Oct 162014

Low income developing countries continue to do remarkably well, and this despite a slowdown in commodity prices
You have now seen the basic numbers from our latest projections in the October 2014 World Economic Outlook released recently. We forecast world growth to be 3.3 percent in 2014, down 0.1 percent from our July forecast, and 3.8 percent in 2015, down 0.2 percent from our July forecast.

This number hides however very different evolutions.  Some countries have recovered or nearly recovered. But others are still struggling.

Looking around the world, economies are subject to two main forces. One from the past: Countries have to deal with the legacies of the financial crisis, ranging from debt overhangs to high unemployment. One from the future, or more accurately, the anticipated future: Potential growth rates are being revised down and these worse prospects are in turn affecting confidence, demand and growth today.

Because these two forces play in different countries to different degrees, economic evolutions are becoming more differentiated.  With this in mind, let me take you on the usual quick tour of the world.

Growth prospects vary in advanced economies
Among advanced countries, the United States and the United Kingdom in particular are leaving the financial crisis behind and achieving decent growth.  Even for them however, potential growth is lower than it was in the early 2000s.

Japan is growing, but high public debt inherited from the past, together with very low potential growth going forward, raise major macroeconomic and fiscal challenges.Growth in the euro area nearly stalled earlier this year, even in the core.  While this reflects in part temporary factors, both legacies, primarily in the south, and low potential growth, nearly everywhere, are playing a role in slowing down the recovery.

Emerging markets adjusting to slower growth
In emerging market economies, lower potential growth is the dominating factor.  For emerging market economies as a whole, potential growth is now forecast to be 1.5 percent lower than it was in 2011.   But, there again, differentiation is the rule:

China is maintaining high growth, despite the end of a housing and a credit boom.  Looking forward, rebalancing is likely to imply slightly lower growth, but this must be seen as a healthy development.

India has recovered from its relative slump, and, thanks in part to policy and a renewal of confidence, growth is expected to exceed 5 percent again.By contrast, uncertain investment prospects in Russia had already led to low growth before the Ukraine crisis, and the crisis has made it worse.  Uncertain prospects and low investment, are also weighing on Brazil.

Finally, low income developing countries continue to do remarkably well, and this despite a slowdown in commodity prices.  We forecast their growth rate to b 6.1 percent in 2014, 6.5 in 2015.

Downside risks clearly present
The long period of low interest rates has led to some search for yield, and financial markets may be too complacent about the future.  One should not overplay these risks, but, clearly, policy makers should be on the lookout.  Macro prudential tools are the right instruments, but one has to worry that they may not be up to the task.
Geopolitical risks have become more relevant.   So far, there is little evidence that Ukraine crisis has had measurable effects beyond the affected countries and their immediate neighbours.  Nor has turmoil in the Middle East affected either the level or the volatility of energy prices very much.   But, clearly, the risk that they do so in the future is there, and could affect the world economy in a major way.

The third risk is a stalling of the recovery in the euro area, the risk that demand weakens further, and that low inflation turns into deflation.  This is not our baseline, as we believe fundamentals are slowly improving, but, were it to happen, it would clearly be the major issue confronting the world economy.

And this takes me to policy implications
In advanced economies, policies must both deal with the legacies of the crisis and address low potential growth.  With respect to legacies, while a major focus has been on improving bank balance sheets, debt overhang of firms and households remains an issue in a number of countries.   So long as demand remains weak, monetary accommodation and low interest rates remain of the essence.

The weak recovery in the euro area has triggered a new debate about the stance of fiscal policy.  The low spreads on sovereign bonds suggest that the fiscal consolidation of the past few years has led financial investors to believe that current fiscal paths are sustainable.  This credibility, which was acquired at a high price, should not be threatened.  This does not mean however that there is no scope for fiscal policy to sustain the recovery.  As we argue in one of the analytical chapters, infrastructure investment, even if debt financed, may well be justified and can help demand in the short run and supply in the medium run.  And, were the risk of stalling to materialize, being ready to do more is also important.

Finally, one obviously wishes that potential growth were higher.  This would not only be good for itself, but it would also make fiscal and financial challenges much less daunting.  Increasing potential output, let alone potential growth, is however a tall order, and expectations should remain realistic.  Yet, in most countries, specific structural reforms can help.  The challenge, for both advanced and emerging market countries, is to go beyond the general mantra of “structural reforms,” to identify which reforms are most needed, which reforms are politically feasible.

