16th Jan 08

ATTN: MR CHANDIMA UDABAGE RUNDOWN THE STATE OF BUSINESS – 16TH JAN, 2008 NATIONAL SECURITY

VTR

NILANTHA

01.35

EXPORT EARNINGS

VTR

CHAMINDA

01.45

COCONUT

VTR

SHASHIKA

01.20

T/B RATES

CARD

NISHANI

00.25

ADD STATE OF D/R BRIDGE DEALING ROOM

VTR

01.20

ADD STATE OF BUSINESS BRIDGE U.S. ECONOMY

VTR

RIYAD

BREAK 2 - STOCK WATCH STOCK UPDATE

CARDS

01.30

CURRENCY

CARDS

00.20

LINE UP EDITOR: ANCHOR:

- NISHANI P. - DAKSHITHA S.

04.10

HEADLINES 1.PRESIDENT REQUESTS THE PUBLIC TO REMAIN CALM FOLLOWING INCIDENTS IN MONARAGALA ,AND 2.SRI LANKA’S TRADE DEFICIT FURTHER WIDENS IN NOVEMBER 2007. 1.SLUG:MCNS–VTR PRESIDENT MAHINDA RAJAPAKSA CALLS ON ALL PEOPLE OF SRI LANKA WHO VALUE DEMOCRACY, HUMAN VALUES AND PEACE TO BE EVEN MORE RESOLUTE IN THEIR DETERMINATION TO RID THE COUNTRY OF THE MENACE OF TERRORISM. IN A STATEMENT, HE ALSO REQUESTS THE PUBLIC TO REMAIN CALM, AND GIVE ALL ASSISTANCE TO THE SECURITY FORCES IN THE EXEMPLARY EFFORTS TO ELIMINATE TERRORISM AND BRING ABOUT A GENUINE AND SUSTAINABLE PEACE IN SRI LANKA. PRESIDENT’S STATEMENT CAME FOLLOWING THREE SEPARATE ATTACKS IN MONERAGALA KILLED AROUND 28 PEOPLE TODAY.

LTTE

ROLL VTR

2.SLUG:EXTERNAL TRADE–VTR SRI LANKA’S BALANCE OF PAYMENT BY END REGISTERED A SURPLUS OF 616 MILLION DOLLARS.

NOVEMBER

2007

THE CENTRAL BANK PROJECTS A FIGURE OF 550 MILLION DOLLARS BY END OF 2007 WHICH IF ACHIEVED WILL BE THE HIGHEST BOP SURPLUS SRI LANKA HAS ACHIEVED SO FAR. THE PREVIOUS HIGH OF 502 MILLION DOLLARS WAS RECORDED IN 2003. THE BANK SAYS THIS IS POSSIBLE DUE TO THE INFLOW OF DOLLARS TO THE COUNTRY VIA THE DEBUT DOLLAR BOND ISSUED LAST YEAR. MEANWHILE DURING NOVEMBER THE COUNTRY’S EXPORT EARNINGS CONTRACTED BY 5.1% WHILE THE IMPORT BILL WENT UP BY 15.4%. THE TRADE DEFICIT DURING THE FIRST ELEVEN MONTHS OF 2007 STOOD AT 3.2 BILLION DOLLARS RECORDING A MARGINAL INCREASE OF 1.8 PERCENT COMPARED TO THE CORRESPONDING PERIOD IN 2006. ROLL VTR

3. SLUG: COCONUT – VTR THE COCONUT DEVELOPMENT AUTHORITY TOGETHER WITH THE COCONUT EXPORTERS ASSOCIATION LAUNCHED A PROGRAM TO SELL COCONUTS AT A REASONABLE PRICE. THIS PROGRAM WAS LAUNCHED AT AUTHORITY IN NARAHENPITA TODAY.

THE

COCONUT

DEVELOPMENT

ROLL VTR

4.UP NEXT IS A LOOK AT THE PRIMARY MARKET T-BILL AUCTION RESULTS FOR THIS WEEK 5.LET’JOIN SANETH FOR OPERATIONS THIS WEEK

A

LOOK

AT

DEALING

ROOM

BREAK 6.SLUG:U.S.ECONOMY-VTR THE CURRENT SLIDE OF THE U.S. ECONOMY IS A SERIOUS CONCERN FOR SRI LANKA AS THE U.S. IS THE LARGEST TRADING PARTNER AND IS THE NUMBER ONE DESTINATION FOR SRI LANKAN APPAREL EXPORTS. THE 2008 KICKED OFF WITH SERIOUS CONCERNS REGARDING THE HEALTH OF THE U.S. ECONOMY AS U.S. UNEMPLOYMENT FIGURES SOARED TO 5% AND THE DOLLAR CONTINUED ITS WEAK STREAK. HOWEVER, SRI LANKAN ECONOMISTS SAY THE ECONOMIC TROUBLES IN THE U.S. ARE A STORM IN A TEA CUP. ROLL VTR

