Happy & Prosperous New year 2011 for all the Investor commiunity.
Team Sri Lanka Stock Picks
Friday, December 31, 2010
Happy New Year 2011
Happy & Prosperous New year 2011 for all the Investor commiunity.
Team Sri Lanka Stock Picks
Sri Lanka’s Inflation Rate Held Near a One-Year High in December
Sri Lanka’s inflation rate held near a one-year high in December, adding pressure on the central bank to raise interest rates.
Consumer prices in the capital, Colombo, rose 6.9 percent from a year earlier after a 7 percent gain in November, the statistics department said on its website today.
The Central Bank of Sri Lanka said Dec. 14 it will take “appropriate” steps to check any “build up of demand pressures.” Governor Ajith Nivard Cabraal left rates unchanged this month after reducing them in July and August even as counterparts in India and Pakistan tightened monetary policy.
“Sri Lanka has little room to ease rates further to boost growth,” Saminda Weerasinghe, an analyst at Asia Capital Plc in Colombo, said before the report. “If inflation trends higher because of sustained economic growth momentum, the central bank will need to raise borrowing costs next year.”
Sri Lanka’s $42 billion economy may grow 8 percent this year and by 9 percent in 2011, Cabraal said on Dec. 6.
The main contributors to inflation were food products, the statistics dept said in the statement.
“Among the food commodities, vegetables, coconut and coconut oil, which have significant weights in the CCPI basket, recorded price increases on a year to year basis,” the statement showed.
Sri Lanka plans to introduce inflation targeting in its monetary policy in order to keep prices low for long periods, the central bank said on Nov. 22. It didn’t say what level of inflation it would be targeting.
The central bank’s reverse repurchase rate is 9 percent, which is the lowest level since November, 2004, and the repurchase rate is 7.25 percent.
To contact the reporter on this story: Anusha Ondaatjie in Colombo at anushao@bloomberg.net
To contact the editor responsible for this story: Stephen Foxwell at sfoxwell@bloomberg.net
source - www.bloomberg.com
Consumer prices in the capital, Colombo, rose 6.9 percent from a year earlier after a 7 percent gain in November, the statistics department said on its website today.
The Central Bank of Sri Lanka said Dec. 14 it will take “appropriate” steps to check any “build up of demand pressures.” Governor Ajith Nivard Cabraal left rates unchanged this month after reducing them in July and August even as counterparts in India and Pakistan tightened monetary policy.
“Sri Lanka has little room to ease rates further to boost growth,” Saminda Weerasinghe, an analyst at Asia Capital Plc in Colombo, said before the report. “If inflation trends higher because of sustained economic growth momentum, the central bank will need to raise borrowing costs next year.”
Sri Lanka’s $42 billion economy may grow 8 percent this year and by 9 percent in 2011, Cabraal said on Dec. 6.
The main contributors to inflation were food products, the statistics dept said in the statement.
“Among the food commodities, vegetables, coconut and coconut oil, which have significant weights in the CCPI basket, recorded price increases on a year to year basis,” the statement showed.
Sri Lanka plans to introduce inflation targeting in its monetary policy in order to keep prices low for long periods, the central bank said on Nov. 22. It didn’t say what level of inflation it would be targeting.
The central bank’s reverse repurchase rate is 9 percent, which is the lowest level since November, 2004, and the repurchase rate is 7.25 percent.
To contact the reporter on this story: Anusha Ondaatjie in Colombo at anushao@bloomberg.net
To contact the editor responsible for this story: Stephen Foxwell at sfoxwell@bloomberg.net
source - www.bloomberg.com
SRI LANKA : HPFL inks deal with CEB
December 30, 2010
Hydro Power Free Lanka 2 and Hydro Power Free Lanka 3 inked deal with Ceylon Electricity Board (CEB) to sell power and get tax concessions. Hydro Power Free Lanka 2 and Lanka 3 are the subsidiaries of Hydro Power Free Lanka (HPFL) while Ceylon is Sri Lanka's state power utility and investment promotion agency.
According to a stock exchange filing, HPFL subsidiaries, Hydro Power Free Lanka 2 and Hydro Power Free Lanka 3, are constructing two min-hydro power plants of one megawatt each at Thebuwana and Stellenberg.
As per the deal, the subsidiaries of HPFL will get tax cut and other concessions such as duty free imports. HPFL will construct another three new plants - 0.83 MW plant in Thebuwana, 0.94 MW plant in Stellenberg and 3.0 MW plant in Halgran Oya.
source - www.hydroworld.com
Hydro Power Free Lanka 2 and Hydro Power Free Lanka 3 inked deal with Ceylon Electricity Board (CEB) to sell power and get tax concessions. Hydro Power Free Lanka 2 and Lanka 3 are the subsidiaries of Hydro Power Free Lanka (HPFL) while Ceylon is Sri Lanka's state power utility and investment promotion agency.
According to a stock exchange filing, HPFL subsidiaries, Hydro Power Free Lanka 2 and Hydro Power Free Lanka 3, are constructing two min-hydro power plants of one megawatt each at Thebuwana and Stellenberg.
As per the deal, the subsidiaries of HPFL will get tax cut and other concessions such as duty free imports. HPFL will construct another three new plants - 0.83 MW plant in Thebuwana, 0.94 MW plant in Stellenberg and 3.0 MW plant in Halgran Oya.
source - www.hydroworld.com
Sri Lanka shares end up 0.33-pct
Dec 31, 2010 (LBO) - Sri Lankan stocks closed higher Friday with activity seen across the board by both the institutions and the retail traders, brokers said.
The All Share Price Index closed at 6,635.87, up 0.33 percent (21.74 points) while the more liquid Milanka index rose 0.15 percent (10.78 points) to close at 7,061.46, according to stock exchange provisional figures.
Turnover was 1.3 billion rupees.
Distilleries Company (DCSL), which was the third highest traded stock with over 450,000 shares changing hands, closed flat at 177.90.
The company said the government had returned the 5.7 billion rupees that was paid by DCSL subsidiary Milford Holdings to buy control of Sri Lanka Insurance Corporation.
Bairaha Farms closed at 324.30, up 20.90 and Three Acre Farms closed at 90.20, up 1.40 with over 650,000 shares changing hands.
Sampath Bank closed at 271.90, up 2.00 rupees while DFCC closed at 200.20, up 0.20 cents. Commercial Bank closed at 259.90, down 0.60 cents.
Dialog Axiata closed flat at 11.80.
source - www.lbo.lk
The All Share Price Index closed at 6,635.87, up 0.33 percent (21.74 points) while the more liquid Milanka index rose 0.15 percent (10.78 points) to close at 7,061.46, according to stock exchange provisional figures.
Turnover was 1.3 billion rupees.
Distilleries Company (DCSL), which was the third highest traded stock with over 450,000 shares changing hands, closed flat at 177.90.
The company said the government had returned the 5.7 billion rupees that was paid by DCSL subsidiary Milford Holdings to buy control of Sri Lanka Insurance Corporation.
Bairaha Farms closed at 324.30, up 20.90 and Three Acre Farms closed at 90.20, up 1.40 with over 650,000 shares changing hands.
Sampath Bank closed at 271.90, up 2.00 rupees while DFCC closed at 200.20, up 0.20 cents. Commercial Bank closed at 259.90, down 0.60 cents.
Dialog Axiata closed flat at 11.80.
source - www.lbo.lk
Sri Lanka plantations mull loans for replanting
Dec 31, 2010 (LBO) - Sri Lanka's plantations are considering concessionary loans with interest subsidies from the government to improve replanting of tea, which has fallen behind targets, the Tea Board said.
The plantations ministry wants to increase the re- plantation rate of regional plantations corporation estates to three percent a year from the current 0.5 percent.
An interest subsidy is being considered by the ministry for the RPCs as well as small farmers who now produce the bulk of the crop, the Tea Board said in its third quarter review of the plantations industry.
"Discussions are already underway to negotiate a loan scheme under concessionary interest from the banking chain to the RPCs," it said.
"An interest subsidy is being considered by the ministry. The small holder sector is bound to get a financial hand-out from the government for replanting."
The Tea Board also said measures to accelerate the rate of infilling of bushes on tea estates are also being considered.
Plants would be provided by the state-run Tea Research Institute and Tea Smallholdings Development Authority to small farmers. Most of the RPCs have their own nurseries.
"The yields in the tea sector of Sri Lanka are comparatively low at around 1,600 kilos a hectare as against about 2,000 kilos in India and around 2,600 kilos a hectare in Kenya," the Tea Board review said.
"Consequently the cost of production in Sri Lanka is as high as 2.80 US dollars a kilo compared with 2.00 dollars a kilo in India and 1.20 dollars a kilo in Kenya.
"Thus, it is obvious, that productivity has to increase for the sustainability of the Sri Lanka tea industry. The re-planting and infilling is addressed with a view to circumvent this problem."
source - www.lbo.lk
The plantations ministry wants to increase the re- plantation rate of regional plantations corporation estates to three percent a year from the current 0.5 percent.
An interest subsidy is being considered by the ministry for the RPCs as well as small farmers who now produce the bulk of the crop, the Tea Board said in its third quarter review of the plantations industry.
"Discussions are already underway to negotiate a loan scheme under concessionary interest from the banking chain to the RPCs," it said.
"An interest subsidy is being considered by the ministry. The small holder sector is bound to get a financial hand-out from the government for replanting."
The Tea Board also said measures to accelerate the rate of infilling of bushes on tea estates are also being considered.
Plants would be provided by the state-run Tea Research Institute and Tea Smallholdings Development Authority to small farmers. Most of the RPCs have their own nurseries.
"The yields in the tea sector of Sri Lanka are comparatively low at around 1,600 kilos a hectare as against about 2,000 kilos in India and around 2,600 kilos a hectare in Kenya," the Tea Board review said.
"Consequently the cost of production in Sri Lanka is as high as 2.80 US dollars a kilo compared with 2.00 dollars a kilo in India and 1.20 dollars a kilo in Kenya.
"Thus, it is obvious, that productivity has to increase for the sustainability of the Sri Lanka tea industry. The re-planting and infilling is addressed with a view to circumvent this problem."
source - www.lbo.lk
Sri Lanka Distilleries gets Rs5.7bn for insurance takeover
Dec 31, 2010 (LBO) - The government has paid Distilleries Company of Sri Lanka 5.7 billion rupees spent by the firm to buy control of a state insurance firm in a privatisation deal reversed by a court order citing irregularities.
Sri Lanka's Supreme Court had ordered the government to repay the money originally paid by the liquor group to gain control of the state-owned Sri Lanka Insurance Corporation (SLIC) when it was privatised in 2003.
But the Supreme Court reversed the sale in June 2009, citing irregularities in the 6.0 billion rupee privatisation deal.
"The government returned the 5.7 billion rupees that was paid by DCSL subsidiary Milford Holdings to buy 510 million shares of SLIC," DCSL said in a stock exchange filing, Friday.
Distilleries Company is a unit of the unlisted Stassens group controlled by tycoon Harry Jayawardena who also has large stakes in the listed Hatton National Bank, Commercial Bank and National Development Bank.
In the June 2009 ruling, court has said Milford Holdings, a special purpose company incorporated by the Distilleries group to purchase SLIC, could keep the profits earned during the time they ran the firm.
source - www.lbo.lk
Sri Lanka's Supreme Court had ordered the government to repay the money originally paid by the liquor group to gain control of the state-owned Sri Lanka Insurance Corporation (SLIC) when it was privatised in 2003.
But the Supreme Court reversed the sale in June 2009, citing irregularities in the 6.0 billion rupee privatisation deal.
"The government returned the 5.7 billion rupees that was paid by DCSL subsidiary Milford Holdings to buy 510 million shares of SLIC," DCSL said in a stock exchange filing, Friday.
Distilleries Company is a unit of the unlisted Stassens group controlled by tycoon Harry Jayawardena who also has large stakes in the listed Hatton National Bank, Commercial Bank and National Development Bank.
In the June 2009 ruling, court has said Milford Holdings, a special purpose company incorporated by the Distilleries group to purchase SLIC, could keep the profits earned during the time they ran the firm.
source - www.lbo.lk
Sri Lanka toughens penalties under new finance company law
Dec 31, 2010 (LBO) - A new finance company law that is to be introduced in Sri Lanka will provide for tougher penalties against illegal deposit taking and give regulators wider powers to probe abuses, a statement said.
The new law will repeal the existing No 78 finance company act of 1988 which was seen as inadequate to deal with abuses that occurred in recent years where unlicensed deposit taking institutions duped unsuspecting savers with high interest rates.
Large number of savers have still not been able to recover their funds deposited in institutions which collapsed and some of which are being rehabilitated by the regulator.
The central bank came in for criticism for not doing enough to prevent finance scams but the regulator maintained that it did what it could under the existing law.
The statement issued by the government information department Friday said that the new law provides for a clear definition of deposits and also bans the use of names or letters similar to registered finance companies by other firms.
Unauthorised acceptance of public deposits will be made a crime and those violating the law can be indicted in the high court, it said.
Registered finance companies will also have to improve their public disclosures, it added.
source - www.lbo.lk
The new law will repeal the existing No 78 finance company act of 1988 which was seen as inadequate to deal with abuses that occurred in recent years where unlicensed deposit taking institutions duped unsuspecting savers with high interest rates.
Large number of savers have still not been able to recover their funds deposited in institutions which collapsed and some of which are being rehabilitated by the regulator.
The central bank came in for criticism for not doing enough to prevent finance scams but the regulator maintained that it did what it could under the existing law.
The statement issued by the government information department Friday said that the new law provides for a clear definition of deposits and also bans the use of names or letters similar to registered finance companies by other firms.
Unauthorised acceptance of public deposits will be made a crime and those violating the law can be indicted in the high court, it said.
Registered finance companies will also have to improve their public disclosures, it added.
source - www.lbo.lk
Sri Lanka IPOs seen hyped by bank guarantees
Dec 31, 2010 (LBO) - Sri Lankan investors who make big applications for shares with bank guarantees instead of cash in public issues are helping them appear overvalued to the untrained eye and can be risky for banks, analysts said.
Recent initial public offers on the Colombo bourse have seen massive over-subscriptions, with many big investors using bank guarantees to apply for shares.
"As little as five or ten percent collateral was used by some investors for bank guarantees when applying for IPO shares," a stock market analyst said.
Some big investors are reported to have applied for the entire issue using bank guarantees, with the bank liable in the unlikely event all shares applied for are given.
"Using only five percent collateral for grantees can be quite irregular and can also be rather risky in terms of conventional banking," the analyst said.
Stock brokers and analysts said the massive IPO over subscriptions helped by bank guarantee, gives the share an overall artificial hype, making its stock an 'in-demand' commodity, encouraging buying by retail and new investors.
However, officials in the market regulator, Securities and Exchange Commission said the oversubscriptions are merely the effects of supply and demand and that there is no regulation needed at this point.
"However, what happens is that when trading of the stock begins officially the big players sell early making a profit while the smaller investor holds on to his stock and by the time he decides to sell usually the stock price has dropped," an analyst said.
"Lots of small investors can be discouraged because of this scenario and can also get driven away from trading," he said.
The banking regulator, the Central Bank, sees the share transaction as too small to pose any systemic risk.
Central bank's deputy governor, Dharma Dheerasinghe says the regulator is not worried about bank guarantees for IPO applications as they are not massive transactions and that its bank supervision division is aware of what is going on.
"Earlier these investors were using cheques to do these transactions but because of cheque floats there were some complications and now bank guarantees are used instead."
Dheerasinghe said there is room for higher credit to the private sector from commercial banks and that the central bank wants to encourage investors to participate more actively in daily market trading.
Some 378 big players on the Colombo bourse applied for large quantities of shares in the recent Singer Finance (Lanka) IPO which was over-subscribed by a record 135 times, mostly using bank guarantees.
The Singer Finance IPO offered 26.7 million shares at 15 each.
Traders who applied for all the IPO shares by using the bank guarantee would have had to pay close to 500,000 rupees to the bank for the facility and get about 100,000 shares in return.
Brokers say that other recent IPOs have also been massively oversubscribed, again mostly with bank guarantees.
The Odel IPO in July was oversubscribed by 63 times with a record 22,686 applications received from the public with a cumulative value of over 15.9 billion rupees.
Some banks are reported to have earned about 30 million rupees from the Singer Finance IPO by issuing bank guarantees, analysts said.
source - www.lbo.lk
Recent initial public offers on the Colombo bourse have seen massive over-subscriptions, with many big investors using bank guarantees to apply for shares.
"As little as five or ten percent collateral was used by some investors for bank guarantees when applying for IPO shares," a stock market analyst said.
Some big investors are reported to have applied for the entire issue using bank guarantees, with the bank liable in the unlikely event all shares applied for are given.
"Using only five percent collateral for grantees can be quite irregular and can also be rather risky in terms of conventional banking," the analyst said.
Stock brokers and analysts said the massive IPO over subscriptions helped by bank guarantee, gives the share an overall artificial hype, making its stock an 'in-demand' commodity, encouraging buying by retail and new investors.
