Ec september 2010

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Ec september 2010

  1. 1. Research & Development Unit ECONOMIC CAPSULE  September, 2010
  2. 2. <ul><li>S & P: Upgrades SL’s Long-term FC Sovereign Credit Rating to ‘B+’, Fitch : Upgrades SL’s Outlook to ‘Positive’, Moody’s: Assigns ‘B1’ Foreign Currency Issuer Rating to SL </li></ul><ul><li>Sri Lanka’s USD 1 Bn Sovereign Bond Issue Oversubscribed by 6 times in 14 Hour </li></ul><ul><li>UDA Debenture Issue Oversubscribed </li></ul><ul><li>Sri Lanka Economy Grows at 8.5% in Q2, 2010 </li></ul><ul><li>IMF Releases the Fifth Tranche of USD 212.5 mn Under the SBA Facility </li></ul><ul><li>Fiscal Performance – July, 2010 </li></ul><ul><li>Inflation Accelerates to 5.8 % in September </li></ul><ul><li>External Trade – June, 2010 </li></ul><ul><li>FDI Update </li></ul><ul><li>More Investments to Sri Lanka ? </li></ul><ul><li>CBSL Requests Banks to Reduce Interest Rates on Lending </li></ul><ul><li>CBSL Reduces the General Provision Requirement on Loans </li></ul><ul><li>CBSL Implements the Sri Lanka Deposit Insurance Scheme </li></ul><ul><li>Commercial Bank Teams up with United Motors </li></ul><ul><li>Commercial Bank Internet Payment Gateway Offers New Functionality </li></ul><ul><li>Share Market Performance </li></ul><ul><li>Branch Openings </li></ul><ul><li>Snippets </li></ul>Financial Sector News Economy & Business News C O N T E N T S ECONOMIC CAPSULE – SEPTEMBER, 2010
  3. 3. Back to Contents E C O N O M Y & B U S I N E S S N E W S   <ul><li>Standard & Poor's : Upgrades Sri Lanka’s Long-term Foreign Currency sovereign credit rating to ‘B+’ from ‘B’ </li></ul><ul><li>Fitch Ratings : Upgrades the Outlook to ‘Positive’ from ‘Stable’ </li></ul><ul><li>Moody’s : Assigns ‘B1’ Foreign Currency issuer Rating to Sri Lanka </li></ul><ul><li>  </li></ul><ul><li>Sri Lanka’s USD 1 Bn Sovereign Bond Issue Oversubscribed by 6 times in 14 Hour </li></ul><ul><li>UDA Debenture Issue Oversubscribed </li></ul><ul><li>Sri Lanka Economy Grows at 8.5% in Q2, 2010 </li></ul><ul><li>IMF Releases the Fifth Tranche of USD 212.5 mn Under the SBA Facility </li></ul><ul><li>Fiscal Performance – July, 2010 </li></ul><ul><li>FDI Update </li></ul><ul><li>Standard & Poor's : Upgrades Sri Lanka’s Long-term Foreign Currency sovereign credit rating to ‘B+’ from ‘B’ </li></ul><ul><li>Fitch Ratings : Upgrades the Outlook to ‘Positive’ from ‘Stable’ </li></ul><ul><li>Moody’s : Assigns ‘B1’ Foreign Currency issuer Rating to Sri Lanka </li></ul><ul><li>  </li></ul><ul><li>Sri Lanka’s USD 1 Bn Sovereign Bond Issue Oversubscribed by 6 times in 14 Hour </li></ul><ul><li>UDA Debenture Issue Oversubscribed </li></ul><ul><li>Sri Lanka Economy Grows at 8.5% in Q2, 2010 </li></ul><ul><li>IMF Releases the Fifth Tranche of USD 212.5 mn Under the SBA Facility </li></ul><ul><li>Fiscal Performance – July, 2010 </li></ul><ul><li>FDI Update </li></ul><ul><li>Inflation Accelerates to 5.8 % in September </li></ul><ul><li>External Trade – June, 2010 </li></ul>
  4. 4. <ul><li>S & P : Upgrades SL’s Long-term FC Sovereign Credit Rating to ‘B+’ </li></ul><ul><li>Fitch : Upgrades SL’s Outlook to ‘Positive’ </li></ul><ul><li>Moody’s : Assigns ‘B1’ Foreign Currency Issuer Rating to SL </li></ul>Back to Contents Research & Development Unit <ul><li>S&P, Fitch & Moody’s ratings are speculative/non investment grade ratings which are on par. </li></ul><ul><li>These upgrades could be viewed as an outcome of the strategy towards upgrading Sri Lanka’s sovereign rating over the medium term. </li></ul><ul><li>For this purpose the CBSL recently appointed a Sovereign Rating Committee (SRC), comprising senior officials of the Ministry of Finance and Planning (MOFP), CBSL, and some private sector leaders. The SRC has been assigned to make regular reviews on the developments of the economy and have negotiations with the rating agencies through Rating Advisors towards upgrading the country’s sovereign rating. </li></ul>Rating Agency Date Rating Outlook Standard & Poor’s 14/9/10 B + Stable Fitch Ratings 21/9/10 B + Positive Moody’s 22/9/10 B 1 Stable CONT…
