$ gains SL cents 70 to Rs. 114 in spot
CB curbs on forex trading election ploy
Central Bank's (CB's) ploy to minimize
banks' exposure to overnight foreign
exchange (forex) trading by cutting down
limits by 50% last week in order to
strengthen the rupee is an election ploy,
market sources who did not want to be named
told The Sunday Leader.
"This is an election ploy to bring down the
cost of living by having a strong rupee,
thereby making imports less expensive," they
Overnight forex trading limits among
commercial banks are fixed by the CB.
being a trading country is dependent on
imports to keep the economy going and a weak
rupee would make imports more expensive, the
Cutting down banks' exposure to forex
trading is a step geared for next month's
provincial council elections by having a
control on prices of imported goods, they
However despite those controls, due to the
two state owned commercial banks buying US
dollars from the market, the dollar gained
by 70 Sri Lanka cents at Friday's trading to
be quoted at Rs. 114 at spot trading..
"CB's recent controls on banks' exposure to
forex trading, artificially curbs the
market's appetite for the US dollar, thereby
hoping to take the pressure off the rupee,"
In the three month from September to
November the CB expended over US$ one
billion by making available to the market
dollars first at Rs. 108, then at Rs. 110
and afterwards at Rs. 112 per dollar unit
during this period in order to keep a check
on a steep rupee depreciation.
But with reserves sufficient for only two
months of imports, the CB then stopped
intervening in the forex market which then
saw the dollar going past the Rs. 113 mark.
This resulted in the CB last week
introducing new controls to curb the demand
for dollars in the market by cutting banks'
overnight dollar positions by 50%, which, at
least temporarily has halted the rupee slide
But the flip side is that a strong rupee is
"High inflation and interest rates coupled
with an over-valued rupee are hurting
exporters," Tanky Wickremaratne, Chairman
Hayleys plc, one of the country's
diversified export companies said.
Inflation and interest rates in the country
are at over 20%.
By far the worse of the two evils is
inflation, said Wickremaratne
However, competitor companies in other
parts of the world face no such
disadvantages, he added.
"Our margins are being squeezed as a
result," said Wickremaratne.
"The tariff 'advantages' that we enjoy in
exporting to our markets are also enjoyed by
our competitors, so there is no advantage,"
The advantage may be to garment exports
because of the duty free entry allowed into
the EU market which their competitors
however may not be enjoying, he said.
"But the disadvantages we face are high
inflation and high interest rates and an
overvalued currency which, however our
competitors are not burdened with," added
Things are being made worse due to the
global recession with no end in sight, he
Hayleys are into the export of agro and coir
products, activated carbon, textiles and
Public not warned of Golden Key
Banks have lifted their suspension on
lending to Seylan Bank and there is no run
on the bank, Central Bank (CB) Governor
Ajith Nivard Cabraal told reporters on
A representative of one bank which had
suspended lending to Seylan confirmed that
what Cabraal said was true. "We lifted the
suspension after CB assurance," the source
CB on Monday took over the management of
Seylan and appointed a new Board after there
was a run on the bank, posing a systemic
risk to the financial stability in the
country, the CB said.
This was after the collapse of Golden Key
Company due to a credit card scam. Both
Golden Key and Seylan Bank are Ceylinco
Cabraal was however unable to give a clear
answer as to why the CB in their recent
advertisements which warned the public in
placing their moneys in unregistered
financial institutions, failed to highlight
Golden Key Company as one of those, whilst
at the same time highlighting others.
But he said that certain amendments have
been proposed to the Registered Finance
Companies Act so that unregulated finance
companies could be brought to book by the
Since the appointment of the new Board,
Seylan's shares have gained by 81% to close
at Rs. 28.50 as at December 31, 2008.
Cabraal said that former Seylan Bank
Chairman Dr. Lalith Kotelawala was happy
that CB took over the management of his
Cabraal had no objections if the Ceylinco
Group sold their equity stake in Seylan to
another party, estimated at 53% by market
sources. Various names are touted in this
regard vis-…-vis DBS Bank Singapore, Lanka
Orix Leasing Company plc and the John Keells
Holding Group, which together with Central
Finance operates Nations Trust Bank plc.
On the negative side is the high staff
numbers at Seylan when averaged on a per
branch basis, in comparison with its peers.
But on the plus side, Seylan has 7% of the
country's total commercial bank loan
portfolio, the sources said.
CB may have management control over Seylan
for a maximum period of six months, which
however may be extended afterwards.
Cabraal said that depositors with other
Ceylinco Group companies registered with the
CB and which were providing financial
services had nothing to fear with regard to
the safety of their money. But Cabraal said
that he could not vouch for the same in
regard to financial institutions that were
unregulated by the CB.
On the Ceylon Petroleum Corporation hedging
contract, he said that the CB has completed
their investigations, but refused to give
details with regard to their findings.
Rates artificially stifled
Upward pressure on rates continued at
Wednesday's Treasury Bill (T. Bill) Primary
Auction despite Central Bank (CB)
intervention to stifle rates.
Whilst bids for the re-issue of T. Bills of
a 91 day tenure were rejected (Rs. 1,295
million worth of bids were received for this
tenure) at this auction, ostensibly because
the market was asking for higher rates than
that which the CB was prepared to pay,
weighted average yields of the 182 day and
364 day tenures increased by eight and four
basis points (bp) to 18.57% and 19.12%
Re-issuing of T. Bills to the market is a
popular method that the government adopts to
meet its borrowing needs, with the CB acting
as its facilitator.
This auction was for the re-issue of
Rs.5,000 million worth of maturing T. Bills
of which Rs. 2,949 million was reissued to
the market while bids for the balance (Rs.
2,051 million) rejected. Rejection of bids
means three things: Either the CB got
captive funds to invest in the same at rates
lower than that which the market was
demanding or the CB invested in the same by
issuing new paper money to the Treasury in
lieu or it was a mix of the first two
US$ 500mn., Sovereign Bond liability hidden
Central Bank (CB) on Tuesday released a
handout concerning the government's foreign
commercial debt situation. However the
statement excludes the US$ 500 million
Sovereign Bond that the government sold to
the international market in 2007.