However, officials in the market regulator, Securities and Exchange Commission said the oversubscriptions are merely the effects of supply and demand and that there is no regulation needed at this point.
"However, what happens is that when trading of the stock begins officially the big players sell early making a profit while the smaller investor holds on to his stock and by the time he decides to sell usually the stock price has dropped," an analyst said.
"Lots of small investors can be discouraged because of this scenario and can also get driven away from trading," he said.
The banking regulator, the Central Bank, sees the share transaction as too small to pose any systemic risk.
Central bank's deputy governor, Dharma Dheerasinghe says the regulator is not worried about bank guarantees for IPO applications as they are not massive transactions and that its bank supervision division is aware of what is going on.
"Earlier these investors were using cheques to do these transactions but because of cheque floats there were some complications and now bank guarantees are used instead."
Dheerasinghe said there is room for higher credit to the private sector from commercial banks and that the central bank wants to encourage investors to participate more actively in daily market trading.
Some 378 big players on the Colombo bourse applied for large quantities of shares in the recent Singer Finance (Lanka) IPO which was over-subscribed by a record 135 times, mostly using bank guarantees.
The Singer Finance IPO offered 26.7 million shares at 15 each.
Traders who applied for all the IPO shares by using the bank guarantee would have had to pay close to 500,000 rupees to the bank for the facility and get about 100,000 shares in return.
Brokers say that other recent IPOs have also been massively oversubscribed, again mostly with bank guarantees.
The Odel IPO in July was oversubscribed by 63 times with a record 22,686 applications received from the public with a cumulative value of over 15.9 billion rupees.
Some banks are reported to have earned about 30 million rupees from the Singer Finance IPO by issuing bank guarantees, analysts said.
source - www.lbo.lk
Sri Lanka's post - war economic boom on the rise - Wall Street Journal
Sri Lanka's post-war economic boom is only just beginning. The potential here goes well beyond a boost in tourism. Adjusted for inflation, economic growth could be close to 8% this year, up from an average of 5% in the prior decade. Bond market strategists are now expecting Sri Lanka's credit rating to be revised upward next year, sates The Wall Street Journal in a year end analysis on Sri Lankan economy on 30th December.
The report states that Sri Lanka's location within East-to-West shipping lanes is promising, and large areas of farmland and coastline in the northeast can be developed now that fighting has ended. The government, meanwhile, recently implemented tax cuts and other reforms aimed at boosting foreign investment. Adjusted for inflation, economic growth could be close to 8% this year, up from an average of 5% in the prior decade.
The report also states that a difficulty for Sri Lanka to achieve "Investment Grade" is in large that the government debt racked up over three decades of fighting.
It also adds that Stocks face a possible headwind too. As many as 60 companies likely conduct initial public offerings next year.
Following is the report:
Sri Lanka's post-war economic boom is only just beginning. Have investors already missed the boat?
In the 19 months since the nation's civil war ended, stock prices are up nearly 250% and the rupee up 6%. Government debt is also in high demand: The difference between yields on a Sri Lankan dollar-denominated bond due in 2012 and similar U.S. Treasurys is just 3.5 percentage points, data from Barclays Capital show. A year ago, that was spread closer to 6%.
The potential here goes well beyond a boost in tourism. Sri Lanka's location within East-to-West shipping lanes is promising, and large areas of farmland and coastline in the northeast can be developed now that fighting has ended. The government, meanwhile, recently implemented tax cuts and other reforms aimed at boosting foreign investment. Adjusted for inflation, economic growth could be close to 8% this year, up from an average of 5% in the prior decade.
Bond market strategists are now expecting Sri Lanka's credit rating to be revised upward next year. Investors, though, have already taken things a step further: Moody's says the market-implied rating on Sri Lanka's sovereign debt is Ba1, three notches above where the agency currently rates the country and only one level below investment grade.
But Sri Lanka is still far from investment grade, in large part because of government debt racked up over three decades of fighting. This debt stood at a whopping 86% of gross domestic product last year. On "debt affordability" Moody's rates Sri Lanka higher only than Lebanon and Jamaica. Rising commodity and food prices could make efforts to cut this debt tougher if domestic investors demand the government pay higher yields to compensate for inflation. About 40% of spending in next year's budget is allocated for interest payments.
Stocks face a possible headwind too. As many as 60 companies could conduct initial public offerings next year, says Yolan Seimon, head of research at John Keells Stock Brokers in Colombo. Many of these deals will be small, but the rush is still substantial given that there are only 240 companies currently listed. Anyway, Seimon says, with stocks now trading at 14.9 times expected earnings, price gains will likely average 20% to 25% a year, tracking profit growth.
Investors turning up now, seeking the triple-digit returns of recent years, will find that ship has sailed.
source - www.dailymirror.lk
The report states that Sri Lanka's location within East-to-West shipping lanes is promising, and large areas of farmland and coastline in the northeast can be developed now that fighting has ended. The government, meanwhile, recently implemented tax cuts and other reforms aimed at boosting foreign investment. Adjusted for inflation, economic growth could be close to 8% this year, up from an average of 5% in the prior decade.
The report also states that a difficulty for Sri Lanka to achieve "Investment Grade" is in large that the government debt racked up over three decades of fighting.
It also adds that Stocks face a possible headwind too. As many as 60 companies likely conduct initial public offerings next year.
Following is the report:
Sri Lanka's post-war economic boom is only just beginning. Have investors already missed the boat?
In the 19 months since the nation's civil war ended, stock prices are up nearly 250% and the rupee up 6%. Government debt is also in high demand: The difference between yields on a Sri Lankan dollar-denominated bond due in 2012 and similar U.S. Treasurys is just 3.5 percentage points, data from Barclays Capital show. A year ago, that was spread closer to 6%.
The potential here goes well beyond a boost in tourism. Sri Lanka's location within East-to-West shipping lanes is promising, and large areas of farmland and coastline in the northeast can be developed now that fighting has ended. The government, meanwhile, recently implemented tax cuts and other reforms aimed at boosting foreign investment. Adjusted for inflation, economic growth could be close to 8% this year, up from an average of 5% in the prior decade.
Bond market strategists are now expecting Sri Lanka's credit rating to be revised upward next year. Investors, though, have already taken things a step further: Moody's says the market-implied rating on Sri Lanka's sovereign debt is Ba1, three notches above where the agency currently rates the country and only one level below investment grade.
But Sri Lanka is still far from investment grade, in large part because of government debt racked up over three decades of fighting. This debt stood at a whopping 86% of gross domestic product last year. On "debt affordability" Moody's rates Sri Lanka higher only than Lebanon and Jamaica. Rising commodity and food prices could make efforts to cut this debt tougher if domestic investors demand the government pay higher yields to compensate for inflation. About 40% of spending in next year's budget is allocated for interest payments.
Stocks face a possible headwind too. As many as 60 companies could conduct initial public offerings next year, says Yolan Seimon, head of research at John Keells Stock Brokers in Colombo. Many of these deals will be small, but the rush is still substantial given that there are only 240 companies currently listed. Anyway, Seimon says, with stocks now trading at 14.9 times expected earnings, price gains will likely average 20% to 25% a year, tracking profit growth.
Investors turning up now, seeking the triple-digit returns of recent years, will find that ship has sailed.
source - www.dailymirror.lk
British tourist arrivals up
Disna MUDALIGE
A 31 percent increase has been recorded in the number of British tourist arrivals to Sri Lanka from January 1 to November 30 this year compared to the same period in 2009, Sri Lanka Tourism Development Authority statistics revealed. From the total number of 569,849 tourists arrived in the country during the above mentioned period 17 percent are British tourists. According to the statistics 95,320 British tourists have visited the country during past 11 months while this number was 72, 858 in the same period of 2009.
The British High Commission web site reports that the British Government no longer advises against travel to any part of Sri Lanka and it has eased travel advice to Sri Lanka. The Consular Section of the British High Commission in Colombo launched an SMS alert system in April this year to inform British nationals arriving in Sri Lanka of the contact details of the Consular Section.
British tourists who stay in the country for more than a month are asked to register themselves on the Consular database prior to their visit.
The Consular also promotes cultural sensitivity among British tourists to Sri Lanka and publishes annual travel brochures with required information while focusing on respect for religion and religious monuments and sites, awareness of local laws, customs and common sense advice.
source - www.dailynews.lk
A 31 percent increase has been recorded in the number of British tourist arrivals to Sri Lanka from January 1 to November 30 this year compared to the same period in 2009, Sri Lanka Tourism Development Authority statistics revealed. From the total number of 569,849 tourists arrived in the country during the above mentioned period 17 percent are British tourists. According to the statistics 95,320 British tourists have visited the country during past 11 months while this number was 72, 858 in the same period of 2009.
The British High Commission web site reports that the British Government no longer advises against travel to any part of Sri Lanka and it has eased travel advice to Sri Lanka. The Consular Section of the British High Commission in Colombo launched an SMS alert system in April this year to inform British nationals arriving in Sri Lanka of the contact details of the Consular Section.
British tourists who stay in the country for more than a month are asked to register themselves on the Consular database prior to their visit.
The Consular also promotes cultural sensitivity among British tourists to Sri Lanka and publishes annual travel brochures with required information while focusing on respect for religion and religious monuments and sites, awareness of local laws, customs and common sense advice.
source - www.dailynews.lk
Boost for construction sector
Cabinet decides to end 1% construction levy by UDA
In a bid to promote entrepreneurship the Cabinet has given approval to suspend the 1% construction levy charged by the Urban Development Authority (UDA).
“The government intends to increase total investment by 40% within the next decade and understand that about 30% of this must come from the private sector,” Media Minister Keheliya Rambukwella told media yesterday. “Therefore Cabinet decided to suspend the 1% construction levy for projects. At present all construction other than houses is subject to this charge.”
The relevant gazette notification has also been repealed following the Cabinet decision. It was first released on 27 February 2008.
source- www.ft.lk
In a bid to promote entrepreneurship the Cabinet has given approval to suspend the 1% construction levy charged by the Urban Development Authority (UDA).
“The government intends to increase total investment by 40% within the next decade and understand that about 30% of this must come from the private sector,” Media Minister Keheliya Rambukwella told media yesterday. “Therefore Cabinet decided to suspend the 1% construction levy for projects. At present all construction other than houses is subject to this charge.”
The relevant gazette notification has also been repealed following the Cabinet decision. It was first released on 27 February 2008.
source- www.ft.lk
Shangri La purchases land outright for US$ 125mn *Defence Ministry land to be country’s only 7-star hotel property
Hong Kong based leisure chain Shangri La has concluded an outright purchase of a 10 acre plot in Colombo facing the Galle Face green owned by the Defence Ministry, for US$ 125 million, a top official said.
Sri Lanka Tourism Development Authority Chairman Dr. Nalaka Godahewa told The Island Financial Review that the outright purchase was concluded with an upfront payment of US$ 75 million with the balance US$ 50 million to be paid later.
Shangri La is expected to invest US$ 500 million in what would be the only seven star hotel in Sri Lanka.
The Island Financial Review yesterday (30) reported that the US$ 75 million inflow had appreciated the rupee.
source - www.island.lk
Vanik to focus on fee based business
By Hiran H.Senewiratne
Vanik Incorporation Ltd, the company that involves in the total financial services business is now planning to move away from funds based activity business to fee based business as a part of its restructuring plan.
At present, a law suit is pending before the Court of Appeal on the company’s restructuring plan. Before that a District Court order was given to wind up the company, which was filed by Ruhunu Development Bank five years ago when it was facing a financial crisis.
"We are quite positive that court order will be delivered in our favour, for us to implement the restructuring proposal, its President/ Chief Executive Officer Justin Meegoda told the Financial Review.He said, if the court order is delivered in favour of them they could implement the restructuring proposal in three to four months. Under the restructuring plan 50 per cent of its debt will be converted into equity and the balance to be paid in three years. At present the company’s total liability is running into Rs11 billion including the cumulative interest.
Ruhunu Development Bank now the Regional Development Bank filed a case before the District Court to recover Rs 90 million worth of deposits, when the company was facing a financial crisis, he said.
At present the company has paid 80 percent of their deposit money and the balance money to be paid once the restructuring proposal is being implemented, while only Rs 3-4 million will be left to be paid for individual shareholders, Meegoda said.
According to Meegoda the company does not have any assets with them as they disposed all of their assets including a 240 perches land in Colpetty pay off debt
"We want to focus on fee based business including insurance brokering, financial consultation, and company feasibility studies and many more. Since the tourism sector is a good future, they intend to get into that business as well, he said.
The court hearing on this company will be held on January 24 and will be filing relevant submission on that day. If we get the court order in our favour only the company could implement or roles out the restructuring plan within two to three months following the court order, he said.
Currently, major shareholders of the company are Vanik (5.5 million shares), Capital Reach Holding Limited (one million shares), and Capital Reach Credit Limited (2.2 million shares), while they hold more than 8.5 million shares of the company.
While the number of ordinary shares holders runs into 22,000, where they hold 70 million worth of shares of the company, Meegoda added.
At present the company has subsidiaries namely Vinketh teak plantation company, Vanik Insurance Brokers , Tour East (Lanka) Ltd and Sebrof Limited.
source - www.island.lk
Vanik Incorporation Ltd, the company that involves in the total financial services business is now planning to move away from funds based activity business to fee based business as a part of its restructuring plan.
At present, a law suit is pending before the Court of Appeal on the company’s restructuring plan. Before that a District Court order was given to wind up the company, which was filed by Ruhunu Development Bank five years ago when it was facing a financial crisis.
"We are quite positive that court order will be delivered in our favour, for us to implement the restructuring proposal, its President/ Chief Executive Officer Justin Meegoda told the Financial Review.He said, if the court order is delivered in favour of them they could implement the restructuring proposal in three to four months. Under the restructuring plan 50 per cent of its debt will be converted into equity and the balance to be paid in three years. At present the company’s total liability is running into Rs11 billion including the cumulative interest.
Ruhunu Development Bank now the Regional Development Bank filed a case before the District Court to recover Rs 90 million worth of deposits, when the company was facing a financial crisis, he said.
At present the company has paid 80 percent of their deposit money and the balance money to be paid once the restructuring proposal is being implemented, while only Rs 3-4 million will be left to be paid for individual shareholders, Meegoda said.
According to Meegoda the company does not have any assets with them as they disposed all of their assets including a 240 perches land in Colpetty pay off debt
"We want to focus on fee based business including insurance brokering, financial consultation, and company feasibility studies and many more. Since the tourism sector is a good future, they intend to get into that business as well, he said.
The court hearing on this company will be held on January 24 and will be filing relevant submission on that day. If we get the court order in our favour only the company could implement or roles out the restructuring plan within two to three months following the court order, he said.
Currently, major shareholders of the company are Vanik (5.5 million shares), Capital Reach Holding Limited (one million shares), and Capital Reach Credit Limited (2.2 million shares), while they hold more than 8.5 million shares of the company.
While the number of ordinary shares holders runs into 22,000, where they hold 70 million worth of shares of the company, Meegoda added.
At present the company has subsidiaries namely Vinketh teak plantation company, Vanik Insurance Brokers , Tour East (Lanka) Ltd and Sebrof Limited.
source - www.island.lk
Share transaction levy up from Jan 1 *Investors given until June 30, 2011 to clear credit based equity purchases
In keeping with the Budget 2011 proposals, the Colombo Stock Exchange yesterday announced that the share transaction levy would be increased from 0.2 percent to 0.3 percent with effect from January 1, 2011. The Securities and Exchange Commission said that from January 1, 2011 brokers would have five days before force selling shares to recover dues from investors who had purchased shares on credit, but existing portfolios have been given time until June 30, 2011 to clear their accounts, the Director General of the Securities and Exchange Commission said.The government opted to increase this levy in the absence of a capital gains tax.
The stock exchange announced the following revisions to transaction costs following the revision to the share transaction levy.
As reported in The Island Financial Review yesterday (30) the Securities and Exchange Commission (SEC) has allowed brokers to extend credit through margin providers and provide a grace period of three days plus the transaction date (T+3) after which brokers have two days to force sell stocks to recover dues.
"With effect from January 1, 2011, all broker firms shall be required to force-sell by T+5, securities of buyers who are in default of settlement by T+3 days, in order to recover the monies owing to them by such defaulting clients," the SEC said yesterday (30).
An official of the Securities and Exchange Commission (SEC) said this would apply to transactions from January 3, 2011. Existing portfolios have been given until June 30, 2011 to clear accounts acquired through margin trading or credit from brokers.
SEC Director General Malik Cader told The Island Financial Review that brokers would have to reduce their credit portfolios by 50 percent by end March 2011, and clear all credit accounts by end June.
"There is no need to panic as existing credit accounts have been given time. The T+5 rule would apply to transactions that take place from January 3," he said.
source - www.island.lk
Indices drop sharply but recover quickly CSE takes a blow from SEC’s T+5 ruling
The Colombo Stock Exchange yesterday took a blow from the SEC directive that forced selling of stock will be compulsory if settlement is not made within the five days of a transaction with effect from January 01 with both indices slumping sharply after the announcement but recovering quickly.
At the end of the day the All Share was down 32.79 points (0.49%) and the Milanka by 24.55 points (0.34%) with 114 decliners well ahead of 56 gainers.
