business Sri Lanka

The asset base of Sri Lankan cooperatives have increased to nearly Rs three billion (US $ 18 million)-and coops are no longer charitable but they too should now compete in the liberal market economy.

“Cooperatives are no longer charitable organizations and they have to compete with other institutions in a liberalized market economy. Accordingly, Cooperatives may formulate proper strategic plans to sell their products and services,” said Minister of Industry and Commerce Rishad Bathiudeen addressing the launch of Asia Pacific Cooperative Development Conference by the International Co-operative Alliance (ICA) at Galadari Hotel Colombo.

This is the first ever such ICA Conference to be held in Sri Lanka with over cooperative reps from 27 countries.

The two day sessions that conclude on February 29 shall be focusing on integrating Sustainable Development Goals (SDGs) to cooperative systems.

This series of ICA sub-regional conferences began last year with three already concluded (In Jordan for Central Asia, in Mongolia for East Asia, and in Philippine for South East Asia).

“It is obvious that this conference has paid its attention to Socio-economic, cultural well-being, poverty, hunger, food conservation, environment conservation etc. The recommendations, proposals and conclusions of this conference could be implemented through the cooperative movement and be contributed to the sustainability in the region. Global Co-operative movement will also find out ways and means to achieve SDGs through this largest Community based movement in the world,” said Minister Bathiudeen.

“There are almost 14,500 cooperatives in various productions, services, SMEs, women’s development, rural banking, insurance and farming sectors. Cooperatives are also now present in our FMCG retail sector –in Sri Lanka through “Coop City” shops.

Lankan cooperative assets are a huge $1.8 billion with another dollar one billion in savings. The membership in our cooperative system exceeds five million.”

“This conference brings together participants of previous three sub-regional conferences. This meeting is held with the support of the European Union. Discussions and presentations will take place in the coming two days on eradicating poverty, sustainable food system, improving access and protecting environment.” Regional Director of Asia Pacific Region of the International Cooperative Alliance Balu Iyer said.

The Board of Directors of AIA Group Limited announced that AIA has delivered strong results for the year ended November 30, 2017 with double-digit growth across their main financial metrics.

AIA’s Group Chief Executive and President, Ng Keng Hooi said, “AIA has delivered another strong performance with double-digit growth across our main financial metrics. Value of new business increased by 28 per cent to reach a new high of US$3,512 million and we also achieved strong growth in IFRS operating profit and free surplus.”

“The Board has recommended an increase of 17% in the 2017 final dividend, reflectingthe strength of AIA’s financial results as well as our confidence in the outlook for the Group.”

“AIA has been in Asia for almost a century and we operate in some of the most dynamic and attractive life insurance markets in the world.

 AIA’s extensive distribution reach, product innovation, trusted brand and outstanding people capabilities place us in a unique position to help safeguard the financial security of consumers across the Asia-Pacific region.

“Our focus continues to be on the execution of our strategic priorities that will build on our competitive advantages and make a material difference to AIA’s future.” 

Despite the volatile macro environment Union Bank has performed exceptionally well in 2017 resulting in a 35.6% increase in profits from operating activities to Rs. 782 million.

This is in comparison to Rs. 577 million recorded in 2016, while recording a profit before tax (PBT) of Rs. 534 million, a 23% growth YoY.

Gross income of the Bank improved by 39.7% to Rs. 11,938 million in comparison to Rs. 8,546 million recorded in 2016. Income growth of the Bank in 2017 was mainly driven by the core banking operations. This highlights the Bank’s continuing progress in its swift transition to a full-fledged commercial bank with a wider focus on Retail, Corporate and SME sectors. The impressive results reflect the success of the rapid expansion initiatives implemented by the Bank following the capital infusion made in the latter part of 2014.

The net interest income of the Bank recorded Rs. 3,046 million during the year, significantly improving by Rs. 539 million which translates to an increase of 21.5%. The rise in net interest income was mainly driven by the balance sheet growth of the Bank.

The Bank’s loans and receivables stood at Rs. 70,578 million as at end of 2017. This was a growth of Rs. 15,140 million which translated to a healthy increase of 27.3%. Composition of the loans and receivables of the Bank changed in line with the Bank’s strategy for the year.

The Bank’s deposit mobilisation strategies yielded good results with the deposit base of the Bank standing at Rs. 70,326 million along with a growth of Rs. 18,484 million which is an impressive 35.7% increase in 2017. Much of this growth was steered by retail fixed deposit growth of Rs. 13,284 million, 58.7% growth over the previous year.

The Bank has made significant efforts to improve its fee and commission income using the key enablers established during the current and the previous years.

The Bank reported a net trading and other income of Rs. 656 million.

Operating expenses of the Bank was well managed and increased to Rs. 3,345 million during the year, as opposed to Rs. 3,008 million in 2016, which is only an increase of 11.2%. This is in comparison to the total operating income increase of 17.1% during the same period.

Commenting on the performance of the Bank, Director, Chief Executive Officer of Union Bank, Indrajit Wickramasinghe said, “the year 2017 ended a period of transformation and the implementation of a 3 year strategic plan that resulted in significant enhancements to the business model resulting in transformational growth in the Bank’s performance during these three years.” 

Nations Trust Bank closed the financial year December 31, 2017 with a post-tax profit of Rs.3,371 million, up by 18% over the previous year with pre-tax profits increasing by 31%.

A higher effective tax rate stemming from the increase in the financial services VAT rate as well as the additional tax of Rs. 210Mn on inter-company dividend payments impacted the Group bottom line growth. Healthy portfolio growth and strong fee-based income growth enabled the Group to record higher pre-tax profits, despite the effects of narrower NIMs and an increase in impairment provisions.

The Group’s Net Interest Income grew by 26% underpinned by good growth in its advances portfolio.The faster increase in deposits rates which mirrored market trends due to tightening of market liquidity, especially in the first half of the year, resulted in interest expenses increasing by 56% whilst the corresponding increase in interest income was lower at 42%. However, this trend was somewhat reversed in the second half with the decline in cost of funds and a moderate pick-up in NIMs.

Net fee and commission income increased by 29% driven by growth in the cards fee based income, increased trade and transactional fees as well as contributions made from structured financing transactions. Net trading losses for the year amounted to Rs. 558 Mn which is partly reflective of the swap cost arising from an increase in the funding of theforexswap book by30% and increase in SWAP premiums by 117bps.

Impairment charge increased by 58%, stemming primarily from the increase in individual impairment as the weather relatedweakening of thecountry’s agriculture sector had trickle down effects on several industry sectors. Previous year individual impairment charge was low as a result of reversals in impairment provisions.

Total operating expenses increased by 15% due to business growth in transactional volumes and increased operational activity. “It has been an extremely rewarding year as the Bank not only exceeded in achieving the financial goals set for the year but also successfully executed a numbers of strategic initiatives in our customer experience and digital journey,” Director/CEO Renuka Fernando, said.

Loans and advances recorded a well balanced growth of 25%.Depositsgrew by 28% faster than the industry growth of 17%. The Bank successfully concluded a $50Mn funding line from IFC adding more diversity to the medium term funding structure of the bank. During the year, the Bank reached a major mile stone in its digitization journey with thelaunch of Sri Lanka’s first digital bank, FriMi, a combination of next generation bank account, payment system and e-wallet wrappedup in one convenient app.

The Colombo South Teaching Hospital, Kalubowila, the second largest government hospital in the Colombo District, has received a fully-equipped High Dependency Unit (HDU) from life insurance leader Ceylinco Life.

Located in Ward 24, the HDU has four ICU beds, six syringe pumps, two infusion pumps, a patient warmer, a blood or fluid warmer, two DVT pumps, a piped medical gas system for the four beds, two portable ventilators, four cardiac monitors, and a central monitoring station.

Its role is to provide intensive post-surgery care for recuperating patients before they are transferred to regular wards.

Constructed and equipped by Ceylinco Life at a cost of Rs 11.75 million, the unit was donated by the company as a community initiative. It is the fourth such unit donated by Ceylinco Life to a government hospital.

Commenting on this generous donation by Ceylinco Life, Dr. Asela Gunawardene, Director of the Colombo South Teaching Hospital said, “This unit serves a long-felt need at this hospital. It will significantly increase the quality of post operative care given to patients, without compromising on the attention needed by patients in the Surgical Intensive Care Unit.”

