17th July,  2005 Volume 12, Issue 1

First with the news and free with its views                                     First with the news and free with its views                             First with the news and free with its views                                    


Mixed reactions by investors to P-TOMS stay order

By Jamila Najmuddin

The perception among a section of the stockbroking community on the Supreme Court (SC) stay order on the Post Tsunami Operational Management Structure (PTOMS) was mixed, with some fearing that this may lead to an escalation of violence, and, as a result, a bear run on the market, while others felt that such an order will not have an impact on the bourse.

One senior stockbroker told 'The Sunday Leader' that investors were nervous as a result of the SC decision, fearing that this may lead to a further escalation of violence.

"As it is, the ongoing violence in the East has made investors jittery, but Friday's SC stay order has made matters worse as far as the psyche of the investors are concerned," he said.

The performance of the bourse in the week beginning tomorrow hinges on how the ground situation is over this weekend, this source said. If matters take a turn for the worse, it will naturally have a negative impact, he said.

Research Manager, HNB Stock Brokers, Hasitha Premaratna said, "Already the market is suffering due to the tense situation in the east and with the PTOMS agreement now stalled, the market would react negatively.

Premaratna said the country's economy would also remain volatile due the tense political unrest following the SC's decision. "After signing the PTOMS, implementation was expected. However, development work would now get delayed and investor confidence will be affected," Premaratna said.

Stockbroker Bartleet Stock Brokers Angelo Ranasingha told The Sunday Leader that the country would now have to decide on an alternate solution to distribute the funds without any political unrest.

Ranasingha said that although investors would now panic due to the stalled PTOMS, the consequences of the supreme court's decision would only be known in the next few weeks. "Although the market is likely to react negatively, it is still to early to discuss the consequences," he said.

Economist, Asia Stock Brokers, Channa Amaratunga also maintained the country the market was likely to react negatively following the stalled P-TOMS as investors would be unwilling to invest new monies. "Investors are concerned and cautious about the current political situation in the country. It is time a firm decision is taken by both parties," Amaratunga added.

But other stockbrokers were more optimistic, saying that though the bourse lost between 10-15 points when trading opened on Friday morning, it subsequently picked-up, to end the day at 1,929.06 points, marginally up by 5.06 points (0.0%) over Thursday's closing figure, despite the SC stay order.

"Investors do not have the perception that the ceasefire agreement is in jeopardy just because the SC stayed the implementation of the PTOMS," these stockbroking sources said.

And, as if to justify their position, the Hotel and Travel Sector Index, one of the most sensitive sectors to suffer in the event of a war, or, if there is a perception that war would break-out, actually gained over Thursday's closing figure by 41.89 points (2.7%) to close the week at 1,621.73 points.

Among some of the major trades that took place on Friday were also those related to the Hotel Sector, with well-known hotel investor George Ontaatjie investing a sum of Rs 12 million to buy 200,000 shares of Kandy Hotels (Ceylon) Ltd., the holding company of Hotel Suisse and Queens Hotel Kandy. Kandy Hotels closed at Rs 67, Rs 7 more than its previous.

And business magnate Don Harold Stassen Jayawardena, rumoured to have had bought 200,000 shares of Hotel Developers Ltd., the holding company of Colombo Hilton, for a sum of around Rs 26 million. Hotel Developers closed at Rs 133, Rs 11.75 more than its previous closing price.

Country sentiment reflected in bourse's behaviour

 The Colombo Stock Exchange (CSE) has been constantly emphasizing that it is important that brokers diversify their activities and move away from being 'agency brokers,' CSE Chairman Eraj Wijesinghe is quoted to have had said in the CSE's 2004 Annual Report.

He had also said that it is unfortunate that brokers are still not showing much interest in diversifying their activities. "Given that brokerage commissions are constantly under pressure and that investors are demanding a higher level of service, the only way that stockbrokers could become competitive is through creating value for investors through offering a complement of services," Wijesinghe had said.

"I hope that Members of the CSE will take heed of this fact and take positive steps to engage in other activities and move away from the agency broking model," he had said.

Following are other excerpts from his review. "A stock market plays a significant role in identifying the health of the economy of a country.

Whatever the economic circumstances, the active purchases and sales of securities in a stock exchange determines corporate asset values in a manner that is fair and visible to all. The sentiment of the investing public on the state of affairs of the country is well expressed through their behaviour in the stock market.

The CSE was once again dubbed as one of the best performing markets in the world. The market had recorded a consistent annual growth of over 30% in the All Share Price Index (ASPI) for the past three years. The ASPI had recorded a growth of 48% upto December 26, 2004 when the tsunami struck the coastal belt of Sri Lanka.

The growth in the ASPI declined due to this calamity and the index closed the year registering a growth rate of 41.9% in 2004. It is significant that the ASPI reached its highest ever level of 1580.7 points recorded upto then on December 22, 2004.

Furthermore, the levels of activity have also shown a significant increase. The average daily turnover of the CSE increased from a low of Rs. 44 million in 2000 to a high of Rs. 307 million in 2003.

However, the daily turnover in 2004 averaged Rs.246 million. It is however significant that the transactions increased in terms of number of trades and the volume of shares traded recorded an all time high in 2004.

Once again domestic investors were the main contributors to market turnover accounting for over 80% of purchases. Investor confidence continued in spite of the elections in April 2004.

 Despite political uncertainty due to minority parties within the Government constantly making threats to pull out and the stalemate in the peace talks between the government and the LTTE, CSE's performance is a clear indication that investors have discounted the possibility of war and were confident of the future of the economy in spite of the change in government.

The larger volumes of shares transacted daily make it evident that investors saw the opportunity of realizing higher returns by investing in the stock market as against other forms of investment.

The comparatively low interest rates for deposits offered by banks and other lending institutions made investments in stocks more attractive. Further the CSE continued to offer good value as evident from the corporate results which showed a growth in profits. When compared to other regional markets the P/E ratio of 10.8x of the CSE was one of the lowest.

Non financial cost in listing

A listing of shares enables a company to reduce its gearing and the associated financial risk. However there is a non financial cost that companies should be prepared to pay for being listed, a Colombo Stock Exchange (CSE) press release, quoting CSE's Director General Hiran Mendis' review of the bourse's performance last year said.

He said that listing a company involves adhering to rules and regulations, adopting better governance practices and giving up an element of control. The cost and benefit of a listing could vary from company to company. As the experiences of many other countries have shown.

But the more competitive the economy gets, the benefits of listing far outweigh the cost, Mendis said. He further said that while it is noted that the benchmark ASPI appreciated by 41.9% in 2004 which is the highest growth in the index recorded since 1993, with the ASPI surpassing its previous high of 1,423.5 points reached on October 23, 2003 and peaking at 1,580.7 points on December 22, 2004, in contrast, the more sensitive Milanka Price Index (MPI) increased by only 9.3% in comparison to 38% in 2003.

Mendis said that unarguably 2003 was the best ever year experienced by the Colombo Stock Market, while 2004 proved to be one in which the upward momentum of the market continued despite several perceived set backs.

He also said that the dissolution of parliament in February 2004 followed by the general elections in April and the change in government slowed the market somewhat but failed to stem investor enthusiasm.  Even though some expected a possible set back to the economy and the peace process due to the change in government, the market continued its upward momentum.

 This was in sharp contrast to the situation that many perceived based on past experience. The unprecedented natural disaster in the form of the tsunami which hit Sri Lanka on December26, 2004 understandably had a negative impact on the market with the All Share Price Index (ASPI) declining by 5.4% over the two market days immediately succeeding the tsunami.

CWE seeks loan by mortgaging property

The government owned Cooperative Wholesale Establishment (CWE) is seeking a loan from the state controlled People's Bank.

Trade Ministry Secretary and CWE Chairman Mahinda Gammanpila in an undated letter to the Deputy General Manager People's Bank, Corporate Branch, had asked him to know the extent of the loan facilities that can be granted to the CWE based on the valuation report.

The Ministry, through this letter which is titled 'New Loan Facility for CWE Operations,' had forwarded documents related to their land and building at Union Place, Colombo to obtain this loan.

International apparel buyers at FASE exhibition

 Several top international apparel buyers such as the J. C. Penny Corporation, Li & Fung, Steve & Barry's, the V. F. Corporation and Collins Company will be in Sri Lanka later this month to attend the country's first ever Fabric and Accessory Suppliers' Exhibition (FASE), a press release said.

The exhibition which takes place from Tuesday to Thursday is jointly organised by the Lanka Exhibition and Conference Services (LECS) and the Sri Lanka Apparel Institute (SLAI).

