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Archive for the ‘Economy’ Category

New Airbus A320s Coming Sri Lanka Airlines In December.

In development, Economy, magerata on October 19, 2010 at 9:46 am

SriLankan Airlines is getting ready for the first of the five A320s in December and another three brand new planes will be joining the fleet in May next year. I really hope I can fly in Sri Lankan Air lines, at least half way, when I come to visit Sri Lanka in December.

According to Financial times, the national carrier has said that it is acquiring seven more aircraft by end of next year. Within the order are three brand new A320s first of which will be taken delivery of in May next year. The airline recieved the last of the six A330-200s over a decade ago in June 2000. In addition to the five A320s, there will be two twin otter floatplanes joining the fleet.

“We will be celebrating an important new chapter in the history of SriLankan Airlines with the arrival of this large number of aircraft within a short period. They will allow SriLankan to significantly enhance the passenger experience on board our flights, give us the ability to fly to more cities in the Subcontinent, Middle East and Southeast Asia, and to also increase capacity to existing destinations in these regions,.. Our fleet expansion plans are constantly updated to support Sri Lanka’s rapidly growing tourism industry, while keeping in mind the financial requirements of the airline” SriLankan Airlines CEO Manoj Gunawardena said.

The new aircrafts scheduled to be acquired in 2011 will sport the latest comforts and entertainment systems including Audio-Video On Demand (AVOD) in both Business and Economy Classes.All five aircrafts including the two A320s which are to arrive in December 2010 and early 2011, would be on operating leases at very attractive terms of monthly payments.

The two Twin Otters will be used for the re-launch of the domestic service SriLankan Air Taxi this winter.

The seven new aircrafts join SriLankan’s fleet of 13 aircrafts – three A320s, five A330s, and five A340s – with a global network covering 49 cities in 31 countries. The twin-engined A320s operate to destinations in the Subcontinent, Maldives, Southeast Asia, and parts of the Middle East, while the A330s and A340s operate to the Middle East, Europe, and the Far East.

Sri Lankan Stocks Settle After Diving Deep

In Colombo Stock Exchange, Economy, magerata on October 14, 2010 at 4:37 am
#CSM, #colombostocks
Sri Lankan stocks closed up 1.4 percent after what seemed a wild ride on Wednesday. The benchmark index fell 5.7% during intra-day trade but late institutional purchases brought the index back up. The benchmark All Share Price Index closed at 94.81 points at 6,628.83 points recovering a part of the 4.4 percent loss a day earlier.
According to LBO, the Milanka Index of liquid stocks closed up 0.56 percent (47.13) at 7,166.88.
The Colombo stock exchange intervened and halted trading for half an hour till 10.59 am after the index fell more than 5.0 percent after one hour of trading as investors dumped stocks. But it was also an opportunity presented to those who are familiar with the numbers.
The intra day dive of 5.7 was only surpassed by the January 27, 2005 dip of 6.97, Bloomberg reported.
Sri Lanka stock market was prepared and the watchdog put limits on margin trading and also price curbs to prevent the formation of large bubbles which can collapse and hurt everyone.
Most Sri Lankan stocks are non-liquid and they are easy to manipulate. The overall market was valued at 25.1 times historical earnings at the day’s close. Sri Lanka’s stocks were up more than 110 percent at the beginning of the month.

Following stocks gained support of buyers and made me smile.

John Keells Holdings closed up 6.70 at 320.30 after falling as low as 300.00 with 3.0 million shares traded.

Dialog Axiata,  fell to 11.00 rupees before closing flat at 12.00.Hatton National Bank closed up 4.40 rupees at 220.60 after falling as low as 200.00 rupees.

National Development Bank closed up 4.70 at 360.20 after falling as low as 336.00.

Nestle Lanka closed up 16.10 at 665.00 after falling as low as 630.00.

Aitken Spence Hotel Holdings closed up 11.40 at 778.00 after falling to 680.00.

Disclosure, I own stocks of some of the companies listed above and I am good.

Sri Lanka’s Gross Reserves Surpass US $7 billion Mark.

