Sri Lanka Newspapers Wednesday19/04/2012

Rupee flat, benchmark interest rates up

The rupee stayed relatively flat against the dollar on Wednesday with import demand matched by inflows, currency dealers said.

The rupee opened the day at Rs. 128.55/70 against the greenback and closed at Rs. 128.50/60.

"We are seeing some importer demand but it is equally matched by inflows, which has kept the exchange rate relatively stable," a dealer said.

Meanwhile, benchmark Treasury bill rates rose across all maturities at yesterday’s primary market auction.

The three-months Treasury bill saw its yield increase to 11.73 from 11.62 percent a week ago, the six-months bill yield moved up to 11.85 percent from 11.65 percent and the 12-months bill yield rose 11.96 percent from 11.69 percent.

The Public Debt Department of the Central Bank offered maturing bills amounting to Rs. 10 billion at yesterday’s auction. Bids amounted to Rs. 22.8 billion of which Rs. 12.4 billion was accepted.

http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=49846

he International Monetary Fund (IMF) releasing its World Economic Outlook April 2012 edition in Washington DC this week said Sri Lanka’s economy is expected to grow 7.5 percent this year, slightly better than the Central Bank’s forecast of 7.2 percent.

However, growth is expected to dip to 7 percent in 2013 and 6.5 percent by 2017. According to Central Bank forecasts, growth is expected to pick up to 8 percent in 2013 and average around 8 percent in the medium term.

The economy grew by 8.3 percent last year.

While year-end inflation in 2011 stood at 4.9 percent, the IMF has forecast inflation would pick up to 9.1 percent by the end of this year before easing to 7 percent by the end of 2013.

The IMF has maintained that recent policy reversals to contain a balance of payments problem would stifle growth, but would put the country on a more sustainable growth trajectory. The ADB on the other hand, says inflation and public debt management could come under pressure because of the falling rupee.

"I personally prefer to have a 7 percent growth rate with stability, rather than a higher growth rate with reserves under pressure," IMF Sri Lanka Resident Representative Dr. Koshy Mathai said earlier this month announcing the resumption of the IMF programme.

"We are very happy about the policy package introduced by the authorities and their commitment that there would be flexibility. Now is the time to be happy about the sustainability of the economy. Six months ago there was a problem with the policy left unchanged. But now, the policy mix is right and is now beginning to shape into a consistent policy regime," he said.

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LBO: Shares closed weaker Wednesday with trading remaining lacklustre following a holiday for the traditional new year last week, brokers said.

The main All Share Price Index fell 0.09 percent (4.97 points) to 5,407.47, while the more liquid Milanka index fell 0.06 percent (3.17) to close at 4,907.15.

Turnover was 250 million rupees, according to stock exchange provisional figures.

Turnover was 250 million rupees, according to stock exchange provisional figures.

Index heavyweight John Keells Holdings closed at 208.50 rupees, down 90 cents.

Swarnamahal Financial Services was the most actively traded stock, closing at 8.80 rupees, down 20 cents with over 2.4 million shares traded.

Commercial Bank was also actively traded, ending at 101.80 rupees, up 1.60 rupees, with 170,476 shares done.

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With the bright prospects for a boom in the tourist industry, Browns Investments Plc has decided to venture into the leisure sector with an investment of Rs. 1.75 billion, the company announced yesterday. The required approvals have been obtained and construction of a 150-room star-class hotel will commence shortly. It is planned to increase the number of rooms to 172 with requisite approvals.

The site selected at Kosgoda on the Colombo-Galle road for the hotel is surrounded on three sides by water. All rooms will have a sea view thereby providing a luxurious setting for the occupants. The average room size will be 35 sq meters. The agreement with Board of Investment of Sri Lanka was signed on 5th April 2012.

A reputed architectural firm in Thailand has been commissioned to design the hotel which will be built in an eco-friendly environment. The hotel is adjacent to a turtle hatchery and the guests will have a unique experience in watching the turtles moving around on the beach, from their rooms.

The hotel will be equipped with all modern facilities including two restaurants, the main one which can accommodate 250 persons and a specialty restaurant. The accent will be on outdoor facilities with an outdoor lounge bar, an outdoor food outlet, and a pool bar.