It is endorsed by the Sri Lanka Garment Buying Offices Association and the Joint Apparel Association Forum (JAAF) with the Fabric and Apparel Accessory Manufacturers Association (FAAMA) acting as the Industry Partner.

Extensive promotions have been conducted in India, Pakistan and Bangladesh to attract top buying offices and LECS has also invited and agreed to host several other principal buyers, whose participation at the exhibition will be a tremendous boost to the local fabric and accessory industry, the release quoting the organisers said.

The communiqu‚ quoting SLAI Chairman Prof. Lakdas Fernando said they were glad that all accessory manufacturers have realised that this exhibition will be a great opportunity for them to establish their names with top foreign buyers.

Considering this is the first fabric and accessories suppliers' exhibition, they were encouraged at the response thus far and expect a good turnout at the exhibition.

FASE was organised to provide Sri Lankan manufacturers and suppliers of fabrics, accessories, trimmings and other support services to the garments industry with a forum to showcase their products. All stalls are nearly sold out, the organisers said.

The exhibition is intended for manufacturers of fabrics, buttons, thread, lace, buckles, zippers, washing and dyeing services and other accessories as well as providers of other support services.

Sri Lanka Garment Buying Offices Association Chairman Suresh John is quoted to have said that with the intensive competitiveness in the sourcing industry, any information available on suppliers is very helpful. At FASE all fabric and accessory manufacturers will be present under one roof so it would be a large database from which buying offices can gather information about possible suppliers.

The release quoting Fabric and Apparel Accessory Manufacturers' Association (FAAMA) Chairman Inthikab Muhajireen said that an exhibition of this nature is very important as several Sri Lankan fabric and accessory manufacturers produce world class products. FASE will provide these manufacturers with a platform to showcase their products and services, and meet with leading international buyers, thus establishing them in the international market.

A special feature at FASE 2005 is a static exhibition of Moratuwa University's Textile Department's Fashion Design and Product Development Course.

The exhibition organisers have provided prime exhibition space for the university to give this new degree programme exposure and publicity. The static exhibition will be opened by Deborah Lunstead, the wife of the American Ambassador.

The principal sponsor of FASE is TNT International while SriLankan Airlines is the official airline of the event. FASE will be declared open by the US Ambassador to Sri Lanka Jeffrey J. Lunstead and World Bank Country Director Peter Harrold.

LECS is the leading professional exhibition and conference organiser in Sri Lanka. The company is registered with the Sri Lanka Convention Bureau, which operates under the Tourism Ministry. LECS is managed by a team of professionals who count over eight years of experience in organising exhibitions and conferences at international venues.

The company has branch offices in Maldives and India and has a network of agents in India, Malaysia, Thailand, Singapore and Dubai. LECS is also the organiser of some of the country's premium events including Construct, Profoods, AISEX and Hotel Show.

American Jews give $ 200,000 for tsunami relief

"A lack of basic facilities, loss confidence and livelihoods were the main problems that the tsunami affected people had to deal with. They all cried out their sorrows," a release quoting the Treasurer, Sarvodaya Women's Movement, Preethi Almeida said.

Such were the effects of the Asian tsunami on thousands of families living in the southern, eastern, and northern coastal areas of Sri Lanka.

A national disaster of such scale as the tsunami required the support of not only governments but also individuals. The international support which came Sri Lanka's way was unprecedented.

 Among many organisations that extended a helping hand to the recovery and rebuilding efforts of Sri Lanka is the American Jewish Joint Distribution Committee (AJJDC).

"We have a strong tradition of tsedakah, or charity, in Judaism - we are here in Sri Lanka because thousands of North American Jews donated funds and asked AJJDC to help with the tsunami relief efforts on their behalf," the release quoting Programme Coordinator AJJDC in Sri Lanka Rebecca Bardach said.

The objectives of the project were two-fold: to empower people of 20 villages (10 in Galle, six in Ampara and four in Batticaloa) to address the psycho-social issues and to launch a livelihoods supportive programme by providing advice, training and technical expertise. The main target groups are women, children and elders. The American Jewish Joint Distribution Committee chose Sarvodaya Women's Movement to be the implementing partner of this project.

Sarvodaya is Sri Lanka's probably biggest as well as oldest local NGO. It has experience in working at the grass roots level in over 10,000 villages across Sri Lanka. Their forte has always been empowering and mobilibing communities to take charge of their lives.

 They took a similar approach in this project by forming village volunteer teams to reach the two target groups - women and children. A team of seven volunteers per village were identified. They started with 50 awareness programmes which were followed by a household survey to identify the needs. The required activities were then decided upon based on the survey by the volunteer teams. Victims were turned into victors by giving them psycho-social training to help the community members.

"I almost lost hope. I can no longer depend on my husband who was lost. He was a fisherman. I have been depressed," the release quoting Titaganami, a programme beneficiary in Sarvodaya Puram, Kalmune, Ampara, who is a mother of seven children and whose home was completely destroyed said. "Now I can practice my trade again and begin to rebuild my future," she said.

In the livelihoods programme not only did the project provide the women with sewing machines, coir machines, cooking utensils for food processing, but also training on how to make a living out of the support provided.

Reed products, ornaments made out of sea shells and coconut shells and recycled paper products were also sold at various exhibitions and sales organised by Sarvodaya to encourage home crafts.

Home spun lace, garments to be sold to the tourists, dry fish, mushroom, spice paste for cooking were also items that made the women bread winners once again. With support and encouragement from Sarvodaya they opened bank accounts and started saving money with much hope for the future.

"We used Grama Sevaka reports and police reports in verifying the beneficiaries. The advantage was that the village volunteer team knew the people. So they made the priority list of the recipients," the release quoting President Women's Movement Kusum Wijesinghe said.

"The idea is for the people to be self employed and Sarvodaya could help them achieve that," she said.

While conducting monthly programmes on health and hygiene, environment and disaster preparedness, the project did not forget to include spiritual programmes incorporating all the religions. A multi religious alms giving was held and the lighting of 'moksha lamps' were held in the name of the deceased. This indeed helped the people to find solace and let go of the grief and the losses. 

Five out of the seven volunteers from the team are dedicated to the early childhood programme in a village. Out of this number one person is trained as the pre school teacher.

The team is trained on psycho social interventions to help children. Regular pre-school activities such as art, singing, dance, playing, music, story telling, environment observation, spiritual and cultural activities help children gain a sense of normalcy in their lives.

There are also activities for children of six to 12 year age group after school. Sports goods and material for other recreational activities have been provided.

Children's camps were held to bring all the children together in fun activities. Cultural pageants, drama and play activities were held on this day. Alongside children's camp, psychosocial medical camps were also held.

The project which reaches a target of 15,545 persons in 20 villages also held legal clinics to help the affected people obtain lost documents. The project which started in March 2005 will continue till September with the generous contribution of $ 200,000 provided by the American Jewish Joint Distribution Committee.

Sinhaputhra in new line of business

Sinhaputhra Finance Ltd., which has made rapid progress, proposed new lines of business would include credit and debit card issuance and construction of apartment complexes.

It is today one of the leading registered finance companies in the country with assets of approximately Rs. 2 billion and a deposit base in excess of Rs. 1.2 billion, a press release said.

The release quoting AGM (Deposits and Establishment) Susan Gunawardene highlighted that with an employee strength of nearly 100, the company has exceeded industry growth rates.

 For example whilst the industries' deposit base grew by 14% in 2004, Sinhaputhra recorded a 22.3% growth. Sinhaputhra Finance which has historically mobilised a network of long standing business promoters islandwide has developed strong bonds with the rural agricultural sector of the country. The strategy behind having a presence in Colombo is primarily to serve savers and depositors.

The communique quoting AGM (Business Development) Saliya de Alwis said that Sinhaputhra Finance Ltd. Kandy, with a consistent growth in all its business activities during a period of over 25 years in financial intermediation, has received the approval of the Central Bank to open a Collection Centre to serve its customers in the Western Province. The centre was open for operations on July 11 and will be situated at Unit No. F 160 (250/1/10), first floor, Liberty Plaza, Colombo.

 It will function in close co-ordination with the Head Office and have hot-line connections as well as electronic communication systems in place which will utilise the latest IT System. It is expected that the centre will be later upgraded as the first Branch Office of the company enabling the office to carry out all principal lines of business.

Present lines of business are acceptance of fixed deposits, acceptance of savings deposits, finance leasing, hire purchase, business finance, personal finance, real estate development and sub-agents for insurance.

Future Waves puts theory into practice

Performance Management should be viewed as an ongoing communication process, undertaken in partnership between employee and his/her immediate superior that involves in establishing clear expectations and understanding about the essential job functions the employee is expected to do, how employee's job contributes to the goals of the organisation, how employee and immediate superior will work together to sustain, improve or build on existing performance and how job performance is measured and rewarded.

