - the Mahinda Chintana and ADB’s Strategy 2020 are very similar, and the CPS builds on their priorities.

The strategy, also developed in consultation with key development partners, complements their programs and aims to assist the government to address the major constraints for sustaining inclusive growth.

The CPS focuses on three pillars: (i) inclusive and sustainable economic growth, (ii) catalysing private investment and enhancing the effectiveness of public investment, and (iii) human resource and knowledge development.

ADB’s future interventions will be strategically focused in five sectors - transport; energy; water supply and other municipal infrastructure and services; education; and public sector management.

The strategy’s crosscutting themes are also in line with the government’s priorities and include the environment and climate change adaptation, gender, governance, and regional cooperation.

Recognising the magnitude of the needs in lagging regions, ADB will remain flexible to support critical interventions in these regions depending on the emerging needs.

ADB’s operations will leverage its resources to attract private capital and will work with development partners to improve coordination of the overall assistance package. A critical role has been assigned to the private sector, and skills development has been assigned high priority.

Q. What is your assessment of the newly opened Southern Expressway, its economic benefits, mitigation of negative socio and environmental impacts?

Answer: The Southern Expressway is Sri Lanka’s first expressway with a length of 102km connecting Colombo to Galle. There are significant economic benefits generating from this expressway, as evidenced by the initial tourist business increase in Galle. The journey from Colombo to Galle, which previously took over three hours, now takes just over one hour. The expressway is contributing to saving in travel time, reduced vehicle usage costs and opening of new markets, which contribute to economic development.

For example, agriculture-related incomes in the areas connected to the expressway are expected to prosper, because faster transportation and better access to markets reduce crop wastage.

As long distance vehicles shift to the new expressway, the existing Galle Road will become less congested, and encourage development of local industries. The potential for tourism and industrial development of the Southern Region will significantly expand. Faster travel times, smooth traffic flow will also cause improved fuel efficiency of the vehicles which in turn will result in lower emission of CO2 and pollution.

Land prices around the expressway interchanges are increasing with some estimates showing up to 90 percent growth in land valuation. Socially, the expressway is supporting families with some workers now travelling to work daily from their homes in the South.

This was not possible before the expressway when many workers had to opt to rent houses in the suburbs of Colombo and live away from their families. We are seeing a happy result for the families in the South to travel to Colombo daily for personal and official work.

This advantage will be extended when the public transport service commences operation in three months time.

New industries will also develop around the eight interchanges at Kahathuduwa, Bandaragama, Dodangoda, Welipenna, Elpitiya, Baddegama, Akmeemana, and Weligama.

For the purpose of land use planning, satellite towns are also identified and access roads will be rehabilitated to provide better linkages from satellite towns to the interchanges.

We note there were land acquisition and resettlement issues that arose during the building of the expressway.

However, the impact of the necessary land acquisition is now mitigated with the government’s initiative to build 37 resettlement sites with facilities to impacted communities and paying replacement value for land for resettled families. ADB provided experts in resettlement to assist with this work.

From an environmental perspective, there is an underpass or an overpass available every 500 metres (m), so that pedestrians need only walk for a distance of 250m to access them.

There are pedestrian walkways built as part of every river bridge. The expressway has a strong cross drainage structure, with 100-year flood return period for bridges and 50-year-flood return period for culverts.

Q. Are you ready to invest in proposed mega projects such as highways, ports and airports?

Answer: We have a firm project program for 2012 focusing on transport, energy, education and water supply sectors, with an annual public sector investment envelope of about of $300 m.

There are three loans proposed in the transport sector: The Northern Road Connectivity Project additional financing for about $92 million, National Highways Sector Project additional financing for about $40 million and Second Road Project Preparatory Facility for about $6 million.

The energy sector project entitled Clean Energy and Network Efficiency Improvement Project for about a $100 million loan will contribute to a reliable, adequate, and affordable power supply for sustainable economic growth in Sri Lanka.

The objective of the project is to increase clean power supply and to improve efficiency and reliability in the delivery of electricity in Sri Lanka.

Technical Education and Vocational Training Sector Development Project with a Multi Finance Facility of $200 million and the first tranche of $40 million is planned to be released in 2012. Under this project, the performance of the technical and vocational sector will be improved significantly while also strengthening private sector involvement in skills development.

