Tuesday, August 31, 2010

Sri Lankan stocks close up 1.02-pct

Aug 31, 2010 (LBO) – Sri Lankan stocks bounced back Tuesday, driven by interest in selected blue chip and midcap stocks, while heavy buying of Asia Capital and Distilleries Company boosted turnover, brokers said.

The All Share Price Index closed at 5,658.01, up 1.02 percent (57.24 points) while the more liquid Milanka index rose 0.47 percent (27.29 points) to close at 5,889.16, according to stock exchange provisional figures.

Turnover was 2.9 billion rupees.

Distilleries Company of Sri Lanka closed at 145.10 rupees, up 5.30 (3.79 percent) with over 1.1 million shares traded, while Asia Capital closed at 44.50 rupees, up 3.60 (8.80 percent) with 2.55 million shares changing hands, brokers said.

John Keells Holdings, an index heavy conglomerate closed at 265.30 rupees, up 2.40 (0.91 percent) with 2.3 million shares traded.

Touchwood Investment, a forestry company closed at 34.00 rupees, up 60 cents (1.80 percent) with one million shares traded, brokers said.

Investors were seeking shares that offered good value, brokers said.

LB Finance closed at 176.50 rupees, up 11.10 (6.71 percent) with 571,000 shares traded, while People's Leasing Finance closed at 97.00 rupees, up 3.00 (3.19 percent). Property Development closed at 48.50 rupees, up 3.80 (8.50 percent).

'Penny' stock Muller and Phipps closed at 1.60 rupees, up 10 cents with 13.6 million shares traded.

source  - www.lbo.lk

Market summery - S.L.S.Picks


  • Central Finance Company
  • L.B.Finance
  • Balangoda Plantations
  • Grain Elevators
  •  Marawila Hotel
  • Colombo Land & Development

Sri Lanka shoe maker in Rs8.6bn rights issue

Aug 31, 2010 (LBO) – Shareholders of Sri Lanka's Ceylon Leather Products, controlled by Environmental Resources Investment, have approved an 8.6 billion rupee rights issue to repay debt, invest in new ventures and expand, a statement said.

The shoe manufacturer's 1:1 rights issue comprises of the issue of 12.5 million ordinary shares at 73 rupees per share together with 12.5 million warrants executable in 2011, 25 million warrants executable in 2014 and 25 million warrants executable in 2015.

The warrants are priced at 102 rupees, 118 rupees and 142 rupees per share.

The proceeds from the rights issue will be used for expansion and modernization of the manufacturing units of CLPL and to buy a 51 percent controlling stake in South Asia Textile Industries and 8.31 percent stake in Dankotuwa Porcelain.

The funds will also be used "for investments possibly in publicly listed as well as private companies in Sri Lanka," the statement said.

"The investments will be in 'distressed companies' which have potential to be revived and made profitable within a reasonable period of time with the introduction of capital, financial discipline, controls and management guidance."

CLPL chairman Lalith Heengama said the firm also "has plans to diversify and invest in other lucrative and growing industries with significant potential in order to achieve our strategic corporate objectives."

Environmental Resources Investment owns 72 percent of Ceylon Leather.

source - www.lbo.lk

Sri Lanka Colombo Dockyard delivers supply vessel

Aug 31, 2010 (LBO) - Sri Lanka's Colombo Dockyard has delivered the second of a series of four Multipurpose Platform Supply Vessels (MPSV) for Singapore's Greatship Global Offshore Services, a statement said.

The delivered vessel, with a 3,200-tonne deadweight capacity, was designed by Seatech Solutions International of Singapore in consultation with the owner and the builder, Colombo Dockyard.

"The role of the vessel is to support offshore oil and gas fields on a twenty-four hour per day basis," said the yard, which books profits on delivery of vessels and is a unit of Japan's Onomichi Dockyard Company.

"The vessel is built for operation in un-restricted waters and is capable of undertaking multi-purpose roles such as transportation of pipes, fresh water, diesel, methanol, bulk cement, stores, equipment, and moving men and materials between platforms and shore."

The vessel has an endurance of about 35 days and a cruising range of about 9,200 nautical miles.

The vessel has a larger accommodation area for 50 persons as against the 24 persons in the previous Anchor Handling Tug Supply Vessels built by Colombo Dockyard.

"Over the past few years, Colombo Dockyard operating in joint collaboration with Onomichi Dockyard Company has accumulated a wealth of experience in building vessels for the offshore sector requirements," the statement said.

"(It) is now well-experienced and geared to meet any kind of requirement that may arise in the offshore oil exploration activities being carried out in the Sri Lankan waters."

Colombo Dockyard has said it will deliver a total six vessels this year and will focus more on offshore work with the search for oil off the island's north-west coast.

source - www.lbo.lk

Browns Group profits for the year grow by 178%

 The Browns Group For the first time in its history posted a yearly profit before tax of Rs.1.268 Billion & a net profit of Rs 1.148 Billion for the period 2009/10 thus achieving yet another significant milestone. The growth in net profits over the same period last year stands at 178%.

The Group turnover reached Rs.8.95 Billion and net profit recorded Rs.1.15 Billion, a growth of 178% from last year. Group profit before tax for the year stood at Rs.1,148 Million.

Speaking on the above, Group Managing Director/CEO Mr Murali Prakash said "this is a significant achievement for the Group since it clearly validates our strategy adopted during the last couple of years". He further stated that these significant achievements would propel the organization to greater heights and we are now geared to deliver results of similar nature as we go forward."

At present the Browns Group hold the market leadership in seven segments it operates, namely vehicle batteries, two and four wheel tractors, marine engines, office automation equipment, radiators & power tools.

Chairperson of Brown & Company PLC, Mrs. Rohini Nanayakkara said, "The Browns Group today is not only a trading/manufacturing entity but a strategic investment vehicle that seeks as part of our corporate strategy, to identify & venture into Sunshine industries that are fast becoming the future of the national economy."  The Browns Group has acquired a 10% stake in Seylan Bank PLC & Hatton National Bank PLC thus strengthening its presence in the financial sector.

In the Plantation sector The Group acquired Maturata & Pussellawa Plantations in collaboration with Taprobane Holdings  & have made significant post-consolidation contribution to the bottom line. In keeping with avenues to maximize growth a company has also been formed to expand the mini-hydro projects within the 31 tea estates and 9 rubber estates belonging to the above plantations
The company continued to provide management input through the 49% stake held in Galoya plantations by the consortium (Brown & Company PLC and Lanka Orix Leasing Company PLC) as a part of the public private partnership initiated with the Government to revive the sugar industry. This strategic investment is well under way to become fully operational by 2011.

The Browns Group expansion strategy, based on not compromising the core values and building on the core competencies will continue.

The group will continue to invest in sunshine industries thus securing itself as a leading Sri Lankan Conglomerate whilst ensuring greater shareholder value to all its stakeholders.

The Browns Group Board consist of Mrs Rohini Nanayakkara (Chairperson), Mr Ajith Devesurendra (Deputy Chairman), Mr Murali Prakash (Group Managing Director/CEO), Mr I.C. Nanayakkara (Director) Mr Shanker Somasunderam (Director) , Mr R.N.Asirwatham (Director)

source - www.dailymirror.lk

Monday, August 30, 2010

China Merchants, Spence Picked for Colombo Port Deal (Update2)

By Anusha Ondaatjie and Asantha Sirimanne

Aug. 30 (Bloomberg) -- China Merchants Holdings (International) Co. and Aitken Spence & Co. have won a contract to build a new terminal in Sri Lanka’s Colombo port, the head of the island nation’s ports authority said.

A special meeting of the cabinet approved the order and construction on the terminal will start within six months, Sri Lanka Ports Authority Chairman Priyath Wickrama said today. China Merchants will take a 55 percent stake in the $500 million project, Managing Director Hu Jianhua said at a media briefing after earnings were announced in Hong Kong earlier today.

Sri Lanka, 31 kilometers (19 miles) southeast of India, wants to exploit its location to compete with Singapore and Dubai as a sea-trading hub in Asia. President Mahinda Rajapaksa plans to spend $1 billion a year on infrastructure including ports, roads and power plants to help stoke an economic recovery after the end of a 26-year civil war.

Aitken Spence, Sri Lanka’s biggest operator of resorts, and China Merchants, which has stakes in ports that move about a third of China’s container traffic, in July 2009 submitted the sole bid for the terminal after the government in 2008 scrapped earlier bids for the facility.

A government-appointed committee will likely announce the contract “as early as possible,” Sri Lankan Ports Ministry Secretary Ranjith de Silva, said by phone earlier today.

Construction may start early next year, depending on negotiations with the government, China Merchants’ Hu said.

