Sri Lanka Newspapers - 01/01/2012

Agbiz exhibition to boost food exports
by Mohammed NAALIR

The Pro Food Pro Pack exhibition will provide stakeholders an unparalleled experience in the food and beverage industry.

The latest products in the local processed food industry will be on display, said Chairman, Organising Committee, Dhammika Gunasekara.

He said a large number of institutions in the processed food, packaging and beverage industry will take part in the exhibition. This year's event will be held in conjunction with the agriculture sector under the theme From Farm to Kitchen.

The Pro Food Pro Pack and Agbiz exhibition 2012 will be held from July 6- 8 at the Sirimavo Bandaranaike Memorial Exhibition Centre.

http://www.sundayobserver.lk/2012/01/01/fin30.asp

Nation Lanka ventures into micro finance
Nation Lanka Finance PLC launched a project in the financial services sector, at a ceremony where the company disbursed loans to a group of individuals for use in self-employment opportunities.

Venturing into Micro Finance under the name Dinawamu Lanka was a collective decision of the new Board of Directors, as it was felt that with the expansion in economic activity throughout the country the resources and talents of the rural sector too had to be made use of. However, for this to be made a reality private sector contribution and participation was imperative. Micro Finance was found to be a major contributor to the improvement of the national economy of countries, especially in the South Asian region.

With the expansion of its branch network with 10 new branches planned to be added to its 13 branches, the inclusion of Micro Finance to its portfolio will be a fillip to the company's growth.

Chairman Jayantha Dharmadasa said that this was an ideal opportunity for Nation Lanka Finance to honour its Corporate Social Responsibility through this venture, where the rural sector could be harnessed and made contributors and partners to national growth.

http://www.sundayobserver.lk/2012/01/01/fin31.asp

P.G. Martins introduces new vehicles for tourist industry
P.G. Martins Motorways Co. of the P.G. Martins group, with a history of more than sixty years launched for a local and overseas tourists service under the Slogan "Travel with comfort and safety."

Sri Lanka has now achieved worldwide fame as a tourist paradise. The best testimony is the increasing number of foreign tourists.

Not only overseas tourists but local tourists as well are interested to visit tourist attraction in the country.

P.G. Martins Motorways Company recently imported a fleet of modern luxury buses and vans with a capacity of up to 10, 15, 30 and 40 seats. Vice-Chairman of the P.G. Martins Group of companies P.G. Lalith Nimalsiri said that these vehicles of international standard are ideally suited for the fast improving road network of Sri Lanka.

Vehicles of the latest models, including jeeps suitable for any form of travel including weddings can now be obtained from P.G. Martins Motorways Company.

http://www.sundayobserver.lk/2012/01/01/fin32.asp

AA-/P1 ratings for Hayleys
RAM Ratings Lanka has assigned respective long and short-term corporate credit ratings of AA-and P1 to Hayleys PLC ("Hayleys" or "the Group"); the long-term rating has a stable outlook.

The ratings reflect the Group's diversified business portfolio, strong market positions in several key businesses and adequate debt-protection metrics.

On the other hand, the ratings are moderated by the Group's high debt levels, fragile liquidity and a few loss-making operations.

The ratings are further pressured by Hayleys' exposure to volatile commodity prices and foreign-exchange risk.

http://www.sundayobserver.lk/2012/01/01/fin33.asp

Janashakthi on winning streak
Janashakthi Insurance PLC won the CMO Asia Awards, Asian Leadership Awards, SLIM (Sri Lanka Institute of Marketing) Brand Excellence Awards, World Brand Congress Awards, National Business Excellence Awards 2011 and the recently held ICASL (Chartered Accountants of Sri Lanka) Annual Report Awards 2011.

Janashakthi Managing Director, Prakash Schaffter said, “Continuous improvement is a practice we have tried to inculcate in our pursuit of excellence. Janashakthi was the only Sri Lankan insurance company to secure top honours at the second CMO Asia Awards for Excellence in Branding and Marketing with the “Award for Brand Excellence” in the Banking, Financial Services and Insurance category. Hosted by the World Brand Congress, the awards were presented at a ceremony in Suntec, Singapore amidst a large gathering of representatives from Asia and the Middle Eastern region.

http://www.sundayobserver.lk/2012/01/01/fin34.asp

Make a fresh start - get rid of bad habits
Let me begin by wishing you a wonderful year ahead with greater success and happiness.

I'm sure by now you have been bombarded with many such messages and you will continue to receive such messages for at least another week or so. Is it really the other person's wish that matters or is it your own wishes that have to be taken into consideration?

