Dialog Television connects 500,000 Sri Lankan households

Opens up all Channels to celebrate Landmark

Dialog Television affirmed its position as the leading satellite entertainment network in the country, as it’s announced a major milestone of hitting the 500,000 customer mark. The Company is celebrating this achievement by opening up all channels to the entire base up to 15th July, whereby subscribers can avail of the very best in movies, news, sports, lifestyles and entertainment including in HD (High Definition).

Dialog Television was inaugurated in February 2007, and has since revolutionized the pay-television sector in Sri Lanka, becoming the first operator to offer pre-paid packages. These innovative ‘pay-as-you-watch’ packages for as low as Rs. 3 per day opened up premium content and satellite entertainment for everyone, demonstrating the Company’s commitment to inclusivity.

"Coupled with best-in-class global and local content, and unbeatable rates – our ability to provide television and entertainment to remote locations island wide, no matter the terrain, has made Dialog Television the preferred choice for consumers," says Chirantha De Zoysa, Head of Business, Dialog Television.

Dialog Television, is also the preferred network amongst the country’s leading city and resort hotels. Dialog Television offers customised entertainment packages to suit its corporate and business clientele. Dialog Television’s product offering is further strengthened by exclusive partnerships with premium channels such as CNN, Bloomberg, Disney, AXN and more. Dialog Television is the only operator that offers HD (High Definition) satellite TV channels. At present Nat Geo HD, Discover HD World, TLC HD, Star World Premier HD, AXN HD, Star Sports HD 1 and Star Sports HD 4 make up list. De Zoysa says, with more HD channels in the pipeline.

"We are immensely proud of this achievement, which once again demonstrates how Dialog has transformed the digital entertainment sphere in Sri Lanka. Our vision is to provide the very best in local and global entertainment to all Sri Lankans in an inclusive manner, and together with our penchant for innovation, our efforts are strengthened by exclusive partnerships with some of the leading players in the regional and global broadcast business", says Azwan Khan, Group Chief Operating Officer of Dialog Axiata PLC.

"We wish to thank our loyal viewers for their unrelenting support, and look forward to innovative activations which will further empower and transform the entertainment landscape in Sri Lanka", Dialog Television also broadcasts the Nenasa Digital Education Bridge to 2,000 schools all over Sri Lanka, presenting the national educational curriculum to Grade 10 and 11 students. Nenasa is a gift from Dialog to the Ministry of Education and children of Sri Lanka", he noted.

Similar to innovation in product packaging and pricing, Dialog Television is also looking to introduce innovative new offerings to provide a platform to boost local talent and productions.

Apart from all local channels, specialist local channels such as Ada Derana 24x7, Channel C, Nenesa, City Hitz, Revision TV, Cine Thirai, HTV and Ridee TV are also offered free of charge to subscribers in the basic pack. Dialog Television is also presenting a special offer during the period, where customers could purchase a connection for just Rs. 3,990 with the sports pack active for two months.

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Swisstek doing nicely with new products

Solid wooden flooring back in portfolio

Swisstek (Ceylon) PLC., a member of the Lanka Wall Tiles group whose ultimate parent is the Dhammika Perera controlled Vallibel One PLC., has profited from growth in the construction industry enabling higher market share for Swisstek branded products – tile mortar, tile grout, skim coat, decorative pebbles and aluminium, during the year ended March 31, 2015.

"The re-introduction of solid wood flooring under the Swissparkett (Swisstek is the successor to Parquet Ceylon PLC.) under the Swissparkett brand name is expected to show future growth in this area of business as well," the Swisstek annual report said.

The company’s chairman, Mr. Nimal Perera, has reported that economic growth in the country had a positive effect on the construction industry, paving the way for a substantial boost in the performance of the Swisstek group.

"Whilst the turnover of your company grew by 5.9% to record Rs. 339 mn. ( Rs. 320 mn. the previous year), the turnover of the subsidiary, Swisstek Aluminium Ltd., (SAL) increased by 29.3% to record Rs. 1.52 bn., (Rs. 1.18 bn. in the previous year) for the year under review," Perera said.

