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BOC celebrates 81 years of yeoman service

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With an unfathomable bond that was built with the Sri Lankan community for over 81 years, Bank of Ceylon, the No.1 Bank in the country celebrated that deeply rooted relationship with pride at its 81st anniversary of establishment on August 1 .

With a heritage that explicitly showcases the commitment it has towards the nation in terms of co-creating social and economic wellbeing together with the government of Sri Lanka, Bank of Ceylon has reached Sri Lankan businesses and individuals of all-walks-of-life to enrich their socio-economic standards. Indigenously originated in response to the needs of Ceylonese businesses to move forward to expand their businesses and wellbeing, the Bank of Ceylon Ordinance was enacted in 1938 and the Bank was declared open on August 1st, 1939 at 41, Bristol Street in Colombo Fort, by the Governor, Sir Andrew Caldecott.

Beginning its first extended branch in Kandy, Bank of Ceylon has moved forward to open 645 branches across the country, four overseas branches and a banking subsidiary in London up to now. BOC has expanded so much both in size and influence that the bank can still be considered as the prime financier for Sri Lankans despite all competition.

“BOC has been the highest profit earning single business entity in the country for a number of years continuously. The Bank’s anniversary would be the best day to remind the nation that all learning of the bank goes back again as an investment to assist the government’s socio-economic agenda to develop the country’s infrastructure facilities and other, on behalf of all Sri Lankans. BOC takes great pride and responsibility in responding to the needs of all its stakeholders” stated the chairman Kanchana Ratwatte.

BOC is currently standing strongly with a balance sheet that encompasses Assets valued over Rs.2.6 Trillion, Deposits over Rs. 2.1 Trillion, Advances and Lending over Rs. 1.8 Trillion, BOC boasts of being the wealthiest single business entity in Sri Lanka. This leading Sri Lankan banking giant has spread its wings across the island with a sophisticated inter-connected digital network currently inclusive of 645 branches, 10 mobile branches, 15 SME centres and also 1270 ATMs/ CDMs and CRMs that are 24 x7 operative as physical customer touch points building up a total of 1915, enabling customers to transact at their convenience. In its 81 year long journey, BOC has empowered generation after generation of individuals and businesses that many of the indigenous corporate scale businesses that are here today were start-ups financed by the bank back in the early days. At present BOC has taken its responsibility even further by being the bank that elevates the Sri Lankan banking industry by harnessing world class banking technologies and spreading the synergy across the country benefitting every household.

Leveraging on the strength gathered over eight decades, Bank of Ceylon has continued to dominate the Sri Lankan banking landscape at many different levels. “Looking at a broader perspective, anyone can observe that Bank of Ceylon is substantially rooted with every industry in the country in a significant way. In order to manage the requirements that are coming from this diverse customer base, BOC manages a product and a service portfolio that could financially enable anyone’s aspiration for social or economic growth. Considering the current social circumstances, the Bank has identified that the country is in need to promote the entrepreneurial spirit and more prominence should be given for financial inclusion and employment generation” stated the Acting General Manager Mr. D.P.K. Gunasekera.

BOC’s structure is sustainable in the longer-run as it is deeply connected to a profound vision, mission and a set of corporate values to begin with. It demonstrates it agility by adapting itself to be more responsive to customer needs. The assurance the Bank has earned throughout these years is validated by all stakeholders especially all Sri Lankans. The Bank aims to confront future challenges by developing market leadership, confronting market volatility, channeling and aligning resources to ensure business growth and transforming the banking landscape digitally.

 



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Spotlight on ‘Emerging Issues for Macroeconomic Stability’

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The Central Bank of Sri Lanka co-hosted the CBSL-ADBI-APAEA Online Macroeconomics Conference for the third consecutive year, in collaboration with the Asian Development Bank Institute (ADBI) and the Asia-Pacific Applied Economics Association (APAEA), on 23 September 2022. This year’s theme remained same as the previous year; ‘Emerging Issues for Macroeconomic Stability’.

Inaugurating the Conference, Dr. Nandalal Weerasinghe, the Governor of the Central Bank, elaborated on some key challenges faced by many countries over the world, mainly driven by the COVID-19 pandemic and geo-political tensions, driving most central banks to prioritise on stabilising their corresponding economies. He highlighted the increasing concern faced by both advanced and emerging market economies alike, in the balancing act between supporting economic growth on the one hand, and maintaining overall macroeconomic stability on the other, amidst varying levels of macroeconomic buffers. He also noted the importance of research collaborations between the academia and policymakers to address various issues faced by the economies amidst the prevailing high volatility in the global economic landscape.

