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Central Bank CB Governor Ajith Nivard Cabraal appears to be explaining to President and Finance Minister Mahinda Rajapakse something from a document. Will he also advise the President to ask the government to stay away from the money markets so as to ease pressure on rates?

CB's Rs. nine bn. stimulus pkg.
fails to bring down rates

Central Bank's/Monetary Board's Rs. nine billion stimulus package to the banking industry that kicked off on Friday failed to bring down rates with overnight (o/n) inter-bank borrowing rates remaining unchanged at the 14-14«% levels, the same rates they commanded the previous day, with the market recording a net liquidity shortfall of Rs. 15.9 billion on an o/n basis.

Central Bank (CB) statistics however showed that average o/n inter-bank lending rates fell by 32 basis points (bps) to 13.61% over that of Thursday's figures. But commercial banks' average weighted prime lending rate in the week ended Friday increased by 21 bps week on week (WoW) to 19.39%.

CB, to boost liquidity in the market, and therewith defuse pressure on rates, reduced the statutory reserve requirement (SRR) of commercial banks effective from Friday by 75 basis points (bp) to 7%, thereby injecting an additional Rs. nine billion of liquidity to the market on a daily basis.

Sources attributed the reason for rates to remain virtually unchanged despite this, due to heavy borrowings in the rupee market by the State to buy US Dollars, and also to meet its rupee expenditure commitments.

They said that the main reason for the State to be heavily involved in the markets was to fund the war.

In sluggish trading in the secondary Treasury (T) Bond market on Friday, Bonds of two, three and four year maturities were commanded rates of 18.35% by prospective investors, while sellers were demanding rates of 18.15%.

Market shortfall which on an overnight net basis was Rs. 22.9 billion on Thursday, came down to between Rs.15,9 billion on Friday because of this fresh liquidity infusion, though rates remained unchanged.

Friday's liquidity shortfall was nearly twice as big as the new liquidity injection brought to the market as a result of the lowering of banks' SRR.

Sources further said that CB purchases of  T Bills also do not augur well for inflation control. CB T Bill stock in the week ended Thursday stood at Rs. 182,549 million; a WoW increase of Rs. 15,235 million (9.1%). CB's T Bill stock holding is equivalent to the amount of money that the Bank has lent the Treasury by printing money.

The danger in such an exercise is that it may fuel demand side inflationary pressure on the economy which does not augur well to control interest rates.

Meanwhile, the weighted average yields (WAYs) at Wednesday's T Bill auction remained unchanged over the WAYs fetched at the previous week's auction.

Sources said that the rates remained unchanged due to CB intervention to prevent rates from going up.

 As a result, the WAYs of Bills of 91, 182 and 364 day maturities remained unchanged at 15.76%, 16.93% and 17.73% respectively. This auction was for the re-issue of Rs. 7,000 million worth of maturing T Bills to the market of which Rs. 2,903 million was re-issued to the same and the balance (Rs. 4,097 million) rejected, a term interpreted by the market that the CB subscribed to the same, thereby "printing" money and lending the same to the Treasury, therewith fuelling demand side inflationary pressure on the economy, or getting captive funds to invest in the same at rates lower than that which the market was demanding, or a mix of both.

Interest rates killing investments

"There's the high interest rate of 25-28%. Overdrafts are going at 30% plus. Therefore, there isn't a single developer who can continue in this fashion. There isn't an incentive for investors at interest rates of such magnitude. This is a huge deterrent and something must be done about it," Deshabandu Surath Wickramasinghe told Benchmark last Sunday.

 "Now that the war is almost at an end-there will be many interested parties that will want to come and invest in Sri Lanka in various projects. Therefore, if we take the viable projects and have 10 feasibility studies and proposals, and the Government approves these projects, any investor coming in can take them on. The Government must be serious about the development aspect in nation building," he said.

Discussing the state of Colombo's highways and byways, Wickramasinghe asserted that the road infrastructure was "getting a beating" because traffic has increased enormously over the years. "And in the case of drains, culverts and road surfaces, for example, maintenance has not been keeping up with usage. Consequently, the surfaces are destroyed. It's a Municipality and Highways Department problem, but I don't think they have the financial resources to keep things in good order," he explained.

Commenting on why roadworks take so long to complete, he pointed out that it was important to carry out such work at night. "In countries like Singapore the work is done at night. But in Sri Lanka they start work in the morning, in heavy traffic. So, naturally, construction work is hampered," he told the widely-watched business TV programme.

While 50% of the Rs. 370 billion allocated for capital expenditure in the budget has been set aside for housing for defence personnel, new ports and airport development, local players don't necessarily enjoy a share of this pie.

Commenting on this, Wickramasinghe said: "When the Government signs agreements with foreign governments it doesn't specify that a certain proportion of the workforce or the professional workforce should be Sri Lankan. Consequently they have a field day. They bring everything and they also take all the profits out. So, there is no benefit to locals."

 The sudden changes in policy decisions have also affected the construction industry, he affirmed, adding that it was a serious matter. "On the one hand there is a global downturn in financial circles.."

 As for the expected reconstruction boom in the soon-to-be-liberated north and east, Wickramasinghe said that irrespective of the location, having a structured plan is important. To this end he noted: The Government must mobilise the private sector-we are capable and we can do it."

 Benchmark is presented by LMD and airs on TNL-on Sundays at noon, with a repeat at 9.05 p.m. The programme is also carried over DialogTV as well as on LBN and on Bloomberg Channel on Mondays at 10 p.m. The weekly biz show is prroduced by the wrap factory.

Soft drink sales down 10%

The carbonated drinks industry in volume terms came down by10% year on year (YoY) to 135 million litres last year as high inflation eroded consumer spending power, " an industry source told The Sunday Leader.

He valued the carbonated drinks market at Rs. 9.5 billion

The source said that they had requested the Treasury to reduce the VAT on such drinks from the current 20% to the low band of 12% and a reduction in the excise duty levy from the present charge of Rs. 6 a litre.

But the government had been slow to respond to this request.

He however said that the industry was expectantly awaiting the opening of the A9 highway, the road link to the Jaffna peninsula, to boost sales, which, according to him the government had said would be opened in May.

 "Sales to Jaffna comprise 5% of Coca Cola Beverages' market both in volume and in value," the source said. It may be upped by 2-3% if the road was opened, that's how it was during the brief ceasefire period, he said. Currently goods to Jaffna are transported by sea, which service is however erratic, he said.

"Supply to the peninsula cannot meet the demand," he said.

Sales to the East are however steady because of the peace prevailing there, the East commands about 5-6% of Coke's market. The company's biggest market however is the Western Province.

The source said Coke and Elephant House are joint leaders in this industry, with each of them having a 42% market share.

He said that the introduction of a "ready to drink" fruit juice fuelled the company's topline growth last year, but bottomline growth remained flat YoY.

 He valued the ready to drink fruit juice market at Rs. four billion with Coke having a 25% share of this pie.

$ hits Rs. 116

The U.S. Dollar went up to Rs. 116 at Friday's trading due to the two State commercial banks, People's Bank (PB) and Bank of Ceylon (BoC) which usually acts as an agent for the government buying the greenback from the market, but then slipped sharply by Rs. 1.65 to Rs. 114/35 when they withdrew, market sources told The Sunday Leader.

The Treasury maintains accounts with both the PB and BoC.  When those accounts are overdrawn, the two State banks go to the market to replenish their depleted foreign exchange (forex) reserves.

At the same time BoC which also acts as an agent to the Central Bank (CB) was offering dollars to the market at the rate of Rs. 113.85 to the dollar (while simultaneously having had bought the same at Rs. 116) on the condition that the necessary import documentations are furnished.

This way CB is believed to have had lost some US$ 20 million from its forex reserves portfolio on Wednesday alone.

The State has been actively buying forex from the market in the past few weeks.