It was only on Friday that CB Governor Ajith
Nivard Cabraal, when he unveiled the Bank's
Fiscal and Monetary roadmap for the year
said that they would be transparent in their
Meanwhile, the CB release said: " Last year
the Government settled several external
foreign currency commercial loan obligations
amounting to US $ 175 million. Those
payments included: (a) settlement of a US$
100 million syndicated loan arranged by the
Citicorp Investment Bank (Singapore) Ltd.,
in December 2005; (b) settlement of the
balance of US$ 25 million out of a loan
obtained through Citibank in September 2003
with the assistance of NEXI Japan and (c)
repayment of US$ 50 million loan obtained
from the ICICI Bank India in October 2007
through the National Savings Bank.
Since new external foreign currency
commercial borrowings during 2008 was
limited to only US $ 150 million, total
external foreign currency commercial debt
stock declined from US $ 485 million at end
2007 to US $ 460 million at end 2008.
Foreign investments in rupee denominated
Treasury bonds and Treasury bills which was
at a value of Rs 50 billion (US$ 443
million) at end 2007 increased to Rs 70
billion (US$ 620 million) by early September
2008. However, the aggravation of the
turmoil in international financial markets
resulted in the withdrawal of foreign
investments of Rs 46 billion (US $ 407
million) since mid September 2008 to end
2008. Accordingly, foreign investments in
rupee denominated Treasury bonds and
Treasury bills by end 2008 recorded a value
of Rs 24 billion (US$ 213 million) which is
a net reduction of approximately US$ 230
million from the value as at end 2007.
However, the Central Bank was able to manage
such outflow of foreign currency without any
adverse effect due to the consistent and
prudent build up of reserves during the
period of the inflows.
On this basis, the government's external
commercial net debt liabilities stock has
declined by about US $ 255 million during
2008 thereby substantially reducing the
government's exposure to foreign exchange
risk. Therefore, it is clear that the
recent media reports attributed to various
analysts which have claimed that the
government's external commercial borrowings
have been rising are clearly misleading and
The spectre of Cancer
In its first year of operation, Ceylinco
Radiation Treatment Unit has helped hundreds
of cancer patients in Sri Lanka to battle
the disease with the latest equipment and
The unit houses
first Linear Accelerator, the international
Gold Standard in the delivery of accurate
intensity-modulated radiation therapy for
the treatment of many forms of cancer. Here,
the unit's Medical Director Dr. Sarath
Abeykoon elaborates on some of the types of
cancer and the treatment available.
Q: In layman's terms, what is cancer?
A: Cancer is the uncontrolled growth
of abnormal cells in the body. Cancerous
cells are also called malignant cells.
Cancer may affect people at all ages, but
the risk for most varieties increases with
Q: What are some of the commonest cancers in
A: The commonest cancers among Sri
Lankan males are head and neck cancers, of
which the most predominant is oral cancer.
Leukemaeias and lymphomas lie second and
lung cancer follows a close third.
Oesophageal cancer, colo-rectal cancer and
prostate cancer constitute the other major
cancers in males.
Breast cancer is the most common cancer
amongst females while uterine cervix cancer
lies second. Oesophageal cancer, ovarian
cancer, leukemaeias and lymphomas, thyroid
and head and neck cancer constitute the
other major cancers in females.
Q: Lets start with breast cancer. In Sri
Lanka, breast cancer accounts for about 22%
of all cancers in women. How is this
detected and cured?
A: Physical examinations and, past
age 40, annual mammograms can detect up to
90% of cases in women. Well-funded research
efforts have brought breast cancer therapies
closest to personalized medicine. The first
targeted cancer drug Herceptin was designed
to seek and destroy breast cancers
containing the HER2/ neu protein. The latest
test, Oncotype Dx, a 21-gene screen can
predict the likelihood that a woman's cancer
will recur and even whether she will respond
No other cancer comes with so many treatment
options which means more women than ever
before can, and will continue to survive the
disease. Ceylinco Healthcare Centre (CHC) is
equipped with breast cancer screening
facilities and offers mammography tests and
more information on this disease as well.
Q: How is Lung cancer diagnosed and treated?
A: At present doctors are
investigating whether X-rays or spiral CT
scans are better at finding lung cancers
early. When it comes to treatment, until
targeted drug therapies emerged in the past
decade, traditional cancer therapy could do
little for lung cancer patients. But certain
forms of the disease depend on blood vessel
and growth factory agents, all of which can
now be eliminated with anticancer drugs.
Other compounds that block insulin growth
factors are being studied.
Survival rates remain stubbornly low, but
smarter treatments combined with better
screening tests may soon raise those
percentages. The best way to avoid the
disease is by not smoking. However, there
has been a reduction of lung cancer cases
over the last two decades due to greater
awareness of the repercussions of smoking.
Q:What is colo-rectal cancer? Is it curable?
A:Cancer of the colon or rectum is
also called colorectal cancer. Caught early,
it is often curable. Symptoms can include
blood in the stool, narrower stools, a
change in bowel habits and general stomach
discomfort. However, a victim may not have
symptoms at first, so screening is
important. People over 40 years of age
should be screened periodically for
colorectal cancer. Colonoscopy screening
should normally be done once in five years
and in high-risk cases, frequent screening
is essential. Treatment include surgery,
chemotherapy, radiation, or a combination.
Q: What are the treatments on offer for oral
A: Oral cancer treatment may include
surgery, radiation therapy or chemotherapy.
Some patients have a combination of
treatment.However, over the next decade the
incidence of oral cancers amongst males and
females may show a reduction. This could be
attributed to the younger generation giving
up the betel chewing habit as a result of an
improvement in their educational and social
Q: What can you tell us about Ovarian
A: The majority of ovarian cancers
are diagnosed late, after the cancers have
spread. Only about 20% of women are
diagnosed early, when the disease may be
curable. There is no definitive screening
test for early ovarian cancer. Regular
pelvic examinations, sometimes supplemented
by ultrasound examinations or blood tests
for cancer-related markers have been
routinely used for ovarian cancer screening,
but none of these tests are specifically
able to detect ovarian cancer.
Traditionally, it was believed that ovarian
cancer does not produce any characteristic
symptoms until the tumor is widespread and
that early symptoms of ovarian cancer were
Q: Isn't Thyroid cancer also common among
Sri Lankan men and women?