Hutchison Port Holdings Ltd. and PSA International Pte., the world’s biggest container port operators, were among five companies that earlier bid for the 2.4 million-containers-a-year facility at Colombo’s south harbor.

The existing three terminals at the Colombo port can handle 4.5 million standard 20-foot containers a year.

source - noir.bloomberg.com

Sri Lanka new port to China-Lanka firm

Aug 30, 2010 (LBO) - A concession to build and operate a 450 million US dollar container terminal in an expanded port in Colombo port has been awarded to Sri Lanka's Aitken Spence and China Merchants Holdings, an official said.

The decision was taken at a meeting of Sri Lanka's cabinet Monday, chairman of the state-run Sri Lanka Ports Authority Priyath Wickrama told a forum in Colombo.

Construction of the new terminal is expected to start within six months, Wickrama said.

The Aitken Spence - China Merchants consortium was the sole bidder for the terminal concession but SLPA negotiated for higher royalties and upfront fees.

Wickrama said the terminal would be build by the same Chinese contractor that is building a Chinese financed port in the island's south in Hambantota.

The Hambantota port is built by China Harbour Engineering Company (CHEC) and Sino Hydro Corporation.

CHEC and China Merchant come under the same arm of the Chinese government, industry analysts say.

The Colombo terminal will be financed with debt and equity and will be jointly owned by listed Aitken Spence and China Merchants Holdings, along with the SLPA.

China Merchants Holdings will have 55 percent, Aitken Spence 30 percent and the SLPA 15 percent in the new terminal.

source - www.lbo.lk

Tea prices on the up

By Steve A. Morrell

Tea brokers said last week’s auction fetched good prices with Uva grade teas continuing to fetch healthy prices. They said prices could improve this week as well.

Aislaby Plantations in the Malwatte Valley maintained its leader slot last week too, selling a line of BOP at Rs. 600 per kilo but brokers said its true potential was yet to be seen. Most tea holdings in the Malwatte Valley returned good prices. "But those fancy prices that was more the character of this area was yet to be realized," brokers said.

Although prices were moving up plantation sources were yet to acknowledge the viability of their holdings. There are three plantation companies that are now above the blue income line and are doing well. Regional Plantation Companies Watawala Plantations Ltd., Bogowantala, and Talawakelle Plantations, are those doing well.

The Asia Siyaka Weekly Tea Market Report reported that, black tea had strong anti oxidant properties to stall lung damage consequent to bad effects of smoking.

Similarly, a report from Ceylon Tea Brokers Ltd. quoting a randomized study conducted in Taiwan said green tea could modify ill effects of smoking on lung cancer risks. They said surveys involving about 380 respondents proveded positive counter effects of those treated who drank Green Tea.

We on our part too sought views from the ‘private’ plantation sector, who simply said ‘Tea is tea green or black or what ever. Drink it, its good for you’.

This week, the quantity on sale at the auction would be about 6.7 million kilos. Brokers are confident prices would improve further.

The Research report from Asia Siyaka Brokers Ltd. presented graphic analysis of major beverages. Coffee volumes dipped in August 2009, but since then overtaken tea and is now placed 1st in the beverages demand scale. Coffee is now approximately US$ 450 cents per Kilo. Tea is languishing at around US$ 350 cents per kilo. Cocoa, comparatively the lowest selling beverage at this time, recorded selling at around US$ 300 cents.

Meanwhile, apart from Bangladesh and North India, all countries including Sri Lanka have recorded strong growth in crops as compared with last year, with brokers saying, ‘Last year should best be forgotten’.

The collective agreement and demands for higher wages will be an issue for the tea industry and the estate sector early next year. Whether it is to be another confrontation episode or not is yet to be seen.

source - www.island.lk

Friday, August 27, 2010

Sri Lanka bourse up on hotels, banks earning hopes

 * Market rises 0.71 percent

* Hotel, banking shares hit new record high

* Rupee weaker on importer demand for dollars

COLOMBO, Aug 27 (Reuters) - Sri Lanka's benchmark share index rose on Friday led by banking and hotel shares on hopes of strong earnings due to increasing credit growth and the start of tourism season in the island nation.

Sri Lanka's main share index .CSE rose 0.71 percent or 39.85 points to 5,634.15 points. It hit an all-time high of 5,679.14 on Friday and is up 1.28 points for the week.

The bourse is Asia's best performer, with 66.4 percent gain so far this year, although analysts have said the bourse has overheated with local retail investors chasing speculative shares instead of fundamentally sound stocks.

The Banking, financial, and insurance .CSEBF, and hotel and travel sub sector .CSEHT indices hit new record highs on Friday.

"Credit growth and high tourist arrival with the start of the season have boosted investor confidence in those shares," Danushka Samarasinghe, an economist at Frands Consultant, told Reuters.

Sri Lanka's private sector credit had grown by 6.2 percent month-on-month, the highest for this year, while earnings from tourism in the first seven months have jumped 69 percent.

Leasing firm Capital Trust LOLC.CM, formerly Lanka Orix Leasing Company, and Taj Lanka Hotel TAJ.CM each jumped 10 percent.

Information technology product trader PC House PCHO.CM, which started trading on Thursday, closed 9 percent weaker at 10 rupees.

Turnover was 2 billion rupees ($17.1 million), more than three times the 2009 daily average. Foreign investors bought a net 11.7 million rupees' in shares. They have overall sold a net 11.3 billion rupees of stock so far this year.

The rupee LKR= edged down to 112.70/77 per dollar, from Thursday's 112.60/65 on importer demand for dollar, dealers said. ($1=112.735 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Karen Foster)

source - www.reuters.com

Sri Lankan stocks close up 0.71-pct

Aug 27, 2010 (LBO) – Sri Lankan stocks closed the week at another record high and passed the 5,600 mark Friday, from price gains on fundamentally strong midcap shares, while newly listed PC House shares closed below the offer price, brokers said.

The All Share Price Index closed at 5,634.15, up 0.71 percent (39.85 points) while the more liquid Milanka index rose 0.25 percent (14.89 points) to close at 5,897.11, according to stock exchange provisional figures.

Turnover was 1.9 billion rupees.

PC House shares which made its debut at the Colombo Stock Exchange earlier this week closed at 10.00 rupees, down 1.00 ( 9.09 percent). The share was offered at 11.00 rupees at the initial public offering with 2.2 million shares traded, brokers said.

Investors continued to buy into midcap stocks that were fundamentally sound, brokers said.

Amaya Leisure closed at 93.00 rupees, up 3.00 (3.33 percent), Arpico Finance Company closed at 93.90 rupees, up 3.40 (3.76 percent), Bairaha Farms closed at 133.80 rupees, up 3.00 (2.29 percent) and Central Finance closed at 583.80 rupees, up 4.30 (0.74 percent).

Chemical Industries (Colombo) closed at 67.50 rupees, up 2.70 (4.17 percent), Colonial Motors closed at 166.90 rupees, up 15.10 (9.95 percent), Kelani Tyres closed at 111.80 rupees, up 10.10 (9.93 percent) and Merchant Bank of Sri Lanka closed at 36.80 rupees, up 1.50 with almost 950,000 shares changing hands.

Eden Hotel Lanka closed at 60.80 rupees, up 4.80 (8.57 percent) with nearly 1.4 million shares traded, brokers said.

There was some high net worth interest on selected blue chip stocks, brokers said.

John Keells Holdings, an index heavy stock closed at 236.10 rupees, up 70 cents (0.27 percent, while Aitken Spence closed at 2,588.50 rupees, down 8.90 (0.34 percent), Hayleys closed at 329.80 rupees, down 20 cents (0.06 percent) and Hemas Holdings closed at 39.70 rupees, up 20 cents (0.51 percent).

source - www.lbo.lk

Sri Lanka Merchant Bank to merge with group units

Aug 27, 2010 (LBO) - The state-owned Merchant Bank of Sri Lanka (MBSL) seeks to merge with two units of its parent Bank of Ceylon group, a stock exchange filing said.

It said a proposal is being considered to merge Merchant Credit of Sri Lanka and Ceylease Finance Services with Merchant Bank of Sri Lanka with the continuing entity to be MBSL.

The MBSL board agreed to the merger at a meeting on August 25 subject to getting the licensed specialised banking license for BMSL, regulatory clearances and statutory approvals, it said.

The boards of Merchant Credit of Sri Lanka and Ceylease Finance Services have also approved the merger.

Merchant Credit of Sri Lanka is a subsidiary of Bank of Ceylon that does deposit taking, leasing, hire purchase, lending and real estate development.