"These increases together with strong bottom line contributions of Rs. 91.89 mn. (Rs. 49.66 mn. the previous year) and Rs. 157.36 mn., (Rs. 70.72 mn. in the previous year) respectively from the two companies, resulted in encouraging year-on-year increase in post tax profits of 113.3% of the group."

He said that this was indeed commendable and demonstrates very significant future prospects for both companies.

After a long lapse, Swisstek paid a dividend of Rs. 0.50 to shareholders last October. Perera expressed his belief that continuing growth in profits will enable them to have a sustainable dividend policy in the future to benefit all shareholders.

In recent months, the Swisstek share has been gaining substantially on the Colombo Stock Exchange (CSE). It closed the year under review at Rs. 41.90, up from Rs. 20.40 a year earlier. It traded last week at Rs. 58.

Perera said that they have been investing on upgrading technology, systems and procedures to bring greater efficiencies, at all levels of operations. Group investments totaled Rs. 16 million for the year which he said will bring rich benefits in coming years.

The company’s Managing Director, Mr. J A P M Jayasekera, said that group turnover, had grown 25% during the year under review to Rs. 1.86 bn. while the post tax profit had better than doubled to Rs. 251 mn. from Rs. 118 mn. a year earlier.

The company too has done well, with a topline growth of 6% to Rs. 339 mn while the bottom line grew by 85% to Rs. 92 mn.

"The main contribution to the profit came via increased commission income from sales at the factory outlet, a gain of Rs. 9 mn on fair value of investment property and a one-off gain of Rs. 24 mn from the land acquired by the government for road expansion," he said.

"The subsidiary company, Swisstek Aluminium Ltd., also performed very commendably. Turnover increased by 29.3% to Rs. 1.53 bn, and profit increased by 123% to Rs. 157 mn."

Jayasekera reported that many steps had been taken during the year to optimize capacity utilization at the factory alongside on-going efforts to streamline operational processes, and improve efficiencies at the tile grout and tile mortar, manufacturing unit. The products’ technical and functional specifications had been further improved to offer a superior product to the market.

Lanka Tiles with 47.8 % and Lanka Walltiles with 11.4% are the controlling shareholders of Swisstek.

The directors of the company are Messrs. W D N H Perera (Chairman), Mahendra Jayasekera (MD), K Y Choy, Nalaka Ratnayake, J K A Sirinatha and Ms. K C Silva.

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SLI Life Insurance Bonus giveaways to its Life Policy Holders tops Rs 30 billion in the last 10 years, with the Latest Issue of Rs 4.7Billion

Breaking all landmarks in the local insurance industry Sri Lanka Insurance has once again declared a life bonus of Rs 4.7billion for the year 2015 surpassing it’s own record of Rs 4.4 billion declared the year before. Sri Lanka Insurance has declared Rs 30Billion in total as Life Insurance Bonuses since 2006. This is ample evidence of the company’s commitment to providing the highest returns while protecting its policyholders through wise investment management

Explaining how the company continuously achieve this success, Mr Hemaka Amarasuriya, Chairman, Sri Lanka Insurance said " The company is managed with a clear strategy and a vision to become the trusted insurer to the nation whilst providing best value to our customers. This was demonstrated by declaring the unmatchable highest ever bonus in the local insurance industry year on year totaling to a Rs 30Billion for the last 10 years. Conscious, informed and timely decisions were made on opportunities that evolved in the capital market, boosting investment income to achieve exceptionally high-level. As a result SLI life fund, largest in the industry, recorded a mammoth growth in investment income enabling us to achieve this landmark. At Sri Lanka Insurance, the bonus is calculated on the sum assured and is based on the time span of the policy, where customers receive tremendous benefits."

Sri Lanka Insurance strongly believes that every citizen should invest in life insurance hence SLI offers strong, secure and stable solutions that come with government protection. In an era of diminishing interest rates, SLI Life offers competitive returns along with internationally acclaimed protection that is not only limited to protection of the policy holder but also enables one to obtain cash advances, good investment returns and savings. For nearly five decades, Sri Lanka Insurance has been committed to excellent customer service and innovative policies and systems that have allowed the company to service a whole gamut of customer needs from corporate entities to individuals from all walks of life.

