Tuesday, May 31, 2011

Sri Lanka Hunas Falls hotel to increase rooms, push eco-image

May 31, 2011 (LBO) - Sri Lanka's Hunas Hotel, located in the central hill district of Kandy will expand rooms and ride on its eco-friendly image targeting niche markets, chairman Mohan Pandithage told shareholders.

The hotel, owned by Sri Lanka's Hayleys group is managed by Jetwing, a leisure group.

Pandithage said a wood gasifier and mini hydro power project has started and 80 percent of all lighting is from energy saving CFL bulbs.

"The hotel continues to position itself as an eco-friendly Hotel, attracting niche markets," Pandithage said in the annual report.

"The Hotel is very popular among Sri Lankans and continues to maintain its stature as the premier honeymoon hotel in the country."

A 'Jetwing Eternal Earth Program' involving 3,200 trees has been implemented.

The hotel's revenues had increased 31 percent to 102 million in the year to March and profits had increased 153 percent to 14.5 million rupees.

"Looking at prospects for the future, it is essential that the hotel upgrade its facilities through a refurbishment as well as position it for the renewed interest and resurgence in the tourism industry in Sri Lanka," Pandithage said.

"It is envisaged that the room inventory will be increased to cater to the higher demand for quality rooms in the Kandy district and its environs."

The hotel now has 28 rooms and 3 suites.
source - www.lbo.lk

Sri Lanka Softlogic nine month net Rs630mn

May 31, 2011 (LBO) - Sri Lanka's Softlogic group, which is making an initial public offering on June 09, 2011, had net profits of 630 million rupees on sales of 6.7 billion rupees in the nine months to December 31, 2010.

Earnings per share for the nine-month period were 98 cents, according to the company's prospectus.

The group made a net profit of 154 million rupees on sales of 4.8 billion rupees in the financial year ending March 31, 2010 with earnings per share of 3.08 rupees.

The prospectus showed that Softlogic's net profit in the 2009 financial year was 69 million rupees on sales of 5.6 billion rupees. EPS for the year was 1.37 rupees.

Softlogic group plans to issue 139 million ordinary shares at 29 rupees each to raise 4,031 million rupees mainly to repay debt taken for investments and for increased working capital.

Softlogic Holdings made big investments in the healthcare, leisure and financial services sectors in recent months.

source - www.lbo.lk

Sri Lanka Aitken Spence net up 20-pct in March

May 31, 2011 (LBO) - Sri Lanka's Aitken Spence group, which has interests in tourism, shipping, power and plantations said profits rose 20.7 percent to 754.4 million rupees in the March 2011 quarter, with revenues flat at 6.9 billion rupees.

In the full year to March the group's revenues rose 4.0 percent to 25.1 billion rupees and profits rose 23.4 percent to 2.53 billion rupees.

Aitken Spence said performance was helped by strong growth in tourism. The group owns or operates hotels in Sri Lanka, Maldives, India and Oman. Tourism arrivals to Sri Lanka have surged following the end of a war in 2009.

"I welcome the spirited and upbeat sentiment in the economy and believe that the next few years will bring the transformation of Sri Lanka to a truly competitive emerging economy," Aitken Spence chairman Harry Jayawardena said in a statement.

"For Aitken Spence, our advantage will be on our home ground and this will be reflected in our interests within Sri Lankan economy.

"I can say with certainly that we will invest to expand our existing positions of strength while also aggressively exploring fresh opportunities for diversification in to growth sectors of the economy."

The group had it has fully refurbished three 'Heritance' branded premium properties.
A resort Heritance Ayurveda Mahagedara will be opened next month, while construction started on a 'Six Senses' hotel in Ahungalla in the South West coast which is expected to be finished in 2013.

A resort in Kalutara 'The Golden Sun' is closed for refurbishment upgrade to 4-star status and is due to be opened in December. A hundred new rooms will also be built pushing the total to 200.

A 200 room hotel will be built on the location of Browns Beach hotel which is being demolished. A new property will be built in a land in Nilaveli the eastern coast. In April the group had got majority ownership of Hilltop Hotel.

Tourism had brought 1.6 billion rupees in annual operating profits, up from 1.17 billion rupees a year earlier. Strategic investments brought in 1.6 billion rupees in operating profits, down from 1.4 billion rupees a year earlier.

Aitken Spence with China Merchant Holdings (International), a Chinese state firm, was making site investigations after getting a concession to build container terminal in Colombo port. It is expected to be built by 2013.

The firm had also bought Logilink (Pvt) Ltd, a container freight station catering to the garment industry. The cargo logistics sector brought in 601 million rupees in profits, down from 623 million a year earlier
The firm's thermal power sector has seen lower generation due to rain, but hydro power and wind power plant was in the works.

source - www.lbo.lk

CDIC, MSL shares rally in market

NDB Bank’s investment arm Capital Development and Investment Company PLC (CDIC) shares skyrocketed once again yesterday, closing as high as Rs.707.30 per share. The share price shot up by 74.99% for the day.

A total of 59,900 shares changed hands with 345 trades, whilst the share price rose by Rs.303.10 compared to previous close of Rs.404.20 last Friday.

However, the share was caught up with market watchdog’s 10% price band from today to June 6. Earlier, Mirror Business exclusively reported that market analysts and brokers were of the view that share price of CDIC rocketed up due to capital gains that CDIC could book in if AVIVA exits from the AVIVA NDB Insurance PLC.

Capital Development and Investment Company PLC (CDIC) became the highest gainer at the Colombo Bourse, gaining almost 50 percent last Friday and share price surged by Rs.134.70 to close at Rs.404.20 and a total of 26,500 shares changed hands during market hours. Meanwhile, Mercantile Shipping PLC (MSL) shares also started to soar from last week whilst the share price of MSL rose   49.98% by Rs.155.20 to close at Rs.465.70, which was traded at Rs.310.50 last Friday.

A total of 56,100 shares traded via 257 trades during market hours.

Although CDIC is a fundamentally strong company as per balance sheet, MSL had lost Rs.38 million in the March 2011 quarter though revenues rose 22% to Rs.197 million.

source - www.dailymirror.lk

CIC puts up strong performance during 2010

Backed by strong agriculture and livestock sector performances, CIC Holding’s net profit for the financial year ended March 31, 2011 rose 58 percent to Rs.929 million compared with the previous financial year.
For the fourth quarter (March) the firm has recorded a net profit of Rs.170 million, up 52 percent from the corresponding period of the previous year. The annual diluted Earnings Per Share (EPS) also increased to Rs.9.80 from Rs.6.22

The group revenue grew 27 percent during the year to Rs.21 billion from last year’s Rs.17 billion. The administrative costs during the year however increased 43 percent to Rs.1.6 billion. The agricultural and livestock operations of the group brought in Rs.14 billion in revenue against the last year’s Rs.12 billion, and an operating profit of Rs.1.2 billion. The other sector that showed significant increase in revenue during the year was consumer and pharmaceutical sector. This bought Rs.4 billion in revenue against last year’s Rs.3 billion.

The ‘other income’ component of the company had gone down significantly during the year under consideration to Rs.227 million from Rs.485 million, mainly due to the lack of government fund receipts.

During 2010, CIC Holdings had received Rs.250 million as government receipts. But in 2011, the funds received from the government showed zero.

 The state-owned pension fund, Employee Provident Fund and Sri Lanka Insurance Corp. and new kid in the block, Perpetual Capital feature prominently among the top shareholders of the company.

source - www.dailymirror.lk

Softlogic explains pricing strategy, growth plans

By Indika Sakalasooriya
“Equity is sometimes costlier than borrowings and it’s more troublesome”, these were the opening remarks of a brief interview Mirror Business had with the flamboyant Chairman and Managing Director of Softlogic Holdings, Ashok Pathirage, who holds a reputation for risk taking.

This was in fact a response to a question posed by the Mirror Business on the pricing of the Softlogic Initial Public Offering (IPO) which has already been announced.

Softlogic has announced that it is offering 139 million shares each at Rs.29, to raise Rs.4 billion, making it one of the biggest in the recent history of the Colombo bourse.

However, there has been some uproar among brokers and analysts about the IPO price at which the share is being offered, as the same share was offered at Rs.7.20 in a private placement deal one and a half years back.

“The price difference is solely done on valuations. During the time we went for a private placement, the forecasted profit was around Rs.150-200 million. But for the year ended March 2010/11 we have made Rs.855 million after tax profit” Pathirage said.

“The IPO price is based on the expected net profit for FY 2011/12, which we anticipate to be Rs.1.8 billion. Our valuations are based on 12 times of P/E of the conglomerate sector. We are in fact giving our share at a 40 percent discount to the current P/E levels of conglomerates” Pathirage added.

According to a five-year forecast of the company, the post tax profit is expected to go up to Rs.1.8 billion in 2012 and to Rs.2.7 billion in 2013. The expected profit in 2014 is Rs.3.1 billion.

“In that sense our share is undervalued. If we wanted, we would have raised Rs.4 billion by way of private placements, and nobody would have raised these questions” he remarked.

According to un-audited financial statements of the Softlogic Holdings, for the year ended March 31, 2011, the group has recorded revenue of Rs. 10.5 billion compared to a revenue of Rs.4.8 billion in the previous year.

As per the balance sheet (un-audited), the company’s current portion of interest bearing borrowings is Rs. 8.3 billion and it also has Rs.2.7 billion worth of short term borrowings. Total assets of the company stand at Rs.27 billion.

According Pathirage, majority of IPO proceedings will be utilized for retiring short term debts.

“About Rs.3 billion IPO money will be used for short term debt settlement and the rest on some of the long term commitments. He also said that retiring of debt will strengthen the balance sheet of the company and it will make easier for the firm to obtain finances for future expansions.”

When asked why the biggest IPO in the recent times is going for a listing in the Diri Savi Board of the Colombo bourse, Pathirage said that the company made about Rs.46 million loss in 2007/2008.

“This has made us to list our share at first in the Diri Savi. But soon after the listing of shares we will move into the main board” Pathirage stressed.

Softlogic Holdings currently operates in six sectors; ICT, automobiles, retail, healthcare, leisure and finance.
When asked about the core business or the cash cows of the group, Pathirage said ICT, healthcare and retail are those which bring the bulk of the revenue.

“Many think that healthcare is a long term investment. But I have a different view. Our hospitals are well established and it is only The Central which has to come out of woods. Last year, The Central made a Rs.200 million loss but this year we are hoping it will make about Rs.200 million in profits, as the hospital is breaking even and making money” Pathirage pointed out.

