Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.

Thank You

Join the forum, it's quick and easy

Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.

Thank You
Would you like to react to this message? Create an account in a few clicks or log in to continue.

Encyclopedia of Latest news, reviews, discussions and analysis of stock market and investment opportunities in Sri Lanka


Submit Post




View results

ශ්‍රී ලංකා මූල්‍ය වංශකථාව - සිංහල
Submit Post


Send your suggestions and comments

* - required fields


Latest topics

» AAIC 100 = SCAP 16
by SamJay1974 Today at 12:47 am

» Technical update 12.08.2022 Maharaja
by Maharaja Yesterday at 11:04 pm

» Exterminators Plc (EXT.N)
by ErangaDS Yesterday at 9:09 pm

by Gaudente Yesterday at 8:08 pm

by ADVENTUS Yesterday at 5:12 pm

» LOLC to enter the giant Indian Market
by samaritan Yesterday at 4:52 pm

by IDK Yesterday at 4:01 pm

by ADVENTUS Yesterday at 3:42 pm

» Hidden Gem - GLAS - 40/- Soon
by vijay singh Yesterday at 10:36 am

» Buy lofc tomorrow - Maharaja
by Anushka Perz Yesterday at 12:59 am

» LIOC ....Get in soon
by Citizen Silva Sun Aug 14, 2022 10:26 pm

» L G I L - Maharaja special
by Chula Sun Aug 14, 2022 10:12 pm

» New Bermuda Triangle
by CHRONICLE™ Sun Aug 14, 2022 9:23 pm

» SGH buys EXPO from retailers
by samaritan Sun Aug 14, 2022 2:29 pm

by cheetah Sun Aug 14, 2022 2:27 pm

» What you need to remember is there is ALWAYS a way to make income from day trading stocks. Stock market for beginners and day traders
by Asoka Samarakone Sat Aug 13, 2022 9:00 pm

» LPRT and CHOT old and profitable businesses, yet severely undervalued
by deli Sat Aug 13, 2022 5:13 pm

» CW Makie Highest Dividend Payer- EPS of Rs.10 for Quarter
by Ros123 Fri Aug 12, 2022 5:57 pm

» LOFC Future
by samansilva Fri Aug 12, 2022 11:05 am

by stocknoob Fri Aug 12, 2022 7:59 am








You are not connected. Please login or register

FINANCIAL CHRONICLE™ » DAILY CHRONICLE™ » Sri Lanka Newspapers Sunday 13/05/2012

Sri Lanka Newspapers Sunday 13/05/2012

4 posters

Go to page : 1, 2  Next

Go down  Message [Page 1 of 2]

1Sri Lanka Newspapers Sunday 13/05/2012 Empty Dampen Bourse Sat May 12, 2012 4:32 pm


Director - Equity Analytics
Director - Equity Analytics

12, May 2012 (LBT) - Controversial purchase of TFC shares by the state savings giant NSB, and not honoring the payment, spread panic waves among the investors thus activities at the Colombo bourse continued to lose steam throughout the week giving YTD negative return of 15.9%. Many counters, including blue chip companies too fell to experience 52 week low; however foreign interest remained to be at a laudable level recording a net foreign inflow of LKR 509.4mn for the week. Mixed bag of corporate results were released so far; reflecting selected entities witnessed FOREX loss from loans after the devaluation of rupee and increase in indirect expenses dented the bottom line. Despite the tenuous interaction in the past, last tranche of USD 425 mn from IMF is to be received in July; followed by Sri Lanka is expecting to extend the relationship with IMF hoping it would assist the country in how the economy should move which indeed a valuable support in this volatile world. Whereas, prevailing unstable political and economic situation in Euro Zone emerged as a challenge in achieving projected GDP growth of 7.2% considering the fact, that the Europe is the major export market of Sri Lanka. The overall sentiment has left the question among the investors on their asset value, demolishing their risk taking ability. In view of this, market expect the investors to be in wait and watch situation to re- align their portfolio till the market to gather steam.


Director - Equity Analytics
Director - Equity Analytics

May 12, 2012(LBT) - Sri Lanka's Nations Trust Bank's (NTB) net profit for the March 2012 quarter rose 08 percent to 406 million rupees ,a stock exchange filing said. “Current year quarter was driven by a noticeable growth in business volumes, modest growth in top line revenue and controlled growth in operating expenses. All business pillars contributed to PBT in equal measure resulting in a well balanced result." chief executive Saliya Rajakaruna said.

“With the mandatory credit ceiling coming into effect, business portfolios were re-positioned to optimize returns in a controlled growth environment.”

“Group cost income ratio stood at 60% on par with the previous period. Cost efficiency and productivity has taken a predominant role in the day to day operations of the Bank with initiatives being implemented not only to reduce waste and consumption but also by exploring ways and means of inculcating a culture of working smarter amongst employees across all functions. ."

NTB-Financial Review – 1st Quarter 2012

Core-earnings posted good growth over 2011 with revenue increasing at the higher rate of 9% compared to growth in expenses of 4%. In the current quarter, the Bank recorded a mark to market loss of Rs. 46Mn in contrast to the gain of Rs. 36Mn recorded in the corresponding quarter of previous year.

Loan loss provisions which comprises of specific provision write-back and a general provision charge in line with asset growth for the quarter was comparatively higher than the previous period which recorded reversals on both categories.

Net Interest Margins were challenging yet again with rising cost of funds and intensifying competition.

Timely intervention in pricing across asset and liability portfolios and growth in business volumes resulted in net interest income recording a growth of 9% over the previous year.

Non funds based (NFB) income too recorded a 9% growth over the previous period. Trade finance income recorded a drop due to IPO guarantee commission income generated during the previous period being absent in the current period.

Credit cards recorded good growth of 29% stemming from acquiring commission income and card fees. Both local and destination spend increased over 20% compared to the 1Q of 2011 with the number of new cards issued doubling.

Forex income also recorded a notable growth as a result of currency volatility in the Market.

A sizeable vacuum was created in NFB income as trading losses were recorded on the FIS portfolio for the current period compared to gains recorded for the previous period.

The continuous upward movement in the yield curve negatively impacted the FIS trading portfolio which has been mitigated to some extent by shortening its duration.

The Bank continued to manage costs, curtailing the increase in expenses to 4% despite rolling out an expansion strategy with investments made in people, premises, systems and the NTB brand.

Group cost income ratio stood at 60% on par with the previous period. Cost efficiency and productivity has taken a predominant role in the day to day operations of the Bank with initiatives being implemented not only to reduce waste and consumption but also by exploring ways and means of inculcating a culture of working smarter amongst employees across all functions.

The bank also took the first step in initiating the move into a paperless boardroom.
With the introduction of the iPad Board Application, the Bank eliminated costs in terms of paper usage, printing and couriering whilst giving Board Members access to all past and current board papers at the click of a button, enabling both simpler and faster decision making.

3Sri Lanka Newspapers Sunday 13/05/2012 Empty Sri Lanka Newspapers Sunday 13/05/2012 Sat May 12, 2012 6:25 pm


Global Moderator

Lynch the culprits

That may by the law of the land many centuries ago. Nevertheless frustration, anger, apathy and indifference at enforcement of the law has led to many calls from the public to lynch the culprits in the plethora of irregular deals that’s happening with alarming frequency in paradise land.