BREAK

7.STOX THE MARKET HIT A STEADY DOWNWARD TREND TODAY AND ENDED WITH BOTH INDICES NEGATIVE. 3 CROSSINGS TOOK PLACE FOR THE DAY. 0.78 MILLION SHARES OF TOKYO NON VOTING CHANGED HANDS AT 17 RUPEES AND 50 CENTS. DISTILLERIES SAW 0.54 MILLION SHARES MOVE AT 95 WHILE 0.2 MILLION SHARES OF THE FINANCE CROSSED AT 65 RUPEES. TOKYO NON VOTING SAW THE DAY’S HIGHEST TRANSACTION OF SHARES OF 0.8 MILLION AND WAS FOLLOWED BY DISTILLERIES AND THE FINANCE COMPANY. TURN OVER WAS DOMINATED BY DISTILLERIES WITH A CONTRIBUTION OF 51.6 MILLION WHILE THE FINANCE AND TOKYO NON VOTING FOLLOWED WITH CONTRIBUTIONS OF 27.4 MILLION AND 14.1 MILLION RESPECTIVELY. FOREIGN BUYING FOR THE DAY WAS TAGGED AT 75.7 MILLION AND FOREIGN SALES AT 70.9 MILLION. CARD 1 THE ALL SHARE PRICE INDEX SAW A SIGNIFICANT DROP OF 50.55 POINTS TO 2,382.16 WHILE THE MILANKA ALSO PLUNGED 47.43 POINTS TO CLOSE AT 3,055.86. TURN OVER FOR THE DAY WAS AT 180.3 MILLION. CARD 2 BERUWALA WALK INN, COMMERCIAL DEVELOPMENT, LANKA ALUMINUM, KELANI CABLES AND LB FINANCE TOPPED THE DAY’S GAINERS LIST CARD 3 WHILE HOTELS CORPORATION, ELPITIYA, MULLERS, KANDY HOTELS AND SUNSHILE HOLDING WERE THE DAY’S MAIN LOSERS CARD 4 LANKA TILES LIMITED MADE A N INTERIM DIVIDEND ANNOUNCEMENT FOR THE DAY. FOREX RATES CARD 5 CARD 6

SEGMENT: MAIN DATE: 16/01/08 REPORTER: NK SLUG: MCNS – VTR PRESIDENT MAHINDA RAJAPAKSA CALLED UPON ALL PEOPLE OF SRI LANKA WHO VALUE DEMOCRACY, HUMAN VALUES AND PEACE TO BE EVEN MORE RESOLUTE IN THEIR DETERMINATION TO RID THE COUNTRY OF THE MENACE OF TERRORISM. IN A STATEMENT, HE ALSO REQUESTS THE PUBLIC TO REMAIN CALM, AND GIVE ALL ASSISTANCE TO THE SECURITY FORCES IN THE EXEMPLARY EFFORTS TO ELIMINATE TERRORISM AND BRING ABOUT A GENUINE AND SUSTAINABLE PEACE IN SRI LANKA. PRESIDENT’S STATEMENT CAME FOLLOWING THREE SEPARATE ATTACKS IN MONERAGALA KILLED AROUND 28 PEOPLE TODAY. ROLL VTR CLAYMORE ATTACK IN BUTTALA KILLS 26 THREE SEPARATE LTTE ATTACKS IN MONARAGALA PRESIDENT CALLS FOR CALM SUPER Minister Keheliya Rambukwella Govt. Defence Spokesperson

LTTE

VOICE OVER – MCNS A PASSENGER BUS, WHICH WAS PLYING FROM BUTTALA OKKAMPITIYA WAS CAUGHT UP IN A CLAYMORE MINE BLAST BUTTALA AT AROUND 7.40 AM THIS MORNING.

TO AT

THE DEFENCE MINISTRY SAID 26 OTHERS INJURED IN THE ATTACK.

