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Banking and financial sectors seen as needing urgent strengthening

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By Hiran H.Senewiratne

The government should strengthen the banking and financial sectors, with a few banks and finance companies facing some issues. The recent Covid 19 pandemic too caused a lot of issues for these sectors, State Minister of Finance and Capital Markets and Public Enterprise Reform Ajith Nivard Cabraal  said.

‘There are several other local industries and services that have also suffered significantly as a result of the acute fall in local demand due to the lockdown and reduced purchasing power. Those persons too need to be supported by way of cash grants, tax breaks, loan and interest moratoriums, quick release of new loan facilities at concessionary interest rates, Cabraal said after assuming duties as a state minister at the Finance Ministry yesterday.

Cabral said if the export revenue of a country drops due to quality issues or availability problems within the exporting country, then it could be fixed by taking the required management and operational remedial measures to rectify such issues.

‘However, if the export revenue is declining due to decreasing purchasing power of the importing nation’s people and business entities, the problem would be more challenging as it would be beyond the control of the exporter or the exporting country, he explained

Cabraal added – “As is well known, in the case of many export-market collapses experienced in the last few months, it is clear that the decline is due to consumer demand in the importing country declining as a direct result of the COVID -19 situation.

‘In that background, it is likely that the demand would pick up after a few more months and, therefore, what would be important is for the exporting country to remain resilient by following policies that would enable its exporters to keep their factories and businesses intact, and survive until such time the downward trend changes.

‘In the case of exports of apparels, fish, tea, rubber, etc., we have already begun to see an improvement in export revenues. Therefore, it is now time for us to strive even harder to stimulate our existing markets and find new niche markets that would provide us with the opportunity to export more.

‘Further, although we do observe a reduction in remittances due to the purchasing power decline in the Middle Eastern countries, it is likely that once global demand picks up, oil prices would improve, which would be a favourable outcome from the point of view of the oil exporting nations.’

 

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BITUMIX – locally manufactured sealant- catering to rubber plantation sector

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BITUMIX, the flagship Bitumen company in Sri Lanka is ready with yet another star product in their product portfolio, catering to the Rubber Plantation sector. The company has recently established a modern manufacturing facility to produce high quality Bitumen based sealants for pasting rain guard covers above the tapping panel of the rubber tree. Rubber plantations are reported to be benefitted by pasting rain guards recommended by the Rubber Research Institute (RRI) of Sri Lanka, which facilitates continuous tapping even during rainy season and as a result the estimated annual latex production yield can be increased significantly.

 While the local Rubber sealant market has been dominated by imported products, BITUMIX is expanding their product portfolio with a focus to produce locally manufactured sealants conforming to the highest international quality standards using a modern processing facility, proven product recipes and high quality raw materials, thereby reducing the necessity of importing such products to the Country.

The introduction of this product facility by BITUMIX is very much in line with the Sri Lankan government’s drive to save all important foreign exchange during these challenging times.

 

 

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Our mission is to enable wealth generation for all citizens: CSE chairman

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Reproduced below are some excerpts from the speech made by CSE Chairman Dumith Fernando at the recent special bell ringing ceremony organized at the CSE under the patronage of Prime Minister Mahinda Rajapaksa to mark the Digitalization of the Sri Lankan Stock Market. The launch event which had been themed as ‘Hyper-Leap to the future’ saw the participation of key policymakers and industry leaders of the country.

“In this 35th year of operation of the Colombo Stock Exchange, we are gathered today to launch the Digitalization of the CSE and its entry into the Future”.

“The step we are taking today in partnership with, and enabled by, the Securities and Exchange Commission of Sri Lanka to Digitalize the stock market – is a first step towards a transformation that can reposition Sri Lanka in a digital financial marketplace. While this may be the first step, it is a major milestone in the advancement for the CSE. Your presence here today, to witness this momentous leap in our nation’s financial infrastructure is a great pleasure and an honor to us. Therefore, on behalf of the Board of Directors and Management of the Colombo Stock Exchange, I warmly welcome you to this home of the country’s stock market and this event. We are deeply grateful, especially to you Hon. Prime Minister, for your presence here today”.

