Sri Lanka Browns to increase hydropower generation

Aug 31, 2011 (LBO) - Sri Lanka's Browns Investments has said it plans to make use of its plantations to generate more hydropower and increase capacity to 16 megawatts and sell electricity to the national grid.

The firm, a joint venture between Brown & Company and Taprobane Holdings, said power generation is one of the sectors identified as a "sunshine industry" in which it plans to make investments.

"Browns Investments, through Free Lanka Capital Holdings, is also leveraging other assets on the estates by venturing into hydropower and leisure," the company told shareholders in its annual report.

"The company's investment into hydropower through Free Lanka continues to show good results," it said.

Two hydropower plants, Delta and Sanquhar, which are operational have the capacity to generate 3.2 megawatts.

"By harnessing hydropower potential on the estates, the company expects to generate a total of 16MW of electricity by 2013, which will be supplied to the national electricity grid," the report said.

Free Lanka Capital Holdings, a joint venture between Browns and Perpetual Holdings, is the holding company of Pussellawa and Mathurata plantations which manage 19,000 acres of tea and 13,000 acres of rubber in the hill country.

source - www.lbo.lk

Sri Lanka shares at one-week high, rupee steady

* Ceylon Hotels Corporation, DFCC boost turnover, volumes

* Rupee flat amid heavy importer demand

COLOMBO, Aug 30 (Reuters) - Sri Lanka's stock market rose on Tuesday in high volume, helped by institutional buying of Ceylon Hotels Corporation and DFCC bank , while the rupee closed steady.

The island nation's main share index rose 0.6 percent, or 41.94 points, to 6,879.29. It is the second-best performer in Asia this year, with a return of 3.7 percent, after Indonesia .

Ceylon Hotels Corporation, which accounted for a quarter of the day's volume, jumped 7.1 percent to 34.50 rupees. After the market closed, the hotel manager said one of its holding firms, Curlew (pvt) Ltd, bought 29.9 million shares at 35 rupees to lift its stake to 70 percent from 52 percent.

DFCC, which contributed 22 percent of the day's turnover, rose 3.2 percent to 135.80 rupees.

Gainers outperformed losers by 105 to 100, Thomson Reuters data showed .

Retail speculative trade on HVA foods and Singer Finance forced the regulator to impose the 10 percent price band with effect from Sept. 1 to Sept. 7.

The bourse saw a foreign inflow of 8.8 million sri lanka rupees ($80,000). The day's turnover was 4.93 billion rupees.

Tuesday's total volume was 127.8 million shares, the highest since Aug. 19 and compared with a five-day average of 77.2 million. Last year's daily average was 67.9 million shares.

The rupee ended flat at 109.89 per dollar after heavy importer demand as a state bank, through which the central bank usually directs the market, sold at 109.90, dealers said.

The stock and foreign exchange markets will be closed on Wednesday for Id-Ul-Fitr or Ramazan festival holiday. Normal trading will resume on Thursday. ($1 = 109.900 Sri Lanka rupees)

FACTORS TO WATCH:

Whether:

- Retail investors continue buying shares

- Foreign investors buy shares in large volumes

- Rupee will rise after the cenbank relaxed tough FX controls


source - www.reuters.com

Harsha breathes fire on SEC over ERI

UNP MP and its chief spokesman for the economy Dr. Harsha de Silva yesterday raised concern over Securities and Exchange Commission's (SEC) alleged leniency over its action against Environmental Resources Investment Plc (ERI).

In a statement Dr. de Silva said: "We are deeply perturbed at the news that ERI and its Directors have been let off the hook by the SEC with a negligible Rs. 10 million fine by compounding a serious offence of securities fraud.

This is totally unacceptable given the serious nature of the white collar crime in the context of continuing manipulation of the CSE by powerful individuals."

The UNP MP alleged that the ERI has ironically promised to fund the Hambantota 2018 Commonwealth Games while the investigation was being carried out.

"As a responsible opposition we will dig deeper into this fraud and its perpetrators to safeguard the interest of the large number of bona fide investors," Dr. de Silva added.

ERI or SEC officials weren’t available for comment over the UNP statement.

source - www.ft.lk

Gardiner consolidates Hotels Corp holding into one

Sanjeev Gardiner yesterday consolidated his and connected party holdings in Ceylon Hotels Corporation (CHOT) into one via an in-house deal.

Nearly 30 million shares of CHOT held by different entities was acquired by Curlew Ltd., at Rs. 35 each (Rs. 2.80 above the market) in a deal worth Rs. 1 billion increasing its stake in CHOT to 70% from 52% previously. Curlew is the investment arm of Gardiner, who is also the Chairman of the Galle Face Hotel.

Sellers yesterday included Galle Face Hotel (18.1 million shares), Cyril Gardiner Ltd., (5.8 million shares), S.E.C. Gardiner and M. Gardiner (Joint Holding) (3.06 million shares) and Union Co Ltd., (1.9 million) shares.

Overall 31.84 million shares of CHOT traded for Rs. 1.1 billion before it closed at Rs. 34.50, up by Rs. 2.30 from its previous close. It hit an intra-day high of Rs. 40. Net asset per share of the Company is Rs. 35.

source - www.ft.lk

myeaglefunds allows retail investors benefit from IPO allocation

Post war Sri Lanka has left many retail investors with little access to the upside offered in the IPO market.

NDB AVIVA Wealth Management Limited offers retail investors the unique opportunity to enjoy the advantages of preferential allocations in many IPOs yet to be offered in the local market through the special 10% allocation granted to Unit Trusts by the Securities and Exchange Commission of Sri Lanka. The Eagle Growth Fund and Eagle Growth & Income Fund managed by NDB AVIVA Wealth Management are currently the only qualifying funds in Sri Lanka able to take advantage of this exclusive prospect.

The increasing leverage towards the IPO’s in the post war economy saw small retail investors being edged out by corporate entities and high net-worth individuals, with access to bank guarantees, resulting in poor allocations. Massive levels of over-subscriptions seen on many ‘hot’ IPOs have also resulted in meager allotments to the retail investor who has subsequently not been able to reap the benefits of the post IPO price increases.

The Securities & Exchange Commission of Sri Lanka promptly took action to rectify the situation by enabling a priority access to retail investors by mandating minimum allotments of 40% for direct retail applicants and 10% for retail applicants through Unit Trusts. The Eagle Growth Fund and Eagle Growth and Income Fund are currently the only mutual funds qualified for this concession, and have already invested in selected IPO’s that were listed on the CSE.

NDB AVIVA Wealth Management, the management company of the Eagle Growth Fund and the Eagle Growth & Income Fund, is highly focused on research based investing and ensures its clients funds are invested in the quality companies with good long term profit potential. A fund performance of 117.8% and 101.5% in 2009 and 2010 respectively for the Growth Fund and 121.9% and 94.6% in 2009 and 2010 respectively for the Growth and Income Fund has ranked these funds as top performers among unit trusts, in Sri Lanka.

A joint venture between NDB Bank, Sri Lanka and AVIVA International Holdings, U.K., NDB AVIVA Wealth Management Limited is the largest private sector Fund Management Company in Sri Lanka with approximately LKR 50.0 Billion funds under management. The company has an exemplary track record of over 18 years and having a highly qualified and experienced team of professionals assisted by best in class systems.

source - www.dailymirror.lk

Gardiners consolidate CHOT holdings

Gardiners, the major shareholders of Ceylon Hotel Corporation PLC (CHOT), yesterday consolidated their shareholdings in the firm under Curlew Private Limited, a company controlled by the Gardiners, which in turn is the parent company of CHOT.

Before the share transfer, Curlew was the main shareholder having 52 percent of CHOT. Following the transaction, the shareholding of the Curlew increased to 70 percent.

According to brokers, the transaction took place through five off-market crossings, which accounted for 29.6 million shares, each at Rs.35.

The shareholdings that were transferred to the Curlew were; 314, 479 shares held by S.E.C Gardiner, 3,068, 888 shares jointly held by S.E.C Gardiner and M.Gardiner, 58, 783 shares held by Hotel International, 18, 153, 988 shares held by Galle Face Hotel Company Limited, 1, 916, 700 shares held by Union Company Limited and 5, 830, 312 held by Cyril Gardiner.

A total of 31.85 million CHOT shares were traded, becoming the highest contributor to the day’s turnover with Rs.1.12 billion.

CHOT share yesterday opened at Rs.32.20 and closed at Rs.34. The highest price it traded was Rs.40 while the lowest point was Rs.31.

The company has 171.8 million shares in issue. Sri Lanka’s state owned pension fund, Employee Provident Fund has 11 percent stake in CHOT.

source - www.dailymirror.lk

Expolanka to expand presence in H’tota

By ChannaFernandopulle

Recently listed, freight forwarding and transportation conglomerate, Expolanka Holdings said that the company is planning to have its presence in Hambantota, where a new port and an airport are coming up.

According to its annual report released yesterday, Expolanka has started operations in the BOI zone in Hambantota.

Commenting on its operations in the area, Jagath Pathiran, CEO and Director of Expolanka Freight said that they went into Hambantota on a gut feeling.

"We are starting off work with Brandix in the BOI zone. We do some shipments for them. All the infrastructure that the government is building there is what triggered the move. We thought we’d go there early and be one of the first in the area. We’ve interacted with the Hambantota Chamber of Commerce quite a bit now," Pathirana said.At present, operations in Hambantota are limited mostly to small cargo but there are plans to expand further as more investment comes into the region.

"In time to come investors will require machinery, building material and the like cleared, delivered and stored in warehouses.