The Water Supply Service Improvement Project worth $42 million aims to deliver better urban water supply services in an effective and efficient manner by reducing Non-Revenue Water (NRW) mainly in Colombo. The project will involve both physical network rehabilitation, and institutional and management enhancement to reduce NRW.

On the private sector side, we are working with various parties to develop possible projects in a number of sectors in which ADB will take a stake and support private sector development, but these are still on the drawing board.

Q. What is your view on 3% rupee devaluation recently in the 2012 budget?

Answer: Businesses, mainly exporters have been optimistic about the government’s decision to devalue the Sri Lankan rupee by 3% as it is expected to provide some support to exporters, whose competitiveness has been eroded by the currency’s strength and high local rates of inflation.

Sri Lanka’s rupee devaluation appears to be a step in the right direction as it helps restrain imported inflation. We expect foreign reserves to be maintained by continued inflows of foreign lending and investment.

Q. Are you satisfied with the speed of recovery and development in the North and East? What are the areas that ADB is involved in?

Answer: After May 2009, ADB approved several projects with a special focus on reconstruction and development of the North and East. The North-East Community Restoration and Development Project II, Conflict-Affected Region Emergency Project, Northern Road Connectivity Project, Secondary Towns and Rural Community-Based Water Supply and Sanitation Project, Jaffna Water Supply and Sanitation Project are among many such projects.

The objectives of these projects are to significantly expand and strengthen the reconstruction of urgently needed essential infrastructure and administrative services to assist in meeting basic human needs and create livelihood and sustainable employment opportunities in the conflict affected areas by supporting the recovery of the region’s economy. Clearly a lot of work is needed in Sri Lanka’s lagging regions and the ADB is partnering with the government and other development partners to improve the situation.

12Sri Lanka Newspapers - 25/12/2011 Empty Re: Sri Lanka Newspapers - 25/12/2011 Sun Dec 25, 2011 1:36 am


Global Moderator

Why u duplicate your post...

Lalith De Silva Mobitel CEO again
Post by kaka on Thu Dec 22, 2011 10:15 am


Global Moderator

A Rs 9.3 billion concessionary loan from the Asian Development Bank (ADB) is helping the Sri Lankan Government to rehabilitate roads connecting the Southern Expressway. The total estimated cost for rehabilitation of these roads is Rs 11.6 billion, with the balance coming from the Government. Six access roads are expected to be rehabilitated under the above project, a joint Government-ADB press release said.

These rehabilitation works are crucial to improve the connectivity of roads and to realize the full potential benefits from the expressway. Rehabilitation work of the identified road sections will be carried out under the 2nd phase of the ongoing National Highway Sector Project (NHSP) which commenced in 2007 with the aim of rehabilitating 270 km of national highways and improving the transpot sector regulatory framework.

Under the second phase of the National Highways Sector Project, 62 km of national highway road sections on Matara – Akuressa (3.40 km), Hikkaduwa – Baddagana (14.34km), Horana – Aguluwatota – Aluthgama (23.48 km), Katukurunda – Naboda (2.72km), Kirulapona – Godagama (5.33 km) and Colombo – Horana (12.7 km) are to be rehabilitated. These selected six road sections usually experience high traffic volume. “…the rehabilitation of these six road sections will facilitate easier access to the new expressway while improving the transport efficiency of the national highways network,” the statement said.

ADB plans to promote multimodal transport systems to ease road congestion and reduce pollution and extending financial assistance for this project was a major initiative towards this end, Rita O’Sullivan, Country Director of ADB’s Sri Lanka Resident Mission told the Business Times. She added that according to ADB’s Country Partnership Strategy, “ADB’s involvement in developing an effective Public-Private Partnerships (PPPs).enabling environment will provide synergies between ADB’s assistance for infrastructure development and private sector development.” She noted that driving on Sri Lanka’s southern expressway was a new experience for Sri Lanka’s motorists and they will get accustomed to it soon.

Around 5,000 vehicles on average are daily using the southern expressway, an official of the Road Development Authority said. Daily revenues from tolls charged from motorists using the southern expressway is around Rs1.5 million, he revealed. On weekends, the number of vehicles using the expressway, is around 10,000 a day, he said.