A: Yes, generally, among women.
Thyroid cancer is unique among cancers. In
fact, thyroid cells are unique among all
cells of the human body. They are the only
cells which have the ability to absorb
Iodine. Iodine is required for thyroid cells
to produce thyroid hormone, so they absorb
it out of the bloodstream and concentrate it
inside the cell. Most thyroid cancer cells
retain this ability to absorb and
concentrate iodine. This provides a perfect
treatment strategy. Radioactive Iodine is
given to patients with thyroid cancer after
their cancer has been removed.
Q: What about uterine cervix cancer?
A: Cancer of the uterine cervix is a
condition when the cells of the cervix
undergo abnormal growth. Early detection is
the key to treatment and cure. Because of
the slow progression of cancer of the
cervix, it can be detected early and thereby
prevented. Most often, treatment for uterine
cancer involves surgery and radiation
therapy. Sometimes radiation therapy is
combined with chemotherapy. This is called
Chemoirradiation. With these treatments
death rate has been greatly lowered in
recent years mainly because of early
detection. However, it is hard to limit the
effects of therapy so that only cancer cells
are removed or destroyed, because treatment
also damages healthy cells and tissues, it
often causes unpleasant side effects.
Q:What is Oesophageal cancer and what is the
A:Oesophageal cancer is a serious
form of cancer that starts in the inner
layer of your esophagus, the 10-inch long
tube that connects your throat and stomach.
The most common symptom of esophageal
cancer, usually occurring late in the
disease, is difficulty swallowing and a
sensation of food getting stuck in your
throat or chest. Oesophageal cancer
treatment depends on the type, location and
stage of cancer as well as on your age,
overall health and personal preferences.
Decisions about therapy can be particularly
complicated because various combinations of
surgery, chemotherapy and radiation may be
more effective than any single treatment.
Q: How about Prostate cancer?
A: A blood test for the
prostate-specific antigen is the most common
screen. A physical examination can also pick
up changes in the gland's size or shape.
Talking about treatment, doctors can cut out
contained growths while radioactive seeds
implanted in the tumor can destroy it from
within. Newer beam devices can focus
radiation on the prostate from outside the
body. Hormone therapies can also shrink
growth and stall the cancer. Prostate is one
of the more curable cancers as long as it is
Q: What about brain cancer? How is it
identified and what is the treatment?
A: This is somewhat rare in Sri
Lanka. There is no screening test for brain
cancer and symptoms such as headache,
blurred vision and seizure are often the
first signs. When it comes to treatment,
surgery, radiation and chemotherapy are the
standard anticancer measures. However,
growths in the brain are difficult to reach
with these methods and researchers are
testing a number of potentially more
effective ones, including harnessing immune
cells via vaccination, heating up the tumors
and cutting off the cancer's blood supply
using targeted drug therapies.
These new treatment options have only
recently started to emerge, but a better
understanding of the molecular mechanisms
behind brain cancer could push survival from
months to years.
Q: What are the facilities that are offered
by CHC and its radiation treatment unit?
A: CHC is equipped for oral, breast,
colorectal, stomach and cervical cancer
screening. Tests such as mammography,
colonoscopy, endoscopy, laryngoscopy,
ultrasound screening and x-ray are performed
at the centre in comfortable and pleasant
surroundings. Our state-of-the-art radiation
treatment unit which began operations one
year ago, houses the country's only
operational Linear Accelerator for the
delivery of Intensity Modulated Radiation
Treatment. This unit also offers
Brachytherapy, radioactive Iodine Treatment
MNC expands to K'gala
Allianz Lanka realised plans for reaching
out to the people of the provinces with the
opening of its first provincial branch in
The Kurunegala office is located at Negombo
Road, Kurunegala and is headed by Allianz
Zonal Manager Nishantha Bandara. Allianz
Kurunegala is equipped with all facilities
for Life and General business and is
serviced by an experienced team of sales,
front office and underwriting professionals
trained to internationally benchmarked
Allianz standards of customer service and
In her welcome address, Allianz Lanka CEO
Surekha Alles affirmed, "We are delighted to
be able to now offer our customers in the
Wayamba Province the benefits, facilities
and the same financial security enjoyed by
our customers in Colombo. Today is a
milestone in the careful strategy for
expanding our business in Sri Lanka.
Kurunegala is one of Sri Lanka's most
developed and dynamic provinces and we are
convinced that this is the ideal point from
which to spearhead our branch expansion."
Province Chief Secretary G.B. Jayasundera
expressed his satisfaction that a
multinational insurer of the stature of
Allianz had chosen Kurunegala to set up its
first branch office.
Allianz Lanka is backed by the global
strength of Allianz SE, one of the world' s
largest financial services providers with
experience since 1890 in providing
innovative insurance, asset management and
banking services to over 80 million
customers in more than 70 countries. The
Allianz Group has over Euros one trillion in
assets under management and is ranked 19th
among Fortune 500's listing of top global
corporates in 2007, over half of whom insure
The local subsidiary successfully set up
General insurance operations in Sri Lanka in
2005, and already has an impressive track
record of achievements, with many 'firsts'
in performance in just three years and a
fast growing customer base of large
multinationals, local corporates, small
traders and individuals. The success of its
General insurance business in Sri Lanka
prompted parent company Allianz SE to set up
Life operations in the country in October
2008, following approval in July last year
of its application to start Life operations
in Sri Lanka by insurance regulator
Insurance Board of Sri Lanka.
CF A+ ( LKA) rating reaffirmed
On the eve of the 51st anniversary of
Central Finance Company PLC (CF), it
maintains the best rating amongst registered
Fitch Ratings Lanka has affirmed the
Company's National Long-term rating at 'A+ (lka)'.
"The Outlook is Stable", Fitch Ratings Lanka
announced in a press release.
A Company spokesman said, "In continuing to
enjoy the A+(lka) rating for the past three
years, CF has proved its strong financial
position, good asset quality, solvency and
strong capital position relative to peers in
the financial sector."
Over the past half century, CF has expanded
to become one of the most respected
financial services companies in the country.
Starting with a modest capital of Rs.