The opening ceremony of the HDU at the Kalubowila Teaching hospital was attended by Directors and Senior Managers of Ceylinco Life, Dr. Gunawardene, Professor Deepaka Weerasekara, Head of the Department of Surgery of the Surgical Unit of the Sri Jayewardenepura University and Professor Aloka Pathirana of the Department of Surgery, Faculty of Medical Sciences, University of Sri Jayawardanapura.

Past donations of this nature by Ceylinco Life include a sophisticated High Dependency and Research Unit exclusively for the treatment of children afflicted by Dengue to the Lady Ridgeway Hospital (LRH) in 2012 in partnership with a group of well-wishers; an HDU to the National Hospital of Sri Lanka in 2013; and a Dengue High Dependency Unit in 2014 to the Jaffna Teaching Hospital.

Ceylinco Life has also made several donations of essential equipment to other hospitals, including the Trincomalee General Hospital.

Additionally, the Company conducts a series of free health camps under its community programme ‘Waidya Hamuwa’ which has benefitted over 135,000 people in the past 15 years.Held in towns and villages across the country, these camps provide free medical examinations bya team of travelling doctors, and offer necessary diagnostic tests such as random blood sugar, ECG and blood pressure. Attendees also receive optical checkups for free.

In the area of education, Ceylinco Life is committed to supporting the development of educational infrastructure for underprivileged schools in rural areas. This consists principally of building classroom blocks for schools and providing water supply facilities to those in need. The company has donated classrooms to 70 schools under this programme to date.

Adjudged Sri Lanka’s Best Life Insurer in 2017 for the fourth consecutive year by World Finance, Ceylinco Life has been market leader in Sri Lanka’s life insurance sector since 2004 and has close to a million lives covered by active policies. The company is acknowledged as the benchmark for innovation in the local insurance industry for its work in product research and development, customer service, professional development and corporate social responsibility.

Minister Dr. SarathAmunugama participated at a seminar organized jointly by the Sri Lanka Embassy in Thailand and the Chulalongkorn University of Bangkok, on the theme of “Thai-Sri Lanka relations through the annals of history”, to commemorate the 70th anniversary of Sri Lanka’s independence. The seminar was held on February 26 at Chulalongkorn University in Bangkok.

Minister Dr. Amunugama delivered a scholarly address on ‘The history of Sri Lanka-Thai relations’ at this seminar. Prof. J.B. Disanayake, Prof. Dr. Suwanna Satha-anand, Prof. Dr. Sunait Chutintranond were also participated at this seminar. 

Keells Supermarkets has awarded Lanka Value Foods, their award for the “Most Innovative Supplier” for the year 2017/2018.

LVF which manufactures cheeses and greek yoghurt under Aeri brand has been in retail over three years and had its inception at Keells Supermarkets.

Since its founding at a stall at the Good Market to a national brand today, LVF manufactures over 20 different types of cheese including goats cheese and haloumi and has offered its customers in the hospitality industry options of customizing flavours etc. LVF looks to expand its greek yoghurt line which has been built on a “gelatin free” concept and plans to introduce yoghurt smoothies including fruit smoothies. LVF also plans to introduce a line of aged cheeses to match internationally recognized varieties imported at present.

Dell EMC is to announce the appointment of Chrishan Fernando as the new Dell EMC Country Manager for Sri Lanka and Maldives.

Chrishan, who will be based in Colombo, joins from IBM Sri Lanka where he was Country General Manager for the past eight years, responsible for the growth of the business in Sri Lanka. Prior to that, he was Country Manager at HP for 12 years, piloting operations in Sri Lanka while covering regional markets in South Asia.

Harjeet Rekhi, General Manager, South Asia Developing Markets Group, Dell EMC, discusses Chrishan’s appointment, “We are delighted to have Chrishan join the leadership team for Sri Lanka. The wealth of experience he brings will be an asset as we strengthen our leadership position in the market.”

“I am excited to join Dell EMC at a time when the organization is becoming a powerhouse in all segments of the market. Through the merger of Dell and EMC, the company is well-positioned to help more customers navigate the challenging landscape of digital transformation.

With Sri Lanka expanding tremendously in both infrastructure and economy, Dell EMC is well positioned to capitalize on this growth and I look forward to deepening its leadership in the market,” said Chrishan Fernando, Country Manager, Sri Lanka & Maldives, Dell EMC.

Renewing a successful working partnership of three consecutive years, a Memorandum of Understanding (MoU) was signed between The Chartered Institute of Marketing (CIM) Sri Lanka and First Capital Holdings PLC, committing to goals mutually benefiting both organizations and strengthening the respective brand identities in the market.

Commenting on the partnership, Brian Selvanayagam, Chairman CIM Sri Lanka said,we are honored to partner with the investment bank, First Capital Holdings PLC. The cooperation is aimed at sharing industry insights through a series of initiatives planned throughout the year. We are grateful to First Capital’s continued support to help promote CIM and its activities in Sri Lanka.

Dilshan Wirasekara, Director / Chief Executive Officer of First Capital Holdings PLC said, “We are pleased to collaborate with a renowned professional body such as the Chartered Institute of Marketing Sri Lanka.We are confident that this partnership will contribute in enhancing cross disciplinary know-how and the creation of new ideas, enabling us to maintain a competitive edge in the fast changing financial services industry.

CIM Sri Lanka is the first International branch of CIM UK and is proud to claim the largest membership outside the UK. CIM Sri Lanka has always campaigned for high professional standards, greater recognition for the Profession and Marketing excellence in Sri Lanka through education, training and development.

First Capital Holdings PLC is a full service investment bank providing a diverse range of advisory services and financial products. The company’s integrated business platform comprises four specialized areas - Capital Markets Advisory, Wealth Management, Fixed Income and Equities.The Company is listed on the Colombo Stock Exchange and is rated A- by ICRA Lanka Limited. 

Stepping out of being a young tech start-up and making its way towards the larger perimeters of tech-based businesses, PickMe, recently announced a significant expansion of its engineering team to equip the ride-hailing software with the resources needed to cater to the forecasted growth of the company.

This expansion is based on an accelerated recruiting plan where PickMe's partnership with the local universities will enable engineering students from these universities to be trained and recruited by PickMe, having proven their skills on individual projects assigned to them by PickMe and the students’ mentors.

The students recruited will then have the rare opportunity to be resourced by PickMe to carry out their projects to its completion, thereby bringing their ideas to life and releasing their solutions for the benefits of the local commuters.

PickMe actively presents themselves in a number of career and educational fairs organized by universities in a bid to handpick prospective employees to strengthen their engineering team with the best local talent. With its rapid growth and the continuation to expand its footprint across Sri Lanka, PickMe is positive that its recruitment process will pick pace and accelerate over the next few years.

“At PickMe, we believe that efforts aimed at advancing capabilities, maximizing performance and enhancing efficiency of our service will help fuel the innovative solutions needed to uplift the transportation industry of the country and maintain our qualitative edge as the industry leader,” said Jiffry Zulfer, Chief Executive Officer of PickMe.

“This increased focus creates a need for engineering assets to actively support PickMe’s innovation through close collaboration with internal and external stakeholders of the company and ultimately, developing the best product which is tailor-made to meet customer expectations. In this regard, we are actively recruiting the best engineering talent from local universities and groom them to become future leaders of Sri Lanka.”

“As we enter the next crucial phase in our journey, this infusion of fresh blood into the PickMe team will make an invaluable contribution towards shaping an exceptional new portfolio of PickMe products,” Zulfer said.

A product of the University of Moratuwa, Aruna Prabhashwara from Halvitigala, Galle, is one such recruit that joined PickMe's team of engineers recently. “I have always had a keen interest in doing something new, this is a dream I hoped to achieve when I joined the University of Moratuwa following my A/Ls, in the process I fell in love with software languages and decided that software was a very useful tool to help realize my dream,” said Prabhashwara.

“When PickMe hosted a hackathon at our university I realized that this was my golden opportunity and I went for it. My project was shortlisted by PickMe and today I'm a Trainee Software Engineer at PickMe, helping build software solutions that can help elevate the transport sector in our country,” Prabhashwara commented further.

PickMe recently strengthened its core leadership team further, with the appointment of Isira Perera as the Chief Operating Officer (COO). With his visionary leadership and proven track record in digital financial services and mobile commerce, PickMe is set for a new course of innovativeness and to thrive well in Sri Lanka’s rising digital economy sphere.

