Sri Lanka Newspapers Friday 30/03/2012

Rupee gets stronger, dealers expect trend to continue

The Sri Lanka Tourism Promotion Bureau (SLPB) and the Export Development Board (EDB) facilitated one-on-one meetings between local tour operators and visiting representatives of over 50 foreign tour operators yesterday at the sidelines of the Sri Lanka Expo 2012. The visiting tour operators hailed from the US, UK, India, China, South Korea, France, Malaysia and many other East Asian nations.

The rupee made its sharpest gain against the dollar in recent times, firming up against the greenback to close at Rs. 127.80 yesterday, from the previous day’s close of Rs. 129.25/40.

Currency dealers said they expect the rupee to gain further against the dollar in days to come.

Exporters and BOI companies, who were largely inactive after the exchange rate was floated early February, are now converting their dollar holdings to pay salaries and bonuses ahead of the festive season, dealers said. Import demand has stabilised and was showing signs of easing.

Some dealers said the rupee could have reached Rs. 90 to a dollar towards the latter half of 2009 when foreign inflows were buoyant soon after the end of the 30-year conflict, but the Central Bank had prevented this from happening, by absorbing the dollars into reserves.

"The Central Bank expects more than US$ 25 billion this year in inflows. If global oil prices do not increase by much, and if and when import demand decreases owing to the recent policy decisions, the rupee could make a significant gain, and if the Central Bank does not intervene, exporters could be in for a torrid time," one dealer said.

"We will have to see how much of the Central Bank’s expected inflows materialise. It may not allow the rupee to make a sharp gain because it may want to build up the already depleted reserves," another dealer said.

Meanwhile, Central Bank Governor Ajith Nivard Cabraal told Reuters that the bank would no longer intervene to settle oil bills three months from now. However, he said it could still intervene to meet any dollar shortages for the country’s oil bills and provide dollars for oil payments outside the market up to May 9, to prevent the country’s fuel imports from distorting the exchange rate.
http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=48593

Heavy trades in Citrus Leisure, JKH, NDB and Seylan Bank among others pushed turnover on the Colombo bourse to nearly Rs.1.2 billion yesterday, up from the previous day’s Rs.627.25 million with the indices closing in opposite directions – the All Share down a marginal 4.78 points (0.09%) and the Milanka up 25.60 points (0.52%) with 86 gainers and 95 losers almost on even keel.

Brokers said there was a fair level of activity with possible switches within portfolios with the approach of March 31.

Citrus generated the day’s top business volume of nearly Rs.80 million closing 20 cents down at Rs.30 on nearly 2.7 million shares traded between Rs.29.60 and Rs.30.20.

JKH continued to be keenly sought closing Rs.2.80 up at Rs.208.10 on slightly over 0.2 million shares traded on the floor between Rs.208 and Rs.210 generating Rs.42 million turnover.

NDB also saw over 0.3 million shares traded and closed Rs.1.50 down at Rs.122 while Seylan (non-voting) closed 40 cents up at Rs.29 on nearly 1.2 million shares done between Rs.27 and Rs.29.10.

Another banking stock that demonstrated some volume was Sampath where over 0.1 million shares were done between Rs.176 and Rs.178.90 gaining Rs.1.70 to close at Rs.178.50.

Brokers noted that Citrus Leisure had attracted interest this week while JKH saw over 0.3 million shares crossed at Rs.208 with a further 200,000 shares done on the floor at around the same value.

Distilleries too saw a crossing of 250,000 shares at Rs.145 while the counter closed Rs.2 up at Rs.145 with nearly 0.2 million shares traded on the floor between Rs.144 and Rs.145.
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* State owned bank says group PBT of Rs. 21bn is highest in the industry =Highest contribution to govt. coffers with Rs. 12.5bn
* Assets increase 21% to Rs. 663bn * Deposits up 17% to Rs. 540bn * Loans & advances increase 29% to Rs. 478bn
*Capital and reserves Rs. 26.5bn * NPL reduced to 3.4%, below industry average

State-owned People’s Bank (PB) announced its financial results for 2011, saying its group profit before tax of Rs. 21 billion was the highest for any bank in the industry.