It's you who allow intentions to derail - no one else

Past practises dictates that on all 365 days, you should try to kick bad habits and start life anew for success. What kind of new year resolutions will you make for yourself for 2012 if you haven't already made them? All I know for sure is that you resolve to improve every year on a day like yesterday.

It almost seems like we can start all over again and finally become that successful, wonderful, productive, healthy, happy person we've always wanted to be. However, the problem with the start of a new year is that most good intentions are often derailed within a few days or weeks.

Key drivers; Change of Attitude, lifestyle and commitment

The trouble is, the enthusiasm to make changes tends to fade once we realise that we can't change everything overnight or it takes effort to realise them. If you want to make lasting changes, there are three things you can do to make your resolutions work all year long: Correct your attitude, embrace the right lifestyle and be committed to achieving the resolution.

Accept physical and mental discomfort to make it work

Why do people abandon resolutions halfway? One reason is that we become discouraged when results don't come quickly enough or easily, or when we find that we are not necessarily happier because of them. Behavioural change requires sustained effort and commitment.

It is accompanied by physical and mental discomfort.

For example, reducing food, working or studying longer hours and taking less hours of sleep from the level to which you have become accustomed to.

Being a successful man is no goal

What does this mean? How do you measure this? Resolutions also fail because they are vague and impossible to measure.

One could resolve to be a nicer person, but what does that mean? How would anyone know when and whether that goal had been reached? A better resolution would be to pay a compliment to a person each day.

Make a goal that can be reached in one year.

This guideline is important for gifted children, who tend to have lofty goals, often beyond what they could achieve in one year.

Of course, if a child goes beyond a goal in less than one year, that's fine. The idea is just to make sure the goal set is not impossible to reach.

Keep tracking and reminded of the resolution

Writing the resolution and plans to make it happen is important because it helps you remain focused and will serve as a reminder of the resolution. It also makes the plan more formal, not just a passing thought on New Year's Day. Creating a plan and writing it down can help understand how to set goals and find ways to reach them.

Find alternatives far things you want to change, and make this part of your resolution plan. So you want to quit night clubbing but you have been doing it to relax yourself or be with friends? What other forms of relaxation are available to you? Look at the alternatives to choose the ones that have more positives, not activities that have more negatives than positives.

Above all, aim for what is truly important to you, not what you think you ought to do or what others expect of you. After all it's your life, your vision, your goal, your effort and your success that's primary. It's not being selfish but accepting the reality that if you fail you cannot help others.

You think I can be of help to you; catch me via; kishugomes@yahoo.com. I will be more than willing to help you young ones.

http://www.sundayobserver.lk/2012/01/01/fin40.asp

HR in heaven and hell
One day while walking down the street, a successful HR Director was tragically hit by a bus and she died. Her soul arrived up in heaven and met the angel at Heaven's gates.

"Welcome to Heaven," said the angel. You see, strangely enough, we've never once had a Human Resources Director make it this far", the angel said.

" I prefer to stay in Heaven," said the woman. "According to our rules in this situation we will let you have a day in hell and a day in Heaven and then you can choose whichever one you want to spend an eternity in", the angel said.

First the angel sent her to hell and there she found her friends and colleagues all dressed in evening gowns and cheering for her. There she played an excellent round of golf and at night went to the country club where she enjoyed an excellent steak and lobster dinner. She had a great time in hell. "Now it is time to spend a day in heaven," the angel said. So she spent the next 24 hours lounging around on clouds and playing the harp and singing. She had a great time there too.

"So, you've spent a day in hell and you've spent a day in heaven. Now you must choose your eternity," the angel said. The woman said, "Well, heaven is a good place but now I prefer hell and I choose hell."

So the angel sent her to hell.

When the doors of hell opened she found herself standing in a desolate wasteland covered in garbage and filth. She saw her friends dressed in rags and picking up garbage and putting it in sacks. The devil came up to her and put his arm around her.

"I don't understand," stammered the woman, "yesterday I was here and there was a golf court and a country club and I had a great time here. Now all there is, is a wasteland of garbage and all my friends look miserable."

