Showing posts with label bourse colombo stock market azhar razak. Show all posts
Showing posts with label bourse colombo stock market azhar razak. Show all posts

Monday, September 27, 2010

Bond rating

Fitch rates Sri Lanka's upcoming bond 'B+'

Fitch Ratings has assigned Sri Lanka's upcoming USD bond issue a rating of 'B+', a statement by the rating firm said.
 The rating is in line with Sri Lanka's Long-term foreign currency Issuer Default Rating (IDR) of 'B+', which has a Positive Outlook
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Sri Lanka and Mexico 'best for long-haul value'

Sri Lanka and Mexico 'best for long-haul value'


Australia and Hong Kong were the least cost-effective destinations featured in the survey, which also revealed significant rises in the price of food, drinks and supermarket goods in Thailand and South Africa.
The Post Office's annual Long-Haul Holiday Report compares the cost of 10 essential holiday purchases – such as an evening meal, a cup of coffee and sun cream – in 22 destinations.

In
Sri Lanka, the 10 items cost just £46.85, compared with £155.48 in the Australian capital, Sydney.
Research released this week by Hayes and Jarvis, a tour operator specialising in long-haul trips, also suggested that Sri Lanka is among the best-value destinations for a package holiday, with a one-week break in November costing £799 on average, bettered only by Egypt (£649) and the Dominican Republic (£729).
Sri Lanka has witnessed a sharp rise in visitors following the end to hostilities between government forces and Tamil separatists in the north and east of the island. 

Nearly 400,000 foreign tourists visited in the first eight months of 2010, an increase of 47 per cent on the previous year.
Thailand – the cheapest destination in the Post Office's 2009 report – fell to sixth in the survey, thanks in part to the strength against the pound of the Thai baht, which is worth 11.6 per cent more than last year. The 10 items cost £52.85 in Phuket, up by 16 per cent on last year.
Mexico and Kenya finished second and third in the survey. UK sales of the Mexican peso and the Kenyan shilling have risen by 5 and 11 per cent, respectively, while the Kenyan Tourism Board has reported a 7 per cent rise in British visitors.
Malaysia and Indonesia finished fourth and fifth in the survey, with the 10 items costing British visitors £51.89 and £52.39.

Sean Tipton from Abta
, the travel association, emphasised the importance of prices on the ground, particularly with air travel becoming more expensive. The latest rises in APD, due in November, will add up to £240 to the cost of long-haul flights from the UK for a family of four.
"Long-haul travel can initially look unattractive, with air fares costing more than travelling to Europe," Mr Tipton said. "But many long-haul destinations are cheaper than the Mediterranean, with even a weak pound still going a very long way."
Elsewhere
, prices in Australia, Canada and Brazil have all risen sharply, and sterling's recent weakness against the rand means that tourists visiting South Africa can expect to pay about 28 per cent more for food, drink and other holiday essentials this winter.

(Courtesy The Telegraph)
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Britannia to wind up ‘unviable’ Lanka operation

Britannia to wind up ‘unviable’ Lanka operation

The Nusli Wadia-promoted biscuit maker, Britannia Industries, has decided to wind up its ‘unviable’ Sri Lankan operations, according to foreign media.

 Britannia entered the Sri Lankan market in 2008 by launching a range of biscuits under the brand name Britannia Lanka.
“The company had decided to withdraw from the operations in Sri Lanka as they were not found to be viable. The right thing for a management to do was realise and recognise something and act on it and it is precisely for this reason that the company decided to withdraw,” Wadia told shareholders of the company recently.

Britannia could not turn around its business in the island nation
, thanks to stiff competition from the local and already established brands in that counrty, sources said. 
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Friday, September 24, 2010

Welcome

The Bottom Line always provides quality content that is surely 'worth reading'. So please keep posting and do keep reading
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GSP crisis prompts top apparel firms to look beyond Lanka

The loss of the Generalised System of Preferences Plus (GSP+) facility offered to Sri Lanka and the wages board’s recent decision to raise the minimum salary of garment workers by 20% have prompted some top industry players to look for alternatives in other countries.
Industry sources said some major apparel manufacturers in the country were considering the possibility of shutting down their factories here and open then elsewhere to cut costs.
“This is the case at present with factories that have a greater exposure to Europe since they are reluctant to lose the higher margins that could be made through buyers in these markets,” a top industry official told The Bottom Line.
The sources said some players were contemplating on relocation based on the fact that costs of labour and raw materials were much lower in those countries.
It is learnt that some major players are conducting feasibility studies to operate from regional countries such as Bangladesh and the Maldives.
Joint Apparel Association Forum (JAAF) secretary-general Rohan Masakorala said the industry was facing a ‘tough situation.’
“There’s a grave threat of GSP-related orders moving out of Sri Lanka and to countries like India or Bangladesh. Exporters will feel the pinch by late September or October. However, it’s too premature to comment on this.”
He said the turnover forecast for apparels would be around Rs 333bn or US$ 3bn.
According to Masakorala, the minimum wage has risen to Rs 7,900 for a garment employee, starting without any skills.
“I can’t tell what the exact impact would be but certain industrialists will definitely feel the pressure. Although industrialists wanted the Wages Board to have January 1, 2011, as the implementation date the government wanted it to be
October 1, 2010.”
“It will affect within the trade and across the trade although we still haven’t heard of retrenchment or layoffs so far.”
Another top official, meanwhile, said the industry was currently trying to mitigate the loss of the GSP plus by portraying Sri Lanka as a country that is serious about its ethics in manufacturing standards such as employing greener production methods and adhering to accepted labour standards.
Sri Lanka’s garment industry is a US$3.2 billion export business and accounts for around 46% of the country’s export revenue.
Sri Lanka has nearly 300 garment factories including major suppliers such as Brandix, Hirdaramani and MAS Holdings.
Until recently, Sri Lanka had been one of the two Asian countries which enjoyed the GSP Plus benefits for trade with EU countries.
Sri Lanka was awarded the GSP Plus to facilitate its recovery from the Tsunami disaster in 2004.

