Sri Lanka Newspapers Wednesday 18/04/2012

Tourism arrivals up 21.3%, Western Europe dominant

Tourist arrivals grew 21.3 percent in March 2012 to 91,102 from 75,130 a year earlier with the bulk of arrivals from Western European countries, according to latest data released by the Sri Lanka Tourism Development Authority yesterday.

Arrivals from Western Europe grew 35.6 percent to 40,686 with tourists from the UK numbering 12,032, up 35.9 percent from a year earlier. German tourist arrivals amounted to 7,654, an increase of 29.6 percent while French nationals visiting the island during the month totalled 6,378, up 8.1 percent. Visitors from Switzerland and Sweden increased by 87.8 percent and 83.7 percent respectively to 2,345 and 2,654.

Visitors from the US increased by 21.3 percent to 2,342 during March 2011 from 1,931 a year ago, while Canadian tourists increased by 19.1 percent to 2,453.

Arrivals from Eastern Europe increased 59.3 percent to 7,882 with Russian visitors amounting to 2,998, up 56.7 percent.

Arrivals from Africa increased 4.6 percent to 410 while visitors originating from the Middle East increased a mere 0.5 percent to 4,086.

The number of tourists from East Asia increased 44.3 percent to 10,148. Chinese visitors grew 6 percent to 1,442, Japan 14.9 percent to 1,752, Malaysia 47.3 percent to 1,958 and Singapore 30.6 percent to 1,564.

The highest number of arrivals from any country was reported by India at 13,908, up 2.1 percent from a year earlier.

The number of arrivals from South Asia declined by 7.3 percent in March from a year earlier to 19,516 while visitors from Australasia dipped 2.3 percent to 3,460 with tourists from Australia numbering 3,047 arrivals, up 1 percent from last year.

The cumulative numbers for the period January to March 2012 showed an increase of 21.1 percent with total arrivals numbering 260,525 as against 215,124 a year ago with Western Europe continuing to play a dominant role with 115,547 arrivals, up 23.3 percent.

Total tourist arrivals in 2011 amounted to 855,975, generating earnings amounting to of US$ 830.3 million.
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*Fitch: State-owned BOC rating outlooks stable
*Capitalisation weak
*Profitability low, operating cost base high
*Loans to deposits ratio 95%, management challenged to bring it down to 85%

Fitch Ratings has assigned Sri Lanka’s Bank of Ceylon (BOC) Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) of ‘BB-’ with Stable Outlooks. Fitch has also assigned BOC a ‘b+’ Viability Rating (V/R). Simultaneously, BOC’s National Long-Term rating and its outstanding subordinated debentures have been affirmed at ‘AA+(lka)’ with a Stable Outlook and ‘AA(lka)’, respectively.

"Fitch has also assigned BOC’s proposed senior unsecured USD-denominated notes an expected rating of ‘BB-(exp)’, same as its Foreign Currency IDR. The size and tenor of the notes are yet to be determined. The final rating is contingent upon receipt of final documents conforming to information already received," the ratings agency said.

"BOC’s IDRs and National Long-Term ratings reflect Fitch’s expectation of support from the government of Sri Lanka (GoSL, ‘BB-’), if required, given its quasi sovereign status, high systemic importance and role as one of the main bankers to the government. BOC is the largest bank in Sri Lanka and fully owned by GoSL. Any change in Sri Lanka’s sovereign ratings would likely be reflected in the ratings of BOC.

"The V/R reflects BOC’s domestic franchise being underpinned by its sovereign linkages and extensive branch network, as well as its weak capitalisation, improving profitability, increasing loan/deposit ratio and concentration in the state sector (GoSL and state entities).

"While BOC’s IDRs and National Long-Term rating are closely correlated with Sri Lanka’s sovereign rating, an upgrade of BOC’s National Long-Term rating could result from a demonstration of preferential support for BOC. The V/R could be upgraded if BOC enhances its capital buffer substantially (including a high loan loss reserve coverage), the loan-deposit ratio is maintained/sustained at 80%-85% and/or supplemented by medium term wholesale funding, and operating performance and asset quality remain stable. The V/R could be downgraded if capital buffer weakens from continued high asset growth, or if a large asset quality downturn from domestic/external macroeconomic shocks leads to capital impairment.

BOC hires foreign banks to promote bond issue

Bank of Ceylon has hired several foreign banks to arrange bond investor meetings in Asia, Europe and the US ahead of a planned new bond issue, news wire agencies reported yesterday.