The Governor highlighted that although the applicability and validity of findings of certain models and theories presented in theoretical academic research could be somewhat limited amidst crisis situations like the one Sri Lanka is facing at present, ongoing effort to study the dynamics of emerging market economies is an essential element in the recovery process. Professor Tetsushi Sonobe, Dean and Chief Executive Officer (CEO) of ADBI delivered opening remarks and noted the heterogeneity among different regions in terms of the exposure to inflation pressures, available policy space and the soundness of macro-fundamentals. He emphasized that workshops of this nature would help stimulating a dialogue among academia and policymakers and support further development of policy research.

The Conference comprised two sessions of research paper presentations by authors from the Central Bank of Sri Lanka, ADBI and APAEA. The sessions were chaired by Dr. John Beirne, Vice-Chair of Research at ADBI, and Mrs. Yvette Fernando, Deputy Governor of the Central Bank.

The proceedings of the conference can be accessed via the Central Bank Website in the ‘Conferences, Seminars and Workshops’ section (https://www.cbsl.gov.lk/sites/ default/files/cbslweb_documents/research/CBSL_ADBI_APAEA_Workshop_Sep2022_Agenda.pdf).

Collaborative Research Conference by CBSL-ADBI-APAEA – 23 September 2022.

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A compelling value proposition for investing in SL in the context of Port City Colombo

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On the heels of the interim budget speech and a Staff Level agreement on an Extended Fund Facility with the IMF, the Ceylon Chamber of Commerce hosted a virtual session on the 01st of September 2022 to discuss, ‘How can Sri Lanka compete for investment amidst turbulence times: Economic growth vs Fiscal consolidation’.

Joining the discussion were Natarajan Sankar, Managing Director and Partner at Boston Consulting Group (BCG), Dr Dushni Weerakoon, Executive Director at the Institute of Policy Studies, Ashique Ali, chairman of SLASSCOM, and Thulci Aluwihare, Deputy Managing Director of CHEC Port City Colombo. The session was moderated by Shiran Fernando, Chief Economist at the Ceylon Chamber of Commerce.

During the discussion, Natarajan Sankar highlighted how the development of economic clusters could be an important policy tool to activate growth in new sectors, similar to Dubai, Singapore and Malaysia. The presentation demonstrated that Sri Lanka is now at an inflection point, where bold reforms must be implemented to enhance export competitiveness and FDI attraction, similar to major South Asian Economies following the 1997 Asian Financial Crisis.

Discussing these ideas further in the context of Port City Colombo, where BCG has been engaged as the International Strategy Consultant, Sankar stressed that the structural advantages offered by Sri Lanka need to be augmented by strengthening the country’s brand as a destination for investment, as well as by improving the ease, risks and costs of doing business. As many SEZs have failed due to poor conceptualization and implementation, he emphasized the need to form a compelling value proposition through a comprehensive package of fiscal incentives, infrastructure support, talent pool and a conducive legal/ regulatory framework.

Sankar also discussed the vast potential that exists in the IT, Digital Education and Professional Services segments, where Sri Lanka could position for an India+1 strategy, on the back of lower cost of operations, good quality talent pool and robust connectivity. In the context of IT companies, he pointed out that businesses consider a multitude of factors in their international location decisions, as they take a long-term view on graduating from Outposts to Satellites, and eventually, Hub operations. Hence, a precise overarching narrative and investor pitches, tailored for sectors and sub-sectors, should be set out to appeal for international investment, he explained.

Adding to the discussion, Dr Dushni Weerakoon, Executive Director of the Institute of Policy Studies, referred to the World Bank’s Global Investment Competitiveness Report, which points out the top 3 factors for investment decisions as: supportive political environment, macroeconomic stability and a supportive regulatory regime. Sri Lanka’s poor performance across these pillars, coupled with the ongoing economic crisis, could cause investors to generally steer away from long term investments and consider opportunistic/portfolio investments where exit is relatively easier.

