Thursday, December 31, 2009

HAPPY NEW YEAR 2010


SRI LANKA STOCKPICKS WISHES YOU ALL HAPPY & PROSPEROUS NEW YEAR 2010

SRI LANKA TOPS IN ASIAN STOCK MARKETS PERFORMANCE - 2009

Following are Asian stock markets' moves over full year
2009. Data as of 0730 GMT, Thursday.
MARKET                               Index level   % gain
Sri Lanka (Colombo All-share)  .CSE    3385.55       125.3
 Indonesia (JSX)               .JKSE   2534.36        87
 India (Sensex)               .BSESN  17478.78        81.2
 China (Shanghai Composite)    .SSEC   3277.14        80
 Taiwan (Taiex)                .TWII   8188.11        78.3
 Singapore (FT Straits Times) .FTSTI   2897.62        64.5
 Thailand (SET)                .SETI    734.54        63.3
 Philippines (PHS Composite)    .PSI   3052.68        63.0
 Pakistan (Karachi 100)         .KSE   9475.24        61.7
 Vietnam (Ho Chi Minh)          .VNI    494.77        56.8
 Hong Kong (Hang Seng)          .HSI   21872.5        52.0
 South Korea (KOSPI)           .KS11   1682.77        49.7
 Malaysia (KLSE Composite)             1269.89        44.8
 Australia (S&P/ASX 200)             4870.64        30.9
 Tokyo (Nikkei average)        .N225  10546.44        19.0
 New Zealand (NZX 50)          .NZ50   3230.15        18.9
 (Compiled by Vidya Ranganathan, Asia Desk; Tel: +65 6870 3090)
source - reuters

BUY - SINGER SRI LANKA ( A HIDDEN OPPORTUNITY)

SECTOR                    -   TRADING

SHARE PRICE         -   Rs 76.00

ASI                             - 3385.55

Singer Sri lanka is a more than 100  year old company operating in our country. To day it is a large diversified company hold dealership for several powerful brands (Philips/Kenwood/Titan) in Sri lanka. It has acquired the Heylease consumer electronic channel in year 2008.

Singer has a very good network covering major towns,Rural areas etc. They are rewarded MOST POWERFUL BRAND IN SRI LANKA  by the Ac Nielsen/SLIM  & Most popular teen brand in  Sri lanka.

Singer  profitability was severely affected by low consumer demand,war situation & high interest costs for the past two years. Now with the economic rebound/low interest regime we can expect the reverse of the same from the company in future taking in to consideration their strong presence in agricultural/rural ares.


They have following strategic business units-

*Sewing related products             * Consumer electronics                * White goods (Refrigerators/ Freezers)
*Communication (computers)       * Kitchen related products           * Furniture
*Transportation (Motor bicycles)  * Agro (water pumps/Threshers) * Singer finance

We believe that the company is well positioned to grab the opportunities available in future specially from the economic revival & the  North & East areas.

NAV of the company as at 30/09/2009 was Rs 47.97 . Reported  profit for the same period was Rs49 m.n as against a profit of Rs 183 m.n.(This is with one off sale of commercial leasing in 2008).However for the last quarter there was a significant profit growth announced by the company. As at 30/09/2009 quarter profit was Rs 14.9 m.n. as against a loss of Rs 40.9 m.n a growth of 137% YOY.

Company has Reserves to the value of Rs 1.9 b.n in its books.as at 30/09/2009.

Singer finance will be the main driving arm of Singer Sri lanka's profitability in future.

Major share holders - 

               *  Singer (Sri Lanka) BV                      53,906,425 86.11  -   86.11%
               *  Singer Industries (Ceylon) PLC             1,050,700 1.68 -    1.68%

Singer Sri lanka is a high dividend paying company in its history as LLUB, NEST, TOBACCO.
Singer has been listed in CSE during the year 1982.Since then they have given 13 bonus issues to its share holders up to the year 2006.

RECOMMEND - LONG TERM BUY

SRI LANKA STOCK MARKET ASIA'S BEST PERFORMER

The performance made for the year 2009 the Colombo Stock Exchange Asia’s best performing bourse, and the world’s second best behind Russia, according to a ranking by Bloom berg news wires.

 Sri Lankan shares ended an eventful 2009 at a record high of 3,385.55 points, up 0.86 percent (28.96 points) Wednesday, and up 128 percent for the year, outperforming all other exchanges except Russia, brokers said.
The more liquid Milanka closed at 3,849.38 points, up 0.75 percent (28.81 points), according to provisional stock market data.Turnover was 765.4 million rupees.
Top gainers were Carsons by massive Rs30.50 to close  at Rs 490.50,Greg warrants 0000 & 0001 by Rs 5.00 & 5.25 to close at Rs 35.25 & 37.25 & Hexp by 4.25 to close at 35.25.
There were 98 positive contributors as against 47 negative contributors.

“Selected blue chips with adequate free float liquidity and good earnings in the September quarter continued to be preferred by investors ahead of the New Year,” Nikita Tissera, research manager at stock brokering firm SC Securities said.

“We expected more foreign fund inflows after the presidential elections next year 2010.


source- www.lbo.lk

SRI LANKA SHARES UP BY 128% FOR 2009


Sri Lankan shares hit a fresh record high on Wednesday led by blue chip buying, on expectations of better performance due to post-war economic optimism amid low interest rates ahead of a January election.

Analysts said local investors were driving up the market after they have seen foreigners buying shares when the market slows down.
"Foreign buying confidence is still encouraging the market," Danushka Samarasinghe, head of research at Asia Securities, said.

Analysts also said investors were positioning ahead of Jan. 26 presidential polls, betting that regardless of the outcome the stock market will continue its climb, fueled by post-war economic optimism.
Analysts said investors are also buying shares heavily due to low interest rates prevailing in the market.
Sri Lanka's presidential poll is scheduled for Jan. 26 and will be followed by parliamentary election due by April.

Analysts and traders said the broader market is still waiting for direction from the economic policies of the main presidential candidates Mahinda Rajapaksa and Sarath Fonseka.

Wednesday, December 30, 2009

MORE CRUISE SHIPS NOW COMING TO COLOMBO


The Sri Lanka Ports Authority said the cruise ship ‘Discovery’ of the Voyages of Discovery cruise line called at Colombo port as part of a cruise tourism revival with the end of the island’s ethnic war.
The vessel, sailing under Bermuda flag, can carry 756 passengers and touches Colombo mainly on its voyages in the winter season, an SLPA statement said.

SLPA managing director Nihal Keppetipola said improved security after the end of the war has created a conducive climate for a boom in tourism.
The Discovery ship’s call follows that of one by Louise Cruise Lines in recent weeks, he said.

“The global cruise industry is the fastest growing sector of the travel industry.”

Tourist arrivals in Sri Lanka have increased sharply since the end of the war in May when government forces defeated the Tamil Tiger separatists.

Voyages of Discovery was formerly known as Discovery World Cruises.

The line seeks to serve a "soft adventure" niche for travelers who not only crave adventure, but also love the comforts and amenities of traditional cruising aboard a classic ship, the statement said.
The cruise line is now owned by UK-based All Leisure Group which is also the holding company of Swan Hellenic and Discover Egypt.

source - www.lbo.lk

GOOD TIME AHEAD FOR HOTEL SECTOR COMPANIES

Tuesday, December 29, 2009

RENUKA AGRI TO BE LISTED ON 4TH JANUARY 2010

The Colombo Stock Exchange said shares of Sri Lankan coconut-based food products exporter Renuka Agri Foods will be listed on January 4, 2010 classified under the beverage, food and tobacco sector.

It said in a statement that 401,250,000 shares of Renuka Agri Foods will be listed on the CSE’s ‘Diri Savi’ second board, where listing rules are less stringent than on the main board.

The managers to the Renuka Agri Foods Initial Public Offer (IPO) last month have said it was oversubscribed by more than 12 times.
The company received over 5,409 applications worth more than 3.2 billion rupees.

The IPO was for 120 million shares at 2.25 rupees each. - (source - www.lbo.lk)

  This is the best time to invest in shares of COCO lanka & Renuka holding limited. Renuka Holding is the ultimate holding company of COCO lanka & Renuka Agri Foods. RHL subdivision of each share in to five is still pending & COCO has a pending rights issue of  Five (05) ordinary voting shares for every seven (07) existing ordinary shares held & One (01) ordinary non voting share for every seven (07) existing ordinary shares held.
(Issue Price - Ordinary voting share at Rs. 35/= each, Ordinary non voting share at Rs. 25/= each)
This rights issue is attractive  & we are confident that the investors who owns coco will have a very good times in future.