http://www.thebottomline.lk/2010/09/05/page1.html
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Economic implications of the 18th Amendment

By Azhar Razak

Although certain sections of the government claim the implementation of the 18th Amendment last week could lay the foundation towards an accelerated economic growth derived from the political stability, a senior economist from the main opposition party says it could pave the way for a more politicised and autocratic economic culture.
“The Sri Lankan economy is certainly going to face dire consequences by the implementation of the amendment as it would make regulators such as the Central Bank of Sri Lanka to be completely managed by politicians and questions being asked over its independence,” economist and UNP MP Dr Harsha de Silva told The Bottom Line.
He charged that since the Constitutional Council, which earlier had a say in the appointment of the three non-executive board members to the Central Bank’s Monetary Board, is now replaced with the parliamentary council set up, the President would now get exclusive powers to appoint all five members to the board.
“Earlier although the non-executive board members are appointed by the President on the recommendation of the Minister of Finance, the approval of the Constitutional Council was also required for the appointment of these non-executive board members. However, since the Constitutional Council has now been repealed, additional approvals would no longer be needed in future with the President having powers to appoint anyone as he wishes,” de Silva explained.
He added that the 18th Amendment only required the President to seek observations from the Parliamentary Council, which does not necessarily mean he has to abide by the decisions taken by the council.
The Central Bank has a unique legal structure in which the Central Bank is not an incorporated body. In terms of the Monetary Law Act, the corporate status is conferred on the Monetary Board, which is vested with all powers, functions and duties and the Monetary Board is responsible for making all policy decisions related to the management, operation and administration of the Central Bank.
Meanwhile, heads of universities and academics who met at a recent discussion stated that the 18th Amendment to the Constitution could lay the strong foundation that is required to accelerate economic development in the country. Speaking to journalists, University Grants Commission chairman Professor Gamini Samaranayake said Sri Lanka suffered from both political and economic instability since independence due to the war.
“We believe that the 18th Amendment would give the long felt political stability to achieve the economic stability that is required to accelerate the country’s development process while ensuring the People’s right to appoint a president according to their wish,” Samaranayake pointed out.
He said Sri Lanka was able to record average growth rates of around six percent even during the war and with the political stability it derives from the implementation of the 18th Amendment, it could well mean that we could be heading towards ‘double digit growth rates’ in the future.
“In the past 40 years, although Sri Lanka tried to reduce inflation, unemployment, etc to single digits it had failed in the attempt due to the lack of political stability. Around 47,000 graduates were recruited to the Public Service in 2005. The 18th Amendment is a must for the country’s economic development and that is why even the entire private sector supports it,” Strategic Enterprise Management Agency (SEMA) Financial Service Cluster Director, who is also a senior economic advisor to the President said.
The 18th Amendment was also supported by the Vice Chancellor of the Open University Sri Lanka, Professor Upali Vidanapathirana and the Vice Chancellor at the University of Colombo, Professor Kshanika Himburegama, at the press briefing held at the Sri Lanka Foundation Institute.
One of the objectives of the 18th Amendment to the Constitution is to replace the Constitutional Council by a Parliamentary Council consisting of five members of which three are ex-officio (The Speaker, the Prime Minister and the Leader of the Opposition).
The other two members will be separately nominated by the Prime Minister and the Leader of Opposition to include ethnic groups not represented by the three ex-officio members.
President Mahinda Rajapaksa had earlier said that the Constitutional Council in the 18th Amendment to the Constitution will better assure the supremacy of the Parliament as there will not be a presidential representative in the proposed council and will only consist of parliamentary members.

http://www.thebottomline.lk/2010/09/12/biz_feature3.html
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Turnaround at BOGA’s marketing subsidiary

The marketing subsidiary of Bogawantalawa Tea Estates (BTE) Plc, BPL Teas Private Ltd., which used to be a loss making entity over the years, has showed a positive turnaround during the year ended March 31, 2010, a senior official of the firm said.
According to the group’s chairman, tea manufacturer and green tea exporter, BPL Teas made a profit after tax of Rs. 6.9 million during the recent financial year.
“As a result of the continuous efforts made during the recent past, the marketing subsidiary has begun to give positive results as evidenced by declaring a profit after tax of Rs. 6.9 million for the year under review,” BTE Plc chairman D J Ambani highlighted in his message written to the shareholders at the release of BTE’s 2009 annual Report last week.
He said that the company had made a considerable progress during the year and was able to increase the market share especially in highly competitive markets such as Europe and the US.
“In addition to the positive financial results shown by the company, the firm continued to enhance the facilities at the processing centre to meet the high International Standards,” the chairman said.

BTE Plc reported a profit after tax of Rs. 120.4 million for the year ended March 31 2010, a complete turnaround from a loss of Rs. 126.4 million recorded during the corresponding period in the previous year. Gross profit shot up by 144 percent to Rs. 331.8 million helped by a sharp increase in revenues from Rs. 2.8 million a year ago to Rs. 3.56 million. However, the group has not allocated a management fee this year although it spent Rs. 4.4 million on it last year.
The chairman said that BTE Plc has embarked on Agroforestry, Dairy farming and Tea-based tourism projects this year.
“One of the impediments for effective implementation of the above is the lack of clear-cut policy guidelines. Policy consistency is an area in which the plantation sector has had a poor record,” Ambani pointed out.
He said union demand for wage hike also remains an issue considering the long-term viability of the industry as well as the competitiveness of Ceylon tea in international markets.
“There has been almost a 40% wage hike at the last round of wage negotiations which had around Rs. 402 Mn. impact (Incl. gratuity provision) on the cost of production of our company (Rs. 49 per kg of Made tea). It is therefore important that the companies and the trade unions agree to look at the industrial relations issues with a fresh and open mind in the best interest of the industry. This is because the sector cannot sustain any further ad hoc wage increases without linking such increases to productivity and product quality or in other words to “Value Addition”, he outlined.

