Amana Takaful Maldives in share swap

Amana Takaful PLC announced that Amana Global Limited, a fully owned subsidiary of Amana Takaful PLC, has transferred 10,402,558 shares of Amana Takaful (Maldives) PLC being 51.39% of the total shares of Amana Takaful (Maldives) PLC to Amana Takaful PLC without any purchase consideration.

The shares of Amana Takaful (Maldives) PLC are fair valued at Maldivian Rufiyaa Six (MVR 6/-) per share upon being transferred to Amana Takaful PLC in conformity with the Sri Lanka Accounting Standards.

The transaction was effected on December 31, 2015. The rationale for effecting the transaction has been for the purpose of restructuring the Amana Takaful Group. In 2015, the Life operation was segregated as a wholly owned subsidiary of Amana Takaful PLC under the name and style of Amana Takaful Life Limited. (IH)
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Sri Lankan shares fall to over 18-month low

Reuters: Sri Lankan share index fell more than 1.6 percent to more than 18-month low on Thursday due to rising yields that led investors to shift towards risk-free assets such as government securities amid global worries, brokers said.

The main stock index ended 1.65 percent, or 108.17 points weaker, at 6,446.20, its lowest close since July 2, 2014. The bourse had lost 4.93 percent so far this year as of Wednesday's close.

"The market is falling way too fast with the continued foreign selling and talk of big foreign funds selling Sri Lankan shares due to global volatility," said Dimantha Mathew, research manager at First Capital Equities (Pvt) Ltd.

"Investors are of the view that they will likely see lower prices and are awaiting the psychological barrier of 6,000 mark. But we feel there is a possibility of small rebound with the huge downturn we have seen," he said.

Stockbrokers said some foreign funds have already started selling blue chips including the market heavyweight John Keells Holdings and lender Commercial Bank of Ceylon .

The bourse dipped further into an over sold territory on Thursday with the 14-day relative strength index at 16.689 points versus Wednesday's 20.874, Thomson Reuters data showed. A level between 30 and 70 indicates the market is neutral.

The turnover was at 978.7 million rupees ($6.81 million).

Foreign investors were net buyers fore the first time in four sessions on Thursday due to a block deal, traders said.

They bought a net 56.6 million rupees worth of equities on Thursday. But they have been net sellers of 2.21 billion rupees worth of equities so far this year, compared with 4.43 billion rupees of outflow in 2015.

Analysts said local investors are worried of more monetary tightening after the central bank raised commercial banks' statutory reserve ratio by 150 basis points with effect from Jan. 16.

The yield on 91-day t-bill rose 40 basis points to an over three-month high of 6.78 percent in three weekly auctions since the Dec. 30 monetary policy announcement.

Shares in Sri Lanka Telecom Plc fell 8.33 percent while Commercial Bank of Ceylon lost 2.91 percent, dragging the overall index. Distillers Company of Sri Lanka fell 3.79 percent while John Keells Holdings Plc fell 1.73 percent.

Markets will be closed for Hindu religious holiday on Friday. Trading will resume on Monday. 

($1 = 143.8000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez)

ADB approves $175m loan for Sri Lanka road improvements

ECONOMYNEXT – The Asian Development Bank said it has approved a loan of 175 million US dollars to improve rural roads in Sri Lanka.

“The absence of all-weather road connectivity is a serious problem in Sri Lanka's rural areas, preventing communities from accessing socioeconomic centres,” the ADB said.

“Poor road infrastructure has a strong link to poverty and affects economic growth in rural areas, agricultural productivity, and employment.”

The loan is the third tranche of an integrated road investment program to improve connectivity between rural communities and socioeconomic centres in the island by year 2027.

The program aims to improve road conditions between selected rural communities and socioeconomic centres and the capacity of road agencies, the ADB said.

The loan will finance projects in the Southern and Sabaragamuwa Provinces, Kalutara District of Western Province, Central Province, North Central Province, and North Western Province.

Sri Lanka delays removal of VAT from retail trade

ECONOMYNEXT - Sri Lanka has delayed the removal of value added tax from wholesale trade and the increase in a turnover tax (nation building tax) until changess are approved by parliament, the finance ministry said.

But a 'deemed VAT' charged from shops owned by citizens on foods which are not liable to VAT will be removed.

Under discriminatory laws, enacted by the Rajapaksa regime, LakSathosa, a network of shops built with people's money and run by rulers are not liable to VAT, despite having a turnover above the liable threshold.

It can pocket the difference between the retail price and VAT in an indirect subsidy at the cost of revenue to the state.

Removal of VAT from wholesale and retail trade was considered a regressive move by some observers. In modern economies the organized retail chains are a key cog in the tax system.

Motor vehicles for which letters of credit were opened before a budget in January will also be allowed to be cleared at the old rates, the finance ministry said.

The outcry by helpless citizens over sudden tax rises, stem from violating principle of 'taxation by consent' which led to the establishment of the Magna Carta in UK and the 'Royal Prerogative' in tax laws and other laws.

Sri Lanka hatches taxes in secret as if by 'Royal Prerogative' and hikes them by midnight gazette, while citizens are sleeping in a practice that became widespread especially during the 1970s, in direct contravention to basic principles of parliamentarism and freedom involving 'taxation by consent'.