Sri Lanka Insurance is acknowledged as the strongest and largest insurance provider in Sri Lanka, whose 2014 year end consolidated profits before tax soar to an unprecedented 11.1 billion. It is the only insurance company in the country to receive both AA(lka) with Stable outlook from FitchRatings (London) and AAA with Stable outlook from RAM Ratings for its financial stability.

Mr. Hemaka Amarasuriya SCIC Chairman issuing bonus certificates

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HNB joins hands with Sathosa Motors for Mega Leasing Promotion

Hatton National Bank (HNB) premier private sector commercial bank has joined hands with Sathosa Motors PLC to promote Isuzu vehicles, with a host of benefits and value additions for customers.

Buyers of brand new Isuzu trucks, SUV’s and buses from Sathosa Motors will now receive a tailor made leasing package from HNB Leasing complete with exciting options in addition to a free life insurance cover of RS.2Mn and an HNB credit card free of joining fee.

HNB and Sathosa Motors have launched this joint promotion to provide their customers a cost effective solution to develop their business by combining the strengths of both companies. Sathosa Motors PLC and Isuzu Motors have enjoyed an enduring partnership over the past 52 years while HNB introduced leasing to Sri Lanka in 1990 and celebrates the 25th anniversary of leasing this year as the market leader.

This is the 11th consecutive year that these two parties have offered this promotion and the continuing collaboration ensures that the customer is the true winner as he is assured of high quality commercial vehicles from Isuzu, a multinational company with a presence in 120 countries and a respected brand in Sri Lanka which holds a 45% market share. Sathosa Motors and HNB further offer value for money, reliability and a hassle free service to their customers.

Hatton National Bank has been awarded by the Asian Banker Magazine as the ‘Best Retail Bank in Sri Lanka’ for 7 years for its performance from 2007 to 2012 and in 2014 and named as the ‘Bank of the Year in Sri Lanka’ for the year 2012 & 2013 by the Banker Magazine of UK. In 2012 HNB became the first Sri Lankan bank to obtain an international credit rating and was assigned a foreign currency issuer rating of B1 on par with the sovereign rating by Moody’s Investors Service, while it has a national long term rating of AA- (lka) by Fitch Ratings (Lanka) Ltd.

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CEAT’s new plant in Sri Lanka launches ‘Gripp’ high performance tyres

Rolls out first four sizes of new range of motorcycle tyres

Some of the new Gripp motorcycle tyres launched by Asian Tyres (Pvt) Ltd.

Four new high performance tyres with sophisticated features and attention grabbing good looks have been launched in Sri Lanka by Asian Tyres (Pvt) Ltd., the new motorcycle tyre plant commissioned recently by CEAT Kelani Holdings.

Branded Gripp, the four tyre sizes fit nearly 30 models of motorcycles from popular brands on Sri Lanka’s roads, significantly enhancing the CEAT product portfolio in the two-wheel segment.

The Gripp 3.00-18 (TT) tyre fits models such TVS Star Sport, TVS Star City, Hero Dawn, TVS Metro, Yamaha YBR, Hero Achiever, Hero Glamour, Hero Passion Pro and Bajaj Caliber Croma, the company said.

The 3.00-17 (TT) Gripp tyre is manufactured for Bajaj’s Platina, XCD 125, Discovery 100, Boxer and Discovery 112, and TVS’ Jiva, Star LX and Victor GLX motorcycles.

The Gripp 100/90 – 17 (tubeless) tyres fits the Honda CBR Stunner and Honda Unicorn, TVS Flame SR 125 and Flame DS, Yamaha SZ-X and Bajaj’s Pulsar 135LS, Discovery DTS, and Pulsar 150.

The fourth new tyre size, the Gripp 100/90 – 18 (tubeless) is intended for the Honda Unicorn ES andHero Karizma ZMR.

All of these tyres have a unique directional block tread pattern that ensures free tyre rolling, with sturdy blocks for excellent grip, the company said. Deep shoulder grooves ensure outstanding water pumping even while cornering, while maximum tread arc width delivers exceptional handling and stability at high speeds. An improved tread compound also contributes to enhanced grip on wet and dry surfaces.

