30th November 1997


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Watawala share trade begins tomorrow

Watawala Plantation shares will begin trading on Monday December 1 a PERC release said.

According to analysts, Watawala Plantations has shown good results this year with tea production growing 25% and net profits growing 128% year on year for the 1st half of 1997.

Analysts predict tea crops to go up by almost 30% for 1998 and by 15% for 1999. A profit growth of 67% for1997 is anticipated on account of increased production, higher prices and low costs due to efficiency gains.

Profits for 1997 are estimated at Rs.142 mn. which figure may rise before the end of the year. This healthy position is attributed to the efficiency of privatised management which has begun to show results.

Being the only company to possess palm oil (1015 ha) and an operational palm oil factory on its plantations, Watawala Plantations has the added advantage of reaping a tidy profit from the sale of palm oil, PERC said.

Stress on proressional quality contro

Experts warn of serious problems ahead

By Asiff Hussein

The lack of a proper regulatory authority for quality consultants and certification bodies engaged in quality related services is becoming a serious problem, experts have warned.

Some quality consultants were applying generic systems developed for other companies to Sri Lankan firms seeking ISO 9000 registration without property meeting the needs of individual companies, says of Saleem, President of the newly set up Association for International Standards (AIS) Sri Lanka said.

Though the national quality policy of the government has proposed the setting up of a National Accreditation Council, so far no such body has been set up. ISO certification is provided by European firms which have not been given formal recognitions in Sri Lanka, as there is no body to recognize or regulate them. The Sri Lanka Standards Institution which would perform a regulatory role, was itself a practitioner in the trade by offering ISO registration.

Mr Saleem said the AIS was hoping to increase professional standards among its members.

The association is dedicated to promoting ISO standardization in Sri Lanka, fulfilling a long felt need amongst local Industrialists. It hopes to promote a culture of total quality through international standardization so that Sri Lankan industries could achieve a competitive edge in the global market.

Vice President of the newly set-up association, Stefane Moraes said the AIS would organise and conduct lectures, seminars and workshops to create an awareness on ISO standardization.

He said that besides corporate membership, the association would also hopes to attract membership from trade unions.

Mr. Moraes noted that it is imperative today that there be an organisation of the nature of the AIS to cater to the needs of the private sector.

The Sri Lanka Standard Institute (SLSI) is today merely a certification body and does not provide consultancy services nor acts as a regulatory body.

He noted that in Britain, for example, all certification bodies are required to certify themselves under the National Accreditation Council which also acts as a regulatory body to oversee standardization procedures.

NAMAL: new income fund

By Priyantha Gamaga

Another fixed and regular income investment option in the form of a unit trust is open to the Sri Lankan public now. NAMAL (National Asset Management Ltd.) recently signed the trust deed for the new fund, NAMAL Income Fund, with the Deutsche Bank, the trustees and custodians to the Fund.

NAMAL Income Fund (NIF) only invests in Axed income securities and does not engage in eguity market investments.

NIF intends to invest in Government Securities, Treasury Bills and Treasury Bonds, corporate debt instruments, debentures, asset backed securities and other capital and money market instruments with the exception of equities.

The intial public offer, open till February 27, will be at Rs. 10 per unit and the minimum investment has to be Rs. 10,000/- .

NAMAL General Manager Nihal Disanayake, said NIF would provide an investment plan for a higher and regular income at a low level of risk. NIF will pay its unit holders two dividends a year and according to Mr. Disanayake the "investor cannot lose money here", since the fund itself is investing only in fixed income securities where the rates of return do not vary:

He also said that being pioneers in the local unit trust market, NAMAL had the expertise, and the experience to help people diversify their capital at a reduced risk. Though there is no front end fee attached there is a mangement fee of 1.25% and an exit fee 2% if an investor withdraws his investment within the 12 months. NIF is an open ended fund where an investor has the choice of coming in and going out at any time.

DFCC, the initial sponsor to the Fund has already pumped-in Rs.100 million. C. A. Cooray, M.R. Peiris, I. S. De Silva, Dr. Gamini Fernando and Sarath Sathkumara are the directors of the Fund.

NAMAL which entered the investment arena in 1992 is the only Unit Trust that acts as a primary dealer in Central Bank Treasury Bills.

Continue to Business page 3 * A case against devaluation * Currency crisis exposes fragility of global economic order

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