Tender floated for 50,000 houses in Northern Province

•           GoSL has floated tenders for  construction of 50,000 permanent brick and mortar houses
•      The project is to be executed by the Ministry of National Integration and Reconciliation together with other relevant line ministries and agencies.                                                                           

The Government has floated tenders for the construction of 50,000 permanent brick and mortar houses for the north and east as part of resettlement and reconciliation initiative.

The move follows Cabinet approving a Memorandum submitted by Prime Minister Ranil Wickremesinghe, to construct 50,000 brick and mortar houses for conflict-affected families in the Northern and Eastern provinces.

The project is to be executed by the Ministry of National Integration and Reconciliation together with other relevant line ministries and agencies. The project was formulated under the guidance of the Northern and Eastern Provinces Development Committee and recommended by the Cabinet Committee on Economic Management headed by the Prime Minister and gained the endorsement of Cabinet. The Ministry of National Integration and Reconciliation directly comes under the purview of President Maithripala Sirisena. Action was taken to call for the tenders with financing arrangements on soft terms, revealed Ministry of National Integration and Reconciliation Secretary V. Sivagnanasothy.

Already invitations for proposals have been advertised and will be open to eligible bidders and financiers.Bidders who submit proposals should also get confirmed financing arrangements from donors or financing institutions. Members of the Parliament, district officials and civil society organisations welcomed the initiative as the proposals were acceptable to the social context of the provinces and address the long-felt needs of conflict-affected families.

You can now score up to $1m seed funding in Sri Lanka. These co-founders show how.

•        Medtech app oDoc – score US$1 million seed funding
•       This is the largest seed investment round for any startup in Sri Lanka.

The island nation south of India with its gorgeous beaches, rainforests, and ancient Buddhist ruins just saw one of its startups – medtech app oDoc – score US$1 million seed funding.

This is the largest seed investment round for any startup in Sri Lanka. The country’s startup ecosystem is still very young with over 50 percent of its entrepreneurs using their personal savings to fund their companies. The seed funding round for oDoc comes at an opportune time as the island’s mass market is embracing tech through new ride-hailing options.

ODoc isn’t going after the mass market though – at least not yet. The app connects patients with doctors for video consultation. Say you wake up in the morning with a nasty rash and fever. 

Three taps on your smartphone and you can submit your pre-consultation notes, take a picture of your rash, and get a doctor to review those. A doctor will call you and send his prescription with the doctor’s seal and signature right to your phone. All done in 10 minutes.

Many startups around the world have been at it but oDoc’s four founders – with their diverse backgrounds – approached it more from a design perspective than as a tech problem to solve.

Sri Lankan born Venture Capitalist – Chamath Palihapitiya raises $600 Mn in IPO for Tech Investments

•          Chamath had raised 600 million dollars in its IPO to invest in private tech companies
•          There are about 150 private tech startups valued at over $1 billion

Chamath Palihapitiya, founder of the venture-capital firm Social Capital, has launched a new “blank-check” company in partnership with the London-based VC firm Hedosophia, named Social Capital Hedosophia Holdings Corp.

Social Capital Hedosophia said it had raised 600 million dollars in its IPO to invest in private tech companies, Business Insider reported. Blank-check public companies, or special purpose acquisition companies, which raise money first and then figure out how to invest it, are in vogue, according to The Wall Street Journal’s Maureen Farrell.

Social Capital Hedosophia estimates there are about 150 private tech startups valued at over $1 billion, compared with about 200 public technology companies with a market cap of $1 billion. Private tech startups can now hold out from going public indefinitely because of money available to fund growth from private investors.

Twenty-two blank check funds have been launched on US exchanges so far this year, raising 6.9 billion dollars, Farrell reports, citing Dealogic data. Tony Bates, a Social Capital partner and former CEO of Skype, is on the holding company’s board, while Palihapitiya will be the CEO.

MCC Grant from USA Soon

•       This is going to be the biggest grant ever by any country

Economic Affairs Deputy Minister Dr. Harsha de Silva yesterday said that Sri Lanka would receive several hundreds of millions of dollars in grant assistance from the US as a result of signing the Millennium Challenge Cooperation Compact.

Noting that it will be the largest grant Sri Lanka is to receive, he was however unable to disclose the amount. “We don’t know what the amount is. It is being processed now. We are confident it will be several hundreds of millions of dollars of grant assistance to Sri Lanka.