In CENTRAL BANK OF SRI LANKA, Economy, Postwar Sri Lanka on October 7, 2010 at 10:08 pm

Central Bank of Sri Lanka announced today that the Sri Lanka’s Gross  Reserves have surpassed US $7 Billion mark on 4th October 2010. These reserves are roughly equivalent of 6.8 months import requirements of Sri Lanka. The officials also mentioned that this is the highest ever reserves level recorded by Sri Lanka.

Are we beginning to see the results of ending of the war?

Sri Lanka External Sector Performance – July 2010 (+ Jan – July 2010)

In CENTRAL BANK OF SRI LANKA, Economy, magerata on October 7, 2010 at 7:49 am

External Sector Performance – July 2010

PDF of the original document “Sri Lanka External Trade Performance January – July 2010


Earnings from exports rose to US dollars 656 million reflecting a growth of 0.6 per cent in July 2010. Earnings from agricultural exports performed well, while earnings from industrial exports declined marginally. Expenditure on imports increased by 25.3 per cent to US dollars 1,177 million in July 2010 reflecting increases in all major categories of imports.  The cumulative earnings from exports and expenditure on imports have increased by 11.4 per cent and 39.2 per cent, respectively, during the first seven months of 2010. The trade deficit expanded to US dollars 3,364 million during this period.

Sources: Central Bank of Sri Lanka              Sri Lanka Customs
The increase in earnings from agricultural exports is attributed mainly to the healthy performances by the tea and minor agricultural export sectors. Year-on-year, tea exports volumes grew by 6.1 per cent to 28.8 million kilograms in July 2010 while the average export price of tea increased by 1.4 per cent to US dollars 4.19 per kg.  Earnings from minor agricultural exports grew by 17.7 per cent mainly due to significant increases in the export volumes of sesame seeds, pepper, vegetables and cloves and the higher prices fetched by essential oils, cardamoms and cinnamon. Lower rubber production due to unfavorable weather conditions amidst higher international demand for natural rubber led export prices of rubber to increase by 84.4 per cent to US dollars 3.28 per kg. Although rubber export volumes declined by 46.0 per cent in July 2010, exports of rubber based products have increased substantially, reflecting higher levels of domestic value addition. Other key categories of industrial exports, such as machinery and equipment and petroleum based products also performed well in July 2010. Nevertheless, earnings from industrial exports declined marginally to US dollars 483 million in July 2010, led by lower exports of textiles and garments, ceramic products and diamonds and jewellery.
Expenditure on imports of consumer goods increased significantly during the month of July 2010, led by higher imports of non-food consumer goods, of which nearly 45 per cent comprised of motor vehicles.  Food imports also increased mainly due to the higher prices of sugar imports. However, expenditure on rice imports declined in view of the lower prices in the international markets and the bountiful crop from the yala season.  Expenditure on intermediate goods also increased, led by higher imports of fertilizer, mainly due to the substantially higher import volumes of fertilizer amidst lower prices. Expenditure on investment goods increased owing to the significant increases in expenditure on transport equipment, of which around 55 per cent comprised of an aircraft imported in July 2010.
During the first seven months of 2010, workers’ remittances increased by 12.5 per cent over that of the corresponding period of 2009 to US dollars 2,141million. The gross official reserves, without Asian Clearing Union (ACU) funds increased to US dollars 5,467 million by end July 2010. Based on the previous 12 months average expenditure on imports of US dollars 1,021 million per month, the gross official reserves, without ACU funds were the equivalent of 5.4 months of imports.

The performance of external trade during the period is further illustrated in the following table.

External Trade Performance: July 2010 and January – July 2010

Sri Lanka Meets IMF-SBA Key September 2010 Goals

In CENTRAL BANK OF SRI LANKA, development, Economy, magerata on October 7, 2010 at 6:30 am

Sri Lanka achieves end September targets under IMF-SBA programme

Sri Lanka has successfully achieved the key September 2010 programme targets, namely, Net International Reserves (NIR), Reserve Money (RM) and Net Domestic Financing (NDF) under the IMF-SBA. This outcome indicates the successful progress Sri Lanka has made since the approval of the SBA facility in July 2009. So far, under the programme, Sri Lanka has received 5 tranches, totalling US dollars 1,275 million, out of the total facility of approximately US dollars 2,600 million.