Future Waves (Pvt) Ltd., an organisation 'dedicated' to professional skills development and training will facilitate a one-day workshop on 'Performance Management: Putting Theory into Practice,' on July 28 at the Ceylon Continental Hotel.

This workshop will thus be useful to those involved in frontline activity as well as back-office staff who conduct supports activities. To achieve this, it is crucial that employees understand the organisational goals and work towards achieving them.

 To effectively understand and manage performance management programmes, organisations should focus on performance planning, performance improvement, performance review and rewards linked to performance.

In this workshop, the key focus would be performance planning through the Balanced Score Card and developing objectives that are realistic to achieve organisational goals. It will help managers to effectively set objectives and implement action plans, to understand the key processes, link process measures to departmental/division goals and objectives and to achieve them through the realisation of employee objectives.

The workshop director would be A. K. L. Jayawardana of Senior Faculty of Postgraduate Institute of Management who has obtained a doctoral award from the University of Canberra.

Jayawardana has conducted a series of lectures on performance management in Hong Kong in the BBA Hong Kong programme of the University of Canberra.

APIIT highly commended

APIIT Sri Lanka, a leading higher education institute that offers British Degree Programmes in Sri Lanka has been commended for the high standards of its educational programmes and the quality of learning opportunities provided to students.

A press release issued in this connection said that as a higher education institute, APIIT Sri Lanka comes under the purview of the Quality Assurance Agency for Higher Education (QAA) of the UK.

The Quality Assurance Agency is an independent body that evaluates British university awards with a view to safeguarding public interest in sound education standards. The academic programmes conducted by APIIT have been audited by the Quality Assurance Agency, UK.

An audit team from the Quality Assurance Agency visited APIIT Sri Lanka last year to appraise APIIT facilities and programmes as part of quality assurance of Staffordshire University, UK degree programmes. The team inspected the facilities, examined the teaching processes and procedures in relation to the Computer Degree Programmes and interviewed the students and staff.

The audit report released recently has highly commended the academic standards maintained and the quality of learning opportunities provided to students at APIIT. The audit team has concluded that the student experience at APIIT Sri Lanka is comparable to that provided in British universities.

From 8 to 6,000 personnel; the growth of Ceylinco Cisco

Ceylinco Cisco began its operations in 1977 as Key Security Services (Pvt) Ltd with only eight security personnel but has now grown to be he market leader with over 6,000 male and female security officers.

Deputy Chief Executive Director Ceylinco Cisco, Vipul Hettige says the success story of the company revolves around the vision of Ceylinco group Chairman Dr. Lalith Kotelawala.

"Ceylinco Cisco now has seven companies operating under its umbrella. Ceylinco Cisco security corporation (Pvt) Ltd is the parent company," Hettige said.

 Ceylinco CISCO is a joint venture with a Singapore government owned company. He said that their Singaporean joint venture partner, follows a system, known as the M3 system, which Ceylinco-Cisco emulates. M3 stands for ' Men, Machines and Methods,' key elements for the success of a company, he said.

Hettige further said that Ceylinco Cisco's subsidiaries include Security Transport and Allied Services (Pvt) Ltd, which has a fleet of 60 vehicles and over 300 personal in the workforce, Technology and Consultancy (Pvt) Ltd which provides electronic security systems, vehicle alarm systems and burglar alarm systems and CCTV systems, Ceylinco Swift Care providing doctor on call services and ambulance services as well as Ceylinco Home Nursing which provides nursing services to both industries and homes, on call.

"The latest addition to Ceylinco CISCO is Ranaviru Services (Pvt) Ltd, which is a non profit company assisting fallen war heroes. Our Chairman started Ranaviru Services to provide employment to disabled soldiers" Hettige added.

Ceylinco CISCO has a set of pre-planned goals which it hopes to achieve with the backing of the group to continue its current market status. "Our Vision is to be recognized as the most reliable and effective industrial security service in Sri Lanka and spread our operations overseas," Hettige said.

Ceylinco CISCO has signed a memorandum with a Maldivian company to support loss prevention services.

"We are now negotiating with a company in Malaysia. It is 90 percent complete. We have also joined up with Sunway College, Malaysia," the Deputy Chief Executive Director said.

Hettige said that the Mission of Ceylinco CISCO is to set the highest professionals standards in solutions to loss prevention in Sri Lanka while giving employees a challenging, rewarding and fulfilling career. He says although the company is satisfied with what it has achieved to be the market leader in its business, it has to do more to reach greater heights.

With this in mind Ceylinco CISCO operates an academy for training staff and security personnel which includes a security diploma course.

"With more than 6,000 personnel on board you must have a good human resource division. We have a fully fledged training centre in Borella with all the equipment one needs to provide good training. We plan to expand it by adding a gymnasium and swimming pool as well as accommodation for trainees and a restaurant," Hettige added.

Hettige says Ceylinco CISCO also wants to promote electronics based operations in the country to suit the current high tech market needs.

Work on Hyatt Hotel begins

Building work on Sri Lanka's tallest building, Ceylinco Celestial Residencies has begun, with the contract for the piling work being awarded to Nawaloka Construction Company Ltd.

This landmark venture was the vision of Ceylinco Consolidated Chairman Dr. Lalith Kotelawala and will be the pride of the nation once completed, with local expertise to be engaged in the project, a press release said.

"Ceylinco has spearheaded many ambitious development projects in the country, let us show the world that we Sri Lankans have the knowledge, expertise and all it takes to match world class structures," the release quoting Kotelawala said.

The 43 storey structure set on a 240 perch prime property at Galle Road, Kollupitiya will be a mixed development that will house 'Ceylinco Celestial Residencies (CCR)' and Hyatt Regency Colombo (HRC).

This architectural marvel that will change the landscape of Colombo is planned to be completed in three and a half years, with Hyatt expected to start operations in Winter 2008, the communiqu‚ said.

Ceylinco Homes International (Lotus Tower) Ltd. will be the developer of CCR, while Ceylinco Leisure Properties Ltd. will be the owning company of Hyatt. CCR will comprise 176 super luxury apartments that will be located from levels 17-40 of the building. The 'Residencies' will change Colombo's skyline once completed, the communique said.

"We have received a positive response with more than 50% of the apartments already reserved," the release quoting a company spokesman said.

HRC will be a 245 room suite hotel and will be located in the first 16 levels of the building. "Residents can look forward to an exciting lifestyle with facilities and features such as an infinity pool, international standard spa, multi cuisine restaurants and bars and meeting and fitness facilities to name a few," it added.

12% revenue growth for Eagle Insurance

Eagle Insurance Company Ltd. recorded a 12% year on year (YoY) growth in consolidated revenue to Rs. 921 million in the first quarter of this year (2005), a press release said. Further, life revenue during this period grew by 14% to Rs. 773 million.

The company said that these growth figures are all the more significant considering the unfavourable macro-economic environment that prevailed during the period under review. Professional underwriting practices and continuous efforts made by the company to streamline business portfolios resulted in reduced non-life written premiums.

Operating profit grew by 28% to Rs. 36 million and consolidated profit after tax grew by 36% to Rs. 33 million despite a significant increase in claims costs incurred in both life and non-life businesses.

In line with the company's prudent claims reserving policy, supported by actuarial recommendations, a further provision of Rs. 10 million was made on account of incurred but not reported claims (IBNR). Effective expense and resource management initiatives contributed to the profit after tax of non-life insurance. Asset management business recorded profits in line with the budget for the period.

The company, as a measure to provide higher security to its insuring public, issued an audited solvency certificate confirming the solvency position of the long-term and non-life insurance businesses as at December 31, 2004 conforming to the proposed rules applicable under section 47 of the Regulation of Insurance Industry Act No. 43 of 2000.

 Eagle was the first to comply with the proposed regulation, in fact three years ahead of schedule, the communiqu‚ said.

The release quoting the Company's outgoing Managing Director Chandra Jayaratne said that the Company's first quarter results are satisfactory and business strategies that are in place will ensure that the year-end results would be achieved as planned.

Kala Pola comes alive

Once again, the works of Sri Lanka's diverse canvas of talented artists and sculptors will be on display when the Kala Pola comes alive today, a press release said. The creativity and variety of talented artists and sculptors will be the focus of attention amidst a day of fun and fraternity at the new and exciting venue: the Slave Island Railway Station.

Organised by The George Keyt Foundation, Kala Pola has been supported by the John Keells Group for 12 consecutive years. The highlight of this year's Kala Pola will be its change of venue - from the sidewalks of Green Path to the platforms of the Slave Island Railway Station.

