June 30, 2011 (LBO) - Sri Lanka stocks closed weaker Thursday with heavy trading in Aitken Spence Hotel Holdings and Distilleries Company bolstering turnover, brokers said.
The main All Share Price Index closed at 6,825.94, down 0.76 percent (52.21 points) while the more liquid Milanka index fell 1.32 percent (84.29 points) to close at 6,301.02, according to stock exchange figures.
Turnover was 1.9 billion rupees.
Aitken Spence Hotel Holdings closed at 75.70, up 70 cents with almost 2.6 million shares traded, mostly in several private off-market deals at 75 rupees a share..
Distilleries Company closed at 179.80, down 20 cents with just over a million shares changing hands with a single private deal of 726,560 shares at 180.00 rupees each.
Orient Garments, which began trading on Wednesday, closed at 25.90, down two rupees.
source - www.lbo.lk
Thursday, June 30, 2011
Sri Lanka motor stocks lose speed
June 30, 2011 (LBO) - Sri Lanka's motor sector companies' profitability has fallen after the reversal of some import tax cuts that caused a profit surge, although vehicle demand remains strong with rising incomes and economic growth, a report said.
Motor sector companies reported the highest growth in net profit for the last couple of quarters after the government slashed import duties last year, Lanka Securities said in a report on corporate earnings for the January - March 2011 quarter.
. Net profit growth in the sector was 132.5 percent in the quarter from a year ago owing to the tax cuts but profits were down compared with the previous quarter.
. "The sector demonstrated a monstrous growth in profitability - by 132.5 percent year-on-year to 1,119.8 million rupees - which can be attributable to the overwhelming demand for vehicles hyped by the reduction in vehicle imports duties," it said.
. Nevertheless, the sector saw a 13.4 percent quarter-on-quarter drop in earnings - a sign of the fading effects of the tax revision, the report said, referring to the re-imposition of some import duties by the government.
. "Hence, we are not anticipating abnormal profit growth in the forthcoming periods that was seen in the last quarter," Lanka Securities said.
. "But with the prevailing economic conditions in the country and growing demand along with per capita income we anticipate sustainable growth in the companies in the sector."
.
Sri Lanka's economic growth has begun to accelerate with the end of its 30-year ethnic war in 2009 with vehicle imports remaining high.
source - www.lbo.lk
Motor sector companies reported the highest growth in net profit for the last couple of quarters after the government slashed import duties last year, Lanka Securities said in a report on corporate earnings for the January - March 2011 quarter.
. Net profit growth in the sector was 132.5 percent in the quarter from a year ago owing to the tax cuts but profits were down compared with the previous quarter.
. "The sector demonstrated a monstrous growth in profitability - by 132.5 percent year-on-year to 1,119.8 million rupees - which can be attributable to the overwhelming demand for vehicles hyped by the reduction in vehicle imports duties," it said.
. Nevertheless, the sector saw a 13.4 percent quarter-on-quarter drop in earnings - a sign of the fading effects of the tax revision, the report said, referring to the re-imposition of some import duties by the government.
. "Hence, we are not anticipating abnormal profit growth in the forthcoming periods that was seen in the last quarter," Lanka Securities said.
. "But with the prevailing economic conditions in the country and growing demand along with per capita income we anticipate sustainable growth in the companies in the sector."
.
Sri Lanka's economic growth has begun to accelerate with the end of its 30-year ethnic war in 2009 with vehicle imports remaining high.
source - www.lbo.lk
Sri Lanka Finco cuts stake in newly listed apparel firm
June 30, 2011 (LBO) - Sri Lanka's Finco group has reduced its stake in Orient Garments, a newly-listed apparel subsidiary, when it began trading Wednesday, a stock exchange filing said.
Finco Holdings, which held 80.98 percent of Orient Garments, sold 10,983,400 shares of its holding constituting 20 percent of the apparel exporter's issued capital at an average price of 28.07 rupees a share.
Orient Garments shot up 21.30 percent or 4.90 rupees to close at 27.90 rupees on its trading debut Wednesday, from its reference price of 23 at which a stake had been sold in a private placement earlier.
Altogether 15 million shares changed hands Wednesday, hitting a high of 40 rupees and a low of 26.50 during the day.
A 16.4 percent stake (nine million shares) were bought by high-net-worth investor T Senthilverl at an average price of 28.01 rupees a share, a stock exchange filing said.
source - www.lbo.lk
Finco Holdings, which held 80.98 percent of Orient Garments, sold 10,983,400 shares of its holding constituting 20 percent of the apparel exporter's issued capital at an average price of 28.07 rupees a share.
Orient Garments shot up 21.30 percent or 4.90 rupees to close at 27.90 rupees on its trading debut Wednesday, from its reference price of 23 at which a stake had been sold in a private placement earlier.
Altogether 15 million shares changed hands Wednesday, hitting a high of 40 rupees and a low of 26.50 during the day.
A 16.4 percent stake (nine million shares) were bought by high-net-worth investor T Senthilverl at an average price of 28.01 rupees a share, a stock exchange filing said.
source - www.lbo.lk
DFCC Vardhana Bank to raise Rs. 1bn through debt issue
Fitch Ratings Lanka has assigned DFCC Vardhana Bank Limited’s (DVB) proposed subordinated debentures of up to Rs. 1billion a National rating of ‘A+(lka)’ and has simultaneously affirmed DVB’s National Long-Term rating at ‘AA-(lka)’ with a ‘Stable Outlook’, the ratings agency announced Wednesday.
"The proposed debt issue has tenures ranging from five to seven years, and will have both fixed and floating coupon rates. Capital will be re-paid on maturity. The proposed debenture will be utilised to finance loan growth and will also help strengthen the bank’s tier 2 capital. It is expected to be listed on the Colombo Stock Exchange, and is DVB’s initial step in fulfilling the regulatory listing requirements for licensed commercial banks (LCB)," Fitch said.
"The ratings reflect Fitch’s expectation that support would be forthcoming from its parent, DFCC Bank (DFCC; ‘AA(lka)’/Stable), should it be required. DVB is almost fully owned by DFCC, with the latter increasing its stake to 99.01% in June 2011 (end-2010: 95.58%) via a rights issue; this will increase DVB’s capital base by LKR1.1bn. It accounted for 33% of the DFCC group’s assets at end-March 2011, and plays an important role in expanding the group’s product offering. In addition to the common franchise shared by both banks, the operations of the two are closely linked with the integration of key back-office and treasury functions, as well as shared personnel and inputs on key decision-making committees.
"DVB’s rating is linked to that of DFCC and contingent on the support assumed to be available from the parent. Therefore, any changes to the implied support from DFCC or the strategic importance of DVB to its parent could trigger a rating action. DVB is an LCB. DFCC is a licensed specialised bank and Sri Lanka’s only development finance institution," Fitch said.
source - www.island.lk
"The proposed debt issue has tenures ranging from five to seven years, and will have both fixed and floating coupon rates. Capital will be re-paid on maturity. The proposed debenture will be utilised to finance loan growth and will also help strengthen the bank’s tier 2 capital. It is expected to be listed on the Colombo Stock Exchange, and is DVB’s initial step in fulfilling the regulatory listing requirements for licensed commercial banks (LCB)," Fitch said.
"The ratings reflect Fitch’s expectation that support would be forthcoming from its parent, DFCC Bank (DFCC; ‘AA(lka)’/Stable), should it be required. DVB is almost fully owned by DFCC, with the latter increasing its stake to 99.01% in June 2011 (end-2010: 95.58%) via a rights issue; this will increase DVB’s capital base by LKR1.1bn. It accounted for 33% of the DFCC group’s assets at end-March 2011, and plays an important role in expanding the group’s product offering. In addition to the common franchise shared by both banks, the operations of the two are closely linked with the integration of key back-office and treasury functions, as well as shared personnel and inputs on key decision-making committees.
"DVB’s rating is linked to that of DFCC and contingent on the support assumed to be available from the parent. Therefore, any changes to the implied support from DFCC or the strategic importance of DVB to its parent could trigger a rating action. DVB is an LCB. DFCC is a licensed specialised bank and Sri Lanka’s only development finance institution," Fitch said.
source - www.island.lk
Wednesday, June 29, 2011
Bangladesh allows 'black money' in stock exchange
DHAKA, June 29, 2011 (AFP) - Bangladesh will allow billions of dollars of untaxed money to be invested in shares under a new tax amnesty designed to prop up the volatile Dhaka Stock Exchange, an official said Wednesday.
The new legislation, which was approved by parliament late Tuesday, offers an amnesty on so-called "black money" if it is invested in local stocks and shares, tax authority chairman Nasiruddin Ahmed Chowdhury said.
"Undeclared money can be invested in stocks on the payment of a 10 percent tax on the investment," he told AFP, adding that no questions would be asked about the source of the undeclared income.
Tax evasion is widespread in Bangladesh, with a new study by the finance ministry finding that undeclared income or "black money" could account for up to 80 percent of Gross Domestic Product -- some $110 billion.
The new amnesty is designed to attract some of that cash into the Dhaka Stock Exchange, where the benchmark DGEN index has lost some 45 percent of its value since hitting record highs in early December.
"Given the volatility in the stock market, it needs more incentives from the government," Finance Minister A.M.A. Muhith said as parliament approved the new measures.
In recent years, the government has offered tax evaders a string of amnesties to encourage them to declare their money as it seeks to boost the state's income from revenue collection.
Experts have criticised the amnesties, saying they are short term solutions that have not worked in the past.
"This new amnesty will give some short term boost to the stock exchange but it is not a permanent solution to the problems on the Dhaka Exchange," said Mahmud Osman Imam, finance professor at Dhaka University.
Bangladesh is among the world's most corrupt and impoverished countries. Only an estimated one million of its 150 million population pay any taxes.
source - www.lbo.lk
The new legislation, which was approved by parliament late Tuesday, offers an amnesty on so-called "black money" if it is invested in local stocks and shares, tax authority chairman Nasiruddin Ahmed Chowdhury said.
"Undeclared money can be invested in stocks on the payment of a 10 percent tax on the investment," he told AFP, adding that no questions would be asked about the source of the undeclared income.
Tax evasion is widespread in Bangladesh, with a new study by the finance ministry finding that undeclared income or "black money" could account for up to 80 percent of Gross Domestic Product -- some $110 billion.
The new amnesty is designed to attract some of that cash into the Dhaka Stock Exchange, where the benchmark DGEN index has lost some 45 percent of its value since hitting record highs in early December.
"Given the volatility in the stock market, it needs more incentives from the government," Finance Minister A.M.A. Muhith said as parliament approved the new measures.
In recent years, the government has offered tax evaders a string of amnesties to encourage them to declare their money as it seeks to boost the state's income from revenue collection.
Experts have criticised the amnesties, saying they are short term solutions that have not worked in the past.
"This new amnesty will give some short term boost to the stock exchange but it is not a permanent solution to the problems on the Dhaka Exchange," said Mahmud Osman Imam, finance professor at Dhaka University.
Bangladesh is among the world's most corrupt and impoverished countries. Only an estimated one million of its 150 million population pay any taxes.
source - www.lbo.lk
Sri Lanka stocks close 0.22-pct up
June 29, 2011 (LBO) - Sri Lanka stocks ended higher Wednesday with Orient Garments, the first apparel exporter to list, which opened trading, the most actively traded share and the day's fourth highest gainer, brokers said.
The main All Share Price Index closed at 6,878.15, up 0.22 percent (15.32 points) while the more liquid Milanka index fell 0.16 percent (10.47 points) to close at 6,385.31, according to stock exchange figures.
Turnover was 2.9 billion rupees.
Orient Garments, part of the Finco group, opened at 35 rupees, above its refence price of 23 at which a stake had been sold in a private placement earlier.
It closed at 27.90 rupees, up 4.90 rupees or 21.30 percent with 15 million shares changing hands, having hit a high of 40 rupees and a low of 26.50 during the day.
Stock market analysts said 10.9 million shares were sold by a single seller, believed to be one of the promoters in early trade with a 5.5 million block in one transaction at 28 rupees a share.
There were 20 crossings or privately negotiated off-market deals.
Brokers said 3,158,5000 shares of Aitken Spence changed hands in eight crossings at 133 rupees a share. The stock closed at 136.50 rupees, up 1.90.
Brokers said 2,575,337 shares of Aitken Spence Hotel Holdings changed hands at 75 rupees each in three crossings. The stock closed unchanged at 75 rupees after rising to 76.50 during the day.
source - www.lbo.lk
The main All Share Price Index closed at 6,878.15, up 0.22 percent (15.32 points) while the more liquid Milanka index fell 0.16 percent (10.47 points) to close at 6,385.31, according to stock exchange figures.
Turnover was 2.9 billion rupees.
Orient Garments, part of the Finco group, opened at 35 rupees, above its refence price of 23 at which a stake had been sold in a private placement earlier.
It closed at 27.90 rupees, up 4.90 rupees or 21.30 percent with 15 million shares changing hands, having hit a high of 40 rupees and a low of 26.50 during the day.
Stock market analysts said 10.9 million shares were sold by a single seller, believed to be one of the promoters in early trade with a 5.5 million block in one transaction at 28 rupees a share.
There were 20 crossings or privately negotiated off-market deals.
Brokers said 3,158,5000 shares of Aitken Spence changed hands in eight crossings at 133 rupees a share. The stock closed at 136.50 rupees, up 1.90.
Brokers said 2,575,337 shares of Aitken Spence Hotel Holdings changed hands at 75 rupees each in three crossings. The stock closed unchanged at 75 rupees after rising to 76.50 during the day.
source - www.lbo.lk
Sri Lanka DFCC Vardhana sub debt rated 'A+(lka)'
June 29, 2011 (LBO) - Fitch Ratings Lanka has assigned DFCC Vardhana Bank's (DVB) proposed subordinated debentures of up to a billion rupees a national rating of 'A+(lka)'.
The agency has simultaneously confirmed DVB's National Long-Term rating at 'AA-(lka)' with a stable outlook, a statement said.
The proposed debt issue has tenures ranging from five to seven years, and will have both fixed and floating coupon rates. Capital will be re-paid on maturity.
The proposed debenture will be used to finance loan growth and will also help strengthen the bank's tier 2 capital.
It is expected to be listed on the Colombo Stock Exchange, and is DVB's initial step in fulfilling the regulatory listing requirements for licensed commercial banks.
The ratings reflect Fitch's expectation that support would be forthcoming from its parent, DFCC Bank which is rated 'AA(lka)', should it be required, Fitch said.
DVB is almost fully owned by DFCC, with the latter increasing its stake to 99.01 percent in June 2011 via a rights issue which will increase DVB's capital base by 1.1 billion rupees.
It accounted for 33 percent of the DFCC group's assets at end-March 2011, and plays an important role in expanding the group's product offering, Fitch said.
In addition to the common franchise shared by both banks, the operations of the two are closely linked with the integration of key back-office and treasury functions, as well as shared personnel and inputs on key decision-making committees.
"DVB's rating is linked to that of DFCC and contingent on the support assumed to be available from the parent," Fitch said.
"Therefore, any changes to the implied support from DFCC or the strategic importance of DVB to its parent could trigger a rating action."
DVB is an LCB. DFCC is a licensed specialised bank and Sri Lanka's only development finance institution.
source - www.lbo.lk
The agency has simultaneously confirmed DVB's National Long-Term rating at 'AA-(lka)' with a stable outlook, a statement said.
The proposed debt issue has tenures ranging from five to seven years, and will have both fixed and floating coupon rates. Capital will be re-paid on maturity.
The proposed debenture will be used to finance loan growth and will also help strengthen the bank's tier 2 capital.
It is expected to be listed on the Colombo Stock Exchange, and is DVB's initial step in fulfilling the regulatory listing requirements for licensed commercial banks.
The ratings reflect Fitch's expectation that support would be forthcoming from its parent, DFCC Bank which is rated 'AA(lka)', should it be required, Fitch said.
DVB is almost fully owned by DFCC, with the latter increasing its stake to 99.01 percent in June 2011 via a rights issue which will increase DVB's capital base by 1.1 billion rupees.
It accounted for 33 percent of the DFCC group's assets at end-March 2011, and plays an important role in expanding the group's product offering, Fitch said.
In addition to the common franchise shared by both banks, the operations of the two are closely linked with the integration of key back-office and treasury functions, as well as shared personnel and inputs on key decision-making committees.
"DVB's rating is linked to that of DFCC and contingent on the support assumed to be available from the parent," Fitch said.
"Therefore, any changes to the implied support from DFCC or the strategic importance of DVB to its parent could trigger a rating action."
DVB is an LCB. DFCC is a licensed specialised bank and Sri Lanka's only development finance institution.
source - www.lbo.lk
Sri Lanka Carson to expand pubs chain
June 29, 2011 (LBO) - Sri Lanka's Carson Cumberbatch group plans to expand its network of retail outlets and pubs as growing disposable incomes and a tourism revival increases beer consumption.
Ceylon Brewery, a subsidiary of the conglomerate which sells under the Lion brand, has set up a fully-owned unit called CBL Retailers which runs wine shops and a chain of pubs named 'Machang' (local slang for mate).
The move was part of a downstream shift to reach consumers, the company said in its annual report to shareholders.
The Carson group brewery business did well in the financial year ending March 31, 2011 with the end of the island's 30-year ethnic war enabling distribution in the former war zone and consumption growing.
"Access to the Northern and Eastern markets grew, given the ability to distribute products freely in those areas, while higher per capita consumption was recorded from the more established regions, evidence of growing disposable incomes," the report said.
The firm said it sees the growth in tourism as a "major new force" that will enhance sales volumes, with tourist arrivals up 46 percent in 2010, and expectations luring a million tourists within the next two years.
"These trends support our strategy of creating more retail reach through our own outlets and the franchised pubs branded 'Machang' which we are in the process of creating across all important regional centres in our quest to get closer to the customer," the report said.
source - www.lbo.lk
Ceylon Brewery, a subsidiary of the conglomerate which sells under the Lion brand, has set up a fully-owned unit called CBL Retailers which runs wine shops and a chain of pubs named 'Machang' (local slang for mate).
The move was part of a downstream shift to reach consumers, the company said in its annual report to shareholders.
The Carson group brewery business did well in the financial year ending March 31, 2011 with the end of the island's 30-year ethnic war enabling distribution in the former war zone and consumption growing.
"Access to the Northern and Eastern markets grew, given the ability to distribute products freely in those areas, while higher per capita consumption was recorded from the more established regions, evidence of growing disposable incomes," the report said.
The firm said it sees the growth in tourism as a "major new force" that will enhance sales volumes, with tourist arrivals up 46 percent in 2010, and expectations luring a million tourists within the next two years.
"These trends support our strategy of creating more retail reach through our own outlets and the franchised pubs branded 'Machang' which we are in the process of creating across all important regional centres in our quest to get closer to the customer," the report said.
source - www.lbo.lk
Sri Lanka apparel stock opens trading
June 29, 2011 (LBO) - Sri Lanka's Orient Garments, a company listed by a process of introduction without an offer for subscription started trading above its reference price of 23 rupees at which an stock had been private placed earlier.
The stock opened at 35 rupees, peaked at 40 rupees, before settling at around 30 rupees in early trade, brokers said.
The firm has is the first apparel factory to be listed on the market. Apparels are Sri Lanka's top industrial export.
The firm's reference price, based on historical valuations was at a discount to the market, but as a new industry to the public market, investors do not yet have other stocks to make direct comparisons.
source - www.lbo.lk
The stock opened at 35 rupees, peaked at 40 rupees, before settling at around 30 rupees in early trade, brokers said.
The firm has is the first apparel factory to be listed on the market. Apparels are Sri Lanka's top industrial export.
The firm's reference price, based on historical valuations was at a discount to the market, but as a new industry to the public market, investors do not yet have other stocks to make direct comparisons.
source - www.lbo.lk
EPF active in sluggish bourse
■ Buys 2% of Central Finance, one million Aitken Spence shares
The Employees Provident Fund (EPF) is active in the Colombo stock market amidst bearish sentiments, picking up strategic blocks of select companies.