The Deputy Minister said that this is a grant "to the Sri Lankan people by the American people" and that it is "the biggest grant ever by any country". Dr. De Silva said the grant money would go into a number of sectors. “We will utilize those kinds of funds in most urgent areas including land reforms, transport and agriculture logistics.”

EDB forecasts $ 13 billion export revenue for 2017

EDB Chairperson Indira Malwatte

·         FTAs with Singapore, China and India will boost export-oriented investments and trade

Capitalising on the impending trade and economic partnerships of the Government, the Export Development Board (EDB) is optimistic of achieving export revenue of over $ 13 billion by the end of this year.

“With the regaining of GSP+ and different trade agreements the Government is planning to sign, in 2017 we are expecting to achieve around $ 13.8 billion worth of export revenue,” EDB Chairperson Indira Malwatte

She pointed out that free trade agreements (FTAs) and economic partnerships with Singapore, China and India will no doubt boost export-oriented investments and trade.

In the first half exports grew by 5.2% to $ 5.4 billion as a result of high income received from exports of tea, transport equipment, petroleum products and machinery and mechanical appliances. However, export earnings from textiles and garments, gems, diamonds and jewellery and leather, travel goods and footwear declined during the period under consideration. In June export earnings rose 9.6% to $ 987 million marking the fourth consecutive month of gain.

Sri Lanka records 4% Economic Growth in Q2

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•     The country’s economy grew by 4% in the second quarter from a year earlier
•         The industrial activities have recorded a considerable growth rate of 5.2%
•          Services activities recorded a positive growth rate of 4.5% during Q2 of 2017.

The country’s economy grew by 4% in the second quarter from a year earlier and slightly better than the 3.8% improvement in the preceding three months.

The Department of Census and Statistics said the GDP for Sri Lanka for the second quarter of 2017 at a constant (2010) price reportedly reached up to Rs. 2,211,612 million and the GDP reported for the second quarter of 2016 was Rs. 2,125,848 million

The 2Q growth was despite a setback faced by agriculture due to adverse weather conditions. The Industrial and the Services activities recorded higher growth rates of 5.2% and 4.5% respectively whilst agricultural activities reported a negative growth rate of 2.9%.

The four major components of the economy, Agriculture, Industry, Services and Taxes less subsidies on products, have contributed their share to the GDP at the current price by 8.2%, 25.9%, 56.6% and 9.4% respectively in the second quarter of 2017.

Among the sub-activities of agriculture, the value added ‘Growing of rice’, ‘Growing of oleaginous fruits including Coconut’, ‘Growing of Cereals (except rice), ‘Growing of vegetables’ and ‘Growing of Spices’ declined by 32.9%, 20.2%, 15.3%, 5.9% and 3.8% respectively during this quarter, when compared to the same quarter of the previous year.

The industrial activities, which shared the GDP by 25.9% at current price, have recorded a considerable growth rate of 5.2% in the overall industrial activities of this quarter. Among the industrial activities, the Construction activity, which corresponds to the highest share within the industry sector, grew by 9.3% during this quarter when compared to the second quarter of 2016.

In parallel with the construction activity ‘Mining and quarrying’ has also reported a significant growth rate of 18.4%. Overall manufacturing activities have grown by 0.9% during the second quarter of 2017. The major proportion of manufacturing activities is shared by the ‘Manufacture of food, beverages and tobacco’ and the ‘Manufacture of textile and wearing apparel’ activities which have reported a 2.2% negative growth rate and 2.5% positive growth rate respectively during the quarter.

In addition, the ‘Manufacture of furniture’ and ‘Manufacture of rubber and plastic products’ activities have reported significant positive growth rates of 12.4% and 8.4% respectively.

Among the three major activities, the Services activities, which gave the highest contribution (56.6%) to the GDP, recorded a positive growth rate of 4.5% during the second quarter of 2017, when compared to the same quarter in 2016. The performance of the Services sector was underpinned specially by the sub-activities of ‘Financial service activities’, ‘Human health activities’ and ‘Telecommunication’ which reported significantly higher growth rates of 16.4%, 13.2% and 12.4% respectively.

Nine New Investment Zones in Pipeline - Prime Minister Ranil Wickremesinghe

•         Says major investment and export plans already drafted
•        About nine new investment zones in pipeline

Hailing the Board of Investment (BOI) celebrating four decades, Prime Minister Ranil Wickremesinghe yesterday said his Government together with President Sirisena was preparing for a great leap forward in investment and exports to catapult Sri Lanka towards stronger growth.

