‘Sri Lanka is a gateway to almost 3 billion people in South Asia, East Asia and the Pacific and is located close to some of the busiest trading routes in the world. The country is therefore well positioned to become a leading trade and maritime hub in Asia, ambassador of Norway to Sri Lanka Trine Joranli Eskedal said.
The ambassador was addressing the 19th AGM of the Sri Lanka – NORDIC Business Council of the Ceylon Chamber of Commerce on Sept. 21 as Chief Guest.
At the meeting Prasath Mahalingam of 99X Technology Limited was elected unanimously as the president of the Council.
The ambassador noted that the promotion of business cooperation between Norway and Sri Lanka, including increased trade and investment, is one of her key priorities.
The ambassador added – ‘The Sri Lankan – Norwegian bilateral relationship has withstood the test of time and is stronger today because it has always been based on mutual respect and cooperation. On this occasion, I want to make special mention of the ‘Match-Making Programme’ funded by NORAD, and very successfully implemented by the Ceylon Chamber of Commerce, a few years ago. This project aimed at encouraging Norwegian businesses to invest and initiate commercial co-operation with Sri Lankan partners. Over a 15-year period, it mobilised interest amongst 330 Norwegian SMEs in commercial operations with and in Sri Lanka. This programme had its roots in the embassy support for the Hambantota Integrated Rural Development programme carried out from 1979-1999. ‘Norway’s Sovereign Wealth Fund, which is managed by the Norwegian Central Bank, had a total of USD 114 million investments in Sri Lankan stocks at the end of 2019, investing in 20 Sri Lankan companies.
The ambassador further noted that at a time when traditional development co-operation is on the decline, increasing trade and commercial co-operation will emerge as prime areas of interaction between Norway and Sri Lanka. There are many new opportunities for Sri Lanka to expand trade and investment by identifying new niche markets and products. She concluded by saying that the Royal Norwegian Embassy looked forward to continuing the partnership with the NORDIC Business Council and supporting Sri Lanka on its development journey.
The outgoing president, Merrick Gooneratne appreciated the support extended to local exporters through the ‘Sri Lanka – Norway Match – Making Programme,’ managed successfully by the Ceylon Chamber of Commerce, and requested Norway’s support to initiate similar programmes for further developing trade and investment between Sri Lanka and the NORDIC region.
Prasath Mahalingam, 99X Technology Ltd. was elected president of the Council, and Jehan Perinpanayagam, of Infomate (Pvt) Ltd., and Andre Fernando, of MAC Holdings (Pvt) Limited were elected Vice Presidents. The Committee members representing Aitken Spence Travels (Pvt) Ltd., Indika Abeykoon, Alpha Industries (Pvt) Ltd., Sarath Weerasuriya, Columbus Tours (Pvt) Ltd., Bobby J. Hansen, John Keells IT Ousman Anthony and Wilhelmsen Meridian Navigation Limited, Maleena Awn, were elected to serve for the period 2020 – 2021.
The Bilateral Business Councils, an integral part of the Ceylon Chamber of Commerce, play a vital role in the promotion of international business. The main activity of the Councils is expansion of business between Sri Lanka and the partner country. The Ceylon Chamber operates 20 Bilateral Business Councils with the prime objectives of promoting of trade and investment, joint ventures, services including promotion of tourism between Sri Lanka and the respective countries. The first Business Council, Sri Lanka – Japan Business Co-Operation Committee was formed in 1979. Since then, 19 more Business Councils were formed to fulfill the primary objectives.
The Sri Lanka – NORDIC Business Council was inaugurated in 2001 to promote trade, tourism investment and services between Sri Lanka and Denmark, Finland, Norway and Sweden and vice versa. The Sri Lanka – NORDIC Business Council of the Ceylon Chamber of Commerce continues to act as the vital link between Sri Lanka and the partner countries, to develop new initiatives and areas of cooperation in terms of trade, tourism and investment. The Business Council membership comprise a wide spectrum of companies engaged in infrastructure, logistics and services, financial services, tourism and leisure, import and export trading, manufacturing, ICT and telecommunication.