Meanwhile a luxury bus service will commence from next year on this expressway, he revealed. Four 48-seater buses will be deployed by the Sri Lanka Transport Board as an initial step. According to traffic police, motorists who use the expressway should strictly adhere to the rules and regulations related to the expressway. Some motorists and passengers travelling in vehicles have been found parking their vehicles on the way and enjoying the beautiful surrounding of the road, which is an offence.

A penalty of Rs. 5,000 will be imposed on such offences, police said adding that all activities on the road are closely monitored by CCTV cameras.

14Sri Lanka Newspapers - 25/12/2011 Empty India fears bigger current account deficit Sun Dec 25, 2011 1:40 am


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

December 23, 2011, 7:12 pm

Affirming that the domestic financial system remains robust and stable, the Reserve Bank of India fears widening of current account deficit (or CAD) because of higher oil prices, increase in the imports of bullion, machinery and electronics. In the central bank’s estimate, the CAD which was $14.1 billion in the first quarter of FY 2011-12 is likely to reach $54 billion by 31 March next year.

The financial stability report (or FSR) of the RBI released in Mumbai also forecasts broadening of trade deficit gap for the year from $155 billion to $160 billion, a significant rise from the previous year’s $104.4 billion. The half yearly assessment of financial sector released today, according to the RBI, is a "holistic assessment of soft spots in the financial sector from systemic perspective." The RBI has started publishing status report since 2010 and today’s is the third in the series.

15Sri Lanka Newspapers - 25/12/2011 Empty Promising Peace Collection gets US backing Sun Dec 25, 2011 1:40 am


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

December 23, 2011, 7:13 pm

The promising Sri Lanka Peace Collection has successfully garnered the US government’s nod. ‘Sri Lanka Peace Collection’ is the government’s initiative to provide livelihood support for war widows through the country’s handloom sector. "The Sri Lanka Peace Collection has very high potential," announced Patricia Butenis, Ambassador of the United States of America.

Butenis announced this after a special presentation and a discussion facilitated by Rishad Bathiudeen, Minister of Industry and Commerce, last month in Colombo. She was attending the second round of discussions on the Sri Lanka Peace Collection along with the officials of Sri Lanka Export Development Board, the Textiles Department, Department of Commerce and National Entrepreneurs Development Authority represented the Government of Sri Lanka on this occasion. Attending the discussions along with Butenis were Edward P. Heartney, Counsellor on Economic and Commercial Affairs, US Embassy and Laura. A. Gonzalez, Private Enterprise Officer, U.S. Agency for International Development (USAID).

Preliminary discussions were held with H.E. Butenis on January 6, 2011 to explore possible market access for the Peace Collection in the US.

Ms Himali Jinadasa, Advisor to the Minister and Convenor of the Sri Lanka Peace Collection project made the special presentation on Peace Collection on November 3 to Butenis.

Butenis and Minister Bathiudeen discussed the many ways in which the US assistance could be incorporated to the Peace Collection project and jointly evaluated the next steps on how to move the project forward.

Minister Bathiudeen, apprising Butenis said: "The Peace Collection is our effort to support he war widows of North and East. We have already received support from USAID and UNESCO for this unique project."

The collection is scheduled to be launched at the Sri Lanka Expo 2012, the mega export show held in Sri Lanka in March 2012 after 15 years lapse. Thereafter the Collection will be launched in Washington, New York and Los Angeles with support from the US Trade Representative for Central and South Asia and the US Embassy in collaboration with the Sri Lanka Export Development Board (SLEDB), Department of Commerce and Textile Unit of Ministry of Industry and Commerce of Sri Lanka.

Handloom experts praised the latest development. "The US support is good news for the Peace Collection and also the Sri Lankan handloom industry in general," said Senaka De Silva, leading Sri Lankan fashion designer of international fame who has been in the fashion industry for over 25 years and the Designated Designer for the project. De Silva has worked on researching and restoring age old textile techniques in Sri Lanka. His vast collection has a Sri Lankan identity and is admired by international buyers in Paris, Brussels, Amsterdam, Rome, Oman, Dubai and more recently, in Mumbai.