The purpose of Kala Pola is twofold: firstly, it is a 'platform' to sell one's works of art.ÿ Secondly, it provides an open-air 'gallery,' a kind of trade fair, where hundreds of talented persons from around the island get to display their work - an opportunity they would ordinarily not be able to afford with their own resources. Most importantly, this is an opportunity for budding artists to display their talent and launch their careers.

This year's Kala Pola will feature over 300 stalls along the railway platform and its environs. The event will include musical entertainment for visitors, including sitar, jazz band, trumpet, flute, sarapina, traditional drums and street singers. Visitors could also treat themselves to Keells sausages, Elephant soft drinks and ice creams, traditional sweet meats and fruits.ÿPeanut and manioc sellers will hawk their offerings while astrologers, palm readers, stilt walkers, and a live elephant entertain the visitors.

The release quoting Chairman George Keyt Foundation Cedric de Silva said that creating opportunities for art is the core objective of the foundation.ÿ In this respect, the Kala Pola is a unique event that will enable us to support and enhance this objective. Consequently, this is an event that our foundation is truly proud of.ÿ"We are grateful to JKH for partnering with us for more than a decade, ensuring that the event keeps growing and more successful every year," de Silva said.

The release quoting JKH Director Sumithra Gunesekera said that being a nation that has displayed inherent genius in the arts for centuries and are steeped in a culture and traditions that revert to the beginnings of civilization, JKH is ardently committed to preserving and developing the intrinsic talents of our people.

Kelaniya launches MBA programme

Kelaniya University recently launched a full time MBA programme at their Faculty of Commerce and Management Studies. This is the first time that a full time MBA programme is offered in Sri Lanka.

This course has been designed in collaboration with the Indian Institute of Management (IIM) Lucknow, one of the premier management institutes in India. It has been worked out over the past two years between the faculties of the two institutions by means of regular exchange of visits by senior faculty members of the two institutions.

This collaboration and the launch of the full-time MBA programme has been entirely funded by the India-Sri Lanka Foundation (ISLF). ISLF has been set by the Indian and Sri Lankan governments with the objective of fostering Indo-Lanka relations through the enhancement of economic, scientific, educational, technical and cultural cooperation and the promotion of greater understanding between the people of the two countries.

The corpus of funds to the foundation has been contributed in equal measure by the two governments. The management and direction of the foundation are vested in a board of directors consisting of six directors. The High Commissioner for India to Sri Lanka and the High Commissioner for Sri Lanka to India are the co-chairpersons of the board.

Suntel launches CDMA technology

Suntel, said to be the new generation national telecom network, established its vision by making it possible of connecting every home in Sri Lanka with the launch of CDMA 2000 1X technology in Kandy, a press release said.

Held at the Mahaweli Reach, the event was attended by several dignitaries and celebrities including Posts and Telecommunications Minister D. M. Jayaratne, Posts, Telecommunication and Udarata Development Ministry Secretary C. Maliyadde, Central Province Chief Minister Sarath Ekanayake, Kandy Mayor Kesera Senanayake and Director General TRC Aruna Amarasekera. Also present was Suntel's new Brand Ambassador Marvan Atapattu.

It said that a huge benefit of the CDMA technology over wire lines are the low investment costs which are passed on to the customer through a lower connection fee and the comparatively low maintenance costs translated to customers as lower monthly rentals.

Suntel CDMA connections are user friendly with features incomparable to any other fixed line phone. They provide a higher speed dial up and data access (three to four times higher than a normal land line) as well as other features like SMS, Caller Identity (CLI) and ring back tones etc., which are only available on mobile phones.

Fully portable, as there are no wires other than the one for power supply, Suntel CDMA connections are also less affected by lightening, a major problem in a tropical country like Sri Lanka, the communiqu‚ said.

With an extensive distribution infrastructure in place, Suntel CDMA connections can be bought and activated instantly. To deploy the CDMA technology, Suntel has joined hands with Ericsson, the world leader in telecom infrastructure.

Ericsson is a major telecoms supplier with a key focus on helping operators in rolling out large-scale networks. Ericsson currently provides major network outsourcing, serving over 30 operators worldwide and is the dominant player in this segment of the global telecom marketplace.

It further said that over the last eight years Suntel has been an achiever in the corporate segment, gaining the reputation of a service provider giving fast delivery, professional approach and service 'second' to none.

 Suntel's current coverage includes 20 cities and villages including the north and the east. Already having a large share of the corporate and SME market, this new technology will enable Suntel to further expand its coverage to rural areas and further strengthen ties with its business customers by offering state-of-the-art services, the release said.

Meanwhile, the release quoting Jayaratne said that the CDMA license was approved in his 'regime' with the objective of providing telecommunication with much emphasis to the rural market.

"The active participation of private companies like Suntel will help strengthen our country's telecom infrastructure. Suntel has taken the initiative to deploy telecommunication services in all parts of the country connecting more and more lives in Sri Lanka with the launch of CDMA technology with a vision to provide a phone to every Sri Lankan home," he had said.

Suntel launched CDMA technology with another revolutionary concept, 'Off The Shelf.' This enables customers for the first time to purchase a fixed line phone off the shelf and use it simply by plugging in the phone unit and make calls immediately.

As the first phase, Suntel CDMA services will be available in 22 districts covering over 500 towns and the tiniest villages around the county. Staying in line to achieve the vision and reach of customers in all parts of the country, Suntel expanded its service network with over 40 customer contact points making it the widest service network in the country thus making Suntel 'the next generation telecom network,' the communiqu‚ said.


It also said that even before the TRC approvals for CDMA, Suntel has been a forerunner in expanding its network islandwide having recently covered over 10 new areas like Kataragama, Tissamaharama and Warakapola, including the tsunami-hit areas of Ampara, Hambantota and Trincomalee.

The latest CDMA 2000 1X technology will help to push fixed line penetration higher and deeper into the country at a comparatively lower cost, providing advanced services to consumers and hence help develop and expand ICT in the country. In keeping with this philosophy, the first few CDMA connections were presented to several loyal Suntel customers at the launch event, the release said.

The communiqu‚ quoting the Managing Director Suntel Lillemor Larson said that Suntel strives to be an innovative, service oriented and cost effective telecoms solutions provider offering the best to the Sri Lankan market. Through this new technology, convergence will now become a reality in terms of having voice, data and video offered through one single phone line. More so an individual can just buy a phone off the shelf and get connected immediately.

With the launch of CDMA, Suntel has expanded its capacity to connect an additional 250,000 customers.

"Today, the telecoms industry in Sri Lanka is at the threshold of a new era and we at Suntel ultimately hope to touch more than one million lives with a world class product, offering quality and value for money combined with our inimitable service," Larson is quoted to have had said.

Suntel is a joint venture company that brings together the 'resources and expertise' of Swedish telecoms giant Overseas Telecom AB, Metrocorp (Pvt) Ltd., Townsend Ltd, Hong Kong, the National Development Bank and the International Finance Corporation (IFC) - a member of the World Bank Group.

Protecting local Industries

Orange, an ISO 9001.2000 company with a history of over two decades of innovation behind it, has been producing electrical wiring and accessories to SLS, BS and IEC standards, a press release said.

 Having been subjected to a rough ride initially by an international industrial giant, the company today has won its battle and shines as the ' Rising Spirit of Sri Lanka' representing the best of Sri Lankan ingenuity and internationally recognised quality by becoming the number one product in this category.

Orange has the expertise in local innovations and engineering capability in electrical, lighting and industrial integrated systems and data comunications solutions. They are a distinctive example of an employment creator in the country both directly as well as indirectly through their associated suppliers of raw materials, distributors, market researchers,etc.

Can a local industry function effectively and profitably on its own? Definitely not, and it does need the fullest cooperation, support and assistance from the State as much as from the general public. Assistance from the Government should focus on cutting down of red tape in administration and duty in case of compulsory import of raw materials needed for local productions.

A good transport network either by road or rail is vitally important in distributing functions. Minimum political interference by opposition political parties in these areas are paramount issues for a nation's progress. By getting caught up in critical policy warfare rather than thinking positively on issues that affect the country will only make the whole nation suffer as a consequence. Therefore the underlying factors towards the progress of a country, rests on the blessings of the government, collaboration of the Opposition and also the cooperation of the consumer in recognising local products and becoming 100% national minded in their purchases.

Advanced countries in Asia such as Malaysia and India are good examples to this effect. Their national policies have been to recognise the local product, local industries and local manufacturers.

As such, these countries have successfully paved the way towards industrial expansion and, as a result, have built up a sound economy and have become profound foreign exchange earners simultaneously.