COLOMBO SHARES UP AGAIN


29/12/2009 - Colombo share market continues its upward momentum today, & ASI is up by 11.70 points & the millanka index by 11.55 points. Turn over for the day is Rs 620 m.n. Local investors are active in the market as useful.
Top gainers for the day are Ceylon guardian up by Rs 40 to close at Rs 430, Ceylon investment by Rs 20.50 to close at Rs 239.50. Investors who follows these two shares, Carsons & shares of Carson group of companies are intelligent & real winners by now.
Lion brewery is up by Rs 7.25 to close at Rs 81.75 & Cargo boat  by Rs 8.25 to close at Rs66.50.

There are 59 positive contributors as against 52 negative.

Monday, December 28, 2009

LION BREWERY PLC

SECTOR                   -   BEVERAGE FOOD & TOBACCO


SECTOR  P.E.          -   14.8


SHARE PRICE        -    Rs 74.50

ASI                            -    3344.89

Lion brewery is a Carson group company.The holding company of lion is Ceylon brewery limited.The company has performed well for the first six months of the year 2009 by reporting a profit of Rs 237 m.n. as against a loss of Rs 21,900/- an increase of 1183% YOY .

Net asset per share is Rs 64.93.

During last couple of weeks we saw large parcels of lion changing hands between Rs 65 - 70 range.
We can expect a steady growth in profits in LION in future due to the increased tourists arrivals to the country after the end of 30 year old civil war.

The joint venture company in India is the future of the LION. That Company now operates 4 breweries,one each in Maharashtra, Rajasthan, Himachal and Kolkata. It’s distribution reach has expanded to cover 23 of India’s 35 states and Union Territories. And in the first 4 months of 2009, it has all but reached the sales volume achieved during the 12 months of 2008.


COLOMBO SHARE MARKET UP 122% SO FAR THIS YEAR

Colombo share market is up today (28/12/2009), the bench mark index ASI by 52.13 points & the millanka price index by 31.78 points. The market turnover for the day was Rs 562 m.n once again driven by local investors.
Top gainers were Aitken spence by Rs 151.25 to close at Rs 1350 , Ceylon brewary by Rs 11.75 to close at Rs 107 & another carson group company Ceylon investment by Rs 16.75 to close at Rs 219.
High net worth individuals & institutional investors go behind blue chip companies & retailers more like to have mid cap stocks.

Sri lanka share market still trades lower in P.E. multiples than the most of the other countries in the region .
Trailing market price to earnings is the current price of a stock divided by last year's four quarters earnings per share.

Sunday, December 27, 2009

NATIONAL DEVELOPMENT BANK

SECTOR                        -  BANKS,FINANCE & INSURANCE

SECTOR  P.E.               -  10.30 

BANK'S  P.E. RATIO  -  4.4

SHARE PRICE             -  Rs 201.50


ASI                                 -  3292.76


Last week we saw  several large parcels of NDB bank changing hands once again @ Rs 200 *1,000,000 & @ Rs 205 *564,700. NDB bank is one of Sri lanka's top developments banks in the past & now doing commercial banking activities as well with a branch network of 40.

 Nine months profitability as at 30/09/2009 saw a significant growth of 50% (Group) YOY . Nine months profits were Rs 1.6 b.n. as against a profit of Rs 1.06 b.n. in year 2008

Earning per share is Rs 23.96 as at 30/09/2009 & Book value per share is Rs 167.58.

NDB bank has  one of the best loan books in our country which consists of low Non Performing Facilities & is the one of best capitalized banks in the country. Capital  adequacy ratio is around 20% which is well above minimum standards.

 They have significant stakes in CDIC & Eagle insurance company. Further we can expect profits from banks overseas business arm in Bangladesh in future as well.

NDB bank paid a high dividend for its share holders in the past.  This time also we can expect a better dividend from the bank,which is due withing the first quarter of year 2009.

Since the market is trading at  peak levels in its history, we would like to advise the investors to collect the share in small blocks,especially in the event of any price drop of the share in future.



RETURNS FORM THE SHARES RECOMMENDED BY US AS AT 27/12/2009

For the month of December 2009 we recommended following stocks for our visitors/investors.

 STOCK                             PRICE                    PRICE AS AT 24/12/2009                           RETURN

Coco lanka                        Rs 50.25                           Rs 46.75                                                    (8%)

Commercial bank (X)         Rs 120                              Rs 125                                                        5%

Renuka holding (N)            Rs 124.75                         Rs 138                                                      12%

Renuka holding (X)             Rs 95                               Rs 114                                                       20%

Ahungalle                            Rs 148                             Rs 164.50                                                   7%

Chevron                              Rs 125                             Rs 146.25                                                   18%
                                                                                                                                                        +
                                                                                                                            Rs 6.50 pending dividend

Tokyo (N)                           Rs 295                             Rs 298                                                         1%

Tokyo (X)                            Rs 17.25                         Rs 17.75                                                      3%

Colombo stock market still offers us attractive returns in medium to long term. After the end of 30 year old civil war, the liberated areas (North & East) we believe is  behind two three decades to the rest of the country. Participation of these areas to the economy during the coming months, Increase tourist arrivals in future, Low interest rate regime,Calm atmosphere in the country are the main factors to be considered when investing in the market.

HAVELOCK CITY FIRST PHASE COMPLETED


Overseas Reality (Ceylon) Plc owner, developer and Manager of the World Trade Centre (WTC) currently houses over 150 corporates under one roof. The facility is easily accessible by both tenants and visitors alike, being in the heart of the business hub in Colombo.

With peace dawning in the country, the business sentiments have improved with increasing demand for office space, contributing to growth in occupancy levels at WTC.

WTC is supported by state-of-the-art infrastructure facilities and is managed by a professional team. The facility also provides ample parking space to both tenants and visitors alike, in 9 levels of secure basement parking and off-site parking facility. It is also one of the most energy efficient commercial facilities in Sri Lanka.

As a member of the International World Trade Centre Association, tenants of WTC have access to business contacts in 326 World Trade Centres situated in 92 countries across the globe, linking Sri Lanka with the World.

Backed by the strength and stability of the World Trade Centre Project, Overseas Reality (Ceylon) Plc. currently has teamed up with Bank of Ceylon, the premier commercial bank in the country to undertake the mega development project, 'Havelock City'.

Havelock City, the most exclusive and elite condominium experience in Colombo, is spread over 17 acres of prime land in Havelock Town. The venture consists of four residential condominium phases, comprising of eight residential towers and a commercial complex. Phase 1 of the residential complex has now been completed and is due to be handed over to the buyers shortly.

Phase 1 consists of two towers, Park Tower and Elibank Tower.

Collectively there are 226 apartments in these two towers that include limited number of penthouse units.

source - www.sundayobserver.lk

COLOMBO SHARE MARKET CREATES RECORDS

The Colombo Stock Exchange (CSE) marked new records in both indices All Share Price Index (ASPI) and Milanka Price Index (MPI) on December 21.

The ASPI reached 3,219.87 up by 0.97% and MPI reached 3,6663.45 up by 0.91%. The days turnover topped Rs. 384.9 million.

This positive trend in the performance of the CSE was from May 2009 this year. On 22 May just one week after defeating the entire leadership of the LTTE, CSE broke its own record in daily turnover generating over 1.5 billion rupees turnover for five consecutive market days.

Though there were fluctuations the momentum continued and on several occasions CSE marked new records. The earlier record stood at four consecutive one billion rupee market days in 2006 and 2003. According to market analysts this run was a natural outcome of the inherent prospects the country has to offer investors.

In October the CSE surpassed the highest ever turnover recorded for a given year, when it reached Rs.115.2 billion for the year 2009. The previous record was Rs. 114.6 billion recorded for the year 2005. On October 13, 2009 the All Share Price Index (ASPI) reached 3,139.7 the highest point reached by the index.

Again on November 20 the CSE, surpassed the highest ever turnover recorded for a given year when it reached Rs.115.2 billion for the year 2009 to date. The previous record was Rs. 114.6 billion for the year 2005. CSE was ranked the second best performer this year by Bloomberg international, not solely on its own performance but as a result of the crisis in major economies and stock markets. However, market analysts said that these achievements indicate that peace achieved is being translated into optimism in business prospects. The end of the war means which new opportunities and new markets have been opened.

North, East provinces are two three decades behind the rest of the country in terms of economic development. Rehabilitation and reconstruction of these regions means huge investment opportunities.