Meanwhile, BTE Plc which is Sri Lanka’s largest supplier of iced tea to the United States entered into a Joint Venture (JV) agreement in June 2010 with US based, Walters Bay International by incorporating a new BOI company “Walters Bay Bogawantalawa Estates (Pvt) Ltd”.
This JV company has already set up a state of art processing centre at Welisara to manufacture iced tea in packaged form for export to US, in fulfillment of its contractual obligations with the global multiple brands.(AR)

http://www.thebottomline.lk/2010/09/12/biz_news.html

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MphasiS Lanka sets ambitious growth targets

By Azhar Razak

The newly opened Sri Lankan unit of Indian IT firm, MphasiS is presently finalising a contract with a large multinational that could immediately require the company to hire about 500-1,000 employees, a top official of the firm revealed.
MphasiS, a leading IT services provider headquartered in India, kicked off its operations in Sri Lanka last week following the opening of its Global Delivery Centre in Orion City, Colombo 9, to provide Applications, Business Process Outsourcing (BPO) and IT infrastructure and Outsourcing (ITO) services to clients worldwide.

“We are presently negotiating with a large multinational firm to get outsourcing work for the new Sri Lanka unit. We will be doing a presentation today and if the contract materialises, we are talking about employing anywhere between 500 to 1,000 people,” MphasiS, Chief Executive Officer Ganesh Ayyar disclosed at the inauguration ceremony held at the company’s new office last week.
He said that over the longer-term the company plans to hire 3,000-5,000 people in the space of 36 months.
“As we are speaking, a contract is already being finalised with a large multinational to move its work to Sri Lanka. The work will be shifted in about four weeks,” Ayyar said.

The outsourcing unit presently has a 250-seat office space and has already hired 55 IT graduates to manage infrastructure and application services. Ayyar said that MphasiS has been working on hiring local talent as well as setting up infrastructure since it announced its intention to set up the delivery centre end last year.
“The three main reasons why MphasiS chose Sri Lanka compared to another country in the region – which I do not want to name – are because of the strength of the island’s IT talent pool, the government’s hunger for an accelerated post war growth drive and Sri Lanka’s Board of Investment,” Ayyar claimed.
The new centre was formally inaugurated on Monday by Minister of Economic Development Basil Rajapaksa along with the participation of a large number of other senior officials.

With over 38,000 employees and a global presence across America, Europe, Australia, Asia Pacific, Japan and India, MphasiS has been India’s fastest growing IT company in the year 2009, with a growth rate of 43 percent.
It is learnt that employees at the new Sri Lanka centre will be part of MphasiS Global Talent Pool and groomed as a part of MphasiS Talent Development Programme.

“Sri Lanka’s vibrant talent pool is of strategic interest to us and we hope to expand our footprint here. Our focus in Sri Lanka is holistic. Our aim is to develop the larger ecosystem and be a responsible corporate citizen. We want to build deeper roots into the talent supply chain in Sri Lanka, partnering with academia, industry bodies and the government,” MphasiS Chief Information Officer M G Raghuraman.

MphasiS is a leading provider of applications services, remote management services and BPO services. The company delivers real improvements in business performance for clients through a combination of technology know-how, domain and process expertise. MphasiS services clients are in financial services, healthcare, communications, transportation, consumer and retail industries and governments around the world
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IFS to deploy ERP solution for 9 firms at Flinth Ind. Park

The Sri Lankan unit of global business solutions provider, IFS has recently been awarded with a major contract from owners of Flinth Industrial Park (FIP) to swiftly deploy Enterprise Resource Planning (ERP) systems for all nine companies operating within the park.
IFS has already deployed its fully-fledged solutions for two companies in the park, Cable Solutions Private Ltd and Flinth Industrial Park (the main company managing the firms in the park) while a third company, AeroSense Private Ltd is expected to go live on October 1, officials said.
“We decided from the outset that we needed a globally-reputed ERP provider for the park to ensure that all the functions process smoothly and that is why we selected IFS. We have also given them a target to complete the implementation of ERP to all the companies in the park by the end of this year, which promise we are confident the IFS team could live up to,” Flinth Industrial Park’s Managing Director Michael Thorburn told reporters at a recent press conference.
He said that while there were only a few global companies that could cover all the functions carried out by FIP with their ERP systems, only IFS from the outset had a strong exposure and expertise in manufacturing and supply chain sector and a fully fledged offering that satisfied the senior management.
“IFS had no competition in that aspect as their compliant ability with the most rigid quality requirements necessary in the airspace industry ideally suited our requirements,” Thornburn explained.
FIP is home to AeroSense Ltd, a company manufacturing sensors for aircrafts across the world, and which needs to adhere to the highest levels of quality. This in turn benefited all the other companies in the park, Thorburn pointed out, since the quality assurance system embedded in the ERP had to be of the highest standard.
Meanwhile, IFS South Asia Vice President Jayatha De Silva explained that Flinth’s requirements in an ERP were challenging from the start but IFS was bold and took it on.
“For the success of any ERP implementation there are four factors that need to fall in place. The first factor of success is that the business solution must match the requirements of the business”.
“In this situation, the ERP we offered covered all the functions required by Flinth Industrial Park, including HR, finance, and quality assurance”.
The second factor was the consultants and experienced personnel that went into the task.
“IFS had the potential and the capacity, with its hugely experienced team of consultants to take on this challenge, work long hours, and get the ERP going well within the prescribed time frame.”
The third factor for a successful implementation was the post-implementation, De Silva explained. “The hand-holding is vital for the entire process to run smoothly, and in a project of this scale and magnitude, this is even more important.
“With this in mind, IFS will have two of its own personnel working with FIP, on-the-ground and at-hand, after the ERP goes live in order to ensure the system functions smoothly and to train any new personnel entering FIP, on the ERP.”
The fourth factor was the customer’s readiness, and Jayantha pointed out that in this respect, FIP were extremely supportive.
“When you want the ERP implemented so fast, you need the customer to set his priorities and let us know what is most important first. We found FIP ready with their guidelines and recommendations and ready to compromise in order to focus on what was most vital”, Jayantha explained.
FIP, which brings a unique industrial park concept to Sri Lanka, is the brain child of Swedish entrepreneur and visionary Rune Flinth. The park is based upon the concept that companies should focus mainly on production, while supporting functions such as finance, IT, legal services, quality control and human resources, are handled by the park itself.
Located in a 10-acrea area in Kadawatha, FIP already has eight export-oriented companies in residence, creating products that are highly technical, state-of-the-art and demanding stringent levels of quality in both hardware and software.
FIP is a subsidiary of the Swedish holding company Swedcord Development AB owned by Rune Flinth, who has been an industrialist in Sri Lanka for over 20 years having founded two major companies, Flintec and Toroid. (AR)


