Distilleries Company of Sri Lanka controlled by business tycoon Harry Jayawardena said it is seeking regulator clearance to launch an insurance company with a startup capital of 500 million rupees after losing control of a former state-owned insurance company, Lanka Business Online (LBO) reported today.
Distilleries Company said in a stock exchange filing that it is willing to increase the investment provision to a billion rupees if necessary. The new insurance company will be a fully-owned unit of Distilleries.
Distilleries Company is a unit of the unlisted Stassens group controlled by tycoon Harry Jayawardena who also has large stakes in the listed Hatton National Bank, Commercial Bank and National Development Bank.
source-www.dailymirror.lk
Thursday, December 10, 2009
RENUKA AGRI FOODS - BASIS OF ALLOTTMENT
Renuka Agri Foods to give 10,000 shares minimum to all investors.
Investors who applied over 10000 will get 10000+ 5.99%
As Managers and Registrars to the Renuka Agri Foods Limited (RAFL) Initial Public Offer (IPO) of 120 million shares of LKR2.25, Merchant Bank of Sri Lanka PLC (MBSL) yesterday announced the basis of allotment for the initial offer. We consider the allotment basis announced by the Board of Directors of RAFL is an equitable basis of allotment for all types of shareholders.
source-www.dailymirror.lk
Investors who applied over 10000 will get 10000+ 5.99%
As Managers and Registrars to the Renuka Agri Foods Limited (RAFL) Initial Public Offer (IPO) of 120 million shares of LKR2.25, Merchant Bank of Sri Lanka PLC (MBSL) yesterday announced the basis of allotment for the initial offer. We consider the allotment basis announced by the Board of Directors of RAFL is an equitable basis of allotment for all types of shareholders.
source-www.dailymirror.lk
SRI LANKA - COCO LANKA
We recommend a BUY for Coco Lanka on 8th of Dec.At that time it was tarding at Rs 50.25. We saw a minimum 20% price appreciation for the share on back of several positive news such as improved profitability YOY as at 30.09.2009, Listing of Renuka Agri foods , New listing of RHL X (non voting) shares in the market, Sub division of 5 for 1 offered by RHL etc.
To day Coco lanka closed at Rs 56.00 ( 11.4% price appreciation since Our buy recommendation). Further they have annouced following,
:- Five (05) new ordinary voting shares for every seven (07) existing ordinary voting shares held
:-One (01) ordinary non voting share for every seven (07) existing ordinary shares held
:-Issue Price:- Ordinary Voting share-Rs.35/-
:-Ordinary Non Voting share - Rs. 25/-
To day Coco lanka closed at Rs 56.00 ( 11.4% price appreciation since Our buy recommendation). Further they have annouced following,
:- Five (05) new ordinary voting shares for every seven (07) existing ordinary voting shares held
:-One (01) ordinary non voting share for every seven (07) existing ordinary shares held
:-Issue Price:- Ordinary Voting share-Rs.35/-
:-Ordinary Non Voting share - Rs. 25/-
Wednesday, December 9, 2009
DIVIDEND ANNOUNCEMENTS
(click on the image for a bigger version)
# commercial bank X (Non voting).This is the second interim dividend that the company offered withing three months period.They gave Rs 1.50 as first interim earlier.Another dividend in excess of Rs 2.00 can be expected on back of improved perfomance of the bank.
Price @120,it gives a dividend yield of 4.1% which equals to savings deposit rate offered by most of sri lankan banks.
Tuesday, December 8, 2009
SRI LANKA - COCO LANKA
Coco lanka is listed on main board in CSE. It is an investment company for agricultural ventures. It holds 78.6% in Renuka Agri Foods. Once the Renuka Agri Foods shares starts trading during the later part of the year 2009 or early 2010 the share price of COCO should move up since they can get a value for their investment in Renuka Agri Foods.
It has a minimum of 20% growth from the current price levels. (Rs 50.25) due to its own business activities in the agricultural sector as well as due to the large stake they owned in RAL.
Friday, December 4, 2009
Know more about Stock Market Instruments
What is a share?
- A share represents your ownership in a company. As a part owner you are investing in the future growth of the company.
What are the types of shares?