Ceylease Finance Services provides leasing and hire purchase facilities and is also into property development and sales.

source - www.lbo.lk

Sri Lanka PC House falls below issue price

Aug 27, 2010 (LBO) - PC House, a Sri Lankan information technology company which debuted on the stock exchange this week, closed below its issue price of 11 rupees Friday, the second day of trading, brokers said.

The share opened the day's trading at 10.90 rupees, went down to 9.90 and closed at 10.00 with some 2.2 million shares done for the day.

When the firm debuted Thursday it was the most actively traded stock of the day and closed flat at 11 rupees, its issue price, after hitting a high of 14.70 rupees and a low of 10.90 rupees.

PCH had an initial public offer on August 5 to raise 630 million rupees by offering 57.2 million shares at 11 rupees each.

The IPO was oversubscribed on its opening day itself.

PC House has said it is planning a 100-seat business process outsourcing centre in the island's northern Jaffna peninsular to provide accounting and back office services to the international market.

The company also has a firm revenue stream from computer hardware and software sales and setting up networks.

In the year to March 2010 the group earned 123.8 million rupees on revenues of 3.0 billion rupees with 171.7 million shares getting 72 cents of earnings per share.

source - ww.lbo.lk

Sri Lanka hotel group exits loss-making Maldives resort

Aug 27, 2010 (LBO) - Sri Lanka's John Keells Holdings (JKH) group said it had exited from an island further away from the capital of the Indian Ocean archipelago of Maldives, and extended its lease at a more profitable resort.

JKH said it had sold the 'head lease' of Alidoo Island, which was located in the northern most atoll in the archipelago and in return received a 18 year head lease for Dhonveli resort which was 15 minutes by speedboat from the capital, Male.

The group had previously had a 'sub lease' for Dhonveli until 2021, JKH said in a statement.

The switch did not involve capital gains to the group.

But the Alidhoo island was making losses, and Dhonveli was more profitable the firm said.

The Maldives government leases uninhabited islands to resort operators. Lease rentals are a key source of revenue for the state.

source - www.lbo.lk

Sri Lanka tops charts for UK tourists – Times of London

Sri Lanka is becoming one of the most popular long-haul destinations from the UK, according to The Times of London newspaper.

In an article published yesterday (25) titled ‘Sri Lanka tops the charts for UK tourists on a bargain hunt’ the influential paper says that visits from the UK increased by 51 per cent last month compared with 2009, encouraged by big discounting by airlines and hoteliers striving to win back business.

The story explains that the British travel boom to Sri Lankan is due to “the relative calm restored after decades of bombings and bloody battles with the Tamil Tigers and devastation caused by the tsunami in 2004.”

The Times says that one British-based specialist long-haul tour operator, Hayes and Jarvis, reports that bookings for winter and next summer are also up.

The paper adds that some of the best deals for British holidaymakers can be found at the five-star Heritance Ahungalla – designed by the celebrated Sri Lankan architect Geoffrey Bawa – one of the best beach hotels in the country.

The total number of tourist arrivals to Sri Lanka went up 50 percent to 63,339 in July 2010, compared to the corresponding period in the previous year, according to figures released by Sri Lanka Tourism Development Authority. In July 2009 only 42,223 tourists arrived in Sri Lanka.

The tourism office figures showed an increase in the number of arrivals from Western Europe, South Asia, East Asia, Middle East and North America in July 2010.

Tourist arrivals to Sri Lanka increased by 48.4% during the first half of 2010 (January-June), with a total of 278,652 arrivals to the country in comparison to 187,729 arrivals during the same period last year (2009).

Sri Lanka was recently ranked as the number one tourist destination by the 'New York Times' in its list of "31 Places to go in 2010".

Just days after this ranking, a leading lifestyle web resource, Daily Candy, weighed in with a similarly enthusiastic travel recommendation, praising Sri Lanka as “the best place ever been”.
The United Kingdom recently stated that it is no longer advising its citizens against travel to Kilinochchi, Mannar, Mullaittivu and Vavuniya.

Commenting on changes to the UK Government’s official advice on travel to Sri Lanka, Britain's Foreign and Commonwealth Office (FCO) stated, ‘regarding to Jaffna Peninsula: there is free movement everywhere outside High Security Zones with a reduction in checkpoints around the Peninsula’.

USA and Germany too recently relaxed travel advisories. The German Embassy said that a long standing travel advisory had been eased enabling German tourists to visit earlier restricted locations such as Yala National Park and Arugam Bay.

source - www.priu.gov.lk

Ex-estate teas meet fair demand

Ex-estate teas comprising one Mkgs on offer met with fair demand. Western High Grown BOP's were irregular and was somewhat disappointing. The BOPF's on the other hand commenced irregular and appreciated as the sale progressed. The few Nuwara Eliya BOP's were firm to a little easier whilst the BOPF's were marginally dearer continuing to sell above Rs 400 up to Rs 420. Uva BOP's and BOPF's were lower to last week following quality with the top price for the sale being Rs 600 and Rs 520 respectively. CTC PF1's were well received with High and Medium invoices being Rs 5 to 10 dearer on average and Low Grown types appreciating Rs 10 to Rs 15. A number of invoices sold above Rs 500.

There was good demand from the tea bag sector and Russia, whilst Japan and Continental buyers were active following quality.

Three to five Mkgs of Low Grown that were on offer this week, met with wide spread demand at improved price levels. In the leafy category. Pekoes which moved up Rs 20 to Rs 30 in the last two weeks saw a slight correction in the market with prices settling down around Rs 410 - Rs 420 range. BOP1/OP1s continued quite strong particularly for the Below Best varieties. OPAs too met with a fully firm market with the exception of the Select Best where prices at times gained several Rupees. In the Small Leaf category FBOPs led the way with price increase of upto Rs 20, whilst FF1s too advanced in value. The Best Tippy varieties met with a lower market, however Below Best and poorer sorts maintained previous weeks levels. All in all it was another good sale for the Low Growns. The Weekly Sale Average for Orthodox Low Grown teas is expected to be above Rs 400 level.

Russia and Iran purchased quite strongly, whilst there was better demand from Saudi Arabia. Syria, Jordon and Iraq also lent useful support.

Western Teas

Select Best BOPs declined Rs 5 to Rs 10, other good invoices were firm, Below Best and plainer sorts maintained last levels. Select Best BOPFs were firm to dearer, other good invoices gained Rs 5 to Rs 10 on average, Below Best sorts were firm, and gained Rs 10 as the sale progressed, plainer varieties were irregularly lower. Medium BOPs were irregular, whilst BOPFs gained Rs 5 to Rs 10.

Nuwara Eliya Teas

BOPs were Rs 5 lower. BOPFs gained Rs 5 to Rs 10 on average.

Uva Teas

A few bright BOPs sold well on special inquiry, whilst most others declined Rs 10 and more. Brighter BOPFs sold well on special inquiry, others gained Rs 10 on average. Udapussellawa BOPs advanced following quality. BOPFs were Rs 5 dearer.

CTC Teas

Low Grown PF1s gained Rs 10 to Rs 20. BP1s were firm to Rs 5 easier. A few High & Medium PF1s gained substantially following special inquiry, others were firm. BP1s declined Rs 5 to Rs 10.

Low Growns

Good demand. Select Best OP1s were firm to Rs 5 to Rs 10 dearer, Best and Below Best types advanced Rs 10 to Rs 15, poor clean varieties too were dearer by Rs 5 to Rs 10. Select Best BOP1s appreciated Rs 10 to Rs 15 and more at times, Best and Below Best types were irregularly dearer by Rs 5 to Rs 10, poor types were steady. Select Best OPs advanced sharply by Rs 20 to Rs 30, however the balance were steady.

Select Best OPAs maintained last levels, the Best and the Below Best types were irregularly lower by Rs 5 to Rs 10, poor stalky varieties declined Rs 5 to Rs 10 and more at times. Select Best Pekoes appreciated Rs 10 to Rs 20, however the bold Pekoe varieties commenced fully firm but declined Rs 10 to Rs 20 and more as the sale progressed, flaky types too tended lower by Rs 5 to Rs 10. Shotty Pekoe1s eased Rs 10 to Rs 20, the Best types too declined Rs 5 to Rs 10, Below Best and poor sorts were irregularly lower by a similar margin. Select Best and Best BOPs advanced Rs 5 to Rs 10, Below Best and poorer types too moved up by a similar margin. Select Best and Best BOPSP maintained last levels, Below Best and poorer types tended a little irregular.

Select Best and Best FBOPs continued to meet with strong demand and advanced Rs 10 to Rs 20 and at times more towards the close of the sale, Below Best and poorer types gained Rs 10 to Rs 15.