  5. 5. Back to Contents Ratings Reasons for the upgrade Negative facts that would affect the rating <ul><li>Raised long-term foreign currency sovereign credit rating to 'B+' from 'B’. Long-term local currency rating to 'BB-' from 'B+’ </li></ul><ul><li>Affirmed the 'B' short-term rating </li></ul><ul><li>Outlook - Stable </li></ul><ul><li>Continued strengthening of Sri Lanka's balance-of-payments position, and reflects S&P’s expectation that the government's planned revenue reforms will improve public finances, such that fiscal deficits and public debt will decline again in a sustainable manner. </li></ul><ul><li>These positive factors are balanced against ongoing risk posed by excessive public and external leverage, and the risk of a rebound in inflation. </li></ul><ul><li>Substantial deviation from the IMF program, or if </li></ul><ul><li>Expectations on recovery in Sri Lanka's growth prospects and revenue improvements disappoint. </li></ul><ul><li>Affirmed long-term foreign and local currency issuer Default Ratings (IDR) at 'B+‘. </li></ul><ul><li>Affirmed short-term IDR at 'B' and Country Ceiling at 'B+'. </li></ul><ul><li>Revised the Outlook to Positive from Stable. </li></ul><ul><li>Sri Lanka's economy benefitting from the end of a prolonged civil war in 2009, from a more disciplined policy framework put in place under the Stand-By Arrangement (SBA) with the IMF, and from an improved external liquidity position bolstered by the IMF programme. </li></ul><ul><li>Fitch would negatively view an erosion of macroeconomic policy discipline as an acceleration of inflation would undermine Sri Lanka's export competitiveness and result in a sharp rise in domestic borrowing costs for the fiscal authorities and raise overall interest payments. </li></ul><ul><li>Interest payments stood at 43% of government revenues in 2009, which is well above the 'B' rating peer group median of 5.7%. </li></ul><ul><li>Assigns 'B1' sovereign rating for Sri Lanka </li></ul><ul><li>‘ Stable' outlook on the end of a war, low inflation and efforts to contain the budget deficit, despite having high levels of debt.  </li></ul><ul><li>Sri Lanka's small size, partial dollarization, and relatively modest gross domestic savings. </li></ul><ul><li>The outlook also reflects considerable scope for fiscal reforms and high likelihood of foreign investment inflows against lingering risks posed by a large government debt overhang and remaining, though, diminishing, external financing risks. </li></ul><ul><li>Ratings could be downgraded if there is no progress in improving budgets, there is loss of inflation control and foreign currency liquidity worsens, or recent political instability worsens local or foreign investor confidence. </li></ul>
  6. 6. Sri Lanka’s USD 1 Bn Sovereign Bond Issue Oversubscribed by 6 times in 14 Hour Back to Contents Research & Development Unit USA Europe Asia Geographic Distribution Investor Type Pension Funds, Insurance companies & banks. Fund and Asset Managers <ul><li>Sri Lanka’s third global debt issue was oversubscribed by more than 6 times receiving USD 6.3 bn worth of orders. </li></ul><ul><li>In 2009 Sri Lanka raised USD 500 mn for 5 years at 7.4 % and in 2007 the country's maiden offering, was also USD 500 mn for 5 years at 8.25 %. </li></ul><ul><li>Amount </li></ul>USD 1 Bn. <ul><li>Period </li></ul>10 years <ul><li>Interest Rate </li></ul>6.25% <ul><li>Distribution </li></ul><ul><li>Lead Managers </li></ul><ul><li>Bank of America </li></ul><ul><li>HSBC </li></ul><ul><li>Royal Bank of Scotland </li></ul>Year Amount (USD mn) Period Interest Rate Oversubscribed by Distribution Rating 2007 500 5 years 8.25% More than 03 times USA - 40% Europe - 30% Asia - 30% S& P: B + Fitch: BB – 2009 500 5 years 7.40% More than 13 times USA - 45% Europe - 31% Asia - 24% S& P : B Fitch : B +
