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Port City infrastructure development to be completed by Q3 of 2023

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= USD 1.2 bn has already been invested

= USD 1.5 billion more expected to flow in

= Estimated to add USD 13.7 billion to annual GDP when fully operational

= Duty-free shopping mall expected to be open to the public by April 2023

By Sanath Nanayakkare

Port City Colombo (PCC) whose infrastructure development is slated for completion by Q3 of 2023 is showing all the possibilities to be one of the key drivers of growth and recovery in Sri Lanka, a source familiar with many aspects of the project told The Island.

He said that all Sri Lankans should welcome the project and call upon the authorities to provide the fullest support to fast-track its progress.

“While critics have often referred to Port City Colombo (PCC) as a “white elephant” and a “burden of debt” on the Sri Lankan people, these claims cannot be further from the truth. In fact, PCC is not debt-funded and is actually Sri Lanka’s largest foreign direct investment (FDI) driven project. As a result, Colombo now has a platform to create an ultramodern planned metropolis with all the trappings of modern life, which can co-exist and complement the existing sprawl of Colombo. With infrastructure development slated for completion by Q3 of 2023, of the total committed investment of USD 1.4 Bn by the project company, USD 1.2 Bn has already been invested, with a further USD 1.5 billion expected to flow in during the vertical development phase, which will commence thereafter, “he said.

Elaborating on his findings, he said:

“PCC has been designated as a Special Economic Zone (SEZ), which is a legal structure in Sri Lanka, and around the world, that allows certain geographically delimited areas to enjoy special rules and regulations in order to increase ease of doing business, and promote enterprise and development. This concept is not new to Sri Lanka and Sri Lankans have seen many such Export Development Zones in the past, which have no doubt contributed positively to the country’s growth trajectory, by attracting FDIs and promoting exports and industrialization.”

“However, PCC goes beyond any other SEZ in Sri Lanka, supported by the Port City Economic Commission and its associated laws and regulations. This sets up a single management or administrative structure that can help streamline processes and improve ease of doing business dramatically within PCC, potentially even making it the most business-friendly destination in the whole region. This also makes PCC attractive to FDIs and Diaspora, while providing a venue for technological learning, innovation and development. Having separate and more efficient customs provisions also further adds to the attractiveness of PCC. Ultimately, by creating a venue for international business, local businesses will also thrive as PCC and its businesses and residents will need to buy supplies and services from local businesses.”

“Sri Lanka is a relatively small economy, which is one of the reasons that we have not been able to open up and liberalize more efficiently and quickly. Opening up a small economy to global forces can create imbalances that can quickly turn into different issues. However, PCC provides a very efficient way to open Sri Lanka up to the world, whilst shielding the wider Sri Lankan economy from any negative effects. This, combined with wider economic reforms will create a platform for Sri Lanka’s economy as a whole to open up to the world.”

“As an SEZ, PCC will be able to create massive employment opportunities for both skilled and unskilled roles. These jobs will be paid for in foreign currency and in line with globally competitive standards. With global businesses looking to do business in Sri Lanka, the incentives for qualified professionals to seek migration will be diminished, as they will be able to obtain comparable salaries here at home, and in foreign currency too.”

“During construction alone, PCC has created 8,000 employment opportunities and is expected to generate 83,000 well-paid jobs as development matures, contributing USD 13.7 billion per annum to Sri Lanka’s GDP when fully-operational.”

“The construction of the USD 7 million Duty-Free shopping mall inside PCC will be the biggest duty-free mall in the region, with a further USD 6.5 million in the pipeline for expansion of operations. The mall is expected to be open to the public by April 2023, with the initial infrastructure expected to be fully completed by Q3 of 2023, which will open up the doors for a further USD 1.5 billion worth of investments into vertical developments. Two international duty-free operators and an international food and beverage partner are already on board and, with the investment plans for entertainment and leisure activities, PCC is expected to be a top destination for city tourism.”

