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FINANCIAL CHRONICLE™ » DAILY CHRONICLE™ » Sri Lanka Newspapers - 09/01/2012

Sri Lanka Newspapers - 09/01/2012

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1Sri Lanka Newspapers - 09/01/2012 Empty Sri Lanka Newspapers - 09/01/2012 Sun Jan 08, 2012 10:38 pm


Global Moderator

SEC Director General’s post not lucrative enough?
*Price band imposed to counter difficulties in ATS

By Ravi Ladduwahetty

The much awaited appointment of the Director General of the Securities and Exchange Commission (SEC) has taken a new turn with the favourite who was handpicked rejecting the offer while two insiders who applied for the post following the media advertisement, have also withdrawn.

SEC insiders told The Island Financial Review yesterday that the initial panic had been triggered with Varuna Epasinghe , the US based Fund Manager and son of Presidential Advisor and ICTA Chairman Prof. Epasinghe announcing his non- availability for the post, despite the market and the authorities expressing their confidence of his taking up the post.

Earlier, SEC Chairman Tilak Karunaratne also expressed confidence that he will be ideal in the light of the experience that he has in Fund Management and similar operations which was believed to be useful for the post. These sources also said that Epasinghe (Junior) had declined the appointment on the basis that it was not financially lucrative for him to take up the post.

These sources also said that SEC’s incumbent Director ( Investigations) Dhammika Perera who was a more senior official to the deposed Director General Malik Cader in the Commission along with Director Surveillance Chandu Epitawela who had earlier applied for the post of Director General at the time of the applications being advertised, had later withdrawn theirs for personal reasons.

It is also well known in market circles that it was Chandu Epitawela who had brought up the research paper and the proposal for the price bands, due to the migration from the ATS ( Automated Trading System ) to ATS 7 was taking a longer time than expected to materialise.

The reason for the proposal for the price band is reported to be that the system at the Colombo Stock Exchange could not hold the volume of the transaction and the high turnover which was being reported on a daily basis.

Meanwhile, the SEC has interviewed some candidates who had applied for the Director General’s post with the shifting of Malik Cader, but no finality has been reached yet in this regard.

The market is awaiting the ruling of the SEC Commissioners who are scheduled to meet next Wednesday (11), to announce not only the name of the new Director General but also on its stand on the price band as well. However, it is fairly uncertain whether the ruling on the price band will be given until the installation of the ATS 7 at the Colombo Stock Exchange is complete, the sources said.

2Sri Lanka Newspapers - 09/01/2012 Empty Banks have brief window of opportunity Sun Jan 08, 2012 10:40 pm


Global Moderator

Raising capital from international markets - CB expects US$ 1.5bn each year from banking sector

Domestic banks would have to prepare their balance sheets and prepare to seize the brief window of opportunity to raise capital from global capital markets as the gap between advances and deposits increase, a senior banker and a ratings specialist said.

Hatton National Bank Managing Director Rajendra Theagarajah said domestic banks have two options of raising capital from overseas markets, through a private placement for smaller banks and via the listing route for the bigger players.

Theagarajah, former president of the Association of Professional Bankers and former Chairman of the Sri Lanka Banks Association and Chairman Asian Bankers’ Association, said banks would no longer have the luxury of taking their time preparing for an international capital issue.

"There was a time six months would be ample time enough to prepare for an international capital issue, but with the global financial crisis, particularly the debt crisis in the Eurozone, international capital markets are in a constant state of flux, so picking the right moment would be crucial," he said.

"Bigger banks could probably raise capital through listings in foreign capital markets as this would also provide a benchmark. Smaller banks could also go for listings, but raising capital through private placements with established financial institutions would be an easier option.

"Banks need to beautify their balance sheets in advance because given the global uncertainty, the window of opportunity would be open for a brief moment and we must be ready to seize it," Theagarajah said.

The Central Bank has relaxed Exchange Control regulations giving banks and the corporate sector space to raise capital from foreign markets.

Central Bank Governor Ajith Nivard Cabraal recently said some banks have already initiated efforts to raise foreign capital through the strength the of their balance sheets. "Many are yet to test themselves out in the international markets and secure such funding," he said delivering the bank’s ‘Road Map: Monetary and Financial Sector Policies for 2012 and Beyond’ last week.

"There is potential for banks to raise approximately US$ 1 billion as Tier II debt capital in 2012, and thereafter raise around US$ 1.5 billion each year as Tier I and Tier II capital from foreign sources. Banks need to look for stable wholesale funding sources without relying on small scale customer deposits," Cabraal said.

Theagarajah told The Island Financial Review that Hatton National Bank had been exploring these options for around six months and that some progress has been made although it was too soon to elaborate further. In 2005, HNB successfully listed on the Luxemburg Stock Exchange.

The country’s balance of payments is going through a crisis and some market analysts say official gross reserves hover around the US$ 3 billion range.

Cabraal says significant foreign currency inflows would materialise within the next three months, which include capital generated by domestic banks from overseas markets.

State-owned banking giant Bank of Ceylon has already indicated that it was planning a US$ 500 million international debt issue soon.

RAM Ratings Lanka CEO Adrian Perera said domestic banks will have a small window of opportunity of rising capital through an international issue but much work would have to be done.