Yesterday EPF is believed to have picked up a majority of Central Finance shares whilst on Monday it bought 1.14 million Aitken Spence and Company shares.
Central Finance saw around 450,000 of its shares trade for Rs. 628 million, accounting for the highest turnover for the day. It peaked to a high of Rs. 1,420 before closing at Rs. 1,400, up by Rs. 9.40.
The volume traded amount to a 2.2% stake of Central Finance, whilst sellers included individual and institutional investors. Perpetual Capital of Arjun Aloysius fame holds an 11% stake in Central Finance.
On Monday EPF bought 1.14 million Spence shares, of which one million was done at Rs. 135 per share. As at 31 March 2011, EPF’s stake in Spence was 4.17%, but it had picked up few more blocks later on. Yesterday’s quantity was a mere 0.3% stake.
Renuka Consultants had also picked up one million shares of Spence on Monday. Sellers were Carson Cumberbatch Group firms Ceylon Guardian Investment and Ceylon Investments.
Deals on 2.237 million shares of Spence produced the highest turnover of Rs. 302 million on Tuesday.
It was the first time in recent weeks that EPF had picked up Spence shares, whereas of late it had been aggressively collecting available quantities of subsidiary Aitken Spence Hotel Holdings. The previous major block bought was one million shares for Rs. 78 million early this month on top of one million in May. As at mid-June, EPF’s stake in Spence Hotel Holdings was over 6%.
source - www.ft.lk
The Employees Provident Fund (EPF) is active in the Colombo stock market amidst bearish sentiments, picking up strategic blocks of select companies.
Yesterday EPF is believed to have picked up a majority of Central Finance shares whilst on Monday it bought 1.14 million Aitken Spence and Company shares.
Central Finance saw around 450,000 of its shares trade for Rs. 628 million, accounting for the highest turnover for the day. It peaked to a high of Rs. 1,420 before closing at Rs. 1,400, up by Rs. 9.40.
The volume traded amount to a 2.2% stake of Central Finance, whilst sellers included individual and institutional investors. Perpetual Capital of Arjun Aloysius fame holds an 11% stake in Central Finance.
On Monday EPF bought 1.14 million Spence shares, of which one million was done at Rs. 135 per share. As at 31 March 2011, EPF’s stake in Spence was 4.17%, but it had picked up few more blocks later on. Yesterday’s quantity was a mere 0.3% stake.
Renuka Consultants had also picked up one million shares of Spence on Monday. Sellers were Carson Cumberbatch Group firms Ceylon Guardian Investment and Ceylon Investments.
Deals on 2.237 million shares of Spence produced the highest turnover of Rs. 302 million on Tuesday.
It was the first time in recent weeks that EPF had picked up Spence shares, whereas of late it had been aggressively collecting available quantities of subsidiary Aitken Spence Hotel Holdings. The previous major block bought was one million shares for Rs. 78 million early this month on top of one million in May. As at mid-June, EPF’s stake in Spence Hotel Holdings was over 6%.
source - www.ft.lk
Asia Wealth upbeat on Laugfs future earnings
Asia Wealth Management Ltd. is upbeat on future earnings of Laugfs Gas Ltd., on the back of improved performance in financial year ended on 31 March 2011.
In an earnings research report, Asia said Laugfs recorded an impressive gain of 90% for cumulative four quarters of FY11, registering a net earnings of Rs. 1,003 m. It recorded a revenue of Rs. 7,303.9 m for cumulative 4QFY11, which is a 31% increase, relative to the previous year.
The 4QFY11 depicts 27% growth in top-line to reach Rs. 1,983.5 m, which was majorly owing to strong demand for LP gas during the period. Since the company plays a significant role in the industrial bulk gas segment, growth in the leisure and manufacturing industry supported the improvement in top line.
“Forecasted FY12E earnings would remain at Rs. 1,183.3 m whilst we expect FY13E earnings to move up to Rs. 1,602.7 m supported by accelerated growth prospects, mainly in the domestic LP gas segment. Meanwhile, we anticipate the top line to reach Rs. 9,926.3 m in FY11E and Rs. 11,790 m in FY12E respectively,” Asia Wealth Management added.
source - www.ft.lk
In an earnings research report, Asia said Laugfs recorded an impressive gain of 90% for cumulative four quarters of FY11, registering a net earnings of Rs. 1,003 m. It recorded a revenue of Rs. 7,303.9 m for cumulative 4QFY11, which is a 31% increase, relative to the previous year.
The 4QFY11 depicts 27% growth in top-line to reach Rs. 1,983.5 m, which was majorly owing to strong demand for LP gas during the period. Since the company plays a significant role in the industrial bulk gas segment, growth in the leisure and manufacturing industry supported the improvement in top line.
“Forecasted FY12E earnings would remain at Rs. 1,183.3 m whilst we expect FY13E earnings to move up to Rs. 1,602.7 m supported by accelerated growth prospects, mainly in the domestic LP gas segment. Meanwhile, we anticipate the top line to reach Rs. 9,926.3 m in FY11E and Rs. 11,790 m in FY12E respectively,” Asia Wealth Management added.
source - www.ft.lk
No brides but bears in June for bourse
■ Rs. 152 b in value wiped off so far in the month; Rs. 237 b since 2011 Valentine’s Day peak; ASI now at seven months low
June is renowned as being the month of brides, but the Colombo bourse has seen too many bears, with Rs. 152 billion in value wiped off so far.
A dip of Rs. 11 billion in market capitalisation yesterday brought the loss of value month to date to Rs. 152 billion. In comparison to the all-time high market cap of Rs. 2,600 billion on 14 February, yesterday’s figure of Rs. 2,363 reflects a loss of Rs. 237 billion.
Year to date the market’s gain has now been reduced to 3.4% down from 17.7% as at mid-February. However, the more important Milanka Index had produced a negative return of 9.4% year to date as opposed to a 2.65% return in mid-February. At present ASI is at a seven month low.
Capital market regulator the SEC which took pride in Colombo being world’s second best performer for two years is likely to take stock of its status quo when Commissioners hold their monthly meeting today.
Whilst some welcome the dip in value as part of correction from an overheated level as well as driving home the point that the stock market also needs to go down as opposed to moving up and up alone, others blamed negative sentiments over regulatory aspects as well as the economy for the dip.
Lack of serious foreign interest was another cause for concern because active non-national interest is critical for a healthy cycle of activity in the bourse. “It seems locals have lost much of their money power, whilst the more serious institutional players are staying on the sidelines because of play on speculative and junk stocks,” an analyst opined.
Independent observers said most retailers who reinvested past profits in dead stocks were now losing capital. This, as well as billions stuck in IPOs and private placements, could be the major reason for loss of money and staying power among majority of investors.
Lack of cash as well as other macro concerns could also explain why fresh round of buying is absent despite the market’s Price Earnings Ratio dipping to 23 times as against 30 times in mid-February. PE of blue chips and other fundamentally sound stocks remain attractive as well prompting some analysts emphasise that there are good buy opportunities for medium to long-term investors.
Meanwhile, NDB Stockbrokers commenting on the market’s performance yesterday said the ASPI fell by another 31 points despite the gains made during early trading. The index gained with Environmental Resource price moving up to Rs.82 (7.2%) and the trend started to reverse as the price came down to close at Rs. 69.80. While forced selling continued to drag the indices down, speculation on counters such as Environmental Resources, Ceylon Leather Products and Dankotuwa Porcelain seems to have resumed.
The Bank, Finance and Insurance sector was the main contributor to the market turnover (due to Central Finance), while the sector index decreased a further by 0.02%. Central Finance price increased Rs. 9.40 (0.68%) to close at Rs. 1,410. A total of 199,300 shares of Central Finance exchanged hands at a price of Rs. 1,400.
Investment Trusts sector also contributed significantly to the market turnover (due to Environmental Resources). The sector index decreased 1.71% today. Environmental Resources’ voting share declined Rs. 2.50 (3.38%) while Environmental Resources’ W0002 price fell Rs. 3.20 (8.25%) to close at Rs. 34.90.
Environmental Resources Investment (GREG) announced that it purchased 10,700 ordinary shares of its subsidiary, Ceylon Leather Products (CLPL), at a volume weighted average price of Rs. 93.38 per share on 27 June 2011, consequently increasing the shareholding in CLPL to 18.1 m ordinary shares (72.5%).
TKS Securities said the market opened the day in green and shed ground during the latter part of the day to close in the red. The top traded counter of the day, Central Finance, gained +0.7% on the back of institutional investor interest and contributed circa 27% of day’s turnover. Further, the counter saw 199.3k shares changing hands during the day.
Environmental Resources Investments (voting and warrant 2012) and Ceylon Leather Products saw mixed investor interest whilst both institutional and high net worth investors were seen active on Distilleries.
A net outflow of foreign funds were seen during the day, where foreign purchases amounted to Rs. 51.8 m (US$ 472.2 k), whilst foreign sales amounted to Rs. 185.8 m (US$ 1,693.7 k).
Reuters said stocks hit a near-seven month low on Tuesday in light volumes as cautious investors stayed on the sidelines amid margin calls that forced selling and low liquidity.
It said main share index fell 0.46 per cent or 31.43 points to 6,862.83, its lowest close since 6 January. It had shed 7.5 per cent so far in June alone, but is still up 3.42 per cent so far this year.
It was the Asia Pacific’s top performer in 2010 and 2009 with 96 per cent and 125 per cent returns respectively.
Forced selling by brokers continued in line with the policy of the regulator Securities and Exchange Commission (SEC) to recover credits, while over Rs. 6 billion has been locked up in the two recent Initial Public Offerings.
Foreign investors were net sellers of Rs. 134 million worth of shares on Tuesday and have sold a net Rs. 6.82 billion in 2011 after a record 26.4 billion in 2010.
The day’s turnover was Rs. 2.35 billion ($ 21.4 million), in line with last year’s average of 2.4 billion, but below this year’s daily average of 2.86 billion.
The rupee closed a tad weaker at 109.69/70 a dollar from Monday’s close of 109.68/70 on importer dollar demand as a State bank sold dollars at Rs. 109.70, dealers said.
source - www.ft.lk
June is renowned as being the month of brides, but the Colombo bourse has seen too many bears, with Rs. 152 billion in value wiped off so far.
A dip of Rs. 11 billion in market capitalisation yesterday brought the loss of value month to date to Rs. 152 billion. In comparison to the all-time high market cap of Rs. 2,600 billion on 14 February, yesterday’s figure of Rs. 2,363 reflects a loss of Rs. 237 billion.
Year to date the market’s gain has now been reduced to 3.4% down from 17.7% as at mid-February. However, the more important Milanka Index had produced a negative return of 9.4% year to date as opposed to a 2.65% return in mid-February. At present ASI is at a seven month low.
Capital market regulator the SEC which took pride in Colombo being world’s second best performer for two years is likely to take stock of its status quo when Commissioners hold their monthly meeting today.
Whilst some welcome the dip in value as part of correction from an overheated level as well as driving home the point that the stock market also needs to go down as opposed to moving up and up alone, others blamed negative sentiments over regulatory aspects as well as the economy for the dip.
Lack of serious foreign interest was another cause for concern because active non-national interest is critical for a healthy cycle of activity in the bourse. “It seems locals have lost much of their money power, whilst the more serious institutional players are staying on the sidelines because of play on speculative and junk stocks,” an analyst opined.
Independent observers said most retailers who reinvested past profits in dead stocks were now losing capital. This, as well as billions stuck in IPOs and private placements, could be the major reason for loss of money and staying power among majority of investors.
Lack of cash as well as other macro concerns could also explain why fresh round of buying is absent despite the market’s Price Earnings Ratio dipping to 23 times as against 30 times in mid-February. PE of blue chips and other fundamentally sound stocks remain attractive as well prompting some analysts emphasise that there are good buy opportunities for medium to long-term investors.
Meanwhile, NDB Stockbrokers commenting on the market’s performance yesterday said the ASPI fell by another 31 points despite the gains made during early trading. The index gained with Environmental Resource price moving up to Rs.82 (7.2%) and the trend started to reverse as the price came down to close at Rs. 69.80. While forced selling continued to drag the indices down, speculation on counters such as Environmental Resources, Ceylon Leather Products and Dankotuwa Porcelain seems to have resumed.
The Bank, Finance and Insurance sector was the main contributor to the market turnover (due to Central Finance), while the sector index decreased a further by 0.02%. Central Finance price increased Rs. 9.40 (0.68%) to close at Rs. 1,410. A total of 199,300 shares of Central Finance exchanged hands at a price of Rs. 1,400.
Investment Trusts sector also contributed significantly to the market turnover (due to Environmental Resources). The sector index decreased 1.71% today. Environmental Resources’ voting share declined Rs. 2.50 (3.38%) while Environmental Resources’ W0002 price fell Rs. 3.20 (8.25%) to close at Rs. 34.90.
Environmental Resources Investment (GREG) announced that it purchased 10,700 ordinary shares of its subsidiary, Ceylon Leather Products (CLPL), at a volume weighted average price of Rs. 93.38 per share on 27 June 2011, consequently increasing the shareholding in CLPL to 18.1 m ordinary shares (72.5%).
TKS Securities said the market opened the day in green and shed ground during the latter part of the day to close in the red. The top traded counter of the day, Central Finance, gained +0.7% on the back of institutional investor interest and contributed circa 27% of day’s turnover. Further, the counter saw 199.3k shares changing hands during the day.
Environmental Resources Investments (voting and warrant 2012) and Ceylon Leather Products saw mixed investor interest whilst both institutional and high net worth investors were seen active on Distilleries.
A net outflow of foreign funds were seen during the day, where foreign purchases amounted to Rs. 51.8 m (US$ 472.2 k), whilst foreign sales amounted to Rs. 185.8 m (US$ 1,693.7 k).
Reuters said stocks hit a near-seven month low on Tuesday in light volumes as cautious investors stayed on the sidelines amid margin calls that forced selling and low liquidity.
It said main share index fell 0.46 per cent or 31.43 points to 6,862.83, its lowest close since 6 January. It had shed 7.5 per cent so far in June alone, but is still up 3.42 per cent so far this year.
It was the Asia Pacific’s top performer in 2010 and 2009 with 96 per cent and 125 per cent returns respectively.
Forced selling by brokers continued in line with the policy of the regulator Securities and Exchange Commission (SEC) to recover credits, while over Rs. 6 billion has been locked up in the two recent Initial Public Offerings.
Foreign investors were net sellers of Rs. 134 million worth of shares on Tuesday and have sold a net Rs. 6.82 billion in 2011 after a record 26.4 billion in 2010.
The day’s turnover was Rs. 2.35 billion ($ 21.4 million), in line with last year’s average of 2.4 billion, but below this year’s daily average of 2.86 billion.
The rupee closed a tad weaker at 109.69/70 a dollar from Monday’s close of 109.68/70 on importer dollar demand as a State bank sold dollars at Rs. 109.70, dealers said.
source - www.ft.lk
Jetwing plans up to $37 mln IPO
Sri Lankan family-owned leisure and tourism group Jetwing plans to raise up to 4 billion rupees ($36.5 million) through an initial public offering to fund tourism expansion in the island nation.
“We need about 8 billion rupees for new properties. We want to have the control, so we might consider 3 to 4 billion on IPO,” Jetwing chairman Hiram Cooray told Reuters on Monday.
Cooray said the company planned to build two hotels in the north and east, where a 25-year civil war ended two years ago, and funds will be raised through a private placement in the next three months before the IPO.
Jetwing manages 12 hotels including 10 of its own, a motel in New Zealand, and luxury villas in Vietnam and Cambodia.
The end of the war in May 2009 has boosted the $50 billion economy’s leisure industry, with visitor arrivals rising every month, on a year-on-year basis, since then
source - www.dailymirror.lk
“We need about 8 billion rupees for new properties. We want to have the control, so we might consider 3 to 4 billion on IPO,” Jetwing chairman Hiram Cooray told Reuters on Monday.
Cooray said the company planned to build two hotels in the north and east, where a 25-year civil war ended two years ago, and funds will be raised through a private placement in the next three months before the IPO.
Jetwing manages 12 hotels including 10 of its own, a motel in New Zealand, and luxury villas in Vietnam and Cambodia.
The end of the war in May 2009 has boosted the $50 billion economy’s leisure industry, with visitor arrivals rising every month, on a year-on-year basis, since then
source - www.dailymirror.lk
Fitch affirms Sinhaputhra Finance at ‘B(lka)’
Fitch Ratings Lanka has affirmed Sinhaputhra Finance PLC’s (SFL) National Long-Term rating at ‘B(lka)’. The outlook is negative.
The affirmation reflects the latest improvement in SFL’s credit risk management practices and the subsequent stabilisation in its asset quality, although the latter still remains weaker than its peers’ average.
The rating may face downward pressure if SFL fails to prevent its asset quality and net non-performing loans (NPL)/equity from weakening under the regulatory six-month classification.
The high proportion of NPLs will also constrain the company’s overall net interest margins (NIM) and reduce its internal capital generation.
In addition, any deterioration in corporate governance performance at SFL would also lead to a negative rating action.
Fitch notes that SFL’s clientele are largely limited to the Kandy district (Central province) and its surrounding areas, and consist of the small and medium enterprise sector.
Vehicle finance via leases and hire purchase agreements accounted for half of SFL’s loan portfolio at end-March 2011 (FYE11), with the remainder consisting primarily of loans (majority backed by property mortgages) which has been the case over the last five years.
Incremental portfolio loan growth was 11 percent in FYE11 following a contraction of 4 percent in FYE10.
Operationally, SFL’s operating costs and average assets (historical five-year average was 3.5 percent at FYE11) has been low relative to its sector.
This is partly due to better utilisation of collection centres within its network. Statutory liquidity ratios were comfortable, while interest rate risks were managed by better matching of interest bearing assets and liabilities.
The company’s NIM continued to be well below the sector average at FYE11, largely because a large proportion of the lending portfolio was non-performing. SFL’s NPLs over three months as a percentage of loans spiked to 32 percent at FYE10 from 22 percent at FYE09.
In early January 2011, its restructured recovery and credit procedures began to take effect with its three-month NPLs/loans declining to 27 percent at FYE11 (end-May 2011: 24 percent).
SFL’s advances in arrears over six months (regulatory NPLs) followed a similar trend.
Established in 1978, SFL is a registered finance company.
It was listed on the Colombo Stock Exchange on June 2, 2010. However, its current managing director, Ravana Wijeyeratne, continues to maintain control, holding 52 percent of SFL’s equity.
source - www.dailynews.lk
The affirmation reflects the latest improvement in SFL’s credit risk management practices and the subsequent stabilisation in its asset quality, although the latter still remains weaker than its peers’ average.
The rating may face downward pressure if SFL fails to prevent its asset quality and net non-performing loans (NPL)/equity from weakening under the regulatory six-month classification.
The high proportion of NPLs will also constrain the company’s overall net interest margins (NIM) and reduce its internal capital generation.
In addition, any deterioration in corporate governance performance at SFL would also lead to a negative rating action.
Fitch notes that SFL’s clientele are largely limited to the Kandy district (Central province) and its surrounding areas, and consist of the small and medium enterprise sector.
Vehicle finance via leases and hire purchase agreements accounted for half of SFL’s loan portfolio at end-March 2011 (FYE11), with the remainder consisting primarily of loans (majority backed by property mortgages) which has been the case over the last five years.
Incremental portfolio loan growth was 11 percent in FYE11 following a contraction of 4 percent in FYE10.
Operationally, SFL’s operating costs and average assets (historical five-year average was 3.5 percent at FYE11) has been low relative to its sector.
This is partly due to better utilisation of collection centres within its network. Statutory liquidity ratios were comfortable, while interest rate risks were managed by better matching of interest bearing assets and liabilities.
The company’s NIM continued to be well below the sector average at FYE11, largely because a large proportion of the lending portfolio was non-performing. SFL’s NPLs over three months as a percentage of loans spiked to 32 percent at FYE10 from 22 percent at FYE09.
