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TRC
crisis delays cellphone rate hike The Commission has not met since December 4 last year because the government has delayed re-constituting its membership, TRC officials said. Three mobile operators, Celltel, Dialog GSM and Mobitel, recently ran a joint press advertisement announcing that all call charges on their networks would be increased by one rupee. Media reports that followed the advertisements revealed that the TRC had not approved the tariff increase but that the operators were determined to go ahead with the proposal. R.D. Somasiri, Director General of the TRC, maintained that this issue needs to be put before the Commission. "The TRC has not approved the tariff," he said. It was not possible for mobile operators to go ahead with the tariff hike as planned because new members have not been appointed to the Commission, he said. Though the operators may decide on a tariff plan, TRC officials would have to give their findings on the matter for the Commission to take a decision on the issue, he added. John
Keells plans hotel in Goa "We are looking at some properties in Goa and a due diligence is on at the moment," said Keells group chairman Vivendra Lintotawela in an interview. JKH has hotel properties in Sri Lanka and the Maldives and has been considering the Indian investment since last year. With Sri Lanka's economy improving after a disastrous 2001, the group is planning to bounce back to the 1999/2000 profit level. "Things are getting back to normal. We can easily bounce back to the 1999/2000 profitability figures," said Lintotawela after the company declared a 10 percent dividend for the year ending March 31, 2002. He said the current year's profitability, likely to be announced in June, would be lower than last year but declined to give figures. Investors
cautious despite truce The Colombo Stock Exchange's benchmark, the All Share Index (ASI), has lost ground since December 2001 as investors made profits in the wake of a 75 percent surge induced by optimism surrounding the change in government. Although the ruling United National Party (UNP) has in the past demonstrated itself to be a more responsible economic manager than the People's Alliance, analysts said there was little justification for the size of the increase. "If you look at the fundamentals, there just wasn't anything to support such a rise," said Radhika Jayasundera, assistant vice-president of research at DFCC Stockbrokers. But she said a number of factors including recent interest rate cuts, reduced power cuts and a rise in tourist arrivals should provide a basis for an annualised 5 to 8 percent recovery in earnings in the second half. However, she downplayed the implications for the share market. "It might be a very slow and steady [recovery in the market]," she said. But Dushyanth Wijayasingha, head of research at Asia Securities, is more confident, predicting the market will begin to lift 15 to 20 percent as early as late July. He said the
re-rating would be underpinned by the improving global economy,
fewer power cuts, more amenable weather and greater clarity on the
prospects for peace once talks between the government and Tamil
Tiger rebels begin in Thailand. Speaking at his press conference in Kilinochchi earlier this month, LTTE leader Velupillai Prabakaran provided little guidance about the likely chances of a long-term solution to the two-decade conflict. Chinthaka Ranasinghe,
head of research at John Keells Stockbrokers, attributed recent
low trading volumes to not only to the Sinhala and Tamil New Year
celebrations, but also the uncertainty surrounding Prabakaran's
statements. Nevertheless, he said there are already signs that hopes for peace are leading to renewed interest in the local market, with a pick up in foreign investment over the past four months. Ranasinghe expects corporate profits for the year to March 30 to be down 22 to 23 percent on last year. But he predicted a continued ceasefire would see earnings climb 25 to 28 percent in 2003 and 45 percent in 2004. However, investors will require much more concrete evidence of a lasting peace before these predictions translate into any improvement in the markets. "Investors are very cautious about this because we've been there many times," Jayasundera said. Unilever's
tactics bother Tea Board The issue relates to a trade document that compares Unilever's Lipton Yellow Label Tea with its main rival in the Saudi market, Rabea. The document, in the form of questions and answers, promotes Unilever Saudi Arabia's Lipton Yellow Label Tea, which is made of Indian tea, claiming it is superior to Rabea, which used to consist of pure Ceylon tea but is now blended with other teas. Rabea was previously packed in Sri Lanka but is now packed in Jeddah to get over import duty hurdles. The document, a copy of which was obtained by The Sunday Times Business, contains statements like: "Lipton Long Leaf tea is finest quality Assam with more flavour and body than the Ceylon teas" and "Assam teas are much brighter, more golden in colour and superior tasting. Unlike Sri Lankan teas, Lipton Long Leaf has more flavour and body." Tea industry officials have expressed concern over the issue because Saudi Arabia is the fifth largest tea bag market for Ceylon tea and marketing tactics which run down Ceylon tea could affect exports. The matter was brought to the notice of a visiting senior Unilever official, Sandy Morrison, by Tea Board chairman Ronnie Weerakoon recently. "We are
very disappointed with this type of unethical marketing," Weerakoon
said. "Tea marketing is a cut-throat business," one tea expert said. It was not clear whether the document was put out by Unilever Saudi Arabia or by one of its distributors. Unilever's local
outfit, Unilever Ceylon, said it was unaware of the document. "Unilever believes in vigorous yet fair competition. Wholesalers and retailers are important partners. Leaflets are a tool for maintaining good communication with the trade and for countering any claims made by competitors. "Unilever's goal is to maximise consumer benefit, not exports from any country. Consumer needs differ from country to country. Ceylon tea is an important component of our blends in a number of markets. We have consistently advocated blending to accord with global trends. Unfortunately, due to the restriction of the import of orthodox teas into Sri Lanka we had to close down our blending plant in Sri Lanka. Nevertheless, Unilever Ceylon is amongst the top five exporters of Ceylon tea," Malik said. Hasitha de Alwis, director, Tea Promotion Bureau, said they had received complaints from Sri Lankan tea exporters about the negative marketing effort. |
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