He also said that Softlogic Holdings expects to increase its thrust on the retail sector, as the firm is planning to add up another 150 showrooms islandwide.

Softlogic Holdings has been collecting the local agencies of number of international brands from mobile phones to clothing. The company boasts of brands like Nokia, Dell as well as Nike, Levis and Mango.

Disclosing his plans for the company’s leisure sector, Pathiage said he is looking at owning 1000 rooms
within the next five years.

Softlogic has entered into a management agreement with Switzerland-based Movenpick Hotels and Resorts. It also recently bought over the former Ceylinco group owned, Hotel Ceysands for Rs.925 million.

When asked whether would continue on the risk taking business strategy even after the IPO, Pathirage said “I am going to be aggressive and dynamic as I’ve been in the past five years. If you look at my track record you’d see that I have not grown organically. This is how I am planning to create shareholder value”.

source - www.dailymirror.lk

Softlogic Financial Services posts Rs. 118 m profit after tax in FY 2011

Softlogic Capital Limited and its subsidiaries have recorded a consolidated profit after tax of Rs. 118 m for the year ended 31 March 2011, with the gross income of the main subsidiary Softlogic Finance PLC growing 88% to reach Rs. 650 m from Rs. 346 m a year ago. The financial services arm of the Softlogic Group has gone from strength to strength over the last year since its acquisition by the dynamic conglomerate.

Softlogic Finance’s total lending portfolio as at the quarter ending 31 March was declared at Rs. 3.78 b compared to that of Rs. 1.55 b the previous year, an impressive growth of over 243%.

With the company’s lending clientele concentrated in the SME sector and fairly diversified geographically through its branch network, Softlogic Finance also managed to maintain the quality of its lending portfolio at industry benchmark levels, keeping non-performing loans at less than 2% of the total portfolio.

The total assets of Softlogic Capital rose from Rs. 2.56 b last year to Rs. 5.4 b this year, an increase of over 210%. With their main lending activities of Leasing, Hire Purchase and Term Loans thriving under the wing of the Group, Softlogic Finance also added several new services to its portfolio during the last quarter including Business Loans, Group Personal Loans and Gold Loans.

Softlogic Finance’s total deposit portfolio nearly doubled during the last financial year, passing the landmark of 1.5 b deposit liabilities by the end of the year. The company also recorded a threefold increase in its other borrowings mainly from the banking sector and through securitisation of its Leasing and Higher Purchase receivables, and strengthened its capital base towards the end of last year through a Rights Issue of shares to support the growth of its lending activities.

“We are aggressively driving to expand our presence in the financial services sector over the next few years,” said the Chairman of Softlogic Finance Ashok Pathirage, commenting on the future plans of the company.

“The geographical coverage of Softlogic Finance will be consolidated through the expansion of our branch network as well as our network of business development centers. We are ready to face the challenges of the market and will continue to push for phenomenal growth in terms of both presence and performance in the next financial year too.”

A foothold in the financial industry adds a new facet to the group’s portfolio and the entry of the group into the financial services sector is the ideal strategic fit in offering the retail and SME customer both personal and business financial solutions through the Softlogic Finance branch network of 11 branches spanning around the country, as well as the Softlogic stores that will soon expand island-wide.

source - www.ft.lk

SFS shares make strong debut

SFS an EAP Edirisinghe Company are preparing to launch a Gold Exchange Trading Fund (ETF) to provide opportunities for the public to invest in gold.

This is following the plan to implement a Commodities Exchange in Sri Lanka.

"The legal framework is still being assembled and we expect it will be implemented by the end of this year," SFS Director Nalaka Edirisinghe said. "Gold is a highly demanded metal and is something the public knows about. Thus, the opportunity to invest and gain benefit from it will be an exciting opportunity for the public," he said.

The company posted a pre-tax net profit of Rs 120.6 million for the FY ended March 31, 2011 as opposed to the Rs 23.3 million recorded in the previous year.

Net profit after tax was Rs 76 million as opposed to the Rs 16.8 million the year before.

Swarnamahal Financial Services Ltd. (SFS) listed 25 million ordinary shares on the Diri Savi Board of the Colombo Stock Exchange last week.

A total number of 25 million voting shares have been listed as per a listing directive issued by the Central Bank. The total number of shares in issue is 25 million.

The highest price the share traded was at Rs 100 and the lowest Rs 41. A total of 682,600 shares traded and the shares closed at Rs 43 at the first day of trading.
source - www.dailynews.lk

JKH posts Rs 10.63 b PBT for 2011

The John Keells Holdings has posted an outstanding performance for 2011

The Group’s profit before tax (PBT) was Rs 10.63 billion, a 63 percent increase over the PBT of 2009 and 10 and the profit attributable to equity holders at Rs 8.25 billion was an increase of 59 per cent over the previous year. It is encouraging to note that our investment strategies in the past few years are contributing towards our endeavours to better balance our portfolio of businesses.

The recurring PBT was Rs 8.83 billion, a 58 per cent increase over that recorded in 2009 and 2010. Summarised below are the key financial highlights of our operating performance during the year.

The strength of our balance sheet is demonstrated, amongst others, by a debt to equity of 21.8 per cent, a net cash to equity of 6.2 per cent, a debt to total assets of 13.3 per cent and an interest cover of 14.4 times (previous year 5.8 times).

“Further, we believe that the present asset turnover can be significantly improved as increasing market demand emanating from a rapidly growing economy, makes our current capacities work more efficiently both in terms of asset utilisation as well as productivity,” JKH Holdings Chairman Susantha Ratnayake told shareholders.

The Transportation group has remained the main contributor to the Group’s after tax profits. Revenues at Rs 13.43 billion and PAT at Rs 2.78 billion were 22 per cent and 31 per cent of the Group’s total revenue and PAT respectively.

Whilst the port operations performed to expectations, the PAT growth of 22 percent over the previous year was mainly due to improved performances by all the strategic business units driven by the growth in the economy.

Increased flight frequencies and the advent of new airlines contributed to the performance of the Airline segment in the subject year. This will also enable future growth in both passenger and cargo volumes.

Profitability in the bunkering business grew on the back of efficiencies achieved in operations and fuel purchasing, whilst shipping, air express and logistics segments benefited from the pick up in trade volumes arising out of increased economic activity. As the anticipated growth in infrastructure projects materialises and economic activity gathers further momentum, the outlook for the Transportation group is positive.

source - www.dailynews.lk

Aitken posts Rs 2.5 b profit

Declares Rs 1 dividend per share:

Aitken Spence PLC’s net profit attributable to shareholders rose by 23 percent to Rs 2.5 billion, from Rs 2.1 billion last year, revealed the leading diversified conglomerates results for the financial year ended March 31, 2011 released to the Colombo Stock Exchange yesterday.

Net profit before tax increased by 13.8 percent from Rs 3.4 billion to Rs 3.8 billion recorded last year.

Net revenue for the year rose 4 percent to Rs 24.73 billion, from Rs 23.80 billion a year ago, largely driven by growth in the tourism, cargo logistics and manufacturing sectors.

The company reported an impressive growth in earnings per share of 23 percent to Rs 6.25, up from Rs 5.07 during the previous year.

Aitken Spence announced an outstanding dividend per share of Rs 1, which is a rise of 50 percent from Rs 0.67 last year.

The company’s share price showed a growth of 77.2 percent compared to the previous year to close the year at Rs 162.30.

Aitken Spence Chairman D H S Jayawardena said, “I welcome the spirited and upbeat sentiment in the economy and believe that the next few years will bring the transformation of Sri Lanka to a truly competitive emerging economy. For Aitken Spence, our advantage will be on our home ground and this will be reflected in our interests within Sri Lankan economy. I can say with certainly that we will invest to expand our existing positions of strength while also aggressively exploring fresh opportunities for diversification in to growth sectors of the economy.

Deputy Chairman and Managing Director J M S Brito stated, “There is a positive sentiment and increased investor confidence in the Sri Lankan economy, which was strengthened by the improvements witnessed in the global economy. These factors created the right environment for many of the sectors to perform exceptionally well in 2010 and 11, having fully emerged from the shadow of a prolonged war.”

He added, “As a mainstay of the Sri Lankan economy, Aitken Spence will seek further growth opportunities in the local economy, particularly in the tourism, logistics, agriculture and IT sectors, while consolidating our operations overseas during the coming year. The Group’s strategy of diversification with our core business will continue, as this has paid rich dividends over the years,” he said.

Having fully refurbished properties, the Group was able to take advantage of the tourism boom, with its three premier Heritance properties in Sri Lanka recording an outstanding performance. The company states that its resort portfolio will be expanded in the short-term through several new expansions; Heritance Ayurveda Mahagedara will be opened next month, while construction has begun on the Six Senses property in Ahungalla, targeted to launch in 2013. The Golden Sun Resort Kalutara is now closed for refurbishment until December 2011 and this development will see the resort being uplifted to a four-star property.

Construction of an additional 100 rooms will commence in mid 2011 to increase the total room inventory of this property to 200.
source - www.dailynews.lk

Monday, May 30, 2011

Sri Lanka JKH new apartment sales increasing

May 30, 2011 (LBO) - Sri Lanka's John Keells Holdings said it had managed to sell 60 percent of the apartments in a new high-rise property project work on which began only in May 2011.

The ‘OnThree20’ property project at Union Place in the heart of Colombo is expected to be completed by December 2014.

"Construction of the 475 apartments ‘OnThree20’ commenced in May 2011 with 60 per cent of the apartments sold off-plan with more bookings still to be finalised," JKH chairman Susantha Ratnayake said.

"The group will continue to look for opportunities to maximise the potential of its large land bank in Colombo and will look to expand it with the acquisition of sites with high development potential," he told shareholders in the company's annual report.

The property project targets the luxury market at the mid to upper middle class category, it said.
The project will be done by John Keells Residential Properties, a wholly owned subsidiary of JKH.

The report said that the increase in tourism with the end of the island's 30-year ethnic war, rising incomes and changes in lifestyles will increase the potential for retail and commercial developments and residential apartments.

"Sri Lanka is relatively under-priced compared to the region," it said.

"The property markets in Sri Lanka have hardened with prices for large blocks of land in Colombo city and suburbs increasing. A continuation of current interest rates could have a further positive impact on property prices."

source - www.lbo.lk

Sri Lanka shares becalmed

May 30, 2011 (LBO) - Sri Lankan shares ended flat Monday with active trade in newly listed The Multi Finance Company and Capital Development and Investment Company, brokers said.