Sri Lanka needs to focus her economic and manufacturing strategy on Malaysia and India and learn a lesson or two from them as to how they give their first preference to local products and manufacture. No doubt there will be major challenges in such a climate with giant International institutions coming to play a major role, at times to serve the local industries with sledge hammer blows or to steam roll them completely with their crooked marketing strategies where sometimes even the will of the strongest political hero will be tested.

The Government and the Opposition alike have a major role and a bounden duty in this regard in backing up local production if Sri Lanka has the qualitative local manufacture which could challenge any foreign product.

The role played by the local manufactures in a competitive world is equally important in this regard. They need to be reasonable, rational and regularly responsible in terms of quality control of their products with a fair pricing policy to give the consumer value for money. Short sighted policies of making a' quick buck with one shot' attitude or producing cheaper quality goods for bargain basements will only help them to 'dig their own industrial graves'! Such foolish and selfish motives will only kill the local industry and encourage the local consumer to alienate from local products altogether and to seek solace on foreign imports.

But, as a nation, Sri Lanka needs to be united as one in propping up and supporting her own national industries. Otherwise how can local manufactures survive? When there are internationally reputed industries in Sri Lanka such as Orange (among many others) with ISO 9001.2001 recognition, it would be crazy for people to think of any foreign alternatives from simple electrical sockets to the most intricate equipment that controls power supplies to cities!

Skills completes 12 years

Skills Advertising at Kirulapone has successfully completed 12 years of intense advertising, a press release said. The Company handles the whole A to Z gamut of the industry and has served companies of the corporate world as well as individual establishments without reservations. Having a good track record, it has gained the confidence of as much as over 75 clients at present, ranging from banks to educational institutes to retailers.

The release quoting its Managing Director Ananda Samarasinghe who took over the management in 2000 from Sri Sangabo Corea, the agency's founder, said that the Company made great strides even during turbulent periods of the advertising industry as a whole.

 "Corea continued to be the guiding and the driving force up to now, which gave the new management the much-needed strength and stability. The client's loyalty towards the Company is very evident by the fact that quite a number of them are still with Skills since its inception. The Penthhouse Group of Companies, the Travel Club & Blue Diamonds are just three of the bigger accounts that the agency services, even up to date", Samarasinghe, is quoted to have had said.

Skills has a clientale of more than ninety at present, besides quite a number who come for secondary help. The Ceylinco Group too has entrusted Skills with some of their portfolio.

Jagath Alwis, Deputy Chairman of Ceylinco Education is a client that continues to offer unstinted support by placing confidence in the company, in the advertising of numerous products and in the execution of promotions.

 Mohan Pathirana, CEO-ICBT, is another versatile entrepreneur who sought the services of Skills. Such corporate backing made the ad agency move forward. Currently, the work force consists of two creative directors and three art directors in a total of 25 members.  Samarasinghe attributes the agency's success to dedication and sincerity towards its clients and their satisfaction. Being an experienced campaigner with over 17 years of experience, Samarasinghe marshals his team with sheer business acumen. He was initially groomed as a media coordinator and that remains his forte. Thereafter, fortune encountered him to rise up to the position of MD and hence, he possesses the dexterity to handle all types of advertising modes. "Having succeeded thus far, the agency is ready to take up any challenge and any client in the field of marketing," he had said.

Skills Advertising could claim to be among the top 20 agencies in the country with the largest number of adverts with in ANCL and other publications. At this pace, it is believed that the company will  be reckoned as the most sought after advertising agency in the imminent future.

The Directors - Lalith Deshapriya Ganegoda and Priyanga Jayaweera on behalf of the agency take this opportunity to thank all its clients for the support extended throughout the years, the communque added.


New airline applicants' deadline closes

Is it the Maths that Flies?

The race, in connection with the bids called by the government in their 'Open Skies' policy hots up, with the deadline for submitting detailed financial information and business plans to the Civil Aviation Authority (CAA) having closed on Wednesday.

Industry sources said that of the nine original applicants, just five investors had actually submitted the information together with a payment of Rs 1.15 million. Counted amongst those who paid are some colourful characters in Sri Lankan commercial life: Chandran Rutnam of Lion Air, Osman Kassim at Expo Air, Arjun Ruzaik from HolidayAir and Suren Merchandani representing Deccan Air.

Jayantha Dharmadasa from the Nawaloka Group decided to postpone their entry into Aviation at this stage.

As the CAA begins the task of evaluating the 'sky high' data, some analysts speculated as to how any airline would be able to provide shareholders with returns. Yet, in the airline industry, the difference between keeping an aircraft on the ground and off the ground is relatively marginal. Thus, having made the necessary (huge) investment in aircraft, people, facilities and logistics, an airline usually finds that flying is better than cancelling flights, in the wake of near empty planes. High utilisation plays a key role in the economies of scale at any airline and especially so for a budget airline.

The world's low-cost carriers are profitable even as the venerable "legacy" airlines barely tread water. How can they make money while offering fares that are 40 to 70% lower?

The reasons are many - cost of labour is a big one - but here are five major differences between the proposed upstarts and the traditional boys.

1.3 million

That's (1.3 million) the minimum number of potential annual airline passengers a city must offer before a low-cost carrier will consider it as a destination. Airline industry consultant Michael Boyd of the Denver-based Boyd Group says low-cost carriers avoid smaller cities and target only those areas where they can get the highest revenue. Airports within a 45-minute drive of such locations are sought out by the carriers.


That's (84.6) the number of employees per aircraft at Southwest Airlines. And it's the figure the industry uses to measure employee productivity.

Compare that number with 116 employees per plane at United Airlines, a number the airline achieved last year during its bankruptcy reorganization. The United number had been 173 in 2002, said airline analyst Vaughn Cordle of Airline Forecasts.

Small wonder the so-called legacy airlines are trying to get that number down to get productivity up. The 'United' reduction resulted in a savings of about $2 billion and boosted productivity by 33%.


That's the percentage (2%) of ticket sales that JetBlue Airways makes through traditional travel agents. By contrast, travel agents sell 61.2% of US Airways tickets. The number is about 50% for American Airlines.

While legacy carriers have drastically reduced the commissions they pay travel agents, selling the traditional way remains the most costly method - between 7 and 9% of ticket value. And the big carriers still offer some of the largest agents steep discounts in exchange for moving market share to that airline.

The legacy carriers are looking for ways to attract travellers to their sites by offering steeper discounts, bonus frequent-flier miles or other incentives.

Also, low-cost carriers such as Southwest were among the first to implement electronic ticketing to avoid the costs of printing and mailing. During the past two years or so, legacy carriers have expanded their use of electronic ticketing as well.


That's the percentage (40%) of "legacy airline" passengers who connect to another flight to reach their final destination. The number is significant because routes that include connections are more expensive than direct, nonstop flights.

In general, the low-cost carriers have set up their schedules to focus on point-to-point flights. Southwest Airlines calculates that only 10% of its passengers connect to another flight to get where they're going, in large part because the airline focuses on flights to and from destination cities. In essence, the burden for any onward travel is on the passenger to arrange, not the low-cost carrier.

Nonstop, direct flights are cheaper for several reasons. First, because airline employees are paid by the hour and connecting flights take longer to get to a destination, there is extra pay for flight attendants and pilots. Also, connecting flights require more manpower, says American Airlines spokesman Tim Wagner. Remember, bags have to be loaded, then offloaded on the first leg, then reloaded and offloaded again on the final leg of each flight.


The number (zero) of downtown ticket offices low-cost carriers such as Southwest, JetBlue and AirTran operate but US Airways alone has 13 such offices.

Crucially therefore, it is the mathematicians within the airlines who call the shots when deciding on routes and frequencies.

In 2002 for example, IATA members in the industry issued an excess of 308 million tickets in a $ 138 billion industry. Yet globally the aviation industry is said to have lost in excess of $ 25 billion over the past two years. However, within that segment, some airlines have created niches for themselves - like Singapore Airlines and Sri Lankan Airlines. The particular niche both these airlines have created is one based on inflight service and facilities and convenience in departure and arrival times.

Drastic cost reductions, flexible fleets and carefully managed capacity adjustments are part of the solution. A new, more balanced approach to distribution tools like the internet also contributes to success as well as an obsessive attention to costs - both fixed and variables.

Faraz Shauketaly

Banking & Finance News

HSBC - building on a solid foundation

July 2005 marks the completion of 113 years of HSBC in Sri Lanka. On July 1 in 1892, HSBC officially opened its doors in Sri Lanka, just 27 years after its first offices were established in Hong Kong and Shanghai. Today, the HSBC Group has 9,800 offices in 77 countries and territories worldwide. HSBC offers personal financial services, commercial banking, corporate, investment banking and markets, and private banking, among other activities. Formerly known as the HongkongBank, HSBC was established as a uniform, international brand name in 1999.