The company also announced a partnership with the Department of Computer Science and Engineering (CSE) and the newly-established Center for Data Science (DataSEARCH) at the University of Moratuwa recently in strengthening and extending the capacity of research and development needed to foster a culture of technological innovation and entrepreneurship in Sri Lanka.

As the software platform that hosts the largest organized taxi fleet in Sri Lanka, with over twelve thousand three-wheelers, mini cars, cars, vans and luxury sedans, PickMe currently services the transportation needs of over one million passengers based in Colombo, Gampaha, Kalutara and Kandy regions.

Adding to its portfolio of services, PickMe also provides corporate traveling solutions to businesses and organizations with the PickMe Business Portal, the benefits of which is currently enjoyed by over 150 corporates in the country. 

Steelcase had decided to enter the Sri Lankan market to cater to the needs of its global customer who are now in Sri Lanka, said Praveen Rawal, Steelcase, Asia Pacific Managing Director, India and SEA.

Speaking to Daily News Business at the launching ceremony in Colombo he said the Steelcase Colombo showroom will open tomorrow.

“Our global customers who are now present in Sri Lanka obviously would like to have Steelcase in their environments because they work with us around the world.

We have for the last seven to eight years developing products for these markets including China the Philippines, Malaysia and Sri Lanka,” he said.

Rawal said Steelcase products will do well in these markets because they meet the performance and value segments in terms of price points and ergonomics and they plan to meet the customers and make them aware that the Steelcase brand was available in the Lankan market now.

He also said that they will do that through workshops, seminars conferences and also by inviting designers and customers to spread the message of design and ergonomics among everybody. That will get the attraction of the people to the brand, he said.

Rawal said they also can customize their products according to the requirements of the customer in term of power needs, power management and electrical needs on a work station.

“In term of colours and fabrics and finishes we have a huge pallet that we can offer to our customers and we have incorporated in our statement of line almost 95 percent what we observe across this part of the world in terms of our standard offerings.”

He noted that they were very high on sustainability and a lot of value was given on warranty with their products carrying warranty for 8 to 12 years.

Rawal added that their products were manufactured using the best materials and chemicals and are produced in China, India and Malaysia having a huge manufacturing footprint in Asia. 

An evening of ‘empowerment and eco vision - press for progress’ an event to celebrate International Women’s Week next month, Ladies VIP Night will be held on March 7 at the Shangrila Hotel, Colombo.

The event will feature presentations by TEDx Colombo Speakers and an Eco Chic Fashion Show. The evening will also focus on Empowerment, Inspiration and promoting Green Living”

“International Women’s Day means different things to different people. For some women it’s a celebration, for others it’s a call for action to accelerate Gender Parity,” said Event Producer, Latika Alok.

“This year we would like to “Press for Progress” not only on gender equality but also on the importance of Sustainability and Recycling - creating awareness through our fashion industry with an Eco Chic Fashion Show.”

The panel discussion for the event would include the following.

Selyna Peiris – TEDx Colombo Alumni, an attorney-at-law and Director of Business Development at Selyn Handlooms, Sri Lanka’s only fair trade guaranteed handloom company employing a majority of women, Sarinda Unamboowe – TEDx Colombo Alumni. He is the CEO of MAS Kreeda, heading Environmental Sustainability for MAS. He is a member of MAS’ Apparel Board and Innovations Leadership Team, Hans Billimoria – The Grassrooted Trust, works on sexual and reproductive health education and prevention of gender-based and partner violence, including sexual harassment in the work place, Chandi Dharmaratne, Senior HR Director, Virtusa.

The panel will be moderated by Aritha Wickramasinghe, an international banking lawyer, a founding trustee of the global education initiative Think Equal and the Director of Equality Law at legal pro bono platform iProBono. He is also a TEDx Alumni.

Shanuki de Alwis, TEDx Colombo Alumni, will do an introduction skit to the panel discussion.

Timothy Wright, General Manager and Vice President of Shangri-La Hotel, Colombo said, “We are proud to partner with VIP Ladies Night - Press for Progress as many aspects of the event align with Shangri-La’s own core values. In our recruitment drive to open Shangri-La Hotel, Colombo we sought to employ and empower women in multiple disciplines of the hotel.”

Ladies VIP Night continues to support local charities by seamlessly blending the opportunities to socialize and have fun whilst contributing towards building a stronger community.

Ladies VIP Night will work with Shangri-La Hotel, Colombo to support Ceylon Fellowship of Service – Prithipura Home, where a proportion of the ticket value will be given to this charity.

The State Government of Victoria, in association with the Consulate General of Sri Lanka in Melbourne and the Aus-Lanka Business Council, organised a well-attended networking reception to recognise mutual opportunities for trade and investment between Sri Lanka and the State of Victoria on February 23, 2018 at the Investment Centre of Victoria in Melbourne.

The event was hosted by the Philip Dalidakis, MP, and Minister for Trade Investment, Innovation and Digital Economy, Small Business, and International Education of Victoria.

The Frank McGuire, MP, Parliamentary Secretary for Small Business and Innovation, representing the State Government of Victoria, delivered a speech highlighting the longstanding and mutually beneficial relationship between the State of Victoria and Sri Lanka. The McGuire said that the State Government of Victoria is focusing on business/investment opportunities between Victoria and Sri Lanka in key areas such as education, agriculture, infrastructure, tourism etc. He also announced that the Philip Dalidakis and Michelle Wade, Trade Commissioner - South Asia of the Victorian State Government will be undertaking a visit to Sri Lanka in March 2018, to further explore trade and investment opportunities and to consolidate existing relations between the two sides.

Delivering his remarks at the event, Consul General of Sri Lanka for Victoria W.G.S. Prasanna, for Victoria, South Australia, Tasmania, and Melbourne conveyed the appreciation of the Government of Sri Lanka to the State Government of Victoria for hosting the event and underlined the salient aspects of the enduring partnership between Sri Lanka and Australia.

The Consul General also highlighted the potential areas for trade and investment in Sri Lanka and invited Victorian business community to invest in Sri Lanka. National President of the Aus-Lanka Business Council, Dilkie Perera, also addressed the gathering.

The event provided an opportunity for over 100 participants to interact and discuss trade, business and investment opportunities. Consul/Trade of the Consulate General of Sri Lanka in Sydney Abdul Rahim was also present and assisted in providing information relating to trade and investment opportunities available in Sri Lanka to the participants.

The audience was treated to an exquisite Sri Lankan cultural performance, which comprised traditional Sri Lankan dancing and drumming.

The 110th birth anniversary of the late N U Jayawardena, first Sri Lankan Governor of the Central Bank, Senator and Financier, was held recently.

N U Jayawardena was the founder of the Mercantile Group of Companies that formed the Merc Bank Sri Lank, Sampath Bank and several investment portfolios. N.U. was born in the backwaters of Hambantota, studied at St. Servatius’ College, Matara and completed his secondary education at St. Aloysius’ College, Galle. Thereafter he gained a BSc in Economics from the Westfield College and studied Business Administration at the London School of Economics.

On his return to Ceylon, he took up his first job as clerk in the government service, which was uncommon for a graduate. In 1934 he moved to the Banking Commission and during World War II, he moved to the Department of Commodity Purchase and became the Controller of Exchange by 1948. Thereafter he worked closely with John Exter, the American economist in establishing the Central Bank of Ceylon in 1950 with Exter as its first Governor and Jayawardena as Deputy Governor.

When Exter left in 1953, Jayawardena succeed him as the first Ceylonese Governor, holding the post till 1954 when he was interdicted.

However he was appointed first Ceylonese Joint-Managing Director of a British-owned firm, Vavasseur & Company and was exonerated in public service in 1957.

Following his exoneration he was appointed to the Senate of Ceylon. Moving into the private sector, he founded the Mercantile Group of Companies. 

Vallibel Finance PLC will issue 17,312,750 ordinary shares by way of a rights issue, which shall rank equal and pari passu with the existing ordinary shares five new ordinary shares for every 12 ordinary shares held as at the relevant date at a consideration of Rs 60 per share.