CPC has also not been able to carry out revaluation of assets within regular intervals to identify the impairment of its assts, specially the refinery plants and oil pumping system which has not been repaired for long period of time

　

source - www.dailymirror.lk

Turnover nudges Rs. 5 bn. driven by Hotels Corp & DFCC

Heavy retail play on HVA, Colombo Lands and Lanka Hospitals

Turnover on the Colombo bourse ysterday nudged the Rs.5 billion mark with both indices moving up driven by large trades in the Ceylon Hotels Corporation (CHC), DFCC and to a lesser extent by recent high flyers including HVA Foods, Colombo Land and Lanka Hospitals (Apollo).

The All Share Price Index was up 41.94 points (0.61%) and the Milanka 10.88 points (0.17%)on a turnover of Rs. 4.9 billion, up from Rs. 2.6 billion the previous day, with 99 gainers slightly ahead of 93 losers.

The biggest business generator was CHC where 31 million shares were crossed at a price of Rs.35 with the counter gaining Rs.2.30 to close at Rs.34 on over 31.8 million shares traded between Rs.31 and Rs.40 generating a turnover of Rs.1.1 billion.

Well informed sources said that the controlling shareholder had engaged in a restructuring but had not sold off any shares outside the group. According to a Stock Exchange filing, Curlew (Pvt) Ltd., the parent company of CHC which held 52% controlling interest, had acquired additional 18% from connected parties.

DFCC Bank too saw slightly over 7.9 million shares done, the majority by a crossing of 7.9 million shares at a price of Rs.135 in one large parcel shortly after trading opened yesterday. The counter gained Rs.4.20 to close at Rs.136 trading between Rs.134 and Rs.136 contributing nearly Rs.1.1 billion to turnover.

There was a surge of activity on HVA Foods where nearly 13.8 million shares were traded between Rs.48 and Rs.58.50 gaining Rs.12.50 to close at Rs.56.50 generating a turnover of Rs.750.9 million.

The CSE imposed price bands on HVA and on Singer Finance with effect from Sept. 1 to Sept. 7 inclusive of both days as both shares had been moving up steeply in recent days.

Singer Finance saw over 4.4 million shares traded between Rs.38.70 and Rs.43.40 gaining Rs.2.90 to close at Rs.41.60.

Other shares that were highly traded included Colombo Land and Lanka Hospitals which were largely retail driven. Colombo Land closed Rs.2.10 up at Rs.65.50 on nearly 4.5 million shares while Lanka Hospitals gained a rupee to close at Rs.67.90 on 2.7 million shares.

Multi Finance, a newly listed finance company, gained Rs.11.60 to close at Rs.63.90 on nearly 3.8 million shares done between Rs.51.60 and Rs.66.60.

Softlogic Finance announced an interim dividend of Rs.1.50 per share for 2011/12 XD from Sept. 9 and payment on Sept. 15.

Other dividends announced yesterday were by Coco Lanka which will pay a final dividend of Re.1 per share for 2010/11 following an AGM on Sept. 16. The share will trade XD from Sept. 19 with payment on Sept. 21.

Ceylon Theatres group announced final dividends for 2010/11 for three companies, Office Equipment (Rs.30 per share), Kalamazoo Systems (Rs.5 per share) and Ceylon Printers (Rs.10 per share).

Brown & Company announced an interim dividend of Rs.1.32 per share for 2011/12 XD from Sept. 8 with payment on Sept. 19.

source - www.island.lk

Janashakthi “most profitable” among all quoted insurance firms

Recording a Profit after Tax of Rs. 280 m for 1H (first half) 2011, Janashakthi Insurance PLC (JIPLC) became the most profitable insurer from among all quoted insurance companies in Sri Lanka.

This is a growth of 98% in comparison to a profit after tax of Rs.145 m in 2010 in the same period and is considered a remarkable achievement given the nature of the industry which has 19 players competing, the company said in a statement.

Prakash Schaffter, Managing Director of JICPLC said, "Despite aggressive competition in Sri Lanka’s insurance industry and with such a large number of players, we are proud to record the highest profit quantum."

Schaffter attributed this achievement to the company’s strategy of focusing on the bottom line while offering a wide array of insurance products and services with unmatched benefits to policyholders, coupled with exceptional service standards. "This enabled us to retain our existing customers together with timely settlement of claims which amounted to over Rs. 1.4 b during the first half of 2011", he added.

The company showed a consolidated GWP growth of 23%. Janashakthi’s Motor Gross Written Premium (GWP) amounted to Rs. 1.7 b which is an increase of 18% over the 2010 first half of Rs. 1.5 b while the Life GWP amounted to Rs. 869 m which is an increase of 23% over the 2010 first half of Rs. 707 m. The Non Motor GWP amounted to Rs. 736 m which is an increase of 39% over the 2010 first half of Rs. 531 m.

"Our proven track record has helped us gain the confidence of the general public. We have the highest stated capital among Public Quoted Insurance Companies, amounting to over Rs. 1.49 b. This is over 7.5 times the statutory requirement. We’re also backed by a rapidly accumulated asset base of over Rs. 12 b of which Rs. 4.1 b is in government securities. We also enjoy an extensive island wide branch network of over 100," Schaffter added.

Head of Marketing Paddy Weerasekera said: "During 2011, our primary focus is to extend the benefits of our flagship brands such as Janashakthi Full Option, Janashakthi Life Unlimited, and Janashakthi Awaranaya.

Added to this will also be a number of innovative products in keeping with the current economic and consumer preferences. In fact we will further enhance the deployment of technology to enable faster service delivery and to empower our sales force to serve our customers better."

source - www.ft.lk 

Lanka’s GDP to reach US $ 100 billion - CB Governor

Shirajiv SIRIMANE

Sri Lanka’s Gross Domestic Product (GDP) will reach a record US $ 100 billion by the end of the year, Central Bank Governor Ajit Nivaard Cabraal said. Speaking at the Ceylon National Chamber of Industries (CNCI) awards ceremony last night at Cinnamon Grand he said that this is currently at around the US $ 50 billion mark. Per capita income which is at around US $ 2,000 would also pass 2,700 soon, he added.

The Governor said these positive figures are being maintained at a time when most of the world economic giants are facing economic turmoil. "The success story of Sri Lanka is that the country had been insulated against the world shock by getting the macroeconomics right," he said.

"Sri Lanka has now entered an era of rapid economic and social progress. The macroeconomic stability reinforced by the long term development plans, significant development of physical infrastructure, and conducive business environment have contributed to the advancement in our industrial and manufacturing sector. A series of further initiatives are already under way to improve the investment climate and reduce the cost of doing business," the Governor said.

"The Ceylon National Chamber of Industries could be the catalyst in this process by supporting the private sector to seize numerous new opportunities which are opening up in many sectors of the economy. In this context, let us now work together to reposition Sri Lanka to accelerate the growth momentum and reach the per capita income of US $ 4,000 mark in the next five years," Cabraal said.

Panel of Judges Chairman Sunil G. Wijesinhe said that soon after the ending of the second world war industries in Japan were asked to do mass production compromising quality. "However they introduced a scheme of ‘quality awards’ for their products and the standard dramatically improved which prompted USA Europe and other countries to conduct quality awards as well," he said.

CNCI Chairman Sunil Liyanage said that today industries face competition both nationally and globally.

"Regional trade agreements whilst opening up new markets also brings with it, its own pit falls. To succeed, industries must adapt well and bring out from within, solutions through innovation and creativeness," he said.

"Through participation and involvement in events such as this, enterprises could benchmark themselves against best practices and strive for excellence," Liyanage said.

shirajiv@yahoo.com

source - www.dailynews.lk

PCH enables Sri Lanka with Panora computers

Targeting the corporate sector, PC House PLC, launched the revamped version of the Panora, Sri Lanka’s first locally assembled branded computer. Panora computers will be fitted with the latest Intel processor range and licensed Microsoft Windows 7 operating systems.

Panora was launched in 2002 with the vision of bringing ICT closer to the general user, in line with the government’s vision to develop the ICT sector and to increase IT literacy levels across the island.

The brand has been well accepted, especially in the retails sales and public sector for its value for money offerings. The advanced version of Panora will intensify the objectives of adding value for money as it is intended to serve the burgeoning economy.

Commenting on the re-launch of the Panora, PCH Chairman, S. H. M. Rishan said, "ICT has made an integrated approach towards the development of economies globally. Panora has been in the market for a considerable period and has transformed into a reliable, versatile and cost effective brand that transfers quality, durability and considerably lower total cost of ownership to its owners." The Panora PC created Sri Lanka’s first computer assembly plant and has been assembled in the island since 2007, under stringent ISO 9001 quality standards.

PCH Sales Head Inthishar Feroz, speaking on the brand position said, Panora has been available to the public and corporate sector since 2002, serving some of the largest private and public sector organisations including leading financial institutions in Sri Lanka. In the recent past a computer has become more of an essential commodity for the everyday person; Panora offers its customers a PC that provides efficiency, with higher business value that enables productivity and has excellent reliability. The latest edition of the Panora will bring cutting-edge technology, security, manageability and services to our customers?.

"Though Panora has been present in the regional markets for many years, we feel with the current economic climate in Sri Lanka it is the right time to revive this brand as a dominant player among the multi-nationals," he said.

All Panora computers consist of high quality components sourced from well-reputed brands such as Intel, who supply components to top manufacturers across the globe. A rigorous quality assurance process, which includes a software based burn-test, undergone by each single unit prior to them reaching the end user, which ensures their performance at optimum level. Over the past nine years Panora has sold over 30,000 PCs to discerning customers including many projects done by the Government of Sri Lanka.