The main All Share Price Index closed at 7,468.41, up 0.12 percent (8.83 points) while the more liquid Milanka index was down 0.13 percent (9.25 points) to close at 6,866.29, according to stock exchange provisional figures.

Turnover was 3.1 billion rupees.

The Multi Finance Company, which began trading Monday, was the top gainer of the day and closed up 15 rupees or 106.08 percent at 30.50 rupees.

The share opened at 35 rupees and hit a high of 65 rupees.

Capital Development and Investment Company shot up 303.10 rupees or almost 75 percent and ended at 707.30 rupees.

The markets regulator brought the share under its 10 percent price band with effect from May 31 2011 to June 06, 2011.

Shares of Aviva NDB Insurance went up 7.03 percent or 20.40 rupees to end at 310.60 after news that the firm was going to be sold.

Singer Sri Lanka went up 16.30 rupees or 14.19 percent to end at 131.2 rupees. There were three crossings of a total of 530,000 shares all at 122 rupees a share.

source - www.lbo.lk

Sri Lanka rubber plantation profits up

May 30, 2011 (LBO) - Sri Lanka's Kegalle Plantations, which gets most of its revenues from rubber, said profits rose 14 percent to 270 million rupees with revenues growing 30 percent to 900 million rupees.

Full year profits rose 129 million rupees to 837 million rupees with revenues growing 35 percent to 2.9 billion rupees.

The firm grows rubber, tea, coconut, cardamom and other crops.

The bulk of the full year revenues amounting to 1.9 billion rupees came from rubber where operating profits after depreciation and gratuity were 1.0 billion rupees.

Tea brought revenues of 908 million rupees and operating profits of 40 million, coconut revenues of 37 million rupees and gross profits of 17 million rupees.

Tea is a most labour intensive crop compared with rubber or coconut.

The firm was charged 197 million rupees in management fees by its parent up from 82 million rupees a year earlier. The firm is part of the listed Richard Peiris group.

source - www.lbo.lk

Sri Lanka Richard Peiris profits flat

May 30, 2011 (LBO) - Sri Lanka's Richard Peiris group said profits for the March 2011 quarter were up 1 percent to 335 million rupees, with revenues growing 22 percent to 7.2 billion rupees.

Full year profits rose 190 percent to 1.68 billion rupees with revenues growing 22 percent to 27.2 billion rupees according to interim accounts filed with the Colombo Stock Exchange.

The firm reported earnings per share of 17 cents for the quarter and 87 cents for the year.

The group has operations in retailing, rubber goods, plastics and plantations.

The bulk of its annual revenues of or 10.9 billion rupees came from retailing which showed operating profits of 827 million rupees up from 515 million.

Out of a total of 3.4 billion rupees in operating profit most or 2.0 billion rupees came from plantations, where rubber prices have been moving up.

Plastics brought operating profits of 460 million up from 320 million. Operating profits from tyres fell to 263 million from 299 a year earlier.

source - www.lbo.lk

Sri Lanka shipping firm's loses rise

May 30, 2011 (LBO) - Sri Lanka's Mercantile Shipping lost 38 million rupees in the March 2011 quarter through revenues rose 22 percent to 197 million rupees, according to interim accounts.

For the full year ending March the group lost 23.5 million rupees against a profit of 26 million a year earlier. Last year profits were boosted by the sale of an old vessel.

Up to 2009, the firm also had business from operating vessels within Sri Lanka's territorial waters but its business now comes entirely from international operations.

In the year to March revenues rose 25 percent to 602 million rupees.
Its finance costs rose 65 percent to 91 million rupees.

Last year Mercantile Shipping warned shareholders that despite taking delivery of new vessels international charter rates were depressed in the near term.
source - www.lbo.lk

Sri Lanka CIC agro firm annual net up 58-pct

May 30, 2011 (LBO) - Sri Lanka's CIC Holdings group said net profit for the financial year to March 2011 rose 58 percent to 929 million rupees from a year ago driven mainly by its agriculture and livestock business.
Sales rose 27 percent to 21 billion rupees, the company said in a stock exchange filing.

Operating profit from its agriculture and livestock business rose to 1.2 billion rupees during the year from 671 million rupees the year before.

Other income fell 53 percent to 227 million rupees during the year as the group did not get any funds from a government fertiliser subsidy, the accounts showed.

Last year, the group's CIC Agri Business got 250 million rupees.

In the March 2011 quarter, CIC Holdings said net profit rose 52 percent to 170 million rupees from a year ago with sales up 30 percent to 5.4 billion rupees.

source - www.lbo.lk

CDIC rally amidst Aviva exit talks

By Jithendra Antonio

 NDB Bank’s investment arm Capital Development and Investment Company PLC (CDIC) became the highest gainer at the Colombo Bourse, gaining almost 50 percent last Friday, amidst propaganda of a possible Aviva UK exist from Aviva-NDB Insurance Plc.

Market analysts and brokers were of the view that share price of CDIC rocketed up due to capital gains that CDIC could book in if AVIVA exits from the AVIVA NDB Insurance PLC.

However, some analysts dispelled the rumours  that this could be just market hype driven by speculation.
The CDIC share price surged by Rs.134.70 to close at Rs.404.20 and a total of 26,500 shares changed hands during market hours.

At present, CDIC’s largest investment is in Aviva NDB Finance Lanka (Pvt) Ltd, through which the Company holds a 36.27% stake in Aviva NDB Insurance PLC (Aviva NDB).

 It is anticipated that CDIC could obtain over Rs. 2 billion capital gain in the event of Aviva exiting from its investment in Aviva NDB Insurance through a strategic sale of stake.

CDIC’s initial investment in Aviva NDB Finance Lanka (Pvt) Ltd is said to be only Rs.741 million (41.56% stake) as per financials.

 As to date, Aviva NDB Insurance PLC (CTCE) market capitalization is valued at Rs.8.7 billion and CDIC would have capital inflow of approximately Rs.3.2 billion (current market value) via Aviva NDB Finance Lanka (Pvt) Ltd if CTCE stake was sold to a new investor according to market sources.

 Mirror Business in April 2011 quoting foreign media report carried an article which said UK insurer Aviva would only remain in countries where Aviva’s operations provide at least $100 million in profit and gives a minimum 12% return on capital, or are valued at a minimum of $1 billion.

Aviva is present in 30 countries and it entered Sri Lanka in 2006 partnering with National Development Bank to establish Aviva-NDB Insurance, which was earlier known as Eagle Insurance
The financial accounts of CDIC further notes that the dividend income received from Aviva NDB (via Aviva NDB Finance Lanka (Pvt) Ltd.) to CDIC amounted to Rs.92 Million for 2010.

CDIC also holds a 51% stake in the ordinary share capital of NDB Aviva Wealth Management Ltd.

(NAWM) (formerly known as Eagle NDB Fund Management Company Ltd.), the largest fund Management Company in Sri Lanka, managing Assets in excess of Rs. 42 billion as at end 2010. NAWM is a unit trust and fund management company licensed by the Securities and Exchange Commission of Sri Lanka.

Subsequently, during 2010, CDIC has earned revenue of Rs..476.4 million through its investments and further revenue of Rs.188.3 million from NDB Aviva Wealth Management Ltd. CDIC’s assets are valued at Rs.5.3 billion.

 In the lately published annual report of CDIC, Chairman Nihal Wadugodapitiya outlines that its parent company, National Development Bank PLC (NDB) which owns 99.6% of CDIC has repositioned CDIC as its strategic investment arm. However, CDIC currently holds only Aviva NDB and NAWM as strategic investments.

 As per CDIC Chairman Wadugodapitiya, in anticipation of capitalizing on the stock market performance, during the year 2010, CDIC approved a total sum of Rs.850 million to be invested in the Colombo Stock Exchange (CSE) where Rs.750 million was managed by NDB Aviva Wealth Management Ltd.

Wadugodapitya in his annual review for 2010 further noted that through  the above investments, CDIC was able to reap benefits from the soaring stock market performance during 2010 whilst the gains (both realized and unrealized) from these stock market investments added an aggregate sum of Rs.161 million during the year.

 Meanwhile, CDIC financial results outlined that as at balance sheet date 31 December 2010 the portfolio value in the Quoted Equity Securities and investment in unit trusts amounted to Rs.456.9 million and over Rs.1 billion respectively. 

For the quarter ended 31 March 2011, CDIC Earnings Per Share had risen from Rs.0.73 to Rs.9.74 whilst net Asset Value per Share had risen from Rs.105.29 to Rs.109.05.

source  - www.dailymirror.lk

Excitement and challenge as market awaits biggest IPO in six years

The post-war burgeoning equities market is facing a fresh and mega opportunity this week with the biggest ever IPO in six years worth Rs. 4 billion from fast expanding Softlogic Holdings being available for subscription from tomorrow.

Softlogic’s IPO comes hot on the heels of the successful conclusion of the year to date biggest issue worth Rs. 2.4 billion from Expolanka Holdings (172 million shares at Rs. 14 each). The latter drew applications worth Rs. 11.5 billion reflecting a near 5 times oversubscription.

Softlogic IPO (139 million shares at Rs. 29 each) as in the case of Expolanka’s will be a test to the market and its appetite as per independent analysts.

A test in the context that unlike pre-Expolanka IPOs there is limitations on applications with bank guarantees whilst the other is the sheer size, being the biggest since Dialog’s IPO in 2005.

Most analysts are unanimous in welcoming the listing of Softlogic like they did to Expolanka.

 Two conglomerates are unique on their own right and big in stature though the former is relatively new and aggressive apart from being highly visible with some of the biggest or popular consumer brands under its portfolio.

“These two companies are by far best and biggest names to come to the Colombo stock market therefore the IPOs are healthy developments. They are also solid investments hence very attractive,” a senior broker opined.

Despite equities market having an unprecedented busy run and liquidity-stretched since post war, Softlogic IPO will be sought after. Enormous level of liquidity has been absorbed in equities market on account of Rs. 43 billion via Rights Issues so far this year (on top of Rs. 24 billion in 2010), Rs. 4.6 billion on IPOs (as against Rs. 4.3 billion in 2010) and nearly Rs. 20 billion in private placements since early last year. These are on top high average daily turnover since early last year.