The devil looked at her and smiled. "Yesterday we were recruiting you, today you're staff.

ajokeaday.com

--------------------------------------------------------------------------------

The loan
Kathy goes to her local bank, walks into the manager's office, and says, "I want a loan; I am going to divorce my husband." "Oh, we don't give loans for divorces," the manager says. "We offer loans only for things like real estate, appliances, automobiles, businesses, and home improvement." Kathy interrupts: "Stop right there. This definitely falls into the category of 'Home Improvement'".

http://www.sundayobserver.lk/2012/01/01/fin50.asp

Oil Leeching Possible By India

Piracy


Source: development.lk

The danger of the possibility of oil being pirated from Sri Lanka’s side by India was highlighted by an off shore oil consultant at a seminar on Wednesday.
Dr. Amaranath S. Kumara, Consultant, Scandpower AS Norway said that he couldn’t understand why the contract to quest for oil in Sri Lanka was given to an Indian company, Cairns.
Leeching of oil from India to Sri Lanka could take place when drilling for oil under the seabed by horizontal drilling from the Indian side to the Sri Lankan side.
In particular, it could take place at the narrow Cauvery basin, where on the Indian side they have had already struck oil.
Cauvery basin is closer to Jaffna and forms part of the narrow Palk Straits that separates Sri Lanka from India, where at its narrowest point the distance between the two countries is 22 miles.
Sri Lanka has currently contracted Cairns, India, to drill for oil, south of the Cauvery Basin, in the area that falls under the Mannar Basin, at a distance of some 70 kilometres from India.
Delivering a lecture titled “Offshore Oil & Gas Production in Norway and its Relevance to Sri Lanka” at the Institution of Engineers; he said that hydro carbons have been discovered by Cairns at a depth of more than three kms. off Mannar, similar to the depth at which oil has been discovered in the North Sea by Norway. Discovery of hydrocarbons is generally indicated as a harbinger heralding the presence of oil and gas.
The thickness of the hydrocarbon layers discovered, of 25 metres, is also similar to the thickness of the layers found in the North Sea oil fields. In comparison, the thickness of such hydrocarbon layers found onshore in the Middle East is some 200 metres, said Kumara.
Cairns which has dug three test wells in the block allocated to it in the Mannar basin has found hydrocarbon deposits in two, with the next step being to find out whether the oil/gas deposits available are in commercial quantities to make it worthwhile to exploit that resource.
As the offshore hydrocarbon layers found in Sri Lanka and in Norway are smaller in thickness, the most economical way for drilling for oil is horizontal drilling where the extraction assured is some 60% compared to a mere 20% in vertical drilling in such instances, he said. The Norwegians are specialists in horizontal drilling, he added, going up to a length of some 7.2 km. (4.5 miles) in such drilling.
The Mannar basin is estimated to hold one billion barrels of oil according to reports.
Kumara alleged that Cairns India’s former parent, Cairns UK, was virtually unheard of in questing for oil in the North Sea.
He also questioned Government of Sri Lanka’s wisdom in rescinding the earlier contract with Nopec Norway, in the island’s quest for oil. Kumara further said that before going into building expensive oil platforms, it was imperative to do further tests to ascertain the feasibility of the project, like what the Norwegians do before going into such capital investments.
He said that safety and environmental protection was important when questing for oil. “Otherwise marine life will die,” said Kumara.
He also said that the explosion at Piper Alpha platform in the UK side of the North Sea in 1988 resulted in 167 deaths and an insurance loss of US$ ($) 3.4 billion. Similarly the disaster at the Gulf of Mexico in 2010 resulted in 11 deaths and an insurance loss of $ 35 billion.
As concentration is paramount when working on oil platforms, mobile phones are not allowed. In a Norwegian oil platform on which Kumara had worked, it was a 12 hour working shift for two weeks, with the next four weeks off. An oil platform is like a five star hotel, he further said.
Kumara said that Norway which once was a poor country became rich because of oil. Its per capita GDP is $ 84,000. Norway is the third largest oil exporting country in the world. The Arctic which holds 25% of the world’s remaining oil and gas reserves, is the next venture for exploitation. However the debilitating factor is the cold and the snow with temperatures as low as minus 50 degrees Centigrade, Kumara said.
He also said that research and development was an important component in the oil industry.


Safety, a la Sri Lanka
An offshore oil expert questioned Sri Lanka’s safety standards when questing for oil by drawing a parallel, based on his own experience.
Dr. Amaranath S. Kumara, Consultant, Scandpower AS Norway said that recently he and his family took a boat ride from Jaffna to the Delft islands-“A boat which could take 70 people was crammed with 147 in this hour long journey,” he alleged.
Kumara said that this took place when empty naval boats such as high speed Dvoras were found idling in the vicinity He also alleged that this boat on which they made the trip belonged to a Government Minister.