Perhaps more generally, the challenge for policy makers is to re-establish confidence, through a clear plan to deal with both the legacies of the crisis and the challenge of low potential growth.

The weak recovery in the euro area has triggered a new debate about the stance of fiscal policy

(A citizen of France, Olivier Blanchard has spent his professional life in Cambridge, U.S. After obtaining his Ph.D in economics at the Massachusetts Institute of Technology in 1977, he taught at Harvard University, returning to MIT in 1982, where he has been since then. He is the Class of 1941 Professor of Economics, and past Chair of the Economics Department. He is currently on leave from MIT, as Economic Counsellor and Director of the Research Department of the International Monetary Fund)

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Oct 162014
Budget 2014 must articulate sound labour market strategy

In Sri Lanka we often find that the trained talent we have in the country is not sufficient to meet the local demand although it may be just sufficient at the moment for some sectors in the domestic market

Treasury Secretary DR P.B Jayasundra last week highlighted the need to brand Sri Lanka as a knowledge destination.

The veteran public servant knows very well that the key to improving labour market competitiveness in the economy lies in raising human resource capabilities; that is, to make appropriate investments in human capital through higher education and professional training in order to more efficiently generate and manage new technologies to create wealth.

In this new era of intensified globalization and international competition, we can no longer rely on cheap labour to gain competitiveness. We must continue to invest in our human resource, since the high growth industries of the future such as the information technology (IT) and biotechnology industries, require an increasingly skilled labour force.

Lessons learned from other successful countries in attracting FDI indicate that the ability to create a skilled human resource base is crucial for multinational companies in order to relocate firms and world class high-tech plants to new markets.

In Sri Lanka we often find that the trained talent we have in the country is not sufficient to meet the local demand although it may be just sufficient at the moment for some sectors in the domestic market. The three main reasons for this emerging situation are, a) because the education system in the country is not delivering the volume and quality desired b) we are losing our highly trained talent to other developed markets. c) the existence of stringent labour market regulations limits training opportunities for young people to learn and grow new skills. The areas of growth for the Lankan economy in the future would be in the services sector and therefore, it is knowledge and training of the people that is imperative to build competitive advantage. Therefore given the current development of the BPO industry as well as skilled opportunities in foreign countries, there is now a need to revamp our training infrastructure according to the job market.

Talent challenges for Sri Lanka

The problem still we have is that most Sri Lankan graduates are underemployed, this is often attributed  to universities not affiliating themselves fully with good business establishments. Then human resource managerial problems in the public sector and low productivity in the public and private sectors remains a priority concern for both the private sector and the public sector.

The other concern in the economy now is the movement of commercial savvy and trained talent to developed markets like Canada, Australia, Middle East, UK and South East Asia. Furthermore developed countries have progressed from simply relaxing their laws to actively luring highly qualified people. In addition many of them are using their universities as magnets for talent. Therefore to stop the skills drain and lure back some of our brightest people back, the private sector and the government need to collectively address this issue now.

Wooing back our professionals

Today, the most mobile people now are not political refugees, but the educated, and they are being sought after as never before. Most governments are easing restrictions on the entry of qualified people. For a start the government should focus on wooing our highly skilled professionals working abroad by making it very attractive for them to come back. But the government’s effort will depend on whether the country is backed up by a vibrant economy and also governed properly.

Our best bet would therefore to woo back some of our top Sri Lankan expatriates who have gone abroad to make their money but still feel the tug of their home country, to fill some of our short term critical skills gaps. Therefore we need to be more imaginative about attracting our trained talent abroad and developing and retaining our skilled talent that we have in Sri Lanka.

To achieve that we need a framework that provides a way of looking at the skills and abilities of our people, and how these can be used successfully to create wealth and to bring all skills training interventions under one roof to ensure alignment with country’s development goals. The budget 2014 needs to address these challenges if we are serious about branding Sri Lanka as a knowledge hub.

(The writer is a thought leader in HR)

Oct 162014
Electricity tariff reduction is cost reflective: energy expert

n independent study carried out by a leading energy consultant with international repute shows that the recently announced electricity tariff reduction is reflective through the reduction in cost of production and thus, could not completely attribute to merely a politically-motivated election goody as claimed by many.