170,000, CF has Shareholder funds of Rs.6.6
billion (as at end September 2008). Profit
after tax has exceeded a billion rupees in
the past three years recording Rs 1,048
million in 2007/08, increasing from Rs 1,024
million in the previous year. Operating
income increased from Rs 1,003 million to Rs
1,066 million in 2007/08.
Prudent financial polices in addition to
complying with guidelines and norms
specified by the Central Bank of Sri Lanka (CBSL)
has supplemented the inherent strength of
the Company .A consistent policy of
re-investment of earnings continue to
strengthen its capital base, the highest in
The establishment of strict credit controls
coupled with an effective network of
branches ensures timely and efficient
collection of receivables which has resulted
in positive trends in lowering
non-performing loans. Skilful management of
financial resources and the priority given
to the development of human resources at all
levels has helped the Company to build
stability and strength over the years.
This has been endorsed by Fitch saying,
"Well-defined credit policies and stringent
recovery procedures have translated into
asset quality that is amongst the best in
the Registered Finance Company (RFC) sector
in Sri Lanka." The statement further says:
"CF's NPL (defined by Fitch as loans in
arrears for over three months)/gross loan
figure was 9.8% at H109 (FYE08: 8.3%), while
the corresponding ratio at the six-month NPL
level was 3.2% at H109 (FYE08: 3.3%). CF
also had an additional provision for NPLs in
arrears between three to six months-more
prudent than the required regulation."
Fitch pointed out that "Consequently, Net
NPL/Equity ratio was 21.6% at H109 (17.3% at
FYE08)", while adding "Although the majority
of CF's assets are financed by customer
deposits, growth has been increasingly
funded by bank borrowings (17% of the
funding mix at H109 versus 7% at FYE05).
Interest rate swaps of LKR 2.6 bn at FYE08
(40% of borrowings at FYE08) have minimised
market risk. Internal capital generation was
strong with high margins, low cost
structures (cost/income ratio was 41% in
H109) and a strong retention policy; overall
capitalisation remained strong at 22% of
assets at H109."
Meanwhile, CF's policy of diversifying into
new ventures has paid dividends. CF
Insurance Brokers (Pvt) Ltd, for instance
continues to be the country's leading
insurance broker. The investment in its
associate company, Nations Trust Bank PLC (NTB)
has brought in encouraging returns. NTB's
net interest income increased by 23% in
2007 to record Rs 2,110 million. Profit
after tax of Rs 505 million showed an
increase of 56% over the previous year.
Emerson refutes allegations
A CIMA official refuted allegations that he
had not furnished the necessary
documentation pertaining to his former
CIMA South Asia & Middle East Director
Bradley Emerson told The Sunday Leader that
he had provided the necessary testimonials
at the interview for the CIMA SL CEO post.
Subsequently Emerson was promoted to the
position of CIMA South Asia & Middle East
Director. He is based in
Emerson was responding to allegations made
by a former CIMA SL Division President that
he had not furnished the same.
U.N. Jinasena, in a letter to Tony Woodcock,
who was sent recently by London to review
CIMA's operations here had said, "the local
CIMA President who was in office at the time
of recruitment of Emerson had confessed at a
meeting of past presidents that he had not
called for references from former employers
of Emerson which was compulsory considering
this high profile post of the CIMA SL
Emerson who said that he was headhunted, was
appointed to the post of CIMA SL Division in
Prior to his appointment he had served as
Deputy CEO PABC Bank, from which post he had
resigned, when he was headhunted by CIMA.
London recently suspended the local Council
on alleged governance matters.
Emerson also refuted another allegation made
by Jinasena that his Communications Manager
Radley Stephens had been "derogatory &
insulting" in an e.mail sent to CIMA SL
Division President Ms. Gowrie Shanker (now
Emerson claimed that Stephens' email was in
no way derogatory or insulting in regard to
a reply Stephens had sent her concerning a
press statement from London, to be
circulated among the media here.
Apollo to make Rs. 60 mn.,
Lanka Hospitals Corporation plc. (LHCL), the
holding company of Apollo Hospitals,
Colombo, net earnings grew by 175% year on
year (yoy) to Rs.18.83 mn., in the second
quarter (2Q)ended September 30, 2008, while
revenue grew by 24% yoy to Rs. 617.68 mn.,
during this period. Revenue during the first
half of 2009 (1H09) increased by 26% yoy to
Rs. 1,169.41mn., with significant growth
seen from the inpatient segment.
Cost of services increased by 17% during
the six months to Rs.375 mn., which could be
attributed to high cost of drugs. Staff
costs rose by 30% partly owing to a salary
revision made in June 2008.
Due to the bleak economic outlook,
including factors such as inflation,
interest rate volatility, utility and energy
costs, operating expenses rose by 19% during
Long term liabilities reduced by 44% to
Rs.341mn., and finance cost reduced by 70%
to Rs.27mn., during the 1H owing to funds
received from the rights issue.
Almost a 160% increase in net profit in
1H09 to Rs. 36.379 million boosted interest
13.58 times from a mere 1.16 times a year
LHCL is concentrating in developing
centres of excellence, instilling best
skills and facilities in key areas and
investing in improving customer service,
John Keells Stock Brokers in a report said.
"With the company's improving performance
and increasing potential for healthcare
services we revise the company's earnings
upwards to Rs.60 mn., for FY09,"the report
Bad year for vehicle imports
Government's withdrawal of the vehicle
permit scheme offered to senior government
officials and the high fiscal levies on
vehicle imports are expected to result in a
sharp decline in demand for high end models.
The increase in the Letters of Credit margin
on vehicle imports from 100% to 200% would
entail a substantial increase in working
capital, and the additional borrowing
requirement would increase finance costs of
United Motors Lanka plc, (UML) John Keells
Stock Brokers (JKSB) in a statement said.
High costs of credit and the global economic
downturn would further depress the local
demand for brand new vehicles as well. "We
expect UML to record a decline in earnings
of Rs 204 mn., in financial year 2009
(FY09), JKSB said.
UML witnessed a 37% drop in earnings year on
year (YoY) for the first half of 2009
(1H2009) ended September 30, 2008 to Rs 68
mn., while earnings for the quarter (Q)
were 43% lower at Rs 36 mn.
A combination of high import taxes and the
appreciation of the Japanese Yen against the
Sri Lankan rupee led to an increase in the
prices of Mitsubishi vehicles, adversely
impacting on demand.
