Thai model mulled in place of SEC’s price band

By Indika Sakalasooriya

A system prevailing on the Thai bourse is being proposed to curb excessive manipulation at the stock market here, a Securities and Exchange Commission (SEC) source told The Bottom Line.
His remarks came amid the commission’s indecisiveness over the 10 percent price band issue.
Suggestions have been made to adopt the Thai stock market (SET) model to curb excessive manipulation if the price band is lifted in the near future, the SEC source explained. 
“The price band would go but it won’t just go. If it is to go, a proper monitoring system should be in place. So, we are contemplating several models we could adopt and Thai model is one of them,” the source said. 
As he further pointed out, the Thai model imposes price bands only on selected shares which look too vulnerable due to possible manipulative attempts. The SET model does not place price bands across the board.
According to the literature available on the Internet, SET imposed a 10 percent price band during the early part of 1990s to curb excessive manipulation even though it hurt the vibrancy of the market to some extent. But they introduced a set of new floor and ceiling price limits in 1997, letting a stock to fluctuate with a range of 30 percent of the previous closing price.
Along with these new measures, SET also introduced circuit-breakers to ease any unusual volatility in the market that may cause investor panic.

However, TBL’s attempt to get an official confirmation on the matter was fruitless as senior SEC officials maintained a tight-lip policy over the price band issue.
SEC Deputy Director-General Malik Cader, while confirming that a final decision had not yet been reached on the price band, refused to comment on the possible adoption of the Thai-market model saying that “nothing of that sort was suggested during the commissioners’ meeting held last week”.
The 10 percent price band, which was imposed by the SEC a few weeks ago, has been subjected to a lot of criticism - for and against. 
The key argument against the price band was that it could kill a day’s trading, an aspect according to many, a market should facilitate.
The Colombo bourse dipped immediately after the imposition of the price band, but rebounded a few days later, pushing the investor community’s hopes up - though the sentiments are not fully recovered yet. 

Sixth Senses CEO to visit Lank

Sixth Senses CEO to visit Lanka

By Indika Sakalasooriya
The Chief Executive of luxury spa operator Sixth Senses, Sonu Shivadasani, is to visit Sri Lanka next month, to announce the joint venture between his company and Sri Lanka’s resort operator Aitken Spence to construct an up market resort in the Southern Coastal line of the country.
“Mr Shivadasani will be here to open the construction of the Ahungalle Luxury Resort and Spa Complex, which was originally billed as Evason Hideaway next month,” an Aitken Spence official said.
Aitken Spence Hotels managing director Malin Hapugoda told the media earlier that the joint venture project is to come up near Ahungalla, in Beruwala, a prime beach resort where it has two properties, Heritance and Neptune.
The investment for the project is estimated at USD 20 million and the ownership structure would be 50:50. Presently Sixth Senses operates spas at Aitken Spence-owned hotels, Kandalama and Tea Factory.
Sonu Shivdasani, Chairman and CEO, founded the Six Senses group together with his wife, Eva. British born, he is a former student of Eton College, and holds a M.A. in English Literature from Oxford University.
Sonu began his career with a two-year induction in the family business which covered many businesses except tourism.
According to an interview he has given to Meridia Capital in 1991, Sonu reduced the amount of time he spent in the family businesses and made a small investment in Pavilion Resorts. The original shareholding was later extended to full ownership and renamed as Six Senses Hotels & Resorts, later to become Six Senses Resorts & Spas.
The company’s focus was changed to the higher end 5 star designer niche. The executive team also changed so that the management’s skills reflected the requirements of the new strategic direction.
In October 1995, he opened his first new build resort in the Maldives, and created the brand: Soneva. This was followed by the Evason brand, initially in Thailand and Vietnam, and Six Senses Spas.

Rate cut to hit pensioners

Rate cut to hit pensioners (22/08/10 The Nation)

By Indika Sakalasooriya
Pensioners, who depend on interest income from their bank deposits for their daily expenses, are likely to be hit by the newest interest rate cut announced by the Central Bank, analysts and economists point out.
According to them, the interest rate cut announced by the Central Bank last Friday would prompt commercial banks to immediately cut deposit rates.
“This decision by Central Bank to lower the reverse repurchase rate by half a percentage point to 9 percent would certainly compel the banks to reduce both deposit and lending rates — which we will be able to see during this week,” an analyst, who requested anonymity, said.

Currently, the average deposit rates are between four to five percent and lending rates range from 12 to 15 percent.
He said he was doubtful whether whether the new rate cut would spur a credit growth as there was “hardly any demand for credit, apart possibly from the construction sector in anticipation of a tourism boom”.
“On the other hand, the deposit rates will further fall and as a result the interest income will follow suit. This could be a quite a challenge for a country where there’s a lot of pensioners and an increasingly aging population.