According to a study carried out by Dr. Tilak Siyambalapitiya, the total cost of producing a unit of electricity is estimated to have come down by 22 percent for the second half of 2014 in comparison to its first half (See table).

On September 16, President Mahinda Rajapaksa announced the reduction of electricity tariffs by 25 percent soon after the commissioning of the second and third stages of the coal-powered Norochcholai power plant.

“In 2014, (costs) for the first half as published by the Public Utilities Commission of Sri Lanka (the shadow regulator) and also my estimates for the second half of this year tell me that the cost between the first half and the second half is 22 percent lower.

So, the announcement you heard of the 25 percent electricity tariff reduction is almost there,” he said.

Speaking at a public seminar on natural gas in Sri Lanka and optimizing its economic utility organised by the economic think tank The Pathfinder Foundation, Dr. Siyambalapitiya attributed the reduction in cost purely to the cheaper coal power.

Hence, the additional 600MW coal power plugged into the national grid in September has pulled down the energy cost of producing a unit of electricity from Rs.12.47 to Rs.10.41.

As a result, the total cost of producing a kWh is estimated to have come down from Rs.20.83 to Rs.16.25.

“If not for coal, we would not have had even the politically determined 25 percent price reduction,” he remarked.

Currently, coal comprised the lion’s share – 40 percent – of Sri Lanka’s energy mix and is expected to increase up to 65 percent in a decade’s time with the commissioning of the Sampur coal power plant.  

By 2020, Sri Lanka’s energy mix is expected to comprise of 65 percent of coal, 20 percent of hydro, 10 percent of renewable and 5 percent of oil.

Further speaking, Dr. Siyambalapitiya, who is also the Managing Director of Resource Management Associates Private Limited, an energy sector consultancy, opined that Sri Lanka is not too far away from moving in to a market-based pricing model for its energy products, given the energy prices – both globally and locally – trending downwards.

“Renewable (energy) is also coming down in prices; our estimate for wind power generation is now Rs.12.0/kWh from Mannar. As you saw the numbers, they are now coming very close. We are now very close to establish a competitive market for electricity production.

Administered prices or the centrally-planned generating systems perhaps are way out,” he said.

He said the lowest Sri Lanka could go in terms of generation cost is Rs.7.13/kWh with hydro and coal and the total production cost at Rs.13.77/kWh the lowest.

Oct 152014
Markets too do need to take profits

Corporate sector profit growth and private credit expansion would be vital for the short- to medium-term outlook of the CSE, while the valuations would become the primary focus in the coming months


he All Share Price Index (ASPI), which rose to 7,406 points, peaked on October 3, 2010 (the highest the index has achieved since the all-time high in February 2011) and started to take a breather in the subsequent days.

The Colombo Capital Market Conference jointly organised by the Colombo Stock Exchange (CSE) and Securities and Exchange Commission (SEC) successfully concluded on October 9 with an impressive turnout of overseas investors.

However, despite the robust marketing activities, a bout of profit-taking was not to be postponed much further and the index decline, which started latter part of last week, continued on to this week with some traders/investors eager to cut losses.

Profit-taking bout 

The two weeks of trading leading up to last Friday (October 10,  2014) saw the ASPI gaining 1.2 percent (around 87 points) chiefly on the back of large cap interest and a sharp rise in market activity with the average daily turnover recorded at almost Rs.3 billion.

However, during this two-week period, the foreign investors were net sellers, buying nearly Rs.7 billion worth of stock and selling to the value of nearly Rs.8.5 billion. During last week, the ASPI lost around 86 points (1.2 percent) from the high of 7,406 index value, indicating a bout of profit-taking has started.

With the global markets also remaining dull, the foreign investors too were more so on the sell side, despite no indications of a sharp selloff. Profit-taking spree intensified on October 13, 2014 with the ASPI losing over 136 points within the day and moved down to 7,184 index value.

The contraction in the index was primarily driven by the banking sector and other large cap stocks which gained significantly during the past two months. However, on October 13, 2014, despite the index losing nearly 140 points, foreigners became net buyers to the tune of Rs.284 million.

The current bout of profit-taking was far overdue and in my opinion was necessary to maintain trading momentum, which otherwise could have led to an unwarranted market correction in a month or so. Also, profit-taking at the CSE took place alongside declining global markets. This strengthens the argument which I have been making in the past that despite the lack of strong correlation between the CSE and other global markets, the Colombo bourse is not an island on its own.

