Friday, November 30, 2012
Sri Lanka's Vallibel net down 21-pct in first half
Nov 30, 2012 (LBO) - Sri Lanka's Vallibel One Plc, which has interests in ceramics, finance and leisure said profits fell 21 percent to 796 million rupees in the six months to September 2012 from a year earlier amid lower profits from tiles and higher finance costs.
The firm reported 74 cents in profits per share for the half year.
Revenues grew 42 percent to 15.2 billion rupees, cost of sales grew at a faster 53 percent to 10.7 billion rupees and gross profits grew 22 percent to 4.4 billion rupees.
Finance costs grew 154 percent to 596 million rupees.
Profits at its tile business, manufactured by subsidiary Royal Ceramics in which Vallibel One has a 51 percent stake, had fallen to 413 million rupees from 794 million rupees.
Profits from sanitary ware profits rose to 110 million rupees from 63 million rupees a year earlier.
Paints lost 13.5 million rupees, from a profit of 7.5 million rupees a year earlier. Profits from financial units rose to 941 million rupees from 841 million.
source - www.lbo.lk
Net foreign inflow at Bourse tops Rs. 36 b
As reported by the Daily FT yesterday foreign buying continued unabated with net buying of a further Rs. 460 million, bringing the year to date net inflow to Rs. 36 billion. On Wednesday net inflow amounted to Rs. 400 million.
Unlike the previous day, relatively serious foreign interest lifted sentiments among local investors yesterday pushing both indices ASI and MPI up by over 0.5%. Turnover was Rs. 877 million but volume was a low 25 million shares according to Softlogic Stockbrokers.
Premier blue JKH dominated foreign interest for the second consecutive day with 3 crossings accounting for 1.2 million shares at Rs. 211.8. On board activity of the counter was also on a high note with 168 trades during the day. Overall 1.6 million shares of JKH traded between Rs. 210 and Rs. 212 to finally close at Rs. 211.70, up by Rs. 2.60 or 1.2%.
Other main positive contributors were Lion Brewery (+12.9%), Distilleries (+3.2%), Bukit Darah (+1.9%) and Ceylon Tobacco (+0.7%). These stocks have been among foreigners favourites.
A crossing in Cargills brought the counter up the ladder of turnover as 535,000 shares were dealt with at Rs. 150. Investor attention was recorded in the dividend play counter, Nestle, with the counter accounting for 43,000 shares in volume while the counter gained 0.8% to close at Rs. 1,284.9.
Banking sector counters continued to be in the preferred list of investors as interest was observed in Seylan Bank [Non-Voting], Commercial Bank and Hatton National Bank. An on-board deal of 1.2 million shares was noted in Seylan Bank [Non-Voting] at a price of Rs. 35 as the counter with a gain of 2.7% at Rs. 34.8. Similar interest was recorded in Alcohol sector counters, Lion Brewery and Distileries. The former peaked today at a 52-week high price of Rs. 290 and closed at Rs. 289.1 with a gain of 12.9% while the latter gained 3.2% to close at Rs. 150.0.
Lanka Securities said yesterday’s cash map (excluding crossings) improved to 46% and market RSI (14 day) on All Share Index increased to 32 from the previous figure of 27. As of yesterday 132 stocks are trading more than 40% discount to their 52 week high prices and almost 80 stocks are in oversold position. In addition to that, 110 stocks are trading below the net assets value.
Reuters said many domestic investors stayed away as high interest rates weighed on sentiment.
“Foreign buying in select shares pushed turnover levels while retail investors stayed away as usual due to high interest rates,” Reuters quoted an unnamed broker as saying.
The rupee closed at 130.24/28 to the dollar compared with Wednesday’s close of 130.13/17 on seasonal importer dollar demand, dealers said.
source - www.ft.lk
Unlike the previous day, relatively serious foreign interest lifted sentiments among local investors yesterday pushing both indices ASI and MPI up by over 0.5%. Turnover was Rs. 877 million but volume was a low 25 million shares according to Softlogic Stockbrokers.
Premier blue JKH dominated foreign interest for the second consecutive day with 3 crossings accounting for 1.2 million shares at Rs. 211.8. On board activity of the counter was also on a high note with 168 trades during the day. Overall 1.6 million shares of JKH traded between Rs. 210 and Rs. 212 to finally close at Rs. 211.70, up by Rs. 2.60 or 1.2%.
Other main positive contributors were Lion Brewery (+12.9%), Distilleries (+3.2%), Bukit Darah (+1.9%) and Ceylon Tobacco (+0.7%). These stocks have been among foreigners favourites.
A crossing in Cargills brought the counter up the ladder of turnover as 535,000 shares were dealt with at Rs. 150. Investor attention was recorded in the dividend play counter, Nestle, with the counter accounting for 43,000 shares in volume while the counter gained 0.8% to close at Rs. 1,284.9.
Banking sector counters continued to be in the preferred list of investors as interest was observed in Seylan Bank [Non-Voting], Commercial Bank and Hatton National Bank. An on-board deal of 1.2 million shares was noted in Seylan Bank [Non-Voting] at a price of Rs. 35 as the counter with a gain of 2.7% at Rs. 34.8. Similar interest was recorded in Alcohol sector counters, Lion Brewery and Distileries. The former peaked today at a 52-week high price of Rs. 290 and closed at Rs. 289.1 with a gain of 12.9% while the latter gained 3.2% to close at Rs. 150.0.
Lanka Securities said yesterday’s cash map (excluding crossings) improved to 46% and market RSI (14 day) on All Share Index increased to 32 from the previous figure of 27. As of yesterday 132 stocks are trading more than 40% discount to their 52 week high prices and almost 80 stocks are in oversold position. In addition to that, 110 stocks are trading below the net assets value.
Reuters said many domestic investors stayed away as high interest rates weighed on sentiment.
“Foreign buying in select shares pushed turnover levels while retail investors stayed away as usual due to high interest rates,” Reuters quoted an unnamed broker as saying.
The rupee closed at 130.24/28 to the dollar compared with Wednesday’s close of 130.13/17 on seasonal importer dollar demand, dealers said.
source - www.ft.lk
Bourse recovers some lost ground
All indices gain tidily, large trades drive turnover
The Colombo bourse yesterday recovered some lost ground with JKH generating the bulk of the day’s turnover and all three indices moving up tidily – the All Share by 28.92 points (0.54%), the Milanka by 32.39 points (0.67%) and S&P SL20 by 17.29 points (0.59%) with 121 gainers comfortably ahead of 83 losers while 107 counters closed flat.
Turnover at Rs.877.5 million was up from the previous day’s Rs.739.47 million with crossings in Cargills and JKH responsible for over Rs.334 million of the day’s business volume.
"The indices ended higher on the back of gains on large caps amid improved turnover levels, which were largely driven by trades on diversified, banks, finance and beverage counters. Crossings on JKH and CARG accounted for 38% of turnover," John Keells Stockbrokers said.
Foreign inflows amounted to Rs. 461.71 million with foreign purchases amounting to Rs. 513.69 million.
JKH saw three block trades totaling 1.2 million shares at a price of Rs.211.80 per share in deals worth Rs.254.2 million while Cargills saw a single crossing of over 0.5 million at Rs.150 per share in a deal worth Rs.80.4 million.
Apart from the block trades, JKH with nearly 0.5 million shares done between Rs.210 and Rs.212 on the trading floor closed Rs.2.70 up at Rs.211.70 contributing Rs.96 million to turnover – the day’s highest on the floor.
An unusually large quantity of 48,364 Nestle at Rs.1,285 generated Rs.61.7 million turnover with the counter closing Rs.10 up at Rs.1,285 trading between Rs.1,276 and Rs.1,285.
Other big turnover generators yesterday included Seylan (non-voting) - over 1.7 million shares), PC Pharma (5 million shares) and Commercial Bank (voting) (over 0.4 million shares).
Brokers said that most of the day’s business was done in large parcels of shares that changed hands with retail activity slow.
Several banking counters (Seylan X), ComBank (N), HNB (N) and HNB (X) were among the most traded stocks during the day.
PC Pharma closed 20 cents down at Rs.10.10 on 5 million shares done at Rs.10.10, ComBank closed flat at Rs.100 on 0.4 million shares while HNB (voting) closed 50 cents down at Rs.143.50 on nearly 0.2 million shares.
Distilleries closed Rs.4.60 up at Rs.150 on nearly 0.1 million shares done between Rs.145.50 and Rs.150.
Central Finance announced a first interim dividend of 85 cents per share for 2012/13 XD from Dec. 7 with payment on Dec. 18 while Colonial Motors announced the dates for its previously announced rights issue and sub-division of shares.
source - www.island.lk
The Colombo bourse yesterday recovered some lost ground with JKH generating the bulk of the day’s turnover and all three indices moving up tidily – the All Share by 28.92 points (0.54%), the Milanka by 32.39 points (0.67%) and S&P SL20 by 17.29 points (0.59%) with 121 gainers comfortably ahead of 83 losers while 107 counters closed flat.
Turnover at Rs.877.5 million was up from the previous day’s Rs.739.47 million with crossings in Cargills and JKH responsible for over Rs.334 million of the day’s business volume.
"The indices ended higher on the back of gains on large caps amid improved turnover levels, which were largely driven by trades on diversified, banks, finance and beverage counters. Crossings on JKH and CARG accounted for 38% of turnover," John Keells Stockbrokers said.
Foreign inflows amounted to Rs. 461.71 million with foreign purchases amounting to Rs. 513.69 million.
JKH saw three block trades totaling 1.2 million shares at a price of Rs.211.80 per share in deals worth Rs.254.2 million while Cargills saw a single crossing of over 0.5 million at Rs.150 per share in a deal worth Rs.80.4 million.
Apart from the block trades, JKH with nearly 0.5 million shares done between Rs.210 and Rs.212 on the trading floor closed Rs.2.70 up at Rs.211.70 contributing Rs.96 million to turnover – the day’s highest on the floor.
An unusually large quantity of 48,364 Nestle at Rs.1,285 generated Rs.61.7 million turnover with the counter closing Rs.10 up at Rs.1,285 trading between Rs.1,276 and Rs.1,285.
Other big turnover generators yesterday included Seylan (non-voting) - over 1.7 million shares), PC Pharma (5 million shares) and Commercial Bank (voting) (over 0.4 million shares).
Brokers said that most of the day’s business was done in large parcels of shares that changed hands with retail activity slow.
Several banking counters (Seylan X), ComBank (N), HNB (N) and HNB (X) were among the most traded stocks during the day.
PC Pharma closed 20 cents down at Rs.10.10 on 5 million shares done at Rs.10.10, ComBank closed flat at Rs.100 on 0.4 million shares while HNB (voting) closed 50 cents down at Rs.143.50 on nearly 0.2 million shares.
Distilleries closed Rs.4.60 up at Rs.150 on nearly 0.1 million shares done between Rs.145.50 and Rs.150.
Central Finance announced a first interim dividend of 85 cents per share for 2012/13 XD from Dec. 7 with payment on Dec. 18 while Colonial Motors announced the dates for its previously announced rights issue and sub-division of shares.
source - www.island.lk
Thursday, November 29, 2012
Sri Lanka's HDFC Bank downgraded to 'BBB(lka)': Fitch
Nov 29, 2012 (LBO) - Fitch Ratings has downgraded Sri Lanka's HDFC Bank, a mortgage lender by one level to 'BBB(lka)' as its profits came under pressure from rising interest rates.
"The downgrade reflects the bank's inability to swiftly re-price its existing housing loan portfolio to avert deterioration in profits as market interest rates started to rise since end-2011," the rating agency said.
"This failure of timely re-pricing has further accentuated the interest rate risk inherent in HDFC's balance sheet due to maturity mismatches between its assets and liabilities."
BBB is still in the investment grade.
The bank's outstanding 195 million rupees of senior unsecured redeemable debentures have also been downgraded to 'BBB(lka)'. The outlook on both ratings is stable.
Fitch said with 51 percent state ownership support was expected if needed. Credit management was also satisfactory, with overdue loans only 1.8 percent of total advances.
The full statement is reproduced below:
Fitch Downgrades Sri Lanka's HDFC Bank to 'BBB(lka)'; Outlook Stable
Fitch Ratings-Colombo/Seoul/Singapore-29 November 2012: Fitch Ratings Lanka has downgraded the Housing Development Finance Corporation Bank of Sri Lanka's (HDFC) National Long-Term Rating to 'BBB(lka)' from 'BBB+(lka)'.
The Outlook is Stable. Its LKR195m outstanding senior unsecured redeemable debentures have also been downgraded to 'BBB(lka)' from 'BBB+(lka)'.
The downgrade reflects the bank's inability to swiftly re-price its existing housing loan portfolio to avert deterioration in profits as market interest rates started to rise since end-2011. This failure of timely re-pricing has further accentuated the interest rate risk inherent in HDFC's balance sheet due to maturity mismatches between its assets and liabilities.
The current rating and Stable Outlook reflect Fitch's expectations that the Government of Sri Lanka, with over 51% ownership of HDFC, is likely to provide support to the bank under extreme circumstances if required. This is based on the bank's linkages with the state, and its quasi-policy role in supporting the government's initiatives towards low- and middle-income housing.
The state's ownership stake in HDFC is almost entirely held via the National Housing Development Authority - a state-owned corporation that is tasked with formulating and implementing the national housing policy. HDFC's board is appointed by the Ministry of Finance, and seven out of a total of nine board members are senior public servants, representing key ministries and state-owned corporations, most of which are related to housing and construction. A majority of HDFC's clientele consists of low and middle-income consumers who have limited access to traditional bank credit.
HDFC's profitability weakened sharply in the nine months to September 2012 (9M12), driven by increasing borrowing costs in line with rising market interest rates. Consequently HDFC's return on assets (ROA) fell to an annualised 0.07% at end-9M12 (end-2011: 1.77%). The bank increased interest rates on its existing housing loans with effect from 1 October 2012 - by up to 200bps or up to a ceiling rate of 18% - which the bank expects will stem the deterioration in profits in the near-term.
HDFC successfully amended its Act of Incorporation in November 2011, in order to be able to disburse short-term lending products such as gold-backed loans, Islamic finance, and leasing.
Furthermore the bank expects to introduce variable-rate housing loans starting in 2013 which will be re-priced annually in line with market rates. However, gaining a critical mass in these products is likely to take 24 months or more, and the successful implementation of these strategies will be key in determining the level of HDFC's long-term profitability.
HDFC's credit risk management has been satisfactory, considering the low income nature of its borrowers. Credit quality is supported by the low default risk of housing loans relative to other consumer loans. Loans in arrears of over 18 months have remained broadly below 1.8% of total advances between 2009 and 2012.
HDFC's rating may be downgraded further if its linkages with the state weakens, including a dilution of the state's majority ownership of the bank. Fitch does not expect rating upside for HDFC over the medium-term, given that a successful reduction in the bank's exposure to interest-rate risk will likely take longer to implement.
HDFC is a licensed specialised bank created by an Act of Parliament. At end-September 2012 HDFC's asset base stood at LKR20.4bn, while it had a network of 21 branches and 11 service centers.
source - www.lbo.lk
Foreign funds’ craving for Sri Lankan stocks persists
Rs. 400 m net inflow but indices dip on weak local investor sentiments midst rise in interest rates
Foreign funds’ craving for select Sri Lankan stocks continue unabated as the Bourse saw a net inflow of Rs. 400 million yesterday amidst dip in indices largely due to weak sentiments from local investors.
Contrary to misconception among some that foreign inflows currently enjoyed by Colombo Bourse are from dubious parties, yesterday’s as well as recent foreign buying are largely by established funds.
A fund linked to Aberdeen was responsible for Rs. 538 worth of buying into JKH and Aitken Spence. Premier blue chip JKH saw three crossings involving 1.8 million shares at Rs. 211.80 each with Captains being major sellers. Aitken Spence saw two crossings involving 1.3 million of its shares at Rs. 121 each. The seller was a foreign fund.
Foreign funds/investors were also on the buying side of Commercial Bank, Cargills, Ceylon Tobacco, Distilleries (which saw Rs. 600 million in foreign buying on Friday), Softlogic Holdings and Lion Breweries yesterday.
In total foreign buying amounted to Rs. 575 million and selling was Rs. 179 million, resulting in a near Rs. 400 million inflow, propelling the year to date inflow close to Rs. 36 billion mark, an all time high. According to Lanka Securities, foreigners have been net buyers for 165 market days out of the total of 220 so far this year (i.e.75%).
