Namal Acuity Value Fund's NAV plunges

By Jithendra Antonio

The Net Asset Value of Namal Acuity Value Fund (NAVF) unit has fallen from Rs.122.74  in October 2010 to Rs.105.65 as at 1 April 2011, a  company filing to the stock exchange outlines.

Earlier, Namal Acuity Value Fund (NAVF) had said that the Net Asset Value of a unit had dipped from Rs.109.97 (January 31) to Rs.109.63 (February 28) this year.

The highest ever value for Namal Acuity Value Fund unit was reported in October last year which was Rs.122.74, whilst the value drastically fell in November 2010 to Rs.103.34.

Though the net asset value of a NAVF unit shot up from Rs.49.70 (November 2009) to its highest level of Rs.122 per unit in October 2010, NAVF claims on a Year-on-Year basis, the fund increased by 107.93 % (October 2009 to October 2010) since its inception. During the corresponding period, the All Share Price Index (ASPI) of the Colombo bourse increased by 124.33% as per company’s financials.

As at December 2010, NAVF had mainly invested the Rs.1 billion worth fund money in Diversified Holdings stocks (35.18%), Hotels & Travels stocks (17.14%), and Banks & Finance stocks (16.61%). According to financials, the company had decreased its asset allocation percentage on equity from 98% (October 2010) to 90.96% (December 2010). NAVF financials also said that company’s net current asset value stood at Rs.1.113 billion as at 31 December 2010.

NAVF which is a 10 year, closed-ended unit trust fund, launched its Initial Public Offering (IPO) in early September 2009. The fund raised Rs. 537.56 million through the IPIO and commenced investment activities in end-September 2009. The primary objective of the fund is to provide long-term capital appreciation by investing in a portfolio of listed shares. In accordance with this objective, investments were carried out, and the fund had invested 82.5% of the portfolio in listed shares by the end of December 2009.

source - www.dailymirror.lk

With Tamil Tigers slain, booming Sri Lanka makes up for lost time

Eric Ellis
April 2, 2011
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What to call the emerging Sri Lanka?

The country seems like a construction zone, with ports, highways and airports sprouting and former rebel strongholds blossoming, writes Eric Ellis in Colombo.

SO TINY Sri Lanka has made it to today's Cricket World Cup final, to face mighty India in Mumbai in the first all-south Asian final.

With India emerging as an economic superpower and relations with Pakistan, also a semi-finalist, thawing, it's a symbolic triumph for this fast-rising region and for Sri Lanka, in particular, just two years after the end of its 25-year civil war with Tamil Tiger insurgents.

The talented team from Colombo may well start favourite to triumph over its behemoth of a neighbour, whose progression to the final has been far less emphatic.

Advertisement: Story continues below So it's party time in Colombo, a city as buzzy as it has been for decades, where Sri Lankans are spending a delayed peace dividend.

During long years of siege, the island was abandoned by foreign investors and by locals, too, who sought their fortunes overseas.

Colombo became sleepy and dilapidated, a place that had seen its best days when London's Raj ruled here. The once grand banking halls of Fort, Colombo's financial district, were sad places, off limits to visitors who needed to pass airport-style security gantries to get in. They found a ghost town pock-marked by Tamil Tiger suicide bombers.

A pariah to Western investors, Colombo's best business friends became Iran, Libya and China.

Today's perkiness is also a long way from this same week four years ago when Ricky Ponting's Australia walloped Sri Lanka in the 2007 World Cup final in Barbados. Sri Lanka's President, Mahinda Rajapaksa, had journeyed to Bridgetown hopeful of victory, only to be embarrassed by a Tamil Tiger air raid on Colombo as the match got under way.

The raid was designed to humiliate the Rajapaksa regime, then a wobbly two years in power, and it did. I was in Colombo that night of high farce. The government cut Colombo's power supply to deny Tiger pilots visibility. But it made little difference, because Sri Lankans knew that the state utility has always been a boondoggle for fat-cat bureaucrats with snouts in the trough, so many people rely on diesel generators. No sooner had the power been switched off and Colombo was again bathed in light.