However, to attract “efficiency seeking FDIs”, which are the conduit for new technology, management know-how and business networks, the long-term reform agenda plays a crucial role. Amidst an economic crisis and an era of fiscal consolidation, there is a case to be made for strategically considering tax incentives to attract investment in sectors such as IT, construction and exports. This could also position Sri Lanka competitively amongst the 50-70% of developing countries that offer fiscal incentives to attract investment.

Providing an insight from an IT/BPM perspective, Ashique Ali, chairman of SLASSCOM, underscored the importance of developing globally relevant skills to benefit from the vast opportunity within the IT/BPM sector, which remained resilient globally even during the pandemic, due to the rising demand for digitalization. He stressed that Sri Lanka continues to remain attractive for global clientele despite the disruptions to business activity that the industry experienced over the recent couple of months.

Discussing the matter from the point of view of the Port City Colombo development, Thulci Aluwihare, Deputy Managing Director at CHEC Port City Colombo explained the significance of strong economic growth in achieving long term debt sustainability, notwithstanding fiscal consolidation. Whilst agreeing that efficiency of the workforce, quality of infrastructure, political stability etc. take precedence over fiscal incentives in the context of investment decisions, Aluwihare revealed a comparative analysis of regional peers, which highlights Sri Lanka’s poor ranking in these aspects. Furthermore, Sri Lanka is also a relatively high tax jurisdiction, where taxes were second to India despite the lack of a vast domestic market. On the other hand, even developed jurisdictions such as Singapore and Dubai, UAE provide targeted tax incentives for as long as 40-50 years.

He also further explained that the hurdle return rates expected by international investors, commensurate with country risks, is significantly higher than in the region, which in turn makes large-scale development projects relatively unattractive. Aluwihare concluded by stressing that targeted incentives should be offered by considering a cost benefit analysis where the wider economic impact outweighs the cost of such incentives.

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External and internal factors set stage for CSE revival

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By Hiran H. Senewiratne

The CSE rose over 1 per cent within the first hour of trading yesterday, continuing the momentum from the previous day, unfolding a stock market driven by retail investors. The reasons for the market to bounce back were external and internal factors, stock market analysts said.

One external factor that propelled the market was the Asian Development Bank (ADB) reassurance of further support for crisis-hit Sri Lanka once the International Monetary Fund Board approves the US $ 2.9 billion four-year Extended Fund Facility program.

ADB President Masatsugu Asakawa told journalists that reaching the Staff Level Agreement by Sri Lanka with the IMF earlier this month was a positive development and expressed confidence in the government receiving “financing assurances” from relevant creditors leading up to the IMF Executive Board approving the new support program for Sri Lanka.

A further factor that positively impacted the market was the Export Development Board report that our export earnings from the beginning of the year to August this year reached more than US $ 8 billion, which was a 12 per cent increase, stock market analysts said.

Amid those developments both indices moved upwards. All Share Price Index went up by 97.25 points (0.99 per cent) to end of the day at 9958.87 and S and P SL20 gained 22.71 points (0.72 per cent) to end of the day at 3187.22. Turnover stood at Rs 3.1 billion without a crossing.

In the retail market top seven companies that mainly contributed to the turnover were, ACL Cables Rs 458 million (3.8 million shares traded), Lanka IOC Rs 299 million (one million shares traded), Expolanka Holdings Rs 198 million (890,000 shares traded), Lanka Wall Tiles Rs 169 million (2.2 million shares traded), First Capital Holdings Rs 121 million (6.2 million shares traded), Royal Ceramic Rs 106 million (2.5 million shares traded) and First Capital Treasuries Rs 101 million (4.4 million shares traded). During the day 181 million shares changed hands in 33000 transactions.

Between early August and yesterday, SG Holdings is estimated to have acquired 67 million shares or a 3.7 per cent stake in Expolanka at a price range of Rs. 200 and Rs. 230 per share.

It is said buying in September alone resulted in a net inflow of Rs. 14.6 billion to the stock market and more importantly boosted liquidity of those who sold out of Expolanka. On the previous day Expolanka saw 11.6 million of its shares change hands via 883 trades for Rs. 2.65 billion. It closed at Rs. 224.75, up by one rupee. Expolanka’s market value was Rs. 439.3 billion as of yesterday accounting for 10 per cent of CSE’s total.

Yesterday the Central Bank- announced US dollar buying rate was Rs 359.18 and the selling rate Rs 369.93.

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