The state-owned banking giant is reported to have hired Bank of America Corp., Citigroup Inc. and HSBC Holdings to arrange bond investor meetings, according to Bloomberg news agency. LBO reported that other sources had indicated that top financial management firm Merril Lynch was also included.

The office of BOC Chairman Dr. Gamini Wickramasinghe told us the bank was not making an official statement, nor commenting on the proposed bond issue at the moment.
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The rupee weakened against the dollar yesterday with importer demand dominating trading activities, currency dealers said.

The rupee closed at Rs. 128.55/70 against the greenback after opening at Rs. 128.30.

"Importer demand was strong which is a bit surprising for this time of year, especially after the New Year," a currency dealer said.

According to Central Bank and Treasury analysis, the rupee was expected to strengthen after the festive season.

According to the IMF, the Central Bank’s decision to stop intervening in the foreign exchange market would help contain a balance of payments crisis and was the major factor, along with adjustments to domestic fuel prices and electricity rates and a policy rate increase and ceiling on private sector credit growth, to recommence the US$ 2.6 billion standby facility arrangement earlier this year.

According to the Asian Development Bank (ADB), the falling rupee would pressurise inflation and the all ready high public debt to GDP ratio.

Growth is expected to slowdown to 7.2 percent this year from 8.3 percent last year, according to the Central Bank. The ADB growth forecast is 7 percent.

Sovereign ratings agency Moody’s said on Monday that the recommencement of the IMF programme was a positive factor for the Sri Lankan economy.
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The holiday mood continued to linger on the Colombo bourse yesterday when a low turnover of Rs.442 million, up from the previous day’s Rs.206 million, was posted with both indices moving down – the All Share by 21.22 points (0.39%) and the Milanka by 17.73 points (0.36%) with 72 gainers trailing 103 losers.

Nearly half the day’s turnover was contributed by JKH where over a million shares were traded including crossings of over 0.3 million shares at prices of Rs.209.40 and Rs.209.50 generating a business volume of Rs. 216.5 – the bulk of it from transactions on the trading floor.

JKH closed at Rs.209.40, down 40 cents from its previous close, with the counter traded between Rs.209.40 and Rs.209.50.

Other turnover generators yesterday included Ceylon Tobacco where 50,000 shares were crossed at a price of Rs.600 while 40,510 shares were done on the market between Rs.599.80 and Rs.600 gaining Rs.3 to close at Rs.595.10 contributing Rs.24.3 million to the day’s turnover on the floor trades.

Hayleys closed Rs.3.90 down to Rs.360.10 with 36,500 shares traded between Rs.360 and Rs.360.10 while HNB (non-voting) gained Rs.1.30 to close at Rs.96.50 on over 0.1 million shares done between Rs.95.90 and Rs.97.

The Colombo Stock Exchange announced that Taprobane Holdings will be listing approximately 0.73 million shares by way of an introduction with details to be released shortly.
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MUMBAI, India (AP) — India’s central bank cut its key interest rate by a bigger-than-expected half percentage point Tuesday, the first cut in three years as it tries to shore up flagging growth even as inflation remains high.

The Reserve Bank of India cut its short term lending rate — the repo rate — to 8.0 percent from 8.5 percent. Many economists had expected a quarter point cut.

The bank said it decided to cut the rate because economic growth has slowed to below what it believes is its long-term trend rate, which in turn is contributing to a moderation in core inflation.

The last interest rate cut was in April 2009. Between March 2010 and October 2011, the bank waged a lonely battle against inflation, raising interest rates by 3.75 points in 13 consecutive rate hikes.

The central bank cautioned that the scope for further rate cuts is limited, partly because growth is not slowing dramatically. "At the same time, upside risks to inflation persist. These considerations inherently limit the space for further reduction in policy rates."

The move comes amid simmering tension between India’s central bank and New Delhi, which has been unable — or unwilling — to contain government spending and enact policy changes that could unblock supply bottlenecks and kickstart growth.

The RBI chided New Delhi for "fiscal slippage" and again warned that unless the government takes steps to contain subsidy spending, which has stoked demand and worsened the budget deficit, it would be difficult for the bank to cut rates further.

The bank admonished New Delhi to raise subsidized fuel prices, despite the inflationary impact of such a move.