Putting out roots in Sri Lanka

HSBC appointed agents in Sri Lanka in 1882. During the 1884 coffee crisis, when the economy of Sri Lanka suffered a severe setback as coffee plantations throughout the country were almost totally destroyed by disease, HSBC realised the need for an international corporate bank in the island. Ever since, the bank has improved upon the quality and level of service provided to local customers and has upheld the tradition of loyalty and support.

In the early 1920s the bank purchased and began construction work on land adjoining the Bank of Madras. HSBC then moved into its new home at 24, Sir Baron Jayatilaka Mawatha (which it occupies even today), an impressive landmark in Colombo's architectural and business landscape, marking the presence of a bank that is here to stay.

Corporate banking services: An impressive record

In possession of local and foreign currency lending capabilities, HSBC's Commercial, Corporate and Institutional Banking have a complete range of finance structures as well as a strong appetite for providing working capital and/or trade financing. The bank has also supplied financial support for a large number of multinationals and domestic borrowers.

HSBC is a pioneer in offering custody and clearing services and a market leader in foreign client custody portfolio. Furthermore, HSBC is a forerunner in offering trustee services to unit trusts and debenture issues in this country and a market leader in unit trusts, offering trustee services to 50% of the unit trusts in Sri Lanka. HSBC's Treasury, too, has pioneered ground-breaking vanilla derivative deals worth millions of dollars with other leading organisations like Aitken Spence Limited and Brandix Lanka Limited.

Personal banking services: Fulfilling the needs of different customers

Understanding the changing needs of customers according to their age and level of income, HSBC created Premier, PowerVantage and E-Saver Accounts to cater to different market segments. In addition, the bank introduced Children's Savings Accounts for younger customers. The bank has also launched Personal Installment Loan (PIL), Home Loan, Car Loan, Smart Money and Personal Exclusive Revolving Credit (PERC) to enhance the diverse lifestyles of customers.

HSBC is also the undisputed leader in the credit cards market in Sri Lanka. With over 150,000 cards, HSBC has demonstrated that credit cards are no longer a luxury, but a commodity suited to the pace of customers' lifestyles. Over the years, the bank has continued to provide a number of privileges to its credit cardholders. Lifting the 2 per cent surcharge on fuel, a world class Rewards and Air Miles programme, Home & Away automatic travel insurance from Hayleys AIG Insurance, and the 12-month Bonus Spree at Cargills Food City are some of the remarkable privileges on offer for HSBC credit cardholders.

The bank also offers credit cards to those who do not even have an account with HSBC, as long as they meet the age and income criteria. These credit cards are accepted in Sri Lanka and at over 17,000,000 establishments the world over, ensuring HSBC credit cardholders are welcome anywhere in the world.

Revolutionising banking in Sri Lanka

HSBC has a worldwide reputation for its pioneering work in the field of technology. The bank was the first to establish an internet payment portal in Sri Lanka, for Sri Lankan customers. Personal Internet Banking and Phonebanking are two other services offered by HSBC.

In July of 1980, HSBC became the first bank to computerise its operations in Sri Lanka. Another first in Sri Lanka was the installation of Automated Teller Machines (ATMs) in June of 1986, enabling round-the-clock banking. In 1991 the Colombo branch was connected to HSBC's Global Data Network enabling the exchange of financial data with members of the HSBC Group within a few seconds. Furthermore, with the introduction of Hexagon in the same year, the bank became the first in Sri Lanka to introduce electronic banking.

HSBC Trade Services also offers customers Electronic DC Advising - a quick and easy way for customers to receive a complete copy of their export documentary credits and amendments via e-mail or fax. This is the first service of its kind to be offered in Sri Lanka.

The introduction of the first Day ands Night Automated Banking Centre is another first for Sri Lanka. The Day and Night Automated Banking Centres include Personal Internet Banking and Phonebanking Services and a customer services desk in addition to the requisite ATM machine. Currently, HSBC has three such centres - at the Sentra Super Market in Maharagama, Cargills BigCity in Moratuwa and at the bank's newest branch in Wattala.

The HSBC story: Sharing success

The HSBC Group advocates two main strategies of CSR - education and the environment. Under these, HSBC Sri Lanka has carried out many long-term projects.

HSBC strongly believes that the needs of today's society should not be fulfilled at the expense of future generations, and is therefore, deeply conscious of its responsibilities to the environment. HSBC Sri Lanka has joined forces with the Department of Wild Life Conservation in conducting an ongoing campaign to maintain a cleaner environment and preserve the natural beauty of Horton Plains. Awareness boards and garbage bins are posted discretely in strategic locations throughout the Plains. In addition, the bank sponsors the salaries and uniforms of workers and tour guides within the Plains.

In May 2005, the bank launched yet another environmental project in collaboration with the Sewalanka Foundation - the Sinharaja Rainforest Youth Bio-monitoring Programme. This programme aims to conduct applied research within the buffer zone of the Sinharaja rainforest involving  several parties of stakeholders in the project, including the community in the area, the local school children, the Forest Department, academics from the University of Peradeniya, HSBC staff and other interest groups.

Another important policy at HSBC is providing education for disadvantaged children. The bank sponsors trained-teachers for 200 children at St. Joseph's School for Deaf Children Sri Lanka. The Thirivanaketiya Maha Vidyalaya in Ratnapura is another pet project the bank undertook, following the flash floods in the area in 2003. Since then, the bank has not only rebuilt the school but also provided it with a library, a computer laboratory and an on-going nutritional programme.

The Vesak Lantern Competition and the Christmas Tree Project for orphaned children are other projects sponsored by HSBC that bring out the dynamic creative skills of these youngsters while also providing them with an opportunity to experience the joy of the festive seasons.

HSBC also sponsored the refurbishment of the Anuradhapura and Polonnaruwa galleries at the Colombo National Museum, in an ambitious and successful project worth Rs.6 million. Work has already commenced on a third gallery, the Kandy gallery. This project by the bank has increased the level of awareness and appreciation of the Colombo National Museum, and in turn, the glorious history of Sri Lanka.

HSBC Sri Lanka now operates 10 branches in Sri Lanka and has a staff of over 1,000.

HSBC goes high-tech

By Jamila Najmuddin

HSBC launched its state of the art internet based global electronic banking platform, HSBCnet for its corporate and institutional customers last week.

Offering a range of solutions that encompass HSBC's corporate, investment banking and markets business, delivering tailored financial solutions via a single internet platform, HSBCnet effectively covers areas such as domestic and international fund transfers, cheque outsourcing services, payments advising and electronic and paper collections.

HSBCnet also covers areas such as systems integration with accounting and treasury platforms, receivables management system and internet trade services.

Speaking at a media briefing to announce the launch, HSBC's Head of Payments and Cash Management for Asia Pacific, Lawrence Webb said that HSBCnet was developed through dialogue with the bank's large and institutional clients who saw the internet as a tool for control over information which in turn helped them to work smarter. "The development was carried out based on the philosophy of addressing customer needs and demands," Webb said.

HSBCnet also offers strong security measures to customers and is developed with the latest, high security features that can be customised according to a user's requirements.

Head of Corporate Banking, HSBC, Trevine Fernandopulle said in addition to providing SSL 128-bit encryption, it enforces the use of username and password for information access and smart card security for transactional services. "The inputting of username and password is done via a 'virtual keyboard' which further enhances the overall security. It also provides protection against key-logging and 'denial of service' attacks," he said.

In addition, HSBCnet also effectively addresses issues relating to corporate firewalls, customer-supplier relationships and regional solutions for financial accounting and treasury management.

HSBC's expertise in cash management is widely acknowledged and the bank continues to be recognised winning the "Best Cash Management in Asia 2004/2005" award by Asiamoney Poll, Euromoney Poll and Global Finance. HSBC was also awarded "The Best Bank for Payables and Receivables" by Asset Asian Awards 2005. The launch of HSBCnet in Sri Lanka further consolidates HSBC's reputation for its pioneering work in the field of technology.

Seylan banking on technology

Seylan Bank has been continually adding value to their banking systems. Speaking to the press on this matter was the Deputy General Manager, Information Technology, Dr. D.N.D. Ramanayake who gave an update on the recent innovations at the bank.

Dr. Ramanayake stated that in today's context with the technological advances, banking could even be carried out from office, home or anywhere. It is in this environment that Seylan Bank provides many electronic delivery channels such as SMS Banking, Tele Banking, Internet Banking, Virtual Wallet, Visa Electronic Debit, credit cards and even a fully computerised bank on wheels.

