'Step-motherly treatment' for water pump manufacturers... DFCC Bank 65 Mln floatting rate note issue EDS launches solace Banking systems Central Bank reduces Repo Rate Unit Trust Prices Exchange Rates

'Step-motherly treatment' for water pump manufacturers...

Sri Lanka's market for water pumps is 70,000 units annually. With three manufacturers, Jinasena, Solex and Singer the local industry is said to be able to meet the demand. But like all other nascent industry in this country they are said to be given a step motherly treatment by the authorities.

Solex Chief, Upali Wijayasiri pleads: 'Give us a level playing field'. He says there is no incentive given for them to get into high technology and make further investments in developing the product. If this was done we could refrain from importing any part for the manufacture of a Solex pump' he told the Island.

In fact, they are now producing between 15 to 16,000 units per year. They are rated the second in the market and despite the product is being fully manufactured in the country except for one small part Solex gives a full two year warranty.

Solex Marketing Manager Muditha Wijekulathilaka says: 'We have a large market niche. But we are unable to supply the demand'.

Wijeyasiri is highly concerned that the government has not provided them with the infrastructure required. He says, they are now located in an area that is marked for industry. But then a liquor go- down objects to the manufacturing facility. 'We have had to change locations three times', he says.

Apart from these duties and taxes have taken toll of their business. While their imports is only 10 per cent the imported product has only to pay an all inclusive 35 per tent. But then Solex has to bear the cost of manufacture and the 10 per cent duty together with GST.

Solex chief says this kind of treatment leaves them a very small margin to be able to compete with mostly inferior quality. They are also unable to make any further investments in improving the product.

The Solex Company makes both domestic and industrial water pump ''Our customers have been highly satisfied with our product`, says the marketing manager. In fact, recently they held a dealer convention where the complaints were only about short supply. Four levels of awards were given to the best Solex dealers. The Company are also the sole agents in Sri Lanka for MEZ Electric made induction motors.

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DFCC Bank 65 Mln floatting rate note issue

The signing ceremony with respect to the USD 65 million Listed FRN Issue by DFCC Bank was held in Singapore on 7 December 1998. The signing was attended by senior officials of participating banks which include high quality European, Asian and American institutions namely ABN.AMRO Bank, UniCredito Italiano, Banca Nazionale del Lavoro, Berliner Bank, KBC Bank, Bank of Ceylon, Citibank, Bank of Nova Scotia, and Tokyo Mitsubishi International. ABN.AMRO is the sole Lead Manager and Bookrunner.

His Excellency Nimal Wijayaratne, high commissioner for Sri Lanka in Singapore signed on behalf of the Government of Sri Lanka. Mr David Hodgkinson, senior cofinancing officer and Ms Noy Siackhachanh, senior financial economist, signed on behalf of the ADB. Moksevi Prelis, chief executive and Mr Thusantha Wijemanne, AGM (legal & admin.) signed on behalf of the DFCC Bank. Mr Nils Lorenzen and Mr Roland Plan signed on behalf of ABN.AMRO, the lead Bank. Senior officers of the other Managers signed on behalf of their respective institutions. The ceremony was chaired by Mr Nils Lorenzen, Managing Director, investment banking, ABN.AMRO Bank.

H.E. Wijayaratne expressed his deep appreciation to the participating banks and stated that the overwhelming success of the issue represented the strong faith of the international investor community in Sri Lanka. He mentioned that while Sri Lanka was going through a difficult period, the investors had focussed on the key macro-economic strengths and had shown their confidence in the Republic. H.E. Wijayaratne also mentioned that the issue had set a new landmark for Sri Lanka in terms of tenor and structure.

Mr Hodgkinson and Ms Siackhachanh of the ADB both reiterated the long association of the ADB with Sri Lanka in general and with DFCC Bank in particular. The signing for the direct loan of USD 5 million by ADB to DFCC Bank was also concluded. Mr Hodgkinson noted that the direct loan did not have any sovereign guarantee and reflected ADB's close involvement and the confidence in the DFCC Bank.

Mr. Lorenzen noted that for many of the investing banks, it represented their first exposure to Sri Lanka. The broad based nature of the syndicate met with the issuer's desire to expand the investor universe with respect to Sri Lanka.

Mr Prelis, CEO, DFCC Bank, thanked the syndicate members, the guarantors and the lead manager for making the transaction an unqualified success. He mentioned that the funds would be used to develop the domestic debt capital market in Sri Lanka.

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EDS launches solace Banking systems

As the world approaches, rather apprehensively, the next millennium, rigid banking systems will be forced to go open Sesame, clearing the way for the Customer to be enthroned King.

This rather startling 'Millennium prediction' emerged loud and clear at the Galadari Hotel Orchid Room last Thursday where SOLACE - the fastest growing Australian supplier of powerful core banking software and related services - launched its Retail Banking Systems products range. The banking suite of programmes was presented by John Owen, CEO of SOLACE Asia and Africa branches with a product demonstration by Banking Applications Expert, Ms. Jeanie Mackee. SOLACE will be represented in Sri Lanka by EDS.