"Domestic savings cannot sustain the level of credit that would be required sustain economic growth and unless banks raise capital from overseas, there would soon be a liquidity problem. Already, credit has saturated the savings in the system and capital adequacy ratios of most banks are at their peak," he said.

Banks would have to show robust balance sheets, impressive ratings and good governance structures in order to satisfy international capital markets.

Also, shareholders would have to be prepared to let go of some of their holdings as shares would be diluted in the case of raising capital through the issue of equity, Perera said.

"Banks must also show what the proceeds would be utilised for. Lending to sound infrastructure projects would be more acceptable to investors. Ten year debt instruments would be a better option to go for given the prevailing rates in international markets," he said.

According to the Central Bank, total assets of the banking sector grew 19.6 percent year-on-year to Rs. 4.1 trillion as at end November 2011 while total deposits grew 19.4 percent to nearly Rs. 3 trillion.


Global Moderator

India is keen on awarding Bangladesh the status of the "most preferred nation for trade across the border" and will work to ensure capital flows to the country for business, a senior Indian minister said yesterday.

Home Minister Palaniappan Chidambaram said India and Bangladesh can join hands in making this part of the world "a hub of business activities" when bilateral relation between the countries is in the best shape.

He said it is the duty of New Delhi to give access to goods and services from Dhaka since India’s economy is many times bigger than the other. "It is India’s responsibility to ensure that capital flows from India to Bangladesh to start businesses."

Addressing the Northeastern States Business Summit here yesterday, Chidambaram said Bangladesh is blessed with natural resources, especially natural gas while India with entrepreneurs and capital.

"Joining the hands together, so much business can be created on both sides of the border. I think it is important that the businessmen look upon Bangladesh and India as one market — a market where goods and services can be produced, traded and exchanged.

"Therefore, we are very keen to gift Bangladesh the most preferred nation status for trade across the border, (so that) trade between the countries takes place almost tariff-free.

"We should reach out to Bangladesh," the minister said.

He also lauded the role of Bangladesh prime minister in developing the bilateral relations. "I want to pay tribute to the vision and statesmanship of Prime Minister Sheikh Hasina. India and Bangladesh are today closer than ever before.

"We are perhaps today as close as the day on which Bangladesh was liberated," Chidambaram said.

India entered into a number of agreements with Bangladesh, especially on territory, enclaves and adverse possession of areas which are now accessible due to the cooperation of the chief ministers of northeastern states, particularly Assam, Tripura, Meghalaya and West Bengal.

"They have made it possible to settle the long-standing disputes. There are still one or two outstanding issues but I am confident that we will settle those too in 2012," he affirmed.



Global Moderator

Dharma Dheerasinghe, former Deputy Governor of Central Bank Sri Lanka has been appointed as the new Chairman of Bartleet Finance PLC with effect from January 03, 2012. Eraj Wijesinghe, the current Chairman makes way after a long spell with Bartleet Finance in keeping with Corporate Governance requirements of the new Finance Business Act of 2011 and would continue as the Managing Director/Chief Executive Officer, the company announced recently.

Bartleet Finance declared that Dheerasinghe has joined them as an Independent, Non Executive Director and had been appointed the Chairman.

Dheerasinghe, a Career Banker spent well over 35 years with the Central Bank of Sri Lanka and held various senior positions before retiring as the Senior Deputy Governor. He also served as an Alternate Executive Director in the IMF from September, 2007 to January, 2010. He obtained his Masters in Economics from the University of Leeds UK and is an Honorary Fellow of the Institute of Bankers, Sri Lanka.

S. Raghavan, Director and spokesperson for Bartleet Finance is of the view that the wealth of knowledge and the hands-on experience he possesses would help to reinforce the trust and confidence of the depositors as well as in infusing new insights into the financial portfolio that Bartleet Finance operates, thereby further enhancing the Productivity and Service Orientation of the Company. Bartleet Finance under the new leadership of Dheerasinghe will now look to enhancing shareholder value and all stake holders to benefit by the future growth of the company.

"It is indeed a great opportunity and challenge to be able to take on the reins of one of the leading mercantile establishments specializing in finance, and I look forward with great interest to infuse the wealth of my knowledge to further enhance the financial portfolio of Bartleet Finance. I also look forward to working closely with the management team in a spirit of understanding and goodwill," stated the new Chairman Dheerasinghe."

Bartleet Finance, a member of the Bartleet Group was incorporated in 1983. It is registered with the Central Bank under the Finance Business Act and has a network of 17 branches islandwide. It is also listed in the main board of the CSE and rated BBB- by RAM rating.

Dheerasinghe was recently appointed Deputy Chairman to one of the country’s largest private sector banks, Commercial Bank of Ceylon PLC.


Global Moderator

*Rupee devaluation just might have some positive implications
By Steve A. Morrell

Asia Siyaka Tea market report last week indicated that negatives from 2011 will get carried over into 2012. Chairman of this company, Anil Cooke, said there could also be some positive repercussions affecting tea trading. He agreed market conditions could pose positive perspectives with Russian buying increasing because of their admittance to the World Trade Organisation (WTO). He did not disagree that the Ceylon Tea tag line ‘Ceylon Tea the best in the world’, was now outmoded and not a credible marketing ploy. There were alternative Tea choices on retail shelves. There was not much difference between, say, a CTC from Kenya, or a ‘Ceylon’.