Ordinary Shares (N) offer
- A right to vote at the company's AGM.
- An entitlement to a share of dividends declared.
- If the company is liquidated, shareholders will be settled after all the creditors, depositors, debt holder dues has been settled.
Non-Voting Ordinary Shares (X)
- These shares have the same characteristics of Ordinary shares except the right to vote at the company's AGM.
Preference Shares (P) offer
- Limited ownership rights.
- A claim on the company's earnings before payment to ordinary shareholders.
- Entitled to priority over ordinary shares if the company liquidates.
- Most preference shares have a pre-determined dividend rate which you are entitled to receive.
Warrants (W)
- This is a certificate giving you the right to buy shares at a stipulated price at a future date.
Saturday, July 25, 2009
Colombo Stock Exchange (CSE) Sri Lanka - Methods of profiting
Investing in shares can give you returns in two key forms:
1. Dividends - This is where a company distributes a proportion of its annual earnings to the shareholders. Dividends at all times are distributed as a percentage of the nominal/par value of a share. For example, the par value of Caltex Lubricants Lanka Ltd is Rs. 10; for financial year 2005 the company declared 77.5% dividends. This implies that the company has declared 77.5% of the par value of the company’s stock, equaling to Rs. 7.75 per share.If you take present scenario Chevron formerly known as Caltex is distributing more than Rs 10/ as dividends per annum for each & every share holder. Stocks in the likes of LLUB, CTC, DOCK, NEST,HNB,COMB are categorized as high dividend paying counters.
2. Capital Gains – This is where an investor makes a gain by buying at a lower price and selling at a higher price. The price of a share is chiefly determined by the earnings of the company. For example if a company made a net profit of Rs. 100 million for the financial year 2008 and then reinvested the profits in the business and was able to generate a net profit of Rs. 140 million for the subsequent year; the demand for the share will appreciate causing the share price to rise. By investing in growth companies over a long investment horizon, will certainly give higher returns than many fixed income securities.
Even though fixed income securities give a known return, (in the range of 13.5% for 12 months fixed deposit). However, the CSE on the other hand has provided returns over and above the returns offered by the fixed income securities over the years. CSE delivered with 27.55% for the year 2005 and 24% for the first nine months of the year 2006, indicating the genuine wealth creation and preserving wealth of investors.
However rate of return offered by the Colombo Stock Exchange in future will be definitely high after the end of 30 year old civil war in the country.
Hence this is the best time to invest in COLOMBO STOCK EXCHANGE SRI LANKA .
source - www.cse.lk
1. Dividends - This is where a company distributes a proportion of its annual earnings to the shareholders. Dividends at all times are distributed as a percentage of the nominal/par value of a share. For example, the par value of Caltex Lubricants Lanka Ltd is Rs. 10; for financial year 2005 the company declared 77.5% dividends. This implies that the company has declared 77.5% of the par value of the company’s stock, equaling to Rs. 7.75 per share.If you take present scenario Chevron formerly known as Caltex is distributing more than Rs 10/ as dividends per annum for each & every share holder. Stocks in the likes of LLUB, CTC, DOCK, NEST,HNB,COMB are categorized as high dividend paying counters.
2. Capital Gains – This is where an investor makes a gain by buying at a lower price and selling at a higher price. The price of a share is chiefly determined by the earnings of the company. For example if a company made a net profit of Rs. 100 million for the financial year 2008 and then reinvested the profits in the business and was able to generate a net profit of Rs. 140 million for the subsequent year; the demand for the share will appreciate causing the share price to rise. By investing in growth companies over a long investment horizon, will certainly give higher returns than many fixed income securities.
Even though fixed income securities give a known return, (in the range of 13.5% for 12 months fixed deposit). However, the CSE on the other hand has provided returns over and above the returns offered by the fixed income securities over the years. CSE delivered with 27.55% for the year 2005 and 24% for the first nine months of the year 2006, indicating the genuine wealth creation and preserving wealth of investors.
However rate of return offered by the Colombo Stock Exchange in future will be definitely high after the end of 30 year old civil war in the country.
Hence this is the best time to invest in COLOMBO STOCK EXCHANGE SRI LANKA .
source - www.cse.lk
Monday, June 1, 2009
Terms you need to know when trading at CSE
When trading in the Stock Market there is a lot of technical jargon often used by the CSE and Stockbrokers.