"At one point soon after the announcement the All Share was down more than 90 points but quickly recovered thereafter," Prashan Fernando of Acuity Stockbrokers said. "The increase in government’s share transaction levy by 0.1% will also be effective from January 1."
He expressed the view that compelling share buyers to clear their accounts quickly was a positive sign for long term stability of the market although there was also a point of view among some brokers that lack of credit can be a market depressant.
Yesterday’s turnover of Rs.2.09 billion, up from the previous day’s Rs.1.5 billion, was supported mainly by Commercial Bank, Bairaha Farms, Distilleries, Three Acre Farms, Dialog and Grain Elevators.
Commercial Bank, the top turnover generator, with nearly 1.2 million shares traded between Rs.258 and Rs.261 closed Rs.2 down at Rs.260.50 contributing Rs.306.3 million to the business volume.
The poultry producers continued to fly with Bairaha up Rs.13.20 to Rs.299.90 trading between Rs.280 and Rs.304.90; Three Acres up Rs.4 to Rs.89.20 on nearly 1.1 million shares traded between Rs.80.10 and Rs.89.80 and Grains up Rs.2.80 to Rs.73 on over 1.1 million shares done between Rs.68.70 and Rs.75.30.
Distilleries continued to rise on investor hope that the refund of the purchase price paid for Sri Lanka Insurance will be settled shortly, brokers said. Although there was no confirmation of payment, the counter gained Rs.6.90 to close at Rs.178 on nearly 0.6 million shares.
Dialog saw nearly 7.3 million shares done closing 20 cents down at Rs.11.90 trading between Rs.11.70 and Rs.12.
Brokers said that most of ComBank was done on crossings at Rs.260. Five such crossings accounted for most of the trades.
Bairaha, Distilleries and Three Acre Farms were mostly retail driven with three crossings of Dialog at Rs.12 per share accounting for Rs.5.7 million of the shares transacted during the day.
The government’s share transaction levy moves up from 0.2% to 0.3% with effect from January 01 while other transaction charges (brokerage, CSE and CDS fees and SEC cess remains as they were. The total fee/cess will amount to 1.12% of transactions of up to Rs.50 million and 0.6125 for transactions over Rs.50 million.
The CSE will function as normal today (Friday).
source - www.island.lk
At the end of the day the All Share was down 32.79 points (0.49%) and the Milanka by 24.55 points (0.34%) with 114 decliners well ahead of 56 gainers.
"At one point soon after the announcement the All Share was down more than 90 points but quickly recovered thereafter," Prashan Fernando of Acuity Stockbrokers said. "The increase in government’s share transaction levy by 0.1% will also be effective from January 1."
He expressed the view that compelling share buyers to clear their accounts quickly was a positive sign for long term stability of the market although there was also a point of view among some brokers that lack of credit can be a market depressant.
Yesterday’s turnover of Rs.2.09 billion, up from the previous day’s Rs.1.5 billion, was supported mainly by Commercial Bank, Bairaha Farms, Distilleries, Three Acre Farms, Dialog and Grain Elevators.
Commercial Bank, the top turnover generator, with nearly 1.2 million shares traded between Rs.258 and Rs.261 closed Rs.2 down at Rs.260.50 contributing Rs.306.3 million to the business volume.
The poultry producers continued to fly with Bairaha up Rs.13.20 to Rs.299.90 trading between Rs.280 and Rs.304.90; Three Acres up Rs.4 to Rs.89.20 on nearly 1.1 million shares traded between Rs.80.10 and Rs.89.80 and Grains up Rs.2.80 to Rs.73 on over 1.1 million shares done between Rs.68.70 and Rs.75.30.
Distilleries continued to rise on investor hope that the refund of the purchase price paid for Sri Lanka Insurance will be settled shortly, brokers said. Although there was no confirmation of payment, the counter gained Rs.6.90 to close at Rs.178 on nearly 0.6 million shares.
Dialog saw nearly 7.3 million shares done closing 20 cents down at Rs.11.90 trading between Rs.11.70 and Rs.12.
Brokers said that most of ComBank was done on crossings at Rs.260. Five such crossings accounted for most of the trades.
Bairaha, Distilleries and Three Acre Farms were mostly retail driven with three crossings of Dialog at Rs.12 per share accounting for Rs.5.7 million of the shares transacted during the day.
The government’s share transaction levy moves up from 0.2% to 0.3% with effect from January 01 while other transaction charges (brokerage, CSE and CDS fees and SEC cess remains as they were. The total fee/cess will amount to 1.12% of transactions of up to Rs.50 million and 0.6125 for transactions over Rs.50 million.
The CSE will function as normal today (Friday).
source - www.island.lk
Colombo Stock exchange excels
Amid Asia's post-crisis boom it was the tiddlers among the region's stock markets that surged ahead in 2010, fuelled by a flood of easy money into emerging economies.
Among the bigger bourses Hong Kong was the standout thanks to some of the world's biggest listings.
But the past 12 months belonged to previously overlooked markets such as Colombo, Bangkok and Manila, with Mumbai also sprinting ahead.
Sri Lanka's stock index, enjoying in a post-civil war peace dividend, soared 96 percent, making it the second best performer in the world after hard-to-access Mongolia's national bourse, according to the Colombo exchange.
Snapping at Sri Lanka's heels was Bangladesh (up 80 percent for the year), Indonesia (46 percent), the Philippines (up 38 percent), Malaysia (19 percent), Thailand (up more than 40 percent) and South Korea (up nearly 22 percent).
In each case local factors played a role - disturbances near Bangladesh's stock exchange in which bricks were hurled and furniture was set on fire demonstrated how local sentiment can affect that market.
But a decisive factor was foreign cash flowing into the strengthening emerging markets as investors in the West, where interest rates are at record lows, sought out better returns for their money. The United States' decision to effectively print more cash with its quantitative easing also helped, weakening the dollar and pushing investors into strengthening Asian currencies. AFP
source - www.dailynews.lk
Among the bigger bourses Hong Kong was the standout thanks to some of the world's biggest listings.
But the past 12 months belonged to previously overlooked markets such as Colombo, Bangkok and Manila, with Mumbai also sprinting ahead.
Sri Lanka's stock index, enjoying in a post-civil war peace dividend, soared 96 percent, making it the second best performer in the world after hard-to-access Mongolia's national bourse, according to the Colombo exchange.
Snapping at Sri Lanka's heels was Bangladesh (up 80 percent for the year), Indonesia (46 percent), the Philippines (up 38 percent), Malaysia (19 percent), Thailand (up more than 40 percent) and South Korea (up nearly 22 percent).
In each case local factors played a role - disturbances near Bangladesh's stock exchange in which bricks were hurled and furniture was set on fire demonstrated how local sentiment can affect that market.
But a decisive factor was foreign cash flowing into the strengthening emerging markets as investors in the West, where interest rates are at record lows, sought out better returns for their money. The United States' decision to effectively print more cash with its quantitative easing also helped, weakening the dollar and pushing investors into strengthening Asian currencies. AFP
source - www.dailynews.lk
SEC mulls commodity exchange Directives to strengthen capital market :
The introduction of the commodity exchange to the Sri Lanka’s capital market is at an early stage.
The Securities and Exchange Commission Sri Lanka (SEC) is exploring possibilities of having a commodity exchange in the country and obtaining the necessary information.
“We seek expressions of interest from market stakeholders, Securities and Exchange Commission of Sri Lanka Chairperson Indrani Sugathadasa told Daily News Business.
“The commodity exchange is at a very early stage and we could see some results in time to come,” she said.
She also said the increase in the share transaction levy from 0.2 percent to 0.3 percent from January 1 will not have any negative effect. This increase was introduced considering requests from the market participants. The negative market performance yesterday was not related to the increase in the levy, Sugathadasa said.
The SEC also has granted stock brokers two extra days from January 1, 2011 to force-sell securities of buyers who are in default of the usual settlement period to recover their funds, a Colombo Stock Exchange statement said yesterday.
Commenting on the introduction of this directive to stock brokers Sugathadasa said the SEC does not want to see the capital market run on credit.
“We introduced this directive to strengthen the market and to ensure stability. We have an effective and efficient clearing system,” she said.
The SEC has taken measures to improve the quality of investment analysts by providing professional training to facilitate a vibrant stock market.
“We have trained over 300 persons to enter the stock market as investment analysts. The SEC conducts compulsory continuous professional education programs for stock brokers to maintain and uplift their standard in the share market performance, Securities and Exchange Commission of Sri Lanka Director-General Malik Cader said.
“These measures were in place to maintain professionalism in Sri Lanka’s capital market. The market performance will have a positive impact and Sri Lanka will be able to maintain its high performance in the future too,” he said.
source - www.dailynews.lk
Thursday, December 30, 2010
Sri Lanka investors have time till June to clear equity positions
Dec 30, 2010 (LBO) - Sri Lankan stock market investors have time till June 30, 2011 to clear existing portfolios acquired through margin trading or credit from brokers, Securities and Exchange Commission Director General Malik Cader said.
"For existing portfolios with brokers we have given time till June 30 to liquidate," he told LBO. "There's no big hurry now to liquidate positions."
An SEC directive giving stock brokers two extra days to force-sell securities of buyers who are in default of the usual settlement period of T+3 to recover their funds applies to new trades after Monday, January 03, and not legacy trades, he said.
"Anything after January 03, if they're unable to settle on T+3, they are given two more days and then the broker will sell on T+5 or else they can transfer to margin trading accounts."
source - www.lbo.lk
"For existing portfolios with brokers we have given time till June 30 to liquidate," he told LBO. "There's no big hurry now to liquidate positions."
An SEC directive giving stock brokers two extra days to force-sell securities of buyers who are in default of the usual settlement period of T+3 to recover their funds applies to new trades after Monday, January 03, and not legacy trades, he said.
"Anything after January 03, if they're unable to settle on T+3, they are given two more days and then the broker will sell on T+5 or else they can transfer to margin trading accounts."
source - www.lbo.lk
Sri Lanka hydro electricity firm in power purchase deal
Dec 30, 2010 (LBO) - Hydro Power Free Lanka (HPFL) has entered into agreements with Sri Lanka's state power utility and investment promotion agency to sell power and get tax concessions, according to a stock exchange filing.
Its subsidiaries, Hydro Power Free Lanka 2 and Hydro Power Free Lanka 3, have begun building two min-hydro power plants of one megawatt each at Thebuwana and Stellenberg, it said.
The two subsidiaries have entered into small power purchase agreements with the Ceylon Electricity Board to sell power to the utility, the statement said, without disclosing details.
They two firms have also signed agreements with the Board of Investment, which grants tax holidays and other concessions like duty free imports to investors.
An initial public offer in October by Hydro Power Free Lanka to raise 350 million rupees to build three new plants was oversubscribed. The firm issued 35 million shares at 10 rupees each.
Hydro Power Free Lanka wants to build three new plants. It now has two power plants which sell power to the CEB.
A new 0.83 MW plant is to be built in Thebuwana and another 0.94 MW plant in Stellenberg for 150 million rupees each.
It also plans a larger plant in Halgran Oya for 3.0 MW which can be expanded by another 0.60 MW.
source - www.lbo.lk
Its subsidiaries, Hydro Power Free Lanka 2 and Hydro Power Free Lanka 3, have begun building two min-hydro power plants of one megawatt each at Thebuwana and Stellenberg, it said.
The two subsidiaries have entered into small power purchase agreements with the Ceylon Electricity Board to sell power to the utility, the statement said, without disclosing details.
They two firms have also signed agreements with the Board of Investment, which grants tax holidays and other concessions like duty free imports to investors.
An initial public offer in October by Hydro Power Free Lanka to raise 350 million rupees to build three new plants was oversubscribed. The firm issued 35 million shares at 10 rupees each.
Hydro Power Free Lanka wants to build three new plants. It now has two power plants which sell power to the CEB.
A new 0.83 MW plant is to be built in Thebuwana and another 0.94 MW plant in Stellenberg for 150 million rupees each.
It also plans a larger plant in Halgran Oya for 3.0 MW which can be expanded by another 0.60 MW.
source - www.lbo.lk
Sri Lanka shares gyrate after forced-selling scare
Dec 30, 2010 (LBO) - Sri Lankan stocks closed lower Thursday after recovering from sharp losses in early trade on panic selling by investors confused over a regulator order for brokers to force-sell equities of buyers in default, brokers said.
The All Share Price Index closed at 6,614.13, down 0.49 percent (32.79 points) while the more liquid Milanka index dipped 0.34 percent (24.15 points) to close at 7,050.68, according to stock exchange provisional figures.
Turnover was two billion rupees.
"The All Share Price Index dropped as much as 100 points in the first two hours of trading reacting adversely to the Securities Exchange Commission provision of force-selling of portfolios remaining unpaid for longer than T+5," a broker said.
The ASI plunged 116 points (-1.7 percent) and Milanka 101 points (-1.4 percent) in mid-morning trade after the order on forced-selling by the market regulator, SEC, at the start of the day's trading, before recovering, brokers said.
"Panic driven retailers drove the market down initially but the patient value stock collectors benefitted from today’s index swing. This continues to show CSE’s over dependence on credit," Nikita Tissera of SC Securities said.
The SEC issuing a statement said it granted stock brokers two extra days from January 01, 2011 to force-sell securities of buyers who are in default of the usual settlement period of three days to recover their funds.
The statement said stockbrokers will be granted an additional two days (T+5) to force-sell securities of buyers which are in default of settlement by T+3 in order to recover the monies owed to them by defaulting clients.
SEC officials clarified the statement saying investors have time till June 30, 2011 to clear existing portfolios acquired through credit from brokers and need not be in a hurry to liquidate positions.
The SEC directive giving brokers two extra days to force-sell securities of buyers in default of the usual settlement period of T+3 applies to new trades after January 03.
Bairaha Farms closed at 303.40, up 13.20 with over 500,000 shares traded and Three Acre Farms closed at 88.80, up 4.10 with over a million shares done.
Dialog Axiata stocks were heavily traded and it closed at 11.80, down 0.20 cents with over 7.2 million shares changing hands. Five million shares crossed in a private deal at 12.00 rupees.
Sampath Bank closed at 269.90, down 0.80 cents while DFCC closed at 200.00, down 1.20 rupees. Commercial bank closed at 260.50, down 2.00 rupees with 1.1 million shares done.
source - www.lbo.lk
The All Share Price Index closed at 6,614.13, down 0.49 percent (32.79 points) while the more liquid Milanka index dipped 0.34 percent (24.15 points) to close at 7,050.68, according to stock exchange provisional figures.
Turnover was two billion rupees.
"The All Share Price Index dropped as much as 100 points in the first two hours of trading reacting adversely to the Securities Exchange Commission provision of force-selling of portfolios remaining unpaid for longer than T+5," a broker said.
The ASI plunged 116 points (-1.7 percent) and Milanka 101 points (-1.4 percent) in mid-morning trade after the order on forced-selling by the market regulator, SEC, at the start of the day's trading, before recovering, brokers said.
"Panic driven retailers drove the market down initially but the patient value stock collectors benefitted from today’s index swing. This continues to show CSE’s over dependence on credit," Nikita Tissera of SC Securities said.
The SEC issuing a statement said it granted stock brokers two extra days from January 01, 2011 to force-sell securities of buyers who are in default of the usual settlement period of three days to recover their funds.
The statement said stockbrokers will be granted an additional two days (T+5) to force-sell securities of buyers which are in default of settlement by T+3 in order to recover the monies owed to them by defaulting clients.
SEC officials clarified the statement saying investors have time till June 30, 2011 to clear existing portfolios acquired through credit from brokers and need not be in a hurry to liquidate positions.
The SEC directive giving brokers two extra days to force-sell securities of buyers in default of the usual settlement period of T+3 applies to new trades after January 03.
Bairaha Farms closed at 303.40, up 13.20 with over 500,000 shares traded and Three Acre Farms closed at 88.80, up 4.10 with over a million shares done.
Dialog Axiata stocks were heavily traded and it closed at 11.80, down 0.20 cents with over 7.2 million shares changing hands. Five million shares crossed in a private deal at 12.00 rupees.
Sampath Bank closed at 269.90, down 0.80 cents while DFCC closed at 200.00, down 1.20 rupees. Commercial bank closed at 260.50, down 2.00 rupees with 1.1 million shares done.
source - www.lbo.lk
Sri Lanka among small-bore Asian stock exchanges that excelled
HONG KONG, December 30, 2010 (AFP) - Amid Asia's post-crisis boom it was the tiddlers among the region's stock markets that surged ahead in 2010, fuelled by a flood of easy money into emerging economies.
Among the bigger bourses Hong Kong was the standout thanks to some of the world's biggest listings.
But the past 12 months belonged to previously overlooked markets such as Colombo, Bangkok and Manila, with Mumbai also sprinting ahead.
Sri Lanka's stock index, enjoying in a post-civil war peace dividend, soared 96 percent, making it the second best performer in the world after hard-to-access Mongolia's national bourse, according to the Colombo exchange.