International market behaviour and foreign portfolio money flows will have an impact on the local stock market. Markets are sentiment driven and with technology and marked improvements in communications, geographical boundaries are not sufficient to hold sentiments at bay. Long gone are the days where markets and countries operate in a cocoon of their own instead of been influenced by the global economy.

State of global economy

All indications suggest that despite many attempts by policymakers the global economy is poised for a slowdown and that casts a big shadow on many markets around the world. Europe is heading towards its third recession in six years; China is slowing in the wake of its credit boom and pulling down many regional economies, including Australia with it.

Despite many efforts to uplift it from stagnation, Japanese economy is contracting. BRIC countries with the exception of India, which is showing some rejuvenation following political change, is also struggling. And only the United States of America is showing some optimism in its economic outlook with the reduction in unemployment.

Therefore, the expected slowdown in the global economy would invariably weigh down on all global markets though the impact on the CSE would be of less intensity and if the local economy manages its finances well the global downturn may have only limited impact on our market.

Global demand is contracting and manufacturing power houses such as China is having a glut of supply. Global oil prices have fallen by around 20 percent during the last four months and this is despite the supply concerns created by the ongoing Middle East crisis, sporadic supply disruptions in Nigeria and the stand-off between Russia and Ukraine.

Other commodities from gold to corn are having downward price pressure. With sagging growth the US policymakers wanting to stall the impact on their economy is most likely to delay rate hikes despite the US dollar gaining strength as the preferred storage of wealth in these turbulent times.

The delay in US rate hikes, if there is any would bode well with the Sri Lankan economy stretching possibilities for policymakers to maintain the low interest rate environment. However, given the lull in local credit expansion an upward revision in US interest rates may only have minor impact on the local interest rate scenario.
Nevertheless, as mentioned in the past, we cannot shy away from the natural depreciation of the Sri Lankan rupee, given the twin deficits, and may end the year with the local currency lose around 3 percent vs. the US dollar.

Weary credit growth

However, with market interest rates falling to the lowest during the past two decades or so, I believe even the policymakers are engulfed trying to find reasons why credit demand is not picking up. Individuals can now borrow money at single digit rates and some corporates have the luxury of borrowing at rates around mid-single digit, but still credit growth seems weary and needless to say that this doesn’t pave the way for a buoyant economic outlook.

With limited credit growth in the system, consumption growth would be held back, investments capped and overall corporate profit growth would sag creating pressure on the ASPI and the CSE performance as a whole. With inflation reported at mid-single digit and market interest rates also now having fallen to single rate levels credit growth theoretically should make marked gains, however it is not the case still.

Though reasoning is difficult, the closest I can rationalize would be that the banking system is more concerned about risk and despite the low rates are only lending selectively. However, this is not a bad strategy in the eyes of the banking institutions since they should prioritize risk over growth, which would invariably assist in maintaining financial system health.

Also, consumption growth seems to be hindered, at least among the urban consumers (who have direct access to banking system credit), due to sharp cost escalation of essentials and stalled growth in incomes. Property transactions and subsequent maintenance of property which doesn’t qualify for various benefits are heavily taxed, in order to collect maintenance revenue for various localised state institutions.

Therefore, an inherent reluctance is persistent among the public to transact in property taking advantage of the low interest rates. The drag in settling property-related disputes within the legal system is another bottleneck for property markets to pick up in Sri Lanka, unlike in other emerging economies. Also for corporates, fresh investments most often seem non value adding, given the direct and indirect cost pressure, red-tape involving various approvals and the opportunity cost of time.

Further, the vicious cycle seems to be continuing with the limited expansion in business and fresh investments adversely affecting job creation and growth in salaries, which would lead to lower demand for credit. The state sector increasing its foothold in commercial businesses is also crowding out private sector growth and adding more pressure on the State Treasury to finance the added resources, which would directly affect the fiscal deficit.

Therefore, corporate sector profit growth and private credit expansion would be vital for the short- to medium-term outlook of the CSE, while the valuations would become the primary focus in the coming months.

Also, the prevailing uncertainty (which could be addressed shortly) regarding the national elections are not assisting market sentiment. If snap polls are announced, the market could experience a fair amount of volatility, followed by strong directional movement leading up to the elections, whilst thereafter, focus again would shift to valuations and profit growth.

