Roshanie Jayasundera Moraes addressing the membership. Also in the picture are Linda Giebing, VP, Dinithi Dias, Secretary, Ceylon Chamber of Commerce, Ameena Ziaudeen, VP and Tania Polonnowita Wettimuny, Treasurer, CBB
The 20th Annual General Meeting (AGM) of the Council for Business with Britain (CBB) of the Ceylon Chamber of Commerce was conducted on August 27.
During the course of proceedings, Roshanie Moraes, Executive Vice president, John Keells Holdings PLC became the first woman to be elected as the president of the Council for Business with Britain.
“Moving forward our efforts will primarily be focused on enhancing business and trade between the UK and Sri Lanka as part of wider government-led efforts to support post-COVID economic revival. We believe that women will also play a greater role in driving this recovery, and to that end, we will also be launching an initiative to improve female labour force participation and gender parity across Sri Lanka’s business environment,” she stated.
Exports to the UK from SL is around USD 1 b and imports from the UK, around USD 370 m. UK is one of the two largest apparel buyers from SL.
Commenting on developments during his tenure, outgoing president, Mark Prothero, CEO of HSBC, Sri Lanka & Maldives said: “As we all know, it has been an unfortunate and difficult period for Sri Lanka with two “Black Swan” events in a row in 2019 and 2020 which brought with it unprecedented challenges to our economy and particular hardship for our tourism and leisure sector.
“However, it is encouraging to see that despite these unique challenges, there are other sectors of Sri Lanka’s export economy which have rebounded sharply in a strong v-shaped recovery. This serves as one of many indicators as to the resilience of the Sri Lankan people and we can be confident that under a united president and government there is still strong opportunity for Sri Lanka to develop and prosper in the years ahead,” he said.
Having served as president during the 20th anniversary of the CBB, Prothero went on to express his gratitude to fellow Committee members – including some of the largest domestic corporates and multi-nationals – for their support and senior-level engagement in the CBB.
Over the past year, CBB organised multiple discussions and events focused on relevant and timely topics, covering financial and forex markets, responsible marketing, urban development and the significance of architecture and sustainable development. Among the other key highlights in the CBB’s calendar over the past year was the launch of the SL-UK trade and investment report and the hosting of a special event to felicitate former Sri Lankan cricketer and captain, Kumar Sangakkara on his appointment as the Chairman of the MCC.
Additionally, the council has also been actively supporting the training of English Language in partnership with the British Council for over 15 years. During this time, the CBB has funded the training of 2,300 teachers countrywide and positively impacted over 300,000 students.
Reading a statement issued on behalf of High Commissioner to Sri Lanka from the UK, Sarah Hulton, Lisa Whanstall, Deputy High Commissioner for the UK said: “I would like to thank the outgoing President Mark Prothero and the CBB committee for all their hard work and for the time they have spent sharing insights and working together with me in my first year in Sri Lanka. I also wish to congratulate incoming President Roshanie Jayasundera Moraes, together with the new office bearers and other committee members, with whom I look forward to working closely in the year ahead to support UK businesses in this challenging time. I understand that we have a first for the CBB on the gender representation front, which is also very exciting, and I am keen to explore activities and initiatives around this as well.”
The 2020/21 committee comprises of Linda Giebing, General Manager, Hilton Colombo Residences and Ameena Ziauddin – Development Director, Norfolk Foods as Vice Presidents, Tania Polonnowita Wettimuny, MD, Inter Air & Sea Logistics, as the Treasurer and Mark Prothero, CEO, HSBC Sri Lanka & Maldives as the Immediate Past President.
Newly appointed committee members include: Shirendra Lawrence, COO, MAS Holdings, Hajar Alafifi, Chairperson, Unilever Sri Lanka, Sarath Ganegoda, Director, Hayleys PLC, S Renganathan, MD, Commercial Bank, Nikhil Hirdaramani, Director, Hirdaramani Group, Arjuna Nanayakkara, Head of Shared Services, London Stock Exchange Group SL, Irfan Thassim, MD, Oceanpick, Dougie Douglas, Country Manager, Etihad Airways, Indika Abeykoon, GM, Aitken Spence Travels and Gihan Jayasinghe, MD, Finlays Group, SL.
Michael Fernandopulle, Head of Trade & Investment at the DIT, of the British High Commission, the Head of the British Council and Shaameel Mohideen, MD of Spillburg Holdings representing SMEs will be invitees to the Committee. Representatives from the BOI and the EDB to attend the meetings as invitees every quarter.
Further details regarding membership of the Council and its activities could be obtained from the Secretariat of the CBB of the Ceylon Chamber of Commerce, No. 50, Navam Mawatha, Colombo 2. E-mail: email@example.com or Tel.: 011-5588861, 5588800. CBB also could be contacted via www.cbbsl.com https://www.facebook.com/CBBSriLanka/ and on Twitter @CBB_SL.
Spotlight on ‘Emerging Issues for Macroeconomic Stability’
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.
A compelling value proposition for investing in SL in the context of Port City Colombo
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.
External and internal factors set stage for CSE revival
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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