Set up within the CEAT Kelani complex at Kelaniya, the new Asian Tyres (Pvt) Ltd. plant is a state-of-the-art facility for the manufacture of motorcycle tyres for the local and international markets. It has an initial capacity of 162,000 tyres a year in 17 sizes, some with all-new tread patterns that deliver improved performance in local conditions.

As a member of CEAT Kelani Holdings, the new plant is expected to increase the value of import substitution that CEAT has already achieved, enhance export earnings and further consolidate the company’s market share in the motorcycle tyre segment.

CEAT Kelani currently accounts for 17 per cent of the motorcycle tyre market in Sri Lanka, in addition to its market shares of 30 per cent in the radial segment, 52 per cent in the Truck/Light Truck category, 48 per cent in the 3-Wheeler segment and 73 per cent in the agricultural tyre segment.

A global tyre brand present in 110 countries and now headquartered in India, CEAT is an acronym that stands for Cavi Electrici Affini Torino, or Electrical Cables & Allied Products of Turin, with origins that date back to 1924 in Italy. A National Business Excellence Award winner in 2010, 2011, and 2012 and a National Quality Award winner in the ‘Manufacturing – Large’ category in 2013, CEAT – Kelani Holdings is a successful Indo-Sri Lanka joint venture between the RPG Group of India and Kelani Tyre Sri Lanka.

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Dipped Products boost earnings as production normalizes

New factory in Biyagama EPZ increases capacity

Dipped Products Plc., one of the world’s largest manufacturers of non-medical latex gloves, has overcome the problems resulting from the closure of its Rathupaswala factory with a new facility opened at the Biyagama Export Promotion Zone (EPZ) and increased turnover in its hand protection segment 12% to Rs. 15 bn. in the year ended March 31, 2015, the company has said in its annual report.

DPL Premier Gloves Ltd. (DPGL), in the Biyagama EPZ is now on stream and the DPL group has posted an after tax profit of Rs. 1.39 bn., up 21% from Rs. 1.16 bn., earned a year earlier. The profit attributable to equity holders of the parent at Rs. 1.11 bn., is up 40% from the Rs. 795.1 mn. earned the previous year.

The company’s chairman, Mr. A M Pandithage, and its Managing Director, Dr. K I M Ranasoma, have told shareholders in the recently released report that commissioning their Biyagama facility under the banner of DPGL has been completed sooner than envisaged with high output plants for production of natural rubber low to medium thickness gloves installed and commissioned along with the supporting infrastructure.

DPL saw earnings from its plantations sector down to Rs. 390 mn., from Rs. 747 mln., the previous year due to the depressed rubber market, adverse weather conditions and the volatility of global tea prices. The plantation portfolio is held by two listed companies, Kelani Valley Plantations and Talawakelle Plantations owning tea and rubber estates.

Analysts said that while depressed rubber prices hurt the group’s plantation segment, it assisted hand protection.

Pandithage and Ranasoma said that the plantation sector had contributed Rs. 13.4 bn., to group turnover during the period under review, up 28% from a year earlier. This was partially due to Kelani Valley Plantations and Talawakelle Tea Estates consolidating 15 months of their results in view of changing their financial year from January – December to April-March.

"With enhanced production capacity (at Biyagama) the company had returned to normalcy of operations," they said. "Thus DPL was able to reduce order lead times and restore customer confidence that was challenged a year ago. It is pertinent to know that the DPGL was able to record a significant performance in its first financial year of operations."

DPL’s facility in Thailand manufacturing latex medical examination gloves had also turned around during the year contributing to the bottom line. This was partly attributable to the Ebola epidemic in West Africa creating a temporary surge in demand for medical disposable gloves.

Pandithage and Ranasoma said that with the new capacity installed at DPGL will be able to accelerate DPL’s unsupported glove business focusing specially on the retail and light industrial sectors in the new financial year.

They have also established a new company, DPL Universal Gloves Ltd., (DUGL) to consolidate the supported glove range for the industrial sector. This will see in installation and commissioning of new plants with knitting capabilities acquired in the last financial year.

DUGL, also set up in the Biyagama EPZ, will add new capacity for long length natural and synthetic latex industrial gloves in order to meet growing customer demand, they said. The development of a biodegradable nitrile glove, for which there is increasing demand for medical use, has been nearly completed.