Qualifying what he said an orthodox ‘Black’ Ceylon was still a commanding presence on market shelves.

Oil prices moving up could have telling impact on Tea . Some other Brokers too did not sound overly enthusiastic that this could have negative impacts on the market.

Reverting to value addition and image building for the beverage, he cited the recently launched ‘Heladiv’ Tea Choice, located in, literally, the heart of the business world, the Fort. And more so a tranquil haven for quick retreat to the Old Dutch hospital, opposite the World Trade Center, Twin Towers.

He agreed the market could have its ups and downs but positive options were that there was now an allocated sum of 10 million Dollars for Tea promotion through a cabinet decision. This sum was not at all adequate, but something to build on.

The Tea Board was pursuing marketing strategies targeting the United States, and China. Considering the allocated sum was barely sufficient, envisaged focus was on active participation of the private sector for joint promotion activity.

A Tea shop, here or there in some obscure international location was not dynamic marketing other brokering sources said. As already established this was a small beginning subject to expansion.

End 2011, the sales average was Rs. 359.80. In 2010, the average was Rs.370.61 indicating lower prices for the year by about Rs, 20 per kilo. This is substantially debilitating, these sources said.

Instability in the Plantation sector fuelled by lower prices would have negative effects on the industry. Our sources , who prefer to remain anonymous said that closure of one Estate in the Hatton planting district spelt some turn- around pointers that could lead to more closures. In that instance we are told the labour have now agreed to increase their intake to at least 16 kilos per day. ( In India the green leaf intake per plucker is 28 kilos. In Kenya each plucker brings in at least 45 kilos per day.) Disparity in harvest per plucker would need further examination.

Currently, cost of production in the formal Tea sector is around Rs. 450. With a selling price at Rs. 360. producers stomach a loss of around Rs. 100 per kilo.

Labour wages are about 63 % of the cost bill.

6Sri Lanka Newspapers - 09/01/2012 Empty Re: Sri Lanka Newspapers - 09/01/2012 Mon Jan 09, 2012 9:12 am


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

Banking sector assets to double
Assets of the banking sector is projected to increase to Rs. 8,000 billion from the current level of around Rs. 4,100 billion by 2016 said the Central Bank Governor Ajith Nivard Cabraal. Speaking at the release of the Road Map for 2012 and beyond he said that lending is projected to reach a broader spectrum of corporates and households and is projected to reach Rs. 5,000 billion. This is currently at around Rs 2,500 billion.

“Access to finance in the country is projected to improve significantly.” Net interest margin is projected to decline to around 3.3% from current level of 4.2% while the corporate bond market outstanding is to increase from below Rs. 100 billion to Rs. 1,000 billion by 2016.

Market capitalization of the CSE is projected to reach 70% of GDP by 2016. Towards this scenario, banks will need to realign their business models and processes to be in syne with the evolving needs in the economy.

To face the challenge of supervision in 2016, the Central Bank too will take the required steps internally such as strengthening the regulatory capacity by equipping the supervisory teams with the necessary skills and also building capacity through strengthening the knowledge base of the existing supervisors. The Central Bank will also support a deeper, more liquid and vibrant bond market.

The Government Securities Market is projected to grow further while the Secondary market operations are to take place through an electronic trading platform. A deeper, more liquid and vibrant equity market will also be encouraged. The Stock Market is projected to grow to a value of 70% of GDP when GDP reaches US $ 100 billion.

Steps would also be taken to raise awareness of foreign investors on investment opportunities in Sri Lanka through continuous investor updates and road shows.

Encouraging listing of Sri Lankan Corporates and foreign companies on the CSE are also on the cards.

Measures will also be introduced to popularize foreign exchange inflows and outflows, through convenient formal mechanisms.

Non-Bank Financial Institutions would be further authorized to carry out money changing activities. Already Laugfs Super Markets are already engaged in this. Facilitating transmission of foreign exchange collected by authorized dealers outside the Colombo District and Automation foreign currency encashment operations at certain popular commercial outlets would also take place soon.

Since foreign remittances are one of the key drivers of the economy Promoting training and awareness programmes relating to foreign exchange transactions would be a priority.

Introducing and implementing strict regulatory and punitive action against unauthorized or illegal money changing activities would be conducted in a tougher manner in the future.

7Sri Lanka Newspapers - 09/01/2012 Empty Re: Sri Lanka Newspapers - 09/01/2012 Mon Jan 09, 2012 9:13 am


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

‘Lankan healthcare world class’
Sanjeevi Jayasuriya
The country’s private healthcare facilities are on par with international standards and the sector could look at business beyond borders. The Asiri Central Hospital acquired at an investment of Rs 1.8 billion today stands as the best healthcare institution in Asia and the vision of the management is to take the service to the next level, Softlogics PLC Chairman Ashok Pathirage said.

The company further invested Rs 5.5 billion to develop the facilities to become the largest healthcare provider in the country.

