BOI launching ‘strategic actions’ to add to SL’s attractiveness as investment destination
By Lynn Ockersz
The BOI is in the process of launching ‘strategic actions’ to add to Sri Lanka’s attractiveness as a top international investment destination. In keeping with this broad aim, the BOI is taking a lead role in setting up export processing zones with all pre-clearances, so that investors experience minimum hassle, besides paving the way for increased ease of doing business, in addition to initiating paperless documentation procedures to facilitate import and export activities, among other measures, BOI Chairman Sanjaya Mohottala said.
However, while pointing out that the BOI has “not got its fair share of the FDI pie” over the years, the BOI Chairman said in an interview with The Island Financial Review that ‘It’s time for the BOI to course correct, not only where FDI is concerned, but also when it comes to quality jobs, higher value addition and inclusive growth, so that a comprehensive impact is generated. ‘
As the Head of the BOI in which main directions do you hope to develop the institution?
The BOI is the country’s apex agency for attracting FDI into Sri Lanka. It plays a primary role in providing direction for the economy of the country, under the direct purview of His Excellency the President. As the apex investment promotion agency, it must compete with over 1,000 international investment promotion agencies for a global FDI pool that has dipped by 40%. Remaining equally competitive with these other agencies therefore to global investors against this backdrop is a challenging task. We govern ourselves with the core principles of ensuring the medium to long term policy framework remains competitive and relevant and that it is infused with a strong public private partnership, as we actively canvas and convince investors to lay their stake in Sri Lanka. We have seen how compelling examples of transformations such as Investindia have experienced over the recent past and are encouraged by the results these campaigns have yielded. Using these examples, we have also launched some strategic actions recently. The recently concluded Sri Lanka investment forum (SLIF 2021), which was facilitated to optimise opportunity for the country by providing first-hand experience to international investors on what Sri Lanka has to offer, taking a lead role in setting up export processing zones with all pre-clearances, so that investors experience minimal hassle and increased ease of doing business, and launching paperless documentation procedures to facilitate our import and export activities have all been activated in line with that direction.
Are BOI companies facing any special issues currently? If so, what are they?
Companies that fall under the purview of the BOI contribute to 85% of Sri Lanka’s industrial exports and a significant portion of Services exports. It is a challenging time for all of us given that tourism receipts have not brought in revenue to the country in the past 2 ½ years. The pandemic has also challenged the realisation of FDI as investor nations also deal with the situation in their home front. Exports therefore are critical for Sri Lanka, and the BOI is supporting these companies not only because it is our duty to do so, but also, because we consider it a national task that everyone must work together on. In this regard, we have worked with the Occupational Health Directorate at MOH, along with industries, to develop guidelines for companies to operate safely and have also administered vaccines to almost all the entities who are supporting this national cause to keep everyone safe and healthy. In addition, close to 5,000 ICC beds are currently being maintained by JAAF and BOI, in collaboration with FTZMA, to ensure that employees are well looked after. All of this has aided the current attendance turnout to hover around 80%.
What are your main suggestions on reviving the local economy amid the current constraints posed by the pandemic?
Our main task is to support both propping up the economy and economic activity to stay afloat. Our priority of course is the safety of the people, which is why we doubled down earlier this year to vaccinate all zonal and non-zonal based employees. Even though we have to deal with the pandemic currently, we must also use this time to lay the foundation for a post covid Sri Lanka. Which is why we have established two zones in the recent past – one in Hambantota for Pharmaceuticals, and the other in Eravur for Textiles and Apparel. We have also been able to secure and invite strategic investments like HCL to the country. These and several other initiatives have enabled us to secure USD 2.3bn worth of investment approvals and USD 1.4bn capital formation, half of which was FDI – all in 2020. We need to now accelerate this pace and introduce investments into the funnel faster.
How effective has the BOI been over the years in bringing in FDI?