In early January 2011, its restructured recovery and credit procedures began to take effect with its three-month NPLs/loans declining to 27 percent at FYE11 (end-May 2011: 24 percent).
SFL’s advances in arrears over six months (regulatory NPLs) followed a similar trend.
Established in 1978, SFL is a registered finance company.
It was listed on the Colombo Stock Exchange on June 2, 2010. However, its current managing director, Ravana Wijeyeratne, continues to maintain control, holding 52 percent of SFL’s equity.
source - www.dailynews.lk
Bimputh Lanka expands outstations
Ramani Kangaraarachchi
A subsidiary company of Daya Group, Bimputh Lanka Investments Limited (BLI) listed with the Colombo Stock Exchange to facilitate the small and micro entrepreneurs especially in Ampara and Moneragala Districts fulfilling their financial needs, BLI Director and CEO Kingsley Bernard said.
He said that the share price was at Rs 10.56 at the introduction and it was traded at a high value of Rs 120 a few days later. He said that the company is determined to unleash the potential of the rural economy within the next ten years.
He said the company is strategizing to be the leader in providing micro finance to the farmers, small businessmen and low income earners in the rural sector and it has progressed rapidly within a short period and has been rated BB by RAM Ratings Lanka Ltd.
source - www.dailynews.lk
A subsidiary company of Daya Group, Bimputh Lanka Investments Limited (BLI) listed with the Colombo Stock Exchange to facilitate the small and micro entrepreneurs especially in Ampara and Moneragala Districts fulfilling their financial needs, BLI Director and CEO Kingsley Bernard said.
He said that the share price was at Rs 10.56 at the introduction and it was traded at a high value of Rs 120 a few days later. He said that the company is determined to unleash the potential of the rural economy within the next ten years.
He said the company is strategizing to be the leader in providing micro finance to the farmers, small businessmen and low income earners in the rural sector and it has progressed rapidly within a short period and has been rated BB by RAM Ratings Lanka Ltd.
source - www.dailynews.lk
EPF portfolio Rs 924 b by May 2011
Investments in corporate debt securities soon :
Ravi Ladduwahetty
The Employees Provident Fund (EPF) has an astronomical Rs 924 billion in its investment portfolio by end May 2011. Of the total investment portfolio of Rs 924 billion as at May 31, 2011, the Fund has invested Rs 856 billion in Treasury Bills and other government securities, accounting for 92.7% of the total portfolio, Central Bank’s EPF Superintendent Rupa Dheerasinghe told Daily News Business yesterday.
Of the remaining investments, there is Rs 57.28 billion or 6.2% of the total portfolio which is invested in listed and unlisted equities of which there is Rs 53 billion which accounts for 5.5% of the total portfolio in listed equities while the investment portfolio in unlisted equities is Rs 7.1 billion or 0.7% There is also 0.5% or Rs 4.62 billion invested in Reverse Repo.
“Our investments in unlisted equities and Reverse Repo is very small, she said.
Of the Rs 53 billion in listed and unlisted equities, banks, finance and insurance companies account for Rs 18.55 billion or 35%, while diversified holdings have Rs 15.9 billion or 30%. The hotel and travel company equities have Rs 4.77 billion or 9% of the EPF funds while the portfolio in manufacturing companies account for Rs 3.18 billion or 6%. The investments in the construction and engineering sector are Rs 2.65 billion or 5% while the telecommunication sector accounts for Rs 1.59 billion or 3% and all other equities Rs 6.36 billion or 12%, Dheerasinghe said. However, she conceded that the investments in the unlisted equities were relatively small.
She said that the Fund was managing the monies of the people and was extremely vigilant in the manner of making the investments being acutely conscious of the security of the people some of whom have their lifetime’s savings in the EPF. “We are safeguarding the interests of the EPF members while giving them the best possible returns. We made an overall return of 15% for all our investments, she said.
“We are extremely careful when making the investments and our decisions are made by a fully-fledged team of Fund Managers who are acutely conscious of the market developments and fluctuations and their decisions are backed scientifically,” she said.
The number of member accounts by end May has been 13.3 million and the contributing employees has been 62,000 as at December 31, 2010.
The EPF will also shortly go in for investments in corporate debt securities, which will yield very positive returns as well, she said.
source - www.dailynews.lk
Ravi Ladduwahetty
The Employees Provident Fund (EPF) has an astronomical Rs 924 billion in its investment portfolio by end May 2011. Of the total investment portfolio of Rs 924 billion as at May 31, 2011, the Fund has invested Rs 856 billion in Treasury Bills and other government securities, accounting for 92.7% of the total portfolio, Central Bank’s EPF Superintendent Rupa Dheerasinghe told Daily News Business yesterday.
Of the remaining investments, there is Rs 57.28 billion or 6.2% of the total portfolio which is invested in listed and unlisted equities of which there is Rs 53 billion which accounts for 5.5% of the total portfolio in listed equities while the investment portfolio in unlisted equities is Rs 7.1 billion or 0.7% There is also 0.5% or Rs 4.62 billion invested in Reverse Repo.
“Our investments in unlisted equities and Reverse Repo is very small, she said.
Of the Rs 53 billion in listed and unlisted equities, banks, finance and insurance companies account for Rs 18.55 billion or 35%, while diversified holdings have Rs 15.9 billion or 30%. The hotel and travel company equities have Rs 4.77 billion or 9% of the EPF funds while the portfolio in manufacturing companies account for Rs 3.18 billion or 6%. The investments in the construction and engineering sector are Rs 2.65 billion or 5% while the telecommunication sector accounts for Rs 1.59 billion or 3% and all other equities Rs 6.36 billion or 12%, Dheerasinghe said. However, she conceded that the investments in the unlisted equities were relatively small.
She said that the Fund was managing the monies of the people and was extremely vigilant in the manner of making the investments being acutely conscious of the security of the people some of whom have their lifetime’s savings in the EPF. “We are safeguarding the interests of the EPF members while giving them the best possible returns. We made an overall return of 15% for all our investments, she said.
“We are extremely careful when making the investments and our decisions are made by a fully-fledged team of Fund Managers who are acutely conscious of the market developments and fluctuations and their decisions are backed scientifically,” she said.
The number of member accounts by end May has been 13.3 million and the contributing employees has been 62,000 as at December 31, 2010.
The EPF will also shortly go in for investments in corporate debt securities, which will yield very positive returns as well, she said.
source - www.dailynews.lk
Bourse closes in the red - ERI ups stake in Ceylon Leather
The Colombo bourse ended in the red on Tuesday with selling pressure and speculative play continuing to drive the market. The All Share Price Index dipped 31.43 points to close at 6,862.83, 0.46 percent lower than Monday and 3.42 percent up year-to-date. The Milanka Price Index of more liquid stocks closed 0.53 percent lower, down 34.13 points to end the day at 6,395.78, down 9.43 percent year-to-date.
Turnover recovered from the previous few days to Rs. 2.3 billion on a volume of a little more than 84 million shares changing hands during the day which saw 76 counters close on positive territory against 119 counters with negative gains.
"The indices dipped on selling pressure with trades centred on banking, finance and speculative play on investment trust counters dominating the day’s turnover," John Keells Stockbrokers said.
Bartleet Mallory Stockbrokers said the market witnessed lacklustre sentiments to end in the red.
Net foreign outflow amounted to Rs. 134.04 million.
Central Finance Company PLC contributed the largest share to the day’s turnover generating Rs. 627.7 million to close at Rs. 1,410 followed by Environment Resources Investment PLC (ERI), generating Rs. 243.1 million to close at Rs. 69.80 while its warrants (GREG W0002) generated Rs. 110.9 million to close at Rs. 34.90.
ERI announced that it had increased its stake in Ceylon Leather Products PLC to 72.51percent, or 18.1 million ordinary shares, with 10,700 changing hands for a total consideration of Rs. 1 million.
Central Finance featured in four crossings of 199,300 shares at 1,400.
Beruwala Walk Inn PLC was the highest jumper, up 28.92 percent to close at Rs. 28.92 followed by SMB Leasing PLC warrants up 25 percent to close at 0.50. Paragon Ceylon PLC lost 43.64 percent to close at Rs. 1,550 followed by Abans Financial Services PLC, down 10.28 percent to close at Rs. 71.60.
Aitken Spence Hotels saw one crossing of 200 thousand shares at Rs. 135 while Distilleries Company of Sri Lanka also saw a single crossing of 454 thousand shares at Rs. 180.
Volume-wise, Amana Takaful PLC saw 8.2 million shares being traded to close at Rs. 2.50.
source - www.island.lk
Turnover recovered from the previous few days to Rs. 2.3 billion on a volume of a little more than 84 million shares changing hands during the day which saw 76 counters close on positive territory against 119 counters with negative gains.
"The indices dipped on selling pressure with trades centred on banking, finance and speculative play on investment trust counters dominating the day’s turnover," John Keells Stockbrokers said.
Bartleet Mallory Stockbrokers said the market witnessed lacklustre sentiments to end in the red.
Net foreign outflow amounted to Rs. 134.04 million.
Central Finance Company PLC contributed the largest share to the day’s turnover generating Rs. 627.7 million to close at Rs. 1,410 followed by Environment Resources Investment PLC (ERI), generating Rs. 243.1 million to close at Rs. 69.80 while its warrants (GREG W0002) generated Rs. 110.9 million to close at Rs. 34.90.
ERI announced that it had increased its stake in Ceylon Leather Products PLC to 72.51percent, or 18.1 million ordinary shares, with 10,700 changing hands for a total consideration of Rs. 1 million.
Central Finance featured in four crossings of 199,300 shares at 1,400.
Beruwala Walk Inn PLC was the highest jumper, up 28.92 percent to close at Rs. 28.92 followed by SMB Leasing PLC warrants up 25 percent to close at 0.50. Paragon Ceylon PLC lost 43.64 percent to close at Rs. 1,550 followed by Abans Financial Services PLC, down 10.28 percent to close at Rs. 71.60.
Aitken Spence Hotels saw one crossing of 200 thousand shares at Rs. 135 while Distilleries Company of Sri Lanka also saw a single crossing of 454 thousand shares at Rs. 180.
Volume-wise, Amana Takaful PLC saw 8.2 million shares being traded to close at Rs. 2.50.
source - www.island.lk
HSBC appointed co-banker for Textured Jersey Lanka Limited IPO
HSBC has been appointed as a co-banker for the Textured Jersey Lanka Ltd’s initial public offering. The initial public offering of Rs. 1.2 billion will offer 80 million ordinary voting shares at Rs 15 per share and will be available for subscription from 27 June 2011 and will open on 7 July 2011.
If fully subscribed, the New Shares will amount to 12.21% of the Issued and Paid up Ordinary Shares of the Company, subsequent to the issue.
HSBC will provide the full range of solutions required for an IPO including the collection of applications, clearing of cheques and other instruments as well as processing the refunds after allotment.
With over 140 years of international experience and over 7,500 offices in 87 countries, HSBC offers a full range of banking facilities to its corporate clientele including comprehensive cash management solutions.
source - www.island.lk
If fully subscribed, the New Shares will amount to 12.21% of the Issued and Paid up Ordinary Shares of the Company, subsequent to the issue.
HSBC will provide the full range of solutions required for an IPO including the collection of applications, clearing of cheques and other instruments as well as processing the refunds after allotment.
With over 140 years of international experience and over 7,500 offices in 87 countries, HSBC offers a full range of banking facilities to its corporate clientele including comprehensive cash management solutions.
source - www.island.lk
Orient Garments to be the first listed apparel manufacturer - Reference price Rs. 23 per share
Orient Garments Ltd’s (OGL) 54.9 million ordinary shares will be listed and commence trading on the Colombo Stock Exchange from June 29, 2011. Orient Garments Limited, part of the Finco Group of companies, will be the first apparel manufacturer to be listed on the CSE and will be classified under the manufacturing sector on the Diri Savi Board. A stock exchange filing said the reference price would be Rs. 23 per share.
OGL, having established in 1982 as a specialized outerwear manufacturer for the export market, is today a fully-fledged garment manufacturer with 1,500 direct machine capacity employing over 3,500 personnel. OGL Group comprises of the holding Company and two subsidiaries, Stafford Orient (Pvt) Limited and Priority Garments (Pvt) Limited. The Group currently serves many leading international brands including Next, Tesco, Tommy Hilfiger, Polo Ralph Lauren and Burberry.
OGL Group has posted Rs. 2.8 billion revenue and earned Rs. 125.7millionprofit attributable to shareholders during the financial year 2009/2010. For the eleven month period ended February 28, 2011, the revenue was Rs. 3.3 billion and profit attributable to shareholders was Rs. 98.2 million.Net asset value of the Group as at March 31, 2010 was Rs. 512.3 million which had improved to Rs. 603.7 million by end of February 2011.
The Company operations are expected to gather a steady upward momentum with its moves to reinforce its position in its niche market capitalizing on its competitive strengths such as design capabilities, skilled workforce and the level of service.
Mr. Harsha De Silva, Managing Director of Navara Capital, which is managing the listing of OGL stated that this was the first instance of an apparel manufacturer obtaining a listing although the sector represents almost half of Sri Lanka’s export earnings. "We hope that this listing will encourage other players in the industry to share their success with the investing public by listing their shares on the CSE".
OGL shares will be introduced at Rs. 23.00 which was the same price at which the private placement was carried out in December 2010. At the introductory price, the Company will have a market capitalization of Rs. 1.2 billion at a PE of 10.00
The Finco Group of Companies with its history of nearly 50 years is today a well-diversified conglomerate with interests in a set of diversified business sectors encompassing Construction, Travel, Leisure, Manufacturing, IT and so on. The Group’s portfolio includes Sri Lanka’s iconic MI contractor, International Construction Consortium (Pvt) Limited, which is known as ICC and the leading office furniture and equipment manufacturer under the well-known brand "Alpha", Alpha Industries (Pvt) Limited.
The Board of Directors include; Sarath Chandra Weerasooria, Non-Executive Chairman, Rajinda Priyanjith Weerasooria, Managing Director, Harsha Mahendra de Saram, Executive Director, Sunil Karunanayaka, Non-Executive Independent Director and Dinesh de Zoysa, Non-Executive Independent Director.
source - www.island.lk
OGL, having established in 1982 as a specialized outerwear manufacturer for the export market, is today a fully-fledged garment manufacturer with 1,500 direct machine capacity employing over 3,500 personnel. OGL Group comprises of the holding Company and two subsidiaries, Stafford Orient (Pvt) Limited and Priority Garments (Pvt) Limited. The Group currently serves many leading international brands including Next, Tesco, Tommy Hilfiger, Polo Ralph Lauren and Burberry.
OGL Group has posted Rs. 2.8 billion revenue and earned Rs. 125.7millionprofit attributable to shareholders during the financial year 2009/2010. For the eleven month period ended February 28, 2011, the revenue was Rs. 3.3 billion and profit attributable to shareholders was Rs. 98.2 million.Net asset value of the Group as at March 31, 2010 was Rs. 512.3 million which had improved to Rs. 603.7 million by end of February 2011.
The Company operations are expected to gather a steady upward momentum with its moves to reinforce its position in its niche market capitalizing on its competitive strengths such as design capabilities, skilled workforce and the level of service.
Mr. Harsha De Silva, Managing Director of Navara Capital, which is managing the listing of OGL stated that this was the first instance of an apparel manufacturer obtaining a listing although the sector represents almost half of Sri Lanka’s export earnings. "We hope that this listing will encourage other players in the industry to share their success with the investing public by listing their shares on the CSE".
OGL shares will be introduced at Rs. 23.00 which was the same price at which the private placement was carried out in December 2010. At the introductory price, the Company will have a market capitalization of Rs. 1.2 billion at a PE of 10.00
The Finco Group of Companies with its history of nearly 50 years is today a well-diversified conglomerate with interests in a set of diversified business sectors encompassing Construction, Travel, Leisure, Manufacturing, IT and so on. The Group’s portfolio includes Sri Lanka’s iconic MI contractor, International Construction Consortium (Pvt) Limited, which is known as ICC and the leading office furniture and equipment manufacturer under the well-known brand "Alpha", Alpha Industries (Pvt) Limited.
The Board of Directors include; Sarath Chandra Weerasooria, Non-Executive Chairman, Rajinda Priyanjith Weerasooria, Managing Director, Harsha Mahendra de Saram, Executive Director, Sunil Karunanayaka, Non-Executive Independent Director and Dinesh de Zoysa, Non-Executive Independent Director.
source - www.island.lk
Tuesday, June 28, 2011
Sri Lanka stocks down 0.46-pct
June 28, 2011 (LBO) - Sri Lankan stocks closed 0.46 percent lower Tuesday amid profit-taking by Environmental Resources Investment (ERI) investors and month-end clearing of debtor’s positions, brokers said.
The All Share Price Index closed at 6,862.83, down 0.46 percent (31.43 points) while the Milanka Price Index of more liquid stocks closed at 6,395.78, down 0.53 percent (34.13 points), according to stock exchange provisional figures.
Turnover was 2.3 billion rupees. There were 85 gainers and 134 losers.
Central Finance was the highest contributor for the day to turnover and closed at 1,400.00 rupees, up 9.40 rupees or 0.68 percent with 448,400 shares traded generating 627 million rupees.
Environmental Resources Investment was the second highest contributor of the day to turnover and closed at 71.50 rupees, down 2.50 rupees or 3.38 percent.
More than 03 million ERI shares were traded generating 243 million rupees. During early trading it hit a high of 82 rupees when investors started profit-taking, brokers said.
Brokers also said that they are in the process of clearing the month-end debtor’s positions following a regulatory ruling which they said will impact price levels.
Union Bank fell below its IPO price of 25 rupees and traded within the range of 24.7 rupees and 25.20 rupees.
Notable crossings (off-market negotiated deals) were 454,100 shares of Distilleries at 180 rupees each, 199,300 shares of Central Finance at 1400 rupees and 200,000 Aitken Spence Hotels shares at 135 rupees.
source - www.lbo.lk
The All Share Price Index closed at 6,862.83, down 0.46 percent (31.43 points) while the Milanka Price Index of more liquid stocks closed at 6,395.78, down 0.53 percent (34.13 points), according to stock exchange provisional figures.
Turnover was 2.3 billion rupees. There were 85 gainers and 134 losers.
Central Finance was the highest contributor for the day to turnover and closed at 1,400.00 rupees, up 9.40 rupees or 0.68 percent with 448,400 shares traded generating 627 million rupees.
Environmental Resources Investment was the second highest contributor of the day to turnover and closed at 71.50 rupees, down 2.50 rupees or 3.38 percent.
More than 03 million ERI shares were traded generating 243 million rupees. During early trading it hit a high of 82 rupees when investors started profit-taking, brokers said.
Brokers also said that they are in the process of clearing the month-end debtor’s positions following a regulatory ruling which they said will impact price levels.
Union Bank fell below its IPO price of 25 rupees and traded within the range of 24.7 rupees and 25.20 rupees.
Notable crossings (off-market negotiated deals) were 454,100 shares of Distilleries at 180 rupees each, 199,300 shares of Central Finance at 1400 rupees and 200,000 Aitken Spence Hotels shares at 135 rupees.
source - www.lbo.lk
Sri Lanka apparel firm to trade from June 29
June 28, 2011 (LBO) - Orient Garments, Sri Lanka's firm apparel manufacture to be listed on the Colombo Stock Exchange will be offered for trading from June 29, at an introductory price of 23 rupees.
Orient Garments had posted revenues of 2.8 billion rupees in the year to March 2011 with profits of 125.7 million rupees.
The firm's financial advisors Navara Capital said it had earned 3.3 billion rupees in revenues and 98.2 million in profits in the 11 months to February 2011. The firm has 54.9 million shares.
Earlier stock had been privately placed at 23 rupees priced at about 10 times earnings on the last year's results.
