7th October 2001
Editorial/Opinion| Plus| Sports|
The global outlook for the financial services industry is unclear with growing evidence emerging of fragile economic conditions in certain emerging markets, says HSBC group chairman Sir James Bond.
In a statement, Bond - who heads one of the world's biggest banking groups - noted that the performance of the US economy remains pivotal with the Federal Reserve indicating recently that there are as yet few signs of rebounding.
"It has yet to be seen what the full effect of the corporate slowdown will be on employment and, in turn, how that will affect the consumer demand, which currently sustains some major economies," he said in comments made on HSBC's first half-year performance to August. These remarks were made before the September 11 bombing crisis in the US, which has dramatically changed all economic and banking forecasts.
"While the economic environment will remain challenging, we have positioned our business conservatively. The strength of our liquidity, our capital base and our loan loss reserves enable us to respond robustly to any events, which may arise. Our international reach, combined with the quality of our staff and the strength of our customer base, gives grounds for confidence that we will continue to create value for our shareholders as opportunities arise."
He said that when HSBC announced last year's results in February, it said the outlook for 2001 would be challenging. "This has proved to be the case.
Nevertheless, HSBC has increased its attributable profit, raised its first interim dividend and made good progress in developing its businesses, particularly its wealth management services."
Bond said HSBC maintained cash operating profits before provisions at just over US$ 5.6 billion, the same as in the first half of 2000, which was "our best half ever."
UK-based Datastrip Ltd, a world leader in digital ID solutions, is offering a database facility to provide foolproof and tamperproof ID card systems.
Datastrip together with Epic Lanka (Pvt) Ltd, an IT vendor partner, would provide customers with cost-effective ID solutions.
Company Business Director, Sri Lanka, Patrick Gilmore, said at a press conference in Colombo, that foolproof, personnel identification and security systems have become necessary for most sectors. These systems could be a deterrent against an increasing number of frauds and crimes committed thro-ugh impersonation, Mr. Gilmore said. Epic Lanka, an e-commerce and security technology solutions company, represents Datastrip Ltd in Sri Lanka.
The 2000 Plaza Residencies, the first luxury apartment complex outside Colombo city, is being constructed at Sri Jayawardenapura in Kotte, near the Jayawardenapura hospital.
This 143-unit condominium is a joint venture between 2000 Plaza (Private) Ltd and the Urban Development Authority (UDA) and is one of the Board of Investment's flagship projects.
The complex, the only high-rise building (on completion) in the area under the UDA master plan, is located in an unspoilt environment of nature strips, paddy fields and lakes, Executive Director, 2000 Plaza (Pvt) Ltd, Janaka Edirisinghe said.
He said the price per unit of these residencies range from Rs. 7.5 million to Rs. 11 million and this amount can be paid in dollars by interested expatriates. All residencies come with granite floors and polished woodwork while bathrooms have high quality fixtures. Additional features include a mini mart, coffee shop, swimming pool, gymnasium and laundry, he added.
Washington - The world's poor will get poorer as economic growth in developing countries is hurt by the September 11 terrorist attacks in the US, the World Bank has warned, according to US newspaper reports.
"We have seen the human toll the recent attacks wrought in the US, with citizens from about 80 nations perishing in New York, Washington and Pennsylvania," World Bank President James Wolfensohn is quoted as saying. "But there is another human toll that is largely unseen and one that will be felt in all parts of the developing world, especially in Africa."
It is estimated that 40,000 children worldwide will likely die from disease and malnutrition and ten million people will fall below the Bank's extreme poverty line of $1 a day or less as a direct result of slower economic growth. While the decline in output may be greater in the United States and other developed countries, those nations also have far greater resources to cushion the blow, the Bank said.
"It's a lot of people...It will mean that more parents will be unable to afford food or medicine. And the poorer you are, the more likely you are to get sick," Nicholas Stern, the World Bank's chief economist, was quoted as saying.
Stern and others pointed to several warning signs of a slowdown in the global economy in coming months. Countries that depend on tourism have seen trip cancellations of 65 percent or more. Insurance rates have skyrocketed for freight cargo in some parts of the world. Some countries have begun to implement protectionist policies, slapping additional tariffs on imports. And prices on some commodities, such as cocoa, have significantly dropped, reports said.
By Hiran Senewiratne
A technical assistance grant of US$ 550,000 will be given by the Asian Development Bank (ADB), through its Japan fund, to Sri Lanka to develop its rural finance system.
Under this project a study will be done to support government policy reforms to build a market-oriented rural finance system, rationalise rural finance and strengthen governance.
Sri Lanka has experienced relatively high economic growth in the last decade but rural poverty is still prevalent, said Central Bank Governor A. S. Jayawardena at a recent press conference to announce the ADB grant.
He said the main constraints in efforts towards reducing rural poverty are slow growth in agriculture, limited opportunities for diversification and an inefficient rural financial system.