According to recent Labour Ministry data, the percentage of people above the age group of 60 years increased from 6.3% in 1971 to 9.2% in 2001 and was estimated by the United Nations at 11% in 2008. By 2031, 21.9% of the people will be over 60 years, or one out of four will be an aged citizen.
Meanwhile, in its statement announcing the rate cut, the Central Bank has reasoned out why the bank opted for it as “The Central Bank expects credit flows to the private sector to gather momentum during the remaining months of the year alongside the anticipated pick-up in economic activity”.

However, a reputed senior economist, who also wished to remain unnamed, said that this measure by the Central Bank communicates that it is trying to accelerate economic growth at any cost.
“The bank’s presumption that the country’s inability to attain a higher growth is due to lack of cheaper credit would have prompted it to do so. But the economic growth is a complex issue and adequate credit flows are necessary but not sufficient for generating growth. We need an investment friendly atmosphere for people to take risk and invest. The prerequisites like a flexible labour market, good infrastructure, improved road transportation and energy and power at competitive prices are all needed for credit to work in an economy. Hence, this move may simply lead to higher credit expansion and future inflation”.

Since 2009 the Central Bank of Sri Lanka quite opposed to the other central banks in the region, has been lowering interest rates to push economic growth whereas others raised borrowing costs to avoid rise in prices and asset bubbles.

Devil's Staircase

Journey To ‘Devil’s Staircase' ( Double Cut )

Bamarakanda Falls

We started our journey from Colombo on Saturday evening to reach the fairly unknown, though much glorified among trekkers, nature lovers and the like, the ‘devil’s staircase’, which is located in a tricky track between Kalupahana and Ohiya in the Sabaragamuwa Province.

Since we set off around 3.00 p.m., we knew that it was not possible for us to reach Kalupahana before dark through the Colombo-Badulla A4 highway, we settled at a rather small inn for the night in Balangoda, planning to reach Kalupahana by the dawn of the next day.

The anticipation to witness this man-made abnormality to nature woke us up early in the morning and we loaded our gear back to the car to reach Kalupahana.

From Balangoda, there is around 20 miles to Kalupahana. Though the car rumbled due to the sudden elevation, it had to tackle, it was the last thing to be heard as we were completely enraptured by the scenic beauty of the road we were travelling on. The hills, the dew, the mist, the freshness in the air, and the children dressed in white sarongs and ‘lama sarees’ going to Dhamma Schools—what else was lacking for a perfect morning!

By about 7.30 we were able to reach Kalupahana junction and took the road to the left, which is also the route to reach Sri Lanka’s tallest waterfall, Bambarakanda, to reach our hideout, the Bambarakanda Resort, from the bustling society for the next two days.

The owner of this small eco friendly resort is Mrs. Sera Mayakaduwa, who is an ardent nature lover. Bambarakanda Resort was the starting point for our trekking adventure to the ‘devil’s staircase’ as it was situated at the beginning of the track.
We unloaded our luggage to the small cottage given to us and ate a hasty but tasty meal prepared by Mrs. Mayakaduwa, which consisted of my favorite, ‘pol rotti’ with butter. The lady was also kind enough to equip each of us with a lunch packet, probably knowing very well that the journey to ‘devil’s staircase’ might leave us with a desire to gobble a devil.

Equipped with backpacks with water, food and glucose and some first aid in case of emergency, the six of us started the journey at around 8.30 a.m. The road was rock-strewn and a prime example for soil erosion. Probably an experienced driver behind a four wheel drive might be able to pass through, we chatted.

As we walked forward, the elevation began to increase. Within the first kilometre or may be two, there were a few small houses beside the road. By the road, there was a man with a small child in his arms and we asked him as to how far the devil’s staircase was.? In response, he presented us with a blank face and said he has not heard about such a place. Of course, he was an inhabitant who lived in one of those houses beside the road!

Intrigued, we thought, are we going the wrong way? Nevertheless, we decided to trek forward and as the elevation rose, the cooler the climate became. Now we were the only one on the road and there were no houses or people to be seen. Off guard, a drizzle started and a slight mist fell upon us. But neither the drizzle nor the mist was an obstacle for us to continue with our journey. We were going above the Bambarakanda falls .

As we trod forward, we reached a place where the people who were passing by had lit oil lamps and hung on tree boughs asking protection from some supernatural powers when entering the area. This gave us the signal that we were following the correct route.