It was once said that the stock market has hit the bottom, and the next flow of media reports called it a ‘bottomless pit’. Now Sri Lanka is going down the abyss owing to lack of governance, transparency and confidence faster than anyone can think, with no bottom to hit! Unfortunately for the people that matter in the country, the voting population – rural populace – these issues are not as serious as it is to an urban audience.

Yet the 390 million-rupee scam in the stock market in a deal between some directors and investors of The Finance Co (TFC) and the National Savings Bank (NSB) should bell the cat this time because it involves the country’s premier savings bank where members of the public of all walks of life have put their money in.

Newspapers have been filled with the developments relating to this deal like the President ordering its cancellation; the Securities & Exchange Commission (SEC) launching an investigation; settlement bank Sampath settling the seller but awaiting payment from the NSB which is unlikely to come if the government has cancelled the deal, etc. However among other issues that need to be vigorously addressed is restoring the confidence, integrity and sanctity of the market place.

The Chamber of Commerce (CCC), the country’s premier chamber, has slammed the deal and said ensuring the integrity and transparency of the market place is paramount. Laudable statement indeed if not for the fact that the chamber itself is guilty of not practicing what it preaches, given its conduct of an investigation of a member firm which had been reprimanded by the Supreme Court. The less said about that inquiry tainted with conflicts of interests, the better. But it simply goes to show that society has degenerated to such a low level that even those supposedly, highly respectable individuals have skeletons in their cupboards.

Last week’s editorial on the ‘fit and proper’ rules for directors issued by the SEC explains in detail the dilemma of assessing the ‘honesty and integrity’ of a director merely from an affidavit or referees (who themselves are questionable). In recent times, the number of dubious deals and irregular transactions have increased so much that it’s hard to keep up with the numbers.

In addition to the NSB fiasco, another issue that has surfaced is the funds used for the recent mega EXPO exhibition and fair. The Government and the Export Development Bank (NDB) say the event was well received but questions are now being raised by directors about the cost of staging the event. When this was raised at a board meeting, EDB Chairman Janaka Ratnayake walked out of the meeting saying he is not ‘answerable to the board but only to the President’.

What kind of nonsensical statement is this? It’s not only the chairman but the entire board that is responsible to – in this case – the Minister in charge (not the President). Taking the argument further, the ultimate authority is the people, because state institutions are run with public funds, and directors are mere representatives of the public. Such high-handed conduct should not be tolerated by anyone including the Minister or the President. By law, by statute, those working for state institutions are servants of the people.

In the case of a private company, the board is responsible to its shareholders, and cannot run on the whims and fancies of a bunch of directors. Irregularities abound in Sri Lanka. Here are some reported examples: contaminated petroleum; EDB, NSB, the manipulation of the stock market that led to the fall of its respected chairperson Indrani Sugathadasa (despite her high connections); goings-on at Watawala Plantations; the Sheraton Hotel issue which is reported extensively on the previous page; Hilton, the CATIC (Chinese investor) deal, etc, etc.

These are just the reported ones; what about the others that are yet to come into the public domain because the paper trail has been skillfully hidden from the media by the perpetrators?

On the NSB transaction, while various options have been discussed, the only possible course available to ensure the credibility of the Colombo bourse is for the transaction to be reversed through the stock market. This means that the NSB should sell back the shares at the same price to the original buyers, who also need to take this option for the sake of preserving the integrity of the market mechanism. By doing so, nothing is lost or gained while the markets restore back its credibility.

It is also incredible for the NSB to publicly state that it was cancelling the deal (whatever the Treasury Secretary or the President would say) as a deal done must be honoured. If the decision to cancel the deal is effected and settlement bank Sampath Bank takes the loss, it erodes confidence in the market for which both the Treasury and the President must take responsibility. Sampath on the other hand is answerable to its shareholders. The Central Bank must also take responsibility as to whether these directors are ‘fit and proper’.For NSB Chairman Pradeepa Kariyawasam, the NSB issue comes a full circle after the problems he had at the Sri Lanka Insurance which he chaired after the Supreme Court reversed the privatization of that institution.

“History repeating itself’, quipped one analyst, referring to our report on November 15, 2009 headlined “Crisis at SLIC board settled by PBJ”. That report said that Treasury Secretary Dr P.B. Jayasundera intervened to settle a dispute between Kariyawasam and the rest of the board of directors.

It said Kariyawasam was asked to adhere to his function as a non-executive chairman in the face of clashes and disagreements between the directors and the chairman over decisions allegedly taken by Mr Kariyawasam without consulting the board.

A similar drama has taken place at the EDB where the board says it was not fully consulted on the budget for the EXPO fair. Whether or not NSB directors were involved in a corrupt deal, this issue must be dealt separately without tampering with the market, struggling to recover from a long period of uncertainty.

Through these external measures, including influential brokers seeking favours and other needs with the intervention of the President (as Ministry of Finance) without allowing market forces and regulation to take its course, the Colombo bourse from its exalted position of being ‘among the best performing in the world’, has turned into the laughing stock (market) in the world.

For sanctity to prevail, the buck must stop somewhere and that is the President as the Ministry of Finance. Wrongdoers must be punished, whoever they may be; otherwise the law of the jungle (which is happening in the market) will spread to the streets, a situation Sri Lanka can ill afford.

4Sri Lanka Newspapers Sunday 13/05/2012 Empty Learning from mistakes is hard work Sat May 12, 2012 6:27 pm


Global Moderator

Everybody thinks they are excellent at learning. After all, most of us have gone through years of university education and got one or more bits of paper showing just how good we are accumulating knowledge. Acronyms after our names often appear just in case society forgets the value of this knowledge.
However, it is learning from past errors (or mistakes) that interests me. Here the evidence is compelling: we aren't good at understanding our mistakes. In fact, we generally don't even acknowledge that we have made mistakes, let alone going on to learn from them.

Our minds have a gamut of mental devices that can be deployed to protect us from the ugly reality of our poor decision-making. Four hurdles in particular stand out. First is self-attribution bias. We have a relatively fragile sense of self-esteem; one of the key mechanisms for protecting this self image is self-attribution bias. This is the tendency for good outcomes to be attributed to skill and bad outcomes to be attributed to sheer bad luck. This is one of the key limits to learning that investors are likely to encounter. This mechanism prevents us from recognizing mistakes as mistakes, and hence often prevents us from learning from those past errors.

Hindsight bias is a second oft-used mental defence mechanism. Hindsight bias refers to the fact that after something has happened we are all really sure that we knew it would happen all along.
Once people know the answer, they find it impossible to imagine any other outcome. As with self-attribution, hindsight blinds us to past errors. Orwellian rewriting of history becomes the norm. Simply warning people about this bias has little effect.

Explicitly, asking people to think about other alternative outcomes has more impact. Written records of previous beliefs can also help offset this bias. Our world is inherently probabilistic. That is to say; we live in an uncertain world where cause and effect are not always transparent. We have a habit of believing that we can control events far more than we can. Thus we attribute outcomes to our actions, even though they may well have nothing to do with us. The illusion of control is particularly prevalent when lots of choices are available, you have had early success at the task, the task is familiar to you, the amount of information is high and you have a personal involvement. Large portfolios, high turnover and short time horizons are the financial equivalents of these conditions.