Oct 152014
Penalising customer loyalty
There’s a huge reservoir of loyalty floating around out there.  People are loyal to their nation. People are loyal to their president. People are loyal to their political party. People are loyal to their club. People are loyal to their school. People are loyal to their religion.  People are loyal to their job. People are loyal to people.

There is loyalty and then there is blind loyalty which to a lot of people, means, that they shouldn’t under any circumstances, criticize that which they are loyal to; be it their country – right or wrong, their president – right or wrong. Their political party – right or wrong, their club – right or wrong and so on. Now, “That’s some bad hat,” as the American would say. Nevertheless, like it or not, that hat is here to stay.

Any company that provides better pricing and service for new customers than it does for existing customers is institutionalizing disloyalty and ‘tinkering’ with its integrity

Loyalty is a word that is used often in the business community. Establishing loyal customers is always a challenge and a worthy pursuit. At the same time organisations can ill afford to take customer loyalty for granted. What’s even worse is when businesses arrogantly cross that line assuming that customers can be conned into blind loyalty! Shane Warne once said that part of the art of spin bowling is to make the batsman think something special is happening when it isn’t.

Reward customer loyalty, not disloyalty

We appreciate your business. And as our way of recognising you for being a loyal customer all these years, we’re going to overcharge you. Service providers don’t say this explicitly, of course. But that’s the cryptic message conveyed via the rates they charge different customers. I’m not alone in that I have experienced plenty of betrayal. When people experience betrayal — or even the mildest forms of disloyalty— they begin to show a lack of distinct interest.

Any company that provides better pricing and service for new customers than it does for existing customers is institutionalizing disloyalty and ‘tinkering’ with its integrity. Last month I received a letter from my mobile service provider who claims to be futuristic. It was signed by the Chief Manager – Device Management Mobile Telecommunications (quite a mouthful) and informed me that they were offering their loyal customers their newest Android smartphone on a special 06 month or 12 month installment plan.

The CM-DMMT in his letter goes on to state “As we continue on our journey to value our customers we are pleased to offer this new smartphone. So hurry, this offer is only valid till 31/10/2014. Walk into any of our Customer Care Centre and present this letter to avail yourself of this exclusive offer”. Eight days later, I happen to see this identical offer from the same mobile service provider, advertised in a Sunday newspaper.

Astonishingly, the same Android smartphone on a 12 month installment basis was 17 percent cheaper to ‘Tom, Dick or Herschel’ than the claimed ‘exclusive’ offer to its loyal customers! This service provider’s interpretation of loyalty requires loyal customers including ‘privileged’ members, not only to dish out more but also submit the organisation’s letter as proof of loyalty. What a load of hogwash!  My message to this telecom service provider and to all others – please do not embark on this perilous journey. Stop such spurious practices immediately.

The times are changing

Most of us couldn’t imagine life without money, cable or satellite TV and if you reside in the city – supermarkets. A recent survey done in the US revealed that TV and Mobile service providers, and Medicare have the most of the very unhappy customers, which shouldn’t surprise too many people.

Banks, on the other hand, have fewer of these sulking customers, but they have the highest percentage of customers that aren’t satisfied with customer service and who aren’t forgiving. I ask you could it be any different in Sri Lanka? My experience tells me no. Infact, I would add supermarkets to my list of those who make customers unhappy. People are powerful, and they outweigh the combined effects of products, advertising, celebrity endorsements, layout, technology, and—all of the various components that brick-and-mortar retailers often think define their competitive advantage. While there may be various drivers of satisfaction in retail, customer engagement comes down to the human encounter.

Very recently, I purchased some fruit and when presented the bill noticed that the price tag on the bagged items were different to that which was on the bill that I had settled with my credit card. When I queried this from the female cashier she looked blankly at me, and then at the price tags on the sealed items, scrutinized the bill, before summoning the supervisor. She then told him something in hushed tones, where after the supervisor cast a surreptitious glance towards me and with nary a word, walked away towards the fruit display section. The cashier resumed work attending to another customer, leaving me reminiscing about Samuel Beckett’s tragicomic play ‘Waiting for Godot’. During the wait, I stood forsaken, and unlike the larger-than-life ‘cutout’ of the Sri Lankan cricketer who swears by this supermarket brand – unnoticed. Inwardly, I suspected that the problem arose due to a breakdown in the scale management process, (system that links different weigh scales and labelers throughout the perishable departments in the store).