Deals on JKH and Spence accounted for 74% of the day’s turnover of Rs. 739.4 million. Local investor sentiments wise, the Bourse saw further setback as ASI dipped by 1% bringing the year-to-date negative return to over 12%.
Some linked the dip to rising scenario for interest rates, a development making fixed income options more attractive for investors whilst others pinned it to lack of confidence. At yesterday’s weekly Treasury Bill auction, the weighted averages (WAY) of the 364 and 182 day bills continued its upward trend increasing by 4 basis points (bp) and 2 bp respectively to 12.85% and 12.09%. The benchmark 91 day bill in the meantime, increased by 5 bp to 12.79%. (See P4 for more).
The main negative contributors to yesterday’s ASI’s dip were; John Keells Holdings (-1.3%), Sri Lanka Telecomm (-2.09%), NDB Capital Holdings (-6.13%), Commercial Bank (-1.48%) and Carsons Cumberbatch (-1.11%).
Softlogic Stockbrokers said the more liquid MPI touched 5,389.04 (+9.21 points) at its intra-day high, before taking a steep downtrend to touch 4,857.88 points at its intra-day low before settling at 4,858.15 points (-77 points).
The S&P SL20 index witnessed its peak at 2,964.70 points during mid-day trading which declined to 2,937.73 points at its lowest before the index lost 25 points at its close of 2,934.77 points.
The banking cluster gathered interest with Commercial Bank and Nations Trust Bank edging up to the top turnover slot. The former witnessed c.72k shares changing hands at Rs. 100 while the latter saw 297,000 shares being transacted at Rs. 53. National Development Bank gained focus during the final hour of trading as a tranche of 95,000 traded at its intra-day low of Rs. 132 (-2.2%).
Renewed interest heaved up in Piramal Glass as several on-board blocks were transacted at Rs. 6 including a block of 500,000 shares. Interest stayed in People’s Finance and Eden Hotel Lanka. The former hiked up 3.6% to Rs. 35 at its intra-day high before closing at Rs. 34.4 (+1.78%).
Softlogic also said retail activity was not majorly prominent yet slight interest was witnessed in penny stocks; Browns Investments (+0.0%), Free Lanka Capital (-8.7%), E-Channelling (-1.85%) and Swarnamahal Finance (-3.23%).
A number of stocks touched their 52-week low price levels; CIC Holdings, Tokyo Cement, Swarnamahal Finance, Ramboda Falls, Regnis Lanka and Bimputh Finance, while SMB Leasing, Coco Lanka, Touchwood Investments, Vidullanka, Beruwala Resorts and Touchwood Investments continued to trade at their respective 52-week low levels.
source - www.ft.lk
Foreign funds’ craving for select Sri Lankan stocks continue unabated as the Bourse saw a net inflow of Rs. 400 million yesterday amidst dip in indices largely due to weak sentiments from local investors.
Contrary to misconception among some that foreign inflows currently enjoyed by Colombo Bourse are from dubious parties, yesterday’s as well as recent foreign buying are largely by established funds.
A fund linked to Aberdeen was responsible for Rs. 538 worth of buying into JKH and Aitken Spence. Premier blue chip JKH saw three crossings involving 1.8 million shares at Rs. 211.80 each with Captains being major sellers. Aitken Spence saw two crossings involving 1.3 million of its shares at Rs. 121 each. The seller was a foreign fund.
Foreign funds/investors were also on the buying side of Commercial Bank, Cargills, Ceylon Tobacco, Distilleries (which saw Rs. 600 million in foreign buying on Friday), Softlogic Holdings and Lion Breweries yesterday.
In total foreign buying amounted to Rs. 575 million and selling was Rs. 179 million, resulting in a near Rs. 400 million inflow, propelling the year to date inflow close to Rs. 36 billion mark, an all time high. According to Lanka Securities, foreigners have been net buyers for 165 market days out of the total of 220 so far this year (i.e.75%).
Deals on JKH and Spence accounted for 74% of the day’s turnover of Rs. 739.4 million. Local investor sentiments wise, the Bourse saw further setback as ASI dipped by 1% bringing the year-to-date negative return to over 12%.
Some linked the dip to rising scenario for interest rates, a development making fixed income options more attractive for investors whilst others pinned it to lack of confidence. At yesterday’s weekly Treasury Bill auction, the weighted averages (WAY) of the 364 and 182 day bills continued its upward trend increasing by 4 basis points (bp) and 2 bp respectively to 12.85% and 12.09%. The benchmark 91 day bill in the meantime, increased by 5 bp to 12.79%. (See P4 for more).
The main negative contributors to yesterday’s ASI’s dip were; John Keells Holdings (-1.3%), Sri Lanka Telecomm (-2.09%), NDB Capital Holdings (-6.13%), Commercial Bank (-1.48%) and Carsons Cumberbatch (-1.11%).
Softlogic Stockbrokers said the more liquid MPI touched 5,389.04 (+9.21 points) at its intra-day high, before taking a steep downtrend to touch 4,857.88 points at its intra-day low before settling at 4,858.15 points (-77 points).
The S&P SL20 index witnessed its peak at 2,964.70 points during mid-day trading which declined to 2,937.73 points at its lowest before the index lost 25 points at its close of 2,934.77 points.
The banking cluster gathered interest with Commercial Bank and Nations Trust Bank edging up to the top turnover slot. The former witnessed c.72k shares changing hands at Rs. 100 while the latter saw 297,000 shares being transacted at Rs. 53. National Development Bank gained focus during the final hour of trading as a tranche of 95,000 traded at its intra-day low of Rs. 132 (-2.2%).
Renewed interest heaved up in Piramal Glass as several on-board blocks were transacted at Rs. 6 including a block of 500,000 shares. Interest stayed in People’s Finance and Eden Hotel Lanka. The former hiked up 3.6% to Rs. 35 at its intra-day high before closing at Rs. 34.4 (+1.78%).
Softlogic also said retail activity was not majorly prominent yet slight interest was witnessed in penny stocks; Browns Investments (+0.0%), Free Lanka Capital (-8.7%), E-Channelling (-1.85%) and Swarnamahal Finance (-3.23%).
A number of stocks touched their 52-week low price levels; CIC Holdings, Tokyo Cement, Swarnamahal Finance, Ramboda Falls, Regnis Lanka and Bimputh Finance, while SMB Leasing, Coco Lanka, Touchwood Investments, Vidullanka, Beruwala Resorts and Touchwood Investments continued to trade at their respective 52-week low levels.
source - www.ft.lk
Wednesday, November 28, 2012
Sri Lanka e-Channeling profits fall
Nov 28, 2012 (LBO) - Sri Lanka's e-Channeling Plc which runs an online booking engine said, profits fell 66 percent to 24 million rupees in the half year ending September 2012 from a year earlier, without one off investment profits.
The group reported earnings of 20 cents per share for the half year. E-channeling reports half yearly accounts as a second board listed company.
Last year's profits were boosted by a 71 million rupee one-off gain.
Up to September the e-channeling, at company level, reported 28 million rupees in profits from operating activities.
In September 2011 after a change in shareholders the firm said it will take out 150 million rupees and invest in a related company, ECL Soft (Pvt) Ltd.
The company was expected to be involved in many areas "such as leisure, consultancy and training, media and advertising, financial services, international marketing of the ECL group, business process outsourcing in the healthcare sector and strategic investments."
The 150 million rupees now appears in the balance sheet of e-channeling as an investment.
By the end of September 2012, another 37 million rupees was shown as being due from a related party while the cashflow statement showed a 34 million rupee outflow to a related party.
source - www.lbo.lk
Energizing the stock market and good corporate governance
By K.C. Vignarajah
Glorious opportunities are still available in Sri Lanka for investments, small and large, local and foreign. Therefore, promote sustainable industry growth, with equity. It is essential to ensure a vibrant, clean free market with fairness and equity’, to shareholders and investors. The few errant controlling interests (CI) who do not comply should be made to do so quickly; use the ‘carrot and stick’ now!
‘Revenue Neutral’ measures to energize the stock market:
* Increase liquidity: minimum public or free float should be 30% and preferably over 45% (as in India, Thailand Malaysia etc.) which may be rewarded by two-tier preferential tax rate, and penalize where free float is less than 20%. (Progress to minimum 25% and 30%).
* Encourage CI to increase the Public float to 40%, by making their (CI & RP) voting rights in a PLC. or subsidiaries restricted to 60%. (example of holdings voting shares in banks restricted to 10%). This will not reduce the value, of their excess holdings, as purchasers, (other than RP, obviously) will have usual voting rights.
* Encourage high Dividend payout % (DP) of 50% of Net Profit After Tax (NPAT) and 50% to Revenue reserves. Again preferential tax rates (to incentivize/penalize) may be applied.
* These measures will create large increase in revenue/cash flow to the state via With Holding Tax (WHT) to pay for the other concessions stated above.
* Encourage obtaining Foreign currency loans to be repaid from export earnings. I have been suggesting this to many companies for over 2 years. In the early seventies, I negotiated hard with the authorities and CBSL to allow this facility; but ended up with buyer supplying the raw materials on ‘No Foreign Exchange’ (NFE) basis which still was greatly beneficial in many ways to the exporters and the country! That was innovation to circumvent CBSL for the greater good. (Now, thanks to the budget 2013, it is more profitable safer, and easier).
* If additional capital is required by a Company, a ‘Rights Issue,’ correctly priced, to be fair to the company and all existing shareholders could be made. This should take into account the retained earnings and reserves (shareholders’ fund), on the undeniable principle that these belong to the existing shareholders.
* Assets should be properly re-valued and the excess value capitalized; Bonus shares should be issued.
* Waive stamp duty on the above progressive measures (Bonus and Rights), to eliminate excuses by the errant CIs, as well as being fair to the shareholders and the market, by increasing liquidity, marketability and availability of greater number of shares at lower cost.
* Prevent creation of ‘Shareholder fatigue’ by errant (CI) and their collaborators, the so called ‘independent directors, auditors, valuers/advisers and managers and captive Company Secretaries. They should all be penalized, in cases of dereliction of duty and breach of trust. Some of the white collar criminals and market offenders should be sent to jail as in other respected jurisdictions for insider dealing, market manipulation, unjust enrichment, bribery and corruption etc., to deter others from doing so or trying to do same.
* Encourage Corporates and CIs to reward shareholders by giving discounts on goods and services produced or provided by the company. These may be at the same rates afforded to the directors, or may be 5% more than their prices given to whole-sellers, in proportion to their shareholdings. There are very many examples of good companies and CIs, who are doing this in a very equitable shareholder friendly manner as contrasted with other Corporates who create Shareholder fatigue.
* Ensure timely disclosure of material information inter-alia (of new plans, projects and potential). Non disclosure, or delay helps CI themselves or related parties (RP) to acquire shares at cheap prices, and also to reduce ‘Public float’ delivering a double blow to debilitate IMS and also the market.
* The invaluable experience of two of H.E. President’s own well trusted appointees, as chairpersons of SEC, Dr. Thilak Karunaratne and Mrs Indrani Sugathadasa, may now be utilized as Capital Market Ombudsman, and to review progress of investigations into market malpractices/ misconduct.
All the above measures will truly create ‘Investor Confidence’, and certainly energize the stock market.
Inspire International Investor Confidence, ‘inter alia’, by:
1. Fully implementing International Financial Reporting Standards (IFRS) which had been implemented by more than 100 countries by 2011.
2. Strict Adherence to strengthened rules and regulations which eliminate loop holes. Enforcement of law and order impartially, irrespective of personalities and political influence.
3. Good Corporate Governance, Transparency and showing respect for, and sincere compliance with, all international norms of political and social responsibility.
(Acting in the Interests of IMS, the Investing Public and Spokesperson for Promoters of Association of Independent Shareholders of Sri Lanka)
source - www.island.lk
Glorious opportunities are still available in Sri Lanka for investments, small and large, local and foreign. Therefore, promote sustainable industry growth, with equity. It is essential to ensure a vibrant, clean free market with fairness and equity’, to shareholders and investors. The few errant controlling interests (CI) who do not comply should be made to do so quickly; use the ‘carrot and stick’ now!
‘Revenue Neutral’ measures to energize the stock market:
* Increase liquidity: minimum public or free float should be 30% and preferably over 45% (as in India, Thailand Malaysia etc.) which may be rewarded by two-tier preferential tax rate, and penalize where free float is less than 20%. (Progress to minimum 25% and 30%).
* Encourage CI to increase the Public float to 40%, by making their (CI & RP) voting rights in a PLC. or subsidiaries restricted to 60%. (example of holdings voting shares in banks restricted to 10%). This will not reduce the value, of their excess holdings, as purchasers, (other than RP, obviously) will have usual voting rights.
* Encourage high Dividend payout % (DP) of 50% of Net Profit After Tax (NPAT) and 50% to Revenue reserves. Again preferential tax rates (to incentivize/penalize) may be applied.
* These measures will create large increase in revenue/cash flow to the state via With Holding Tax (WHT) to pay for the other concessions stated above.
* Encourage obtaining Foreign currency loans to be repaid from export earnings. I have been suggesting this to many companies for over 2 years. In the early seventies, I negotiated hard with the authorities and CBSL to allow this facility; but ended up with buyer supplying the raw materials on ‘No Foreign Exchange’ (NFE) basis which still was greatly beneficial in many ways to the exporters and the country! That was innovation to circumvent CBSL for the greater good. (Now, thanks to the budget 2013, it is more profitable safer, and easier).
* If additional capital is required by a Company, a ‘Rights Issue,’ correctly priced, to be fair to the company and all existing shareholders could be made. This should take into account the retained earnings and reserves (shareholders’ fund), on the undeniable principle that these belong to the existing shareholders.
* Assets should be properly re-valued and the excess value capitalized; Bonus shares should be issued.
* Waive stamp duty on the above progressive measures (Bonus and Rights), to eliminate excuses by the errant CIs, as well as being fair to the shareholders and the market, by increasing liquidity, marketability and availability of greater number of shares at lower cost.
* Prevent creation of ‘Shareholder fatigue’ by errant (CI) and their collaborators, the so called ‘independent directors, auditors, valuers/advisers and managers and captive Company Secretaries. They should all be penalized, in cases of dereliction of duty and breach of trust. Some of the white collar criminals and market offenders should be sent to jail as in other respected jurisdictions for insider dealing, market manipulation, unjust enrichment, bribery and corruption etc., to deter others from doing so or trying to do same.
* Encourage Corporates and CIs to reward shareholders by giving discounts on goods and services produced or provided by the company. These may be at the same rates afforded to the directors, or may be 5% more than their prices given to whole-sellers, in proportion to their shareholdings. There are very many examples of good companies and CIs, who are doing this in a very equitable shareholder friendly manner as contrasted with other Corporates who create Shareholder fatigue.
* Ensure timely disclosure of material information inter-alia (of new plans, projects and potential). Non disclosure, or delay helps CI themselves or related parties (RP) to acquire shares at cheap prices, and also to reduce ‘Public float’ delivering a double blow to debilitate IMS and also the market.
* The invaluable experience of two of H.E. President’s own well trusted appointees, as chairpersons of SEC, Dr. Thilak Karunaratne and Mrs Indrani Sugathadasa, may now be utilized as Capital Market Ombudsman, and to review progress of investigations into market malpractices/ misconduct.
All the above measures will truly create ‘Investor Confidence’, and certainly energize the stock market.
Inspire International Investor Confidence, ‘inter alia’, by:
1. Fully implementing International Financial Reporting Standards (IFRS) which had been implemented by more than 100 countries by 2011.
2. Strict Adherence to strengthened rules and regulations which eliminate loop holes. Enforcement of law and order impartially, irrespective of personalities and political influence.
3. Good Corporate Governance, Transparency and showing respect for, and sincere compliance with, all international norms of political and social responsibility.
(Acting in the Interests of IMS, the Investing Public and Spokesperson for Promoters of Association of Independent Shareholders of Sri Lanka)
source - www.island.lk
Union Assurance reports consolidated performance in third quarter
Union Assurance PLC (UA), a leading player in the Sri Lankan insurance sector, consolidated its position by reporting steady growth in both turnover and profits for the nine months ended 30 September 2012. UA reported a year-on-year growth rate of 15% in combined gross written premium and profit after tax.
Combined gross written premium increased from Rs. 6 billion for the first nine months of 2011 to Rs. 6.9 billion for the nine months ended 30 September 2012. Life insurance gross written premium recorded a growth of 17% from Rs. 3.2 billion as at September 2011 to Rs. 3.7 billion as at September 2012.
