news bulletin - july 2012

7/31/2019 News Bulletin - July 2012

1/8

BI- Gradient

AllianceM o n t h l y B u l l e t i n : J u l y 2 0 1 2

In Economic news:

In Business news:The Ceylon Petroleum Corporation (CPC) lost its appeal against a London court ruling orderingit to pay about $200m to Standard Chartered Bank on an oil derivative CPC purchased in 2008.

New vehicle registrations in June wilted to 21,587 (-46% YoY) with motor car registrationsdeclining to 1,454 (-66% YoY).

Tourist arrivals for June were up 21.6% YoY to 65,245 with total arrivals from Jan-Jun 12recording a growth of 18.7% YoY to 452,867.

Sri Lanka Tea Board reduced its tea production forecast to 325m kg for 2012 from 330m kgciting severe drought conditions.

Abans is to receive $40m from private equity investors. Parkson Retail Asia acquired a 41.8%stake in Odel PLC.

LMD-Nielsen Business Condence Index in July at a four month high of 108, up 18 points MoM,as negative sentiment of the economy from policy tightening was reported to have receded.

Litro and Laugfs gas prices were reducedby Rs.150. In May gas prices wereincreased by Rs.350 to Rs.2,396 citing high

energy costs despite prices of propaneand butane declining.

LankaClear invests Rs.300m to create acommon ATM card. Asian AllianceInsurance introduces online motorassessment reporting. Nielsen ConsumerCondence Index in July 12 was 59 (+ 1point MoM); 54% (up from 34% in June12) consider conditions will be bad forpeople to buy things they need over thenext 12 months.

In Consumer news:

Sri Lanka launched a $1.0bn 10-year international sovereign bond. Part of theproceeds will be utilised to pay back the maiden $500m sovereign bond maturingin October 12.

IMF released the nal tranche ($415m) of Sri Lankas Stand-by Arrangement (SBA)facility and entered into talks with the government to grant a further $500m underan extended fund facility.

CBSLs investment of the countrys foreign reserves came under close scrutiny, as it

was revealed that its Greek investments had made an Rs.2.2bn (about $16m) loss.

According to UNCTAD, Sri Lanka attracted only $300m in FDIs in 2011, contrary todata released by the BOI that stated over $1bn in FDIs for 2011.

The trade decit in May widened to $864.9m (+2.1% YoY) as exports declined forthe third consecutive month (-15.1% YoY) osetting a reduction in imports (-6.4%YoY). The trade decit for the rst ve months of 2012 now stands at $4.2bn(+24.7% YoY).

The rupee ended at 130.07/133.47 vs. the USD at the end of July 12 (stronger~1.5% MoM).

Ination rose to a 42 month high of 9.8% YoY (+50 bps MoM). Food pricesincreased 1.6% MoM due to dry weather conditions aecting crop production andthe lagged eect of previous price hikes on wheat our, fuel and milk powderimpacting the prices of prepared foods.

The All Share Price Index closed at 4,944.86 down 0.4% MoM. Year to date the Indexis down 18.6%.


2/8

BI- Gradient


Sri Lanka launched a $1.0bn 10-year

international sovereign bond. Part of the proceedswill be utilised to pay back the countrys maiden $500m sovereign bond

maturing in October 12. The latest bond was priced at a yield of 5.875% p.a.

and was oversubscribed 10.5x. Moody's and S&P rated the bonds B1 with

positive outlook and B+' with a stable outlook. The number of investors in

the order book increased to 425 from 315 in 2011.

The International Monetary Cooperation Minister revealed to the Parliament

that Sri Lanka would have to repay debts of more than $15bn to China andthe Asian Development Bank (ADB) from its borrowings since 1997.