Hotel managers were told not to tell guests what was happening, as anti-aircraft towers blazed away, at one point imagining a Malaysian flight landing from Kuala Lumpur to be a Tiger plane.

Four years on, the Tigers have been vanquished. An embarrassed Rajapaksa told me last year he was furious about the raid. He accelerated the war from that night and by May 2009, he had won. Rajapaksa faces many claims of human rights abuses - but the majority Sinhalese have handed him unprecedented power, expecting him to deliver the prosperous peace he promised.

Two years later, he's probably Asia's most secure strongman. His sprawling family make hay in business as democratic opponents and possibly democracy itself is neutralised, the Rajapaksa model being autocratic Singapore.

But weary of war and sick of being poor, Sri Lankans seem prepared to give the Rajapaksas free rein, so long as the prosperity their family enjoys is shared by them, too.

So far that seems to be happening. Playing China off against India Inc against the West looking again for greenfields entry to emerging markets, Sri Lanka seems like a construction zone, with new ports, highways and airports sprouting island-wide. The former Tiger strongholds of the Tamil north are also going ahead and Sri Lanka feels very pleased with itself.

Last year, the island's economy grew a China-like 8 per cent and is slated to expand at least that again this year, and outstrip it next year. Share prices on the Colombo stock exchange - long little more than a sleepy luncheon club of local plutocrats - have doubled over the past year, after doubling in the first year of peace. Likewise property prices. Credit has expanded by a third on last year as Sri Lankans borrow to fund investment.

It is no longer intimidating to visit Sri Lanka. For the first time in this correspondent's 20 years of visiting Sri Lanka, there were no military checkpoints on a recent trip into Colombo from the airport; there used to be up to 10 at the twitchy height of the war.

Tourists are flooding back, up by 50 per cent this past year, and hotel tariffs are three times what they were during wartime. Back then, the only foreign hotel chain in Colombo was a tired old Hilton, a ratty Taj from India and a poor excuse for a Holiday Inn. Now the luxury Shangri-La chain is developing the downtown military barracks as well as a south-coast resort in Rajapaksa's hometown, Hambantota, which has been redeveloped by $2 billion in aid from China. Marriott and Hyatt also want to build there.

The island's long-neglected south is becoming the place to invest, partly to cosy up to the Rajapaksas. The area is where Sri Lankan leaders have long raised their armies. But since Rajapaksa and his clan came to office, their hold cemented by their war triumph, their home region has seen China developing the area as an alternative trans-shipment centre for finished mainland goods and oil from the Middle East to US-allied Singapore, several expensive day's sail further east.

All of this is leading to a dilemma - what to call this emerging Sri Lanka?

Given its tragic recent past, calling it a tiger economy like its similarly booming neighbours would seem to be out.

source - www.smh.com.au

Sri Lanka bourse at 3-week highs; rupee flat

* Foreign investors net buyers for second straight session

* Investor still worried on inflation, volumes hurt

* Rupee flat for seventh straight session

COLOMBO, April 1 (Reuters) - Sri Lanka's stock market rose to a three-week high on Friday as investors bought large-cap shares with offshore investors buying in for a second straight session.

The island's main share index closed 2.09 percent or 151.1 points firmer at 7,377.22, highest since March 11. It hit a record closing high of 7,811.82 on Feb 14.

Government data showed March inflation year-on-year rose beyond forecasts to a 26-month high of 8.6 percent. [ID:nL3E7EV1KF]

Analysts said worries over inflation may hurt the market with a possible supply disruption due to ongoing turmoil in the oil-producing Middle East and North Africa. Oil rose on Friday, with Brent nearing $118. [ID:nL3E7F10U8]

The day's turnover was at 1.6 billion Sri Lanka rupees ($14.5 million), less than last year's average of 2.4 billion rupees and well below this year's daily average is 3.2 billion rupees.

