Portfolios and functions of Ministers gazetted; CBSL, SEC, ETF under PM

(LBO) – Sri Lanka’s Prime Minister Ranil Wickremesinghe has taken several important financial institutions under his purview, as per the gazette notification published on the subjects under each minister.

The Prime Minister as the Policy Planning and Economic Affairs Minister has taken the Central Bank, the Securities and Exchange Commission, the Employees Trust Fund and CRIB under his purview.

All together 20 institutions including the Public Utilities Commission, National Wages Commission, Department of External Resources and Department of Census have been gazetted under Prime Minister’s control.

Wickremesinghe also kept these institutions under the period of 100 day government.

Meanwhile Finance Minister Ravi Karunanayake has been given 26 institutions including the Treasury and its departments, the Inland Revenue Department, Valuation Department and Sri Lanka Customs.

The Minister is also in charge of Insurance Board of Sri Lanka, Excise Department and National and Development Lotteries Boards.

Urban Development Authority, Land Reclamation and Development Corporation and National Physical Planning Department are under the purview of Megapolis and Western Province Development Minister Patali Champika Ranawaka.

Public Enterprise Development Ministry has 19 state institutions to develop including all state Banks, Sri Lanka Insurance Corporation and as well as troubled SriLankan Airlines and Mihin Lanka.

Newly formed Telecommunications and Digital Infrastructure Ministry has two key institutions namely the ICTA and SLT under its purview apart from the control of all IT parks.

Meanwhile newly formed Development Strategies and International Trade Ministry headed by Malik Samarawickrama is in charge of 4 institutions namely the BOI, Export Development Board, Export and Import Department and ‘Mahapola’ Trust Fund.

Civil Aviation Authority and Airport & Aviation Services (Sri Lanka) Limited have been gazetted under the Ministry of Transport.

Sri Lanka brings back retrospective, telecom, small car importer tax

ECONOMYNEXT - Sri Lanka has re-introduced to parliament, a series of taxes including a controversial retrospective punitive tax and a levy aimed at hindering small car importers.

The administration elected in January was not able to pass the taxes as the then opposition did not support the taxes.

Opposition members at the time said the taxes amounted to taking vengeance on some companies including telecom companies and casino as firms perceived to have made 'ill-gotten' gain with the help of the last regime.

A tax on large 'mansions, changes to the value added tax, nation building tax was also tabled, to be taken up for a second reading tomorrow.

Opposition member Bandula Gunewardene said a debate was needed for the taxes.

Analysts warned that the retrospective taxes, and punitive taxes would hurt Sri Lanka's investment environment, just rule of law and open the door for the elected ruling class to wreak vengeance of other companies based on political connections.

Analysts say instead of using the taxation system to take back 'ill-gotten gains' those who made ill-gotten gains should be brought before the law.

Anura Kumara Dissanayake an opposition legislator said Avant Garde Security, a company which had made millions of dollars, apparently breaking the law was getting off scot free.

Sri Lanka’s Sierra Cables to set up plant in Kenya

ECONOMYNEXT – Sri Lankan cable manufacturer Sierra Cables said it plans to set up a manufacturing plant in Kenya to supply transmission and distribution cables to East African countries.

A stock exchange filing said the firm had recently done a survey in Nairobi, Kenya on the feasibility of setting up a cable manufacturing plant.

“The feasibility study had indicated favourable financial outcomes and a formal project report has been approved by the Board of Directors for implementation in forthcoming months.”

It said the Kenyan economy is expected to grow by six percent in 2015 and infrastructure would be a significant contributor to that growth.

“The company could take part in this growth wave and establish its place in the Kenyan manufacturing sector,” it said.

“The returns would depend on the time considering the facility construction time, initial trial production, and the establishment of the marketing processes.”

Sri Lanka Treasuries yields flat

ECONOMYNEXT - Sri Lanka's Treasuries yields were flat at Tuesday's auction with 22.5 billion rupees of 3-month bills being sold, at an average yield of 6.78 percent, down one basis point from a week earlier.

The 6-month yield was 7.07 percent with 2.7 billion rupees of bills being sold. Last week bids were rejected.

The 12-month yield was just up 01 basis point at 7.18 percent with 3.0 billion rupees of bills being sold.

The debt office sold a total of 28.3 billion rupees of bills.

Sri Lankan stocks recover from more-than-2-month closing low

Reuters: Sri Lankan shares snapped a five-session losing streak on Tuesday and recovered from their lowest close in more than two months hit in the previous session after the government gave some clarity on the specific duties of each ministry.

Despite parliamentary elections ending in August and the appointment of the cabinet early this month, the government had until Tuesday failed to announce the institutions and their role under each ministry, leading to uncertainty among investors.