The ADB in its Outlook Supplement in July 12 stated that sluggish global economy

would weigh on Asias growth. It reported that economic growth in developing Asia moderated during the rst half of 2012 as slowergrowth in the US and Euro area reduced demand for the region's exports. ADB expects GDP for developing Asia to be 6.6% in 2012 and 7.1% in 2013 due to the

weak global economic environment and slower growth in China and India. However ination in developing Asia is to moderate to 4.4% given the weaker outlook

on economic growth and the declining trends in international oil and food prices.

In Economic news:

The Central Bank of Sri Lanka (CBSL)s investment of the countrys foreign reservescame under close scrutiny, as it was revealed that its Greek investments had made asignificant loss. Whilst the CBSL did not to disclose the amount of the loss, an opposition member of parliament stated that a parliamentarycommittee was informed of an Rs.2.2bn (about $16m) loss on the Greek investment.

The CBSL stated that at the time of the investment, Greece had the backing of the

European Financial Stability Fund and an AAA rating. The investment was noted as only asmall fraction of its European portfolio and the loss was said to be comfortably oset by

higher returns from other investments. The return on foreign reserves was 6.56% in 2011

(6.16% in 2010). We believe this to increase in 2012 due to the receipt of the SBA tranche

($415m), bond issue ($1bn) and CBSLs lesser intervention in supporting the rupee.

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

0

1000

2000

30004000

5000

6000

7000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Average CBSL Reserves USD$m (LHS) Return on foreign reserves (%) (RHS)

Source: CBSL

The International MonetaryFund (IMF) released the finaltranche ($415m) of Sri LankasStand-by Arrangement (SBA)facility. The total amount approved and disbursedwas about $2.6bn. The main objectives of the facility

were to rebuild the external reserves and strengthen the

scal position.

A few days after the nal tranche was released the

government engaged the IMF to arrange further

funding of $500m as an extended fund facility. Koshy

Mathai, the IMF's resident representative in Sri Lanka, said

talks on this facility are at the very preliminary stage and

that they were keen to "move to a new kind of

arrangement, a sort of higher level of arrangement,

where we are able to focus on macroeconomic goals we

already have".

The countrys government debt to GDP ratio was 78.5%

in 2011. During 1990 to 2007 it averaged 95.0%, reaching

a high of 103.2% in 2001. Debt servicing remains a

problem in Sri Lanka due to tax and non-tax revenuesnot being sucient to meet current and capital

spending compelling the government to go to the debt

market.

Year Amount Period Rate Premium Subscribed

($m) (yrs) (%) (bps) (x) USA Europe Asia

20072009

20102011

2012

500500

1,0001,000

1,000

55

1010

10

8.2507.400

6.2506.250

5.875

408494

377322

435

>3.0x>13.0x

>6.0x>7.0x

>10.0x

40%45%

53%43%

44%

30%31%

25%30%

29%

30%24%

22%27%

27%

Region

Source: CBSL


3/8

Sri Lanka attracted only $300m in Foreign DirectInvestment (FDI) in 2011, United Nations Conference on Trade andDevelopment (UNCTAD) reported. However Sri Lankas Board of Investment noted FDIs exceeding

$1bn in 2011 and expects $1.75bn in 2012. UNCTAD ranked Sri Lanka 159th out of 182 in FDI

attraction and 68th in FDI potential. Sri Lankas revival of underperforming companies and

under-utilised assets Bill was noted as a global example of FDI restrictions.

M o n t h l y B u l l e t i n : J u l y 2 0 1 2

BI- Gradient

AllianceIn Economic news:

Sri Lanka benefits from its lowcorrelation to major global markets thanmost other competitor frontier markets,Acuity Stockbrokers states.

It notesthat while frontier market specic issues such as low liquidity and

volatile exchange rates may continue, at an institutional level the case for Sri

Lanka is robust. Sri Lankas greatest trump card in this context is its new found

political stability. The company forecasts short-term GDP growth of 7.0% and

medium term growth of 8.0% on improved production eciencies and

post-war business opportunities.