  7. 7. UDA Debenture Issue Oversubscribed Back to Contents Research & Development Unit <ul><li>The first ever 5-year bond, issued by Sri Lanka's Urban Development Authority (UDA), to raise Rs. 10 bn rupees has been successfully oversubscribed. </li></ul><ul><li>According to the managers to the issue, Bank of Ceylon, the issue had drawn Rs. 8.2 bn with seven large investors applying for debentures worth of 6.3 bn and the balance subscribed by 59 investors. </li></ul><ul><li>A five bn rupee initial tranche of the bond which opened on September 23, 2010 was oversubscribed within days, prompting the UDA to go for another five billion rupees as previously announced. </li></ul><ul><li>The UDA issued 50 mn debentures at 100 rupees each to raise cash to resettle squatters occupying prime property in Colombo city owned by the government and to free land for private sector commercial development. </li></ul>
  8. 8. Sri Lanka Economy Grows at 8.5% in Q2, 2010 Back to Contents Research & Development Unit Sri Lanka's economy is estimated to have grown by 8.5 % during Q2, 2010 (YoY), which is the highest quarterly growth rate recorded since 2002. According to Fitch Ratings the growth rate of Sri Lanka is expected to record 7.2% in 2010. Robust growth across all three sectors contributed to the impressive Q2-2010 performance. Research & Development Unit Sector % Share YoY Growth (%) Agriculture 11.9 5.1 Industry 28.1 9.2 Services 60.0 8.8
  9. 9. IMF Releases the Fifth Tranche of USD 212.5 mn Under the SBA Facility Back to Contents Research & Development Unit <ul><li>Following the successful completion of the fourth review of the Sri Lanka Stand-by Arrangement (SBA) by the International Monetary Fund (IMF), the fifth tranche to the value of SDR 137.8 mn (approximately USD 212.5 mn) had been disbursed by the IMF on 24 September 2010. </li></ul><ul><li>With this disbursement, a total of USD 1,275 mn has been received thus far by Sri Lanka in relation to the SBA facility that was approved in July 2009. </li></ul>
  10. 10. Fiscal Performance – July, 2010 Back to Contents Research & Development Unit Latest data released by the Central Bank showed the budget deficit for the first seven months of 2010 had contracted by 8.22 % to Rs. 264.6 bn from Rs. 288.3 bn recorded during the corresponding period of 2009.  Category     Jan-July 2009 (Rs. Bn) Jan-July 2010 (Rs. Bn) Change (%) Total Revenue & Grants 359.5 432.4 20.28 Revenue 344.4 425.0 23.40 Tax 314.8 372.4 18.30 Non tax 29.6 52.6 77.70 Grants 15.1 7.4 (50.99) Expenditure & Lending Minus Repayments 647.8 697.0 75.95 Current expenditure 505.1 550.4 8.97 Capital & Lending Minus Repayments 142.7 146.6 2.73 Budget Deficit 288.3 264.6 (8.22) Estimated GDP 4,825.0 5,445 Deficit as a %of GDP 5.97% 4.85%
  11. 11. Inflation Accelerates to 5.8 % in September Back to Contents Research & Development Unit <ul><li>Inflation, as measured by the Colombo Consumers’ Price Index (CCPI), increased to 5.8 % in September 2010 , on a point-to-point basis, from 5.0 % in August, reflecting mainly the lower base in the corresponding month of 2009. Meanwhile, the annual average inflation increased to 5.0 % in September from 4.5 % in the previous month. </li></ul><ul><li>The fastest rise was seen in food and non-alcoholic beverages which rose 1.7 % in the 30 days of September and was up 7.5 % from a year earlier. </li></ul><ul><li>Meanwhile, the core inflation, which measures the price movement of non-food and