Panora branded PCs are available through the corporate and public sector sales team at the PCH Head Office and will be made available through all 26 PCH branches islandwide and 11 retail showrooms in Colombo.

source - www.dailynews.lk

Kelani Tyres PAT up

The performance of Kelani Tyres PLC for the year ended March 31, 2011 has been hampered by the escalation of natural rubber prices, petroleum product prices and unfair competition.

"A major negative phenomenon that we experienced quite unexpectedly during the year has been the 72% escalation of natural rubber prices in the world market from $ 2.90 to $ 5, coupled with the high prices of petroleum based raw materials has created total mayhem in world tyre markets, Kelani Tyres Chairman Chanaka de Silva has told shareholders in his Annual Report for 2010/2011.

He has also said that, despite the efforts had been made to absorb these price increases in the selling prices, the company has been unable to hedge against these increases due to the inconsistent policies of competitors.

He has also pointed out that there has been unfair competition from the under-invoiced imports. He believed that the representations made to the government in this regard, would be taken seriously and that necessary action would be put into place to circumvent this serious problem, which is causing annual losses to Treasury valued at Rs 500 million.

The consolidated Kelani Tyres Group turnover for the period under review was Rs 3.9 billion, up from the Rs 2.4 billion a year ago while the Gross Profit for the period was Rs 826.8 million, up from the Rs 687.4 million, the previous year. The Group pre-tax profit had increased to Rs 361.3 million from Rs 333.9 million between the two years while the Profit After Tax had also increased to Rs 260.8 million from Rs 209.1 million.

The Kelani Tyres turnover was Rs 129 million, up from the Rs 22 million a year ago while the Gross Profit for the period was Rs 11.1 million, up from the Rs 1.9 million. Pre-tax profit had increased to Rs 91.5 million from Rs 13 million between the two years while the Net Profit had also increased to Rs 91.2 million from Rs 12.9 million.

source - www.dailynews.lk

Janashakthi records 98% PAT growth

Recording a Profit After Tax of Rs 280 million for 1H (first half) 2011, Janashakthi Insurance PLC (JIPLC) became the most profitable insurer from among all quoted insurance companies in Sri Lanka.

This is a growth of 98% in comparison to a profit after tax of Rs 145 Million in 2010 in the same period and is considered a remarkable achievement given the nature of the industry which has 19 players competing.

JICPLC Managing Director Prakash Schaffter, said, "Despite aggressive competition in Sri Lanka’s insurance industry and with such a large number of players, we are proud to record the highest profit quantum".

Schaffter attributed this achievement to the Company’s strategy of focusing on the bottom line while offering a wide array of insurance products and services with unmatched benefits to policyholders, coupled with exceptional service standards.

"This enabled us to retain our existing customers together with timely settlement of claims which amounted to over Rs 1.4 billion during the first half of 2011," he added.

The Company showed a consolidated GWP growth of 23%. Janashakthi’s Motor Gross Written Premium (GWP) amounted to Rs 1.7 billion which is an increase of 18% over the 2010 first half of Rs 1.5 billion while the Life GWP amounted to Rs 869 million which is an increase of 23% over the 2010 first half of Rs 707 million. The Non Motor GWP amounted to Rs 736 million which is an increase of 39% over the 2010 first half of Rs 531 million.

"Our proven track record has helped us gain the confidence of the general public. We have the highest stated capital among Public Quoted Insurance Companies, amounting to over Rs 1.49 billion. This is over 7.5 times the statutory requirement. We’re also backed by a rapidly accumulated asset base of over Rs 12 billion of which Rs 4.1 billion is in government securities. We also enjoy an extensive island wide branch network of over 100," Schaffter added.

Marketing Head Paddy Weerasekera said "During 2011, our primary focus is to extend the benefits of our flagship brands such as Janashakthi Full Option, Janashakthi Life Unlimited and Janashakthi Awaranaya.

source - www.dailynews.lk

Stocks end in green

Colombo stocks ended in the green zone yesterday as both benchmark indices recorded gains. ASI gained 41.94 index points (0.61%) to close at 6,879.29 while liquid MPI closed at 6,233.82, up 10.88 index points (0.17%).

Daily market turnover reached Rs 4.9b.

Ceylon Hotels Corporation turned out to be the top contributor to the market turnover with an amount of Rs 1.1 billion. A total of 31.8 million shares of Ceylon Hotels Corporation traded yesterday and out of that 23.7 million shares which accounted for 13.8% of the issued shares, changed hands within inter-connected parties of the group at a price of Rs 35.00 per share.

 The buyer was Curlew (Pvt) Limited, the holding company of Ceylon Hotels Corporation which held 52% of the stake prior to the transaction and now has increased to 70% stake. The stock yesterday reached the high of Rs 40.00 and closed at Rs 34.00, up Rs 1.80.

DFCC Bank made the second highest turnover level of Rs 1.1 billion while recording a off-the floor deal of 7.9 million shares at a price of Rs 135.00 per share. DFCC closed at Rs 136.00, up Rs 4.40.

Further, HVA Foods Plc made notable contribution to the turnover (Rs 750.9 million) with heavy investor participation. Meanwhile, Multi Finance, Singer Finance and Colombo Land & Development were among the mostly traded counters of the day. However at the end of the day the 10% price band was imposed on HVA Foods and Singer Finance.

Foreign participation was insignificant at 2.2% of the total market activity. Foreign investors ended as net buyers with a net foreign inflow of Rs 8.8 million.

Lanka Securities Research

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

Sri Lanka stocks end up 0.6-pct

Aug 30, 2011 (LBO) - Sri Lanka's stock market closed higher Tuesday with heavy trading in a hotel share and continued interest in a newly listed tea exporter boosting turnover, brokers said.

The main All Share Price Index closed at 6,879.29, up 0.61 percent (41.94 points) while the more liquid Milanka index rose 0.17 percent (10.88 points) to close at 6,233.82, according to stock exchange figures.

Turnover was 4.9 billion rupees.

Trading in shares of Ceylon Hotels Corporation generated the day's highest turnover of 1.1 billion rupees. It closed at 34.50 rupees, up 2.30, with over 31.8 million shares traded.

Brokers and analysts said 29.6 million shares of Ceylon Hotels Corp were traded in five crossings or off-market private deals, all at 35 rupees a share.

DFCC Bank was also heavily traded with over 7.9 million shares done and closing at 135.80 rupees, up 4.20, generating a turnover of just over a billion rupees. There was one crossing of 7,913,700 DFCC shares at 135 rupees each.

HVA Foods was the day's higherst gainer and most actively traded stock, closing at 57.30 rupees, up 12.50, with over 13.78 million shares done.

A 10 percent price band was imposed on HVA Foods as well as on Singer Finance (Lanka).

Singer Finance (Lanka) was also actively traded with over 4.4 million shares done, closing at 41.30 rupees, up 2.90.

source - www.lbo.lk

Sri Lanka Browns to build hotels on tea plantations

Aug 30, 2011 (LBO) - Sri Lanka's Browns Investments plans to build boutique hotels on two tea estates in the island's central hills as it diversifies into the rapidly growing tourism industry.

The company, part of the Browns group, is planning a 34 roomed hotel on Ayr estate and a 58 roomed hotel on Geragama estate run by its two plantations subsidiaries, Pussellawa and Mathurata.

Ayr's 85-year-old planter’s bungalow, a replica of a Scottish castle perched on a mountain, is already being used by the company as a hotel.

"The project proposals are currently being finalised and they are expected to be operational by early 2013," Browns Investments group chief executive Murali Prakash told shareholders in the firm's annual report.

Browns Investments is also building a 150-roomed beach hotel in Kosgoda on the southern coast costing 1.5 billion rupees which is to be completed by the summer of 2013, he said.

The firm has a 30 percent stake in LOLC leisure which controls Palm Garden, Riverina, Eden and Tropical Villas hotels on the south coast some of which are being upgraded.

Browns Investment is a joint venture between Brown & Company and Taprobane Holdings.

The island's tourism industry has been growing rapidly with a sharp increase in arrivals after the end of the 30-year ethnic war in May 2009.

source - www.lbo.lk

Sri Lanka firm, officials, fined on securities offence

Aug 30, 2011 (LBO) - Sri Lanka's securities watchdog has fined Environmental Resources Inc and several officers, over a disclosure related offence, market sources said.

Sri Lanka's Securities and Exchange Commission earlier sent the firm a notice of action, over a disclosure related matter.

Under Sri Lanka's securities law, a person charged with securities fraud can agree to pay a 'compound fee' and avoid going to court.

Market sources said the company and three directors had been fined close to 10 million rupees.

A company official confirmed that it had settled with the SEC.

The SEC had earlier been probing the firm's filings that it owned stock in a platinum mine and other securities of unlisted firms. ERI late said it had sold the mining stock and remitted cash to the firm.

source - www.lbo.lk

Future upside prompts Dilith to buy 10% stake in HVA Foods for Rs. 300 m

High net worth investor Dilith Jayaweera yesterday described the 10% stake bought in HVA Foods Plc for Rs. 300 million as strategic given the upside.

“I see great value in HVA Foods considering some of the initiatives undertaken in China in promoting its Ceylon tea brands as well as other plans. It was bought for strategic reasons and not for immediate trading,” Dilith told the Daily FT last night.

The stake amounting to 6.64 million shares was bought at Rs. 45 each via Dilith’s pure investment arm Divasa Equity Ltd from HVA’s 70% controlling shareholder HVA Lanka Exports Ltd.              

Soon after the transaction went through many perceived it to be a ‘home and home deal.” Divasa Equity Director Varuni Amunugama Fernando also serves on the Board of HVA Foods.

HVA Foods, which has had a sensational two weeks of late, was the star yesterday as well with 25.2 million of its shares changing hands via 5,420 trades for Rs. 1.09 billion. It peaked to an all time high of Rs. 46.40 before closing at Rs. 44.80, still up by Rs. 6.30 or 16%.