http://www.thesundayleader.lk/2012/01/01/oil-leeching-possible-by-india/

Ethics Will Halt Poaching

A government official said that due to ethics it was unlikely that oil would be pirated by the Indians from the Sri Lanka side (see the main story on this page).
Ms. D. T.K. Preeni Withanage, Director Benefits, Petroleum Resources Development Secretariat told this reporter that the Indian Government would put a stop if such a thing was happening by companies drilling for oil on India’s side of the Cauvery basin where oil has already been discovered, by poaching into Sri Lanka’s side.
Anyway international oil drilling companies don’t resort to such malpractices, she claimed.
She also alleged the Cauvery Basin that separates Sri Lanka from India, though narrow, was still too wide for India to be able to poach for oil from Sri Lanka’s side, if oil was also available there, as the present horizontal drilling technology in use could not go beyond a length of 7.2 kilometres.
Withanage further said that the Sri Lanka side of the Cauvery basin couldn’t be first exploited over and above the Mannar basin by the Government of Sri Lanka (GoSL) earlier, because at that time the terrorist war was on.
She also said that Cairns India won the contract to drill for oil by tender. On the issue of safety standards, she said that Cairns India which is drilling for oil off Mannar conforms to international safety standards in their operations.
She further said that Cairns’ contract in the locality of the Mannar basin is some 70 kilometres from India.
On environmental standards, she said that Cairns has done the required environmental impact assessment.
On the issue of the wisdom of Sri Lanka rescinding its earlier contract with Nopec, Withanage alleged that that contract was weighted heavily in favour of Nopec, giving them the virtual monopoly to quest for oil.
“But we bought their seismic data for US$ ($) 8.5 million and are selling such information to prospective investors for $ one million,” she said.
Withanage further said that as India and China have had not taken the blocks offered to them in the Mannar basin; that contract seizes to be operable, giving GoSL the right to decide on the future course of action to be taken in regard to those blocks.
She also said that Cairns, if they do not have the horizontal drilling expertise, could always subcontract such works to a party which is familiar with such operations.

http://www.thesundayleader.lk/2012/01/01/ethics-will-halt-poaching/

Motorised Bike

Abans’ latest innovative product in keeping with their “Green Revolution” is the electric motorized bicycle.
A cheaper and environmentally friendly power source, now you can enjoy cycling pleasure without pedalling. And what’s more it presents an economical and convenient transport mode and the perfect solution for escalating oil prices and bus fare increase.
The electric motorized bicycle (EMB) is powered by a rechargeable battery and gets you to your destination quicker and easier than a normal bicycle.
And the best part is that once you have paid the initial cost for the bike, you can go wherever you want, whenever you want to at no running cost. You can charge the battery free of charge at any Abans or JVC-Haier showroom islandwide. It has a maximum speed of 25 kmph. It is an ideal transport mode for commuters in rural areas where they have to walk a long distance for public transport and to the market. It’s eco-friendly, no smoke, no pollution and requires the minimum in maintenance cost.
The Electric Motorized Bicycle does 40 to 60 kilometres on a full charge (depending on road conditions), and if you run out of power unexpectedly, all you have to do is just pedal like a normal bicycle to complete the journey.

http://www.thesundayleader.lk/2012/01/01/motorised-bike/

Rates On Upward Swing

An analysis of Wednesday’s Treasury (T) Bill primary auction shows that there is pressure on rates, a banker told this reporter.
According to him this pressure is emanating from the illiquid state of the market, with the liquidity available being held tightly by foreign banks, which however are constrained by “limits” in lending further, in inter-bank trading.
Wednesday’s T Bill auction saw the weighted average yields (WAYs) of 91, 182 and 364 day maturities go up by 10, 15 and 10 basis points (bps) to 8.68%, 8.71% and 9.31% respectively.
While the increase in WAYs in the 91 and 364 day tenures were week on week, that of the 182 day was over the WAY fetched in the December 7 weekly auction as bids made in the weekly auctions held inbetween for that tenure, ie the December 14 and December 21 auctions, were rejected by the Central Bank of Sri Lanka (CBSL) ostensibly because the market was asking for higher yields than that which CBSL was prepared to pay.
The source said that pressure on T Bill WAYs was due to the illiquid state of the market. He therefore expected upward pressure on rates to continue in the coming weeks as well.
But due to mandated liquidity ratios, the financial sector is compelled to invest in T Bills, the source said.
“Simultaneously pressure on the exchange rate (ER) too persisted, with state owned CBSL’s agent in the market, Government of Sri Lanka owned Bank of Ceylon offering US dollars ($s) to the market at the current administered rate of Rs. 113.90 to the $ at the expense of draining out the island’s foreign exchange reserves, coupled with affecting the market’s rupee liquidity.”
However CBSL through its reverse repo auction window has been reinjecting rupee liquidity into the system.
On the issue that CBSL has said that inflation has been tamed and a reaction therefore to such a situation that naturally should follow being that rates should come down and not the reverse, the source said that the market’s perception of events were contrary to what the CBSL and/or the state owned Statistics Department said.An upward movement of rates makes borrowings more expensive, thereby dampening investments, a complementary result of which being the stultifying of employment creation, a situation likely to cause adverse socio-economic ramifications in the country.