An IMF staff mission is expected in November 2010 to conduct the next review under the SBA programme, and the sixth tranche is expected to be released on completion of same.

PDF version of the press release “Sri Lanka achieves end September targets under IMF-SBA programme” Sri Lanka Meets IMF-SBA September Goals

 

Colombo Consumers Price Index 2007- 2010 September.

In CENTRAL BANK OF SRI LANKA, Colombo Consumers’ Price Index, Economy, magerata on October 1, 2010 at 10:27 pm

The Central Bank Of Sri Lanka has released monthly data on the Colombo Consumers Price Index September 2010 in a tabular format. The little problem is that it was prepared for publication by someone who did not know how to create a table in the famous Microsoft Word they use and also had no idea of font sizes. I have manipulated table columns to make it a bit readable.

Colombo Consumers Price Index 2007-2010

Please download the attached PDF file,  Colombo Consumers’ Price Index (CCPI) 2008-2010

Inflation Rises In Sri Lanka During September 2010, The Department of Census and Statistics

In CENTRAL BANK OF SRI LANKA, Colombo Consumers’ Price Index, Economy, magerata on October 1, 2010 at 10:02 pm

Inflation, as measured by the Colombo Consumers’ Price Index (CCPI) (2002=100), computed by the Department of Census and Statistics, increased to 5.8 per cent in September 2010, on a point-to-point basis as anticipated, from 5.0 per cent in August, reflecting mainly the lower base in the corresponding month of 2009. Meanwhile, the annual average inflation increased to 5.0 per cent in September from 4.5 per cent in the previous month, as a result of the price developments in the preceding twelve month period. Meanwhile, the core inflation, which measures the price movement of non-food and non-energy items of the CCPI basket, stabilized at 6.3 per cent on an annual average basis, for the fourth successive month, while increasing marginally on a point-to-point basis, to 5.7 per cent in September 2010 from 5.5 per cent in the previous month.

The contribution to the monthly increase of 1.0 per cent in the Index originated from price increases in the sub categories of Food and non-alcoholic beverages (1.7 per cent); Clothing and footwear (1.2 per cent); Health (0.4 per cent); Housing, water, electricity, gas and other fuels (0.3 per cent); Recreation and culture (0.2 per cent); and Furnishing, household equipment and routine household maintenance (0.03 per cent). Meanwhile, prices in the sub categories of Transport, Communication, Education, and Miscellaneous goods and services remained unchanged during the month.

The original Press release by CBSL as a PDF Sri Lanka inflation Sep 2010

Global Investors Snatch Up Sri Lankan Sovereign Bond Issue of USD 1 billion

In CENTRAL BANK OF SRI LANKA, Economy, magerata, Sri Lankan Market Research on September 30, 2010 at 9:26 am
The third international sovereign bond offering by Sri Lanka amounting to USD 1 billion to be realized in 10 years, attracted an order book that exceeded USD 6.3 billion within 14 hours of its opening, indicating the high global investor confidence based on the recent progress and the future prospects in Sri Lankan economy, after the eradication of civil war that raveged the country for more than 30 years.
Following is the full text of the CBSL press release and a PDF version of the document is available after the jump
Global Investors’ Demand Exceeds  over USD 6 billion in 14 Hours For Sri Lankan Sovereign Bond Issue of USD 1 billion
Sri Lanka finalized a USD 1 billion  10 year Sovereign Bond issue  with  a coupon rate of 6.25% on 27 September 2010. This was the third international sovereign bond offering, following  issues in 2007 and   2009. The offering   attracted an order book that  exceeded USD 6.3 billion within  14 hours of opening  on 27 September 2010, thereby being over-subscribed by more than 6 times, clearly underscoring the high global investor confidence based on the recent progress and the future prospects in Sri Lankan economy since the   end of  the  conflict in the country. Orders were  received from 362 investors globally.  By geographic distribution, 52.5% of the bonds were allocated to investors in the United States,  25% to investors in Europe and 22.5%   to investors in Asia.  By investor type, 85% of the bonds were allocated to Fund and Asset Managers and the balance to Pension Funds, Insurance companies and banks.
The Offering  is of 144A / Reg.S format and the bonds will mature in October 2020. The bonds are rated B+ by two international rating agencies, Standard & Poor’s  and  Fitch Ratings and will be listed on the Singapore Exchange. The current coupon rate of 6.25%  for the  10 year sovereign bond is significantly lower than the cost of borrowings as compared to previous two international offerings in 2009 and 2007.
Year