non-energy items of the CCPI basket, stabilized at 6.3 % on an annual average basis, for the fourth successive month, while increasing marginally on a point-to-point basis, to 5.7 % in September 2010 from 5.5 % in the previous month. </li></ul>External Trade – June, 2010 Category     June 2009 US$ mn June 2010 US$ mn Change June (%) Jan - Jun 2009 US$ mn Jan - Jun 2010 US$ mn Change Jan - Jun (%) Exports 565.21 697.48 23.4 3,188.66 3,624.20 13.7 Imports 845.10 1,113.61 31.8 4,551.59 6,467.76 42.1 Balance of Trade -279.89 -416.13 48.7 -1,362.93 -2,843.56 108.6 Workers’ Remittances 280.49 321.79 14.73 1,602.91 1,820.01 13.54
  12. 12. FDI Update Back to Contents Research & Development Unit While global FDI flows declined by 14% in 2008 and dropped by an even larger 29% in 2009 (according to UNCTAD figures), FDI inflows into Sri Lanka rose to a record USD 0.89 bn in 2008, then slowed in 2009 to USD 0.6 bn. While flows to Sri Lanka were not immune to the global financial crisis, the reasons for the decline in FDI in 2009 were two-fold;   <ul><li>The BOI has estimated 2010 FDI inflows at USD 0.6bn </li></ul><ul><li>Equal to what the country received during the war-ravaged year of 2009 </li></ul><ul><li>Inflows for the first 6M of 2010 were only USD 0.2 bn (USD 0.25 in 2009), </li></ul><ul><li>although USD 2bn worth of FDI projects had been approved by the BOI up to end-June. </li></ul><ul><li>With the improved economic environment in 2010, these FDI inflows should have been much stronger. </li></ul><ul><li>A non-conducive business environment due to both domestic factors and the global crisis, and </li></ul><ul><li>The high fiscal deficit, which triggered investor concerns about the structural soundness of the economy. </li></ul><ul><li>  </li></ul>CONT…
  13. 13. FDI Update (cont…) Back to Contents Research & Development Unit <ul><li>According to provisional figures for H1-2010, the bulk of foreign investment (almost 59.7%, or USD 124.22mn) was channeled into the infrastructure sector, </li></ul><ul><li>Manufacturing sector attracted 26.7% (USD 55.6mn) of flows, </li></ul><ul><li>Services sector attracted 12.5%(USD 25.91mn), </li></ul><ul><li>Agriculture sector received just USD 2.24mn, or 1.1% of flows. </li></ul><ul><li>  </li></ul>Infrastructure Manufacturing Services Agriculture
  14. 14. More Investments to Sri Lanka ? Back to Contents A group of foreign representatives from Avendus Capital, Edelweiss Capital, General Atlantic, ISS shipping, Morgan Stanley Infrastructure, RBC Capital Markets, Thani Group and WL Ross were in Sri Lanka recently on a three-day engagement with both the Government and private sector to explore new investment opportunities. Between these groups, they command around US$ 80bn. According to the CEO of Thani Group, Mr. Rishard Camball (Thani Group has investments in oil, mining, power & real estate sectors) the government should implement the following steps with a view to maximizing significant post war benefits:   <ul><li>Establish a one-stop-shop for investors. </li></ul><ul><ul><li>The government needs to take all its different boards and authorities that concern investment and put them together so that investors could cut through red tape and bureaucracy effortlessly. </li></ul></ul><ul><li>Sri Lanka needs to look around the world and find what suits them and implement those pluses ideally through a central authority. </li></ul><ul><ul><li>The economic development authority in Malaysia can be cited as an example. Perhaps such a setup can be established under the aegis of the Economic Development Ministry. </li></ul></ul><ul><li>Tax Concession </li></ul><ul><ul><li>Removing tax concessions would be a deterrent to luring more foreign investments, as Sri Lanka is still early in the game of attracting FDI. </li></ul></ul><ul><ul><li>It is very important for the government to have a few large investors come in and get those projects off the ground first, because that gives assurance to other investors that they will also be able to duplicate this success. </li></ul></ul><ul><li>  </li></ul>Research & Development Unit