"This ground-breaking performance reflects the unwavering commitment on the part of the bank to sustain and improve on its key performance indicators in a consistent and progressive manner while upholding high standards of corporate governance, thus living up to the expectations of its diverse stakeholders," the bank said in an upbeat statement yesterday.

"People’s Bank Group created history by surpassing all previous records to post an exceptional profit before tax (PBT) figure of Rs. 21 billion in FY 2011 – the highest ever recorded in the banking industry to-date. This includes the PBT of Rs. 15.3 billion recorded by People’s Bank - which delivered a phenomenal 75 percent growth over the previous year, thus emerging as one of the most profitable banks in Sri Lanka for the financial year 2011," it said.

The bank experienced a substantial increase in its gross interest income which expanded by 10% whilst its interest expenses increased only by 3.5% during the period under review. Stringent cost management initiatives and budgetary control enabled the bank to reduce its overall overheads by 4.5% over 2010. This, along with growth in fee-based income enabled PB to record a profit after tax (PAT) of Rs 10.2 billion, a 95% growth over the previous year’s figure of Rs. 5.2 billion.

PB’s ability to maintain a healthy mix of loans, advances and investments enabled the bank to enhance its asset quality significantly during the year under review, recording a "mammoth Rs. 663 billion", which was an increase of 21% over the previous year. The favourable macro-economic conditions that prevailed during the year contributed positively towards this achievement. The healthy growth experienced in commercial and housing loans, pawning advances and state owned enterprises inter-alia resulted in the expansion of total loans and advances to Rs. 478 billion from the last year’s figure of Rs. 372 billion which is a healthy increase of 29% over the previous year.

The pawning business – which is a capital efficient business segment continued to propel profitability of the bank by emerging as an integral segment of PB’s financial cycle, particularly for those stakeholders involved in agriculture, fisheries, and micro, small and medium scale entrepreneurial community in the country.

Directly influenced by the increase in rupee savings the bank’s overall deposits rose to a formidable Rs. 540 billion. during the year under review, an increase of 16.8% over the previous year’s Rs. 462 billion. Moreover, the Fixed Deposits segment which represents a significant portion of the deposit portfolio also grew by 18% over the year 2010 to boost the overall deposits status of the bank.

Fuelled by a substantial retention of earnings, despite high taxation and returns to PB’s owner – the Government of Sri Lanka (GOSL), the position of capital funds improved to Rs. 26.5 billion up from Rs. 20.8 billion. recorded in the previous year. The increasingly important contribution made by People’s Bank towards GOSL by way of taxes, levies and dividends is aptly reflected in the amount paid out during the year 2011 which stands at Rs. 12.5 billion, an increase of 25% when compared to the Rs. 9.9 billion paid out a year ago. "This amount incidentally is the highest ever contribution made by any single bank to state coffers in the history of the banking industry," the bank said.

Among the many noteworthy achievements during the year 2011; the bringing down of the NPL ratio from last year’s figure of 5% to 3.4% in FY 2011 can be singled-out as one of the key accomplishments that speaks volumes of the bank’s management strength, given the diverse and complex business environment state banks operates in. Of this amount, 48% has been classified as ‘Old and hard-core loans’ for which the bank has made full provisions for.

Moreover, the cost-to-income ratio has also shown a healthy decline from 60.2% in FY 2010 to 50.7% in the current year while Return-on-Assets which stood at 1.7% in FY 2010 increased to 2.5% during the FY 2011. To cap it all; the bank was also successful in managing the Capital Adequacy Ratio during the year 2011 exceptionally well; in fact well above the statutory requirements stipulated by the regulator – the Central Bank of Sri Lanka; to 14.8% thus showcasing its commitment towards maintaining benchmark efficiency levels across all Key Performance Indicators relevant to the country’s banking industry.

Exceptional performance recorded by the Bank during the FY 2011 received a further boost when both Fitch Ratings Lanka & RAM Ratings Lanka – upgraded/sustained their ratings on People’s Bank, reflecting the positive sentiments shared by the financial community on the Bank. Accordingly, Fitch Rating Lanka upgraded its rating on the Bank from AA– (Positive) to AA (Stable) while RAM Ratings Lanka affirmed their AAA rating on the Bank during the year, underpinning the confidence the Bank has been able to instill through its strong financial fundamentals, sustainable business model and long term growth prospects.