The final major hurdle in learning from our failures stems from our ability to twist the facts to fit our own beliefs. So if we get on the bathroom scales and they show us we have gained weight, we get off and try again, just in case we were standing strangely.

However, if they gave us a pleasant surprise we would accept it and skip off to the shower. We go through life in much the same fashion, accepting feedback that agrees with us, and scrutinising any that disagrees with us. Once again; this prevents us learning from our errors.

Another, related effect: humans exhibit confirmation bias when they tend to view all new evidence through the old lens of their existing beliefs. They disregard whatever might tend to disprove what they already believe, even while they point eagerly to any information that reinforces the views they already hold.

Understanding these biases are useful not only to investors but to the general public as we are all susceptible to these fallacies. Take for instance how parents react to children on receiving their exam results. Good results are rewarded with gifts, while poor ones are sometimes harshly punched. Parents spend little time in trying to decipher whether the result was down to pure skill (which deserves rewards and recognition, as long as they are not high-fat, high-sugar treats!) or luck (deserving a far more nuanced reaction). The same applies to our views on the success and failure of others.

Some of these behavioural problems can be countered by keeping written records of decisions and the 'logic' behind those decisions. But this requires discipline and a willingness to re-examine our past decisions. Psychologists have found that it takes far more information about mistakes than it should do, to get us to change our minds. So little wonder that learning from past mistakes is a difficult process. However, as always, being aware of the potential problems is a first step to guarding against them.

(Kajanga is an Investment Specialist based in Sydney, Australia. You can write to him at


Global Moderator

By Bandula Sirimanna
The ongoing tug of war between the Treasury and Board of Investment (BOI) designed to be a ‘one stop shop’ for investors, is hindering Sri Lanka’s efforts to attract US$2 billion in foreign direct investment targeted for this year, official sources said.

Having been absorbed by the Economic Development Ministry, the BOI is still in a transition without a Chief Executive Officer proposed in 2010 and included in November when the 2011 budget was presented, to issue clear direction on investment promotion.They said the BOI top management has failed to perform up to expectations in spite of Treasury instructions towards revitalizing the country’s premier investment agency.

More than 18 months after proposing the post, Treasury Secretary Dr.P.B. Jayasundera against referred to the issue at a media conference last week saying they are searching for a suitable candidate for the post of CEO to turnaround the BOI.

On the other hand, top BOI officials expressed concern over foreign investment deals and canvassing for investments by powerful individuals completely ignoring normal procedures. They said that the role of the BOI has become less important as its functions and responsibilities have been taken over by certain ministries and that, this is one of the reasons for its slow progress in facilitating new investments.

Right now the BOI is simply acting as an agency to get tax relief, not promote investments, they say.
Responding to the Treasury Chief’s observations and criticism, BOI Chairman and Director General, M.M.C Ferdinando told the Business Times that he has taken measures to attract mega investment, as all the other investments had been saturated. He initiated these actions since his appointment as the acting Chairman of the agency in mid July last year. Necessary infrastructure to attract such investments had to be built and he initiated a massive project to set up heavy industrial investment zone in Sampur at an investment of US$4 billion towards this end, he said.

Sri Lanka is targeting most of the US$ 2 billion of foreign direct investment for 2012 to flow into infrastructure with US$ 400 million going into tourism, he said. Mr Ferdinando said the BOI has been undermined by those implementing ad hoc rules and regulations and the introduction of pieces of legislation. He blamed the Customs, Inland Revenue, Exchange Control Department, Import-Export Control Department and UDA for not being considerate in dealings with the BOI. He also opposed experiments (at the BOI) such as restructuring at the expense of the institution. He added that millions of rupees had been spent for restructuring process of the BOI, but it has failed to bring expected results so far. He noted that he is trying his best to put the house in order.

He disclosed that he proposed the setting up of new investment promotion zones in Trincomalee, Kilinochchi, Maduruoya, Puttalam and Achchuweli areas. Twelve new Investment Promotion Zones (IPZ) will be set up to make Sri Lanka a preferred destination for investment in Asia catering to the needs of local and foreign investors. The BOI will invest Rs. 3 billion to upgrade the 12 BOI zones in the country within the next three years, he disclosed.

Responding to an allegation of BOI’S failure to properly facilitate a team of Korean investors, he said that he also heard about this complaint made to the President during his recent tour of Korea. But no such team approached the BOI and this particular Korean delegation was not an investment mission. They were looking for loan facilities to implement some tourism projects, he revealed.


Global Moderator

Sri Lanka has set a target of 22,500 rooms in the next five years when tourist arrivals would reach 2.5 million, and aims to turn the entire country into a tourism development zone, according to Dr Nalaka Godahewa, Chairman Sri Lanka Tourism. He was making the keynote address at the 24th Joint Meeting of the UNWTO commission for East Asia, South Asia and the Pacific : UNWTO high level Regional Conference on Green Tourism held in Thailand recently.

Speaking on "Marketing an emerging tourism destination in Asia : The Sri Lanka perspective of Green Tourism", he spelt out the entire plan and philosophy behind the drive to grow tourism in the country referring in particular to giant strides made by individual hotel companies on issues of environment and green tourism. Here are excerpts of his presentation: "Amongst the recent global trends, green tourism plays an important role. The number of travellers seeking green tourism destinations is clearly on the rise. According to UNWTO research 34% of world travelers today are willing to spend more for a hotel that has a record of being environmental friendly. 50% of tourists are willing to pay more for a hotel which shares the economic benefits with the community.

What is green tourism or sustainable tourism? We can simply define it as responsible travel to natural destinations that preserves the environment and improves the well-being of local community thereby ensuring sustainability. The Tourism Development Strategy document published by the Ministry of Economic Development has very clearly articulated the sustainable tourism development policy of the country which is built on three main pillars.

Firstly making sure that there is absolutely no negative impact on environment in any of our tourism development activities and also to contribute actively towards conservation of natural environment. Secondly to ensure that the economic benefits of the tourism industry is shared with a larger cross section of the society.

Thirdly to ensure a pleasant experience throughout the stay for each and every tourist so that these tourists will not only repeat their visits but also promote the destination to friends and relatives. In Sri Lanka tourism is 100% private sector driven industry.

The Government has confined its role to planning, policy making and regulation. Of course we support the development of the industry through development of common infrastructure like roads, ports, airports, energy and water supplies etc. The private sector is making the business investments and is responsible for capacity building, innovation, value creation and quality assurance. Just to demonstrate how the country is approaching green tourism, let me therefore take a few examples from the private sector. Aitken Spence is one of the largest groups of companies in Sri Lanka involved in tourism. All its nine hotels are Earth Check Silver certified for energy and water savings, waste management and community involvement.

They are all ISO 14001 certified for environment management. One of the group hotels has already received ISO 50001 certification. Some of Aitken Spence group hotels can calculate their carbon footprint and are able to state how much CO2 is emitted per guest per day. Jetwing, another large group in the tourism industry, is a PATA gold award winner for corporate environmental program in 2012.
They have an ongoing environment conservation project called Jetwing Eternal Earth Project. Through this program they educate the younger generation of country on best practices of environment conservation and minimising global warming.