The secondary T Bond market however was largely inactive last week, with corporates not wanting to upset the rhythm by taking new positions because of the year end, the source said.
Bourse
Foreign selling last week, particularly of blue chip Commercial Bank, underlined the fundamental weakness of the Colombo Stock Market, that it’s not an attractive destination for investments, a source said.
The stocks that went up as a result of retail and high networth individual buying last week are therefore also bound to fall, he said.
Loss of confidence in the market by foreigners may be attributed to several reasons. Among those is the Euro zone debt crisis, the Expropriations Act, Government fiddling with the regulator, ie the Securities and Exchange Commission and the breakdown in law and order in the country.
The bourse last year experienced a net foreign outflow of over Rs. 20 billion, with the figure during the first three working days of last week (December 26 was a holiday) alone being nearly Rs. 1.2 billion. State owned Sri Lanka Insurance Corporation was active in the market last week, buying into an allegedly dubious stock

http://www.thesundayleader.lk/2012/01/01/rates-on-upward-swing/

Literary Festival

HSBC Galle Literary Festival 2012 from January 18-22 features award winning writers from all over the world.
Among the writers attending will be Joanna Trollope, Richard Dawkins, Tom Stoppard, DBC Pierre, John Boyne, Aminatta Forna, Simon Sebag Montefiore, Katherine Frank, Nayantara Sahgal, Shashi Tharoor as well as Sri Lankan local and diaspora writers such as Romesh Gunesekera, Randy Boyagoda and Roshi Fernando, and many more.
Printcare’s partnership with the Galle Literary Festival enables the festival to achieve their original mandate of bringing internationally acclaimed authors to a wide local audience, thus aiding the development of tourism, as well as giving precedence to the rich and diverse cultural heritage of Sri Lanka.

http://www.thesundayleader.lk/2012/01/01/literary-festival/

Sharing “Green” Philosophy

Vijitha Bandara Ekanayake

Switch Asia F&B Programme (SAFP) launched its first Green Business Club (GBC) in Kurunegala recently.
Addressing the gathering, Wayamba GBC President and Polypacking Industries Pvt. Ltd. Managing Director S.M.A.G. Perera said, “GBCs can be a useful exchange platform for disseminating successful business cases on sustainable production amongst the Food & Beverage business community and further crosscutting towards other sectors.
Therefore the programme aims to make this initiative a reality and use it as a platform for active dialogue on environmental issues in the country so that all stakeholders could work towards creating better enabling environment for Sustainable Consumption and Production.”
The programme organised by SAFP in collaboration with Industrial Services Bureau, Kurunegala aims at networking businesses at all levels through formation of GBCs.
Speaking at the launch ceremony, Wayamba Province Chief Secretary Vijitha Bandara Ekanayake observed that environmental conservation and ecosystem management issues are complex and far from individual daily life experiences. He said, “in order to curb the extinction and habitat destruction tide, a concerted ecosystem management and nature conservation plan is needed. In order to achieve this, increased awareness and involvement by key leaders are essential.”
With this initiative SAFP is creating a stage for business leaders with exposure to ensure that green thinking is an integral part of their personal and professional lives. GBCs’ establishment is aimed at inspiring and involving business leaders in ecosystem and biodiversity conservation.
GBC’s main goals would be to create nature conservation awareness’ importance among emerging leaders and to give them a sense that they can make a difference through their positions of influence; to create fellowship and opportunities for concrete participation in conservation projects in Sri Lanka among these individuals and to broaden their experience and to contribute their expertise in conservation and ecosystem management.
SAFP is implemented by the Ceylon Chamber of Commerce and is funded by the European Union.

http://www.thesundayleader.lk/2012/01/01/sharing-green-philosophy/

Trade Deficit Widens To $ 7.7 Bn.