The 600 bed capacity of the hospital will be further boosted by adding the Kandy Hospital which will commence construction within the next six months, he said.

The 38th LBR LBO CEO Forum on managing growth, scale and complexity with new generation conglomerates builders conducted a fireside chat last week in Colombo.

“The key drivers to sustain business are discipline, integrity, perceived value and credibility. We could expect a huge lifestyle shift with the per capita income reaching US $ 4,000 by 2016.

There will be wide potential for quality and branded products and we work towards making the company becoming the top most conglomerate in the country,” he said.

The ambitious growth plan of the Softlogic Holdings include adding 250 retail ICT stores by 2014 with an expected customer base of over 20 million.

The company is one of the current market leaders in the consumer electronics with a growth rate of 20 percent.

The retail stores will be an important channel for the consumers as well as showcasing for the company.

The retail venturing will be further extended by entering into the branded apparels where there is an unmet demand.

Plans are under way to bring in a reputed departmental store to Sri Lanka and the company is looking to set up two to three malls with the assistance of developers.

“We believe that our retail sector will have the fastest growth which at present is 100 percent. The leisure sector too is expected to perform where the Sea Sand Hotel Bentota is currently under refurbishment.

It will be a 165-room property in the four star category and will be ready for business by next year,” he said.

The automobile business, where there are plans to include more brands, is expected to give scale to the company performance and the product offering will be given more emphasis.

The company is also in to financial and insurance businesses.

8Sri Lanka Newspapers - 09/01/2012 Empty Re: Sri Lanka Newspapers - 09/01/2012 Mon Jan 09, 2012 9:14 am


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

AirAsia to Bangkok direct from Colombo
AirAsia, the World’s Best Low-Cost Airline (Skytrax Award 2009, 2010, 2011), has launched daily direct flights from Colombo to Bangkok. The first flight from Colombo to Bangkok is scheduled to depart on March 1, 2012. AirAsia, the leading and largest low-cost carrier in Asia, services the most extensive network with approximately 139 routes.

Within 10 years of operations, AirAsia has carried over 100 million guests and grown its fleet from just two aircraft to approximately 106.

According to Thai AirAsia CEO Tassapon Bijleveld, they are very excited to open this new route, which will open up a world of opportunities for people to shop, sight-see, and experience all the flavours that Thailand has to offer, at a very affordable price.

“As a low-cost carrier, we are committed to keeping our fares low and affordable so that people can spend more money on a great hotel, or do more shopping and simply enjoy their time in Thailand.

“On the other hand, we are also confident that this new route will bring in a surge of visitors and business people from Thailand which will significantly stimulate Sri-Lanka’s travel industry,” Bijleveld said.

AirAsia also offers connecting flights from Bangkok to Phuket and Chiang Mai, among other dream destinations.

“The 180-seat Airbus A320 deployed for this operation has leather seats and a variety of in-flight meals to choose from,” added the CEO.

AirAsia, the leading and largest low-cost carrier in Asia, services the most extensive network with approximately 139 routes.

Within 10 years of operations, AirAsia has carried over 100 million guests and grown its fleet from just two aircraft to approximately 106.

9Sri Lanka Newspapers - 09/01/2012 Empty Re: Sri Lanka Newspapers - 09/01/2012 Mon Jan 09, 2012 9:14 am


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

Timex Fergasam expands to Mannar with $ 5 million, 1,200 jobs
The first BoI apparel manufacturer to enter Mannar, Timex and Fergasam Group (T&FG) will be investing $ 5 million for its two factories in the region. Officials of Timex and Fergasam said that the upcoming factories will be the 17th and 18th manufacturing facilities to be set up by the apparel group.

Garment workers in a BoI zone’s manufacturing facility floor of Timex and Fergasam Group which caters to such labels
as Marks & Spencer, Victoria’s Secret and Diesel.
According to them, the project will be in two phases-the first factory will provide employment for 1,200 and the second, for 800.

Timex and Fergasam currently employs more than 8000 across its 16 manufacturing facilities with offices in the UK and Hong Kong.

The Timex and Fergasam officials also revealed that the first Mannar factory to start production will begin operations by mid-October 2012. According to the officials of Timex and Fergasam, the firm is a $ 60 million Sri Lankan apparel producer within the top five apparel manufacturers of Sri Lanka.

T&FG has won the 2006 NCE Export Award and the All Star Award 2007.

Among the clients of Timex and Fergasam Group are such top labels as Marks & Spencer, Victoria’s Secret, House of Frazer, Diesel, H&M and SUZI Chin. “The two new garment factories, once built, will also provide employment for more than 2000 at its full capacity” said Industry and Commerce Minister Rishad Bathiudeen.

Minister Bathiudeen also inaugurated the commencement of the groundwork for T&FG’s two factories last Saturday at Mannar Industrial Zone, Mannar.

10Sri Lanka Newspapers - 09/01/2012 Empty Re: Sri Lanka Newspapers - 09/01/2012 Mon Jan 09, 2012 9:15 am


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

Nivasie Developers to invest Rs. 4 b
Indunil Hewage in Kandy
Nivasie Developers Pvt Ltd, a fully owned subsidiary of reputed construction company ICC is planning the construction of 230 luxury houses in Malabe.