A key initiative that was aimed at improving business agility and customer response speed was the connection of the Bank’s network of 722 island wide branches to its ‘core banking system’ thus affording its 13 million plus customers to connect with the Bank conveniently. Further investments were made during the year to enhance customer conveniences such as ATM facilities by adding 52 more new ATM machines, thus bringing the total number of ATM’s to 382.
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Hemas has commenced construction of its third multi-speciality hospital in Thalawathugoda at a cost of over Rs. 1 billion. Occupying one acre of prime land on the major arterial road in Thalawathugoda, the 50-bed hospital will serve the community around the Thalawathugoda, Battaramulla, Pannipitiya and surrounding areas. The project is to be completed by mid 2013.

Equipped with a 24-hour emergency unit, MRI, CT facilities, a modern laboratory, an ICU, a radiology centre along with specialised operating theatres and labour rooms, the new Hemas Hospital Thalawathugoda will offer the estimated 300,000 strong population living in close proximity to Thalawathugoda, the finest in medical facilities. In keeping with its vision of providing the best services, this new enterprise will be fully equipped to handle general surgery, internal medicine, paediatrics, gynaecology as well as emergency & ICU services for critically ill patients. In addition, the best Specialists and Consultants and the finest nursing and clinical staff will be on hand to offer patients the best in medical treatment.

Linus Jeganathan, Director of the Project, said "Thalawathugoda is a rapidly developing suburban area where many people have chosen to live. With this fast growing population, a multi-speciality private hospital in the area has thus become a necessity. With this in mind, a sustainable model has been followed in the hospital design to blend in well with the surrounding area. Our hospital design has been inspired by some of the best international hospitals."

Hemas Hospital Wattala is the Group's flagship hospital. It is also Sri Lanka's first internationally accredited multi-specialty hospital chain. This 100-bed state-of-the-art hospital is built to international standards in order to offer the highest levels of medical care to its patients. The 50 bed Hemas Southern Hospital, which is located in the Galle Town, is one of the more popular private hospitals in the area offering some of the best health care facilities in the southern region.

Chairman Hemas Hospitals Murtaza Esufally said, "Our aim is to provide affordable and high quality health care to the community while introducing international standards to the industry. We believe that the private sector has a key role to play in the industry to reduce the burden of the public sector. Hemas Hospital Thalawathugoda will also create many job opportunities and complement the on-going development that is taking place in the area"

Hemas Hospital Thalawathugoda is a subsidiary of Hemas Holdings Plc and a part of the Hemas chain of hospitals - the first internationally accredited hospital chain in Sri Lanka.

Hemas Group is one of the leading conglomerates in Sri Lanka with a focus on five key sectors - FMCG, Healthcare, Transportation, Leisure and Power Generation.
http://www.dailynews.lk/2012/03/30/bus20.asp

Access International Water Division has seen a growth of over 100% over the last two years with the new project openings that have been experienced in the travel and leisure industry. Access International Water Division, Business Development Manager, Suresh Jayawardene said that Access International has been the exclusive agent in Sri Lanka for DP Pumps of Holland for almost 20 years, who have been rated as one of the leading suppliers of Variable Speed Drive Booster(VSD) Systems. Access International is also the agent for many other world leading manufacturers such as Zenith of Italy for submersible sewage and waste water pumps, booster systems from DAB of Italy and water heaters from Tesy of Bulgaria.

"Access International and DP Pumps Holland are the preferred choice of many consultants in the Sri Lankan water industry. Our clientele include many leading hotels, consultants, contractors and engineers," he said.

Speaking further he added that the success of the water division is largely due to the Management team of Access Group headed by the Chairman Sumal Perera, who believes that the success of the company depends on their human resources. Access Group follows their Chairman in saying 'People, People and People' are the success factor for the organization. Apart from which, after sales services, customer care and gaining customer confidence are three major factors they lay emphasis on.

Jayawardene said that he feels very comfortable that the market for specialized pumps and related equipment will see a favourable growth in the coming years with over 200 hotels being constructed at the moment along with many infrastructure development projects that have been planned by the Sri Lankan government.
http://www.dailynews.lk/2012/03/30/bus11.asp