Prasad Polwatte and Asanka Liyanage
The Sri Lankan economy is bouncing back with a projected nine percent growth in 2011, in the backdrop of a further fillip through increased foreign direct investments or FDIs with the surge in tourist inflows.
The Foreign Direct Inflows in the first quarter of 2011 totalled US $ 236 million. It was reported that the local financial markets were more stable with improved liquidity and declines in interest rates since the beginning of 2010. The exchange rates were fairly stable during the period and the same trend is likely to continue in 2011. On the other hand financial markets encourage long-term borrowings through Initial Public Offering (IPOs) of shares and debentures which contributed to the downward trend in interest rates.
The banking sector sustained its earnings via investment income from government securities and equities.
In this article an effort has been made to compare and contrast the performances of Licensed Commercial Banks (LCBs) in the first half 2010 and 2011.
Both state and private LCBs overall performances were comparatively higher and almost all key performance indicators showed an improvement.
Except Seylan all LCBs have increased their profits. Significant increases are noticeable in the performance of the two state banks and Commercial Bank and Pan Asia Bank of the Private Sector. The main reason for this increases were the reduction in provisioning for bad and doubtful debts and loans written off compared to previous year. However, the increments in interest income and interest expenses were fairly moderate.
In the case of DFCC Bank the results of 2010 included profit relating to the sale and change of classification of part of the Bank’s shareholding in Commercial Bank Ceylon PLC (the contribution to profit after tax from this CBC share disposal was Rs 5,282 million).
Generally, LCBs performances have improved in all measures and paved the way to set aside money for loan defaults and improved liquidity for on lending.
Even though an increasing trend was visible in the growth in Advance portfolio of the banks (Approximately 20% to 30%) the interest income showed only a marginal increase because of the decrease in Average Weighted Prime Lending Rates (AWPLR).
Further, LCBs were more concentrated on government securities and that especially in Treasury Bills, of which interest rates have decreased considerably during the period.
LCBs have shown an average deposit growth around 20% to 30% in the first half of 2011, and also, the same growth is reported for loans and advances. These were remarkable achievements, when deposits during the period have experienced unattractive low interest rates. In sharp contrast the growth in loans and advances were not adequate with low interest rates offered by banks.
Apart from the Commercial and Nations Trust Bank shares, prices of all other LCB shares have declined during the period. This reduction in prices might be mainly due to overall declining trends in prices in the Colombo Stock Exchange.
However, even with the drop market prices of LCBs alone were positioned well above their respective book values. Due to the improved profits in the first six months of 2011, all LCBs have made a remarkable improvement in their ROA and ROE except Seylan. Banks exercise a delegated function of CBSL as a monitor to ensure that firms use the resources allocated to them effectively.
They also play an important role in sharing risk in the economy by diversifying and thereby minimize market fluctuations during the period. Key performance indicators showed an overall improvement in the first half 2011. However it was mainly due to the efficient recovery actions rather than profits generated from core banking activities. Therefore, a greater challenge persists for LCBs to sustain and improve upon the first half performance to the next lap due to external shocks, immerging competitors, new regulations and tax structure.
source - www.dailynews.lk
Monday, October 3, 2011
Pelwatte Chief implores blue chips to invest in milk, sugar
Says self sufficiency could save Rs. 70 billion annually
By Ravi Ladduwahetty
Chairman of Pelwatte Diaries and Director Pelwatte Sugar, Ariyaseela Wickremanayake yesterday implored blue chips to invest in sugarcane and milk industries, claiming that self sufficiency in both would lead to saving Rs. 70 billion annually spent on imports.
"This is an absurd situation where this country is spending US$ 300 million (over Rs. 30 billion) on importing milk powder and a further US$ 400 million (over Rs. 40 billion) on importing sugar, and this could be saved if efforts are made to reach self sufficiency in both which would be instrumental in saving US$ 700 million or Rs. 70 billion," he told The Island Financial Review yesterday.
Commenting on the milk industry, he said that all that has to be done would be for six top blue chips to invest in six milk producing factories in the districts of Trincomalee, Jaffna Anuradhapura and Polonnaruwa where the milk could be collected from farmers on the out-grower basis which will add 100% value in this country .
This is vital in the context of the deficit of imports over exports exceeding gradually where it was US$ 2.5 billion in 2009, US$ 5.5 billion in 2010 and the projected figure for 2011 is expected to be in the region of US$ 10-12 billion. This is where blue chip corporates should be investing doing instead of only investing overseas, he quipped.
In a startling revelation, he also said that this country had the cattle population of 1.5 million which could lead to self sufficiency but the drawback was that they were not milked by farmers due to the imported milk being offered cheaper.
This is absurd where New Zealand dumps milk here which is subsidized by the Government and sold at Rs. 30 per litre where the farmer could produce it at Rs. 50, but the heart of the matter is that the price of a litre of the same milk in New Zealand is the equivalent of Rs. 390. When the Government should be subsidizing the local milk farmer, it is subsidizing the Kiwi milk farmer which is economic terrorism, he said in indignation.
