SEC to educate teachers on capital markets

The subject of capital markets which has been included in the 'A' level syllabus is being introduced 'O' Level syllabus with a view to creating a more literate society with heightened capital market awareness in the long term. The 'O' Level exam in 2001 will include the subject of capital markets.

A three day residential program for teachers was held at the Maharagama Teachers Training Institute last week. Teachers were shown the Colombo Stock Exchange and other practical aspects of capital markets and are expected to educate their peers when they return to schools located islandwide.

Money Market Update 

The inter-bank call money market and the overnight repo market

We estimate the liquidity shortfall to be in the region of Rs.10-12Bn. The improved cash in circulation and the dollar purchases by the market participants from the Central Bank, further squeezed the liquidity in the market. 

Meanwhile, the enhanced government expenditure is likely to keep the liquidity available in the system constricted. 

Given the provoked liquidity position in the market, the inter-bank call money rate was mostly held up between 17% and 16%, probably the highest seen in the recent history. 

The pressure on the call money rate was stretched to the term money rates and the three months money was quoted at 17%~17.5%. The weekly call money average shot up to 16.58%, marginally higher than the previous week. 

The market repo rate was held by the Central Bank's repo rate and was in the region of 15.75%~16%. 

Central Bank open market operations

It was a yet another intense week for the Central Bank's reverse repo window. The Central Bank did not offer any term reverse repos.

Hence, the liquidity shortfall was continued to renew on a daily basis.

Therefore, the reverse repo window had to release Rs. 56.96Bn averaging Rs. 11.96Bn a day. No significant amount was recorded at the repo window. 

Treasury bill auction

The auction was oversubscribed by 186%. Nevertheless, the Central Bank accepted less in 91 days & 364 days categories and accepted more in the 182 days category.

Most probably with the intention of maintaining the bill yields at a manageable level, Rs. 963Mn worth of bills were purchased by the Central Bank. 

However, the liquidity position will have no significant impact, as there were Rs. 1200Mn worth of other maturities, which were most likely be the Central Bank's holdings.

In spite of the Central Bank intervention the bill yields continued to surge. The highest gain was witnessed in the 91 days category. 

The gap between yields of 91 days and 364 days was reduced further to close at 46 basis points. 

Treasury bond auction

They accepted only Rs. 2011Mn and Rs.1996Mn from the 2-years and 3-years respectively. 

The rising momentum of the treasury bond yields prevailed. The spread between 2-year's and 3-year's yield is anomalous and we expect it to be corrected in the forthcoming auctions. 

The secondary market activities remained lethargic .

Foreign exchange - dollar spot movement

As the regulator clearly extinguished the idea of a further devaluation of rupee in the early parts of the week, the rupee strengthened slightly. 

Further, sustained higher inter-bank call money rate, made the strategy of holding on to dollars costly. In the early parts of the week the inter-bank spot market was very quiet as the spot was quoted above Central Bank selling rate. 

The spot that started at Rs. 79.60~Rs.79.80 closed at Rs. 79.25~Rs. 79.28.

The weekly spot average plummeted to Rs. 79.51, as compared with the Rs. 79.72 of the previous week. Three months forward was quoted at Rs.81.20 to Rs. 81.30, while six months was at Rs. 82.93 to Rs. 83.10. 
 
 

	91 Days	182 Days	364 Days
Last Week	14.92	15.58	15.82
This Week	15.50	15.74	15.96
Change	0.58%	0.16%	0.14%

 

Maturity	15-Oct-02	15-Oct-03
Coupon	10.75%	11.00%
Amount offered Rs.Mn	2500	2500
Amount Accepted Rs.Mn	2500	2500
Weighted Average	16.40 %	16.44%
Change	0.69%	0.44%

UK laws may assist partnerships here

This follows the granting of Royal Assent to the Limited Liability Partnership Act. The Limited Liability option was mainly granted due to pressure from large accounting firms who were becoming affected by large professional liability claims. Under the new Act partners will cease to be jointly and severally liable for professional liability claims. The course of action will lie with the firm as an legal entity.