The BOI was one of the first organisations of its kind that was set up 40 years ago to capitalise on the benefits of an open economy. And while the ambition was directed correctly, over the years, other BOI equivalent agencies have overtaken Sri Lanka, and we have not got our fair share of the FDI pie. It’s time to course correct, not only where FDI is concerned, but also, when it comes to quality jobs, higher value additions and inclusive growth, so that a comprehensive positive impact is generated.
Hemas Hospitals makes national-level contribution through ‘Upakara’ initiative for deprived CKD patients
In a concerted effort to ensure healthcare equity for all Sri Lankans, the country’s foremost trusted private healthcare provider Hemas Hospitals introduced ‘Upakara’, an unmatched timely initiative which offers free monthly dialysis cycles to a selected number of Chronic Kidney Disease (CKD) patients from low-income backgrounds, through Hemas Hospitals.
Hemas Hospitals’ Upakara is a one-of-a-kind initiative, contributing to the health and wellbeing of individuals from underprivileged and less fortunate communities, who are suffering from CKD. While most individuals face difficulties with affording basic healthcare during the country’s perilous economic situation, this facility will be considered a life-saving, monumental effort from a private healthcare provider, contributing on a national level.
“Chronic Kidney Disease is one among the most prevalent non-communicable diseases in Sri Lanka. Statistically, 20-25 percent of diabetic patients and 18-20 percent of patients with hypertension are prone to CKD. Holistically, one in 10 Sri Lankans is estimated to have CKD, while the vast majority is unaware of the fact that they have it, resulting in most patients seeking healthcare support at its late-stages. This forces CKD patients to either opt for kidney transplants or regular dialysis treatments, both bearing an intense level of financial burden on patients and their loved ones. Given the volatile macro-economic environment in the country today, this financial burden is heavier than ever before,” stated Dr. Lakith Peiris, Managing Director Hemas Hospitals.
“A statistically higher number of CKD patients from the underprivileged communities who are affected by fewer resources prompted us to address this issue by extending our support to these communities with essential infrastructure and services through Hemas Hospitals’ Upakara initiative,” he added.
CKD is fast becoming a major public health concern, attracting increased global attention due to rapid spread of the disease, and its grave impact on patients and their quality of life. With a larger number of CKD patients reported from Sri Lanka each year, the national healthcare system often finds it difficult to cater to the full requirement of all patients requiring dialysis, affecting their health and wellbeing on a large scale.
With the aim of ensuring good governance and community participation, Upakara will be overseen and operated by a governance committee inclusive of key opinion leaders within the hospital and communities.
With a vision of ‘Making Healthful Living Happen’, Hemas Hospitals intends to support CKD patients in a manner that eases the great financial burden that falls on them every month and enhances their access to life-saving dialysis treatment. At a time in the country when macro-economic volatility has destabilized personal economies, Upakara will lend greatly to easing the financial pressure of healthcare on these chronic patients and enable them to re-establish a sense of wellbeing.
“Therefore, in such a dire context, we believe Upakara is an important step forward in assuring health and healthcare equity in Sri Lanka, and consider it our duty as a responsible healthcare provider to ensure that all Sri Lankans have access to the life-saving treatment they require regardless of their financial background. Upakara was therefore borne with this vision, and we consider ourselves privileged to launch this vital CSR programme as we continue to work to eliminate disparities in the diagnosis and treatment of kidney diseases in Sri Lanka,” stated Dr. Peiris.
Cargills Bank reports profitability turnaround with robust income growth and operating cost management
Cargills Bank reported a profit before tax of LKR 206Mn for the financial year 2022, recovering from a loss before tax of LKR 369Mn in the previous year, driven by robust growth in operating income that offset erosions due to increased provisioning and operating costs.