The inactivity of the private sector in the forex market is attributed to the various forex controls and high margins, sometimes as much as 200%  imposed by the CB in the opening of letters of credit  on certain imports.

The government's requirement of forex from the market is believed to be driven by the need to buy defence stores to fund the war. The government borrows from the rupee market for the purpose of buying forex as well as to fund their rupee expenditure needs.

This action causes pressure on both interest rates as well as the forex rates, mainly the dollar vis-…-vis the rupee, as most forex transactions are done in dollars. If the government stays away from the market then both rates and the forex will stabilize, they said.

 It's expected that after the provincial council elections the government will at least partially remove the peg on the dollar. A depreciated rupee will raise  government's borrowing costs while at the same time it will make imports more expensive. 

Ban on slaughter bad

A food exporter warned that the proposed new law banning the slaughter of cattle would be harmful to the country.

Mario de Alwis, Chairman, Processed Foods Development Initiative (Pvt.) Ltd. on Wednesday asked what would then happen to the excess cattle then?

He was speaking at a press conference held in connection with the annual Pro Foods exhibition organised by the National Agribusiness Council (NAC) which will take place for the 8th consecutive year in Colombo from August 21-23.

De Alwis told The Sunday Leader that the milch farmer was just about breaking even by selling milk at prices ranging from between Rs. 23-27 a litre (depending on the fat content). The jam is in the carcass, he said.

Speaking further, he said that he believed that Sri Lanka was a five million tourists market.

"If we get those numbers we won't need to find export markets for our products," said De Alwis.

He said that a papaw farmer last year had said that he cannot even get Rs. 20 for a kg. of papaws. "But if pre-1983 conditions existed, hotels will be coming to his garden to buy those," said De Alwis.

Sri Lanka Food Processors' Association Chairman Dhammika Gunasekera told reporters that the exhibition will be an opportunity for the industry to learn about new technology, whilst at the same time to promote its products, especially for those involved in the food packaging industry,

"By the time the event is held, peace will have dawned in the country, with tourists and investments coming into the country," he said.

Integration of the North-East will be an added boon to the industry, said Gunasekera.

Industrial Development Ministry Secretary R.V.D. Piyathilake in his speech said that processed food exports had grown from Rs. 11.8 billion in 2002 to Rs. 58.6 billion in 2007.

The processed food sector, with US$ 491 million in export earnings in 2007, accounted for 6% of exports and 5% of GDP in 2007.

Plantation crops up

All three traditional plantation crops showed volume increases in production last year over that of 2007.

Tea production increased by 4.3% year on year (YoY) to 318.5 million kilos, rubber by 9.9% YoY to 129.2 million kg. and coconut by 1.4% YoY to 2,909 million nuts. (Source: Central Bank)

Celebrating yet another landmark

On Wednesday Hatton National Bank (HNB) celebrated a momentous occasion: 120 years of service to the Nation since its inception as Hatton Bank, way back in 1888.

Arrangements were made to mark this occasion in a special manner with the cancellation of a Commemorative Cover, especially designed for this special day, under the patronage of Posts and Telecommunications Minister Mahinda Wijesekera and the Postmaster General.

HNB, the Bank with a finger on the pulse of the people has, in its inimitable way changed lives, enhanced lifestyles and brought goals that seemed distant within reach. The ability to reach out and touch people from every single social stratum has given the Bank the aura of a national institution, rather than a business organization and HNB with its record of achievement that spans 120 years, is committed to remain a household name in Sri Lanka.

In 1888, a bank began in the hill-station named Hatton. It was rather appropriately named Hatton Bank. The modest beginnings focused on serving the fledgling tea industry that was also beginning to make its mark. The Bank made the collection of workers' wages so much easier, catered to investors in the industry and began fostering the caring touch that would become its hallmark over the years: Serving small-time savers among the plantation workers.

After Ceylon gained independence in 1948. Brown & Company, leaders in the engineering trade bought over the interests from the Bank's original partners Messrs R.D.Banks and A.T. Aitkin, introducing greater Ceylonese participation - and Hatton Bank was on its way.

If the Bank's progress over the next two decades was steady, 1970 marked the year when it veered off the beaten track to blaze a spectacular trail of its own-the first step that would eventually earn the Bank the title: "The Flagship of Sri Lanka's Commercial Banking Sector."

 The saga began with the merger with the Kandy and Nuwara Eliya Branches of National & Grindlays Bank. This was followed four years later by the acquisition of the business, assets, Head Office and Pettah Branch of Mercantile Bank. A series of mergers and acquisitions resulted in Indosuesz Banque and the Colombo branch of the Dubai-based Emirates Bank International coming under HNB's wing.

In the successive years, HNB's inimitable banking style, much in demand, necessitated the opening of branches-more intimately called 'Customer Centres' and today HNB has the largest network from among commercial banks,  comprising 177 of these, and a further 152 Students' Centres.

These apart, HNB has a global presence too, with a network of 82 Correspondents around the world and enjoys the distinction of being the first and the only Sri Lankan Bank to be listed internationally on the Luxembourg Stock Exchange.

 The innovation that initiated many 'firsts' in banking products and services, also increased the cadre and by 1983 the Head Office moved to Mel Mawatha Colombo. A decade later, HNB Towers, among the most sophisticated high-rises in the region became home to thousands of the professionally dedicated staff and stands tall as a testimonial to HNB's confidence in the future.  

The values that reflect the distinctive culture that is fostered and cherished at HNB centre on the treasuring of professional and personal integrity at all times; demonstrating mutual respect in all interactions; being passionate in whatever the task undertaken; total commitment to customers and the courage to regard change and challenges as opportunities to be different, with the emphasis on unity in diversity.

The Vision, Mission and Values have been carefully compiled, with the accent on simplicity that all at HNB can relate to, be passionate about, think in unison and thus be proud stakeholders of an acknowledged leader in Sri Lanka's banking industry.

1989-HNB ventured where other banks feared to tread. The "perfectly" formulated Village Re-awakening Scheme 'Gami Pubuduwa' was launched to boost earning-power among Sri Lanka's rural sector-a prototype in Micro-financing that was hailed by no less a prestigious world body than the World Bank. Today over 250,000 people from over 50,000 families are afforded support and assistance to bring their talents, capabilities and creativity to the fore to boost economic development among the rural Sri Lankan community-apart from inculcating the benefits of the savings habit.

1991-HNB became the first Sri Lankan private commercial bank to introduce a branded financial product: Singithi. The purpose was two-fold. First it was designed to encourage the savings habit in children. Secondly Singithi also serves to familiarize children with banking. HNB took it further. Savings Centres, established in schools-there are over 150 today-uniquely run by Student Managers, thus paving the way for these youngsters to acquire managerial and leadership skills. The Singithi Jumbo Till was introduced to boost the concept of saving at home.  Today more than 500,000 Jumbo Tills serve as mini banks for children spread across this country.

1993-The year 'Pathum Vimana,' the 'crown-jewel' in HNB's spectrum of high-benefit products for its customers was launched. This novel scheme was launched to give account-holders more than just encouragement to persevere with the savings habit. Prizes for maintaining specified balances in particular accounts win for lucky depositors prizes worth millions at draws-right throughout the year!

Up to now HNB has disbursed more than Rs. 850 million in prizes that include 50 luxury houses, 25 luxury cars and 200 other motor vehicles-apart from weekly cash prizes. More than two million customers save with HNB today.

1996-The year that marked the launching of two innovative products to give HNB customers a definite edge.  HNB was the first bank to launch a branded, long-term Housing Loan Plan-Shanthi. The launch could not have been timely, because at the time housing loans, when a prospective home-builder could obtain one, was only after considerable hassle and a rigid pay-back period: Three to five years at best.

HNB added a refreshingly different dimension with fast processing of applications, minimum documentation-and most importantly, pay back periods that could go up to 20 years or more at a competitive interest rate too. Through this initiative the bank was able to turn the elusive dream of many into a reality.  Today HNB is a leader in housing finance among private commercial banks.