Amount

US $ million

Maturity (yrs)

Yield (%)

2007 500 5.0 8.25
2009 500 5.25 7.40
2010 1000 10.0 6.25

The Government will use the proceeds from the bond issue to finance  its current     infrastructure and to  restructure  a part of the existing debt stock of the government  to improve overall public debt management.

Bank of  America Merrill  Lynch, Royal Bank of Scotland and Hong Kong and Shanghai Banking Corporation functioned  as Joint Lead Managers and  Joint Book Runners of the offering,  while Bank of Ceylon participated as   Co-Manager.

Sri Lankan Sovereign Bond Issue of USD 1 billion

Bringing Back The Finance Company PLC

In CENTRAL BANK OF SRI LANKA, Economy, magerata on September 30, 2010 at 8:38 am

I am sure everyone knew and a few wondered what is going to happen to The Finance Company PLC when a Ceylinco Group Companies went under. The Central Bank of Sri Lanka (CBSL) intervened and safeguarded the interests of  stakeholders, including the employees, customers, depositors and shareholders. It also helped to stabilize the financial situation of the country as well.

Now the CBSL thinks it is time to return the company to a Board of Directors representing the shareholders as the situation has normalized and the public confidence of the TFC is returning.

Following is the text of the news release and those who are interested could also download the PDF document.”Recapitalising The Finance Company PLC.PDF ”

Recapitalising The Finance Company PLC

In February 2009, the Central Bank of Sri Lanka (CBSL) intervened to stabilize The Finance Company PLC (TFC) in the face of difficulties encountered by the TFC as a result of the collapse of the several Ceylinco Group establishments. The interventions included the appointment of a Managing Agent and the issue of several specific directions to TFC. These measures contributed to stabilize TFC and to safeguard the interests of the company and its stakeholders, including the employees, customers, depositors and shareholders, and also to maintain financial system stability in the country. As a result of such interventions, the Company has now recovered from the initial shock, while public confidence has been restored.

In that background, the Monetary Board of the CBSL has decided that the time is now appropriate to recapitalize the company in order to facilitate the smooth operations of the Company in the future. It has also been decided that the Company must be managed by a capable Board of Directors representing the shareholders so that the Managing Agent could exit from the operations of TFC as soon as normalcy has been restored.

Report On Sri Lanka Telecommunications, Q4 2010

In development, Economy, magerata, Sri Lankan Market Research on September 28, 2010 at 9:32 am

Business Monitor International has published an update to the Sri Lanka Telecommunications Report for fourth quarter 2010.  The new report has revised the its forecasts on Sri Lankan communication markets, including but not limited to fixed-line, internet and broadband services markets extensively with fresh data from authorities, operators and industry associations in Sri Lanka. The mobile market forecasts remain the same due to lack of data from Sri Lankas five mobile operators.

Notable are the downgrade of the fixed line growth forecasts even though with the new avenues to build communication lines in the North and East of the country. There is a positive growth but I assume it will be more visible in the year 2012 or so. The aging PSTN has been suffering and even some wireless local loops WLL, have been taken off line by some of the operators. The report believes that each of the next five years will see nominal positive growth, in contrast to our previous forecasts for steady increases to 2014 in the Sri Lankas Fixed Line Telecommunication Market.

There is some overlap with the increase of broadband lines in recent times, as both PSTN and CDMA WLL connections are increasingly being used to deliver broadband services to Sri Lankans looking to surf the net, get their daily information dose as according to the news reaching us, print news being more and more polarized. Yet the new data show that fixed broadband connections grew less strongly in 2009 than had been expected, but the market was bolstered by growing interest in Sri Lankan WiMAX and 3G/3.5G mobile telephone networks for broadband access. Data from the Central Bank of Sri Lanka suggest that there were 70,000 WiMAX/3G subscribers at the end of 2009 which, when added to fixed broadband subscriber numbers, pushes up our growth forecasts quite significantly. The analysts expect broadband penetration to reach 21.3% by the end of 2014, up from 1.2% at the end of 2009.