Analysts said that the market had got wind of an impending deal though not necessarily involving Divasa hence HVA price gained after trading began opening at Rs. 39.10 which was its lowest. Net Asset Per Share of HVA Foods is Rs. 13 and in 2010/11 financial year earnings per shares was 69 cents.

HVA Foods’ turnover in FY11 was Rs. 561.6 million, up by 15% whilst gross profit dipped by 13.7% to Rs. 80.6 million and pre-tax profit in a similar percentage to Rs. 48.3 million. Net profit was down by 15% to Rs. 46 million over 2009/10’s figure of Rs. 54.2 million. In fourth quarter of FY11 bottom line was down by 37% to Rs. 8.3 million whilst turnover grew by 6.5% to Rs. 146.6 million.

HVA Foods which offered 19.9 m shares through an Initial Public Offering priced at Rs.16 per share in January, manufactures and markets value added tea based products, tea extract based products, tea concentrate based products and operates franchises.

Apart from deal involving HVA Foods, the rest of the market remained lacklustre. The ASI slipped 0.23 % and the Milanka Index edged up 0.01% whilst turnover was healthy at Rs. 2.6 billion.

source - www.ft.lk

Divasa Equity acquires 10% of HVA

Divasa Equity Private Limited yesterday bought 10 percent or 6,642,866 shares of HVA Foods PLC, each share at Rs.45, a filing to the Stock Exchange said.

Advertisers turned investors Dilith Jayaweera and Varuni Amunugama Fernando function as directors of Divasa Equity, which was earlier known as Emagewise.

The seller of the shares was HVA Lanka Exports Private Limited which is the parent company of HVA Foods PLC.

The disclosure filed also said that Varuni Amunugama Fernando is a director of HVA Lanka Exports.
According to Divasa Equity’s Dilith Jayaweera, this purchase of shares is ‘strategic’.

When asked whether the price they bought HVA was reasonable, Jayaweera said that the share price went up because of talks that Divasa was negotiating a stake.

Not long before, HVA share was trading at Rs.15 levels last week, even below the IPO price of Rs.16.

In the meantime, shares of HVA Foods PLC traded heavily yesterday contributing Rs.1.1 billion to the market turnover of Rs.2.5 billion.

HVA share was trading heavily since morning, and the day closed with 25.2 million shares being traded.

The share gained over Rs.6 compared with previous closing price of Rs.38.50.  HVA opened trading at Rs.39.10 and went as high as Rs.46.40 and closed at Rs.46. One crossing of 6,642,866 shares was executed at Rs.45, which was later disclosed to the Stock Exchange.

HVA has 66.4 million shares in issue. The company recorded a net profit of Rs.8.3 million in the fourth quarter of 2011.

source - www.dailymirror.lk

Emerging markets safest bet: Mark Mobius

Mark Mobius , Executive Chairman , Templeton EMs Group , believes that Mr. Bernanke in fact did the right thing by not promising QE3 at this juncture at the Jackson Hole symposium and explains why does he think that emerging markets are safe havens:

Mark Mobius: I think it was a smart move because he left his options open. He has got a number of tools as he stated and by not bringing up QE3, he dampens the expectations for inflation which I think is a big worry.

So in that sense, he did not say he will do it, but he can if he wants to.

He said for over long time now, they have got to diversify globally. In other words you can put all your eggs in the US treasury basket or the Euro basket or any other basket. You have got to be globally diversified and within that global diversification at least 34% should be in emerging markets, which is not the case now.

A whole picture globally is that emerging markets will be the safest play. Why? Because they are growing at three times faster than the developed countries, their debt to GDP levels are lower, their foreign exchange reserves are higher. Put this all together, you realise these are the places where you want to be. Now you cannot really pinpoint whether it is going to be Brazil or Turkey or Thailand. You have got to be diversified among these various countries because you can have volatility from one to the other.

The way we are doing it is saying 40-50% in Asia and the rest in Latin America, Africa and Eastern Europe, that is basically the structure of the portfolio. I think it will stay that way because Asia is a bigger area in terms of market capitalisation and economic size and so forth and of course the Asian countries are growing very faster.

We still believe longer-term commodity prices will trend upwards. There will be lots of volatility as we have said in the past. We expect oil prices $130, $80 up and down so forth. That trend, upward trend is there and not only for oil but for all other minerals.

source - www.dailymirror.lk

BIL to build two boutique hotels

Browns Investment PLC (BIL), the investment arm of the Browns group is to set up two boutique hotels in the plantations owned by the company.

The two projects that are currently in the pipeline will be located in Ayr and Geragama estates within the Mathurata and Pussellawa Plantations. The hotel in Ayr is to be constructed with 34 rooms while the Geragama one will have 58 rooms. “The project proposals are currently being finalized and are expected to be operational by early 2013” Group MD/CEO Murali Prakash said.

BIL has also embarked on a 150 room star-class hotel in Kosgoda with an investment of Rs.1.5 billion. The hotel is expected to open for visitors by summer, 2013.

source - www.dailymirror.lk

Sampath outlook positive - Fitch

Fitch Ratings Lanka has affirmed Sampath Bank PLC’s (SB) National Long-Term rating at ‘AA-(lka)’. The outlook remains positive.

The affirmation reflects SB’s strong asset quality and profitability, its comfortable equity buffer maintained against future loan losses, as well as its rapid growth from 2010.

The retention of the positive outlook is driven by continuous improvements in the bank’s credit metrics supported by ongoing structural changes since 2009 (in terms of tighter credit controls, improved recovery focus and better risk management), as well as its growing franchise and market share in terms of bank sector deposits, loans and assets.

An upgrade of SB’s rating would depend on its ability to meet or surpass its core capitalization levels relative to local and regional peers over the medium-term, particularly in view of its continued high loan growth, while maintaining strong asset quality and robust core returns on assets (ROA, excluding non-recurring items).

Conversely, the outlook may be revised to stable if the bank’s current growth momentum results in a further dilution of its core capitalization to levels more in line with lower-rated peers.

Gross non-performing loans (NPLs) fell by 33% yoy in 2010 and by a further 3% in H111, due to enhanced recovery initiatives, tighter underwriting standards than previous years (including credit centralisation), and structural improvements in the macroeconomy.

Gross NPL ratio of 3.2% at end-H111 (FYE10: 4%) is considerably better than peers’, also supported by its large pawning (gold-backed loans) portfolio (end-H111: 22% of advances) with near zero NPLs.
source - www.dailynews.lk

HVA highest contributor

The Colombo bourse ended indecisively yesterday where benchmark indices closed in alternate directions.
ASI lost 15.61 points (-0.22%) to end at 6,837.35 while sensitive MPI gained marginally by 0.86 points (+0.01%) to close at 6,222.94.

Market turnover stood at Rs 2.6 billion.

HVA Foods Plc (Rs 1.0 billion) made the highest contribution to the daily turnover while attracting active investor participation. The counter depicted a notable rally during trading.

HVA closed at its daily high of Rs 46.00, up Rs 7.50 (+19.48%). In addition DFCC Bank Plc (Rs 168.9 million) and Colonial Motors Plc (Rs 166.0mn) made significant contributions to the turnover. In the meantime Singer Finance Plc, East West Properties Plc and Asiri Hospitals Plc witnessed active trading during the day.

Foreign participation stood at 5.75% of the total market activity. At the end of the day foreign investors were the net sellers with a net foreign outflow of Rs 27.3 million.

Lanka Securities Research

source - www.dailynews.lk

Raigam Saltern in Trincomalee

To be the largest in country:

Sanjeevi JAYASURIYA

Raigam Wayamba Salterns PLC will construct the largest saltern in the country on an extent of 1,850 acres in Trincomalee. The company engages in massive development projects in Puttalam and Hambantota and during 2010 and 11 financial year it has invested Rs 130 million. The Wayamba Salterns has already completed the acquisition process to construct the Trincomalee saltern and is into halfway of construction activities. “While concentrating on our core business, we will also venture into the tourism sector,” Raigam Wayamba Salterns PLC Chairman and CEO Ravindranath Liyanage told Daily News Business.

Considering the tourism attraction in the area, the company will implement an eco-tourism project to benefit 100 fishing families.

“We will take measures to improve the livelihood of 100 fishing families and will start a fishing pier inside the saltern to retain water during arid seasons to ensure fishing around the year,” he said.

The eco-tourism project will be part of the CSR project by the company to serve the Eastern community while main emphasis is given to the saltern related activities.

Phase one of the project is expected to be completed within one and a half years.

“We are the 100 percent shareholder of Nilaweli Saltern and plans are underway to amalgamate this venture into the Wayamba Salterns,” Liyanage said.

The company recorded a turnover of Rs 297.4 million for the financial year 2010 and 11 as against Rs 259.5 million recorded in the previous year an increase of 37.8 million or 14.5 percent.

The company recorded Rs 57.8 million profit after tax after absorption of a large amount of project related revenue expenditure in contrast to Rs 51.2 million last year, an increase of 12.8 percent. The Wayamba Salterns expects to open two salterns at Puttalam and Bata-atha for commercial production in the latter part of 2011 and 12. The initial harvest from these projects, though it is not at full capacity will make a substantial contribution to reduce the cost of production of table salt and be more competitive in the market.

The new salt refinery installed at the Bata-atha industrial zone will be commissioned shortly. The distinct advantage of this project is the benefit on transport cost connected with the catering to the demand in the Southern Province where the total salt requirement is self-generated. The vacuum evaporation salt plant is under construction at Palavi, Puttalam.

The year 2011 and 12 will be a milestone year in the company’s development drive as four major projects are to be completed shortly.