Some analysts have endeavoured to draw parallels in Expolanka and Softlogic’s IPOs.  One is their diversified holding structure and businesses and the other is their dynamic success, proven track record and the future vision. All characteristics make the two most sound for new investors.

Incidentally the Managers and Co Managers to the Softlogic IPO are John Keells Capital and CT Capital, the same combination for Expolanka Holdings issue as well.

Brokers who are not directly involved in the two IPOs said that Expolanka attracted the most mature set of investors who are looking for long-term value. The same will apply when assessing and rating Softlogic as well, they added.

Whilst the common view is that Softlogic IPO despite its bigger value, will be a sellout and will withstand the handicap of restrictions on bank guaranteed-applications as did Expolanka.

The latter faced a major uproar over the big difference in the pre-placement versus IPO price. In the case of Expo it was Rs. 8 or 133% whilst Softlogic’s difference is Rs. 21.80 or 303%. Softlogic raised Rs. 1 billion via a private placement early last year issuing approximately 138 million shares at Rs. 7.20 each.  Via the IPO it will issue around 18% stake of the company.

As in the case of Expolanka, Softlogic’s performance and valuation dynamics too had changed considerably accordingly to independent analysts.

Though the issue opens officially on 9 June so far analysts and brokers who made a hue and cry over Expolanka’s price differences have remained conspicuous by their silence of a higher variation in Softlogic’s pricing. Softlogic’s prospectus will be out on Tuesday after which greater discussion and debate are likely.
Among contrasts are Softlogic listing is on the Diri Savi Board whilst Expolanka Holdings is on the main board of the CSE.

The more objective market analysts expect sanity to prevail in the run up to the mega IPO so that all future investments are assessed on fundamentals than other vested or sinister reasons by doom and gloom-savvy brokers and analysts. It was in this context (midst anti or negative connotations and various wild allegations) and bank-guarantee restrictions that independent analysts and objective brokers commended the oversubscription of Expolanka by 4.7 times.

Certain to be highly recommended by most brokers Softlogic IPO involves 139 million shares at Rs. 29 each.  Funds raised by the company will mostly go to retire the expensive short term debt as well as finance some of the new high growth sector investments.

Softlogic’s expanding business portfolio includes IT, telecom and consumer electronics, healthcare, financial services, automobile, retail and apparel and leisure. Reuters reported recently that Softlogic recorded a more-than six-fold net profit growth of Rs. 950 million in 2010/11 financial year ended on 31 March.

source - www.ft.lk

Pick stocks, IPOs on strong sustainable earnings – Asia

Midst bearish and challenging market conditions, Asia Wealth Management is recommending investors to pick stocks and IPOs with strong sustainable earnings.

It also said that strong earnings will muscle market momentum going forward.

Last week the Colombo Bourse moved 20.5 points down (WoW) and the MPI dipped 4.45 points down (WoW).

Asia said with the SEC extending the settlement period, many envisaged the market to recover from its “dull” momentum. However, the week ended with the market registering a marginal dip.  “This also could be due to the investors currently/ expecting to lock up cash on Expo IPO, couple of expected big IPO’s and the massive rights issues of HNB and COMB, and also due to retail investors booking profits on the previous week’s gains. Albeit, this liquidity situation in the market, we witnessed healthy quarterly earnings results from the companies,” Asia said.

“This actually is an encouraging point to augment the market momentum. However, the current week was majorly muscled by retail play, mostly concentrating on the mid to low cap stocks. Going forward, we advice the investors to pick on the counters/ IPO’s with strong sustainable earnings. As long as the company earnings are supporting the market the investors should not feel ambiguous,”

Acuity Stockbrokers opined that indices reflected mixed investor sentiments at the bourse last week as it continued to be dominated by retail activities and the absence of major institutional investments.

“With regard to corporate profits, 88% of the counters that have released their quarterly earnings up to now have recorded profits with the Banking, Finance and Insurance sector recording the largest contribution of the total attributable earnings. We anticipate that the present momentum of activities will be maintained during the week ahead,” Acuity added.

source - www.ft.lk


Expolanka Holdings last week announced the basis of allocation on its Rs. 2.4 billion IPO which was oversubscribed by 5 times drawing near 13,000 applications.

Applicants under retail category will get 100% of their requests whilst the rest will be allotted on the following basis.

Nonretail Category

Shares Applied Basis of Allotment Up to 71,000 100%

71,100 – 4,000,000 71,000 shares + 16.000000% of the balance shares applied. The percentage is applied after deducting 71,000 shares rounded to nearest 100 shares.

4,000,100 – 10,715,000 699,600 shares +4.000000% of the balance shares applied. The percentage is applied after deducting 699,600 shares rounded to nearest 100 shares.

10,715,100 – 26,785,000 1,100,200 shares +3.889837% of the balance shares applied. The percentage is applied after deducting 1,100,200 shares rounded to nearest 100 shares.

26,785,100 and above 2,099,300 shares + 3.285000% of the balance shares applied. The percentage is applied after deducting 2,099,300 shares rounded to nearest 100 shares.

source - www.ft.lk

John Keells Tea Market Report

Monsoon likely to affect crops

The South West monsoon appears to have started to develop over the Island, which will lead to heavy and incessant rain. From May to September the South West monsoon will sweep across the Western central highlands unloading heavy rains on the mountain slopes and emerge as dry winds on the Eastern slope of the central hills heralding the start of the Uva quality season which is famous for its distinctive flavour.

It’s a period when the tea bushes undergo severe stress conditions on account of the harsh weather and consequently, crop intakes from both sectors will show a substantial drop.

Depending on the severity of the monsoon these rains can bring gale force winds and lashing rain in the South Western quarter.

Sri Lanka Tea Crop for the month of April 2011 at 28.4 mkgs is 5.6 percent below the corresponding month of 2010. Although High Growns have once again recorded a gain during the month Medium and Low Growns have both recorded shortfalls.

As at end April, Sri Lanka production at 106.3 mkgs reflects a gain of 2.1 mkgs over last year which in fact was a record year.

Last week’s large volume of 1.8 mkgs. of Ex Estate teas commenced at firm levels and appreciated as the sale progressed by Rs 10 to Rs 15 for most invoices.

However prices were not sustained and once again tended lower towards the latter part of the sale.

A fair weight of Low Grown, High and Medium CTC PF1s remained unsold on account of little or no interest. Russia was selective, whilst the Tea Bag sector lent only fair support. UK, Japan and Continental buyers too were very selective.

The 3.9 mkg of Low Growns that came under the hammer last week, met with better demand. In the Leafy category, although prices of Main Grades commenced on a lower note, gained as the sale progressed, but dipped again towards the latter part.

In the Small Leaf category, the well made teas appreciated in value, whilst at the bottom end prices declined further. With the large volume on offer, it is clearly evident that most markets are looking at well made teas with the poorer sorts been neglected.

Western Teas

Select Best BOPs were firm to Rs 5 dearer, other good invoices gained Rs 5, Below Best and Plainer varieties were firm to dearer. Select Best BOPFs declined Rs 5 to Rs 10, other good invoices were irregularly dearer, Below Best sorts which were Rs 10 dearer eased as the sale progressed, plainer varieties too followed a similar trend. Medium BOPs shed Rs 5 to Rs 10, whilst the BOPFs declined by a similar margin and substantially more for the poor leaf sorts.

Nuwara Eliya Teas

Brighter BOPs declined Rs 10 to Rs 15 and more, others were firm to Rs 5 dearer. Brighter BOPFs declined substantially whilst the others were firm to marginally dearer.

Uva Teas

BOPs declined Rs 5 to Rs 10, whilst the BOPFs were firm to irregular. Uda Pussellawa BOPs advanced Rs 5 to Rs 10 whilst the BOPFs were irregular.

CTC Teas

Low Grown CTC PF1s declined Rs 5 to Rs 10 with a large volume remaining unsold. BP1s declined Rs 20. High and Medium PF1s shed Rs 10 and more as the sale progressed with a large volume remaining unsold. BP1s advanced Rs 5 to Rs 10 on average.

Low Growns

Lower demand. Select Best OP1s were firm to dearer by Rs 5 to Rs 10 whilst the balance were irregularly lower Rs 5 to Rs 10 and more at times.

A few Select Best and Best BOP1s were firm to Rs 5 to Rs 10 dearer, however the Below Best and poor sorts tended lower by Rs 5 to Rs 10. Select Best along with the Best OP/OPAs eased Rs 5 to Rs 10, the balance too declined by a similar margin and declined further as the sale progressed.

Select Best and Best Pekoe/Pekoe1s were firm to Rs 3 to Rs 5 dearer at times, however the balance shed Rs 10 to Rs 15, flaky types were firm. Improved demand was witnessed for Tippy/Small Leaf category.

Select Best BOPs advanced Rs 5 to Rs 10, Best types maintained last levels, Below Best types gained Rs 5 to Rs 8, poorer types gained Rs 5. Select Best BOP. SPs were firm, Best types gained Rs 5 to Rs 10, Below Best sorts were firm, poorer sorts were easier by Rs 5.

A few Select Best FBOPs advanced Rs 5 to Rs 10, others maintained last levels.

Best types moved up Rs 5 to Rs 8, Below Best types were irregular, poorer sorts were irregularly lower to last. Select Best and Best FF1s moved up Rs 5 to Rs 10, Below Best and poorer sorts too moved by Rs 5 to Rs 8.

Select Best tippy varieties met with improved demand and gained above last, Best types too gained Rs 10 to Rs 20, Below Best and poorer sorts were irregular.

Off Grades

Select Best liquoring Fngs1s appreciated by Rs 10 to Rs 15, whilst the Below Best and poorer sorts advanced Rs 10. Select Best and Best BMs appreciated by Rs 5 to Rs 10, whilst the poorer sorts were dearer by Rs 10 to Rs 15. All BPs sold at firm levels. All Low Grown Fngs were lower by Rs 10 Select Best BOP1As along with the Best appreciated Rs 5 to Rs 10 and more at times whilst Below Best and poorer sorts were firm to dearer by Rs 10 to Rs 15 from last levels.