“It’s going to be a remarkable confluence of events. So, all Sri Lankans should realize the effectiveness of PCC as the largest FDI-driven project, and support it. The people can be confident in doing so as the Port City Economic Commission will be entrusted with the administration, regulation and control of all matters connected with businesses and other operations, in and from the area of authority of the Port City,” he pointed out.



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Softlogic Life’s FY22 results grows to LKR 23 Bn GWP amidst tough macroeconomic challenges

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Softlogic Life recorded a superior full year performance in a crisis-affected business landscape, posting Gross Written Premium (GWP) of Rs. 23,083 million for the year ended 31 December 2022 with an increase in top-line growth of 15% compared to the corresponding period of last year. The Company has stood firmly with its policyholders in the face of the tough macroeconomic conditions, paying claims of Rs 8,264 million for the period.

During the period in review, Softlogic Life’s market share is at 16.87%, in comparison to 16.08% as of 31 December 2021. The market share increase continues to rank Softlogic Life as the second-largest in the life insurance market, overtaking much older players to establish strong growth momentum. Compared to the estimated Industry GWP growth, which was 9.6% during 2022, Softlogic Life recorded GWP growth of 15%.

The company reported a 10-year Compound Annual Growth Rate (CAGR) of 28% of GWP, while the industry 10-year GWP CAGR growth was at 14%. Softlogic Life also notes that its contribution to increasing insurance penetration in the country has increased during the period in review with 133,872 policies issued, insuring more than 1.5 million Sri Lankan lives.

Profit after tax (PAT) for the period in review rose to Rs. 2,683 million, an increase of 27% YoY. Profit before tax (PBT) grew by 36% compared to last year at growth of Rs. 1,065 million. The company’s operating expense ratio remained at 22% irrespective of the inflation hike during 2022 as a result of prudent and efficient expense management initiatives adopted. Furthermore, Softlogic Life maintained a healthy Capital Adequacy Ratio (CAR) of 287%, well above the regulatory CAR requirement of 120%.

The company recorded impressive Return on Equity of 25% and Earning per share of LKR 7.15 after providing one off provision for impairment. Recurring Earning per share for the year 2022 increased to LKR 12.85 from LKR 5.61 per share.

Commenting on the financial performance of the Company, Ashok Pathirage, Chairman of Softlogic Life Insurance PLC, stated, “Despite numerous challenges in a tough business landscape, we have performed well to maintain our position as the second-largest life insurance company in Sri Lanka, growing our market share further to 16.87% by the end of 2022. These accomplishments were facilitated by the strategies we deployed and the strong execution of those strategies that have enabled the Company to sustain momentum in spite of the prevailing macro challenges.”

Since its inception, Softlogic Life has been striving to improve the quality of life of Sri Lankans through relevant disruptive innovations and digitalization. Industry-first innovations such as one-day automated claims settlement, hospitalization claim settlement, 100% digitalized sales platform, automatic policy issuance and mobile based micro products has helped the company to deliver a superior customer experience, which has been instrumental in enhancing its competitive position.

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Foreign investors bullish and local counterparts bearish at CSE; year-to-date net foreign inflows hit Rs. 2 billion

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By Hiran H. Senewiratne

Foreigners remained bullish on Sri Lanka’s listed equities as year-to-date net foreign inflows crossed the Rs. 2 billion mark, while local investors appeared bearish at the CSE yesterday.

JKH was the major driver for foreign inflows to reach more than Rs two billion, without any specific reason, since last week, market analysts said. However, shares fell in mid-day trade over the need for further positivity on the International Monetary Fund loan being secured, an analyst said.

Both indices moved downwards. The ASPI fell by 125.28 points, while the most liquid S&P SL20 fell 43.82 points. Turnover stood at Rs 2.2 billion with four crossings. Those crossings reported in Lanka Tiles, which crossed 1.2 million shares to the tune of Rs 54 million, its shares traded at Rs 45, JKH 300,000 shares crossed for Rs 43.65 million, its shares traded at Rs 145.50, HNB 468,000 shares crossed to the tune of Rs 43.3 million, its shares traded at Rs. 92.50 and Chevron Lubricants 200,000 shares crossed for Rs 24.1 million, its shares fetched Rs 107.

