Sri Lanka Newspapers Wednesday 11/04/2012

Bourse in holiday mode, both indices down
*CSE revises transaction fees

The Colombo bourse was yesterday very much in a holiday mode with a turnover of Rs.202.8 million, up from the previous day’s Rs.131.9 million, with both indices down – the All Share by 20.78 points (0.38%) and the Milanka by 19.43 points (0.40%) with 84 gainers and 85 losers almost on even keel.

"This being a holiday week there was hardly anything to talk about with Swarnamahal Financial Services, Ceylon Hotels Corporation and Coco generating the most business volumes," a broker said.

Swarnamahal led the turnover league with nearly 1.7 million shares traded between Rs.8.50 and Rs.8.90 closing 30 cents up at Rs.8.80 and contributing Rs.14.7 million to turnover while Hotels Corporation closed Rs.1.60 up at Rs.23.60 on nearly 0.6 million shares done between Rs.22.50 and Rs.24.40.

Coco which gained Rs.1.70 to close at Rs.50 on 0.2 million shares and Kelani Tyres up Rs.1.30 to close at Rs.28 on nearly 0.4 million shares were the other turnover generators.

"There was interest in Hotels Corporation, Coco and Tyre that we have not seen recently," a broker commented. "Hayleys also saw some activity with slightly over 25,000 shares traded closing flat at Rs.360.’’

Among the banking stocks HDFC was up 20 cents to close at Rs.55 and HNB (non-voting) down 50 cents to close at Rs.92.50 saw some activity with over 0.1 million HDFC and 73,022 HNB X traded.

The Colombo Stock Exchange announced amendments to the minimum brokerage and CDS fees and revision of custodian fees saying that with the implementation of the ATS 7 trading system the board lot size has been changed to one share. In these circumstances the directors of the CSE and SEC have approved the removal of the minimum brokerage fees of Rs.10 and the minimum CDS fees of Rs.5 levied on transactions.

"Accordingly, the 0.64% brokerage fee and the CDS fee of 0.02% will be applicable for all transactions up to Rs.50 million with effect from April 10, 2012," the announcement said.

The fee of Rs.25 charged from custodian banks in respect of custodian trades has been done away with effect from March 19, 2012.
http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=49438

The value of rupee currency notes and coins in circulation increased by 14.7 percent to Rs. 293.2 billion as at end December 2011 from a year earlier while unfit currency notes amounting to Rs. 39.7 million were taken out of circulation.

Physical currency held with public amounted to Rs. 242.9 billion while commercial banks held Rs. 50.4 billion.

Consolidated broad money supply (which includes physical money and value of deposits held in banks and financial institutions) grew 19.1 percent to Rs. 2.5 trillion (Rs. 2,491.7 billion).

The rate at which broad money was exchanged from transaction to transaction, or the velocity of money, was 2.85 in 2011 while the money multiplier, the rate at which the banking system creates money (through lending for example) was 5.67. The Velocity of money in 2010 was 2.92 and the money multiplier was 5.80 percent.

The Currency Department (CRD) of the Central Bank issues both notes and coins to the economy through Licensed Commercial Banks (LCB) by way of new issues and re-issue of serviceables. The value of new and serviceable (fit) currency notes issued to LCBs in 2011 was Rs.106.1 billion and Rs.229.0 billion, respectively, the Central Bank said in its 2011 Annual Report.

The value of new and fit coin issues to LCBs was Rs.458.9 million and Rs.13.5 million, respectively.

Accordingly, the value of currency notes and coins in circulation as at December 31, 2011 stood at Rs.293.2 billion representing an annual increase of 14.7 per cent over circulation as at end 2010.

CRD accepts deposits of fit and unserviceable (unfit) currency from LCBs. The fit currency is reissued to LCBs and unfit currency is withdrawn from circulation. Total values of fit notes and unfit notes received through deposits were Rs.258.2 billion and Rs.39.7 billion respectively, in 2011 whereas the value of deposits of coins was Rs. 13.8 million. Accordingly, the total net values of notes and coins issued were Rs. 37.2 billion and Rs.472.3 million, respectively.