http://www.thebottomline.lk/2010/09/19/it3.html

 

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PABC confident of meeting minimum capital requirement organically – Official

By Azhar Razak

PABC Bank says it is confident of raising the additional capital requirement of around Rs. 500 million through organic growth and would not need to go for another Rights issue to fund the recently stipulated Rs. 3 billion capital requirement by end 2011. Presently, PABC Bank, which has a core capital (Tier 1 capital) of Rs. 2.54 billion as at 30.06.2010, is the only private commercial bank that is short of the increased minimum capital stipulated by the Central Bank of Sri Lanka (CBSL).
“Given the existing strength of PABC Bank’s core capital adequacy ratio and the total adequacy ratio, we are very much confident of easily reaching the Rs 3 billion Tier 1 required through significantly expanding our business in the near future,” Director-CEO, PABC Bank, Claude Peiris told The Bottom Line in a recent interview.
The amended regulations of CBSL requires existing private commercial banks to increase their minimum capital to Rs 3 billion by end 2011, and further raise it to Rs. 4 billion by end 2013 and Rs 5 billion by end 2015.
He stated that, according to recent interim financials as at June 30, 2010, PABC Bank’s core capital adequacy ratio, calculated as a percentage of Risk Weighted Assets, stood at a healthy 19.24%, which is well above the minimum requirement of 5%, while total capital adequacy ratio, also calculated as a percentage of Risk Weighted Assets, was 19.91%, as opposed to the minimum requirement of 10%.
“The fact that we have maintained a higher capital adequacy ratio means that we will have a greater capability to deal with risk going forward, and therefore, we are already planning for a rigorous expansion drive,” he said, pointing further that the Bank will have sufficient time until end 2011 to meet the new requirement.
Expansion plans
According to Peiris, PABC Bank plans to open at least five branches around the island before the end of this year, which could take the bank’s Branch network to 42 by December 2010.
“We have plans to open branches in Embilipitiya, Matale, Ambalangoda, Batticaloa and Kalmunai before the end of this year,” Peiris said.
It has to be noted that PABC Bank went for a Rights issue last year to infuse fresh capital amounting to Rs 563 million, which had been needed at the time to meet a CBSL minimum capital requirement of Rs 2.5 billion by December 2009. In 2006, the CBSL had increased a minimum capital requirement for licensed commercial banks from 0.5 billion to 2.5 billion, to be met by end 2009. However, the deadline was later extended until June 30, 2010.
PABC Bank’s net profit for the June 2010 quarter fell 60% to Rs 83 million from a year earlier, despite lower loan loss provisions, as fee income fell steeply.
Listing requirement
Meanwhile, new regulations set out by the CBSL a fortnight ago, also requires unlisted locally incorporated private banks to list on the Colombo Bourse by end 2011. Union Bank and DFCC Vardhana Bank, at present, are the only two ‘locally incorporated’ private commercial banks that are not listed on the Colombo Stock Exchange. Union Bank is however in line with the ‘minimum capital requirement’, following the receipt of an Rs 2 billion private placement in May 2010. Prior to the private placement being received, the Bank’s equity stood at Rs 1.5 billion.
According to recent media reports, Union Bank is planning to go public at the end of this year or early next year, to comply with the CBSL directive.
However, Sri Lanka’s three largest banks, State-run Bank of Ceylon, Peoples Bank and National Savings Bank are not listed, and the CBSL has not requited them to do so. (AR)
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LIRNEasia urges implementation of mHealth programme