As the drizzle ceased and the mist went away taking the dark clouds with them, the sun came out, giving us some relief. Again we were able to witness signs of life, as we entered a large tea estate. A stream coming though the estate crossed the road we were travelling on and there we met Karupaiah, who worked as a labourer in the estate. In incorrect Sinhalese, he told us that we have entered Udaweriya tea estate. Then we asked him the question. “How far is devil’s staircase?”

The expression on his face proved that he had heard the remark before and told us that though the people in Colombo call it the ‘devil’s stair case’, the people around here call it the ‘double cut’. Karupaiah said at least we have to travel another 5 kilometres, if we are to reach the ‘double cut’. What an expression was there on the faces of the guys who accompanied me!

We had already travelled not less than 6 kilometres. Sensing the situation, Karupaiah kindly told us that instead of taking the road that goes round the estate we can take a short cut that lies through the estate.

We were more than willing to take the shortcut and Karupaiah was suddenly transformed into a tour guide! Then we started the journey among the tea bushes. We were not walking but climbing. The elevation was so steep that we had to climb very carefully.

As we climbed there, he told us some stories. According to Karupaiah, Udeweriya Estate is the highest living point in Sri Lanka. However, he was unable to recall the elevation. He also told us that Udeweriya workers could probably be the estate workers who suffered the most in the country, largely due to extreme weather conditions and access difficulties.

As Karupaiah said if they were to go to a town to even to buy the essentials they either have to go to Kalupahana or Ohiya. “There is no public transport and a vehicle travels very rarely along this road. People go to Ohiya or Kalupahana to fetch even their essentials on foot, every week.”

Through the shortcut again, we reached the road, a higher spot of the road we were travelling earlier. There was a board bearing “Udeweriya Estate” by the road. Then Karupaiha showed us a vacant area located between two mountains in the distance, as the entrance to the devil’s staircase.

If I were to say, two of our travel mates lost their temper, I was not mistaken I guess. However orange flavoured glucose with cool mountain water did the trick for them, as they got up and started to walk, rather ascend, ahead.

Along with Karupaiah, another two young Tamil boys from the nearby workers quarters, which are well known as ‘lines’, accompanied us. They told us that very rarely do visitors come along this road. However according to Karupaiah some travellers take this track to go to Horton Plains .
“By the end of this track, you can go to Horton Plains if you turn to the left and if you turn to the right you can go to Ohiya along the railway track” he said.

After another 30 minutes walk, Kaurupiah announced that we have reached the ‘double cut’ or as we call it the ‘devil’s staircase’. At the entrance to it, there was sign board, painted in white, which bore nothing. When we asked Karupaiah whether this board is there to hold the notice ‘devil’s staircase’ to inform the travellers, he said that it was there for sometime, but no one has written anything on it.

Then we saw the ‘devil’ staircase’ and understood why it is called such. Suddenly the road disappeared into a mountain and two extremely steep bends bring down the elevation more than hundred metres. From the distance this is seen as a staircase dug into a mountain. What makes it special, is the sudden decrease of elevation and the extreme narrowness of the bends.

The people around there call this palace as ‘double cut’ because of the two bends that were cut into a mountain. According to Karupaiah, this place was baptised as ‘devil’s stair case’ by the white planters in the colonial era, who ran the Udeweriya Plantation.

Recently, only the area we call devil’s staircase has been concreted to avoid land slide. While having lunch in the shade of a nearby tree, we saw several people carrying various goods on their heads and shoulders coming though devil’s staircase. They told us that they are workers at the Udeweriya Plantation, returning from Ohiya. They were an acquaintance of Karupaiah and he told us that these people have gone to Ohiya to buy food and other essentials. When we met them at ‘devil staircase’ they had travelled more than 7 kilometres on foot.

Since it was getting late, we decided to head back with them. While walking they told us several years back there was a plan to construct this road from Kalupahana to Ohiya to make it suitable for public transport.

“However no one came forward to take the contract to construct the road for several years. Then one company came forward but they also abandoned the project due to the obvious difficulties” Raju, 40, one of the group of the people we were travelling with told us.

By their ‘lines’, Raju and the group and Karupaiah bade us good bye and we hurried back down to our cottage since it was getting dark and a slight mist was falling upon us. By about 6.00 p.m., we were able to reach our cottage and there was Mrs. Mayakaduwa with cups of hot coffee.

If you are planning to visit ‘devil’s staircase’ or planning to pass it through to Horton Plains via the route we took by vehicle you must have a four-wheel-drive with an experienced driver. And also it is better if you can take the journey in the early part of the year—January to April—since incessant rain and mist won’t be there at that time of the year. If the road gets wet and muddy, driving would be very tricky. If you like to trek, our advice is to take enough food, water and glucose with you. And a good pair of sports shoes would certainly come in handy.

by Indika Sakalasooriya
The Nation , March 1, 2009