The second product introduced was Pawning facilities, which at that time, as far as banks were concerned was the sole preserve of People's Bank. The difference was that HNB took the humiliating stigma associated with pawning out of the equation and made it just another perfectly normal way to raise cash, not only in an emergency, but even for more pragmatic needs, including business and investment needs. Today, HNB customers can make use of the appreciating assets-gold and jewellery have grown into and take advantage of professionalism, speed, convenience and confidentiality-and the reassurance that sometimes, all that glitters is really gold.

1999-The launch of Pathum Udanaya-a rewarding savings scheme for Sri Lankans working abroad based on HNB Pathum Vimana's format. Normally, banks are not inclined towards sentimentality, but in this case, the scheme was inaugurated to compensate those who must have felt the wrench of leaving families and home in search of more lucrative opportunities. The draw-based rewards are exceptional to say the least. Expatriates in the Middle East (ME) in particular also have the advantage of having representatives of HNB on-site at a number of Exchange Houses in the region.

2008-HNB took a bold step to place its footprint internationally in venturing out to invest and manage exchange houses overseas.  The first such was in Oman with the opening of Majan Exchange.  This move will definitely boost the remittance flow to the country through accepted and regulated channels.  Similar operations will be initiated in selected markets not only in the ME but also in other regions as well.

A little known fact is that HNB also operates a Mobile Banking Unit which was operative on a small scale as far back as 1970.


1995-A special paper on Gami Pubuduwa was published by the World Bank hailing the project as a 'Role model to the world.' 1997 and 1998-The South Asian Federation of Accountants rated HNB's Annual Report and Accounts as the best in the financial category in the entire SAARC region-for two consecutive years.

1997-HNB was ranked No: 1 from the 'TOP 10 COMPANIES" by 'Business Today' magazine.

1998-HNB's Issue of Rs. 1 billion Debentures was not surprisingly fully subscribed on the first day of issue. 1999-HNB won the Asian Bankers' Association Award for Gami Pubuduwa.

2006-Won the prestigious "Bracken" Award for the Bank of the Year 2006 for Sri Lanka, awarded by the prestigious publication, 'The Banker.'

2008 - The first Sri Lankan Bank to be awarded the "Best Retail Bank in Sri Lanka" at the Retail Financial Services Awards 2008 by the Asian Banker magazine.

Vallibel Finance profits up 242%

Vallibel Finance, one of the top names in the financial sphere, recently posted financial results for the nine months ended December 31, 2008, with overall exceptional results in asset growth, revenue, profit, asset quality and productivity.

The Company announced a significant Rs.61.4 million profit from operations, a 242% increase and net interest margin of 9.23% for the period; a commendable success given volatile market conditions that prevailed during the period.

The Company continues to keep to its progressive growth journey, overcoming economic fluctuations. During the concluded 9 months, total assets rose to Rs.1.4 billion recording a 59% growth, whilst revenue recorded a 287% year on year (YoY) growth.

A 41% increase was seen in hire purchase, leasing and loans, adding up to a momentous Rs.1.65 billion. The Company's fixed deposit collection too sustained the same upward momentum during the period, growing by 75% to reach an impressive over Rs.360 million. Vallibel also maintained significant liquid assets to a fixed deposit ratio of 32.74% at the end of the period which is in fact very much favourable than the regulatory requirement of 15 %.

With improved collection from non-performing loans (NPL) and close monitoring of lease and hire purchase portfolios, the Company was also able to maintain the gross NPL ratio at a lower rate of 2.91% as at the end of the period.

 "Vallibel is on a march forward to the very crest of the industry," says Managing Director Jayantha. Rangamuwa. "We are known for our commitment to providing unsurpassed customer convenience whilst seeking progress by strengthening and reinventing traditional methods which in turn it has helped in a big way to bring the Company to where it is today." He added that present customer confidence and the increasing number of investors would help the Company reach even greater heights in future.

Vallibel Finance is registered with the Monetary Board of the Central Bank of Sri Lanka under the Finance Companies Act and is rated B + lka by Fitch Lanka. Principal business lines include Hire Purchase, Leasing, Fixed Deposits, Real Estate and Auto Finance.

Dhammika Perera, Chairman Vallibel Finance is a prominent entrepreneur and investor in the country whose well-diversified business interests include Hydro Power Generation, Shipping, Manufacturing, Hospitality, Entertainment, Banking and Finance, andInsurance. He recently became the one major shareholder of Hayleys Ltd. and is also Director to and holds significant shares of Sampath Bank and Asian Alliance Insurance. Perera's expertise in corporate re-engineering and revival has been instrumental in improving the financial performance of several companies including Pan Asia Banking Corporation Ltd., LB Finance, Connaissance Holdings Ltd. and Royal Ceramics Lanka Ltd.

A well-diversified conglomerate in Sri Lanka, Vallibel Holdings has more than 40 associate companies and its diversified investment portfolio includes some of the best performing public quoted companies listed in the Colombo Stock Exchange.

Going against the tide

Aviva plc, the fifth largest insurance group in the world which acquired the controlling interest in Eagle Insurance PLC in 2006 reported significant growth in Global long-term savings sales and Life and pensions sales in 2008.

Today Aviva is the biggest insurer in the UK.  The group has 57,000 employees serving 45 million customers worldwide with more than GBP 359 billion of assets under management.

Aviva's chief executive Andrew Moss said: "In a year of unprecedented turbulence, our sales have continued to grow. Operating across 27 markets with a range of products and varied distribution has served us well and has brought us an additional real benefit from currency appreciation. Growth in developing economies such as Asia and central and eastern Europe has offset difficult conditions in more mature markets such as Ireland and Italy. Our capital position remains strong and Aviva continues to be attractive to customers seeking security for their long-term savings. Our priorities are to maintain our financial strength and continue to transform Aviva for the benefit of customers and shareholders."

 Global long-term savings sales up 1% to GBP 40.3 billion (down 7% on local currency basis), Life and pensions sales up 11% to GBP36.3 billion (up 2% on local currency basis), Sales figures reported on Market Consistent Embedded Value (MCEV) basis for the first time.

 UK: highest ever life and pensions sales at ś11.9 billion, Europe: Life and pension sales up 8% to GBP 17 billion (buoyed by strength of the euro (down 7% on local currency basis)), North America: Target to double sales in three years achieved a year ahead of plan, up 57% (up 45% on local currency basis) and Asia Pacific: Life and pension sales up 8% (down 1% on local currency basis)-led by 66% growth in China (up 40% on local currency basis)

 Consistent strategy through global crisis has ensured the financial health of Aviva:  Estimated GBP two billion IGD surplus as at December 31, 2008; Strong liquidity position maintained and Group dividend policy remains unchanged.

Opportunities in difficult times

Asian Alliance Insurance (AAI) began the operations of the newest addition to its Regional Distribution Network in Nugegoda recently.

 Currently the AAI Regional Distribution Network consists of 20 branch offices located strategically islandwide.

AAI CEO Ramal G. Jasinghe was present as the chief guest on this occasion. Executive committee members along with the management and regional distribution staff were also present at this event.

Kottawa Senior Regional Distribution Manager Soma Hettiarachchi began the ceremonial opening of the new office with his welcome note. Sales & Marketing General Manager Chula Hettiarachchi shared the strategy behind the Company's expansion amidst prevailing economic & market trends.

He also stressed the strength of the Company to further expand its operations to provide innovative insurance solutions to the target customers.

Jasinghe in his speech emphasized that strengthening the Company's value system by fine tuning the various skills possessed by its staff will act as the backbone of AAI's winning trend, driving the Company towards achieving its objectives. He further stressed that maintaining high standards of professionalism & integrity is of utmost importance.

The Nugegoda branch is a landmark office geared to service both Life and Non Life businesses, using its successful formula of "professionalism." 