The current stated capital of the company is Rs.287,153,000, represented by 41,550,600 ordinary shares. The proceeds will be utilized to strengthen the tier I capital base of the company in keeping with the company’s expansion and maintaining the capital adequacy requirements as stipulated by the Central Bank of Sri Lanka. The Rights Issue is subject to the exchange approving in principle, the issue and listing of shares and the company obtaining the shareholders’ approval at a general meeting.

Fitch Ratings has affirmed Sri Lanka-based conglomerate Richard Pieris & Company PLC’s (RICH) National Long-Term rating at ‘A(lka)’ with a stable outlook. Fitch has also affirmed the National rating on RICH’s outstanding senior unsecured debentures at ‘A (lka)’.

The affirmation of RICH’s ratings reflects our view that the improvement in the group’s adjusted net leverage was offset by the underperformance in its tyre business and some segments in the plastics sector over the last 18 months, and the risks around their recovery prospects over the medium term, limiting any positive rating action. RICH’s rating also reflects the group’s diversified cash flows, market leadership in several of its segments, and the company’s well-established operating history. Fitch Ratings also expects the company to increase capex in the next two years in a bid to expand production capacity in the retail, rubber and palm oil segments.

“We expect store expansion and a shift in consumer preference towards hypermarkets and supermarkets to lead to double-digit revenue growth for the company’s retail segment in the medium term.

Moody’s Investor Services notes that household debt has increased in many advanced economies over the past decade.

The increase in and diversification of household income sources as a result of increased female integration into the labor market should act as a buffer to higher individual debt levels and consequently reduce the risk of broader financial instability.

Moody’s Investors Service also says that policies to promote greater female labor market participation in high-income countries will, if they are successful, boost sovereign creditworthiness.

In particular, sovereign creditworthiness will improve through three main channels: economic growth by partly offsetting shrinking labor forces, government balance sheets by widening the tax base and easing pension pressure, and, potentially, financial stability by shoring up household finances.

Moody’s conclusions are contained in its just-released report titled “Sovereigns — Advanced Economies: Higher female labor force participation mitigates demographic pressures”.

Among high-income economies in member countries forming the Organisation for Economic Co-operation and Development, Moody’s sees the greatest scope for positive credit impacts in countries where populations are ageing fastest and where governments have highlighted female participation as a key priority, particularly Japan (A1 stable) and Korea (Aa2 stable).

Moody’s report identifies three main advantages to sovereigns of higher female employment: 1) a higher number of workers and higher productivity growth would partly offset the growth impact of shrinking of working-age populations, 2) a broader tax revenue base would enhance public finances, and 3) a higher share of two-income households would likely support greater financial stability. 

Registering steady double digit growth in premiums through FY 2017, Janashakthi Insurance PLC (Janashakthi) posted a consolidated Gross Written Premium (GWP) of Rs. 15.115 billion for the twelve months ended December 31, 2017, a commendable year on year (YoY) growth of 11%.

The Non-Life or General Insurance business grew by 14% to end the year with a GWP of Rs. 12.212 billion, while the Life Insurance business remained flat, recording a GWP of Rs. 2.903 billion.

Paying out claims to the total of Rs. 7.317 billion during the period under review, Janashakthi continued to uphold its commitment to standing by its policyholders during times of distress. The more than 9% YoY increase in claims settlements was a result of the rise in the number of flood-related fire and engineering claims, as well as a spike in medical claims due to the dengue epidemic. Stringent cost management practices allowed the insurer to keep overhead expenses under control, which reduced by 1% YoY.

Janashakthi Insurance PLC reported its consolidated full year results for the final time, as the Company recently entered into an agreement with Allianz SE to sell 100% of its fully owned subsidiary Janashakthi General Insurance Limited. Speaking on the Company’s performance, Managing Director, Prakash Schaffter said, “I am delighted to report that we have ended FY 2017 on a high note, with premium inflows continuing to grow through the year. We have been able to maintain our steady growth momentum despite a considerable rise in claim settlements thanks to our strong fundamentals and prudent reinsurance structure. The year 2018 will be a year of change resulting from the divestment of the Non-Life business. We are optimistic that the opportunities arising from a singular focus on theLife Insurance business, coupled with the opportunity of rebuilding an efficient distribution system, will strengthen our presence in the Sri Lankan Life Insurance industry.”

The total Consolidated Assets of the company grew by 15% YoY, standing at Rs. 36.848 billion at the end of the period under review with the investment portfolio accounting for Rs. 25.523 billion of this value. 

Dialog Broadband Networks, a subsidiary of Dialog Axiata PLC,was rated Gold under the Leadership in Energy and Environmental Design (LEED) for Sri Lanka’s first UPTIME Tier III certified commercial Data Centre.

The certificationwas bestowed by the Green Building Certification Institute (GBCI), and recognizes the data centre as the first LEED certified commercial data centre facility in the country to receive the certification.

Dialog’s tier III data xentre also recently received the ISO 27001:2013 certification, further re-iterating Dialog’s requirement for establishing, implementing, maintaining and continually improving the information security management system within the context of the organisation.

The LEED (Leadership in Energy and Environmental Design), rating system, designed by the Green Building Certification Institute (GBCI), provides standards for an environmentally-sustainable design and construction for high-performance green buildings. Dialog’s new Data Centre facility features regionally sourced construction material and on-site operating systems designed to conserve natural resources and optimise water efficiency, air quality and energy performance.

Acontinuous improvement sustainability strategy was deployed to further support its green initiatives and is currently widespread across the 50,000 sqft. data centre. 77.5% of the site area is retained as open space with a section utilised for vegetation. Additionally, rain water runoff has been reduced by 5% due to effective rain water management strategies, controlled by best management practices andHeat Island Reduction through high reflective paving.

Commenting on receiving the LEED Gold Certification, Navin Pieris, Head of Broadband and Fixed Telecommunications, Dialog Axiata PLC commented, “Since inception, the team has focused on the sustainability of the Data Centre, and the responsible use of its resources, culminating in receiving the LEED Gold Certification. This independent third party certification awarded indicates no deficits or weak links in the ecosystem and is a confirmation that the country’s first Tier III certified Dialog Data Centrehas been designed and constructed to meet the highest global standards. We are committed to continuously focusing on a ‘green-mindset’ across our data centres” 

Allianz announced yesterday that the company has completed its acquisition of Janashakthi General Insurance Limited, after receiving all the necessary regulatory approvals.

This transaction brings together two highly complementary businesses for enhanced scale, competitiveness and service capabilities, while positioning Allianz as one of Sri Lanka’s largest general insurers and significantly accelerating its growth agenda in this market.

With this closing, Allianz will begin amalgamating the operations of both companies, while being fully committed to honouring and servicing the policies of our customers from both Allianz Insurance Lanka Limited and Janashakthi General Insurance Limited.

The Board of Directors of Janashakthi Insurance in a Stock Market filing announced that Jude Fernando, currently Director, Chief Executive Officer of Janashakthi General Insurance Limited, will with effect from May 1, 2018 have responsibility for the life insurance business as Director, Chief Executive Officer of Janaskthi Insurance PLC.

His appointment follows the resignation of Stuart Chapman Director, Chief Executive Officer of Janashakthi Insurance PLC effective April 30. Prior to Chapman’s appointment, Fernando functioned as Director, CEO of the Janashakthi Insurance PLC with responsibility for both life and general businesses. Last week Allianz, the global financial services leader, announced that it has entered into an agreement with Janashakthi Insurance PLC to acquire 100% of its subsidiary Janashakthi General Insurance Limited for Rs 16.4 billion (EUR 85.9 million).

This acquisition makes Allianz Insurance Lanka one of the country’s largest general insurers, with a market share of approximately 20%. The acquisition will deliver a range of strategic benefits to all stakeholders.

Janashakthi Insurance PLC will continue to focus on its life insurance portfolio in order to strengthen its presence in the Sri Lankan life insurance industry, and remains committed to its vision of lighting the lamp of insurance in every home and workplace. Janashakthi Insurance has been operating in Sri Lanka for over 23 years with a focus on motor, fire and health protection for individuals and corporates.

This transaction also represents one of the largest investments into Sri Lanka, demonstrating Allianz’s confidence in this market.

George Sartorel, Allianz’s Regional CEO for Asia Pacific, said, “This transaction provides a highly attractive opportunity to transform our market presence in Sri Lanka, while accelerating our growth agenda in the Asia Pacific region.” 