By Azhar Razak

Sri Lanka’s ICT policy think tank, LIRNEasia has urged Sri Lanka to implement a ‘real-time bio-surveillance programme’ (RTBP) which uses mobile phones for sharing information following its successful completion of a recent pilot research project.
The findings of the research survey shows that implementation of the project could enable early detection and notification of potential health outbreaks (more importantly some killer communicable diseases) while at the same time reducing costs by 30 percent as the system only uses mobile phones, software applications and a Web interface.
“I am proud to say that we are extremely pleased that the research and pilot project has led to the unprecedented milestone of a significant improvement in capturing and documenting health information. We now have solid proven evidence to support RTBP as an important tool in preventing the spread of devastating diseases. Had these monitoring systems been in place before, we would have prevented the deaths of many,” Nuwan Waidyanathan, Senior Research Manager, LlRNEasia, told a press conference recently.
Some of the findings from the project noted that respiratory infectious diseases are the most common in Sri Lanka, common cold is the most popular but gastrointestinal infectious are, relatively, the most visible, people over 45 years are most vulnerable to both hypertension (high blood pressure) and Diabetes-Mellitus.
RTBP is designed to collect timely relevant health surveillance data and to process this data in order to reliably and quickly detect possible outbreaks of diseases. The pilot project carried out with the aid of a grant of US $ 300,000 from the International Development Research Centre, Canada, was tested out in 12 hospitals and clinics in the Kurunegala District from July 2008 onwards accumulating an average of 7,200 records per week or 300,000 patient records in total.
“They detected 25 prioritised infectious diseases like dengue, malaria and dysentery. They were also the first to utilise other options of investigating other communicable like common colds and non-communicable diseases like diabetes or arthritis,” Waidyanathan said.
Cost reduction
The research which was also carried out simultaneously in South India also concluded that Sri Lanka could reduce its overall expenses by 30 percent with RTBP while India could reduce by 50 percent. It further noted that both India and Sri Lanka presently dedicate very little or no resources to event detection or alerting and that RTBP allows allocating more resources to the upkeep of situational awareness and to crisis response activity
“Bulk of the health departments expenses are spent on data collection and consolidation. They can be reduced by RTBP with the introduction of mHealth at the point of care,” the research findings pointed out.
The research paper urged authorities to invest more in alerting to empower health workers with information on the state of affairs of the health in their regions.
“Following a feasibility analysis, researchers have found that the project would require US $12,000 per month per district to be implemented island wide in Sri Lanka,” Waidyanathan noted.
Technical aspects
mHealthSurvey software works on any available standard java mobile phone. A typical record contains the patient visitation date, location, gender, age, disease, symptoms, and signs. Data is transmitted over GPRS cellular networks. T-Cube Web Interface (TCWI) is an Internet browser based tool to visualise and manipulate large spatio-temporal data sets. Epidemiologists can pin down a potential outbreak of, for instance, a gastrointestinal disease among children in the Wariyapola. Sahana Alerting Module (SAM) allows for the generic dissemination of localised and standardised interoperable messages. Selected groups of recipients would receive the single-entry of the message via SMS, Email, and Web.
“The key paradigm of the bio-surveillance programme is not just about computerising the present day processes but it is about complementing them with revolutionary techniques like “syndromic” surveillance. RTBP’s real time bio surveillance capabilities will enhance the present day passive or non-active passive surveillance to an active surveillance system,” Wayamba Provincial Director of Health Services, Dr. R. M. S. K. Ratnayake said.
He added that since the manner in which responses are sent back to health workers follow a global standard recognised by the International Telecommunications Union, RTBP makes it possible for information dissemination with other national organisations such as the boarder control health authorities as well as across borders with neighbouring countries or global organisations.


 http://www.thebottomline.lk/2010/09/19/it1.html

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Thursday, September 23, 2010

Colombo Bourse likely to buzz this week- Analysts

By Azhar Razak


Sri Lanka’s stock market is expected to bustle with more activity again from tomorrow as a highly-debated ten percent price band rule becomes ineffective and is replaced by a formula to curb fishy transactions, analysts opine.
According to them, the bourse will flurry again with activity, similar to the pre-price band period that was however driven by speculations rather than proper fundamentals.
“The market has been fairing pretty well even when the price band was in place. So there is no reason why it should not continue to do so,” a top market analyst, who however wished to remain anonymous, told The Bottom Line.
The analyst said the market will be further boosted by the more recent positive reports of the economy, political stability, strong financial performances reported by firms in the recent quarter and other macro economic factors.

“I feel the removal of the ten percent price band rule by the SEC will be taken in a positive light by the retailers although regulation is only one aspect of what investors will look into prior to investing and factors such as transparency also plays a part specially for long term investors,” Nikita Tissera, manager, research, at SC Securities said.
Alternatively, he said, SEC could have even kept the price band rule in place as investors had started getting used to the system but made other changes such as to ensure flexibility is given to genuine long term investors.

Capital Trust Securities director Sarath Rajapaksa, meanwhile, said the market was anyway expected to take a bull run irrespective of the price band rule being in place as the country is presently bustling with positive sentiments.
“What is further encouraging is to see that the banks have also lowered interest rates following directives given by the Central Bank as non-availability of cheap financing had always been a major detriment to investor activity,” Rajapaksa pointed out.
Critics of the price band rule had earlier argued that the rule had imposed a flat punishment to all listed securities in the market due to actions of a few ‘so called manipulators’ whom the SEC had even not named todate.
The new formula that replaces the price band takes into account ‘unusual activity’ in both volume and price movements based on the last five trading days of the share which will then be captured into a list and will remain there for 15 days.


During this time, SEC will place restrictions on these shares such as the applicability of the 10 percent price band and the 50 percent margin upfront for trading such shares. On a further development, the SEC has also asked all stock broking companies to refrain from extending credit to any investor beyond three days from January 1 next year.
“If credit is to be extended beyond this specified period it could be done only through a Margin Provider duly registered with the SEC, the regulator said in a statement made to the Colombo Stock Exchange recently.
However, according to Sarath Rajapaksa, the new changes to be introduced from January 1 will harm the small retailers who used margins to sell and would only provide more benefits for big corporates to do their ventures.