64

PEOPLE

WERE

KILLED

AND

IN THE SECOND INCIDENT, 4 SOLDIERS WERE INJURED WHEN THEIR MILITARY VEHICLE WAS CAUGHT UP IN A CLAYMORE BLAST ON THE BUTTALA-KATARAGAMA ROAD. IN THE THIRD INCIDENT, LTTE CADRES FIRED UPON A GROUP OF FARMERS KILLING TWO OF THEM AND INJURING 4 AT DAMBEYAYA. MEANWHILE, THE CEASEFIRE AGREEMENT BETWEEN THE SRI LANKAN GOVERNMENT AND THE LTTE FORMALLY ENDED TODAY. THE GOVERNMENT GAVE NOTICE TWO WEEKS AGO THAT IT WAS PULLING OUT OF THE AGREEMENT, WHICH WAS BROKERED BY NORWAY IN 2002. GOVERNMENT DEFENCE SPOKESPERSON EXPLAINED TO THE MEDIA MORE ABOUT ITS DECISION TO END THE CFA. V/C

SEGMENT: DATE: REPORTER: SLUG:

MAIN 16 / 11 / 2007 CHAMINDA EXTERNAL TRADE – VTR

SRI LANKA’S BALANCE OF PAYMENT BY END REGISTERED A SURPLUS OF 616 MILLION DOLLARS.

NOVEMBER

2007

THE CENTRAL BANK PROJECTS A FIGURE OF 550 MILLION DOLLARS BY END OF 2007 WHICH IF ACHIEVED WILL BE THE HIGHEST BOP SURPLUS SRI LANKA HAS ACHIEVED SO FAR. THE PREVIOUS HIGH OF 502 MILLION DOLLARS WAS RECORDED IN 2003. THE BANK SAYS THIS IS POSSIBLE DUE TO THE INFLOW OF DOLLARS TO THE COUNTRY VIA THE DEBUT DOLLAR BOND ISSUED LAST YEAR. MEANWHILE DURING NOVEMBER THE COUNTRY’S EXPORT EARNINGS CONTRACTED BY 5.1% WHILE THE IMPORT BILL WENT UP BY 15.4%. THE TRADE DEFICIT DURING THE FIRST ELEVEN MONTHS OF 2007 STOOD AT 3.2 BILLION DOLLARS RECORDING A MARGINAL INCREASE OF 1.8 PERCENT COMPARED TO THE CORRESPONDING PERIOD IN 2006. ROLL VTR TRADE PERFORMANCE Nov. exports down by 5.1%, Imports up by 15% Garments, Rubber Products & Diamond exports slow down Imports of consumer goods drops in Nov.07’

VOICE OVER – EXTERNAL TRADE – CHAMINDA – 16 / 11 THE MONTH OF NOVEMBER 2007 SAW EXPORTS BRINGING IN REVENUE OF IN 591 MILLION DOLLARS, A DROP COMPARED TO THE 622 MILLION THE COUNTRY EARNED DURING NOVEMBER 2006. THE CENTRAL BANK ATTRIBUTES THE CONTRACTION OF EXPORT EARNINGS TO THE DECLINE IN EARNINGS FROM ITEMS SUCH AS GARMENTS AND TEXTILES, RUBBER PRODUCTS AND DIAMONDS AND JEWELRY. GARMENTS AND TEXTILES EARNINGS DROPPED BY 12.9 PERCENT DURING NOVEMBER 2007 WHILE AGRICULTURE BACKED BY TEA EXPORTS SAW A GROWTH OF 21.6 PERCENT DURING THE SAME MONTH MEANWHILE IMPORT EXPENDITURE DURING NOVEMBER 2007 HAS INCREASED BY 15.4 PERCENT YEAR ON YEAR TO STAND AT 1 BILLION DOLLARS. THE INCREASE WAS CAUSED BY HIGH SPENDING ON OIL IMPORTS WHICH ROSE BY 46.7 PERCENT DURING THE PERIOD. INCREASED IMPORTS OF INTERMEDIATE GOODS SUCH AS TEXTILES, CLOTHING AND DIAMONDS AND INVESTMENT GOODS SUCH AS MACHINERY, EQUIPMENT AND BUILDING MATERIALS TOO HAS PUSHED UP THE IMPORT BILL. ENDS/.