Select Best and Best FBOPF1s advanced Rs 10 to Rs 20, Below Best and poorer types gained Rs 5 to Rs 10. Select Best and Best Tippy varieties were slightly lower to last, however price levels continued to be attractive, Below Best and poorer sorts were lower to last.

Off Grades

Select Best liquoring Fngs1s were irregularly dearer by Rs 5, while the Best and the Below Best depreciated Rs 10, poorer sorts were lower by Rs 5 to Rs 10. All BPs sold at last levels. Select Best and Best BMs were irregularly dearer by Rs 10, Best and the Below Best types depreciated Rs 10, poorer sorts were lower by Rs 5 to Rs 10. All Low Grown Fngs were irregularly lower by Rs 5. Select Best BOP1As were lower to last by an average of Rs 15, whilst Best and Below Best BOP1As were lower by Rs 15 to Rs 20, poorer sorts were lower by Rs 15 to Rs 20 and more at times.


Improved demand. Select Best Dust1s appreciated Rs 5 to Rs 10. Improved teas in the Best and Below Best category gained Rs 15 to Rs 20, whilst the poorer sorts were firm. Clean secondaries appreciated Rs 10 to Rs 15, whilst the Below Best types were firm, poorer sorts declined Rs 5 to Rs 10. Best Low Grown Dust/Dust1s were firm, whilst the balance advanced Rs 5 to Rs 10.

source - www.dailynews.lk

Increases asset base with rights issue: Touchwood plants 350 acres of mahogany


Touchwood the only agro-forestation company in Sri Lanka has commenced cultivating 350 acres of mahogany in Girandurukotte increasing its asset base.

Touchwood, CEO Channa Abeygunawardena told the Daily News Business that this move is a result of recent rights issue of the company to the value of Rs 534 million which was oversubscribed by 49 per cent. The rights issue was part of the strategies placed for the future, ensuring that company remain profitable for decades to come. He said that future value is at the core of the Touchwood business proposition and consumers are increasingly demanding timber from sustainable sources.

"The proportion of timber harvested from old growth natural forests will decline in favour of timber from sustainable managed resources in the future", he said.

Abeygunawardena said Touchwood has a bullet proof business model that paves the way for the enhancement of its 25,000 strong client base's investments.

It is significant that the entire plantation is fully insured and every tree is numbered and every plot is tagged.

"Any tree cannot be sold twice under this system," he said.

He ensured of its ability to redefine the investment industry in Sri Lanka by proving that agro plantation returns are a win-win solution for all investors and future generations. Touchwood will also introduce new products to the market and has plans to invest in research and development facilities partnering with academic institutions to develop more environment friendly agricultural practices.

"It will also strengthen the brand image and improving efficiency to create stakeholder value now and in the future as it is a system dependant company with every policy process and procedure mapped electronically and adhered to fully," he said.

source - www.island.lk

SEC okay for Dankotuwa private placement Bourse holds its ground after dip in early trading

The Colombo bourse held its ground yesterday although dipping in early trading but recovering with both indices moving up slightly at close – the All Share by 11.43 points (0.20%) and the Milanka by 5.82 points (0.1%) on a turnover of Rs.3 billion, up from the previous day’s Rs.1.9 billion, with 88 decliners a neck ahead of 85 gainers.

Brokers attributed the decline in early trading to rumours that the Regulator had decided that the 10% price band would remain at least for the time being. However, there was no formal announcement and the market moved up thanks largely to JKH and other blue chips like Hayleys, DFCC and LOLC.

The bulk of yesterday’s business was generated by JKH where over 2.9 million shares were traded on a narrow band between Rs.260 and Rs.263.10, gaining a rupee to close at Rs.263.10.

Brokers said that some large parcels were done during early trading at a price of Rs.262. However the first trade of 177,000 shares was at Rs.260.

United Motors saw a large volume of over 1.7 million shares traded between Rs.194 and Rs.200 with the counter closing Rs.1.60 up at Rs.199.90.

"With car sales moving up on the duty cut, there is expectation of high earnings by motor companies," Asmath Iqbal of John Keells Stockbrokers said.

There was no word on who the buyers or sellers of UML were although there were two large parcels including one of 1.5 million shares and another of slightly over 0.2 million shares, both done at a price of Rs.200, accounting for the bulk of the trades.

Hayleys continued to attract interest gaining Rs.5.80 to close at Rs.329 on a trading range of Rs.321 to Rs.331 with one parcel of 200,000 shares done at a price of Rs.325.

PC House had a disappointing debut closing at the issue price of Rs.11 with over 12.2 million shares traded between a low of Rs.10.90 and a high of 14.70.

Analysts noted that this share too was comfortably oversubscribed in the IPO with allotments pro rated but did not appreciate substantially when trading commenced.

DFCC gained a further Rs.2.60 to close at Rs.329 on nearly 0.4 million shares done between Rs.315 and Rs.340 while LOLC to gained strongly closing Rs.78.40 up at Rs.863.10 on 45,100 share.

"This stock has been trading for the past few days at the upper limit of the 10% price band with some investors expecting a share split," brokers said. "However, there has been no announcement from the company."

Vallibel Finance announced a first and final dividend of Rs. 1 per share XD from Sept. 6 and with payment on Sept. 15.

Dankotuwa Porcelain made a stock exchange filing saying that the SEC has waived the rule on a 20% limit on private placement in response to the company’s application. It can now go ahead with the placement enabling a substantial cash infusion as both shareholder and SEC permission has been received.

Under this arrangement, Environment Resources Investments will take control of Dankotuwa.

source - www.island.lk

Thursday, August 26, 2010

Sri Lanka’s Tourism sector enjoys unpredicted boom

Sri Lanka is starting to look like its old self. Now recovering from the 2004 tsunami and resolving a decades-long conflict, the country is welcoming record numbers of visitors. It may be expected to shortly run out of hotel capacity as it experiences an unprecedented boom.

The occupancy rates of the hotels which were mainly hit by the three decade of war saw a remarkable growth. The overall occupancy rate hit an average of 48.4 percent in 2009 when compared with the corresponding period of 43 percent. Further the occupancy rates hit an all time high for the first three months of 2010 at an average of 82 percent. Same time the average spending per tourist increased to US $ 781 a 7 percent increase in 2009 compare with previous years.

The latest generation of travellers have been quick to pick up on Sri Lanka’s affordable beach and culture combination. The healthy trend would continue in the future too. The positive sentiment due to peace and the removal of travel advisories help this healthy trend to continue.

Sri Lanka’s tourist infrastructure can handle up to 800,000 visitors a year, comfortably meeting expected demand this year of 500,000. However within the next two years, visitor arrivals are expected to double and then double again two years later to 2 million. There are suggestions that unless the country embarks on a hotel construction boom it will fail to meet demand. Approximately 2,000-3,000 new hotel rooms must be constructed during 2010. The country aims to add approximately 20,000 hotel rooms in the next six years to cater to the anticipated boom in tourism. You can see the hotel companies begun renovating and upgrading hotels in Colombo and the war-torn eastern province and same time there are new projects to build tourist accommodation in the Northern Province to meet the tourism boom.

 The Tourism Development Authority has already approved the construction of new hotels in Passekudah and Batticaloa to promote eastern beaches as a tourist destination. Further, new zones which are being developed as tourist hotel sites are, Kuchchaveli north of the eastern port and five islands in Kalpitiya, which would be similar to the Maldives. As developing tourism related infrastructure facilities, the Government plans to build a domestic airport at Uchchamunai, an under-water amusement park in Kandakkuliya, a golf course in Dutch Bay, a race course and a cricket ground in Kalpitiya. Fishing Tourism, Leisure Tourism and Ayurvedic Tourism are some of the concepts the Government is planning to implement to attract the global appeal.

 The top five contributors to Sri Lankan Tourism in 2009 were India, UK, the Maldives, Germany and Australia. This brought the earnings of nearly Rs 40,133 million which is equivalent to US$ 350 mn an increase of 8 percent over 2008.The industry is hoping to attract 2.5 million visitors by 2016, up from 450,000 in 2009. It is also hoping to earn US$2 billion annually in tourist revenue by 2016, up from US$350 million last year.

It is a noteworthy feature that new source markets will feature in the list. Meanwhile it is necessary to carry out brand building and image enhancement activities. Brand development is needed to improve credibility, dependability, believability and acceptability in the minds of the tourists.

source - taprobanetravel.blogspot.com

Sri Lanka stocks close 0.20-pct up

Aug 26, 2010 (LBO) – Sri Lankan stocks closed slightly higher Thursday in somewhat choppy trading with some interest seen in financial sector shares and poultry firms, brokers said.
The All Share Price Index closed at 5,594.30, up 0.20 percent (11.43 points) while the more liquid Milanka index rose 0.10 percent (5.84 points) to close at 5,882.22, according to stock exchange provisional figures.