AAI has resourced this unit with experienced staff and state of the art ICT offering tailor made insurance solutions to Nugegoda residents. Having consolidated its strengths over the past years, the Company rolled out its well scripted plans for expansion with the opening of this Distribution Office this year.

Dialog makes loss

Dialog Telekom PLC in the 4th quarter (4Q) ended December 31, 2008 made a Rs. 3.9 billion loss compared to a Rs. 1.6 billion net profit made in the corresponding Q the previous year.

The company in the financial year (fy) ended December 31, 2008 made a Rs. 2.9 billion loss compared to a Rs. nine billion net profit made in the corresponding period the previous year.

SLT PAT up 127%

SLT in the 4Q ended December 31, 2008 saw net profits increase by 127% year on year (YoY) to Rs. 2.97 billion. The Group in the fy ended December 31, 2008 saw PAT increase by 31% YoY to Rs. 7.37 billion.

Abans makes loss

Abans Electricals in the 3Q ended December 31, 2008 made a Rs. 0.19 million loss compared to a Rs. 3.12 million net profit made in the corresponding Q the previous year.

The company in the nine months ended December 31, 2008 made a Rs. 3.35 million loss compared to a Rs. 9.85 million net profit made in the corresponding Q the previous year.

Hous. Dev. Fin. makes loss

Housing Development. Finance in the 4Q ended December 31, 2008 made a Rs. 74.37 million loss compared to a Rs. 36.46 million net profit made in the corresponding Q the previous year.

The company in the fy ended December 31, 2008 made a Rs. 227.94 million loss compared to a Rs. 65.5 million net profit made in the corresponding period the previous year.

Bairaha makes loss

Bairaha Farms in the 3Q ended December 31, 2008 made a Rs. 12.20 million loss compared to a Rs. 23.46 million net profit made in the corresponding Q the previous year.

The company in the nine months ended December 31, 2008 made a Rs. 7.63 million loss compared to a Rs. 84.78 million net profit made in the corresponding Q the previous year.

Browns makes loss

Browns in the 3Q ended December 31, 2008 made a Rs. 7.69 million loss compared to a Rs. 76.9 million net profit made in the corresponding Q the previous year.

The company in the nine months ended December 31, 2008 saw PAT come down by 61% YoY to Rs. 49.65 million.

Kegalle makes loss

Kegalle Plantations in the 3Q ended December 31, 2008 made a Rs. 23.86 million loss compared to a Rs. 91.77 million net profit made in the corresponding Q the previous year.

The company in the nine months ended December 31, 2008 saw PAT come down by 22% YoY to Rs. 246.42 million.

MTD Walkers makes loss

MTD Walkers in the 3Q ended December 31, 2008 made a Rs. 19.30 million loss compared to a Rs. 10.16 million net profit made in the corresponding Q the previous year.

The company in the nine months ended December 31, 2008 saw its losses increase by 43% YoY to Rs. 10.87 million.

Richard Pieris reduces losses

Richard Pieris in the 3Q ended December 31, 2008 reduced its YoY losses by 47% to Rs. 271.10 million. The company in the nine months ended December 31, 2008 saw PAT increase by 191% YoY to Rs. 133.97 million.

DIMO makes loss

DIMO in the 3Q ended December 31, 2008 made a Rs.17.97 million loss compared to a Rs. 30.46 million net profit made in the corresponding Q the previous year.

The company in the nine months ended December 31, 2008 saw PAT come down by 33% YoY to Rs. 54.29 million.

Hotel Corpn.'s losses increase

Hotel Corporation in the 3Q ended December 31, 2008 increased their losses by 93% YoY to Rs. 7.92 million. The company in the nine months ended December 31, 2008 increased their losses by 67% YoY to Rs. 46.68 million.

Taj makes loss

Taj Lanka Hotels PLC in the 3Q ended December 31, 2008 made a Rs. 49.34 million loss compared to a Rs. 12.78 million net profit made in the corresponding Q the previous year.

The company in the nine months ended December 31, 2008 made a Rs. 96.13 million loss compared to a Rs. 135. 39 million net profit made in the corresponding Q the previous year.

Piramal makes loss

Piramal Glass in the 3Q ended December 31, 2008 made a Rs. 53.57 million loss compared to a Rs. 1.54 million net profit made in the corresponding Q the previous year. The company in the nine months ended December 31, 2008 made a Rs. 206.67 million loss compared to a Rs. 89.86 million net profit made in the corresponding period the previous year.

Samson's makes loss

Samson International in the 3Q ended December 31, 2008 made a Rs. 5.07 million loss compared to a Rs. 17.48 million net profit made in the corresponding Q the previous year. The company in the nine months ended December 31, 2008 saw its profits reduce by 66% YoY to Rs. 14.08 million.

Radiant makes loss

Radiant Gems in the 3Q ended December 31, 2008 made a Rs. 5.94 million loss compared to a Rs. 12.91 million net profit made in the corresponding Q the previous year. The company in the nine months ended December 31, 2008 however reduced its losses by 13% YoY to Rs. 4.46 million.

Reefcomber makes loss

Hotel Reefcomber in the 3Q ended December 31, 2008 made a Rs. 1.59 million loss compared to a Rs. 0.77 million net profit made in the corresponding Q the previous year. The company in the nine months ended December 31, 2008 however reduced its losses by 32% YoY to Rs. 7.56 million.

Sunshine makes loss

Sunshine Holdings in the 3Q ended December 31, 2008 made a Rs. 0.54 million loss compared to a Rs. 54 million net profit made in the corresponding Q the previous year. The company in the nine months ended December 31, 2008 however saw its PAT increase by 17% YoY to Rs. 132.84 million.

Talawakelle Tea makes loss

Talawakelle Tea in the 3Q ended December 31, 2008 made a Rs. 29.49 million loss compared to a Rs. 84.26 million net profit made in the corresponding Q the previous year. The company in the nine months ended December 31, 2008 however saw its PAT increase by 10% YoY to Rs. 109.28 million.

Watawala makes loss

Watawala Plantations in the 3Q ended December 31, 2008 made a Rs. 35.75 million loss compared to a Rs. 148.96 million net profit made in the corresponding Q the previous year. The company in the nine months ended December 31, 2008 saw its PAT decline by 75% YoY to Rs. 65.03 million.

Serendib Land PAT up 4%

Serendib Land in the 3Q ended December 31, 2008 saw net profits increase by 4% YoY to Rs. 1.59 million. The company in the nine months ended December 31, 2008 saw net profits increase by 12% YoY to Rs. 4.99 million.

Vidullanka PAT up 28%

Vidullanka in the 3Q ended December 31, 2008 saw net profits increase by 28% YoY to Rs. 23.43 million. The company in the nine months ended December 31, 2008 saw net profits increase by 108% YoY to Rs. 82.75 million.

United Motors PAT down

United Motors in the 3Q ended December 31, 2008 saw its net profits decrease by 100% YoY to Rs. 0.62 million. The company in the nine months ended December 31, 2008 saw net profits decline by 75% YoY to Rs. 67.97 million.

Renuka Hotel PAT up 447%

Renuka City Hotel in the 3Q ended December 31, 2008 saw net profits increase by 447% YoY to Rs. 31.81 million. The company in the nine months ended December 31, 2008 saw net profits increase by 23% YoY to Rs. 96.17 million.

Colombo Pharmacy PAT up 17%

Colombo Pharmacy in the 3Q ended December 31, 2008 saw net profits increase by 17% YoY to Rs. 3.60 million. The company in the nine months ended December 31, 2008 saw net profits increase by 11% YoY to Rs. 13.40 million.

Milk Foods' PAT down 93%

Lanka Milk Foods in the 3Q ended December 31, 2008 saw net profits decline by 93% YoY to Rs. 12.84 million. The company in the nine months ended December 31, 2008 saw net profits decline by 94% YoY to Rs. 13.40 million.

Walltile's PAT down 51%

Lanka Walltile in the 3Q ended December 31, 2008 saw net profits decline by 51% YoY to Rs. 60.17 million. The company in the nine months ended December 31, 2008 saw net profits decline by 36% YoY to Rs. 168.40 million.