A huge market for consumer goods and other durables as well as markets for vast amount of natural resources, raw materials, and agricultural products have been opened.

Analysts said that policy supports from the government is also a major factor for the stock market boom. IMF standby agreement facility removed external uncertainty over the Sri Lankan economy.

Stability of the Rupee, lose monitory policy and lowering of interest rate, sharp decline in inflation and lower unemployment rate helped build up confidence on the macro economic stability of Sri Lanka which boosted business confidence. The ongoing election cycle created political uncertainty and a negative impact in terms of attracting investments. The month of December turned out to be a spectacular month for the bourse, with increased foreign activity and the indices reaching heights not reached earlier. The high share prices provided ample opportunities for the retail to make quick profit.

Among the high powered dealings was that of JK Holdings in which over 29 million shares were transacted in a day which saw the turnover exceed five billion rupees. In the diversified Sector Aitken Spence reached Rs. 1,170 on 23 but cooled off.

There was extraordinary interest in the high potential Banking Stocks like NDB, HNB voting and Non voting and Commercial Bank.

The high arrivals in the tourist sector was also instrumental in making massive gains in hotel stocks. Where hot properties witnessed high demand and a substantial hike in its price.

A similar movement was effected in Ahungalla Hotels, Renuka Hotels and Hotel Developers which was fluctuating at various stages.

Dockyard was a big mover in the construction and engineering sector while Chevron made steady advances. The market helped the capitalization to pass the trillion mark once again.

source - www.sundayobserver.lk

Friday, December 25, 2009

Merry Christmas & Happy New Year

Staff of Sri Lanka Stock Picks wish our readers a Merry Christmas and a Happy New Year. May everyone enjoy the festivities and have a great time.Take care all

CIC RECEIVED RS 250M.N. SUBSIDIY FROM SL GOVT

Chemical Industries Colombo PLC (CIC) says the government has paid its dues amounting to Rs250 million which would have a positive impact on the listed company’s profitability.

"The Government of Sri Lanka has released Rs250 million due to price adjustments on sale of fertilizer made during the period November 2008 to March 2009. This will have an impact to the group profitability," CIC said in a filing with the Colombo Stock Exchange yesterday.

CIC made an after tax profit of Rs6 million from continuing operations during the September quarter, down 98 percent from the Rs326 million profit made in the corresponding period of 2008.

After adding profits from discontinued operations, the group’s after tax profit for the period recorded Rs24 million which was still 92 percent below the Rs323 million it made for the corresponding period of 2008.

In interim financial statements filed with the Colombo Stock Exchange, CIC said its "profit for the six months ended 30th September 2009 was adversely affected due to the significant losses recorded in the fertilizer business".

It made a profit of Rs160 million for the six months ending 30th September, down by 74 percent from Rs623 million for the corresponding period of 2008.

source - www.island.lk

Thursday, December 24, 2009

RETURN AS AT 24/12/2009 FROM RENUKA HOLDING

ON 11/12/2009 SRILANKA STOCK PICKS Published a recommendation regarding the company Renuka holding limited both voting & nonvoting counters .

At that time Rhl (n) was trading at Rs 124.75 & Rhl (x) Was trading at Rs 95. All Share Price Index was at 3056.64 points. As at today 24/12/2009 Rhl (n ) is up by Rs 13.75 ,trading at Rs 138.50. Rhl( x) is up by Rs 19 & trading at Rs 114.
ASI as at 24/12/2009 is 3292.76

RETURN FROM  INVESTING  RENUKA HOLDING   AS AT 24/12/2009


             ASI                 RHL (N)               RHL (X)
    
            7.72%              11.02%                  20%

This clearly shows both Rhl ( n) & (x) shares outperformed the market ASI as at today (24/12/2009)& the highest growth can be seen in non voting counter due to its low liquidity.

We still believe that both these counters have room for go up, back of the strong company performance as at 30/09/2009 (see RHL Accounts)& the future opportunities available in the agricultural sector in our country.Further RHL being the ultimate holding company of COCO LANKA, RENUKA AGRI FOODS, RENUKA  AGRI  EXPORTS LIMITED has the chance of price moving up once the Renuka agri foods commence trading at the cse.

How ever we advise investors to have a very close look at the price fluctuations of the counters.Selling of a particular share at any time is the choice of investors.

Investing in shares is one of the best investment opportunities available in our country today after the end of 30 years civil war. You can clearly see the return mentioned above,which is withing a very short period of 02 weeks.To day bank rates have come down to single digits levels,there for act now tomorrow may be too late.

PAN ASIA BANK RATING BBB - (lkr)

Pan Asia Bank had its long term national rating of BBB-(lka), which carries a stable outlook, confirmed by Fitch Ratings Lanka.

The rating is constrained by the bank's weak asset quality and consequently high non-performing loans / equity ratio, Fitch said in a statement.

Although capital adequacy ratios of Pan Asia are strong, the bank is yet to meet the 2.5 billion rupee minimum capital requirement that all licensed commercial banks have to show by June 2010.

Pan Asia operates in the small and medium enterprise segment but has also been growing its corporate loan book, which amounted to 10 percent of loans as at September 2009 compared to about 5 percent at the end of the financial year 2005.

The loan book contracted 11 percent in the nine months ending September 2009 due to the repayment of a few large facilities and the bank taking a cautious approach to loan growth amid the prevailing credit environment.

Asset quality weakened considerably between the 2007 financial year to end September 2009.

"However, the bank stepped up recovery efforts and increased its recovery staff in mid-2009, and Fitch notes the reduction in the rate of NPL (non-performing loan) accretion, with the bank's infection ratio falling to 2.3 percent as at end September 2009."

Profitability as measured by returns on assets improved to 2.5 percent as at end September 2009, driven largely by marked-to-market gains on Pan Asia's government securities portfolio.

"Higher operating costs, driven by PABC's proposed branch expansion in 2010 and higher credit costs could place downward pressure on profits in the 2010 financial year," Fitch said.

Fitch notes there were several changes to senior management positions in 2009 and that PABC is in the process of re-segmenting some of its key product lines as well as tightening credit processes and strengthening the overall risk management framework."

The impact of these changes on the bank remains to be seen.

PABC, is a small licensed commercial bank established in 1995, and is 35.3 percent owned by Mr. K.D.D. Perera and related parties. It operates through a branch network of 35.

INVESTORS  THINK  TWICE  BEFORE INVESTING  IN ANY  STOCK


source - www.lbo.lk

STOCKS UP AT COLOMBO SHARE MARKET

24/12/2009- Colombo market is up once again. Bench mark All Share Price index by 26.76 points,& millanka index by 32.91 points. Turn over for the day was 868 m.n. lead by local investors.Foreigners were net sellers for the day by massive Rs 350 m.n.
Gainers were BUKI  by Rs 159, Aitken spence by Rs 63, RHL X by11.50 & RHL by Rs 7.50.
Losers were CINS X , Seylan merchant leasing,& LHCL etc.

The pending subdivision of each of company shares in to five by the RHL looks attractive. As we mentioned in one of our earlier reports both voting & non voting shares of the Renka holding still have room for the go up in coming days.

NEW INSURANCE COMPANY

Distilleries group said in a stock exchange filing the Insurance Board of Sri Lanka had approved its application to set up an insurance subsidiary called Continental Insurance Lanka.

The Insurance Board said in a separate statement it had given registration to Continental Insurance Lanka to do General Insurance Business with effect from December 18, 2009.

Distilleries Company, the island's top alcohol producer, said sought regulator clearance to launch an insurance company with a start-up capital of 500 million rupees after losing control of a former state-owned insurance company.

Distilleries Company had said that it is willing to increase the investment provision to a billion rupees if necessary.

In 2003 Distilleries acquired state-owned Sri Lanka Insurance Corporation (SLIC) in a privatization deal.

But in June 2009 the Supreme Court reversed the sale, citing irregularities in the 6.0 billion rupee privatization deal.

Court ordered the government to repay 6.0 billion rupees originally paid by the private firm to gain control of SLIC.

Distilleries Company is a unit of the unlisted Stassens group controlled by tycoon Harry Jayawardene who also has large stakes in the listed Hatton National Bank, Commercial Bank and National Development Bank.

In June 2009, court said Milford Holdings, a special purpose company incorporated by the Distilleries group to purchase SLIC, could keep the profits earned during the time they ran the firm.

source - www.ibo.lk

OIL IS TRADING ABOVE $75 - BARREL

SINGAPORE (AP) — Oil prices rose to near $75 a barrel Wednesday in Asia after a report showed US crude inventories fell last week and a jump in housing sales suggested the world’s biggest economy is picking up speed.