The directors have recommended the payment of a final dividend of Rs. 4 per share on top of an interim dividend of Rs. 3 per share declared and paid last April.

Hayleys with 42.12% is the major shareholder of DPL followed by the EPF, with 13.06%. Hayleys subsidiaries, Volanka with 8.14%, Haycarb with 6.8% and Ravi Industries 0.95% gives Hayleys control of DPL.

The DPL share traded at a high of Rs. 151 and a low of Rs. 87 during the year under review against a trading range, of Rs. 134-Rs. 86 the previous year.

The Directors of the Company are Messrs. A M Pandithage (Chairman), Dr. K I M Ranasoma (MD), R K Witanachchi (Deputy MD), F Mohideen, K A L S Fernando (Technical Director), S C Ganegoda, Dhammika Perera, M Bottino (representing Icoguanti, DPL’s Italian partner) S Rajapakse, N A R R S Nanayakkara (Finance) and S P Peiris.

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Retained losses grow as Maskeliya posts another loss-making year

Maskeliya Plantations Plc., a member of the Richard Pieris Group, has reported a loss for the second year running in the year ended March 31, 2015 posting an after tax loss of Rs. 184.1 mn., up from a loss Rs. 92.2 mn. the previous year. The company is now carrying retained losses of Rs. 546 million on its balance sheet.

The company which has 18 tea estates, holding a land base of 10,560 ha. up-country is mainly a tea grower with 7,845 ha. under tea.

Maskeliya has an average production of around nine million kilograms of high grown tea and its various estate marks command a high reputation for quality, the company said in its latest annual report.

Maskeliya is controlled by RPC Management Services (Pvt.) Ltd., owning 83.34 % of its equity.

The company’s chairman, Dr. Sena Yaddehige, attributed adverse weather conditions and falling tea prices that have declined since August last year with demand from the CIS and Middle Eastern countries slowing to the company’s dismal performance during the year under review.

"Despite adverse weather conditions and low global tea prices, the company’s turnover increased by 3% to Rs. 3.5 bn. against a decline of 4% experienced the previous year," he noted. "However, company profitability declined sharply."

Despite the losses Maskeliya had continued its capital expenditure program spending Rs. 204 mn. on this account during the year under review, down from Rs. 243.3 mn. the previous year. This expenditure has been mainly on field development of tea, rubber, cinnamon and fruit cultivation with Rs. 40 mn. invested on property, plant and equipment.

"The company is expected to maintain the diversification of cultivations in the upcoming year as well," Yaddehige said. Avocado, pears and citrus are among the fruit crops grown.

He expected the current crises in Russia and the Middle East to continue in the foreseeable future and said that it is unlikely that the Sri Lanka tea industry will benefit from stronger demand for Ceylon Tea.

Stressing the pressing need for linking productivity to wages, he said that failing to do this could reflect adversely on the viability of the tea industry. "I strongly believe that a strategic approach towards wage negotiations in future will determine the survival of the plantations," he said.

Yaddehige also reported that they were continuing to experiment on the conversion of garbage collected within the estates into compost. They were also looking at introducing mechanical harvesting in an effort to control the cost of production.

Maskeliya was pressing on with their tea replanting program as well as in-filling of vacancies and plan to plant 50 ha. of rubber and 25 ha. of citrus on their estates.

Maskeliya has a stated capital of Rs. 673.7 mn., a general reserve of Rs. 540 mn. and timber reserves valued at Rs. 561.5 mn. in its books. Retained losses had grown to Rs. 546 mn. from Rs. 321.8 mn. the previous year.

A management fee calculated at 3.5% of gross turnover, 2% on supplies, 50 cents per kg on tea crop and 5% of profit is made to the managing agent of the company, RPC Management Services which is the controlling shareholder. According to the profit and loss statement this amounted to Rs. 150.9 mn. in the year under review, up marginally from Rs. 150.4 mn. a year earlier.

RPC Management Services with 83.4% is the major shareholder. All other shareholders individually own less than 2%.

The Maskeliya share closed at Rs. 9.70 in the year under review trading at a low of Rs. 9.70 and high of Rs. 16.