"We hope that this listing will encourage other players in the industry to share their success with the investing public by listing their shares on the CSE," Harsha De Silva, managing director of Navara Capital said in a statement.
It employs 3,500 people and 1,500 machines. It has two subsidiaries, Stafford Orient (Pvt) Limited and Priority Garments (Pvt) Limited.
The firm produces for brands including Next, Tesco, Tommy Hilfiger, Polo Ralph Lauren and Burberry.
Orient Garments is a part of Sri Lanka's Finco group, whose other units include International Construction Consortium, and Aplha Industries, an office equipment maker.
source - www.lbo.lk
Orient Garments had posted revenues of 2.8 billion rupees in the year to March 2011 with profits of 125.7 million rupees.
The firm's financial advisors Navara Capital said it had earned 3.3 billion rupees in revenues and 98.2 million in profits in the 11 months to February 2011. The firm has 54.9 million shares.
Earlier stock had been privately placed at 23 rupees priced at about 10 times earnings on the last year's results.
"We hope that this listing will encourage other players in the industry to share their success with the investing public by listing their shares on the CSE," Harsha De Silva, managing director of Navara Capital said in a statement.
It employs 3,500 people and 1,500 machines. It has two subsidiaries, Stafford Orient (Pvt) Limited and Priority Garments (Pvt) Limited.
The firm produces for brands including Next, Tesco, Tommy Hilfiger, Polo Ralph Lauren and Burberry.
Orient Garments is a part of Sri Lanka's Finco group, whose other units include International Construction Consortium, and Aplha Industries, an office equipment maker.
source - www.lbo.lk
Sri Lanka airline catering unit listing shelved
June 28, 2011 (LBO) - A plan to take public SriLankan Catering, a wholly owned unit of Sri Lanka's state-run national carrier has been shelved amid a flood of private sector initial offers, Treasury secretary P B Jayasundera said.
"Now the private sector is moving," he said, adding that firms like the Jetwing leisure group were also planning to list.
Jayasundera said no time frame could be given for a planned listing of Sri Lanka Insurance Corporation, another state-run firm that was awaited by the market.
Several Sri Lankan private sector firms have raised money from capital markets in recent weeks.
source - www.lbo.lk
"Now the private sector is moving," he said, adding that firms like the Jetwing leisure group were also planning to list.
Jayasundera said no time frame could be given for a planned listing of Sri Lanka Insurance Corporation, another state-run firm that was awaited by the market.
Several Sri Lankan private sector firms have raised money from capital markets in recent weeks.
source - www.lbo.lk
ERI Group firms dominate percentagewise gainers list
In a rebound of sorts several securities of the ERI Group yesterday dominated the list of gainers percentage wise.
Several warrants of Ceylon Leather occupied the 2 to 4th positions with gains ranging between 50% and 46% followed by ERI warrants ranging from 41% and 32% whilst Ceylon Leather gained by 23%, ERI by 19% and Dankotuwa Porcelain by 15%.
ERI emerged second highest generator to turnover with Rs. 165.5 million whilst ERI W0002 and Dankotuwa produced fourth and fifth highest.
TKS Securities said Environmental Resources Investments (Voting and Warrant 0002) saw renewed all rounder interest to gain 19.2% and 41.6% respectively whilst Distilleries and Dankotuwa Porcelain witnessed institutional investor interest.
Asia Wealth said retail interest was evident in Environmental Resources Investment to see a price appreciation of 19.2%, whilst Environmental Resources Investment (W) on the back of similar interest witnessed a price appreciation of 41% to close at LKR27.40.Dankotuwa Porcelain witnessed renewed high net worth and retail interest to close at LKR.46.60, with a price appreciation of 15.5%.
source - www.ft.lk
Several warrants of Ceylon Leather occupied the 2 to 4th positions with gains ranging between 50% and 46% followed by ERI warrants ranging from 41% and 32% whilst Ceylon Leather gained by 23%, ERI by 19% and Dankotuwa Porcelain by 15%.
ERI emerged second highest generator to turnover with Rs. 165.5 million whilst ERI W0002 and Dankotuwa produced fourth and fifth highest.
TKS Securities said Environmental Resources Investments (Voting and Warrant 0002) saw renewed all rounder interest to gain 19.2% and 41.6% respectively whilst Distilleries and Dankotuwa Porcelain witnessed institutional investor interest.
Asia Wealth said retail interest was evident in Environmental Resources Investment to see a price appreciation of 19.2%, whilst Environmental Resources Investment (W) on the back of similar interest witnessed a price appreciation of 41% to close at LKR27.40.Dankotuwa Porcelain witnessed renewed high net worth and retail interest to close at LKR.46.60, with a price appreciation of 15.5%.
source - www.ft.lk
Colombo Hilton owning firm HDL celebrates ‘Decade of default’ today
Colombo Hilton owning company Hotel Developers (Lanka) Ltd., (HDP) perhaps deserves insidious ‘congratulations’ for celebrating an unprecedented decade on the Colombo Stock Exchange’s Default Board today.
Exactly on 28 June, 2001, HDL was relegated to the CSE’s Default Board for non submission of Annual Reports for the financial year ended on 31 March, 1991. Today marks a decade on the Default Board whilst the company has also not released accounts for 20 years.
The market has been waiting with dismay for the release of accounts which the HDL Board a few months ago finalised and rushed Board approval in a jiffy. Despite nearly two months since then no disclosure has been made by the company either.
Analysts have been urging the capital market regulator the Securities and Exchange Commission (SEC) to suspend trading of HDL for a few days until investors have fully comprehended 20 years of accounts.
HDL share ended last week at Rs. 135, up by Rs. 11 from the previous week whilst it 52-week highest is Rs. 165. There was no trading on HDL shares yesterday. When the market opens today a dubious toast could await HDL for remaining on default board for 10 years and also for the SEC and CSE for accommodating same apart from letting the share trade despite no accounts for 20 years.
source - www.ft.lk
Exactly on 28 June, 2001, HDL was relegated to the CSE’s Default Board for non submission of Annual Reports for the financial year ended on 31 March, 1991. Today marks a decade on the Default Board whilst the company has also not released accounts for 20 years.
The market has been waiting with dismay for the release of accounts which the HDL Board a few months ago finalised and rushed Board approval in a jiffy. Despite nearly two months since then no disclosure has been made by the company either.
Analysts have been urging the capital market regulator the Securities and Exchange Commission (SEC) to suspend trading of HDL for a few days until investors have fully comprehended 20 years of accounts.
HDL share ended last week at Rs. 135, up by Rs. 11 from the previous week whilst it 52-week highest is Rs. 165. There was no trading on HDL shares yesterday. When the market opens today a dubious toast could await HDL for remaining on default board for 10 years and also for the SEC and CSE for accommodating same apart from letting the share trade despite no accounts for 20 years.
source - www.ft.lk
DFCC invests Rs. 1.3 b more in Vardhana Bank
Pioneering development finance institution DFCC Bank has invested Rs. 1.3 billion in commercial bank venture DFCC Vardhana Bank (DVB).
DFCC said yesterday that its stake in DVB has been increased to 99.01% from the previous level of 98.94%. The latest increase is following DFCC subscribing to rights issue of DVB of 1 for 5 and additional shares for the rights not taken up by other shareholders.
DFCC also said that total investment in DVB now stands at Rs. 3.62 billion.
At end 31 March, 2010 financial year, DFCC held 95.6% with an investment of Rs. 2.286 billion.
In April 2011 DFCC got Monetary Board approval to acquire up to 100% of DFCC Vardhana Bank and to functionally manage DVB. This is to help DFCC and DVB to further enhance synergy and operate as a single economic entity in the future.
source - www.ft.lk
DFCC said yesterday that its stake in DVB has been increased to 99.01% from the previous level of 98.94%. The latest increase is following DFCC subscribing to rights issue of DVB of 1 for 5 and additional shares for the rights not taken up by other shareholders.
DFCC also said that total investment in DVB now stands at Rs. 3.62 billion.
At end 31 March, 2010 financial year, DFCC held 95.6% with an investment of Rs. 2.286 billion.
In April 2011 DFCC got Monetary Board approval to acquire up to 100% of DFCC Vardhana Bank and to functionally manage DVB. This is to help DFCC and DVB to further enhance synergy and operate as a single economic entity in the future.
source - www.ft.lk
Textured Jersey IPO to fund future growth
Textured Jersey Lanka (Private) Limited, whose majority shareholders are Pacific Textured Jersey Holdings Limited, a fully owned subsidiary of Pacific Textiles Holdings Limited of Hong Kong (Pacific Textiles), and Sri Lanka’s Brandix Lanka Limited (Brandix Lanka), launched its Initial Public Offering (IPO) yesterday, to raise funds for the expansion of production facilities and to purchase state-of-the-art machinery to increase its production scale and efficiency.
Bill Lam, Chief Executive Officer of Pacific Textiles and a director of Textured Jersey, said that the listing would enable Textured Jersey to take advantage of potential inorganic growth opportunities in knit fabric in both Sri Lanka and the South Asian region in the medium term.
“Volatility in cotton prices and regional currency appreciation are industry-wide headwinds, but we believe these challenges will facilitate industry consolidation in the longer term, and stronger players will continue to gain market share” he said.
The value stands at Rs 1.2 billion where the Company is issuing a 12.21% stake or 80,000,000 new shares at a price of Rs. 15/- per / share.
Textured Jersey is currently majority owned by Pacific Textiles, which owns 45.6% of the company, with 34.3% being held by Brandix Lanka and the balance 20.1% being held by 47 other shareholders. Post listing it is expected that 29.9% of Textured Jersey will be held with the public, with part of the dilution having already taken place via a pre-IPO placement in May 2011 and the balance through this P0 of new shares. The total transaction value is estimated to be approximately Rs 2.9 billion.
Both Pacific Textiles and Brandix Lanka completed a placement of a total of 116,000,000 shares, which amounts to 17.71% of the Company (post- IPO) to certain qualified investors before the IPO as a private sell down in May 2011. The consideration for the pre-IPO placement was Rs. 15/- per share, which is the same price as the IPO share price. Subsequent to the IPO, Pacific Textiles and Brandix Lanka will collectively hold 70.08% of the total issued shares of the Company.
Ashroff Omar, Chief Executive Officer of Brandix Lanka and a director of Textured Jersey, said that the listing was sought to provide Textured Jersey with a separate independent platform to raise funds from the capital markets to support its future growth aspirations. “Knit products are the fastest growing segment of the Sri Lankan apparel export market, which is growing strongly even after the end of the GSP+ concessions in August 2010, and Textured Jersey is the country’s pre-eminent producer of value- added knitted fabric” he added.
Textured Jersey is one of Sri Lanka’s most sophisticated production facilities, manufacturing knitted fabrics for the intimate apparel and sportswear industries. Specialising in the manufacture of high quality, weft –knitted and dyed stretch fabrics, Textured Jersey is a major supplier to apparel manufacturers throughout Asia and end-chain retailers. Amongst its largest clients are Victoria’s Secret, Marks & Spencer and Intimissimi. Infrastructure at the 650,000 sq. ft facility in Avissawella enables a capacity to knit, dye and finish up to 2.5 million meters of fabric a month. De9pite facing challenges in the form of rising cotton prices, high energy costs and loss of tariff concessions, Textured Jersey has delivered strong financial results during the past five years.
For the year ended 31st March 2011, the Company recorded a revenue of USD 83.2mn (Rs. 9,284.6mn) and a net profit after tax of USD 6.lmn (Rs. 684.7mn) which represented 15% and 23%YoY growth respectively. The Company has a strong financial track record, with five year revenue and net profit CAGRs of 25% and 21% respectively, during a period of multiple challenges for the apparel industry.
source - www.dailymirror.lk
Bill Lam, Chief Executive Officer of Pacific Textiles and a director of Textured Jersey, said that the listing would enable Textured Jersey to take advantage of potential inorganic growth opportunities in knit fabric in both Sri Lanka and the South Asian region in the medium term.
“Volatility in cotton prices and regional currency appreciation are industry-wide headwinds, but we believe these challenges will facilitate industry consolidation in the longer term, and stronger players will continue to gain market share” he said.
The value stands at Rs 1.2 billion where the Company is issuing a 12.21% stake or 80,000,000 new shares at a price of Rs. 15/- per / share.
Textured Jersey is currently majority owned by Pacific Textiles, which owns 45.6% of the company, with 34.3% being held by Brandix Lanka and the balance 20.1% being held by 47 other shareholders. Post listing it is expected that 29.9% of Textured Jersey will be held with the public, with part of the dilution having already taken place via a pre-IPO placement in May 2011 and the balance through this P0 of new shares. The total transaction value is estimated to be approximately Rs 2.9 billion.
Both Pacific Textiles and Brandix Lanka completed a placement of a total of 116,000,000 shares, which amounts to 17.71% of the Company (post- IPO) to certain qualified investors before the IPO as a private sell down in May 2011. The consideration for the pre-IPO placement was Rs. 15/- per share, which is the same price as the IPO share price. Subsequent to the IPO, Pacific Textiles and Brandix Lanka will collectively hold 70.08% of the total issued shares of the Company.
Ashroff Omar, Chief Executive Officer of Brandix Lanka and a director of Textured Jersey, said that the listing was sought to provide Textured Jersey with a separate independent platform to raise funds from the capital markets to support its future growth aspirations. “Knit products are the fastest growing segment of the Sri Lankan apparel export market, which is growing strongly even after the end of the GSP+ concessions in August 2010, and Textured Jersey is the country’s pre-eminent producer of value- added knitted fabric” he added.
Textured Jersey is one of Sri Lanka’s most sophisticated production facilities, manufacturing knitted fabrics for the intimate apparel and sportswear industries. Specialising in the manufacture of high quality, weft –knitted and dyed stretch fabrics, Textured Jersey is a major supplier to apparel manufacturers throughout Asia and end-chain retailers. Amongst its largest clients are Victoria’s Secret, Marks & Spencer and Intimissimi. Infrastructure at the 650,000 sq. ft facility in Avissawella enables a capacity to knit, dye and finish up to 2.5 million meters of fabric a month. De9pite facing challenges in the form of rising cotton prices, high energy costs and loss of tariff concessions, Textured Jersey has delivered strong financial results during the past five years.
For the year ended 31st March 2011, the Company recorded a revenue of USD 83.2mn (Rs. 9,284.6mn) and a net profit after tax of USD 6.lmn (Rs. 684.7mn) which represented 15% and 23%YoY growth respectively. The Company has a strong financial track record, with five year revenue and net profit CAGRs of 25% and 21% respectively, during a period of multiple challenges for the apparel industry.
source - www.dailymirror.lk
Agstar Fertilizer concludes Rs.1 bn PP, mulls listing
By Jithendra Antonio
Browns held Sierra Group’s Agstar Fertilizers (Pvt) Ltd has recently concluded a private placement worth Rs.1 billion, an official said.
A top official from Sierra Group told Mirror Business that Agstar Fertilizers had got nearly 100 private investors who subscribed voting shares of the company at Rs.8 per share.
“We will be listing the company by way of an Introduction” he said. Accordingly, the company will start trading on CSE by August this year.
Agstar Fertilizers (Pvt) Ltd. incorporated in 2002 is engaged in fertilizer marketing under Agstar brand, and the goal of Agstar is to satisfy specific needs of the commercial agriculturists and rural farmers through valued-added innovative superior quality products.
Agstar Fertilizers is a 50% subsidiary of Sierra Holdings and a 20% subsidiary of Sierra Constructions whilst Browns group and LOLC Group holds equally 9.99% of Agstar, Sierra Holdings and Sierra Constructions.
source - www.dailymirror.lk
Browns held Sierra Group’s Agstar Fertilizers (Pvt) Ltd has recently concluded a private placement worth Rs.1 billion, an official said.
A top official from Sierra Group told Mirror Business that Agstar Fertilizers had got nearly 100 private investors who subscribed voting shares of the company at Rs.8 per share.
“We will be listing the company by way of an Introduction” he said. Accordingly, the company will start trading on CSE by August this year.
Agstar Fertilizers (Pvt) Ltd. incorporated in 2002 is engaged in fertilizer marketing under Agstar brand, and the goal of Agstar is to satisfy specific needs of the commercial agriculturists and rural farmers through valued-added innovative superior quality products.
Agstar Fertilizers is a 50% subsidiary of Sierra Holdings and a 20% subsidiary of Sierra Constructions whilst Browns group and LOLC Group holds equally 9.99% of Agstar, Sierra Holdings and Sierra Constructions.
source - www.dailymirror.lk
Mission accomplished, says Senanayake stepping down as SMB Dty. Chairman
After 14 years at the helm of the Seylan Merchant Bank, its current-day successor SMB Leasing and the SMB Group, Rohan Senanayake has announced he will relinquish his position as Deputy Chairman of the entity he helped restructure twice, confident that his mission has been accomplished.
Senanayake, who was appointed Director/General Manager of Seylan Merchant Bank in September 1997 and later became the Deputy Chairman of the SMB Group, has announced he will continue his association with SMB Leasing as a non-executive director, to devote more time to his enduring interest in fund management and corporate finance activities.
Under his stewardship, the SMB Group navigated several periods of adversity, most notably its substantial underwriting liabilities and accumulated unsecured margin trading debts that contributed to swelling non-performing debts to Rs 750 million plus in the late 1990s, and the high-profile collapse of several companies of the Ceylinco Group in 2008.
During his 14 year tenure as the chief executive at SMB, the Group weathered these and other impediments by clearing its liabilities, establishing new partnerships, expanding its range of activities in the financial services arena, restructuring operations to respond to new challenges and strategically exiting from non-productive businesses.
By December 2008 when the issues facing the Ceylinco Group came to a head, SMB’s liabilities, principally public deposits and public borrowings, exceeded Rs 4.3 billion, but the Group, which included a registered leasing company and a registered finance company, was permitted by the Central Bank to continue operating with the same Board of Directors.
Today, these liabilities have been reduced to Rs 350 million, SMB has repaid all its borrowings from the Seylan Bank, has returned to profit and will receive an infusion of Rs 700 million in December 2011 from listed warrants.
"I believe the company is now on the threshold of a new phase of growth, free from the ghosts of the past," Senanayake says. "My job is done, and I can now pursue my special interest, the capital market, in which there is much scope for innovation and new thinking."
For the three months ending 31st March 2011, the SMB Group reported gross income of Rs 41.4 million, an improvement of 7.5 per cent over the corresponding quarter of the previous year, and net profit of Rs 18.5 million, which reflected a growth of 210 per cent.
source - www.island.lk
Senanayake, who was appointed Director/General Manager of Seylan Merchant Bank in September 1997 and later became the Deputy Chairman of the SMB Group, has announced he will continue his association with SMB Leasing as a non-executive director, to devote more time to his enduring interest in fund management and corporate finance activities.
Under his stewardship, the SMB Group navigated several periods of adversity, most notably its substantial underwriting liabilities and accumulated unsecured margin trading debts that contributed to swelling non-performing debts to Rs 750 million plus in the late 1990s, and the high-profile collapse of several companies of the Ceylinco Group in 2008.
During his 14 year tenure as the chief executive at SMB, the Group weathered these and other impediments by clearing its liabilities, establishing new partnerships, expanding its range of activities in the financial services arena, restructuring operations to respond to new challenges and strategically exiting from non-productive businesses.
By December 2008 when the issues facing the Ceylinco Group came to a head, SMB’s liabilities, principally public deposits and public borrowings, exceeded Rs 4.3 billion, but the Group, which included a registered leasing company and a registered finance company, was permitted by the Central Bank to continue operating with the same Board of Directors.
Today, these liabilities have been reduced to Rs 350 million, SMB has repaid all its borrowings from the Seylan Bank, has returned to profit and will receive an infusion of Rs 700 million in December 2011 from listed warrants.
"I believe the company is now on the threshold of a new phase of growth, free from the ghosts of the past," Senanayake says. "My job is done, and I can now pursue my special interest, the capital market, in which there is much scope for innovation and new thinking."