Benchmark crude for February delivery was up 36 cents to $74.76 at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange.

The contract rose 68 cents to settle at $74.40 on Tuesday after the Organization of Petroleum Exporting Countries said the 12-nation cartel won’t change production quotas, a move widely expected by investors. OPEC leaders called on group members to adhere more closely to current quotas and reduce cheating.

Prices were boosted by signs U.S. oil demand may be picking up. U.S. crude inventories fell more than expected last week, the American Petroleum Institute said late Tuesday. Crude stocks fell 3.7 million barrels while analysts had expected a drop of 2.0 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

The Energy Department’s Energy Information Administration plans to announce its inventory report later Wednesday.

News that November home resales jumped 7.4 percent, above a forecast 2.5 percent, also supported the case for stronger crude demand in the U.S.

In other Nymex trading in January contracts, heating oil rose 1.04 cents to $1.96 while gasoline gained 0.87 cent to $1.90. Natural gas fell 4.5 cents to $5.67 per 1,000 cubic feet.

In London, Brent crude for February delivery rose 46 cents to $73.92 on the ICE Futures exchange.

source - www.island.lk

GOOD  TIME AHEAD FOR RUBBER PLANTATION  COMPANIES

THIS TIME WORLD STOCKS GOING UP

 World stocks rose for a third straight session on Wednesday and the dollar set a two-month peak against the yen after upbeat U.S. housing market data fanned expectations for a solid recovery in the U.S. economy.

Data showed on Tuesday that sales of previously owned U.S. homes jumped to the highest level in nearly three years last month, offering the latest evidence that the housing market -- the main trigger of the worst U.S. recession in 70 years -- is on the mend.

This fanned expectations that the Federal Reserve could raise interest rates sooner than its counterparts in the euro zone and Japan, sending the dollar higher and pushing U.S. Treasury yields to four-month peaks.

MSCI world equity index rose 0.3 percent, on track to scoring one of the biggest annual gains in the past 20 years.

"Some fund managers are making sure they've got good equity positions for the end of the year. There's still momentum in there, and it may carry on into the new year," said Justin Urquhart Stewart, director at Seven Investment Management.

The FTSEurofirst 300 index rose two thirds of a percent, with banks leading the gains. Emerging stocks rose 0.7 percent.

Ten-year U.S. Treasury yields rose as high as 3.773 percent.

The dollar rose as high as 91.86 yen. It was steady against a basket of major currencies.




source - www.island.lk

BENCH MARK RATES UP

Short-term benchmark Treasury bill rates gained further this week as the Central Bank continues to maintain a stable exchange rate and the market adjusts itself to what some dealers called an over-reaction.

Dealers said benchmark interest rates were going up as the Central Bank was continuing to maintain exchange stability by purchasing excess dollars from the domestic market with the rupee trading between 114.30/55 against the dollar.

"But there is a price to pay. When the exchange rate is kept stable, which is being done to benefit exporters, the Central Bank has to purchase the excess dollars and this releases rupees into the market. This in turn can be inflationary with lots of money chasing fewer goods," a dealer said.

"The Central Bank then conducts open market operations to absorb the excess rupees, offering rates above the 7.50 percent policy rate (repurchase rate by which a commercial bank can place its excess funds with the Central Bank).

"This is what is reflected in the increases to benchmark Treasury bill rates," the dealer said.

The three-month Treasury bill rate increased to 7.76 percent at this week’s auction of Treasury bills at the primary market from 7.60 percent a week ago. The rate for six-month bills increased to 8.65 percent this week from 8.59 percent.

The 12-month Treasury bill rate remained unchanged at 9.32 percent.

"In an economy you cannot control inflation, have a stable exchange rate and low interest rates all at the same time. Stability in one of these will require another to be sacrificed. At the moment authorities seemed to be concerned about rejuvenating the export sector," a dealer said.

Over-reaction…

Dealers said short term Treasury bill rates were low in the recent past because markets over-reacted to policy rate cuts of the Central Bank.

Earlier this year, the Central Bank brought down policy interest rates to 7.50 percent and 9.75 percent (both overnight rates for commercial bank placements and borrowings from the Central Bank), as the rate of inflation began to decline after peaking at 28.2 percent in June 2008.

"The three-month Treasury bill fell below the 7.50 percent policy rate which does not make sense as shorter the term lower the risk. Earlier this month, the three-month Treasury bill rate fell to as low as 7.25 percent," a dealer said.

"We have now seen the market correcting itself over the past few weeks," he said.



Inflation…

The fall in the rate of inflation has bottomed out since reaching 0.7 percent last September. Last month inflation reached 2.8 percent and is expected to reach around 4 percent by the year-end, according to Department of Census and Statistics.

A contracting trade deficit as imports fell sharply, and a tight monetary policy helped contain inflation and bring to it lower levels.

But with imports expected to pick up in 2010, and as the government struggles to fund a budget deficit, inflation is expected to increase but remain within single digits in 2010.

Some dealers said inflation could reach eight percent next year. The Central Bank, however, maintains there is still room for commercial banks to lower lending rates and increase their lending to the real economy.

source - www.island.lk

Wednesday, December 23, 2009

SRI LANKA FORIEGN RESERVES STEADY

Sri Lanka's foreign reserves were steady at 5.2 billion US dollars by December 18, boosted by foreign inflows into debt markets and International Monetary Fund loans, the Central Bank said.

By end-November gross official reserves, which includes fiscal balances, were 5,228 million US dollars, up from 4,822 million US by end-October.

Reserves with balances at the Asian Clearing Union, a regional settlement arrangement, were 5,308 million US dollars by end-November.

The Central Bank said 262 million US dollars had flowed into short-term Treasury bills and 1,068 million US dollars into Treasury bonds.

Remittances from expatriate workers had increased to 2,774 million US dollars to November, up 12.9 percent from a year earlier.

The remittances were 557 million US dollars above the trade deficit. Remittances which increases the spending power of economic agents is a key driver Sri Lanka's trade deficit under Sri Lanka's pegged exchange rate regime, with capital controls.

But heavy contractionary sterilization of rupees generated from inflowing remittances will tend to deny its use in the economy and lock up the corresponding foreign currency as reserves.

source - www.lbo.lk

VIDUL LANKA GETS BBB+ RATING

Private power producer Vidullanka PLC has been given a short term financial rating of P2 and a long term rating of BBB+, by agency RAM Ratings Lanka.

The long term rating has a stable outlook.

The rating is supported by the company's sound project economics and financial strategy, the rating agency said.

It was also helped by the improving credit profile of the company over the past three years due to a strategy of retiring debts through internally generated funds.

As a result of this, gearing levels have been eased to 25 percent of company capital as at end September 2009. Debt service coverage ratio stands at 7.09 times.

Vidullanka is an independent power producer, listed on the Colombo Stock Exchange. It is in renewable energy generation, while its subsidiary Vidul Construction specialists in building mini-hydro power projects.

Vidullanka owns two power plants of 2 and 3.2 Mega Watts, supplying power to state-run Ceylon Electricity Board grid under 15-year power purchase agreements.

The company is a working partner in another power plant and manages two other projects. A new power plant is to be commissioned in March 2010.

source - www.lbo.lk

TEA MARKET UP DATE

 Tea export countries like Sri Lanka could see prices easing next year as better weather improves crops and reduces the global shortfall that drove prices higher in 2009, the Food and Agriculture Organisation has forecast.


Tea prices reached a record high in 2009, but should ease next year as weather improves in the main tea-producing regions in Asia and Africa, the United Nations agency said in a statement

The agency’s Tea Composite price, the world’s indicator for the price of black tea, reached a high of 3.18 US dollars a kilo in September as India, Sri Lanka and Kenya experienced droughts while demand surged, compared to an average price of 2.38 dollars a kilo in 2008.

Sri Lanka's shortfall in crop accounted for much of the global shortfall.
Although crops have been catching up, production in other origins have recovered faster than on the island.


source - www.lbo.lk

STOCKS DOWN ON PROFIT TAKING

23/12/2009 - Shares of the Colombo stock exchange took a breath today due to profit taking some of investors ahead of the festival season. ASI dip by 14.82 points & the liquid Millanka by 12.69 points. There were 95 negative performers as against 47 positive contributors. Turn over for the day was healthy & it was Rs 1.3 b.n once again dominated by local investors.

