Sri Lanka's NDB, DFCC hire Boston Consulting to advice on merger June 17, 2014 (LBO) - Sri Lanka's National Development Bank and DFCC Bank has engaged Boston Consulting Group (India) Pvt Ltd, to advice on a planned merger.The two banks are merging under a regulatory move to create a bigger entity. The banks said in a joint stock exchange filing that no final decision has been made on the merger.
298 on board crashed Malaysian flight, 154 Dutch: airline KUALA LUMPUR, July 18, 2014 (AFP) - There were 298 people, including 154 Dutch nationals, on board the Malaysia Airlines flight that crashed in strife-torn eastern Ukraine, the carrier said on Friday.The flight "was carrying a total number of 298 people -- comprising 283 passengers including three infants of various nationalities and 15 crew of Malaysian nationality," the airline said in an emailed statement.
There also were 43 Malaysians, including the crew and two infants, and 27 Australians, it said, updating earlier figures as the airline worked to verify passenger nationalities.
Twelve were Indonesians including an infant, nine were British, four were German, three were from the Philippines and one was Canadian.
The airline said four were Belgian but the Belgian foreign minister said five Belgians were on board.
Malaysia Airlines said the nationalities of 41 passengers remained unconfirmed.
Air traffic control lost contact with the Boeing 777-200 around 14:15 (12:15 GMT) near the Russian-Ukrainian border, Malaysia Airlines has said.
The flight took off from Schiphol airport in Amsterdam shortly after noon Thursday and was supposed to land in Kuala Lumpur at around 6:10 am Friday local time.
Malaysia Airlines will send a team to Ukraine on Friday to help with the investigation.
Another plane will also be made available to grieving relatives wanting to visit the crash site, an official said.The crash is the Netherlands' second-largest air disaster to date.
The country's largest happened in March 1977 when 238 Dutch citizens died at Tenerife in the Canary Islands when two Boeing 747s crashed with the loss of 582 lives.
The crash is a fresh blow to the flag carrier which, along with the Malaysian government, is still struggling to provide answers on the disappearance of flight MH370 on March 8 with 239 people aboard.
Benefits to Sri Lanka banks from pawning guarantee temporary: S&P July 17, 2014 (LBO) - Benefits from a state guarantee for gold-backed loans (pawning) will be temporary, a report by Standard & Poor's, a rating agency said."The credit guarantee for pawning loans will provide only brief respite to Sri Lanka's banking industry, which is still struggling to overcome the effects of declining gold prices," said Standard & Poor's credit analyst Deepali Seth-Chhabria said in a statement.
"The banking industry will remain vulnerable to the volatility in gold prices, given that pawning loans form a significant part of banks' loan books, unless essential structural and regulatory changes are implemented."
The guarantee encourages banks to lend up to 85 percent of the value of gold instead of around 60 percent.
Banks that loaned money when gold prices were around 1,700 US dollars an ounce, were hit by defaults when prices fell to 1200 to 1,300 dollars an ounce.
Banks then cut back on total pawning loans in 2013 and so far in the first quarter of 2014.
Standard & Poor's expects the overall volume of pawning loans to increase with new loans.
But a cap on interest rates could lower margins along with a premium that has to be paid to the Central Bank.The full statement is reproduced below:-
Sri Lanka's Loan Guarantee Will Benefit Its Banks, But Only For A While
SINGAPORE (Standard & Poor's) July 15, 2014--Sri Lanka's decision to guarantee pawning (gold-backed) loans could be a blessing for the country's troubled banks. But the reprieve is unlikely to last too long. That's according to a report titled "Sri Lanka's Pawning Loan Guarantee Could Temporarily Cushion Banks' Flagging Performance," that Standard & Poor's Ratings Services published today.
"The credit guarantee for pawning loans will provide only brief respite to Sri Lanka's banking industry, which is still struggling to overcome the effects of declining gold prices," said Standard & Poor's credit analyst Deepali Seth-Chhabria. "The banking industry will remain vulnerable to the volatility in gold prices, given that pawning loans form a significant part of banks' loan books, unless essential structural and regulatory changes are implemented."