For the three months ending 31st March 2011, the SMB Group reported gross income of Rs 41.4 million, an improvement of 7.5 per cent over the corresponding quarter of the previous year, and net profit of Rs 18.5 million, which reflected a growth of 210 per cent.
source - www.island.lk
‘RFCs would propel market growth’
Ravi Ladduwahetty
Listing of the registered finance companies would further propel the stock market and this was indeed encouraging for capital market growth, Colombo Stock Exchange Chairman Krishan Balendra told Daily News Business yesterday.
Commenting on his perceptions of so many listings this year - such as Browns Investments, Softlogic, and the Textured Jersey issue billed to open on July 7 with a host of others to follow, he said, “The CSE encourages unlisted companies to seek a listing on the bourse. This would increase the overall market cap of the CSE and improve liquidity. Companies listing on the stock exchange to raise capital in a fast growing economy is a positive development.”
He also noted that more tourism companies should list. “The tourism industry is one of the fastest growing sectors of the economy.
“The CSE would encourage more well managed companies to list and raise capital to fund their expansion and refurbishment plans,” he said.
Asked for his overall perceptions of the market in the backdrop of a war free and risk free market, he said,
“After more than 25 years of conflict that crippled the economy, we are in a period of strong economic growth and development. The private sector is likely to have new opportunities for investment and growth. In this positive environment, the Colombo bourse should offer attractive long term investment opportunities.”
Asked what he would do to promote Sri Lanka as an investment destination for Capital Markets, he said, “New initiatives such as the central counter party (CCP) and delivery versus payment (DVP) should be implemented to protect investors.
“Certain foreign portfolio funds cannot invest in the market at the moment due to the lack of guaranteed settlement.
“Other technology enhancements to improve the efficiency of the trading platform are also planned. We are also looking at more investor education programmes both locally and overseas to increase awareness of the investment opportunities that the CSE offers,” he remarked.
source - www.dailynews.lk
Listing of the registered finance companies would further propel the stock market and this was indeed encouraging for capital market growth, Colombo Stock Exchange Chairman Krishan Balendra told Daily News Business yesterday.
Commenting on his perceptions of so many listings this year - such as Browns Investments, Softlogic, and the Textured Jersey issue billed to open on July 7 with a host of others to follow, he said, “The CSE encourages unlisted companies to seek a listing on the bourse. This would increase the overall market cap of the CSE and improve liquidity. Companies listing on the stock exchange to raise capital in a fast growing economy is a positive development.”
He also noted that more tourism companies should list. “The tourism industry is one of the fastest growing sectors of the economy.
“The CSE would encourage more well managed companies to list and raise capital to fund their expansion and refurbishment plans,” he said.
Asked for his overall perceptions of the market in the backdrop of a war free and risk free market, he said,
“After more than 25 years of conflict that crippled the economy, we are in a period of strong economic growth and development. The private sector is likely to have new opportunities for investment and growth. In this positive environment, the Colombo bourse should offer attractive long term investment opportunities.”
Asked what he would do to promote Sri Lanka as an investment destination for Capital Markets, he said, “New initiatives such as the central counter party (CCP) and delivery versus payment (DVP) should be implemented to protect investors.
“Certain foreign portfolio funds cannot invest in the market at the moment due to the lack of guaranteed settlement.
“Other technology enhancements to improve the efficiency of the trading platform are also planned. We are also looking at more investor education programmes both locally and overseas to increase awareness of the investment opportunities that the CSE offers,” he remarked.
source - www.dailynews.lk
Textured Jersey to take advantage
Potential growth opportunities in Sri Lanka, South Asia:
Ramani Kangaraarachchi
The latest listing would enable Textured Jersey to take advantage of potential growth opportunities in both Sri Lanka and South Asian region, Brandix Lanka CEO and Textured Director Jersey Ashroff Omar told a media briefing at the Taj Samudra Hotel yesterday. He said that the infrastructure at the 650,000 sq ft facility in Avissawella enables a capacity to knit ,dye and finish up to 2.5 million metres of fabric a month .
Omar said that Textured Jersey has delivered strong financial results during the last five years despite facing challenges in the form of rising cotton prices, energy costs and loss of tariff concessions.
He said that the company recorded a net profit US $ 6.1 million after tax. Knit products were the fastest growing segment of the Sri Lankan apparel export market, which is growing strongly even after the end of the GSP regime last year. It is a major supplier to apparel manufacturers throughout Asia and end retailers being the pre -eminent producer of value added knitted fabric.
Pacific Textiles CEO Bill Lam said “Volatility in cotton prices and regional currency appreciation are industry wide headwinds but these challenges will facilitate industry consolidation in the longer term.
source - www.dailynews.lk
Ramani Kangaraarachchi
The latest listing would enable Textured Jersey to take advantage of potential growth opportunities in both Sri Lanka and South Asian region, Brandix Lanka CEO and Textured Director Jersey Ashroff Omar told a media briefing at the Taj Samudra Hotel yesterday. He said that the infrastructure at the 650,000 sq ft facility in Avissawella enables a capacity to knit ,dye and finish up to 2.5 million metres of fabric a month .
Omar said that Textured Jersey has delivered strong financial results during the last five years despite facing challenges in the form of rising cotton prices, energy costs and loss of tariff concessions.
He said that the company recorded a net profit US $ 6.1 million after tax. Knit products were the fastest growing segment of the Sri Lankan apparel export market, which is growing strongly even after the end of the GSP regime last year. It is a major supplier to apparel manufacturers throughout Asia and end retailers being the pre -eminent producer of value added knitted fabric.
Pacific Textiles CEO Bill Lam said “Volatility in cotton prices and regional currency appreciation are industry wide headwinds but these challenges will facilitate industry consolidation in the longer term.
source - www.dailynews.lk
Fresh IPOs add Rs 5.6 b to market in 2011
Ten finance companies already listed and ready for trading:
Ravi LADDUWAHETTY
Buoyed by an environment of sustainable and durable peace and buttressed by a positive investment and growth climate, the six fresh initial public offerings held this year, have already added Rs 5.6 billion to the Colombo Stock Market.
The six IPOs which have added the Rs 5.6 billion to the market were: 26,666,667 shares of Singer Finance Lanka at the rate of Rs 15 which has yielded Rs 400,000,005 on January 17; 200 million shares of Pan Asian Power at the rate of Rs 3 which yielded Rs 600 million on January 7; 19,928,598 shares of HVA Foods at Rs 16 which yielded Rs 318,857,568 on March 29; 15 million shares of Union Bank at the rate of Rs 25 which yielded Rs 375 million; 300 million shares of Free Lanka Capital Holdings at the rate of Rs 5 which yielded Rs 1.5 billion and the 172 million shares of Expo Lanka Holdings Ltd at the rate of Rs 14 which yielded Rs 2,408,000. The total yielded so far by these issues, have aggregated to Rs 5,601,857,573.
Consequent to the Central Bank’s directive for registered finance companies to list on the Stock Exchange by June 30, there have been ten of them which have already been listed and they are ready for trading.
They are: Senkadagala Finance Company Limited which has listed 53,368,000 shares on March 22, Swarnamahal Financial Services Ltd which has listed 25,000,007 shares on May 26, The Multi Finance Company which has listed 17,976,325 shares on May 30, Chilaw Finance which has listed 28,083,948 shares on May 30, Commercial Credit Ltd which has listed 218,074 AMW, 365 on June 1, AMW Capital Leasing Ltd which has listed 20 million shares on June 8, Mercantile Investments Limited which has listed 3,006,000 shares on June 2, Associated Motor Finance Company Ltd which has listed 5,608,355 shares on June 23, Bimputh Lanka Investments Limited which has listed 20,200,002 shares on June 13 and Abans Financial Services which has listed 37 million shares on June 27.
source - www.island.lk
Ravi LADDUWAHETTY
Buoyed by an environment of sustainable and durable peace and buttressed by a positive investment and growth climate, the six fresh initial public offerings held this year, have already added Rs 5.6 billion to the Colombo Stock Market.
The six IPOs which have added the Rs 5.6 billion to the market were: 26,666,667 shares of Singer Finance Lanka at the rate of Rs 15 which has yielded Rs 400,000,005 on January 17; 200 million shares of Pan Asian Power at the rate of Rs 3 which yielded Rs 600 million on January 7; 19,928,598 shares of HVA Foods at Rs 16 which yielded Rs 318,857,568 on March 29; 15 million shares of Union Bank at the rate of Rs 25 which yielded Rs 375 million; 300 million shares of Free Lanka Capital Holdings at the rate of Rs 5 which yielded Rs 1.5 billion and the 172 million shares of Expo Lanka Holdings Ltd at the rate of Rs 14 which yielded Rs 2,408,000. The total yielded so far by these issues, have aggregated to Rs 5,601,857,573.
Consequent to the Central Bank’s directive for registered finance companies to list on the Stock Exchange by June 30, there have been ten of them which have already been listed and they are ready for trading.
They are: Senkadagala Finance Company Limited which has listed 53,368,000 shares on March 22, Swarnamahal Financial Services Ltd which has listed 25,000,007 shares on May 26, The Multi Finance Company which has listed 17,976,325 shares on May 30, Chilaw Finance which has listed 28,083,948 shares on May 30, Commercial Credit Ltd which has listed 218,074 AMW, 365 on June 1, AMW Capital Leasing Ltd which has listed 20 million shares on June 8, Mercantile Investments Limited which has listed 3,006,000 shares on June 2, Associated Motor Finance Company Ltd which has listed 5,608,355 shares on June 23, Bimputh Lanka Investments Limited which has listed 20,200,002 shares on June 13 and Abans Financial Services which has listed 37 million shares on June 27.
source - www.island.lk
Monday, June 27, 2011
Shot-gun regulations come under fire by industry; SEC urged to consult and regulate
Capital Markets Workshop
By Duruthu Edirimuni Chandrasekera
Sri Lanka’s stock market which has come under considerable scrutiny over the past few months is not over regulated, but the ‘rush’ to regulate has to be stopped, according to a corporate lawyer.
"The regulations put out by the Securities and Exchange Commission (SEC) in the recent past had issues as there was no consultation with the industry. The regulations weren’t consistent and predictable. You can’t rush to regulate – you must consult and then regulate,” former Director General of the SEC and now Precedent Partner of Nithya Partners Arittha Wikramanayake told the Business Times on the sidelines of a high-level two day capital market development workshop organized by the SEC last weekend outside Colombo.
He pointed out that the recent introduction of price bands has not stopped manipulations. “The industry is smarter to find a way over it. You don’t put price bands - it’s fundamentally wrong and they may have resulted in over regulation,” he said.
Addressing the gathering as the keynote speaker on ‘Is the stock market overregulated?’ he added that the biggest dilemma the industry currently faces is that there’s no standard to judge the level of regulation in the Colombo stock market. Mr. Wikramanayake pointed out that the more the laws, the more regulation there is but at times the number of regulations increase, without any enforcement. According to him, the ease of regulation, formal costs of compliance, etc are some gauges to measure the level of regulation by SEC.
Shot-gun
Mr. Wikramanayake noted that there’s a huge transaction cost and in this retail – driven market the regulations pose a serious issue. He said the shot-gun approach to stockbroker credit regulation which was imposed by the regulator a couple of months ago is an example.
“Trading in penny stocks and price movements are worrisome, but there should be market awareness and also enforcement of existing regulation, as the existing laws is sufficient. The credit rules should be based on the exposure levels of each stockbroker,” he added.
Another point he made was whether there is transparency and fairness in the regulations which were put out by the SEC. “Good regulations must be facilitators. Many regulations are seen with resentment by the industry. SEC’s nitpicking is overbearing on some share market participants." He said that in as much as the market participants should be governed by a code of conduct, the same has to be applied to the regulator (in terms of SEC decisions being leaked to the media before formal announcements).
Ray Abeywardhana, CEO Acuity, said for broader rules and regulations there should be a consultative committee to look at issues that are not confidential in nature so that a more thoughtful process can be given before the rules are implemented. “For example, as an investment banker I have reservations about the allocation for Initial Public Offerings and on brokers not being permitted to lend. We need to look at the high cost of transferring client portfolios' to margin trading,” he said.
Don’t be a dampener
Hiran de Alwis. Director Colombo Stock Exchange (CSE) noted that there’s enough regulation, but effective enforcement is what is needed. “The regulator should be a facilitator, not a dampener."
Dhammika Perera, Director Investigations SEC pointed out that the recent regulatory measures were mainly due to what transpired in the market. “With the support of the industry, there was a bubble being created in the market. The regulator was reluctantly compelled to bring about these rules to immediately arrest this situation," he said, adding that this was the remedial action. He added that these are no 100% merit or disclosure based jurisdictions in the world. “The regulations in the past were situational,” he said, adding that at the time, the market witnessed rampant manipulation.
Pump to dump
Posing a question to the panel, Tushan Wickramasinghe, Managing Director, Capital TRUST Securities asked the panel to properly define what the much talked about phrase "pump and dump" is so that investors and stock brokers know exactly what they can do and what they should not do. “There seems to be over 16 million mobile phones in our country, but in our stock market there are only about 30,000 investors who actively invest in shares. Therefore, if the necessary steps are taken, then one million investors will be in our stock market and then no one can manipulate it,” he said.
Dhanushka Samarasinghe, Director TKS Holdings told the Business Times that total freedom in financial markets would lead to a “survival of the fittest” scenario, at the expense of ill informed and less knowledgeable market participants. Most often the affected party would be the relatively less wealthy retail investors albeit part of their losses could be attributed to demerits of speculation and gambler instincts of their own.
Let the fools burn
“Therefore the free market advocates are quick to say that let the fools burn and learn and if not get burned again! However the regulator is forced to the middle with the uphill task of creating freer markets whilst ensuring equality to all market stakeholders. As such rules by the SEC would not always be rosy to all market participants and hence lead to criticism of the regulator,” he said, noting that the SEC has taken many initiatives to develop and sustain the capital markets in the recent past.
He pointed out that it’s always better to have an active regulator as opposed to an SEC which prolongs its action and maybe in the worst case take no action at all. “With large monetary considerations at stake and market reacting every second the SEC would have to take swift action to mitigate the formation of undue risk in the system. So in hindsight one could view such action taken by the SEC as stop gap measures to avoid market chaos, though in reality it is arguable whether any better alternative existed to manage the risk posed by herd mentality in selected counters. The regulator action has moved from being situational to more strategic and preemptive in nature. Such indication by the SEC is most welcome by the market participants and improves confidence on the Sri Lankan market,” he explained.
Catch me if you can
Adding that market manipulation is part and parcel of capital markets, he was more critical on advocates who look upon to developed (or so defined) markets such as the USA for answers to mitigate manipulation.
"The level of manipulation in so called developed and sophisticated markets is many fold compared to ours and it’s a disgrace for us to be compared with that. The question of manipulation arises due to part of the market participants ending up in the losing end while a few become victorious on a given day. Such volatility and vulnerability exists because people would want to make a quick buck and become blind followers and worshippers of speculation. Therefore it is no doubt that part of the blame should be borne by the parties who were affected whilst initiating organized speculation and false buying pressure are aspects which should be punishable," he said, lauding SEC for trying to educate the public on investing wisely whilst seeking to amend the rules and regulations in order to bring about controls to speculation and organized manipulation.
Malik Cader Director General SEC said that there’s a ‘catch me if you can’ attitude (by some players in the markets) and it will be ‘unpleasant’ if these things come up. “The surveillance system the regulation has recognized (some erratic behaviour) and all I can say (to those responsible) is to be careful,” he warned.
Credit cost
On the topic of credit where SEC had granted until the end of this year for broking houses to clear their credit lines offered to clients (they will be able to offer credit through margin trading instead), brokers complained that extending credit was essential for business and that the cost to transfer to margin trading was large. Heraymila Director/ CEO Ravi Abeysuriya told the Business Times that it is illegal for a stockbroker in any country to lend money; however, brokerage firms all over the world allow clients if they wish, to trade "on margin" up to a maximum of 50% of the value of the clients existing portfolio value of stocks (collateral) and charge interest on the funds lent. Buying on the margin is simply a brokerage firm lending money based on collateral value.
Margin lending is a core part of a broking business and a legitimate revenue opportunity for broking firms, similar to giving credit facilities on any trading business. "SEC, to avoid a potential systemic risk (the damage that may cause to the whole industry if a broker goes bankrupt, due to excessive margin lending) completely prohibited brokerage firms in Sri Lanka from margin lending and encourage margin lending to be carried out through a separately owned company other than owned by the brokerage firm,” Mr. Abeysuriya explained, adding that the decision to completely prohibit brokerage firms in Sri Lanka from margin lending had a huge cost.
Market decline
He added that curtailing retail trading had a negative impact on the market where the market has been on the decline since. Moreover the cost of moving margin facilities to independent margin trading providers are burdensome to clients and costly as they attract stamp duty and a higher risk premium as independent margin providers are less knowledgeable about the quality of brokerage firm’s clients as well as the quality of the stocks in their clients portfolios compared to brokerage firms.
Mr. Abeysuriya said that allowing brokerage firms to engage in margin lending based on value at risk (VaR) principles where the level of margin lending is limited to meeting certain capital adequacy standards, which are monitored by SEC on a daily basis electronically. “Brokerage firms, on their part will have to adopt superior risk management and back office systems to monitor and provide pertinent information to SEC,” he added.
The forum titled "The Right Moves: Capital Market Development Workshop" was jointly organised by the Colombo Stock Brokers’ Association and Unit Trust Association of Sri Lanka. High networth investor K.C. Vignarajah, a protector of the rights of minority shareholders, was critical of the role of independent directors saying they were not independent as they should be and often go along with board decisions without debate.(Also see above)
Speaking during one of the panel discussions, he suggested that such directors, who play an impartial role in the board, should have a stake in the company (for them to be effective and be concerned about how well the institution is run) and should be elected by minority shareholders, not the controlling interests.
source - www.sundaytimes.lk
By Duruthu Edirimuni Chandrasekera
Sri Lanka’s stock market which has come under considerable scrutiny over the past few months is not over regulated, but the ‘rush’ to regulate has to be stopped, according to a corporate lawyer.
"The regulations put out by the Securities and Exchange Commission (SEC) in the recent past had issues as there was no consultation with the industry. The regulations weren’t consistent and predictable. You can’t rush to regulate – you must consult and then regulate,” former Director General of the SEC and now Precedent Partner of Nithya Partners Arittha Wikramanayake told the Business Times on the sidelines of a high-level two day capital market development workshop organized by the SEC last weekend outside Colombo.
He pointed out that the recent introduction of price bands has not stopped manipulations. “The industry is smarter to find a way over it. You don’t put price bands - it’s fundamentally wrong and they may have resulted in over regulation,” he said.
Addressing the gathering as the keynote speaker on ‘Is the stock market overregulated?’ he added that the biggest dilemma the industry currently faces is that there’s no standard to judge the level of regulation in the Colombo stock market. Mr. Wikramanayake pointed out that the more the laws, the more regulation there is but at times the number of regulations increase, without any enforcement. According to him, the ease of regulation, formal costs of compliance, etc are some gauges to measure the level of regulation by SEC.
Shot-gun
Mr. Wikramanayake noted that there’s a huge transaction cost and in this retail – driven market the regulations pose a serious issue. He said the shot-gun approach to stockbroker credit regulation which was imposed by the regulator a couple of months ago is an example.
“Trading in penny stocks and price movements are worrisome, but there should be market awareness and also enforcement of existing regulation, as the existing laws is sufficient. The credit rules should be based on the exposure levels of each stockbroker,” he added.
Another point he made was whether there is transparency and fairness in the regulations which were put out by the SEC. “Good regulations must be facilitators. Many regulations are seen with resentment by the industry. SEC’s nitpicking is overbearing on some share market participants." He said that in as much as the market participants should be governed by a code of conduct, the same has to be applied to the regulator (in terms of SEC decisions being leaked to the media before formal announcements).