Most of their hotels invite the guests to volunteer to plant a tree when they stay at the hotel. What is interesting is not just the idea of planting a tree but the follow up. The tree is given a number and the information of the progress of the tree is reported in a website that the guest can visit. So year on year the guest can monitor how his or her tree in Sri Lanka is growing. They can one day visit the tree or recommend their friends or relatives who visit Sri Lanka to go and see the trees they planted. John Keels is another large group managing two famous hotel brands in Sri Lanka. They have started out sourcing most of the services originally managed in-house creating more opportunities for entrepreneurship.
For example recently they discontinued one of the largest fleets of cars owned and operated by them and started hiring vehicles from private owners for tourist transportation. Around their new hotels they help upgrading the nearby shops owned by small time vendors and encourage their guests to go out and shop.

The in house training facilities are extended to rural youth with no commitment to join the group after training. There are many other groups of companies such as Serendib Group, Tangerine Group, Taj Group, etc which have similar initiatives which focus on environment conservation and community development.

I must emphasize that it is not only the group companies who are actively focusing on sustainability. There are a large number of boutique hotels, villas and lodges which have won world attention for best practices in eco tourism. There are many hotels in the country which use renewable energy, recycle waste and cook using bio mass generated out of waste.

When we talk about tourism development it is also interesting to note that the Government is not focusing on specific tourism zones like many other counties. For us the entire country is a tourism development zone.

Sri Lanka has an inherent advantage of having a highly diversified tourism product which could be pitched against any other well established tourism destination in the world. It has beaches like Maldives or Mauritius, ancient heritage sites like Egypt or Greece, Rain forests like Congo or Amazon, art and culture like India or Thailand, waterfalls like Zambia or Canada, wildlife like Kenya or South Africa, natural beauty like Switzerland or Myanmar, gemstones like Madagascar or Burma, spices like India or Indonesia and festivals like China or Brazil.

Now just think of any tourism destination in the world where you can find all these in one place. Even if you do, where else can you cover all these within a few days? Sri Lanka is probably the only country which makes it possible. To many tourists visiting Sri Lanka is a refreshing experience. The whole country is a natural wonder. That is why in our tourism promotions we use the tag line "Refreshingly Sri Lanka- the Wonder of Asia' .


Global Moderator

Treasury Secretary Dr P.B. Jayasundera this week expressed his opposition to moves by some tea exporters for Sri Lanka to open out to multi-tea blending options. Proposals have been to permit Sri Lankan exporters to allow tea imports for blending purposes, a proposal that is opposed (for many years) by growers and companies like Dilmah.

On Tuesday, speaking to some 200 foreign delegates at the biennial Dilmah Tea global distributor conference in Colombo, the Treasury Secretary offered clear strategy guidance to the Sri Lankan tea industry.

Referring to industrial zones overseas where teas from many origins are blended, Dr Jayasundera stated, "Sri Lanka does not believe it should get into that marketing strategy. Sri Lanka should not permit our product to be used in that manner in the global market." His comments were released by the company to the media.

"One product we should uncompromisingly preserve and protect is Sri Lankan tea. Dilmah has shown that all facets can be developed locally. That is the philosophy of this government. We believe Sri Lanka has a tremendous comparative advantage in tea and can make it a 3-billion dollar industry in the next 10 years," he told delegates.

Referring to the current just over 1 billion dollar annual exports from 325 million kg, Dr Jayasundera stated that this was a gross under-estimation of the industry, referring to the fact that exports 'under premium priced Sri Lankan brands is still very low and the dominance of bulk and price based trading'.
He said the imports of cotton and textiles were initially encouraged as raw material was not available locally. He stated that apparel was now moving to the upper end of value-added and that he was encouraging local textile manufacturing to backward integrate and increase value added.

"Tea is the opposite. Everything is here," noted Dr Jayasundera, referring to the climatic advantages of growing tea in Sri Lanka, the two million employed and smallholders growing over 70 % of the tea. "But he bemoaned the fact that despite the many advantages, tea was not as large an exporter as apparel. He expressed the hope that the two industries would converge in the 10 years whereby both tea and apparel would be similar in size with tea a 100 % value added, fully locally sourced product with absolute integrity and apparel working backwards to manufacture textiles locally and growing cotton," he was quoted as saying.


Global Moderator

By Quintus Perera
A top Sri Lankan boat manufacturer, specializing in luxury yachts and exporter, has slammed what he calls a “grossly unfair” decision to allow duty-free import of marine vessels. Such a move, he warned, adversely affects Sri Lanka’s boat making industry and exports because of the availability of cheap, imported marine craft, in the local market.

Neil Fernando, Chairman, Boat Building Technology Improvement Institute (BTI) and Chairman, Penthouse Group of Companies, made these comments at the launch of the Boat Show Sri Lanka 2012 held in Colombo this week.

He said this senseless action of the government could ruin the boat building industry, especially pleasure boats manufacturing which have gained a ready export market, throughout. He told the Business Times on the sidelines of the media briefing that they could not see any adducible reason for this ‘senseless’ action of the authorities when the local boat builders have to pay duty for all their equipment and spares for their trade. He said that they are having negotiations with the government to stop these ‘duty-free imports’. Otherwise he said that their industry would be doomed.

The Boat Show 2012 organized by BTI in collaboration with the Lanka Exhibition and Conference Services and supported by the Ministry of Industry and Commerce and the Export Development Board, is scheduled to be held from 18 to 20 May at the BMICH.

This is the third time the Boat Show is held and it has attracted leading industry suppliers in the region to display a wide range of products at the exhibition.

9Sri Lanka Newspapers Sunday 13/05/2012 Empty DFCC Vardhana Bank's profits up Sat May 12, 2012 6:36 pm


Global Moderator

DFCC Vardhana Bank's profit before tax (PBT) amounted to Rs 708.5 million during 2011 recording an increase of 31.5% compared with the PBT of Rs 538.8 million in 2010, the bank said.

"The provision for taxation amounted to Rs 177 million. The effective tax rate was 24% of PBT down from 51% in 2010. Profit after taxation (PAT) attributable to the shareholders amounted to Rs 531.4 million reflecting an increase of 92.5% over the PAT of Rs 276 million over the previous year. The earnings per share (EPS) increased by 73.3% to Rs 2.6 in 2011 from Rs 1.50 in 2010 while the return on assets (ROA) was 1.4% up from 0.9% in 2010," the statement said.

"In terms of asset growth and profit generation during the year, DVB delivered a sound financial performance. Total assets increased by 55.6% to Rs 45,940 million as at 31 December 2011. This growth was driven by the increase in loans and advances. The favourable macro-economic conditions and positive investment sentiments supported the rapid increase in loans and advances," it noted.

The bank said interest income from loans and investments amounted to Rs 3,733 million showing an increase of 10.8%, despite low interest rates, benefiting from the balance sheet growth. The income streams have begun to be diversified with the addition of pawning advances, housing loans, financial leases, credit card advances and other PFS products.


Global Moderator

Haycarb PLC has sustained performance in the fourth quarter of 2011-12 despite challenging external conditions and rising production costs to end the year on a positive note, the company said.
According to interim statements filed with the Colombo Stock Exchange, volume increases and continued focus on value added carbons enabled the Hayleys Group company to increase revenue by Rs 2.1 billion or 33 % to Rs 8.5 billion for the 12 months to 31st March 2012.