After keeping me waiting over ten minutes, the supervisor emerged out of nowhere and spoke to the cashier – who then returned me the overcharged amount in cash. What peeved me the most was that I was not given any explanation or even a simple apology! It mattered little to this supermarket that I was a member, of what it declares as ‘perhaps the most rewarding loyalty programme in the country’. On a scale of 1 to 10, the customer service miscues I was rewarded with that day rated a 10 plus. The bottom line: Don’t count on celebrity endorsements to disguise the disappointment of customers who make that loyal leap of faith.

Paying more to stay

Running a modern day home can be expensive. It’s impossible to do without electricity, water, cooking gas and a telephone. It’s also difficult to leave out television from this basic list of ‘must have’ utilities- all of which can hit you with steep monthly fees. One expense, in particular, stands out: cable television.

Cable television delivers both local broadcast channels (Don’t they broadcast that for free?), and premium programming to your home. Basic cable isn’t very expansive. However, if you start adding premium channels such as Star, Cinemax, Nat Geo, HBO and more, the bills start to add up. My monthly package consists of 93 channels. This includes a large number of local and nondescript channels that my cable provider has digitally compressed to squeeze in more channels than I need – merely to inflate the ‘offering’ in order to justify the high fees. The truth of the matter is that like me, most people never watch a vast majority of the channels they are forced to pay for. We simply don’t have time.

According to a 2007 Nielsen study, the average American household received 104 channels—and watched only 15 of them regularly. So if statistics are any measure, a broad selection of content is important to viewers, but sheer quantity is not. It does tick me off that we will never get true menu-pricing on cable. Why can’t you and I pay for just what we need? It won’t happen – not at least in the near future. Why?  Because cable companies are a supreme example of a natural monopoly. The inexplicable, but obviously profitable business model, in which the oldest, most loyal, best customers are “thanked” with bills that escalate over time, is standard practice among pay TV and cable service providers. I have tried flirting with other service providers and other supermarkets and have learned the following:

  •     I see no advantage in switching because all operators were more or less the same.
  •     I am not sticking with my providers as a result of loyalty – it’s just too inconvenient to change.

Service operators who feel they have created a loyal customer base may be under a fundamental misunderstanding of allegiance. The danger comes from subscribers like me who tend to stay with them due to a mixture of practical apathy and a general air of anguish with the alternatives. This is certainly no real emotional attachment, or loyalty, to operators.

(Shafeek Wahab has an extensive background in Hospitality Management spanning over 30 years. He has held key managerial responsibilities in internationally renowned hotel chains, both locally and abroad. Now focusing on corporate education, training, consulting and coaching he can be contacted on Website:

Oct 142014
Hemas to exit power biz in Rs.1.68bn deal

This is an important move for us given the change in the group’s strategic direction to realign its portfolio to focus on its core strengths of wellness, leisure and mobility

emas Holdings PLC yesterday said it had entered into a share sale and purchase agreement to fully divest its shareholding in Hemas Power PLC to a consortium of buyers, consisting of NDB Capital Holdings PLC, ACL Cables PLC and Trydan Partners Private Ltd for a consideration of Rs.1.68 billion—Rs.17.90 per share.

Hemas Holdings PLC represents 75 percent of the shareholding of Hemas Power, consisting of 93.9 million shares out of the 125.2 million ordinary shares of Hemas Power in issue.  Mirror Business exclusively reported on Hemas’ intentions to exit the power business on its June 17 issue.

The sale is subject to regulatory approval and fulfilment of certain conditions specified in the sale and share purchase agreement, including the sale of shares in Hemas Power’s thermal plant, Heladhanavi and changing the name of the company.

Hemas Power in a stock exchange filing yesterday said it divested its 50 percent interest in Heladhanavi to Lakdhanvi Ltd, the joint operator of the power plant, for a consideration of RS.531.7 million. The power purchase agreement of the 10MW thermal plant with Ceylon Electricity Board is scheduled to expire this December.   

The government appears to have taken a decision not to renew the power purchase agreement with private thermal power producers amid concerns of relatively higher prices paid per unit.

“This is an important move for us given the change in the group’s strategic direction to realign its portfolio to focus on its core strengths of wellness, leisure and mobility. The consortium of buyers was chosen after a rigorous process of evaluation by the board of directors of Hemas Holdings PLC. We wish the consortium every success going forward,” Hemas group CEO Steven Enderby said.