General insurance gross written premium recorded a 13% growth from Rs. 2.8 billion in 2011 to Rs.3.1 billion in 2012. Growth was reported from both corporate and retail customer segments, and all classes of General insurance business reported a year-on-year growth.
Profit after tax of Rs. 223 million, was an increase of 15% from Rs. 194 million reported in September 2011. The profit excludes the surplus from the Life insurance business which is determined after an actuarial valuation which is conducted at the end of the year.
As at end of 30 September 2012, the Life fund stands at Rs. 16.4 billion, including the unit linked fund and is one of the largest Life funds in the industry.
Dirk Pereira, Chief Executive Officer of UA, said, “We are pleased with the progress we are making in achieving our twin objectives of growing both turnover and profits of the business. Given the current dynamics in the insurance market, we retain a positive outlook with regard to the company’s prospects in the short to medium term.”
The financial statements for the period ended 30 September 2012 have been prepared and presented in accordance with Sri Lanka Accounting Standards (SLFRS/LKASs) which have converged with the International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
UA announced a rights issue of one ordinary share for every seven shares to strengthen the capital position of the company in order to proactively meet future regulatory requirements.
The issue was approved by the shareholders at an extraordinary general meeting held on 12 November 2012.
Delivering on their brand promise, Union Assurance shone bright at the recently held SLIM Brand Excellence Awards and was the only insurance company to win an award for Service Brand for the year 2011.]
The Union Assurance brand is positioned on the promise of ‘trust’ and strives to deliver this promise by being transparent, convenient and respectful when dealing with all stakeholders.
source - www.ft.lk
Combined gross written premium increased from Rs. 6 billion for the first nine months of 2011 to Rs. 6.9 billion for the nine months ended 30 September 2012. Life insurance gross written premium recorded a growth of 17% from Rs. 3.2 billion as at September 2011 to Rs. 3.7 billion as at September 2012.
General insurance gross written premium recorded a 13% growth from Rs. 2.8 billion in 2011 to Rs.3.1 billion in 2012. Growth was reported from both corporate and retail customer segments, and all classes of General insurance business reported a year-on-year growth.
Profit after tax of Rs. 223 million, was an increase of 15% from Rs. 194 million reported in September 2011. The profit excludes the surplus from the Life insurance business which is determined after an actuarial valuation which is conducted at the end of the year.
As at end of 30 September 2012, the Life fund stands at Rs. 16.4 billion, including the unit linked fund and is one of the largest Life funds in the industry.
Dirk Pereira, Chief Executive Officer of UA, said, “We are pleased with the progress we are making in achieving our twin objectives of growing both turnover and profits of the business. Given the current dynamics in the insurance market, we retain a positive outlook with regard to the company’s prospects in the short to medium term.”
The financial statements for the period ended 30 September 2012 have been prepared and presented in accordance with Sri Lanka Accounting Standards (SLFRS/LKASs) which have converged with the International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
UA announced a rights issue of one ordinary share for every seven shares to strengthen the capital position of the company in order to proactively meet future regulatory requirements.
The issue was approved by the shareholders at an extraordinary general meeting held on 12 November 2012.
Delivering on their brand promise, Union Assurance shone bright at the recently held SLIM Brand Excellence Awards and was the only insurance company to win an award for Service Brand for the year 2011.]
The Union Assurance brand is positioned on the promise of ‘trust’ and strives to deliver this promise by being transparent, convenient and respectful when dealing with all stakeholders.
source - www.ft.lk
Tuesday, November 27, 2012
Sri Lanka's People's Leasing rating unchanged: S&P
Nov 27, 2012 (LBO) - The conversion of Sri Lanka's People's Leasing and Finance into a licensed finance company would imposed a higher regulatory capital charge but its 'B+' stable rating would remain unchanged, Standard and Poor's said.
People's Leasing and Finance is expected to become a licensed finance company (LFC) in mid 2013 and also merge with subsidiary finance company, which has a lower domestic rating from Fitch.
S & P said the conversion and merger which would expand finance leased assets will also increase its regulatory capital charge as the risk weight for finance leases were higher than leased assets.
It's Tier I capital ratio would decline from 25.4 percent in September 2012 to 20 percent.
"The risk weight applied on finance leases, which form about 50 percent of the company's loan book, is double for LFCs," Standard and Poor's said.
"The treatment of investments in unconsolidated subsidiaries in the calculation of Tier 1 capital is also different.
"Nevertheless, the rating on PLF will not be affected because our capital assessment is based on our view of the risk in various asset classes.
"Moreover, we assess the company on a consolidated basis; hence, its merger with its subsidiary does not affect the rating."
Peoples Leasing, a unit of Sri Lanka's state-run People's Bank is the country's largest leasing company at present.
source - www.lbo.lk
Bourse lacklustre ahead of holiday
The Colombo Bourse depicted a rather stagnant mode on the back of the holiday mood of investors clouding activity levels, which slid to its lowest since 11 December 2009.
Mid-day turnover remained at a mere Rs. 34 million in the absence of large block trades. CSE ended the day with a turnover of Rs. 116 million.
Softlogic Stockbrokers said the benchmark ASI took a volatile path as it inched up to an intra-day high of 5,419.01 points (+11.9 points) during the initial hour followed by a gradual down turn leading to an intra-day low at 5,386.62 points (-20.49 points) before it slipped 22 points at its close of 5,384.89.
Major losses in Aitken Spence (-2.93%), Commercial Leasing and Finance (-5.41%), Aitken Spence Hotel Holdings (-3.98%) and Bukit Darah (-1.19%) outweighed the contributions from Sri Lanka Telecom (+2.38%), Hatton National Bank (+2.11%) and John Keells Holdings (+0.1%).
The MPI sketched a zigzag pattern touching 4,973.58 points at its peak Vs 4,934.75 points at its intra-day low.
The index slid 19 points at its close of 4,935.51 points. The S&P SL20 index fluctuated in a similar tone with its intra-day high at 2,974.60 which edged down to reach an intra-day low of 2,962.06 points before it closed with a marginal gain.
John Keells Holdings dominated the day’s trading as it gained more interest towards the latter trading hours which led to a peak of Rs. 212.80 (+0.6%) before settling to close with 0.1% gain at Rs. 211.80.
Finance companies gathered interest as People’s Finance and Central Finance saw some activity during the latter trading hours. The former saw its price appreciate as much as 11.2% at Rs. 34.70 before its close at Rs. 33.80 (8.3%), following the company being placed on rating watch positive by Fitch Ratings.
Colombo Dockyard witnessed renewed interest with most of its transactions taking place at its intra-day low level of Rs. 215.00 (-1.8%). Commercial Credit and Finance was witnessed in the top turnover slot for the day with an on-board pick of around 190,000 shares at Rs. 16 each after which a steep downtrend led to the counter losing -3.2% at its close of Rs. 15.10.
Softlogic Holdings saw some interest with its announcement of the opening of its new Mothercare outlet. Two tranches carrying 233,000 shares were transacted on-board at its closing price of Rs. 10.50.
Retail activity remained minimal while slight interest surrounded Blue Diamonds [Non-Voting] (-5.8%), Browns Investments (+0.0%) and Panasian Power (+0.0%).
SMB Leasing and Asia Asset Finance touched new 52-week low levels of Rs. 0.90 and Rs. 2.20 respectively while Coco Lanka, Touchwood Investments, Vidullanka, Agstar Fertilizers and Beruwala Resorts continued to trade at their 52-week low levels, Sotlogic Stockbrokers said.
Lanka Securities said cash map yesterday was 30%. Foreign participation was 15% of total market turnover whilst net foreign buying was Rs. 29 million.
“The 14-day RSI still remains at oversold region and the market PE has now declined to 11x, below the PEs of the MSCI emerging markets (12x) and MSCI frontier emerging markets (13x),” Lanka Securities added.
source - www.ft.lk
Mid-day turnover remained at a mere Rs. 34 million in the absence of large block trades. CSE ended the day with a turnover of Rs. 116 million.
Softlogic Stockbrokers said the benchmark ASI took a volatile path as it inched up to an intra-day high of 5,419.01 points (+11.9 points) during the initial hour followed by a gradual down turn leading to an intra-day low at 5,386.62 points (-20.49 points) before it slipped 22 points at its close of 5,384.89.
Major losses in Aitken Spence (-2.93%), Commercial Leasing and Finance (-5.41%), Aitken Spence Hotel Holdings (-3.98%) and Bukit Darah (-1.19%) outweighed the contributions from Sri Lanka Telecom (+2.38%), Hatton National Bank (+2.11%) and John Keells Holdings (+0.1%).
The MPI sketched a zigzag pattern touching 4,973.58 points at its peak Vs 4,934.75 points at its intra-day low.
The index slid 19 points at its close of 4,935.51 points. The S&P SL20 index fluctuated in a similar tone with its intra-day high at 2,974.60 which edged down to reach an intra-day low of 2,962.06 points before it closed with a marginal gain.
John Keells Holdings dominated the day’s trading as it gained more interest towards the latter trading hours which led to a peak of Rs. 212.80 (+0.6%) before settling to close with 0.1% gain at Rs. 211.80.
Finance companies gathered interest as People’s Finance and Central Finance saw some activity during the latter trading hours. The former saw its price appreciate as much as 11.2% at Rs. 34.70 before its close at Rs. 33.80 (8.3%), following the company being placed on rating watch positive by Fitch Ratings.
Colombo Dockyard witnessed renewed interest with most of its transactions taking place at its intra-day low level of Rs. 215.00 (-1.8%). Commercial Credit and Finance was witnessed in the top turnover slot for the day with an on-board pick of around 190,000 shares at Rs. 16 each after which a steep downtrend led to the counter losing -3.2% at its close of Rs. 15.10.
Softlogic Holdings saw some interest with its announcement of the opening of its new Mothercare outlet. Two tranches carrying 233,000 shares were transacted on-board at its closing price of Rs. 10.50.
Retail activity remained minimal while slight interest surrounded Blue Diamonds [Non-Voting] (-5.8%), Browns Investments (+0.0%) and Panasian Power (+0.0%).
SMB Leasing and Asia Asset Finance touched new 52-week low levels of Rs. 0.90 and Rs. 2.20 respectively while Coco Lanka, Touchwood Investments, Vidullanka, Agstar Fertilizers and Beruwala Resorts continued to trade at their 52-week low levels, Sotlogic Stockbrokers said.
Lanka Securities said cash map yesterday was 30%. Foreign participation was 15% of total market turnover whilst net foreign buying was Rs. 29 million.
“The 14-day RSI still remains at oversold region and the market PE has now declined to 11x, below the PEs of the MSCI emerging markets (12x) and MSCI frontier emerging markets (13x),” Lanka Securities added.
source - www.ft.lk
Monday, November 26, 2012
Sri Lanka stocks slip 0.4-pct, turnover dips
Nov 26, 2012 (LBO) - Sri Lanka's stocks closed 0.4 percent lower Monday while turnover dipped to 115 million rupees, levels not seen for three years, amid weak demand, brokers said.
The benchmark Colombo All Share Price Index closed at 5,384.8, down 22.2 points and the S&P SL20 Index closed at 2,960.01 down 7.3 points of 0.25 percent.
Turnover was 115.9 million rupees.
Turnover was at these levels in the first half of 2009, when the country was in the middle of a balance of payments crisis and in the last stages of a 30-year war. Turnover fell to 80 million rupees on April 30, 2009.
Sri Lanka is now again recovering from a balance of payments crisis, triggered by large volumes of credit taken by state enterprises to manipulate energy prices and the market is going through a correction.
There are also concerns over rule of law and property rights.
On Monday People's Finance rose 2.60 to close at 33.80 rupees. The firm is due to be merged with its larger parent People's Leasing and Finance. Brokers said the stock moved up on expectations of a mandatory offer to buy out minority shareholders.
Aitken Spence fell 3.60 rupees to 119.20, Bairaha Farms fell 5.20 to 141.00 rupees, Chevron Lubricants fell 2.50 to 189.50 rupees and Tokyo Cement rose 80 cents to close at 27.90 rupees.
source - www.lbo.lk
Swarnamahal Financial Services posts Rs. 129 m operating profit in 1H
Swarnamahal Financial Services Plc (SFS) has recorded a strong performance by securing its growth momentum during the first six month of the financial year 2012/13.
During the first six month of the FY13 year the company turnover grew by 28% to Rs. 634 million in comparison to Rs. 495 million a year earlier, while the net income also grew by 14% to Rs. 273 million.
Operating profit in the FY13 first half was Rs. 129.5 million, up by 5% over the first half of last financial year. Pre-tax profit was Rs. 112 million, up by 4% and after tax profit was Rs. 71 million, down marginally by 6% over the 1H of FY12.
“As one of the most trusted finance companies in the country, 65% of SFS’s total assets are backed by gold. During the first half of FY13, the gold pawning portfolio grew by 14.2% to Rs. 3.9 billion as at 30 September 2012,” SFS Director Nalaka Edirisinghe said.
Interest income from pawn advances grew b 34.3% to Rs. 556 million during 1H of FY13 in comparison to Rs. 414 million recorded in the corresponding year’s 1H.
The company continues to improve the quality of the credit portfolio by easing NPL ratio to 0.3%, which is well below the industry average. Nevertheless, the cost/income ratio rose by 8% from 48.1% in September 2011 to 44.4% in September 2012, Edirisinghe added.
The total asset base of SFS grew by 13.2% from Rs. 5.31 billion in March 2012 to Rs. 6.01 billion as at 30 September 2012. The deposit portfolio also grew by 14.2% to Rs. 5.02 billion compared with Rs. 4.39 billion recorded as at 31 March 2012.
“The branches in the Northern and Eastern Provinces account for one-third of the company’s total assets due to rising demand for our financial services from the newly-liberated areas Therefore a plan is underway to open five new branches during the financial year 2012/13 with a view to further increase the accessibility to our services to the customers in such provinces and further enhance our growth momentum,” Edirisinghe said.
SFS is presently enriched with seven fully-fledged branches and 10 pawning centres. Edirisinghe said the company has already obtained the approval from the Central Bank to upgrade the pawning centres located at Batticaloa, Chilaw, Hatton and Kandy into fully fledged branches which in turn, will enable SFS to increase customers’ accessibility to financial products marketed by the company.
“Therefore the company is now capable of offering the full range of its financial services through such branches,” Edirisinghe added.
Swarnamahal Financial Services PLC offers gold loans/pawning services, leasing and hire purchase services, fixed deposits and savings accounts for both corporate and individual customers.
The company’s Board of Directors is led by the Chairman Jeewaka Edirisinghe. Other Board members are Nalaka Edirisinghe, Deepa Edirisinghe, Asanka Edirisinghe, Sunil Abayaratna, Sameera Ganegoda, and Ajith Weerasinghe.
SFS is licensed by the Monetary Board of the Central Bank of Sri Lanka under the Finance Business Act No. 42 of 2011 and listed on the Colombo Stock Exchange.
source - www.ft.lk
During the first six month of the FY13 year the company turnover grew by 28% to Rs. 634 million in comparison to Rs. 495 million a year earlier, while the net income also grew by 14% to Rs. 273 million.
Operating profit in the FY13 first half was Rs. 129.5 million, up by 5% over the first half of last financial year. Pre-tax profit was Rs. 112 million, up by 4% and after tax profit was Rs. 71 million, down marginally by 6% over the 1H of FY12.
“As one of the most trusted finance companies in the country, 65% of SFS’s total assets are backed by gold. During the first half of FY13, the gold pawning portfolio grew by 14.2% to Rs. 3.9 billion as at 30 September 2012,” SFS Director Nalaka Edirisinghe said.
Interest income from pawn advances grew b 34.3% to Rs. 556 million during 1H of FY13 in comparison to Rs. 414 million recorded in the corresponding year’s 1H.
The company continues to improve the quality of the credit portfolio by easing NPL ratio to 0.3%, which is well below the industry average. Nevertheless, the cost/income ratio rose by 8% from 48.1% in September 2011 to 44.4% in September 2012, Edirisinghe added.
The total asset base of SFS grew by 13.2% from Rs. 5.31 billion in March 2012 to Rs. 6.01 billion as at 30 September 2012. The deposit portfolio also grew by 14.2% to Rs. 5.02 billion compared with Rs. 4.39 billion recorded as at 31 March 2012.
“The branches in the Northern and Eastern Provinces account for one-third of the company’s total assets due to rising demand for our financial services from the newly-liberated areas Therefore a plan is underway to open five new branches during the financial year 2012/13 with a view to further increase the accessibility to our services to the customers in such provinces and further enhance our growth momentum,” Edirisinghe said.