Profit before tax at Rs 724 million was on par with that of the previous year, principally due to the impact of high raw material prices in the first 9 months, resultant market conditions and rising conversion costs and overheads, the company said.

Net profit for the year improved by a marginal 3 % to Rs 590 million, and profit attributable to equity holders of the company increased nearly 7 % to Rs 539 million, the statement added. Haycarb and Hayleys Chairman Mohan Pandithage said the Haycarb Group had consolidated and sustained its performance.

"The consolidated profit of Rs. 724 million was achieved in the face of unprecedented increases in the price of the primary raw material, coconut charcoal, in all manufacturing locations," he said, explaining that the Haycarb Group adopted bold initiatives in its procurement strategy to ensure continuity of raw material supplies even at significant cost penalties during the first half of the year to retain the confidence of strategic and loyal customers across the globe.


Global Moderator

Singer Finance last week reported a net profit of Rs 46 million for fourth quarter 2011/2012, up 106% over the same quarter of the previous year, in the midst of a challenging business environment during the latter part of the quarter under review.

In a media statement, the company said its income increased by 47% in the fourth quarter from Rs 245.3 million to Rs 360.2 million. "Income for the year ended March 2012 increased by 30% to Rs 1,263.3 million while profit for the full year increased by 79% to Rs. 201 million," it said. The company's numbers were buoyed by an increase in the leasing and hire purchase portfolio, which accounted for 61% of revenue for the last quarter and 58% of revenue for the year ended 31st March 2012.

Singer Finance said it has zero exposure to shares and the stock market and is "totally unaffected by the decline in share prices experienced currently". Singer finance (Lanka) PLC was listed on main board of Colombo Stock Exchange and currently 24.94% of its shares are held by the public.


Global Moderator

Citrus Leisure PLC recently announced the appointment of Chandana Talwatte as Director/CEO and Vasula Premawardhana as Director of the Citrus Group.

Mr Talwatte is a corporate leader with a proven track record of driving businesses forward under challenging conditions. He served most recently as Director - Sales and Marketing of Cinnamon Lakeside, Colombo and has been part of the leadership team at John Keells Holdings PLC since 1993.

Mr Premawardhana has over 15 years of comprehensive management experience comprising local and international hands-on experience in the fields of Capital Markets and Risk Management.

He is the Managing Director of First Derivatives (Pvt) Ltd and is a former Director of the Securities and Exchange Commission of Sri Lanka, Citrus said in a media release.


Global Moderator

Amitha Gooneratne, formerly long-time Managing Director of the Commercial Bank, has joined the Harry Jayawardena-led Distilleries Group (DCSL) as the Managing Director of its strategic investment arm Melstacorp Ltd.

A company statement said, Melstacorp is the holding company of several companies such as Lanka Bell Ltd, Balangoda Plantations PLC, Pelwatte Sugar Industries PLC, Continental Insurance Lanka Ltd, Melsta Logistics Ltd, Periceyl Pvt. Ltd, Texpro Industries Ltd, Bogo Power Ltd and Melsta Regal Finance Ltd.

Mr Gooneratne recently retired from the Commercial Bank after an illustrious 29 year career with the bank. "With the appointment as the Managing Director, Mr. Gooneratne has also joined the boards of several subsidiary companies of Melstacorp namely Melsta Logistics Ltd, Periceyl Pvt. Limited, Balangoda Plantations PLC, Lanka Bell Ltd, Texpro Industries Ltd, and Bogo Power Ltd. He will join the boards of Continental Insurance Lanka Ltd and of Melsta Regal Finance Limited as Chairman once the approval is granted from respective regulatory bodies," the statement said.

The board of Melstacorp comprises Harry Jayawardena (Chairman), Amitha Gooneratne (Managing Director), R.K Obeyesekere, C.R Jansz, N. De S Deva Aditya, C.F Fernando, Dr. A.N Balasuriya, Capt. K.J Kahanda, and (Ms) V.J Senaratne (Alternate director to N. De S Deva Aditya).

14Sri Lanka Newspapers Sunday 13/05/2012 Empty SriLankan mulling over air taxi operations Sat May 12, 2012 6:41 pm


Global Moderator

SriLankan Airlines would continue to operate its air taxi flights despite the losses it is making since commencing this service. The airline observed that they would continue the service but there would be a different type of aircraft or operation and that they have no plans of terminating the service.

Chief Marketing Officer G.T. Jayaseelan speaking with the Business Times said they were likely to change the method of operation from the current wet lease to a dry lease agreement. With a wet lease operation the national carrier would provide fuel, airport fees, and any other duties and taxes and the aircraft would be provided by the company with the complete crew, maintenance and insurance.

On the other hand, under a dry lease agreement the airline obtains only the aircraft and it would be on the airline operator’s certification and provide the required aircraft registration as well. Currently, the airline is operating for a period of nearly two years and it was uncertain whether the national carrier would enter into a joint venture with a private operator as these are currently under discussion, Mr. Jayaseelan said.

The airline now operates its air taxi service on an ad hoc basis to Iranamadu, while progressing on work towards moving into Batticaloa, with substantial work already done in Trincomalee and still working on obtaining approvals for landing in Jaffna.


Global Moderator

By Sunimalee Dias
Asia Capital’s subsidiary Asia Leisure will develop a US$6 million hotel “Taprobana” in Balapitiya following its strategic tie-up with Teoria Investments, Japan. An initial investment of US$2 million has already been made.

Asia Capital PLC acting Director/CEO Stefan Abeysinghe said they would be part of the hotel management, construction of which commenced a few months back. Japan funds to Sri Lanka are believed to be scarce and it was considered a “wonderful sign” that investments of this nature were entering the country, it was stated.

Teoria Investments is a Japanese asset management company and is their first investment in the country and marks diversification into new sectors. Asia Wealth Management Company was the financial advisors to structuring the partnership.

Asia Leisure owns and operates three properties, The Park Street Hotel, Colombo, The River House, Balapitiya and the Tamarind Hill, Galle with construction underway on two more properties in Wadduwa and Balapitiya.

The Balapitiya resort hotel is expected to have 30 rooms that would be opened in April next year, Mr. Abeysinghe said. Asia Capital would own 66% of the property and the Japanese entity would have the balance.

A second property is expected to open in Wadduwa where they had purchased a BOI property with the building. This building would be further constructed to establish the new property of Asia Capital with 35 rooms, Mr. Abeysinghe said.

The company is currently working on establishing its own brand as well that would be developed in the future, the CEO said. He pointed out that they would invest in research and development in this regard, and were currently talking to two Indonesian companies.

In this respect they would be incurring Rs.20 million for branding of its boutique hotels and Rs.10-15 million in its resorts, he said. The new brand is expected to provide a “benchmark for service” that would be concluded by the end of this year.

The company is also looking at establishing a hotel management company that would ensure the management of all its five properties.


Global Moderator

Fitch Ratings Lanka Ltd has assigned an "A (lka)" National Long - term rating with a positive outlook for Sampath Leasing and Factoring Ltd (SLFL), a fully owned subsidiary of Sampath Bank PLC, Sampath Leasing said in a press release.

Commenting on the rating, Chairman of the company Arthur Senanayake said that "the company has now established itself in a profitable and niche market within an intensely competitive leasing market. This will open new vistas of opportunity for the company paving the way to introduce innovative product variants to its core products - leasing and factoring. I am sure that SLFL will be a vibrant company within the Sampath Bank Group", he added.