He also said that investments by corporates should also be in the sugarcane industry where six companies could see Sri Lanka through towards self sufficiency. "Sri Lanka produces a mere 15% of the national sugar requirement at present which originate from Pelwatte ( 10%) and Sevanagala ( 5%) .
What is also striking is that sugarcane is a grass and which grows anywhere in Sri Lanka and could be cultivated in any part of the country which means that factories could be established in any part of the country including the North and the East, he pointed out.
Each of the sugar cane factories would give direct and indirect employment to 175,000 people which means that six factories would could provide employment to over a million people.
As reported earlier in The Financial Review, Pelwatte Diaries is planning to raise around Rs. 500 million through an IPO soon
source - www.island.lk
Sunday, October 2, 2011
UPDATE 2-Sri Lankan president says natural gas found offshore
* More drilling needed to see if commercial-Cairn
* Cairn: Sri Lanka's first full hydrocarbon find
* Govt expects better bids for remaining Mannar blocks (Adds Cairn confirmation)
By Ranga Sirilal and C. Bryson Hull
COLOMBO, Oct 2 (Reuters) - Sri Lankan President Mahinda Rajapaksa on Sunday said natural gas has been found off the Indian Ocean island nation in the Mannar Basin, in a well Cairn India Ltd. said required more exploration to see if it is commercially viable.
Cairn, a subsidiary of London-listed Cairn Energy Plc , said the find was Sri Lanka's first confirmed hydrocarbon discovery.
"Explorers have informed me that they have found a gas deposit in the seabed," presidential spokesman Wijayananda Herath quoted Rajapaksa as saying to an audience in the hill city of Kandy.
Cairn Lanka, a subsidiary of Cairn India, has one of eight blocks in the Mannar Basin and began drilling in August.
It struck a 25-metre hydrocarbon column showing primarily gas with "other liquid hydrocarbon potential" in the CLPL-Dorado-91H/1z wildcat well, drilled at a water depth of 1,354 metres (4,442 feet).
"Further drilling will be required to establish the commerciality of the discovery," Cairn said in a statement.
In 2007, the government gave one Mannar block each to India and China, but neither has drilled. The remaining five blocks are to be awarded by tender.
"We are optimistic that this will be commercially successful," Petroleum Industries Minister Susil Premajayantha told Reuters. "Now with this discovery, we can get good competition and offers for the remaining five blocks when we go for tendering."
Interest in the blocks has grown, but most operators have been happy to let Cairn try its luck before making any commitments while the government smooths an erratic oil and gas regulatory regime, diplomats following the exploration in Sri Lanka have told Reuters.
It is unclear whether the find will affect terms of a deal by London-listed miner Vedanta Resources to take a majority stake in Cairn India.
Sri Lanka's government has said seismic data shows the potential for more than 1 billion barrels of oil under the sea in a 30,000 sq km area of the Mannar Basin, off the island's north western coast.
Sri Lanka produces no oil and is dependent on imports, which cost it $3 billion in 2009. Since the end of a 25-year war with Tamil separatists two years ago, the government has tried to reinvigorate oil and gas exploration.
American and Russian companies from the mid-1960s to 1984 explored the Cauvery Basin off the northern shore, but only traces were found and no commercial oil was produced.
Violence onshore from Sri Lanka's civil war with the Tamil Tigers ended offshore exploration there.
There are nearly 30 operating wells on the Indian side of the Cauvery Basin, and Calgary-based Bengal Energy Ltd. has exploration rights for 1,362 sq km there. Sri Lanka is hopeful that success will be reflected on its side of the field.
There is also speculation that Sri Lanka's eastern coastal shelf has major oil and gas potential, but there is no seismic data yet to back it up. (Additional reporting by Devidutta Tripathy in New Delhi; Writing by Bryson Hull. Editing by Jane Merriman)
source - www.reuters.com
* Cairn: Sri Lanka's first full hydrocarbon find
* Govt expects better bids for remaining Mannar blocks (Adds Cairn confirmation)
By Ranga Sirilal and C. Bryson Hull
COLOMBO, Oct 2 (Reuters) - Sri Lankan President Mahinda Rajapaksa on Sunday said natural gas has been found off the Indian Ocean island nation in the Mannar Basin, in a well Cairn India Ltd. said required more exploration to see if it is commercially viable.
Cairn, a subsidiary of London-listed Cairn Energy Plc , said the find was Sri Lanka's first confirmed hydrocarbon discovery.
"Explorers have informed me that they have found a gas deposit in the seabed," presidential spokesman Wijayananda Herath quoted Rajapaksa as saying to an audience in the hill city of Kandy.
Cairn Lanka, a subsidiary of Cairn India, has one of eight blocks in the Mannar Basin and began drilling in August.
It struck a 25-metre hydrocarbon column showing primarily gas with "other liquid hydrocarbon potential" in the CLPL-Dorado-91H/1z wildcat well, drilled at a water depth of 1,354 metres (4,442 feet).
"Further drilling will be required to establish the commerciality of the discovery," Cairn said in a statement.
In 2007, the government gave one Mannar block each to India and China, but neither has drilled. The remaining five blocks are to be awarded by tender.