SFS is presently enriched with seven fully-fledged branches and 10 pawning centres. Edirisinghe said the company has already obtained the approval from the Central Bank to upgrade the pawning centres located at Batticaloa, Chilaw, Hatton and Kandy into fully fledged branches which in turn, will enable SFS to increase customers’ accessibility to financial products marketed by the company.
“Therefore the company is now capable of offering the full range of its financial services through such branches,” Edirisinghe added.
Swarnamahal Financial Services PLC offers gold loans/pawning services, leasing and hire purchase services, fixed deposits and savings accounts for both corporate and individual customers.
The company’s Board of Directors is led by the Chairman Jeewaka Edirisinghe. Other Board members are Nalaka Edirisinghe, Deepa Edirisinghe, Asanka Edirisinghe, Sunil Abayaratna, Sameera Ganegoda, and Ajith Weerasinghe.
SFS is licensed by the Monetary Board of the Central Bank of Sri Lanka under the Finance Business Act No. 42 of 2011 and listed on the Colombo Stock Exchange.
source - www.ft.lk
Rs. 3bn private placement in January
* Proposed Cargills Agriculture and Commercial Bank
* Initial operations will be through Food City branches
* Funding for agriculture, fisheries dairy, SMEs
* IT systems being designed
By Ravi Ladduwahetty
Cargills PLC and CT Holdings will launch a Rs. 3 billion private placement in January 2013 for the launch of the much awaited Cargills Agriculture and Commercial Bank.
"We will be announcing the private placement in January which will be open to both local and overseas investors and the investment amount will be Rs. 3 billion, which is the minimum amount required by the Central Bank of Sri Lanka, " Cargills Agriculture and Commercial Bank CEO Harris Premaratne told The Island Financial Review yesterday.
He said that it will be a private placement at the start and the Initial Public Offering will come at a much later stage depending on the progress of the venture.
The preliminary functions of the proposed bank are being worked out and the core area is the Information Technology right now prior to the private placement in January and the funding for that has been made available by both CT Holdings and Cargills and other parties, though Premaratne was extremely tightlipped "who the other parties" were!
Premaratne, himself a former Sampath Bank Managing Director/ CEO said that the new bank will be initially operating through the Cargills Food City outlets where there will be facilities for commercial lending for agriculture and agri-based industries such as dairy farming, micro financing, small and medium enterprises development and even fisheries.
"Initially, we would launch around five branches and the target of the bank would be to launch branches in Anuradhapura, Polonnaruwa, Jaffna, Ampara (Digamadulla) Galle and Matara Districts subject to the approval of the Central Bank," he said, adding that the bank will have a presence wherever agriculture would be.
Agribusiness, food and beverage and acquisitions have been the name of the game for Cargills PLC and the CT Holdings Group which made a major foray into agribusiness and food and beverage in 2011 when Cargills acquired controlling interest in Kotmale Holdings PLC, Diana Biscuits Manufactures (Private) Limited and entering into an agreement to acquire McCallum Breweries (Ceylon) Limited, McCallum Brewing Company (Private) Limited and Three Coins Company (Private) Limited. In 2002, Cargills acquired the Walls Ice Cream plant and CPC/ Bestfoods production facility of jams, cordials and sauces.
source - www.island.lk
* Initial operations will be through Food City branches
* Funding for agriculture, fisheries dairy, SMEs
* IT systems being designed
By Ravi Ladduwahetty
Cargills PLC and CT Holdings will launch a Rs. 3 billion private placement in January 2013 for the launch of the much awaited Cargills Agriculture and Commercial Bank.
"We will be announcing the private placement in January which will be open to both local and overseas investors and the investment amount will be Rs. 3 billion, which is the minimum amount required by the Central Bank of Sri Lanka, " Cargills Agriculture and Commercial Bank CEO Harris Premaratne told The Island Financial Review yesterday.
He said that it will be a private placement at the start and the Initial Public Offering will come at a much later stage depending on the progress of the venture.
The preliminary functions of the proposed bank are being worked out and the core area is the Information Technology right now prior to the private placement in January and the funding for that has been made available by both CT Holdings and Cargills and other parties, though Premaratne was extremely tightlipped "who the other parties" were!
Premaratne, himself a former Sampath Bank Managing Director/ CEO said that the new bank will be initially operating through the Cargills Food City outlets where there will be facilities for commercial lending for agriculture and agri-based industries such as dairy farming, micro financing, small and medium enterprises development and even fisheries.
"Initially, we would launch around five branches and the target of the bank would be to launch branches in Anuradhapura, Polonnaruwa, Jaffna, Ampara (Digamadulla) Galle and Matara Districts subject to the approval of the Central Bank," he said, adding that the bank will have a presence wherever agriculture would be.
Agribusiness, food and beverage and acquisitions have been the name of the game for Cargills PLC and the CT Holdings Group which made a major foray into agribusiness and food and beverage in 2011 when Cargills acquired controlling interest in Kotmale Holdings PLC, Diana Biscuits Manufactures (Private) Limited and entering into an agreement to acquire McCallum Breweries (Ceylon) Limited, McCallum Brewing Company (Private) Limited and Three Coins Company (Private) Limited. In 2002, Cargills acquired the Walls Ice Cream plant and CPC/ Bestfoods production facility of jams, cordials and sauces.
source - www.island.lk
Sunday, November 25, 2012
Saturday, November 24, 2012
Energising the stock market and good corporate governance
By K.C. Vignarajah
Glorious opportunities are still available in Sri Lanka for investments, small and large, local and foreign. Therefore, promote sustainable industry growth, with equity. It is essential to ensure a vibrant, clean free market with fairness and equity,’ to shareholders and investors. The few errant Controlling Interests (CI) who do not comply should be made to do so quickly; use the ‘carrot and stick’ now!
‘Revenue Neutral’ measures to energise the stock market:
Increase liquidity: minimum public or free float should be 30% and preferably over 45% (as in India, Thailand, Malaysia, etc.) which may be rewarded by two-tier preferential tax rate, and penalise where free float is less than 20%. (Progress to minimum 25% and 30%).
Encourage CI to increase the public float to 40%, by making their (CI&RP) voting rights in a PLC or subsidiaries restricted to 60% (example of holdings voting shares in banks restricted to 10%). This will not reduce the value, of their excess holdings, as purchasers, (other than RP, obviously) will have usual voting rights.
Encourage high Dividend Payout % (DP) of 50% of Net Profit After Tax (NPAT) and 50% to revenue reserves. Again preferential tax rates (to incentivise/penalise) may be applied.
These measures will create large increase in revenue/cash flow to the State via Withholding Tax (WT) to pay for the other concessions stated above.
Encourage obtaining foreign currency loans to be repaid from export earnings. I have been suggesting this to many companies for over two years. In the early seventies, I negotiated hard with the authorities and CBSL to allow this facility; but ended up with buyer supplying the raw materials on ‘No Foreign Exchange’ (NFE) basis which still was greatly beneficial in many ways to the exporters and the country! That was innovation to circumvent CBSL for the greater good. (Now, thanks to the Budget 2013, it is more profitable, safer, and easier).
If additional capital is required by a company, a ‘rights issue,’ correctly priced, to be fair to the company and all existing shareholders could be made. This should take into account the retained earnings and reserves (shareholders’ fund), on the undeniable principle that these belong to the existing shareholders.
Assets should be properly re-valued and the excess value capitalised; bonus shares should be issued.
Waive stamp duty on the above progressive measures (bonus and rights), to eliminate excuses by the errant CIs, as well as being fair to the shareholders and the market, by increasing liquidity, marketability and availability of greater number of shares at lower cost.
Prevent creation of ‘shareholder fatigue’ by errant (CI) and their collaborators, the so called ‘independent directors, auditors, valuers/advisers and managers and captive company secretaries.
They should all be penalised, in cases of dereliction of duty and breach of trust. Some of the white collar criminals and market offenders should be sent to jail as in other respected jurisdictions for insider dealing, market manipulation, unjust enrichment, bribery and corruption, etc., to deter others from doing so or trying to do same.
Encourage corporates and CIs to reward shareholders by giving discounts on goods and services produced or provided by the company. These may be at the same rates afforded to the directors, or may be 5% more than their prices given to whole-sellers, in proportion to their shareholdings. There are very many examples of good companies and CIs, who are doing this in a very equitable shareholder friendly manner as contrasted with other corporates who create shareholder fatigue.
Ensure timely disclosure of material information inter-alia (of new plans, projects and potential). Non disclosure or delay helps CI themselves or Related Parties (RP) to acquire shares at cheap prices, and also to reduce ‘public float,’ delivering a double blow to debilitate IMS and also the market.
The invaluable experience of two of the President’s own well-trusted appointees, as chairpersons of SEC, Dr. Thilak Karunaratne and Indrani Sugathadasa, may now be utilised as Capital Market Ombudsman, and to review progress of investigations into market malpractices/ misconduct.
All the above measures will truly create ‘investor confidence’ and certainly energise the stock market.
Inspire international investor confidence, ‘inter alia,’ by:
1. Fully implementing International Financial Reporting Standards (IFRS) which had been implemented by more than 100 countries by 2011.
2. Strict adherence to strengthened rules and regulations which eliminate loop holes. Enforcement of law and order impartially, irrespective of personalities and political influence.
3. Good corporate governance, transparency and showing respect for, and sincere compliance with, all international norms of political and social responsibility.
(The writer is an investor and spokesperson for the Promoters of Association of Independent Shareholders of Sri Lanka.)
source - www.ft.lk
Glorious opportunities are still available in Sri Lanka for investments, small and large, local and foreign. Therefore, promote sustainable industry growth, with equity. It is essential to ensure a vibrant, clean free market with fairness and equity,’ to shareholders and investors. The few errant Controlling Interests (CI) who do not comply should be made to do so quickly; use the ‘carrot and stick’ now!
‘Revenue Neutral’ measures to energise the stock market:
Increase liquidity: minimum public or free float should be 30% and preferably over 45% (as in India, Thailand, Malaysia, etc.) which may be rewarded by two-tier preferential tax rate, and penalise where free float is less than 20%. (Progress to minimum 25% and 30%).
Encourage CI to increase the public float to 40%, by making their (CI&RP) voting rights in a PLC or subsidiaries restricted to 60% (example of holdings voting shares in banks restricted to 10%). This will not reduce the value, of their excess holdings, as purchasers, (other than RP, obviously) will have usual voting rights.
Encourage high Dividend Payout % (DP) of 50% of Net Profit After Tax (NPAT) and 50% to revenue reserves. Again preferential tax rates (to incentivise/penalise) may be applied.
These measures will create large increase in revenue/cash flow to the State via Withholding Tax (WT) to pay for the other concessions stated above.
Encourage obtaining foreign currency loans to be repaid from export earnings. I have been suggesting this to many companies for over two years. In the early seventies, I negotiated hard with the authorities and CBSL to allow this facility; but ended up with buyer supplying the raw materials on ‘No Foreign Exchange’ (NFE) basis which still was greatly beneficial in many ways to the exporters and the country! That was innovation to circumvent CBSL for the greater good. (Now, thanks to the Budget 2013, it is more profitable, safer, and easier).
If additional capital is required by a company, a ‘rights issue,’ correctly priced, to be fair to the company and all existing shareholders could be made. This should take into account the retained earnings and reserves (shareholders’ fund), on the undeniable principle that these belong to the existing shareholders.
Assets should be properly re-valued and the excess value capitalised; bonus shares should be issued.
Waive stamp duty on the above progressive measures (bonus and rights), to eliminate excuses by the errant CIs, as well as being fair to the shareholders and the market, by increasing liquidity, marketability and availability of greater number of shares at lower cost.
Prevent creation of ‘shareholder fatigue’ by errant (CI) and their collaborators, the so called ‘independent directors, auditors, valuers/advisers and managers and captive company secretaries.
They should all be penalised, in cases of dereliction of duty and breach of trust. Some of the white collar criminals and market offenders should be sent to jail as in other respected jurisdictions for insider dealing, market manipulation, unjust enrichment, bribery and corruption, etc., to deter others from doing so or trying to do same.
Encourage corporates and CIs to reward shareholders by giving discounts on goods and services produced or provided by the company. These may be at the same rates afforded to the directors, or may be 5% more than their prices given to whole-sellers, in proportion to their shareholdings. There are very many examples of good companies and CIs, who are doing this in a very equitable shareholder friendly manner as contrasted with other corporates who create shareholder fatigue.
Ensure timely disclosure of material information inter-alia (of new plans, projects and potential). Non disclosure or delay helps CI themselves or Related Parties (RP) to acquire shares at cheap prices, and also to reduce ‘public float,’ delivering a double blow to debilitate IMS and also the market.
The invaluable experience of two of the President’s own well-trusted appointees, as chairpersons of SEC, Dr. Thilak Karunaratne and Indrani Sugathadasa, may now be utilised as Capital Market Ombudsman, and to review progress of investigations into market malpractices/ misconduct.
All the above measures will truly create ‘investor confidence’ and certainly energise the stock market.
Inspire international investor confidence, ‘inter alia,’ by:
1. Fully implementing International Financial Reporting Standards (IFRS) which had been implemented by more than 100 countries by 2011.
2. Strict adherence to strengthened rules and regulations which eliminate loop holes. Enforcement of law and order impartially, irrespective of personalities and political influence.
3. Good corporate governance, transparency and showing respect for, and sincere compliance with, all international norms of political and social responsibility.
(The writer is an investor and spokesperson for the Promoters of Association of Independent Shareholders of Sri Lanka.)
source - www.ft.lk
Distilleries hold the fort on bourse
* Activity largely restricted to single counter
* BOC debenture issue closed, Rs. 6bn raised
The Colombo bourse yesterday closed virtually flat on a turnover of Rs.803.2 million, up from the previous day’s Rs.487.8 million, with most business generated largely on account of crossings of Distilleries.
The All Share Price Index was up a fraction of a point (0.01%) and the Milanka too was up by 0.21 points (calculated at 0%) while S&P was down 0.22 points (0.01%) with 83 gainers outpaced by 100 losers while 49 counters closed flat.
Meanwhile, State banking giant Bank of Ceylon closed its debenture issue yesterday (23) having successfully raised Rs. 6 billion. At the time of writing, the bank announced to the stock exchange that the offer had been oversubscribed, no details were given.
Over 4.4 million Distilleries was crossed in five parcels at a price of Rs.145.10 in deals worth Rs.640.7 million while over 0.1 million shares traded on the floor closing Rs.1.80 up at Rs.147.50 trading between Rs.145.10 and Rs.150 contributing Rs.17.9 million to the day’s turnover.
Two large Distilleries parcels, at the crossing price of Rs. 145.10, were done on the floor at around the same time as the block trades. However there was no word on who the buyers and sellers of the Distilleries quantities were.
``There may be a clue when the foreign trading figures are in,’’ a broker said. ``But if it’s local to local it can be between related parties who are among the major shareholders.’’
``It was a very quiet day with hardly any activity apart from the trades in Distilleries,’’ brokers said.
The top turnover generator on the trading floor was HNB X closing Rs.2.50 up at Rs.112.50 on 0.2 million shares trading between Rs.110 and Rs.112.50 contributing Rs.22.4 million to turnover.
JKH lost 60 cents to close at Rs.211.40 on 61,436 shares traded between Rs.210 and Rs.212.90 generating a turnover of Rs.16.42 million.
Volume-wise , heavily traded stocks included PC House closing 30 cents up at Rs.5.40 on 2.6 million shares, Panasian Power closing flat at Rs.2.40 on nearly 3.5 million and Blue Diamonds (non-voting) closing flat at Rs.1.60 on slightly over 1.3 million shares. NDB closed 50 cents up at Rs.134 on 39,800 shares.
source - www.island.lk
* BOC debenture issue closed, Rs. 6bn raised
The Colombo bourse yesterday closed virtually flat on a turnover of Rs.803.2 million, up from the previous day’s Rs.487.8 million, with most business generated largely on account of crossings of Distilleries.
The All Share Price Index was up a fraction of a point (0.01%) and the Milanka too was up by 0.21 points (calculated at 0%) while S&P was down 0.22 points (0.01%) with 83 gainers outpaced by 100 losers while 49 counters closed flat.
Meanwhile, State banking giant Bank of Ceylon closed its debenture issue yesterday (23) having successfully raised Rs. 6 billion. At the time of writing, the bank announced to the stock exchange that the offer had been oversubscribed, no details were given.