http://www.thebottomline.lk/2010/09/19/page2.html

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Tuesday, September 21, 2010

Fitch assigns positive outlook to Sri Lanka

Fitch assigns positive outlook to Sri Lanka
Fitch Ratings a while ago affirmed Sri Lanka's Long-term foreign and local currency Issuer Default Ratings (IDRs) at 'B+', and simultaneously revised the Outlook to Positive from Stable. Fitch also has affirmed Sri Lanka's Short-term IDR at 'B' and Country Ceiling at 'B+'.
The Outlook revision is in large part a reflection of Sri Lanka's economy benefitting from the end of a prolonged civil war in 2009, from a more disciplined policy framework put in place under the Stand-By Arrangement (SBA) with the IMF, and from an improved external liquidity position bolstered by the IMF programme. Fitch believes these developments support the prospects for Sri Lanka to achieve sustained medium-term growth, without a resurgence in inflation or another bout of external liquidity stress (as experienced over end-2008 to early-2009). Foreign exchange reserves stood at USD5.8bn at end- July 2010, well above the low of USD1.1bn in March 2009, bolstered by USD1.0bn of IMF funds.
Sri Lanka's authorities have made headway in rebuilding and integrating the two war-torn Northern and Eastern provinces into the rest of the local economy, which is helping to boost Sri Lanka's productive capacity, particularly in the agriculture and tourism sectors. This is highlighted by real GDP growing 8.5% yoy in Q210, from a 7.1% yoy rise in Q110. Fitch is forecasting real GDP growth to average 7.2% in 2010-2012, versus an average of 5.1% over the last 20 years.
The authorities look to be implementing a more prudent macroeconomic policy framework under the IMF SBA. The Central Bank of Sri Lanka (CBSL) appears to have shifted the focus of monetary policy towards fighting inflation and away from supporting growth. As evidence, the CBSL has maintained a positive real interest rate environment since February 2009 (versus an average of -12% in 2008). Fitch views the CBSL's management of monetary policy as broadly appropriate, which along with more benign global energy and food prices, is helping to keep the inflation rate in the single-digit range (up 5.6% yoy in January-to-August 2010).
Sri Lanka's authorities also appear more ready to tackle the sovereign's biggest ratings constraint - weak public finances. The budget deficit of 9.9% of GDP in 2009 and public debt of 86.2% of GDP were both well above the medians for the 'B' rating peer group of 4.9% and 37.3%, respectively. Similarly, the government revenue-to-GDP ratio stood at just 15% in 2009, which is well below the 'B' rating peer group median of 28.1%. The Presidential Commission on Taxation is set to release its final recommendations in November 2010. New tax measures will be crucial in determining if the authorities can get the public finances on a more sustainable path. Equally vital, the end of the civil war should provide the authorities much needed flexibility in cutting spending on defence and resettling refugees.
Maintained policy discipline would support the case for a ratings upgrade. If the Sri Lankan authorities can sustainably boost the tax revenue base and restrain spending to consolidate the budget deficit, this would help lower the country's overall public debt burden and directly address a key rating weakness. Similarly, a sustained period of stronger GDP growth that does not see a return to accelerating inflation or a sharp deterioration in the current account deficit would also support Sri Lanka's ratings. Fitch would also view a pick-up in foreign direct investment as a positive development as this could help bolster the country's external finances and also improve the overall competitiveness of the economy. More specifically, this could help stem concern over Sri Lanka's export sector following the loss of reduced tariff rates via the GSP Plus facility to the European Union in mid-August 2010.
On the other hand, the agency would negatively view an erosion of macroeconomic policy discipline as an acceleration of inflation would undermine Sri Lanka's export competitiveness and result in a sharp rise in domestic borrowing costs for the fiscal authorities and raise overall interest payments. These already stood at 43% of government revenues in 2009, which is well above the 'B' rating peer group median of 5.7%.

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Monday, August 30, 2010

Thai model mulled in place of SEC’s price band
By Indika Sakalasooriya
A system prevailing on the Thai bourse is being proposed to curb excessive manipulation at the stock market here, a Securities and Exchange Commission (SEC) source told The Bottom Line.
His remarks came amid the commission’s indecisiveness over the 10 percent price band issue.
Suggestions have been made to adopt the Thai stock market (SET) model to curb excessive manipulation if the price band is lifted in the near future, the SEC source explained. 
“The price band would go but it won’t just go. If it is to go, a proper monitoring system should be in place. So, we are contemplating several models we could adopt and Thai model is one of them,” the source said. 
As he further pointed out, the Thai model imposes price bands only on selected shares which look too vulnerable due to possible manipulative attempts. The SET model does not place price bands across the board.
According to the literature available on the Internet, SET imposed a 10 percent price band during the early part of 1990s to curb excessive manipulation even though it hurt the vibrancy of the market to some extent. But they introduced a set of new floor and ceiling price limits in 1997, letting a stock to fluctuate with a range of 30 percent of the previous closing price.
Along with these new measures, SET also introduced circuit-breakers to ease any unusual volatility in the market that may cause investor panic.
However, TBL’s attempt to get an official confirmation on the matter was fruitless as senior SEC officials maintained a tight-lip policy over the price band issue.
SEC Deputy Director-General Malik Cader, while confirming that a final decision had not yet been reached on the price band, refused to comment on the possible adoption of the Thai-market model saying that “nothing of that sort was suggested during the commissioners’ meeting held last week”.
The 10 percent price band, which was imposed by the SEC a few weeks ago, has been subjected to a lot of criticism - for and against. 
The key argument against the price band was that it could kill a day’s trading, an aspect according to many, a market should facilitate.
The Colombo bourse dipped immediately after the imposition of the price band, but rebounded a few days later, pushing the investor community’s hopes up - though the sentiments are not fully recovered yet. 
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Sixth Senses CEO to visit Lank