Snapping at Sri Lanka's heels was Bangladesh (up 80 percent for the year), Indonesia (46 percent), the Philippines (up 38 percent), Malaysia (19 percent), Thailand (up more than 40 percent) and South Korea (up nearly 22 percent).
In each case local factors played a role -- disturbances near Bangladesh's stock exchange in which bricks were hurled and furniture was set on fire demonstrated how local sentiment can affect that market.
But a decisive factor was foreign cash flowing into the strengthening emerging markets as investors in the West, where interest rates are at record lows, sought out better returns for their money.
The United States' decision to effectively print more cash with its quantitative easing also helped, weakening the dollar and pushing investors into strengthening Asian currencies. All of which stoked fears about destabilising short-term inflows.
"There have already, for two years in a row, been huge net inflows into the region," said Frances Cheung, a strategist at Credit Agricole in Hong Kong, referring to East Asian economies such as South Korea.
"We do think money will continue to flow in, but there's also a risk of sudden reversals of flows."
Pichai Lertsupongkit, a vice-president at Thanachart Securities in Bangkok, predicted another good year ahead for his country, albeit with some uncertainty around expected elections after "Red Shirt" unrest this year.
"Liquidity in both foreign and domestic market is good and will further improve next year," he said.
However for all the exuberance about Asia, the region also holds risks -- communist Vietnam is seen as a particularly vulnerable smaller economy.
And mainland Chinese stock markets have been a notable exception in the rush of positive news. They have slumped about 16 percent in 2010 amid nervousness about a host of measures by the authorities to rein in soaring inflation -- from rate hikes to property market restrictions.
While China may see more intervention by the authorities, investors are anticipating a better year to come, differing only on "how big the rally could be," said Lu Zhengwei, an economist at Industrial Bank.
Tokyo's mammoth market meanwhile was down three percent over the year, in large part reflecting pressure on Japanese exporters from a strong yen, which in November hit a 15-year high against the dollar, and from rival exporter nations.
Masatoshi Sato, senior strategist at Mizuho Investors Securities, said the yen's strength was likely to continue exerting pressure in the first quarter of next year but things should improve later.
"The market's consensus is that toward the year-end, Japanese shares should generally advance," he said. "The market is yet to fully digest likely strong corporate earnings for the next fiscal year."
Among other larger markets, Mumbai was a notable success in 2010, rising more than 17 percent with the help of foreign fund flows, while billionaire investor George Soros gave the exchange his vote of confidence when he bought a four percent stake in August.
But among the major players it was Hong Kong that outshone, not for the performance of its stocks, which rose five percent, but for the number and scale of new listings by foreign firms.
Among the firms listing shares in the city were Rusal, the first Russian firm to listing in Hong Kong, and Brazilian mining giant Vale.
China's AgBank and the Asian unit of insurer AIG each scored debuts worth more than 20 billion dollars
"In terms of performance (Hong Kong) is a great disappointment if you want to make money, but for the exchange it has been a tremendous year because Hong Kong leads the world," said Francis Lun, general manager at Fulbright Securities.
source - www.lbo.lk
Among the bigger bourses Hong Kong was the standout thanks to some of the world's biggest listings.
But the past 12 months belonged to previously overlooked markets such as Colombo, Bangkok and Manila, with Mumbai also sprinting ahead.
Sri Lanka's stock index, enjoying in a post-civil war peace dividend, soared 96 percent, making it the second best performer in the world after hard-to-access Mongolia's national bourse, according to the Colombo exchange.
Snapping at Sri Lanka's heels was Bangladesh (up 80 percent for the year), Indonesia (46 percent), the Philippines (up 38 percent), Malaysia (19 percent), Thailand (up more than 40 percent) and South Korea (up nearly 22 percent).
In each case local factors played a role -- disturbances near Bangladesh's stock exchange in which bricks were hurled and furniture was set on fire demonstrated how local sentiment can affect that market.
But a decisive factor was foreign cash flowing into the strengthening emerging markets as investors in the West, where interest rates are at record lows, sought out better returns for their money.
The United States' decision to effectively print more cash with its quantitative easing also helped, weakening the dollar and pushing investors into strengthening Asian currencies. All of which stoked fears about destabilising short-term inflows.
"There have already, for two years in a row, been huge net inflows into the region," said Frances Cheung, a strategist at Credit Agricole in Hong Kong, referring to East Asian economies such as South Korea.
"We do think money will continue to flow in, but there's also a risk of sudden reversals of flows."
Pichai Lertsupongkit, a vice-president at Thanachart Securities in Bangkok, predicted another good year ahead for his country, albeit with some uncertainty around expected elections after "Red Shirt" unrest this year.
"Liquidity in both foreign and domestic market is good and will further improve next year," he said.
However for all the exuberance about Asia, the region also holds risks -- communist Vietnam is seen as a particularly vulnerable smaller economy.
And mainland Chinese stock markets have been a notable exception in the rush of positive news. They have slumped about 16 percent in 2010 amid nervousness about a host of measures by the authorities to rein in soaring inflation -- from rate hikes to property market restrictions.
While China may see more intervention by the authorities, investors are anticipating a better year to come, differing only on "how big the rally could be," said Lu Zhengwei, an economist at Industrial Bank.
Tokyo's mammoth market meanwhile was down three percent over the year, in large part reflecting pressure on Japanese exporters from a strong yen, which in November hit a 15-year high against the dollar, and from rival exporter nations.
Masatoshi Sato, senior strategist at Mizuho Investors Securities, said the yen's strength was likely to continue exerting pressure in the first quarter of next year but things should improve later.
"The market's consensus is that toward the year-end, Japanese shares should generally advance," he said. "The market is yet to fully digest likely strong corporate earnings for the next fiscal year."
Among other larger markets, Mumbai was a notable success in 2010, rising more than 17 percent with the help of foreign fund flows, while billionaire investor George Soros gave the exchange his vote of confidence when he bought a four percent stake in August.
But among the major players it was Hong Kong that outshone, not for the performance of its stocks, which rose five percent, but for the number and scale of new listings by foreign firms.
Among the firms listing shares in the city were Rusal, the first Russian firm to listing in Hong Kong, and Brazilian mining giant Vale.
China's AgBank and the Asian unit of insurer AIG each scored debuts worth more than 20 billion dollars
"In terms of performance (Hong Kong) is a great disappointment if you want to make money, but for the exchange it has been a tremendous year because Hong Kong leads the world," said Francis Lun, general manager at Fulbright Securities.
source - www.lbo.lk
Stockbrokers to extend credit
The Securities and Exchange Commission (SEC) has encouraged stockbrokers to extend credit facilities to their clients through margin providers registered with the Securities and Exchange Commission of Sri Lanka.
Securities and Exchange Commission of Sri Lanka Chairperson Indrani Sugathadasa together with other members and officials of the Commission and CSE Chairman Nihal Fonseka met members of the stockbroking industry on Wednesday and informed the stockbrokers that the directive that was issued earlier by the Commission on extending credit to any investor beyond T+3 days, was not a measure taken by the Commission to discourage investors, but was a critical step taken towards managing the inherent systemic risks in the capital market.
The Commission has published a list of the Margin Providers registered with the Securities and Exchange Commission of Sri Lanka in the newspapers for the information of the public and has also made the list of registered Margin Providers available on the website of the Securities and Exchange Commission of Sri Lanka (www.sec.gov.lk).
The Commission having taken note of the concerns of the stockbroking industry also permitted stockbrokers to grant a brief grace period to buyers who are in default of settlement by T+3. Stockbrokers will be granted an additional two days to force-sell securities of buyers which are in default of settlement by T+3 in order to recover the monies owing to them by such defaulting client.
source - www.dailynews.lk
Securities and Exchange Commission of Sri Lanka Chairperson Indrani Sugathadasa together with other members and officials of the Commission and CSE Chairman Nihal Fonseka met members of the stockbroking industry on Wednesday and informed the stockbrokers that the directive that was issued earlier by the Commission on extending credit to any investor beyond T+3 days, was not a measure taken by the Commission to discourage investors, but was a critical step taken towards managing the inherent systemic risks in the capital market.
The Commission has published a list of the Margin Providers registered with the Securities and Exchange Commission of Sri Lanka in the newspapers for the information of the public and has also made the list of registered Margin Providers available on the website of the Securities and Exchange Commission of Sri Lanka (www.sec.gov.lk).
The Commission having taken note of the concerns of the stockbroking industry also permitted stockbrokers to grant a brief grace period to buyers who are in default of settlement by T+3. Stockbrokers will be granted an additional two days to force-sell securities of buyers which are in default of settlement by T+3 in order to recover the monies owing to them by such defaulting client.
source - www.dailynews.lk
Dockyard to capture new markets
Sanjeevi JAYASURIYA
Sri Lanka has not fully recovered to its full potential at the operational level in the shipping industry.
The country needs to address this as it is a serious concern for industrialists, Colombo Dockyard Managing Director and CEO Mangala P B Yapa told Daily News Business.
The time is not right for ship repairs and ship builders as shipping companies are looking at cheap yards in countries such as Malaysia and Indonesia.
“This is the reality of business,” he said.
The year 2010 was one of the most challenging years for Colombo Dockyard PLC (CDL). The company carried out 152 ship repairs in 2010 compared to 148 in 2009.
The CDL has adopted a two fold strategy to face the challenging situation. One is the internal focus to raise standards to increase the level of efficiency in all aspects.
This will enable to compete aggressively whilst offering an improved value proposition to customers. The other strategy is to build a strong relationship with customers.
CDL is looking at new markets which it has not been able to attract in the past.
“We consider Far East as a potential market. We have already attracted three customers from Greek ship owners for the last two months for dry dock and repairs. We will continue being market-oriented.
“We have been mainly focusing on petroleum tankers especially from India where there is a change in fleet composition.
The LPG and other chemical tankers are an opportunity at present. With improved safety and quality standards we could attract this type of business,” he said.
The first LPG tanker will arrive in mid January 2011.
Company had a successful marketing launch in Singapore under the theme Ayubowan Singapore to attract ship owners. Though there is a drop in revenue in the ship repair business this year compared to last year, CDL is confident that it could turnaround and have better performance in 2011. The ship building business recorded one of the most successful years in 2010.
CDL was able to deliver five vessels this year. The total contract value was US $ 115 million.
It was able to secure three more large ship building contracts from Singapore.
It is yet to deliver four vessels from previous stock one vessel to India, two to Singapore and one to Sri Lanka.
The company directs excess resources for ship building when necessary adding more product portfolio.
source - www.dailynews.lk
Sri Lanka has not fully recovered to its full potential at the operational level in the shipping industry.
The country needs to address this as it is a serious concern for industrialists, Colombo Dockyard Managing Director and CEO Mangala P B Yapa told Daily News Business.
The time is not right for ship repairs and ship builders as shipping companies are looking at cheap yards in countries such as Malaysia and Indonesia.
“This is the reality of business,” he said.
The year 2010 was one of the most challenging years for Colombo Dockyard PLC (CDL). The company carried out 152 ship repairs in 2010 compared to 148 in 2009.
The CDL has adopted a two fold strategy to face the challenging situation. One is the internal focus to raise standards to increase the level of efficiency in all aspects.
This will enable to compete aggressively whilst offering an improved value proposition to customers. The other strategy is to build a strong relationship with customers.
CDL is looking at new markets which it has not been able to attract in the past.
“We consider Far East as a potential market. We have already attracted three customers from Greek ship owners for the last two months for dry dock and repairs. We will continue being market-oriented.
“We have been mainly focusing on petroleum tankers especially from India where there is a change in fleet composition.
The LPG and other chemical tankers are an opportunity at present. With improved safety and quality standards we could attract this type of business,” he said.
The first LPG tanker will arrive in mid January 2011.
Company had a successful marketing launch in Singapore under the theme Ayubowan Singapore to attract ship owners. Though there is a drop in revenue in the ship repair business this year compared to last year, CDL is confident that it could turnaround and have better performance in 2011. The ship building business recorded one of the most successful years in 2010.
CDL was able to deliver five vessels this year. The total contract value was US $ 115 million.
It was able to secure three more large ship building contracts from Singapore.
It is yet to deliver four vessels from previous stock one vessel to India, two to Singapore and one to Sri Lanka.
The company directs excess resources for ship building when necessary adding more product portfolio.
source - www.dailynews.lk
HVA goes for new extraction plant
Charumini DE SILVA
HVA will set up an unique tea extraction plant, one of its kind in Sri Lanka with an investment of Rs 100 million.
HVA Lanka Exports Chairman Rohan Fernando told Daily News Business the company plans to invest Rs 100 million to upgrade the tea extraction plant to a high end commercial venture, Heladiv Innovative Centre, as well as increase the capacity in the tea packaging factory.
The company is planning to officially open the commercial venture Heladiv Innovative Centre during the first quarter of next year.
The tea extraction plant is a novel concept to Sri Lanka as there are no such extraction models available in the country.
HVA is expecting to achieve a 10 to 20 percent growth compared to this year’s performance. “We are targeting to be in a strong and an enviable position on tea exports by mid of 2011,” Fernando said.
The company is fully focused on expanding businesses, while upgrading manufacturing and increasing the capacity.
HVA is expecting to capture new markets with tea based products such as iced tea, body care, horticulture, pharmaceuticals and other healthcare products, as the demand for tea based healthcare products are increasing rapidly and it is a niche market.
Fernando said there are many opportunities to develop new products based on tea. However, most industrialists engaged in the tea industry have not thought of this side as they have only focused on traditional tea export markets.
“Value-added tea products have a huge potential in the international arena. HVA has done research and development on, product profiles, feasibility studies on markets and the consumer behaviour,” he said.
They are also planning to launch a tea boutique franchise in Colombo under the tagline of Heladiv Infini-t. The company has high end tea products in Heladiv tea parlours in China, which caters to a wide range of customers. “The tea parlours in China is a successful business concept of Heladiv and we want to develop a similar atmosphere with Tea boutique concept in Sri Lanka and worldwide,” he said.
At present the company is looking for an ideal format of locations to setup these tea boutiques. “We expect that this concept will emerge in Sri Lanka well in 2011,” Fernando said.
HVA Foods Ltd, a subsidiary of HVA Lanka Exporters will open the Initial Public Offering (IPO) on January 12. The company is all set for the IPO, while expecting that it will have a good response from the public.
source - www.dailynews.lk
HVA will set up an unique tea extraction plant, one of its kind in Sri Lanka with an investment of Rs 100 million.
HVA Lanka Exports Chairman Rohan Fernando told Daily News Business the company plans to invest Rs 100 million to upgrade the tea extraction plant to a high end commercial venture, Heladiv Innovative Centre, as well as increase the capacity in the tea packaging factory.
The company is planning to officially open the commercial venture Heladiv Innovative Centre during the first quarter of next year.
The tea extraction plant is a novel concept to Sri Lanka as there are no such extraction models available in the country.
HVA is expecting to achieve a 10 to 20 percent growth compared to this year’s performance. “We are targeting to be in a strong and an enviable position on tea exports by mid of 2011,” Fernando said.
The company is fully focused on expanding businesses, while upgrading manufacturing and increasing the capacity.
HVA is expecting to capture new markets with tea based products such as iced tea, body care, horticulture, pharmaceuticals and other healthcare products, as the demand for tea based healthcare products are increasing rapidly and it is a niche market.
Fernando said there are many opportunities to develop new products based on tea. However, most industrialists engaged in the tea industry have not thought of this side as they have only focused on traditional tea export markets.
“Value-added tea products have a huge potential in the international arena. HVA has done research and development on, product profiles, feasibility studies on markets and the consumer behaviour,” he said.
They are also planning to launch a tea boutique franchise in Colombo under the tagline of Heladiv Infini-t. The company has high end tea products in Heladiv tea parlours in China, which caters to a wide range of customers. “The tea parlours in China is a successful business concept of Heladiv and we want to develop a similar atmosphere with Tea boutique concept in Sri Lanka and worldwide,” he said.
At present the company is looking for an ideal format of locations to setup these tea boutiques. “We expect that this concept will emerge in Sri Lanka well in 2011,” Fernando said.
HVA Foods Ltd, a subsidiary of HVA Lanka Exporters will open the Initial Public Offering (IPO) on January 12. The company is all set for the IPO, while expecting that it will have a good response from the public.
source - www.dailynews.lk
Dialog boosts turnover, indices gain marginally
Turnover on the Colombo Stock Exchange at Rs.1.5 billion yesterday was down from the previous day’s Rs.1.64 billion with both indices moving up marginally thanks largely to some big trades in Dialog with plantations and chicken stock gaining, brokers said.
The All Share Price Index was up 5.84 points (0.09%) and the Milanka up 11.19 points (0.16%) with 86 decliners ahead of 74 gainers according to CSE data.
"The market was very quiet most of the day but looked up shortly before closing with some big crossings on Dialog," Prashan Fernando of Acuity Stockbrokers said. "We saw crossings of over 26 million, 10 million and 5.7 million shares at a twelve rupee price in the final minutes of trading."
He said that there were few other big parcels also done on the trading floor and not as crossings.
In the final count, Dialog was up 40 cents to close at Rs.12 on nearly 46.6 million shares done between Rs.11.50 and Rs.12 generating the day’s top turnover of Rs.558.8 million.