Over 4.4 million Distilleries was crossed in five parcels at a price of Rs.145.10 in deals worth Rs.640.7 million while over 0.1 million shares traded on the floor closing Rs.1.80 up at Rs.147.50 trading between Rs.145.10 and Rs.150 contributing Rs.17.9 million to the day’s turnover.
Two large Distilleries parcels, at the crossing price of Rs. 145.10, were done on the floor at around the same time as the block trades. However there was no word on who the buyers and sellers of the Distilleries quantities were.
``There may be a clue when the foreign trading figures are in,’’ a broker said. ``But if it’s local to local it can be between related parties who are among the major shareholders.’’
``It was a very quiet day with hardly any activity apart from the trades in Distilleries,’’ brokers said.
The top turnover generator on the trading floor was HNB X closing Rs.2.50 up at Rs.112.50 on 0.2 million shares trading between Rs.110 and Rs.112.50 contributing Rs.22.4 million to turnover.
JKH lost 60 cents to close at Rs.211.40 on 61,436 shares traded between Rs.210 and Rs.212.90 generating a turnover of Rs.16.42 million.
Volume-wise , heavily traded stocks included PC House closing 30 cents up at Rs.5.40 on 2.6 million shares, Panasian Power closing flat at Rs.2.40 on nearly 3.5 million and Blue Diamonds (non-voting) closing flat at Rs.1.60 on slightly over 1.3 million shares. NDB closed 50 cents up at Rs.134 on 39,800 shares.
source - www.island.lk
Friday, November 23, 2012
Sri Lanka Top Stocks and Market Overview
CAL's Sri Lanka Top Stocks and Market Overview
1. CAL's Stock Views: A few worthy notes
a) Hatton National Bank Voting [HNB.N0000] 1-year total return of +42%: BUY
b) Commercial Bank Voting [COMB.N0000] 1-year total return of +38%: BUY
c) Piramal Glass Ceylon [GLAS.N0000] to deliver +30% in total returns FY13E: BUY
d) Dialog Axiata [DIAL.N0000] to deliver +20% in total returns 2013E: BUY
e) COCO Lanka [COCO.N0000] LKR 37: BUY
f) Lion Breweries [LION.N0000] fair value LKR 274: HOLD
g) John Keells Holdings [JKH.N0000] trades at a 21% premium to CAL's fair value of LKR 178: SELL
2. CSE poised to provide +20% returns for 1 year investors
a) CAL estimates a 17% market earnings growth in FY13, plus a dividend yield of 3%
3. Sri Lanka Economic Outlook Relatively Strong: +6% GDP growth through 2014
source - CAL Research
Bourse puts on a brave face with rebound
In a welcome move, the Colombo stock market yesterday bounced back strongly though on thin volumes, confirming its continued struggle to perform with strong conviction.
The market’s value rose by Rs. 17 billion after having lost Rs. 55 billion in the previous two days. The ASI gained 46.05 points or 0.86% and MPI by 29.97 points or 0.61%. The S&P SL20 index moved up 16.27 points or 0.55%. Turnover was only Rs. 488 million.
“Market rebounded on thin volumes today as bargain hunting set in. Many blue-chips gained ground whilst turnover was concentrated amongst a handful of blue-chips. The market will see many bargain hunting opportunities in the near term as investors generally liquidate small quantities ahead of the festive season,” Lanka Securities said.
Cash map for yesterday was 79.57%. Foreign participation was 57% of total market turnover whilst net foreign buying was Rs. 25 million.
Asia Wealth Management said the Colombo Bourse turned to the positive territory as it witnessed heavy buying spree across the board, facilitating the market to travel on an upward trend throughout the day. Thus, trading activities in most of the counters were on green, delivering substantial price gains.
Softlogic Stockbrokers said yesterday’s market uptick has supported to erase the dark clouds of the Bourse to add in some hope that the slow run is the usual seasonal market play with the holiday moods of the investors.
“Although we expected the institutions and the foreign play to cool down towards the year end being a period for settlements and balancing out investments. However, in reverse, the big play in the market has not totally evaporated with the dominance of crossings and big trades on the turnover levels,” it said, adding, “This could be taken as an encouraging factor for the smaller players.”
It said early morning crossings in Environmental Resources Investments and Aitken Spence secured the market turnover at initial hours before Sampath Bank joined the crossings board for the day.
Environmental Resources Investments, which encountered a number of stake changes recently with a restructure made to their investment holdings, saw a crossing carrying 9.3 million shares at Rs. 16 each.
Environmental Resources Investments’ most recent 18.98% acquisition, Browns Investment, also saw four trades taking 299,000 shares at Rs. 3.6, accelerating the counter’s active move during the day.
Apart from the 344,000 share crossing at Rs. 122 each, Aitken Spence also witnessed two on-board transactions totally taking 235,800 shares at the same price. Sampath Bank registered a 140,000 shares changing hands at Rs. 187 each followed by two on-board deals totalling 101,400 shares at Rs. 185.3 and Rs. 186.
A number of hefty deals in Lanka IOC drove the counter to be spotted on the top turnover list. Five trades carrying and or more than 100,000 shares totalling 936,200 shares were transacted over a price range of Rs. 19 to Rs. 19.50. Lanka IOC has been spotted as a ‘Buy’ with an assuring earnings pattern after the price increase for diesel in October, Softlogic said.
Lanka Tiles too was amongst the counters which caught the eye in terms of sizeable on-board deals.
The tile manufacturer saw two trades carrying 121,500 shares at Rs. 67. A very rarely active counter, Lanka Ventures, saw activity building up for the day but slanting more on the selling side. The price however closed flat at Rs. 30.
Some buying evolved around John Keells Holdings leading the counter to gain 0.9% for the day.
Finance sector interest was visible in Nations Finance (+2.2%), Commercial Bank (+0.4%), Vallibel One (+1.7%), Vallibel Finance (-0.3%) and Union Bank (+0.7%).
DNH Financial said in the absence of any market moving news, it expects the Bourse to end the week on a quiet note.
In terms of market trajectory, given the prospect of limited downside risk, DNH Financial advises investors to selectively enter the market given its expectation of medium to longer term growth prospects. Its rationale is based on the following:
Equities will benefit from the strong economic top down story, improved corporate sector performance in selected stocks and likelihood of international asset allocations into emerging/frontier markets such as Sri Lanka
The Bourse is currently down 11%YTD presenting an excellent opportunity for investors not following the herd to invest in a well structured portfolio of stocks that will outperform in a complete market cycle
Market cap to GDP at 35% is still significantly low compared to other emerging markets, leaving considerable scope for growth
Strong organic fund flows and fast growing FII flows will provide liquidity support to the Bourse
Weak form efficiency will provide opportunity to create significant alpha
Growth will continue to be driven by domestic factors and largely unaffected by global macro-economic recessionary woes
source - www.ft.lk
The market’s value rose by Rs. 17 billion after having lost Rs. 55 billion in the previous two days. The ASI gained 46.05 points or 0.86% and MPI by 29.97 points or 0.61%. The S&P SL20 index moved up 16.27 points or 0.55%. Turnover was only Rs. 488 million.
“Market rebounded on thin volumes today as bargain hunting set in. Many blue-chips gained ground whilst turnover was concentrated amongst a handful of blue-chips. The market will see many bargain hunting opportunities in the near term as investors generally liquidate small quantities ahead of the festive season,” Lanka Securities said.
Cash map for yesterday was 79.57%. Foreign participation was 57% of total market turnover whilst net foreign buying was Rs. 25 million.
Asia Wealth Management said the Colombo Bourse turned to the positive territory as it witnessed heavy buying spree across the board, facilitating the market to travel on an upward trend throughout the day. Thus, trading activities in most of the counters were on green, delivering substantial price gains.
Softlogic Stockbrokers said yesterday’s market uptick has supported to erase the dark clouds of the Bourse to add in some hope that the slow run is the usual seasonal market play with the holiday moods of the investors.
“Although we expected the institutions and the foreign play to cool down towards the year end being a period for settlements and balancing out investments. However, in reverse, the big play in the market has not totally evaporated with the dominance of crossings and big trades on the turnover levels,” it said, adding, “This could be taken as an encouraging factor for the smaller players.”
It said early morning crossings in Environmental Resources Investments and Aitken Spence secured the market turnover at initial hours before Sampath Bank joined the crossings board for the day.
Environmental Resources Investments, which encountered a number of stake changes recently with a restructure made to their investment holdings, saw a crossing carrying 9.3 million shares at Rs. 16 each.
Environmental Resources Investments’ most recent 18.98% acquisition, Browns Investment, also saw four trades taking 299,000 shares at Rs. 3.6, accelerating the counter’s active move during the day.
Apart from the 344,000 share crossing at Rs. 122 each, Aitken Spence also witnessed two on-board transactions totally taking 235,800 shares at the same price. Sampath Bank registered a 140,000 shares changing hands at Rs. 187 each followed by two on-board deals totalling 101,400 shares at Rs. 185.3 and Rs. 186.
A number of hefty deals in Lanka IOC drove the counter to be spotted on the top turnover list. Five trades carrying and or more than 100,000 shares totalling 936,200 shares were transacted over a price range of Rs. 19 to Rs. 19.50. Lanka IOC has been spotted as a ‘Buy’ with an assuring earnings pattern after the price increase for diesel in October, Softlogic said.
Lanka Tiles too was amongst the counters which caught the eye in terms of sizeable on-board deals.
The tile manufacturer saw two trades carrying 121,500 shares at Rs. 67. A very rarely active counter, Lanka Ventures, saw activity building up for the day but slanting more on the selling side. The price however closed flat at Rs. 30.
Some buying evolved around John Keells Holdings leading the counter to gain 0.9% for the day.
Finance sector interest was visible in Nations Finance (+2.2%), Commercial Bank (+0.4%), Vallibel One (+1.7%), Vallibel Finance (-0.3%) and Union Bank (+0.7%).
DNH Financial said in the absence of any market moving news, it expects the Bourse to end the week on a quiet note.
In terms of market trajectory, given the prospect of limited downside risk, DNH Financial advises investors to selectively enter the market given its expectation of medium to longer term growth prospects. Its rationale is based on the following:
Equities will benefit from the strong economic top down story, improved corporate sector performance in selected stocks and likelihood of international asset allocations into emerging/frontier markets such as Sri Lanka
The Bourse is currently down 11%YTD presenting an excellent opportunity for investors not following the herd to invest in a well structured portfolio of stocks that will outperform in a complete market cycle
Market cap to GDP at 35% is still significantly low compared to other emerging markets, leaving considerable scope for growth
Strong organic fund flows and fast growing FII flows will provide liquidity support to the Bourse
Weak form efficiency will provide opportunity to create significant alpha
Growth will continue to be driven by domestic factors and largely unaffected by global macro-economic recessionary woes
source - www.ft.lk
Indices move up as bourse recovers some lost ground
Most business came off block trades
The Colombo bourse yesterday recovered some ground lost earlier in the week with all three indices moving up – the All Share by 46.05 points (0.86%), the Milanka by 29.97 points (0.61%) and S&P by 16.27 (0.55%) on a turnover of Rs.487.8 million, down from the previous day’s Rs.1.56 billion, with 154 counters moving up against 58 decliners and 97 closing flat.
Brokers said that block trades in ERI, Aitken Spence and Sampath Bank accounting for nearly Rs.260 million of the day’s turnover provided the bulk of business.
``The ASPI reversed a six day downtrend to end sharply higher amid strong gains on some large caps, John Keells Stock Brokers said in a market report. ``Activity levels were subdued despite crossings on SPEN, GREG, and SAMP, which collectively accounted for over 50% of market turnover."
Foreigners remained net buyers with purchases of Rs. 288.97 million a little ahead of sales of Rs. 263.88 million giving a net inflow of Rs. 25.08 million.
ERI closed flat at Rs.16 with 9.3 million shares traded in one block while Aitken Spence saw two blocks of nearly 0.7 million shares done at Rs.122 and Sampath a block of 140,000 shares transacted at Rs.187.
The ERI deal was worth Rs.148.8 million, Spence 84.6 million and Sampath Rs.26.2 million. Apart from the crossings, much of yesterday’s business came off Seylan (non-voting) where nearly 0.9 million shares were traded, floor trades of Aitken Spence with over 0.2 million shares traded, nearly 1.3 million LIOC and over 0.1 million Sampath.
Seylan X closed Rs.1.60 up at Rs.35 on nearly 0.9 million shares done between Rs.33.40 and Rs.35 generating a turnover of Rs.30.2 million while Spence closed Rs.4.50 up at Rs.122.50 on over 0.2 million shares done between Rs.121 and Rs.122.50 contributing Rs.28.9 million to turnover.
LIOC closed 70 cents up at Rs.19.70 on nearly 1.3 million shares done between Rs.19 and Rs.19.70 contributing Rs.24.3 million while Sampath closed 70 cents up at Rs.187 on over 0.1 million shares done between Rs.185.10 and Rs.189.70 contributing Rs.22.5 million to turnover.
Banking sector shares including Sampath, Seylan X and Commercial Bank (voting) helped push up the indices, brokers said. Limited retail play on selected stocks was seen.
source - www.island.lk
The Colombo bourse yesterday recovered some ground lost earlier in the week with all three indices moving up – the All Share by 46.05 points (0.86%), the Milanka by 29.97 points (0.61%) and S&P by 16.27 (0.55%) on a turnover of Rs.487.8 million, down from the previous day’s Rs.1.56 billion, with 154 counters moving up against 58 decliners and 97 closing flat.
Brokers said that block trades in ERI, Aitken Spence and Sampath Bank accounting for nearly Rs.260 million of the day’s turnover provided the bulk of business.
``The ASPI reversed a six day downtrend to end sharply higher amid strong gains on some large caps, John Keells Stock Brokers said in a market report. ``Activity levels were subdued despite crossings on SPEN, GREG, and SAMP, which collectively accounted for over 50% of market turnover."
Foreigners remained net buyers with purchases of Rs. 288.97 million a little ahead of sales of Rs. 263.88 million giving a net inflow of Rs. 25.08 million.
ERI closed flat at Rs.16 with 9.3 million shares traded in one block while Aitken Spence saw two blocks of nearly 0.7 million shares done at Rs.122 and Sampath a block of 140,000 shares transacted at Rs.187.
The ERI deal was worth Rs.148.8 million, Spence 84.6 million and Sampath Rs.26.2 million. Apart from the crossings, much of yesterday’s business came off Seylan (non-voting) where nearly 0.9 million shares were traded, floor trades of Aitken Spence with over 0.2 million shares traded, nearly 1.3 million LIOC and over 0.1 million Sampath.
Seylan X closed Rs.1.60 up at Rs.35 on nearly 0.9 million shares done between Rs.33.40 and Rs.35 generating a turnover of Rs.30.2 million while Spence closed Rs.4.50 up at Rs.122.50 on over 0.2 million shares done between Rs.121 and Rs.122.50 contributing Rs.28.9 million to turnover.
LIOC closed 70 cents up at Rs.19.70 on nearly 1.3 million shares done between Rs.19 and Rs.19.70 contributing Rs.24.3 million while Sampath closed 70 cents up at Rs.187 on over 0.1 million shares done between Rs.185.10 and Rs.189.70 contributing Rs.22.5 million to turnover.
Banking sector shares including Sampath, Seylan X and Commercial Bank (voting) helped push up the indices, brokers said. Limited retail play on selected stocks was seen.
source - www.island.lk
TFC reports massive loss, surge in short term debt
The Finance Company PLC (TFC) losses have mounted, according unaudited interim financial results submitted to the Colombo Stock Exchange (CSE).
For the nine months ended September 30, 2012 TFC reported a net loss amounting to Rs. 751.7 million after reporting a Rs. 33.3 million net profit a year earlier. During the September quarter, TFC saw a Rs. 6.9 million net profit a year ago turn into a huge Rs. 357.7 million loss.
TFC’s net interest expense during the nine month period grew by Rs. 132.6 million from a year earlier to Rs. 344.77 million resulting in dip in operating profits from Rs. 560.5 million a year ago to a loss of Rs. 149.1 million this year.
Total operating expenses grew by Rs. 11.1 million during the nine month period to Rs. 645.9 million.
Public deposits reached Rs. 21.4 billion as at end September 2012, up a marginal 2.59 percent a year ago.
TFC’s short term borrowings have surged 291 percent to Rs. 79.6 million. Its outstanding bank overdrafts amounted to Rs. 565.6 million, up 73.63 percent a year ago.
The EPF continues to be the fourth largest shareholder of TFC with an 8.43 stake involving 5,091,200 shares.
