Ec september 2010

Research & Development Unit ECONOMIC CAPSULE  September, 2010

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Financial Sector News Economy & Business News C O N T E N T S ECONOMIC CAPSULE – SEPTEMBER, 2010

Back to Contents E C O N O M Y & B U S I N E S S N E W S   ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

[object Object],[object Object],[object Object],Back to Contents Research & Development Unit ,[object Object],[object Object],[object Object],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…

Back to Contents Ratings Reasons for the upgrade Negative facts that would affect the rating ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

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 ,[object Object],[object Object],[object Object],USD 1 Bn. ,[object Object],10 years ,[object Object],6.25% ,[object Object],[object Object],[object Object],[object Object],[object Object],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 +

UDA Debenture Issue Oversubscribed Back to Contents Research & Development Unit ,[object Object],[object Object],[object Object],[object Object]

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

IMF Releases the Fifth Tranche of USD 212.5 mn Under the SBA Facility Back to Contents Research & Development Unit ,[object Object],[object Object]

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%

Inflation Accelerates to 5.8 % in September Back to Contents Research & Development Unit ,[object Object],[object Object],[object Object],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

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; ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],CONT…

FDI Update (cont…) Back to Contents Research & Development Unit ,[object Object],[object Object],[object Object],[object Object],[object Object],Infrastructure Manufacturing Services Agriculture

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: ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Research & Development Unit

Back to Contents F I N A N C I A L S E C T O R N E W S   ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

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.

CBSL Reduces the General Provision Requirement on Loans Back to Contents Research & Development Unit ,[object Object],[object Object]

CBSL Implements the Sri Lanka Deposit Insurance Scheme Back to Contents Research & Development Unit ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

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. ,[object Object],[object Object]

Commercial Bank Internet Payment Gateway Offers New Functionality Back to Contents Research & Development Unit ,[object Object],[object Object],[object Object],[object Object]

Share Market Performance Back to Contents Research & Development Unit Share Prices of CBC, HNB, Seylan & Sampath

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 ,[object Object],[object Object],[object Object],[object Object],Mawanella 160

SNIPPETS - SNIPPETS - SNIPPETS - SNIPPETS - SNIPPETS - SNIPPETS - SNIPPETS - SNIPPETS - - - - - - Back to Contents SNIPPETS - SNIPPETS - SNIPPETS - SNIPPETS - SNIPPETS - SNIPPETS - SNIPPETS - SNIPPETS - - - - - - - - - - - - ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

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

Ec september 2010

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Ec september 2010