Sri Lanka imported 45,000 metric tonnes of salt in 2004 and it has reduced to 10,000 metric tonnes at present where 90 percent of refined table salt in the market is produced by the Raigam Group.
source - www.dailynews.lk

Second time name change for People’s Leasing Finance

People’s Leasing Finance Plc has changed its name to “People’s Finance Plc.”

This is the second change in the name of the company which was originally known as Seylan Merchant Leasing Ltd., then owned 84% by Seylan Merchant Bank.

At present People’s Leasing Ltd., owns 88.5% stake in the company.

In the financial year ended on 31 March, 2011, People’s Leasing Finance Plc (PLF) reported excellent results, signifying a revolutionary turnaround achieving a Rs. 227.7 million pre-tax profit from a loss of Rs. 187 million in FY10.

The turnaround follows successful restructuring and rightsizing the company in FY2011. After tax profit amounted to Rs. 106.8 million as against a loss of Rs. 123 million in the previous year.

Asset base grew to Rs. 8 billion from Rs. 2.5 billion.

In accordance with the Central Bank Directions on capital adequacy, PLF went in for a 1:1 Rights Issue at Rs. 25 per share in October 2010. The unprecedented growth and expansion of the company necessitated a further 1:2 Rights Issue also at Rs.25 in 13 in mid 2011 which was coupled with a 3 for 10 warrant issue which attached the option to be converted in 2012 for a share at a price of Rs. 30.

source - www.ft.lk

Construction boom Principles of DIMO meet end-users in Colombo, East

DIMO Construction Machinery Division recently arranged a series of presentations to their customers - fleet owners and corporate where top principals from the UK, Singapore and India were flown in to do the presentations which covered a wide spectrum. The first event was held on 19th August 2011 at Waters Edge, where 150 key customers were invited for the presentations. Presentations were done by Shivaprasad Ganiga (Manager, Strategic IT and Sales from Komatsu Asia Pacific, Singapore), Andy Quek (Regional Sales Manager - Oceania / Pacific from Bomag Gmbh, Singapore), Andy Linham (Regional Manager – Gomaco International Limited, England), P. Sudhakar (General Manager – Markting –Schwing Stetter, India) and Ian Lee (Regional Sales Manager-Everdigm Corp Singapore).

Gomaco International Limited is the latest addition to the DIMO family. Gamaco Corporation manufactures curb and gutter machines, concrete slipform pavers, placer/spreaders, trimmer/placers, cylinder finishers, canal machinery and accessories ideal for any concrete construction project. Gamaco has their headquarters in Iowa USA, with their international office in England.

The next event was held on 24th August at Maalu Maalu Resort Paasikudah, where over 100 customers and fleet owners from the East were invited for the presentations. This is the first time that DIMO has arranged such an event for the Construction Industry in the East. Shivaprasad Ganiga, Nandha Kumar (Senior Engineer, Application Engineering Department of Komatsu Asia Pacific Singapore), Andy Quek, Andy Linham, P. Sudhakar and Chandima Samarasinghe (Head of fluid management systems-DIMO) did presentations on their respective products. The East of Sri Lanka is experiencing a substantial growth in infrastructure development with many hotels being planned along the coastline. Participants appreciated these presentations and said that exposure to new technologies from the best in the world would certainly help their work in the construction industry.

Speaking about the events General Manager of DIMO Construction Machinery Division Chaminda Ranawana said that DIMO is proud to represent the Best Engineered Construction Machinery Brands in the world, and that this is first time that top principals from 5 top brands have done such a series of presentations together.

source - www.island.lk

Bourse down as HVA Foods dominates the day

The Colombo Stock Exchange closed in the red on a day driven by retail investors with HVA Foods PLC dominating activity at the bourse on Monday, brokers said.

The All Share Price Index closed 0.23 percent lower, down 15.61 points to 6,837.35 while the Milanka Price Index of more liquid stocks closed 0.01 percent higher, gaining 0.86 points to settle at 6,222.94. Turnover amounted to Rs. 2.59 billion on a little over 83.5 million shares changing hands during the day which ended with 74 counters closing on a positive note against 117 counters which closed in the red.

"The market kicked off on an optimistic note but the momentum did not sustain. Retail investors were more dominant during the day," Bartleet Mallory Stockbrokers said.

HVA Foods PLC attracted investor interest contributing Rs. 1.09 billion to the day’s turnover with a little more than 25.22 million shares changing hands. Turnover-wise DFCC bank was second with a contribution of Rs. 168.9 million, closing at Rs. 132.0, while Tess Agro PLC was the second highest traded share with 9.8 million shares changing hands, closing at Rs. 3.40.

HVA Foods featured in a crossing of 6,642,866 shares at Rs. 45 each. The counter was the highest gainer of the day, up 16.36 percent from the previous close to end Monday at Rs. 46.0.

The Beverages, Food and Tobacco sector made the highest contribution to turnover at 43.57 percent gaining 0.09 percent on the summary index. Banks, Finance and Insurance contributed 17.29 percent to turnover and gained 0.94 percent.

DFCC Bank featured in a crossing of 1,243,800 shares at Rs. 135. Colonial Motors saw a crossing of 50,000 shares at Rs. 407 each, John Keells Holdings 103,500 shares at Rs. 212 and Bukit Darah PLC 77,500 shares at Rs. 1,075.0.

John Keells Holdings generated a turnover of Rs. 109.8 million.

NDB Stockbrokers said there was profit taking in Colonial Motors’ shares, which contributed Rs. 166.04 million to turnover before closing at Rs. 406.50.

source - www.island.lk

Sri Lanka stocks down, heavy trading in HVA

Aug 29, 2011 (LBO) - Sri Lanka's stock market fell Monday after two days of gains with heavy trading seen in newly listed tea exporter HVA Foods which went over 46 rupees after recently trading below its issue price, brokers said.

The main All Share Price Index closed at 6,837.35, down 0.23 percent (15.61 points) while the more liquid Milanka index rose 0.01 percent (0.86 points) to close at 6,222.94, according to stock exchange figures.
Turnover was 2.6 billion rupees.

HVA Foods was the day's most actively traded stock and highest gainer, closing at 44.80 rupees, up 6.30, with over 25.2 million shares changing hands. The firm has 66.4 million shares in issue.

Trading in HVA Foods, which hit a high of 46.40 rupees during the day, generated 1.1 billion rupees in turnover.

There was a crossing or off-market negotiated deal of 6,642,866 shares (a 10 percent stake) of HVA Foods at 45 rupees a share. It opened trading at 39.10 rupees.

HVA Foods said in a stock exchange filing the 6.6 million shares held by its parent, HVA Lanka Exports, had been bought by Divasa Equity (Private) Ltd., in which Varuni Amunugama Fernando, a director of HVA Lanka Exports, was also a director.

HVA Foods traded at 15.60 rupees, below its IPO price of 16 rupees, as recently as August 17, 2011.
Singer Finance (Lanka) was also actively traded, with over 3.7 million shares done, closing at 38.40 rupees, up 1.10.

Colonial Motors was another actively traded stock, closing at 406.50 rupees, down 7.10, with 400,000 shares done. There was a crossing of 50,000 Colonial Motors at 407 rupees each.

Brokers said there was also a crossing of 1,243,800 shares of DFCC at 135 rupees each.

source - www.lbo.lk

Sri Lanka Sampath Bank's 'AA-(lka)' positive outlook confirmed

Aug 29, 2011 (LBO) - Fitch Ratings Lanka has confirmed Sampath Bank's (SB) National Long-Term rating at 'AA-(lka)' with a positive outlook.

"The affirmation reflects SB's strong asset quality and profitability, its comfortable equity buffer maintained against future loan losses, as well as its rapid growth from 2010," the rating agency said in a statement.
The positive outlook is supported by continuous improvements in the bank's credit metrics supported by ongoing structural changes since 2009 with tighter credit controls, improved recovery focus and better risk management.

It is also supported by the bank's growing franchise and market share in terms of bank sector deposits, loans and assets.

The full Fitch statement follows:

Fitch Ratings Lanka has affirmed Sampath Bank PLC's (SB) National Long-Term rating at 'AA-(lka)'. The Outlook remains Positive.

The affirmation reflects SB's strong asset quality and profitability, its comfortable equity buffer maintained against future loan losses, as well as its rapid growth from 2010. The retention of the Positive Outlook is driven by continuous improvements in the bank's credit metrics supported by ongoing structural changes since 2009 (in terms of tighter credit controls, improved recovery focus and better risk management), as well as its growing franchise and market share in terms of bank sector deposits, loans and assets.

An upgrade of SB's rating would depend on its ability to meet or surpass its core capitalisation levels relative to local and regional peers over the medium-term, particularly in view of its continued high loan growth, while maintaining strong asset quality and robust core returns on assets (ROA, excluding non-recurring items).

Conversely, the Outlook may be revised to Stable if the bank's current growth momentum results in a further dilution of its core capitalisation to levels more in line with lower-rated peers'.

SB's tier 1 capital adequacy ratio (CAR) was strong at 10.5% at end-June 2011. However, its total CAR at 12.3% was marginally lower than rated-peers and has been decreasing due to rapid loan growth over 2009-mid-2011. While SB's high profitability supports incremental capital generation, its capital base may require further strengthening to enable it to maintain present capitalisation levels if the current growth momentum is sustained.

Gross non-performing loans (NPLs) fell by 33% yoy in 2010 and by a further 3% in H111, due to enhanced recovery initiatives, tighter underwriting standards than previous years (including credit centralisation), and structural improvements in the macroeconomy. Gross NPL ratio of 3.2% at end-H111 (FYE10: 4%) is considerably better than peers', also supported by its large pawning (gold-backed loans) portfolio (end-H111: 22% of advances) with near zero NPLs.