Sri Lanka’s handloom sector is one of the low cost but high earning industries. Its annual production exceeds six million metres of looms with an estimated annual production value of Rs 1500 Mn ($ 13.19 Mn) all of which are swallowed by both local and international demand. The production is labour intensive and the industry consumes less electricity & utilities while generating higher employment. At present, there are 511 weaving centres with 2971 weavers and more than 10000 looms in Sri Lanka assisted by 22 dying houses. More than 15000 personnel are engaged in the handloom industry.

The key Lankan provinces for handlooms are the Wayamba, Western, and Central provinces. The eastern regions of Sri Lanka too were reputed for handlooms but the 2004 Tsunami disaster inflicted damage on the eastern production but despite this, eastern handlooms continue to command buyer appeal. The handloom textile export target for 2011 set by the EDB under the Ministry of Industries is US $ 1.29 million (Rs 146 million). Among the international markets that vie for Sri Lankan handlooms are Italy, Germany, France, UK, Norway, Netherlands, Maldives and Thailand. The Ministry of Industry and Commerce is also pushing the Sri Lanka Peace Collection which follows the renowned Rwandan Peace Collection model.

Based on the ‘trade instead of aid philosophy’, the Rwandan Peace Collection, made available at Macy’s department store based in the US, consists of traditionally woven baskets direct from Rwanda. Created by Rwandan widows, the basket exports that began in 2005 became one of Rwanda’s biggest exports by 2010, sustaining the weavers and their families. The Sri Lankan initiative also plans to support a portion of the female headed households in the N&E Provinces with livelihood support while assisting towards their responsibility of looking after the needs of nurturing their families. The project will be implemented through existing weaving centres in the districts of Jaffna, Mannar, Vavuniya, Mullathivu, Killinochchi, Trincomalee,Anuradhapura,Polonnaruwa, Batticaloa and Ampara.

16Sri Lanka Newspapers - 25/12/2011 Empty Oil rises to near $100 Sun Dec 25, 2011 1:42 am


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

December 23, 2011, 7:14 pm

SINGAPORE (AP) — Oil prices closed in on $100 a barrel Friday in Asia amid expectations an improving U.S. economy will boost demand for crude.

Benchmark crude for February delivery was up 23 cents to $99.76 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose 86 cents to finish at $99.53 on Thursday.

In London, Brent crude was down 4 cents at $107.85 on the ICE futures exchange.

Crude has jumped from below $93 earlier this week on evidence of a slow but steady improvement in the U.S. economy.

The number of people applying for unemployment benefits dropped last week to the lowest level since April 2008, the third week in a row that applications fell. The Conference Board reported that its measure of future economic activity jumped last month, the second straight gain.

"This is a market that just appears to want to go higher," energy consultant and trader The Schork Group said in a report. "All good positive economic headlines are hyped and all poor headlines are ignored. Bears seem unable to keep crude from finishing 2011 below $100."

The market is also primed for potential threats to global crude supplies, such as rising tensions between Iran and Western nations over Iran’s nuclear power program. The U.S. and Europe may bolster sanctions against the world’s fourth crude biggest producer.

"Iran might not passively wait for sanctions to be applied and could act unilaterally to embargo supplies," J.P Morgan said in a report. "We are also concerned about Iraq, where political uncertainties seem to be rising following the U.S. troop pullout."

"We expect Iraq to add about 500,000 barrels a day of new supply in both 2012 and 2013, and any deviation from its present course could have serious implications for global supply."

Trading volume is normally low during the next week as many traders take vacations around the Christmas and New Year’s Day holidays. Global oil markets are closed Monday for Christmas.

In other energy trading on the Nymex, natural gas fell 3.3 cents to $3.14 per 1,000 cubic feet. Heating oil rose 0.4 cent to $2.92 a gallon and gasoline futures were up 0.4 cent to $2.64 a gallon.


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

December 23, 2011, 7:17 pm

With companies abandoning conventional budgeting methods, the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) will explore an informative topic at an interactive seminar titled ‘Beyond Budgeting: Can this be Tenable in Sri Lanka?," early next month, which will be conducted by renowned Professor of Management Accounting, Prof. Danture Wickramasinghe of the University of Hull, UK.