Turnover was three billion rupees.

PC House, a computer vendor which debuted Thursday, was the most actively traded stock and closed flat at 11 rupees, its issue price.

The stock hit a high of 14.70 rupees and a low of 10.90 rupees with about 12.2 million shares traded.

PCH had an initial public offer on August 5 to raise 630 million rupees by offering 57.2 million shares at 11 rupees each.

There was a privately negotiated off-the-floor deal of 1.5 million shares of United Motors Lanka at 200 rupees each. The share closed at 196 rupees, up 1.60 rupees.

SMB Leasing non-voting shares were the highest gainer, closing at 2.20 rupees, up 20 cents or 10 percent, with just over a million shares traded.

Poultry firms Ceylon Grain Elevators and Three Acres Farms were among the most actively traded stocks.

Ceylon Grain Elevators closed at 42.10 rupees, up 10 cents while Three Acres Farms ended at 33.30, up three or 9.90 percent.

Company earnings have improved in post-war Sri Lanka and leasing and motor firms are seen doing better as demand for vehicles increase while poultry firms are expected to benefit from a revival in tourism.

source- www.lbo.lk

Sri Lanka pension fund gets on board shipbuilder

Aug 26, 2010 (LBO) - Sri Lanka's listed shipbuilder Colombo Dockyard has appointed to its board of directors a nominee of the Employees' Provident Fund, a pension fund managed by the central bank, a stock exchange filing said.
The appointment of Janaki Kuruppu, director and consultant to the President's Secretariat as the nominee independent, non-executive director of the EPF has been accepted with effect from August 25, it said.

Kuruppu is also chairperson of the state-run Regional Development Bank and a nominated member of the National Economic Council with over 20 years of experience in management, marketing and economic research, it said.

The EPF, the biggest fund in the island, held a stake of just over 13 percent in the ship yard as at June 2010, having raised its stake from three percent as of March 31, 2010.

Colombo Dockyard is majority owned by Japan's Onomichi Dockyard.

The EPF has been buying into listed firms on the Colombo Stock Exchange in recent months to capitalise on a post-war economic revival and diversify away from government securities as interest rates fall.

It has also bought into listed commercial banks, raising a controversy over perceived conflict of interest as the central bank, which manages the fund, is also the banking regulator.

source - www.lbo.lk

Tea industry takes giant leap

  • Surpasses US $ One billion revenue target:
Indunil HEWAGE

The Sri Lankan tea industry is poised to take a giant leap in the international tea market and the country has comfortably crossed US $ one billion revenue in the tea industry, HVA Group Chairman Rohan Fernando said.

He said country has the potential to make US $ five billion in revenue from the tea industry in 10 years.

Addressing the "Product liability and product recalls seminar" Chairman Fernando said adopting a good brand building process while adding value to the products will assist in achieving these business targets. "Sri Lanka is the pioneer in building branding when it comes to tea industry and no other country has done it so far. The country is unable to go forward without having a proper brand building effort. Fishery, marine, boat building, gem and jewellery and spices should be branded to enhance export revenue," Fernando said.

He emphasized the significance of product liability as it is a technical jargon for exporters. However, more exporters are trying to make contacts with foreign countries to sell their products and make profits without paying attention to long-term marketing strategies.

Product liability is also considered as brand builder and making Sri Lanka branding, country would be able to go beyond Rs 20 billion export revenue mark by 2020.

 source - www.dailynews.lk

Sri Lanka Overseas Realty to raise Rs4.2bn in rights issue

Aug 25, 2010 (LBO) - Sri Lanka's Overseas Realty (Ceylon) is to raise 4.2 billion rupees in a one for two rights issue at 15 rupees a share by issuing 281,161,453 new ordinary shares, a stock exchange filing said.

The issue is for the compulsory redemption of non-convertible cumulative redeemable preference shares issued to Shing Kwan Investment (Singapore), part of the Shing Kwan group, its main shareholder, and meet working capital needs of planned projects.

Shing Kwan Investment (Singapore) subscribed to the preference shares as part of a company restructuring in 2005.

The rights issue is not underwritten but the statement said the parent firm, Shing Kwan group, will subscribe to its entire entitlement and any balance to ensure full redemption of the preference shares to the group unit.

Overseas Realty has said it is pushing ahead with Colombo's largest property project amid renewed buying interest in apartments after the end of a 30-year war.

Overseas Realty owns Colombo's World Trade Centre building which houses the Colombo Stock Exchange and is jointly developing Havelock City, an 18-acre block of land with state-run Bank of Ceylon.

Havelock City has started work on a third apartment block, with sales of around 70 percent out of 226 apartments in the first two towers the firm is building being completed.

The first two towers had cost about 25 million US dollars.

Sri Lanka's property market is recovering after its ethnic war ended in May 2009.

source - www.lbo.lk

Tuesday, August 24, 2010

Good Time for Sri Lanka - Tea prices unmoved by India pest attack

International tea prices remained firm despite a pest attack on India’s farms, the Tea Board of Kenya (TBK) said disappointing farmers who had hoped for a windfall arising from lower output.

The board’s managing director Sicily Kariuki said India contributes a relatively small portion of the global supply, meaning its absence would not unsettle the market.

“We don’t anticipate much because India’s contribution in terms of volume is relatively small,” Ms Kariuki said.

A pest attack of helopeltis has affected tea farms in the north-eastern state of Assam, which is India’s largest tea producing zone, cutting the country’s tea output in June by 11.9 per cent and lifting domestic tea prices by nearly 15 per cent since late July.

Good harvests from leading global producers as a result of good weather are also expected to dampen the effects of production cuts in India.

Statistics showed that over the first half of 2010 tea production in Sri Lanka increased 26 per cent over a similar period last year.

Locally, Mrs Kariuki said both production and earning is expected to grow substantially, driven by quality and demand.

Kenya’s tea production this year is likely to rise 5 to 10 per cent above the 2009 levels of 315 million kilograms supported by good weather conditions that have been experienced since December last year.

Sufficient rains over the first half of the year helped improve both output and crop quality that had suffered serious damages from prolonged drought conditions in 2009.

She added that the ongoing humanitarian crisis in Pakistan was unlikely to have an impact on Kenyan tea exports in the short term.

Pakistan is among the leading export destinations of Kenyan tea.

“Prices and exports have remained stable since the flooding in Pakistan began but we are not ruling out any effects in the long term,” she said.

Purchasing power

Pakistan has in the last fortnight experienced serious floods that have claimed 1,600 lives, displaced two million people and disrupted the livelihoods of 14 million people, or 8 per cent of Pakistan’s population of 172 million.

Such disruptions directly threat the purchasing power of individual households, a development that may have an effect on imports as buyers turn to more essential commodities.

'We haven’t recovered yet but the demand for tea is unlikely to change much because even some of the displaced people may need to keep warm with beverages such as tea,” Mrs Kariuki said.

source & photo credit - www.businessdailyafrica.com

Sri Lanka’s economic growth to double: IMF

* Head of IMF mission to Colombo says island’s economy will grow by 7% this year, up from 3.5% in 2009

COLOMBO: Sri Lanka’s economic growth rate is expected to double this year, with the country firmly on the road to recovery after decades of ethnic war, a top International Monetary Fund official said Monday.

The island’s economy will grow by seven percent this year, up from 3.5 percent in 2009, thanks to improved farm output in the previously embattled north and east, forecast Brian Aitken, head of the IMF mission to Colombo.

The strong economic performance meant there would be no difficulty for the IMF in releasing the fourth tranche of a $2.6 billion bailout approved in July 2009, Aitken said.

“We feel things are quite good,” Aitken told reporters following a 10-day visit to the island.

“We are in a position to recommend to the IMF board approval of the next (loan) installment worth over $200 million,” he said. With that payout, the IMF will have released $1.2 billion of the loan.

Sri Lanka sought an IMF bailout to avert its first balance of payment crisis after the island’s foreign reserves slipped to under a billion dollars last year.

The loan was approved in July, two months after the military crushed the Tamil Tiger rebels and ended a 37-year conflict that claimed up to 100,000 lives, according to UN figures.

Aitken said the government has shown progress in cutting spending and boosting revenue to ensure that the budget deficit stays on track at eight percent of GDP this year.

He said Sri Lankan authorities have promised to raise tax revenues, cut spending and step up fiscal reforms when the 2011 budget is announced in November.