Sales Manager
Janaka Weliwitigoda
The company hopes to invest Rs. four billion for this investment.

One of the projects completed in Digana, Kandy.
Pictures by Saliya Rupasinge
The construction of the Malabe project to be built on 23 acres of land will start in May, 2012. “However, we are still in the preliminary stage of this development at the Malabe project and we expect to complete the project in three years,” Nivasie Developers (Pvt) Ltd Sales Manager Janaka Weliwitigoda said.

“The Sri Lankan housing market is also picking up as a result of increased demand from the local and foreign expatriates. This was also a reason for us to look at this mega investment in Malabe,” he said.

Founded in 2000, the company has made a significant contribution to shaping the residential landscape into what it is today by building more than 2500 houses and shows its commitment to delivering signature developments of high quality, excellent value and responsible design, which deliver above-average investment returns. “Our homes have grown in value. Many consider it a great investment which has been proven real.

“With the quality guarantee on the home and a well organized support service, our home owners have always displayed highest levels of satisfaction and appreciation,” Weliwitigoda said. One of our unique qualities is that we have repeaters who have bought our houses and waiting for other projects to be completed to purchase them, he said.

Digana Village which was one of the company’s flagship projects and their fourth project was completed with only two units to be sold.

This property has 300 plus holiday bungalows with all entertainments and club facilities.

11Sri Lanka Newspapers - 09/01/2012 Empty Re: Sri Lanka Newspapers - 09/01/2012 Mon Jan 09, 2012 9:16 am


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

Record tourist arrivals in December
Hemanthi Guruge
Sri Lanka’s tourist arrivals increased by 30 percent to 855,975 from January to December in 2011 compared to the same period in 2010. This is the first time ever that the tourism industry arrivals passed the 800,000 mark.

Tourists in Galle Face. Picture by
Saliya Rupasinghe
In addition, another unique milestone that was recorded last year was the December arrivals of 97,000 which was the highest ever for a single month in the history. Sri Lanka Tourism Promotion Bureau sources told Daily News Business that arrivals from January to December in 2011 have witnessed a steady increase as against the same period in 2010.

This year has also seen a massive contribution of arrivals from India, Japan, Germany, the U.K, France, the Netherlands and other countries.

Arrivals from Western Europe, one of the key sources of revenue to the country, has increased by 22 percent to 315,210.

Visitors from South Asia rose 35 percent to 237,647, with India rising 35 percent to 171,374.

Australia was up 24 percent to 46,467 and Germany was up 22 percent to 55,882. Chinese arrivals increased by 56 percent to 16,308. Thirty thousand visitors arrived from Western Europe during December.

12Sri Lanka Newspapers - 09/01/2012 Empty Re: Sri Lanka Newspapers - 09/01/2012 Mon Jan 09, 2012 9:17 am


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

Papyrus targets high growth for Conqueror - retains MTI
The World’s leading fine paper brand Conqueror represented by Sri Lanka’s premier paper and printing solution provider Papyrus Papers (Pvt) Ltd has unveiled plans to scale up the Sri Lankan operations, commit significant investment and retained the services of MTI Consulting.

Speaking at the launch of the strategizing process with MTI Consulting, Ashan and Michelle Abeyesundere, Directors of Papyrus Papers expressed the need to further strengthen the company and to gear-up to optimize on Sri Lanka’s projected growth trajectory and thereby to determine a strategic road map for the future of the business while maintaining a premier position.MTI Consulting CEO Hilmy Cader said that given the well-entrenched position of the company and its value proposition, Papyrus is poised for quantum growth and this exercise should help them to critically evaluate the business environment and develop high growth strategies.

13Sri Lanka Newspapers - 09/01/2012 Empty Re: Sri Lanka Newspapers - 09/01/2012 Mon Jan 09, 2012 9:17 am


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

Sri Lanka starts tech drive to safeguard int’l coir lead
Sri Lanka is the world’s largest exporter of coir fibre. Nevertheless, Sri Lanka’s coir industry is in urgent need for infrastructure upgrading for it to sustain its coir supremacy. “New technology infusion to our coir sector can greatly enhance our coir appeal in the competitive global marketplace,” said Industry and Commerce Minister Rishad Bathiudeen last week.

Minister Bathiudeen was speaking in the aftermath of signing of the MoU between the Moratuwa University and the Industry and Commerce Ministry to support new coir machinery development processes. Minister Bathiudeen also handed over Rs 1.25 in additional financing to the Electrical Engineering Department of the Moratuwa University lst week to further develop the already successful coir automation machinery developed by the University with the assistance of Industry and Commerce Ministry’s initial financing in 2010 of only Rs 0.49 million.

Minister Bathiudeen (right) examines a piece of Sri Lankan made one metre wide erosion control oriented high-grade geo-textile piece used to stabilize the embankments between Imaduwa and Baddegama
stretch of new Southern Expressway with Moratuwa University Vice Chancellor Prof. A.K.W. Jayawardane.
“We need to increase value addition to our coir exports since 90% of our coir exports are in raw form. Also, as I am given to understand by the Coconut Development Authority (CDA) of Sri Lanka, from the husks coming out of our total three billion units of annual coconut output, only 30% of the husks are converted into coir fibre. With the support of CDA, we can increase this percentage so that our coir industry readily benefits from it,” Minister Bathiudeen said.