India’s economic growth slipped to 6.1 percent during the December quarter, the lowest in over two years.

The RBI predicted that India’s economy grew 7.0 percent for the fiscal year ended March 2012, and expects growth to pick up to 7.3 percent in the current fiscal year.

It said that inflation, which was 6.9 percent in March, would moderate to 6.5 percent by next March.
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With the release of a further payment by Ceylinco Shriram, nearly 75% of their investors were paid over 60% of their deposits in cash, a reliable source informs. The same source divulged that the money was released to depositors in March 2012, in compliance with the payment plan submitted by the Board of Directors of Ceylinco Shriram to the Courts and its depositors. The payment plan was prepared with the interest calculated up to March 2009 which was also included in the repayment.

It was further revealed by the same source that several more assets owned by Ceylinco Shriram would be liquidated in the future and converted into liquid cash, which would then be utilised to pay the balance outstanding, in keeping with the promise made to the depositors that 60% of the deposit money would be settled within 42 months. The same source further revealed that the payment plan was on course and that Ceylinco Shriram is confident of delivering the promised results.

Ceylinco Shriram was the first, and one among the few companies, to present a practical and a realistic payment plan that addressed the concerns of the depositors. The Directors of Ceylinco Shriram, who were committed to seeing every depositor is settled, stood with the depositors, understanding their plight, which many felt was reflected in the payment plan presented.

Ceylinco Shriram had to face a situation beyond its control, and succumb to the domino effect of the collapse of Golden Key and other Ceylinco Group companies. Ceylinco Shriram continued to pay all depositors their dues until December 2008 even after many financial giants worldwide experienced difficult situations due the changing dynamics of the industry by the beginning of that year. Even after the crisis the company always strove to maintain a productive dialogue with the depositors and took their views in preparing the payment plan.
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WASHINGTON (AP) — Jim Yong Kim, an American who is president of Dartmouth College, has been chosen to be the next president of the World Bank. His selection extends the U.S. hold on the top job at the 187-nation development agency.

Kim, a surprise nominee of President Barack Obama, was selected Monday in a vote by the World Bank’s 25-member executive board. He’ll succeed Robert Zoellick, who’s stepping down after a five-year term.
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Apr 17, Colombo: Sri Lanka's vehicle importers met with the Sri Lankan President Mahinda Rajapaksa today at the Temple Trees to discuss the restrictions and levies imposed by the Ministry of Finance on the vehicle imports.

Following the meeting a decision was taken to keep the two year time limit for importation of used cars unchanged and reduce the five-year time limit for importation of commercial vehicles to four years.

According to the Amendment in 2007 the importation of reconditioned motor cars that have been used for more than two years and commercial vehicles used for more than five years is not allowed.

The government raised taxes significantly on motor vehicles effective March 31, 2012, as a measure to arrest the growing trade deficit and curtail the expenses the government incurring in importing fuel.

Deputy Minister of Finance and Planning Geethanjana Gunawardena, Secretary to the Ministry of Finance Dr. P.B. Jayasundera, President's chief of Staff Gamini Senarath were also present at the discussion.
http://www.colombopage.com/archive_12/Apr17_1334682549CH.php

The publisher of leading business magazine LMD, Media Services announced yesterday that its special edition the Brands Annual has been released to supermarkets and bookstores across the island.

The all-encompassing annual special issue centers around the top 200 brands in this country, compiled by Brand Finance.

Heading the most valuable listed-company brands this year are the two state-banking giants, Bank Of Ceylon (BOC) and People’s Bank with brand values of Rs. 15.2 billion and Rs 14 billion respectively.

They are followed by leading mobile-phone operator Dialog, and three more banks NSB, Commercial Bank and HNB.

In its foreword to the 190-plus page journal, LMD says: “The local brands landscape continues to be dominated by the giants of banking. And not for the first time, they are led by two state-owned entities. A sign of the times perhaps is the fact that the brand values of both BOC and People’s Bank declined this year.

“In contrast however, the two torchbearers of Sri Lanka’s telecommunications industry enjoyed brand-value growth because the tel-co price war of old has abated and the regulatory environment improved.”

The Brands Annual also contains profiles of many of the top-ranking brands, including interviews with the guardians of leading unlisted brands.

And Brand Finance’s top 100 global brands led by heavyweights Apple and Google are also listed in the publication, together with commentaries on the importance of brands in the business landscape of today and branding in general.
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