Issuing a statement yesterday (22) TFC said projections have been done for the next five years to wipe off the negative net worth with the intended capital infusion in order to ensure profitable levels in its business operations.
source - www.island.lk
For the nine months ended September 30, 2012 TFC reported a net loss amounting to Rs. 751.7 million after reporting a Rs. 33.3 million net profit a year earlier. During the September quarter, TFC saw a Rs. 6.9 million net profit a year ago turn into a huge Rs. 357.7 million loss.
TFC’s net interest expense during the nine month period grew by Rs. 132.6 million from a year earlier to Rs. 344.77 million resulting in dip in operating profits from Rs. 560.5 million a year ago to a loss of Rs. 149.1 million this year.
Total operating expenses grew by Rs. 11.1 million during the nine month period to Rs. 645.9 million.
Public deposits reached Rs. 21.4 billion as at end September 2012, up a marginal 2.59 percent a year ago.
TFC’s short term borrowings have surged 291 percent to Rs. 79.6 million. Its outstanding bank overdrafts amounted to Rs. 565.6 million, up 73.63 percent a year ago.
The EPF continues to be the fourth largest shareholder of TFC with an 8.43 stake involving 5,091,200 shares.
Issuing a statement yesterday (22) TFC said projections have been done for the next five years to wipe off the negative net worth with the intended capital infusion in order to ensure profitable levels in its business operations.
source - www.island.lk
Wednesday, November 21, 2012
Sri Lanka stocks extend losses
Nov 21, 2012 (LBO) - Sri Lanka stocks extended losses, sliding 1.3 percent Wednesday on top a 1.2 percent fall a day earlier with losses across the board with some margin calls also contributing, brokers said.
The benchmark Colombo All Share Price Index fell 73 percent to close at 5,360.60 after recovering some intra-day losses. The S&P SL20 Index fell 40.77 points (1.36 percent) to close at 2,951.26.
Index heavy large caps including John Keells Holdings (down 3.90 rupees to 210.10), Aitken Spence (down 7.0 to 118 rupees), Ceylon Tobacco Company (down 3.90 to 704), Distilleries (down 4.90 to 145 rupees) contributed most to the index fall.
Active trading was also seen in Environmental Resources Investments with two 70 million tranches in two warrants traded at around 4.50 rupees and 4.20.
Analysts say ERI is a classic story in Sri Lanka's stock market history. The firm which only had assets, which it said was invested in platinum stock started to trade at increasingly higher multiples to net asset value. Most of the stock was held by promoters.
Its stock price continued to move up with virtually no operating revenues or profits other than capital gains amid asset transfers. It then bought some troubled firms showing revenues but not much profit.
The firm also issued a series of warrants, until new rules were brought to the market. It also came under SEC investigation, which eventually forced the firm to bring back cash into Sri Lanka. The promoters are now exiting.
Sri Lanka's stocks have now fallen over 600 points from an early October peak.
Stocks went through a mini rally through August with the speculation of the replacement of former securities and exchange rife in the market. Stock started to pick up in August from an end July level of 4944 to 6005 in early October.
source - www.lbo.lk
The benchmark Colombo All Share Price Index fell 73 percent to close at 5,360.60 after recovering some intra-day losses. The S&P SL20 Index fell 40.77 points (1.36 percent) to close at 2,951.26.
Index heavy large caps including John Keells Holdings (down 3.90 rupees to 210.10), Aitken Spence (down 7.0 to 118 rupees), Ceylon Tobacco Company (down 3.90 to 704), Distilleries (down 4.90 to 145 rupees) contributed most to the index fall.
Active trading was also seen in Environmental Resources Investments with two 70 million tranches in two warrants traded at around 4.50 rupees and 4.20.
Analysts say ERI is a classic story in Sri Lanka's stock market history. The firm which only had assets, which it said was invested in platinum stock started to trade at increasingly higher multiples to net asset value. Most of the stock was held by promoters.
Its stock price continued to move up with virtually no operating revenues or profits other than capital gains amid asset transfers. It then bought some troubled firms showing revenues but not much profit.
The firm also issued a series of warrants, until new rules were brought to the market. It also came under SEC investigation, which eventually forced the firm to bring back cash into Sri Lanka. The promoters are now exiting.
Sri Lanka's stocks have now fallen over 600 points from an early October peak.
Stocks went through a mini rally through August with the speculation of the replacement of former securities and exchange rife in the market. Stock started to pick up in August from an end July level of 4944 to 6005 in early October.
source - www.lbo.lk
Sri Lanka graphite firm net up 11-pct
Nov 22, 2012 (LBO) - Sri Lanka's Bogala Graphite, a unit of Germany's Graphitwerk Kropfmuhl said profits rose 11 percent to 16.8 million rupees in the September 2012 quarter, amid a surge in revenues and gross profits.
The firm reported earnings of 36 cents per share in the quarter. For the nine months to September the firm reported earnings of 63 cents per share on profits of 29 million rupees, which were dampened by a 28 million rupee forex loss.
In the September quarter revenues rose 61 percent to 155 million rupees and cost of sales orse at a slower 43 percent to 104 million rupees allowing gross profits to surge 117 percent to 50 million rupees.
Bogala Graphite's distribution expenses rose from 10 to 17 million rupees and admin expenses to 13 million rupees from 9.4 million rupees a year earlier.
Last year September quarter profits were boosted by a 15.9 million rupee forex gain. The firm has a Euro denominated loan.
In 2012 Sri Lanka's rupee, which is pegged to the US dollar, weakened to in the first half but gained slightly during the third quarter.
In the third quarter the firm reported 168,000 rupees in forex gains.
There has been renewed interest in mining and exporting Sri Lanka's vein graphite, which is supposed to be of high purity. Sri Lanka's Board of Investment has this year approved the setting up of two foreign invested graphite export firms.
source - www.lbo.lk
CB on broker credit limits: Necessary in 2011, cause of market slump this year
The Central Bank says the slump affecting the Colombo Stock Exchange this year was caused by investor sentiments impacted by rising interest rates, limits imposed on broker credit and the lack of market liquidity. Last year the bourse fell 8.6 percent and the Central Bank said it was due to a market correction. It also said broker credit was unregulated.
Former SEC Chairman Thilak Karunaratne and a few broker firms explained the stock exchange slump on poor macroeconomic management and broker/investor excesses during the 2009/2010 surge.
In fact, very few in the industry were able to see the market was overheating and that a slump would ensue. However, an influential group of investors and their crony brokers had blamed the market’s fall on overregulation, a ruse to stifle investigations into rampant market irregularities and offences.
The Central Bank explaining last year’s slump said it was due to a market correction and that the SEC was imposing limits to curb large, unregulated broker credit. This year however, the very same broker credit limits, now relaxed, is portrayed in a different light.
"The Colombo Stock Exchange (CSE) showed signs of recovery in the month of September 2012. Although in the first eight months of the year, equity price indices saw a downward movement reflecting negative investor market sentiments contributed by increased interest rates, limits imposed on stock brokers’ credit, lack of market liquidity, as well as the spillover effects of the developments in global financial markets, equity prices surged upwards from the end of August 2012 reflecting positive market sentiments among investors," the Central Bank said in a recent report released on November 08.
"The All Share Price Index (ASPI) declined by 2 per cent, while the Milanka Price Index (MPI) increased by 8 per cent during the first nine months of 2012. The CSE introduced a new S&P SL20 index on 27 June in 2012 with a view to increasing the level of transparency and integrity in the market and this index has increased by 14 per cent by end September 2012.
The market price earnings ratio declined to 16 by end September 2012 from 18 at end September 2011. Market capitalisation increased by 3 per cent (or Rs. 71 billion) to Rs. 2.3 trillion at end September 2012, which is equivalent to about 30 per cent of GDP.
The number of companies listed on the CSE increased by 16 to 287 by end September 2012. There were 5 Initial Public Offerings (IPOs) through which Rs.1.6 billion was raised and 12 rights issues through which Rs.6.4 billion was mobilised during the period.
Although daily average turnover declined, foreign investors remained net buyers while domestic investors dominated the market. The average daily turnover declined to Rs. 954 million during the first nine months of 2012, compared with Rs. 2,286 million in 2011. Domestic investors accounted for about 69 per cent of turnover. There was a net inflow of foreign funds to the market, in the first nine months of 2012 amounting to Rs. 31.5 billion (or US dollars 243 million), compared to a net outflow of Rs. 17 billion (or US dollars 154 million) in the corresponding period of 2011.
"Several measures were introduced by the SEC to facilitate the smooth functioning of the stock market. The 10 per cent price band imposed for 5 market days on volatile securities was removed in April 2012 and several measures were also introduced to mitigate settlement risk. A number of revisions have been made to the listing rules of the CSE as well," the Central Bank said.
In its 2011 Annual report, the Central Bank said the decline in share prices that year was due to a market correction after prices surged for two years since the decades long conflict ended in May 2009. The Central Bank also said broker credit was unregulated.
"Several measures were introduced to facilitate the smooth functioning of the stock market. In view of the large amount of unregulated credit extended by stockbrokers, the SEC introduced measures to restrict the provision of credit by stock brokers from 2011," the Central Bank said.
"Foreigners were net sellers in the market, and net foreign purchases continued the downward trend which started in the latter part of 2009. Total foreign purchases and total foreign sales were Rs. 50 billion and Rs. 69 billion respectively in 2011, recording a net foreign outflow of Rs. 19 billion for the year, compared with a net foreign outflow of Rs. 26 billion in 2010."
source - www.island.lk
Former SEC Chairman Thilak Karunaratne and a few broker firms explained the stock exchange slump on poor macroeconomic management and broker/investor excesses during the 2009/2010 surge.
In fact, very few in the industry were able to see the market was overheating and that a slump would ensue. However, an influential group of investors and their crony brokers had blamed the market’s fall on overregulation, a ruse to stifle investigations into rampant market irregularities and offences.
The Central Bank explaining last year’s slump said it was due to a market correction and that the SEC was imposing limits to curb large, unregulated broker credit. This year however, the very same broker credit limits, now relaxed, is portrayed in a different light.
"The Colombo Stock Exchange (CSE) showed signs of recovery in the month of September 2012. Although in the first eight months of the year, equity price indices saw a downward movement reflecting negative investor market sentiments contributed by increased interest rates, limits imposed on stock brokers’ credit, lack of market liquidity, as well as the spillover effects of the developments in global financial markets, equity prices surged upwards from the end of August 2012 reflecting positive market sentiments among investors," the Central Bank said in a recent report released on November 08.
"The All Share Price Index (ASPI) declined by 2 per cent, while the Milanka Price Index (MPI) increased by 8 per cent during the first nine months of 2012. The CSE introduced a new S&P SL20 index on 27 June in 2012 with a view to increasing the level of transparency and integrity in the market and this index has increased by 14 per cent by end September 2012.
The market price earnings ratio declined to 16 by end September 2012 from 18 at end September 2011. Market capitalisation increased by 3 per cent (or Rs. 71 billion) to Rs. 2.3 trillion at end September 2012, which is equivalent to about 30 per cent of GDP.
The number of companies listed on the CSE increased by 16 to 287 by end September 2012. There were 5 Initial Public Offerings (IPOs) through which Rs.1.6 billion was raised and 12 rights issues through which Rs.6.4 billion was mobilised during the period.
Although daily average turnover declined, foreign investors remained net buyers while domestic investors dominated the market. The average daily turnover declined to Rs. 954 million during the first nine months of 2012, compared with Rs. 2,286 million in 2011. Domestic investors accounted for about 69 per cent of turnover. There was a net inflow of foreign funds to the market, in the first nine months of 2012 amounting to Rs. 31.5 billion (or US dollars 243 million), compared to a net outflow of Rs. 17 billion (or US dollars 154 million) in the corresponding period of 2011.
"Several measures were introduced by the SEC to facilitate the smooth functioning of the stock market. The 10 per cent price band imposed for 5 market days on volatile securities was removed in April 2012 and several measures were also introduced to mitigate settlement risk. A number of revisions have been made to the listing rules of the CSE as well," the Central Bank said.
In its 2011 Annual report, the Central Bank said the decline in share prices that year was due to a market correction after prices surged for two years since the decades long conflict ended in May 2009. The Central Bank also said broker credit was unregulated.
"Several measures were introduced to facilitate the smooth functioning of the stock market. In view of the large amount of unregulated credit extended by stockbrokers, the SEC introduced measures to restrict the provision of credit by stock brokers from 2011," the Central Bank said.
"Foreigners were net sellers in the market, and net foreign purchases continued the downward trend which started in the latter part of 2009. Total foreign purchases and total foreign sales were Rs. 50 billion and Rs. 69 billion respectively in 2011, recording a net foreign outflow of Rs. 19 billion for the year, compared with a net foreign outflow of Rs. 26 billion in 2010."
source - www.island.lk
Bourse broods; negative return back to double digit level
The Colombo stock market suffered a sharp dip yesterday amidst lacklustre activity and bearish sentiments, as the year-to-date negative return shifted to double digit territory.
The Bourse saw Rs. 27 billion in value wiped off in a single session, the sharpest dip in recent weeks. The ASI was down 1.27%, bringing the year-to-date negative dip to 10.5%.
As reported in the Daily FT yesterday, the market had dipped by over 1% and lost Rs. 21 billion in value since the Budget 2013 presentation on 8 November.
The last time the ASI’s negative return at double digit was in first week of September, after which it rose sharply by 15% during the month to bring the year-to-date negative return to below 2%. Since early October the market had lost ground recovered previously.
Turnover was a below average Rs. 272 million whilst foreign interest remained intact with a net inflow of Rs. 75 million. Despite recent shedding of stakes in ERI by Lionhart, net foreign inflow has been a healthy Rs. 34.2 billion year-to-date.
The persistent losing streak at the Colombo Bourse has raised serious concern among capital market stakeholders. This was despite a widely-perceived positive Budget, surprising upturn in corporate earnings, and attractive valuations of a wide collection of good or fundamentally sound stocks.
Upward pressure on interest rates has dragged equity investors to fixed income options, as per some analysts, in addition to a weaker confidence level given the political and judicial issues.
The Government appears to be inclined to keep the interest rate lower, judging by the Central Bank keeping policy rates unchanged for seven months. The Treasury also remains optimistic about favourable GDP growth, lower inflation, and improved fiscal management amidst a challenging environment.
source - www.ft.lk
The Bourse saw Rs. 27 billion in value wiped off in a single session, the sharpest dip in recent weeks. The ASI was down 1.27%, bringing the year-to-date negative dip to 10.5%.
As reported in the Daily FT yesterday, the market had dipped by over 1% and lost Rs. 21 billion in value since the Budget 2013 presentation on 8 November.
The last time the ASI’s negative return at double digit was in first week of September, after which it rose sharply by 15% during the month to bring the year-to-date negative return to below 2%. Since early October the market had lost ground recovered previously.
Turnover was a below average Rs. 272 million whilst foreign interest remained intact with a net inflow of Rs. 75 million. Despite recent shedding of stakes in ERI by Lionhart, net foreign inflow has been a healthy Rs. 34.2 billion year-to-date.
The persistent losing streak at the Colombo Bourse has raised serious concern among capital market stakeholders. This was despite a widely-perceived positive Budget, surprising upturn in corporate earnings, and attractive valuations of a wide collection of good or fundamentally sound stocks.
Upward pressure on interest rates has dragged equity investors to fixed income options, as per some analysts, in addition to a weaker confidence level given the political and judicial issues.
The Government appears to be inclined to keep the interest rate lower, judging by the Central Bank keeping policy rates unchanged for seven months. The Treasury also remains optimistic about favourable GDP growth, lower inflation, and improved fiscal management amidst a challenging environment.
source - www.ft.lk
Tuesday, November 20, 2012
Sri Lanka Fortress Resorts profits sharply up
Nov 20, 2012 (LBO) - Fortress Resort and Spa, a hotel in Koggala in Sri Lanka's southern coast said profit rose sharply to 35 million rupees in the six months to September 2012 recovering from a loss a year earlier.
The firm reported earnings of 32 cents for the half year.
Sri Lanka's rupee weakened in 2012 and tourist arrivals have also been strong, though some 5-star resorts are saying that occupancy is not high.
The hotel is positioning itself in the premium market becoming a member of the 'Small Luxury Hotels' network.
The hotel said revenues rose 29 percent to 210 million rupees in the half year and cost of sales rose at a slower 7 percent to 54.7 million rupees allowing gross profits to grow 39 percent to 155 million rupees.
Administration costs rose 21 percent to 109 million rupees. Finance costs at 25 million rupees were flat, and there was 4.3 million rupees of finance income.