Inflation rose to a 42 month high of 9.8% YoY (+50 bps MoM). Food prices increased 1.6% MoM due to dryweather conditions aecting crop production and the lagged eect of previous price hikes on wheat our, fuel and milk powder impacting the prices of prepared

foods.

Annual average change in ination was 6.0% (+20 bps MoM). In mid-July, CBSL

Governor Ajith Cabraal stated that annual ination in July should come down

from reduced import taxes on certain foods. Previously in response to the 9.3%

June ination an IMF ocial stated that "so the measure of ination has increased,

but we do not expect to see continued ination month after month after month.

We expect the statistical eect to fade out as the months move on."

Country

IndiaMaldivesPakisatanBangladeshSri LankaAfghanistanBhutan

Nepal

Attraction Ranking

5968

127144159168174

175

Potential Ranking

3126508968

159134

150Source: UNCTAD

The All Share Price Index closed at 4,944.86 down 0.4% MoM and down 18.6% year to

date. Best performing sectors were footwear and textiles (+11.2% MoM) and trading (+6.3%) while chemicals & pharmaceuticals and construction &engineering lost 6.5% and 3.4%. In July, foreign investors were net buyers of Rs.2.5bn and have been net buyers of Rs.25.6bn in 2012.

Nishan Sumandeera, co-founder of Frontier Capital Partners stated that Sri Lanka is to witness a foreign investor led wave of mergers and acquisitions in tourism

and nancial services. He noted that foreign investors are seeking acquisition opportunities via the stock market as they see potential from a weaker rupee and

bearish sentiment.

Next stock rally could be driven by the discovery of a commercially viable

deposit of oil, Amal Sanderatne, head of Frontier Research says. He estimates a 40%chance of a commercially viable oil deposit being found and noted that "Markets do not necessary try to look at the long term. Markets

love big news, investors love it".

A few days later Cairn Lanka a wholly owned subsidiary of Cairn India, an oil and gas exploration and production company announced that

it is going into the next stage of exploration in Sri Lanka in mid-2013. The rst stage resulted in gas and condensate discoveries.

40%

6.2%

7.2%7.7%

8.9%

8.2%

7.1%

7.5%7.0%

6.4%

5.1%

4.7%4.9%

3.8%

2.7%

5.5%

6.1%

7.0%

9.3%9.8%

Jan-11

Feb-

11

Mar

-11

Apr-1

1

May

-11

Jun-11

Jul-1

1

Aug-11

Sep-11

Oct-1

1

Nov-11

Dec-1

1

Jan-12

Feb-

12

mar

-12

Apr-1

2

May

-12

Jun-12

Jul-1

2

Inflaon YoY% change

Source: CBSL


4/8

The rupee ended at 130.07/133.47 vs. the USD in July 12

(stronger ~1.5% MoM). Ajith Cabraal in an interview with Reuters stated that theCBSL sees Rs.125 as an equilibrium level, but not a target. Arming CBSL action taken since February

12 he went on to state that Sri Lanka will maintain a exible exchange rate, allowing ows to

determine trends, though the Central Bank will intervene, if needed, should uctuations of the rupeecurrency become too sharp. An IMF ocial said it is tough to say if the rupee is overvalued' and that

any specic level no longer matters because the exchange rate is now exible.

M o n t h l y B u l l e t i n : J u l y 2 0 1 2

BI- Gradient

AllianceIn Economic news:

The trade deficit in May 12 widened to

$864.9m (+2.1% YoY); as exports declined for the thirdconsecutive month (-15.1% YoY to $710.1m) osetting a reduction in imports

(-6.4% YoY to $1.57bn). Growth of the trade decit is decelerating, lowest since

it contracted 15.8% YoY in Jan 11. This is evidence of restrictive monetary and

scal policies introduced in early 2012 impacting trade. However the trade

decit during Jan-May 12 is $4.2bn (+24.7% YoY).