Union Chemicals' PAT down 33%

Union Chemicals in the 3Q ended December 31, 2008 saw net profits decline by 33% YoY to Rs. 7.38 million. The company in the nine months ended December 31, 2008 however saw net profits increase by 64% YoY to Rs. 33.22 million.

Blue Diamonds' PAT down 47%

Blue Diamonds in the 3Q ended December 31, 2008 saw net profits decline by 47% YoY to Rs. 2.71 million. The company in the nine months ended December 31, 2008 however saw net profits increase by 25% YoY to Rs. 13.33 million

Cargo Boat PAT up 51%

Cargo Boat Development in the 3Q ended December 31, 2008 saw net profits increase by 51% YoY to Rs. 20.96 million. The company in the nine months ended December 31, 2008 saw net profits increase by 246% YoY to Rs. 126.53 million.

DFCC PAT up 25%

DFCC Bank in the 3Q ended December 31, 2008 saw net profits increase by 25% YoY to Rs. 637.65 million. The company in the nine months ended December 31, 2008 saw PAT increase by 2% YoY to Rs. 1.6 billion. (Source: John Keells Stock Brokers)

Reducing  post harvest losses

The Agriculture Ministry has taken steps to reduce post harvest losses of fruits and vegetables by selling plastic crates to the key players in this supply chain.

Dr. D.B.T. Wijeratne of the Agriculture Ministry, the architect behind this venture estimated post harvest losses of those  produce at Rs. 24 billion annually.

He told The Sunday Leader that such losses, placed at 40% for fruits and 30% for vegetables, could be brought down to 10% if such crates in the plucking, handling and transport of such products are used as a replacement to the conventional gunny bag.

Wijeratne said that he made a presentation in this connection to the President on February 13, at the regular cost of living meeting which resulted in a commitment of Rs. 300 million by the Treasury to buy some 400,000 plastic crates required for this purpose.

"I initially asked the President funding for 50,000 crates, but when he asked me how much is needed to implement this scheme in its totality,  I quoted the Rs. 300 million figure, and got his approval," said Wijeratne.

Some one million fruits and vegetables are annually harvested in the country.

The Ministry in this connection has contracted two local plastic products manufacturers to make these crates. They will be priced at Rs. 640 each and will be sold on the basis of "buy one and get one" free, he said.

They can hold upto 25 kilos of produce and can be used for a period of five years, Wijeratne said.

He however said that to make this scheme a success, it was imperative that all the stakeholders, the grower, the plucker, the transporter, et al-those involved, right down the supply chain  be educated  in the use of such material.

"Otherwise they may be used as  linen baskets," he said.

This scheme was first mooted by the Ministry in 1994 and 50,000 plastic crates were imported  for this purpose, followed by a further 50,000 the following year. But due to bureaucracy it didn't get off the ground at that time, it's learnt.

This scheme however does not cover yams and roots and grains, which by nature are tougher than fruits and vegetables, said Wijeratne.

He however said that post harvest losses could be further reduced to a low of 5% if investments are made in the more expensive cold chain facilities right down the supply chain. "For the moment plastic crates are good enough," said Wijeratne.

Dividend announcements

Singer Industries (Ceylon) PLC has declared a final dividend of Rs. 2 a share for the financial year (fy) 2008.  AGM March 31, 2009, excluding dividend (XD) date April 1, 2009 and payment date April 6, 2009.

Regnis (Lanka) PLC has declared a final dividend of Rs. 2.50 a share.  AGM March 31, 2009, XD date April 1, 2009 and payment date April 6, 2009.

Overseas Realty (Ceylon) PLC has declared a first and final dividend of 40 cents a share. XD date March 27, 2009 and payment date April 2, 2009.

Talawakelle  Tea Estates PLC has declared a first and final dividend of Rs. 1 a share. XD date March 30, 2009; XD date: March 31, 2009 and payment date April 6, 2009.

Nestle Lanka PLC has declared a second interim dividend of Rs. 10 a share. XD date March 16, 2009 and payment date March 26, 2009.

Lanka Tiles PLC in the fy 2008/09 has declared an interim dividend of Rs. 1 per share with dates to be notified.

Colombo Dockyard PLC has declared a second interim dividend of Rs.10 a share for the fy 2008. AGM: March 27, 2009; XD: March 30 and payment: March 31, 2009.

Property Development PLC has declared a first and final dividend of Rs. 2 a share for the fy 2008. AGM: March 18, 2009; XD: March 19 and payment: March 25, 2009.

Finlays Colombo PLC has declared a Rs. 1.50 dividend per share. XD date: March 31, 2009 and payment: April 6, 2009.

Merchant Bank of Sri Lanka has declared a first and final dividend of Rs. 1 per ordinary share with dates to be notified.

"Great Depression"

Role of markets were overvalued, role of states undervalued and the dignity of work devalued, said ILO Director-General Juan Somavia.

Speaking at the opening of the Eighth European Regional Meeting at Lisbon recently, he said: " In other words, there was already a crisis before the current financial and economic crisis.  Globalization was operating in an ethical vacuum making it morally unacceptable and politically unsustainable. The economic upswing was not creating enough decent work. Inequalities within and between countries were widening.

Now in 2009 we can see it worsening still further into a potential global social recession provoking tensions, political uncertainties and even possible security risks.

The latest projections for 2009 from IMF show an economic decline of 2% in the Euro area and of about a «% in both European and Central Asia and the countries of the Commonwealth of Independent States.

Only three months ago Russia foresaw an expansion of 3.5%, now a fall of 0.7% is expected.

The ILO forecasts that depending on policies implemented, global unemployment could increase by around 50 million in 2009 from 2007.

"We expect almost 8 million of this increase or one fifth of the global total to be in the 51 nation European region-with nearly half coming from the EU-27.  However, the world acting together can reverse these trends. That means a  convergence of policies to maintain and create jobs and get credit flowing to enterprises; to expand and deepen social protection."

Swift service

A mere three days after the attack on the Inland Revenue Building by the terrorists, on the first working day itself, Ceylinco Insurance General made a swift payment of compensation to their client People's Bank.

People's Bank Head Office situated next to the Inland Revenue Building sustained damages during the attack.  At a special ceremony arranged for the occasion, a cheque for Rs 25 million as an advance payment was presented by Ceylinco Insurance General Executive Director Ajith Gunewardena, to People's Bank Chairman W. Karunajeewa.

Karunajeewa in his speech said that he was amazed and overwhelmed by the swift service provided by Ceylinco Insurance's Management and staff. He reiterated that they were on the site at the following day and offered compensation the same day.

" But we wanted to wait till the next working day. They were with us right from the beginning until an estimate to damages sustained was completed. As a result of their outstanding service we were able to provide an uninterrupted service to our customers from the very first working day itself,." he added.

 In conclusion Karunajeewa said that Ceylinco Insurance fulfilled all their expectations as a customer. 

He echoed the sentiments of a very satisfied customer of Ceylinco Insurance General. Given the company's leadership position and outstanding results during 2008, Ceylinco Insurance General believes that their overwhelming success, even during tough economic conditions  is due to their ability to exceed customer expectations time and again.

 Ceylinco Insurance General Chief Executive  Director  Ajith Gunawardena said, " Our hope is to be with our clients at their time of need. We have pioneered many concepts of insurance for our customers and will continue to be by their side when needed."

The senior management of the People's Bank was present at the event held on Tuesday   at People's Bank  Head Office.

Strength to Strength

Ceylinco Development Bank (CDB), ranked among the fourth largest specialised leasing institutions regulated by Central Bank of Sri Lanka (CBSL), recently announced that it was in the process of effecting major changes to its business and operating models to support and boost its next phase of growth and strategic direction subject to regulatory and other approvals.