"We are committed to keep pace with the global technological developments. For the benefit of our customers we keep on adding value to our products and services." Dr. Ramanayake was referring to the recent upgrade on Internet Banking, Telephone Banking and Credit Card System. In addition to the standard functionality, Seylan now offers third party online money transfers, utility bill payments, credit card account information, credit card payments and ability to draw funds from the credit card account as a cash advance using either the telephone or Internet Banking System. Applications for internet banking are available through any of the Seylan Bank branches or the form can be downloaded from the web site

Explaining the strategic developments, Dr. Ramanayake said in April 2004, Seylan commissioned an IT payment gateway to electronically make payments. This system helps a customer to make payments for goods and services over the internet. He further said that clients of Seylan Bank with access to the internet can obtain not only information such as prices from registered merchants in this system, but also pay through Visa credit card or make a direct debit to his / her account.

"The basic strategy using IT is to offer convenience to Seylan Bank customers by providing anytime, anywhere, anyway banking. To achieve this we use electronic delivery technologies," explained Dr. Ramanayake. He further explained the innovative plan of the bank augmented by Chairman, Deshamanya Dr. Lalith Kotelawala, and the corporate management of Seylan wanting to take banking to the remote areas through many channels.

One such service is Automated Mobile Banking. Dr. Ramanayake said that Seylan now offers a fully computerised 'bank' in a mobile vehicle. The vehicle can be parked in a village, supporting the local community to perform all banking functions available to any customer in Colombo. "We are now researching to provide a fully computerised mobile bank in areas even without a telephone connection," he added.

"We were the first to introduce fully functional SMS banking to Sri Lanka a few years ago and also internet banking just before Y2K. With SMS banking customers can perform a wide range of query-based transactions from the mobile phone, without even making a call. The mobile phone will ring to alert a debit due to the use of Seylan Credit Card/Visa Electron card.

"At the next stage of transition we have plans to evolve this facility into a fully- fledged 12ME enabled mobile banking solution. The advantage is that it will enable customers to perform most of the internet banking facilities on the move; on their mobile phones," he said

Another innovation of Seylan Bank is the Visa Travel Card replacing the cumbersome travellers cheques. "Simply visit a Visa Supported ATM anywhere in the world, any time of the day to obtain currency of that country," says Dr. Ramanayake. "One can also use it for purchases globally at any Visa merchant outlet."

Dr. Ramanayake said that Chairman Kotelawala's vision to provide digital dividends to all parts of Sri Lanka has become a reality with services such as automated mobile banking and e-learning programmes. Already Seylan Bank has implemented small-scale solar powered computer centers at Thanthirimale in the NCP and in Kayts in the north.

Dr. Ramanayake explained: "We have designed a blueprint to provide solar enabled power and RF based telecommunication to any remote village in Sri Lanka. The bank would develop a call center to enable a single point of service to their customers to effect cross selling of services and to provide outbound marketing."

Dr. Ramanayake also spoke of the importance of an excellent security system governed by good IT policies. He said, "Our systems are definitely secured over and above the industry standards through firewalls, encryption methods for remote access and frequent penetration testing conducted by the bank. We have also established a sound security policy for IT governance and are working towards achieving an ISO security standard."

HNB's Shanthi - an innovative housing solution

"Get Shanthi, go home." This simple line says it all. Not only does the Shanthi housing loan scheme from HNB allow you to obtain your loan faster, it makes life a lot easier, and your dream home inevitably becomes a reality. HNB is the first institution to offer a branded housing loan scheme, and they've been in the business long enough to know what's best for you.

"We can meet any housing requirement and our loan covers everything from purchasing of bare land for construction of a house, purchase of a fully constructed house and property, construction of a house on land owned by the applicant, completion of a partly constructed house and renovation or extension of an existing house," said  Senior Manager, Consumer Banking, N. Premarajah.

Loans can be obtained in just 14 days if documents are in order. Premarajah said HNB recently tied up with a legal firm, making the documentation process that much easier for the customer. HNB has an islandwide network of 143 customer centers and loans can be obtained from any part of the country.

Those eligible for the loan includes anyone who has a regular monthly income individually or jointly with a spouse: professionals, businessmen and anyone with a sound financial standing. The income must be sufficient to meet the monthly loan commitment plus living and other expenses.

The minimum amount offered is Rs.100,000, while loans in excess of Rs.5 million are considered on a case-by-case basis, depending on individual incomes. Higher amounts can be negotiated with the respective branch managers. "Customers can choose their payment scheme. We have no hidden charges unlike most other housing loan schemes offered by various other institutions," Premarajah said.

Interest rates vary from 12.5% onwards and are both attractive and competitive. Customers can choose between fixed and floating rates. The 'floating' option is based on the going market rate while those who choose 'fixed' will have a fixed rate. The minimum repayment period is five years while a maximum repayment period of up to 25 years is offered depending on the age of the customer.

HNB also obtains a mortgage protection policy that allows settlement of the loan outstanding in case of the death of the borrower and there will be no burden on his or her dependents. "If necessary we also offer loan facilities for payment of this insurancepremium," Premarajah said.

In addition to all the benefits offered by Shanthi, including low interest rates, minimum hassle, faster processing, easy access, and insurance protection, the housing loan scheme also includes a wipe out draw.

All customers and those who obtain housing loan facilities in 2005 are eligible to enter. The scheme consists of a mid year draw and a year-end grand draw. The first prize for the mid year draw is the settlement of a Shanthi outstanding loan of up to Rs.2 million. Consolation prices include household furniture, cash or a pre paid credit card to the value of Rs.100 000 for five winners and furniture, cash or a pre paid credit card to the value of Rs.50,000 for five winners.

First prize for the year-end draw is the settlement of an outstanding loan of up to Rs.2.5 million. Consolation prizes include furniture, cash or a pre paid credit card worth Rs.100,000 for 10 winners and furniture, cash or a pre paid credit card worth Rs.50,000 for a further 10 winners.

Commercial Leasing completes Rs. 325 mn debenture issue

Commercial Leasing Co. Ltd (CLC), a leading specialised leasing company in Sri Lanka, announced the successful private offering of a secured redeemable debenture issue of approx Rs.325 million. The debentures are secured by specific finance lease contracts of CLC, and the principal and interest payments are unconditionally and irrevocably guaranteed.

The core objective of this issue was to finance new lease portfolios as part of CLC's growth strategy. CLC believes that this process provides effective medium term funding which in turn allows for very attractive medium term returns to investors.

The transaction consists of senior pass through fixed and floating rate certificates due from Aug 2005 - Feb 2009. Various structural features were built into this transaction to protect investors such as diverse accelerated amortisation triggers and overcollaterlisation to provide credit enhancements.

Investec Capital Limited was the Lead Arranger and Commercial Bank of Ceylon Limited acted as Co-Arranger for the transaction.

Established in 1988 as a private limited company and converted to a public limited company in 1992, today CLC has emerged as a major player in the leasing industry. The company provides a wide range of services including finance leasing, operating leasing, hire purchase and debt factoring. The company's head office is based in Bambalapitiya and at present has a branch network of over nine locations in Negombo, Kandy, Anuradhapura, Matara, Kurunegala, Trincomalee, Ambalangada, Kelaniya and Kohuwala.

The company has made a pre-tax profit of Rs.237 million in year 2004 and was able to post a Rs.80 million pre-tax profit in the first quarter of 2005, an increase of 60% from the previous corresponding quarter.

DFCC Bank fully geared for big projects

The Corporate Banking Division of DFCC Bank handles large corporates, which includes working capital and project financing.

Senior Vice President, Corporate Banking, Dheerendra B. Abeyaratna says the project financing focuses on long term projects where the bank looks at the business as a whole to see if it is viable to finance for the long term.

"We look at the risk of a project when lending financial assistance including the feasibility and cash flows and then decide if it will be a viable project and if the cash flow is adequate for the returns expected," Abeyaratna said.

Since its inception in 1959, DFCC has focused heavily on development banking. Development banking revolves around project financing and Small and Medium-scale Enterprises (SME).

DFCC has a separate unit and branches that specialise in the SME sector while the corporate bank focuses exclusively on large corporate customers.

"DFCC has developed its own edge to finance a project. At DFCC Corporate Banking we have people with accounting and other financing skills. So we have the ability to identify a business and how the project will work especially if it involves some sort of risk," Abeyaratna added.

To provide the funding for the projects DFCC has access for long-term assistance from the government via the World Bank and Asian Development Bank.

"Project funding is very important for Sri Lanka otherwise companies will not be able to finance their long term projects," Abeyaratna said.

He further said that his vision is to identify small businesses that have the potential to grow and ensure DFCC assists in creating the next conglomerate in Sri Lanka.