It is worthwhile for an investor to familiarise oneself with such terms in order to engage in a well informed investing experience.
Thus our article this week would focus on some of these terms.
Market Capitalisation:
This is the total market value of all voting ordinary shares of all listed companies. This is also calculated company wise and indicates a company's size in relation to the total Market.
It is used to conduct market valuations.
The market capitalisation is calculated by multiplying the issued quantity of shares by the market price. For example, if XYZ company has 15,000,000 shares outstanding ( total issued shares) and a share price of Rs 20.00 per share then the market capitalisation is 15,000,000 x Rs 20.00 = Rs 300,000,000.
Although the market capitalisation of a company is an indication of the value of the company, it is only a temporary metric based on the current stock market.
The true value of the company (its profits, product positioning and balance sheet) may not be reflected in the market capitalisation.
What are the Indices used to Measure the Movement of Share Prices?
The CSE publishes two main price indices, twenty sector indices, two main Total Return Indexes and twenty Total Return Sector Indices.
An index can be used to understand the direction or the movement of the market and also to calculate returns.
* All Share Price Index (ASPI): The All Share Price Index is used to measure the movement of share prices of all the listed companies.
The ASPI is based on market capitalisation. Weighting of shares is conducted in proportion to the issued ordinary capital of the listed companies, valued at current market price (i.e. market capitalization). The base year for this index is 1985.
* Milanka Price Index (MPI): The Milanka Price Index is used to measure the movement of share prices of 25 selected companies.
These companies have been selected on the basis of liquidity (number of shares traded) and market capitalisation (size). This index is revised bi-annually.
The base year for this index is 1998.
Market Day: This is a day on which the Stock Exchange is open for trading. Trading is open from 9.30 am to 2.30 pm, on all weekdays other than public holidays.
Turnover: The turnover is the total value of shares traded on that date. The turnover of each company is determined by summing up the value of each transaction.
Portfolio: A portfolio is a collection of investments, all owned by the same individual or organisation.
These investments often include stocks, which are investments in individual businesses; bonds, which are investments in debt that are designed to earn interest; and mutual funds, which are essentially pools of money from many investors that are invested by professionals or according to indices.
A portfolio is a mix of investments.
Diversification: Diversification is spreading investment across different assets in order to reduce the overall risk of the portfolio.
It is the concept of spreading your money among a number of different investments in order to reduce risk. It is the idea that you shouldn't put all of your eggs in one basket.
Margin Trading:
Margin trading is the practice of buying stock with money borrowed from the broker. In this arrangement, the investor makes a cash down payment (called the margin) with the broker and can purchase stocks worth about twice the cash amount.
The broker charges interest on this loan (in addition to the commission on each buy/sell trade) and the investor has to keep the entire stock holding with the broker as collateral.
Also, the investor has to put up additional cash in case the value of the stockholding falls below a certain amount.
Margin trading is a double-edged sword - it cuts both ways.
If the stock price rises, the investor makes twice as much profit as with his own cash only.
Similarly, if the stock price falls, the investor loses twice the amount
Odd Lots: Shares are normally traded in lots of 100 shares at the CSE.
Any lot of less than 100 shares is considered an odd lot.
Any trades of less than 100 shares are traded on a separate order book and Odd lots do not affect the
Market Indices or the last traded price of a share.
Courtesy CSE
It is worthwhile for an investor to familiarise oneself with such terms in order to engage in a well informed investing experience.
Thus our article this week would focus on some of these terms.
Market Capitalisation:
This is the total market value of all voting ordinary shares of all listed companies. This is also calculated company wise and indicates a company's size in relation to the total Market.
It is used to conduct market valuations.
The market capitalisation is calculated by multiplying the issued quantity of shares by the market price. For example, if XYZ company has 15,000,000 shares outstanding ( total issued shares) and a share price of Rs 20.00 per share then the market capitalisation is 15,000,000 x Rs 20.00 = Rs 300,000,000.
Although the market capitalisation of a company is an indication of the value of the company, it is only a temporary metric based on the current stock market.