"We are optimistic that this will be commercially successful," Petroleum Industries Minister Susil Premajayantha told Reuters. "Now with this discovery, we can get good competition and offers for the remaining five blocks when we go for tendering."
Interest in the blocks has grown, but most operators have been happy to let Cairn try its luck before making any commitments while the government smooths an erratic oil and gas regulatory regime, diplomats following the exploration in Sri Lanka have told Reuters.
It is unclear whether the find will affect terms of a deal by London-listed miner Vedanta Resources to take a majority stake in Cairn India.
Sri Lanka's government has said seismic data shows the potential for more than 1 billion barrels of oil under the sea in a 30,000 sq km area of the Mannar Basin, off the island's north western coast.
Sri Lanka produces no oil and is dependent on imports, which cost it $3 billion in 2009. Since the end of a 25-year war with Tamil separatists two years ago, the government has tried to reinvigorate oil and gas exploration.
American and Russian companies from the mid-1960s to 1984 explored the Cauvery Basin off the northern shore, but only traces were found and no commercial oil was produced.
Violence onshore from Sri Lanka's civil war with the Tamil Tigers ended offshore exploration there.
There are nearly 30 operating wells on the Indian side of the Cauvery Basin, and Calgary-based Bengal Energy Ltd. has exploration rights for 1,362 sq km there. Sri Lanka is hopeful that success will be reflected on its side of the field.
There is also speculation that Sri Lanka's eastern coastal shelf has major oil and gas potential, but there is no seismic data yet to back it up. (Additional reporting by Devidutta Tripathy in New Delhi; Writing by Bryson Hull. Editing by Jane Merriman)
source - www.reuters.com
Sri Lanka finds natural gas deposit offshore: president
Oct 02, 2011 (LBO) - Sri Lankan president Mahinda Rajapaksa has announced that a large natural gas deposit has been found in offshore waters, a presidential spokesman said.
He made the announcement in a speech at a meeting for local government polls in Kandy in the central hills.
The spokesman quoted Rajapaksa as saying an oil exploration firm drilling test wells in offshore waters had informed the government about the discovery Sunday morning.
"I was getting ready to come to Kandy early this morning when I got good news that I thought of sharing with the people in Kandy," Rajapaksa was quoted as saying.
"The company doing test drilling in the Gulf of Mannar informed me this morning that they have found a huge deposit of (natural) gas in the sea bed.
"This will help us to meet the country's energy requirements."
Rajapaksa did not give further details but Cairn India began drilling its first test well in the Mannar Basin off the north-west coast in August.
The spokesman quoted Rajapaksa as saying the firm had also begun drilling the second test well.
The discovery announced Sunday is the first since intermittent exploration for oil and gas began in the 1970s.
source - www.lbo.lk
He made the announcement in a speech at a meeting for local government polls in Kandy in the central hills.
The spokesman quoted Rajapaksa as saying an oil exploration firm drilling test wells in offshore waters had informed the government about the discovery Sunday morning.
"I was getting ready to come to Kandy early this morning when I got good news that I thought of sharing with the people in Kandy," Rajapaksa was quoted as saying.
"The company doing test drilling in the Gulf of Mannar informed me this morning that they have found a huge deposit of (natural) gas in the sea bed.
"This will help us to meet the country's energy requirements."
Rajapaksa did not give further details but Cairn India began drilling its first test well in the Mannar Basin off the north-west coast in August.
The spokesman quoted Rajapaksa as saying the firm had also begun drilling the second test well.
The discovery announced Sunday is the first since intermittent exploration for oil and gas began in the 1970s.
source - www.lbo.lk
United Motors seeking more acquisitions
United Motors PLC (UML) is looking to diversify into other areas – especially Fast Moving Consumer Goods (FMCG) and trading firms, riding high on great sales in its vehicles, officials said.
"We are eyeing other such opportunities in areas like FMCG and trading,” a UML official told the Business Times, noting that UML’s core business, auto trade, is doing quite well due to duty concessions in the vehicle's import sector.
"This is why we are also eyeing other areas. We are quite confident to pursue other areas as we have more than stabilised in the specialised sector," he added. He said that UML is looking at acquisitions in any sector, but they are not keen on tourism. “This is because many are entering into this area and it’s also not in our forte,” he added.
He added that they had dropped the J. L. Morison acquisition plan, reported by the Business Times earlier, as the price range was not right about two weeks ago. The UML official added that Morison's attraction was its businesses in importing and distributing finished pharmaceuticals, toiletries, agro chemicals, medical aid, and other consumer products.
When the Business Times contacted S.I. Abeywira, Chairman and 40% shareholder of J.L. Morison, recently he said that the company isn't for sale, but that if they get a decent offer they will sell.
Morison's was also eyed by entrepreneur and businessman, Dhammika Perera but his bid has not been upto the major share owners’ interest, who according to the sources want Rs 5,500 per share.
source - www.sundaytimes.lk
"We are eyeing other such opportunities in areas like FMCG and trading,” a UML official told the Business Times, noting that UML’s core business, auto trade, is doing quite well due to duty concessions in the vehicle's import sector.