Poultry producers, Bairaha, Three Acre Farms and Grain Elevators also saw both price increases and quantity with Bairaha up a hefty Rs.19.90 to Rs.289.90 on nearly 2 million shares done between Rs.270 and Rs.294.
Three Acres was up Rs.7.30 to Rs.85.10 on nearly 1.1 million shares traded between Rs.78.90 and Rs.86 while Grains gained Rs.3.20 to close at Rs.72 on nearly 0.7 million shares done between Rs.68.50 and Rs.72.80.
Among plantations, Kotagala was up Rs.10.40 to Rs.111.90 on over 0.3 million shares, Kegalla up Rs.6.70 to Rs.164.90 on 61,600 shares, Namunukula up Rs.6.20 to Rs.110 on nearly 0.2 million shares and Malwatte up Rs.4.2 to Rs.78 on 67,200 shares.
Other plantations stock including Agalawatte, Balangoda, Hapugastenna, Horana, Elpitiya, Kelani Valley and Uda Pussellawa were also among the gainers.
Brokers said that retail sentiment had improved with more activity seen across the board although volumes were sluggish. They noted the indices were down by 20 points at the beginning of the day but looked up before the market closed.
source - www.island.lk
The All Share Price Index was up 5.84 points (0.09%) and the Milanka up 11.19 points (0.16%) with 86 decliners ahead of 74 gainers according to CSE data.
"The market was very quiet most of the day but looked up shortly before closing with some big crossings on Dialog," Prashan Fernando of Acuity Stockbrokers said. "We saw crossings of over 26 million, 10 million and 5.7 million shares at a twelve rupee price in the final minutes of trading."
He said that there were few other big parcels also done on the trading floor and not as crossings.
In the final count, Dialog was up 40 cents to close at Rs.12 on nearly 46.6 million shares done between Rs.11.50 and Rs.12 generating the day’s top turnover of Rs.558.8 million.
Poultry producers, Bairaha, Three Acre Farms and Grain Elevators also saw both price increases and quantity with Bairaha up a hefty Rs.19.90 to Rs.289.90 on nearly 2 million shares done between Rs.270 and Rs.294.
Three Acres was up Rs.7.30 to Rs.85.10 on nearly 1.1 million shares traded between Rs.78.90 and Rs.86 while Grains gained Rs.3.20 to close at Rs.72 on nearly 0.7 million shares done between Rs.68.50 and Rs.72.80.
Among plantations, Kotagala was up Rs.10.40 to Rs.111.90 on over 0.3 million shares, Kegalla up Rs.6.70 to Rs.164.90 on 61,600 shares, Namunukula up Rs.6.20 to Rs.110 on nearly 0.2 million shares and Malwatte up Rs.4.2 to Rs.78 on 67,200 shares.
Other plantations stock including Agalawatte, Balangoda, Hapugastenna, Horana, Elpitiya, Kelani Valley and Uda Pussellawa were also among the gainers.
Brokers said that retail sentiment had improved with more activity seen across the board although volumes were sluggish. They noted the indices were down by 20 points at the beginning of the day but looked up before the market closed.
source - www.island.lk
Dialog drives bourse
Heavy trading in Sri Lanka’s leading mobile operator Dialog yesterday boosted the Colombo bourse in addition to preventing an overall dip.
The third biggest stock in terms of market capitalisation, Dialog saw 46.57 million of its shares trade for Rs. 558.6 million. It was subjected to three crossings of 42,201,000 shares at Rs. 12 while the share price increased by Rs. 0.40 (3.45%) and closed at Rs. 12.
“Early trading was on a red note with thin volumes until DIAL entered with three negotiated transactions to lift the indices up at the end,” said NDB Stockbrokers.
The ASPI gained marginal 5.7points to close at 6,646.9 points (+0.1%), whilst the Milanka Price Index also gained 11.0 to close at 7,074.8 points (+0.2%). The gain yesterday was the eight straight session and the Bourse has gained 4.5% since 12 December.
Plantations and Poultry sectors were also on the up.
“The last week of the year is on its way to end on a high note to cap a great year for equity,” noted NDB Stockbrokers.
The Telecommunications sector index increased by 3.28% and Bank, Finance & Insurance sector index decreased by 0.05%.
Three Acre Farms also contributed to the market turnover while the share price increased by Rs. 7.30 (9.43%) and closed at Rs. 85.10.
Two crossings were recorded for 168,000 shares of Commercial Bank at Rs. 248.50 and 100,000 shares of Sampath Bank at Rs. 259.
Asia Securities said Dialog saw foreign buying whilst Three Acre Farms proved to be popular amongst high net worth and retail participants which traded with almost 10% price gain whilst Commercial Bank grabbed the interest of the high net worth investors. Further e-Channelling and Bairaha Farms were mostly sought after by retailers.
Meanwhile, the rupee ended flat at 110.92/96 a dollar in sluggish trade, currency dealers said. It has risen 3.07 per cent so far this year.
source - www.ft.lk
The third biggest stock in terms of market capitalisation, Dialog saw 46.57 million of its shares trade for Rs. 558.6 million. It was subjected to three crossings of 42,201,000 shares at Rs. 12 while the share price increased by Rs. 0.40 (3.45%) and closed at Rs. 12.
“Early trading was on a red note with thin volumes until DIAL entered with three negotiated transactions to lift the indices up at the end,” said NDB Stockbrokers.
The ASPI gained marginal 5.7points to close at 6,646.9 points (+0.1%), whilst the Milanka Price Index also gained 11.0 to close at 7,074.8 points (+0.2%). The gain yesterday was the eight straight session and the Bourse has gained 4.5% since 12 December.
Plantations and Poultry sectors were also on the up.
“The last week of the year is on its way to end on a high note to cap a great year for equity,” noted NDB Stockbrokers.
The Telecommunications sector index increased by 3.28% and Bank, Finance & Insurance sector index decreased by 0.05%.
Three Acre Farms also contributed to the market turnover while the share price increased by Rs. 7.30 (9.43%) and closed at Rs. 85.10.
Two crossings were recorded for 168,000 shares of Commercial Bank at Rs. 248.50 and 100,000 shares of Sampath Bank at Rs. 259.
Asia Securities said Dialog saw foreign buying whilst Three Acre Farms proved to be popular amongst high net worth and retail participants which traded with almost 10% price gain whilst Commercial Bank grabbed the interest of the high net worth investors. Further e-Channelling and Bairaha Farms were mostly sought after by retailers.
Meanwhile, the rupee ended flat at 110.92/96 a dollar in sluggish trade, currency dealers said. It has risen 3.07 per cent so far this year.
source - www.ft.lk
Market meets for momentum
Key stakeholders of the Colombo stock market yesterday met for a brainstorming session on the current status of the bourse, to make it more vibrant given the recent lull in comparison to the bizarre bull run until October.
SEC said Chairperson Indrani Sugathadasa together with other members and officials of the commission and Chairman of the Colombo Stock Exchange (CSE) Nihal Fonseka met with the members of the stock-broking industry yesterday where several decisions were made.
One was to encourage stockbrokers to extend credit facilities to their clients through margin providers registered with the SEC.
The SEC had informed the stockbrokers that the directive that was issued earlier by the commission on extending credit to any investor beyond T+3 days, was not a measure taken by the commission to discourage investors, but was a critical step taken towards managing the inherent systemic risks in the capital market.
A list of the margin providers registered with the SEC has been published in the newspapers for the information of the public whilst it is also available on the website of the SEC (www.sec.gov.lk).
SEC said, having taken note of the concerns of the stock-broking industry, it permitted the stockbrokers to grant a brief grace period to buyers who are in default of settlement by T+3.
Accordingly, stockbrokers will be granted an additional two days to force-sell securities of buyers which are in default of settlement by T+3 in order to recover the monies owing to them by such defaulting client.
The market’s move towards margin providers is growing judging by the number of registered parties for this activity. As of last week there were 23 registered margin providers in comparison to 14 end of 2009.
Some analysts viewed yesterday’s multi-stakeholder dialogue as a “crisis meeting” as the market in a critical sense has remained lackluster especially when considering the extremely bullish run a few months ago.
The introduction of the price band as well as new rule to formalize credit arrangements were cited as two factors that has killed the market’s momentum.
However, others noted some of the measures taken by the SEC were warranted to cool an overheated market as well as discipline an extremely dangerous bull run which they described as “highly artificial” and loomed as a “bubble about to burst”. Some even alleged the bourse was akin to a casino.
Despite the arguments for and against, statistics show mixed results. In comparison to record high in October of 115% year to date gain, the bourse’s return as of yesterday had come down to 96%.
The latter however was boosted since Christmas week as the market is currently trading at an eight-week high. The more mature investors opine that the market needs further correction, a forecast shot down by those who insist that the market is over-regulated.
Analysts said that some of the new measures introduced by the SEC were to keep extreme risks out of the market. A case in point is requiring brokers to float separate entities and not even a subsidiary if they wish to provide margin facilities to clients.
Perhaps under pressure, SEC recently relaxed the deadline for clearing of previously offered credit by brokers to clients. They are now required to settle 50% by 31 March and the balance by June 2011.
The enforcement of the 15 market day (three weeks in normal basis) 10% up or down price band remains an eyesore among many investors. Some brokers and investors have been lobbying for a reduction in the effective period, whilst others have called for a total removal. SEC however remains firm over the price band as it hasn’t made any changes so far.
SEC takes Miramar Beach Hotels to court over Annual Report failure
The Securities and Exchange Commission (SEC) has recently instituted proceedings in the Magistrate’s Court, Fort, against Miramar Beach Hotels Plc and its directors for non submission of the Annual Reports of the Company for the financial years ended on 31 March 2008 and 31 March 2009.
The rules issued by the SEC makes it mandatory requirement for every company listed on a stock exchange to comply with the Listing Requirements of that exchange.
According to the Listing Rules of the Colombo Stock Exchange, all listed companies must release their annual reports within five months of the end of the financial year. If a listed company fails to do so, the securities of that listed company are transferred to the Default Board of the Exchange.
SEC said this rule had been introduced to enable investors to make well-informed decisions in respect of public listed companies. “All public listed companies on the CSE are under a contractual and legal duty to release the Annual Report of the company within the stipulated time period,” SEC said.
Sources said Miramar is the second listed company to be slapped with legal proceedings over non submission of annual reports. The first was Asia Capital, which later complied.
In the current default board, there are several companies on account of non submission of Annual Reports. For example, Hotel Developers (Lanka) Plc hadn’t submitted an annual report since 1990.
This appears to be an extraordinary case as the Company has some legal cover for non submission.
Vanik and Ferntea are two other companies in the Default Board for non submission of Annual Reports since 2006 and 2005 respectively, but both are under liquidation.
Lanka Cement, also on the Default Board for non submission of an Annual Report since 2005, is likely to face legal action by the SEC shortly.
source - www.ft.lk
SEC said Chairperson Indrani Sugathadasa together with other members and officials of the commission and Chairman of the Colombo Stock Exchange (CSE) Nihal Fonseka met with the members of the stock-broking industry yesterday where several decisions were made.
One was to encourage stockbrokers to extend credit facilities to their clients through margin providers registered with the SEC.
The SEC had informed the stockbrokers that the directive that was issued earlier by the commission on extending credit to any investor beyond T+3 days, was not a measure taken by the commission to discourage investors, but was a critical step taken towards managing the inherent systemic risks in the capital market.
A list of the margin providers registered with the SEC has been published in the newspapers for the information of the public whilst it is also available on the website of the SEC (www.sec.gov.lk).
SEC said, having taken note of the concerns of the stock-broking industry, it permitted the stockbrokers to grant a brief grace period to buyers who are in default of settlement by T+3.
Accordingly, stockbrokers will be granted an additional two days to force-sell securities of buyers which are in default of settlement by T+3 in order to recover the monies owing to them by such defaulting client.
The market’s move towards margin providers is growing judging by the number of registered parties for this activity. As of last week there were 23 registered margin providers in comparison to 14 end of 2009.
Some analysts viewed yesterday’s multi-stakeholder dialogue as a “crisis meeting” as the market in a critical sense has remained lackluster especially when considering the extremely bullish run a few months ago.
The introduction of the price band as well as new rule to formalize credit arrangements were cited as two factors that has killed the market’s momentum.
However, others noted some of the measures taken by the SEC were warranted to cool an overheated market as well as discipline an extremely dangerous bull run which they described as “highly artificial” and loomed as a “bubble about to burst”. Some even alleged the bourse was akin to a casino.
Despite the arguments for and against, statistics show mixed results. In comparison to record high in October of 115% year to date gain, the bourse’s return as of yesterday had come down to 96%.
The latter however was boosted since Christmas week as the market is currently trading at an eight-week high. The more mature investors opine that the market needs further correction, a forecast shot down by those who insist that the market is over-regulated.
Analysts said that some of the new measures introduced by the SEC were to keep extreme risks out of the market. A case in point is requiring brokers to float separate entities and not even a subsidiary if they wish to provide margin facilities to clients.
Perhaps under pressure, SEC recently relaxed the deadline for clearing of previously offered credit by brokers to clients. They are now required to settle 50% by 31 March and the balance by June 2011.
The enforcement of the 15 market day (three weeks in normal basis) 10% up or down price band remains an eyesore among many investors. Some brokers and investors have been lobbying for a reduction in the effective period, whilst others have called for a total removal. SEC however remains firm over the price band as it hasn’t made any changes so far.
SEC takes Miramar Beach Hotels to court over Annual Report failure
The Securities and Exchange Commission (SEC) has recently instituted proceedings in the Magistrate’s Court, Fort, against Miramar Beach Hotels Plc and its directors for non submission of the Annual Reports of the Company for the financial years ended on 31 March 2008 and 31 March 2009.
The rules issued by the SEC makes it mandatory requirement for every company listed on a stock exchange to comply with the Listing Requirements of that exchange.
According to the Listing Rules of the Colombo Stock Exchange, all listed companies must release their annual reports within five months of the end of the financial year. If a listed company fails to do so, the securities of that listed company are transferred to the Default Board of the Exchange.
SEC said this rule had been introduced to enable investors to make well-informed decisions in respect of public listed companies. “All public listed companies on the CSE are under a contractual and legal duty to release the Annual Report of the company within the stipulated time period,” SEC said.
Sources said Miramar is the second listed company to be slapped with legal proceedings over non submission of annual reports. The first was Asia Capital, which later complied.
In the current default board, there are several companies on account of non submission of Annual Reports. For example, Hotel Developers (Lanka) Plc hadn’t submitted an annual report since 1990.
This appears to be an extraordinary case as the Company has some legal cover for non submission.
Vanik and Ferntea are two other companies in the Default Board for non submission of Annual Reports since 2006 and 2005 respectively, but both are under liquidation.
Lanka Cement, also on the Default Board for non submission of an Annual Report since 2005, is likely to face legal action by the SEC shortly.
source - www.ft.lk
Over 5 billion rupees raised through IPOs this year
With bank credit to the private sector slow to pick up during the year, Sri Lankan companies have raised finances for expansion and retirement of debt amounting to over Rs. 5.3 billion through initial public offerings (IPOs) in 2010.
Around 10 companies have listed on the Colombo Stock Exchange this year; raising more than Rs. 5,342.9 million.
The Laugfs Gas IPO for Rs. 2.5 billion was the highest public offering while Ceylon Tea Brokers’ IPO for Rs. 28 million was the lowest.
Singer Finance’s IPO for Rs. 400 million established a record after it was oversubscribed by 135 times a few weeks ago. The record was previously held by Odel PLC, where its Rs. 250.5 million IPO was 63.8 times oversubscribed.
Apart from these IPOs, two financial institutions introduced their equity to the stock exchange. Sinhaputhra Finance made an equity introduction of 6,295,893 voting shares at Rs. 75 each and Citizens Development Bank introduced over 39.6 million shares at Rs. 15 each.
The Colombo Stock Exchange is one of the better performing exchanges in the global economy which is still in uncertainty.
Market capitalisation grew by 105.84 percent to Rs. 2,168.8 billion as at December 24, 2010 from Rs. 1053.6 billion a year ago.
During this period, the All Share Price Index grew by 99.38 percent to 6,512 points from 3,266 a year ago. The Milanka Price Index of more liquid stocks grew by 86.27 percent from 3,744 points a year ago to 6,974.
The government announced several proposals in the Budget 2011 to uplift the country’s capital market.
In order to encourage new listings in the Colombo Stock Exchange the government proposes to recognize expenditure related to initial public offerings (IPOs) as deductible expenditure for tax purposes subject to 1 percent of the value of the IPO.
Withholding tax on corporate debt securities will be treated on par with government securities.
Re-insurance commissions and claims from VAT would be exempted from Withholding tax to reduce the transaction cost of insurance. In order to promote unit trusts to mobilize savings the government proposes to exempt them from the Economic Service Charge.
Exchange control restrictions on foreigners and foreign funds investing in unit trusts will also be exempted.
Income derived by unit trusts from investments in listed debentures and equity is proposed to be exempted from income tax.