Sources: Sri Lanka Customs and Central Bank of Sri Lanka

External trade continued to remain resilient in October 2011, Central Bank of Sri Lanka (CBSL) in a press release said.
Reflecting the high export base in October 2010 and contraction in tea, rubber and minor agricultural crops exports, export earnings declined by 4.9% to US dollars ($) 882 million in October 2011 year on year (YoY). However, during the first ten months of 2011, cumulative export earnings increased by 23.4% to $ 8,702 million YoY. At the same time, import expenditure driven by high investment and intermediate goods growth increased by 41.4% to $ 1,751 million in October 2011 YoY, CBSL said. Import expenditure was mainly driven by increases in intermediate and investment goods. Intermediate goods imports increased YoY by 42.7% led by petroleum imports. Higher petroleum import expenditure was mainly due to the higher average crude oil import price of of $ 107.2 per barrel in October 2011 compared to $ 81 per barrel in the corresponding month of 2010. Cumulative import expenditure in the first ten months of 2011 increased by 50.7% to $ 16,436 million YoY. As a result, the trade deficit for the first 10 months of 2011 stood at US dollars 7,734 million, a significant portion of which was on account of government’s infrastructure related projects’ imports that have been funded mainly by foreign loans, it said. In that context total inflows to government, including International Sovereign Bond proceeds amounted to $ 3,507 million, during 2011’s first ten months.
Industrial exports recorded a 12.8% growth in October 2011 YoY. Agricultural export earnings which accounted for 23% of total exports declined by 10.3% mainly due to decline in tea export earnings by 12.1% YoY in October 2011. Despite higher export prices, rubber volume exports declined by 40.8% in October 2011 as a result of high rubber demand by domestic industries to produce value added exports. Minor agricultural exports earnings also declined due to lower pepper, cocoa, fruits and vegetables exports. Industrial exports growth was led by textile and garments; rubber based and petroleum products; diamond and jewellery and food, beverages and tobacco. Textiles and garments exports grew by 12% YoY in October 2011. Rubber based products exports increased by 34.8% in October 2011 YoY. compared with the corresponding month of 2010.
Fertiliser imports grew in terms of both prices and volumes by 28.9% and 72.6% YoY respectively and the sharp increase of volume was mainly due to expansion of fertiliser subsidy to cover all crops. Investment goods imports increased by a substantial 58.7% in October 2011 led by higher import expenditure on machinery and equipment, transport equipment and building materials. Non-food import expenditure increased by 12.7% despite the decline in personal motor vehicle imports by 16.3% YoY in October 2011.
For the first eleven months of 2011, tourism earnings grew at a healthy 46.7% rate to $ 736 million YoY. Average per tourist earnings per day increased to $ 97 for the period under review from $ 88 for the same period in 2010. Tourist arrivals for the first eleven months of 2011 increased by 33.1% to 758,458 YoY. The majority of tourists numbering 281,484 arrived from Western Europe while arrivals from Middle-East, East Asia, South Asia and Australasia also recorded healthy growths during this period.
Cumulative workers’ remittances inflows grew at 24.3% to $ 4,203 million in the first ten months of 2011. The expansion in services exports and increased workers’ remittances helped contain the trade deficit impact, thereby mitigating the current account deficit to $ 3,253 million for the first ten months of 2011.
Gross official reserves, excluding Asian Clearing Union (ACU) balances, increased to $ 6,896 million by end October 2011 from $ 6,610 million by end 2010. Gross official reserves had reached a historically high $ 8,099 million level by end July 2011 as a result of the Central Bank accumulating high reserves over a period of time thus avoiding fluctuations in the domestic foreign exchange market. A part of such reserves have now been utilized to deal with any exchange rate pressure due to increased imports demand arising mainly from petroleum and investment goods. Total external reserves, which include commercial banks’ gross official reserves and foreign assets also increased to $ 8,136 million by end October 2011 from $ 8,035 million by end 2010. In terms of import months, gross official reserves and total external reserves by end October 2011 were equivalent to 4.4 months and 5.1 months respectively.
arrived from Western Europe while arrivals from Middle-East, East Asia, South Asia and Australasia also recorded healthy growths during this period.
The cumulative inflows on account of workers’ remittances grew at 24.3 per cent to US dollars 4,203 million for the first ten months of 2011. The expansion in exports of services and increased workers’ remittances helped contain the impact of the trade deficit, thereby mitigating the deficit of the current account to approximately US dollars 3,253 million for the first ten months of 2011.
Gross official reserves, excluding Asian Clearing Union (ACU) balances, increased to US dollars 6,896 million by end October 2011 from US dollars 6,610 million by end 2010. Gross official reserves had reached a historically high level of US dollars 8,099 million by end July 2011 as a result of the Central Bank accumulating high reserves over a period of time thus avoiding fluctuations in the domestic foreign exchange market. A part of such reserves have now been utilized to deal with any pressure on the exchange rate due to increased demand for imports arising mainly from petroleum and investment goods.
Total external reserves, which includes gross official reserves and foreign assets of commercial banks also increased to $ 8,136 million by end October 2011 from $ 8,035 million by end 2010. In terms of months of imports, gross official reserves and total external reserves by end October 2011 were equivalent to 4.4 months and 5.1 months, respectively.
(a) Revised; (b) Provisional; (c) FDIs for the first nine months of 2010 and 2011; (d) Tourism earnings for the first eleven months of 2010 and 2011; (e) Government inflows in 2010 and 2011 including International Sovereign Bonds proceeds issued in October 2010 and July 2011 respectively.