"This is why we are also eyeing other areas. We are quite confident to pursue other areas as we have more than stabilised in the specialised sector," he added. He said that UML is looking at acquisitions in any sector, but they are not keen on tourism. “This is because many are entering into this area and it’s also not in our forte,” he added.
He added that they had dropped the J. L. Morison acquisition plan, reported by the Business Times earlier, as the price range was not right about two weeks ago. The UML official added that Morison's attraction was its businesses in importing and distributing finished pharmaceuticals, toiletries, agro chemicals, medical aid, and other consumer products.
When the Business Times contacted S.I. Abeywira, Chairman and 40% shareholder of J.L. Morison, recently he said that the company isn't for sale, but that if they get a decent offer they will sell.
Morison's was also eyed by entrepreneur and businessman, Dhammika Perera but his bid has not been upto the major share owners’ interest, who according to the sources want Rs 5,500 per share.
source - www.sundaytimes.lk
Blue Diamonds upbeat despite losses
Perfect method of setting coloured gems like `floating diamonds’
Blue Diamonds Jewellery Worldwide PLC whose shares, both voting and non-voting, have been actively traded on the Colombo Stock Exchange recently will have its 21st annual general meeting on October 7 with accumulated losses of Rs.902.7 million in its books and a loss of Rs.14.2 million incurred in the year ended March 31, 2011, down from a loss of Rs.20.1 million a year earlier.
The company last posted a modest profit of Rs.10.4 million in 2008, up from a profit of Rs.8.5 million the previous year but has since had three consecutive loss making years.
However, Mr. W.G.B.M. Ranaweera, the company’s Chairman/MD, has told shareholders in the annual review that "barring any unforeseen circumstances, your company is heading into a profitable level in the very near future."
Future plans include the use of coloured gemstones in jewellery using the carbonlokd (floating diamonds) setting concept which has already been developed by their production team.
Ranaweera said that given the global economic recession, there has been a trend among the affluent to invest in precious metals and non-financial instruments rather than stocks, bank and government securities etc.
Also, the economic boom in China and India had contributed heavily to the increased global demand for precious metals, especially gold.
"These factors have resulted in the increase of the prices of gold by 30% during the period under review.
Economists forecast a further escalation of prices of precious metals to its highest in future," he said.
Alongside this, the international demand for diamond jewellery, a luxury product, was slowing with consumers looking for alternatives. Their company mainly exports its products to the Middle East and the uncertain market conditions had an adverse impact on their export performance.
The biggest challenge the company faced now was price escalation of important raw materials – gold, diamonds and other gemstones. The opinion in the jewellery trade is that after the price of gold reaches a level of US$ 2,500 per troy ounce, a price slide in gold is likely.
"Another setback that affected the jewellery industry in Sri Lanka is the lack of qualified & trained staff in all areas of the jewellery industry. Due to the shortage of experienced gemstones setters, craftsmen, polishers and staff for soldering & laser engraving, major manufacturers find it difficult to retain staff after an extensive training program which is very costly as they are offered employment abroad," Ranaweera said.
He thanked shareholders for the confidence placed in the company when 62% of a rights issue they floated last December was subscribed infusing Rs.187.4 million equity finance into the business. The business plan they issued along with the rights issue documents has been initiated and positive results seen so far.
"The factory automation process has commenced and new machinery and equipment ordered to upgrade the factory production sections. Our marketing team made vigorous successful efforts in developing new markets such as India during the period and products were exported to the Indian market with a significant order," he said.
Despite difficult market conditions, they had increased revenue 20% during the year under review and exports had grown to Rs.163.5 million from Rs.92.3 million the previous year.
New products had been developed and 75% factory utilization achieved. Net assets per share had more than doubled from Rs.0.68 to Rs.1.39 and the loss during the year was down 30% from the previous year.
Their voting share had gone up to Rs.13 which was the highest value received in the recent past signaling investor confidence in the future direction of the company.
They were observing strict cost control measures and closely monitoring expenses to ensure efficiency. This helped control expenditure and operate economically. Despite cost reduction strategies, attractive employee benefits well above industry standards have been maintained.
"By this the company has retained its experience and well trained staff to maintain the high quality standards and secrecy of the production techniques and employee loyalty towards the company," Ranaweera said.
He reported that the company had prepared itself to enter new markets such as Russia, Europe, Australia and New Zealand with positive results obtained from efforts to revive traditional markets like Singapore and Malaysia.
"We have added a collection of traditionally set diamond jewellery into our product range and our product development team has developed new range of jewellery set with coloured gemstones using the carbonlokd (floating diamonds) setting concept. This major achievement had excited the jewellery trade and customers the world over. In addition we are pioneering the traditionally set diamond and gemstones jewellery," Ranaweera said.
He was optimistic that this would help the company to reduce its dependence on carbonlokd jewellery without undermining their prime asset, this setting concept, where they continue to hold an international monopoly.
The company is also looking at a Rs.14 million plan to build a new administration and marketing building as their old buildings are in very poor condition. They hoped to have this building ready eight months after construction begins.