The government notification through the gazette and some foreign interest in stocks boosted sentiment, brokers said.

The main stock index ended 0.2 percent up at 7,118.38, edging up from its lowest close since July 15 hit on Monday.

"Investors were waiting for some kind of positive news. The gazette notification with subjects and functions of each ministry has given some kind of clarity to the market," said a stockbroker asking not to be named.

However, a weaker rupee and upward pressure on interest rates weighed on sentiment.

The rupee fell 0.11 percent on Tuesday to a fresh low of 141.00 per dollar due to importer demand for dollars, while exporters held on to the greenback on expectations of further depreciation.

Turnover was 806.4 million rupees ($5.72 million), compared with the daily average of 1.11 billion rupees. The turnover has been mostly about half of this year's daily average since Aug. 31, stock exchange data showed.

Analysts said investors were waiting to see how the government would bridge the budget deficit and where the revenue would come from, in its November budget.

The weak rupee curbed investor risk appetite and rising market interest rates also hit sentiment, with t-bill yields at their highest level in more than five months at the last auction.

Foreign investors were net buyers of 30.6 million rupees worth of shares on Tuesday, but they have been net sellers of 2.96 billion rupees so far this year.

Shares of Lanka ORIX Leasing Company Plc jumped 5.99 percent while conglomerate John Keells Holdings Plc rose 1.33 percent. 

($1 = 140.8900 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil Nair)

Revenue Act Amendments to House today -Treasury Secretary confident of approval

By Ishara Gamage

Ceylon Finance Today: The government will re-submit the controversial Revenue Act amendments to Parliament today (22nd), Finance Ministry Secretary Dr. R.H.S. Samaratunga told Ceylon FT.

"We will re-submit those long delayed amendments to the Finance Act and Inland Revenue Act without any single omission or revision", he said.

The Ministry is confident that it will get required parliamentary approval without any hassle.

"First of all we have to re-submit it and then we have to wait another week for approval," he added.

The Mini-Budget of the new government was presented to Parliament on 29 January and it introduced several controversial taxes such as super gain tax and mansion tax.

Dr. Samaratunga told Ceylon FT yesterday that all those revenue amendments were still at the Committee Stage of Parliament and if they were not passed within this fiscal year, they become null and void, which, he said, would impact revenue targets for 2015.

All those new taxes come under the Finance Act amendments, the Ministry Secretary said.

Though the expected revenue has not been gained through these taxes the new government has made all payments properly, he said. We don't have any revenue issues. 

But somehow we have to collect this money, he remarked.

Except the revenue proposals which have been brought under Gazette notifications, other all revenue proposals have to be passed in the same fiscal year. Otherwise they become invalidated, he said.

We are not saying that we are going to lose that tax money, but we are very much frustrated with this unusual delay," he said

The Government imposed a retrospective ‹super gain tax› in its supplementary budget.

This proposes a 25 percent tax to be imposed on corporates which have gained profits of over Rs. 2 billion during 2013-14.

According to the new amendments, the government has said a Rs. One million Mansion Tax will be imposed on houses valued at Rs. 150 million and over or 10,000 square feet floor area, which have been built after 1 April 2000.
www.ceylontoday.lk

‘Wealth in SL’s Family Offices exceeds moneys in Equity Funds’

By Sanath Nanayakkare
Single Family Offices in Sri Lanka that manage their own financial affairs and funds have more wealth than the country’s Equity Funds, The Island Financial Review learnt last week at the Sri Lanka Investment Fund and Asset Management Forum organized by Fitch Ratings at the Taj Samudra.

Murtaza Jafferjee, Managing Director JB Securities explaining this at the forum said, "Equity Funds control only around Rs 13 billion in assets relative to the free float of the market which is around Rs 1,000 billion. Many retail investors are risk averse. They don’t want a potential short term capital loss so they seek safer options. Therefore, the money market Funds have to do a better job of promoting the advantages of equity-investing over a long period of time".

Speaking further he said, "Most of the savings in this country are in fixed deposits and in land. Due to lack of financial literacy people have not ventured into other options that have the potential to bring higher returns. The potential asset classes are equity, fixed income and real estate. Most of the savings in this country are in fixed deposits and in land. There are other options that have higher returns, but due to lack of financial literacy people have not ventured into them. My advice is for anyone who ventures into more risky asset classes like equity and bonds to FIRST invest through a unit trust product, and once they have familiarized themselves with the asset class they could go onto self-directed investing".