In Britain taxation by royal prerogative was explicitly outlawed by the Bill of Rights of 1689 which said that the…"execution of laws by regal authority without consent of Parliament is illegal".

Telecoms giant seeks TRC approval

By Ishara Gamage

Ceylon Finance Today: Sri Lanka's mobile telecoms giant Dialog seeks Telecommunications Regulatory Commission (TRC) approval to buy the Colombo operations of Bharti Airtel for US$ 100 million, sources close to negotiations told Ceylon FT yesterday.

"The deal will be finalized soon after TRC approval is obtained," they said.

Responding to our previous report relating to this deal (see Ceylon FT of 2 December, 2015), Dialog Axiata said that no final deal has been made to acquire a rival, following a media report that is was in talks to buy a unit of Bharti Airtel in the island.

"Should the firm reach material certainty with respect to an inorganic merger or acquisition, the company would make due disclosures of the same to the relevant authorities," the firm said in stock exchange filing.

Bharati Airtel Lanka Ltd and Dialog Axiata PLC officials, when contacted declined to comment.

"'The transaction will be a mix of cash and an equity stake in Dialog at 'current' market prices, where the total value would be US$ 100 million', they said", Ceylon FT on its 2 December, 2015 had further said.

Sources also said that Dialog Axiata is planning to transfer all its towers business to a separate company.
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JLL Report on Sri Lanka’s hospitality industry

By Chanaka de Silva

Property consultancy company JLL rereleased a report on the tourism sector of Sri Lanka in Colombo yesterday.

The report provides observation of the growth of the tourism sector in Sri Lanka.

Speaking at the press meet JLL Hotels & Hospitality Managing Director Mandeep Lamba said Sri Lanka, which has been ranked among the world's Top 10 'Coolest Countries' to be visited in 2015 shows room for tremendous growth. The North and the East Coast of Sri Lanka has a large requirement for development and training.

" It is advisable to let the market decide on the rates and they should not be controlled now. Even though it was correct at a particular time now that policy should be withdrawn. We are massively invested into Sri Lanka's hospitality market, which boasts of ongoing double-digit growth in tourist arrivals year-on-year. The country registered an average Compounded Annual Growth rate of 16% over the past five years, and is now working towards a target of 2.2 million tourist arrivals in 2016. The business potential is immense, and JLL has taken its customary leadership position in harnessing it" he said.

Sri Lanka had close to 1.8 million foreign tourist arrivals in 2015, demonstrating a growth of 17.8% over the previous year. Sri Lanka has approximately 28,000 rooms, of which over 60% fall in the informal segment

There is a planned hotel supply of close to 8,000 rooms, largely in Colombo and along the South-west coast Colombo has seen an increase in hotel supply in the 3 and 4 star segments leads to a slight decline in overall occupancy levels, while the city has also seen a slight decline in Average Room Rates.

While occupancy levels over the past three years have seen a steady increase, the South-west coast has seen a reduction in room rates during the year due to increased competition, with a substantial increase in room inventory along this stretch. There is a gradual shift in tourist profile, with arrivals from the traditional European source markets declining, while Asian countries have increased their market share - led by China and India.
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Customs targets Rs 1 trillion record revenue this year

Indunil Hewage (indunil.hewage@gmail.com)

Sri Lanka Customs (SLC) is expected to collect Rs. 1 trillion as tax revenue for 2016, Director General Chulananda Perera said.

Speaking at a seminar on Sri Lanka Customs' Single Window Implementation for Boarder Regulatory Authorities, Perera said the Customs will take proactive measures to reach this target. Perera however noted that the SLC is not willing to touch every aspect in an ad-hoc manner to realize this target.

Commenting on operational benefits and the processes of the recently implemented single window system, Perera said the new system will help increase the efficiency of customs' related activities and will be beneficial to both traders and the Sri Lanka Customs.

The system will also help ensure the smooth flow of information between the government, traders and to help the government ensure efficient deployment of resources and correct revenue yield.

Under the program all public and private sector institutions involved in the import export sector will be allowed to lodge information with a single body to fulfill all import or export related regulatory requirements.

With a view to facilitating legitimate trade; necessary measures will be taken to improve the technical aspects relating to export and import activities of the Sri Lanka Customs.The DG said that measures have also been taken to acquire advanced passenger information and cargo information systems.

"All employees attached to the Customs will be trained and better equipped to handle customs operations in a transparent and efficient manner.

To this end, SLC is in discussions with several countries to get their support to conduct capacity building programs for its employees."

Sri Lanka Customs ICT Division's Athula Lankadeva speaking on the deployment of digital signatures towards paperless processing at Sri Lanka Customs said that SLC is committed to offer the facility of paperless processing to the compliant traders and take necessary steps to complete the requisite tasks on priority basis.

The technical team of SLC has met Information and Communication Technology Agency (ICTA) officials in this regard and legal opinion of the Attorney General has been obtained.

SL Customs is also hoping to set up disaster recovery sites in three months. The ICT policy for Customs Department is currently under development incorporating provisions for information security management suitable for paperless processing, more controls in granting access to the Customs computer system and the procedures for dealing with breach of access policy among others. 

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