The recent success of their product development division perfecting setting of coloured gemstones using the carbonlokd method had opened new possibilities of using mainly Sri Lankan coloured gemstones and some imports of types not found to produce a fine range of jewellery. Local designers as well as some from the UAE, USA, Australia and the Peoples Republic of China will work on this, Ranaweera said.
"With the frequent changes in the prices of gold and diamonds, it became necessary for us to diversify production into the use of cheaper raw materials, such as range of coloured gemstones products which will in actual cost 10% of the cost similar design using diamonds."
In addition the company is also working on designing and manufacturing a collection of 24 kt gold jewellery initially for the UAE market. A range of samples were recently presented to their buyer in the UAE who has shown interest and assured them of a substantial order.
The company’s Auditors, KPMG Ford, Rhodes, Thornton & Company have issued a qualified opinion saying that Blue Diamonds had obtained a credit facility of US$ 2.75 million from the Seylan Bank in previous years by pledging an inventory of jewellery as security. During the year ended March 31, 2005, the directors had resolved to write back the balance outstanding to the bank in respect of this facility on the basis that the company had handed over jewellery in lieu of the said credit facility as a full and final settlement.
Although Rs.203.5 million had been written back to the income statement during that financial year there was insufficient and appropriate audit evidence of this transaction. The Seylan Bank has in December 2009 demanded US$ 4.3 million together with further interest of 8% being the total outstanding sum.
The company and bank have agreed to go to arbitration on this matter and this process has commenced with the case currently at the trial stage.
The auditors have pointed out that no liability had been recorded in the financial statements in respect of the balance payable to the bank. They were therefore unable to satisfy themselves of the completeness, existence and accuracy of this liability as at March 31, 2011.
The auditors have also made reference to a write back of Rs.4.5 million to the income statement out of a payment due to Ceylinco Investment Co Ltd during the year. They have not been able, due to the absence of sufficient and appropriate audit evidence, satisfy themselves "as to the completeness, accuracy, existence of amount due to Ceylinco Investment Co Ltd of Rs.19.4 million as at March 31, 2011."
Blue Diamonds has a stated capital of Rs.1.06 billion and a general reserve of Rs.135 million in its books as at March 31, 2011. Total assets ran at Rs.372.9 million and total liabilities at Rs.75.8 million.
The Blue Diamonds share had traded at a high of Rs.13 and a low of Rs.1.90 against a trading range of Rs.4.30 to Rs.1.30 the previous year.
The directors of the company are: Messrs. W.G.B.M. Ranaweera (Chairman/MD), G. de Kretser, K.V.D.D.A. Dias, W.K. Galagoda, M.M.N. Priyantha, H.A. Wehalle and W.P.J.L.M. Fernando.
source - www.sundayisland.lk
Blue Diamonds Jewellery Worldwide PLC whose shares, both voting and non-voting, have been actively traded on the Colombo Stock Exchange recently will have its 21st annual general meeting on October 7 with accumulated losses of Rs.902.7 million in its books and a loss of Rs.14.2 million incurred in the year ended March 31, 2011, down from a loss of Rs.20.1 million a year earlier.
The company last posted a modest profit of Rs.10.4 million in 2008, up from a profit of Rs.8.5 million the previous year but has since had three consecutive loss making years.
However, Mr. W.G.B.M. Ranaweera, the company’s Chairman/MD, has told shareholders in the annual review that "barring any unforeseen circumstances, your company is heading into a profitable level in the very near future."
Future plans include the use of coloured gemstones in jewellery using the carbonlokd (floating diamonds) setting concept which has already been developed by their production team.
Ranaweera said that given the global economic recession, there has been a trend among the affluent to invest in precious metals and non-financial instruments rather than stocks, bank and government securities etc.
Also, the economic boom in China and India had contributed heavily to the increased global demand for precious metals, especially gold.
"These factors have resulted in the increase of the prices of gold by 30% during the period under review.
Economists forecast a further escalation of prices of precious metals to its highest in future," he said.
Alongside this, the international demand for diamond jewellery, a luxury product, was slowing with consumers looking for alternatives. Their company mainly exports its products to the Middle East and the uncertain market conditions had an adverse impact on their export performance.
The biggest challenge the company faced now was price escalation of important raw materials – gold, diamonds and other gemstones. The opinion in the jewellery trade is that after the price of gold reaches a level of US$ 2,500 per troy ounce, a price slide in gold is likely.
"Another setback that affected the jewellery industry in Sri Lanka is the lack of qualified & trained staff in all areas of the jewellery industry. Due to the shortage of experienced gemstones setters, craftsmen, polishers and staff for soldering & laser engraving, major manufacturers find it difficult to retain staff after an extensive training program which is very costly as they are offered employment abroad," Ranaweera said.
He thanked shareholders for the confidence placed in the company when 62% of a rights issue they floated last December was subscribed infusing Rs.187.4 million equity finance into the business. The business plan they issued along with the rights issue documents has been initiated and positive results seen so far.
"The factory automation process has commenced and new machinery and equipment ordered to upgrade the factory production sections. Our marketing team made vigorous successful efforts in developing new markets such as India during the period and products were exported to the Indian market with a significant order," he said.