Commenting on the direction the SL money market should take, Jafferjee said, The Sri Lankan money market fund has developed significantly in the last few years, but it has still not been broad based. Distribution is a challenge due to lack of reach due to an absence of a branch network, insufficient adoption of digital technology and the lack of awareness amongst investors". 
www.island.lk

Smarter lighting: Time of Use tariff for domestic users

• PUCSL approves optional TOU tariff
• Households can request for service immediately from CEB and LECO
• Move aims to reduce power usage during peak hours
• TOU tariff based on three time blocks; off-peak, day and peak

The Public Utilities Commi-ssion of Sri Lanka (PUCSL) has approved the time of use (TOU) tariff proposal submitted by the Ceylon Electricity Board (CEB).

Issuing a statement the PUCSL said that this has been designed as an optional tariff for domestic users that consume a three-phase, 30A or above power supply.

The Commission said that the TOU would be implemented with immediate effect and any domestic consumer interested in this can request this fromthe service providers;CEB and Lanka Electricity Company Ltd. (LECO).

By implementing this TOU tariff, PUCSLaims to reduce power usage during the peak hours and promote power usage during the off-peak hours.

“This basically targets to encourage the use of electricity during off-peak hours for the purposes such as charging electric vehicles,” the statement said. According to TOU tariff, there are three separate time blocks namely off-peak (between 22:30-5:30), day (5:30-18:30) and peak (18:30-22:30) which are separately metered and billed.

During the off peak hours only Rs. 13 would be charged per unit (kWh), which is a reasonable amount for the electric vehicle charging purposes. The tariffper unit during peak hour would be Rs. 54,while during day it would be charged Rs. 25 per unit.

As TOU tariff is based on three time blocks unlike the existing domestic tariff,users can rationally decideprioritisingtheir electricity demand for time blocks which offer lower rates. Thus, TOU tariff has been identified as beneficial for the domestic users.

PUCSL said that those who wish to upgrade their customer category from the existing domestic category to TOU tariff should apply it from the regional area engineer’s office of their service provider (CEB or LECO). Such customers should pay for the new meter, which is required to support the TOU Tariff.

Time of use Energy charge (LKR/kWh) Fixed charge (LKR/month)

Off-peak (2230-0530 hrs) 13.00 540.00
Day (0530-1830 hrs) 25.00
Peak (1830-2230 hrs) 54.00

- See more at: http://www.ft.lk/article/473841/Smarter-lighting--Time-of-Use-tariff-for-domestic-users#sthash.UhiusNwq.dpuf

Adam Carbons inaugurates first export under new management

Adam Carbons (Pvt) Ltd (Former Bieco Link Carbons (Pvt) Ltd) a 100% subsidiary of Adam Capital PLC inaugurated its first international export under the new management of Adam Investments PLC (AINV.N).

The first shipment of high grade value added activated carbon to a reputed East Asian buyer was exported on September 18, at held at the company's 12 acre factory in Giriulla.

Chairman of Adam Investments and Adam Capital PLC, Ajita Pasqual said, "This first export shipment is a testament to the hard work and dedication of the senior management and staff of the group in successfully turning around a once defunct factory which had been non-operational for 12 months bringing in valuable foreign currency earnings to our country."

"I also offer special thanks to our bankers DFCC Vardhana Bank for their unwavering support to the company through this transition which helped revive this once thriving factory to its former glory."

A spokesman for the factory also went on to say that at present the company is building up a strong export order book and is gearing for the second phase of its renovation of the 12 acre factory which would result in a steep increase in production output.
www.dailynews.lk

Nation Lanka Finance Q1 PAT Rs. 38m

Following its dynamic turnaround, Nation Lanka Finance has shown promising results in Q1 of 2015/2016, with the company recording a profit after tax (PAT) of Rs. 38 million for the period under review. The company is now well on track to achieve its revenue targets for 2015.

At the year end of 2014/2015, Nation Lanka Finance recorded total assets valued at Rs. 7 billion, indicating an asset growth of 52%. The company also increased its deposit base by 48% to 5.5 billion and recorded a turnover of Rs. 1.15 billion.

In Q1 of the current financial year, the Nawaloka Group acquired a 25% majority stake of Nation Lanka Finance and is now leading the company towards a new era of growth and success.

Following the change in management, Nation Lanka Finance has embarked on a strategic turnaround which has already yielded impressive results as shown by the company’s performance in Q1 of 2015/2016.

Commenting on the company’s new direction, Jayantha Dharmadasa, Chairman of Nation Lanka Finance said, “Nation Lanka Finance has now laid the foundation to accomplish our overall goal of progressively growing the wealth of our nation and its people.

CEO, Jayantha Perera, said that Nation Lanka Finance will overcome all challenges and strategically grow and strengthen its product and service offering.

“As we build on our long-standing heritage, our new strategic direction will enable us to reinvent the company to more effectively serve the needs of the local finance industry and the Sri Lankan people.”