The hotel will be fully owned by Browns Investments Plcbut it is intended that management will be given over to a well experienced, globally recognized operator.Discussions are underway with international hotel chains regarding the management of the hotel.

The project, estimated to cost around Rs 1.75 billion, is scheduled to be completed in two years.

Browns Investments Plc has ventured into a number of sectors during its short period of existence.The sectors include Hotels & Leisure, Plantations, AgriBusiness , Construction, Manufacturing &Exports , and Entertainment .

According to a spokesman of Browns InvestmentsPlc, they were not hesitant in venturing out and making investments during the war years. After the war, the Company has aggressively ventured into a number of areas through investments and joint ventures. Some of these initiatives are investments in LOLC Leisure, the Sierra Group, SamudraBeach Hotel, Excel Holdings, Free Lanka Capital Holdings and Agstar Fertilizers Ltd.

In its joint venture with LOLC Leisure, Browns Investments holds a 30% stake. The hotels in the joint venture include Riverina, Palm Garden Hotel, Eden, Tropical Villas &Dickwella Village Resort. These properties comprise 620 + rooms in the Southern Province. Currently, most of these properties are going through a major refurbishment drive with the objective of making them more attractive to the tourists. The leisure sector is a key segment in the investmentportfolio of Browns Investments. According to Mr. P R Saldin, CEO, Browns Investments, with Browns Investments’ stake in LOLC Leisure and the construction of the hotel at Kosgoda, Browns Investment will strengthen it’s foot print in this sector.

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Sri Lanka's pharmaceutical manufacturing sector will get a new boost when Glaxo Wellcome Ceylon GlaxoSmithKline (GSK) commences the first ever solid pharma production facility by a multinational in the country on April 24.

"I am given to understand that Glaxo Wellcome will be producing a huge 2.5 billion Panadol brand of Paracetamol tablets volume annually in its new facility in Moratuwa equipped with the state of the art machinery. I congratulate Glaxo Wellcome on their new initiative" told Minister of Industry and Commerce Rishad Bathiudeen to T.S. Dayanand, Expatriate CEO of global pharmaceutical giant GlaxoSmithKline Sri Lanka last week.

"This new source of supply will boost our pharma manufacturing sector and will also help stabilize domestic prices. Realizing the high dependency of local market on imported products and the need for setting up domestic production, President Mahinda Rajapaksa, proposed in September 2011 that steps are necessary to be taken towards pharma imports substitution.

"I believe that the new plant in Moratuwa will help us move towards Strategic Import Replacement in our pharma market" Minister Bathiudeen said. Sri Lanka's competitive domestic pharma market is estimated to grow 11% annually. Only six local pharmaceutical manufacturers are already active in Sri Lanka and the shortfall is met by imported products from more than 300 international manufacturers which are currently competing in the domestic market.

The government spends around US $ 140 million annually for medicines alone. Private sector research showed that among the promising growth segments within the Sri Lankan pharma market are chronic care, cardiovascular, and anti-diabetics segments.

The market share of generic drugs also has increased steadily over the past few years, and now represents almost two-thirds of the market. According to the Business Monitor International which analyses country risks across 175 countries, the projected expenditure for Lankan pharmaceuticals for 2011 is expected to increase by 15 percent to US $ 444 million in comparison to $ 386 million in 2010. Such a high dollar quantum together with rates of increase on annual pharma expenditure demonstrates promise for potential investors in this sector. Among the proposals in the 2012 budget were to develop manufacturing of pharmaceuticals in Sri Lanka as a Strategic Import Replacement Enterprise by granting tax holidays for investment in the pharmaceuticals production.

"We are also planning to invest a further $ 11.2 million (Rs. 1.4 billion) to expand operations in Sri Lanka. We are looking to bring in state of the art technology to Sri Lanka" Dayanand told Minister Bathiudeen. "We also view the upcoming special pharmaceutical zone in Kurunegala positively" Dayanand said.