Dates for the subdivision was announced by the RHL . As we predicted voting share appreciated by Rs 7 to close at Rs 130 & the RHL X was up by Rs 6.50  closed at Rs 102.50. We believe that these two have further room to go up before the sub division. Other gainers were KHC (queens hotel- kandy) by Rs  6.25 & INDO a palm oil company in the carson group by Rs 25. etc. Losers lead  by KFP & Acl plastics.

TOKYO CEMENT LANKA

SECTOR                  -   MANUFACTURING
SECTOR  P.E          -   18.30
MARKET PRICE   -  Rs 295 (voting) , Rs 17.25 (non voting)
ASI                           -  3280.82  (22/12/2009)

Tokoyo cement company recently annouced a subdivision of each company shares in to ten shares.This is applied only for the voting shares.

In the past, market positively reacted to all the sub divisions & rights issues. Eg -- ASIR, LLUB, & MARA, DURDANS, LION etc. giving investors massive returns withing a very short period. Like wise we believe that tokyo both voting & non voting counters have further room to go up.

Share capital is represented by     Ordinary Shares - Voting 18,000,000-
                                                    Ordinary Shares - Non Voting 90,000,000-

As at 30/09/2009 we can see a drop in profits at the group level. How ever at  company level  reported profit was Rs 1.3 m.n as against Rs 134,314- for the six months , a growth of  882%. For the last quarter at company level profit was Rs 1.1.m.n as against a profit of Rs 57,243- YOY , a growth of  1956%.

This clearly shows us the future potential available for the company due to the strong upward trend in the construction sector after  end of 30 year old civil war.Further we believe that the company is well positioned to grab the future opportunities available in the construction field specially in the NORTH & EAST.

Further the risk factor available in investing TOKYO is minimal at this stage (market is at all time high)because of  the pending sub division of its shares. We believe that due to the low liquidity, the voting share has further room to go up.It was trading around Rs 255 levels in September 2009. Remember now you have the chance of getting 1000 shares if you have 100 before the sub division.

Non voting share is trading at a discount to the voting at the moment. Hence it also has a room to go further up.

Nippon Coke & Engineering Company Limited, Japan (formerly Mitsui Mining Com) & St Anthony's Consolidated Limited owns 27 .5% each of the issued voting shares of the company as at 30/09/2009.


NEWS FROM TEA MARKET




We have confirmed reports from buyers that because US Government freeze on Iranian assets in the US, they will not settle their bills particularly tea buying bills owing to Sri Lanka and India.

These sources said although alarming repercussions were absent at this week’s sale, particularly because of Christmas holidays; sales in January would not auger well for the Tea market here.

Non-settlement of bills will also affect all goods and services involving Iran’s custom; from other supply locations as well.

Iran buys about 70 million kilos tea each year from Sri Lanka. Approximately 22 percent crop. Quantum bulk Tea exports if not purchased will affect market conditions.

Expectations are that inter-government moves are now under way to defuse an other wise volatile situation directly affecting Colombo Tea Auctions. Results will be serious, and according to Tea Traders will have drastic drop down effects on the entire industry.

It would be interesting to see what the Tea Board would do to counter desultory positions such as this.

Colombo auctions since 2006 have seen steady increases in sales averages converging on 2009.


The former period 2006, price average was Rs199.58 per kilo. However 2009 to date averages increased to Rs384 per kilo.

Substantial increases such as that indicated here have never been experienced by the tea industry in Sri Lanka previously.

source - www.island.lk

Tuesday, December 22, 2009

SRI LANKA EXPORTS START PICKING UP

Sri Lanka’s exports declined the least this year in October as U.S. and European orders increased for the South Asian island’s tea and rubber.


Overseas sales fell 4.9 percent to $628.7 million from a year earlier, after dropping 12.8 percent in September, the Central Bank of Sri Lanka said on its Web site today.

The recovery in exports from Sri Lanka, which makes garments for Marks & Spencer Group Plc and Gap Inc., may falter as the European Union plans to withdraw trade concessions on alleged human rights violations by President Mahinda Rajapaksa’s government. Central bank Governor Nivard Cabraal said he plans to keep interest rates low to spur local consumer demand and support growth.

“Demand for Sri Lankan products is growing in Western markets,” said Saminda Weerasinghe, research manager at Acuity Stockbrokers Pvt. in Colombo. “The loss of EU trade concessions would be a worry in the medium-to long-term.”

The value of industrial exports such as clothing and jewelry declined 8.2 percent to $456.4 million, the central bank said. Agricultural shipments gained 5.1 percent to $165.8 million in October.

Cabraal said low inflation in the $41 billion economy gives the central bank room to maintain interest rates at a five-year low. That would help drive consumer demand and investments, overcoming any export loss from the removal of EU benefits.


The central bank has cut lending rates five times this year as inflation plunged from a record high in June 2008 to a five- year low in September.

Gross domestic product expanded 4.2 percent in the third quarter from a year earlier, the fastest pace this year, after gaining 2.1 percent in the three months to June 30, the statistics department said Dec. 18.

Sri Lanka’s trade deficit in October narrowed 33.6 percent from a year earlier to $369.6 million, today’s report showed. Imports fell 18 percent to $998.2 million.

source - www.bloomberg.com

ITS EARLY CRISTMAS SEASON AT COLOMBO STOCK MARKET


22/12/2009-Colombo stock exchange closed up benchmark index ASI by 46.54 points & more liquid Millanka price index by 67.74 points. Turn over for the day was Rs 1.4 b.n. which was mainly a local driven market. Net foriegn out flow for the day was Rs 488 m.n.

BUKI a carson group palm oil company was up by massive Rs 320.75 per share. It was in the top gainer list on monday as well. Durdens hospital, Acl plastic, Auto,HDFC bank were in the top 10 gainers list.

Past couple of days were belongs to Carson group of companies,where shares of  all most all the companies such as GUAR,CINV,CARS,BUKI,LION,SHAL,GOOD  etc were up by substantial amounts.

As we mentioned in our previous report, massive dealings in the blue chip counters such as JKH,HNB, COMB, DFCC, etc sparks the upward trend in the market.

SRI LANKA CAN GROW 6% SAYS ADB

The Asian Development Bank (ADB) said yesterday that Sri Lanka should capitalise from improved investor confidence and global economic recovery to a target growth rate over 6%.


"This year is an important year for Sri Lanka, given the Government's successive operation against the LTTE, resulting in the end of the long-standing war. On top of this, there has been significant improvement in investor confidence and an increasing number of investors are entering the country. With that strong standing, the Sri Lankan economy is likely to grow by 4% by the year end, but the country holds more potential than that," said Country Director of ADB Richard Vokes.

Commenting on the economy, ADB Lead Economist Narhari Rao cited the ADB's prediction that Sri Lanka's economy would grow by around four per cent and said that overall main indexes were performing in favour of the country, including the Colombo stock market.


"If you analyse the Sri Lankan economy for the year, it is very commendable. During the second and third quarters, the economy started to show momentum. In a relative sense, the Sri Lankan economy is doing extremely well and the main reason is the growth in the industrial service sector, apart from that of the agricultural sector. The remarkable reduction in inflation from 20% to 2% was followed by the Central Bank's decision to bring down interest rates, which is the right move," he added.

source - http://www.dailymirror.lk/

Monday, December 21, 2009

COLOMBO STOCKS HIT NEW HIGH LEVELS



Sri lanka stocks up as fresh week of trading commenced on monday morning (21/12/2009).Bench mark All share price index up by 45.46 points & more liquid Millanka price index is up by 58.80 points.Turn over reported was Rs 1.0 b.n.Foriegners were net sellers today by Rs296 m.n.

Gainers were Aitken spence by Rs 100, Buki by Rs 95,LLUB by Rs 16.25 etc.

All share price index at points 3234.38 by end of trading 21/12/2009 was the highest in the history.

KALPITIYA A NEW TOURISM HUB

The islands near Kalpitiya are the focus of a mega development project.


This will help Sri Lanka achieve the targeted 2.5 million tourist arrivals by 2016, say officials.
According to the Sri Lanka Tourist Development Authority (SLTDA), 14 islands with a total land area of 1,672.67 hectares are being targeted for investment projects.

Nine of those islands are state lands and the other five are held by both private and state owners. The total state-owned land area amounts to 268.94 hectares, according to officials.

The potential of generating tourist revenues is very high in these areas, says the Industrial Services bureau (ISB).