“To do that, tax reform is needed — to simplify the existing system, broaden the tax base, including restricting concessions and to spread the tax burden more equitably to support economic growth,” Aitken said. Since the IMF bailout, Sri Lanka’s foreign reserves have swelled to a record $5.8 billion, boosted by international investor interest in the island’s sovereign bonds.

The central bank expects foreign reserves to hit $6.2 billion by the end of 2010.

Aitken said Sri Lanka planned to issue in September a 10-year $1 billion euro bond whose proceeds would be earmarked for infrastructure and other purposes.

source - www.dailytimes.com.pk

Home builder KELSEY ventures into selective land sales

Armed with the professional expertise and reputation gained from the construction of more than 1,000  houses in Sri Lanka, Kelsey Developments PLC has ventured into the real estate business, and has announced that its new property development company is looking for land in good residential areas.

The new company, Kelsey Property Developers (Private) Ltd., will focus on seeking out virgin land in potential residential suburbs for development with infrastructure and amenities, blocking out and sale, while Kelsey Homes continues to develop housing schemes and build houses for clients on their land, said a spokesman for Kelsey Developments PLC, the holding company of both entities.

Already, the first project of Kelsey Developers branded 'Makamba Gardens' and located 150 meters from the High Level Road near the Makumbura Junction at Kottawa, has sold ten of the 17 blocks developed, since its launch in mid June.

"We believe that there is renewed interest in real estate and that this is the opportune time to leverage our 25 years of experience in the house construction business to offer buyers fully-developed, construction-ready land from a company with a pristine reputation for quality and integrity," Kelsey Developers Director Ms. Manjula Mathews stated.

She said the company would target people in the household income category of Rs 75,000 to Rs 200,000 a month, offering a choice of land in the price range of Rs 300,000 to Rs 600,000 per perch, initially in the outskirts of Colombo, and later in the suburbs of provincial cities.

The 140 perch development at Kottawa, with internal roads, three phase electricity and pipe borne water, storm water drainage, easy access to banks, schools and markets, is an example of the product Kelsey Developers would offer buyers, Ms. Mathews said, disclosing that the company ensures clear titles and assists in procuring financing through banks for its customers.

The 17 blocks of land at Makamba Gardens, ranging from 7 perches to 9 perches are priced between Rs 390,000 and Rs 460,000 a perch. Buyers who request assistance with construction would be referred to Kelsey Homes with no obligations, she said.

The new company plans to develop and launch new projects regularly, and is prospecting for land with a high development potential, she added.

Established in 1983 as a subsidiary of John Keells Holdings, Kelsey Developments has very successfully operated under the KELSEY HOMES brand, which today stands synonymous with reliable home building.

source - www.dailymirror.lk

IMF happy with Lanka Fiscal targets on track, foreign investments low on turbulent macroeconomic past

An IMF Review Mission headed by Dr. Brian Aitken concluded the fourth review under a US$ 2.6 billion Standby Facility Programme yesterday and Dr. Aitken said the mission was happy with the progress made by the government in containing the fiscal deficit.

"Sri Lanka’s performance was good and we will report favourably to the IMF Executive Committee and if they do decide to release the fourth tranche, we would have released around US$ 1.2 billion under the standby facility. The tranche could be expected late September or early October. So far, disbursements amounted to US$ 1 billion," he said speaking to journalists in Colombo.

"According to the solid numbers made to available to us, the government’s fiscal performance up to June showed that it was consistent with its commitment to reaching a deficit target of 8 percent of GDP by the year end," Dr. Aitken said.

Under the IMF standby facility programme, and the government’s own budgeted target, Sri Lanka was supposed to reach a deficit of 7 percent of GDP in 2009 but it ballooned to 9.9 percent instead and this resulted in the IMF delaying the third tranche until the government showed it was committed to bringing down the high deficit.

Earlier, this year, the IMF approved the tranche after the government released the mini budget for 2010 which showed a deficit of 8 percent of GDP.

As reported in The Island Financial Review yesterday, the fiscal deficit for the first six months of the year had reached 3.95 percent of GDP or Rs. 215.3 billion, a 15.46 decline from Rs. 254.7 billion for the same period in 2009, which was 5.27 of GDP.

Dr. Aitken said the economy was picking up but in order to reach growth rates of more than eight percent, investments into long term projects would have to improve.

"There is a lot of positive sentiment and foreign investors are looking at the prospects in Sri Lanka, but we have not yet seen such projects materialise. In a sense there seems to be gestation period. Given Sri Lanka’s turbulent macroeconomic past, investors are probably waiting to see if Sri Lanka could sustain the macroeconomic stability it is now seeing. Also, long term projects take time, so we will have to see how the months ahead unfold," Dr. Aitken said.

He went on to say that investment grew sluggishly or at historical levels Sri Lanka would not be able to realise its true growth potential.

source - www.island.lk

IMF set to approve Sri Lanka loan payment

The International Monetary Fund (IMF) has indicated it will release the next tranche of a multi-billion dollar loan to Sri Lanka.

Following a two week mission to the country, the body gave an upbeat assessment of Sri Lanka's economy.

It said government targets for deficit reduction were on track, with taxes increasing and spending being cut.

An IMF mission also arrived in Serbia on Monday to assess its economy with a view to releasing a loan payment.

The body agreed a 3bn euro ($3.8bn; £2.4bn) loan with the country last March.
'Strong growth'

The IMF approved a $2.6bn (£1.7bn) loan to help Sri Lanka weather the global economic crisis last summer.

The Sri Lankan government also said it would use the money to pay for post-war reconstruction following the end of fighting with the Tamil Tiger rebels.

"We are in a position to recommend to the IMF board approval for the next loan instalment worth over $200m," head of the Sri Lankan mission Brian Aitken said.

The IMF said: "Overall economic conditions are improving, and the economy is likely to show strong growth this year."

However, it said the country still faced "significant challenges". These included "fundamental tax reform" and encouraging far more private-sector investment.

In June, Sri Lanka's government unveiled its first budget since being re-elected earlier this year, aimed at reining in the budget deficit.

It pledged to cut the deficit to 8% of gross domestic product (GDP) this year, from 9.9% in 2009.

To achieve this, it announced plans to widen the tax net while introducing a "more business-friendly" tax system with simpler rules and lower levels for income and company tax.

source - www.bbc.co.uk

PC House profits up

Shares of PC House will make their debut on the Colombo Stock Exchange (CSE) this Thursday (26), the exchange announced yesterday.

Approximately 228.9 million ordinary shares valued at Rs. 629.6 million will be listed on the main board of the CSE and will be open for trading under security code PCH-N-0000.

"Deposits would be accepted with the Central Depository Systems (Pvt.) Ltd. with immediate effect," the stock exchange said.

PC House made a profit of Rs. 56.3 million for the four months ending July 31, 2010, unaudited interim financial statements filed with the Colombo Stock Exchange showed.

PC House recorded a 38 percent revenue growth during this period amounting to Rs. 1,066 million, as against Rs. 772.3 million a year ago. Gross profits increased by 26 percent to Rs. 220.2 million from Rs. 175.2 million.

The company’s finance costs for this period declined by 42 percent to Rs. 43.1 million from Rs. 73.8 million.

Its earnings per share increased to 0.24 from Rs. 0.09.

The company’s long term borrowings declined to Rs. 187.3 million as at July 31, 2010 from Rs. 223.9 million a year ago. Short term debts decreased to Rs. 670.6 million from Rs. 699 million while bank overdrafts decreased to Rs. 118.8 million from Rs. 130.4 million. It recorded a negative cash flow of Rs. 4.7 million.

Inventories dropped to Rs. 413.6 million from Rs. 523.6 million while trade receivables increased to Rs. 517.6 million from Rs. 283.8 million.

Total non current assets amounted to Rs. 625.2 million while current assets amounted to Rs. 1,145 million.

source - www.island.lk

Monday, August 23, 2010

Sri Lankan stocks becalmed

Aug 23, 2010 (LBO) - Sri Lankan stocks closed flat Monday, as investors adjusting to the 10 percent trade margin took defensive positions looking for shares that offered bargains, while punters continued to chase after 'penny' stocks, brokers said.

The All Share Price Index closed at 5,563.99, up 0.02 percent (0.99 points) while the Milanka index of more liquid stocks fell 0.04 percent (2.34 points) to close at 5,860.66, according to stock exchange provisional figures.

Turnover was 1.5 billion rupees.

"We feel investors are getting used to trading with the price corridor in operation," Nikita Tissera, research manager at stock brokering firm SC Securities said.

On August 05, market regulator the Securities and Exchange Commission (SEC) slapped a daily 10 percent upward and downward price band on all listed securities on suspicion of price manipulation.