“At the CSE our mission is clear. Our goal is to Revitalize long-term Capital Mobilization for businesses, and to Enable Wealth generation for all citizens by providing a Trusted Venue for Trading and Depository Services”.

“Now if we are serious about enabling wealth generation for all citizens through the CSE, there are 3 things we need to do –

1) Make it easier for citizens to access and learn about the stock market;

2) Make it easier and more efficient to complete transactions – end-to-end; and

3) Make it cheaper to perform all these activities.

The Digitalization of the CSE does exactly these things. With the new Digitalization app being launched today, users will be able to open an account at the Central Depositary System (commonly known as the CDS) and a stockbroker from anywhere in the country in a matter of minutes and begin trading within an hour. In addition, from today, trade settlements including sending trade confirmations and payment settlement can be done entirely online. With this, the Colombo Stock Exchange can also safely operate, completely virtually, even during a lockdown like we had earlier this year. Today’s launch of the new and improved websites of the CSE, CDS and SEC as well as the SEC’s Youtube channel will further support Digitalization by instantly delivering much needed information to issuers and investors”.

“This launch is a result of a large team of people who have worked together tirelessly for months. In the interest of time, I will leave it to our CEO, Rajeeva Bandaranaike to recognize all those who contributed to this effort. But I must say in no uncertain terms, that this milestone was achieved through a combination of the leadership given by the SEC, as well as extensive collaboration between the SEC, CSE and the member stockbroker firms and I thank you all for that”.

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BOI approves agreements worth US$ 1.5 billion in first nine months

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The Board of Investment of Sri Lanka (BOI) has geared for a tremendous FDI earning within the first nine months of 2020, a press release issued by BOI said.

BOI Director General Sanjaya Mohottala said that the BOI has approved agreements worth US$ 1 .5 billion in the first nine months of this year. This value includes new investments and expansions of the ongoing projects. According to him this number is expected to reach US$ 2 to 2.5 billion by the end of this year.

With the unprecedented crisis triggered by the coronavirus, severely dented the world economy, it’s impressive to see the local Investors expanding their ventures in Sri Lanka. While the advanced economies are shrinking their activities, local investors grabbed the opportunities arisen in the present world market. The confidence of the existing investors in expanding their projects, strengthened the rupee value of the country, Mohottala added.

According to him the foreign investments are expected to grow significantly within the next two years and the basic requirements are already being worked out. A formal mechanism is being set up to initiate new investments as well.

There are influential factors to attract FDI to any country. This includes a stable government, stable polices, a proper legal frame work, and free trade agreements. A stable and an emphatic government has already been established and other sectors need to be updated to suit the present. This will enable the expected amount of FDI to the country. Meanwhile we are exploring the extensive global trade needs and the markets available to expand our production.

We also focus on the Sri Lankan work force and the areas where projects can be implemented. The Eravur fabric park is one of our significant initiative which will bring a huge foreign exchange saving to the country. It’s expected to establish a rubber-based manufacturing zone outside Colombo and Gampaha districts. Fisheries and aquatic resources projects are too in our concern. The focus is to implement these projects are in North, East and Northwest coasts. Furthermore, we intend to establish IT parks in Colombo, Gampaha, Kandy, Hambantota, Vavuniya and Jaffna districts with in next 05 years’ time. Young professionals from these areas who are qualified in IT field will be fortunate enough to work in these ventures.

The main role of the Board of Investment is to uplift the economy of the country, while attracting foreign direct investments. In addition, the Board of Investment of Sri Lanka stands for the economic and social development of the employees who contribute immensely to the growth of the economy. Apart from these ,we will take steps to integrate the people who live in undeveloped areas in to the economy, he said.

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