29th April 2001
Editorial/Opinion| Plus| Sports|
When a group of Sri Lankan rubber tappers went to work in Malaysia, they were confronted with a major problem – the type of knife that is used in cutting the tree bark to tap the milk was different to the one used in Sri Lanka.
"Sri Lankan workers use a push knife to tap rubber while a draw knife is used in Malaysia," explained an industry official last week. "Our chaps were not familiar and that's when the troubles began."
In addition to that the workers had accommodation problems – they were not used to the hostel facilities that were provided, which were then also being used by workers from other countries like Bangladesh for instance.
Malaysia is fast becoming an important centre for Sri Lanka's labour market and this incident was illustrated at a press conference last week to explain the teething problems of the labour market there. The problems have been sorted out now after discussions between authorities of the two countries, local labour officials noted.
The briefing was called to announce plans for a major trade and investment fair in Colombo organized by the Sri Lanka-Malaysia Business Council (SLMBC) from June 28 to 30. As a prelude to this, a Sri Lankan delegation is visiting Malaysia next month to attend an investment symposium on May 9 promoting business opportunities in Sri Lanka.
SLMBC officials said the two events should boost investment in Sri Lanka from Malaysian businesses. Currently the trade balance is much in Malaysia's favour with Colombo buying 16.4 billion rupees worth of goods from there while Kuala Lumpur has imported 539 million rupees worth of goods from here.
Tourism is also weighed heavily in Malaysia's favour. Last year there was a 107 percent increase in the number of Sri Lankans to Malaysia, to 16,500 from 7,948 in 1999. Malaysian tourists to Sri Lanka were 4,125 in 1998, 6,012 in 1999 and 4,833 in 2000.
Bank credit ratings will prevent banks taking on excessive risks, unknown to their depositors, without paying higher rates of interest to justify the higher risks assumed by them, Ravi Abeysuriya, CEO Fitch Ratings Sri Lanka told a seminar recently.
Fitch Bank credit ratings analyse bank credit quality comprehensively from a future perspective, using a wide range of quantifiable and qualitative factors.
The Fitch analytical exercise is based on linking of future quantitative projections with qualitative information to make an assessment of the risk of a bank defaulting timely payments of interest and capital, he added.
The importance of qualitative factors such as depth of the management, the sophistication of risk management techniques, management information systems are critical in looking "beyond the numbers" and predicting the future of the bank. At the credit rating committee level the experience of former industry practitioners, regulators and auditors are brought to assess the credit risk of the bank.
Abeysuriya said bank credit ratings would lead to a more efficient resource allocation in the financial sector by encouraging the banks to evaluate loan applications more carefully, extend fewer risky loans and follow sounder banking practices.
Depositors can make use of the ratings to determine the default risk of investing in a particular bank and to verify whether it meets with their own tolerance levels. Investors do not pay for the credit ratings and they should demand to know the rating of a particular bank before they part with their hard-earned money.
MIGA (Multilateral Investment Guarantee Agency), a World Bank affiliate, has developed a new Investment Promotion Toolkit, the first comprehensive compilation of international best practices in investment promotion.
"Countries are looking for practical support in their efforts to target and service investors," says Cecilia Sager, senior investment promotion adviser. "We designed the toolkit to support national initiatives to attract and retain foreign direct investment, using first-hand insights gained during our 12 years of investment experience in over 150 countries." Sager describes the toolkit as a desktop reference for those seeking information on investment trends, site selection factors, strategy development, image building in the international business community, generating and targeting investment opportunities, and more. "Basically, it's an A-Z guide on how to attract investment," Sager says in a statement.
The new resource underlies MIGA's technical assistance services, and serves as a valuable reference tool for sustaining investment initiatives after completion of MIGA's formal capacity-building work. It's designed for use by a broad range of investment intermediaries, including investment promotion agencies, consulting firms, sectoral ministries, international development agencies, and economic development organizations at the national, state, and local levels. Toolkits are available to the general public at a cost of $600, and are being made available to clients in MIGA's developing member countries on a concessionary basis.
Commercial Bank, which owns Sri Lanka's largest computer linked banking network, is offering its customers the facility to access their accounts through the internet from a personal computer from anywhere in the world.
The first local Bank to offer on-line services in Sri Lanka to corporate customers in 1997 through intranet, Commercial Bank has now expanded this facility to provide access via internet to customers of all its 82 branches, a bank statement said.
With a view to catering to the needs of the company's ever-increasing customer-base, UAL has now upgraded its existing IBM A/S/400 model 510 system with an IBM i-Series 820 e-Server, the latest midrange e-business technology to enter the market.
This new IT system contains all the new technologies for Internet and e-business solutions and will ensure that all business processes of the company are soon fully automated, UAL said in a statement. The system will enable UAL to ultimately become a hi-tech, very customer-centric entity and move towards becoming an efficient, and to the extent possible, paperless office. It will enhance business to business (B2B) capabilities, which enables UAL to interact with any business partner or obtain any information from any organisation when processing claims, which would even include, for instance, information from a hospital when processing a medical insurance claim.