The 11th currency note series on the theme of "Development, Prosperity and Sri Lanka Dancers" was issued in February 2011. The series consisted of Rs. 20, 50, 100, 500, 1000 and 5000, the bank said.
http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=49437

*Ports authority profits up 89%
*Central Bank updates port develop ment activities, full scale operations at H’tota this May

Despite a sluggish global economic recovery the Sri Lanka Ports Authority has seen its profits increase by 89 percent to Rs. 8.3 billion in 2011 while 84 new companies were registered as freight forwarders, bringing the total number of freight forwarders to 429 at the end of 2011, the Central Bank said.

"A steady growth was seen in the ports sector in 2011. Despite severe set-backs in the pace of global economic recovery, total container handling increased by 3 per cent to 4.3 million twenty foot equivalent container units (TEUs) in 2011 while transshipment handling increased marginally, the Central Bank said in its 2011 Annual Report.

"The total cargo handled increased by 6.2 per cent to 65.1 million metric tons. The total number of vessels arriving at the port of Colombo grew by 5.5 per cent.

"As per the unaudited provisional financial data, financial performance of the Sri Lanka Ports Authority (SLPA) improved significantly despite the sluggish pace of global trade. The revenue of the SLPA increased by 10.5 per cent to Rs. 31.2 billion, while the operating expenditure decreased by 3.9 per cent to Rs. 30 billion in 2011. The operating profit of the SLPA increased by 89 per cent to Rs. 8.3 billion compared to Rs. 4.4 billion in 2010.

"Development of port infrastructure has been at the forefront of the government’s infrastructure development drive. Construction of Phase I of the Hambanthota Port was completed in December 2011 and full scale commercial operations are expected to commence by mid-2012," the Central Bank said.

"SLPA shortlisted 14 of the 27 Expressions of Interest received for the setting up factories at the Hambantota Port. Four proposals to set up petrochemical, cement, sugar and fertilizer processing plants have been approved by the Cabinet of Ministers. Construction of an oil tank farm with fourteen tanks was in progress at the Hambantota Port to facilitate the supply of bunkering fuel.

"The Colombo South Port project was in progress in 2011 and construction of the South Container Terminal is expected to commence in early 2012. The estimated project cost is US dollars 500 million and the terminal is expected to commence operations in May 2014 with the capacity to handle another 2.4 million TEUs per annum.

"All land, building and road construction work of the Oluvil Port was completed in 2011 while the entire project is expected to be completed by July 2012. The project comprises a commercial harbor and a basin for fishing rafts.

"Upon completion of reconstruction work of the Galle Port, it will cater to the tourism sector in the region by developing a Yacht Marina, which will attract more yachts.

"The Trincomalee harbour has been identified as a centre to cater for bulk cargo and port related industrial activities including heavy industries, tourism and agriculture.

"SLPA has also proposed to build a Port City adjacent to the Port of Colombo at an estimated cost of US dollars 700 million. This will consist of a range of facilities such as luxury hotels, apartment complexes and shopping malls.

"SLPA took measures to improve productivity and efficiency of container and cargo handling to maintain its competitiveness. In the face of the slow growth in the global trade and competition from regional ports, Sri Lanka needs to take timely measures to improve productivity and efficiency in the port sector. With a view to improve productivity, in 2011, both the Jaya Container Terminal (JCT) and South Asia Gateway Terminals Limited (SAGT) have installed new equipment to reduce turnaround time.

Further, SLPA recognised the need for capacity building among existing employees to help improve competitiveness of its port operations. The staff was provided with required training to help improve their soft skills, human resource management and technical skills," the Central Bank said.
http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=49439

REPORT FROM SRI LANKA—Nearly three years after Sri Lanka’s 30-year civil war came to an end, the country is ramping up efforts to recapture its status as one of Asia’s most popular holiday destinations.

The efforts begin with new development. Sri Lanka, a country of approximately 20 million, has fewer than 15,000 registered hotel rooms, according to the Sri Lanka Tourism Development Authority. The government wants to add 35,000 rooms within the next four years to meet the projected demand of 2.5 million foreign visitors.

But is that number attainable? And if it is, will it satisfy projected demand?

Growth during the past three years has been promising. The SLTDA estimates there were 850,000 foreign arrivals in 2011, which is 30% above the 2010 numbers. During the first full year of peace in 2010, arrivals increased 50%.