The governor also said that when credit is being given at subsidised rates to farmers and not utilised properly, there are problems.
The government has taken a bold decision to write off all loans disbursed to rice and banana farmers during the Maha and Yala seasons amounting to Rs. 153 million who were affected by drought in the districts of Hambantota, Puttalam, Kurunegala and Ampara, he said.
The grant agreement was signed in the presence of Japanese Ambassador Seiichiro Otsuka, Residential Representative, ADB, John. R. Cooney and Mr. Jayawardena.
Sri Lanka's Central Bank said economic growth grew by just 0.9 percent during the first half of 2001 against 6.9 percent in the corresponding period of 2000, blaming the decline on a significant slowing down in the world economy.
The Bank said in a statement last week that this had an adverse effect on Sri Lanka's major export markets while unfavourable weather resulted in a weak performance in domestic agriculture and hydropower generation.
Sri Lanka's economy has been badly dented by a combination of LTTE attacks, global recession and last month's attacks in the USA in addition to the drought and prolonged power cuts. Rebel attacks on the Colombo airport in July ruined the tourism industry and saw airfares and insurance surcharges rise sharply.
The Gross Domestic Product (GDP) in second quarter 2001 was 0.4 percent compared with 7.3 percent in the same 2000 period, the Bank said.
The Bank statement noted that the construction sector contributed the most to overall growth while the manufacturing sector declined due to a fall in the value of export oriented industries, particularly textiles and garments.
Apparel is the country's biggest export, most of which goes to the US and Europe.
A Colombo judge has turned down a plea by Nikini Automation Services Ltd for an injunction against Jinasena Engineering Technologies Ltd in a patent rights case.
Commercial High Court Judge, I.K. Wimalachandra, refused Nikini's application for an injunction against Jinase-na's on the grounds that the latter was not exploiting the patent commercially. The dispute was over Nikini's patent for using pneumatics on the tea roller. Nikini, in its petition, argued that it had invented this machinery for use in the tea industry and accused Jinasena of infringing the patent. Jinasena's, rejecting the accusation, told court that pneumatics has been used as a source of power for centuries and there couldn't be a patent for the use of pneumatics in tea rollers. It said the use of pneumatics was made in good faith to improve the process of the manufacturing of tea in Sri Lanka.
By Diana Mathews
"East Africa is a potential market with large buying power (for Sri Lankan products)," said Sudath Ariyawansa, Marketing Manager of Premadasa General Trading, (Dubai).
Many Sri Lankan manufacturers and producers are unaware of this large market, he said. East Africans travel to Dubai to make their purchases and usually they make large purchases by cash.
The Premadasa Group of Companies (PGC) recently announced the opening of the Sri Lanka Trade Centre (TC) in Dubai.
"This would be a great opportunity for our Sri Lankan companies to expand," he added. Ariyawansa emphasised that Dubai, being the trading hub, companies would be afforded the opportunity to cater to the market in Dubai and neighbouring countries as well as reach out to the East African market.
The Chamber of Commerce of Dubai has agreed to advertise the products of Sri Lankan participants at the trade centre in magazines which would be distributed among the chief executive officers of well known companies in Dubai. The National Chamber of Industries, the National Chamber of Exporters and various other institutions in Sri Lanka will be displaying products at the centre.
The Ministry of Trade of Sri Lanka is also playing an important role in this project, he said, adding that the ministry is providing a helping hand for the small and medium scale industries to display their products at the trade centre.
The TC will facilitate the display of products of Sri Lankan firms for an annual fee of US$ 150. Currently 35 companies have applied and eight companies have paid their subscriptions. The TC is scheduled to be opened by early 2002.
COIMBATORE, India - Friendly government policies, good infrastructure, best packaging and a transparent auction system have helped the Sri Lankan tea industry to stay in the forefront despite the country's dependence on exports, Mr. Dickie Juriansz, Chairman, James Finlay, said at a session on tea at the recently-held UPASI annual conference in Coonoor.
During the past decade, tea exports had increased from 215 million kg in 1990 to 288 million kg in 2000, recording a 34 percent increase.
Talking about the 'success of Sri Lanka's tea promotion campaign', Mr. Juriansz said, "We have both locational advantage and variety (to suit the requirements of every consumer in the world) to offer." Over 600 sellers and 150 buyers participate in Lanka tea auctions, he said according to reports in Indian newspapers.
Multiplicity at the buying and selling ends was the hallmark of the Colombo tea auctions, which were transparent and friendly, he added.
SriLankan Airlines has withdrawn the insurance surcharge of US$ 40/80 for travel to and from Colombo with immediate effect, the airline announced last week.
This has been replaced by a US$ 5 insurance surcharge per SriLankan Airlines sector across its network.
The new insurance surcharge of US$ 5 reflects the war risk insurance being applied on airlines by international insurers worldwide following the terrorist attacks in the USA on September 11, the statement said.
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