Foreign investors were net buyers of shares worth 162.6 million rupees on Friday, the second straight session. They have sold a net 6.9 billion in 2011, and a record 26.4 billion in 2010.

The bourse is still Asia's best performer in 2011 with an 11.2 percent gain, after bringing in the region's best return of 96 percent last year.

Traded volume was 93 million, against a five-day average of 59.4 million shares. The 30-day and 90-day average trading volumes were 64.2 million and 70 million, respectively. Last year's daily average volume was 67.9 million.

The bourse is trading at a forward price-to-earnings (P/E)ratio of 15.2, one of the highest among emerging markets, compared with an average 12.5 in Asian markets and 11.7 for global emerging markets, Thomson Reuters StarMine data showed.

The rupee closed flat at 110.38/40 a dollar from Thursday's close after it trades at 110.20 on exporter conversions but bounced back on state bank buying, dealers said.

FACTORS TO WATCH:

- Impact of the ongoing Middle East/North Africa turmoil on stocks and rupee

- Impact of rising inflation

source - www.reuters.com

Sri Lanka shares close up 2-pct

Apr 01, 2011 (LBO) - Sri Lankan shares closed sharply higher Friday with interest in banking and manufacturing stocks, brokers said.

The All Share Price Index closed at 7,377.22, up 2.09 percent (151.10 points) while the more liquid Milanka index rose 2.18 percent (149.89 points) to close at 7,024.63, according to stock exchange provisional figures.

Turnover was 1.6 billion rupees.

John Keells Holdings, which has a heavy weighting on the benchmark index, closed at 295.60 rupees, up 10 rupees with 356,900 shares done while Guardian Capital Partners closed at 319.60 rupees, up 29 rupees.

Distlleries Company closed at 182.30, up 2.30 rupees. There was a crossing of 800,000 shares of Distlleries Company at 180 rupees each.

PC House was actively traded, closing at 19.50, up 2.40 rupees with 6.2 million shares done.

Union Bank of Colombo, which began trading during the week, was also heavily traded, closing at 36.50 rupees, up 70 cents.

Central Finance fell 31.10 to close at 1,242.60 rupees.

source - www.lbo.lk

Welcome return of foreign investors as Bourse ends in green in FY11

The Colombo stock market yesterday saw a welcome return of foreign investors and more importantly ending the 31 March, 2011 financial year on a positive note.

Foreign investors purchased Rs. 794 million worth of shares, mainly on Sampath Bank, and selling amounted to only Rs. 101.3 million resulting in a net inflow of Rs. 693 million.

The benchmark ASI gained by 0.46% and Milanka Index more sharply by 0.9% whilst turnover was a respectable Rs. 2.19 billion. Yesterday’s gain ended three consecutive days of dips.

The net foreign inflow yesterday was the first in 12 sessions hence investors and brokers were upbeat. Year to date however foreigners have been net sellers to the tune of Rs. 7.1 billion on top of a record Rs. 26.4 billion in 2010.

Colombo remains Asia’s best performer in 2011 with an 8.9 percent gain, after bringing in the region’s best return of 96 percent last year.

NDB Stockbrokers headlined its report saying “Financial year ends in green” and noted that as expected, blue chip counters recorded gains pushing the MPI up.

“However, the momentum may slow down with the end of financial year. Illiquid small and mid cap counters might get attention with the end of the deadline to reduce credit at broking houses,” NDB Stockbrokers added.

Bank, Finance & Insurance sector was the main contributor to the market turnover (due to Sampath Bank, Central Finance, Union Bank & HDFC Bank) with the sector index increasing 1.21%.

Diversified sector also contributed to the market turnover (due to John Keells Holdings), with the sector index increasing 0.74%. Profit taking was witnessed in Ceylon Cold Stores to a certain extent after making substantial gains over the last couple of days.