Based on CBSLs 2012 forecasts of $11.7bn of exports and $20.9bn of imports

and a simple analysis of monthly trade activity during 2009-2011, our May 12

exports forecast was $942.0m above the actual $701.1m. However imports of

$1.57bn were in-line with our forecast. Poor export performance is likely derail

CBSLs trade decit target of $9.2bn in 2012, as during Jan-May 12, 46% of this

target ($4.2bn) has been exhausted.

In May, industrial exports (~77% of exports) declined 16.2% YoY as textile and

garments exports reduced 13.5% YoY to $278.2m due to lower demand in the

EU area, lower cotton prices and what we feel as the industry loosing price

competitiveness due to withdrawal of GSP+. Agriculture exports (22% of

exports) decreased 11.5% YoY due to lower international prices. Overall, May

exports drop of 15.1% was the largest since March 12 (-10.2%).

Intermediate goods imports (~62% of imports) declined 10.0% YoY due to a

19.7% YoY decline in petroleum imports from lower volumes and a marginal

decline in crude oil prices. Consumer goods imports declined 11.0% YoY, as

personal vehicle imports dropped 31.1% YoY to $57m. Overall May importreduction of 6.4% was the largest since March 10 (-4.6% YoY).

During Jan- May 12, exports fell 5.4% YoY to $4.0bn and imports increased 7.8%

YoY to $8.2bn, expanding the trade decit to $4.2bn (+24.7% YoY).

To achieve CBSLs trade targets the following are essential a) sustained increase

in export demand from US and Euro area (currently 21% and 36% of total

exports) b) higher cotton prices c) crude oil prices remaining at or below $110.

However higher European and US demand is unlikely as in July 12 the IMF

revised US GDP to 2.0% for 2012 and 2.3% in 2013 (previous estimates - 2.1% and

2.4%) and Euro area GDP was revised to negative 0.3% for 2012 and 0.7%

(previously unchanged for 2012 and 0.9% for 2013).

72.3%

230.5%

191.0%

137.4%

179.8%

238.7%

43.5% 49.7%67.6

""#(%&"#-%& "#)%&

-10.0%

40.0%

90.0%

140.0%

190.0%

240.0%

290.0%

-

200

400

600

800

1,000

1,200

Jun-11 Jul-11 Aug-11 Srp-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12

Trade deficit ($m) (LHS) YoY%$m

Source: CBSL

2009

2010

2011

710

917

2012E

400

500

600

700

800

900

1000

1100

1200

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

TOAL EXPORTS

$m

Esmated monthly export progression to meet CBSL 2012 exports target of $11.7bn

Note: May - Dec-2012 monthly esmates is based on average monthly contribuon to annual exports from 2009-2011

Source: CBSL

2009

2010

2011

May 12 A - 1,575May 12E - 1,583

2012E

600

800

1000

1200

1400

1600

1800

2000

2200

2400


TOTAL IMPORT

$m Esmated monthly Import progression to meet BSL 2012 Import target of $20.9bn

Note: May-Dec 2012 monthly esmates is based on average monthly contribuon to annual imports from 209-2011

Source: CBSL


5/8

BI- Gradient

AllianceM o n t h l y B u l l e t i n : J u l y 2 0 1 2Ceylon Petroleum Corporation (CPC) loses

its $200m hedging payment appeal. Previously the London court had ordered CPCto pay Standard Chartered Bank about $200m ($162m+interest) on the oil derivative. The CPC has 28 days to go before

the UK Supreme Court and make a case for the appeal.

In 2008 the CPC entered into a hedging agreement with international and local banks to buy crude oil at a cappedprice of $130 per barrel. Oil prices having hit a high of $147 in early 2008 fell to $40 in December 2008 thus exposingCPC to approximately a $500m obligation.