The Limited Liability option will be available to other businesses as well. It is reported that up to 90, 000 partnerships in UK will be able to take advantage from the new form of incorporation. However they will be required to register with the Registrar of Companies and file annual returns.

The Sri Lankan Accounting community holds the view that there is no necessity for similar legislation in Sri Lanka. Past President Sri Lanka Institute of Chartered Accountants, Nivard Cabraal said, 

"This legislation in UK was mainly caused by the large liability claims brought against accounting firms. Sometimes even after the partners were dead their estates were litigated. Certain clients misused the Unlimited Liability doctrine in partnerships, as a result many accountants were reluctant to join the industry. In Sri Lanka we still do not have a litigant society. Therefore such legislation is not necessary at the moment"

Tea update 

Low growns achieve record prices

Though we might not see a Tea Auction Index the auction itself continues to perform. The low grown category in particular is enjoying good demand and as a result is achieving record prices. The previous week's auction saw another record being broken as the low growns average, once again rewrote the record books and set an all time, any elevation high of Rs. 161.05. 

Brokers expect the rally to continue into the following weeks and perhaps till the end of the year. At last week's auction too, low grown teas met with good demand and the chances are that we might see a new record. Meanwhile, most other categories of tea experienced volatile conditions and saw a few grades shed a few rupees in the process. 

On creating digital dividends 

While the U.S. and European economies continue to ride the wave of the information revolution, according to the World Resources Institute, about 4 billion people throughout the world have barely been touched by it. 

WRI research has discovered there are more Internet accounts in London than on the entire continent of Africa, and 80 percent of the world's population is being left out of the global communication systems that are reshaping the world. 

About 300 selected world leaders came to Seattle last week for three days of brainstorming on expanding the reach of the new technologies and creating new patterns of development. 

"Our purpose, simply stated, is to find ways to turn the 'digital divide' into opportunities for expanded applications of digital technologies in ways that have broad social and environmental benefits," said William D. Ruckelshaus, the chairman of WRI, a Washington think tank that is sponsoring the invitation-only meeting. 

"The idea is to get the business community excited about this opportunity, both to do good and, at the same time, for them to do well." 

Tech and political luminaries slated to speak include Internet pioneer Vinton G. Cerf; Microsoft (MSFT ) chief Bill Gates; Amazon.com (AMZN) CEO Jeff Bezos; U.S. Secretary of Commerce Norm Mineta; Intel (INTC) education VP Carlene Moore Ellis; Mark Malloch Brown, administrator of the United Nations Development Programme; Jos Maria Figueres, former president of Costa Rica; and N. Chandrababu Naidu, chief minister of Andhra Pradesh State, India. 

Ruckelshaus pointed out that while most of the world's multinational business is focused on the most affluent 100 million people, who earn an average of $20,000 a year or more, there are approximately 1.5 billion whose income is between $1,500 and $20,000 annually, and another 4 billion who make $5 a day or less. 

Those bottom tiers have "largely been ignored as a marketplace by business," Ruckelshaus said. "One of the themes of this conference is to point out that that is a potential marketplace." 

He said the challenge is to develop new approaches to generating wealth among those people, and at the same time to see them as an opportunity for businesses — opportunities he refers to as "digital dividends." 

Ruckelshaus was part of a U.N. commission in the 1980s that called for "new patterns of development" for the Third World, which could lift people's living standards while avoiding the social and environmental disruptions of the Industrial Age. 

Ruckelshaus said that at the time, the commission did not have a model for such development, but he now believes the information revolution holds the key. 

At the same time, he said he sees the world at a crossroads, with the fate of free-market institutions hanging in the balance. 

"It's sort of a chance for these institutions to demonstrate that they're capable of meeting the needs of those who struggle below our own poverty line," Ruckelshaus said. 

"My own belief is, unless those institutions are able to show that it's possible to close this gap between those who participate in the fruits of development and those who don't, free institutions will be discarded and no longer embraced." 