Fitch Ratings in its rating report has positively commented on the support available to SLFL from its parent company through strategic and operational linkages, which augurs well for synergies between the two companies. Aravinda Perera, Managing Director of Sampath Bank PLC and a Director of SLFL, noted that SLFL's contribution to the group profits has increased significantly and its performance is augmented by drawing on the core strengths of Sampath Bank; in particular its wide geographical presence.

The company has had two successful years of operation, reporting post-tax profits of Rs 127 million and Rs 192 million for the financial years 2010 and 2011, respectively. "The Fitch report also stated that SLFL's asset quality has improved considerably in its leasing portfolio. The report further reiterated that selective lending and close monitoring of factoring clients has enabled SLFL to maintain good asset quality in its factoring portfolio as well. The report also added that SLFL's risk appetite for potential credit losses in its factoring portfolio is low.”

17Sri Lanka Newspapers Sunday 13/05/2012 Empty Resignation the best course Sat May 12, 2012 8:08 pm



We do not apologize for returning once more to the problems unleashed by the National Savings Bank’s ill advised and ill-conceived deal to buy a stake in The Finance Company, the country’s oldest established finance company long quoted on the Colombo Stock Exchange. The NSB made a belated statement last week returning to the subject after Dr. P.B. Jayasundera, the Secretary to the Treasury, intervened. Its apologia cut little ice with the public as it in effect bleated ``we won’t do it again.’’ Even the framing of the statement left much to be desired as exemplified by its last paragraph reading (sic): ``As a socially conscious and a responsible state-owned financial institution, we wish to give a strong pledge to the general public that we would continue to uphold all traditions of our bank and as done in the past continue our quest in having the depositors and other stakeholders total interest foremost in our minds in the future as well as the leader in developing you and the country.’’ Ugh!

Was the TFC deal socially conscious and responsible? If so why was it stopped? Is it responsible for an institution with a history going as far as 175 years to enter into a contract on the Colombo Stock Exchange and not pay for the shares it purchased? We have no doubt that this was on the basis of a direction that was made, for excellent reasons, and not a decision of the board of directors of the NSB. It is obviously a case of compliance with orders made by the authority who appointed the directors. Nevertheless, the buck sits on the lap of a bank which had to suffer the ignominy of having its role as a custodial bank suspended by the CSE. Hopefully the issues of the non-payment will be quickly sorted out this week unless some of the sellers cut up rough. Given the dust the whole business raised, it is likely that they will refund the money that went into their pockets due to the Sampath Bank inexplicably paying out funds it has not received for the transaction. Sampath too owes an explanation to its shareholders and constituents on why it did that. If such an explanation is not forthcoming, shareholders should demand it at the next annual general meeting of the bank.

One of our regular commentators, in a piece we run in this issue, has very appropriately described the whole sorry business as ``monkeying’’ with the people’s money. After all, as the NSB itself claims on its website, seven out of 10 Lankans bank with it. Its history goes back to 1832 when the Governor, Sir Robert Horton, set up the Ceylon Savings Bank followed by the Post Office Savings Bank (POSB) in 1885 established due to the pioneering efforts of Sir Ponnambalam Ramanathan. Dr. N.M. Perera, as finance minister of the United Front Government of Prime Minister Sirima Bandaranaike, absorbed the POSB and Ceylon Savings Bank into the National Savings Bank which can rightly claim for itself the reputation of the country’s most trusted bank. The countrywide network of post offices was a powerful instrument of mobilization of the people’s savings with the NSB itself having now established an extensive branch network. Even the most humble in our land have sometime had a potha with the POSB and most families, as a matter of habit, opened accounts for their children. In fact lots of people don’t even know that long departed family members held accounts in the POSB/NSB as evidenced by the treasure trove of dormant accounts on which the bank sits. We would venture to guess that few banks in the world, if any, can claim the proportion of their country’s population banking with them that the NSB does.

It is a sad fact that succeeding political establishments, to varying degrees, have used state-owned institutions to bestow patronage appointments. Far too often the wrong people have been appointed to responsible positions. Even people like Dr. N.M. Perera have been guilty of this offence having once appointed a director to the Bank of Ceylon who subsequently went to jail. This worthy once wrote a cheque drawn on the Bank of Ceylon that bounced for lack of funds. A retired civil servant, among the best in his generation, then serving as the chairman of the bank sought the man’s resignation but the minister preferred to waive off the incident saying there had been occasion when his own cheques had been temporarily not honoured. But Dr. Perera was not a director of the bank on which such a cheque was drawn. This incident triggered the resignation of the bank’s chairman. This was the quality of the people this country was fortunate to have once upon a time.

As we said last week, it might have made business sense for a strong financial institution like the NSB to have taken control of a long established finance company like TFC despite its weak balance sheet. Its accumulated losses and negative net worth would have obviously depressed its share price making it a relatively cheap buy. Given its land bank and goodwill, that would have been a strategy that may well have been beneficial for both institutions. But any such transaction should have been clearly thought out and absolutely transparent. A very thorough due diligence should have been a sine qua non and the bank should have had a water-tight public justification for paying a premium as high as 60 percent over the prevailing market price for the acquisition. Obviously quantity would have not been possible without the premium. There should have been cognizance of the fact that the broker offering the deal was himself a seller; that three sellers were also directors of TFC and the whole scenario was very tricky to say the least. In all these matters, there should have been a consciousness that the right thing must not only be done but be seen to have been done. Sadly, on all these fronts the NSB is wide open. If the top management is not united, problems are compounded as it seems to have been in this case to everybody’s detriment.

Given that the price at which at least some of the major sellers have acquired the shares (Rs. 48) and the Rs. 50 price at which they were sold there was obviously no windfall profit. Given the holding cost, there would probably have been a loss and it is unlikely that there was any substantial kickback paid to anybody as is commonly perceived. But there has been a total lack of judgment and that fact alone should suggest that the honourable course would be for those concerned to place their resignations on the table even if they are not requested. That seems to us to be the best way out of a very difficult situation.


Global Moderator

Company breaks out of loss-making streak but retained losses still in the books

Coca-Cola Beverages Sri Lanka Limited, has posted the highest ever volumes in its history in 2011 taking market leadership in both the sparkling (fizzy) and juice categories towards the last quarter of the year, the company said in its annual report.

Its CEO, Mr. Saumindra Battacharya, said that 2011 was notable for the company’s positive performance in growing the business by 19% "with six record months achieving the highest ever volumes in history."

Coca Cola Chairman Asoka Wickremesinghe said that the turnover during the year at Rs.5.95 billion was up 19% from a year earlier enabling a net income before-tax of Rs.389 million for financial year 2011.

The company is the authorized bottler, marketer and distributor in Sri Lanka of Coco-Cola, Coca Light, Fanta, Sprite, Minute Maid range of fruit juices, Schweppes and manufacturer and distributor of Lion brand soft drinks under the exclusive permission of the trade mark owner, The Coca-Cola Company Limited of Atlanta, USA.

The group also imports, markets and distributes selected other products manufactured by Coca-Cola bottlers worldwide and during the year the company introduced Minute Maid Apple to the market.