Scheduled to be held on 3rd January 2012 at Galadari Hotel, this will be among the institute’s very first events for the New Year. The one-day seminar will be an interactive platform for Prof. Wickramasinghe to highlight how tenable is it for companies in Sri Lanka to go beyond budgeting, while he will also describe how conventional budgeting has become problematic for companies.

The primary objectives of the programme is also to explain how companies have been abandoning conventional budgets, discuss what alternatives can be implemented in place of budgets and promote a dialogue whether and how this agenda is tenable in Sri Lanka.

Prof. Wickramasinghe will also elucidate in detail giving examples as to how some companies have abandoned conventional budgeting and the mechanisms adopted in place of it.

Danture Wickramasinghe is Professor of Management Accounting and the Director of the Centre for Accounting and Accountability Research at Hull University Business School, University of Hull, UK. As the first Sri Lankan to be a Professor in Accounting in a British university, he has joined Hull after 19 years of research and teaching at the University of Manchester where he earned his PhD in Management Accounting, again as the first Sri Lankan to earn this degree.

Formerly, he was the Dean of the Faculty of Management and Finance and the Head of the Department of Commerce at the University of Colombo, and the Head of the Department of Business Administration at the University of Ruhuna. He conducts workshops for MBA students worldwide and has lectured in Dubai, Florida, Shanghai, Hong Kong, Singapore and Manchester and supervises a number of PhD students both at Hull and Manchester.


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

December 23, 2011, 7:16 pm

The Union commerce secretary, Mr Rahul Khullar, today asked exporters to get the first mover advantage in new markets such as Africa and Latin America as the global economic environment is unlikely to improve in the near future.

However, it is within the realm of possibility to reach the annual export target of $300 billion this year and take it to the level of $450 billion by 2013-14, he said, while releasing a strategy paper by the Associated Chambers of Commerce and Industry of India (Assocham).

"The external environment is not good ~ especially in the European Union and the United States. The next two years are going to be difficult. There are going to be cutbacks in government expenditure, exchange rate fluctuations and financial sector problems," Mr Khullar said. -ANN


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

December 23, 2011, 7:18 pm

As an organization committed towards uplifting the society they operate within, Aitken Spence has always steered a clear strategy towards social development. As part of an integrated sustainability plan, which spreads across the entire Group, the Company’s HR Division has included supporting the national education system, in their sustainability strategy.

Aitken Spence HR recently conducted two programmes for students and teachers in the Kaluthara and Colombo districts. One of many similar events planned for the near future, the aim of the programmes is to support the efforts made at a national level to improve skills shortages.

In the two separately held events, the Company’s HR team addressed the needs of students and teachers, taking into considerationthe concerns of each group in an approachable and inspirational manner.

The first event, ‘Cross Roads 2011 Career Fair’, which was organized by the Old Boy’s Association of Holy Cross College Kaluthara, had a group of resource personnel from the Aitken Spence HR team – conducting two sessions on career guidance and the concept of Multiple Intelligence. Over 750 students ranging from the ages of 15 – 18 from a number of educational institutions around the Kaluthara district attended the fair, taking back with them valuable information and knowledge on planning out their future careers.

The main purpose of this event was to build awareness and to guide students in to going beyond the status quo in finding a career path that is in line with their proficiency and interests. The Aitken Spence HR team,who discussed the subject in detail, also talked about myths involved in career planning, self-assessment and introduced a 5 step career planning approach.

The second event on the agenda was the organising of an ‘inward bound’ programme for teachers of the Holy Family Convent in Bambalapitiya on the 25th of October 2011.Hundred teachers participated in this event, which had many interesting outdoor activities, with a special focus on useful developmental concepts. The programme was put together with the main aim of introducing techniques to improve the role of the educator by tailoring different approaches to suit specific situations such as facilitator, mentor and counsellor.

Through regular debriefings and discussions after each activity – the teachers were able to interact and swap stories, and each was able to learn from the experiences of their peers.

Apart from these two events, Aitken Spence HR has also conducted two special programmes on Career Guidance and Multiple Intelligence for G.C.E. A Level students of Mahamaya College, Kandy earlier this year. The programmes were conducted at an event organised by the Old Girls Association of the school and was attended by approximately 400 students.

Aitken Spence also conducted a seminar on career guidance for the University of Colombo. The participantswho numbered over 300 undergraduates, were from the University’s Faculty of Science.