Mr. Owen, at SOLACE's branch office in Malaysia said that the emphasis in the SOLACE Retail banking system is on 'virtual banking' enabling customers to conduct on-line banking.

In fact, he added SOLACE which was listed as recently as February '96 and whose global forum includes Sri Lanka, visualises its 'virtual banking' concept as a 'one stop shop' where 'No Accounts or Stop Payments' problems get automatically resolved. SOLACE software reduces IT costs and the core service ensures maximum flexibility, he adds.

Dr. Ramachandran, Director, South Asia for EDS in his presentation spelled out the future trend of bank customers to fall back heavily on ATM, PCs and Automated Cards etc.

'Banks, perforce, will be called upon to listen to their customers and will be compelled to shed the old, traditional role of the financial controllers, recognising customer trends. Bankers will be forced to provide 'single account needs' for multi-product service. The 'single account' will upset the 'control system' and Virtual Banking will take the centre stage while Electronic Banking Systems will play a major role in banking.

Technology is the only solution of the many challenges the new era - will throw up for the banking sector, Mr. Owen further said, explaining the many hassles that will surface in global banking trends. Virtual banking is the pseudonym used to describe custom convenience through the extensive use of the Internet. In the near future the customer will not be required to go personally to his bank for his loans and other services: he could use on line facilities instead.

EDS officials say that the SOLACE Retail Banking Systems (RBS) enhances profitability, productivity and performance of banking and financial services providers worldwide.

'Solace RBS is a powerful and flexible suite of core banking software that manages retail banking and financial services operations' says Mr. Shankar Sivaprakasam Divisional Manager - Banking of EDS 'Written in an advanced 4GL language, which is open and modern, SOLACE delivers a high level of operational efficiency, flexibility and exceptional technology integration. SOLACE RBS is Y2K ready.'

Based in Melbourne, Australia, SOLACE Ltd. has been an Australian Public Company since 1996, and has offices located in Australia, South Africa and Malaysia.

EDS commenced operation in 1979 in Singapore and - they expanded its operations in Asia Today a Global Organisation with subsidiaries operating in USA, UK, Singapore, Sri Lanka, Thailand, Philippines and India, EDS in some countries is an IBM Business partner supplying and implementing application software for ERP, Human Resource Management and the retail industry.

EDS holds a strong position in other IT support areas such as Software development, outsourcing and facilities management.

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Central Bank reduces Repo Rate

The Central Bank of Sri Lanka has reduced its overnight repurchase (repo) rate from 11.50 per cent to 11.25 per cent, with effect from 15th December 1998. The repo rate is the rate at which commercial banks and primary dealers can invest their surplus funds in Treasury bonds and Treasury bills held by the Central Bank.

The decline in inflation and greater stability in exchange markets experienced in the past few months enabled the Central Bank to reduce the repo rate in several steps from 12.10 per cent in September 1998 to 11.50 per cent on 4th December. Market liquidity has increased since then and there is a declining trend in other market interest rates. In the light of these developments, the Central Bank decided to lower the repo rate by 25 basis points.

NCE Seminar for Exporters in Gampaha District

The fourth seminar under the series of provincial seminars on 'How to Export' organised by the National Chamber of Exporters of Sri Lanka (NCE) will be held at the Pegasus Reef Hotel, Hendala, Wattala on 19th December 1998 for Exporters in Gampaha District.

It is sponsored by the Bank of Ceylon (BOC) and Sri Lanka Export Credit Insurance Corporation (SLECIC) to create awareness among small and medium exporters and entrepreneurs who have the potential to export.

The seminar will be conducted mainly in Sinhala for the benifit of the participants who will be invited by BOC, SLECIC and NCE.

The Export Development Board (EDB) and the National Packaging Centre are also assisting the programme by providing Resource Personnel.

Important issues such as incentives, finding export markets, export facilities, packaging payment terms, credit facilities and credit insurance will be highlighted at the seminar.

+ Exchange Rates

The Central Bank's Spot Rates for transactions with Commercial Banks announced on the morning of December 17, 1998 were as follows:

The approximate middle exchange rates of following currencies calculated on the basis of cross rates quoted by Gulf International Bank, Bahrain as it appeared in Reuters Financial Information System on December 17, 1998 were as follows:

Average rates at which the following currencies were quoted by Commercial Banks in Colombo for Telegraphic Transfers at mid-day on December 17, 1998 were as follows:

Average Weighted Prime Lending Rate (AWRP) and Lowest Prime Rate (LPR)
The Average Weighted Prime Lending Rate (AWPR) during the week ended December 11, 1998 was 15.5 per cent for all banks. The Lowest Prime Rate among banks during this week was 12.0 per cent.

Average Weighted Deposit Rate of Commercial Banks (AWDR)
The Average Weighted Deposit Rate (AWDR) of Commercial Banks for the month ended November 30th, 1998 was 9.2 percent.