The Sri Lankan central bank's credit guarantee scheme for pawning loans aims to increase funding to sectors that are important for economic development. Growth in funds to such sectors slowed last year as banks cut back on pawning loans following an increase in nonperforming loans (NPLs) in the pawning segment as gold prices declined. The scheme encourages banks to once again divert funds toward pawning--a segment that is already vulnerable to gold price volatility--and that too at higher loan-to-value ratios. Banks scaled back in both these areas last year as gold prices fell and NPLs rose.
"Banks may put off tightening their risk management systems to ensure limited losses in the pawning segment because the guarantee would provide a cushion against the losses," said Ms. Seth-Chhabria. "We believe that while relatively relaxed underwriting standards and regulations in the pawning segment resulted in strong loan growth in 2009-2012, they also contributed to the higher defaults thereafter."
Standard & Poor's expects the overall volume of pawning loans to increase as banks offer incremental credit under this scheme and the ones that had curbed lending in 2013 begin issuing new pawning loans. Nevertheless, the scheme could lower banks' margins on pawning loans because of a cap on the interest rate on loans offered under the scheme. In addition, operating costs for the pawning segment will likely increase because banks will have to pay the central bank a premium under the guarantee. But the reduction in credit costs should offset this increase.
Sri Lanka jails killers of British tourist COLOMBO, July 18, 2014 (AFP) - A Sri Lankan ruling party politician and three accomplices were Friday sentenced to 20 years in jai for murdering a British holidaymaker on Christmas Eve and raping his Russian partner.The Colombo High Court said town council chief Sampath Vidanapathirana was guilty of killing 32-year-old Khuram Shaikh, an International Red Cross aid worker, who had tried to stop a brawl at a southern beach resort on December 24, 2011.
After 33 days of hearing evidence, judge Rohini Walgama told a packed court house that Vidanapathirana, a member of President Mahinda Rajapakse's Freedom Alliance, and three others were guilty of all the charges. Two others were discharged.
All six of them were indicted in December after repeated allegations that there was an unnecessary delay in bringing the case to court, leading to suspicions they were being shielded by their political connections.
Britain's Prime Minister David Cameron had cited the murder of Shaikh, who was beaten then shot in the head, as an example of Colombo's failure to deliver justice.
Shaikh was holidaying in Sri Lanka during a break from his job in the Palestinian territory of Gaza where he was fitting prosthetic limbs.
Hotel manager Tharanga Peiris told the court earlier this year that she tried to stop him going to the aid of another hotel guest who was being beaten by the politician and his gang.
Peiris, manager of the Nature Resort in southern Sri Lanka, said she had a clear view of Vidanapathirana and his men during the attack.
Another hotel guest said that the attackers had "behaved like animals" and went on a rampage smashing plates, glasses, car windows and toppling a three-wheel taxi parked outside.
Shaikh's girlfriend, who was knocked unconscious after a brutal assault, returned to Sri Lanka this year to give evidence and identified one of her attackers in court.
She was not seen on Friday, but Shaikh's brother Nasir listened to the judgement being delivered in a packed courtroom.
The case was initially heard in the southern town of Tangalle, the hometown of the main accused, but shifted to the capital Colombo last year following allegations that the suspects were intimidating witnesses."There was a lot of media attention on this case," judge Walgama said while sentencing the four men. "This is an important case in our legal history and I was able to conclude the trial in just over three months of hearings."
It was not immediately clear if the men would appeal the verdict and the 20-year jail sentences. Two more accused in the case were discharged.
Sri Lanka shares close down 0.3-pct July 17, 2014 (LBO) - Sri Lanka's shares closed 0.31 percent lower on Thursday despite net foreign buying, brokers said.
The Colombo benchmark All Share Price Index closed 20.69 points lower at 6,721.87, down 0.31 percent. The S&P SL20 closed 13.58 points lower at 3,747.47, down 0.36 percent.