http://www.thesundayleader.lk/2012/01/01/trade-deficit-widens-to-7-7-bn/

Dinawamu Lanka”

Nation Lanka Finance PLC in the spirit of giving back to society at least part of what society has given to you, launched another ambitious project in the financial services sector recently.
At a simple ceremony the company disbursed loans to a group of individuals for utilization in self employment opportunities.
Venturing into Micro Finance under the name “Dinawamu Lanka,” was a collective decision of the new Director Board as it was felt that with the expansion in economic activity countrywide, the rural sector’s resources and talents too had to be made use of. However, for this to be made a reality private sector contribution and participation was imperative. Further, Micro Finance was found to be a major contributor to the improvement of countries’ national economies, especially in the south Asian region.
Acting on the cue and taking the initiative from this decision, investor director Asanga Seneviratne was quick to act and had no hesitation in directing and guiding his management in putting a team together, headed by Madhawa Edusuriya a stalwart in this industry, who joined the company as General Manager Micro Finance along with a robust, enthusiastic and talented team, most of whom come with vast experience in this sector.
With the further expansion of its branch network with 10 new branches planned to be added to its already existing 13 branches, the inclusion of Micro Finance to its portfolio will undoubtedly be a fillip to the Company’s growth.
Chairman Jayantha Dharamadasa said that this is an opportunity for Nation Lanka Finance to honour its Corporate Social Responsibility through this venture, where the rural sector could be harnessed and made contributors and partners to national growth.
Dharamadasa and Seneviratne were unanimous in their decision when they declared that their aim of launching “Dinawamu Lanka” was to assist the marginalized rural populace especially those of the North and East as well those of the border villages who had to undergo tremendous hardships prior to the war end.

http://www.thesundayleader.lk/2012/01/01/dinawamu-lanka/

Sends Three Letters Asking PDs To Subscribe To Govt. Debt
■CBSL States The Obvious

S.S. Rathnayake

In what may be termed as a tragi-comedy, Central Bank of Sri Lanka (CBSL) on the back of rising interest rates, last month sent three letters saying the obvious to primary dealers (PDs), to subscribe to maturing Government debt!
“The purpose of the then Public Debt Department’s (PDD’s) Superintendent S.S. Rathnayake’s letters was two edged,” Ajith Fernando, Managing Director/CEO Capital Alliance, one of the country’s 12 PDs told this reporter; those are to resubscribe to maturing Government debt with an inference to keep yields low, he said. This is because CBSL cannot mandate yields, Fernando said.
The last time yields went sky high was more than two years ago, about the time of the war end and before the IMF monies came in. Yields of the benchmark one year maturing Treasury (T) Bills rose up to around 21% then, he said. This was caused by depleted foreign exchange reserves, where reserves were as low as being equivalent to one month’s imports.
Since then yields started to come down until recently, when it again started moving up on the back of heavy credit growth and CBSL’s stance of defending the exchange rate (ER) which is draining out rupee liquidity from the system.
“However Rathnayake’s letters are unique,” a source said. Even in the worst of times CBSL never resorted to such letter writing, he said.
“Each PD is mandated by law to subscribe to a minimum of 10% of government securities offered,” Fernando added, thereby assuring that in any case the full subscription of such issues as there are 12 PDs in the market. Though there is no cap on yields, bidding unrealistically higher yields may even result in CBSL, which is also the regulator of PDs, suspending the license of such a PD, though it has never resorted to such an action thus far, he said.
Higher yields would make Government debt more expensive and if investors such as banks opt out from investing in T Bills and T Bonds preferring instead to lend it to the market for a higher return; that would impact Government of Sri Lanka’s domestic borrowing programme.
A source said that Rathnayake was under pressure from the Treasury to rein in yields after they went sky high following the presentation of Budget 2012 by President Mahinda Rajapaksa on November 21, where he devalued the rupee by 3%, taking everyone by surprise, not least CBSL itself, hence the reason for those letters which carried only his signature.
“Rathnayake sent us three such letters prior to the auctions of December 7, 14 and 21, but not before the auction of Wednesday, the year’s last weekly auction where no such letter was received,” Fernando said.
Rathnayake has since been promoted to the post of assistant governor.
In the two weekly T Bill auctions held immediately after November 21, ie the auctions of November 23 and November 30 respectively (prior to CBSL’s/PDD’s letters to PDs), yields of T Bills of 91, 182 and 364 day rose sharply by 69, 96 and 140 bps to 8.20%, 8.50% and 8.99% respectively, as a result of the CBSL which had hitherto been assiduously defending yields despite pressure for those to move up, seemingly giving up the fight and allowing the market to determine the same after the President’s Budget presentation on November 21 and till its letters of last month.
“These requests came about due to rising interest rates caused by credit growth and CBSL’s defence of the ER which is draining out rupee liquidity from the market,” Fernando said.
Meanwhile the primary weekly T Bill auctions held by CBSL in the first three weeks of last month since those letters had been issued have seen the weighted average yields of the 91, 182 and the benchmark 364 day tenures having had gone up by 38, six and 30 basis points (bps) to 8.58%, 8.56% and 9.21% respectively with bids for certain parcels rejected inbetween.
“The rejection of those bids helped to bridle rates, not the letters,” said Fernando.
For instance bids for the 182 day tenure were rejected in the T Bill primary auction of 14.12.11. and 21.12.11. respectively and that of the benchmark one year (364 day) tenure in the T Bill auction of 14.12.11.
Bids are generally rejected to by CBSL, managers to Government debt, when the market asks for higher yields, over above than that which CBSL/Government is prepared to pay.
.The stoppage of such letters coincided with Rathnayake being promoted to the post of assistant governor. His successor J.P.R. Karunaratne was however unaware of his predecessor’s letters. “Ask Rathnayake,” he told this reporter. CBSL may be harbouring the fear that if market interest rates are more attractive than investing in Government debt (T Bills and T Bonds), that banks in particular would then opt to lend to the former rather than to the latter, a source said.
The market went awry after Rajapaksa, when presenting Budget 2012 in Parliament on November 21 announced a 3% depreciation of the rupee. This resulted in the ER in inter-bank trading being depreciated from Rs. 110/40 to Rs. 113/90, the following day. Previously CBSL had even talked of the possibility of the ER appreciating last year and prior to Budget 2012 had even insisted that the ER would not be depreciated despite pressure for it to do so due to import demand.
“With inflation being bridled, yields are now likely to once more begin to be on the descent from this month,” said Fernando.