SriLankan Airlines regrets the continuing delays and congestion at Colombo Airport. Due to a combination of unforeseen events, including a bird strike which damaged an aircraft in Cochin, our valued customers have been subjected to great inconvenience and delayed flights.

We request all our passengers to check in for their flights online, to contact our 24 hour call center on 011-97331979 or their travel agent before going to the Bandaranaike International Airport.

Maintaining an up to date profile, including current mobile numbers and email addresses, on FlySmiLes our frequent flyer programme, would help us contact you in advance to advise of delays or disruptions.

We greatly appreciate the understanding and patience that our customers have shown. Please accept our sincere apologies and be assured that we are working around the clock to restore normal services.

Qatar Airways invites passengers to discover breathtaking new destinations by taking advantage of its latest global sales promotion, offering them fantastic discounts to many new and exciting locations across its extensive global network.

The award-winning airline’s new promotion, “Breathtaking Experiences, Extraordinary Offers,” will provide Qatar Airways passengers discounts of up to 45 per cent on all cabin classes. Passengers travelling with friends and family can also enjoy a special discount with the airline’s Companion Offer on First Class and Business Class.

Qatar Airways Chief Commercial Officer, Ehab Amin, said: “We are delighted to offer our latest promotion, “Breathtaking Experiences, Extraordinary Offers” and invite our valued passengers to discover many exciting new places to explore on our extensive global network. Passengers now have even more incentive to travel with friends and family, as they can take advantage of our Companion Offer in First and Business Class. We look forward to welcoming all passengers on board. ”

Qatar Airways passengers can plan and book their next trip and enjoy fantastic discounts on fares on all classes, valid from February 26 to March 7, with travel validity between February 26 2018 and February 20 2019. Book by March 7, 2018 as per ticket validity.

Qatar Airways has added many new exciting destinations to its network recently, including Chiang Mai, Thailand; St. Petersburg, Russia and Penang, Malaysia, with direct service to Cardiff, United Kingdom and Mykonos, Greece set to launch later this year. 

Thalduwa Island Villas, a boutique hotel opened at Ahangama, plans to offer special ‘Board meeting packages’ to cooperate.

“What we offer is to create special private areas for their meeting in our spacious villas and for the first time offer them a package where a Board meeting could be conducted on our Catamaran boat in the Goviyapana River.

“We will also redesign this Catamaran boat to accommodate 20 guests and also produced necessary furniture on board to hold meetings where the boat would be anchored in the river minus any crew member to ensure privacy. We also have special Wi-Fi facility on board,” said General Manager, Sameera Dias.

Owned by a consortium of local and foreign owners, a unique feature of the Thalduwa Island Villas is that the four vllas are furnished on different themes with river frontage. Each villa also has its own kitchen, DVD players and also a swimming pool.

He said that they are also offering special packages for ‘honey mongers’ and there is good response for this.

In addition Thalduwa Island Villas, is also gaining popularity among large groups which take an entire villa for special parties, get-togethers, anniversaries and events. “We provide special barbeque dinners and many more entertainment options to make the event more attractive.” 

Softlogic Automobiles (Pvt) Ltd, a subsidiary of Softlogic Holdings and the Authorized Distributor and Service Agent for King Long buses in Sri Lanka, delivered 10 King Long luxury tourist coaches to May Flower Holidays (Pvt) Ltd, a destination management company with a focus on the Asia Pacific region. This highlights the status of King Long as the No.1 luxury tourist coach in the tourism industry of Sri Lanka.

Commenting on the occasion, Chamath Tennekoon - Chief Executive Officer of Softlogic Automobiles stated, “We are excited to partner with May Flower Holidays as their preferred Luxury Coach Partner. King Long offers superior built quality, comfort and durability, attributes that all tour operators seek. We were also chosen on our after sales merits, where we offer full spare parts, service and collision repair capability and 24-hour roadside assistance, which is hugely beneficial to our customers in the tourism industry.”

Gihan Vitharana – Director Sales of Softlogic Automobiles stated, “King Long is one of the leading coach manufacturers in the world. Softlogic and King Long have long maintained a very close Dealer-Principal relationship which has enabled King Long to be the preferred coach provider to the tourism industry and the National Transport Commission (NTC) in Sri Lanka. King Long buses have ample seating room and best-in-class legroom as well as aisle space for maximum passenger comfort. They are ideally suited for Sri Lanka’s fast-growing tourism industry, luxury travel and highway transport.”

“They are powered by a 230hp turbo intercooled engine that can easily handle the rapidly-changing geographies of the island while on tour. All of them include cutting-edge technology such as hydraulically assisted transmission with SACHS Clutch, WABCO ABS with Dual Air Brakes. They also include a host of luxury features.”

The fleet drivers of May Flower Holidays were given a basic training on driving economics and safety with a further more advanced course to follow in basic technical training where May Flower’s drivers and transport staff will be certified on King Long busses.

Founder of the world-renowned and award-winning restaurant Ministry of Crab in Colombo, Chef Dharshan Munidasa, visited Anantara Tangalle for an exclusive culinary event on 24 February.

Assisted by the culinary team at the resort, Chef Dharshan served a sublime six-course dining experience inspired by locally sourced prime lagoon crabs and prawns along with his signature creations that infuses Japanese cooking philosophies and Sri Lankan flavours.

The culinary event was held at Verala, the resort’s very popular Teppanyaki restaurant, which is further enhanced by the unique flavours of Sri Lankan cuisine. The restaurant, with its unique architectural structure, which resembles the form of a sea urchin, holds a stunning vista onto a golden sweep of beach and the warm Indian Ocean.

Vignettes of the launch

Cyber threat refers to the possibility of a malicious attempt to damage or disrupt a particular computer network or system. Across the world the threat of such acts loom over every IT system, however with companies such as Sophos battling to keep the systems of their customers safe and threat-free cyber criminals have indeed met their match.

Sophos Technologies was established in 1985 in the UK. For the last 32 years, the company has been built on pure technical solidity and started to acquire companies since the early 2000s in order to complete the product portfolio. Being one of the oldest in the global security space, Sophos also sees continued YoY growth, mirroring its solidified business.

Commenting on the current portfolio of Sophos, Sunil Sharma, Managing Director of Sales (India and SAARC) of Sophos Technologies (Pvt.) Ltd. stated that at present, Sophos has primary research and development centers in 5 locations globally, with India being one of them. With 22% - 25% of the company’s workforce based out of India, there is great focus on India and the SAARC region as part of Sophos’ long-term vision and plan. The business model of Sophos constitutes of 16 branches in India, Regional Heads for the rest of the countries, and a mo1del based purely on distributors in smaller markets such as Nepal and Bhutan.

Sophos is handled by Avian Technologies in Sri Lanka and the Maldives, a relationship counting almost a decade. According to Sharma the partner eco system is of high importance to Sophos. “Sophos worldwide does 100% business through channels only. One of our mission statements is a Channel-first commitment. Therefore, the only eco system that matters to us is the channel eco system. For us loyalty with partners is paramount. At Sophos we believe that a partnership is a give and take relationship. This is what has prompted us to work with Avian, as they have been in the industry for a considerable time, and have repeatedly proven their capability in building our business”, added Sharma.

Regarding the greatest challenge in Cyber Security as perceived by Sophos, he explained that he would prefer not to name one definite threat as he believed that the only thing companies like Sophos needed to do was to think and work faster than cyber criminals.

“In considering cyber threats, there are three different kinds; Global Cyber Warfare, State Sponsored Hacking and Attacks to the corporate business. For example, Ransomware, Malware, Advance Persistence Threats (APTs). In view of these, Sophos is very much prepared. We advocate a system, which is called ‘synchronized security’; it’s a very coordinated defense mechanism, which looks into both the end point as well as the network security. Cyber threat can enter at any point. A network security firewall alone will not make one safe. At one-point cyber security concentrated only on IPS or Network security firewall email gateway or web security gateway, but we have evolved beyond that. A complete security system should cover all potential threat points, and each point should be linked with one another. In this way, even the minutest breach will indicate that something has been compromised and the complete defense mechanism kicks off. We have proactive systems put in place by which the affected system is being quarantined, treated and put back as a clean system. It is with this simple philosophy that Sophos works worldwide”.