"If you look at countries like India they have several companies which have operations overseas but Sri Lanka is yet to reach that level," he said.

DFCC Corporate Banking is still thriving despite the trade dying overseas. Abeyaratna attributed the success of the Corporate Banking Division to the diversified operations of DFCC Bank. DFCC Bank has earned the Fitch AA- rating, boosting customer confidence.

The primary vision of DFCC Bank is to be Sri Lanka's premier financial services group. At DFCC, customer response surveys are conducted from time to time to see if the bank's services are up to the mark and immediate steps are taken to remedy problems if something is lacking. Feedback is obtained from customers and services are upgraded where necessary.

DFCC was set up in 1955 by an Act of Parliament mainly to undertake the financing of development in Sri Lanka by giving long-term loans to the small and medium enterprise sector and private sector companies to set up various industries, plantations and factories.

DFCC Bank has been associated with a stream of significant financial innovations, underpinning its reputation as a market leader. It continues to thrive on the winds of change, seizing opportunities as they come and making it possible for their customers to reach new horizons.

DFCC secures Rs. 2.4bn credit line

An agreement was signed between the Government of Sri Lanka (GOSL), KfW Bankengruppe (KfW) headquartered in Frankfurt am Main, Germany and DFCC Bank (DFCC) on July 14, which will provide DFCC access to a long-term credit line of EURO 20.1 Million (LKR 2.4 Billion). The signing took place at the Ministry of Finance and Planning in Colombo. Secretary to the Treasury, Dr. P. B. Jayasundara signed on behalf of the Government of Sri Lanka while Director, South and Central Asia, Uwe Ohls and Director,  KfW Office in Colombo, Reinhard Dalchow, signed on behalf of KfW. Chief Executive Officer, Nihal Fonseka signed on behalf of DFCC.

The loan is to be used for the purpose of granting sub-loans and leases by DFCC to finance medium and long-term investments in fixed assets, primarily relating to imported capital goods by private sector enterprises in Sri Lanka. However, the sub loans can also be used to finance the cost of machinery purchased from other countries or locally, construction cost and initial working capital related to the eligible projects.

The overall objectives of this credit line is to contribute to the creation of additional jobs, safeguard existing jobs and to enhance private sector economic activity.

Only projects, which support Sri Lanka's socio-economic development and do not endanger the environment, may be funded from the loan. In any case, investments in enterprises producing or processing asbestos or other hazardous substances and investments promoting the use of ozone layer depleting substances (CFCs) are not eligible for funding. DFCC will ensure that all projects to be funded adhere to the environmental rules and regulations imposed by the relevant authorities.

KfW Bankengruppe has been supporting the development of Sri Lanka since 1961. And it has provided financial support to many important development projects such as the development of the Port of Colombo, the construction of the cement factory in Kankasanthurai and in the construction of Randenigala and Ratambe hydropower projects. The funds are provided by KfW within the framework of German Financial Cooperation on behalf of the German Ministry of Economic Cooperation and Development. Over the years, KfW has made available to Sri Lanka more than EUR 830 million of which around EUR 700 million has been disbursed.

DFCC Bank and KfW Bankengruppe have partnered each other for more than a decade and KfW has previously extended three credit lines to DFCC Bank.

Commercial Bank enhances network

Katubedda CSP upgraded to full branch status 

The Commercial Bank of Ceylon recently upgraded its Customer Service Point (CSP) at Katubedda to full branch status. The branch will now offer Commercial Bank's full range of banking services and will have two Automated Teller Machines.

 In the picture, Senior Deputy General Manager - Corporate Banking, Harris Premaratne accepts the first deposit from  Chairman, Amano Group of Companies, Sarath de Costa while  Senior Regional Manager - Colombo South Region, Vimal Fernando and Manager - Katubedda Branch, Sriyan Fernando (extreme right) look on.  

Holiday Banking in Negombo 

The Commercial Bank of Ceylon has extended its ground-breaking Holiday Banking service to Negombo, converting its branch in the coastal city to a 365-day banking facility.

 The branch at Negombo will now be open on all Public, Bank, Mercantile, Poya and other holidays from 10 am to 2:30 pm. It is Commercial Bank's 14th Holiday Banking outlet. The bank offers Holiday Banking through 12 MiniCom branches and Arpico Service Points as well as its branch at Dharmapala Mawatha, Colombo 7.

 Holiday Banking is mainly intended to serve personal customers and offers facilities such as opening and operation of all types of SL rupee or foreign currency accounts, encashment of personal cheques up to a maximum of Rs 100,000, encashment of foreign currencies and traveller's cheques, issue of foreign exchange for travel, settlement of utility bills and credit card outstandings and many such over-the-counter banking services.

 Holiday Banking service is frequently used by tourists who need to encash currency or traveller's cheques and by people travelling overseas on short notice.

 Explaining the rationale for extending Holiday Banking to Negombo, Commercial Bank's Senior Deputy General Manager - Personal Banking, Ravi Dias said that extending Holiday Banking to Negombo was a part of the bank's plan to extend this facility to all major towns of Sri Lanka. Opening a Holiday Banking Centre at Negombo will benefit the large and valuable customer base that Commercial Bank is proud to have in the area extending from Ja-ela to Chilaw, he said.  

Priority Banking Centre moves to Reid Avenue 

 The Commercial Bank of Ceylon relocated its Priority Banking Centre to its branch at Reid Avenue with effect from July 4 to enhance convenience and service to its top customers.

 With this move, Priority Banking facilities would be available even on Saturdays till 2.30 pm. Priority Banking customers will also receive the services and discounts offered by the in-house pharmacy at the Reid Avenue Branch in addition to the exclusive benefits they receive from the Priority Banking Centre.

 The new location will also make the centre more accessible because of its central location and ample parking facilities, the bank said. The Reid Avenue branch has been designed to provide special facilities for the differently-abled.

 Customers who maintain a balance of at least Rs. 5 million or US$ 50,000 in current or savings accounts, foreign currency accounts or deposits are eligible to become Priority Banking customers. In addition to the standard facilities available at their own branches, Priority Banking customers receive advice on the management of their finances, a higher spending limit on credit cards, ATM withdrawals of up to Rs. 50,000 and receive safety locker facilities without deposits.

They may also do their banking by fax or e-mail, and enjoy preferential rates of interest on deposits, as well as loans and overdrafts that can be arranged at short notice.

 The Commercial Bank of Ceylon, which was established in 1969, has the country's largest computer-linked network of 127 branches, and operates over 200 ATMs. In addition to this, Commercial Bank has three fully fledged branches and two booths operating in Bangladesh.

NDB also signs up for Rs. 2.4bn

NDB signed a credit line agreement with KfW of Germany and Government of Sri Lanka (GOSL) on July 14 at the Ministry of Finance. The credit line is for Euro 20 mn which equals Rs 2.4bn. KfW is a leading development bank in Germany and has been associated with NDB for the past two decades in granting credit lines. On earlier occasions KfW has granted credit lines for environmental projects, micro sector financing, SME and large sector projects.

With the availability of this new credit line NDB will offer credit facilities by way of sub loans and leases for long term investments in privately owned enterprises in Sri Lanka. This is the second credit line of this nature to be granted by KfW with the first credit line of DM 60 million granted in 1999.

NDB will channel the proceeds of the credit line towards financing foreign costs involved in projects promoted by the private sector enterprises. As per the lending guidelines 100% of the cost of imported machinery, 80% of cost of locally purchased machinery, and 70% of the construction cost can be financed under the credit line. KfW has also made provision in the agreement to finance 40% of the investment in the permanent working capital.

NDB will also grant sub loans under this credit line towards Small and Medium Enterprises (SMEs) as well as large scale enterprises. In the case of SMEs, the definition used is those projects where the total investment in fixed assets ( excluding the value of land and buildings) do not exceed Rs.70 million after granting the sub loan. Maximum sub loan that could be granted for such SMEs is Rs.35 million. Sub loans can be granted towards large scale projects too where the assets value exceed Rs.70 million.

With the availability of this credit line NDB's presence in project financing will be further strengthened. NDB from its inception in 1979 has granted over Rs. 120 bn for development projects in Sri Lanka and spearheaded project financing in the country.

Sampath Bank assistance for 800 tsunami affected children

Sampath Bank contributed and opened savings accounts for 800 tsunami affected children with Terres des Hommes Nederland's and Lions District 306A. The children spent a joyful day at Navarangahala displaying their talents.

The picture shows Kushlani Amarasuriya and Sepalika Seneviratne, organisers of the event, welcoming AGM, Marketing, Sampath Bank, Kapila Karunaratne  and the large gathering of children. 

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