The Sri Lankan coir fibre used as inputs for many products, is one of the most sought after natural fibre products in the world. Sri Lanka produces 35% of the world’s natural coir output. Almost all the coir fibre produced here are natural with no synthetic fibre produced. Nienty percent of coir exports are in raw form.

The raw coir is exported to the UK, France, Germany, India and China.

The raw coir has the advantage of duty free entry for Sri Lankan coir export destinations but finished coir products exported are levied with various duties at the import country’s end. As a result, Sri Lanka coir exporters find raw coir exports to be more attractive.

According to the Export Development Board (EDB), the export revenue from coir based products from January to October 2011 stood at $ 51 million. Export revenue from raw coir during the same period stood at $ 39.7 million. Around 200 coir mills are in operation in rural Sri Lanka mostly operating in primitive working conditions with out-dated technology. The industry is also faced with labour migration to other jobs and it has become difficult to get new recruits.

Seeing this trend, a new weaving machine has been developed by the Katubedde Engineering Faculty successfully which increased the coir based geo-textile weaving speed by 35% while also reducing the number of labourers needed per machine from three to one. But the project was put on hold by the University due to lack of funds for further development. The Industry and Commerce Ministry’s latest round of funding is aimed at reviving the project immediately.

Moratuwa University Vice Chancellor Prof. A.K.W. Jayawardane addressing the occasion said: “The Moratuwa University is thankful for the continuous support it receives from the Industry and Commerce Ministry for a variety of its projects that aim at value addition. We are always ready to share our knowledge and expertise for industrial development.”

14Sri Lanka Newspapers - 09/01/2012 Empty Re: Sri Lanka Newspapers - 09/01/2012 Mon Jan 09, 2012 9:18 am


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

Jayasika’s ‘Kisses’ are sweeter
Sanjeevi Jayasuriya
As human beings, the majority of us have a craving for sweetmeats and this fondness has created many opportunities including commercial and economic. Identifying the market gap and meeting the demand pays rich dividends.

Jayasika Milanthi Fernando
When there is a constant demand for a product or service, the best way to capitalize on it is to venture into a business by having strategic plans to be innovative and differentiate while concentrating on market needs. Having established a business to produce Kisses, a sweet food item a decade ago Jayasika Milanthi Fernando was able to capture a sizable market share over the years due to the supreme quality of her products and timely delivery.

Jayasika with her family
Her efforts to continuously improve product quality and conformity to best practices in food industry has witness the venture grow rapidly. Her clientele is confident of the quality aspect of her product and their long-standing relationship bears testimony where Jayasika has blossomed in to one of the few quality producers of her chosen food category in the country.

She was interviewed by Daily News Business.

Excerpts of the interview:

Q. How do you describe your line of business?

A. We are in to producing Kisses under the brand name Chummy. The food item is in high demand as it is not imported at present unlike other popular food categories which are flooding the market. The locally produced Kisses have a great demand and the demand comes as a surprise at times especially during Christmas and New Year. My venturing into business was not pre-planned as my husband’s boss was running the business and he migrated with his family leaving the business and the equipment for us. We further developed the business and now have branded our product under the name ‘Chummy’ and over the last ten years period it has proven to be a success.

Q. How do you strike a balance between family life and business?

A. My husband Asiri Karthelis was instrumental in setting up the business. Initially I looked after the entire operation, but afterwards he joined me to support in purchasing, marketing and selling aspects. This has become a family concern. We have two children, son Ashen and daughter Menali. I attend to the household needs in the morning and start production with the help of three employees.

As we have the latest sophisticated equipment to manufacture Kisses, things have become easier. This machine enables mass production and it saves time. As I enjoy what I am doing the business has never been a burden on me.

Q. What motivated you to venture into business on your own?

A. I had this idea of engaging in a business line related to food. I got the right opportunity when we were basically given a business with necessary equipment. It was a matter of planning and organizing to run an efficient business.

Q. What are your goals?

Display of Chummy Kisses
A. The food industry is competitive and it encompasses a wide range which gives the customers a broad selection. Therefore, my goal is to sustain the level of customers while providing a quality product that pampers their taste buds.

Q. How do you face the challenges of competition?

A. Our product is reputed for being of high quality. This has made the difference where customer retention has never been a problem. The seasonal nature of the product have also given us the edge over competition as certain months boost the sales volumes to compensate any downward trend in low volumes in the other months. The other reason for the continuous growth is that the customers especially children are the driving force in the demand for the product. They account for a major segment in our customer base.

Q. What is your specialty?

A. Chummy products are made to perfection where quality and hygiene are the top priorities. Our success of over a decade vouches for unending demand and customer loyalty.

Q. What are your achievements in business?

A. The venture has helped us to reshape our lifestyle and it has provided the foundation to build upon. We will be building a house where more space could be allocated to further develop the business. The positive customer feedback provides the momentum to move forward and the venture has given us a great deal.

In return, we help others and we firmly believe that the business community needs to play a proactive role in the socio-economic progress of the country. The business has made us be compassionate towards the society and of value to the country.