The government also proposed to increase the Share Transaction Levy from 0.2 percent to 0.3 percent, in the absence of a capital gains tax in the country.
source - www.island.lk
Around 10 companies have listed on the Colombo Stock Exchange this year; raising more than Rs. 5,342.9 million.
The Laugfs Gas IPO for Rs. 2.5 billion was the highest public offering while Ceylon Tea Brokers’ IPO for Rs. 28 million was the lowest.
Singer Finance’s IPO for Rs. 400 million established a record after it was oversubscribed by 135 times a few weeks ago. The record was previously held by Odel PLC, where its Rs. 250.5 million IPO was 63.8 times oversubscribed.
Apart from these IPOs, two financial institutions introduced their equity to the stock exchange. Sinhaputhra Finance made an equity introduction of 6,295,893 voting shares at Rs. 75 each and Citizens Development Bank introduced over 39.6 million shares at Rs. 15 each.
The Colombo Stock Exchange is one of the better performing exchanges in the global economy which is still in uncertainty.
Market capitalisation grew by 105.84 percent to Rs. 2,168.8 billion as at December 24, 2010 from Rs. 1053.6 billion a year ago.
During this period, the All Share Price Index grew by 99.38 percent to 6,512 points from 3,266 a year ago. The Milanka Price Index of more liquid stocks grew by 86.27 percent from 3,744 points a year ago to 6,974.
The government announced several proposals in the Budget 2011 to uplift the country’s capital market.
In order to encourage new listings in the Colombo Stock Exchange the government proposes to recognize expenditure related to initial public offerings (IPOs) as deductible expenditure for tax purposes subject to 1 percent of the value of the IPO.
Withholding tax on corporate debt securities will be treated on par with government securities.
Re-insurance commissions and claims from VAT would be exempted from Withholding tax to reduce the transaction cost of insurance. In order to promote unit trusts to mobilize savings the government proposes to exempt them from the Economic Service Charge.
Exchange control restrictions on foreigners and foreign funds investing in unit trusts will also be exempted.
Income derived by unit trusts from investments in listed debentures and equity is proposed to be exempted from income tax.
The government also proposed to increase the Share Transaction Levy from 0.2 percent to 0.3 percent, in the absence of a capital gains tax in the country.
source - www.island.lk
Wednesday, December 29, 2010
Sri Lanka shares end up 0.09-pct
Dec 29, 2010 (LBO) - Sri Lankan stocks closed higher Wednesday with institutions showing a high level of activity in trading, brokers said.
The All Share Price Index closed at 6,646.92, up 0.09 percent (5.84 points) while the more liquid Milanka index rose 0.16 percent (37.09 points) to close at 7,074.83, according to stock exchange provisional figures.
Turnover was 1.5 billion rupees.
"Interest was shown in the poultry sector while there was also some interest in the banking sector," Nikita R Tissera of SC Securities said.
Bairaha Farms closed at 290.20, up 19.90 and Three Acre Farms closed at 84.70, up 7.30 with 788,000 shares done.
Dialog Axiata stocks were heavily traded and it closed at 12.00, up 0.40 cents with three crossings of 26.4 million, 10 million and 5.7 million shares at 12.00 rupees.
Sampath Bank closed at 270.70, down 1.70 rupees while DFCC closed at 201.20, down 1.00 rupee.
source - www.lbo.lk
The All Share Price Index closed at 6,646.92, up 0.09 percent (5.84 points) while the more liquid Milanka index rose 0.16 percent (37.09 points) to close at 7,074.83, according to stock exchange provisional figures.
Turnover was 1.5 billion rupees.
"Interest was shown in the poultry sector while there was also some interest in the banking sector," Nikita R Tissera of SC Securities said.
Bairaha Farms closed at 290.20, up 19.90 and Three Acre Farms closed at 84.70, up 7.30 with 788,000 shares done.
Dialog Axiata stocks were heavily traded and it closed at 12.00, up 0.40 cents with three crossings of 26.4 million, 10 million and 5.7 million shares at 12.00 rupees.
Sampath Bank closed at 270.70, down 1.70 rupees while DFCC closed at 201.20, down 1.00 rupee.
source - www.lbo.lk
Sri Lanka Fitch confirms HDFC Bank at 'BBB+(lka)'
Dec 29, 2010 (LBO) - Fitch Ratings has confirmed the National Long-term rating of Sri Lanka's Housing Development Finance Corporation Bank (HDFC) at 'BBB+(lka)' with a stable outlook, a statement said.
The rating agency has also confirmed the 'BBB+(lka)' rating on the bank's outstanding 195 million rupee senior unsecured redeemable debentures.
"HDFC's ratings reflect its demonstrated ability to contain interest rate risk to an extent by re-pricing existing loans, despite the sizeable maturity mismatches between its assets and liabilities," the rating agency said.
The ratings also factor in the government of Sri Lanka's (GOSL) 51 percent ownership of the bank.
It also considered the bank's perceived importance to low- and middle-income housing, sizeable funds derived from the state and related entities, low ultimate credit risk of its housing loans, and inherent limitations in its current business model.
"The ratings could be upgraded if there is a sustained improvement in HDFC's maturity mismatches and sustained higher equity funding, as well as if it continues to re-price existing loans in a rising interest rate environment in a timely manner while maintaining healthy asset quality and profitability."
The opposite of these factors, Fitch said, would result in a rating downgrade.
HDFC's loan growth improved towards the end of 2010 helped by the low interest rate environment and improving credit demand.
Much of the growth stemmed from housing loans backed by borrowers' employee provident fund balances while other loans declined.
"EPF loans are more profitable for the bank, given that they require minimal appraisal and carry virtually no credit risk," Fitch said.
"However, over-reliance on EPF loans could increase pressure on the bank's liquidity, as arrears on such loans are refunded in full only once a year by the EPF."
HDFC expects to improve its competitive position in housing loans backed by mortgages over property to mitigate this, Fitch said.
"The bank's profitability improved in 2010 as net interest margin widened and credit costs eased in an improving economic climate, helped by focused recoveries."
Its return on assets (ROA) improved to an annualised 2.25 percent at the end of nine months, more in line with an average of 2.83 percent between 2000 and 2006, Fitch said.
"The long-term sustainability of ROA will depend upon HDFC's ability to reduce its asset-liability mismatches and keep credit controls in check over the medium-term," the rating agency said.
"This could prove challenging, in particular if much of the incremental growth is deposit-funded, unless market interest rates remain benign."
HDFC's capitalisation (equity/assets) improved to 12.00 percent at the end of nine months in the current financial year, but was still below an average of 16.76 percent between 2000 and 2006.
"In the absence of viable long-term fixed rate funds or re-finance borrowings to fund its housing loan portfolio, HDFC may require a larger equity cushion to reduce potential adverse effects that rising interest rates could pose to its credit profile."
HDFC was established as a building society in 1984, converted into a licensed specialised bank in 2003, and listed on the Colombo Stock Exchange in 2005.
HDFC group assets amounted to 15 billion rupees. The bank has a network of 27 branches, and employs over 400 staff.
source - www.lbo.lk
The rating agency has also confirmed the 'BBB+(lka)' rating on the bank's outstanding 195 million rupee senior unsecured redeemable debentures.
"HDFC's ratings reflect its demonstrated ability to contain interest rate risk to an extent by re-pricing existing loans, despite the sizeable maturity mismatches between its assets and liabilities," the rating agency said.
The ratings also factor in the government of Sri Lanka's (GOSL) 51 percent ownership of the bank.
It also considered the bank's perceived importance to low- and middle-income housing, sizeable funds derived from the state and related entities, low ultimate credit risk of its housing loans, and inherent limitations in its current business model.
"The ratings could be upgraded if there is a sustained improvement in HDFC's maturity mismatches and sustained higher equity funding, as well as if it continues to re-price existing loans in a rising interest rate environment in a timely manner while maintaining healthy asset quality and profitability."
The opposite of these factors, Fitch said, would result in a rating downgrade.
HDFC's loan growth improved towards the end of 2010 helped by the low interest rate environment and improving credit demand.
Much of the growth stemmed from housing loans backed by borrowers' employee provident fund balances while other loans declined.
"EPF loans are more profitable for the bank, given that they require minimal appraisal and carry virtually no credit risk," Fitch said.
"However, over-reliance on EPF loans could increase pressure on the bank's liquidity, as arrears on such loans are refunded in full only once a year by the EPF."
HDFC expects to improve its competitive position in housing loans backed by mortgages over property to mitigate this, Fitch said.
"The bank's profitability improved in 2010 as net interest margin widened and credit costs eased in an improving economic climate, helped by focused recoveries."
Its return on assets (ROA) improved to an annualised 2.25 percent at the end of nine months, more in line with an average of 2.83 percent between 2000 and 2006, Fitch said.
"The long-term sustainability of ROA will depend upon HDFC's ability to reduce its asset-liability mismatches and keep credit controls in check over the medium-term," the rating agency said.
"This could prove challenging, in particular if much of the incremental growth is deposit-funded, unless market interest rates remain benign."
HDFC's capitalisation (equity/assets) improved to 12.00 percent at the end of nine months in the current financial year, but was still below an average of 16.76 percent between 2000 and 2006.
"In the absence of viable long-term fixed rate funds or re-finance borrowings to fund its housing loan portfolio, HDFC may require a larger equity cushion to reduce potential adverse effects that rising interest rates could pose to its credit profile."
HDFC was established as a building society in 1984, converted into a licensed specialised bank in 2003, and listed on the Colombo Stock Exchange in 2005.
HDFC group assets amounted to 15 billion rupees. The bank has a network of 27 branches, and employs over 400 staff.
source - www.lbo.lk
Bourse succeeds to stay up as year-end nears
The Colombo stock market is succeeding to stay positive as the year end nears though yesterday’s gains were somewhat fragile.
The mere 0.3% gain however was good enough for CSE to bounce back to a near eight-week high, largely driven by retail buying. “The indices continued to trend higher on modest retail buying interest amid healthy activity levels,” John Keells Stock Brokers said. The ASPI gained by 19.58 points whilst the MPI rose sharper by 37 points or 0.5%. Turnover was Rs. 1.6 billion, higher than Monday, whilst foreigners were active though ending up as net sellers. The best performing sector was Trading (+3.21%) whilst the worst was Plantations (-1.75%)
“Indices continued to improve as profit-takers kept on reinvesting across the board. Moderate volumes of certain counters were traded amid foreign participation,” NDB Stockbrokers said.
Bank, Finance & Insurance and Manufacturing sectors were the highest contributors to the market turnover, while sector indices increased by 0.20% and 0.50% respectively.
HNB Bank (non-voting) made the highest contribution to the market with four crossings of 397,000 shares at Rs. 205 while the share price increased by Rs. 4.40 (2.15%) and closed at Rs. 209.40.
Distilleries also contributed to the market turnover although the share price decreased by Rs. 0.60 (0.35%) and closed at Rs. 171.
Three crossings were recorded for 250,000 shares of Commercial Bank at Rs. 261; 75,000 shares of HNB Bank at Rs. 400; and 100,000 shares of DFCC Bank at Rs. 202.
Reuters reported that market gained on hopes of better earnings in 2011. The ASPI’s gain to 6,641.08 points was its highest since 4 November. In 2010, Asia’s best performer has surged 96.2 per cent, with Indonesia, which rose 44.4 per cent, becoming a distant second.
A liquidity shortage, year-end settlements, and impending holidays have hit the island nation’s bourse, which has fallen 7.9 per cent from its record high hit on 4 October.
The bourse is trading at a forward price-to-earnings (P/E) ratio of 18.6, the highest among emerging markets, compared with 13.1 of Asian emerging markets and 12.1 global emerging markets, Thomson Reuters StarMine data showed.
The CSE’s 14-day relative strength index is at 63.9, towards the upper neutral limit of 70.
On Monday, as many as 88 million shares changed hands, as against five- and 30-day average of 33.2 million and 49.6 million, respectively. The 90-day average volume is 62.4 million.
Sri Lanka’s rupee rose to 110.93/95 a dollar from Monday’s 111.05/08 on inflows for a hotel investment and the Central Bank widening its dollar trading band by 10 cents to 110.85/111.45 from 110.90/111.50, currency dealers said. The local currency has risen 3.07 per cent so far this year.
Meanwhile Asian stock markets were mixed today with the Japanese market weighed by profit-taking while Chinese securities fretted over the possibility of further monetary tightening measures from Beijing. Nikkei fell 0.4%.
The New York Stock Exchange had its lowest full-day volume of the year as a snowstorm compounded what would have been a light holiday session. Dow (0.16%) fell for the first time in four days, hurt by a rate hike in China.
source - www.ft.lk
The mere 0.3% gain however was good enough for CSE to bounce back to a near eight-week high, largely driven by retail buying. “The indices continued to trend higher on modest retail buying interest amid healthy activity levels,” John Keells Stock Brokers said. The ASPI gained by 19.58 points whilst the MPI rose sharper by 37 points or 0.5%. Turnover was Rs. 1.6 billion, higher than Monday, whilst foreigners were active though ending up as net sellers. The best performing sector was Trading (+3.21%) whilst the worst was Plantations (-1.75%)
“Indices continued to improve as profit-takers kept on reinvesting across the board. Moderate volumes of certain counters were traded amid foreign participation,” NDB Stockbrokers said.
Bank, Finance & Insurance and Manufacturing sectors were the highest contributors to the market turnover, while sector indices increased by 0.20% and 0.50% respectively.
HNB Bank (non-voting) made the highest contribution to the market with four crossings of 397,000 shares at Rs. 205 while the share price increased by Rs. 4.40 (2.15%) and closed at Rs. 209.40.
Distilleries also contributed to the market turnover although the share price decreased by Rs. 0.60 (0.35%) and closed at Rs. 171.
Three crossings were recorded for 250,000 shares of Commercial Bank at Rs. 261; 75,000 shares of HNB Bank at Rs. 400; and 100,000 shares of DFCC Bank at Rs. 202.
Reuters reported that market gained on hopes of better earnings in 2011. The ASPI’s gain to 6,641.08 points was its highest since 4 November. In 2010, Asia’s best performer has surged 96.2 per cent, with Indonesia, which rose 44.4 per cent, becoming a distant second.
A liquidity shortage, year-end settlements, and impending holidays have hit the island nation’s bourse, which has fallen 7.9 per cent from its record high hit on 4 October.
The bourse is trading at a forward price-to-earnings (P/E) ratio of 18.6, the highest among emerging markets, compared with 13.1 of Asian emerging markets and 12.1 global emerging markets, Thomson Reuters StarMine data showed.
The CSE’s 14-day relative strength index is at 63.9, towards the upper neutral limit of 70.
On Monday, as many as 88 million shares changed hands, as against five- and 30-day average of 33.2 million and 49.6 million, respectively. The 90-day average volume is 62.4 million.
Sri Lanka’s rupee rose to 110.93/95 a dollar from Monday’s 111.05/08 on inflows for a hotel investment and the Central Bank widening its dollar trading band by 10 cents to 110.85/111.45 from 110.90/111.50, currency dealers said. The local currency has risen 3.07 per cent so far this year.
Meanwhile Asian stock markets were mixed today with the Japanese market weighed by profit-taking while Chinese securities fretted over the possibility of further monetary tightening measures from Beijing. Nikkei fell 0.4%.
The New York Stock Exchange had its lowest full-day volume of the year as a snowstorm compounded what would have been a light holiday session. Dow (0.16%) fell for the first time in four days, hurt by a rate hike in China.
source - www.ft.lk
Sri Lanka shares end up 0.3-pct
Dec 28, 2010 (LBO) - Sri Lankan stocks closed higher Tuesday with investors focusing on the banking sector, brokers said.
The All Share Price Index closed at 6,641.08, up 0.30 percent (19.57 points) while the more liquid Milanka index rose 0.53 percent (37.09 points) to close at 7,063.65, according to stock exchange provisional figures.
Turnover was 1.6 billion rupees.
Sampath Bank closed at 272.40, up 1.60 rupees while DFCC closed at 202.00, up 1.80 rupees.
Hatton National Bank non-voting shares closed at 209.40, up 4.40 rupees with over 850,000 shares done.
Heavily traded Distilleries Company stocks closed at 170.60, down 0.60 cents with over 887,000 shares done.
JKH closed at 302.20, down 0.80 cents.
Hotel Reefcomber, which announced a deal to build a beach resort, closed at 43.20, up 0.30 while Merchant Bank of Sri Lanka, whose chief executive was suspended for alleged misconduct, closed at 46.50, up 0.20 cents. (Ends)
source - www.lbo.lk
The All Share Price Index closed at 6,641.08, up 0.30 percent (19.57 points) while the more liquid Milanka index rose 0.53 percent (37.09 points) to close at 7,063.65, according to stock exchange provisional figures.
Turnover was 1.6 billion rupees.
Sampath Bank closed at 272.40, up 1.60 rupees while DFCC closed at 202.00, up 1.80 rupees.
Hatton National Bank non-voting shares closed at 209.40, up 4.40 rupees with over 850,000 shares done.
Heavily traded Distilleries Company stocks closed at 170.60, down 0.60 cents with over 887,000 shares done.
JKH closed at 302.20, down 0.80 cents.