Wickremesinghe, who took part in the BOI 40th Anniversary celebrations with President Maithripala Sirisena, Development Strategies and International Trade Minister Malik Samarawickrama and the latter’s State Minister Sujeewa Senasinghe at the Katunayake Free Trade Zone recalled how he had been present at its opening with former President J. R. Jayewardene.

“At the time, our biggest challenge was finding jobs. The country had just faced an uprising and we understood that government institutions were insufficient to create the jobs that youth so desperately wanted. That is why we decided to establish investment zones,” he said.

The Katunayake Export Processing Zone was the first of its kind in South Asia, the Prime Minister noted, which served as the blueprint for many other similar ventures in India, China and Vietnam. Unfortunately, the early advantage of an open economy was lost to Sri Lanka a few years later when the war began and lucrative investment opportunities drifted to other countries.

“Now we have an even bigger opportunity than we did in 1977. Now we have a chance to regain all that lost opportunity. This is why we formed a coalition Government; and we must support President Sirisena so that together we can implement the economic plan we have drafted for the next three years.”

As many as nine new economic zones are in the pipeline, the premier said, as part of the Government’s efforts to take development to the provinces. An investment corridor from Kandy to Wellawaya as well as other zones up to Paranthan is under discussion, he said. Former President Ranasinghe Premadasa opened over 200 apparel factories outside the zones, Wickremesinghe stated, which also pushed forward development, but in the present, advancements in technology has meant businesses can be established anywhere around the country.

“Invest Sri Lanka Forum 2017” to be held in New York

 

•    Invest Sri Lanka Forum to be held on October 16, 2017 at the Sofitel New York.
•       The Forum is organized with the objective of promoting investment in the Sri Lankan capital market among US based institutional investors                                                                             

The “Invest Sri Lanka Investor Forum” organized by the Colombo Stock Exchange (CSE) and the Securities and Exchange Commission of Sri Lanka (SEC) in association with CSE Member Firms and leading Listed Companies will be held on October 16, 2017 at the Sofitel New York.

The Forum is organized with the objective of promoting investment in the Sri Lankan capital market among US based institutional investors and a strong interest among the investor community in the US is expected.

The Invest SL Forum hosted in New York in 2014 drew the participation of over 200 investment professionals and contributed to the year 2014 recording the highest annual purchases in the Sri Lankan stock market from the US.

The Forum will feature a keynote address by the Governor of the Central Bank of Sri Lanka Dr. Indrajit Coomaraswamy while SEC Director General Vajira Wijegunawardene and CSE CEO Rajeeva Bandaranaike will present on capital market regulation and the opportunities in the capital market respectively.

The event will also feature a speech by CSE Chairman M Ray Abeywardena and a presentation on the experience of investing in Sri Lankan equities by Senior Portfolio Manager at Times Square Capital Management Caglar Somek.

The presentations will be followed by a panel discussion moderated by NASDAQ OMX Group Vice Chairman Meyer “Sandy” Frucher and a series of pre-scheduled one-on-one-group discussions between fund managers and Sri Lankan listed companies on October 16-187, 2017. John Keells Holdings PLC, Commercial Bank PLC, Sampath Bank PLC, Tokyo Cement (Lanka) PLC, Teejay Lanka PLC, Dialog PLC, People’s Leasing & Finance PLC, MTD Walkers PLC and Sunshine Holdings PLC will attend the Forum.

The decision to host the Invest SL event in New York, comes on the back of a considerable level of foreign activity in the stock market in 2017, where a net foreign inflow of Rs 40 billion has been recorded year-to-date in the primary and secondary markets.

Foreign purchases during the first half of 2017 also established a record for the highest foreign purchases recorded in the first half of a calendar year. The year-to-date figure amounts to over Rs. 80 billion. Investors from the UShave consistently been the leading contributors to foreign turnover in the Sri Lankan stock market, and have contributed to 40% of the total foreign turnover since the year 2013.

Commenting on the initiative, Chairman of the SEC Thilak Karunaratne said “Every country’s stock market has its own mix of investors. This mix will have an impact on the efficiency of the stock market.

This year in particular it is the foreign investors who have driven the stock market and to date there is a net foreign inflow of Rs. 28 billion to the CSE. This is the second highest yearly net foreign inflow on record. The US is ranked as the number one contributor to this record figure and we are confident that this Road Show will further strengthen the inflow of funds from the US to our stock market”.