Sixth Senses CEO to visit Lanka
By Indika Sakalasooriya
The Chief Executive of luxury spa operator Sixth Senses, Sonu Shivadasani, is to visit Sri Lanka next month, to announce the joint venture between his company and Sri Lanka’s resort operator Aitken Spence to construct an up market resort in the Southern Coastal line of the country.
“Mr Shivadasani will be here to open the construction of the Ahungalle Luxury Resort and Spa Complex, which was originally billed as Evason Hideaway next month,” an Aitken Spence official said.
Aitken Spence Hotels managing director Malin Hapugoda told the media earlier that the joint venture project is to come up near Ahungalla, in Beruwala, a prime beach resort where it has two properties, Heritance and Neptune.
The investment for the project is estimated at USD 20 million and the ownership structure would be 50:50. Presently Sixth Senses operates spas at Aitken Spence-owned hotels, Kandalama and Tea Factory.
Sonu Shivdasani, Chairman and CEO, founded the Six Senses group together with his wife, Eva. British born, he is a former student of Eton College, and holds a M.A. in English Literature from Oxford University.
Sonu began his career with a two-year induction in the family business which covered many businesses except tourism.
According to an interview he has given to Meridia Capital in 1991, Sonu reduced the amount of time he spent in the family businesses and made a small investment in Pavilion Resorts. The original shareholding was later extended to full ownership and renamed as Six Senses Hotels & Resorts, later to become Six Senses Resorts & Spas.
The company’s focus was changed to the higher end 5 star designer niche. The executive team also changed so that the management’s skills reflected the requirements of the new strategic direction.
In October 1995, he opened his first new build resort in the Maldives, and created the brand: Soneva. This was followed by the Evason brand, initially in Thailand and Vietnam, and Six Senses Spas.
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Tuesday, August 24, 2010

Rate cut to hit pensioners

Rate cut to hit pensioners (22/08/10 The Nation)
By Indika Sakalasooriya
Pensioners, who depend on interest income from their bank deposits for their daily expenses, are likely to be hit by the newest interest rate cut announced by the Central Bank, analysts and economists point out.
According to them, the interest rate cut announced by the Central Bank last Friday would prompt commercial banks to immediately cut deposit rates.
“This decision by Central Bank to lower the reverse repurchase rate by half a percentage point to 9 percent would certainly compel the banks to reduce both deposit and lending rates — which we will be able to see during this week,” an analyst, who requested anonymity, said.
Currently, the average deposit rates are between four to five percent and lending rates range from 12 to 15 percent.
He said he was doubtful whether whether the new rate cut would spur a credit growth as there was “hardly any demand for credit, apart possibly from the construction sector in anticipation of a tourism boom”.
“On the other hand, the deposit rates will further fall and as a result the interest income will follow suit. This could be a quite a challenge for a country where there’s a lot of pensioners and an increasingly aging population.
According to recent Labour Ministry data, the percentage of people above the age group of 60 years increased from 6.3% in 1971 to 9.2% in 2001 and was estimated by the United Nations at 11% in 2008. By 2031, 21.9% of the people will be over 60 years, or one out of four will be an aged citizen.
Meanwhile, in its statement announcing the rate cut, the Central Bank has reasoned out why the bank opted for it as “The Central Bank expects credit flows to the private sector to gather momentum during the remaining months of the year alongside the anticipated pick-up in economic activity”.
However, a reputed senior economist, who also wished to remain unnamed, said that this measure by the Central Bank communicates that it is trying to accelerate economic growth at any cost.
“The bank’s presumption that the country’s inability to attain a higher growth is due to lack of cheaper credit would have prompted it to do so. But the economic growth is a complex issue and adequate credit flows are necessary but not sufficient for generating growth. We need an investment friendly atmosphere for people to take risk and invest. The prerequisites like a flexible labour market, good infrastructure, improved road transportation and energy and power at competitive prices are all needed for credit to work in an economy. Hence, this move may simply lead to higher credit expansion and future inflation”.
Since 2009 the Central Bank of Sri Lanka quite opposed to the other central banks in the region, has been lowering interest rates to push economic growth whereas others raised borrowing costs to avoid rise in prices and asset bubbles.
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Monday, August 23, 2010

Devil's Staircase

Journey To ‘Devil’s Staircase' ( Double Cut )