The true value of the company (its profits, product positioning and balance sheet) may not be reflected in the market capitalisation.
What are the Indices used to Measure the Movement of Share Prices?
The CSE publishes two main price indices, twenty sector indices, two main Total Return Indexes and twenty Total Return Sector Indices.
An index can be used to understand the direction or the movement of the market and also to calculate returns.
* All Share Price Index (ASPI): The All Share Price Index is used to measure the movement of share prices of all the listed companies.
The ASPI is based on market capitalisation. Weighting of shares is conducted in proportion to the issued ordinary capital of the listed companies, valued at current market price (i.e. market capitalization). The base year for this index is 1985.
* Milanka Price Index (MPI): The Milanka Price Index is used to measure the movement of share prices of 25 selected companies.
These companies have been selected on the basis of liquidity (number of shares traded) and market capitalisation (size). This index is revised bi-annually.
The base year for this index is 1998.
Market Day: This is a day on which the Stock Exchange is open for trading. Trading is open from 9.30 am to 2.30 pm, on all weekdays other than public holidays.
Turnover: The turnover is the total value of shares traded on that date. The turnover of each company is determined by summing up the value of each transaction.
Portfolio: A portfolio is a collection of investments, all owned by the same individual or organisation.
These investments often include stocks, which are investments in individual businesses; bonds, which are investments in debt that are designed to earn interest; and mutual funds, which are essentially pools of money from many investors that are invested by professionals or according to indices.
A portfolio is a mix of investments.
Diversification: Diversification is spreading investment across different assets in order to reduce the overall risk of the portfolio.
It is the concept of spreading your money among a number of different investments in order to reduce risk. It is the idea that you shouldn't put all of your eggs in one basket.
Margin Trading:
Margin trading is the practice of buying stock with money borrowed from the broker. In this arrangement, the investor makes a cash down payment (called the margin) with the broker and can purchase stocks worth about twice the cash amount.
The broker charges interest on this loan (in addition to the commission on each buy/sell trade) and the investor has to keep the entire stock holding with the broker as collateral.
Also, the investor has to put up additional cash in case the value of the stockholding falls below a certain amount.
Margin trading is a double-edged sword - it cuts both ways.
If the stock price rises, the investor makes twice as much profit as with his own cash only.
Similarly, if the stock price falls, the investor loses twice the amount
Odd Lots: Shares are normally traded in lots of 100 shares at the CSE.
Any lot of less than 100 shares is considered an odd lot.
Any trades of less than 100 shares are traded on a separate order book and Odd lots do not affect the
Market Indices or the last traded price of a share.
Courtesy CSE
Wednesday, May 6, 2009
Tips for investors to invest in Colombo Stock Exchange
The Stock Market has the ability to outperform any other investment asset class in the longer term.
Even though the benefits may fluctuate in the short term, in the longer term stocks have been the most beneficial investment.
A person can engage in stock market investments as a long term or short term investment.
In this article we will discuss some tips to invest in the right way with the objective of creating wealth in the secondary market through the stock market.
Maintaining a diversified portfolio as in any other risk management technique, when investing in the stock market, it is best that you invest in diverse types of assets. For instance, make sure you do not invest all your money in one single sector. You can spread your investment across different sectors.
The companies listed on the Colombo Stock Exchange (CSE) are divided into 20 sectors comprising telecommunication, banking, finance and insurance, beverage food and tobacco, hotels and travels and Manufacturing.
You need to ensure that you understand each company's business model and the exposure to business and financial risk before making an investment decision.
In depth knowledge and access to research data pertaining to sector dynamics, competition, key success factors, driving forces, government policies, global trends will no doubt help you to better understand the future direction of the respective industries/sectors.
Your investments should thus be divided among the sectors that will offer relatively stronger growth prospects.
Another stage of diversification would be that you can spread your money among various classes of assets such as in Treasury bills, land and gold rather than investing all your money in stocks.
The allocation of funds into different asset classes could be done at your discretion.
If you are a risk taker then increase your exposure to equity with an asset mix of 70:30.
If you are risk averse, then you could allocate more funds into fixed income assets whilst channelling a smaller percentage into equity (stock market).
Once you've decided what your investment portfolio should look like, you can take the initial steps to invest.