The Chairman of CSE Ray Abeywardena commenting stated “Numbers related to foreign activity indicate that foreign investors have identified an opportunity in the Sri Lankan stock market.

Considering such interest and activity, a forum of this nature in what is largely regarded as the largest Fund Hub in the world would help make a strong case for the Sri Lankan capital market, at a time when we have the attention of foreign investors.”

“I invite Stockbroker firms, Unit Trust Companies, Listed Companies and other stakeholders to join in this effort to make a collective case for the Sri Lankan capital market as an investment destination”, Abeywardena added.

The forum follows successful Invest SL forums conducted in Australia this year, which have contributed to 2017 establishing an all-time high in foreign purchases originating from Australiain a calendar year.

Sri Lanka is the second fastest growing market in South Asia for VISA

•                  Sri Lanka has become the 2^nd fastest growing market for VISA South Asia.
•          Sri Lanka’s mobile phone penetration is at 92% and there are over four million internet users with mobile internet via smart phones, registering phenomenal growth

Last year Visa, the global leader in payments technology, saw a 22% volume growth in Sri Lanka and a higher growth momentum is continuing so far in 2017. As per Central Bank data, last year nearly 70,000 transactions were conducted by the country’s base of debit and credit cards, as against 57,000 in 2015. In terms of value, these cards did Rs. 290 billion worth of transactions, up by 22% from Rs. 237 billion in 2015.

Visa Sri Lanka and Maldives Country Manager Anthony Watson told the Daily FT that the biggest volume growth was coming from the travel and airline sector, which has reported a 30% increase year-on-year in June. This momentum in fact prompted Visa to partner SriLankan Airlines and Standard Chartered Bank to unveil the national carrier’s biggest ever promotion of up to a maximum of two free tickets for online bookings.

Last year, payment volume on Visa credit cards increased 23%, while Visa debit cards were up 21%. There has also been a significant increase in the overall number of Visa transactions (22%), with a 61% increase in ecommerce transactions, of which half is via mobile phones, and there is a 39% increase in international transactions. Overall cards in force saw a 12% growth.

The overall number of credit and debit cards in the market is estimated at around 17 million.

According to Anthony Watson - ‎Country Manager Sri Lanka and Maldives at Visa, the impressive growth comes on the back of a number of initiatives and investments made by Visa in developing acceptance infrastructure and driving awareness over the benefits of electronic payments in the country.

He said that with the increased security provided and smart phones being affordable and gaining popularity, more Lankans are making digital payments. Sri Lanka’s mobile phone penetration is at 92% and there are over four million internet users with mobile internet via smart phones, registering phenomenal growth.

“Initiatives and investments made by Visa in developing the acceptance infrastructure and driving awareness around digital payments have helped fuel growth,” Watson added. “More people are taking advantage of the convenience to shop online,” he added.

New Inland Revenue Bill passed in Parliament

• Tax exemptions offered for investments made in Northern Province
• Individuals with a monthly salary of LKR 100,000 will be tax exempted 
• SMEs and identified sectors will get a tax reduction from 28% to 14%
• PAYE tax will be enforced at end October, new act enforced from 1 April 2018
• Monthly interest income of senior citizens up to Rs. 125,000 will be tax exempted. 

The Inland Revenue (IR) Bill was passed in Parliamentyesterday, allowing the Government to scrap the complicated tax system and establish a “fair but transparent” tax policy for Sri Lanka with plans to increase Government revenue from direct tax.

Minister of Finance and Mass Media Mangala Samaraweera stated, “The Government will reduce the gap between direct tax and indirect tax by 2020, enabling the nation to move forward”. According to the Minister, state revenue has declined drastically during recent past. In 1990 state income stood at 19% of the GDP but has declined continuously to 10% by the end of 2014.

Summing up the debate, State Minister of Finance Eran Wickramaratne stated that people will be taxed based on the income they receive from the respective activities they are engaged in. “We will not tax the beggars, but if a beggar is engaged in a business, yes that business will be taxed. But if a businessman is making an investment, proper accounting will help him to enjoy capital allowance within a specified period. This will allow them to recover the investment and encourage him to make more investments. SMEs will have 14% tax. Exporters will also have 14% tax, which is the lowest tax percentage under the new Act. Tax policies were made by not looking at large businesses,” he said.