The major hurdle to growth could be visas, said HVS India associate Kaushik Vardharajan. While Sri Lanka issued tourist visas on arrival in the country through 2011, the government dropped that policy in January of this year. Most foreigners, with the exception of those from the Maldives and Singapore, must now apply and buy visas online.

Meeting visitor targets also will depend on whether the country’s new international airport in Hambantota, financed and constructed by China, is completed as projected by the end of the year, said Bill Barnett, managing director of Phuket-based C9 Hotelworks. Hambantota is located in a rural area on the southeastern coast that is a constituency of President Mahinda Rajapaksa.

The government also must increase the number of flights and airlines allowed to serve the country, Barnett and HVS associate Inshita Wij said.

Wij said increasing the number of flights from India is crucial because Indians are the largest group of visitors, making up nearly 20% of all arrivals in recent years. Visitors from Britain follow, comprising 16% of all foreign visitors during 2010. Visitors from the Maldives and Middle East together made up about 12%.

If everything goes according to plan, however, Sri Lanka still might experience a hotel shortage. HVS India, which issued a report on Sri Lanka’s tourism and hotel prospects last summer, estimated that more than 41,000 new rooms would be needed by that date.

Not that registered and classified hotels reflect the whole accommodation story, according to statistics from the SLTDA. The proprietors of 36% of registered rooms chose not to be classified at all. For the year 2010, SLTDA estimated that close to 6,000 additional rooms were in non-registered, informal “supplementary establishments.” These include inns, guesthouses, youth hostels and homestays. Almost 20% of room nights were spent in these informal lodgings during 2010.
http://www.hotelnewsnow.com/Articles.aspx/7944/Sri-Lanka-aims-to-triple-hotel-supply-by-2016

12 April 2012
By Susan Cunningham
HotelNewsNow.com correspondent

REPORT FROM SRI LANKA—For tourism appeal, Sir Lanka boasts considerable natural and cultural assets. With 1,340 kilometers of coastline, the island country is dotted with beaches with potential for scuba diving, surfing and whale-watching. It has nine well-protected national parks and seven bird sanctuaries.

Running up from the center-south to the center of the nation is a series of pilgrimage sites for Buddhists and Hindus. The trail culminates north of the city Kandy in the “cultural triangle” containing extensive remains of the three ancient cities of Anuradhapura, Sigiriya and Polonnaruwa. Founded as the capital in the fourth century B.C., Anuradhapura was the capital for nearly 15 centuries. East of here was the site of most battles with the Tamils.

Yet accommodation is overwhelmingly concentrated in Colombo, the country’s largest city, and along the 125 kilometers of southwestern coastline that runs from Colombo to the old Dutch colonial outpost of Galle. In between are the beaches of Kalutara, Beruwala, Bentota, Ahungalla and Hikkaduwa. Almost 35% of the registered rooms in 2010 were along the southern coast and almost 40% were in Colombo or the surrounding area, according to the Sri Lanka Tourism Development Authority. It is these areas where most renovations and new hotels are planned.

To encourage renovation and refurbishment, in 2010 the government set minimum rates for the classified hotels in Colombo. A room at a 5-star hotel that in 2008 was charging between $35 and $50 per night was required to charge at least $75 in 2010. The minimum rate is now $125 gross, but rates of $200 per night are becoming common in Colombo.

Although the higher rates are only required in the capital area, many of the large hotels in resort areas have followed suit—regardless of whether the product has been renovated. Many online guest reviews, as a result, cite a disparity between star rating and quality of service and facility.

“It’s a rough period,” said HVS’s Kaushik Vardharajan. “Hotels are having a hard time, but it’s having an impact. The crappy hotels are trying to renovate to keep up. Every hotel is trying to renovate. The profile of guests is changing. It has raised the profile of Sri Lanka.”

Most of the new hotels and relaunches are in the 4- and 5-star range. Often they intend to appeal to European or Australian tourists, even though the share of these traditional source markets is shrinking. The share of visitors from Germany, Australia and France continued to be in the single digits in 2010, according to the SLTDA.
http://www.hotelnewsnow.com/Articles.aspx/7946/Sri-Lanka-boasts-natural-cultural-splendor