Approach a suitable stockbroker and open a Central Depository System CDS account for him/herself via the stockbroker.
At the time of initial investment, it is advisable not to invest all your money at once. You should invest your money gradually in the market to minimize any market timing risk.
Once you purchase shares of companies you are interested in, review them at least once a week and compare them with the initial investment.
Review the portfolio regularly and add any securities in the areas in which you want to increase exposure. These additional securities can either expand the number of securities you hold or be added to existing holdings.
By maintaining your portfolio as such, you would realize in a couple of years that it has become a substantial investment to fund your retirement, pay for a second home, or meet whatever goals you set when you started your investing journey.
Presented above are a few tips for investors on how to benefit from stock market investing in the longer term.
This section below would focus on how an investor can succeed in the stock market through short term trading.
Short term trading can be a high risk, high return option.
You should clearly understand the risks and rewards of each transaction if attempting to profit in the short term.
You should also possess the skills of identifying best deals and safeguard yourself from unexpected losses.
Most of us assume that by following the events of the market at the end of the day, we would be sufficiently updated to make good decisions in the market.
Yet what we don't realize is that by the time we find out the information, the market has already responded to these facts and events.
Thus you should be mindful of the following tips suggested by experts in the field, to make a better decision.
A moving average is the average price of a stock over a specific period of time.
The most common time frames are 15, 20, 30, 50, 100 and 200 days.
The overall idea is to show whether a stock is moving upward or downward. Generally, a good candidate will have an increasing moving average that is sloping upward.
If you are looking for a good short term investment, you want to find an area where the moving average is flattening out or declining.
Usually the markets trade in cycles, which makes it important to watch the calendar at particular times. Cycles can be used to traders' advantage to determine good times to enter into long or short positions.
If the trend is negative, you might consider doing very little buying. If the trend is positive, you may want to consider buying more. The reason for this is that when the overall market trend is against you, the odds of having a successful trade drops even more.
(Courtesy CSE)
Even though the benefits may fluctuate in the short term, in the longer term stocks have been the most beneficial investment.
A person can engage in stock market investments as a long term or short term investment.
In this article we will discuss some tips to invest in the right way with the objective of creating wealth in the secondary market through the stock market.
Long-Term Investing
Maintaining a diversified portfolio as in any other risk management technique, when investing in the stock market, it is best that you invest in diverse types of assets. For instance, make sure you do not invest all your money in one single sector. You can spread your investment across different sectors.
The companies listed on the Colombo Stock Exchange (CSE) are divided into 20 sectors comprising telecommunication, banking, finance and insurance, beverage food and tobacco, hotels and travels and Manufacturing.
You need to ensure that you understand each company's business model and the exposure to business and financial risk before making an investment decision.
In depth knowledge and access to research data pertaining to sector dynamics, competition, key success factors, driving forces, government policies, global trends will no doubt help you to better understand the future direction of the respective industries/sectors.
Your investments should thus be divided among the sectors that will offer relatively stronger growth prospects.
Another stage of diversification would be that you can spread your money among various classes of assets such as in Treasury bills, land and gold rather than investing all your money in stocks.
The allocation of funds into different asset classes could be done at your discretion.
If you are a risk taker then increase your exposure to equity with an asset mix of 70:30.
If you are risk averse, then you could allocate more funds into fixed income assets whilst channelling a smaller percentage into equity (stock market).
Timing of Investment
Once you've decided what your investment portfolio should look like, you can take the initial steps to invest.
Approach a suitable stockbroker and open a Central Depository System CDS account for him/herself via the stockbroker.
At the time of initial investment, it is advisable not to invest all your money at once. You should invest your money gradually in the market to minimize any market timing risk.
Once you purchase shares of companies you are interested in, review them at least once a week and compare them with the initial investment.
Sustaining Your Portfolio
Review the portfolio regularly and add any securities in the areas in which you want to increase exposure. These additional securities can either expand the number of securities you hold or be added to existing holdings.
By maintaining your portfolio as such, you would realize in a couple of years that it has become a substantial investment to fund your retirement, pay for a second home, or meet whatever goals you set when you started your investing journey.
Presented above are a few tips for investors on how to benefit from stock market investing in the longer term.