Among the key changes will be a change of name, changes to brand identity, reconstituting its director board-including the appointment of independent directors and also the relocation of its Head Office which is currently at Ceylinco House.

A Company spokesman said that with the prevailing macro environment necessitating change, CDB too was keeping pace with changing times to adapt to the needs of its customers.

"The re-branding strategy we're adopting for CDB will reflect a new era of change while keeping the promise of being a friend and providing customers with mobility and efficient service."

This comprehensive re-branding effort will create a powerful brand identity that resonates with customers.

CDB Board will include three independent directors. R. Renganathan, a Fellow of the Institute of Chartered Accountants recently took over the reins of the CDB as Chairman.

He is keen to bring in more transparency and be proactive in implementing corporate governance requirements that are in the process of being introduced to registered finance leasing institutions by CBSL.

A professional with an unblemished track record and respected within the Sri Lankan corporate community, Renganathan was awarded the CMA Award for Excellence in Business Management by the Society of Certified Management Accountants at the recently held CMA International Management Conference 2008.

Speaking on the proposed changes, CDB General Manager/CEO Mahesh Nanayakkara said, "A public company with 1,600 shareholders, CDB is not a subsidiary of any single entity or a group of companies. We want to communicate this to the public. CDB's largest single shareholder is Ceylinco Insurance PLC, the leading insurance company which holds a 35% stake. We intend to further broadbase our shareholder structure through a proposed listing of CDB shares on the Colombo Stock Exchange (CSE) this year.

Nanayakkara who joined CDB in 2001 was appointed CEO in 2004 and subsequently appointed to the Board in 2005. A member of the Institute of Chartered Management Accountants (UK), he holds a B.Sc Degree in Business Administration from Sri Jayewardenepura University and an MBA from Postgraduate Institute of Management, Sri Jayewardenepura University. He counts over 19 years of experience in the Banking and Financial Services sector.

Nanayakkara was instrumental in leading a team of young dedicated professionals to overcome and surmount challenges and turn CDB around. 

CDB is today ranked within the top four largest institutions among registered specialised leasing companies.

Since 2004 CDB has recorded consistent assets growth, revenue and profitability. As per the unaudited financial results for the year ended 2008, it recorded a profit growth of 47% to Rs. 72.5 mn. year on year (YoY). Revenue grew by 56% recording a figure of Rs. 1.64 bn. Total assets grew by 26% and stood at Rs. 6.8 bn. as at December 31, 2008.

Its NPL stood at 5.57% as at December 31, 2008. During the five year period from 2004 to 2008, CDB has increased its total assets by 4.6 times and revenue by 7.5 times.

CDB also has strengthened its capital base in line with regulatory commitments. Its online connected branch network of 31 is positioned to support its future growth and intended strategy. With its dedicated team, HR strategy and people driven business approach integrated with state of the art IT platform and customer service business culture, CDB is positioned and geared to enhance its performance and seize future opportunities.

Canadian connection

SANASA Development Bank Ltd. (SDBL) and the Canadian Co-operative Association jointly organized a conference under the theme 'Capacity Building through Co-operative Micro Finance' at the Trans Asia Hotel recently.

The Conference, which saw the participation of development partners and micro finance practitioners from Sri Lanka and abroad, focused on alternative means of building the capacities of micro finance institutions (MFIs), how MFIs can or should build capacities in communities, respond to disasters and address global issues at the local level.

Local and international researchers and practitioners spoke on a variety of topics including gender, environment, the global food crisis and technology. Sanasa, true to its reputation as an innovator, also introduced a new topic to the microfmance discourse, SDBL Director Kuvera De Zoysa outlined the rationale for and the modalities pertaining to microfinance products that could enable people to access and obtain " justice."

The conference also marked a celebration of the 100th anniversary of Canada's co-operative movement. The speakers highlighted the unique potential of co-operative models in overcoming problems such as poverty, the food crisis and environmental degradation, drawing examples from the Sanasa model.

It was pointed out that last year (2008) was one of great achievement and recognition for Sanasa, SDBL was ranked recently among the top 50 microfinance institutions in the world and the best among such institutions in Asia. Moreover Sanasa was ranked No. 3 in the prestigious 2008 MIX Global 100 Composite assessment of microfinance institutions. SDBL also won the National Business Excellence Award offered by the Chambers of Commerce in the 'Specialized Banking Services' sector.

CCAA Program, Manager in Sri Lanka Ms. Ingrid Fischer in her introductory remarks outlined the purpose of the conference, while SDBL Chairman and Sanasa Movement leader Dr. P.A. Kiriwandeniya detailed the long history of cooperation between Sanasa and Canada, expressing appreciation especially of the support rendered by the Canadian Ca-operative Association and CIDA from the inception of the Sanasa Movement.

High Commissioner of Canada Ms. Angela Bogdan said that SDBL has had a long partnership with Canada and highlighted SDBL's development mission, referring primarily to the tsunami response initiatives.

Central Bank of Sri Lanka Governor Ajith Nivard Cabral who delivered the keynote address said Sanasa's role in grassroots mobilization and development may be replicated in the evolving conflict transformation scenario.

"Just as Sanasa's today is built of all of its yesterdays, I hope that Sanasa's today will deliver a better tomorrow for us," he said.


Key to success lies in having a passion and commitment in one's chosen field, according to Ms. Dilshani Gunawardena (20), the latest CIMA World Prize Winner.

 After winning the World Prize for Finance Accounting and Tax Principals last November,  she says she was surprised to find out she got 96 marks and it came as an even bigger shock that she won the award, it was a tough exam but in the end, perseverance paid.

Gunawardena who's a first year student at Colombo University, has got about a year more to go before completing CIMA. Armed with this globally renowned qualification and a university degree, she hopes to get involved in the stock market.

About the journey thus far, she says, "It's tough going, especially students who have to balance 'jobs' because CIMA is serious and you need to dedicate some serious time into it. I think what helped me, and what will help many other students is putting away that time to study. I also think it's important that students really think about what they want. When you love what you do, there are no limits to what you can achieve!"

On why she chose CIMA, Gunawardena says, "CIMA offers an internationally recognized professional qualification in management accountancy which focuses on accounting for business and places much emphasis on management and that's important to anyone who wants to make it big."

 "CIMA is more than just about accounting, the business management skills that CIMA students possess are priceless and that's why I chose CIMA. I think anyone with the right education and commitment can excel in CIMA, they just have to put their heart into it."

CIMA Sri Lanka Division was awarded the Superbrands status last year for its commitment towards excelling in the promotion and delivery of professional studies.

According to independent research conducted by Bath University's School of Management, CIMA's syllabus and examination structure are the most relevant to the needs of business of all the accountancy bodies assessed.

On par with Infosys

Union Assurance PLC's (UA's) transacting both in life and general insurance policies being recognised both at regional and local levels have gained a new momentum. UA Chief Executive Officer Ms. Marina Tharmaratnam expressing the commitment to pursue the highest standards of service and security told The Sunday Leader that these recognitions are another turning point in the company's history.

"We are proud of being recognised both nationally and internationally. One of the awards we won was from the South Asian Federation of Accountants (SAFA) and that was the Overall award for the best presented accounts in all sectors. The award ceremony was in India and UA was the only insurance company in the region that has won this award. We won this award for two years r running- in 2007 and 2008.  We compete with the largest and well established companies in the South Asian region and we are proud and motivated that Infosys was the overall winner in 2006 the year before we won the award. This award has taken into account the financial reports, corporate governance and transparency," she said.

"We also won the Silver award for all sectors and the gold award for insurance sector at the annual report award ceremony conducted by the Institute of Chartered Accountants (ICASL) in 2008, having won the Gold award in 2007. 