The cashflow statements showed a 6.2 million gain on asset disposals and 4.2 million rupee exchange gains.
source - www.lbo.lk
Tourist arrivals up, but slowly
By Mario Andree
Tourist arrivals during the first ten months of this year increased by 16 percent to 774,151 in comparison to 667,569 recorded in the corresponding period last year, while the number of visitors in the month of October surged by 15.5 percent to 80,379 from 69,563, Sri Lanka Tourism Development Authority data showed.
During the first ten months of this year arrivals from North America increased 21 percent to 46,963 with Canadian travellers including the Lankan Diaspora leading the way, while arrivals from Latin America and the Caribbean rose 66.2 percent to 1,278 from 769 in 2011.
Arrivals from Western Europe increased 17 percent to 293,472 from 250,847 registered in January-October last year with arrivals from United Kingdom topping the list, while travellers from Eastern Europe increased 51.6 percent to 50,087 from 33,031 with tourists from Russia leading.
Tourists from Africa increased 53.6 percent to 4,046 from 2,634 with arrivals from South Africa coming first, while travellers from West Asia declined 1.3 percent to 43,945 from 44,522.
Arrivals from East Asia increased 31.1 percent to 100,678 from 76,779 with travellers from Japan leading, the arrivals from South Asia increased 3.2 percent to 193,465 from 187,460 with tourists from neighbouring India leading.
Tourist arrivals from Australasia increased 23 percent to 40,217 from 32,700 with travellers from Australia leading the number of arrivals.
Several programmes to empower the SME sector are being finalized to provide better facilities to the arriving tourists, the government is in discussion with the World Bank to facilitate a grant of US$ 18 million to the SMEs in the hospitality sector which would reach 300 businesses.
The growth momentum slowing down after two years of rapid growth is posing questions about the achievability of the government’s anticipated goals for 2016 with 2.5 million arrivals and US$ 2.75 billion targeted from the industry.
The country would need to sustain 30 percent growth in the number of arrivals to the country through the four years to achieve set goals, industrialists said.
source - www.island.lk
Asian Alliance buys Rs. 34 m worth HNB shares from Chairman Pathirage
Asian Alliance Insurance Plc yesterday bought Rs. 34 million worth of HNB shares held by its Chairman Ashok Pathirage.
HNB saw around 228,000 of its voting shares trading for Rs. 35 million between a high of Rs. 144.90 and a low of Rs. 142 before closing at Rs. 142, down by Rs. 2.80. It was the third largest contributor to turnover. A block of 218,577 shares was done at Rs. 154.90, above Rs. 10 from market levels via a crossing.
Pathirage-controlled Softlogic Group owns a 95% stake in Asian Alliance. The acquisition by Asian Alliance is believed to be part of its investments into listed equities. In 2011, Asian Alliance’s investment in quoted shares was Rs. 469 million at market value and included 27,00 shares in HNB.
source - www.ft.lk
HNB saw around 228,000 of its voting shares trading for Rs. 35 million between a high of Rs. 144.90 and a low of Rs. 142 before closing at Rs. 142, down by Rs. 2.80. It was the third largest contributor to turnover. A block of 218,577 shares was done at Rs. 154.90, above Rs. 10 from market levels via a crossing.
Pathirage-controlled Softlogic Group owns a 95% stake in Asian Alliance. The acquisition by Asian Alliance is believed to be part of its investments into listed equities. In 2011, Asian Alliance’s investment in quoted shares was Rs. 469 million at market value and included 27,00 shares in HNB.
source - www.ft.lk
Cargills turns cautious over expansion of supermarkets
Industry’s biggest Cargills Ceylon Plc has turned cautious over its aggressive roll-out of supermarkets in the country partly owing to the implications of the Budget 2013 move to impose VAT from 1 January 2013.
The Company said yesterday: “Macro-economic implications of the 2013 Budget on our retail segment require the Group to take stock of its future investment and expansion plans.” Apart from this, higher interest costs and utility expenses were other reasons for this caution on the part of Cargills.
Given what it previously described as “the mounting consumer demand from regions,” Cargills in December 2009 kicked off an aggressive expansion of rolling out 100 supermarkets.
In FY12, it opened 31 new outlets, including several in the newly-liberated areas of north. Via this strategy Cargills took modern trade deeper into regional communities.
Capex in Cargills retail segment in FY12 was Rs. 1.47 billion, up by 30% from the previous year.
The original target was to have 240 operating Cargill Food City outlets by the end of 20013/14. In the Annual Report for 2011/12, the Company said an investment of Rs. 1.2 billion has been budgeted for this expansion drive in the forthcoming quarters.
However, given the serious implications of the Budget 2013 move of imposing 12% VAT on those engaged in retail trade with over Rs. 500 million turnover per quarter, analysts feared Cargills could apply brakes on its expansion.
Meanwhile, Cargills yesterday reported improved top line performance for the first half and second quarter though substantial increase in interest cost attributed to new acquisitions saw a sharp 40% dip in bottom line.
In a statement accompanying interim results, Cargills said the Group reports a strong performance for the first half of the financial year, despite challenging market conditions and reductions in consumer spend. Transaction growth in the Retail sector was below expectation while a decline in the consumption of branded FMCG goods continues. The trend was more evident in the urban markets where the increase of fuel and utility prices has had a greater impact than in the regions.
Despite these setbacks, the Group turnover during the six months period saw an increase of 20.5% to reach Rs. 27.9 billion. Gross profit of the Group recorded a growth of 24.2% during the six months period, largely reflecting the performance of Retail, Restaurants and Manufacturing segments that continue to hold the Group in good stead, countering losses incurred by two of its newly-acquired businesses.
The Group recorded an overall growth in operating profit of 17.2% for the 2nd quarter and 19.2% for the six months period. However profit after tax for the period has declined by 39.6% due to the substantial increase in interest cost attributed to the new acquisitions.
“We are particularly pleased with the performance of our dairy segment. Our investments in capacity expansion and new production lines see an unrivalled product portfolio and supply strength towards long term market leadership in the dairy segment. Investments have been made into state-of-the-art UHT milk production which would substantially increase production volumes while the added capacity of the yoghurt line and a diversified cheese category positions our dairy segment towards long-term growth,” Cargill said.
The continued growth of the soft alcohol market is reflected in the performance of the brewery business. Brewing capacity has been doubled since acquisition in early 2011 and the expansion drive is on schedule to reach 400,000 hectolitres capacity in the near term to meet the rising demand.
Recent acquisitions and investments have resulted in an increase in Group debt and a corresponding increase in the finance cost. Finance costs increased by 136.9% during the period compared to last year and amounted to Rs. 608.8 m. The average rate of interest payable by the group has shown an increase of approximately 70% over the last 12 months whilst the quantum of bank borrowings at the end of the period has almost doubled compared to 30 September 2011. The increased borrowings of the group have been utilised to fund new acquisitions and investments, to expand production facilities in the Soft-Alcohol and Dairy sectors and to invest in freehold property as per the future expansion plans of the Group.
Higher interest costs and utility expenses have had a direct impact on the Group’s profit margins.
This, together with the macro-economic implications of the 2013 Budget, on its retail segment requires the Group to take stock of its future investment and expansion plans.
“While the growth of our core businesses would remain on course, the Group would certainly review its risk appetite to ensure optimum and sustained value creation for our shareholders and the communities we serve,” Cargills added.
source - www.ft.lk
The Company said yesterday: “Macro-economic implications of the 2013 Budget on our retail segment require the Group to take stock of its future investment and expansion plans.” Apart from this, higher interest costs and utility expenses were other reasons for this caution on the part of Cargills.
Given what it previously described as “the mounting consumer demand from regions,” Cargills in December 2009 kicked off an aggressive expansion of rolling out 100 supermarkets.
In FY12, it opened 31 new outlets, including several in the newly-liberated areas of north. Via this strategy Cargills took modern trade deeper into regional communities.
Capex in Cargills retail segment in FY12 was Rs. 1.47 billion, up by 30% from the previous year.
The original target was to have 240 operating Cargill Food City outlets by the end of 20013/14. In the Annual Report for 2011/12, the Company said an investment of Rs. 1.2 billion has been budgeted for this expansion drive in the forthcoming quarters.
However, given the serious implications of the Budget 2013 move of imposing 12% VAT on those engaged in retail trade with over Rs. 500 million turnover per quarter, analysts feared Cargills could apply brakes on its expansion.
Meanwhile, Cargills yesterday reported improved top line performance for the first half and second quarter though substantial increase in interest cost attributed to new acquisitions saw a sharp 40% dip in bottom line.
In a statement accompanying interim results, Cargills said the Group reports a strong performance for the first half of the financial year, despite challenging market conditions and reductions in consumer spend. Transaction growth in the Retail sector was below expectation while a decline in the consumption of branded FMCG goods continues. The trend was more evident in the urban markets where the increase of fuel and utility prices has had a greater impact than in the regions.
Despite these setbacks, the Group turnover during the six months period saw an increase of 20.5% to reach Rs. 27.9 billion. Gross profit of the Group recorded a growth of 24.2% during the six months period, largely reflecting the performance of Retail, Restaurants and Manufacturing segments that continue to hold the Group in good stead, countering losses incurred by two of its newly-acquired businesses.
The Group recorded an overall growth in operating profit of 17.2% for the 2nd quarter and 19.2% for the six months period. However profit after tax for the period has declined by 39.6% due to the substantial increase in interest cost attributed to the new acquisitions.
“We are particularly pleased with the performance of our dairy segment. Our investments in capacity expansion and new production lines see an unrivalled product portfolio and supply strength towards long term market leadership in the dairy segment. Investments have been made into state-of-the-art UHT milk production which would substantially increase production volumes while the added capacity of the yoghurt line and a diversified cheese category positions our dairy segment towards long-term growth,” Cargill said.
The continued growth of the soft alcohol market is reflected in the performance of the brewery business. Brewing capacity has been doubled since acquisition in early 2011 and the expansion drive is on schedule to reach 400,000 hectolitres capacity in the near term to meet the rising demand.
Recent acquisitions and investments have resulted in an increase in Group debt and a corresponding increase in the finance cost. Finance costs increased by 136.9% during the period compared to last year and amounted to Rs. 608.8 m. The average rate of interest payable by the group has shown an increase of approximately 70% over the last 12 months whilst the quantum of bank borrowings at the end of the period has almost doubled compared to 30 September 2011. The increased borrowings of the group have been utilised to fund new acquisitions and investments, to expand production facilities in the Soft-Alcohol and Dairy sectors and to invest in freehold property as per the future expansion plans of the Group.
Higher interest costs and utility expenses have had a direct impact on the Group’s profit margins.
This, together with the macro-economic implications of the 2013 Budget, on its retail segment requires the Group to take stock of its future investment and expansion plans.
“While the growth of our core businesses would remain on course, the Group would certainly review its risk appetite to ensure optimum and sustained value creation for our shareholders and the communities we serve,” Cargills added.
source - www.ft.lk
Colombo bourse tumbles
Indices plunged yesterday on heightened selling pressure at the Colombo bourse, taking turnover levels to Rs. 3.86 billion with a net foreign outflow of Rs. 1.66 billion.
The All Share Price Index fell 0.94 percent, down 52.39 points to close at 5,503.93. The Milanka Price Index of more liquid stocks closed 1.12 percent lower, down 57.77 points at 5,086.55 while the S&P SL20 closed at 3,006.47, down 0.73 percent, or 22.21 points lower.
"Selling pressure on several large caps dragged the indices sharply lower. Market turnover crossed the Rs. 3bn threshold, mainly on the back of crossings on BIL, GREG, and HNB, which collectively accounted for around 95 percent of turnover," John Keells Stockbrokers said.
Foreign selling amounted to Rs. 1.7 billion leading to a net outflow of Rs. 1.66 billion yesterday.
GREG (Environment Resources Investments PLC) saw 101 million shares change hands in an off market deal at Rs. 16.70 each.
Two parcels of BIL (Browns Investments PLC) totalling 353 million shares changed at Rs. 5.50 per share.
A crossing of 218,577 HNB shares took place at Rs. 154.90 per share.
"Amongst the losers for the day were Beruwela Walk Inn, George Steuart Finance and Kelsey Developments which declined by 27.3 percent, 19.0 percent and 11.8 percent offsetting gains in Lake House Printers, Industrial Asphalts and Infrastructure Developers which advanced by 14.8 percent, 8.8 percent and 8.2 percent respectively," DNH Financial said.
source - www.island.lk
The All Share Price Index fell 0.94 percent, down 52.39 points to close at 5,503.93. The Milanka Price Index of more liquid stocks closed 1.12 percent lower, down 57.77 points at 5,086.55 while the S&P SL20 closed at 3,006.47, down 0.73 percent, or 22.21 points lower.
"Selling pressure on several large caps dragged the indices sharply lower. Market turnover crossed the Rs. 3bn threshold, mainly on the back of crossings on BIL, GREG, and HNB, which collectively accounted for around 95 percent of turnover," John Keells Stockbrokers said.
Foreign selling amounted to Rs. 1.7 billion leading to a net outflow of Rs. 1.66 billion yesterday.
GREG (Environment Resources Investments PLC) saw 101 million shares change hands in an off market deal at Rs. 16.70 each.
Two parcels of BIL (Browns Investments PLC) totalling 353 million shares changed at Rs. 5.50 per share.
A crossing of 218,577 HNB shares took place at Rs. 154.90 per share.
"Amongst the losers for the day were Beruwela Walk Inn, George Steuart Finance and Kelsey Developments which declined by 27.3 percent, 19.0 percent and 11.8 percent offsetting gains in Lake House Printers, Industrial Asphalts and Infrastructure Developers which advanced by 14.8 percent, 8.8 percent and 8.2 percent respectively," DNH Financial said.
source - www.island.lk
Bourse struggles despite good Budget, boost for capital market
The Colombo Bourse is struggling as local investors appear to be unimpressed by the widely-welcomed 2013 Budget and specific boost for the capital market.
Since the presentation of what was generally considered a “development-oriented” Budget by most chambers of commerce and specifically hailed by capital market stakeholders on 8 November, the stock market has lost over 1% or over Rs. 21 billion in value.
The dip may appear minimal, but what has caused concern among market analysts is the lack of local – retail and institutional – investor participation or their less-than-bullish sentiments.
Average turnover has been below par. Last week SEC officials pointed to past performance to emphasise that November and December months have been relatively subdued annually.
However, given the degree of commendation of Budget 2013 as well as it containing seven capital market specific proposals, the investor response has been disappointing, according to analysts.
“Either the market doesn’t believe in the Budget or investor sentiments have been dampened by other factors such upward pressure on interest rates and lack of confidence overall on macro situation and governance,” some analysts claimed.
The investors’ negative reaction is also of concern to analysts given the surprising rebound in corporate earnings in September. Investors also failed to take heart from the fact that the Central Bank kept policy rates unchanged for the seventh consecutive month.
Some, however, said most active investors who dominate trading were dried up, whilst most others were on the sidelines or opting for fixed income options. This is despite capital markets repeatedly emphasising the Bourse has provided better returns overtime than Treasury Bills.
However, the failure of the market to respond positively to Budget 2013 was highlighted by several brokers last week.
Asia Wealth Management headlined its weekly report as ‘Post-Budget Hype diminishes,’ whilst Softlogic Stockbrokers said ‘Budget fails to restore Bourse’.
“The Colombo Bourse failed to carry forward the last week’s positive sentiments over the Budget proposals despite it is being highly appreciated by investor community, including the Colombo Stock Brokers Association (CSBA),” Asia Wealth said.
“The first week following the reading of the Government’s Budget proposal for 2013 has been marked by various stakeholders of the capital markets, including private corporations and stockbrokers, expressing their contentment over the Budget proposals, while lauding the consistency maintained in the policy directives. The Government’s agenda for the capital market was focussed on further democratising the market by increasing overall investor activity through the promotion of financial instruments such as unit trusts, new equity issues, and corporate debt. Further, in response to the above, the regulatory authorities, the CSE and the SEC, came together to share a common goal in line with the policy direction outlined in the Budget proposals,” Asia said.
“Despite these positive developments, the Budget proposals for 2013 appear to have failed to galvanise investor activity and bring about a turnaround in the equities market, which apart from several large transactions on specific counters, continues to witness lacklustre volumes and turnover levels. However, investor participation maybe partly limited due to continuing investor fears over governance and transparency issues of the regulatory authorities,” the broking firm opined.