Despite difficult market conditions, they had increased revenue 20% during the year under review and exports had grown to Rs.163.5 million from Rs.92.3 million the previous year.
New products had been developed and 75% factory utilization achieved. Net assets per share had more than doubled from Rs.0.68 to Rs.1.39 and the loss during the year was down 30% from the previous year.
Their voting share had gone up to Rs.13 which was the highest value received in the recent past signaling investor confidence in the future direction of the company.
They were observing strict cost control measures and closely monitoring expenses to ensure efficiency. This helped control expenditure and operate economically. Despite cost reduction strategies, attractive employee benefits well above industry standards have been maintained.
"By this the company has retained its experience and well trained staff to maintain the high quality standards and secrecy of the production techniques and employee loyalty towards the company," Ranaweera said.
He reported that the company had prepared itself to enter new markets such as Russia, Europe, Australia and New Zealand with positive results obtained from efforts to revive traditional markets like Singapore and Malaysia.
"We have added a collection of traditionally set diamond jewellery into our product range and our product development team has developed new range of jewellery set with coloured gemstones using the carbonlokd (floating diamonds) setting concept. This major achievement had excited the jewellery trade and customers the world over. In addition we are pioneering the traditionally set diamond and gemstones jewellery," Ranaweera said.
He was optimistic that this would help the company to reduce its dependence on carbonlokd jewellery without undermining their prime asset, this setting concept, where they continue to hold an international monopoly.
The company is also looking at a Rs.14 million plan to build a new administration and marketing building as their old buildings are in very poor condition. They hoped to have this building ready eight months after construction begins.
The recent success of their product development division perfecting setting of coloured gemstones using the carbonlokd method had opened new possibilities of using mainly Sri Lankan coloured gemstones and some imports of types not found to produce a fine range of jewellery. Local designers as well as some from the UAE, USA, Australia and the Peoples Republic of China will work on this, Ranaweera said.
"With the frequent changes in the prices of gold and diamonds, it became necessary for us to diversify production into the use of cheaper raw materials, such as range of coloured gemstones products which will in actual cost 10% of the cost similar design using diamonds."
In addition the company is also working on designing and manufacturing a collection of 24 kt gold jewellery initially for the UAE market. A range of samples were recently presented to their buyer in the UAE who has shown interest and assured them of a substantial order.
The company’s Auditors, KPMG Ford, Rhodes, Thornton & Company have issued a qualified opinion saying that Blue Diamonds had obtained a credit facility of US$ 2.75 million from the Seylan Bank in previous years by pledging an inventory of jewellery as security. During the year ended March 31, 2005, the directors had resolved to write back the balance outstanding to the bank in respect of this facility on the basis that the company had handed over jewellery in lieu of the said credit facility as a full and final settlement.
Although Rs.203.5 million had been written back to the income statement during that financial year there was insufficient and appropriate audit evidence of this transaction. The Seylan Bank has in December 2009 demanded US$ 4.3 million together with further interest of 8% being the total outstanding sum.
The company and bank have agreed to go to arbitration on this matter and this process has commenced with the case currently at the trial stage.
The auditors have pointed out that no liability had been recorded in the financial statements in respect of the balance payable to the bank. They were therefore unable to satisfy themselves of the completeness, existence and accuracy of this liability as at March 31, 2011.
The auditors have also made reference to a write back of Rs.4.5 million to the income statement out of a payment due to Ceylinco Investment Co Ltd during the year. They have not been able, due to the absence of sufficient and appropriate audit evidence, satisfy themselves "as to the completeness, accuracy, existence of amount due to Ceylinco Investment Co Ltd of Rs.19.4 million as at March 31, 2011."
Blue Diamonds has a stated capital of Rs.1.06 billion and a general reserve of Rs.135 million in its books as at March 31, 2011. Total assets ran at Rs.372.9 million and total liabilities at Rs.75.8 million.
The Blue Diamonds share had traded at a high of Rs.13 and a low of Rs.1.90 against a trading range of Rs.4.30 to Rs.1.30 the previous year.
The directors of the company are: Messrs. W.G.B.M. Ranaweera (Chairman/MD), G. de Kretser, K.V.D.D.A. Dias, W.K. Galagoda, M.M.N. Priyantha, H.A. Wehalle and W.P.J.L.M. Fernando.
source - www.sundayisland.lk
Saturday, October 1, 2011
Stocks at one-week high led by blue-chips
COLOMBO (Reuters): Sri Lanka’s stock market gained on Friday for the second day led by heavyweights and bluechips while retail speculative buying continued as the bourse recovered from near oversold territory, while the rupee edged up before closing flat.
The country’s main share index closed 0.53 per cent or 35.64 points firmer at 6,783.55. It hit a two-month low on Wednesday. It is still Asia’s best performer with a return of 2.23 per cent on the year.
Top private lender Commercial Bank and market heavyweight John Keells Holdings rose 3.6 per cent and 0.5 per cent respectively, helping the overall index gain.