SB provides more prudently on NPLs compared to the sector, as well as does not give credence to collateral in its provisioning and aims to maintain a high coverage ratio. Specific loan loss coverage stood at 79% at H111 (around 49% for 'AA(lka)'-rated peers). Consequently, SB's un-provided NPLs at 5.4% of equity at H111, although higher than the 3.0% at end-2010, are significantly lower than historical levels (end-2009: 26%).

Profitability has been improving since 2007 supported by improving net interest margins (NIMs) up to 2009, falling provisioning costs and a largely stable cost structure despite branch expansion. Its core ROA has faced some pressure from narrowing NIMs which, although still healthy, decreased in 2010-H111.

However, Fitch expects better core ROA in the medium term on the back of increased fee income from its growing corporate segment and improving economies of scale as its new branches generate business.

Further, SB's revenue recognition policy is more prudent than the regulatory requirement, which, when adjusted, improves its core earnings ratios to be more in line with peers'.

NIMs fell to 4.7% in H111 (2010: 5.6%) due to funding costs not keeping pace with declining yields from decreasing market interest rates and increased corporate exposures. SB's funding costs are higher than large-rated peers as it has had to offer higher rates on its deposits relative to peers, so as to match deposit growth to loan growth and because funding from low-cost demand and savings deposits has been lower than peers' (SB: 46%, peers: 50% of deposits). However, Fitch expects SB's funding costs to trend closer to that of peers as newly opened branches increase its potential to mobilise deposits.

Established in 1986, SB is Sri Lanka's sixth-largest licensed commercial bank, accounting for 6.7% of sector assets as at end-March 11. As at-end June 2011, three employee share ownership plans and the bank's employee provident fund and pension fund, in aggregate held 17% of SB's equity. The bank's single-largest shareholder is Vallibel One Limited, which is controlled by Mr. K. D. D. Perera - a high net-worth businessman with holdings in several local corporates, banks and non bank financial institutions.

source - www.lbo.lk

Sri Lanka forex reserves US$8.1bn in July

Aug 29, 2011 (LBO) - Sri Lanka's foreign reserves rose to 8.1 billion US dollars in July 2011 boosted with the sale of a sovereign bond, up from 7.5 billion US dollars in June, the Central Bank said.

Based on the previous 12-month, average imports of 1,398 million dollars a month, gross official reserves were equal to about 5.8 months of imports.

Worker remittances were 2.5 billion US dollars in the first six months of the year. Tourism revenues rose 50.9 percent to 370 million US dollars.

Inflows to the state during the same period were 1.4 billion US dollars.
source - www.lbo.lk

Sri Lanka tyre firm seeks tighter protection

Aug 29, 2011 (LBO) - Sri Lanka's Kelani Tyres, which has transformed itself from being a state-run tax arbitrage 'import substitute' scheme to a vibrant exporter with Indian collaboration, is asking for tighter protection at home.

Kelani Tyres, a listed firm started as a state enterprise catering to the local market, largely as an 'import substitute' or 'domestic manufacturing' scheme with import duty protection.

The firm which now has a joint venture with India's CEAT said production rose to 14,972 metric tonnes in the year to March 2011 from an average of 7,400 metric tonnes from 1999 to 2002.

The group's passenger car tyre, CEAT Radial, had the biggest market share among branded radials, the firm said.

Kelani Tyres is complaining of competition from imports which are slipping under trade restrictions imposed on domestic consumers.

"We are still facing unfair competition from under-invoiced imports to the country," chairman Chanaka De Silva told shareholders.

"We believe that the representations we have made in this regard to authorities will be taken seriously and necessary action will be put in place to circumvent this serious problem which in my opinion is causing an annual loss exceeding Rs. 500 million to the Exchequer."

Protected industries and smugglers - including those that 'under invoice' imports - engage in tax arbitrage.

Protected domestic industries arbitrage the entire potential tax and use it to fatten their profits, while under-invoicing smugglers give a part of the tax to the exchequer and may also pass on part of the margin to consumers when competing against protected industries.

Classical economists have pointed out that protected industries steal the trade liberties of citizens by using the coercive power of the state against them to restrict their choices and artificially push up the price on imported goods.

When foreign exchange shortages came to Sri Lanka with the creation of a soft pegged central bank after independence from British rule, trade liberties of citizens were restricted and 'import substitution' schemes flourished.

Sri Lanka made CEAT branded tyres are now exported to many countries. Kelani Tyres exports have grown to 1.9 billion rupees in 2010 from just 136 million rupees before 2002.

CEAT tyres are exported to India under a free trade deal, which improves the trade freedoms of Indian citizens.

Kelani Tyres profits had risen to 829 million rupees in 2010 from an average of 141 million in 1999 to 2002.

The firm is now facing higher production costs due to a sharp spike in rubber prices.

source - www.lbo.lk

Sri Lanka rubber exporter pinched by export taxes, interest

Aug 29, 2011 (LBO) - Eastern Merchants Plc, an exporter of commodities that claims top spot for natural rubber exports from Sri Lanka said its margins were eroded by rising working capital costs and export taxes despite steep commodity inflation.

Eastern Merchants group, which exports rubber, coir fibre, cinnamon and brushes said revenues grew 53 percent to 6.0 billion rupees but gross profits shrank 18 percent to 174 million rupees.

Rubber prices had hit historic highs as the US dollar weakened against commodities and demand for natural rubber rose with synthetic rubber prices also rising.

An export tax on rubber which was originally 4.00 rupees had been increased to 8.00 rupees in November 2010 and then 12 rupees in March 11.

States try to impose such 'windfall' taxes when commodity prices rise and such taxes are sometimes imposed against oil and mining industries in particular.

The group exports cinnamon, desiccated coconut, coir and also has units making brushes and claims to be the largest exporter of natural rubber.

Erratic weather had disrupted supplies and coconut fibre supplies continued to be below demand.

"Furthermore, the high price of rubber demanded an ever-increasing amount of funding to fuel operations," chairman J B L de Silva told shareholders.

"This resulted in inflated finance costs for the Company in spite of a relatively stable policy rate maintained by the Central Bank."

Group interest costs rose 46 percent to 35 million rupees due as more money was required to maintain stocks.

Net profits fell 61 percent to 24.4 million rupees. The group had short term borrowings of 529 million rupees by March.

"[H]having been negatively impacted by ballooning finance expenses during the year under review, it is clear to us that improving the working capital requirements of Eastern Merchants is essential to ensure future stability and growth," de Silva said.

"Possible avenues to strengthen the working capital reserves of the Company are currently being explored."

The company however says high commodity prices may reverse like in 2008, when a US credit bubble collapsed.

Sheet rubber which was about 3.00 US dollars and halved when prices collapsed in 2008, is now over 5.00 dollars.

The company however says prices may fall again.

A "drop in historically-high rubber prices" and reduced volatility may give more stable trading conditions, de Silva said.

source - www.lbo.lk

Asiri Hospitals gets $ 20 m from IFC

Asiri Hospitals, part of the Softlogic Group, have received US$ 20 million by way of a long term financing arrangement from IFC, a member of the World Bank Group.

The transaction includes the main hospitals of the Group; Asiri Hospital, Asiri Surgical Hospital and the new Central Hospital, as Co-borrowers.

The major part of the loan amounting to $ 11.4 million will be taken up by the spanking new Central Hospital that will comfortably enable the newest venture within the Asiri Hospitals cluster to develop and achieve full potential. The loan has been structured as long term, to be repaid in 10 years, that includes a grace period of two years.

The financial structure of the hospitals group will gain significantly from the deal due to the extended tenor and anticipated interest cost savings. Expert technical advisory will also be made available by IFC.

“We believe in building and maintaining the best healthcare institutions in the country, and our partnership with IFC enables us to completely focus on our business knowing that key financing aspects have been well structured in line with requirements,” Asiri Hospitals Chairman and  Managing Director Ashok Pathirage said.

Considered to be the most modern multi-specialty general hospital in Colombo, the Central has 272 beds and 12 operating theatres. It has a 24 hour accident and emergency service apart from many other firsts in the private healthcare sector of Sri Lanka. The main feature among many others is the first specialised unit within the country’s private sector for neurosurgeries and neuro trauma, and a specialised intensive care unit for the same. It has the most technologically advanced neurosurgical unit in the country, with a state-of-the-art neuro navigator for most precise surgical procedures.

Anita George, IFC’s Regional Industry Director – Asia, Infrastructure, and Natural Resources, said: “IFC’s partnership with Asiri Hospitals is helping to provide affordable high-quality health care in Sri Lanka, create jobs, and provide training for medical professionals. It will demonstrate best practices of private health care delivery in the country and become an example for other private sector investors in this critical sector."

The Central also has a specialised Gynecology and Obstetrics unit with a neonatal ICU. In addition it has a pediatrics unit, an eye unit, a haemo-dialysis unit, a dental care unit, and a physiotherapy and post surgical rehabilitation facility. The hospital has more than 250 Consultants visiting from all specialties and super specialties in medicine and surgery. The hospital’s advanced radiology facilities include MRI, CT Scan, mammography, ultrasonography and digital x-ray. It has a fully fledged pathological laboratory with full histo-pathological services and flowcytometry and is run as part of renowned Asiri Laboratories that has more than 65% of market share island-wide.

source - www.ft.lk

Mercantile Shipping to better negotiate charter hires

An acute depression can be seen in the worldwide charter markets, as charter rates are directly related to the economic crisis prevailing in the Euro zone, Chairman of Mercantile Shipping Company PLC, N.U. Jayawardena said.

“As such, the Company is under tremendous pressure to reduce the charter hire rates from the originally agreed rates” Jayawardena was quoted saying in the company’s latest annual report.