The Aitken Spence HR Team who is taking every opportunity to assist initiatives that supplement the national education programme, have made plans to participate in several similar programmes that are lined up for the future.


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

December 23, 2011, 7:19 pm

"JICA will continue to support the Sri Lankan authorities to enhance the safe and effective operation of the Southern Expressway, now that the construction activities are completed", says Mr. Akira Shimura, Chief Representative of the JICA Sri Lanka office. Japan International Cooperation Agency (JICA) is the implementing agency for the Official Development Assistance from the Government of Japan, and has contributed the largest share of funding for the Southern Expressway. The Colombo-Galle section of this first toll expressway of Sri Lanka will be ceremonially opened by His Excellency, President Mahinda Rajapakse on November 27, 2011.

The 95km long section opening on the 27th extends from Kottawa in Colombo District to Pinnaduwa in Galle District. It will allow vehicle speeds of 100km/h dramatically reducing travel time between the sea and air ports of the commercial capital and the Southern Province.

Together with the Government of Sri Lanka, this section of the Southern Expressway is co-financed by JICA and the Asian Development Bank (ADB), and implemented by the Road Development Authority of the Ministry of Ports and Highways.

JICA provided concessionary long term loans to the value of JPY 36,269 million (approx. LKR 50 billion) for construction of 66km of the 4-lane expressway from Kottawa to Kurundugahahetekma. This section consists of 5 interchanges and 4 river bridges including the 695m long bridge over Bentara Ganga, the longest bridge in the country.

Toll plazas and the toll collection system including ETC (Electronic Toll Collection system) for the entire expressway and many of the vehicles for operation and maintenance are also funded by JICA. The expressway will initially open with a manually operated toll collection system, and upgrade to a multi-option state-of-the-art toll operation by end of 2012.

To support the safe and effective operation of the expressway, JICA provided technology transfer by Japanese experts, training for expressway management staff in Sri Lanka and Japan, and job-training of over 300 toll collection and traffic management staff. This support will continue for even after the expressway is inaugurated. "Since this is the first expressway in the country, there will be a learning period for everyone once the operation starts. We will continue sharing Japan’s knowledge and experience to promote safety and sustainability of the expressway", says Mr. Shimura.

The Southern Expressway is the first link of the planned expressway network of Sri Lanka. JICA is also currently financing two sections of the Outer Circular Highway of Colombo which link the Southern Expressway to the Colombo-Katunayake Expressway, as well as provincial and rural road rehabilitation around the country.


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

December 23, 2011, 7:20 pm

Bartleet once again helped foster a sense of peace and wellbeing amongst the management and staff of the Bartleet Group with the holding of its Carol service. It was held on the 11th of December at Park Street Mews, Colombo 2 amidst a gathering of its management, staff, creating an atmosphere of bonhomie and spreading the goodwill of the season. The event was graced by the presence of Mr. Will Graham – CEO of Andrew Wommack Ministries, Europe and was accompanied by his wife Mrs. Barbara Graham. The special Christmas message delivered by him was well received by the audience.

This renowned international speaker was hosted by the Chairman of Bartleet Eraj Wijesinghe who initiated the proceedings. In his welcome speech he stated, " This event epitomizes the thrust of Bartleet’s vision of creating a platform in which all members of our group of companies can come together as one family in mutual respect and understanding. It is also our prayer that our country learn to live in peace and harmony as reflected in the lyrics of the beautiful carols which we are about to hear".

The ambience of the venue, created by the special seasonal lighting effects consisting of shimmering star like lights along the entrance to the venue was a beautiful vista. The interior of the hall included a fitting backdrop for the St. Benedict’s College Choir, who performed an excellent rendition of nostalgic Christmas Carols and Songs with superb harmonizing and singing.