Ray Abeywardhana, CEO Acuity, said for broader rules and regulations there should be a consultative committee to look at issues that are not confidential in nature so that a more thoughtful process can be given before the rules are implemented. “For example, as an investment banker I have reservations about the allocation for Initial Public Offerings and on brokers not being permitted to lend. We need to look at the high cost of transferring client portfolios' to margin trading,” he said.
Don’t be a dampener
Hiran de Alwis. Director Colombo Stock Exchange (CSE) noted that there’s enough regulation, but effective enforcement is what is needed. “The regulator should be a facilitator, not a dampener."
Dhammika Perera, Director Investigations SEC pointed out that the recent regulatory measures were mainly due to what transpired in the market. “With the support of the industry, there was a bubble being created in the market. The regulator was reluctantly compelled to bring about these rules to immediately arrest this situation," he said, adding that this was the remedial action. He added that these are no 100% merit or disclosure based jurisdictions in the world. “The regulations in the past were situational,” he said, adding that at the time, the market witnessed rampant manipulation.
Pump to dump
Posing a question to the panel, Tushan Wickramasinghe, Managing Director, Capital TRUST Securities asked the panel to properly define what the much talked about phrase "pump and dump" is so that investors and stock brokers know exactly what they can do and what they should not do. “There seems to be over 16 million mobile phones in our country, but in our stock market there are only about 30,000 investors who actively invest in shares. Therefore, if the necessary steps are taken, then one million investors will be in our stock market and then no one can manipulate it,” he said.
Dhanushka Samarasinghe, Director TKS Holdings told the Business Times that total freedom in financial markets would lead to a “survival of the fittest” scenario, at the expense of ill informed and less knowledgeable market participants. Most often the affected party would be the relatively less wealthy retail investors albeit part of their losses could be attributed to demerits of speculation and gambler instincts of their own.
Let the fools burn
“Therefore the free market advocates are quick to say that let the fools burn and learn and if not get burned again! However the regulator is forced to the middle with the uphill task of creating freer markets whilst ensuring equality to all market stakeholders. As such rules by the SEC would not always be rosy to all market participants and hence lead to criticism of the regulator,” he said, noting that the SEC has taken many initiatives to develop and sustain the capital markets in the recent past.
He pointed out that it’s always better to have an active regulator as opposed to an SEC which prolongs its action and maybe in the worst case take no action at all. “With large monetary considerations at stake and market reacting every second the SEC would have to take swift action to mitigate the formation of undue risk in the system. So in hindsight one could view such action taken by the SEC as stop gap measures to avoid market chaos, though in reality it is arguable whether any better alternative existed to manage the risk posed by herd mentality in selected counters. The regulator action has moved from being situational to more strategic and preemptive in nature. Such indication by the SEC is most welcome by the market participants and improves confidence on the Sri Lankan market,” he explained.
Catch me if you can
Adding that market manipulation is part and parcel of capital markets, he was more critical on advocates who look upon to developed (or so defined) markets such as the USA for answers to mitigate manipulation.
"The level of manipulation in so called developed and sophisticated markets is many fold compared to ours and it’s a disgrace for us to be compared with that. The question of manipulation arises due to part of the market participants ending up in the losing end while a few become victorious on a given day. Such volatility and vulnerability exists because people would want to make a quick buck and become blind followers and worshippers of speculation. Therefore it is no doubt that part of the blame should be borne by the parties who were affected whilst initiating organized speculation and false buying pressure are aspects which should be punishable," he said, lauding SEC for trying to educate the public on investing wisely whilst seeking to amend the rules and regulations in order to bring about controls to speculation and organized manipulation.
Malik Cader Director General SEC said that there’s a ‘catch me if you can’ attitude (by some players in the markets) and it will be ‘unpleasant’ if these things come up. “The surveillance system the regulation has recognized (some erratic behaviour) and all I can say (to those responsible) is to be careful,” he warned.
Credit cost
On the topic of credit where SEC had granted until the end of this year for broking houses to clear their credit lines offered to clients (they will be able to offer credit through margin trading instead), brokers complained that extending credit was essential for business and that the cost to transfer to margin trading was large. Heraymila Director/ CEO Ravi Abeysuriya told the Business Times that it is illegal for a stockbroker in any country to lend money; however, brokerage firms all over the world allow clients if they wish, to trade "on margin" up to a maximum of 50% of the value of the clients existing portfolio value of stocks (collateral) and charge interest on the funds lent. Buying on the margin is simply a brokerage firm lending money based on collateral value.
Margin lending is a core part of a broking business and a legitimate revenue opportunity for broking firms, similar to giving credit facilities on any trading business. "SEC, to avoid a potential systemic risk (the damage that may cause to the whole industry if a broker goes bankrupt, due to excessive margin lending) completely prohibited brokerage firms in Sri Lanka from margin lending and encourage margin lending to be carried out through a separately owned company other than owned by the brokerage firm,” Mr. Abeysuriya explained, adding that the decision to completely prohibit brokerage firms in Sri Lanka from margin lending had a huge cost.
Market decline
He added that curtailing retail trading had a negative impact on the market where the market has been on the decline since. Moreover the cost of moving margin facilities to independent margin trading providers are burdensome to clients and costly as they attract stamp duty and a higher risk premium as independent margin providers are less knowledgeable about the quality of brokerage firm’s clients as well as the quality of the stocks in their clients portfolios compared to brokerage firms.
Mr. Abeysuriya said that allowing brokerage firms to engage in margin lending based on value at risk (VaR) principles where the level of margin lending is limited to meeting certain capital adequacy standards, which are monitored by SEC on a daily basis electronically. “Brokerage firms, on their part will have to adopt superior risk management and back office systems to monitor and provide pertinent information to SEC,” he added.
The forum titled "The Right Moves: Capital Market Development Workshop" was jointly organised by the Colombo Stock Brokers’ Association and Unit Trust Association of Sri Lanka. High networth investor K.C. Vignarajah, a protector of the rights of minority shareholders, was critical of the role of independent directors saying they were not independent as they should be and often go along with board decisions without debate.(Also see above)
Speaking during one of the panel discussions, he suggested that such directors, who play an impartial role in the board, should have a stake in the company (for them to be effective and be concerned about how well the institution is run) and should be elected by minority shareholders, not the controlling interests.
source - www.sundaytimes.lk
Sri Lanka stocks becalmed
June 27, 2011 (LBO) - Sri Lankan stocks closed almost flat Monday with speculative trade in Environmental Resources Investment (formerly known as Walker & Greig) and connected firms, brokers said.
The All Share Price Index closed at 6,894.26, up 0.02 percent (1.70 points) while the Milanka Price Index of more liquid stocks closed at 6,429.91, down 0.15 percent (9.39 points), according to stock exchange provisional figures.
Turnover was 1.9 billion rupees. There were 79 gainers and 140 losers.
Environmental Resources Investment (ERI) was the highest contributor of the day to turnover and closed at 74 rupees, up 11.90 rupees or 19.16 percent.
More than 2.3 ERI shares were traded generating 165 million rupees.
ERI W0002 warrants were the second largest contributor of the day and closed at 38.80 rupees, up 11.40 rupees or 41.61 rupees. More than 2.5 million W0002 shares changed hands generating 89 million rupees.
ERI controlled Dankotuwa Porcelain was the third largest contributor of the day to turnover and closed at 53.80 rupees, up 7.20 rupees or 15.45 percent.
ERI W0003 warrants closed at 33.20 rupees, up 33.27 percent or 8.10 rupees and W0006 warrants closed at 32.20 rupees, up 33.61 percent or 8.10 rupees.
Ceylon Leather, also controlled by ERI, closed at 98.40 rupees, up 18.90 rupees or 23.77 percent. Its W0012 warrants closed at 16.50 rupees, up 5.50 rupees or 50 percent.
Abans Financial Services (AFSL) share started trading Monday and closed at 79.80, up 70.30 rupees or 740 percent from their introductory price of 9.50 rupees. AFSL's hit a high for the day of 104.5 rupees and a low of 51 rupees.
source - www.lbo.lk
The All Share Price Index closed at 6,894.26, up 0.02 percent (1.70 points) while the Milanka Price Index of more liquid stocks closed at 6,429.91, down 0.15 percent (9.39 points), according to stock exchange provisional figures.
Turnover was 1.9 billion rupees. There were 79 gainers and 140 losers.
Environmental Resources Investment (ERI) was the highest contributor of the day to turnover and closed at 74 rupees, up 11.90 rupees or 19.16 percent.
More than 2.3 ERI shares were traded generating 165 million rupees.
ERI W0002 warrants were the second largest contributor of the day and closed at 38.80 rupees, up 11.40 rupees or 41.61 rupees. More than 2.5 million W0002 shares changed hands generating 89 million rupees.
ERI controlled Dankotuwa Porcelain was the third largest contributor of the day to turnover and closed at 53.80 rupees, up 7.20 rupees or 15.45 percent.
ERI W0003 warrants closed at 33.20 rupees, up 33.27 percent or 8.10 rupees and W0006 warrants closed at 32.20 rupees, up 33.61 percent or 8.10 rupees.
Ceylon Leather, also controlled by ERI, closed at 98.40 rupees, up 18.90 rupees or 23.77 percent. Its W0012 warrants closed at 16.50 rupees, up 5.50 rupees or 50 percent.
Abans Financial Services (AFSL) share started trading Monday and closed at 79.80, up 70.30 rupees or 740 percent from their introductory price of 9.50 rupees. AFSL's hit a high for the day of 104.5 rupees and a low of 51 rupees.
source - www.lbo.lk
Sri Lanka Sinhaputhra 'B(lka)' rating confirmed, outlook negative
June 27, 2011 (LBO) - Fitch Ratings Lanka has confirmed Sinhaputhra Finance's (SFL) national long-term rating at 'B(lka)' with a negative outlook.
The confirmation reflects the latest improvement in SFL's credit risk management practices and the subsequent "stabilisation" in its asset quality, although the latter still remains weaker than its peers' average, a statement said.
"The rating may face downward pressure if SFL fails to prevent its asset quality and net non-performing loans (NPL)/equity from weakening under the regulatory six-month classification," Fitch said.
The full text of the statement follows:
Fitch Ratings Lanka has affirmed Sinhaputhra Finance PLC's (SFL) National Long-Term rating at '(lka)'. The Outlook is Negative.
The affirmation reflects the latest improvement in SFL's credit risk management practices and the subsequent stabilisation in its asset quality, although the latter still remains weaker than its peers' average. The rating may face downward pressure if SFL fails to prevent its asset quality and net non-performing loans (NPL)/equity from weakening under the regulatory six-month classification.
The high proportion of NPLs will also constrain the company's overall net interest margins (NIM) and reduce its internal capital generation. In addition, any deterioration in corporate governance performance at SFL would also lead to a negative rating action.
Fitch notes that SFL's clientele are largely limited to the Kandy district (Central province) and its surrounding areas, and consist of the small and medium enterprise sector. Vehicle finance via leases and hire purchase agreements accounted for half of SFL's loan portfolio at end-March 2011 (FYE11), with the remainder consisting primarily of loans (majority backed by property mortgages) which has been the case over the last five years. Incremental portfolio loan growth was 11% in FYE11 following a contraction of 4% in FYE10.
Operationally, SFL's operating costs/average assets (historical five-year average was 3.5% at FYE11) has been low relative to its sector. This is partly due to better utilisation of collection centres within its network. Statutory liquidity ratios were comfortable, while interest rate risks were managed by better matching of interest bearing assets and liabilities.
The company's NIM continued to be well below the sector average at FYE11, largely because a large proportion of the lending portfolio was non-performing. SFL's NPLs over three months as a percentage of loans spiked to 32% at FYE10 from 22% at FYE09. In early January 2011, its restructured recovery and credit procedures began to take effect with its three-month NPLs/loans declining to 27% at FYE11 (end-May 2011: 24%). SFL's advances in arrears over six months (regulatory NPLs) followed a similar trend.
Established in 1978, SFL is a registered finance company. It was listed on the Colombo Stock Exchange on 2 June 2010. However, its current managing director, Ravana Wijeyeratne, continues to maintain control, holding 52% of SFL's equity.
source - www.lbo.lk
The confirmation reflects the latest improvement in SFL's credit risk management practices and the subsequent "stabilisation" in its asset quality, although the latter still remains weaker than its peers' average, a statement said.
"The rating may face downward pressure if SFL fails to prevent its asset quality and net non-performing loans (NPL)/equity from weakening under the regulatory six-month classification," Fitch said.
The full text of the statement follows:
Fitch Ratings Lanka has affirmed Sinhaputhra Finance PLC's (SFL) National Long-Term rating at '(lka)'. The Outlook is Negative.
The affirmation reflects the latest improvement in SFL's credit risk management practices and the subsequent stabilisation in its asset quality, although the latter still remains weaker than its peers' average. The rating may face downward pressure if SFL fails to prevent its asset quality and net non-performing loans (NPL)/equity from weakening under the regulatory six-month classification.
The high proportion of NPLs will also constrain the company's overall net interest margins (NIM) and reduce its internal capital generation. In addition, any deterioration in corporate governance performance at SFL would also lead to a negative rating action.
Fitch notes that SFL's clientele are largely limited to the Kandy district (Central province) and its surrounding areas, and consist of the small and medium enterprise sector. Vehicle finance via leases and hire purchase agreements accounted for half of SFL's loan portfolio at end-March 2011 (FYE11), with the remainder consisting primarily of loans (majority backed by property mortgages) which has been the case over the last five years. Incremental portfolio loan growth was 11% in FYE11 following a contraction of 4% in FYE10.
Operationally, SFL's operating costs/average assets (historical five-year average was 3.5% at FYE11) has been low relative to its sector. This is partly due to better utilisation of collection centres within its network. Statutory liquidity ratios were comfortable, while interest rate risks were managed by better matching of interest bearing assets and liabilities.
The company's NIM continued to be well below the sector average at FYE11, largely because a large proportion of the lending portfolio was non-performing. SFL's NPLs over three months as a percentage of loans spiked to 32% at FYE10 from 22% at FYE09. In early January 2011, its restructured recovery and credit procedures began to take effect with its three-month NPLs/loans declining to 27% at FYE11 (end-May 2011: 24%). SFL's advances in arrears over six months (regulatory NPLs) followed a similar trend.
Established in 1978, SFL is a registered finance company. It was listed on the Colombo Stock Exchange on 2 June 2010. However, its current managing director, Ravana Wijeyeratne, continues to maintain control, holding 52% of SFL's equity.
source - www.lbo.lk
Sri Lanka stocks regulator seen reducing systemic risk
June 27, 2011 (LBO) - Sri Lanka's capital markets regulator has reduced systemic risk by imposing restrictions on lending to buy stocks that had helped fuel a market rally, a brokerage said.
The curbs on lending were partly responsible for the market to fall from record highs in recent weeks, TKS Securities said in a research report.
"We believe curtailed retail activity (in contrast to the pre-2011 era of uncollateralized debt trading), profit taking by foreign portfolio investors and rather cautious approach by the local institutions are the main reasons for the recent lack-lustre performance.
"However, it is noteworthy that regulator directions have reduced systematic risk (by requiring all brokering houses to clear its uncovered debt by December 31, 2011 and ensuring only licensed margin providers would provide financing for share transactions) though capping retail buoyancy in the short run."
The Securities and Exchange Commission, the market regulator, imposed curbs on broker credit to clients amid fears of a stock market bubble with brokers being given time till the year-end to clear credit accounts.
TKS Securities said foreign portfolio investors who entered the market during the past 36 months (or earlier) were seen booking their profits "with all rationality" despite the strong positive outlook.
The market rally kick-started following the end of the island's 30-year war in 2009 was subdued within one and a half years making the broader market to gain only 6.1 percent in 2011 so far against the 37.6 percent gain in the corresponding period of the previous year.
"Hitherto the ability for the market to sustain and absorb the foreign selling justifies our projection of a much buoyant market when both foreign portfolio investors and local institutional investors become bullish in the future," the report said.
Sri Lanka’s macro outlook remains positive and company profits, based on a sample of 226 firms out of 255 listed in the Colombo bourse, have soared 120 percent to 137.7 billion rupees in the 2011 financial year from a year ago.
The report said corporate profits have increased 67 percent to 37.3 billion rupees in the fourth quarter of the 2011 financial year from a year ago.
In comparison, in 2010 the corporate earnings increased two folds to 22.4 billion rupees.
The banking, finance and insurance sector contributed about 27 percent to overall corporate profits while conglomerates contributed 22 percent.
The highest net profit growth rates came from the hotel, motors and power sectors, the report said.
source - www.lbo.lk
The curbs on lending were partly responsible for the market to fall from record highs in recent weeks, TKS Securities said in a research report.
"We believe curtailed retail activity (in contrast to the pre-2011 era of uncollateralized debt trading), profit taking by foreign portfolio investors and rather cautious approach by the local institutions are the main reasons for the recent lack-lustre performance.
"However, it is noteworthy that regulator directions have reduced systematic risk (by requiring all brokering houses to clear its uncovered debt by December 31, 2011 and ensuring only licensed margin providers would provide financing for share transactions) though capping retail buoyancy in the short run."
The Securities and Exchange Commission, the market regulator, imposed curbs on broker credit to clients amid fears of a stock market bubble with brokers being given time till the year-end to clear credit accounts.
TKS Securities said foreign portfolio investors who entered the market during the past 36 months (or earlier) were seen booking their profits "with all rationality" despite the strong positive outlook.
The market rally kick-started following the end of the island's 30-year war in 2009 was subdued within one and a half years making the broader market to gain only 6.1 percent in 2011 so far against the 37.6 percent gain in the corresponding period of the previous year.
"Hitherto the ability for the market to sustain and absorb the foreign selling justifies our projection of a much buoyant market when both foreign portfolio investors and local institutional investors become bullish in the future," the report said.
Sri Lanka’s macro outlook remains positive and company profits, based on a sample of 226 firms out of 255 listed in the Colombo bourse, have soared 120 percent to 137.7 billion rupees in the 2011 financial year from a year ago.
The report said corporate profits have increased 67 percent to 37.3 billion rupees in the fourth quarter of the 2011 financial year from a year ago.
In comparison, in 2010 the corporate earnings increased two folds to 22.4 billion rupees.
The banking, finance and insurance sector contributed about 27 percent to overall corporate profits while conglomerates contributed 22 percent.
The highest net profit growth rates came from the hotel, motors and power sectors, the report said.
source - www.lbo.lk
Control of J.L. Morison up for grabs? Share price hits all time high
Sending its share price to an all time high, the control of J.L. Morison and Son and Jones (Ceylon) Plc is speculated to be up for grabs with market talk of several parties keenly bidding or evaluating.
The Abeyawira family and connected parties own over 70% stake in the highly respected Group which has long standing interests in consumer products, pharmaceuticals and agro chemicals. The Group also has some good real estate.
Capital market sources said that a possible sell out by Abeyawira family has been doing the rounds with at least a few brokers soliciting interest from prospective interested parties. Others said the family wasn’t on the lookout for a buyer and it was those who are keen that have been expressing interests.
Market talk is among possible contenders are several blue chips with existing exposure in related businesses as well as upcoming conglomerates.
However none of these speculated parties could be reached for confirmation whilst J.L. Morison hasn’t made any disclosure either with the latter being attributed to the fact that no deal has been finalised.
Market talk also stems hot on the heels of consumer goods heavy diversified non-listed entity Delmege Forsyth Group acquired by business leader Dhammika Perera-controlled Vallibel One Ltd and a related consortium for Rs. 3 billion a fortnight ago.
Analysts linked J.L. Morison share price hitting an all time high last week to speculation of a possible impending deal. Morison’s voting share peaked to Rs. 4,500 beating its previous best of Rs. 3,595 whilst non-voting reached Rs. 3,400 surpassing the former all time high of Rs. 2,750. The voting share closed at Rs. 4,037.30, up by Rs. 547.30 and non-voting finished the week at Rs. 3,187.90 up by Rs. 885.90. In the previous week the two classes of shares rose by Rs. 95.50 and Rs. 2 respectively whilst a week before the former rose by Rs. 94.50 and the latter dipped by Rs. 150.