The vehicles division recorded a slight
decline in revenue to Rs 2,707mn., while
PBIT for the segment was Rs 243mn, 5% down
for the 1H2009.
The repairs and services division recorded
a153% revenue growth to Rs. 260 mn., while
PBIT for the segment was up at Rs 52 mn. The
spare part sales accounted to Rs 469 mn of
turnover which was 13% higher than the
comparative period last year while PBIT for
the segment was increased by 8% to Rs 123 mn.
The parent company United Motors Lanka plc
recorded a turnover of Rs. 2.27bn., in 1H
which was a marginal increase from last
year. Sales volumes were affected by
increases in vehicle prices as well as a
shift in demand towards less expensive
models such as the Mitsubishi L200 Single
Cab which has considerably altered the sales
The company's fully owned subsidiary, Unimo
enterprises Ltd (UEL) launched "VIVA" to
its Perodua range in August and the brand is
expected to generate significant profits in
the next Q. However UEL incurred a Rs. 6 mn.,
loss compared to a Rs 20mn., loss in 1H2008.
Other fully owned subsidiaries UML property
development, Orient Motor Company Ltd and
Orient Financial Services Corporation
recorded post tax profits of Rs 14 mn., Rs.
4.5 mn., and Rs 8.3 mn., respectively.
However the jointly controlled entity TVS
Lanka Ltd., suffered a Rs 24.3 mn., loss as
it sought to consolidate its motorcycle
business and gain market share.
Successful marketing, the Obama way
By Shiraz Latiff*
Americans once again recently demonstrated
their unique capacity for self-renewal by
electing the first black as head of state,
not much more than a generation after the
country's African-Americans were accorded
full civil rights.
In electing Barack Obama president by a
solid margin, accompanied by a congress with
the biggest Democratic majority since the
1970s, Americans signalled a dramatic change
in the direction of the world's sole
However, if we re-wind this scene two year's
back, today's achievement by Obama would not
have been thought to be possible. What we
are talking today is the success of a
presidential campaign that was executed with
clinical perfection. Barack Hussein Obama,
two years ago was a relatively unknown name
of a young upstart senator and lawyer with
an excellent oratorical acumen and a
mountain-sized ambition to succeed in life.
If you consider him as a branded product on
the shelf, he had all the demerits that a
marketer could attribute to a disastrous
brand. A black man born to an immigrant
Kenyan father and an American mother in a
country where racism is rampant despite all
the egalitarian rights given by the
Constitution. A middle name, Hussein,
loathed by all Americans, especially both
the Bushes, senior and junior. His father,
though a non-practicing Muslim, not only
extended his genes but his Muslim name to
his son. A Muslim, by all means, whether
practicing or none practicing, is considered
a potential Al-Qaeda sympathizer or even a
potential recruit in most American minds.
With all these drawbacks, how did Obama pull
off an emphatic win over the war-hero turned
senator-saviour of USA from the clutches of
terrorism, John McCain. Any marketing or PR
guru would have first told him to re-brand
himself, viz, change the name to something
more American and re-position himself to the
demand of the country, viz, Country First,
or liberation from terrorism, like McCain
But what did Obama do that we all marketers
can learn from. Though he might not have
borrowed that euphemistic bible of marketing
from Kotler, he seems to have done all that
a good marketer would have done all the way.
Obama's hybrid segmentation of the market
singled out the exact target markets to
focus on. Demographically, he targeted the
young voters, who were either moderate or
liberal, instead of the conservative
middle-aged and the elderly. The exit polls
as per CNN showed 66% of 18-29 and 54% 30-44
age groups had indicated voting for Obama.
He targeted the Blacks and the Hispanics who
expected an Obama to be able to relate to
them as a minority himself. Exit Polls
showed 95% Blacks and 66% Hispanics voted
Geographically, the South was heavily biased
in favour of his opponent due to historical
reasons of white dominant mentality. Other
regions were more of a tie as per the Exit
Polls. Therefore, his segmentations did not
concentrate much on geographical
demarcations except for last minute
campaigns in the toss-up states.
However, psychographically, he focused on
the moderate and the liberals who wanted a
change from the Bush era and focus on the
economy. Exit Polls again showed 60% of the
moderates and 88% of the liberals voted for
His weakness was inexperience in the
political system. Barely two years into his
term as a Senator, he could not have boasted
of a strong CV in the political arena to
outweigh his opponents. However, he
targeted the right market segments as
discussed above, whose expectations were not
an experienced politician with a 'silver'
bullet but a pragmatist with a promise to
'Change' and bring fresh thinking to the
country and the economy.
Two years ago Obama correctly identified
that the overwhelming sentiment in this
presidential election would be a desire for
change. America's yearning for change
focused most closely on dissatisfaction with
the economy and the wars in Iraq and
Afghanistan. McCain was never able to
distance himself from the Republican
calamities of the past eight years even
though he had a right to be considered at
least as much an agent of change as Obama.
His Unique Selling Proposition was 'Change
that we can Believe in.' Though his
opponent's 'Country First' was deemed to
have appealed strongly to patriots, it was
not the expectations of the target market,
which constituted the majority in the
country. McCain kept on improvising with
his slogan and the pay-off lines expected
the tide to turn towards it. When all else
failed, he expected the blonde Sarah Palin
to give him that touch of magic, which she
did, but for a brief respite. People did
get carried away with her charm and glamour
but it was not sufficient to convince the
voters to handover the presidency to
Once the initial euphoria died down and the
reality set in, there was Obama still
touting the 'Change' slogan. He did not
change his focus when he saw the sudden rise
in the ratings for McCain. His consistent
message paid off and the voters not only
remembered him for what he was offering but
also trusted him for being consistent in his
message and offerings.
When modern day elections are always full of
sleaze funding and scandals, Obama not only
refused to accept Federal funding but also
did not run after major donors to fill his
campaign coffers. He was ably supported by
the co-founder of Facebook Christopher
Hughes as the Director of Online Organizing
to mobilize the online community to create a
70 million member army of bloggers,
fundraisers, and volunteers who were hooked
up by e-mail, blogs, chat rooms, and pocket
networks. They not only worked tirelessly
for Obama but also contributed a mere USD 5
each to the campaign fund. This initiative
gave him the best of the money that any
Presidential nominee received in years and
the biggest ever volunteer group, mind you
majority of them young, working tirelessly
for his campaign.