"This was after a disastrous commencement at the beginning of the year where adverse weather affected the first half of the year’s performance," Wickremesinghe said. "However, the turnaround in the second half of the year and the rapid growth contributed to an overall successful year."

Coca-Cola has had a string of loss making years till 2007 and returned to profit in 2008 with an after-tax earning of Rs.124.4 million. This increased to Rs.139.5 million in 2009 but dropped to Rs.133.5 million in 2010. 2011 saw the highest ever net profit in recent times of Rs.289.2 million.

The Sri Lanka company had won a prestigious manufacturing award for Coca-Cola’s business unit covering India and South West Asia on the basis of its plant and mechanical efficiencies, product and package quality, visual management in the plant and reduction of consumer complaints. System certification had also won recognition being the first plant in the region to obtain ISO 22K and PAS 220.

The CEO noted that the profit after-tax was double the previous year while net income before-tax of Rs.389 million signaled 170% growth from a year earlier.

The company’s net assets for 2011 stood at Rs.889 million with Coca-Cola investing Rs.479 million in asset addition of which Rs.143 million was spent on coolers, increasing the availability of chilled Coca-Cola products to consumers across the country. Rs.198 million was invested in returnable containers, Battacharya said.

The impact of the 3% devaluation late last year had a negative impacted on the bottom line in the last two months of 2011, the CEO said.

He reported that the company continued selling for cash with 90% of sales of the business done on a cash basis. This positively influenced the cash position reducing the risk of bad debts.

They had repaid R.425 million borrowing reducing borrowing cost by Rs.66 million from the previous year with lower interest rates too helping.

Coca-Cola Beverages has a stated capital of Rs.2.09 billion, reserves of Rs.733.8 million and accumulated losses of Rs.1.94 billion in its books. Total assets ran at Rs.4.47 billion, non-current liabilities at Rs.747.8 million and current liabilities at Rs.2.84 billion.

The directors said that despite various challenges faced during the year under review, the company continued to perform extremely satisfactorily achieving a sales volume of 12.5 million unit cases and delivering a profit after-tax of Rs.289 million which is more than double the previous year’s profit.

"This is a significant improvement over the past decade," the directors noted explaining the meticulous focus on cost, reduced interest rates and US dollar based borrowings led to cost savings compared to the previous year.

The directors of the company are: Messrs. A.W. Wickremesinghe, S.E. Captain, I.R. Garnett, S. Nothnagel (Resigned 29.7.2011), B. E. Horn, P.J.F. Pech, P.D.S. Humphreys and A. Frangou (Appointed 12.4.2011 and resigned 28.3.2012).


Global Moderator

Overseas Realty (Ceylon) PLC will seek shareholder authority at an EGM on May 24 to set up an Employees Share Option Plan (ESOP) providing an opportunity to the company’s executive directors as well as executives employed by the company and its subsidiaries to participate directly in the equity and profits of the company.

Shareholders have been told that the ESOP is intended to "align employees focus and corporate objective in order to create a commonality of purpose for shareholder value enhancement; and encourage and motivate employees directly contributing to the growth and prosperity of the ORCL group."

The subsidiaries covered by the ESOP are Mireka Capital Land, Mireka Homes and Havelock City and any other subsidiaries of the company as may from time to time be selected by the Board of Directors of the ORCL group.

The price at which shares granted under the ESOP may be purchased will be the closing market price of the shares at the time of the grant of the option or the volume weighted average price of the shares during the preceding 30-day period, whichever is higher.

The resolution provides that the total number of shares that may be issued under the ESOP to eligible employees, in the event that such options are fully taken up, will be approx. 25.3 million shares amounting to 3% of the issued shares of the company.

No individual employee may take over one percent of the total issued shares of the company under options granted through the ESOP.

An exercise period of three years to subscribe to and purchase shares underlying the options granted is part of the ESOP.

Resolutions to establish the ESOP will be taken up at an EGM that will be held immediately after conclusion of the company’s AGM on May 24.


Global Moderator

Controversial NSB – TFC deal being sorted out

There were strong indications yesterday that the controversial deal under which the National Savings Bank bought a stake of The Finance Company but did not make payment will be reversed later this week with the major sellers having indicated that they were willing to return the payments made to them and re-take possession of the shares sold.

Sources close to the arrangements now in the pipeline said that they have not yet been finalized but this appears to be the direction in which the issue which raised major flak in the Colombo stock market as well as political and official circles will be resolved.

The Securities and Exchange Commission (SEC) has been part of the process of working out an orderly solution which would hopefully lay at least the current phase of the issue at rest.

SEC Chairman Tilak Karunaratne was out of the country yesterday and is expected back on Thursday.

Lawyers have been consulted by various affected parties including the Colombo Stock Exchange on whom the Sampath Bank, extending custodial services, made a claim having settled the sellers with no payment received from the buyer (the NSB).

CSE sources were confident that the exchange bore no liability as payment had been made without either confirmation of purchase or sight of funds.

"Although nothing has been finalized, it looks as though the whole issue is now in the process of being sorted out,’’ one source close to developments said.

A government inquiry into the NSB aspect of the deal will be held parliament was told last week while the SEC has already begun its own investigations into the regulatory aspects.

21Sri Lanka Newspapers Sunday 13/05/2012 Empty CSE rejects Rienzie’s contention Sat May 12, 2012 8:22 pm


Global Moderator

Promises action if rules have been breached

The Colombo Stock Exchange (CSE) Friday rejected a contention of one of its former chairmen, Mr. Rienzie. T. Wijetillake, on the NSB – TFC deal published in The Island of May 11.

"The CSE regrets the manner in which the said article seeks to misrepresent the functions and duties of the CSE, to the public,’’ a statement from the Exchange said.

It has been stated that the CSE had "failed in their duties" and "not done its duties on the day of the suspicious deal". All share transactions are carried out by licensed stock broker firms based on the determinations of buyers and sellers. In this regard, the role of the CSE is to ensure that these transactions are executed on the Automated Trading System (ATS) of the CSE in conformity with the applicable Rules.

The ‘order matching’ takes place in a completely automated environment and hence, the CSE cannot intervene in the execution of a particular transaction. In the circumstances, the CSE could not have "halted" the deal in question "for a few hours to conduct a special research reasoning on the deal", as claimed by Mr. Wijetilleke.

Additionally, the Central Depository Systems (Pvt.) Ltd (CDS), a fully owned subsidiary of the CSE, has suspended NSB from carrying out any CDS functions as a CDS Participant with effect from May 8, 2012.

Whilst denying all allegations made against the CSE in the article, the CSE assures the public that, in the event of any violation of the CSE/CDS Rules, necessary action has been / will be taken by the CSE, as deemed appropriate.


Global Moderator

Land acquired in N’Eliya and Bentota

The Abans group which is now a widely diversified conglomerate is looking at entering the tourism industry by building hotels on land already acquired in Nuwara Eliya and Bentota, the group’s Chairperson, Mrs. Aban Pestonjee revealed last week.

It is also going into shopping and entertainment malls in Colombo with a foreign partner, she revealed.

She said that the group which grew to its present stature by dealing in electrical appliances is now focusing in introducing more eco-friendly and energy saving products in the context of rising electricity and oil prices.

Abans have also decided to diversify into shopping and entertainment malls in Colombo and have already identified a couple of sites for this purpose. This project will be in collaboration with a foreign partner, Mrs. Pestonjee said.