Also commenting on the company’s new direction, Jayantha Perera, CEO of Nation Lanka Finance stated, “I am pleased to report robust growth in Q1 of 2015/2016, and I believe that these results have set the precedent for a fruitful and profitable year for Nation Lanka Finance.”

“In the coming months we shall focus on building our presence in the micro finance sector, which has high potential and can generate maximum returns for the company whilst ensuring socio-economic benefits for our customers. Another product which we shall focus on building is working capital loans (Biz Cash), as this is a product which has recorded an impressive year-on-year growth.”
www.dailynews.lk

Pension, ETF funds accessible, but remains inoperative - Fitch

Sri Lanka capacity to enter into the regimen of stable and sustainable growth was good. Particularly transfer of knowledge in relation to the funds industry was considered within the vortex of developing markets, CEO & Country Head, Fitch Ratings Lanka Ltd., Maninda Wickramasinghe said.

"Although Sri Lanka's potential was described to be good, speakers at the forum and panel discussion hinged on the aspect that there was much to be desired from implication of financial disciplines and management of substantial funds left dormant, yet available for development," Sri Lanka Investment Fund and Asset Management Forum recently.

Wickramasinghe said private equity funds subservient to degrees of independence could be better positioned for growth.

Hypothetical aspects of the Forum were that funds management within commercial perspectives could be better utilized for progress.

Managing Director, JB, Murtaza Jafferjee, said, "managing assets should be a clear process of knowing what to do, with the funds available yet, unused. He said pension funds amount to approximately Rs. 1.9 billion and ETF funds were Rs. 1.9 billion. Although this substantial funds base was accessible, it remained inoperative."

"Savings and bank interest were low. Generally people preferred to sustain these low interest rates rather than risk such savings in for instance the share markets. What happens was that the preferred investment was gold or real estate," he noted.

Although China was not affected by the financial crisis of 2008, the Chinese economy is currently in lean times.

The US was now in a commanding position in comparative money markets with a 51 percent global share, comparatively, she said. “Sri Lanka’s share was miniscule. With assets described to be about 1 billon dollars , Sri Lanka’s position was 0.0001 percent”.

It was described as a “low yield environment”. However, growth potential of Sri Lanka was high subject to correct carefully assessed and implemented funds industry, she said.

Li also placed the Russian Ruble to be strong, and added Russia is in the global segment or stable money markets.

At the panel discussion the media disagreed with this view based on the factual position that the depreciated Russian Ruble caused ripples in the local tea market, because Russia was not able pay top rupee for the tea purchased. She did not dispute this view.

Taxes too were an aspect that emerged at the panel discussion. Here, too the view was that the question that taxes ‘would go’ did raise some disbelief.

Again the media pointed out that according to the Inland Revenue Department, only about 150,000 people were paying taxes, the others were not and urged fresh thinking if taxes were to be done away with.

(H.D.H)
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Luxury Anilana Hotels to reach 500 key mark soon

Diresh Jayasuriya

Anilana, Pasikuda owned and managed by Anilana Hotels and Properties Ltd, is looking to invest more on expansion of the Group upto 500 rooms in Sri Lanka.

Anilana, Pasikuda has the biggest world class spa in Pasikuda and it will be opened very soon.

The Managing Director of Anilana, Asanga Seneviratne speaking to ‘Daily News Business’ said that the total investment for Anilana, Pasikuda was Rs. 1.2 billion.

Anilana boutique hotels are based on great locations, style, service and cuisine to give a traveller, a different experience of Sri Lanka. “We are focusing very much on, making sure that foreigners get a local taste of our cuisine in an acceptable manner,” he said.

Anilana in Pasikuda offers 45 rooms, with a spa, an outdoor pool, Free Wi-Fi and many other facilities. These include 26 Deluxe rooms, 6 Beach Chalets, 3 Studios, 8 Lofts and 2 Anilana Luxury Suites.

The Assistant Manager Sales, Nuwan Fernando said, “Anilana, Pasikuda hotel was opened in 2013. We have two more properties in Nuwara Eliya and Nilaveli. Anilana Craigbank, in Nuwara Eliya comes with four rooms. This is a bungalow. Anilana Nilaveli in Trincomalee has a huge potential for tourists,” he said.

“We are planning to open another hotel in Colombo in the future. We have identified key areas in the East Coast for excursions. When it comes to excursions, diving, snorkeling and land excursions are the main things that we promote in the East Coast,” he said.

“ July and August is the peak season for East Coast. In August we ended up with an occupancy rate of 90 % and September to November we are expecting an occupancy rate of 50 % to 60 %,” he added.

Anilana Group Executive Chef, W. A. N. Indrajith Kumara said, “We give the best food in Pasikuda to our guests. We keep our service levels very high at all time and we try to maintain and improve the quality and taste of food every day.”

More information could be obtained from www.anilana.com



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