Select Best Dust1s were firm. Improved teas in the Best and Below Best category appreciated Rs 5 to Rs 10 whilst the balance were firm. Poorer sorts declined Rs 10 to Rs 15. Clean secondaries were firm whilst the balance gained Rs 5 to Rs 10. Best Low Grown Dust/Dust1s were firm whilst the balance gained Rs 10 to Rs 15.
source - www.dailynews.lk

Stock indices bearish

Both indices recorded an overall contraction of .27 percent of the ASPI and .06 percent of the MPI. The ASPI shed 20 points to close at 7459.58 while the MPI shed 4.45 points, closing at 6875.54.
The weekly turnover recorded Rs 15.39 billion with a daily average of Rs 3.07 billion, an increase of 12 percent from last week’s Rs 2.74 billion daily average turnover. The volume of turnover last week was 696.45 million shares averaging 139.29 million shares daily, whilst last week’s volume was 140.43 million shares per day. The volume of turnover contracted marginally week on week.

Banking, Finance and Insurance sector continued to represent the largest contribution to the weekly market turnover both in value and in volume as it accounted for 21.9 percent of overall turnover in value and 32.4 percent of turnover in volume, driven by interests in Nation Lanka, Central Finance, Commercial Bank and Janashakthi. The other major contributors to total market turnover in value were Land and Property sector representing 12.8 percent of the weekly turnover followed by the Diversified sector with 10 percent of total turnover. Second on the list of total turnover in volume was the Land and Property Sector with 8.9 percent whilst Diversified sector was third with 6.3 percent contribution.

JKH was the major contributor of the aggregate market turnover, accounting for Rs 1.14 billion or 7.4 percent of aggregate market turnover of the week. Nation Lanka denoted 5.4 percent of aggregate market turnover accounting for Rs 833 million.

Central Finance, Dunamis Capital and Touchwood were highlighted as other major counters in the top turnover list, reporting total turnover of Rs 813.1 million, Rs 605.8 million and Rs 597.9 million respectively.

CDIC recorded as the major price gainer for the week witnessing an increase of 88 percent increase in share price as against previous week’s price of Rs 215.00. The share closed at Rs 404.20. Dunamis Capital reported a gain of 80.4 percent in comparison with previous week’s price of Rs 13.80 closing at Rs 24.90.

Serendib Land, Colombo Land and CFT were other major price gainers of the week closing prices at Rs 1,700.00, Rs 35.70 and Rs 11.2 respectively.

Swarnamahal Finance was the top loser of the week with a decrease in price of 55 percent against last week price of Rs 100.00, to close at Rs 45.00. Eastern Merchant reported a decline of 32.2 percent in price to close at Rs 1525, compared with previous week price of Rs 2250.00. Bogala Graphite, Autodrome and Alufab were other major losers of the week, as the shares closed at Rs 65.30, Rs 910.10 and Rs 107.10 respectively.

Foreigners remained net sellers this week with Rs 105.21 million outflow as against last week’s outflow of Rs 291.79 million. Total Foreign buying this week was Rs 1.23 billion, recording a daily average of Rs 246.71 million as against last week’s daily average buying of Rs 365.98 million. Therefore total buying recorded a decline by 32 percent week on week. Additionally, Foreign sales experienced a sharp contraction of 42 percent with the total sales for the week at Rs 1.33 billion, averaging at Rs 267.7 million daily compared with last week’s total sales of Rs 1.38 billion averaging at Rs 463.25 million daily.

Colombo Land was placed first in the top volume list with 77.44 million shares changing hands during the week. The counter represented 11.12 percent of aggregate market volume. S M B Leasing (Non-Voting) traded 56.2 million shares contributing 8.12 percent to aggregate turnover in volume. S M B Leasing (Voting), Pan Asian Power, Nation Lanka recorded volumes at 53.3 million, 52.9 million and 33.2 million respectively.

Point of view

The indices reflected mixed investor sentiments at the bourse as it continued to be dominated by retail activities and the absence of major institutional investments.

With regard to corporate profits, 88 percent of the counters that have released their quarterly earnings upto now have recorded profits with the Banking, Finance and Insurance sector recording the largest contribution of the total attributable earnings.

We anticipate that the present momentum of activities will be maintained during the week ahead.

source - www.dailynews.lk

Hemas posts best ever results in FY 2011

New sector Healthcare beats long standing FMCG biz in revenues and profit growth; Leisure bottom line triples

Diversfied blue chip Hemas Holdings Plc has achieved its best ever results in the financial year ended on 31 March, 2011, with net profit attributable to equity holders of Rs. 1.2 billion, up by 34% over the previous year.

Group after-tax profit was up 45% to Rs. 1.35 billion whilst profit before tax showing a similar percentage growth amounted to Rs. 1.56 billion as per provisional results for FY 2010/11 released on Friday.

Hemas’ previous best performance in 2007/8 financial year was with a bottom line of Rs. 1.13 billion and a post-tax profit of Rs. 1.15 billion. The FY 2011 performance the third time where the respective figures topped the Rs. 1 billion mark. The other occasion was in FY 2006/7.

Group revenue in FY 2011 had grown by 20.5% to cross the Rs. 18 billion  mark for the first time (as against Rs. 14.1 billion in the previous best year) whilst gross profit amounted to Rs. 5.83 billion, up from 14.4% over FY 2009/10.

The FY 2010/11 financial results had been supported by Rs. 108.3 million in other income and gains, up by 144% from Rs. 44.5 million last year as well as lower finance cost Rs. 297.7 million, down by 12.6% from Rs. 449.3 million a year earlier. Change in fair value of investment properties was down by 70% to Rs. 24.4 million in FY 2011.

The relatively new healthcare sector had in FY topped with revenue contribution surpassing Hemas traditionally strong Fast Moving Consumer Goods (FMCG) business in addition to achieving profit growth.

 Turnover from the healthcare amounted to Rs. 6.5 billion, up from Rs. 5.04 billion in FY 2010 whilst its pre-tax profit was Rs. 232.3 million, higher from Rs. 68.5 million. FMCG’s revenue was Rs. 5.79 billion, up from Rs. 5.24 billion but its pre-tax profits dipped to Rs. 520 million from Rs. 619 million in FY 2010.

Hemas leisure sector saw a total turnaround with revenue topping the Rs. 1 billion mark from Rs. 752 million, whilst pre-tax profit almost tripled to Rs. 147 million from Rs. 50 million. Transport sector continues to deliver steady performance with turnover up from Rs. 664 million to Rs. 734 million whilst pre-tax profit grew from Rs. 201 million to Rs. 251 million. Hemas Power saw its revenues grow to Rs. 3.37 billion FY 2011 from Rs. 2.84 billion in the previous year whilst pre-tax profit rose to Rs. 244 million to Rs. 428 million. The blue chips “Others” (sector) business though grew revenue wise to Rs. 1.08 billion from Rs. 905 million, suffered a loss of Rs. 122 million, but lower in comparison to Rs. 177 million loss in FY2010.

Hemas had a relatively healthy fourth quarter with top line up by a strong 32% to Rs. 4.96 billion and a gross profit of Rs. 1.48 billion, up by 12.7% over the fourth quarter of 2009/10 financial year.  However its pre-tax profit grew by only 3% to Rs. 446.8 million whilst post-tax profit dipped by 1.3% to Rs. 380.5 million and net profit attributable to equity holders declined by 7.7% to Rs. 311 million in 4Q.

In July 2010, the company exercised a sub division of ordinary shares in the proportion of 5:1 whilst Hemas also issued ESOS 2008 2nd tranche of 2,250,000 ordinary shares on 27 December 2010 at Rs.44.09 per share for Rs.99 million.

Hemas had finished the FY 2011 with an earning per share of Rs. 2.36, up from Rs. 1.76. The Board of Directors has proposed a final dividend of Rs.0.25 per share for the financial year ended 31 March 2011.  In November 2010 an interim dividend of Rs.0.25 per share was paid for FY 2011. Net asset per share was Rs. 17.33 and Rs. 11.33 at Group and Company level up from Rs. 11.33 and 11.23 respectively a year earlier.

Group assets as at 31March, 2011 topped the Rs. 19 billion mark to amount to Rs. 19.2 billion, up from Rs. 16 billion a year earlier. That of the company was Rs. 7.12 billion, as against Rs. 6.82 billion as at 31 March, 2010. Shareholders’ Funds amounted to Rs. 8.87 billion at Group level and Rs. 5.8 billion at Company level, up from Rs. 7.6 billion and Rs. 5.7 billion respectively a year earlier. This included Rs. 6.3 billion in retained earnings for the Group and Rs. 4 billion for the Company as at end FY 2011.

Hemas Group short term liabilities amounted to Rs. 6.57 billion, up from Rs. 5.3 billion whilst long-term liabilities rose to Rs. 2 billion from Rs. 1.5 billion.

During FY 2011 Hemas market capitalisation almost doubled to Rs. 23.5 billion, from Rs. 12.2 billion in the previous year. Hemas had also drawn several new foreign investors reinforcing itself as a solid and attractive blue chip. India Subcontinent Fund of First State Investment had taken up a near 2% stake whilst its Asia Pacific Sustainability Fund had picked up 1.2% apart from First State Global Umbrella Fund retaining its 1.1% stake in tact. Public holding of Hemas as a percentage of number of shares in issue is 28.

Hemas Holdings Board of Directors comprises Lalith De Mel (Chairman), Husein Esufally (CEO), Imtiaz Esufally, Murtaza Esufally, Abbas Esufally, Maithri Wickremesinghe, Pradipta Mohapatra and  Divyaroop Bhatnagar.

Hemas invests

Established in 1974, the Australian Council on Healthcare Standards is Australia’s leading healthcare accreditation provider delivering accreditation and quality improvement programmes throughout the world.

Hemas Healthcare sector in 2010/11 financial year enjoyed a Rs. 6.57 billion revenue up from Rs. 5 billion in the previous year. Pre-tax profit was Rs. 345.2 million, up from Rs. 156.6 million.

Hemas invests Rs. 121 m in healthcare subsidiary

Hemas Holdings has invested Rs. 121 million in Hemas Hospitals on 31March, 2011 following the exercising of the healthcare venture’s Rights Issue.

Hemas Hospital later this week will announce the achievement of being the Sri Lanka’s first to get Australian Council on Healthcare Standards International (ACHSI) Accreditation Certificate.

Established in 1974, the Australian Council on Healthcare Standards is Australia’s leading healthcare accreditation provider delivering accreditation and quality improvement programmes throughout the world.
Hemas Healthcare sector in 2010/11 financial year enjoyed a Rs. 6.57 billion revenue up from Rs. 5 billion in the previous year. Pre-tax profit was Rs. 345.2 million, up from Rs. 156.6 million.

source - www.ft.lk

Kenyan April tea production drops 12% on wet weather

NAIROBI: Kenya’s tea production for the month of April stood at 31.4 million kilograms, which was 12 percent lower compared to 35.8 million kilograms recorded during the corresponding month of 2010.