Seylan Bank records Rs. 1.5 Bn PAT for 1H 2022
Seylan Bank recorded a Profit after Tax of Rs. 1,504 Mn for the 6 months ended 30th June 2022 against Rs. 2,105 Mn reported in the corresponding period of 2021. This has been seen by financial analysts as commendable given the extremely challenging and adverse conditions the Bank operated in, with Sri Lanka facing its worst economic crisis since Independence, especially in Q2 this year.
Net Interest income increased from Rs. 10,971 Mn to Rs 16,851 Mn, a growth of 53.60% over the previous year for the 6 months ended 30th June 2022. The Bank’s net fee based income increased by 27.36% from Rs. 2,180 Mn to Rs. 2,776 Mn during 1H, mainly due to an increase in debit and credit card related income, commission income on e-banking, service charges on deposits and commission on remittances which were partly offset by decrease in guarantees related income and loans and advances related income. Other income captions comprising net gains from trading activities, net gains from de-recognition of financial assets, net gains on foreign exchange transactions and other operating income increased by 37.20 % a net gain from Rs. 1,526 Mn from the correspondent year to a net gain of Rs. 2,093 Mn during 1H 2022. The net increase is mainly due to increase in mark to market net gain on derivative financial instruments and impact from net revaluation losses on FCY assets and liabilities.
Total expenses recorded an increase of 7.43 % from Rs. 6,750 Mn in the 1H of the previous year to Rs. 7,251 Mn for the 6 months ended 30th June 2022. Personnel expenses increased by Rs. 287 Mn mainly due to an increase in the staff benefits based on the collective agreement. Other operating expenses and depreciation and amortisation expenses too increased by 7.35% due to increase in prices of purchases and services as a result of higher inflation and local currency depreciation. However, the Bank will continue to take relevant measures to curtail costs with various cost initiatives.
CSE turnover exceeds Rs. 6 billion as bullish trend accelerates
By Hiran H.Senewiratne
CSE activities were extremely bullish yesterday as market turnover exceeded Rs 6 billion after seven months and the All- Share Price Index surpassed 9000 points for the first time since March 31 this year, stock market analysts said.
All blue chip company shares appreciated by more than five per cent, driven mainly by Lanka IOC and Hayleys. The reason for the market being upbeat was the relative political stability which has come into being under President Ranil Wickremesinghe, who spearheads an effort to establish a national government with some other political parties in parliament, together with the gradual movement of the economy despite all odds, stock market analysts opined.
Observers are of the view that Sri Lanka stock market is still one of the most attractive emerging stock markets in the region. It is said that during 2011/12 the stock market was at the 7000 points level and after ten years, i.e. 2022, the stock market is at 9000 points level. Besides, Sri Lanka’s equity market is ranked as one of the top most of such markets.
Amid those developments both indices moved upwards. The All- Share Price Index moved up by 321 points or 3.69 per cent and closed at 9027.48 points and the S and P SL20 rose by 159.5 points. Turnover stood at Rs 6.3 billion with four crossings. Those crossings were reported in Melstacorp, which crossed 5.2 million shares to the tune of Rs 280 million, its shares traded at Rs 54, JKH 500,000 shares crossed to the tune of Rs 64 million, its shares traded at Rs 128, Kahawatte Plantations one million shares crossed to the tune of Rs 27 million and its shares fetched Rs 27 and Hayleys 200,000 shares crossed for Rs 22 million; its share price stood at Rs 110.
In the retail market, top seven companies that mainly contributed to the turnover were, Lanka IOC Rs 1.4 billion (8.7 million shares traded), Expolanka Holdings Rs 720 million (3.3 million shares traded), Browns Investments Rs 339 million (41.7 million shares traded), Hayleys Rs 326 million (2.8 million shares traded), JKH Rs 294 million (2.3 million shares traded), Melstacorp Rs 235 million (4.4 million shares traded) and Dipped Products Rs 199 million (4.3 million shares traded). During the day 209 million share volumes changed hands in 47000 share transactions.