Turnover was 926.45 million rupees, down from 1.21 billion rupees a day earlier with 75 stocks closed positive against 124 negative.
John Keells Holdings closed 10 cents higher at 245.00 rupees with market transactions of 279.10 million rupees contributing 30 percent of the turnover.
JKH’s W0022 warrants closed 1.20 rupees higher at 65.90 rupees and its W0023 warrants closed 40 cents lower at 73.70 rupees.
HNB closed 1.30 rupees lower at 169.10 rupees with an off-market transaction of 21.93 million rupees changing hands at 173.00 rupees per share contributing 2 percent of the turnover.
E-Channelling closed 1.10 rupees higher at 16.80 rupees, attracting most number of trades during the day.Foreign investors bought 189.13 million rupees worth shares while selling 26.49 million rupees worth shares.
Sri Lanka Telecom closed 1.20 rupees lower at 55.00 rupees, contributing most to the index drop.
Lion Brewery Ceylon closed 13.90 rupees lower at 659.90 rupees and Distilleries closed 1.10 rupees higher at 204.90 rupees.
Ceylon Tobacco Company closed 2.50 rupees higher at 1,102.50 rupees and Hemas Holdings closed 70 cents higher at 48.90 rupees and.
BBC News to cut 400 jobs in austerity drive LONDON, July 17, 2014 (AFP) - The BBC said on Thursday it will cut 415 jobs from its news department in the latest cost-cutting measures by the world's largest public broadcaster.Director of News James Harding said the cuts over the next two years were part of savings needed as a result of a freeze in the licence fee, which all British households with a television must pay.
"It will be a testing time of uncertainty and change," the British Broadcasting Corporation quoted Harding as telling staff in a briefing at its headquarters in London.
But he said the BBC would create 195 new posts in the news division as part of a restructuring plan, meaning a net reduction of 220 full-time jobs overall.
BBC workers are set to go on strike on July 23 during the opening of the Commonwealth Games in Glasgow, Scotland over the layoffs.British Prime Minister David Cameron's coalition government froze the licence fee for six years in 2010 as part of sweeping austerity measures to cut a record deficit.
The BBC also announced 2,000 job cuts in November 2011.
BBC News currently employs around 8,400 people, including around 5,000 journalists, the corporation said.
China picks site for BRICS bank: reports SHANGHAI, July 17, 2014 (AFP) - China has already chosen a site for the future Shanghai headquarters of the BRICS development bank, state media said Thursday just two days after its creation.At a summit in Brazil, the BRICS group of emerging economic powers -- which also includes Russia, India, China and South Africa -- on Tuesday created the New Development Bank to finance infrastructure projects.
After drawn-out negotiations over the bank's location, BRICS leaders agreed to put its headquarters in China's commercial hub of Shanghai, which is seeking to become an international financial centre.
Shanghai will place the headquarters in the former site of the 2010 World Expo in the city's premier Pudong development zone, in the section where the old China Pavilion -- now an art museum -- was located, along with those of several Asian and Middle Eastern countries, local television reported.
The city cleared a five-square-kilometre (two-square-mile) site for the six-month expo and large plots are now unused, though some of the area has been redeveloped.
Chinese state media said the BRICS bank aims to reduce Western dominance of the global financial system, while criticising multi-lateral agencies like the World Bank and the International Monetary Fund.
"The old pattern in which the World Bank and the International Monetary Fund dominated the field will face competition from now on," the Global Times newspaper said in an editorial on Thursday.
"The launch of the BRICS bank with Shanghai as its headquarters is a testament to China's national strength, diplomatic capabilities and strategic position," said the newspaper, known for its nationalistic editorial stance.The Chinese government took a less strident tone. China's finance ministry said the bank would help the global recovery and drive long-term economic growth, according to a report by the official Xinhua news agency.
The BRICS grouping will base an Africa Regional Centre in South Africa, after Johannesburg lost out to host the headquarters