The directors of the company are Dr. Sena Yaddehige (Chairman), Messrs. Paul Ratnayeke (Deputy Chairman), S S Poholiyadde (CEO), Dr. H S D Soysa, Mangala Boyagoda, Dr. L S K Hettiarachchi and J L A Fernando.

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Some comments on tender procedure and free markets

By R.M.B Senanayake

The Government faulted the Central Bank for carrying out negotiations for the purchase of government bonds. They seem to have a naïve faith in the tender procedures. But do they provide the best market price?

What does Economics teach about markets? Markets enable the best price to be obtained only where there is perfect competition or something close to it for perfect competition is only an ideal and the degree of competition varies from market to market. The strict conditions for perfect competition require a large number of buyers and sellers in the marketplace to ensure a competitive market price.   It also requires that the buyers and sellers compete among themselves.

Auctions are one method of having a market place. An auction is like a well defined game. You can write the rules for a tender and the government regulations lay down such conditions. Generally the auction allows the seller and the buyer to quote a price. Buyers may have a valuation for the object that they want to buy. They do not know the valuations of the other bidders and sometimes they may not even make their own valuations unless they have the information of the market prices that already prevail.

Bidders who are prospective buyers need to recognize that their bids only matter when they win the auction. They will win the auction only when they bid the highest or the best price. They may be more optimistic than other bidders or more pessimistic. If it is the former and they expect the market price to go up in the immediate future, they will bid a comparatively higher price. When the tenders are opened they will realize whether they were too optimistic or too pessimistic.

Auctions vary
From the buyers perspective there are choices about how an auction is designed. Auctions can be open bidding like in the auctions conducted by the licensed auctioneers. Alternatively they can call for sealed bids where the seller (or buyer) receives bids and then proceeds to open them at a pre-determined time. Alternatively, bidding may be interactive where each bidder has an opportunity to outbid the previous higher bidder. There are also different ways to use bids received by the auctioneer to determine the price. The seller may consider the total revenue obtainable although governments are sometimes more concerned about efficient allocation.

Both the revenue and the efficiency are affected by the design of the auction. One key question the seller must consider is how the design of the auction will affect the participation of the bidders, as this will determine how competitive the bidding will be as well as whether the object gets to the potential bidder who values the item the most.

When I first joined a private sector firm I wanted to buy some goods for the company. Following the usual practice in the government sector (where I had worked before) I wanted to call for tenders but when I mentioned it to my boss he said it was not necessary and a waste of time. Instead he told me to go to the Pettah market and make inquiries from several merchants and then decide on the best prevailing price and bargain based on the size of the quantity of the purchase. The purchase of goods on tender is mostly confined to the public sector.

Tenders seem to be intended more to ensure fairness to all possible suppliers rather than obtaining the best offer. It is to ensure fairness among the suppliers rather than to achieve an efficient allocation. So the rigid version of the tender procedure is more or less confined to the public sector.

The Bond Market

Now consider the primary bond market consisting of those registered as primary dealers. This is a small number.  There is only one buyer and it is the government. The government’s demand for money is practically unlimited. But it can’t obtain the entire supply in a single auction because the market capacity is limited. So the Public Debt Department of the Central Bank calls for weekly offers from the primary dealers. If there is an urgent need for money which cannot wait, it can always borrow from the Central Bank or the Bank of Ceylon promising to repay it with the proceeds of the next auction.

The Central Bank acts on behalf of the government to raise the money for the government. It has therefore a dual role. The Central Bank generally has a reserve price in mind. It is mindful of the need to keep interest rates low both to benefit the Treasury and to uphold its interest rate policy and also not to allow abrupt changes in the interest rate for it affects the whole structure of market interest rates in the inter-bank system and even affects the capital market. Similarly the tendering parties can select the level of the reserve price, how long the auction will last and the government buyer can decide whether to buy it now or wait for the next week.

With reference to the episode on the recent controversial bond issue, the Central Bank has said that the government made known its need for a larger quantity of money before the tender was closed. But the Central Bank perhaps knowing the market conditions did not want use this higher figure of demand when calling for tenders. Why? Perhaps because if it did so the Bank would push up the interest rate immediately by taking up the higher priced offers which it could not have done without accepting the higher interest offers.  So while the demand of the government is always or often there, the Central Bank’s Public Dept Department which knows the market conditions will tread with caution.