Bamarakanda Falls
We started our journey from Colombo on Saturday evening to reach the fairly unknown, though much glorified among trekkers, nature lovers and the like, the ‘devil’s staircase’, which is located in a tricky track between Kalupahana and Ohiya in the Sabaragamuwa Province.
Since we set off around 3.00 p.m., we knew that it was not possible for us to reach Kalupahana before dark through the Colombo-Badulla A4 highway, we settled at a rather small inn for the night in Balangoda, planning to reach Kalupahana by the dawn of the next day.
The anticipation to witness this man-made abnormality to nature woke us up early in the morning and we loaded our gear back to the car to reach Kalupahana.
From Balangoda, there is around 20 miles to Kalupahana. Though the car rumbled due to the sudden elevation, it had to tackle, it was the last thing to be heard as we were completely enraptured by the scenic beauty of the road we were travelling on. The hills, the dew, the mist, the freshness in the air, and the children dressed in white sarongs and ‘lama sarees’ going to Dhamma Schools—what else was lacking for a perfect morning!
By about 7.30 we were able to reach Kalupahana junction and took the road to the left, which is also the route to reach Sri Lanka’s tallest waterfall, Bambarakanda, to reach our hideout, the Bambarakanda Resort, from the bustling society for the next two days.
The owner of this small eco friendly resort is Mrs. Sera Mayakaduwa, who is an ardent nature lover. Bambarakanda Resort was the starting point for our trekking adventure to the ‘devil’s staircase’ as it was situated at the beginning of the track.
We unloaded our luggage to the small cottage given to us and ate a hasty but tasty meal prepared by Mrs. Mayakaduwa, which consisted of my favorite, ‘pol rotti’ with butter. The lady was also kind enough to equip each of us with a lunch packet, probably knowing very well that the journey to ‘devil’s staircase’ might leave us with a desire to gobble a devil.
Equipped with backpacks with water, food and glucose and some first aid in case of emergency, the six of us started the journey at around 8.30 a.m. The road was rock-strewn and a prime example for soil erosion. Probably an experienced driver behind a four wheel drive might be able to pass through, we chatted.
As we walked forward, the elevation began to increase. Within the first kilometre or may be two, there were a few small houses beside the road. By the road, there was a man with a small child in his arms and we asked him as to how far the devil’s staircase was.? In response, he presented us with a blank face and said he has not heard about such a place. Of course, he was an inhabitant who lived in one of those houses beside the road!
Intrigued, we thought, are we going the wrong way? Nevertheless, we decided to trek forward and as the elevation rose, the cooler the climate became. Now we were the only one on the road and there were no houses or people to be seen. Off guard, a drizzle started and a slight mist fell upon us. But neither the drizzle nor the mist was an obstacle for us to continue with our journey. We were going above the Bambarakanda falls .
As we trod forward, we reached a place where the people who were passing by had lit oil lamps and hung on tree boughs asking protection from some supernatural powers when entering the area. This gave us the signal that we were following the correct route.
As the drizzle ceased and the mist went away taking the dark clouds with them, the sun came out, giving us some relief. Again we were able to witness signs of life, as we entered a large tea estate. A stream coming though the estate crossed the road we were travelling on and there we met Karupaiah, who worked as a labourer in the estate. In incorrect Sinhalese, he told us that we have entered Udaweriya tea estate. Then we asked him the question. “How far is devil’s staircase?”
The expression on his face proved that he had heard the remark before and told us that though the people in Colombo call it the ‘devil’s stair case’, the people around here call it the ‘double cut’. Karupaiah said at least we have to travel another 5 kilometres, if we are to reach the ‘double cut’. What an expression was there on the faces of the guys who accompanied me!
We had already travelled not less than 6 kilometres. Sensing the situation, Karupaiah kindly told us that instead of taking the road that goes round the estate we can take a short cut that lies through the estate.
We were more than willing to take the shortcut and Karupaiah was suddenly transformed into a tour guide! Then we started the journey among the tea bushes. We were not walking but climbing. The elevation was so steep that we had to climb very carefully.
As we climbed there, he told us some stories. According to Karupaiah, Udeweriya Estate is the highest living point in Sri Lanka. However, he was unable to recall the elevation. He also told us that Udeweriya workers could probably be the estate workers who suffered the most in the country, largely due to extreme weather conditions and access difficulties.
As Karupaiah said if they were to go to a town to even to buy the essentials they either have to go to Kalupahana or Ohiya. “There is no public transport and a vehicle travels very rarely along this road. People go to Ohiya or Kalupahana to fetch even their essentials on foot, every week.”
Through the shortcut again, we reached the road, a higher spot of the road we were travelling earlier. There was a board bearing “Udeweriya Estate” by the road. Then Karupaiha showed us a vacant area located between two mountains in the distance, as the entrance to the devil’s staircase.
If I were to say, two of our travel mates lost their temper, I was not mistaken I guess. However orange flavoured glucose with cool mountain water did the trick for them, as they got up and started to walk, rather ascend, ahead.
Along with Karupaiah, another two young Tamil boys from the nearby workers quarters, which are well known as ‘lines’, accompanied us. They told us that very rarely do visitors come along this road. However according to Karupaiah some travellers take this track to go to Horton Plains .
“By the end of this track, you can go to Horton Plains if you turn to the left and if you turn to the right you can go to Ohiya along the railway track” he said.
After another 30 minutes walk, Kaurupiah announced that we have reached the ‘double cut’ or as we call it the ‘devil’s staircase’. At the entrance to it, there was sign board, painted in white, which bore nothing. When we asked Karupaiah whether this board is there to hold the notice ‘devil’s staircase’ to inform the travellers, he said that it was there for sometime, but no one has written anything on it.
Then we saw the ‘devil’ staircase’ and understood why it is called such. Suddenly the road disappeared into a mountain and two extremely steep bends bring down the elevation more than hundred metres. From the distance this is seen as a staircase dug into a mountain. What makes it special, is the sudden decrease of elevation and the extreme narrowness of the bends.
The people around there call this palace as ‘double cut’ because of the two bends that were cut into a mountain. According to Karupaiah, this place was baptised as ‘devil’s stair case’ by the white planters in the colonial era, who ran the Udeweriya Plantation.
Recently, only the area we call devil’s staircase has been concreted to avoid land slide. While having lunch in the shade of a nearby tree, we saw several people carrying various goods on their heads and shoulders coming though devil’s staircase. They told us that they are workers at the Udeweriya Plantation, returning from Ohiya. They were an acquaintance of Karupaiah and he told us that these people have gone to Ohiya to buy food and other essentials. When we met them at ‘devil staircase’ they had travelled more than 7 kilometres on foot.
Since it was getting late, we decided to head back with them. While walking they told us several years back there was a plan to construct this road from Kalupahana to Ohiya to make it suitable for public transport.
“However no one came forward to take the contract to construct the road for several years. Then one company came forward but they also abandoned the project due to the obvious difficulties” Raju, 40, one of the group of the people we were travelling with told us.
By their ‘lines’, Raju and the group and Karupaiah bade us good bye and we hurried back down to our cottage since it was getting dark and a slight mist was falling upon us. By about 6.00 p.m., we were able to reach our cottage and there was Mrs. Mayakaduwa with cups of hot coffee.
If you are planning to visit ‘devil’s staircase’ or planning to pass it through to Horton Plains via the route we took by vehicle you must have a four-wheel-drive with an experienced driver. And also it is better if you can take the journey in the early part of the year—January to April—since incessant rain and mist won’t be there at that time of the year. If the road gets wet and muddy, driving would be very tricky. If you like to trek, our advice is to take enough food, water and glucose with you. And a good pair of sports shoes would certainly come in handy.
by Indika Sakalasooriya
The Nation , March 1, 2009
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