Course on infrastructure regulation

The course will provide opportunities for hands on application of what has been learnt through a worked price control case study. This will include price regulation, asset valuation, lost of capital, the incorporation of methods of efficiency and the incentive properties of different technologies of price regulation. There will also be opportunities to interact within regulators, government officials and executives of regulated companies from around the region who will participate in the program.

The course will cover themes such as reforming the infrastructure sector and introducing competitors, techniques of price regulation, financial aspects of regulation, non price aspects of infrastructure regulation, and design and management of regulatory agencies and process.

The faculty will include ex regulators and professionals currently in the field. Registration for the course is currently being accepted.

SSI now in Lanka

SSI Limited is the leader in providing training in high-end Software and Emerging Technologies in India. 

Formed in 1991 by four young entrepreneurs, in their house in Chennai, the company has had an average annual growth rate of over 93% in turnover and profits for the last three years.

Today SSI is rated as a top technology growth company in India and is among the 200 most valuable companies on the Bombay Stock Exchange. 

The company is India's leading software education institution for high-end software education and offers specialized courses in emerging technologies. 

SSI is today the leading education company for Java training in India. It was also one of the first to launch a course in e-commerce in India. 

SSI has developed its own content materials for courses in Java, e-commerce, Oracle, and the Microsoft Visual Studio range.

The SSI e-commerce curriculum incorporates the latest technology in this area, such as Biz Talk and Site Server, is certified by Microsoft Corp., USA. 

The two major assets SSI Limited has are its Content Development Group (CDG) and the School of Technology and Management (STM). 

The Content Development Group is an ISO 9001 certified division which employs over 650 software professionals for the purpose of pure research and development of course content in all emerging technology. 

The Group is also accredited as an Independent Courseware Vendor by Microsoft Corp. 

The strength of the CDG allows SSI Limited to incorporate all new technology developments into its courses at the earliest and hence guarantee against Technology Obsolesence. 

The SSI School of Technology and Management, located in Chennai, on the other hand, provided constant re-training and skills upgrading to faculty, management and technical support staff through its "Continuous Training Methodology". Under this system the faculty and management are put through an advance update programme every three months, ensuring they are familiar with the most recent developments in Software Technology. 

Today SSI has emerged as a trendsetter in the forefront of software education through its Computer Based Training (CBT) division with its focus on high-end education content. 

The company also plans to set up CBT Kiosks and a Virtual University with facilities for Cyber Learning. 

According to Mr. K. Suresh, SSI Education will be a percentage player in the world market for IT education in the next four years. 

Global Software Labs build software for Microsoft Corp

GSL, a company specializing in e-commerce, internet applications and Windows based desktop applications was set up sixteen months ago with an initial investment of approximately US$1 million. 

The company builds advanced internet and Windows desktop applications primarily for US clients. 

Chairman of the board of directors of GSL, Dirk Flamer-Caldera said in a news release that this major breakthrough in clinching a deal with Microsoft threw open a host of prospective new opportunities to provide software development services to Microsoft." 

The future scope for doing more work with Microsoft Corporation is vast. We think that the deal with Microsoft Corporation is a landmark for Sri Lanka's fledging software and information Technology industry. 

In Sri Lanka, GSL endeavours to hire the cream amongst experienced engineers and new graduates. 

GSL undertakes projects requiring significant technical design and implementation skills in order to design, build and deploy complex state-of-the-art applications. GSL's investors have extensive connections with the finance and technology sectors in Silicon valley and manage a technology-related set of investments exceeding US$ 10 billion. 

The premier reputation of the US investors and their controlling stake in many technology companies gives Global Software Labs unprecedented access to top tier companies in the United States. 

New website for Lankan exporters 

Full information is provided for every importer-business name, business address, telephone number and fax number together with type of products imported, type of business, size of business and buyer's name and job title. For importers that have a website and email address, these are also given. 

The website is published by MetroMark International Limited, a British company based in Northern England, MetroMark has a comprehensive database with information on every importer in the United Kingdom. The company has been providing marketing information to exporters since 1993 and has clients throughout the world. 

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