Brokers said that the majority owners were looking at a price of Rs. 5,000 per share whilst the Group’s net asset value is Rs. 2,300 as at 31 March, 2011 and earnings per share was Rs. 438.50 up from Rs. 1,385 and Rs. 131.82 in the previous year.
Morison’s voting shares in issue is only 580,829 and non-voting amounts to 174,249. Last week 9,500 voting shares traded apart from 11,100 non-voting shares. Volumes were unusually high last week whilst independent director A.S. Abeyewardene made a disclosure that he bought 200 non voting shares at Rs. 2,300 per share on 21 June.
The Company paid a Rs. 20 per share interim dividend in December last year for FY 2011.
J.L. Morison in FY2011 reported a Group revenue of Rs. 12.73 billion, up by 1.4% whilst profit from operations rose by 63% to Rs. 265 million. With profit of Rs. 164 million from the sale of 24% stake in Colombo Pharmacy late last year, pre-tax profit rose to Rs. 429 million from Rs. 160.4 million in FY2010. Net profit grew by 233% to Rs. 331 million in FY 2011 as per provisional results.
Consumer products produced the highest turnover of Rs. 1.3 billion followed by pharmaceuticals (Rs. 834 million) and agro chemicals (Rs. 189 million) in FY 2011. Though top lines were lower in comparison to FY2010, the operating profit from these segments were better in FY2011 with pharmaceuticals producing Rs. 180.4 million (up from Rs. 114 million), consumer producing Rs. 61.4 million (up from Rs. 50.5 million) and agro chemicals Rs. 25 million (up from Rs. 15 million).
Total Group assets were worth Rs. 2.54 billion, up from Rs. 1.9 billion whilst that of the company amounted to Rs. 1.5 billion, higher from Rs. 1.2 billion as at 31 March, 2010. Group current liabilities amounted to Rs. 671 million (trade and other payables Rs. 442 million and 182 million in borrowings), down from Rs. 755 million a year earlier.
source - www.ft.lk
The Abeyawira family and connected parties own over 70% stake in the highly respected Group which has long standing interests in consumer products, pharmaceuticals and agro chemicals. The Group also has some good real estate.
Capital market sources said that a possible sell out by Abeyawira family has been doing the rounds with at least a few brokers soliciting interest from prospective interested parties. Others said the family wasn’t on the lookout for a buyer and it was those who are keen that have been expressing interests.
Market talk is among possible contenders are several blue chips with existing exposure in related businesses as well as upcoming conglomerates.
However none of these speculated parties could be reached for confirmation whilst J.L. Morison hasn’t made any disclosure either with the latter being attributed to the fact that no deal has been finalised.
Market talk also stems hot on the heels of consumer goods heavy diversified non-listed entity Delmege Forsyth Group acquired by business leader Dhammika Perera-controlled Vallibel One Ltd and a related consortium for Rs. 3 billion a fortnight ago.
Analysts linked J.L. Morison share price hitting an all time high last week to speculation of a possible impending deal. Morison’s voting share peaked to Rs. 4,500 beating its previous best of Rs. 3,595 whilst non-voting reached Rs. 3,400 surpassing the former all time high of Rs. 2,750. The voting share closed at Rs. 4,037.30, up by Rs. 547.30 and non-voting finished the week at Rs. 3,187.90 up by Rs. 885.90. In the previous week the two classes of shares rose by Rs. 95.50 and Rs. 2 respectively whilst a week before the former rose by Rs. 94.50 and the latter dipped by Rs. 150.
Brokers said that the majority owners were looking at a price of Rs. 5,000 per share whilst the Group’s net asset value is Rs. 2,300 as at 31 March, 2011 and earnings per share was Rs. 438.50 up from Rs. 1,385 and Rs. 131.82 in the previous year.
Morison’s voting shares in issue is only 580,829 and non-voting amounts to 174,249. Last week 9,500 voting shares traded apart from 11,100 non-voting shares. Volumes were unusually high last week whilst independent director A.S. Abeyewardene made a disclosure that he bought 200 non voting shares at Rs. 2,300 per share on 21 June.
The Company paid a Rs. 20 per share interim dividend in December last year for FY 2011.
J.L. Morison in FY2011 reported a Group revenue of Rs. 12.73 billion, up by 1.4% whilst profit from operations rose by 63% to Rs. 265 million. With profit of Rs. 164 million from the sale of 24% stake in Colombo Pharmacy late last year, pre-tax profit rose to Rs. 429 million from Rs. 160.4 million in FY2010. Net profit grew by 233% to Rs. 331 million in FY 2011 as per provisional results.
Consumer products produced the highest turnover of Rs. 1.3 billion followed by pharmaceuticals (Rs. 834 million) and agro chemicals (Rs. 189 million) in FY 2011. Though top lines were lower in comparison to FY2010, the operating profit from these segments were better in FY2011 with pharmaceuticals producing Rs. 180.4 million (up from Rs. 114 million), consumer producing Rs. 61.4 million (up from Rs. 50.5 million) and agro chemicals Rs. 25 million (up from Rs. 15 million).
Total Group assets were worth Rs. 2.54 billion, up from Rs. 1.9 billion whilst that of the company amounted to Rs. 1.5 billion, higher from Rs. 1.2 billion as at 31 March, 2010. Group current liabilities amounted to Rs. 671 million (trade and other payables Rs. 442 million and 182 million in borrowings), down from Rs. 755 million a year earlier.
source - www.ft.lk
TJ to up fabric production by 40 pc
Ravi LADDUWAHETTY
The Rs 1.2 billion Textured Jersey (TJ) Initial Public Offering (IPO) opening on July 7, will aim to increase the weft fabric production at its Seethawaka Industrial Zone factory by 40 percent.
“The weekly production of the factory is around 220 tonnes of weft fabric and we hope to increase it by 40 percent. The total cost of the expansion will be Rs 1.4 billion and the remainder of Rs 200 million will be funded by internally generated funds,” a company spokesman told Daily News Business yesterday.
Textured Jersey will also declare a dividend of one third of the profits to the new shareholders after the IPO and two thirds will go in for the factory expansion, he said.
The buildings for the factory expansion will be constructed at a cost of approximately Rs 344 million (US$ 3.2 million). This facility will be in line with all modern production requirements and be built according to internationally accepted quality standards.
Approximately Rs 1 billion (US $ 9.2 million) will be utilized to purchase knitting machines, preparation machines, dyeing and finishing machines and infrastructure facilities to house the expansion including buildings.
This state-of-the-art machinery will enable the Company to increase its production efficiency and to further facilitate the Company’s future growth prospects.
The machines will be imported from China and Europe, he said.
Textured Jersey Lanka Limited leased the land from the Board of Investment of Sri Lanka with an extent of 12 acres.
source - www.dailynews.lk
The Rs 1.2 billion Textured Jersey (TJ) Initial Public Offering (IPO) opening on July 7, will aim to increase the weft fabric production at its Seethawaka Industrial Zone factory by 40 percent.
“The weekly production of the factory is around 220 tonnes of weft fabric and we hope to increase it by 40 percent. The total cost of the expansion will be Rs 1.4 billion and the remainder of Rs 200 million will be funded by internally generated funds,” a company spokesman told Daily News Business yesterday.
Textured Jersey will also declare a dividend of one third of the profits to the new shareholders after the IPO and two thirds will go in for the factory expansion, he said.
The buildings for the factory expansion will be constructed at a cost of approximately Rs 344 million (US$ 3.2 million). This facility will be in line with all modern production requirements and be built according to internationally accepted quality standards.
Approximately Rs 1 billion (US $ 9.2 million) will be utilized to purchase knitting machines, preparation machines, dyeing and finishing machines and infrastructure facilities to house the expansion including buildings.
This state-of-the-art machinery will enable the Company to increase its production efficiency and to further facilitate the Company’s future growth prospects.
The machines will be imported from China and Europe, he said.
Textured Jersey Lanka Limited leased the land from the Board of Investment of Sri Lanka with an extent of 12 acres.
source - www.dailynews.lk
Tea records negative variance
Sri Lanka tea averages to end May 2011 records a negative variance of 0.39 percent compared with the corresponding period of 2010 which was a record year for averages and production. High Grown averages are marginally higher with a variance of 0.08 percent where as Medium and Low Grown has recorded negative variances of 0.91 percent and 0.29 percent respectively.
CTC Low Grown averages in particular have recorded the highest slide with a negative variance of 7.27 percent. In comparison, Low Grown CTC averages in 2010 did exceptionally well with monthly averages in excess of Rs 400, with the exception of November where the averages dropped to Rs 395.72. Against the back drop of these attractive averages which extended into the first quarter of 2011, what we are seeing today is a sharp drop in prices for this category of tea. From the month of April 2011, CTC Low Grown averages have declined by approximately 11 percent compared with the corresponding period of 2010.
Sri Lanka tea crop for May of 32.0 Mkgs, although marginally down compared with corresponding month of 2010, (33.3Mkgs) is still a very satisfactory crop considering that in March of this year the crop harvested was 33.3 Mkgs which was the highest on record surpassing the previous best of 32.4 Mkgs in 2008. The strong performance in the first five months of May 2011 has helped maintain a slight advantage of 1.5 Mkgs (1.15 percent) over last year which, as already reported, was a record year.
On the global front whilst there is a positive variance on production in Asia (India and Sri Lanka) reports from Africa suggest, crop declines in Kenya, Malawi and Tanzania due to colder and drier weather. June crop from this region is also very likely to be down on last year.
There are reports that heavy rainfall in China leading to severe flooding could lead to production declines.
The flooding across Eastern, Southern and South Western China has caused widespread damage to Agricultural crops. It is reported that 171,000 hectares (422,550acres) of crops have been destroyed with more than one million acres of farm land in Eastern provinces inundated due to the floods.
Last week’s large volume of 1.7 Mkgs of Ex Estate teas as expected, met with lower demand and consequently prices declined Rs 15 to Rs 20 and more. A few Select Best Western High Grown BOP/BOPFs sold well following quality, while others tended lower. The Below Best and plainer types too declined Rs 20 and more.
Nuwara Eliya’s continued with its downwards trend with many invoices remaining unsold and prices for both BOP/BOPFs on average only selling between Rs 250 to Rs 280 and Rs 250 to Rs 285 respectively. Uva’s were irregularly lower by Rs 15 to Rs 20. Best Low Grown CTC PF1s maintained and at times were a little dearer, whilst the balance were irregularly lower with a fair weight remaining unsold. High and Medium PF1s too declined Rs 10 to Rs 15 with a number of invoices also remaining unsold.
Another disappointing week for the Low Grown tea prices. The few select best BOP1 and OP1s advanced fairly sharply, but all others met with a lower market. The below best OP1s were difficult of sale with a high percentages of withdrawals. A handful of Pekoe1s met with a dearer market, all others declined Rs 10 to Rs 15.
The Russian buyers were fairly strong but all other markets were rather subdued.
Western Teas
Select Best BOPs declined Rs 20 to Rs 25 and at times more, whilst the below best sorts too eased by a similar margin. Plainer varieties were Rs 10 to Rs 15 easier. Select Best BOPFs were lower by Rs 15 to Rs 20 and at times more while the Below Best sorts were lower by Rs 20 Plainer varieties were Rs 10 to Rs 15 lower. Medium BOPs eased Rs 10 to Rs 30 whilst the BOPFs were Rs 20 to Rs 30 lower.
Nuwara Eliya
Teas BOPs were Rs 10 to Rs 15 easier, whilst the BOPFs too were lower by Rs 10 to Rs 20.
Uva Teas
BOPs were easier by Rs 10 to Rs 15, while the BOPFs too were lower by a similar margin. Uda Pussellawa BOPs were Rs 10 to Rs 15 lower while the BOPFs too were Rs 10 to Rs 20 easier.
CTC Teas
Select Best Low Grown PF1s were irregularly firm to dearer at times while the others eased by Rs 5 to Rs 10 and at times more. BP1s were lower by Rs 5 to Rs 10. High and Medium PF1s were easier by Rs 10 to Rs 20, while the BP1s too eased by Rs 10 to Rs 15.
Low Growns
Fair demand. Select Best BOP1s/OP1s were firm while the Best and the Below Best types were irregularly lower by Rs 10 to Rs 15 and declined further as the sale progressed, poorer sorts declined Rs 10 to Rs 20.
Select Best OP/OPAs appreciated by Rs 15 to Rs 20 and more at times, while the Best types were firm to dearer Rs 5 to Rs 10 on average. Below Best and poorer sorts declined Rs 15 to Rs 20 with a large volume remaining unsold. Shotty Pekoe/Pekoe1s were firm to dearer Rs 5 to Rs 10 while the Best and the Below Best types declined Rs 15 to Rs 20 on average. Bold Pekoes declined further by Rs 20 to Rs 25 and more at times. Select Best BOP/BOPSPs were firm, Best types were lower by Rs 5 to Rs 10, Below Best sorts declined Rs 10 to Rs 15, Poor types were firm.
Select Best FBOPs maintained last levels, Best and Below Best types shed Rs 5 to Rs 10, Below Best types too were lower by a similar margin. Select Best FBOPF1s maintained last levels, Best types advanced a few rupees above last, Below Best and poorer sorts shed Rs 5 to Rs 10. Select Best and Best Typpy sorts declined on last levels, Below Best types were often neglected due to lack of demand, Poor types were lower by Rs 10 to Rs 20.
Off Grades
Select Best liquoring Fngs1s depreciated by Rs 5 to Rs 10, while the Below Best and Poorer sorts eased by Rs 10 to Rs 15 and more at times. Select Best and Best BMs sold at firm levels whilst the Below Best and Poorer sorts were irregularly dearer by Rs 10. All Low Grown Fngs shed Rs 15 on average.
All BPs appreciated by Rs 10. Select Best BOP1As along with the Best were lower to last by Rs 5 to Rs 10 and more at times, Below Best and Poorer sorts too shed by a similar margin.
Dust
Select Best Dust1s were firm. A few invoices in the Best and Below Best category advanced Rs 5 to Rs 10 while the balance declined Rs 10 to Rs 15. All secondary Dusts shed Rs 5 to Rs 10. Best Low Grown Dust/Dust1s were firm while the balance eased Rs 15 to Rs 20.
source - www.dailynews.lk
CTC Low Grown averages in particular have recorded the highest slide with a negative variance of 7.27 percent. In comparison, Low Grown CTC averages in 2010 did exceptionally well with monthly averages in excess of Rs 400, with the exception of November where the averages dropped to Rs 395.72. Against the back drop of these attractive averages which extended into the first quarter of 2011, what we are seeing today is a sharp drop in prices for this category of tea. From the month of April 2011, CTC Low Grown averages have declined by approximately 11 percent compared with the corresponding period of 2010.
Sri Lanka tea crop for May of 32.0 Mkgs, although marginally down compared with corresponding month of 2010, (33.3Mkgs) is still a very satisfactory crop considering that in March of this year the crop harvested was 33.3 Mkgs which was the highest on record surpassing the previous best of 32.4 Mkgs in 2008. The strong performance in the first five months of May 2011 has helped maintain a slight advantage of 1.5 Mkgs (1.15 percent) over last year which, as already reported, was a record year.
On the global front whilst there is a positive variance on production in Asia (India and Sri Lanka) reports from Africa suggest, crop declines in Kenya, Malawi and Tanzania due to colder and drier weather. June crop from this region is also very likely to be down on last year.
There are reports that heavy rainfall in China leading to severe flooding could lead to production declines.
The flooding across Eastern, Southern and South Western China has caused widespread damage to Agricultural crops. It is reported that 171,000 hectares (422,550acres) of crops have been destroyed with more than one million acres of farm land in Eastern provinces inundated due to the floods.
Last week’s large volume of 1.7 Mkgs of Ex Estate teas as expected, met with lower demand and consequently prices declined Rs 15 to Rs 20 and more. A few Select Best Western High Grown BOP/BOPFs sold well following quality, while others tended lower. The Below Best and plainer types too declined Rs 20 and more.
Nuwara Eliya’s continued with its downwards trend with many invoices remaining unsold and prices for both BOP/BOPFs on average only selling between Rs 250 to Rs 280 and Rs 250 to Rs 285 respectively. Uva’s were irregularly lower by Rs 15 to Rs 20. Best Low Grown CTC PF1s maintained and at times were a little dearer, whilst the balance were irregularly lower with a fair weight remaining unsold. High and Medium PF1s too declined Rs 10 to Rs 15 with a number of invoices also remaining unsold.
Another disappointing week for the Low Grown tea prices. The few select best BOP1 and OP1s advanced fairly sharply, but all others met with a lower market. The below best OP1s were difficult of sale with a high percentages of withdrawals. A handful of Pekoe1s met with a dearer market, all others declined Rs 10 to Rs 15.
The Russian buyers were fairly strong but all other markets were rather subdued.
Western Teas
Select Best BOPs declined Rs 20 to Rs 25 and at times more, whilst the below best sorts too eased by a similar margin. Plainer varieties were Rs 10 to Rs 15 easier. Select Best BOPFs were lower by Rs 15 to Rs 20 and at times more while the Below Best sorts were lower by Rs 20 Plainer varieties were Rs 10 to Rs 15 lower. Medium BOPs eased Rs 10 to Rs 30 whilst the BOPFs were Rs 20 to Rs 30 lower.
Nuwara Eliya
Teas BOPs were Rs 10 to Rs 15 easier, whilst the BOPFs too were lower by Rs 10 to Rs 20.
Uva Teas
BOPs were easier by Rs 10 to Rs 15, while the BOPFs too were lower by a similar margin. Uda Pussellawa BOPs were Rs 10 to Rs 15 lower while the BOPFs too were Rs 10 to Rs 20 easier.
CTC Teas
Select Best Low Grown PF1s were irregularly firm to dearer at times while the others eased by Rs 5 to Rs 10 and at times more. BP1s were lower by Rs 5 to Rs 10. High and Medium PF1s were easier by Rs 10 to Rs 20, while the BP1s too eased by Rs 10 to Rs 15.
Low Growns
Fair demand. Select Best BOP1s/OP1s were firm while the Best and the Below Best types were irregularly lower by Rs 10 to Rs 15 and declined further as the sale progressed, poorer sorts declined Rs 10 to Rs 20.
Select Best OP/OPAs appreciated by Rs 15 to Rs 20 and more at times, while the Best types were firm to dearer Rs 5 to Rs 10 on average. Below Best and poorer sorts declined Rs 15 to Rs 20 with a large volume remaining unsold. Shotty Pekoe/Pekoe1s were firm to dearer Rs 5 to Rs 10 while the Best and the Below Best types declined Rs 15 to Rs 20 on average. Bold Pekoes declined further by Rs 20 to Rs 25 and more at times. Select Best BOP/BOPSPs were firm, Best types were lower by Rs 5 to Rs 10, Below Best sorts declined Rs 10 to Rs 15, Poor types were firm.
Select Best FBOPs maintained last levels, Best and Below Best types shed Rs 5 to Rs 10, Below Best types too were lower by a similar margin. Select Best FBOPF1s maintained last levels, Best types advanced a few rupees above last, Below Best and poorer sorts shed Rs 5 to Rs 10. Select Best and Best Typpy sorts declined on last levels, Below Best types were often neglected due to lack of demand, Poor types were lower by Rs 10 to Rs 20.
Off Grades
Select Best liquoring Fngs1s depreciated by Rs 5 to Rs 10, while the Below Best and Poorer sorts eased by Rs 10 to Rs 15 and more at times. Select Best and Best BMs sold at firm levels whilst the Below Best and Poorer sorts were irregularly dearer by Rs 10. All Low Grown Fngs shed Rs 15 on average.
All BPs appreciated by Rs 10. Select Best BOP1As along with the Best were lower to last by Rs 5 to Rs 10 and more at times, Below Best and Poorer sorts too shed by a similar margin.