  15. 15. Back to Contents F I N A N C I A L S E C T O R N E W S   <ul><li>CBSL Requests Banks to Reduce Interest Rates on Lending </li></ul><ul><li>CBSL Requests Banks to Reduce Interest Rates on Lending </li></ul><ul><li>CBSL Implements the Sri Lanka Deposit Insurance Scheme </li></ul><ul><li>Commercial Bank Teams up with United Motors </li></ul><ul><li>Share Market Performance </li></ul><ul><li>Branch Openings </li></ul><ul><li>CBSL Requests Banks to Reduce Interest Rates on Lending </li></ul><ul><li>CBSL Requests Banks to Reduce Interest Rates on Lending </li></ul><ul><li>CBSL Implements the Sri Lanka Deposit Insurance Scheme </li></ul><ul><li>Commercial Bank Teams up with United Motors </li></ul><ul><li>Share Market Performance </li></ul><ul><li>Branch Openings </li></ul>
  16. 16. CBSL Requests Banks to Reduce Interest Rates on Lending Back to Contents Research & Development Unit Central Bank has requested all banks to take appropriate measures to reduce interest rates to at least the following levels by end of October 2010: Type Requested Rate by CBSL Market Rates as at Aug-10 Prevailing CBC Rate Housing Loans 14% p.a. 11-16.5% 12.5-13.5% Credit Card Advances 24% p.a. 30-36% 35% Other Loans and Advances Downwards by around a further 1-2 % p.a.
  17. 17. CBSL Reduces the General Provision Requirement on Loans Back to Contents Research & Development Unit <ul><li>The Central Bank of Sri Lanka has decided to reduce the general provision on performing loans and advances and credit facilities in the special mention category from the current 1% to 0.5% by 31 December 2011. </li></ul><ul><li>Accordingly, banks would now be able to reduce the existing general provision requirement of 1% to 0.5%, at a rate of 0.1% per quarter, over each of the five quarters commencing with the quarter ending 31 December 2010. </li></ul>
  18. 18. CBSL Implements the Sri Lanka Deposit Insurance Scheme Back to Contents Research & Development Unit <ul><li>CBSL implemented a mandatory deposit insurance scheme under the provisions of the Monetary Law Act with effect from 1st October 2010. It will be implemented as the Sri Lanka Deposit Insurance Scheme (SLDIS). </li></ul><ul><li>The initial capital of the Scheme of Rs. 1.1 bn (approximately) will be provided by the Central Bank. </li></ul><ul><li>The members of the Scheme will comprise all licensed banks and registered finance companies. </li></ul><ul><li>All deposits excluding deposits of member banks and finance companies, Government of Sri Lanka, shareholders, directors, key management personnel, other related parties, deposits held as collateral against any accommodation granted and deposits falling within the meaning of abandoned property in terms of the Banking Act and dormant accounts in terms of the Finance Companies Act, will be considered as eligible deposits under the scheme. </li></ul><ul><li>In the event the licence or registration of a member institution is suspended or cancelled by the Monetary Board, depositors will be compensated up to a maximum of Rs. 200,000 per depositor. </li></ul><ul><li>While member banks and finance companies will participate in this scheme on a mandatory basis from 1st October 2010, depositors will be entitled to benefits after 1st January 2012. </li></ul><ul><li>The premium to be levied on eligible deposits will range between 0.10% and 0.15% per annum and will be required to be paid by member institutions on a monthly/quarterly basis. Such premia will be credited to a Deposit Insurance Fund which will be operated and managed by the Monetary Board of the Central Bank. However, such Deposit Insurance Fund will be distinctly separate from the Central Bank, and its liability will be limited to the extent of the Fund balance. </li></ul>