Q. What is your message to society?

Production process
A. Achieving peace of mind is a lovely way of describing the meaning of life.

It is something that everyone aspires to. However, peace of mind is often like the pot of gold at the end of the rainbow- it tends to be elusive for most people. You must also make peace with whatever you have to do in life, with your duties and responsibilities. Peace of mind is not achieved by always trying to do what you like.

On the contrary, you find peace of mind by making peace with whatever you are called to do. Whatever your role, whatever your duties are, you can always have fun, enjoy it, put happiness into it and make peace with it. You can make peace and have fun with anything, anywhere. Peace of mind is not found by searching in a deep cave, in a perfect monastery; in a wonderful place high in the Himalayan Mountains.

If you’re looking for peace that way, you are looking for what Ajahn Chah called a tortoise with a moustache. People look for the impossible and of course they can’t find it. There is no such thing as a tortoise with a moustache.

15Sri Lanka Newspapers - 09/01/2012 Empty Re: Sri Lanka Newspapers - 09/01/2012 Mon Jan 09, 2012 9:48 am


Vice President - Equity Analytics
Vice President - Equity Analytics

A. Baur & Co. gets new directors

The Board of A. Baur & Co. (Pvt) Ltd., has appointed Kuda Herath as a Director, three alternate Directors and a General Manager with effect from 1 January. Herath was born in 1967 and graduated from the University of Loughborough, UK.
His experience in the field of marketing of FMCG products spans over a period of 15 years.
The three alternate Directors are Anoja Basanayake born in 1967, a graduate from the University of Colombo in Information Technology, with 17 years of experience in Information Communication Technology and Project Management. Chandima Athukorala born in 1972, graduated from G.B. Pant University of Agriculture and Technology, India, with 13 years experience in Agri Input Business.
Nishantha Weerasinghe born in 1969 with a higher diploma in Supply Chain and Management and over 15 years of experience in the Health Care Industry. Stefan de Run born in 1959 has been appointed as General Manager Operations (Agri Inputs).
He has 19 years of experience in the Tea Industry, enhanced with experience in administration and 11 years experience in the manufacturing and logistics of Fertiliser blends and Agrochemicals.
With the appointment of new Directors and a General Manager, all of whom have a proven track record, Baurs is taking a step in rejuvenating its management in view of ensuring the continuity of its organisation which has been in Sri Lanka since 1897.

16Sri Lanka Newspapers - 09/01/2012 Empty Re: Sri Lanka Newspapers - 09/01/2012 Mon Jan 09, 2012 9:49 am


Vice President - Equity Analytics
Vice President - Equity Analytics

Sri Lanka’s economy stands to gain from a stronger Europe: German Envoy

German Chancellor Angela Merkel and French President Nicolas Sarkozy, the two leaders of the Eurozone’s most powerful economies, met on 9 January to discuss further steps to resolve the debt crisis. Their first meeting of 2012 comes after all EU countries except the UK agreed to work together on a new treaty to stabilise the Eurozone. The German Ambassador to Sri Lanka Jens Ploetner discusses the policy directions of the EU and its implications on EU-Sri Lanka trade relations
Q: For several months now Europe has been engaged in financial policy crisis management – what will a sustainable solution look like?
A: We are now developing the European Union into a ‘stability union’. That is what we agreed at the European Council on December 9, 2011. Almost all member states of the European Union committed themselves to observing the stability criteria by showing, for example, increased thrift and greater budgetary discipline. A European Commission with stronger powers will monitor this and be able to intervene if the common rules are infringed. I am confident that we can thereby regain the trust in our common currency and permanently stabilise the euro.
Q: Financial stability is one point, but how can the competitiveness of the EU countries also be strengthened at the same time?
A: Increases in competitiveness can be achieved within a currency union by raising efficiency and improving productivity. Germany has implemented such reforms in recent years, such as increasing the age of retirement to 67 from 65. These reforms were painful, but necessary. They are one of the main reasons why my country has weathered the recent crises without a massive economic slowdown.
Q: What political opportunities does the crisis present for the European Union? Are the countries moving closer together or moving further apart?
A: We must seize the opportunity that the crisis offers for Europe to grow even closer together. The intensified cooperation that has now been agreed in the key areas of fiscal and economic policy will have spillover effects on all other policy areas. I am convinced: At the end of the day, Europe will emerge from this crisis stronger than before.
Q: Some seem to have gained the impression that German interests are different from European interests. How do you answer such criticism?
A: Germany is not alone in its desire for a more robust fiscal and economic policy in the European Union. The fact that 26 EU member states agreed on 9 December 2011 to set out together on the path towards a stability union shows that our goals receive broad support.
Q: German regulatory policy principles have become more firmly anchored in the Eurozone in recent months. Doesn’t that involve the danger that Germany is perceived too much as a strict taskmaster? Is Germany’s image suffering in the debt crisis?
A: As the largest economy in the European Union, Germany bears a special responsibility towards Europe. We have actively assumed this responsibility in the euro crisis. That also fulfils the expectations that the EU partner countries have of Germany. We have always acted transparently and underlined that we attach importance to cooperation with all 26 EU partners.
Q: Is there a danger that the European ideal will recede into the background?
A: We must not forget during the current crisis that Europe is the compass of German policy. Our goal remains a political union of Europe – with open borders, with an attractive and unique European way of life, with cultural magnetism, economic growth and political appeal.
Q: How important is a stable EU for Sri Lanka?
A: The European Union has been an important trade partner for Sri Lanka for several decades. Sri Lankan exports to the EU have continued to grow in recent years, even after the removal of the GSP plus preferential trade scheme. Both the UK and Germany are among the top three largest markets for the local tourism sector, which has experienced rapid growth after the end of the civil conflict here in Sri Lanka. Europe also continues to be a preferred destination for Sri Lankan students to pursue their higher education. Therefore, in many ways, a stable and growing European economy is important to Sri Lanka.
Q: Some seem to consider that – given Europe’s present crisis – now is the time for Sri Lanka to turn East. What are your thoughts on that?
A: I strongly recommend not thinking in categories of a zero-sum game, meaning what you gain on the one side, you have to lose on the other. Neither economically, nor politically, is this a wise concept. Instead of merely redistributing the ‘cake,’ one should aim at making it bigger.
Translated to Sri Lanka’s situation this means that building and strengthening new ties is a good thing, but it should not be seen as an alternative to existing relationships. A country aiming at the kind of economic development Sri Lanka is cannot relinquish its ties to Europe – the place where 25% of all patents are registered each year!