Hemas entered the power sector with its investment in a 100MW thermal power plant Heladhanavi in 2003.

With its investment in the 2MW Giddawa hydro power plant in 2006, Hemas entered the renewable energy segment by adding on two more plants in Agra Oya (2.6MW) and Magal Ganga (2.4) taking the capacity up to 7MW.

The company was listed in October 2009, issuing 31.3 million shares at Rs.20 per share, through a book-building process, with the intention of building its presence in renewable energy space.

In 2013, Hemas Power invested in a 29.3 percent stake of Pan Asian Power PLC, including a portfolio of two hydro power plants with a total capacity of 4.4MW.

Despite the higher revenue of Rs.6.5 billion, Hemas Power reported an after-tax loss of Rs.259 million in FY13/14, impacted by Rs.576 million impairment as the company had estimated the recoverable value of its thermal assets to fall short of their carrying value. For the first quarter ended June 30, 2014, Hemas Power reported a net loss of Rs.68.8 million with revenue falling 45 percent year-on-year to Rs.94.3 million.

The group net asset value as of the same date was Rs.19.52. The total assets were Rs.3.57 billion.

The June balance sheet reported retained earnings of Rs.664.4 million. Under current liabilities, interest bearing loans and borrowings stood at Rs.152.1 million.
Hemas Holdings PLC is a diversified conglomerate with a focus on four key sectors namely; healthcare, fast moving consumer goods, transportation and leisure.

Oct 112014
In partnership with Sampath Bank Department of Pension launches a Digital Identity Card for senior citizens
In keeping with the Government’s ICT policy, the Department of Pensions has launched a Digital Identity Card for Pensioners in partnership with Sampath Bank, a pioneer in technological innovations and one of the key stakeholders in the banking industry that uses state of the art digital technology in providing banking services to its customers.

The official launch of the Digital Identity Card which was organized by the Department of Pensions was held on October 9, 2014, at Pensioners ’Resort in Wedamulla, Kelaniya to mark the Pensioners’ Day.   

President Mahinda Rajapaksa , the Chief Guest of the occasion, launched the country’s first ever Digital Identity Card for senior citizens who have made a life-time and substantial contribution to Sri Lankan economy.  

Saman Herath—Senior Deputy General Manager of Sampath Bank—officially handed over a replica of the Digital Identity Card to the President.  Over 3000 pensioners attended the event.  Over 600,000 pensioners in the country are expected to benefit from the Digital Identity Card in their banking transactions. Sampath Bank is expecting to issue the Digital Identity Card to the senior citizens in the near future who reside in diverse parts of the country through its extensive network of branches.   

Depending on the requirement, biometric details of pensioners also can be included in the card which will immensely help the pensioners, and the Department would also add WNOP details, medical history which can be used in emergencies such as obtaining medical treatments.

As a measure to further streamline the pension payment and also to facilitate direct coordination with the Head Office of the Department of Pensions, Sampath Bank will provide the Department of Pensions with 25 computers. The computers will be distributed among Government Agents’ offices, facilitating direct coordination with the Head Office of the Department of Pensions in making pension payments. The official Letter of Confirmation was also handed over to the Minister of Public Administration and Home Affairs, W . D. J. Seneviratne at the event.

Oct 102014
Govt. to leverage economic progress to test people’s mandate

resident Mahinda Rajapaksa has asked the ruling coalition ministers to prepare for a ‘national election’ which is to be announced shortly.
According to Investment Promotion Minister Lakshman Yapa Abeywardena, they have not still been told if it would be a Presidential or a Parliamentary election, though speculation is rife that the government would go for a snap Presidential poll early next year. “It (a national election) will come very soon. The President told us to get ready for an election. There are only two national elections – presidential election and a parliamentary election. We are ready for both of them,” he told media yesterday.

Asked if the Minister could give a likely date for the election, he said the President was yet to announce an exact date, as he had the sole authority for calling an election.   It appears that the government is leveraging post-war economic development achieved so far in all fronts including post-war re-construction, rural empowerments and rural economic development, physical infrastructure development and the creation of a conducive business climate for the foreign investors as key election campaign drivers.

“We have spent as much as Rs.58.3 billion this year on rural economic development through the Economic Development Ministry alone.  We have ensured that benefits of economic development feeds through to the rural sectors in all districts including North and East.   