However the CPC refused to make payments thus prompting legal action by Standard Chartered, Citigroup andDeutsche Bank. The government claimed CPC did not have the capacity or technical expertise to enter into such anagreement and that the banks mis-sold the contracts. Standard Chartered maintains that CPC had always been awarethat a fall in oil prices would have made it liable to make payments

Tourist arrivals in June were up 21.6% YoY to65,245 beating our simple estimate of 58,000,with total arrivals to June reaching 452,687(+18.7% YoY).Hotel developments continue to proceed with a) a consortium ledby Asian Resorts & Casinos to build a $3bn tourism city in Katana b) Marriot International teaming

up with EastWest Properties to develop a 200 room hotel in Weligama c) PJ Group to complete Sri

Lankas rst 7 star hotel Isle of Agnes within two years with room rates expected to be between $5,000-10,000.

We forecast 94,400 arrivals in August to meet the governments target of 1m arrivals for 2012. Revenue from tourism was up 24.9% YoY during the rst ve months to

$397m; in May revenues were $57m (+20.6% YoY).

New vehicle registrations in June wilted to 21,587 (-46% YoY) with motor carregistrations declining to 1,454 (-66% YoY), according to a report published by JB securities. The report noted thatsales of the countrys most popular brand, Maruti Suzuki dropped to 318 units in June (-76% YoY), aected by increased vehicle import taxes. Analysts have

warned that declining vehicle sales would impact government revenue, further widening the budget decit.

The Ceylon Motor Traders Association expects a 30-40% drop in new vehicle registrations for 2012 due to by high import duties, weaker rupee and high

interest rates. Industry ocials exhort that citizens with modest income levels who were planning to upgrade from motorbikes to cars were the hardest hit by

the tax hikes. In May, imports of personal vehicles were $57m (-31.1% YoY) and we expect a similar trend for the reminder of the year.

In Business news:

Bajaj Auto is to cut three wheeler prices (~10%)and two wheeler prices (~5-14%) in Sri Lanka tocounter declining exports.The increase of import taxes on petrol anddiesel three wheelers from 51% and 61% to 100% has great impacted the company as shareprices of Bajaj India declined by 2% the date the tax hike was announced. Sri Lanka is one of thelargest export markets for the auto maker, accounting ~17-18% of export revenue.

Faced with similar diculties, Indian based auto company Atul Auto Ltd. is considering settingup an assembly plant in Sri Lanka. The company was also compelled to oer discounts of10-15% due to the tax hike.2012

-

20,000

40,000

60,000

JanFeb

MarApr

MayJun

JulAug

Sep

Oct

Nov

Dec

2010

2011

2012E

33,000

43,000

53,000

63,000

73,000

83,000

93,000

103,000


TOURIST ARRIVAL

2011 Actual 855,975

CAL forecast 900,000

BMI forecast 914,000

Tourism Development Authority forecatsts 1m tourist arivals in

2012. World Travel and Tourism Council esmate is 964,000.

Assumed monthly

progression of

tourist arrivals

Source: Sri Lanka Tourism Development Authority (SLTDA) , Capital Alliance (CAL), Business Monitor International (BM


6/8

BI- Gradient

AllianceAllianceM o n t h l y B u l l e t i n : J u l y 2 0 1 2In Business news:

The Sri Lanka Tea Board reduced its forecasts for teaproduction to 325m kg for 2012 from a previousestimate of 330m kg. Forecasts were revised due to the severe drought prevailing in thecountry. Tea production was down for the fth consecutive month in June to 25.8m kg (-13.2% YoY) with totaltea production for the 1st half of 2012 down 4.3% YoY to 163.26m kg. High grown tea (~25% of totalproduction) declined 29.2% YoY.

In 1Q12 tea exports to Iran (~13% of tea exports) were down 8.2% YoY and exports to the UAE (~3% of total exports) was down 63% YoY. Analysts statethat earnings outlook for tea in 2012 is uncertain as exports continue to be hampered by political instability in the Middle East. Earnings from tea exportsduring Jan-May 12 were $530.1m (-10.8% YoY).

Abans (Pvt.) Ltd (Abans) is to

receive $40m from StandardChartered Private Equity Ltd, theprivate equity and venture capital arm of Standard CharteredBank. Abans stated that the investment would be used toexpand the current business and strengthen its position as thelargest retailer of consumer durables in the country.