Key points of interest for development are: Dutch Bay and Portugal Bay; bar reef marine sanctuary with around 307 sq km of sea area having most valuable rich bio-diversity value; sea turtles, fisheries, ornamental fish collection, lobster capturing, sea cucumber collection, dolphins, whales, mangroves, flora and fauna, historic monuments, birds and butterflies; natural botanical gardens, beaches, natural forest, estuaries and lagoons, sea grass beds.

According to SLTDA, proposed projects for the development would focus on fishing tourism, deep sea, diving, nature-based tourism, beach tourism, sport and adventure tourism, agro-tourism, culture tourism, village tourism and events tourism.

The islands and the proposed resort area would need state-of-the-art infrastructure facilities, say officials.

Special development projects in the zone include the following: domestic airport – Uchchamunai; under-water amusement park – Kandakkuliya; golf course - Dutch Bay; race course – Kalpitiya and cricket playground – Kalpitiya.

ISB director Neelakanth Wanninayaka said 17 new hotels and guest houses with 5.000 rooms would be built in the zone. These projects would create 15,000 direct and 22,500 indirect jobs, reducing the unemployment rate of the North Western Province which is currently at 7.8 percent.

The North Western province currently contributes 9.6 percent to the national GDP with a per capita income of Rs150,551.

The province has a high potential for investments and tourism attractions and it should maximize its contribution to national economic growth, Wanninayaka said.

Tourism is likely to bring higher revenues to post-war Sri Lanka and a study by the Asia Foundation has highlighted a tremendous potential for investment projects within the zone. In addition to new projects, existing facilities are to be upgraded to realize their full potential.

According to the Asia Foundation study, potential investment areas for the North Western Province include leisure tourism and water sports at Bathalegoda Lake, a 100-room star class hotel at Kurunegala lake round, reconstruction of Rajapihilla Rest House, adventure tourism at Ibbagala Circuit Bungalow for local tourists at Lake round, Ayurvedic village and circuit bungalow at Dolukanda cable car project connecting Ethagala and Kurunegala, said North Western Province Chief Minister Athula Wijesinghe.

BUY & KEEP HOTEL SECTOR SHARES


source -www island.lk

Sunday, December 20, 2009

CRUDE OIL PRICES PICKING UP

Crude oil prices are trading above $73 per barrel in the world market.This may be a good time to pay more attention to Rubber plantation companies in the Colombo stock exchange,since the demand for natural rubber may increase if the crude oil prices continue its upward trend in comming months.This was mentioned in one of our previous reports as well, published on 12Th December 2009 under the heading of  RUBBER PRICES UP.

MBSL BOSS DIVESTS ITS HOLDING IN THE FINANCE COMPANY

Merchant Bank of Sri Lanka (MBSL) Chairman Janaka Ratnayake, complying with a Central Bank advice, has divested his personal 46.35% stake in Ceylinco Investment Co. Ltd. (CICL), the major shareholder of The Finance Company PLC (TFC), a pillar of the Ceylinco Group, Central Bank sources indicated.

These sources said that MBSL had taken Ratnayake’s shares in CICL which is the biggest shareholder of TFC, the country’s longest established finance company, which is now under MBSL management.

CICL owned 37.14% of TFC which has long been quoted on the Colombo Stock Exchange and was one of the strongest members of the Ceylinco Group until the Golden Key issue exploded. TFC too, like other group companies, was caught-up in the after shock of the Golden Key collapse.

Ratnayake’s interest in CICL was made public in a stock exchange disclosures made by MBSL last October that it was investing Rs. 5 million to increase its stake in CICL to 46.35%, the same proportion of that company personally held by its chairman.

Both TFC and MBSL are listed companies.MBSL is a subsidiary of the Bank of Ceylon.

MBSL has bought Ceylinco Savings Bank, and also took over Ceylinco Sussex College, a school which it said owed 2.7 billion rupees to TFC, and is also involved in several other Ceylinco firms.

The TFC announcement to the CSE indicated that its five major shareholders as at Sept. 30, 2009 were Ceylinco Investment Company Limited (CICL) - 6,670,230 (37.13%), Pershing LLC S/A Averbach Grauson & Co - 1,498,500 (8.34%), Ceylinco Insurance PLC - 579,178 (3.22%) and Mr. J L B Kotelawala - 526,427 (2.93%).


source - www.island.lk

Saturday, December 19, 2009

SRI LANKA'S ECONOMY GROWS AT FASTEST PACE THIS YEAR

 Sri Lanka’s economy expanded at the fastest pace this year as the end of a civil war and five-year low interest rates spurred consumer and company spending. Stocks rose to a record.


Gross domestic product rose 4.2 percent in the three months ended Sept. 30 from a year earlier after gaining 2.1 percent in the previous quarter, the statistics department said in a statement in Colombo today.

The defeat of Tamil Tiger rebels in May this year after 26 years of war has encouraged some of the island’s biggest companies including John Keells Holdings Plc and Aitken Spence Plc to expand their business. The central bank has room to maintain rates at current levels because of low inflation, Governor Nivard Cabraal said last month.

“The end of the war has rejuvenated economic activity in Sri Lanka,” said Bimanee Meepagala, an analyst at Eagle NDB Fund Management Co. in Colombo. “As the infrastructure in the war-affected areas gets put in place and credit demand picks up, we will see the growth momentum really take off.”

The International Monetary Fund, which granted Sri Lanka a $2.6 billion aid in July to rebuild roads and schools, expects the island’s $41 billion economy to pick up from this year.

Stocks Rise

Sri Lanka’s benchmark Colombo All-Share index increased 1.7 percent to close at 3,188.82, the highest-ever for the measure of 231 companies. The index has doubled this year and is the world’s best performer after Russia.

Sri Lanka’s rupee, which has gained 0.7 percent to 114.35 against the U.S. dollar since the end of the fighting in May, was little changed today.

The island’s services industry expanded 5.1 percent in the third quarter from a year earlier, according to today’s report. Farm output decreased 0.9 percent and industry grew 4.4 percent.

“Peace is the key factor that drove the economy during this quarter,” Nalani Kumarasinghe, deputy director at the statistics department, said today.

“Domestic trade is up steeply due to the north and east resurgence and lower interest rates have helped drive investment,” she said.

John Keells, Sri Lanka’s biggest diversified company, said last month it will invest about $100 million to build new resorts to benefit from an economic resurgence after the war.

Companies Expand

Aitken Spence Plc., Sri Lanka’s biggest operator of resorts, plans to expand its hotel and shipping businesses while Commercial Bank of Ceylon Plc, the nation’s biggest private lender by assets, aims to extend more loans in the island’s northern and eastern regions, which were recaptured from the Tamil Tigers.

Cabraal has cut lending rates five times this year to revive growth as inflation plunged from a record high in June 2008 to a five-year low in September. On Dec. 14, he maintained the reverse repurchase rate at 9.75 percent and held the repurchase rate at 7.5 percent.

Consumer prices in the capital, Colombo, rose 2.8 percent in November from a year earlier after gaining 1.4 percent in October. Cabraal aims to keep inflation below 10 percent this year and next to spur spending.

Appropriate Rates

Policy rates are at an appropriate level to support growth and are likely to remain at current levels “in the near future,” Cabraal said in a Nov. 26 interview.

"This will result in quite a bit of activity mid next year, especially in areas like housing that came to a grinding halt over the last 24 months because people couldn’t afford to borrow,” Ajit Gunewardene, deputy chairman at John Keells, said in an interview in Colombo on Dec. 14. “We’re expecting property development to kick in countrywide.”

The central bank wants to help lift growth to as much as 6 percent in 2010 from 3.5 percent in 2009.
Commercial bank loans rose to 1.18 trillion rupees ($10.3 billion) in September, the first expansion this year, from 1.17 trillion rupees in August.

President Mahinda Rajapaksa instructed state banks to slash lending rates by about 7 percentage points from Oct. 28 to government employees, farmers, small businesses and industries including fisheries and tourism. Non-state banks followed by reducing their rates too.

Sri Lanka, which makes garments for Marks & Spencer Group Plc, The Gap Inc. and Victoria’s Secret, will also see a recovery in overseas orders from the first quarter of 2010, Cabraal said last month. Sri Lanka’s exports have dropped for 10 consecutive months.

Last Updated: December 18, 2009 06:20 EST

source - www.bloomberg.com

Friday, December 18, 2009

COLOMBO SHARES HIT ALL TIME HIGH

Dec 18, 2009 - Sri Lanka stocks hit an all time high with the benchmark Colombo All Share index closing at 3,188.8 points, topping a previous peak of 3,139.7 points reached on October 13, the Colombo Stock Exchange said.
So far this year stocks are up 112 percent. The Milanka index of liquid stocks, which closed at 3,630.5 points, is up 122 percent.