Hence, we are confident that the people are with Mahinda Rajapaksa regime. That’s the truth,” Minister Abeywardena stressed.

“There is no other personality superior to Mahinda Rajapaksa as an alternative for the masses. With this personality we are not scared of facing any national election, and also there is no doubt over wining an election. Therefore we are now preparing ourselves for a national election.”

However according to analysts, despite much has been done to revive the post-war economy, a snap poll could hurt the economic momentum built so far as all efforts and resources will invariably be diverted for the election.

Since last month, the government has been sending signals for a possible national election announcing utility price cuts on electricity and gas,  targeting residential customers.  

Economists question as to how a government could suddenly announce price cuts in an ad-hoc manner when they are required to maintain fiscal discipline.  

Meanwhile Minister Abeywardena hit out at the opposition party JVP for initiating a campaign called ‘Mahindata thun parak beha’ (Mahinda can’t 3 times) even before announcing a Presidential election.  Highlighting opposition parties’ hypocrisy, he asked why they are so scared of President Rajapaksa and asked to present a better contender than the incumbent Rajapaksa if possible.

He further recalled that the 18th amendment to the constitution was passed in parliament in September 2010 with the consent of masses, enabling the contender to contest more than twice for Presidency.  “We are not asking the people’s mandate by force or illegally. So, why do they carry out poster campaigns saying Mahindata thun parak beha?”    

“When Mahinda Rajapaksa contested for the Presidential election in 2005, they said he could not win, but he won.  Some said, he could not defeat the world’s most ruthless terrorism outfit, but he did. Some also said, he could not revive the economy, but it is taking shape as never before. 

Oct 102014
Fly Now, Pay Monthly - Installment payment plans for all travel bookings, Sri Lanka’s most convenient online travel solution provider has partnered with the best bank chains in Sri Lanka, enabling customers to reserve online using their credit cards and pay in installments. The Bank Chains associated for this amazing deal are Sampath Bank, Nations Trust Bank, Standard Chartered Bank, HSBC and Hatton National Bank, offering 0% interest payment plans and remarkably low handling fees. Now customers are able to travel to their most preferred destinations escaping the financial constraints with this easy payment scheme.

Thushan Shanmugarajah, Director of Sales and Marketing of stated “Though people like to travel the world, financial limitations make travel just a dream for many. Hence, our introduction of this opportunity for our customers is to make their dreams holiday a reality. Now, only playing in monthly installments, we have given the chance for the everyday traveler a chance to travel without the pressure”

“Findmyfare IT Team is always prepared to provide innovative travel solutions to ensure highest customer convenience. We have continuously made online purchasing for the user a much more hassle free experience. Even with this valued deal we strive to guarantee that the best is delivered to our customers” mentioned Suren Rajasooriya, the Head of IT, Findmyfare.

Payment plans are available for many tenures starting from 03 months, 06 months to even 24 months with Fly Now, Pay Monthly easy payment scheme.
Findmyfare has conducted several promotions and credit card deals to provide the pleasure of overseas travel for its growing customer base. They are looking forward to bring in more deals to amaze their customer base in the future as well.

For more information visit –

Oct 102014
Amãna Bank Expands Extended Banking Hour network
Having introduced the convenience of Extended Banking hours last year for its customers at selected high traffic branches, Amãna Bank has expanded this service to an additional 5 branches.

Starting last month, Amãna Bank’s Ladies (Colombo 3), Kinniya, Puttalam, Negombo and Badulla branches will be open for business up to 4.00pm on weekdays. Prior to this Extended Banking up to 4.00pm was available at the Bank’s Main Branch in Colombo 3, Dehiwala, Kandy and Kattankudy branches, while Pettah branch operations was available up to 6.00pm.
Speaking on this initiative the Bank’s Vice President – Operations and Business Support, Mr M M S Quvylidh, said “We found that many customers benefited from the initial extended banking hour initiative and wanted the same convenience of banking beyond regular hours to a few other high traffic branches.”

Amãna Bank is the first Licensed Commercial Bank in Sri Lanka to operate in complete harmony with the non-interest based Islamic banking model. Powered by the stability and the support of its strategic shareholders, Bank Islam Malaysia Berhad, The Islamic Development Bank based in Saudi Arabia and AB Bank in Bangladesh, Amãna Bank is making inroads within the Sri Lankan banking industry and is focused on capitalizing the growing market potential for the unique banking model across the country.

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