There was sizable trading on selected midcap stocks, Monday, brokers said.

Asian Alliance Insurance closed at 65.70 rupees, up 3.30 (5.29 percent) with 1.3 million shares traded, and Ceylon Grain Elevators closed at 38.20 rupees, up 3.40 (9.77 percent) with almost 1.5 million shares changing hands.

Dunamis Capital closed at 12.60 rupees, up 90 cents (7.69 percent) with nearly 2.1 million shares traded, and Touchwood Investment closed at 35.10 rupees, down 1.60 (4.36 percent) with 1.3 million shares changing hands, brokers said.

Punters continued to actively trade in penny stocks, brokers said.

Blue Diamonds Jewellery Worldwide closed at 6.30 rupees, up 50 cents (8.62 percent), while its non-voting shares closed at 3.30 rupees, up 30 cents (10 percent) with almost 3.5 million shares traded.

Hotel Reefcomber, another active penny stock closed at 4.50 rupees, up 10 cents (2.27 percent) on over 4.5 million shares changing hands.

SMB Leasing closed at 2.20 rupees, up 20 cents (10 percent) on 2.26 million shares traded, while its non-voting shares closed at 1.90 rupees, up 10 cents (5.56 percent), brokers said.

source  - www.lbo.lk

Market Summery - S.L.S.Picks

data - www.cse.lk

Sri Lanka shares ends flat amid hoiday mood; rupee down

 * Trading dampened ahead of holiday

* Selective buying seen in blue chips

* Rupee falls on importer dollar demand

COLOMBO, Aug 23 (Reuters) - Sri Lanka's benchmark share index .CSE closed flat on Monday, with traders and investors on leave ahead of a public holiday on Tuesday.

The main share index .CSE edged up 0.02 percent or 0.99 points to 5,563.99.

It touched an all-time high of 5,679.14 on Friday but analysts believe the bourse is overheated with local retail investors chasing speculative shares instead of fundamentally sound stocks.

The index, Asia's best performer with a gain of around 64.4 percent this year, has plunged nearly 10 percent in four sessions after the Securities and Exchange Commission (SEC) imposed a 10 percent price limit on Aug. 4. [ID:nSGE6730L1] [ID:nSGE6720EG].

Leading fixed-line telephone operator Sri Lanka Telecom SLTL.CM rose 2.25 percent to 40.90 rupees.

Turnover was 1.5 billion rupees ($13 million), over twice the 2009 daily average but below the daily average turnover of 2 billion so far this year. Foreign investors sold a net 31.9 million rupees' worth of shares on Monday and overall they have sold a net 11.6 billion rupees worth shares this year.

The rupee LKR= closed weaker at 112.50/56 per dollar due to importer demand for dollars, dealers said. ($1=112.53 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by David Cowell)

source - www.reuters.com

Sri Lanka IMF programme on track, to get next tranche: official

Aug 23, 2010 (LBO) - An International Monetary Fund (IMF) mission to Sri Lanka said the island's programme with the fund is on track with the government being able to meet the budget deficit target of eight percent of Gross Domestic Product.
"We think things are quite good and we're in a position to make a recommendation to the management on disbursing the next tranche of 200 US million dollars," said mission leader. Brian Aitken.

“Performance under the program has been good," an IMF statement at the end of the mission said.

"End-June performance criteria on domestic budget borrowing, reserve money, and net reserves have been met.

"With budget revenues increasing and expenditure restraint continuing, fiscal performance so far remains consistent with achieving the government’s full-year deficit target of 8 percent of GDP. Financial sector reforms continue to go forward in line with the program."

Aitken said the next disbursement is likely to be in late September or October.

About a billion dollars of the 2.5 billion dollar IMF loan have been disbursed to the Sri Lankan government so far, he said.

The IMF statement said the central bank's recent rate cut was "appropriate" and that there was no sign of inflationary presssure.

The statement said: “Overall economic conditions are improving as expected in the last visit, and the economy is likely to show strong growth this year.

"External balances are strong, remittance inflows continue at a high rate, tourism prospects continue to improve rapidly, and gross reserves remain at comfortable levels.

"We assess the central bank’s recent rate cut as appropriate—with bank lending only slowly beginning to rebound, and economic growth still below potential, we see little sign of emerging demand-driven inflationary pressures, and average inflation for the year as a whole is expected to remain in the single digits."

With the IMF programme with Sri Lanka now back on track, the review mission also assessed Sri Lanka’s medium-term "challenges" in the context of the fund's Article IV consultation.

The end of the 30-year war has led to a surge in investor enthusiasm, bolstered by the decline in the risk of a short-term balance of payments crisis - "and future growth prospects have improved markedly,' the IMF said.

"Significant near- and medium-term macroeconomic challenges will need to be addressed, however, if Sri Lanka is to take full advantage of the current favorable environment."

Aitken said it was important for the government to achieve the targets set in the IMF programme to maintain investor confidence and attract the foreign investment needed to speed up growth.

"Given the turbulent past record of economic stability investors are going to need to be assured the current stability can be maintained," he told a news conference at the end of the review mission.

"And for that they are going to want to see the fiscal situation brought to a sustainable level and monetary policy handled competently. If they (investors) are not assured then it's going to be an impediment."

source - www.lbo.lk

The hotel industry will experience 45% influx in room capacity

 The double-digit growth of inbound tourism to Sri Lanka has sparked a massive hotel expansion drive by several hotel giants, including refurbishment of existing hotels and major development plans in the pipeline announced Sri Lanka Tourism Promotion Bureau's (SLTPB) Middle East office.

Total hotel expansion and development spending is estimated at Dhs18bn while projected inbound tourism arrival is expected to cross 2.5 million by 2016.

The boom in tourism is projected in the wake of increased demand for hotel rooms post conflict resolution. All this will help accommodate the exponential increase in tourist arrival expected.

In the Middle East alone, tourism arrivals for the first six months of 2010 reported an enormous surge in the number of Saudi Arabian travellers to Sri Lanka, according to figures compiled by the Sri Lanka Tourism Promotion Bureau's (SLTPB) Middle East office.

"Arrivals rose by an unprecedented 96% in the first six months of 2010 compared to the same period last year," said Ms. Heba Al Mansoori, Middle East Director of SLTPB based in Dubai.

According to recent statistics compiled by the Sri Lanka Tourism Development Authority, the total number of travellers from the Middle East region reflected a phenomenal upsurge with arrivals increasing by 102% over the same period.

"Regardless of apprehensions of an unsteady global economy, Middle East's discerning travellers are spending time and money on travel and Sri Lanka has been one of the preferred destinations of choice with a meteoric rise in tourists during H1 2010," observed Ms Al Mansoori.

John Keells Holdings (JKH) invested Dhs13m (400 million LKR) to upgrade and rebrand Club Oceanic to Chaaya Blu in Trincomalee. The group has currently undertaken an Dhs65.4m (2 billion LKR) investment on a new 4 star 190-room hotel in the Beruwela area. Coral Gardens in Hikkaduwa, Bentota Beach and Habarana Lodge are all being given a facelift with the total renovation costing up to Dhs49m (1.6 billion LKR). The chain also has lands in Ahungalla, Wirawila and Nilaweli, upon which new properties are planned.

Amaya Resorts and Spas development process is to be carried out in 4 stages. This includes to firstly developing the existing properties which is estimated at Dhs36.7m ($10m). Next step would be to develop the available land bank. The identified areas are - Wadduwa at a cost of Dhs55m ($15m), Kalpitiya at a cost of Dhs55m ($15m), Mirissa at a cost of Dhs110m ($30m), Negombo at Dhs110m ($30m). The total investment that is projected for this 2nd stage of development is approximately Dhs330.5m ($90m)

Jetwing is all set to spend Dhs23m (LKR 700 million) on rebranding and refurbishing Blue Oceanic as Jetwing Blue. Besides this the chain will spend approximately Dhs16.3m (Rs. 500 million) at Sea Shell which will be converted to Jetwing Sea and Dhs13m (Rs. 400 million) will be spent at Blue Lagoon. Jetwing Blue and Jetwing Sea are slated to open their doors for business in December this year.

"Given the rapid growth of tourism in Sri Lanka, Jetwing seeks to refurbish its current properties and expand its room stock through new ventures. In respect of refurbishment, Jetwing has made a conscious effort to upgrade all its properties gradually to a 4 -5 star (small luxury) properties. Already the Jetwing Blue & Jetwing Sea is underway! As regards new hotel ventures, Jetwing has planned to occupy 'white spots', by locating and developing new similar standard hotels in the East Coast, Yala, Kandy, Jaffna and Colombo, while offering to manage several other properties in the island," states, Hiran Cooray, Chairman Jetwing Group.