Turnover for day is Rs 1.1 b.n. approximately,& its mainly a local driven market. Palm oil companies recorded significant gains together with Carsons,Chevron lanka lubricants,& GREG led the gainers.


source - www.lbo.lk 

CASH PAYMENT FROM LLUB BY WAY OF A DIVIDENT

18/12/2009 Chevron lanka lubricants (LLUB)has annouced a massive 4th interim divident of Rs 6.50 per share on top of the annoucement of the subdivision of its shares each one share in to two. This company has already offered a great return to the investers from the subdivision of its shares in last week, where today its shares commenced trading in the market for the first time after the subdivision.
This divident payment of Rs 6.50 per share gives the investors a divident yield of almost 4.5% which equals savings deposit rate offered by most of sri lankan commercial banks. This is the best time to invest in high divident paying companies since the interest rates offered by banks remain low.

RECCOMEND TO  BUY

COLOMBO STOCK EXCHANGE RE WRITES HISTORY

To day (18/12/2009) Colombo Stock Exchange reached all time high of  All Share Price Index 3162 points during morning hours of trading .

As we mentioned in our report yesterday (17/12/2009)LLUB offered a very good trading opportunity for the investors to day morning as the share commenced trading at Rs 120 after the sub division of its shares in to two. LLUB is currently trading at Rs 131 (11.30.a.m.)after reaching Rs 133.50.

COLOMBO SHARE MARKET IS UP AGAIN - OVER 2 MONTH HIGH NOW

 Sri Lankan shares gained 1.46 percent to an over two-month high on Thursday,(17/12/2009) led by renewed confidence of local investors, taking a cue from the recent heavy foreign fund buying in a market heavy weight.
 The All-Share Price Index of the Colombo Stock Exchange closed 45.02 points firmer at 3,134.47, its highest close since Oct. 15. The bourse hit a record high of 3,157.11 on Oct. 15. "Foreign buying in the past few days is driving the market," Harsha Fernando, CEO at SC Securities, told Reuters.

Market heavyweight John Keells Holdings accounted for over32 percent of the day's turnover of 918.4 million rupees ($8.04million), mostly driven by local buying.

The 2008 daily market average was 464 million rupees. Keells had risen 3.9 percent this week till Wednesday's close. John Keells Holdings fell 0.16 percent to 160 rupees and analysts said some local investor booked profits in the share that hit a two-year high on Wednesday.


Top mobile phone operator Dialog Telekom closed up 3.7percent at 7 rupees, while conglomerate Aitken Spence jumped 8.11 percent to a record high of 1,000 rupees.



Analysts said the foreign buying in the past few days has improved investor confidence, which had been declining since the government announced an early national election next year.


source - www.dailymirror.lk

Thursday, December 17, 2009

CHEVRON (LLUB)

Chevron lanka lubricants formerly Caltex lanka lubricants will starts trading of its shares tomorrow(18/12/2009) in the Colombo Stock Market as per the stock market daily report published by the CSE,after the recently announced sub division of its shares,each existing ordinary share of the company to two ordinary shares.

There for tomorrow may be a good day for traders since there will be price fluctuations in this particular share.This has happened in last Monday as well,when the ASIR shares starts trading after the sub division of its shares.

Further investors who missed this share due its high trading price earlier may now have the opportunity to collect the share at lower price tomorrow.

LLUB is a high divident paying company in the market. It is better to have this share in your investment basket.

FORIEGN INTEREST ON COLOMBO SHARE MARKET

Yesterday's turnover at CSE(16/12/2009) of Rs. 5.3, driven largely by foreign fund Janus buying further into John Keells Holdings (JKH) and increasing its stake to around 7%.


A total of 29.1 million JKH shares changed hands between a high of Rs. 160.50 and a low of Rs. 159 before closing at Rs. 160.25, up by Rs. 1.25. On Tuesday it rose by Rs. 5.25 also on account of buying by Janus. Up to Tuesday, Janus had owned around 3.5% stake in JKH.

Among sellers were several institutional and individuals, both foreign and local.

Analysts said foreign interest on Sri Lanka and in particular on the country's premier blue chip JKH augurs well for future prospects.

Commercial Bank also saw slightly over a million of its shares traded between a high of Rs. 178 and a low of Rs. 175 before closing at Rs. 177, up by Rs. 2.

Year to date the Colombo bourse, in terms of All Share Price Index has gained by 105.5% and Milanka Price Index by 115%. -



source - www.dailymirror.lk

JKH ENTER IN TO HEALTH CARE INDUSTRY

John Keells Holdings PLC (JKH) yesterday announced the purchase of a 24.6% stake in Central Hospital (Private) Limited (CHL) for a consideration of Rs.900 million.


CHL is a new 260 room, state-of-the-art hospital project by the Asiri Group located on Norris Canal Road, Colombo 10. CHL is expected to commence operations in early 2010.

JKH said it has made this investment through its Capital Investments Division which comes under the John Keells' Financial Services Industry Group.

Separately, Asiri Group companies announced dilution in their holdings in Central Hospital as well consequent to the acquisition by JKH.

source - http://www.dailymirror.lk/

Wednesday, December 16, 2009

HIGH DRAMA AT COLOMBO SHARE MARKET

To day (16/12/09)colombo stock market closed with a turnover of Rs 5.2 b.n. This turnover was well supported by Rs 4.7 m.n foriegn purchases & net foriegn inflow for the day was encouraging  Rs 2.4 b.n. To day we saw several crossings from the biggest company in the colombo stock market Jhon Keels Holdings  at Rs 160.The jkh's turn over for the day was well above Rs 4.5 b.n.
This is very encouraging,when the JKH shows positive signals in the market it might spread to all the other counters as well. ASI closed at 12.49 higher than previous day & MPI up by 0.87.
This was the highest turnover reported so far for this year.

THERE FOR HAVE A VERY CLOSE LOOK AT THE MARKET IN COMMING DAYS

COLOMBO SHARE MARKET UP WITH A TURN OVER OF RS 1.4 B.N.

Heavy trading in JKH and Aitken Spence Hotels pushed up turnover on the Colombo Bourse yesterday (15/12/2009) to over Rs 1.4 billion, up from Rs 330.9 million the previous day with healthy gains posted by both indices – the All Share up 37.18 points (1.22 percent) and the Milanka up 54.63 points (1.59percent).

The JKH and Aitken Spence Hotels trades drove the market with most of the big JKH trades done at a price of Rs.154 while the big parcels of Aitken Spence Hotels trades were done at Rs.250,’’ Prashan Fernando of Acuity Stockbrokers said.

JKH saw over 5 million shares done between Rs.154 and Rs.160 gaining Rs.5.25 to close at Rs.159.75 while Aitken Spence Hotels, with over a million shares traded between Rs.239.75 and Rs.245, was up Rs.4.25 to close at Rs.244.(v.w.a)
JKH generated the day’s biggest turnover of Rs.804.1 million while Spence Hotels contributed Rs.256.3 million, with these two stocks accounting for over a billion rupees of the day’s business volume.



source - www.island.lk

Tuesday, December 15, 2009

AITKEN SPENCE HOTEL HOLDINGS (AHUN)

To day a large quantity of AHUN traded at Rs 250, in blocks of two 400,000/- parcels & one 200,000 parcel.Share price was up by Rs 8.25 & closed at 248.This is a good sign to follow because after large parcels most of times we can see upward movement of the particular share price.

Last Q profit up by 225%, However YOY up to 30/09/09 profit down by 163%. NAV Stands at 114.70.

AHUN has Sri lanka's leading hotels under their umbrella, Kandalama,Ahungalla,Browns,Hiltop,Tea factory etc & hotels in Maldives,India & Oman.

These hotels are operated under three brands, namely Aitken spence hotels & resorts ,Heritance hotels & resorts ,Adaaran luxury ,boutiuque,wellness resorts.

Better to have AHUN in your investment basket in the event of a future price drop.

JKH PORT TERMINAL VOLUMES UP

 Container volumes at a Colombo port terminal controlled by Sri Lanka's John Keells Holdings have almost reached last year's levels but those at the state-run facility are still lagging behind, latest figures show.