The bourse witnessed a foreign outflow of Rs. 11.6 million on Thursday, and thus far in 2011, offshore investors have sold 17 billion after a record 26.4 billion in 2010.
Sri Lanka’s banking sector pushed the market up.
Turnover was Rs. 2.4 billion ($ 25.4 million), in line with last year’s average of 2.4 billion, but less than this year’s 2.7 billion.
Friday’s total volume was 107.4 million, against a five-day average of 76.3 million. The 30-day and 90-day average trading volumes were 154.8 million and 142.3 million. Last year’s daily average was 67.9 million.
The rupee closed steady at 110.18/20 a dollar, but it edged up to 110.17 during trade as banks sold dollars to buy rupees due to low liquidity in the local currency, dealers said. Later, importer dollar demand balanced that out, leaving the rupee to close steady.
The Central Bank mopped up Rs. 9.1 billion from the market on Friday through a repo auction at 7.08 per cent.
source - www.ft.lk
The country’s main share index closed 0.53 per cent or 35.64 points firmer at 6,783.55. It hit a two-month low on Wednesday. It is still Asia’s best performer with a return of 2.23 per cent on the year.
Top private lender Commercial Bank and market heavyweight John Keells Holdings rose 3.6 per cent and 0.5 per cent respectively, helping the overall index gain.
The bourse witnessed a foreign outflow of Rs. 11.6 million on Thursday, and thus far in 2011, offshore investors have sold 17 billion after a record 26.4 billion in 2010.
Sri Lanka’s banking sector pushed the market up.
Turnover was Rs. 2.4 billion ($ 25.4 million), in line with last year’s average of 2.4 billion, but less than this year’s 2.7 billion.
Friday’s total volume was 107.4 million, against a five-day average of 76.3 million. The 30-day and 90-day average trading volumes were 154.8 million and 142.3 million. Last year’s daily average was 67.9 million.
The rupee closed steady at 110.18/20 a dollar, but it edged up to 110.17 during trade as banks sold dollars to buy rupees due to low liquidity in the local currency, dealers said. Later, importer dollar demand balanced that out, leaving the rupee to close steady.
The Central Bank mopped up Rs. 9.1 billion from the market on Friday through a repo auction at 7.08 per cent.
source - www.ft.lk
Bourse closes week on upbeat note
Singer Group continues upward roll
The Colombo bourse closed the week yesterday on an upbeat note with tidy gains in both indices on what brokers called a ``decent’’ turnover of Rs.2.36 billion, down from the previous day’s Rs.2.8 billion, with 125 gainers comfortably outpacing 71 losers.
The All Share Price Index was up 35.64 points (0.53%) and Milanka up 46.96 points (0.78%) with Ascot Holdings dominating business volumes with nearly 1.4 million shares done between Rs.175 and Rs.207.70. The counter closed Rs.2.90 down at Rs.184 generating a turnover of Rs.248.9 million.
Singer group shares led by Singer Industries continued to fly with Regnis as well as the parent also moving up. Singer Industries gained Rs.66.90 to close at Rs.368 on over 0.2 million shares done between Rs.322 and Rs.439 while Regnis was up Rs.19.90 to close at Rs.498.70 on over 0.3 million shares traded between Rs.420 and Rs.449. Singer Sri Lanka, the parent, gained Rs.5.80 to close at Rs.133.60 on nearly 0.7 million shares traded between Rs.130.60 and Rs.138.50.
Brokers said that none of the stocks captured within the price band on Thursday reached the permitted ceiling. These included Ascot, Regnis and Asian Alliance Insurance which closed Rs.7.90 up at Rs.354 with nearly 0.2 million shares traded between Rs.335 and Rs.384.70.
One crossing of 800,000 LOLC at Rs.99 was posted. The counter gained Rs.1.10 to close at Rs.99 on 0.9 million shares traded between Rs.98 and Rs.100.
"Although there was one parcel of 100,000 and a couple more slightly smaller traded on the floor, there was a great deal of retail focus on Ascot," a broker said.
Lanka Hospitals too attracted interest gaining Rs.3.60 to close at Rs.62 on 2 million shares traded between Rs.60.50 and Rs.64.50 while Blue Diamonds also saw quantity with the non-voting share up 10 cents to close at Rs.4.90 on nearly 28.3 million shares traded while the voting share edged down 20 cents to close at Rs.9.80 on over 6.8 million shares traded.
Other shares that attracted retail interest included e-Channeling, closing 40 cents up at Rs.8.30 on 13.8 million shares done between Rs.8 and Rs.8.70.
JKH was up 90 cents to close at Rs.206 on nearly 0.2 million shares done between Rs.205 and Rs.208.
source - www.island.lk
The Colombo bourse closed the week yesterday on an upbeat note with tidy gains in both indices on what brokers called a ``decent’’ turnover of Rs.2.36 billion, down from the previous day’s Rs.2.8 billion, with 125 gainers comfortably outpacing 71 losers.
The All Share Price Index was up 35.64 points (0.53%) and Milanka up 46.96 points (0.78%) with Ascot Holdings dominating business volumes with nearly 1.4 million shares done between Rs.175 and Rs.207.70. The counter closed Rs.2.90 down at Rs.184 generating a turnover of Rs.248.9 million.