Beyond the Back Office: Transforming Financials into A Competitive Weapon
With the range of financial solutions available today, businesses can transform accounting functions into a strategic management role and get a whole new competitive advantage.
FCCISL seminar on parate execution
FCCISL is making a departure from routine seminars in English by opening up its presentations in Sinhala Medium.
The first one will be on May 17, 2001 when FCCISL will present a seminar on Parate Execution in Sinhala Medium.
The Enterprise Development Consultancy Centre (EDCC), the consultancy and research arm of the Bank of Ceylon (BoC) for the small and medium scale enterprises, has contributed to the government's endeavour to generate economic growth by training youth for self-employment.
EDCC has so far trained nearly 3,000 youths on various enterprises since its inception in 1995. More than 60 percent of those who underwent five-day residential enterprise awareness programmes have become successful entrepreneurs, BOC Deputy General Manager (DGM) Douglas Weerasinghe said. The BoC has 11 loan schemes including the small enterprise development project, he said at a book launch at the BoC Head office in Colombo recently.
He said most of the programmes were earlier targeted at Sinhala-educated rural school leavers in a bid to ease youth unrest in the country but in recent years the bank has spread this project to the north and the east too.
Mr. Weerasinghe said these books published in Sinhala and Tamil were aimed at helping those who want to be successful entrepreneurs.
The 23rd national Conference of the CIMA Sri Lanka Division on the theme "Sri Lanka Inc. Re inventing for the new Economy" will be held on May 17 and 18 in Colombo.
The conference will be inaugurated on May 17 at the BMICH while the technical sessions will follow at the Hilton Colombo the next day. Over 600 invitees are expected to attend the inauguration, while 250 delegates are expected for the technical sessions. Mr. David Flood, Resident Advisor, J. E. Austin Associates, Inc will deliver the keynote address at the inauguration.
This year's Conference will focus on four key sectors of the Sri Lankan economy; Apparel, Tourism, Plantation and Information Technology; and, how these sectors should "reinvent" to face the challenges and succeed in the emerging new world economy.
Presentations will be made by Mahesh D Amalean-Chairman MAS Holdings (Pvt) Ltd (on apparels and garments), Prema Cooray - Deputy Chairman, Aitken Spence & Co. Ltd (tourism), Rohan M Fernando - Managing Director, Aitken Spence Plantation Management Ltd (plantations) and Dr Lalith Gamage - Managing Director, Sri Lanka Institute of information Technology (Information Technology).
At the Annual General Meeting of the Accredited Advertising Agencies Association held on April 24, founder President Nimal Gunewardena and his team handed over the reins to Lilamani Dias Benson and a new Executive Board.
The Association represe–nting the advertising industry was formed in September 1999 and has grown to include most of the main players in the industry with a membership of 37 agencies.
Photo shows members of the new Executive Board of the Association: Lilamani Dias Benson (President), Kenneth Honter & Neelanie Goonetilake (Vice Presi–dents), Rohan Rajaratnam (Hony. Secretary), Amara Galagoda (Hony. Treasurer), Varuni Amunugama Ferna–ndo, Leslie Uduwavitharane, Chrishantha Jayasinghe, Jayantha Sittampalam, Ameer Ahmed (Directors) and Nimal Gunewardena (Immediate Past President).
By Akhry Ameer
An enterprising Sri Lankan couple, launching a children's furniture outfit in 1988 turning out "fairy tale-type" wooden toys for the export market, says it is now ready to sell its products to local buyers.
The husband-and-wife partnership running "Dreams of Dulanja" told The Sunday Times Business in an interview the firm was ready to tackle the local market after a successful run in international markets.
Having proved its capability and secured orders from buyers in the United States, Dreams of Dulanja has been exporting children's furniture since 1992.
Dreams of Dulanja which originally carried out the manufacturing in house, now operates as a buying office having sub-contracted the manufacturing to about 20 local centres in suburban areas in the past few years.
These local centres are owned by carpenters who were initially employed at Dreams of Dulanja.
"We helped them to set up their centres and made sure they had orders. We also supply them with materials for all of our orders. This way it has also helped employment because about 150 people are dependant on us. We wouldn't have been able to employ such a number, but now the rest of the time they also process their own orders," added Mrs. Jayathilake who now only has a small workshop behind their showroom.
This little operation has been successful in their exports because of the quality and the educational designs in their furniture. The children's furniture consisting of beds, tables, chairs, cupboards, clothes hangers are also adapted for easy transport through its knockdown design and is hand painted using non-toxic paints. As for the educational value these come through the themes, shapes and visuals that are painted on them based on fairy-tales like Hans Christian Andersen. In between export orders the organization has also executed local custom orders from international schools for Montessori furniture and custom orders for the local expatriate community.