The Ministry of Industry and Commerce have already begun preliminary work on developing the country's first pharmaceutical manufacturing zone by mapping out the first steps in developing the 48 acre (19.4 hectare) land plot which is less than 5 kilometres from Kurunegala city in the North Western Province.
http://www.dailynews.lk/2012/04/19/bus10.asp

Foreign investment into the Colombo Stock Exchange has amounted to Rs. 21,050.2 million so far this year, surpassing the net outflow of Rs. 19,232.8 million for the whole of last year, data compiled by Lanka Securities Pvt. Ltd as of April 17, 2012 showed.

Foreign holdings of listed stocks amounted to Rs. 627,232.6 million, or 31.6 percent of total market capitalisation, valued at Rs. 1,984,476.5 million as at April 17, 2012.

Foreign holdings in the consumer goods sector amounted to Rs. 262,165.2 million, industrial Rs. 166,597 million, financial services Rs. 93,379.9 million, utilities Rs. 90,747.7 million, consumer services Rs. 11,703.5 million, Healthcare Rs. 2,138.2 million and technology Rs. 501.1 million.
http://island.lk/index.php?page_cat=article-details&page=article-details&code_title=49847

sriranga wrote:Sri Lanka's pharmaceutical manufacturing sector will get a new boost when Glaxo Wellcome Ceylon GlaxoSmithKline (GSK) commences the first ever solid pharma production facility by a multinational in the country on April 24.

"I am given to understand that Glaxo Wellcome will be producing a huge 2.5 billion Panadol brand of Paracetamol tablets volume annually in its new facility in Moratuwa equipped with the state of the art machinery. I congratulate Glaxo Wellcome on their new initiative" told Minister of Industry and Commerce Rishad Bathiudeen to T.S. Dayanand, Expatriate CEO of global pharmaceutical giant GlaxoSmithKline Sri Lanka last week.

"This new source of supply will boost our pharma manufacturing sector and will also help stabilize domestic prices. Realizing the high dependency of local market on imported products and the need for setting up domestic production, President Mahinda Rajapaksa, proposed in September 2011 that steps are necessary to be taken towards pharma imports substitution.

"I believe that the new plant in Moratuwa will help us move towards Strategic Import Replacement in our pharma market" Minister Bathiudeen said. Sri Lanka's competitive domestic pharma market is estimated to grow 11% annually. Only six local pharmaceutical manufacturers are already active in Sri Lanka and the shortfall is met by imported products from more than 300 international manufacturers which are currently competing in the domestic market.

The government spends around US $ 140 million annually for medicines alone. Private sector research showed that among the promising growth segments within the Sri Lankan pharma market are chronic care, cardiovascular, and anti-diabetics segments.

The market share of generic drugs also has increased steadily over the past few years, and now represents almost two-thirds of the market. According to the Business Monitor International which analyses country risks across 175 countries, the projected expenditure for Lankan pharmaceuticals for 2011 is expected to increase by 15 percent to US $ 444 million in comparison to $ 386 million in 2010. Such a high dollar quantum together with rates of increase on annual pharma expenditure demonstrates promise for potential investors in this sector. Among the proposals in the 2012 budget were to develop manufacturing of pharmaceuticals in Sri Lanka as a Strategic Import Replacement Enterprise by granting tax holidays for investment in the pharmaceuticals production.

"We are also planning to invest a further $ 11.2 million (Rs. 1.4 billion) to expand operations in Sri Lanka. We are looking to bring in state of the art technology to Sri Lanka" Dayanand told Minister Bathiudeen. "We also view the upcoming special pharmaceutical zone in Kurunegala positively" Dayanand said.

The Ministry of Industry and Commerce have already begun preliminary work on developing the country's first pharmaceutical manufacturing zone by mapping out the first steps in developing the 48 acre (19.4 hectare) land plot which is less than 5 kilometres from Kurunegala city in the North Western Province.
http://www.dailynews.lk/2012/04/19/bus10.asp

Foreign investors already invested in srilanka are expanding business with infuse of new capital.Even Nestle have a huge plan to increase it's production capacities. I heard that unilever is also planing to relocate their manufacturing unit in to kalutara district with enhanced capacities.There are many more and all these projects will bring investment in to the country. Government should extend it's fullest support to these companies to implement their business plans without any delay.