Singer group shares led by Singer Industries continued to fly with Regnis as well as the parent also moving up. Singer Industries gained Rs.66.90 to close at Rs.368 on over 0.2 million shares done between Rs.322 and Rs.439 while Regnis was up Rs.19.90 to close at Rs.498.70 on over 0.3 million shares traded between Rs.420 and Rs.449. Singer Sri Lanka, the parent, gained Rs.5.80 to close at Rs.133.60 on nearly 0.7 million shares traded between Rs.130.60 and Rs.138.50.
Brokers said that none of the stocks captured within the price band on Thursday reached the permitted ceiling. These included Ascot, Regnis and Asian Alliance Insurance which closed Rs.7.90 up at Rs.354 with nearly 0.2 million shares traded between Rs.335 and Rs.384.70.
One crossing of 800,000 LOLC at Rs.99 was posted. The counter gained Rs.1.10 to close at Rs.99 on 0.9 million shares traded between Rs.98 and Rs.100.
"Although there was one parcel of 100,000 and a couple more slightly smaller traded on the floor, there was a great deal of retail focus on Ascot," a broker said.
Lanka Hospitals too attracted interest gaining Rs.3.60 to close at Rs.62 on 2 million shares traded between Rs.60.50 and Rs.64.50 while Blue Diamonds also saw quantity with the non-voting share up 10 cents to close at Rs.4.90 on nearly 28.3 million shares traded while the voting share edged down 20 cents to close at Rs.9.80 on over 6.8 million shares traded.
Other shares that attracted retail interest included e-Channeling, closing 40 cents up at Rs.8.30 on 13.8 million shares done between Rs.8 and Rs.8.70.
JKH was up 90 cents to close at Rs.206 on nearly 0.2 million shares done between Rs.205 and Rs.208.
source - www.island.lk
Sri Lanka stocks end up 0.5-pct
Sept 30, 2011 (LBO) - Sri Lankan stocks closed firmer Friday for the second day running in speculative trade and price curbs being imposed on Singer Industries (Ceylon) after it rose sharply, brokers said.
The main All Share Price Index rose 0.53 percent (35.64 points) to 6,783.55, while the more liquid Milanka index climbed back over the 6,000 mark, rising 0.78 percent (46.96 points) to close at 6,045.11, according to stock exchange figures.
Turnover was 2.36 billion rupees.
Asian Alliance Insurance, which was brought under the 10 percent price band Thursday, after rising almost 50 percent, closed at 358.50 rupees, up 7.90, after hitting a high of 384.70.
Singer Industries (Ceylon) was the day's highest gainer, closing at 384.10 rupees, up 66.90 or 21 percent prompting the regulator to bring it under the 10 percent price band restricting daily price movements. It hit a high of 439 rupees during the day.
Blue Diamonds Jewellery Worldwide non-voting shares were the most actively traded stock, closing at 4.90 rupees, up 10 cents, with over 28.2 million shares done.
The Lanka Hospital Corporation was also actively traded, closing at 63 rupees, up 3.60 with two million shares changing hands.
Ascot Holdings, which was also brought unde the 10 percent price band Thursday, was also heavily traded, accounting for the day's biggest turnover. It closed at 186 rupees, down 2.90.
Regnis (Lanka), which accounted for the second highest turnover, closed at 440.20 rupees, up 19.90.
There was a sole crossing or off-market private deal of 800,000 shares of Lanka Orix Leasing Company at 99 rupees each. It closed at 98.80 rupees, up 1.10.
source - www.lbo.lk
The main All Share Price Index rose 0.53 percent (35.64 points) to 6,783.55, while the more liquid Milanka index climbed back over the 6,000 mark, rising 0.78 percent (46.96 points) to close at 6,045.11, according to stock exchange figures.
Turnover was 2.36 billion rupees.
Asian Alliance Insurance, which was brought under the 10 percent price band Thursday, after rising almost 50 percent, closed at 358.50 rupees, up 7.90, after hitting a high of 384.70.
Singer Industries (Ceylon) was the day's highest gainer, closing at 384.10 rupees, up 66.90 or 21 percent prompting the regulator to bring it under the 10 percent price band restricting daily price movements. It hit a high of 439 rupees during the day.
Blue Diamonds Jewellery Worldwide non-voting shares were the most actively traded stock, closing at 4.90 rupees, up 10 cents, with over 28.2 million shares done.
The Lanka Hospital Corporation was also actively traded, closing at 63 rupees, up 3.60 with two million shares changing hands.
Ascot Holdings, which was also brought unde the 10 percent price band Thursday, was also heavily traded, accounting for the day's biggest turnover. It closed at 186 rupees, down 2.90.
Regnis (Lanka), which accounted for the second highest turnover, closed at 440.20 rupees, up 19.90.
There was a sole crossing or off-market private deal of 800,000 shares of Lanka Orix Leasing Company at 99 rupees each. It closed at 98.80 rupees, up 1.10.
source - www.lbo.lk
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