The Tea Board of Kenya (TBK) said lower production compared to the same period of last year was largely attributed to depressed and poorly distributed rainfall occasioned by La Nina weather phenomenon as opposed to higher rainfall amounts that is normally experienced during the month of April.

“Going by the Kenya tea industry production performance for the first four months of the year, production for the year is likely to be lower by 10 percent (39 million kgs) from 399 million kilograms recorded last year to 360 million kilograms,” the board’ s Managing Director Sicily Kariuki said in a statement on Monday.

Compared to the month of April 2010, tea growing areas such as West of Rift recorded a lower output by 13.9 percent (2.8 million Kgs) from 20.4 million kilograms to 17.5 million kilograms.

Kariuki said the smallholder sub-sector, which has a wider coverage within the East of Rift recorded a production decline of 7.7 percent (1.6 million Kgs) from 21.4 million kilograms to 19.7 million kilograms.

Kariuki said cumulative tea production for the period January to April stood at 116.6 million kilograms, which was lower by 20.9 percent (30.9 million Kgs) compared to the output of 147.5 million kilograms recorded during the first four months of 2010.

Kariuki attributed the decline to hot and dry weather conditions experienced in the months of January to March and depressed rainfall in April.

During the month of April 2011, the total export volume stood at 32.1 million kilograms, which was marginally higher by 1 percent compared to 31.8 million kilograms recorded in the same period of last year.

Cumulative export volume for January-April was also lower at 139.6 million kilograms against 148.8 million kilograms recorded during the first four months of 2010.

During the month of April, Kenya tea was shipped to 37  export destinations withPakistan leading export destination for Kenyan tea, having imported 6.4 million kilograms of tea which accounted for 20 percent of Kenya tea export volume.

Other key export destinations for Kenyan tea were Afghanistan which imported 5.8 million kilograms, Egypt (5.1 million Kgs),Britain (4.5 million Kgs), and UAE (1.8 million Kgs).

The five export destinations accounted for 74 percent of Kenya tea export volume.

Among the five export destinations, thePakistan market recorded the highest growth for Kenya tea exports at 70 percent compared to the same period of last year, followed by Afghanistan (39 percent) and UAE (36 percent).

Other key and emerging markets that imported higher volume of tea from Kenyainclude Yemen (54 percent), Kazakhstan(63 percent), Poland (186 percent), andIran (245 percent).

However, due to fluctuation in seasonal demand, Egypt and Britain recorded a drop of 34 percent and 15 percent respectively while Sudan imported less by 54 percent compared to the same period of last year.

The local tea consumption for the month of April stood at 1.78 million kilograms, which was 19 percent higher compared to 1.49 million kilograms recorded the same period of last year. (Xinhua)

source - www.dailymirror.lk

Sri Lanka tea production rises in April

Sri Lankan tea production is increasing despite a downturn in April compared with a year ago with annual output expected to hit a new high.

Tea production fell 5.6 percent to 28.5 million kilos in April from a year ago when output had been boosted by favourable weather and high prices, according to the Sri Lanka Tea Board.

The decline in April output was mainly from teas grown in the low and medium elevations, with over a million-kilo shortfall in low grown teas which make up over half the crop, Tea Board statistics show.

Teas from the high grown estates, mainly produced by regional plantations corporations, actually increased in April 2011 compared with last year.

But the Tea Board said national tea output in the first four months of 2011 rose two percent to 106.3 million kilos from 104.2 million kilos the previous year.

Favourable weather, extension of government fertiliser subsidies to all crops and strong demand from overseas markets were likely to boost production this year, industry officials said.

Tea Board officials have said tea production could hit a new high in 2011, exceeding last year’s production of 329.4 million kilos.

source - www.dailymirror.lk

Multi Finance shares get listed today

The Multi Finance Company Limited (MFCL) obtained approval for listing of 17,976,325 ordinary voting shares on the Diri Savi Board of the Colombo Stock Exchange (CSE) and the shares gets listed today (May 30).

Managers to the Introduction are Capital Alliance Limited. MFCL is registered as a Finance Company with the Monetary Board of the Central Bank of Sri Lanka under the Finance Companies Act No.78 of 1988.

Headquartered in Kandy, MFCL now has branch offices in Colombo, Gampaha, Kurunegala & Matara. It has Central Bank approval for disbursing funds for leasing, hire purchase, pawn broking and mortgage and other loans, and for accepting savings & fixed deposits from the public.

Founded 37 years ago as a family-owned business, MFCL provided financing for consumer durables. In February 2008, it became a part of the Entrust Group, which also includes Entrust Securities – a Central Bank appointed Primary Dealer in Government Securities. Entrust Securities helped MFCL in its statutory investments in Government Securities, and in the proactive identification of interest rate trends. As at 31 March 2011, Entrust Limited owned 15,516,772 shares of MFCL amounting to 86.32% of its share capital.

After Entrust Limited took over control in 2008, MFCL’s performance improved significantly despite the lack of confidence in Registered Finance Companies shown by depositors at the time, which resulted in significant outflows of funds from the industry during 2009. As Group Executive Director and CEO, A. H. M. Riyaz, explained, “Our total asset and lending asset portfolios showed impressive growths from 2008 to 2009, despite widespread financial turmoil and heightened credit and liquidity risks. Our board of Directors and senior management team used their unrivalled expertise to mitigate the heightened risks to which all financial institutions were exposed. Our track record proves we can grow even under hostile market conditions.”

The strategic focus of MFCL is building relationships proactively with clients by providing financial services customized to their changing needs. As the Chairman of MFCL, Dr. Asoka N. Jinadasa, explained, “What makes us different from all other financial service providers is our focus on delivering a tailor-made, innovative service to individuals and enterprises. We are small enough to make all our clients feel they are our only client. We have only 5 offices with less than 50 staff. They have the ability to build long-term financial relationships proactively with our clients, which go far beyond conventionally reactive customer service. The latest online IT system we are currently installing will boost our client service to unprecedented heights.”

While obtaining unsurpassed interest income for depositors, MFCL offers a wide range of financing options to its clients for their personal needs, vehicles and equipment, business & industrial development, liquidity management, real estate and housing. MFCL is implementing a robust disaster recovery system to safeguard the integrity and security of client information during emergency situations that may arise.

To reduce overall credit risk, MFCL diversifies its loan portfolio by granting loans to businesses in many different industries and to borrowers in many different locations. To manage liquidity and ensure solvency even under adverse conditions, MFCL maintains an optimum balance between liquid assets and liabilities, based on historical experience and industry benchmarks.

The Finance Director of MFCL, Lakmali Wickremasooriya, outlined some key strategies of MFCL: “We maintain a very safe ratio between our assets and our liabilities, and a Non Performing Loan (NPL) ratio of less than 2%. We are ready to withstand unforeseen shocks that may arise from simmering turmoil in the global economy and international financial markets.

source - www.dailymirror.lk

Hemas annual net up 34% to Rs.1.2 bn

Hemas Plc’s net profit for the financial year concluded on March 31, 2011 rose 34 percent to Rs.1.2 billion from a year ago. The revenue for the year also went up 20.5 percent to Rs.18 billion.

The company has interests in Fast Moving Consumer Goods (FMCG), pharmaceuticals/healthcare, leisure, power generation and transportation.

However, the post tax profit of the final quarter fell 8 percent to Rs.311 million compared with the corresponding period, last year. Yet, the revenue of the company for the quarter increased 32 percent to Rs.4.9 billion.

According to the segmental analysis, the profits from FMCG sector in 2011 fell to Rs. 83 million from Rs. 162 million in last year while transpiration sector falling to Rs.27 million from Rs.60 million.

However, the profits of the healthcare sector rose to Rs.70 million from previous year’s Rs.37 million while the leisure sector profits increased to Rs.99 million from 55 million.

Profits from power sector rose to Rs. 111 million in 2011 from Rs. 97 million in 2010.

In the notes to the financial accounts, Hemas said in August 2010 Hemas’s subsidiary Serendib Hotels PLC acquired 19.9% of Jada Resorts & Spa (Pvt) Ltd., the holding company of Kani Lanka Resort & Spa for an amount of Rs.325 million.

The notes also said that the Company exercised its rights and invested Rs. 121million in Hemas Hospitals (Pvt) Ltd on 31 March 2011.

source - www.dailymirror.lk

Richard Pieris profit up 1% in 4Q

By Keishara Perera

Richard Pieris and Company PLC (RICH) recorded a 1% growth in net profit to Rs. 335 million during the 3 months ended 31st March 2011, in comparison to a net profit of Rs. 330 million for the period in 2010.
Finance cost for the 4th quarter increased from Rs. 202 million in 2010 to Rs. 276 million this year, indicating a hike of 36%. There was no variance in Earnings Per Share which remained at Rs. 0.17 during the last quarters of both 2010 and 2011.

Meanwhile, RICH recorded a 190% increase in net profit for the financial year ended 31st March 2011. The net profit for the year in consideration stood at Rs. 1.6 billion compared to Rs. 580 million a year before.
Finance cost for the 12 months ended 31st March 2011 indicated a variance of -18% resulting in a cost reduction from Rs. 969 million in 2010 to Rs. 795 million in 2011.

Furthermore, the consolidated income statement indicated a sharp increase in the quarterly effective tax rate during the 4th quarter from Rs. 100 million in 2010 to Rs. 194 million in 2011, resulting in a change of 93%.
According to the report, the plantation segment was the biggest contributor to operating profit growth. The sector recorded a Rs. 2 billion operating profit during the financial year 2011, in comparison to Rs. 822 million during the previous financial year.

The Retail segment was the next largest contributor in terms of operating profit growth increasing from Rs. 515 million in 2010 to Rs. 828 million for the financial year in consideration, while the Plastic segment’s contribution was up from Rs. 321 million to Rs. 460 million in 2011.

source - www.dailymirror.lk

Tata Nano makes debut export market appearance in Lanka

Diesel & Motor Engineering PLC and Tata Motors, India last Saturday celebrated an immensely successful partnership spanning 50 years between the two companies by launching Tata Nano in sri Lanka which was much touted as the world’s cheapest motor car.

The occasion was marked by a gala event at the Sri Lanka Exhibition and Convention Centre, and was well attended by many prominent personalities and other invitees.