"Due to the vast opportunities and prospects of growth in Sri Lanka, we have decided to diversify and set up shopping and entertainment malls in Colombo," she said. "Sri Lankans have very little entertainment to select from and we want to create a place where families and even teenagers can hang out and spend time enjoying themselves."

Currently, the group’s energy saving range comprises home appliances which the company claims save up to 60% of electricity consumption. On offer are LG inverter air conditioners, LG side-by-side refrigerators, LG green lon door cooling refrigerators, LG Tromm washing machines and LG light wave microwave ovens are some of the innovative products that the company claims will enable substantial savings on electricity bills.

Mrs. Pestonjee said that her vision was to see Sri Lanka become a prosperous nation and a business hub in Asia and she expressed the hope that all Lankans here and abroad will work in unison to bring the country to a peak of prosperity we have never seen before.

The group which employs over 15,000 has set up an Academy where staff can learn information technology (IT), English and other skills necessary for career development.

"Our staff is not employed to remain in the same position for the rest of their careers," Mrs. Pestonjee explained. "We want them to develop themselves."

She said that their training Academy is particularly helpful to people in the North and familiar with languages other than Tamil. A program has been created where employees in the Western and Southern Provinces can exchange places with employees from the Northern Province affording an opportunity for people to learn English and Sinhalese.

"This not only provides more jobs but also unifies the Sri Lankan community by breaking down the language barrier," a group news release said.

23Sri Lanka Newspapers Sunday 13/05/2012 Empty Sanasa readies for Stock Exchange listing Sat May 12, 2012 8:24 pm


Global Moderator

Control to remain with current stakeholders

Sanasa Development Bank Limited has posted 21% deposit growth in 2011 increasing deposits to Rs.15.2 billion from Rs.12.6 billion the previous year and increased profit after-tax 6.8% to Rs.345 million from the previous year’s Rs.323 million, the bank announced.

The bank anticipates listing on the CSE in the context of the Central Bank directive for all banks to be listed. Senior officials said that considerable energy is being devoted "to meet this eventuality, again with the primary intention of retaining controlling power among its current stakeholders, key among who are the varied and extensive members of the larger Sanasa Movement."

Despite the increased net profit, the pre-tax profit was down to Rs.537 million from the previous year’s Rs.646 million due to an overall staff salary revision and the commencement of depreciation of the new core-banking system which Sanasa said was a necessary investment expected to deliver greater efficiency and better returns over time.

The bank had concentrated on strengthening existing units rather than expanding its branch network during the year under review. But new customer centers had been established at Buttala, Hataraliyadde, Hingurana, Narammala, Kaduwela and Aluthgama.

"In 2011 we have concentrated on provincial expansion and will continue to focus on this area in view of the fact of the development activities taking place in the provinces," the bank said in a news release.

"As a result we further strengthened the regional management system by giving more authority to regional managers, because their role will be different and more challenging in time to come."

In particular, it is envisaged that regional mangers will work closely and cohesively with regional offices, such as Provincial Councils, GAs, AGAs and Grama Niladaris in order to strengthen public-private sector partnerships.

Sanasa’s total capital base had grown to Rs.3.06 billion during the year from Rs.2.18 billion a year earlier with tier one capital continuing to increase.

The year under review saw Sanasa paving the way towards offering ATM and Debit Card facilities to its customers with the bank announcing that all required documentation is in place. Facilities have been made available from last month with the bank installing its own ATMs in ten branches and sharing ATM services with the Commercial Bank elsewhere.

ATM services are now available to Sanasa constituents at the bank’s Head Office in Kirulapone, First Colombo City, Jaffna, Karapitiya, Ambalangoda, Matale, Kurunegala, Kegalle, Anuradhapura and Polonnaruwa.

Sanasa customers will also have access to 500 ATMs operated by the Commercial Bank.


Global Moderator

Sri Lanka’s central bank kept its key policy rate unchanged at 9.75 percent saying monetary conditions are tightening and credit growth will moderate, eventually helping the exchange rate.

Sri Lanka’s exchange rate came under pressure and the Central Bank lost foreign reserves as loan growth and imports were accommodated and accelerated with central bank credit (printed money) after sterilized forex sales started in August.

In March with a partial float of the currency, central bank money injections to the economy reduced, with sterilized sales falling away. The rupee however fell to 130 to the US dollar from 110 due to pressure from sterilized forex sales.

Total loans taken by the private sector, the central government and loss-making state enterprises shot up to 140.9 billion rupees in January, but has since fallen to 115.1 billion in February and to 110.7 billion in March, according to Central Bank data.

The March loan totals may include possible forex losses on dollar loans.

"With respect to monetary developments, market interest rates have moved up gradually, reflecting the tightening of monetary conditions," the Central Bank said in its March monetary policy statement.

"Benchmark Treasury bill yield rates have increased and in turn, deposit and lending rates of commercial banks as well as other financial institutions have shown an increasing trend."

Even if total loans do not fall as long as loans are matched by deposits, the exchange rate will not come under pressure as aggregate demand will not be change, but there will be shift from consumption to saving.

Though policy rates were only raised 125 basis points to 9.75 percent Treasury bill yields have topped 12 percent, a rise of around 500 basis points since August and dealers say money that fled the Treasuries markets to banks are now returning.

The Central Bank has also stopped buying Treasury bills to print money after April and allowed interest rates to rise, eliminating the key trigger of instability in the monetary system. In late April the rupee came under renewed pressure from money printed to pay April state salaries.

The Central Bank said that "policy measures implemented thus far are sufficient to moderate the expansion of both credit and the trade deficit," and it expects both monetary aggregates and imports to slow the course of this year.

It will also "closely monitor monetary and external sector developments and adopt further measures if necessary in the months ahead."

The central bank said broad money supply grew 22.8 percent in March from a year earlier, but is expected to slow. Consumer prices rose 6.1 percent in April from a year earlier.



Global Moderator

A committee is probing a controversial stock purchase more than 60 percent above market price by a state bank, with payment on the deal stopped on Treasury instruction, a minister said.

Deputy economic development minister Lakshman Abeywardene said Treasury Secretary P B Jayasundera ordered state-run National Savings Bank not pay for the purchase The Finance Company stock because the process was flawed.

He said Treasury secretary P B Jayasundera had halted the payment pending the inquiry for which a committee has been appointed he said.

Opposition legislator Harsha de Silva, has called for the resignation or removal of NSB chairman Pradeep Kariyawasam over the deal.

He said that that any probe should not be compromised because he was the husband of Sri Lanka’s chief justice.

De Silva who had earlier questioned several deals involving stock purchases by the Employees Provident Fund said the latest was only the ‘tip of the iceberg.’

The stopped payment on the controversial deal caused a rumpus in the settlement system of the Colombo Stock Exchange with Sampath Bank, the settlement bank paying the sellers.

Sellers included, Dinal Wijemanne, a stockbroker who was a director and businessmen Rayynor Silva and Anura Fernando.

Minister Abeywardene said the deal could be reversed if wrongdoing was established.

Sri Lanka’s main business chamber, the Ceylon Chamber of Commerce has also asked for wrongdoers to be identified.


Back to top  Message [Page 1 of 2]

Go to page : 1, 2  Next

Permissions in this forum:
You cannot reply to topics in this forum