If Obama can market himself with such
clinical precision without re-branding or
re-positioning himself to suit the current
thinking, but to change the minds of the
prospects to his thinking, isn't he the
greatest marketer of them all in the
contemporary politics or business, for that
My analogy of his political campaign in a
marketing context was for the purpose of
getting our marketers to think outside the
box and learn from the parallel avenues that
are available in the world.
*The writer is CIM Sri Lanka Region Chairman
and Asst. Vice President-Service Quality and
HSBC Electronic Data Processing Lanka (Pvt)
New Board takes over
Seylan Bank PLC's newly appointed Chairman
Eastman Narangoda together with the new
Seylan Board comprising Nihal Jayamanne
(PC), Lalith Withana and Naomal
Gunawardena assumed duties in the new
year by lighting the traditional oil lamp at
Ceylinco Seylan Towers.
Narangoda told the staff that he together
with the other Board members would provide
guidance and directions to make Seylan a
stronger bank and a leading player in the
financial services industry and expressed
his confidence that this new partnership
will drive the bank to greater heights.
Jayamanne also addressed the staff.
Thereafter the Board and Seylan's senior
management led by Chief Executive Officer
Ajita Pasqual partook of the traditional new
year kiribath and other sweetmeats.
The Director Board also met with the
Corporate Management and outlined steps for
Pep up drink
Suri Trading Company (Pvt) Ltd are the sole
agents in Sri Lanka for Kotra Pharma (M)
Sdn.Bhd Malaysia, a leading manufacturer of
Pharmaceutical and Nutricuticals under the
trade name Appeton.
About eight years ago Suri Trading
introduced Booster Energy Drink in 240ml
cans to the Sri Lankan Market. Booster being
an effective lime flavoured energy drink
Suriyaaratchie a young persevering
entrepreneura and his team at Suri left no
stone unturned to make Booster a household
name in Sri Lanka.
Sports people love to drink a Can of Booster
to pep up their lost energy.
Today Suri Trading has introduced their
latest quality product under the Booster
umbrella, Booster "Blitz," a fizzy,
rejuvenating, energizing, revitalizing and
refreshing, energy drink in cans and sachet
form to the local market.
Booster Blitz presented in 250ml tall cans
is a sweet lime flavoured drink. Energy
required is derived from the presence of
Vitamin B6 & B12.The manufacturer, Kotra
Pharma confirms Booster Blitz is a Halal
product certified fit for Muslims by Islamic
Food and Nutrition Council of America.
Booster Blitz revitalizes lost energy of
sports people after intense physical
activities and refreshes those after tedious
mental activities, at the end of hard days'
Booster Blitz in sachets contain 6 g., in
powder form, is available for the first time
in our country. This product which gives a
fizzy effervescence when added to a glass of
water is a sugar free energy drink.
Therefore it is helpful in the management of
Diabetes and Obesity. Nevertheless it
contains United States Food & Drug
Administration approved sweetness which
provides a taste of sweetness without added
calories. As such Booster Blitz powder (6gr)
in sachets is suitable for diabetics and low
calorie intake patients. You can welcome
your visitors by adding a sachet of Booster
Blitz powder to a glass of chilled or normal
This new product with its powerful
energizing qualities having and unmatchable
lime flavour is sure to dominate the energy
drink market within a short period of time,
Chief engineers and Masters may now once
again, join as full corporate members (MIMarEST)
Institute of Marine Engineering,
Science and Technology (IMarEST), rather
than being Associate members (AMIMarEST).
The IMarEST approach to membership is
not based on academic qualifications; it
has to be a combination of academic and
practical professional experience. The
"exact mix" varies from person to
person. (Marine Talk)
275 Cancer detections
Some 275 people who tested positive for
cancer after coming to Ceylinco Healthcare
Centre (CHC) for screening have had or are
Seven years after CHC began operations as
Sri Lanka's centre of excellence for
screening for many forms of cancer, it has
helped thousands of Sri Lankans protect
themselves against the dreaded disease by
opting for early detection.
Having performed nearly 9,000 mammograms
over this period, close to 26,000 have
visited the centre for screening over the
past seven years, about 14,000 of them in
the last three, the Centre's Senior Medical
Officer Dr. Shyama Fernando said.
Now a well-known landmark at
Colombo, the Centre which celebrated its 7th
anniversary last month (December) said it
was particularly pleased with the progress
it had made in combating the spread of
To mark its 7th anniversary, the Centre
organised a get-together for regular
visitors to offer them a day full of fun and
knowledge. Participants had an opportunity
to have a free consultation with an
Oncologist. The programme also included
presentations on hydrotherapy, beauty
culture and cookery. The invitees were
provided a healthy breakfast and a lunch and
enjoyed a musical session.
Fernando said that although the Centre at
the start primarily targeted cancer
patients, its services were extended to
screening packages for a variety of health
problems including diabetes and heart
problems, making it a comprehensive health
She said the Centre has also become popular
among people in the outstations, where
medical screening facilities are virtually
The Centre has dedicated Wednesday to offer
all services within a day for those who book
early. "On this day, visitors can undergo
screening, collect their test reports and
also meet their doctor and discuss further
management of disease," Fernando said.
"We are the only Centre that does needle
biopsies and gives reports on the same day,
thus helping the patient to see the surgeon
and discuss further treatment according to
Further enhancing its services, an
ultra-modern Radiation Treatment Unit was
set up a year ago. This unit houses the
country's first Linear Accelerator, the
international Gold Standard in the delivery
of accurate, intensity-modulated radiation
therapy for the treatment of many forms of
Set up in affiliation with the Washington
Hospital Centre, CHC is equipped for oral,
breast, colorectal, stomach and cervical
cancer screening as well as for genetic
testing to identify high-risk families.
Bringing together the expertise of a Breast
Surgeon, Oncologist, Radiologist,
Pathologist, Counsellor and a team of
trained support staff, the unit offers tests
such as mammography, colonoscopy, endoscopy,
laryngoscopy, ultrasound screening and x-ray
in comfortable and pleasant surroundings.