According to Fitch Ratings, the companys revenue grew at anannualised rate of 34% to Rs.17.6bn in the nine month endedDecember 2011, with operating EBITDAR margin improving to15.7% (FYE11:12.5%) .The companys key SBUs are retail, services,manufacturing, logistics, real estate and infrastructuredevelopment, and employs about 6,000 people.

The LMD-Nielsen Business Confidence Index

in July at a four month high of 108; up 18 points MoM, asnegative economic sentiment from policy tightening was reported to be receding. TheNielson Sri Lankas Director Shaheen Cader stated The business sector is increasinglyoptimistic that the economy would stage a recovery post the devaluation period,although respondents are still ex tremely concerned about ination and the economy.

In the latest survey, 21% of therespondents believed that theeconomy will improve over thenext 12 months, up from 14% inJune 12. More importantly thosewho believed the economy to getworse reduced to 42% from a highof 62% in June 12.

Sri Lanka ranked 15th in A.T. KearneysGlobal Retail Development Index for 2012.This is an improvement of 6 places from 2011 which was attributed to political and economicstability. The report highlights growing tourism, strong GDP numbers, healthy consumerspending, and increased exposure to global brands as growth drivers for the retail industry inSri Lanka. The report estimates the Sri Lankan retail market to be valued between$25bn-$30bn with organized retail (Cargills, Arpico, Abans etc.) accounting for only 3%. Thehigh cost of setting up stores, an un-conducive legal environment and the unavailability of

locally manufactured products are noted as reasons for the low level of organized retail.

Parkson Retail Asia, which operates department stores in Malaysia, Vietnamand Indonesia, has acquired a 41.8% stake in Odel PLC. The purchase of 60.6m shares was fromfounders Otara Gunewardene (27.8 %), Ajit Gunewardene (13.6%) and Ruchi Gunewardene (0.34%) at Rs.23.5 per share. The transaction will be followedby a mandatory oer to minority shareholders along with a 1 for 1 rights issue at Rs.20.

Odel went public in July 2010 oering an 11.5% stake in the companys equity. The company had a tough period during FY2011 with net prots declining23% YoY to Rs.147m despite a revenue growth of 15% YoY to Rs.3.8bn. Odel Plc stated that the acquisition by Parkson Retail Asia would make Odel part ofan international retail company and would contribute to FDI growth in Sri Lanka while raising capital for the companys growth.

2012 Global Retail Development Index

1 Barazil 100.0 85.4 48.2 61.6 73.8 0

12 Kuwait 81.1 88.7 36.4 20.3 56.6 -7

13 Turkey 78.8 69.3 32.3 33.1 53.4 -4

14 Saudi Arabia 63.1 81.8 35.4 33 53.3 -4

15 Sri Lanka 12.7 68.3 79 51.3 52.8 6

16 Indonesia 39.6 61.6 47 62.4 52.7 -1

17 Azerbaijan 19.2 41.5 93.6 53.2 51.9 N/A

18 Jordan 45.8 65.3 69.5 23.8 51.1 N/A

2012rank

Country Marketattractiveness(25%)

Marketsaturation(25%)

Timepressure(25%)

GRDIscore

Change inrank comparedto 2011

Country risk(25%)

Source: AT Kearney, Global Retail Development Index

85

95

105

115

125

135

145

155

165

175

185

Jan-11

Feb-11

Mar-11

Apr-11

May-11

Jun-11

Jul-11

Aug-11

Sep-11

Oct-11

Nov-11

Dec-11

Jan-12

Feb-12

Mar-12

Apr-12

May-12

Jun-12

Jul-12

Source: www.lmd.lk


7/8

BI- Gradient


The price of Litro and Laugfs gas was reduced byRs.150 following a Cost of Living committeemeeting. It was only in May that prices were raised by Rs.350 to Rs.2,396 citing high energy costsdespite prices of propane and butane declining by $420 and $285 during March-May 12. Propane and butaneprices are used as a benchmark against which Middle East sales of liqueed petroleum gas (LPG) to Asia are

priced.Moreover import duty on big onions, potatoes, sprats, sh, sugar, canned sh and dry sh were reduced. Separately the National Water Resources andDrainage Board stated that they would be compelled to increase water rates due to the increased cost of electricity, instability of the rupee and other costs.