Analysts said a foreign fund was scouting for quantities of JKH which saw its share price move up by Rs. 5.70 to close at Rs. 285.60 after peaking to an intra-day high of Rs. 287. Some of the other blue chips to gain were Aitken Spence, Hemas, HNB, Cargills, SLT and Dockyard.

Despite Wednesday’s fiasco at the AGM, Commercial Bank peaked to a high of Rs. 268 (voting) but closed down by Rs. 1 to Rs. 265.80.

Meanwhile the rupee closed firmer at 110.38/40 a dollar from Wednesday’s close of 110.35/37 on importer dollar demand, dealers said.

Indra Silva sells Sampath stake for profit

High networth investor and Indra Traders-fame Indra Silva yesterday sold a small stake in Sampath Bank to book profit.

Around 1.5% stake of Sampath Bank amounting to 2.37 million shares traded for Rs. 687.4 million. Of the quantities traded there were five crossings involving 2.14 million shares at Rs. 290 each. Sampath’s share price rose by Rs. 2.10 (0.73%) and closed at Rs. 287.

Buyer was foreign as non-national holding of Sampath rose by 2.3 million shares. As at 31 December, 2010, Indra Silva had around 7% stake amounting to 10.8 million shares in Sampath Bank.

source - www.ft.lk

Lanka’s trade deficit contracts 10%, as apparel exports surge without EU GSP+

* Garment exports to Europe up 143.5% in January, oil bill down 10.4%

* Worker remittances up 20.1%

* Reserves US$ 6.7bn in February, enough for exports for  nearly six months

No, this is not an April Fools’ Day Joke. Sri Lanka’s trade deficit contracted in January 2011 on the back of a surge in export earnings, driven by the post GSP Plus apparels sector, while imports grew at a much slower pace, according to official external sector data released yesterday (31). Apparel exports to the EU had increased sharply, up 143.5 percent, without the GSP Plus trade concession which was withdraw last August.

The trade deficit for January 2011 reached US$ 687.6 billion, down 10.2 percent from US$ 765.9 million a year ago.

Export earnings in January 2010 increased sharply, up 72.4 percent to US$ 813.4 million from US$ 471.7 million a year ago. Earnings from apparel exports grew 121.9 percent to US$ 385.4 million from US$ 173.7 million, the Central Bank said, releasing its External Sector Review for January 2011.

The import bill grew at a much slower pace, up 21.3 percent to US$ 1,501.1 million in January 2011 from US$ 1,237.7 million a year earlier.

Sceptics...

Central Bank Deputy Governor Dharma Dheerasinghe earlier this week told a public forum that exports had increased by 72.4 percent year-on-year in January and that the trade deficit had contracted, but many were sceptical as it was an unusual trend. Even a top official close the government said he was surprised to hear Dheerasinghe make such a statement saying, ‘Let’s wait for the official data’. So, here it is; the official data.

Exports...

"The largest contribution to the growth in exports in January 2011 was from the industrial sector, reflecting increases in all major categories of industrial exports. Continuing the increasing trend observed since the withdrawal of the GSP+ scheme in August 2010, earnings from textile and garment exports increased by 121.9 percent to US$ 385 million in January 2011, depicting a 143.5 percent increase to EU and 95.8 per cent increase to USA," the Central Bank said.

"Exports of rubber products increased by 118.7 percent, year-on-year, reflecting higher levels of domestic value addition, particularly in the form of solid tyres and rubber gloves. Other key categories of industrial exports such as food, beverages and tobacco, machinery and equipment and petroleum based products also performed well in January 2011," it said.

"Earnings from agricultural exports grew by 28.9 percent to US$ 184 million in January 2011, recording a healthy growth in all major sub sectors mainly due to higher prices. The average export prices of tea and rubber remained high at US$ 4.79 per kg and US$ 4.89 per kg, respectively. However, rubber export volumes declined mainly due to tightened supply as well as the increased demand from the domestic industries for the manufacture of rubber based products. Earnings from minor agricultural exports increased by 20.5 percent to US$ 31 million in January, 2011 mainly due to higher prices fetched by cocoa products, essential oils and unmanufactured tobacco and increased volumes of fruits, cinnamon and vegetables."