The name for the business evolved from the name of their son Dulanja, who is the proud owner of the demo units that were made to secure the foreign orders. Formerly known as Dulanja Exports, the name was later changed to Dreams of Dulanja to complement a storyboard developed as a marketing strategy depicting a kid's dream of fairytales becoming true to life.
However, all is not sweet for this medium level furniture manufacturer. They now have to compete with China due to the high cost of production. These stem from the excessive demand for rubber wood and the high price they have to pay for purchasing other materials like MDF locally. "We have to establish different pricing categories and various levels of quality to cater to a wider local market," said Mrs. Jayathilake.
The husband and wife duo who initially were working in the hotel trade ventured into this industry in 1988 after meeting a buyer from Denmark who was looking for people to manufacture Danish design wooden toys and puzzles based on Hans Christian Andersen fairy tales.
The couple still continues a cordial working relationship with this original buyer.
A Sri Lankan printing giant and a newspaper giant have joined hands in introducing a new and unique packaged offer to distribute free insertions in their publications as long as the client pays for the printing.
Lake House Printers and Publishers (LHPP), RS Printek Limited and Wijeya Newspapers Ltd announced their promotional plan in a letter to the country's top corporates recently.
The new concept enables organizations to distribute information of their products and services in the form of brochures and flyers to be inserted and distributed free with any of the Wijeya Publications, such as the Sunday Times and Lankadeepa.
"As a special incentive we are in a position to waive the total cost of advertisement and insertion, which would normally apply in advertising in other sections of the newspapers. So in effect clients would only have to pay for the cost of printing. It is a single turnkey solution where the colour separation, insertion and distribution is handled under one roof, thus accruing substantial savings on added costs when done through individual agencies," an LHPP official explained.
LHHP is a public quoted company listed in the Colombo Stock Exchange and is a pioneering publishing company of the Wijeya Newspaper Group. RS Printek Ltd is the newest addition to the Group with its facilities at Biyagama, which possesses the latest equipment in the print industry. The company is currently under an ISO certification process and serves most of the leading banks with high security print documents.
Wijeya Publications is the publisher of The Sunday Times and Lankadeepa newspapers and nine other newspapers/magazines. The Sunday Times has a wide circulation in the niche metropolitan market while the Lankadeepa enjoys a much larger circulation among Sinhala readers.
Money Market - First Capital
Call money market
The reduction in the liquidity shortfall helped ease the inter-bank money market rates during the week ended 26th April. The liquidity shortfall dropped to Rs. 30~32Bn, level from Rs.40~42Bn in the previous week. The crunch in cash circulation along with the purchases of treasury bills by the Central Bank reduced the liquidity shortfall. The cash in circulation that reached the peak of Rs. 84Bn, during the festive season lowered to Rs.76Bn mark by the end of this week. During the week most of the call money transactions took place between 22% and 23%. Hence, the weekly average call money rate tumbled by 208 basis points to close at 21.59%.
A similar trend was witnessed in the term money market and one month money was quoted at 20.50% to 21.00%.
With no further reduction in the Central Bank's open market rates, the market repo rate remained at 21.25%~21.50%.
Central Bank Open Market Operations
The Central Bank's open market rates, repo and reverse repo rates remained unchanged at 18.5% and 21.5% respectively. In spite of the liquidity shortfall witnessed a notable reduction, the Central Bank's reverse repo window had to release Rs. 164Bn averaging approximately Rs. 32.9Bn a day.
T Bill Auction
Rs. 5,460Mn worth of treasury bills were offered in the weekly auction. In this auction too the Central Bank reserved Rs. 2,500Mn worth of bills, which helped ease the pressure on the treasury bill yields and also the liquidity level in the market. The announcement of credit support by IMF and other donor countries, boosted the investor confidence and raised expectations for lower interest rate regime. Hence, the investors who were observing the market rushed in to purchase government securities, resulting in a dip in the treasury bill rates.
With the improvement in the investor sentiments, the treasury bill auction weighted averages took a sharp beating. The highest fall was witnessed in the 364 days category.
Treasury Bond Auction
After a lapse of few weeks, a treasury bond auction was held during the week to offer Rs. 1000Mn worth of treasury bonds. The renewed market buying interest, backed by fresh investor expectations, significantly brought down the bond yields. The auction weighted average plummeted by 235 basis points over the previous auction. The secondary market too was trading at the similar levels.
The persistent buying interest for dollars kept the rupee under pressure through out the week. The rupee started trading at Rs.87.90 and reached Rs. 89.20 level by the end of the week.
The rupee depreciation for the year saw a further hike during the week to close at 7.70% as compared with 5.98% at the end of the previous week.
Three months forward was quoted at Rs. 92.45 to Rs.92.75, while six months forward was quoted at Rs.95.40 to Rs.95.80.
Amount offered Rs.Mn 1000
Amount Accepted Rs.Mn 100
Weighted Average 18.07&
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