There is a change in the mobile broadband usage in Sri Lanka thus giving the analysts an opportunity to begin forecasting 3G service usage, which was lacking Previously.  The price wars of Mobile broadband service in 2009 helped to make 3G services more affordable, and it is believed there were 95,000 3G subscribers at the end of the year, representing 0.7% of the mobile market as a whole. The report expects 3G to account for just 2.5% of the mobile market by 2014, pointing at the cost being a major hurdle to mass market adoption.

Following is the table of contents of the Sri Lanka Telecommunications Report Q4 2010 Published by Business Monitor International on Aug 20, 2010 , spaning 78 pages;

Executive Summary
SWOT
Sri Lanka Wireline (Fixed-Line And Broadband) SWOT
Sri Lanka Mobile SWOT
Sri Lanka Political SWOT
Sri Lanka Economic SWOT
Sri Lanka Business Environment SWOT
Business Environment Rankings
Asia
Sri Lanka
Industry Forecasts
Mobile
Table: Sri Lanka Telecoms Sector – Mobiles – Historical Data & Forecasts
ARPU
Table: BMI Telecoms – Mobile ARPU – Historical Data And Forecasts (LKR)
Fixed Line
Table: Sri Lanka Telecoms Sector – Fixed Line – Historical Data & Forecasts
Internet
Table: Sri Lanka Telecoms Sector – Internet – Historical Data & Forecasts
Market Data Analysis
Mobile Market
Table: Sri Lanka Wireless Market, Q110
Table: Sri Lanka Wireless Market Net Additions, Q110
Subscriber Mix & ARPU
3G
Mobile Contract Wins
Mobile Content
Regional Outlook
Table: Asia Mobile VAS Market By Service, 2009 (US$bn)
Country Outlook
Value-Added Services Timeline
Table: Selected VAS Services
Mobile Operator Data
Table: Sri Lanka Mobile Market Overview
Table: Etisalat Lanka
Table: Hutchison Lanka
Table: Dialog
Table: Mobitel
Fixed Line
Table: Sri Lanka Fixed-Line Market, Q409
Provincial Fixed-Line Markets
Provincial Distribution of Fixed Line Phones, December 2009
Internet & Broadband
SLT
Dialog Telekom
WiMAX
Wireline (Fixed Line & Broadband) Developments
Table: Wireline Developments, 2008-2010
Regulatory Environment
Table: Sri Lanka: Regulatory Bodies And Their Responsibilities
Competition
Licensing
Table: Licences Granted Under S.17, Sri Lanka Telecommunications Act 1991 (as amended)
Interconnection
Industry Developments
Regulatory Developments
Competitive Landscape
Competitor Analysis
Table: Key Players – Sri Lanka Telecoms Sector
Company Monitor
Cisco Systems
Table: Cisco Systems: Overall Financial Performance (US$bn)
Table: Cisco Systems: Major Contracts Awarded In Asia (2010)
Operator Profiles
Sri Lanka Telecom (SLT)
Hutchison Lanka
Dialog Telekom
Regional Telecommunications Penetration Overview
Fixed Line
Table: Regional Fixed-Line Penetration Overview
Broadband
Table: Regional Broadband Penetration Overview
Mobile
Table: Regional Mobile Penetration Overview
Country Snapshot: Sri Lanka Demographic Data
Section 1: Population
Table: Demographic Indicators, 2005-2030
Table: Rural/Urban Breakdown, 2005-2030
Section 2: Education And Healthcare
Table: Education, 2002-2005
Table: Vital Statistics, 2005-2030
Section 3: Labour Market And Spending Power
Table: Employment Indicators, 2001-2006
Table: Consumer Expenditure, 2000-2012 (US$)
Table: Average Annual Wages, 2000-2012
Glossary Of Terms
Table: Glossary Of Terms
BMI Methodology
How We Generate Our Industry Forecasts
Table: Key Indicators For Telecommunications Industry Forecasts
Telecoms Business Environment Ratings
Table: Weighting Of Indicators
Table: Ratings Indicators
Sources