17Sri Lanka Newspapers - 09/01/2012 Empty Re: Sri Lanka Newspapers - 09/01/2012 Mon Jan 09, 2012 9:56 am


Vice President - Equity Analytics
Vice President - Equity Analytics

Asia accounts for 70% of economic losses from natural catastrophes in 2011

A sequence of devastating earthquakes and a large number of weather-related catastrophes made 2011 the costliest year ever in terms of natural catastrophe losses, according to global reinsurance giant, Munich Re.
At about US$ 380 billion, global economic losses were nearly two-thirds higher than in 2005, the previous record year with losses of US$ 220 billion. Around 70% of economic losses in 2011 occurred in Asia.

The earthquakes in Japan in March and New Zealand in February alone caused almost two-thirds of these economic losses. Insured losses of US$ 105 billion also exceeded the 2005 record of US$ 101 billion. Torsten Jeworrek, Munich Re’s Board Member responsible for global reinsurance business, says: “Thankfully, a sequence of severe natural catastrophes like last year’s is a very rare occurrence. We had to contend with events with return periods of once every 1,000 years or even higher at the locations concerned. But we are prepared for such extreme situations. It is the insurance industry’s task to cover extreme losses as well, to help society cope with such events and to learn from them in order to protect mankind better from these natural perils.”
With some 820 loss-relevant events, the figures for 2011 were in line with the average of the last ten years. Ninety per cent of the recorded natural catastrophes were weather-related – however, nearly two-thirds of economic losses and about half the insured losses stemmed from geophysical events, principally from the large earthquakes.
Normally, it is the weather-related natural catastrophes that are the dominant loss drivers. On average over the last three decades, geophysical events accounted for just under 10% of insured losses. The distribution of regional losses in 2011 was also unusual.
The most destructive loss event of the year was the earthquake of 11 March in Tohoku, Japan, when a seaquake with a magnitude of 9.0 occurred 130 km east of the port of Sendai and 370 km north of Tokyo. It was the strongest quake ever recorded in Japan.
The damage from the tremors themselves was relatively moderate thanks to strict building codes. However, the quake triggered a terrible tsunami. The wave devastated the northeast coast of the main island Honshu.
Even without considering the consequences of the nuclear accident, the economic losses caused by the quake and the tsunami came to US$ 210 b – the costliest natural catastrophe of all time. The share of insured losses may amount to as much as US$ 40 billion.

18Sri Lanka Newspapers - 09/01/2012 Empty Re: Sri Lanka Newspapers - 09/01/2012 Mon Jan 09, 2012 9:57 am


Vice President - Equity Analytics
Vice President - Equity Analytics

Amal Senadilankara new SLBFE Chairman

Former Parliamentarian Amal Senadilankara assumed duties last Friday as the new Chairman at the Sri Lanka Bureau of Foreign Employment (SLBFE).
He was the former Chairman of the National Apprentice and Industrial Training Authority and the Chairman of the Fisheries Ports Development Authority.

19Sri Lanka Newspapers - 09/01/2012 Empty Re: Sri Lanka Newspapers - 09/01/2012 Mon Jan 09, 2012 10:04 am


Vice President - Equity Analytics
Vice President - Equity Analytics

Sri Lanka credit information office to get D&B software

Jan 09, 2012 (LBO) - Sri Lanka's credit information office is planning to acquire software by US-based Dun & Bradstreet costing 150 million rupees as it expands coverage and services, an official said.

"We expect the software to be deployed from March," Sri Lanka Credit Information Bureau (CRIB) general manager Gamini Karunaratne said.
"It may take about three months."

The D&B software will help the CRIB process and provide credit information to registered financial services firms better, incorporating district or sector-wise breakdowns, he said.

The software was needed to provide credit information on utility payments and insurance in the future, Karunaratne said.

D & B had also helped CRIB in its computerization drive in 2009

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