Lanka IOC and Hayleys drove the market. Lanka IOC shares moved to Rs 27.75 or rose by 20 per cent. Its share price rose to Rs 172.50 from Rs 144.75 and Hayleys share price gained by 11 per cent or Rs 11.75. Its share price moved to Rs 119.75 from Rs 106.25.Yesterday, the Central Bank announced the US dollar buying rate as Rs 357.24 and the selling rate as Rs 368.56.
Sampath Bank remains vibrant, backed by strong capital and liquidity positions
Sampath Bank continued to maintain a solid capital base and stable liquidity profile in the first half of 2022 notwithstanding multiple economic challenges. The Bank remains vigilant in identifying the current economic issues and has continued to implement in a proactive manner the required countermeasures, clearly demonstrating its strength and stability.
In line with that objective and in order to improve the foreign currency liquidity position, the Bank continues to focus and promote inward remittances as well as to encourage the inflow of export proceeds. The Bank further reinforced its commitment to all its stakeholders by continuing to support all affected segments to sustain their respective businesses in order to ride out the current economic crisis.
Despite the prevailing economic turmoil, the Bank posted a commendable PAT of Rs 7.1 Bn and PBT of Rs 9 Bn for the period ended 30th June 2022, reflecting a minor increase of 0.3% and slight decrease of 5.5% respectively compared to the figures declared in 1H 2021. In the meantime, the Group declared a PAT of Rs 7.4 Bn and PBT of Rs 9.6 Bn, denoting a decline of 2% and 5.5% respectively over the first half of 2021.
Key financial highlights declared by Sampath Bank for 1H 2022:
Strong NIM of 4.85% on the back of rising AWPLR.
323% growth in exchange income stemming from the sharp depreciation of LKR against USD by 80% or by Rs 160.25.
Sizable 69.9% increase in net fee and commission income during the period, driven by cards and trade-related operations.
Higher impairment provisions on loans and investments to capture possible economic uncertainties.
A surcharge tax of Rs 2.67 Bn recognized against the opening retained earnings of the Bank.
Fund Based Income
Total interest income increased by 41.1 % year on year to Rs 59.2 Bn in the first half of 2022, compared to Rs 41.9 Bn in the same period of the previous year. This significant increase in interest income is due to the upward trend in interest rates in the first half of 2022. The AWPLR at the end of the reporting period reached 22.62%, which is 1,711 bps higher than the rate reported on 30th June 2021. Furthermore, the current AWPLR surpassed the end 2021 figure by 1,401 bps. At the same time, the interest rate on a one-year treasury bill climbed by 1,861 bps from the treasury bill rate reported at end of 30th June 2021 and stood at 23.84% at the end of 30th June 2022.
Interest expenses increased by 22.6% compared to the corresponding period of last year due to rising interest trend. The Bank’s total interest expense was Rs 27.8 Bn at the end of the current reporting period compared to Rs 22.7 Bn reported in 1H 2021. Prudent asset and liability management however ensured that net interest income grew by 63% in 1H 2022. This trend is reflected in the NIM growth of 124 bps reported for the period.
Non-Fund based income
The Bank recorded a significant increase of 69.9% in its net fee and commission income (NFCI) in 1H 2022 compared to the same period of the previous year. NFCI is made up of income from a variety of sources, including loans and advances, credit cards, trade, and electronic channels. In the period under review, significant growth was noted in card-related business volumes and as well as fee and commission income from trade-related activities.
During the first half of 2022, net other operating income increased to Rs 16 Bn, an unprecedented 378% increase compared to Rs 3.4 Bn recorded in the corresponding period of the previous year. This was mainly due to the 80% depreciation of LKR against US Dollar. Meanwhile, the Bank posted a net trading loss of Rs 2.5 Bn, compared to the gain of Rs 46 Mn reported during the corresponding period of the previous financial year. Total exchange income for the first six months of 2022 was Rs 13 Bn compared Rs 3 Bn registered in 1H 2021.
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