Sunil Sharma went on to explain that Sophos also has Cloud based solutions. This is a cost-effective system where clients have access to Sophos Central, a management console on the cloud, which gives access to a dashboard to CIO s and IT Managers. Sophos’ MSP – Managed Security Provider – caters to SME customers who are cost conscious and work with limited resources. This flexible option has been launched in India and will be expanding to the rest of the region. The MSP is integrated with Sophos Central and is compatible with local network software.

Network security is a 24x7 process. Sophos processes about 400,000 malwares daily at the Sophos threat lab.

The products are updated at an on-going basis. This involves a huge back-end operation, research and development in addition to maintenance to ensure that our customers are protected. “I regularly come across the question, “Does this mean the customer does not get attacked?” said Sharma. “Customers are bound to be attacked.

Will it increase? Yes. The solution to it is a vendor who takes care of you by deploying the right solution and a coordinated defense mechanism”.

The other main aspect, which Sophos is involved in, is Education. Phishing attacks are very common, but in spite of knowing an email could be a phishing email, people still click it. Phish Threat, introduced by Sophos, is a product for the internal system to educate users about Phishing. It can also simulate attacks to better educate the user.

As part of social responsibility, Sophos has also initiated Sophos Home, which is provided free of cost. It is a commercial grade phenomenal product, an anti-virus that has the latest capabilities, which can be downloaded free to your device.

Presenting his opinion on the cyber security landscape in Sri Lanka and the region, Sharma said, “My personal opinion is that Sri Lanka has great potential. It is on par with India, with only the size and volume making the difference. People are equally Internet savvy and the threats we face are the same. Along with Avian Technologies, Sophos continues to achieve milestones every year and yet it is a matter of ‘miles to go before we sleep’. South Asia is a developing economy resulting in differences in terms of use of technology and purchasing habits in comparison to the West. Worldwide, I see huge potential in cyber security”.

The cyber security market is 39 billion USD worldwide, and is expected to grow to 48 billion USD by 2020. “Therefore, as a company Sophos has a lot of work to be done, whether in terms of creating awareness with customers and resellers, or in giving a complete end-to-end solution to customers so that they can be protected and at the same time reducing the complexity in solutions and providing simplicity. This is a job for the entire security industry”.

Sophos considers Sri Lanka as a very important market as it foresaw that Sri Lanka was going to develop and has huge potential and scope. The company has invested to the length of having their own resource in addition to the distributor, so that the customer has direct access when they face issues. Along with Avian Technologies, Sophos is able to provide pre-sales support for resellers as well as post –sales support proactively. Sophos has separate training programmes for partners on both pre and post sales as well as quarterly online and on-site training. “Sophos is a product which has a lot of involvement and that is what makes it very strong”, declared Sunil Sharma.

Diesel and Motor Engineering has diversified in to the agriculture sector and entered into a sale and purchase agreement with two companies involved in the import of fertilizer, agri chemicals and seeds.

In a Stock market filing DIMO said that it invested Rs 345.5 million to take 51% stakes in the privately-owned Plantchem (Private) Limited and Plant Seeds Private Limited.

Plantchem (Private) Limited and Plant Seeds (Private) Limited are engaged in import, processing and distribution of agri inputs such as crop protection products, specialized fertilizers and seeds.

The Commercial Bank of Ceylon PLC has posted profit before VAT and NBT of Rs 28.064 billion for the year ending December 31, 2017 reflecting growth of 18.14%, a performance the Bank attributes to substantial core business growth through adherence to the fundamentals of ‘pure banking.’

Gross income increased by a healthy 24.10% to Rs 115.594 billion, bolstered by interest income of Rs 103.034 billion, up Rs 22.296 billion or 27.62% primarily due to a significant growth in the Bank’s loan book over the 12 months.

Sri Lanka’s benchmark private bank paid approximately 41% of its profit to the government as taxes in a year of volatility and headwinds, but posted typically robust growth in all key performance indicators to end 2017 on steadfast note.

Profit before income tax grew by 15.62% to Rs 23.183 billion, the lower rate due to the impact on the full year of the November 2016 increase in the VAT rate from 11% to 15%.Profit after tax for the year improved by 14.25% to Rs 16.581 billion, the Bank reported in a filing with the Colombo Stock Exchange (CSE).

Commenting on these results, Commercial Bank Chairman Dharma Dheerasinghe said they demonstrate the Bank’s capacity to further financial inclusion within Sri Lanka and grow beyond the country’s shores both regionally and internationally, if additional tax burdens are not imposed.

He noted that the Bank paid out approximately 41% of its profits as taxes in addition to over Rs 2 billion it had collected from customers on behalf of the Government in 2017.

The Bank’s Managing Director/CEO Jegan Durairatnam pointed out that the growth of deposits and credit in the concluded year reflects the Bank’s strong capacity for financial intermediation, and illustrates a deployment of funding resources that is most conducive to the pursuit of productive assets.

“Additionally, a further improvement in asset quality with both gross and net non-performing loans ratios decreasing, boosted profitability,” Durairatnam said.Total assets of the Bank grew by Rs 131 billion or 12.96 % at a monthly average of Rs 11 billion to Rs 1.143 trillion as at December 31, 2017.

Net loans and receivables increased by Rs 121.428 billion or 19.71% over the 12 months of 2017 to stand at Rs 737.447 billion at the end of the year reviewed, recording an average increase of more than Rs 10 billion per month. This was the third successive time that Commercial Bank increased its loan book by more than Rs 100 billion in a year.

The Bank’s deposits portfolio witnessed a growth of 14.95% or Rs 110.564 billion to Rs 850.128 billion as at December 31,2017, reflecting average monthly growth of over Rs 9 billion. This was the second successive year in which the Bank’s deposits grew by more than Rs 100 billion.

In other performance indicators, the Bank improved net interest income by 18.89% to Rs 39.023 billion, more than double the rate of growth achieved in 2016, despite interest expenses growing by 33.59% to Rs 64.011 billion due to rising interest rates and a continuing shift of low cost funds to fixed deposits in 2017.

Net fees and commissions totalled Rs 8.602 billion for the year, reflecting growth of 22.62%. Other income comprising of exchange profit, recoveries and gains from trading of treasury bills and bonds declined to Rs 2.390 billion, mainly because the 2016 figure included translation gains due to a depreciation of the Rupee against the US dollar by 3.88% as against a 2.57% depreciation in 2017.

Consequently, total operating income grew by 13.41% to Rs 50.016 billion in the 12 months reviewed. Net operating income grew by 12.99% to Rs 48.102 billion, with total expenses increasing by just 6.49% to Rs 20.038 billion.

Total impairment charges for loans and other losses were increased by 25.13% to Rs 1.914 billion mainly due to the collective impairment provisions required on the growth of the loan book in 2017.

Shareholder funds grew by Rs 28.746 billion or 36.69%, consequent to the rights issue of shares, a reversal of mark to market gains on the Bank’s Available for Sale (AFS) portfolio due to a drop in rates in the market, and a once-in-three-years revaluation of the Bank’s land and buildings in line with accounting standards.

The Bank’s net assets value per share stood at Rs 107.54 at the end of the year, an increase of Rs 19.57 or 22.25% since December 2016. Return on assets after tax improved marginally to 1.54% while return on equity declined to 17.88% because the year-end shareholder funds base increased.

In terms of Capital Adequacy Ratios, the Bank’s Total Tier 1 capital ratio (with capital buffers) at 12.11% as at 31st December 2017 was well above the 7.75% required under Basel III. The Total Capital Ratio of 15.75% at the end of the year was also comfortably above the Basel III requirement of 11.75%.

At Group level, Commercial Bank, its subsidiaries and associates reported profit before income tax of Rs 23.280 billion for the year ended December 31, 2017, an improvement of 15.74%. Profit after tax for the year grew by 14.93% to Rs 16.627 billion.

Among the highlights of 2017 for Commercial Bank were its investments in digital banking and the performance of its overseas operations.

While the Bank’s Bangladesh operations performed characteristically well, its joint venture Bank in the Maldives broke even, opened a second branch on the island of Hulhumalé and is now making a positive contribution to the Bank’s profitability.

In Myanmar, the Bank received a microfinance license in 2017 and formed a fully owned subsidiary, CBC Myanmar Microfinance Company Ltd., while in Italy, Commex Sri Lanka S.R.L., the Bank’s money transfer operation, increased its presence to eight cities besides Rome.