As a result of this, presently the company earns approximately 75% of the originally agreed charter hire and it has become the main reason for the Rs.23 million loss the shipping firm has made for the year ended March 31, 2011.

To counter this problem, the company is currently negotiating a graduated charter hire agreement with the charterer for a 5-year period.

“This agreement reflects progressively increased charter rates over the period, and the lending bank, the charterer and the Company are parties to the agreement” Jaywardena said.

In addition, he stated that negotiations are in progress to try to secure compensation to the company by securing a share of any profits made by the charterer to offset the reduced charter hires received by the company from those contracted at the inception.

“Considering the present economic downturn, we feel that this is a prudent arrangement” Jaywardena was quoted saying.

source - www.dailymirror.lk

Colombo Dockyard to construct vessels for Singaporean firm

Colombo Dockyard PLC penned contracts for the construction of four units of 78 m Multipurpose Platform Supply Vessels (MPSV) each with a 3,600 deadweight capacity for a Singapore based Ship Owner at an undisclosed price on 25th August 2011. Details of the owner are not divulged due to an agreement of commercial confidentiality, with the owner, the company said in a statement.
With the Offshore Support Vessel market on its way to a gradual recovery, the owner has made the right strategic move, taking steps to beef up their ship assets which will enable them to grab opportunities which will be forthcoming during a period of up-turn in the market, in the near future.

The new orders are as a result of the owner’s extreme satisfaction of the shipyard, living beyond expectation of quality of material, workmanship and professionalism in executing the construction of the Two 130 Ton Bollard Pull Anchor Handling Tug Supply Vessels that are presently being built at Colombo Dockyard.

These two Anchor Handlers were unfortunately slightly delayed in their deliveries, owing to an unprecedented delay in supply of large Anchor Handling Winches, manufactured in China by a Norwegian/Singapore based Supplier, but are now scheduled to be delivered in mid October and end November, 2011, Dockyard said.

Up to date, Colombo Dockyard has built 4 MPSVs in its facility and 3 more are under construction for another Singapore based company. As a result of the proven competence and experience, the Shipyard has built up a strong international clientele, which is growing day by day, earning millions of foreign currency in to the local economy and providing employment to thousands of Sri Lankan Engineers and Technicians.

The latest additions to the Colombo Dockyard’s Shipbuilding Order Book, will take the Shipyard through the years 2012, 2013 and 2014 with an impressively heavy order book, especially considering the current global shipbuilding down-turn, which will undoubtedly make other shipyards in the region envious.

It was as early as in 2006 that the Shipyard identified a niche in the market and positioned it self to respond to new opportunities, by building up capacity and sharpening skills and competencies to serve a very highly complex niche, in the market, engaging companies operating in the offshore oil field exploration and production domain. This strategic decision taken long years back has reaped benefits, with Colombo Dockyard now being sought after, as a preferred Shipbuilder among major players in the industry.

These MPSVs are designed by Seatech Solutions International (S) Pte Ltd of Singapore and incorporates an oil recovery arrangement and operate as advanced PSVs as well as light construction support vessel, complying to SPS Code 2008 & Clean Design requirements of NKK, Dynamic Positioning, Fire Fighting Capability, Oil Recovery Capability, Capability to support ROV operations and these vessels shall be designed and built to accommodate 50T Active Heave Compensated Crane, an A-frame and heli-deck.

The main role of this MPSV is to supply, support offshore oil and gas fields around the clock and is capable of undertaking multi-purpose roles such as oil recovery, transportation of pipes, fresh water, diesel, methanol, bulk cement, stores, equipment, deck cargo, transfer materials between platforms and shore. The MPSV will have an endurance of 35 days and a cruising range of about 9,200 nautical miles. Designed for un-restricted operation worldwide and with an outstanding speed of 14.5 knots, the vessel can get to the desired location around the world as quickly as possible, minimizing downtime.

Twin controllable pitch propellers, twin high lift flap rudders and transverse bow and stern thrusters provide good maneuverability and station keeping ability. The vessel is controlled from twin maneuvering consoles fitted in the wheelhouse, forward and aft stations with "joy-stick" controls. The Vessel shall also be equipped with advanced dynamic positioning (DPS B) system which assures safe and more efficient operations while working in close proximity to oil platforms/ rigs, even under the harsh weather conditions. Being equipped with a fully automated bridge layout with alarm monitoring systems for periodic single man bridge operation, the vessel is classed with "BRS1" notation. The vessel is fitted with automated installations enabling machinery spaces to remain periodically unattended in all sailing conditions including maneuverings, qualifying it to be assigned with "M0" notation

The Vessel is designed to have an enhanced accommodation area for 50 persons. These accommodation areas are well-appointed and are aesthetically designed with special attention being made to noise and vibration levels and crew comfort onboard the vessel, thereby meeting compliance to ‘NVC(c)*’ notation of the classification society.

The Vessel is also classed with "In Water Survey" denoting the vessel could be operated without being dry-docked for 5 years. Due to this, surveying the underwater parts of the Vessel could be carried out while the Vessel is still afloat instead of having to dry dock the Vessel for examination of the under water areas, as is conventionally done. This is a huge saving for the Owner. In addition, the Vessel is also equipped with Tail Shaft monitoring system (SCM) which is a huge advantage for the Owner in his quest for monitoring of temperature and condition in the tail shafts.

In addition to the dry bulk carrying capability, the vessel is also capable of carrying methanol, which is a low flash point liquid. In order to prevent any fire risks, a special deck foam fire fighting and prevention system has been installed for safety.

This Vessel shall be another green, eco-friendly vessel to be built by the yard, with lower fuel consumption, reduced NOx and greenhouse gas emissions.

In addition, the MPSV shall also be fully equipped with following eco-friendly measures.

- Approved Ballast Water Management Plan

- Grey water and black water treated before discharged to sea

- Green Passport, a comprehensive management approach of hazardous substances carried onboard

- Oily Water from machinery bilges provided with 5 ppm Oily Water Separator

- All oil tanks being protected to the MARPOL Annex I Regulation 12A

- Eco friendly refrigerant

- Having maximum sulphur content of 0.1% for Fuel Oil (FO)

The Vessel shall be designed, constructed and outfitted complying with the latest rules and regulations applicable to a Vessel of this type and size. The plan approval and survey during construction will be performed Class NKK of Japan. This project will be yet another first for Colombo Dockyard and Sri Lankan Shipbuilding; i.e. the first NK Class vessel(s) built by Sri Lanka and Colombo Dockyard PLC, epitomizing the ever growing relationship between Japan and Sri Lanka.

source - www.island.lk

ETF investments in 93 listed corporates

Ravi LADDUWAHETTY

The Employers Trust Fund, has invested in equities of 93 listed corporates, as at last Friday.

The nett profit of Rs. 14.5 billion in market transactions for the year ended 31 December, 2010 was apportioned among 9.7 million members at 12.5% interest in sharp contrast to banks providing interest rates of between 6-7%, ETF’s Deputy General Manager (Investments) Ms Rukma Gnanasekera told Daily News Business yesterday.

The return on the market portfolio was 11.3%, she said.

Over 65,000 employers contributed over Rs. 950 million through the 3% monthly contributions. The majority on the investments in Debentures which were A plus rated which were Banks, Finance and Insurance sectors. We have invested Rs. 250 million in Commercial Bank shares, Rs. 200 million in DGCC Bank, Rs. 100 million in Sampath Bank and we have a Rs. 15 million worth stake remaining in Singer, she said. The Fund has a total portfolio worth Rs. 6.8 billion ( Rs. 6,886,057.86) comprising Rs. 35.5 million (Rs.35,518,000.39) in Portfolio I of quoted ordinary shares, Rs. 6.3 million (Rs. 6,335,411.08) under Portfolio II of ordinary shares Rs. 485 million (Rs. 485,834,000.54) in portfolio I of unquoted shares and Rs. 29.2 million ( Rs. 29,293,000.85) under Portfolio II in shares of Delisted and companies under liquidation.

Banking, Finance and Insurance sectors have accounted was highest at Rs. 2,764,556.56 which is 43.64% of the total portfolio. She also said that the decision of the investments were based on the recommendations made by a Equity Committee comprising a four member panel of Fund Managers who recommend in which equities to invest after scientific studies daily. The recommendations are implemented by a four-member committee comprising Senior Deputy Secretary to the Treasury P.A. Abeysekera, ETF Additional General Manager Mangala Herat Gunaratne, Deputy General Manager (Internal Audit) K.S. Weliwita and herself.

She assured that the investment, though risk prone, were evaluated scientifically aimed at giving the members the best returns on the investments.

The Board of Directors of the Fund had its diversity comprising representatives of the Treasury, Employers Federation, Trade Ministry, two Chartered Accountants who are nominated by President Mahinda Rajapaksa in his capacity as Finance Minister, a representative from the employees.

Among the benefits that the ETF provides its members are: a death benefit scheme (Rs. 50,000) financial assistance for heart surgery (Rs. 150,000), financial assistance for kidney transplants ( Rs. 150,000), Permanent disability ( Rs. 200,000) reimbursement of the cost of contact lenses-Rs. 18,000, Hospitalisation allowance of Rs. 25,000 each per annum, 10,000 scholarships to GCE Advanced Level Students at the rate of Rs. 12,000 each for higher studies, housing loans at concessionary rates in three slabs, concessions and allowances for the disabled and those who have been terminated from employment and scholarships for 5000 Year 5 students of Rs. 15,000 each.
source - www.dailynews.lk

Good demand for Low Growns

Despite a downturn in production in July, tea production is on course to achieve last year’s All Time Record.