The tender if strictly followed would require the buyer to accept only the best offer. But the buyer also requires taking into account the quantity of the supply offered and what quantity it requires. It can keep the price unchanged from its previous level if it accepts less. But the demand of the government is always urgent and cannot be put off - at least not for the whole quantity. Strictly it should accept only the quantity for which the tender called for although it could accept less for it may mean a lower interest rate for that supply.  Is it wrong to negotiate with the bidders after the tender is opened? Some in authority seem to think so. But in a small market the bidders may not be able to supply the full quantity needed by the government. In such an event, the government may need to take all the leading offers until it gets the required quantity. Is there anything wrong in then negotiating?  Who thinks so? Those who say so perhaps don’t appreciate the market conditions and the governments demand. The Bank wants to get the total quantity but without pushing up the interest rates. If the tender bids order was strictly followed in order then the government would have to pay a higher average interest, there can be no objection to negotiation after the tenders are opened to get the best price for the government.

The primary dealers were sponsored as a market by the Central Bank and were not a spontaneous springing up of a market.  In any case the history of English banking show how the Bank of England supported and sustained the Discount Houses. (Vide Lombard Street: A Description of the Money Market (1873) by Walter Bagehot)  In fact it is this tradition that led to the evolution of the lender of last resort and even the practice of orthodox monetary policy.

Fairness
The ideas about economic fairness are not exclusively economic ideas. They touch on politics, ethics and religion. Economists have inherited such ideas from politics and religion. All ideas about fairness can be divided into a broad group. They arise from the idea that they are not fair if the result isn’t fair. It is also not fair if the rules are not fair. Consider the idea that the Central Bank while acting on behalf of the government to raise the money must have some reserve price in mind. Similarly the parties can select the level of the reserve price, how long the auction will last (if open auctions) and the buyer can decide whether to buy it now or wait for the next week’s auction. The Central Bank Governor has said that the government made known it its need for a larger quantity of money before the tender was closed. But the Central Bank did not use this demand figure when calling for tenders. Why? Either because the information was conveyed after the tender was closed or perhaps because the Bank knew that the market did not have the capacity to supply the larger quantity; or if they called for the larger quantity the Bank would have to accept much higher offers and thereby push up interest rates when it could have avoided it. The tender procedure strictly requires accepting the best offer. But the buyer must also take into account the quantity of the supply he wants to buy.

Thinking about fairness can be divided into two broad categories. One is to argue that it is fair if the result isn’t fair. The second is that it is not fair if the rules governing the sale are not fair. In the private sector the main concern is with obtaining the best price. That is the criterion of fairness. In this case the result isn’t fair.

In the private sector the main consideration is to get the best price. The attention to procedures is not the prime consideration. But it is not so with the public sector. But let us not think the tender procedure is the best in the world.
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Sri Lanka political uncertainly, poll delay, could hit investor sentiment: Moody's

COLOMBO (EconomyNext) - Sri Lanka's political risks declined with the end of a civil war in 2009, but parliamentary conflicts and uncertainty over elections could have a negative fallout while the effect on investors from new taxes was also not clear, Moody's, a rating agency said.

"Sri Lanka's constitutional democracy was resilient through the many years of civil conflict, and the peaceful change in leadership following the 2015 Presidential election exemplified Sri Lanka's democratic institutions," Moody's said in a credit update.

"However, this year has been characterized by parliamentary conflicts and uncertainty around the timing of parliamentary elections.

"A prolonged period of uncertainty could affect the growth outlook by dampening investor sentiment."

Sri Lanka's inflation was low and the deficit in external the current account has narrowed since 2011, but low tax revenues and high foreign debt repayments made the country "somewhat vulnerable" to external shocks, Moody's said.

In 2014, helped by lower fuel price, the external current account deficit fell to 2.7 percent of gross domestic product from 3.8 percent a year earlier and foreign reserves rose to 7.2 billion US dollars by end 2014 from 6.5 billion dollars a year earlier.

The combined effect of external and domestic uncertainties early in 2015 led to foreign currency reserves declining to $6.5 billion at end April 2015, the rating agency said.