  19. 19. Commercial Bank Teams up with United Motors Back to Contents Research & Development Unit Commercial Bank partnered with United Motors to offer attractive leasing options for the entire range of Mitsubishi vehicles. <ul><li>Among the vehicles offered through this special leasing promo are the Mitsubishi Montero, the latest Outlander, Lancer, the L 200 Sportero, L200 4 WD and 2WD Double Cab, and the Mitsubishi L 300 Van. Among the commercial vehicles offered are the Mitsubishi L200 single cab and the range of Mitsubishi Fuso Canter trucks. </li></ul><ul><li>This special joint promo between the Bank and United Motors offers customers special discounted prices on vehicles, attractive leasing rentals and special insurance covers with low premiums through Commercial Insurance Brokers, which is an associate of the Bank. </li></ul>
  20. 20. Commercial Bank Internet Payment Gateway Offers New Functionality Back to Contents Research & Development Unit <ul><li>Commercial Bank the only Sri Lankan bank operating an Internet Payment Gateway hosted by MiGS (MasterCard Internet Gateway System), now offers many features that facilitate SME type transactions, without the complexity and costs of existing e-commerce structures through its ComBank Payment Gateway (CPG) . </li></ul><ul><li>Sophisticated anti-fraud features make it possible for customers to view products, place their orders, generate invoices and pay online in a secure environment that meets the highest global standards, with both ‘MasterCard Secure Code’ and ‘Verified by Visa’ authentication. </li></ul><ul><li>Transactions are Payment Card Industry – Data Security Standard (PCI-DSS) compliant, thereby providing maximum protection of card holder information. Processing of refunds is also possible while maintaining the integrity of the system and protecting sensitive information. </li></ul><ul><li>The ComBank Payment Gateway supports multiple channels and currencies and offers dynamic conversion of currency, allowing a customer to pay in a currency of choice. In addition to providing convenience this also reduces transaction costs associated with currency conversion and processing charges and makes the payment gateway a desirable channel for discerning organizations and their customers. </li></ul>
  21. 21. Share Market Performance Back to Contents Research & Development Unit Share Prices of CBC, HNB, Seylan & Sampath
  22. 22. Galewela Branch Openings Back to Contents Research & Development Unit 193 Chankanai 194 Pottuvil 195 Ninthavur 196 Moratumulla 155 Puttalam 156 Sooriyawewa 157 Middeniya 158 Galle (2 nd ) 159 Embilipitiya 38 Moratuwa 100 Atchuvely Kadugannawa CBC Launches Information Centre <ul><li>Contact No </li></ul><ul><li>011-2353333 </li></ul><ul><li>011-7353333 </li></ul><ul><li>Service will be available from 8.30 am to 5.00 pm on Working Days. </li></ul>Mawanella 160
  23. 23. SNIPPETS - SNIPPETS - SNIPPETS - SNIPPETS - SNIPPETS - SNIPPETS - SNIPPETS - SNIPPETS - - - - - - Back to Contents SNIPPETS - SNIPPETS - SNIPPETS - SNIPPETS - SNIPPETS - SNIPPETS - SNIPPETS - SNIPPETS - - - - - - - - - - - - <ul><li>New Interbank Payment System goes Live </li></ul><ul><li>In line with the Central Bank's objective of moving towards a much more efficient electronic fund transfer system from paper-based instruments, LankaClear has upgraded the Sri Lanka Interbank Payment System (SLIPS) to facilitate customers to receive funds on the same day through SLIPS. </li></ul><ul><li>In addition to the same day clearing of transactions, the new system