Imports..

"Expenditure on imports of intermediate goods increased 15.7 percent to US$ 812 million in January 2011. The average import price of crude oil increased by 22.6 percent to US$ 95.33 per barrel in January 2011, though import volume declined, the Central Bank said.

The oil bill for January declined 10.4 percent in January 2011 to US$ 364.9 million from US$ 407.1 million a year earlier.

"Imports of textiles increased by 55.2 percent in January 2011 indicating a better outlook for the garment industry. Expenditure on fertilizer imports also increased in January 2011, mainly due to higher import volumes.

"Expenditure on imports of consumer goods increased significantly during the month of January 2011 led by non-food consumer goods, particularly, motor vehicles and electrical equipment. Import expenditure on food and drink also increased with the upward trend in food prices of sugar, wheat grain and milk products in the international market. All sub categories of investment goods imports increased in January 2011," it said.

Reserves...
Worker remittances had increased 20.1 percent to US$ 377 in January 2011 from US$ 313.1 million a year earlier but were not enough to cover the trade deficit.

"Gross official reserves continued to remain above the targeted level and stood at US$ 6.7 billion by end February 2011 without Asian Clearing Union (ACU) balances. Based on the previous 12-month average expenditure on imports of US$ 1,167 million per month, the gross official reserves without ACU balances were equivalent to 5.8 months of imports," the Central Bank said.

Outlook...

Last January, the Central Bank said the Balance of Payments would record a US$ 350 million surplus in 2011. FDIs in 2010 are estimated at US$ 500 million, reflecting declining global capital flows, but FDIs and inflows to the private sector are expected to reach US$ 1.5 billion this year. However, the IMF estimates FDI inflows to reach US$ 900 million this year.

Long term inflows to the government this year are expected to reach US$ 1.7 billion.

The relaxation of exchange controls and improving investment climate would also attract portfolio investments in to the country. Steps have been taken by the government to improve Sri Lanka’s sovereign ratings and also improve its World Bank Doing Business ranking from the current 102nd position out of 183 countries to 30th by 2016.

The rupee which appreciated 3.2 percent against the dollar is expected to appreciate further this year if the expected foreign currency inflows materialise. This is expected to make imports less expensive and would be a benefit as oil prices continue to increase.

Also, a stronger rupee would help the government meet its foreign debt servicing obligations at a lower cost, thus helping to maintain fiscal discipline so that it would not add pressure on inflation through domestic borrowings as it did in the past.

However, exporters complain of loss of competitiveness as the rupee strengthens, but January trade data suggests otherwise.

source - www.island.lk

UAL shares change hands

Two major trades of Union Assurance took place yesterday, as nearly 300, 000 shares of the company changed hands.

According to brokers, the seller is believed to be ACW Insurance, which held 328, 780 shares in Union Assurance as at December 31, 2010. Unconfirmed reports suggested that the buyer of the shares was John Keells Holdings.

The transaction took place in two major trades—146, 200 shares at Rs.160 and 150, 000 shares at Rs.160. The selling price was Rs.9.90 down from the closing price of the previous day. The two trades contributed Rs.47 million to the day’s turnover.

According to Colombo Stock Exchange data, 331, 200 Union Assurance shares traded during the day.

In the mid part of this month, John Keells Holdings upped their stake in Union Assurance to 95.6 percent from 80.8 percent or 5.5 million shares by purchasing Aviva NDB stake, each share at Rs.150.

source - www.dailymirror.lk

Financial year ends in green

As expected, blue chip counters recorded gains pushing the MPI up. However, the momentum may slow down with the end of financial year. Illiquid small and mid cap counters might get attention with the end of the deadline to reduce credit at broking houses.

Bank, Finance & Insurance sector was the main contributor to the market turnover (due to Sampath Bank, Central Finance, Union Bank & HDFC Bank) with the sector index increasing 1.21%.