Hotel Reefcomber, which announced a deal to build a beach resort, closed at 43.20, up 0.30 while Merchant Bank of Sri Lanka, whose chief executive was suspended for alleged misconduct, closed at 46.50, up 0.20 cents. (Ends)
source - www.lbo.lk
Sri Lanka Merchant Bank suspends chief executive
Dec 28, 2010 (LBO) - The Merchant Bank of Sri Lanka (MBSL) has suspended its chief executive officer for alleged misconduct, the bank said in a stock exchange filing.
MBSL's board of directors had decided to suspend the services of its chief executive A P G Karunathilake with effect from December 21, 2010, it said.
The suspension was "pending an inquiry into certain acts of alleged misconduct," the statement said without elaborating.
MBSL shares were trading at 47.40 rupees each, up 1.10, in mid-morning trade.
source - www.lbo.lk
MBSL's board of directors had decided to suspend the services of its chief executive A P G Karunathilake with effect from December 21, 2010, it said.
The suspension was "pending an inquiry into certain acts of alleged misconduct," the statement said without elaborating.
MBSL shares were trading at 47.40 rupees each, up 1.10, in mid-morning trade.
source - www.lbo.lk
Sri Lanka Hotel Reefcomber in deal to build resort
Dec 28, 2010 (LBO) - Sri Lanka's Hotel Reefcomber has struck a deal to build a four-star beach resort with water-front villas on a property it acquired for 67 million rupees, a stock exchange filing said.
Hotel Reefcomber has finalised the purchase of land called 'Santhoduwa' at Santhoduwa village in Akkaraipatu within the secretariat division and pradeshiya sabha (local council0 limits of Kalpitiya, it said.
The land was in three blocks of 12 acres, 25 acres and five acres.
The CSE filing said Hotel Reefcomber has also entered into a lease agreement with Asia Sports Management to lease 35 acres of the land for 99 years for a total lease rental of 55 million rupees.
The company aims to build a four-star resort with 28 water front villas which take advantage of the 700 metre beach frontage of the Santhoduwa-Kalpitiya land, it said.
source - www.lbo.lk
Hotel Reefcomber has finalised the purchase of land called 'Santhoduwa' at Santhoduwa village in Akkaraipatu within the secretariat division and pradeshiya sabha (local council0 limits of Kalpitiya, it said.
The land was in three blocks of 12 acres, 25 acres and five acres.
The CSE filing said Hotel Reefcomber has also entered into a lease agreement with Asia Sports Management to lease 35 acres of the land for 99 years for a total lease rental of 55 million rupees.
The company aims to build a four-star resort with 28 water front villas which take advantage of the 700 metre beach frontage of the Santhoduwa-Kalpitiya land, it said.
source - www.lbo.lk
Sri Lanka to get 7-star Shangri-La hotel
Dec 28, 2010 (LBO) - Hong Kong-based leisure group Shangri-La has signed a deal to acquire land to build a seven-star hotel in the Sri Lankan capital Colombo, the chairman of the tourism authority Nalaka Godahewa said.
Shangri-La signed the agreement Tuesday to acquire 10 acres of government property near the Galle Face green promenade, Godahewa told Vimasuma.com, our sister news website.
The army headquarters which is now located on the land, considered prime commercial property, is to be moved to another location in a Colombo suburb.
Godahewa said Shangri-La will invest about 500 million US dollars in the hotel project which will have almost 500 rooms.
Sri Lanka is experiencing a tourism boom, with arrivals up sharply, after the end of the island's 30-year ethnic war in 2009.
source - www.lbo.lk
Shangri-La signed the agreement Tuesday to acquire 10 acres of government property near the Galle Face green promenade, Godahewa told Vimasuma.com, our sister news website.
The army headquarters which is now located on the land, considered prime commercial property, is to be moved to another location in a Colombo suburb.
Godahewa said Shangri-La will invest about 500 million US dollars in the hotel project which will have almost 500 rooms.
Sri Lanka is experiencing a tourism boom, with arrivals up sharply, after the end of the island's 30-year ethnic war in 2009.
source - www.lbo.lk
MBSL suspends CEO, Reefcomber invests in Kalpitiya
The Colombo bourse continued to gain yesterday on a turnover of Rs.1.64 billion, up from the previous day’s Rs.1.11 billion, with both indices up – the All Share by 19.58 points (0.30%) and the Milanka by 37.09 points (0.53%) with 78 gainers slightly below 79 losers.
"Overall volumes were thin but turnover was relatively healthy in the context of the holiday period," a broker said.
Business volumes yesterday came mainly from HNB X, Distilleries, Touchwood, JKH and Commercial Bank with HNB X being the only gainer among these stocks.
The counter, with nearly 0.9 million shares traded between Rs.205 and Rs.210.40 gained Rs.4.40 to close at Rs.209.40 generating the day’s top turnover of Rs.174.6 million.
Distilleries lost 60 cents to close at Rs.171 on nearly 0.9 million shares done between Rs.170 and Rs.173 while Touchwood was down Rs.1.50 to Rs.28.50 on nearly 3.7 million shares done between Rs.27.30 and Rs.30.
Brokers said that there was retail play on HNB X and Touchwood, more of th latter, although some large HNB X (parcels of 100,000s) were done at a price of Rs.205.
"There were no crossings on Distilleries with all trades done on the market," a broker said. "Touchwood also saw lot of retail participation."
Hotel Reefcomber which announced the purchase/99-year lease of a large extent of waterfront land in Kalpitiya was up 30 cents on 0.4 million ordinary shares that closed at Rs. 43.20 while two of its warrants were up 30 and 20 cents respectively and one down 10 cents.
The company has invested Rs. 67. 2 mn. on the purchase of approx. 43 acres Kalpitiya land and a further Rs. 55 mn. to lease over 35 acres to build a 4-star resort with 28 water villas on the property commanding 700 meters of beachfront.
JKH was down 80 cents to Rs.302 on slightly over 0.3 million shares done between Rs.301.50 and Rs.303 while Commercial Bank lost 90 cents to close at Rs.261.90 on nearly 0.3 million shares traded between Rs.261 and Rs.263.
Dankotuwa Porcelain and Laugfs Gas also saw volume with Dankotuwa up Rs.3.70 to Rs.66.80 on nearly a million shares and Laugfs up 50 cents to Rs.27 on over 1.8 million shares.
The Merchant Bank of Sri Lanka (MBSL) said in a Stock Exchange filing that its CEO, Mr. A.P.G. Karunathillake, has been suspended from service by the board with effect from December 21 pending an inquiry into certain alleged acts of misconduct.
MBSL Chairmen M.R. Shah communicated this to the CSE in terms of Exchange’s corporate disclosures rules.
source - www.island.lk
"Overall volumes were thin but turnover was relatively healthy in the context of the holiday period," a broker said.
Business volumes yesterday came mainly from HNB X, Distilleries, Touchwood, JKH and Commercial Bank with HNB X being the only gainer among these stocks.
The counter, with nearly 0.9 million shares traded between Rs.205 and Rs.210.40 gained Rs.4.40 to close at Rs.209.40 generating the day’s top turnover of Rs.174.6 million.
Distilleries lost 60 cents to close at Rs.171 on nearly 0.9 million shares done between Rs.170 and Rs.173 while Touchwood was down Rs.1.50 to Rs.28.50 on nearly 3.7 million shares done between Rs.27.30 and Rs.30.
Brokers said that there was retail play on HNB X and Touchwood, more of th latter, although some large HNB X (parcels of 100,000s) were done at a price of Rs.205.
"There were no crossings on Distilleries with all trades done on the market," a broker said. "Touchwood also saw lot of retail participation."
Hotel Reefcomber which announced the purchase/99-year lease of a large extent of waterfront land in Kalpitiya was up 30 cents on 0.4 million ordinary shares that closed at Rs. 43.20 while two of its warrants were up 30 and 20 cents respectively and one down 10 cents.
The company has invested Rs. 67. 2 mn. on the purchase of approx. 43 acres Kalpitiya land and a further Rs. 55 mn. to lease over 35 acres to build a 4-star resort with 28 water villas on the property commanding 700 meters of beachfront.
JKH was down 80 cents to Rs.302 on slightly over 0.3 million shares done between Rs.301.50 and Rs.303 while Commercial Bank lost 90 cents to close at Rs.261.90 on nearly 0.3 million shares traded between Rs.261 and Rs.263.
Dankotuwa Porcelain and Laugfs Gas also saw volume with Dankotuwa up Rs.3.70 to Rs.66.80 on nearly a million shares and Laugfs up 50 cents to Rs.27 on over 1.8 million shares.
The Merchant Bank of Sri Lanka (MBSL) said in a Stock Exchange filing that its CEO, Mr. A.P.G. Karunathillake, has been suspended from service by the board with effect from December 21 pending an inquiry into certain alleged acts of misconduct.
MBSL Chairmen M.R. Shah communicated this to the CSE in terms of Exchange’s corporate disclosures rules.
source - www.island.lk
Tuesday, December 28, 2010
Why Mongolia and Sri Lanka are top of the stock markets
One exchange is the world's smallest, the other is in a country recovering from war, but they're both thriving
By James Moore
If you had invested in a tracker fund at the start of the year, which of the world's stock markets would have done the most for your pound? China, or somewhere nearby? How about one of the resource-rich economies of Latin America, growing fat on the commodities boom? The answer is none of the above (and you would have lost money in China, where the rather overheated stock market went into a sharp reverse). No, the winner of this year's stock-market crown is the Mongolian Stock Exchange in Ulan Bator, although resources are largely the reason for its victory. Opened in 1991, the world's smallest stock exchange by market capitalisation has gained a stunning 187 per cent so far this year (in sterling terms), and a still impressive 136 per cent when measured in the local currency, the tugrik.
However, actually investing a pound there is something of a challenge. According to data from Bloomberg, this year's best-performing stock market, to which you could more easily gain some exposure, has been that of Sri Lanka. Had you invested a pound in the Colombo market at the start of the year, your money would have turned into £2.07 at the close of last week. Investors in the local currency, the Sri Lankan rupee, saw their money increase by 92.3 per cent.
How has the island nation pulled it off? Well, an end to years of strife between the country's government and the independence-seeking Tamils in the north and east has helped. In May 2009 government forces crushed separatist rebels, bringing to a close four decades of ethnic tensions that the United Nations says may have cost up to 100,000 lives.
Although the aftermath of the war was messy, and the island still has many issues to deal with, the stock exchange in Colombo immediately benefited, rising 128 per cent in 2009 as investors poured in. And this year it put in a repeat performance. A booming IT sector – the London Stock Exchange (LSE) is a prominent investor, having bought the Sri Lankan technology company MilleniumIT in September last year – and its proximity to booming South-east Asian economies such as India and China, have provided a lot of the impetus, as have government privatisations and a rash of other flotations.
"We have between 60 and 75 initial public offerings lined up for next year. That includes five state entities and 35 finance companies," said Malik Cader, director-general of the Sri Lankan Securities and Exchange Commission, earlier this month. Xavier Rolet, the chief executive of the LSE, also talks enthusiastically about what he has bought. War is supposed to be good for business. Peace is much better, but a bit of democracy wouldn't go amiss; just think how high the country could fly then.
Other than Sri Lanka, the resource-rich economies of Latin America came heavily into play among this year's top-performing markets. Peru and Chile were stars, Argentina, one of the continent's two heavyweights alongside Brazil, also did well, as did Colombia. That has to be put in context: there is an element of bounce-back after the dark years of the recession. All the same, putting a pound into tracking these markets at the start of the year would have produced a more-than-healthy return.
Bill Dinning, head of strategy at Aegon Asset Management, says: "These markets are very much resource plays. We've seen a boom in the prices of industrial metals, and precious metals have also done very well. And there is some support for it still. The outlook for economic growth in 2011 has improved, in the US, in Germany and even here.
"I think we are still playing that game and that will sustain parts of the commodity complex that fuels the markets of these countries. The one thing to watch for is whether the energy complex joins in the bull market. Gasoline is up 10 per cent this year and crude oil has averaged the second-highest price since 2008. That would actually be a worry and a break on growth."
Two other stellar performers, the Thai and Indonesian stock markets, both play into the Asian economic boom, which has continued despite the weakness of Europe and the US, driven by China.
Thailand has not been without its challenges, not least the continuing political instability which led to protests earlier this year. But concerns that this could derail the economy's recovery have proved unfounded. Consumer spending has been on the rise, export growth is strong, and one of the factors that could hamper this – inflation – has remained relatively low.
Elections are expected to be held towards the end of next year, and a repeat of the recent unrest cannot be ruled out, but fund managers say Thailand's equity markets remain cheap and should continue to perform strongly throughout 2011. A word to the wise: peace is good for business. Just look at Sri Lanka.
Robert Quinn, the chief European equity strategist at S&P Equity Research, explains the attraction of the emerging markets, whose stock exchanges have done so well. He said: "We've seen a real acceleration of the global industrial cycle in the latter parts of this year. A lot of money has come out of equities in developed countries and towards emerging markets, which offer a better risk-return profile than other assets at the moment."
One of the important factors to consider when looking at markets is currency – if you look at how markets performed in terms of local currency, as opposed to how they would have performed if you had invested a pound, you get different results. The euro-denominated market in Estonia, for example, has performed exceptionally strongly: it is up 72 per cent in local currency terms. However, in sterling, it has produced a slightly less impressive 65 per cent rise. This is because of the euro's weakness against the pound (and just about every other currency). Elsewhere, sterling's weakness helps inflate returns.
Mr Quinn says: "As for the Baltic states such as Lithuania and Estonia, they took a lot of the adjustment in wages and public spending early, when compared to their counterparts in some of the other weaker Eurozone states on the periphery. Of course, Ireland took an early hit, too. The problem there was that it didn't sort out its banks."
Jerome Booth, head of research and co-founder of fund manager Ashmore Investment Management, says of the markets: "Emerging markets generally should be trading at a premium to the developed world. Inflation, not deflationary pressures, is the main risk, but it is controllable. You have very strongly growing economies without the downside risk of the developed world.
"South-south trade and investment has taken off," Mr Booth continues. "Central banks have started to buy each other's reserves so they are weaning themselves off the old system. There is vibrant growth in investing and demand. This is where you find the bulk of land, people, energy consumption and production. Not to invest in these places is bizarre, particularly when the big risks are at home."
source - http://www.independent.co.uk
By James Moore
If you had invested in a tracker fund at the start of the year, which of the world's stock markets would have done the most for your pound? China, or somewhere nearby? How about one of the resource-rich economies of Latin America, growing fat on the commodities boom? The answer is none of the above (and you would have lost money in China, where the rather overheated stock market went into a sharp reverse). No, the winner of this year's stock-market crown is the Mongolian Stock Exchange in Ulan Bator, although resources are largely the reason for its victory. Opened in 1991, the world's smallest stock exchange by market capitalisation has gained a stunning 187 per cent so far this year (in sterling terms), and a still impressive 136 per cent when measured in the local currency, the tugrik.
However, actually investing a pound there is something of a challenge. According to data from Bloomberg, this year's best-performing stock market, to which you could more easily gain some exposure, has been that of Sri Lanka. Had you invested a pound in the Colombo market at the start of the year, your money would have turned into £2.07 at the close of last week. Investors in the local currency, the Sri Lankan rupee, saw their money increase by 92.3 per cent.
How has the island nation pulled it off? Well, an end to years of strife between the country's government and the independence-seeking Tamils in the north and east has helped. In May 2009 government forces crushed separatist rebels, bringing to a close four decades of ethnic tensions that the United Nations says may have cost up to 100,000 lives.
Although the aftermath of the war was messy, and the island still has many issues to deal with, the stock exchange in Colombo immediately benefited, rising 128 per cent in 2009 as investors poured in. And this year it put in a repeat performance. A booming IT sector – the London Stock Exchange (LSE) is a prominent investor, having bought the Sri Lankan technology company MilleniumIT in September last year – and its proximity to booming South-east Asian economies such as India and China, have provided a lot of the impetus, as have government privatisations and a rash of other flotations.
"We have between 60 and 75 initial public offerings lined up for next year. That includes five state entities and 35 finance companies," said Malik Cader, director-general of the Sri Lankan Securities and Exchange Commission, earlier this month. Xavier Rolet, the chief executive of the LSE, also talks enthusiastically about what he has bought. War is supposed to be good for business. Peace is much better, but a bit of democracy wouldn't go amiss; just think how high the country could fly then.
Other than Sri Lanka, the resource-rich economies of Latin America came heavily into play among this year's top-performing markets. Peru and Chile were stars, Argentina, one of the continent's two heavyweights alongside Brazil, also did well, as did Colombia. That has to be put in context: there is an element of bounce-back after the dark years of the recession. All the same, putting a pound into tracking these markets at the start of the year would have produced a more-than-healthy return.
Bill Dinning, head of strategy at Aegon Asset Management, says: "These markets are very much resource plays. We've seen a boom in the prices of industrial metals, and precious metals have also done very well. And there is some support for it still. The outlook for economic growth in 2011 has improved, in the US, in Germany and even here.