“Further, the prevailing high interest rate environment which offers attractive rates on fixed income instruments proves to be a challenge in persuading retail investors to shift back to equities. This is evident by the fact that despite the strong earnings recorded during the 3QCY12 by a number of counters in the banking and diversified sectors, a marked improvement in investor activity has not been witnessed,” Asia Wealth said.
Softlogic Stockbrokers said: “Despite the Budget focusing on the long-term benefits of the capital markets, the stock market reaction was limited. Instead stocks lost 33 points since the Budget (last week), crashing the hopes of many of another bull run.”
It also said the much-awaited budgetary announcement and the flow of positive earnings announcements by the listed companies “did little to restore the local investor spirits as they preferred to adopt a ‘wait-and-see’ approach”. In contrast the foreign investor community remained with the confident play in the Sri Lankan stocks, Softlogic added.
Given this scenario, the broking firm said it did not expect much participation to occur in the upcoming weeks as many have settled in a holiday mood with the festive season approaching.
“We opine the active players to make use of the present dry up so as to capitalise on other weakness in hoarding as much as you can at this point. Hoarding at this point would mean that you hold on for a reasonable time period to enjoy the gains when the market turns around,” Softlogic said.
source - www.ft.lk
Since the presentation of what was generally considered a “development-oriented” Budget by most chambers of commerce and specifically hailed by capital market stakeholders on 8 November, the stock market has lost over 1% or over Rs. 21 billion in value.
The dip may appear minimal, but what has caused concern among market analysts is the lack of local – retail and institutional – investor participation or their less-than-bullish sentiments.
Average turnover has been below par. Last week SEC officials pointed to past performance to emphasise that November and December months have been relatively subdued annually.
However, given the degree of commendation of Budget 2013 as well as it containing seven capital market specific proposals, the investor response has been disappointing, according to analysts.
“Either the market doesn’t believe in the Budget or investor sentiments have been dampened by other factors such upward pressure on interest rates and lack of confidence overall on macro situation and governance,” some analysts claimed.
The investors’ negative reaction is also of concern to analysts given the surprising rebound in corporate earnings in September. Investors also failed to take heart from the fact that the Central Bank kept policy rates unchanged for the seventh consecutive month.
Some, however, said most active investors who dominate trading were dried up, whilst most others were on the sidelines or opting for fixed income options. This is despite capital markets repeatedly emphasising the Bourse has provided better returns overtime than Treasury Bills.
However, the failure of the market to respond positively to Budget 2013 was highlighted by several brokers last week.
Asia Wealth Management headlined its weekly report as ‘Post-Budget Hype diminishes,’ whilst Softlogic Stockbrokers said ‘Budget fails to restore Bourse’.
“The Colombo Bourse failed to carry forward the last week’s positive sentiments over the Budget proposals despite it is being highly appreciated by investor community, including the Colombo Stock Brokers Association (CSBA),” Asia Wealth said.
“The first week following the reading of the Government’s Budget proposal for 2013 has been marked by various stakeholders of the capital markets, including private corporations and stockbrokers, expressing their contentment over the Budget proposals, while lauding the consistency maintained in the policy directives. The Government’s agenda for the capital market was focussed on further democratising the market by increasing overall investor activity through the promotion of financial instruments such as unit trusts, new equity issues, and corporate debt. Further, in response to the above, the regulatory authorities, the CSE and the SEC, came together to share a common goal in line with the policy direction outlined in the Budget proposals,” Asia said.
“Despite these positive developments, the Budget proposals for 2013 appear to have failed to galvanise investor activity and bring about a turnaround in the equities market, which apart from several large transactions on specific counters, continues to witness lacklustre volumes and turnover levels. However, investor participation maybe partly limited due to continuing investor fears over governance and transparency issues of the regulatory authorities,” the broking firm opined.
“Further, the prevailing high interest rate environment which offers attractive rates on fixed income instruments proves to be a challenge in persuading retail investors to shift back to equities. This is evident by the fact that despite the strong earnings recorded during the 3QCY12 by a number of counters in the banking and diversified sectors, a marked improvement in investor activity has not been witnessed,” Asia Wealth said.
Softlogic Stockbrokers said: “Despite the Budget focusing on the long-term benefits of the capital markets, the stock market reaction was limited. Instead stocks lost 33 points since the Budget (last week), crashing the hopes of many of another bull run.”
It also said the much-awaited budgetary announcement and the flow of positive earnings announcements by the listed companies “did little to restore the local investor spirits as they preferred to adopt a ‘wait-and-see’ approach”. In contrast the foreign investor community remained with the confident play in the Sri Lankan stocks, Softlogic added.
Given this scenario, the broking firm said it did not expect much participation to occur in the upcoming weeks as many have settled in a holiday mood with the festive season approaching.
“We opine the active players to make use of the present dry up so as to capitalise on other weakness in hoarding as much as you can at this point. Hoarding at this point would mean that you hold on for a reasonable time period to enjoy the gains when the market turns around,” Softlogic said.
source - www.ft.lk
ERI, Taprobane cross deals worth Rs. 3.6 b go through
Turnover at the Colombo Bourse yesterday was boosted by the execution of cross deals worth Rs. 3.6 billion by Environmental Resources Investments Plc (ERI) and Taprobane Holdings Plc (TAP).
TAP sold 353 million ordinary shares (19% stake) in Browns Investments to ERI for Rs. 1.94 billion at Rs. 5.50 per share and acquired 101 million shares (29%) in ERI from Lionhart Investments for Rs. 1.68 billion or Rs. 16.70 per share.
Shareholders of TAP on Friday at an EGM gave approval for the deal.
source - www.ft.lk
TAP sold 353 million ordinary shares (19% stake) in Browns Investments to ERI for Rs. 1.94 billion at Rs. 5.50 per share and acquired 101 million shares (29%) in ERI from Lionhart Investments for Rs. 1.68 billion or Rs. 16.70 per share.
Shareholders of TAP on Friday at an EGM gave approval for the deal.
source - www.ft.lk
NDB Capital profits surge 287%
NDB Capital Holdings PLC (NCAP) posted strong third quarter results recording a net profitability of LKR 206.9 million at the company level. This was almost a threefold jump in profitability compared to a Net Profit of LKR 53.4 million recorded during the same quarter the previous year, the company announced yesterday (19).
"Net Profit for the nine month period ended Sep 30, 2012 resulted in a growth of 159% which amounted to LKR 326 million compared to previous year’s figure of LKR 125.5 million. At group level, the Net Profit for the first nine months of 2012 was LKR 353.1 million, a 68.5% growth over the same period, the prior year.
This significant growth in profitability was achieved due to a series of strategic initiatives undertaken earlier in the year. The company was re-launched in June 2012 positioning itself as the only listed full service investment bank in the country offering investment banking, wealth management, stock broking and private equity. The increase in profitability at the company level was driven by a prudent asset allocation policy and efficient investment strategies.
During the period ended Sep 30, 2012, the company made strategic investments to the value of approximately LKR 890 million to acquire 100% stakes in NDB Investment Bank Limited (NDBIB), NDB Stockbrokers (Private) Limited and an additional 5% stake in Aviva NDB Insurance PLC."
Chairman, Ashok Pathirage commenting on the performance said, "NCAP’s performance was commendable despite the tough conditions which prevailed both in the money market and the capital market".
NCAP recently announced the signing of a Share Sale and Purchase Agreement with American International Assurance Company Limited (AIA) of Hong Kong, one of the largest insurance companies in the world with an exclusive focus on the Asia-Pacific region to sell its shareholding in Aviva NDB Holdings Lanka (Private) Limited (Aviva NDB Holdings) together with Aviva Asia Holdings (Private) Limited. The net receipt of US$ 59 Mn from the intended sale is expected to be earned by end 2012, subject to the necessary regulatory and legal clearances.
NCAP is a 99.6% owned subsidiary of NDB Bank."
source - www.island.lk
"Net Profit for the nine month period ended Sep 30, 2012 resulted in a growth of 159% which amounted to LKR 326 million compared to previous year’s figure of LKR 125.5 million. At group level, the Net Profit for the first nine months of 2012 was LKR 353.1 million, a 68.5% growth over the same period, the prior year.
This significant growth in profitability was achieved due to a series of strategic initiatives undertaken earlier in the year. The company was re-launched in June 2012 positioning itself as the only listed full service investment bank in the country offering investment banking, wealth management, stock broking and private equity. The increase in profitability at the company level was driven by a prudent asset allocation policy and efficient investment strategies.
During the period ended Sep 30, 2012, the company made strategic investments to the value of approximately LKR 890 million to acquire 100% stakes in NDB Investment Bank Limited (NDBIB), NDB Stockbrokers (Private) Limited and an additional 5% stake in Aviva NDB Insurance PLC."
Chairman, Ashok Pathirage commenting on the performance said, "NCAP’s performance was commendable despite the tough conditions which prevailed both in the money market and the capital market".
NCAP recently announced the signing of a Share Sale and Purchase Agreement with American International Assurance Company Limited (AIA) of Hong Kong, one of the largest insurance companies in the world with an exclusive focus on the Asia-Pacific region to sell its shareholding in Aviva NDB Holdings Lanka (Private) Limited (Aviva NDB Holdings) together with Aviva Asia Holdings (Private) Limited. The net receipt of US$ 59 Mn from the intended sale is expected to be earned by end 2012, subject to the necessary regulatory and legal clearances.
NCAP is a 99.6% owned subsidiary of NDB Bank."
source - www.island.lk
Malwatte Valley profitability surges
Malwatte Valley Plantations PLC (MVPP) has seen its nine months turnover and gross profit fall from a year ago but an increase in operating income and a reduction in costs has seen net profits rise.
For the nine months ended September 30, 2012, MVPP reported a net profit of Rs. 310.2 million, 14 percent higher than Rs. 272.2 million recorded a year earlier and a whopping 223 percent higher than the Rs. 86.6 million profit for the full year ended December 31, 2011.
"We have an envious record in that MVPP has made recurring profits over the past decade and that too from two basic crops, tea and rubber. This year, the profit from tea amounted to Rs. 151 million while from rubber it amounted to Rs. 191 million," the company’s managing director W. L. Bogtstra said in a statement.
"This is a result of close monitoring of costs, premium prices for produce and the implementation of innovative management practices despite increases in inputs and unjustifiable wage increases," he said.
During the nine months period, turnover fell 8 percent year-on-year to Rs. 2.2 billion. Sales and administration costs fell 8.6 percent and 10.66 percent respectively to Rs. 1.8 billion and Rs. 111.7 million. Operating income surged 83 percent year-on-year to Rs. 98 million.
source - www.island.lk
For the nine months ended September 30, 2012, MVPP reported a net profit of Rs. 310.2 million, 14 percent higher than Rs. 272.2 million recorded a year earlier and a whopping 223 percent higher than the Rs. 86.6 million profit for the full year ended December 31, 2011.
"We have an envious record in that MVPP has made recurring profits over the past decade and that too from two basic crops, tea and rubber. This year, the profit from tea amounted to Rs. 151 million while from rubber it amounted to Rs. 191 million," the company’s managing director W. L. Bogtstra said in a statement.
"This is a result of close monitoring of costs, premium prices for produce and the implementation of innovative management practices despite increases in inputs and unjustifiable wage increases," he said.
During the nine months period, turnover fell 8 percent year-on-year to Rs. 2.2 billion. Sales and administration costs fell 8.6 percent and 10.66 percent respectively to Rs. 1.8 billion and Rs. 111.7 million. Operating income surged 83 percent year-on-year to Rs. 98 million.
source - www.island.lk
Monday, November 19, 2012
Sri Lanka telcos to grow on higher usage, reduced competition: Fitch
Nov 19, 2012 (LBO) - Sri Lanka's telecom operators would grow on higher spending by subscribers and reduced price competition as the market penetration approaches 90 percent, a rating agency has said.
Penetration has already reached 87 percent by the second quarter of 2012, and fixed wireless subscribers were declining, Fitch Ratings said in a report on Sri Lanka's telecom sector.
The rating agency said the outlook for Sri Lanka Telecom (rated BB- with a domestic rating of 'AAA(lka) and Dialog Axiata (domestic rating of 'AAA(lka)' was stable with muted tariff competition.
Sri Lanka's telecom regulator stepped in with price floors following surge of price competition that came with the entry of a fifth mobile firm to Sri Lanka, which saw profits and capital expenditure coming under pressure.
Fitch said operators now charge two Sri Lanka rupees a minute for calls to other networks, despite the regulatory floor being 1.50 rupees.
"Overall, Fitch does not expect a resurgence of tariff-based competition – given the increase in operating costs and inflationary pressures stemming from hikes in energy prices, and the sharp depreciation of the local currency since early 2012," the rating agency said.
"However, tariff competition is likely to continue across data services, international roaming, and international direct dialling revenue.
"Yet the negative impact on blended ARPU (average revenue per user) is likely to be limited, as these segments do not yet account for a major portion of industry revenue."
Though the growth of new subscribers will slow, average minute use of subscribers will continue to grow in 2013.
If domestic call tariffs remain the same among operators, Fitch says multiple subscriber identity module (SIM) usage will decline.
Operators are expected to invest between 20 to 40 percent of revenues on modernising networks, and building capacity and coverage to support greater demand.
Network infrastructure-sharing is also likely to increase, particularly among the smaller players, Fitch said.
The outlook may be downgraded to negative on any adverse regulatory changes. Further consolidation could result in a lifting of the outlook to positive but acquisitions funded by debt may weaken balance sheets, Fitch said.
source - www.lbo.lk
SL stock market on positive path
H.D.H Senewiratne
The Colombo stock market is now growing in a positive direction due to the coordinated effort of all stakeholders including Securities and Exchange Commission (SEC), Colombo Stock Exchange (CSE) and Colombo Stock Brokers Association (SBA). To enhance the market from a medium to long term perspective, it needs to be broad-based with new listing and encourage foreign investment in to the market, Asha Philips Securities Vice President, Thakshila Hulangamuwa said.
“Basically, we witness a positive growth in the market index but debt market growth and growth potentials should be in line with the market capitalisation by increasing new listings, which goes in line with the stability,” Hulangamuwa told Daily News Business .
He also said that the recent budget proposal that all newly listed companies who release 20 percent shares to the public would get three years tax exemptions was a good sign for the market's further growth. He also said that lowering the income tax to 10 % from 28 % on Unit Trust Management companies would also derive a positive impact towards the market.
Since European markets are not performing well, our markets too have a rippling effect, because we are also in line with foreign investors/markets, Hulangamuwa said.
President Colombo Stock Brokers Association Dimuthu Abeysekera said that the market is doing well since the market fundamentals shows a positive growth.
Head of Sales and Marketing Lanka Securities (Pvt) Limited Eardley Kern said that the stock market is positive because fundamentals are showing a growth and during 2012 more than Rs 35 billion was invested in the stock market.
He said that if this fundamental proven growth continues it will attract more foreign investments in to the market, but only negative factor is the high bank interest rate in the market.
Kern also said that most important thing is to stabilize the market to become a strong stock market in the region. At present all stock markets in the region are not performing well due to the European economic recession.
source - www.dailynews.lk
The Colombo stock market is now growing in a positive direction due to the coordinated effort of all stakeholders including Securities and Exchange Commission (SEC), Colombo Stock Exchange (CSE) and Colombo Stock Brokers Association (SBA). To enhance the market from a medium to long term perspective, it needs to be broad-based with new listing and encourage foreign investment in to the market, Asha Philips Securities Vice President, Thakshila Hulangamuwa said.
“Basically, we witness a positive growth in the market index but debt market growth and growth potentials should be in line with the market capitalisation by increasing new listings, which goes in line with the stability,” Hulangamuwa told Daily News Business .
He also said that the recent budget proposal that all newly listed companies who release 20 percent shares to the public would get three years tax exemptions was a good sign for the market's further growth. He also said that lowering the income tax to 10 % from 28 % on Unit Trust Management companies would also derive a positive impact towards the market.
Since European markets are not performing well, our markets too have a rippling effect, because we are also in line with foreign investors/markets, Hulangamuwa said.
President Colombo Stock Brokers Association Dimuthu Abeysekera said that the market is doing well since the market fundamentals shows a positive growth.
Head of Sales and Marketing Lanka Securities (Pvt) Limited Eardley Kern said that the stock market is positive because fundamentals are showing a growth and during 2012 more than Rs 35 billion was invested in the stock market.
He said that if this fundamental proven growth continues it will attract more foreign investments in to the market, but only negative factor is the high bank interest rate in the market.
Kern also said that most important thing is to stabilize the market to become a strong stock market in the region. At present all stock markets in the region are not performing well due to the European economic recession.
source - www.dailynews.lk
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