Sampath Bank was the main contributor to the market turnover with five crossings (2,140,000 shares at Rs 290). The share price increased by Rs 2.10 (0.73%) and closed at Rs 287. Foreign holding of the company increased by 2,302,000 shares. Diversified sector also contributed to the market turnover (due to
John Keells Holdings), with the sector index increasing 0.74%.

Profit taking was witnessed in Ceylon Cold Stores to a certain
extent after making substantial gains over the last couple of days.

Overseas Realty announced a final dividend of Rs 0.30 per share.

source - www.dailymirror.lk

We invest heavily to ensure quality – ACL Cables

Having pioneered cable manufacturing in Sri Lanka since 1962, ACL Cables PLC, has continuously introduced impressive and cutting edge products to fill a portfolio that is unmatchable in the island. ACL Cables has held an undisputed leadership position in the region since inception with a product range that includes household and building wires, unarmed power cables, flexible cords and wires, aerial bundle cables, fire rated cables (sold as ACL Fire Guard) which was introduced for the first time in Sri Lanka, with improved quality parameters.

ACL Fire Guard has proved to be perfect for electrical installations in factories, hotels, commercial structures, homes at no extra cost. Talking about the product benefits, ACL Cables PLC Managing Director Suren Madanayake said that most fires originate owing to accidents, human errors and natural disasters and have a tendency to attack electrical installations first. They then easily spread through cables covered with ordinary PVC. ACL Fire Guard, however, is the only cable that prevents the spread of fire due to such accidents, keeping lives and property safe.

Madanayake explained, “We’ve invested millions of rupees in ensuring the quality of this cable and have established a comprehensive and fully fledged testing facility and laboratory for the product in Sri Lanka. ACL Fire Guard is manufactured through high technology and machinery, in order to deliver a fire rated cable that is comprehensively tested and comes with a certificate guaranteeing quality.”

According to Madanayake, the company was one of the first in the region to initiate such a strong product and one of the few who could maintain the quality as raw materials, such as PVC, are manufactured by ACL. “We also plan to invest in a copper rod manufacturing plant. This is a great accomplishment, not just for the company, but for the country as a whole given that we’re now on a forward march. We’ve proven that our vision goes beyond borders by providing some big companies around the world with high maintenance security through our cables,” he said.

Having understood excellence, quality and efficiency, ACL cables have won many leading international awards in recent times; ACL cables was the world class winner of International Asia Pacific Quality Award in 2008 in the Large Manufacturing Category and the National Quality Award in 2007. On the topic of market share, Madanayake believes that the company’s undisputed leadership position is attributed to the company’s ability to maintain the capacity of manufacturing reliable, quality products.

source - www.dailymirror.lk

Indices record gains

The Colombo shares showed signs of improvement yesterday with both indices recording gains. ASI gained 33.40 points (+0.46 percent) to close at 7,226.12 while liquid MPI jumped by 62.96 points (+0.92 percent) to end trading at 6,874.74.

Daily market turnover stood at Rs 2.2 billion.

Sampath Bank Plc was the top contributor to the turnover with an amount of Rs 687.4 million. The counter recorded five crossings of 2.1 million shares at a price of Rs 290.00. Furthermore Central Finance Company Plc (Rs 155.8 million) and Union Bank Plc (Rs 90.2 million) made notable contributions to the daily turnover. In the meantime Guardian Capital Partners Plc, Ceylon Grain Elevators Plc and PC House Plc attracted heavy investor interest during the day.

High foreign activity level was seen during the day and foreign participation was 20.4 percent of the total market activity. At the end of the day foreign purchases outweighed foreign selling by Rs 692.4 million after 10 consecutive days.

Price appreciation in index heavy counters such as John Keells Holdings Plc (up Rs 6.10), Bukit Darah Plc (up Rs 12.40) and Hatton National Bank Plc (up Rs 10.00) pulled up the overall market performances. - Lanka Securities

source - www.dailynews.lk