http://www.thesundayleader.lk/2012/01/01/sends-three-letters-asking-pds-to-subscribe-to-govt-debt/

Ideal Holiday In N’Eliya
By Nirmala Kannangara

Located in an idyllic setting in “Little England,” Hotel Sun Hill is surrounded by the hill country’s green heights and is perched on a meticulously planned terrain.
The hotel encapsulates a rich cultural and natural heritage surrounding serenity and inspiring ambiance, which is a blessing in disguise for those who seek intimacy in life.
A splendid base from which to explore-the Lover’s Leap waterfall and Ambewela milk farm to witness as to how our own milk powder, cheese and butter are made, World’s End, Horton Plains- to see the endemic species, tea factory to have a first hand experience as to how the tea is blended and the cascading St. Clare’s and Devon waterfalls, Hotel Sun Hill is the ultimate retreat and adventure location for the family. Blessed with a salubrious climate, the air is filled with exotic fragrances of fauna and flora, the Galway Forest Lodge is a paradise heaven especially for nature lovers to hike into the forest reserve to discover the beauty of the abundance of exotic birds and rare orchids and ferns.
With well appointed 20 rooms equipped with modern amenities- satellite TV, piped music, IDD, hot/ cold shower and heaters and an innovative blend of taste and ambiance with rich fabrics, wool and fittings, offering guests the comfort they deserve during their stay. Most of the rooms overlook the landscaped garden while the rest to the picturesque tea plantation and the vegetable cultivation-views to sooth your tired eyes. The cozy restaurant is ready to serve guests their choice of food from an exquisite a-la-carte or set menu when the buffet is not served. Embark on a culinary journey of western, eastern, Chinese or Sri Lankan cuisine prepared by the well trained Chef, ensuring that fresh vegetables and fruits are served for its diners.
Hotel Sun Hill also offers banquet and conference facilities and the tastefully appointed restaurant with 120 seating capacity is an ideal setting to relax and dine. Visit to the country’s finest 18-hole golf course-the Nuwara Eliya Golf Club , enjoy a boat ride at Gregory’s Lake or trek along the lake bank to unwrap your tired mind, body and soul. Hotel Sun Hill guarantees an ultimate secluded vacation for the entire family in Nuwara Eliya that would last a lifetime memory for you.

http://www.thesundayleader.lk/2012/01/01/ideal-holiday-in-neliya/