"I think we are still playing that game and that will sustain parts of the commodity complex that fuels the markets of these countries. The one thing to watch for is whether the energy complex joins in the bull market. Gasoline is up 10 per cent this year and crude oil has averaged the second-highest price since 2008. That would actually be a worry and a break on growth."
Two other stellar performers, the Thai and Indonesian stock markets, both play into the Asian economic boom, which has continued despite the weakness of Europe and the US, driven by China.
Thailand has not been without its challenges, not least the continuing political instability which led to protests earlier this year. But concerns that this could derail the economy's recovery have proved unfounded. Consumer spending has been on the rise, export growth is strong, and one of the factors that could hamper this – inflation – has remained relatively low.
Elections are expected to be held towards the end of next year, and a repeat of the recent unrest cannot be ruled out, but fund managers say Thailand's equity markets remain cheap and should continue to perform strongly throughout 2011. A word to the wise: peace is good for business. Just look at Sri Lanka.
Robert Quinn, the chief European equity strategist at S&P Equity Research, explains the attraction of the emerging markets, whose stock exchanges have done so well. He said: "We've seen a real acceleration of the global industrial cycle in the latter parts of this year. A lot of money has come out of equities in developed countries and towards emerging markets, which offer a better risk-return profile than other assets at the moment."
One of the important factors to consider when looking at markets is currency – if you look at how markets performed in terms of local currency, as opposed to how they would have performed if you had invested a pound, you get different results. The euro-denominated market in Estonia, for example, has performed exceptionally strongly: it is up 72 per cent in local currency terms. However, in sterling, it has produced a slightly less impressive 65 per cent rise. This is because of the euro's weakness against the pound (and just about every other currency). Elsewhere, sterling's weakness helps inflate returns.
Mr Quinn says: "As for the Baltic states such as Lithuania and Estonia, they took a lot of the adjustment in wages and public spending early, when compared to their counterparts in some of the other weaker Eurozone states on the periphery. Of course, Ireland took an early hit, too. The problem there was that it didn't sort out its banks."
Jerome Booth, head of research and co-founder of fund manager Ashmore Investment Management, says of the markets: "Emerging markets generally should be trading at a premium to the developed world. Inflation, not deflationary pressures, is the main risk, but it is controllable. You have very strongly growing economies without the downside risk of the developed world.
"South-south trade and investment has taken off," Mr Booth continues. "Central banks have started to buy each other's reserves so they are weaning themselves off the old system. There is vibrant growth in investing and demand. This is where you find the bulk of land, people, energy consumption and production. Not to invest in these places is bizarre, particularly when the big risks are at home."
source - http://www.independent.co.uk
Big draw for Union Bank private placement
The private placement of Union Bank has triggered significant response with the issue closing yesterday.
Union Bank offered 12.5 million shares via the unique private placement incorporating a tender basis and a book building process. The minimum bid was Rs. 26 per share.
Sources said that the placement had received bids as high as Rs. 34 per share whilst the biggest application was at Rs. 30 per share. Previously 7.5 million shares were placed with a foreign institutional shareholder at Rs. 28 each, bringing the total offered via private placements to 20 million shares.
The private placement comes hot on the heels of Union Bank successfully completing a Rights Issue worth Rs. 250 million (10 million shares at Rs. 25 each) prior to Christmas.
These two issues along with an Initial Public Offering (IPO) slated for February are part of Rs. 1.1 billion fund raising exercise by Union Bank to boost its capital. The IPO will be priced at Rs. 25 per share. The Bank in a statement last week said the innovative fund raiser consisting of a Rights Issue, a Private Placement and a subsequent Initial Public Offering has received remarkable and an overwhelming level of attention from both local and foreign investors. The Rights Issue concluded on 2 December had been oversubscribed by four times. Via the IPO, Union Bank will offer 15 million shares.
Analysts state that this is a much sought after and a rare investment opportunity. The Bank is working with its advisors NDB Securities and Acuity on the proposed IPO. On completion of this multi-stage process, the Bank will fulfill all Central Bank requirements pertaining to capital adequacy until year 2015.
Anil Amarasuriya, Director/Chief Executive Officer of Union Bank in a statement last week said: “The over subscription of the Rights Issue highlights the confidence expressed by our existing shareholders.”
“We are entering an exciting phase, the country’s Per Capita Income is expected to double in five years and the banking industry is poised as a key growth sector thus, concurrently highlighting exciting future opportunities for Union Bank,” he added.
The Bank plans to raise in excess of 1.1 billion through the above funding methodologies and expects to support the implementation of the Bank’s ambitious expansion and consolidation programmes in the next couple of years. To this effect, we will be making further announcements on our Organic and Inorganic growth plans for the Bank he said.
Indubitably one of Sri Lanka’s fastest growing banks, Union Bank will soon be a force to reckon with in the Banking industry offering advanced banking solutions to both the Small and Medium Enterprise and Retail sectors in Sri Lanka. Amarasuriya stated that the Bank’s plans are on track, supported by sound financial standing, network expansion; value addition to its products, image building, and technology upgrades the Bank is well geared to becoming a power house in banking.
An indigenous bank, Union Bank has since it commenced operations in 1995, chalked up many successes, including the introduction of many firsts to the banking industry. The Bank currently has 20 branches including five in the North of Sri Lanka and is expected to open up to 10 new branches in the coming months.
source - www.ft.lk
Union Bank offered 12.5 million shares via the unique private placement incorporating a tender basis and a book building process. The minimum bid was Rs. 26 per share.
Sources said that the placement had received bids as high as Rs. 34 per share whilst the biggest application was at Rs. 30 per share. Previously 7.5 million shares were placed with a foreign institutional shareholder at Rs. 28 each, bringing the total offered via private placements to 20 million shares.
The private placement comes hot on the heels of Union Bank successfully completing a Rights Issue worth Rs. 250 million (10 million shares at Rs. 25 each) prior to Christmas.
These two issues along with an Initial Public Offering (IPO) slated for February are part of Rs. 1.1 billion fund raising exercise by Union Bank to boost its capital. The IPO will be priced at Rs. 25 per share. The Bank in a statement last week said the innovative fund raiser consisting of a Rights Issue, a Private Placement and a subsequent Initial Public Offering has received remarkable and an overwhelming level of attention from both local and foreign investors. The Rights Issue concluded on 2 December had been oversubscribed by four times. Via the IPO, Union Bank will offer 15 million shares.
Analysts state that this is a much sought after and a rare investment opportunity. The Bank is working with its advisors NDB Securities and Acuity on the proposed IPO. On completion of this multi-stage process, the Bank will fulfill all Central Bank requirements pertaining to capital adequacy until year 2015.
Anil Amarasuriya, Director/Chief Executive Officer of Union Bank in a statement last week said: “The over subscription of the Rights Issue highlights the confidence expressed by our existing shareholders.”
“We are entering an exciting phase, the country’s Per Capita Income is expected to double in five years and the banking industry is poised as a key growth sector thus, concurrently highlighting exciting future opportunities for Union Bank,” he added.
The Bank plans to raise in excess of 1.1 billion through the above funding methodologies and expects to support the implementation of the Bank’s ambitious expansion and consolidation programmes in the next couple of years. To this effect, we will be making further announcements on our Organic and Inorganic growth plans for the Bank he said.
Indubitably one of Sri Lanka’s fastest growing banks, Union Bank will soon be a force to reckon with in the Banking industry offering advanced banking solutions to both the Small and Medium Enterprise and Retail sectors in Sri Lanka. Amarasuriya stated that the Bank’s plans are on track, supported by sound financial standing, network expansion; value addition to its products, image building, and technology upgrades the Bank is well geared to becoming a power house in banking.
An indigenous bank, Union Bank has since it commenced operations in 1995, chalked up many successes, including the introduction of many firsts to the banking industry. The Bank currently has 20 branches including five in the North of Sri Lanka and is expected to open up to 10 new branches in the coming months.
source - www.ft.lk
John Keells Tea Market Report: Excellent demand for Low Growns
The top end of the Low Grown CTC PF1s was somewhat easier whilst others were firm to a little dearer. High and Medium types that were firm at the commencement declined a few rupees as the sale progressed.
The tea bag sector and Russia lent good support, whilst UK, Japan and Continental buyers too were active following quality.
The 3.3 mkgs of Low Growns on offer at the final sale of the year met with excellent demand. In the leafy category BOP1s led the way with an invoice of Sithaka BOP1 establishing an All Time Record Price of Rs.770 per kg. surpassing the previous best of Rs 740 established by the same tea factory in the previous week.
Top end of the OP1s sold around Rs 600 levels. Pekoes too met with excellent demand with prices appreciating as the sale progressed. OP and OPAs were mainly firm. In the small leaf category FBOP and FBOPF1s continued its bullish trend with prices appreciating a few Rupees.
Tippy varieties too appreciated in value.
In the absence of an auction in the final week of the year, it was evident that most buyers were looking to finalize the contracts in hand.
There was excellent demand from Russia, Iran, Iraq, whilst Dubai, Jordon, Saudi Arabia, Libya, Syria and other Middle Eastern countries also lent useful support.
Western Teas
Select Best BOPs shed Rs 10 to Rs 15, other good invoices declined Rs 10, Below Best sorts were firm to Rs 5 easier, plainer varieties declined Rs 5 to Rs 10. Select Best BOPF eased Rs. 10 to Rs 15, other good invoices shed Rs 10, Below Best sorts declined Rs 5 to Rs 10, plainer varieties were firm to Rs 5 dearer. Medium BOPs were firm. BOPF shed Rs 5 to Rs 10.
Nuwara Eliya Teas
BOPs declined Rs 20 to Rs 30, while the BOPF were firm to Rs 10 easier.
Uva Teas
BOPs declined Rs 10 to Rs 15, BOPF too shed Rs 15 to Rs 20 on average. Udapussellawa BOPs declined Rs 15 to Rs 20, BOPF shed Rs 10 to Rs 15 on average.
CTC Teas
Select Best Low Grown PF1s declined Rs 10 to Rs 15 whilst the others were firm to marginally dearer. BP1s gained Rs 15 to Rs 20. High and Medium PF1s shed Rs 5 to Rs 10 as the sale progressed. BP1s declined Rs 10 to Rs 15 on average.
Low Growns
Fair demand. Select Best OP1s eased Rs 10 to Rs 20 and more at times, Best types too were lower by a similar margin, Below Best and poor sorts were irregularly lower by Rs 5 to Rs 10. Select Best BOP1s appreciated Rs 10 to Rs 20, Best types were steady, however Below Best and poor sorts tended lower by Rs 5 to Rs 10. Select Best OPAs eased Rs 10 on average, the balance were firm to Rs 5 to Rs 10 lower.
Select Best OPs shed Rs 10 to Rs 20, Best types were firm on last levels, Below Best and poor sorts were irregularly lower by Rs 5 to Rs 10 Select Best Pekoes were firm to dearer, the Best along with the Below Best types were irregularly dearer by Rs 10 to Rs 15, flaky types declined Rs 5 to Rs 10.
Select Best Pekoe1s were irregularly lower by Rs 5 to Rs 10, however the Best types advanced sharply by Rs 10 to Rs 20, Below Best and poor sorts were irregularly dearer by Rs 5 to Rs 10.
Select Best and Best BOP and BOP.SP advanced Rs 5 per Kg., Below Best types were firm, poor types too were steady.
Select Best and Best FBOPs advanced Rs 10 to Rs 20, Below Best types gained Rs 10 to Rs 15. Poorer types gained up Rs 5. Select Best and Best FF1s advanced Rs 5 to Rs 10, Below Best and poor sorts were firm.
Select Best Tippy varieties met with good demand and advanced on last levels, Best types too gained above last, Below Best and poorer types advanced Rs 15 to Rs 30.
Off Grades
Select Best liquoring FNGS1s sold at firm levels, whilst the Best and the Below Best types appreciated Rs 5 to Rs 10, poorer sorts were dearer by Rs 10.
Select Best BMs were lower by Rs 10, Best and the Below Best types were irregularly dearer by Rs 10, poorer sorts appreciated Rs 10 and more at times.
Select Best BPs met with good demand whilst the poorer sorts depreciated by Rs 20 and more at times.
All Low Grown FNGS appreciated Rs 10. Select Best BOP1As were lower to last by Rs 10 to Rs 15, Best and Below Best too followed a similar trend easing by Rs 5 to Rs 10, Poorer sorts too were lower by Rs 5 to Rs 10 and more at times.
Dust
Select Best Dust1s were firm, others in the Best and Below Best category declined Rs 10 to Rs 15 while the poorer sorts declined further. Clean secondaries shed Rs 5 to Rs 10 while the balance advanced by a similar margin.
Best Low Grown Dust and Dust1s eased Rs 5 to Rs 10 while the balance were irregularly lower.
source - www.dailynews.lk
Market gains
The upward thrust of the indices were backed by all other sectors apart from Construction Engineering which was the only sector that moved down by 50.24 points against last week. Value of turnover decreased by 37 percent against last week’s Rs. 11.36 billion to close the week at Rs. 7.10 billion with a 14 percent decline in volumes traded against last week. Market capitalization recorded at Rs. 2.1 billion with 25 P/E Ratio and PBV multiples of 3.
The week’s highest turnover value was generated by the diversified sector at Rs. 2.6 billion accounting for 36.7 percent of the total turnover value, with a volume of 19.17 million shares or 8 percent of Turnover volume. JKH and Aitken Spence were the main contributors to this sector.
Highest turnover in terms of volume was from the Banking and Finance sector which accounted for 51.56 percent of total turnover volumes this week. Janashakthi and SMB Leasing were the main contributors to the Bank and Finance sector turnover volume. Manufacturing sector generated a Turnover volume of 37 million or 15.47 percent buoyed by activity in Piramal Glass and Grain Elevators.
JKH accounted for the highest contribution to the market turnover with Rs. 2.1 billion, accounting for 30 percent of total value of market turnover. JKH closed at Rs. 302.50. Bairaha Farms witnessed a turnover of Rs. 574 million with the scrip closing at Rs. 267.
Commercial Bank and Grain Elevators represented 5.22 percent and 5 percent of market turnover this week. S M B Leasing (voting) placed highest scrip traded during the week representing 21 percent of aggregate market volume. Piramal Glass and S M B Leasing (Non Voting) were active stocks in the market with 15.3 million and 8.3 million shares changing hands respectively.
The week saw several counters such as Bukit Darah and Carsons capitalization of reserves. Foreign activity levels were high this week with both buying and selling seeing improvements week on week.
With JKH being one of the counters which attracted their interest, foreigners remained net sellers once again, with total sales amounting to Rs. 1.77 billion as against the Rs. 1.53 billion recorded last week, an increase by 15 percent week on week. foreign buying was Rs. 1.15 billion this week as against last week’s Rs. 502 million, an increase of 122 percent from that recorded last week.
Confifi Hotel emerged as the week’s top gainer recording a increase of 26.9 percent on the scrip price which closed at Rs. 279.20. Coco Lanka (Non Voting) and Bairaha Farms reflected a northward momentum closing at Rs. 50.90 and Rs. 267.00 respectively. Colombo Investment Trust was the top loser of the week with a dip of 16.5 percent on the share price to close at Rs. 176 as against last week’s Rs. 210.80. Finlays Colombo and Tea Services were other losers, with the scrips closing at Rs. 175 and Rs. 700.10 respectively.
Point of view
The bourse’s trading volumes will continue to be relatively static next week although retail investors looking to pick up bargains in blue chips stocks will be seen active in the market.
source - www.dailynews.lk
CIC keen on increasing milk production
CIC Agri Businesses Managing Director and CEO Keerth B Kotagama said CIC is keen on enhancing liquid milk consumption and increasing the milk production in the country.He said with the acquisition of CIC Mahaweli Livestock and Dairies (Pvt) Ltd in the Eastern province last year, the company is producing 5,000 litres of fresh milk per day.
The company expects to produce 20,000 litres of fresh milk per day in three years. The company started producing yoghurt, curd and milk lollies for a few trial markets in the Eastern province and the company’s initiative was well received by the customers.
With the success in the trial markets CIC Agri Business is now planning on expanding the yoghurt business while introducing it to all Sri Lankan consumers by March 2011. The company also expects to re-brand the product with an investment of over Rs 30 million. “Our focus is mainly Sri Lanka as we want to help the country to be self-sufficient in milk. According to the demand that we will receive for yoghurt the company would gradually expand its business in value added products. Sri Lanka has a one billion-litre milk requirement at present. However, the country imports 80 percent of the milk requirement while spending over Rs 18 to 20 billion per year on imported milk powder,” Kotagama said.
“To cater to the high demand and achieve the targets we have to work along with the outgrowers as well. CIC Agri Business is closely working with the outgrowers. At present there are over 1,200 outgrowers and it will be increased to 3,000 in the near future. The company has generated direct job opportunities for people who are engaged in dairy production and have provided indirect opportunities in other areas too,” he said.
The company is keen on enhancing the milk production in Sri Lanka. By increasing the number of livestock plants and encouraging people that are engaged in the dairy farm industry Sri Lanka can save a large sum of foreign exchange and at the same time sustain the country’s demand for milk as well, Kotagama said.
source - www.dailynews.lk
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