This is a prestigious award as ICASL has been conducting this competition for over 40 years.  We also won the sustainability award for the medium sector from the Association of Chartered Certified Accountants (ACCA) and a Silver award for business excellence from the National Chamber of Commerce Sri Lanka. These awards, clearly demonstrates UA's commitment to good governance and transparency and we are pleased with this recognition as being an insurance company we are responsible for safeguarding policyholders' funds and managing their risks.  In addition to this we won the Silver award for HR conducted by Hewlet Associates and was judged  by Super Brands as one of  top 50 brands in Sri Lanka.

Tharmaratnam,  added, "The volatility in the financial services sector both in Sri Lanka and overseas has demonstrated the importance of sound risk management practices, transparency and balance sheet strength. UA's financial results and the many national and international awards we have won over the recent past stand testament to UA's continued commitment to good governance, transparency and balancing risk."

"We have focused on improving customer service   quality and most of our developments  during the year have been made possible through innovation of products and processes and  IT initiatives.  "Click and Go," the web based motor insurance product which allows customers to "print" their motor certificates "24x7x365" received accolades at the National Best Software Quality Awards 2008 conducted by British Computer Society. The innovative product "Simply SMS" was also conferred with an award by the Sri Lanka Chapter of Information Systems Audit and Control Association Inc. Our IT initiatives included restructuring  motor claims into a paperless system enable our  customers to find out about their claims process via SMS and also to get their motor claims payments  at any Commercial Bank branch  through SMS advise  without coming to any of our branches.  Customers can also pay the life premiums through SMS, Internet, supermarket or  bank," she said.

Tharmaratnam added,  "We have invested in people, systems   and distribution capabiliity to expand our business in a cost effective manner, evolving new business models and operating practices. However there is no doubt that the UA team is its greatest asset. We  strive to be recognised as the most professional and customer service oriented team in the insurance industry." 

UA is well placed to provide a caring and efficient service to its clientele which include many of the largest trading and industrial organisations in Sri Lanka as well as individuals from all walks of life through an extensive network of 49 branches islandwide, strategically located throughout the country.

Top award

CIMA (Chartered Institute of Management Accountants) won the prestigious Accountancy Body of the Year award at the annual PQ Magazine awards held recently at Quaglino's in London.

According to PQ Magazine, CIMA students applauded the recent move to more exam sittings and reduced waiting times for exam results.

The institute was also praised by students for promoting the CIMA brand and furthering their future.

PQ magazine editor Graham Hambly said: 'CIMA has become the listening body. The 2010 syllabus is a breath of fresh air. Melding the case study and practical experience requirements shows the institute's commitment to producing competent accountants for the future.'

CIMA Education Director Robert Jelly said: 'It is an honour to accept this award on behalf of CIMA and we are pleased to see our hard work in reducing exam result waiting times recognised.  Today's CIMA students will go on to become the leading members of the Institute and we are proud to be training business leaders of tomorrow.'

In Brief

Inflation: 7.6%

Point to point change in inflation last month was 7.6%, down 3.1 percentage points over that of January's figure, according to the government's new Colombo Consumers' Price Index. Average annual inflation according to this index last month was 20.3%, down 1.3 percentage points over that of January's figure.

However, market sources told The Sunday Leader that inflation targeting alone will not help to bring down rates." Government must exit from markets for that to happen," they added.

Central Bank Governor Ajith Nivard Cabraal told reporters recently that he would request commercial banks and finance companies to reduce their deposit and lending rates by 2% because inflation was coming down.

He however set no time frame for this rate reduction. Cabraal also said that the prevailing high interest rate regime in the country was stifling investments and the economy as a whole. Cabraal further said that the government will have to bear the cost of borrowing from the market as it would be saddled with a high interest rate bill. He also said that inflation would be brought down to 5% by the year end. (See also main article on this page)

Telecoms wars

Telecoms wars have made this sector the biggest market for the advertising industry, an advertising professional said.

Accredited Advertising Agencies Association (4As) President Mrs. Laila Gunasekere Martenstyn told The Sunday Leader that the advent of Airtel into the local telecoms landscape was the reason for this battle, with Dialog Telekom being one of the main contenders in this "war," for the benefit of the ad industry.

Martenstyn said that the telecoms sector vis-…-vis the industry took off when Tigo positioned itself as catering to the youth, in a campaign that took place several months back.

The local ad industry has an annual value of between Rs. 19.6-21 billion with growth otherwise stagnant due to depressed economic conditions.

Telecoms contribution to this industry is valued at Rs. 600 million, followed by the financial services sector; with the FMCG sector following behind in third place.

Foreign T Bond holdings down 8.4%

Foreign holdings of Treasury Bonds in the week ended Wednesday  slipped 8.4% week on week to Rs. 11,761 million. (Source: Central Bank)

Tourism down 11.2%

Tourist arrivals in numbers and in US$ terms declined by 11.2% year on year to 438,500 and US$ 342 million respectively last year. (Source: Central Bank)

7.1% stake of Ceylinco Insurance traded

A 7.1% stake in Ceylinco Insurance transacted at Friday's trading boosted turnover to Rs. 306.9 million in an otherwise dull day of trading.

This trade which "went" in two parcels comprised  790,270 and 628,174  shares respectively, were executed at Rs. 166 a share each and contributed Rs. 235 million to the day's turnover. 

It was unclear whether these trades were inter-company transfers within the Ceylinco Group, or whether they were an outright sale by the latter to a third party. 

Ceylinco Insurance's issued share capital comprises some 20 million shares.

The benchmark ASPI closed the week 4.46 points down over that of Thursday's close, while the more sensitive MPI was 5.61 points down .

Market sources attributed the illiquid state in the world economy as the reason why foreigners were staying away from the bourse despite the government winning the war,

Cargo contracts 23%

International passenger demand fell by 5.6% in January 2009 year on year (YoY), International Air Transport Association (IATA) said.

It is also a percentage point worse than the 4.6% YoY drop recorded in December.

The January fall in demand is the fifth consecutive month of contraction.

The 5.6% drop in passenger demand outpaced capacity cuts of 2%, driving the load factor to 72.8%, 2.8% below what was recorded for January 2008.

The alarming collapse in cargo markets in December (-22.6%) worsened in January 2009 with a 23.2% YoY demand drop. This is the eighth consecutive month of contraction for freight traffic. "We have not yet seen the bottom," said IATA's Director General and CEO Giovanni Bisignani.

"The only good news is that fuel prices remain well below last year's level. But the drop in demand is much more harmful. The industry is shrinking with revenues expected to fall by US$35 billion to US$500 billion, delivering a loss of US$2.5 billion this year,"  he said.


HSBC Global Payments and Cash Management and Siam Commercial Bank (SCB) have been appointed to provide cash management services for Tesco Lotus (TL), Thailand's leading retailer with over 35,000 employees.

The key services under tender were disbursement outsourcing inclusive of payroll and supplier payments and cheque outsourcing via a secure electronic channel.

HSBC was appointed key overlay bank to TL, focusing on cheque outsourcing and the handling of electronic file transmissions between TL and selected banks. SCB was awarded payroll and supplier payment services.

Highest dividend

Sampath Bank PLC Board recently approved a first & final dividend payment of Rs. 4 per share (as against Rs. 3 per share in the previous year) for 2008 to its shareholders, which is the highest ever dividend payment by the Bank so far.

The Dividend will be paid, after shareholder approval is obtained at the Annual General Meeting to be held on March 31, 2009.

Integrated solution

Suntel Ltd. launched its Converged Voice Data Video solutions (CVDVSs) recently.

With this Sri Lanka becomes one of the first countries to offer Next Generation Network solutions based on real IMS (IP Multimedia Subsystem) in the region, a feature packed intelligent solution bringing cost savings to the Corporate and Business community.

Most of its features are combined with modern communication tools such as Unified Communication Technology.

This "next generation networked communication" enables enterprises over 400 advanced telephony solutions such as remote office, unified communication tools, soft copy fax, voice messages, one number concept with call forwarding selective, missed call alerts and data & multi media conference.