No doubt the pinnacle of the event was the launch of Tata Motors’ brand new car – the Tata Nano - fresh off the factory line, also the vehicle’s debut export from India.

The celebrations which were both colourful and aptly creative saw the arrival of
Tata Motors’ Managing Director & Group CEO Carl Peter Forster and Managing Director - India Operations P. M. Telang, who had specially arrived in the country for the event.

DIMO, which boasts 71 years of operations in Sri Lanka, entered into a partnership with Tata Motors in 1961, and has since grown into one of the conglomerate’s leading partnerships. Tata Motors is India’s largest automobile company, with operations spanning the globe in the UK, South Korea, Thailand and Spain.

 “Today marks a truly momentous occasion in the history of Sri Lankan transport. Fifty years ago, DIMO received Tata Motors’ inaugural export from India. Today, as we commemorate half a century of strong partnership, we will mark the occasion by receiving the first ever export of Tata Motors’ newest innovation, the new Tata Nano” said DIMO Chairman / CEO Ranjith Pandithage speaking at the event.

Managing Director – India Operations, Tata Motors, P. M. Telang, said, “It gives us great pleasure to begin the Tata Nano exports with Sri Lanka, as the company started with its exports business in Sri Lanka and since then has completed 50 long years.  Tata Motors range of passenger and commercial vehicles have received an overwhelming response in Sri Lanka and we hope the Tata Nano, an innovation marvel, is also loved by our customers here”.  

Commercially launched in India on March 23rd 2009, the Tata Nano offers an incredibly spacious passenger compartment which can comfortably seat four adults.

DIMO is also preparing to provide a strong service platform for the new Tata models which were launched, which will enable the company to maintain its long-built reputation for highly commended service. It will soon be expanding its branch network to encompass more areas in the country, along with its existing branches in Akkaraipattu, Ambalangoda, Ampara, Anuradhapura, Colombo, Dambulla, Embilipitiya, Jaffna, Kandy, Kurunegala, Matara, Puttalam, Ratnapura, Vavuniya and Yakkala.

source - www.dailymirrror.lk

Saturday, May 28, 2011

Stock market gains

Speculative demand on CDIC on possible sale of stake in insurance firm

Rupee down on importer dollar demand

COLOMBO (Reuters) – Sri Lanka’s stock market gained on Friday, led by a 50 percent jump in illiquid financial firm Capital Development and Investment , on speculation it could profit sharply from selling its stake in an insurance firm.

Sri Lanka’s main share index closed 0.54 percent or 40.14 points firmer at 7,459.58, to its highest since 20 May.

Capital Development closed at a record Rs. 404.20 and analysts said speculation it would sell its share in an insurance firm owned by National Development Bank helped boost shares in thin volume and turnover.

National Development Bank gained 2.2 percent.

The day’s turnover was 2.38 billion Sri Lanka rupees ($21.7 million), in line with last year’s average of 2.4 billion, but below this year’s daily average of 2.83 billion.

Foreign investors were net buyers for 54.5 million rupees’ worth of shares on Friday. But they have sold a net 6.2 billion rupees worth shares in 2011 after a record 26.4 billion in 2010.

Traded volume was 103.7 million against a five-day average of 139.3 million. The 30-day and 90-day average trading volumes were 79.4 million and 97.5 million respectively. Last year’s daily average was 67.9 million.

The bourse is still Asia’s best performer in 2011 with a 12.4 percent gain, after bringing in the region’s top return of 96 percent last year.

The rupee edged down to 109.87/90 a dollar from Thursday’s 109.85/90 on heavy importer dollar demand despite the Central Bank widening the trading band by 10 cents, reducing the lower band to 109.40 from 109.50, dealers said.

source - www.lbo.lk

Lion Brewery to divest stake in South Asian Breweries

By Jithendra Antonio

Carson group owned Lion Brewery Ceylon’s (LION) director board in a filing to the stock exchange said that they have decided to sell its shareholding in South Asian Breweries Pte Ltd (SABL) to Carlsberg South Asia Pte Ltd (CSAPL) at a consideration equivalent to the book value of the investment.

In the Company’s Balance Sheet in the March quarter interim financial report that was too released to the stock exchange yesterday, a long term investment of Rs.2.1 billion has been mentioned.

The company further said the discussions to sell the investment took place subsequent to the balance sheet date and the present value of the investment is as same as the book value as at 31 March 2011 and the company is currently awaiting the necessary regulatory approvals in order to conclude the transaction.

However, since part of the investment in SABL was funded out of a rights issue of shares in September 2009 the board said it will summon an extra ordinary general meeting of the shareholders no sooner the proceeds are recovered on account of this transaction in order to seek the approval of the shareholders for the utilization of the funds raised through the rights issue.

Lion Brewery has been a shareholder of SABL since 2006 and SABL is the holding company of the operating entity of Carlsberg India Pvt Ltd headquartered in Guragaon, New Delhi.

The statement by LION further said that the board of Lion Brewery (LION) has evaluated the very substantial investment program required in India while the board has also evaluated the significant investments that are required to be made in its Sri Lankan business over the short to medium term to capture opportunities and meet the emerging positive economic environment.

Thus in its statement Lion board further said that the board is conscious of Sri Lanka being the company’s home market and as such is of the view that maintaining its focus on the current market position is the top most priority and one which would in turn deliver the most financially beneficial position for the company and its shareholders.

“With the sale of this investment Lion Brewery will be free of debt thereby strengthening the company and positioning it strongly to invest in its future development and growth and face future challenges in the industry” the filling said.

The financial of LION for the fourth quarter ended in 31 March 2011, company’s revenue had soared to Rs.3.1 billion up by 37% and Profits after Tax rose 47% 313.78 million. Subsequently, Earnings per Share increased from Rs.2.53 to Rs.3.79.

Ceylon Brewery PLC is the country’s single largest brewing and retailing operator of Carlsberg and Lion, and owns 50% of Lion Brewery Ceylon PLC (LION) and a 22% of South Asian Breweries Pte Ltd - Singapore (SABL), which in turn wholly owns Carlsberg India Private Limited in India.

source - www.dailymirror.lk

Bourse up in full week’s trading

The Colombo bourse closed a full trading week yesterday with both indices up on a turnover of Rs.2.38 billion, down from the previous day’s Rs.3.6 billion, with both indices up – the All Share by 40.14 points (0.54%) and the Milanka by 10.06 points (0.15%) with 118 losers ahead of 92 gainers.

"There was quite a bit of activity with the day’s trading almost totally retail driven," Roy Anthony of Acuity Stockbrokers said. "That was very evident."

Yesterday’s big business generators included Nation Lanka Finance with nearly 14.7 million shares traded, Colombo Land with over 5.2 million shares done, Fortress Hotels with 4.8 million shares traded, Janashakthi with 7.9 million shares and Citizens Development with over 1.4 million shares transacted.

Nation Lanka gained Rs.3.50 to close at Rs.28.30 on a trading range of Rs.23.80 and Rs.28.30 while Colombo Land was up 60 cents to Rs.35.80 trading between Rs.32 and Rs.36.80 and Fortress up Rs.2.90 to close at Rs.35 trading between Rs.32 and Rs.35.20. Janashakthi closed Rs.1.20 up at Rs.19.20 trading between Rs.17.60 and Rs.19.40.

Expolanka announced the basis of allotment of its over-subscribed IPO with all categories of retail investors getting 100% of the shares they have applied for. Of the non-retail category, applicants up to 71,000 shares will get 100% while the bigger applicants get a percentage along with a fixed quantum of shares.

The Carsons group announced dividends for the financial year 2010/11 with Carsons paying a first and final dividend of Rs.2 per share, Guardian a first and final of Rs.1.50, Brewery a first and final of Rs.4 and Ceylon Investments a first and final of Re.1 per share, all subject to shareholder approval at the respective AGMs.

United Motors also announced a dividend of Rs.3.25 per share subject to shareholder approval at the AGM.

source - www.lbo.lk

Sri Lanka shares end up 0.5-pct

May 27, 2011 (LBO) - Sri Lankan shares closed firmer Friday with interest in financial stocks and two newly listed finance companies that soared on their debut making further gains, brokers said.

The main All Share Price Index closed at 7,459.58, up 0.54 percent (40.14 points) while the more liquid Milanka index rose 0.15 percent (10.06 points) to close at 6,875.54, according to stock exchange provisional figures.

Turnover was 2.4 billion rupees.

Swarnamahal Financial Services, which was listed at 11.40 rupees and hit 100 rupees when it began trading Thursday but closed at 44 rupees, made more gains Friday, up by a rupee to close at 45.

Chilaw Finance, which also began trading Thursday, went up by 1.40 Friday to close at 32 rupees. The stock was listed at 11 rupees and hit a high of 60 rupees Thursday.

Nation Lanka Finance was the most actively traded stock, with some 14.7 million shares changing hands. The stock closed at 27.40 rupees, up 3.50.

Colombo Land & Development Company, which had topped the turnover list in recent days, was the second most actively traded stock, with 5.2 million shares done. It closed at 35.70 rupees, up 60 cents.

source - www.lbo.lk

Sri Lanka Keells Food back in profit, Indian sales fall

May 27, 2011 (LBO) - Sri Lanka's Keells Food Products made a net profit of 30 million rupees in the year to March 2011 compared with a loss of 146 million the previous year but sales in India fell.

The company, a unit of John Keells Holdings, said in a stock exchange filing annual sales rose 20 percent to 2.2 billion rupees from a year ago.

Sales in its Indian unit fell to 75 million rupees in the year to March 2011 from 139 million the previous year with profit falling to five million from 15 million rupees, according to a segmental analysis of the accounts.

Keells Food Products made additional investments of 36.9 million rupees in its subsidiary, John Keells Fods India during the year.

The company also said that during the year it impaired a further 121 million rupees on its investment in John Keells Foods India "taking into consideration the remaining recoverable amounts and cash and bank balances."

Its subsidiary Keells Foods Products Mauritius was fully impaired in November 2010.

In the March 2011 quarter Keells Food Products said net profit fell to 666,000 rupees from 60 million the year before with sales up 15 percent to 519 million rupees.

source - www.lbo.lk

Sri Lanka Brewery exits Carlsberg India

May 27, 2011 (LBO) - Sri Lanka's listed Lion Brewery said it will sell out of Carlsberg's Indian unit as investment needs in the home market which is looking up after the end of a 30-year war took priority.