The only Sri Lankan bank to be ranked among the Top 1000 banks of the world for seven years consecutively, Commercial Bank operates a network of 261 branches and 756 ATMs in Sri Lanka.

The Bank has won more than 30 international and local awards in 2016 and 2017 and has over the years received multiple awards as Sri Lanka’s Best Bank, Best Trade Bank, Strongest Bank and Most Respected Bank from a number of local and international institutions and publications.

EU member countries were keen on the effective use of digital signature and promotion of a paperless concept, to reduce red tape, delay and duplication of work.

This was highlighted at the 6th EU-SL Investor Dialogue was held last week at the Ministry of Development Strategies & International Trade. It was reported that by now the Department of Customs, banks and the Ministry of Finance have adopted the digital signature. The issues in questions included the need for a transparent tender procedures and possibility to build up a Central Portal where planned project could be listed. The Cabinet has approved Electronic Government Procurement (e-GP) in the Public Procurement System and now it is necessary to establish the system required for implementation.

Several matters specific to Sri Lankan companies as well as companies of EU member countries were discussed to find out solutions for such issues. Levying of charges on Sri Lankan importers and exporters for local charges were also discussed and the Dialogue was a good platform to discuss certain local safety/health regulations imposed for food products with the participation of the relevant regulatory agencies.

The 6thEU-SL Investor Dialogue was co-chaired by Minister of Development Strategies & International Trade Malik Samarawickrama and Ambassador of the European Union to Sri Lanka, Tun Lai Margue.

The meeting was held with the Embassy of the European Union, the embassies of the member states of the EU and Board of Investment of Sri Lanka to address various outstanding matters relating to investment in Sri Lanka and EU both.

The participants from the European missions represented of France, Germany, Italy, the Netherlands, Romania, the United Kingdom and senior officials from the European Union missions based in Colombo and New Delhi and representatives of the European Chamber of Commerce.

Several leading government agencies participated at the meeting to contribute to the Dialogue in relation to the specific areas under their jurisdiction in the discussion and several Sri Lankan state institutions too participated.

Sri Lanka Ports Authority (SLPA) was awarded the Ports Authority of the Year 2018 Award by the Global Ports Forum (GPF). The 4th GPF awards ceremony followed by the conference forum was held last week at the Grand Hyatt Hotel in Dubai in the United Arab Emirates.

From the cosmopolitan global port city of Singapore, the entrepreneurial decision was taken in 2008 to found and launch the Global Ports Forum (GPF). The awards ceremony is organized annually by the GPF, in continuation of the commitment of improving global ports and furthering the interests of ports globally through collaborations among members of the port eco system. The Global Port Forum Awards 2018 aimed to recognize the most valuable contribution made by organizations and professionals in different areas of Ports and Terminals Industry and acknowledge their roles and achievements in different categories. The awards are given based on the nominations received by the Global Ports Forum (GPF) and also in recognition of the important contributions and achievements made by organizations and professionals across the industry during the previous year. The South Asia Gateway Terminal of the Port of Colombo that received the ‘Best Terminal in South Asia’ Award for the Indian Sub Continent at the GPF awards 2017 held in Dubai won the award this year too securing the award for the second consecutive year.

SLPA at present has prepared a Three Year Development Plan to expedite the port sector development process in the country to further increase container volumes. These developments are aimed at making Sri Lanka the Maritime Centre in Asia.

The Sri Lanka Ports Authority (SLPA) has posted a record profit of Rs. 13.2 billion in 2017.

Ports and Shipping Minister Mahinda Samarasinghe revealed these figures at a convocation held in Colombo to coincide with the 24th Annual Awards Ceremony, organized by the Institute of Chartered Shipbrokers (UK) Sri Lanka branch.

Minister Samarasinghe said this recorded profit of Rs. 13.2 billion could he used to expand infrastructure facilities in the Colombo Harbour and when comparing to the profit of Rs one billion recorded in 2016, last year’s profit could be regarded as the highest ever earned by the SLPA.

“There are indications that the SLPA even this year will earn the same profit or more than that,” he said. Samarasinghe commenting on the Hambantota Port joint venture said the country will receive US Dollars 518 million in May this year and this could also be utilized to carry out more development activities. He said in future the SLPA will work with its strong partner the China Merchant Port , the second largest port in the world.

“This year China merchant port has also earmarked to spend approximately 160 million US dollars for infrastructure development activities,”

Minister Samarasinghe highlighted these earnings help the country to be free from huge debt burden one day and said all infrastructure development in the Colombo Harbour can be completed within a short period. He also highlighted about the development of foreign cruise liners which are currently by passing Sri Lanka .

“We have plans to improve infrastructure facilities in the Colombo Harbour in order to facilitate cruise liners,” he emphasized. The minister said the Government has already discussed with the Sri Lanka Tourism, the Tourist Board and with travel agents regarding the development of cruise liners which will help to bring a large sum of foreign exchange.”

Minister Samarasinghe also focused attention towards the development of Trincomalee Harbour as the District should be developed to improve the tourism industry.

He said in addition, steps have been taken to develop the infrastructure facilities of several other harbours including the Kankasanturai Harbour, Oluvil fishers Harbour and the Galle Harbour. Over 20 students received certificates and awards at the ceremony.

ICS (UK) Sri Lanka Branch, Chairperson Anoma Ranasinghe and SLPA, Chairman Dr. Parakrama Dissanayaka also spoke. The Institute of Chartered Shipbrokers (ICS) is a professional society for members of the commercial shipping industry worldwide. It was founded in 1911 in London.

The ICS was granted a Royal Charter in 1920. The Institute provides the shipping industry with highly qualified professionals.

Sri Lankan corporates brings down foreign CEO’s and Administrators to work in Sri Lanka and pay them around Rs. Six to 20 million monthly while sending Sri Lankan house wives and unskilled workers overseas for jobs for around Rs. 40,000.

This was said by youngest CEO of a multinational in Sri Lanka Kishu Gomes of Caltex Lubricants Lanka fame at the inauguration of the EDULINK ICON Business School’s ACCA course. He said that to bring back a salary of one foreign CEO Sri Lanka has to export 20 unskilled workers. “This huge imbalance can only be corrected by producing skilled education for Sri Lanka youth and then export them for higher salaries.”

Though Sri Lanka boasts of a 95.5% literacy rate the education is not focused towards fulfilling the requirements of the current demands of work. The education syllabuses are outdated.

“For this the politicians of successive governments are responsible as they have not fine-tuned the education sector to meet neither the present nor future employee demands.”

Gomes emotionally pointed out that about 25, 000 schoolchildren in Sri Lanka in rural areas have to travel round 10 kilo meters per day to school. “Out of this number 25% of children walk barefoot to school and don’t have a luxury to eat in the morning. They only have their first meal at 3 30 p.m.” He said that the country cannot expect politicians to create a better tomorrow for them as successive governments since independence have failed in this regard. “We along with institutions like EDULINK ICON Business School have to come with solutions.”

Commenting on the way forward for Sri Lanka he said that the best option for the nation is not agriculture, technology but people.

“While Sri Lanka spends Rs. 40 to produce a kilo of paddy, India, Thailand, Malaysia Vietnam and Indonesia does it for Rs. 20. It’s the same scenario with technology as we still try to build a coconut plucking machine while the world is far ahead. Hence this is not the way forward.”

“India has successfully invested in focused education for children and today it’s one of the biggest countries that exporter professionals and Sri Lanka too should take a leaf from that.”

The commercial, state-run Bank of China, not to be confused with the People’s Bank of China, the country’s central bank, has filed a patent with the Chinese State Intellectual Property Office (SIPO) for a solution to scale Blockchain technology systems, according to local news outlet tech.ifeng.

The bank originally applied for the patent on Sept. 28, 2017, with a Zhao Shuxiang indicated as the patent’s inventor, but SIPO only released news of the patent on Feb. 23, 2018.

The patent contains a method for compressing Blockchain data that seeks to solve the problem of storage space in new blocks without compromising on traceability and immutability.

As described in the patent, the amount of data stored in in new blocks would be reduced in the following way: when a full-size node receives a compression request from a client, it compresses transaction data from multiple blocks into a single “data block”, which would then be temporarily hosted on a different data storage system.