This section below would focus on how an investor can succeed in the stock market through short term trading.
Short Term Trading
Short term trading can be a high risk, high return option.
You should clearly understand the risks and rewards of each transaction if attempting to profit in the short term.
You should also possess the skills of identifying best deals and safeguard yourself from unexpected losses.
Most of us assume that by following the events of the market at the end of the day, we would be sufficiently updated to make good decisions in the market.
Yet what we don't realize is that by the time we find out the information, the market has already responded to these facts and events.
Thus you should be mindful of the following tips suggested by experts in the field, to make a better decision.
Watch the Moving Averages
A moving average is the average price of a stock over a specific period of time.
The most common time frames are 15, 20, 30, 50, 100 and 200 days.
The overall idea is to show whether a stock is moving upward or downward. Generally, a good candidate will have an increasing moving average that is sloping upward.
If you are looking for a good short term investment, you want to find an area where the moving average is flattening out or declining.
Understand Overall Cycles or Patterns
Usually the markets trade in cycles, which makes it important to watch the calendar at particular times. Cycles can be used to traders' advantage to determine good times to enter into long or short positions.
Get a Sense of Market Trends
If the trend is negative, you might consider doing very little buying. If the trend is positive, you may want to consider buying more. The reason for this is that when the overall market trend is against you, the odds of having a successful trade drops even more.
(Courtesy CSE)
Wednesday, April 8, 2009
Investing in Colombo Stock Exchange - Key Ratios
KEY RATIOS FOR INVESTING IN STOCK MARKET | ||
| Ratio Analysis provides investors method of systematically analyzing the financial statements of companies. The key to successful analysis is comparison. It is essential that ratios be compared over time within the business to see whether the business is growing or declining and also compare it with similar business and industry norms. We give below the ratios commonly used by the Investors to analyze the risk and return relating to their investments. | ||
Earnings Per Share (EPS) EPS is the profit attributable to each ordinary share or the earnings the company makes for each ordinary share in existence. Calculated as: [EPS = Profit after tax and preference dividends/ Number of ordinary shares in issue] The growth in EPS is essential, since the growth in EPS means growth in profits per share plus a greater chance of a higher dividend. Investors should compare EPS growth over a period and most importantly should look at future EPS growth. Dividend Per Share (DPS) DPS is the proportion of the company’s earnings that the Board of Directors decides to distribute to the ordinary shareholders of the company. DPS is quoted in terms of a percentage of the nominal value of a share and is paid out as cash. Dividend Yield (D/Y) Dividend yield is the return as against the market price or the return for the price paid for the stock. Dividend yield is generally lower than interest yield. This is partly due to the fact that the shareholders expected price appreciation (capital gain) to partly satisfy the expected return. Calculated as: [D/Y= Dividend/Market Price*100] Dividend Cover The Dividend Cover tells you if a company will be able to pay its dividend or how secure your dividend flow would be. Calculated as: [Dividend Cover = EPS/DPS] Investors and companies like the cover to be at least 1 so the dividend payout will not be affected by a short term fall in profits. Dividend Payout The proportion or percentage of Dividend paid as against the EPS. Calculated as: [Dividend Payout = DPS/EPS*100] Price Earnings Ratio (PER) The PER compares the current share price, with the EPS of the company. Calculated as: [PER = Market Price/EPS] The EPS can be a historical EPS or a future projected EPS. PER sometimes referred to as the PE Multiples, means how many times of earnings an investor is willing to pay to purchase a share. In general, a higher PER based on historical earnings or a low PER based on future earnings suggest that investors are expecting higher earnings, indicating the potential. However, due to market inefficiencies even the historical earnings will not be incorporated in the share price. In other words a high earnings yield share will have a low PER compared to other shares in the same sector. Net Asset Value (NAV) The shareholders funds as the name implies belongs to the ordinary shareholders. Therefore the NAV is basically the shareholders funds for one ordinary share. Return On Equity (ROE) This ratio helps investors to assess how much return the company is making for the total shareholders funds. Broadly speaking, the higher the return on equity, the more successful a company is. Calculated as: [ROE = Profit Attributable to Ordinary Shareholders/Shareholders Funds*100] source - bartleet mallorystockbrokers |
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