In the retail market, seven companies that mainly contributed to the turnover were, JKH Rs 721 million (4.9 million shares traded), Aitken Spence Rs 302 million (two million shares traded), Expolanka Holdings Rs 126 million (664,000 shares traded), Softlogic Capital PLC Rs 91 million (5.6 million shares traded), Browns Investments Rs 82.1 million (13.5 million shares traded), Softlogic Life Insurance Rs 63.3 million (512,000 shares traded) and Tokyo Cement (Non- Voting) Rs 49.1 million (1.45 million shares traded). During the day 56.2 million share volumes changed hands in 14000 transactions.

“The overall market was pulled down because the market ran on banking shares in the past sessions, but news on domestic debt restructuring moved the market into the red yesterday, an analyst said.

Any domestic debt restructuring will be part of a negotiation process with creditors, which will take place after a program with the International Monetary Fund is in place, Central Bank Governor Dr. Nandalal Weerasinghe said.

First, financial assurances from bi-lateral creditors have to be received to qualify for the IMF program.

It is said high net worth and institutional investor participation was noted in Expolanka Holdings, JKH and Sampath Bank. Mixed interest was observed in Aitken Spence, Sri Lanka Telecom and Lanka IOC, while retail interest was noted in Browns Investments, LOLC Finance and Ex-Pack Corrugated Cartons.

It said the Capital Goods sector was the top contributor to the market turnover (due to JKH and Aitken Spence), while the sector index gained 0.19 per cent. The share price of JKH gained 75 cents to reach Rs. 145.50. The share price of Aitken Spence closed flat at Rs. 150.

The Transportation sector was the second highest contributor to the market turnover (due to Expolanka Holdings), while the sector index increased by 1.02 per cent. The share price of Expolanka Holdings increased by Rs. 2 to Rs. 194.

Yesterday, the Central Bank announced the US dollar buying rate as Rs 359.99 and selling rate as Rs 370.18.

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Japanese State Minister of Foreign Affairs visits Port of Colombo

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SLPA Chairman Keith D. Bernard presents a token of appreciation to Japanese State Minister of Foreign Affairs - TAKEI Shunsuke. SLPA vice chairman - Gayan Algewattege, SLPA managing director - Susatha Abeysiriwardena and harbour master capt. Nirmal Silva were present.

Japanese State Minister of Foreign Affairs TAKEI Shunsuke visited the Port of Colombo to learn about the ongoing developments in the Port of Colombo. The visit took place on 03rd February 2023. During the visit the Japanese State Minister of Foreign Affairs also met with the Chairman of Sri Lanka Ports Authority (SLPA) – Keith D. Bernard and other higher officials at the main control tower of the Port.

The Chairman of SLPA explained to the Japanese state minister of foreign affairs of the progress of the developments of the East Container Terminal (ECT), the West Container Terminal and the North Port Development Project. The SLPA Chairman thanked the Japanese Government and the people of Japan for the invaluable support extended by them for development of Port sector in Sri Lanka, particularly towards the Jaya Container Terminal and the developments at the Port of Trincomalee.

The high level Japanese delegation at the Port of Colombo also comprised MIZUKOSHI Hideaki – Japanese Ambassador to Sri Lanka, TUTSUMI Tarou – Director, Southwest Asian Division, ANDO Toshiaki – Executive Assistant to the state minister of foreign affairs, TOKITA Yuji – director, second country assistance planning department, IWASE Kichiro – assistant to minister /director-general Southeast and Southwest Asian Affairs Department, MATSUYAMA Miina – third secretary, Embassy of Japan in India, KATSUKI Kotaro – Minister Embassy of Japan in Sri Lanka and OZAKI Takeshi, first secretary – Embassy of Japan in Sri Lanka.

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