This data would then be run through a hash function with the data block hash value, and the compression transaction would map the relationship between the compressed block, the data block, and the compression event, which would all be recorded on the Blockchain.

While China has been one of the stricter countries globally in terms of cryptocurrency regulation, having banned Initial Coin Offerings (ICO) and foreign exchanges from operating within the country, the South Korean Finance Minister spoke earlier this month of a need to cooperate with China in the sphere of Blockchain during a meeting with the governor of the People’s Bank of China.

The third wave of MTI’s ‘idea2fund’ successfully completed the second round’s concept presentations on the 17th of February at the Hilton Colombo. ‘idea2fund’ is a venture challenge platform powered by MTI Corporate Finance for aspiring entrepreneurs to pitch venture ideas, connect with potential investors and receive consulting advisory & implementation support through MTI Consulting.

17 innovative ideas were presented to the panel of judges that comprised of the Co-Founder of Mora Ventures Heminda Jayaweera, Former MD of JL Morrison Trihan Perera, Director MTI Consulting Rajika Sangakkara and MTI Business Analyst Jananga Piyadasa. Each presentation was evaluated on several aspects including validity of concept, size of opportunity and commercial viability. Based on the overall evaluation, the shortlisted entrepreneurs will proceed to the Commercial Presentation stage (Stage 3).

“Concept presentations conducted by this year’s applicants; truly showcased the talent and innovation that the next round of future entrepreneurs possess.” said Director, MTI Consulting Rajika Sangakkara. “Applicants continue to raise the bar for innovation and creativity with fresh ideas covering a diverse array of industries. We look forward to see what the next round entails” she added.

MTI Corporate Finance is the corporate finance arm of MTI Consulting, a boutique strategy consultancy with a network of associates across Asia, Africa and Middle East.

MTI Corporate Finance provides a comprehensive range of services, including due diligence, feasibility studies, funding new businesses or capitalization of existing ones – from IPOs to private placement facilitation, M&A facilitation, and advisory on governance, compliances and risk management.

The Bourse ended on a positive note this week as the ASPI increased by 11.70 points (or +0.18%) to close at 6,575.39 points, while the S&P SL20 Index also increased by 23.10 points (or +0.62%) to close at 3,728.31 points.

Turnover and market capitalization

Commercial Bank was the highest contributor to the week’s turnover value, contributing LKR1.15Bn or 26.64% of total turnover value.

JKH followed suit, accounting for 9.53% of turnover (value of LKR0.41Bn) while Janashakthi contributed LKR0.32Bn to account for 7.49% of the week’s turnover.

Total turnover value amounted to LKR4.33Bn (cf. last week’s value of LKR2.87Bn), while daily average turnover value amounted to LKR0.87Bn (+20.78% W-o-W) compared to last week’s average of LKR 0.72Bn. Market capitalization meanwhile, increased by 0.29% W-o-W (or LKR 8.57Bn) to LKR 3,013.50 Bn cf. LKR 3,004.93 Bn last week.

Liquidity (in value terms)

The Banking, Finance & Insurance Sector was the highest contributor to the week’s total turnover value, accounting for 53.70% (or LKR 2.32Bn) of market turnover.

Sector turnover was driven primarily by Commercial Bank, Janashakthi Insurance, HNB & Sampath Bank which accounted for 76.68% of the sector’s total turnover.

The Diversified Sector meanwhile accounted for 17.90% (or LKR 0.77Bn) of the total turnover value with turnover driven primarily by JKH, Softlogic Holdings & Vallibel One which accounted for 83.52% of the sector turnover.

The Power & Energy Sector was also amongst the top sectorial contributors, contributing 6.95% (or LKR 0.30Bn) to the market driven by Resus Energy which accounted for 92.61% of the sector turnover.

Liquidity (in volume terms)

The Banks, Finance & Insurance sector dominated the market in terms of share volume, accounting for 55.27% (or 104.60Mn shares) of total volume, with a value contribution of LKR 2.32Bn.

The Diversified Sector followed suit, adding 9.85% to total turnover volume as 18.64Mn shares were exchanged.

The sector’s volume accounted for LKR0.77Bn of total market turnover value. The Telecom Sector meanwhile, contributed 14.22Mn shares (or 7.51%), amounting to LKR0.19Bn.

Top gainers and losers

York Arcade was the week’s highest price gainer; increasing 821.4% W-o-W from LKR 14.00 to LKR 129.00. Swarnamahal Finance gained 37.5% W-o-W to close at LKR2.20.Tal Lanka (+19.9% W-o-W) and Trade Finance (+18.3% W-o-W) were also amongst the gainers.

PC Pharma was the week’s highest price loser, declining 50.0% W-o-W to close at LKR0.10 while Adam Investments (-33.3% W-o-W), SMB Leasing [NV] (-33.3% W-o-W), Blue Diamonds [NV](-20.0% W-o-W) were also amongst the top losers over the week.

Foreign investors closed the week in a net buying position with total net inflows amounting to LKR 0.91Bn relative to last week’s total net inflow of LKR 0.49Bn (+84.0% W-o-W).

Total foreign purchases increased by 80.5% W-o-W to LKR 1.90Bn from last week’s value of LKR 1.05Bn, while total foreign sales amounted to LKR 0.99Bn relative to LKR 0.56Bn recorded last week (-77.38% W-o-W).

In terms of volume Commercial Bank & Softlogic Holdings led foreign purchases while Distilleries & Raigam Salterns led foreign sales.

In terms of value Commercial Bank & Softlogic Holdings led foreign purchases while Distilleries & HNB led foreign sales.

Point of view

Political uncertainty over the future of the coalition government continued to cloud investor sentiment this week, with equity markets moving sideways as the benchmark ASPI moved up just 4 points to consolidate at the 6570 level.

Turnover levels however, improved 21% W-o-W to Rs. 0.87Bn, back in line with the YTD average of Rs. 0.86Bn and in contrast to the Rs.0.72Bn recorded last week.

Turnover levels were aided largely by the return of the Institutional and HNI investors who accounted for 32% of market activity this week, cf. the previous 3-weeks when they accounted for just 25% of market activity.

Positive macro-data in the form of lower national inflation levels in January and a stronger external position in December along with relatively robust corporate earnings stoked investor appetite for risky assets.

Of the 85% of corporates who have reported earnings thus far (total earnings of Rs. 65Bn cf. Rs. 75Bn for all companies in Dec’16), 51% have recorded Y-o-Y gains in earnings.

Meanwhile, after a slight dip in their appetite for risky domestic assets in the immediate aftermath of the LG polls last week, foreign investors returned quite strongly back to equity markets this week, pumping in a net of Rs.908Mn (+84% WoW) to the Colombo bourse cf. last week when net foreign inflows declined 32% Wow to Rs. 493Mn.

Markets in the week ahead are likely to look for cues from the conclusion of the corporate earnings season.

Sri Lanka records second highest BoP surplus in 2017

Sri Lanka’s Balance-of-Payments (B-o-P) position in 2017 recorded a surplus for the 1st time in 2 years amid consistent improvements in the country’s external sector throughout the year.

Relative to the deficit of $0.5Bn in 2016 and deficit of $1.5Bn in 2015, the B-o-P surplus in 2017 was $2.1Bn, the country’s 2nd highest surplus since 2009 when it recorded an overall balance of $2.7Bn.

The surplus position was driven primarily by consistent financial flows over the year as robust financial flows to debt ($1.7Bn cf. $1.2Bn in 2016) and equity markets ($279Mn cf. $19Mn in 2016) along with higher FDI’s ($766Mn cf. $397Mn), receipt of the IMF EFF tranches ($419Mn) and proceeds from ISB issuances ($1.5Bn) aided overall capital inflows.

Earnings from exports over December meanwhile surpassed $1Bn mark for the 5th consecutive time this year, helping the cumulative export earnings for 2017 hit a historically high value of $11.4Bn.

Despite the stronger export performance however, the cumulative trade deficit for 2017 rose to $9.6Bn (cf. $8.9Bn in 2016), reflecting higher import expenditure due to weather-related factors.

Import expenditure in 2017 rose to a historical high of $21Bn largely due to the drought-induced need for fuel and rice imports. Nevertheless, the marginal improvement in tourist earnings ($3.6Bn cf. $3.5Bn in 2016) and largely steady workers’ remittances ($7.2Bn) helped curb the trade deficit to an extent.