facilitates online submission of the transaction files by the participating banks with a high level of security through Digital Signing of the transaction messages. The system also has the capability of handling up to 600,000 transactions during a session. </li></ul><ul><li>  </li></ul><ul><li>Sri Lanka Tourist Arrivals up 35% in August </li></ul><ul><li>Tourist arrivals to Sri Lanka was up 35.7 % to 55,898 in August, 2010 led by Indians and Britons, with visitors during the first eight months up 46.7 % from a year earlier. </li></ul><ul><li>  </li></ul><ul><li>Taj Hotels to Invest more in SL </li></ul><ul><li>The Indian Hotels Company the parent company of Taj Lanka Hotels, is in talks to invest up to USD 35 mn to upgrade its hotel in Colombo as tourist arrivals to the island surge. </li></ul><ul><li>Asia to Grow at 8.2% in 2010 - ADB </li></ul><ul><li>Developing Asia is rebounding solidly from the global economic downturn. Growth is expected to reach 8.2% in 2010, underpinned by a rapid turnaround in exports, healthy private demand, and the lingering effects of expansionary fiscal and monetary policy measures. </li></ul><ul><li>In contrast, the major industrial economiest he United States, Eurozone, and Japan seem to be losing steam and are forecast to grow by only 2.2% this year. </li></ul><ul><li>Weakness in US housing markets, the specter of eurozone sovereign debt default, and risks of commodity price spikes are clouding global prospects. A second contraction in the major industrial economies is unlikely, but cannot be ruled out. </li></ul><ul><li>ADB also upgraded Sri Lanka’s 2010 GDP growth forecast to 6.5%, from 6.0% given earlier. Political stability, improved credit ratings, private sector revival, and government infrastructure investment underpin a strengthened economy. GDP is forecast at 7.0% in 2011. </li></ul><ul><li>Aitken Spence in Resort Deal with Six Senses </li></ul><ul><li>Six Senses Resorts & Spas is to set up their first property in Sri Lanka in a joint venture with Aitken Spence conglomerate. </li></ul><ul><li>The project, worth USD 35-40 mn, will comprise a resort and spa and beach front residential villas on a 10.5-acre plot in Ahungalla, close at an existing Aitken Spence resort, and on a 27-acre island nearby. </li></ul><ul><li>The new resort will open in 2012 with Six Senses expecting the average revenue per room to be in the range of 400-450 US dollars. </li></ul><ul><li>The project will comprise a total of 40 one-bedroom villa suites and 14 two-bedroom beach front residential villas in Ahungalla as well as 15 island villas. </li></ul><ul><li>Six Senses currently operates thirteen high-end resorts branded as Soneva, Six Senses and Evason in the Maldives, Thailand, Vietnam, Oman and Jordan. There are also several new developments underway in locations such as Morocco, Turks and Caicos and China. </li></ul><ul><li>The Six Senses Spa division has twenty-seven company-operated spas, with new spa developments underway in several locations, including India, Morocco and Oman. </li></ul>
  24. 24. The information contained in this presentation has been drawn from sources that we believe to be reliable. However, while we have taken reasonable care to maintain accuracy/completeness of the information, it should be noted that Commercial Bank of Ceylon PLC and/or its employees should not be held responsible, for providing the information or for losses or damages, financial or otherwise, suffered in consequence of using such information for whatever purpose. The views expressed in Economic Capsule are not necessarily those of the Management of Commercial Bank of Ceylon PLC “ Keep true, never be ashamed of doing right; decide on what you think is right and stick to it. ” TS Eliot  

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