MacGREGOR’s hopper and blow pump bulk
handling systems for offshore
supply vessels can achieve
capacity increases of up to 75 % compared
with a conventional bulk tank set-up.
The two main tasks of a bulk handling
system-storage and discharge are performed
by two separate units in a hopper and blow
pump installation. Cargo is received and
stored in a hopper, whereas discharge is
performed by a blow pump using compressed
air. Technical solutions based on this
concept have been employed on cement
carriers for the past 20 years. (Marine
Inflation as measured by the new Colombo
Consumers' Price Index (nCCPI) registered an
annual average change of 22.6% last month, a
marginal 0.4 percentage points decline over
that of November.
Meanwhile inflation as measured by the point
to point change in the nCCPI registered a
figure of 14.4% in December 2008, a 1.9
percentage points decline over that of
Central Bank (CB) Governor Ajith Nivard
Cabraal who unveiled CB's Fiscal and
Monetary Policy Roadmap for the year on
Friday, said that annual average inflation
would come down to single digit level by the
middle of the year.
Average annual inflation will be 9% this
year, he added.
Inflation vs., interest cost
Raw materials form the biggest component in
the cost of production (CoP), Central Bank
(CB) Governor Ajith Nivard Cabraal said.
Cabraal who unveiled CB's Fiscal and
Monetary Policy Roadmap for the year on
Friday said that while raw materials cost
comprise 35% of the CoP in Sri Lanka, the
interest component averaged 2.6%, while at
the upper end it was 4.4%.
He further said that in the CoP cost
structure, salaries and wages occupied 12.5%
and power & energy (6.7%).
Cabraal therefore said that what was
important was to tackle inflation and not
the interest cost. "Inflation impacts all
aspects of CoP," he said. (See also this
page's main story)
Hedging is good as long as it's done
properly- Central Bank (CB) Governor Ajith
Nivarrd Cabraal referring to Ceylon
Petroleum Corporation's hedging operations
when he unveiled CB's Fiscal and Monetary
Policy Roadmap for the Year on Friday.
Economic growth this year will be between
However, with the recent policy stimulus it
will go upto 6%.
This was said by Central Bank (CB) Governor
Ajith Nivarrd Cabraal when he unveiled CB's
Fiscal and Monetary Policy Roadmap for the
Year on Friday.
The first three quarters of last year
witnessed a 6.5% growth rate on average.
He also said that last year's budget deficit
was 7%, while unemployment at the end of the
third quarter of 2008 stood at 5.2%, while
Debt to GDP ratio in 2008 was 78%.
Cabraal further said that a bank would be
permitted to open a branch in the Western
Province (WP), provided they agree to open
two more outside the WP.
Ceylon Chamber of Commerce's (CCC's) Chief
Operating Officer Harin Malwatte succeeded
Prema Cooray as CCC's Secretary General/CEO
from January 1, 2009.
Cooray will assume duties as Managing
Director/CEO of CCC Solutions (Pvt) Ltd., a
fully owned CCC subsidiary which will handle
project related activities.
Malwatte a former soldier thereafter worked
for a multinational company and a leading
Sri Lankan tea packaging and exporting
company. He also worked for the Plantation
Human Development Trust as CEO/Director
Three to oversee CIMA
CIMA London will appoint a three member
interim committee to oversee its affairs
here this week.
Recently the UK Secretariat suspended the
local council on grounds of alleged
CIMA South Asia & Middle East Director
Bradley Emerson refused to divulge the names
of those members.
Air powered vehicles
Air France KLM will begin a six-month trial
of zero-emission-compressed-air powered
passenger-carriers at Paris de Gaulle and
Amsterdam Schiphol in spring 2009,
evaluating them for safety, ergonomics,
deployment, reliability and maintenance.
Operating costs for the four-seat AirPods,
developed by Motor Development
International, are extremely low, said the
airline-launch user of the vehicles.
Transport Ministry named investors that have
expressed interest in buying components of
state-run Olympic Airlines.
They include Chrysler Aviation, Goldair,
Ellaktor, Hellenic Cargo, Iberia, Italian
MyAir, Kuwait's Fouad Al Ghanim Group,
Athens Airways, Qatar Airways, Sky Europe,
SkyOne and Swissport. The tender ended
October 31 and is expected to conclude by
last year end.
The privatization plan won EC approval in
September. (Washington Aviation Summary)
Following the success of the World
Superyacht Young Designer Award 2008
competition, The Royal Institution of Naval
Architects in association with Boat
International and Camper & Nicholsons
International invite entries for the 2009
competition to find the world best young
The competition will be open to anyone who
is studying for a degree or other
qualification in a subject related to yacht
or small craft design, or who graduated from
such a course within three years of the
closing date of entries. (Marine Talk)
Rs. 135.7 bn., new money released
Central Bank (CB) Treasury Bill (T.Bill)
holdings as at last year's end increased by
11.2% week on week (WoW) to Rs. 137,596
This increase in the 15 week period from
September 18 to December 31 is a jump from
Rs. 1,911 million to Rs. 137,596 million, a
7,100% increase in CB's lending to the
Treasury in the period under review.
Increase in CB T.Bill holdings means an
equivalent increase of new money being lent
to the Treasury, in this instance Rs.
The danger of new money entering the system
is that it fuels demand side inflation.
The country is likely to end up with a
negative balance of payments (BoP) position
last year, Central Bank (CB) Governor Ajith
Nivard Cabraal said.
Cabraal who unveiled CB's Monetary and
Fiscal Policy Roadmap for this year on
Friday, said that exports which grew by
12.8% in US dollar terms on a year on year (YoY)
basis in the first eight months of last
year, saw this momentum decelerate, with the
first 10 months of last year showing a YoY
growth momentum of only 9.5% during this
In contrast, imports during the first 10
months of last year grew by 31.3% on a YoY
basis, with oil imports alone contributing
to 37% of this growth.
Cabraal further said that the current
account deficit, mainly on account of the
country's high oil bill, shot up to US$
3,009 million in the first nine months of
last year as compared with a figure of Rs.
986 million during the commensurate period
the previous year. (See also the main story
on page 21)
CB sells short term T.Bills
The Central Bank (CB) which rejected offers
for Treasury Bill (T. Bill) purchases of 91
day tenure at Wednesday's primary auction,
however sold short term T. Bills of 21 and
28 day tenures to the market on Thursday,
thereby raising Rs. one billion each on
weighted average yields of of 17% and 17.1%
respectively from both of these tenures.