Other analysts however had warned that the balance of payments turned in September 2014 with forex rising above 9.0 billion dollars, and external position has weakened since then worsened by rate cuts, liquidity releases by the Central Bank in the midst of worsening fiscal deficit.

Moody's said the new administration is targeting a fiscal deficit of 4.4 percent, down from 4.6 planed by the ousted regime. The International Monetary Fund, which was also positive about the balance of payments, however had warned that the budget deficit could go up to 6.7 percent of GDP.

Moody's said a revised budget involved higher state salaries and subsidies, which will be funded by lower capital expenditure, cuts in some current expenses, and new taxes.

"The deficit target is at risk from a shortfall in revenues," the rating agency said.

"The planned increase in expenditures is lower, at 10.4 percent. However, its composition skews towards consumption and could put upward pressure on inflation.

"Moreover, it is unclear what effect tax increases will have on investment sentiment."

Rating withdrawn

Lanka Rating Agency ("LRA"), former RAM Rating Lanka’s, technical partner is CRISIL India ("CRISIL"). CRISIL is a global analytical company providing ratings, research, and risk and policy advisory services. CRISIL is India's leading ratings agency and is also the foremost provider of high-end research to the world's largest banks and leading corporations. CRISIL's majority shareholder is Standard and Poor's ("S&P"). S&P, a part of McGraw Hill Financial (formerly The McGraw-Hill Companies) (NYSE:MHFI), is the world's foremost provider of credit ratings.

LRA has withdrawn EAP Broadcasting Company Ltd’s ("EBC" or "the Company"), respective long- and short-term corporate credit ratings of BBB and P3. Concurrently, withdrawn the BBB long-term issue rating of the Company’s proposed LKR 3 billion Listed Rated Redeemable Debentures (2015/2020) (with a sinking fund mortgaged in favor of the trustee). Both the long-term ratings were on stable outlook. The ratings have been withdrawn upon the request of the management. 

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Dharmadasa family to lead Nation Lanka Finance - Asanga Seneviratne exits!

By Ishara Gamage

Ceylon Finance Today: Colombo Stock Exchange Director Asanga Seneviratne led Investor Access Equities (Pvt) Ltd on Wednesday divested their four year old 32.8% (78 million shares)stake of Nation Lanka Finance PLC to Nawaloka Construction (Pvt) Ltd, Harshith Dharmadasa and Victor R. Ramanan.

With the completion of the transaction, Nawaloka Construction (Pvt) Ltd and Harshith Dharmadasa jointly have a 24% stake while Victor R. Ramanan also has a 24% stake, individual investor Jayaprakash Rudra had also divested 2.5% or 6.5 million shares.

Nation Lanka CEO, Jayantha Perera told Ceylon FT that the deal was done via seven off market or crossing transactions, which were crossed at 4 rupees per share. The value of the deal was Rs 312 million.

Earlier, Nation Lanka Finance Director Harshith Dharmadasa led Nawaloka Construction (Pvt) Ltd and Director Victor R. Ramanan had 7 % and 5% stakes respectively. Top corporate sources said that the reason behind Seneviratne's exit was that he wanted to concentrate more on the leisure and property sectors.

Meanwhile, in a separate transaction, the family stake of the Dharmadasas in Anilana Hotels and Properties was bought by Seneviratne.

On March 2011 a consortium of investors led by Asanga Seneviratne's Investor Access Equities (Pvt) Ltd, Nawaloka Construction Company (Pvt) Ltd, and individual investor Jayaprakash Rudra had invested Rs.800 million to this company via private placement and rights issue.

Former Nawaloka Hospitals PLC, Chief Financial Officer Jayantha Perera recently took over the CEO post of Nation Lanka Finance PLC, after Charith Amarasekera's resignation.
Nation Lanka Finance PLC, had last August got the first tranche of the equity funding from Luxembourg based GEM Global.

The Company earlier said GEM Global Yield Fund LLC SCS, has acquired 1.211 million shares at Rs. 6.85 per share via a remittance amounting to Rs. 8.3 million.

"This is the first tranche of investment made by GEM and further tranches of investments up to Rs. 700 million by way of private placements are expected in due course," Nation Lanka Finance said on last August.

But according to company sources, the second tranche of the GEM Global is yet to be received and is not expecting it either.
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