Lion Brewery had a stake in South Asian Breweries Pte Ltd since 2006 which was the holding company of Carlsberg India (Pvt) Ltd, which the firm was now selling to Carlsberg South Asia.

Lion said the investment required in India was around 200 million in the near terms.

"The Board has also evaluated the significant investments that are required to be made in its Sri Lankan business over the short to medium term to capture opportunities and meet the emerging positive economic environment," Lion Brewery said in a stock exchange filing.

"The Board is conscious of Sri Lanka being the company's home market and as such, is of the view that maintaining its focus on the current market position is the topmost priority and one which would in turn deliver the most financially beneficial position for the company and its stakeholders."

The stake would be sold at book value. In Lion Breweries March accounts an investment is listed at 2.1 billion rupees.

The firm said it wanted to repay debt and would seek shareholder approval as money for its Indian investment was raised through a rights issue.

In the March 2011 quarter profits rose 47 percent to 313 million rupees and revenues rose 37 percent to 3.1 billion rupees.

Full year profits were up 58 percent to 1.01 billion rupees and revenues were up 42 percent to 11.2 billion rupees.

Earlier this month, Lion Brewery's parent, Ceylon Brewery said it was changing its name to Ceylon Beverage Holdings Limited.

source - www.lbo.lk

Sri Lanka Expolanka IPO retail investors get full allotment

May 27, 2011 (LBO) - Sri Lanka's Expolanka group said retail investors will be given all the shares they applied for in the company's initial public offering on May 12.

Expolanka Holdings had reserved for retail individual investors 40 percent of the shares in its IPO to raise 2.4 billion rupees by issuing 172 million ordinary voting shares at 14 rupees each.

Company employees were reserved 15 percent of the IPO shares, Unit Trusts investors 10 percent and non-retail investor 35 percent.

The IPO was oversubscribed on the opening day itself and drew 11.5 billion rupees worth of applications mostly using bank guarantees.

The company said in a stock exchange filing Friday that unsubscribed shares from the retail and unit trust categories in the IPO were allocated to employee and non-retail categories,.

It said that in the non-retail category, investors who applied for up to 71,000 shares will be allocated all they asked for.

Those who applied for between 71,100 to 04 million shares will get 71,000 shares plus 16 percent of the balance shares applied for and those who asked for between 4,000,100 to 10,715,000 will get 699,600 shares plus 04 percent of the balance applied for.

Investors in this category who applied for between 10,715,100 to 26,785,000 shares will get 1,100,200 shares plus 3.9 percent of the balance applied for.

Those who applied for more than 26,785,100 shares will get 2,099,300 shares plus 3.3 percent of the balance shares applied for.

Expolanka group employees who applied for up to 71,000 shares will be allotted in full while those who asked for between 71,100 and 295,000 shares will get 71,000 shares plus 66.8 percent of the shares applied for.

Employees who applied for more than 295,000 shares will be given 295,000 shares plus 86.3 percent of the amount applied for.

source - www.lbo.lk

Friday, May 27, 2011

Profit taking drags Bourse down

PROFIT taking by investors saw the Colombo stock market dip marginally whilst turnover remained healthy.

The benchmark ASI dipped by 27 points to its lowest since 16 May and Milanka by 13 points.

Investor activity was high with Rs. 3.6 billion turnover generated, slightly low from Rs. 3.9 billion on Wednesday.

Foreign investors turned net buyers to the tune of Rs. 41.6 million.

“The indices dipped on selling pressure amid high turnover while foreign participation on JKH was evident,” John Keells Stock Brokers said.

Some degree of sell was seen on the Land and Property sector narrowing its 14% gain up until Wednesday. However a select few stocks in the sector gained in price.

Reuters said stock market fell as investors cashed in their stakes to apply for the upcoming Softlogic IPO, the nation’s largest in six years, while the rupee edged up after the Central Bank lowered the trading band.

Mostly retail investors sold shares to be liquid ahead of the highly-anticipated Softlogic initial public offering, while other investors have already locked in conglomerate ExpoLanka’s IPO, which was subscribed by 4.5 times.

Swarnamahal Financial Services and Chilaw Finance started trading on Thursday after being listed via introduction instead of IPO, and jumped over 285 percent and 178 percent respectively.

 The day’s turnover was 3.61 billion Sri Lanka rupees ($32.8 million), more than last year’s average of 2.4 billion and this year’s daily average of 2.83 billion.

 Foreign investors were net buyers for 41.7 million rupees’ worth of shares on Thursday. But they have sold a net 6.3 billion rupees worth shares in 2011 after a record 26.4 billion in 2010.

Traded volume was 167.2 million against a five-day average of 153.5 million. The 30-day and 90-day average trading volumes were 77.2 million and 100 million respectively. Last year’s daily average was 67.9 million.

 The bourse is still Asia’s best performer in 2011 with an 11.8 percent gain, after bringing in the region’s top return of 96 percent last year.

The rupee edged up to 109.85/90 a dollar from Wednesday’s 109.97/110.00 as the Central Bank narrowed the dollar trading band by 10 cents to 109.50/90 in line with global greenback depreciation amid heavy importer demand, dealers said.

source - www.ft.lk

Capital Trust activates 500 accounts in first week

The newly established licensed margin trading provider, Capital Trust Credit (Pvt) Ltd, which commenced business on March 26, has had an unprecedentedly successful start with the company activating over 500 new margin trading accounts within the first week of operations and continues to have similar demand.

Margin trading facilities allow stock market investors to pledge their share portfolios to obtain credit facilities for the purpose of purchasing more shares. "Our company normally approves and activates Margin Trading facilities to investors - irrespective of their portfolio size, in just 30 minutes," Capital Trust Credit Director Methmal Seneviratne said.

Capital Trust Credit has been able to cope with such a large number of clients due to the state-of-the-art margin trading system developed by Capital Trust Information Technologies (Pvt) Ltd. This margin trading system is integrated with the back office system of Capital Trust Securities (Pvt) Ltd. and the entire process is fully automated.

"Our primary aim is to serve all our smaller retail clients with portfolios valued at less than Rs 1 million, who are often not accepted by most other financial institutions, so that they could continue trading with credit facilities even after the deadline set by the authorities," Capital Trust Credit Director Tushan Wickramasighe said.

source - www.dailynews.lk

LMF, Tunip new venture

Lanka Milk Foods (CWE) PLC (LMF) has entered into a joint venture with Tunip Agro Limited of India to import fruit pulp and concentrates, process, pack and export fruit juices after value addition in Sri Lanka, a CSE filing said yesterday.

Under this joint venture the company by the name of Indo Lanka Exports (Private ) Limited being incorporated to carry out these operations. These value additions being done under the Indo- Sri Lanka Free Trade Agreement, it further said.

The initial investment of the project was Rs 60 million and Lanka Milk Foods CWE PLC has invested Rs 30.6 million for the venture while the Indian party has invested Rs 29.4 million.

Lanka Milk Foods CWE PLC holds a 51 stake in the joint venture and the remaining stake is held by Tunip Agro. Tunip Agro Limited engages in the production and marketing of fruit juices and other fruit-based beverages under the brand name of Onjus.

source - www.dailynews.lk

Nestle declares Rs 22.50 dividend per share

Nestle Lanka PLC has approved a final dividend payout of RS 22.50, the highest payout by the Company so far, bringing the full year dividend payout to Rs 34.50 per share at its 30th AGM which was held recently.

The company also announced the re-election of Pierre Schaufelberger (Vice President - Nestle Zone AOA) and Mahen Dayananda (Chairperson of several organizations, including the Monetary Policy Consultative Committee of the Central Bank of Sri Lanka) as Directors of the Board. Nestle South Asia Chairman and Market Head Antonio Helio Waszyk said the company had a positive outlook on the future of Sri Lanka and that the company would be taking a far-sighted view of business development in the Country to stimulate significant local development here.

The company recorded double digit growth both in sales and gross profit despite strong cost pressures in last year.

“We are starting 2011 with continued momentum and look forward to delivering the right results once again”, he said.

source - www.dailynews.lk

Hydro Power Free Lanka expands operations

A subsidiary company of Free Lanka Capital Holdings PLC, Hydropower Free Lanka PLC (HPFL) has joined the national effort to provide hydropower throughout the country. The Company has already done two mini-hydropower projects, started construction work on two more and is also finalising plans on others.

Incorporated in the year 2000, the Company began operations by developing hydropower within the premises of Pussellawa Plantations Limited and Maturata Plantations Limited – the two plantation companies in the Group. Two plants have been successfully commissioned – one at Sanquhar Estate, Atabage and the other at Delta Estate, Pupuressa each producing 1.6mw of hydropower.

The Company has reported a very profitable fourth quarter ending on 31 March 2011 with a profit before tax of Rs. 22.14 million as against Rs. 2.3 million in the corresponding period last year(as per unaudited accounts). The total profit before tax of Rs. 70.4 million has been recorded for the financial year 2010/11. It shows a decrease from Rs. 75.2 million profit made during the previous year. A Company spokesman explained that the decrease is due to additional depreciation and expenses relating to the Initial Public Offering (IPO) during the year.

Discussing the Company’s approach, a spokesman said that they are utilising assets available on tea estates. “Both Maturata Plantations and Pussellawa Plantations have hydropower resources and we are expanding activities in those areas,” he said.

The Company has now signed the Standard Power Purchase Agreement (SPPA) with the Ceylon Electricity Board (CEB) for two projects. Construction work on these – Thebuwana at Kuruwita and Stellenberg at Gampola - has already begun. Power generation is scheduled to start around March 2012.

Construction of two more projects at Ragala will commence soon and work is due to be completed by August 2012. In addition to hydropower plants being constructed by HPFL, Free Lanka Capital Holdings (FLCH) will also set up seven more hydropower plants in Deniyaya and Rakwana.

By the end of year 2013, the Group expects to generate a total of 16.02mw of power to the national grid. Explaining the Company’s rationale in moving on to hydropower sector, the Company spokesman said that they were guided by government policy of developing the hydropower generation potential of the country to its full potential, as it is a major indigenous resource for power generation.

During the past decade, country’s electricity demand reports an average annual growth of 7% - 8%. This is expected to increase with the post-war boom on the industrial sector and also government continues with sound infrastructure development programs mainly to enhance the living standards of the society. It has been estimated that 95% of electrification will be achieved by 2015 with a mix of grid and off grid system.

source - www.dailymirror.lk