Tourist arrivals have increased to nearly a staggering 48% for the month of July alone when compared with June 2009. The first half of 2010 has registered a 48.4% increase in inbound tourism when compared to the same period in 2009.

source - www.ameinfo.com

Auromatrix Holdings plans to set up resort in Passekudah, Sri Lanka

By HBI Staff | Mumbai

Chennai-based Auromatrix Holdings Pvt Ltd, a technical, management and marketing consultant for various hotel developers in India, plans to set up a resort at Passekudah, Sri Lanka. This is its first project outside India. It has set up Auro Lanka Hotels & Resorts Pvt Ltd (ALHP) to implement the project. Auro Lanka hopes to capitalise on the growth in the tourism and hospitality sector in the island nation, by investing in projects in Passekudah, Kuchchaveli, Trincomalee and Kalpatiya.

According to a report in Business Line, at Passekudah, the company will develop a 50-villa boutique resort in the first phase with an investment of USD 4.5 million. Passekudah will be a beach resort with individual and clusters of two and four villas. The company has identified a six-acre property in line with the Master Plan of Sri Lanka Tourism Development Authority (SLTDA).

Preparatory work for Passekudah has started with the project targeted for completion by December 2011. Architects Co-Partnership, Colombo, an architectural firm in Sri Lanka, has been appointed for this project.

SOURCE - www.hospitalitybizindia.com

‘Pure Ceylon Tea’: Rs 5 billion promotion


The Government will provide Rs 5 billion to promote ‘Pure Ceylon Tea’ in the international market in the next five years. This program will be implemented from November 1 this year. Each year Rs 1 billion will be provided for the project.

“The main purpose of this program is to promote value added and finest Ceylon tea products to the world market,” Plantation Industries Minister Mahinda Samarasinghe said.

Tea, rubber and coconut continue to perform well.

He was speaking at the 156th Annual General Meeting (AGM) of the Planters’ Association of Ceylon (PA) held in Colombo last week.

“Replanting is an absolute requisite for the survival of the industry. Motivating, generating more income and giving proper social status to estate workers will increase the efficiency in the industry,” the Minister said.

Past Chairman of the Association, G.D.V. Perera said they have made strong representations at various fora. “The Presidential Task Force, Treasury, our Ministry, the Chambers and Departments and many other institutions were not spared in our toil to appeal for the resuscitation of the ‘status quo’ that prevailed a few years ago where we were in the zero rated category on VAT, as indirect exporters in the case of tea,” he said. “This was unfortunately withdrawn from us. However, it was afforded to certain other sectors that were earlier not in that category,” he said.

He appealed for the full and proper disbursement of the Cess fund required for the development activities that would enhance performance and sustenance of the plantation industry.

In the case of rubber, the recent statistics show a good increase in price although currently inclement weather has reduced that number of tapping days.

Despite the problems, rubber witnessed an increase of 8 million kilograms in 2009 to record a total crop of 137 m kilograms. The national average yield grew by 4 percent to record a yield of 1,437 kilograms per hectare. Auction prices continued to remain rather buoyant. The value addition in natural rubber in Sri Lanka is a success story.

More encouragement should be given to add value to the Crepe Rubber which is exclusively produced by Sri Lanka and is known as the ‘Rolls Royce’ of natural rubber.

“The research institutes of tea, rubber and coconut and other crops continue to do their best when one takes into account limited funds available for research and development activities,” Perera said.

source - www.dailynews.lk

Return From the Shares Listed in Colombo Stock Exchange Sri Lanka

(S.L.S.Picks) -We have selected following companies listed in the Colombo stock exchange which were represented top price gainers list for the past week (16/08/2010 to 20/08/2010) to give you a basic idea of the value of investing in shares at Colombo Stock Exchange, which was rated as Asia's best performing stock market & World's second best performing stock market in year 2009. Colombo Stock Exchange is the best performing stock exchange in Asia so far for year 2010.



   Opening Price   (Rs)
    Closing Price (Rs)
Week On Week Change

 Comments - 
It is very clear that the all most all the stocks that were representing last week's top 10 gainers list have reported improved profits for the period ended 30/06/2010 & this was similar to the previous week's top gainers list as well.This is a very god trend to continue for the future development of the Colombo Stock Market. We expect that the future growth stocks & fundamentally sound stocks listed in the CSE will out perform the market in coming months

  • Central Bank of Sri Lanka has forecast a 6.5 % economic growth for the country in year 2010.
  • Stable government to adopt consistent economic policies in the country.
  • The Economic growth in future is expected to be well supported by the development activities in the Construction & the Agricultural sectors as well.
  • Holding the International Indian film festival in Sri Lanka gave a much needed boost for the country's tourism sector.
  • Expected improved earnings  by the listed companies in future.
  • Approval of the  IMF third tranche loan facility.
  • Sri Lanka heads powerful G15 summit,consists of 18 developing countries,which includes India, Brazil, Malaysia,Iran, Mexico,Argentina, Chile etc.
  • Sri Lanka will host the next G15 summit t in year 2012.
  • Increased demand for Government Treasury Bonds by the foreign funds.
  •  Colombo has been selected to host several international business forums during this year. (Eg- Hotel show 2010, Asia Micro Finance forum 2010,Colombo Stock Exchange (CSE) is to hold a high-profile Investor Forum in Sri Lanka early 2011)
  •  U.S. State Dept lifts travel warning on Sri Lanka, will be a great boost for the Country as a whole & for the tourism industry.
  • Expected boom in Tourism Industry - Tourist arrivals to the country have increased by 42.3%. Arrivals has risen for the 12th consecutive month since the end of the war as per the Reuters reports.Earnings from the tourism industry has also up by 68.8% to $ 174.9 for the first four months as per the central bank data.
  •  Low interest rates, Low inflation & Expected high consumer spending in future are the key factors to be considered when investing in the Colombo Stock Market.Recent reduction of policy rates will boost the capital market activities further.
  • Removal of the war risk insurance for Sri Lanka by the London Underwriters as a result of the end of 30 year old civil war in the Country.
  • Price-to-earnings ratio to be around 15 times by end of year 2010 as a result of the reported high earnings and growth by the listed companies. The 1st quarter corporate results reflects an improvement of over 175% over the same period in year 2009.
  • Sri Lanka expects 600,000 tourists arrivals in year 2010.
  • Granting of tax concessions for imports such as Electrical items, Motor vehicles etc.
  • Budget targeted the long term economic growth of the country.
  • Sri Lanka has a strong backing from the future power house of the world. The BRIC countries.(Brazil,Russia,India,China)
  • Sri Lanka to host 20 - 20 world cup in year 2012.
  • Expected credit growth due to reduction in lending rates.
  • The contribution of the northern province to the GDP improved slightly to 3.3 percent in 2009 compared to 3.2 percent in 2008.The eastern province's contribution to total GDP edged up to 5.8 percent in 2009 compared to 5.6 percent in 2008."This was a positive development that may be observed since the ending of the 30-year old conflict.
  • International insurers have removed Sri Lanka from their cargo war insurance list paving the way for reduced import costs, removal of surcharges and increasing business confidence.
  • The Central Bank has design a credit guarantee scheme to strengthen liquidity positions of registered finance companies and specialized leasing companies will boost the cash flows of the sick finance companies.
  • Tourist arrivals to Sri Lanka increased by 48.4% during the first half of 2010 (January-June), with a total of 278,652 arrivals to the country in comparison to 187,729 arrivals during the same period last year (2009).
  • Total arrivals increased to 341,991 for the period Jan to July 2010, as against 229,952 during the corresponding period of 2009.July also recorded the highest number of arrivals, at 63,339, since January 2009, which was a 50 percent growth compared to July 2009.
  • The government is planning to reduce taxes imposed on banks, financial institution and companies in a bid to generate investments required to push Sri Lanka’s growth rate to 8 percent in the short term and to double digits in the medium term.
  • Operations of Hambantota Harbor to be commenced withing couple of months & the anticipated revenue generation  through this project will be at high end.
  • Several new broker firms have planned to commence business at the Colombo Stock Exchange withing a very short time. Approval has been granted to one Indian company (Infoline) to start a brokering house in Colombo Stock Exchange. 
  •  Foreigners already got the taste of Colombo Stock Market. Net foreign buying for the first couple of weeks of the month of July tops Rs 3.0b.n mark & net foreign buying for the period 26/07/2010 to 30/07/2010 was Rs 359m.n. This is the first occasion that we witnessed a continuous inflow of foreign funds to the Colombo Stock Market after eradication of the 30 year old civil war from our country in late May 2009.
 data - www.cse.lk