A.T. Kearney categorized Sri Lankase-commerce market as E-commerceinequality. This describes Sri Lanka as a market that has a low-to-moderate levelof internet penetration but having a wealthy class that uses the internet extensively and regularlybought online. The analysis is based on the number of people who uses the internet and thelevel of comfort in purchasing products online.

It further states that the ability to adjust the product mix, prices and advertisements for onlinebuyers would appeal to the high-income web surfers and exibility of these factors would be

important as low-income users become more accustomed to buying online.

Sri Lanka has experienced unprecedented growth in the number of internet and email subscribers with over 1m subscribers as of 31st March 2012compared to only 234,000 at the end of 2008.

LankaClear Private Ltd toinvest Rs.300m to create acommon ATM card. This card isconsidered to reduce transaction costs by enablingcustomers to operate their accounts via multiplecommercial banks at a minor cost to banks and customers.

The project is also considered to save a considerable

amount of foreign exchange to the country by creating aplatform that would facilitate the processing of local cardtransactions. The company has plans on developing aregional switch targeting South Asian neighbours.

In Consumer news:

Sources:Euromonitor,InternationalTelecommunicationUnion;A.T.Kearneyanalysis

Ready and willing

Hesitant shopper

E-commerce inequality

Onlinebuyers

(percentage

ofInternetusersthatbuyonline)

Internet penetration(percentage of population that uses the Internet)

80

75

70

65

60

55

50

45

40

35

30

25

20

15

10

5

0

Mexico

SriLanka

India

Botswana

Philippines Lebanon J or da n A ze rb ai ja n

Morocco

AlbaniaPanamaKazakhistanGeorgiaIndonesia

Top10E-CommerceIndexmarkets

Turkey

ChileUruguay

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80

Infrastructure impediment

Malaysia

UnitedArabEmirates

Oman

Brazil

SaudiArabia

ColumbiaKuwait

Peru

Top30GRDI markets Sizeof bubbleindicatesonlineretailsales, 2011

Asian Alliance Insuranceintroduces online motorassessment reporting.Once an accident is reported, information will be sentto an assessor assigned to assist the policy holderfollowed by a SMS alert to the policy holder stating theclaim reference number. The system enables theassessor to submit the required documents and

photographs online following the inspection. Thecompany expects the new system to provide cost andtime savings to the policy holder.

The Nielsen Consumer Confidence Index in July 2012was 59, up 1 point from the all-time low of 58 recorded in June 12. 54% of the respondents (up from 34% in June12) stated that conditions will be bad for people to buy things they need over the next 12 months, a clear indicationof ination impacting household disposable income.

Consumers who consider job prospects to be bad over the next 12 months had risen to 24%, from 21% in June 12,but was still lower than the April 12 high of 31%.

Jul-12 59

Jun-12 58

May-12 60

Apr-12 65

Mar-12 72

Feb-12 77

Jan-12 85Dec-11 87

Nov-11 85

Oct-11 75

Sep-11 69

Aug-11 77

Jul-11 77

Jun-11 69

May-11 65

Apr-11 62NielsenConsumerIndex

Source: www.lmd.lk


8/8

Gradient AllianceHelping to shape your Business

We are a management consultancy and nancial advisory services provider. Combining

experience and comprehensive capabilities across many industries and business functions,

we work with clients to achieve a higher level of excellence.

We carry out company and market research, developing company nancial models,

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197 Galle Road

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Sri Lanka

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news bulletin - july 2012

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