Suntel Managing Director Jeremy Huxtable said,  "The recession has affected  enterprises all over the world with capital budgets halved if not totally eliminated. During difficult times such as these it is important to focus on business rather than being saddled with additional responsibility of owning and maintaining communication related infrastructure. We are happy to have introduced the latest technology to Sri Lanka to help companies overcome difficulties by trimming their costs without any capital investment which is hard to come by these days."

Chief Technology Officer Vajira Jayasinghe also spoke at this event.

Dethrones IBM

For the second consecutive year, HP BladeSystem c-Class server has dominated the TOP500 list of the world's largest supercomputing installations . HP now commands a total of 41.8% of systems on the TOP500 list, while IBM slipped to 37.6%.

Peaceful Avurudhu

The war will come to an end next month, if not earlier, a Minister said.

Enterprise Development Minister Prof. G. L. Peiris speaking at the South Europe meets South Asia 2009 seminar that was inaugurated at the BMICH on Friday said that the war end would give a boost to tourism and agriculture in the country.

Already companies are negotiating with the government to take land on lease in the East for Agriculture, while hoteliers are planning to invest in Arugam Bay and Pasikudah, he said.

Brandix is to set-up an apparel factory in Batticaloa that will give employment to over 1,700 women, Peiris said. Five per cent of garment export earnings made this year will be paid to the garment exporter in rupees as a stimulus package, he said.

Peiris further said 500 hectares in Ampara will be planted with Cinnamon.

He also said that due to the downturn in the ceramic industry, globally, ceramic exporters have requested the government to increase the permissible limits of their products that may be sold in the local market from the current 20% to 30%. The government is looking at this proposal, he said.

Tea down 37%

Oil import prices in C&F terms declined by 48.4% to US$ 46.30 per barrel in December 2008 on a year on year (YoY) basis, likewise tea prices in the Colombo Auctions declined by 36.8% YoY to Rs. 213.01 per kilo in December.

Meanwhile, wheat import prices in C&F terms declined by 26.8% YoY to US$ 237 per metric ton (pmt) in December. However, rice and white sugar import prices gained by 81.6% and 20.3% to US$ 781.40 and US$ 377.40  pmt respectively in December. (Source: Central Bank)

Debt to shares

Asiri Surgical Hospital PLC (ASH) Board on Wednesday resolved to convert a loan and accrued interest of Rs. 73.2 million due from Central Hospitals (Pvt.) Ltd. into ordinary shares of Central.

Consequent to such conversion, ASH was allotted 7.3 million ordinary shares of Central at a price of Rs. 10 per ordinary share.

Consequent to such allotment, ASH now owns 8.21% of the issued ordinary share capital of Central. The other substantive shareholders of Central are Asiri Central Hospitals PLC (ACH): 83.51% and Asiri Hospitals PLC (AHP): 8.28%.

Meanwhile the AHP Board also on Wednesday resolved to convert a loan and accrued interest of Rs. 73.9 million due from Central into ordinary shares of Central.

Consequent to such conversion, AHP has been allotted 7.4 million ordinary shares of Central at a price of Rs. 10 per ordinary share.

Consequent to such allotment, AHP now owns 8.28% of the issued ordinary share capital of Central. The other substantive shareholders of Central are  ACH : 83.51% and ASH: 8.21%.

Chillies '09

Chillies 2009, the advertising industry's event to recognize creativity in advertising will be held for the third consecutive year in Colombo on April 25

Ambassador's Ball

The 12th annual Ambassador's Ball organised by the American Chamber of Commerce in Sri Lanka will be held at a Colombo hotel on March 7. The chamber comprises 285 companies engaged in trade, business and investment activities between Sri Lanka and the USA.


Polycrome Electrical Industries manufactures 57 types of electrical accessories including "pendant" holders, extension cords, plug tops, ceiling "roses," electric bells, MCB enclosures, mounting and junction boxes from its factory in Homagama.

It recently appointed W.J. De Silva Distributors as its distributor for Balapitiya. Among those associated at the event were Polycrome Regional Sales Executive Ashoka Samarasinghe, Galle District sales representative Prasad Kumara and W.J. De Silva.

Fibre for Steel

Cargotec's MacGREGOR has developed technology for handling lightweight fibre rope that offers several advantages compared with traditional steel wire rope, and is about to instal the world's first subsea crane to use fibre rope.

The knuckle-jib crane equipped with a system for fibre rope handling will be installed on the subsea vessel Havila Phoenix. The 250 - tonne Hydramarine active heave-compensated (AHC)offshore crane is designed with a 250-tonne/3,000m single-line winch and is prepared for a 250-tonne single-line fibre rope. (Marine Talk)

Rs. 700 mn. investment

ANC Education Holdings (AEH) on Thursday said that it has invested nearly Rs. 700 million on its two campus sites housing up to 2,000 students in all three academic programmes located at R.A De Mel Mawatha, Colombo.

 ANC conducts USA, British and Australian degree programs and represents some of the top ranked universities. AEH CEO/Executive Director Dr. Punarjeeva Karunanayake and Chief Academic Officer Dr. Upali Mampitiya also aired their views in this regard.


Association of Accounting Technicians of Sri Lanka's Award ceremony will be held on Tuesday  at the BMICH.

Certificates will be given to those who completed Courses in Computer Studies, Professional Skills Enhancement Programme and Taxation. Around 300 students are eligible to receive their certificates for 2008.

Moratuwa University Information Technology Faculty Dean Prof. (Mrs.) Dileeka Dias will be the Chief Guest, while Guests of Honour will be Sri Lanka Telecom Chairperson Mrs. Leisha De Silva Chandrasena and  Inland Revenue Dept. Commissioner H.M. Premaratne Banda.


Keells Super joined hands with Dialog Telekom and NDB Bank (NDB) to implement the eZ Pay network, South Asia's first mobile commerce platform. Keells Super shoppers may now pay from their mobiles.

eZ Pay would initially be available at the Keells Super outlets in the Western Province with plans afoot to extend the service to the entire chain.

 eZ Pay also facilitates utility bill payments, recreational club payments and insurance payments. Furthermore, existing" Seylan Visa Credit or Debit Card holders who has a Dialog GSM connection can dial from their mobile to register for the eZ Pay facility. 

John Keells Holdings PLC (JKH) Business Systems, Consumer Foods and Retail Groups Head Nalaka Umagiliya, Dialog Group Chief Commercial Officer Thivanka Rangala and NDB Vice President Consumer Banking and Marketing Indrajith Wickramasinghe made comments about this facility.

No. 1

Channel One MTV, in the latest LMRB Ratings have put it at the number one position in the urban market. Four of the highest rated ten programmes are on Channel 1 MTV, according to the figures.

The channel's partnership with Fox News has reaped rewards.Viewers now have the option of watching America's popular news service in Sri Lanka.

The latest ratings have shown that Fox News is the most viewed English language programme in Sri Lanka.  


John Keells Social Responsibility Foundation in collaboration with Moratuwa University's Career Guidance Unit will be conducting  "The Final Step, a series of soft skills workshops for the students of the University of Moratuwa, from March 2 - 6, 2009.

The programme is designed to help final year undergraduates prepare themselves for employment in the corporate sector. It has been carried out twice earlier, with success, at Kelaniya University.

The programme  comprises two panel discussions on 'Employer expectations' and 'Team building and leadership skills' and four interactive workshops on 'Adapting to the corporate environment', 'Personality development and  confidence building', 'Personal grooming' and 'Corporate hospitality'. The speakers at tomorrow's panel discussion will be Hatton National Bank PLC Chairman Rienzie T Wijetilleke, John Keells PLC Non-executive Director and Environmental Foundation Ltd. Chairman Ms. Sharmini Ratwatte, John Keells Holdings PLC- Processes and Systems Human Resources Head Pulasthika Wirasinha and Microsoft Sri Lanka (Pvt) Ltd. Country Manager Sriyan de S. Wijeyeratne.

The moderator is Postgraduate Institute of Management Director Dr. Uditha Liyanage.


 In Brief







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