Total operating income rose 74% year-on-year to LKR 4.28Bn on account of growth in both Interest and Fee-based income in similar proportion. The Bank prudently managed its lending portfolio with the intention of preserving liquidity and maintaining asset quality, leading to a slight decline in the portfolio. However, the Bank was able to expand its net interest margins over the previous year, resulting in significant growth in interest income. Meanwhile robust performance in card operations, trade finance and remittances resulted in 75% year-on-year growth in fee-based income.
Mindful of the challenging environment and its impact on customers, the Bank proactively increased its provision cover ratio, resulting in a 114% year-on-year growth in impairment to LKR 1.46Bn. The Bank’s Stage 3 Loans (Net of Stage 3 Impairment) to Total Loans ratio consequently improved from 6.43% in 2021 to 4.85% in 2022.
The Bank prudently managed its operating costs to limit the increase to 16% year-on-year, resulting in the Bank’s Cost to Income ratio improving from 82.8% in 2021 to 55.4% in 2022. Consequently, the Bank reported an operating profit before taxes on financial services of LKR 448Mn.
The Bank maintained healthy capital and liquid asset ratios during the year, reporting a Total Capital Ratio of 22.85% and Liquid Asset Ratio – Domestic Banking Unit of 26.70% as at 31st December 2022.
Senarath Bandara, Managing Director/CEO of Cargills Bank commenting on the performance of the Bank stated, “Cargills Bank navigated the uncertain economic climate of 2022 with resilience and pragmatism.
The Bank adopted an agile approach in response to the challenges to seek growth and stability in spite of external pressure. Our approach has borne fruit with the Bank achieving profitability within the year under review, while also pursuing our long-term growth aspirations to create sustainable value for all stakeholders.”
The Bank continued to expand its network, opening two new branches in Negombo and Anuradhapura, and complemented branch expansion by opening eight new MINI service locations in Cargills Food City outlets. Furthermore, in line with its objectives to promote financial inclusion and financial deepening, the Bank launched a mobile branch vehicle to serve underbanked customers in the Central, North Central and Northern provinces.
Market ends down as investors await financial results
By Hiran H. Senewiratne
Trading at the CSE started off with a positive note yesterday and in the middle of the session, the market dipped due to profit takings. Subsequently, at the later part of the day it showed slightly recovery. However, the market performed in a negative manner in mid-day trade on shares which were down on the financial year coming to an end, an analyst said.
“The market is down as financial years come to an end and investors await reports to be produced,” another analyst said. It is said that profit taking had been witnessed in Sri Lanka Telecom as the Cabinet of Ministers has granted approval in principle for the divestment of the stakes held by the Treasury Secretary.
It is said that buying interest for Lanka IOC as global oil prices have come down, pushing the interest for the index up. While selling pressures have decreased on banks and stability is coming back as the share price has gone down, which has pitched in buying interest for the index, they said.
Amid those developments both indices moved downward. All Share Price Index down by 43.9 points and S and P SL20 down by 2.95 points. Turnover stood at Rs 912 million without reporting a single crossing. In the retail market top seven companies that mainly contributed to the turnover Lanka IOC Rs 124.3 million (716,000 shares traded), Sampath Bank Rs 71.8 million (1.3 million shares traded), NTB Rs 62.1 million (one million shares traded), SLT Rs 57.2 million (596,000 shares traded), Dialog Rs 51.1 million (4.9 million shares traded), NTB Rs 43 million (998,000 shares traded), and Melstacorp Rs 40.9 million (438,000 shares traded). During the day 45.7 million share volume changed hands in 12000 transactions.
In the meantime treasury bond yields were steady and the rupee opened stronger in the spot market on Thursday, dealers said. A 01.07.2025 bond was quoted at 31.25/75 percent on Thursday, steady from 31.25/30 percent on Wednesday.
A 15.09.2027 bond was quoted at 28.30/29.00 percent, steady from 28.25/29.00 percent on Wednesday. Sri Lanka rupee opened at 327/328.50 rupees against the US dollar strengthened, from 328.50/329.50 rupees from a day earlier.
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