SEGMENT: DATE: REPORTER: EDITOR: SLUG:

MAIN 7TH JANUARY 2007 RIYAD R. ANOUK T. WEAK U.S. ECONOMY 2008

THE CURRENT SLIDE OF THE U.S. ECONOMY IS A SERIOUS CONCERN FOR SRI LANKA AS THE U.S. IS THE LARGEST TRADING PARTNER AND IS THE NUMBER ONE DESTINATION FOR SRI LANKAN APPAREL EXPORTS. THE 2008 KICKED OFF WITH SERIOUS CONCERNS REGARDING THE HEALTH OF THE U.S. ECONOMY AS U.S. UNEMPLOYMENT FIGURES SOARED TO 5% AND THE DOLLAR CONTINUED ITS WEAK STREAK. HOWEVER, SRI LANKAN ECONOMISTS SAY THE ECONOMIC TROUBLES IN THE U.S. ARE A STORM IN A TEA CUP. ROLL VTR Super Indrajith Aponsu Senior Lecturer - Dept. of Economics University of Colombo Kenneth de Zilwa Economist TAG 1 ‘U.S. ECONOMY’S IMPACT’

VOICE OVER / WEAK U.S. ECONOMY / RIYAD / 7TH JANUARY 2007 / VTR ECONOMISTS ALL OVER THE WORLD ARE SCRATCHING THEIR HEADS ON THE POSSIBLE OUTCOME OF A U.S. RECESSION WHICH EXPERTS BELIEVE IS NOT THAT FAR OFF. EXPERTS SAY THE SUB-PRIME FINANCIAL CRISIS WHICH MADE FINANCIAL INSTITUTIONS SUCH AS BANKS WRITE-OFF BILLIONS OF DOLLARS FROM THEIR BOOKS AND THE HIGH PRICE OF OIL HAVE BEEN CITED AS THE MAIN CONTRIBUTORS TO THE NET 5% DECLINE IN U.S. PAYROLLS. U.S. STOCKS HAVE BEEN REELING FROM LAST WEEK DUE EXPECTATIONS OF LOWER CONSUMER SPENDING THIS QUARTER.

TO

THIS MAYBE A WORRYING FACTOR FOR THE SRI LANKAN ECONOMY AS THE U.S., IS THE BIGGEST SINGLE DESTINATION FOR SRI LANKAN APPARELS. IN 2006 OUT OF SRI LANKA’S 303,263 MILLION RUPEE APPAREL EXPORTS 169,718 MILLION RUPEES OR 55% OF TOTAL EXPORTS ARE DESTINED FOR THE U.S. MARKET. 1.46 JITH IF YOU LOOK AT INDIVIDUAL COUNTRIES IT IS THE LARGEST RECIPIENT OF SRI LANKAN EXPORTS SO IF SOMETHING HAPPENS TO THE U.S. ECONOMY THAT SOMETHING WILL HAPPEN TO SRI LANKA EXPORTS SUPERFICIALLY 2.06 IN RECENT MONTHS OTHER MAJOR CURRENCIES IN THE ASIAN REGION SUCH AS THE CHINESE YUAN AND INDIAN RUPEE HAVE SOARED AGAINST THE DOLLAR. MOST OF THE GULF CURRENCIES HAVE CARRIED FORWARDED THE SAME SENTIMENT AGAINST THE DOLLAR. FINANCIAL HOUSE, GOLDMAN SACHS SAYS THAT THE DOLLAR MIGHT DEPRECIATE FURTHER AGAINST MAJOR ASIAN CURRENCIES. HOWEVER, THE SRI LANKAN RUPEE IN CONTRAST, WHICH APPRECIATED DUE TO THE 500 MILLION SOVEREIGN BOND ISSUE IN THE LAST QUARTER, IS EXPECTED TO SLIDE TO THE 114 MARK IN THE NEXT 2 QUARTERS.