The November 2009 volumes at South Asia Gateway Terminals (SAGT) were up 10.4 percent to 153,793 TEUs (twenty-foot equivalent units or containers) from the same month in 2008, after dipping in October, according to SAGT figures.
Analysts said it was the private terminal's strongest monthly percentage increase growth in volumes from a year ago in the past 12 months.
SAGT's container volumes had dipped 3.6 percent in October from a year ago, its first fall after growing for five straight months.
The terminal's container volumes have been growing this year despite an overall slump in cargo volumes at Colombo port this year because of the global economic downturn.
JKH's transportation business, mainly the SAGT container terminal and its Lanka Marina Services ship fuel business, have been the main contributors to the group's bottom line in recent quarters.

But much of SAGT's growth in the container business has come from transshipment cargo which yield relatively low margins compared with export-import boxes.
Colombo is south Asia's hub port, where cargo is shipped on feeder vessels to and from smaller ports in the Indian sub-continent on to mainline vessels plying the main East-West trade route.




source - http://www.lbo.lk/

Monday, December 14, 2009

SRI LANKA - TOURIST ARRIVALS UP






Sri Lanka is regaining its pride as the best tourism location, new trade figures have revealed.

The goal of attracting 2.5 million tourists by 2016 is not an impossible task in view of growing activities in the sector, say industry leaders.
They say the three-decade-old war had hampered the country’s development, crippling almost every industry.
But the tourism industry is now seeing a healthy growth with the end of the war this year, according to latest statistics.
Tourist arrivals to Sri Lanka saw a 20.1 percent year-on-year growth last month. The number of arrivals grew to 44,311 from 36,901 in November, 2008.
Total arrivals grew by 0.4 percent from January to November year-on-year, from 389,550 to 391,028 arrivals.
In 2008, the month of December recorded the highest number of arrivals and the figures are expected to show a higher growth this year because of seasonal offers and post-war stability.
Sri Lanka is also developing a Port City with the aim of attracting more cruisers to Sri Lanka and the tourism industry will grow further with high numbers of arrivals through passenger ships, say industry sources.
The goal of attracting 2.5 million tourists by 2016 is not an impossible task, with such development work in progress, says a top businessman.
Marine-life lovers are also flocking to Sri Lanka, say tourism experts.
They say that whale-watching and dolphin-watching programmes are also attracting tourists.
The marine life-lovers are mostly from France and the numbers of arrivals from that country has grown by 50 percent, Minister Felix Perera told a recent conference.

source - www.island.lk

GOOD TIME AHEAD FOR HOTEL SECTOR COMPANIES

SRI LANKA - ASIRI HOSPITALS

After the subdivision of Each existing ordinary share of the company to ten (10) ordinary shares, Asir shares will start trading to day (14/12/2009) in the market as per the stock market daily report.
Today may be a good day for the traders since there will be price fluctuations in this particular share.
So keep a closer eye on this share.

Sunday, December 13, 2009

RENUKA GROUP INCREASE STAKE IN DFCC BANK

Companies headed by Mr. Ravi Thambiayah (Renuka Hotels, Renuka City Hotels PLC, Cargo Boat Development PLC etc.) have acquired a sizable stake in the DFCC Bank into which entities controlled by Mr. Ajita de Zoysa bought around two million shares.
EC Global, another big fund invested in Sri Lanka has completely exited DFCC by recently selling 2.6 million shares at Rs. 135 and HNB by selling 7.25 million shares at Rs. 162. In May this year, after the military overcame the LTTE, this fund sold 10% of NDB (8.1 million shares), broking sources said.
Brown and Co. PLC, which held a sizable stake in HNB, has been selling out making substantial capital gains, well informed sources said.

source - www.island.lk

SRI LANKA - GALLEON EXITS FROM MANY LISTED COMPANIES IN COLOMBO STOCK MARKET

Billionaire investor Raj Rajaratnam who held shares in 73 listed companies in Sri Lanka through his Galleon Funds has completed disposing these holdings in all but two of these companies with Galleon now holding shares only in Touchwood Investments and the People’s Merchant Bank, sources familiar with the account said yesterday.

Rajaratnam however continues to hold his personal stake in the John Keells Holdings conglomerate where he is the second largest shareholder with 8% of the blue chip amounting to nearly 44 million shares.
The word in the Colombo market is that he will not divest his personal holding of JKH from which Galleon exited before Rajaratnam’s problems with the US authorities surfaced.
Some big disposals of Galleon, handled by Capital Trust Securities (Pvt.) Ltd., a Colombo brokerage in which Rajaratnam is a part owner, included , four million NDB, four million Commercial Bank, 3.7 million Ceylon Leather Products (29.9%), five million CIC and 10.6 million DFCC.
Broking sources said this brokerage, which found approximately 90 percent of the buying for the recent Galleon disposals, has handled some of the biggest transaction recently concluded on the CSE.
Well informed sources said that Rajaratnam who held the dominant stake in Galleon expects to complete liquidating that fund by year end with an estimated USD 800 million of his personal wealth released by Galleon’s divestments. This money is likely to be invested in stock markets in various parts of the world.
These sources said that the billionaire investor is confident of overcoming his problems in the context of a credible defence that is being mounted with resources for this purpose not necessitating disposal of his personal stakes here or elsewhere.

source -www.island.lk

Saturday, December 12, 2009

SRI LANKA - RUBBER PRICES UP

Natural rubber at this week auction fetched Rs.311. per kilo. Reason for this noteworthy performance was, comparing prices in January this year this was distinctly 100 % increase in prices.

January prices were low at Rs. 150. per kilo. This price increase was good, the PlantationMinister said.
According to the Rubber development Department sources 45.7 million metric tons was produced January through October this year. Export value was approximately Rupees 4.3 billion.

Main importers of Sri Lanka rubber are Pakistan, India, US, and Germany.
Minister Jayaratne said increase in world rubber prices was a relief to all natural rubber producers. Particularly small scale producers.


GOOD TIME FOR  PLANTATION COMPANIES THAT HAVE MORE EXPOSURE TO RUBBER

source -www.island.lk

Friday, December 11, 2009

SRI LANKA - RENUKA HOLDING (VOTING / NON VOTING)

Rhl  has 96% in Renuka agro exports ltd. RAEL owns 52.23% of Coco lanka & Coco owns 78.6% in Renuka Agri Foods Ltd. 

The ultimate holding company of RAEL,RAFL & Coco is Rhl. Now Rhl has announced a sub division of its shares at a ratio of 5 for 1 .This looks attractive & the market reacts positively for the previous subdivision announcement by LLUB,ASIR,TOKYO N, etc. 

 Rhl profitability shows a significant growth (2466% YOY) as at 30/09/09. NAV stands at 123.50 per share &  EPS is 11.26.

  Price as at 11/12/09       Voting - Rs 124.75.
                                        Nonvoting -Rs 95
                                        ASI  3056.64

CARGILLS TO OPEN 100 MORE OUTLETS

Sri Lanka's premier retail super market chain Cargills Food City announced the launch of 100 new outlets all over the country, with the opening up of its 140th outlet at Rajagiriya yesterday.
Cargills CEO Ranjit Page said: "The launch of our 140th outlet is all the more special because this outlet marks simultaneously the first of 100 more Cargills Food City outlets that will be set up in neighbourhoods across 25 districts in the coming years."
Cargills (Ceylon) is a diversified company with operations in retailing, manufacturing, restaurants and agri-business.
The company said last month that net profits in the September 2009 quarter rose 35 percent to 139 million rupees from a year earlier, and that it was planning a billion rupees in new investments in the current year.


Cargills, which own landmark buildings in Colombo Fort that were Sri Lanka's first department stores, is part of the Ceylon Theatres group which is into property development, financial services, manufacturing and plantations.



The Ceylon Theatres group is controlled by the Page family.





source - www.dailymirror.lk//www.lankabusinessonline.com

SRI LANKA - COCO LANKA - A HIDDEN OPPORTUNITY

Today unfortunately price of coco lanka came down from Rs 56 to Rs 48 due to the announcement of the right issue & non voting share issue.

However we strongly feel that coco still has the upside potential. It is better to have a closer look at the share price fluctuations in future& when opportunity arises to collect shares carefully.

The large volume of trading we saw to day may be due to panic selling,debt clearing where most of people expect a subdivision from the company.

From Monday onwards we can clearly see where its direction is?

COLOMBO SRI LANKA - GOLDEN KEY DEPOSITORS REFUNDS BEGIN

Friday, 11 December 2009

The refund of deposits of the crashed Golden Key Credit Card Company that ran into a high financial scandal by the Ceylinco Group of Companies commenced today,according to the Committee of Accountants handling the refund process.
They said cheques drawn in favour of depositors were being dispatched to the depositors and refunds were being done under a ceiling drawn up to refund deposits in a gradual process.



source - news.lk