Originally amounts of Rs. two billion and Rs.
three billion were offered for those two
parcels, market sources said. At the
previous week's T. Bill primary auction CB
sold T.bills of 91day tenure at a weighted
average yield of 17.33%. (See connected
story found on page 21)
Canvassing the diaspora
Foreign holdings in Treasury Bonds (T.
Bonds) as at end of last year were Rs. 17,
572 million (US$ 154.1 million).
The Central Bank has allowed foreigners to
invest in both T. Bonds and T. Bills
outstanding upto a maximum of 10% of those
Central Bank (CB) Governor Ajith Nivarrd
Cabraal unveiling CB's Fiscal and Monetary
Policy Roadmap for the Year on Friday, said
that the government will be canvassing the
Sri Lanka diaspora to invest in government
Victories boost market
Treasury bond yields of 2010 maturity fell
below 21% at Friday's secondary market
trading which market sources attributed to
the feel good factor created by the fall of
Meanwhile the market experienced a Rs. 10
billion surplus in inter-bank borrrowing due
to the Central Bank keeping away from the
foreign exchang market.
CB yields to rates over 20%
Thursday's Treasury Bond (T. Bond) primary
auction for T. Bonds of three years and
three months maturity saw the market
successfully demanding yields above 20%
(20.10%), with the Central Bank (CB)
succumbing to selling T. Bonds more than
that which was originally announced for this
The auction was initially for the issue of
only Rs. 500 million worth of T. Bonds to
the market, but the CB ultimately ended up
selling Rs. 700 million worth of T. Bonds.
Issuing of T. Bonds is a popular way that
the Treasury, facilitated by the CB, borrows
from the domestic market to meet its
The other T.Bond tenure which was of a two
year tenure saw the market successfully
bidding for yields (weighted average yield)
of 21%. CB eventually sold only Rs. 200
million worth of T.Bonds of this tenure to
the market, though it was originally
announced that they would be selling Rs. 500
million worth of T. Bonds of this tenure as
well to the market.
Ceylon Tobacco Company plc has declared a
4th interim dividend of Rs. 4.80 a share
less withholding tax. Excluding dividend
date January 13, 2008 and payment date
January 26, 2008.
The acquisition of Alitalia assets by
Compagnia Aerea Italiana (CAI) was approved
by the Italian government and the European
Union (EU) and the new Alitalia was expected
to take off last month.
The European Commission appointed a trustee
to oversee the sale. "This process will
lead to the emergence of a private airline,
smaller in size but more efficient," said EU
Transport Commissioner Antonio Tajani.
The Commission ruled that CAI would not be
liable for repaying a euro 300 million
government loan made to Alitalia; the loan
will be repaid from liquidation proceeds.
The rescue plan does not constitute state
aid, but represents a real privatization,
said Tajani; Ryanair said it would appeal
the "corrupt and biased" decision.
(Washington Aviation Summary)
Nations Trust Bank PLC (NTB) recently
relocated its branch in Battaramulla to a
more spacious & easily accessible location.
NTB Director/CEO Zulfiqar Zavahir said, "The
Bank continues to add to its increasing
branch network across the country in its
steadfast commitment towards delivering
greater levels of convenience for its
The new branch located at Pannipitiya Road,
Battaramulla offers customers banking
services 365 days of the year with extended
banking hours for added ease and
"The Bank at Your Doorstep" service recently
launched by the Bank will continue to be a
key driving factor to the Bank's customers.
NTB is one of the fastest growing banks in
Sri Lanka today. The Bank has 36 branches,
11 leasing centres, 41 ATMs, six Personal
Banking Centres as well as Internet Banking.
Using the Nations Trust debit card,
customers may access their accounts
countrywide and internationally through ATMs
of other banks which have the Cirrus/Maestro
facility. They are also the sole issuers and
acquirer for American Express credit cards
in Sri Lanka.
Handling dangerous goods
A new edition of the International Maritime
Dangerous Goods Code, the standard guide to
all aspects of handling dangerous goods and
marine pollutants in sea transport has been
published by the International Maritime
Organization in hard copy, as a download and
as an internet subscription.
The new edition includes the changes in
Amendment 34-08 adopted by the Maritime
Safety Committee in May 2008. (Marine Talk)
Solutions for passenger delays
A Department of Transportation, USA (DOT)
task force has developed a model contingency
plan for use by airlines and airports to
develop individualized plans that would
address the needs of passengers subject to
lengthy ground delays aboard aircraft and a
return to an airport terminal.
The voluntary guidelines contain no fixed
limit on how long passengers can be delayed
before being allowed to deplane,
disappointing consumer groups. Among task
force recommendations: Airlines are advised
to update passengers every 15 minutes, make
refreshments and entertainment available
when practical, make reasonable efforts to
keep airplane restrooms usable and provide a
secure room for passengers from overseas
flights to avoid the need for security
checks when re-boarding.
Representatives of airlines, airports,
consumer groups and DOT served on the task
force. Most major airlines and airports have
instituted their own passenger protection
guidelines, but DOT is advancing a
regulation that would require airlines to
have airport-specific plans in place to
ensure that passengers are treated
appropriately during extended tarmac delays.
(Washington Aviation Summary)
Applied Weather Technology (AWT) announced
that its Route Optimization
Service used by ships to help identify the
most efficient routes to their destinations
now includes technology that helps AWT's
Route Analysts warn ships at sea of the
potential for resonance, a physics
phenomenon that can cause ships to severely
roll and lead to crew injury and cargo loss.
The severe motion alerts/resonance alerts
are based not only on the weather, but also
on the vessels' size, draft, stability,
heading and wave conditions.
Germanischer Lloyd has developed a guide
outlining major methods and procedures
involved in ship lay-ups.
Deactivating vessels in an effort to save
costs requires planning and investment in
the process. It is imperative that ships are
laid up technically correctly to reactivate
the ship successfully when economic
conditions are more favourable.
The guide gives technical assistance to
shipowners focusing on the maintenance of
class, ship's safety as well as the
maintenance of operability. (Marine Talk)