3.52 JITH IN THE CASE OF THE SRI LANKAN SITUATION IT IS SOMEWHAT DIFFICULT SRI LANKAN SITUATION IS PURELY BASED ON THE BOP SCENARIO SO WE HAVE A FAIRLY DIFFICULT SCENARIO IN THE TRADE AND NOT MUCH OF A OVERALL COMFORTABLE SCENARIO IN THE OVERALL BOP WHICH MEANS THEIRS A LIKELIHOOD THAT THE SRI LANKAN RUPEE WILL CONTINUE TO DEPRECIATE AGAINST THE DOLLAR 4.14 +++++++ 4.20 JITH IN THAT SCENARIO WILL NOT BE SERIOUSLY AFFECTED TO THE RUPEE COST IN THE LOCAL CONTENT. 4.35 HOWEVER, EXPERTS SAY THE WEAK U.S. ECONOMY, HIGHLIGHTED BY A SLIDING DOLLAR MAYBE A BLESSING IN DISGUISE FOR THE SRI LANKAN EXPORTER. 5.11 JITH IF YOU PUT IN A SIMPLE EQUATION FORM YES. BECAUSE IF THE YUAN IS GETTING STRONGER WHICH IS A COMPETITIVE EXPORTER WITH AGAINST SRI LANKA, WILL BE LOSING IT’S COMPETITIVE EDGE, WHICH MEANS COUNTRIES LIKE US WILL STAND TO GAIN 5.30 IN RECENT TIMES THE HIGH PRICE OF OIL TO A CERTAIN EXTENT HAS BEEN CUSHIONED BY FOREIGN REMITTANCES, SOFTENING THE ADVERSE IMPACTS OF CRUDE OIL TO A CERTAIN EXTENT. APONSU FURTHER STATED THAT AT A TIME SUCH AS THIS, A WEAKENING DOLLAR IS NOT A BAD OPTION FOR SRI LANKA AS THE BULK OF ITS DEBT IS IN US DOLLARS. 6.56 JITH IF YOU ARE GETTING CURRENCIES FROM SOME OTHER COUNTRY WHICH IS BOUND TO DEPRECIATE AGAINST THE $ THAT MEANS WHEN YOU CONVERT END OF THE DAY YOU FIND MORE $ 7.06 AND IF YOUR MAKING YOUR PAYMENTS IN $ WHICH MEANS YOU HAVE TO CONVERT LES AMOUNT OF JAP YEN TO PAY UP THE SAME BILL. 7.20 SO SRI LANKA WILL GAIN IN $ FALLING SITUATION. 7.20 HOWEVER HE CONCLUDED THAT ALL IS NOT ROSY FOR SRI LANKA DUE TO IT’S OVER RELIANCE ON IMPORTS SUCH AS COMMODITIES, WHICH WILL HAVE AN ADVERSE EFFECT ON THE CONSUMER. 8.26 JITH BUT FROM A DOMESTIC INFLATION POINT OF VIEW MUCH OF OUR IMPORTS ARE IN $ AND THIS IMPORTS ARE LIKELY TO UP. SO WE’LL BE PAYING MORE $ FOR THE SAME COMMODITY 8.37 WHICH WILL MEAN MORE INFLATION 8.46 - ENDS/

SEGMENT: MAIN DATE: 16.01.2008 REPORTER: SHASHIKA SLUG: COCONUT – VTR THE COCONUT DEVELOPMENT AUTHORITY TOGETHER WITH THE COCONUT EXPORTERS ASSOCIATION LAUNCHED A PROGRAM TO SELL COCONUTS AT A REASONABLE PRICE. THIS PROGRAM WAS LAUNCHED TODAY AT THE COCONUT DEVELOPMENT AUTHORITY. ROLL VTR SUPER Shanthi Wijesinghe – President Coconut Exporters Association D.J.U. Purasinghe - Chairman Coconut Development Authority INFO TAGS ‘COCONUT PRICES’ Coconut production in ’07 – 2900 Mn Usage of coconut per year - 3300 Mn

VOICE OVER / COCONUT / SHASHIKA / 16/01/08 THE COCONUT EXPORTERS ASSOCIATION PLANS TO DISTRIBUTE COCONUTS AT LOWER PRICES RANGING FROM 26 TO 28 RUPEES. CURRENTLY THE RETAIL PRICE OF A COCONUT STANDS AT AROUND 38 TO 40 RUPEES. VOICE CUT – SHANTHI – IN – 44:40 WE ARE GOING TO DISTRIBUTE IN FIVE DIFFERENT AREAS IN COLOMBO AND SUBURBS. MOST OF THE CONSUMER WILL GET A BETTER PRICE. BIG ONE AT 28 AND SMALLER ONE AT 26 RUPEES. OUT – 45:02 HE ALSO SAID THAT THEY HOPE TO CONTINUE THIS PROGRAM UNTIL THE PRICES COME DOWN IN THE RETAIL MARKET. ACCORDING TO THE EXPORTERS ASSOCIATION THEY MAINLY BUY COCONUTS FROM KULIYAPITIYA, MADURANKULIYA IN THE COCONUT TRIANGLE. VOICE CUT – SHANTHI – IN – 46:09 WE HAVE GIVEN PROMISE TO THE CDA GETTING A VERY HIGH FOB PRICE THAT IS MINIMUM OF 40 CENT FOR THE COCONUT AND ALSO PURCHASING PRICE KEEPING AT A REASONABLE LEVEL. SO THAT THE CONSUMER WANT GET AFFECTED. OUT – 46:34 MEANWHILE, IT WAS ALSO REVEALED THAT THERE IS A SHORTAGE IN COCONUT SUPPLY OF 12% DUE TO BAD WEATHER. THE COCONUT DEVELOPMENT BOARD NOTED THAT THE PRICES COCONUTS HAVE GONE UP DUE TO THE SHORTFALL IN SUPPLY. END/

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