The production for July 2011 at 24.1 mkgs is a 12 percent reduction compared to the corresponding period of last year.

The decline is mainly from tea produced in the Medium and Higher Elevations where weather conditions have not been conducive for growth.

Overall the 196.7 mkgs produced in the first seven months in the year represents a marginal decrease of 0.53 percent over last year.

Production from all elevations is expected to peak in the last quarter of the year and given good weather conditions, we could expect to see yet another good year.

A noteworthy feature of this year’s production has been the increase of 3.19 percent recorded by High Growns compared to the corresponding period of last year.

On the Global front Kenya and South India continued to record low intakes which are not surprising as it is a pattern we often see at this time of the year whereas North India has maintained a significant increase over the previous season.

As at end June, Kenya’s crop deficit amounts to 34.55 mkgs with South India recording a negative variance of 4.6 mkgs.

Good growing conditions in India should see North Indian crop for July registering a slightly higher crop than last year, although quality is on the decline.

Kenyan July crop is yet to be released. Good growing conditions with some heavy showers have been reported from the West of Rift whereas the East of Rift continues sunny and dry with low intakes.

China has been experiencing very warm conditions and crops are reported moderate, whilst intakes in Vietnam are low. Last week’s Ex Estate weight of 1.12 mkgs of Ex Estate teas on offer met with fair demand.

Select Best BOP/BOPFs tended lower, whilst Below Best types were mostly firm.

The plainer types were firm to a little dearer.

There was better interest for Nuwara Eliya BOP/BOPFs on offer and price gains of Rs 5 to Rs 10 on average were registered.

Uva invoices with improved seasonal character sold well gaining Rs 50 to Rs 100 with a top price for a BOP being sold at Rs 900. Others fluctuated between Rs 400 to Rs 800 on special inquiry.
The plainer teas however barely maintained.

Low Grown CTC PF1s continued with good demand appreciating Rs 10 to Rs 15 with the top end now selling between Rs 560 to Rs 580.

High and Medium types too were Rs 5 to Rs 10 dearer, whilst brokens appreciated substantially by Rs 20 to Rs 30.

The tea bag sector lent fair support, whilst Russia was little selective. UK, Japan and Continental buyers were active following quality.

The 3.2 mkg of Low Growns that were on offer this week met with good demand.

In the Leafy category, the best BOP1/OP1s continued to sell at attractive levels. Pekoes advanced Rs 10 and more, however the below best OPAs declined as the sale progressed.

In the Small Leaf category, once again FBOP/FF1s continued to sell well, however, some Tippy varieties declined in value.

Considering the turmoil in Syria, Libya and also the month of August being the fasting period in the Middle East, prices could be quoted as quite satisfactory.

Western Teas

Select Best BOPs were barely steady, other good invoices gained Rs 10, Below Best sorts were firm to irregular, plainer varieties gained Rs 5 and more at times.

Select Best BOPFs declined Rs 10 to Rs 15, other good invoices were firm to easier, Below Best sorts advanced Rs 5, plainer sorts gained Rs 5 to Rs 10 on average. Medium BOPs advanced Rs 10. BOPF
were firm to easier.

Nuwara Eliya Teas

BOPs were firm to Rs 10 dearer. BOPF gained Rs 10 to Rs 15 on average.

Uva Teas

Bright BOP/BOPFs with seasonal character advanced substantially on special inquiry, others maintained last levels. Uda Pussellawa BOPs were irregularly dearer whilst the BOPF shed Rs 10 to Rs 15 on average.

CTC Teas

Select Best Low Grown PF1s gained Rs 10 to Rs 20, others were firm. BP1s advanced by Rs 20 and at times more.

High and Medium PF1s were firm to Rs 10 dearer. BP1s gained Rs 10 to Rs 20 on average.

Low Growns

Fair demand.

Select Best along with the Best OP1s were steady, however Below Best and poorer sorts eased Rs 5 to Rs 10.

Select Best BOP1s appreciated Rs 20 to Rs 40, whilst the Best were dearer by Rs 5 to Rs 10, clean Below Best types advanced Rs 10 to Rs 15, others were irregularly lower by Rs 5 to Rs 10.

Select Best OP / OPAs appreciated Rs 20 to Rs 40, however the Best types declined Rs 5 to Rs 10, Below Best and poorer sorts were firm on last levels.

Select Best Pekoes gained Rs 20 to Rs 40, bold Pekoe varieties too gained Rs 5 to Rs 10 and more at times, flaky types maintained last levels.

Shotty Pekoe1s were fully firm, Best types were firm to Rs 3 to Rs 5 lower at times, the balance were steady.

A few Select Best BOPs met with improved demand and advanced Rs 10 to Rs 20 and at times more.

The Best types too advanced Rs 10, Below Best sorts were firm, poor sorts shed Rs 5 to Rs 10. Select Best and Best BOP.SPs maintained last levels, Below Best and poor sorts were lower by Rs 10. Select Best wiry FBOPs moved up Rs 10 to Rs 20 and at times more.

Best types too gained Rs 10 to Rs 15, Below Best sorts advanced Rs 5 to Rs 10, poorer types however were lower to last.

Select Best and Best FBOPF1s moved up Rs 5 to Rs 10, Below Best sorts were firm, poorer sorts shed Rs 5 to Rs 10. A few Select Best tippy sorts maintained last levels. However the balance were lower to last.

Off Grades

Select Best liquoring Fngs1s were lower by Rs 10, Best and Below Best were dearer by Rs 10 to Rs 15 whilst the poorer sorts appreciated by Rs 10. Select Best and Best BMs were lower by Rs 10 to Rs 15 and more at times whilst the Below Best and poorer sorts depreciated by Rs 10 to Rs 15.

All BPs were irregularly lower by Rs 10 to Rs 15. All Low grown Fngs depreciated Rs 10. Select Best BOP1As eased Rs 5, whilst Best and Below Best too were lower by Rs 10 to Rs 20, poorer sorts too shed similar margins and more at times with low demand.

Dust

Select Best Dust1s were firm whilst the others in the Best and Below Best category declined Rs 15 to Rs 20, poorer sorts declined further.

Clean secondaries along with the Below Best types shed Rs 10 to Rs 15 whilst the poorer sorts were firm. All Low Grown Dust / Dust1s eased Rs 10 to Rs 15.
source - www.dailynews.lk

Retail dominance continues

Alufab Plc and Singalanka Standard Chemicals Plc lost 40.1% and 34.5% respectively over the week.

Alufab Plc closed the week at Rs 81.9 while Singalanka Standard Chemicals Plc closed at Rs 305.8. Royal Palms Beach Hotels Plc followed suit, declining 14.2% to close at Rs 65.8. City Housing and Real Estate Co. PLC and Property Development PLC were also among the top losers for the week.

Foreign investors remained net sellers, with a net selling position of Rs 4.81 million compared to last week's net selling position of Rs 406.31 million, however, this represents a significant decline of 98.82% in foreign sales. Foreign buying amounted to Rs 517.68 million representing a 38.26% decrease over the week before.

Over the week, foreign investors showed particular interest in JKH shares. Foreign selling totalled Rs 522.49 million, a week-on-week decline of 58.03%.

Tess Agro Plc topped the volume list recording 30.13 million shares changing hands representing 8.90% of the aggregate share volume. HVA Foods contributed 7.29% of aggregate share volume, with 24.67 million shares changing hands.

The market closed on a negative note, with both the ASPI and MPI recording week on week losses of 1.42% and 1.77%, respectively. The ASPI closed at 6852.96 and the MPI closed at 6222.08.

The weekly turnover value recorded a significant loss of 55.43% to Rs 8.66 billion, amounting to a daily average value of Rs 1.73 billion, in comparison to last week's value of Rs 3.88 billion. Turnover value for the week (23.4%) was dominated by HVA Foods, Colombo Land and Development Company Plc, and Colonial Motors PLC, amidst continued retail interest in these stocks. The number of shares traded declined by 53.42%, averaging 67.71 million shares traded as against 145.36 million traded last week.

Turnover in value for the week was led by the Banking and Finance sector, accounting for 17.67%, amounting to Rs 1.53 billion. Second highest contributor to turnover value was the Beverage Food and Tobacco sector contributing 14.50% or Rs 1.26 billion. Third highest contributor on the turnover value list was the Land and Property sector with 13.77% or Rs 1.19 billion.

Volume of turnover for the week was dominated by the Banking and Finance Sector, accounting for 22.31% of total market volume, with 75.52 million shares changing hands, followed by the Manufacturing sector, which represented 11.19% or 37.89 million shares.

Third highest contributor was the Power and Energy sector, with 34.92 million shares being traded, or 10.32% of turnover volume. Market capitalization recorded a loss of 1.4% to close at Rs 2457.17 billion, as against last week's close of Rs 2492.23 billion.

The major price gainer for this week was Samson International PLC, recording a gain of 36.4%, to close at Rs 150.0. Singer Finance (Lanka) Ltd. was the second largest price gainer, closing at Rs 37.3, a gain of 33.7% from its previous week's closing price of Rs 27.9. The third highest price gainer was Colonial Motors PLC, recording a gain of 28.5%, to close at Rs 413.6.

Point of view

Markets were mixed over the week, as consecutive losses early in the week were marginally reversed by end-week. Markets were buoyed by retail interest in specific counters on mostly speculative trades.
Net foreign outflows continued to be high despite significant foreign purchases in certain blue-chips in the latter half of the week.

We expect moderate retail activity in the shortened trading week ahead. We continue to see potential in fundamentally sound stocks, especially in the context of the recently concluded June earnings season which indicates year-on-year growth across a large proportion of the sectors.

Acuity Stockbrokers Research/Sri Lanka Equities
source - www.dailynews.lk