Dust
Select Best Dust1s were firm. A few invoices in the Best and Below Best category advanced Rs 5 to Rs 10 while the balance declined Rs 10 to Rs 15. All secondary Dusts shed Rs 5 to Rs 10. Best Low Grown Dust/Dust1s were firm while the balance eased Rs 15 to Rs 20.
source - www.dailynews.lk
Liquidity crunch: Market in the red
Both indices continued on the downward trend seen for most of this month with the ASPI losing 157.47 points to close at 6892.56 and the MPI losing 161.57 to close at 6439.30. ASPI contracted by 2.23 percent and the MPI by 2.45 percent. The weekly turnover in value contracted by 38.4 percent to record a daily average turnover in value of Rs 1.77 billion when compared with last week’s daily average turnover of Rs 2.88 billion.
The number of shares traded declined by 43.8 percent, averaging 121.9 million shares traded daily as against 217 million traded last week. Banking and Finance sector returned to lead the turnover in value as activity in finance counters was witnessed with the sector accounting for 25.5 percent of turnover in value amounting to Rs 2.26 billion. Second highest contributor to turnover was Land and Property sector which accounted for 13.66 percent amounting to 1.21 billion. Third highest on the turnover value list was Manufacturing sector with 12.96 percent or Rs 1.15 billion.
Volume of turnover for the week was dominated by Banking and Finance sector 169.2 million shares being traded or 27.76 percent of volume of turnover, followed by the Manufacturing sector which represented 22.32 percent of turnover volume as 136 million shares traded. Third highest contributor to turnover volume was the Power and Energy sector, which accounted for 14.56 percent or 88.7 million shares. Market capitalization was at Rs 2,373.08 billion while the Market Price Earning Ratio was 23.3 and Price to Book Value at 3.0 East West dominated turnover list for the week recording a turnover of Rs 814.22 million, representing 9.2 percent of the market turnover.
Blue Diamonds contributed 5.6 percent of the aggregate market turnover recording Rs 499.28. Pan Asian Power accounted for 4.83 percent or Rs 428.64 million. Shalimar was the major gainer in price witnessing an increase of 42 percent in comparison with last week price of Rs 660.20.
The share closed at Rs 940.70. Swarnamahal Finance became another major price gainer witnessing an increase of 42 percent against last week price of Rs 40.00 to close the week at Rs 56.50. Morisons (Non Voting), Chilaw Finance, Indo Malay recorded a gain of 38 percent, 29 percent and 29 percent respectively.
Kalamazoo showed a significant price decrease of 47 percent against last week price of Rs 5945.00, to close at Rs 3145 this week. Singer Industries became another loser witnessing a dip of 23 percent against the previous week price of Rs 354.10 to close at Rs 271.2.
Hunter witnessed a decline of 21 percent compared to last week’s price of Rs 1192.40, closing the week at Rs 945. Foreigners remained net sellers this week as foreign purchases recorded an average daily buying of Rs 100.33 million, compared to last week’s average daily buying of Rs 294.62 million, witnessing a contraction of 65.94 percent week on week.
Average daily foreign sales increased by 55 percent from last week to record Rs 161.79 daily average selling as against last week’s daily average of Rs 104.1 million.
Pan Asian Power topped the volume list recording 80.09 million shares changing hands representing 13.14 percent of the aggregate share volume. Blue Diamonds (Non Voting) contributed 9.86 percent of aggregate share volume with 60.1 million shares changing hands. Blue Diamonds (Voting), East West and Amana were other popular shares for the week.
Point of view
As anticipated, retail dominance continued during the week’s trading with very low institutional participation.
Selling pressure continued due to settlement dates and investors cashing in on equity portfolios to meet liquidity requirements to invest in the primary offers. This resulted in both indices recording further declines from last week’s close.
Acuity stockbrokers research
source - www.dailynews.lk
The number of shares traded declined by 43.8 percent, averaging 121.9 million shares traded daily as against 217 million traded last week. Banking and Finance sector returned to lead the turnover in value as activity in finance counters was witnessed with the sector accounting for 25.5 percent of turnover in value amounting to Rs 2.26 billion. Second highest contributor to turnover was Land and Property sector which accounted for 13.66 percent amounting to 1.21 billion. Third highest on the turnover value list was Manufacturing sector with 12.96 percent or Rs 1.15 billion.
Volume of turnover for the week was dominated by Banking and Finance sector 169.2 million shares being traded or 27.76 percent of volume of turnover, followed by the Manufacturing sector which represented 22.32 percent of turnover volume as 136 million shares traded. Third highest contributor to turnover volume was the Power and Energy sector, which accounted for 14.56 percent or 88.7 million shares. Market capitalization was at Rs 2,373.08 billion while the Market Price Earning Ratio was 23.3 and Price to Book Value at 3.0 East West dominated turnover list for the week recording a turnover of Rs 814.22 million, representing 9.2 percent of the market turnover.
Blue Diamonds contributed 5.6 percent of the aggregate market turnover recording Rs 499.28. Pan Asian Power accounted for 4.83 percent or Rs 428.64 million. Shalimar was the major gainer in price witnessing an increase of 42 percent in comparison with last week price of Rs 660.20.
The share closed at Rs 940.70. Swarnamahal Finance became another major price gainer witnessing an increase of 42 percent against last week price of Rs 40.00 to close the week at Rs 56.50. Morisons (Non Voting), Chilaw Finance, Indo Malay recorded a gain of 38 percent, 29 percent and 29 percent respectively.
Kalamazoo showed a significant price decrease of 47 percent against last week price of Rs 5945.00, to close at Rs 3145 this week. Singer Industries became another loser witnessing a dip of 23 percent against the previous week price of Rs 354.10 to close at Rs 271.2.
Hunter witnessed a decline of 21 percent compared to last week’s price of Rs 1192.40, closing the week at Rs 945. Foreigners remained net sellers this week as foreign purchases recorded an average daily buying of Rs 100.33 million, compared to last week’s average daily buying of Rs 294.62 million, witnessing a contraction of 65.94 percent week on week.
Average daily foreign sales increased by 55 percent from last week to record Rs 161.79 daily average selling as against last week’s daily average of Rs 104.1 million.
Pan Asian Power topped the volume list recording 80.09 million shares changing hands representing 13.14 percent of the aggregate share volume. Blue Diamonds (Non Voting) contributed 9.86 percent of aggregate share volume with 60.1 million shares changing hands. Blue Diamonds (Voting), East West and Amana were other popular shares for the week.
Point of view
As anticipated, retail dominance continued during the week’s trading with very low institutional participation.
Selling pressure continued due to settlement dates and investors cashing in on equity portfolios to meet liquidity requirements to invest in the primary offers. This resulted in both indices recording further declines from last week’s close.
Acuity stockbrokers research
source - www.dailynews.lk
Rubber production dips in March, April
Indunil Hewage
The total rubber production and the export volume saw a marked decrease in March and April in comparison to January and February.
According to the Rubber Development Department figures, total rubber production in March and April recorded 14408293 Kg and 13136293 Kg respectively as against 14728776 Kg and 15203690 Kg recorded in January and February respectively.
Total rubber export volume in March and April 2011 were 4646641 Kg and 3864918 Kg respectively over 4821377 Kg and 4883039 Kg in January and February 2011 respectively.
According to the recently held Colombo Rubber Auction, the average price of one Kilogram of Latex Crepe 1,2,3 and 4 posted Rs 658, Rs 631, Rs 575, Rs 514 respectively. SC.CR 1X(BR), SC.CR 3X(BR), SC.CR 4X (BR) and skim crepe were Rs 492, Rs 455, Rs 442 and Rs 435 respectively.
source - www.dailynews.lk
The total rubber production and the export volume saw a marked decrease in March and April in comparison to January and February.
According to the Rubber Development Department figures, total rubber production in March and April recorded 14408293 Kg and 13136293 Kg respectively as against 14728776 Kg and 15203690 Kg recorded in January and February respectively.
Total rubber export volume in March and April 2011 were 4646641 Kg and 3864918 Kg respectively over 4821377 Kg and 4883039 Kg in January and February 2011 respectively.
According to the recently held Colombo Rubber Auction, the average price of one Kilogram of Latex Crepe 1,2,3 and 4 posted Rs 658, Rs 631, Rs 575, Rs 514 respectively. SC.CR 1X(BR), SC.CR 3X(BR), SC.CR 4X (BR) and skim crepe were Rs 492, Rs 455, Rs 442 and Rs 435 respectively.
source - www.dailynews.lk
Acuity Partners in search of finance company
A joint venture investment banking arm of DFCC and HNB Bank, Acuity Partners (Pvt) Ltd recently in a public notice said that the company is looking out for a Registered Finance entity for a client.
Speaking to Mirror Business, an official from Acuity said that a locally established diversified company is willing to purchase outright or to acquire of controlling stake of a small or medium sized Central bank registered finance company.
source - www.dailymirror.lk
Speaking to Mirror Business, an official from Acuity said that a locally established diversified company is willing to purchase outright or to acquire of controlling stake of a small or medium sized Central bank registered finance company.
source - www.dailymirror.lk
LOFC to list 2.8 billion shares
The registered finance arm of Japanese Financial giant LOLC group, Lanka Orix Finance Company will list 2.8 billion ordinary voting shares of the company at Colombo Stock exchange by way of an introduction, a filing said.
Yet to be listed in the ‘Diri Savi’ Board of Colombo Bourse, Lanka Orix Finance (LOFC) will be the company with the highest number of issued share capital in the Banking and Finance sector surpassing 826.49 million issued voting share capital of SMB Leasing PLC, and will be the second largest listed company with a higher number of issued share capital after Dialog which has nearly 8 billion voting shares in issue.
Accordingly, the reference price of the share is yet to be informed to the market whilst market sources say that the parent entity of the company LOLC had raised nearly Rs.1.4 billion through a private sell down of 280 million shares or a 10% stake of the company to private investors at Rs.5 per share.
However it is anticipated LOFC will start trading at Rs.5 per share on the ‘Introductory Day’. Meanwhile speaking on the company’s strong growth LOLC Group Managing Director Kapila Jayawardena said that company has a public deposit base of nearly Rs.20 billion to date. The financials of LOLC for 2010 notes that group’s public deposits under management were at Rs.11.76 billion as at 30 June 2010. However, Jayawardena refused to comment about LOFC’s asset base.
LOFC which commenced business operations in 2003 has now spread its reach to establish itself as the leading RFC in the country.
LOFC’s footprint covers a wide network of strategic locations throughout the island allowing the Company to reach a broad base of deposit and lending customers. LOFC already has an expanding business portfolio which includes fixed deposits, savings, leasing, loans among many others, which caters to Individuals, Corporates and SMEs. LOFC is the only RFC in the country with Central Bank of Sri Lanka (CBSL) approval to mobilize foreign currency savings and deposits.
source - www.dailymirror.lk
Yet to be listed in the ‘Diri Savi’ Board of Colombo Bourse, Lanka Orix Finance (LOFC) will be the company with the highest number of issued share capital in the Banking and Finance sector surpassing 826.49 million issued voting share capital of SMB Leasing PLC, and will be the second largest listed company with a higher number of issued share capital after Dialog which has nearly 8 billion voting shares in issue.
Accordingly, the reference price of the share is yet to be informed to the market whilst market sources say that the parent entity of the company LOLC had raised nearly Rs.1.4 billion through a private sell down of 280 million shares or a 10% stake of the company to private investors at Rs.5 per share.
However it is anticipated LOFC will start trading at Rs.5 per share on the ‘Introductory Day’. Meanwhile speaking on the company’s strong growth LOLC Group Managing Director Kapila Jayawardena said that company has a public deposit base of nearly Rs.20 billion to date. The financials of LOLC for 2010 notes that group’s public deposits under management were at Rs.11.76 billion as at 30 June 2010. However, Jayawardena refused to comment about LOFC’s asset base.
LOFC which commenced business operations in 2003 has now spread its reach to establish itself as the leading RFC in the country.
LOFC’s footprint covers a wide network of strategic locations throughout the island allowing the Company to reach a broad base of deposit and lending customers. LOFC already has an expanding business portfolio which includes fixed deposits, savings, leasing, loans among many others, which caters to Individuals, Corporates and SMEs. LOFC is the only RFC in the country with Central Bank of Sri Lanka (CBSL) approval to mobilize foreign currency savings and deposits.
source - www.dailymirror.lk
Pacific Textiles to gain Rs.3.2 bn from Textured Jersey PP
By Jithendra Antonio
The major shareholder of Textured Jersey Lanka (TJL), Cayman Island incorporated Pacific Textiles Holdings Limited (PT) group is yet to realize a total gain of over Rs.3.2 billion or Hong Kong Dollars 230 million on the disposal of shares via TJL private placement.
“Based on the planned listing and stock offering of PT Sri Lanka, the unaudited financial information of PT Sri Lanka and relevant fair value evaluation at the date of disposal, the Group anticipates to recognize a gain on disposal of approximately HK$230 million,” the Chairman of PT Group Wan Wai Loi recently told share holders in its latest financial report.
He outlines that the Pacific Textiles Group proposes to spin-off a subsidiary, PT Sri Lanka, for a separate listing on the Main Board of the Colombo Stock Exchange.
“This proposed separate listing has been approved by the Colombo Stock Exchange, and it is anticipated that the listing will be completed by August 2011,” Loi states noting In connection with the proposed separate listing, the Group disposed 83 million shares representing 14.43% of equity interest in PT Sri Lanka under a pre-IPO private placement in May 2011.
In his review for the financial year 2011 concluded June 24, Wan Wai Loi points out that directors consider the above transactions as a single transaction. However, he further notes that in accordance with Hong Kong Accounting Standard (HKAS) 27 (Revised), the Group has remeasured its 40% retained interest in PT Sri Lanka to its fair value with the change in carrying amount recognized in profit or loss. It further states that it recognizes a goodwill in interest in associate for the remaining 40% equity interests in PT Sri Lanka of approximately HK$150 million (Rs.2.1 billion) in the consolidated financial statements for the year ending 31 March 2012.
“The Pre-IPO Private Placement was very successful. The spin-off of PT Sri Lanka for separate listing on the Main Board of the Colombo Stock Exchange is progressing well.” Wai Loi points out in his financial review. Wai Loi in his review notes that the gross proceeds to be received by the PT Sri Lanka from IPO before deducting the related legal and professional expenses is expected to be approximately US$11.0 million or Rs. 1.2 billion (approximately HK$85.9 million).
He further goes on to explain that the gearing ratio of Pacific Textile (PT), being the ratio of total debts including current and non-current borrowings and finance lease obligations to total equity, was 4.5% (up from 2.2% in 2010) attributable mainly to an increase in borrowings by PT Sri Lanka.
However, according to Wai Loi, the spin-off move of textured Jersey will undoubtedly enhance the profile of PT Sri Lanka (Textured Jersey) and provide the operation a funding platform for future business development.
“After the PT Sri Lanka IPO, we will still be the largest shareholder of PT Sri Lanka and will continue to enjoy the benefits from the growth and development of the business through our shareholding interest,” he said.
Meanwhile the segmental financial results of PT outlines that the company’s sales revenue from Sri Lanka’s Texture Jersey had shot up from HK $ 1.04 billion to HK $ 1.11 billion or Rs.15.6 billion in 2011 as the third largest contributor of group’s revenue above Hong Kong and African region operations.
The financials further states that group revenues of approximately HK$1.58 billion or Rs.22.2 billion are derived from a single external customer accounting for approximately 22% of the Group’s revenue. It also notes that the Group’s non-current assets other than financial instruments and deferred tax.
Assets amounting to HK $ 191.4 million or Rs.2.6 billion are located in Sri Lanka.
Wai Loi states that the subsidiary established and operated in Sri Lanka, Textured Jersey Lanka Limited (“PT Sri Lanka”), is exempted from income tax on its profits for 15 years from the first year of commencement of commercial operations in September 2001.
“After the expiration of the tax exemption period, the profits of PT Sri Lanka will be charged at the rate of 12% for a period of 8 years,” the financial notes.
A joint venture by Sri Lanka’s Brandix group and Hong Kong’s Pacific Textiles, Textured Jersey is hoping to announce its IPO offering 80 million ordinary voting shares today at Rs.15 per share.
source - www.dailymirror.lk
The major shareholder of Textured Jersey Lanka (TJL), Cayman Island incorporated Pacific Textiles Holdings Limited (PT) group is yet to realize a total gain of over Rs.3.2 billion or Hong Kong Dollars 230 million on the disposal of shares via TJL private placement.
“Based on the planned listing and stock offering of PT Sri Lanka, the unaudited financial information of PT Sri Lanka and relevant fair value evaluation at the date of disposal, the Group anticipates to recognize a gain on disposal of approximately HK$230 million,” the Chairman of PT Group Wan Wai Loi recently told share holders in its latest financial report.
He outlines that the Pacific Textiles Group proposes to spin-off a subsidiary, PT Sri Lanka, for a separate listing on the Main Board of the Colombo Stock Exchange.
“This proposed separate listing has been approved by the Colombo Stock Exchange, and it is anticipated that the listing will be completed by August 2011,” Loi states noting In connection with the proposed separate listing, the Group disposed 83 million shares representing 14.43% of equity interest in PT Sri Lanka under a pre-IPO private placement in May 2011.
In his review for the financial year 2011 concluded June 24, Wan Wai Loi points out that directors consider the above transactions as a single transaction. However, he further notes that in accordance with Hong Kong Accounting Standard (HKAS) 27 (Revised), the Group has remeasured its 40% retained interest in PT Sri Lanka to its fair value with the change in carrying amount recognized in profit or loss. It further states that it recognizes a goodwill in interest in associate for the remaining 40% equity interests in PT Sri Lanka of approximately HK$150 million (Rs.2.1 billion) in the consolidated financial statements for the year ending 31 March 2012.
“The Pre-IPO Private Placement was very successful. The spin-off of PT Sri Lanka for separate listing on the Main Board of the Colombo Stock Exchange is progressing well.” Wai Loi points out in his financial review. Wai Loi in his review notes that the gross proceeds to be received by the PT Sri Lanka from IPO before deducting the related legal and professional expenses is expected to be approximately US$11.0 million or Rs. 1.2 billion (approximately HK$85.9 million).
He further goes on to explain that the gearing ratio of Pacific Textile (PT), being the ratio of total debts including current and non-current borrowings and finance lease obligations to total equity, was 4.5% (up from 2.2% in 2010) attributable mainly to an increase in borrowings by PT Sri Lanka.
However, according to Wai Loi, the spin-off move of textured Jersey will undoubtedly enhance the profile of PT Sri Lanka (Textured Jersey) and provide the operation a funding platform for future business development.
“After the PT Sri Lanka IPO, we will still be the largest shareholder of PT Sri Lanka and will continue to enjoy the benefits from the growth and development of the business through our shareholding interest,” he said.
Meanwhile the segmental financial results of PT outlines that the company’s sales revenue from Sri Lanka’s Texture Jersey had shot up from HK $ 1.04 billion to HK $ 1.11 billion or Rs.15.6 billion in 2011 as the third largest contributor of group’s revenue above Hong Kong and African region operations.
The financials further states that group revenues of approximately HK$1.58 billion or Rs.22.2 billion are derived from a single external customer accounting for approximately 22% of the Group’s revenue. It also notes that the Group’s non-current assets other than financial instruments and deferred tax.
Assets amounting to HK $ 191.4 million or Rs.2.6 billion are located in Sri Lanka.
Wai Loi states that the subsidiary established and operated in Sri Lanka, Textured Jersey Lanka Limited (“PT Sri Lanka”), is exempted from income tax on its profits for 15 years from the first year of commencement of commercial operations in September 2001.
“After the expiration of the tax exemption period, the profits of PT Sri Lanka will be charged at the rate of 12% for a period of 8 years,” the financial notes.
A joint venture by Sri Lanka’s Brandix group and Hong Kong’s Pacific Textiles, Textured Jersey is hoping to announce its IPO offering 80 million ordinary voting shares today at Rs.15 per share.
source - www.dailymirror.lk
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