Global Moderator

23Sri Lanka Newspapers - 25/12/2011 Empty What Is Right Is Wrong! Sun Dec 25, 2011 1:47 am


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

Prof. Amal S. Kumarage

The New Paradigm

Prof. Amal S. Kumarage
Engineers of a large state authority were asked by their superiors why their estimates are so low as that would hamper negotiations with contractors, similarly an engineer of a state institution was asked in regard to a contract being executed, not to test its quality as it would delay the next stage of the project!
This was said by Chartered Institute of Logistics and Transport Sri Lanka Chairman Professor Amal S. Kumarage when delivering the B.D. Rampala memorial lecture at the Institution of Engineers on Tuesday.
“Transparency and accountability, be they for tenders and contracts or recruitment, inherited by our colonial masters are now neglected,” he said.
Taking a left handed swipe at the Indians who are doing rail projects here, Kumarage, firing all cylinders said that Indian Rail would not like to be taken over by another country despite how friendly that neighbour is.
He said that the rot sent in after the 1970 elections when Mrs. Sirima Bandaranaike’s UF Government swept into power. Rampala who was then General Manager Railways (GMR) resigned due to the rise in trade unionism and a person from the Sri Lanka Administrative Service was made GMR, which made a promising Assistant General Manager Technical at the Railway to retire prematurely. The then Transport Minister appointed was LSSPer Leslie Gunewardena.
Seven years later when the deleted Government of J.R.Jayewardene was swept into power, Rampala was made a consultant to the transport Ministry.
A newspaper then carried a headline which said, “Trains are running on time, stations are clean, Rampala is back.” But this was shortlived as Rampala was not a person to bend to politicians and resigned shortly afterwards. He was not a puppet in anyone’s string, said Kumarage, adding that in the short space of seven years the rot had set in. The then Transport Minister was M.H.Mohamed.
He said that Rampala, in his time was recognized by the Institution of Locomotives Engineers, London as the best diesel engineer East of Suez.
But nowadays engineers are forced to comply to suppliers’ standards and to take orders from politicians, said Kumarage. “We need engineers of integrity, the collapse of engineering leadership began after Rampala retired,” he said.
“Our engineers are capable,” Kumarage added. When the floods of 1957 devastated 85% of the rail track, Rampala who was GMR then, had it re-established in six weeks. Similarly, when the 2004 tsunami destroyed the coastal track, the Railway, under the then GMR Priyal de Silva had those tracks up and running in 57 days, said Kumarage.
He said that rail accounted for a mere 5% of passenger transport and 2% of goods transport. But in a scenario where motorization is congesting roads and causing pollution, rail, because it’s environmentally friendly is the solution, he said.
In countries such as China, France and Japan, rail, because of its superior speeds in those countries is not competing with motorization, but with air transport, said Kumarage. Similarly, freight transport by rail in the USA has now become a profitable venture, he said

24Sri Lanka Newspapers - 25/12/2011 Empty Point Of View Sun Dec 25, 2011 1:47 am


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

Last Sunday a weekly carried a picture of President Mahinda Rajapaksa’s eldest son Namal (MP) who took his oaths as a lawyer recently, posing for a picture.
Among those captured in the photo were President Rajapaksa and Chief Justice (CJ) Mrs. Shirani Bandaranayake.
A picture of the new attorney posing with his parents probably would have had been in order, but the question is whether it’s right for the Executive together with his son to pose for a picture with the members of the judiciary when there may have had also been several other new lawyers other than Rajapaksa junior who may have had also taken oaths that day?
Is it that the adage “Caesar’s wife must be above suspicion” not applicable in the 21st Century, or rather to Sri Lanka?

25Sri Lanka Newspapers - 25/12/2011 Empty Internet Hits Card Sales Sun Dec 25, 2011 1:48 am


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics

The internet has hit card sales, so a bookshop owner claims.
Dharmapala Wijeratna who runs Samanala Bookshop in Mt. Lavinia told this reporter on Saturday that sales this season are down not due to the economy, but due to the computer!
People nowadays prefer to sit in front of a computer and send out their seasonal greetings rather than buy a card, he said.This has impacted card sales. “Previously, during this time of the year my shop was overflowing with cards due to demand,” said Wijetilaka. “But now the computer has stolen my business away.” He said that deterioration in sales began around 2-3 years ago.
“During this time of the year, previously, I used to sell around 100 cards daily, but now it’s down to 10-12 cards,” Wijetilaka who has his shop by Galle road and who has been operating it for the past 26 years said.Price cannot be the constraining factor, then the average price of a card was Rs. 30; now it’s between Rs.40-45, he said.

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