Lionhart sheds 6% of ERI stake

 

Lionhart Investments Ltd., yesterday sold 6% stake in ERI with foreign fund Caledonian Securities collecting the block.

Around 20 million of ERI shares were done at Rs. 15.30 each in a deal worth Rs. 305 million.

An equal quantity of Warrants 0003 and Warrants 0006 around were also done at Rs. 4.90 and Rs. 5.30 each, in a combined deal worth Rs. 203 million.

 In recent months Lionhart has been selling down on ERI. As at June Lionhart's stake in ERI was 74.57%, down from 85% a year earlier. With yesterday's sale and recent shedding, Lionhart is estimated to be having around 60% stake.

source - www.ft.lk

CSBA to meet today

The Colombo Stock Brokers Association (CSBA) is scheduled to meet today, where recent directives of the SEC, the broking community’s remaining recommendations, as well as the status of market are likely to be discussed.

The CSBA members met the SEC in mid-September, whilst a further meeting between the two parties was held last week as well.

 Individually most brokers have welcomed the revival of the stock market as well as the new measures, although CSBA as a body hasn’t yet made its views officially.

source - www.ft.lk

Bourse down sharply

The Colombo bourse fell sharply on Monday (15) with all three indices closing in the red generating a turnover of Rs. 1.57 billion on 78.1 million shares changing hands during the day.

The All Share Price Index closed 1.47 percent lower, down 84.44 points to 5,653.80 while the Milanka Price Index of more liquid stocks fell 1.89 percent to close at 5,160.34, down 99.77 points. The S&P SL20 closed 1.25 percent lower, down 38.81 points to 3,059.61.

"The indices lost ground due to broad based selling pressure amid improved activity levels with turnover being driven by crossings on JKH and GREG," John Keells Stockbrokers said.

Several crossings were recorded during the day involving JKH and Environment Resources Investments PLC (GREG): A parcel of 19.9 million GREG Warrant 6 changed hands at Rs. 5.30 per share. The same number of GREG Warrants 3 also changed hands at Rs. 4.90 each, while GREG shares also for the same quantity changed hands at Rs. 15.30. Four parcels of JKH shares changed hands at Rs. 205 per share, with each parcel comprising 400,000 shares, 500,000 shares, 1.1 million shares and 1.7 million shares.

Activity in JKH contributed nearly 50 percent to the day’s turnover.

Around 183 counters closed in the red against the 34 that closed in positive territory.

Foreign Purchases amounted to Rs. 1,355.83 million resulting in a net inflow of Rs. 813.84 million.

source - www.island.lk

SEC assures safeguards in place

The Securities and Exchange Commission (SEC) headed by Dr. Nalaka Godahewa responding to concerns raised by K.C. Vignarajah in The Island Financial Review yesterday (15) has sought to reassure the investing public that the recent directives did not take away any safeguards preventing systemic risk and market offences.

"The SEC refers to certain newspaper articles which appeared on 14th and 15th October 2012 giving wide coverage to a communication addressed to the SEC by K.C. Vignarajah highlighting some concerns of the said individual. The SEC has consulted all the key stakeholders including the Colombo Stock Exchange, Broking community, Unit Trust Industry, Margin Providers etc., prior to the issuance of the said directives. The SEC wishes to point out that 27 of the 28 Equity Brokers participated at this meeting," the SEC said in a press communiqué yesterday.

"The SEC has not removed any safeguards as alleged, in that the directives issued by the SEC to the CSE on 9th October 2012 referred to by Vignarajah were in order: (a)   to amend the net capital computation of Stockbrokers; (b)   to lift the restriction imposed on executive directors, employees, their spouses and their nominees of all licensed stockbrokers and stock dealers from selling listed shares purchased from the secondary market for a period of 6 months from the date of purchase; (c)   to life the upper limit of 20% imposed on the price of transactions carried out on the crossings board of the Colombo Stock Exchange and to re-establish the status quo that existed previously in the Automated Trading Rules.

"The SEC wishes to emphasize the fact that whilst the amendment of net capital computation was a measure to rectify an anomaly that existed in such computation, the removal of restrictions imposed on the sale of the shares purchased by the parties connected to licensed stockbrokers as well as transactions carried out as crossings were steps to establish the status quo that existed in the past by removing the "interim" restrictions imposed by the SEC previously.

"Accordingly, it should be re-iterated that no safeguards whatsoever have been removed by the SEC as a result of the above mentioned directives, but has imposed additional safeguards (some of which have been clearly mentioned in our aforesaid directives), whilst emphasizing on the need by the Stockbrokers of strictly adhering to the current safeguards which are already existent as per the Stockbroker Rules of the CSE," the SEC said.

Some analysts, investors and brokers allege the SEC has been subject to regulatory capture, with the recent directives removing previous measures taken to contain market offences and systemic risk. However, others have praised the move as being more market friendly.

Four broker firms, breaking away from the Colombo Stock Brokers’ Association (CSBA), earlier this year had written to President Mahinda Rajapaksa commending the credit restrictions. They said the restrictions would minimise systemic risks. The majority of broker firms had however lobbied for looser credit rules.

Former SEC Chairman Thilak Karunaratne told a recent forum that some stock brokers were plying their trade in an unprofessional manner.

Vignarajah had requested the present commission members of the SEC to introduce transparency and disclosure requirements to brokers trading in the stock exchange while echoing sentiments already expressed by a range of stakeholders that credit, although necessary, had to be regulated so as to prevent bubbles.

The Island Financial Review of Friday October 05 carried a story of how several well respected business personalities were trying to mobilise independent minority shareholders to assist the SEC clean up the market of rampant irregularities.

The outcome of 17 ongoing investigations would be the acid test for the current commission members of the SEC after two chairpersons resigned within a year of each other citing extreme pressure from a group of influential investors with the government doing little to strengthen the arm of the SEC which had taken tough measures against market offences.

source - www.island.lk

Coco Lanka aims for top F&B company tag

Coco Lanka PLC (Coco) in a stock exchange filing on 12 October 2012 stated it has decided to expand the company’s focus from the agri business sector into a full-fledged food and beverage investment holding company. Coco will function with the objective of becoming one of the largest companies in this segment.

In this light, the company has formed a fully owned subsidiary Renuka Consumer Foods Limited (RCL) which will function as the fast moving consumer goods (FMCG) arm of Coco while Renuka Agri Foods PLC (RAL) will continue to function as its agri business arm.

 RCL’s mandate will be to invest in and or acquire fast moving consumer goods (FMCG) brands and companies. To this effect, RCL has acquired 59.76% of the shareholding of Shaw Wallace Ceylon Ltd. (SWCL).

 Renuka Agri Foods PLC and its subsidiaries namely Renuka Organics (Pvt.) Ltd., Renuka Teas Ceylon (Pvt.) Ltd., Kandy Plantations Ltd. and Richlife Dairies Ltd. are engaged in plantations, manufacturing and marketing Ceylon tea, coconut products (coconut milk powder, coconut milk coconut water, de-fatted coconut, virgin coconut oil), organic products, dairy products (plain milk, flavoured milk, yogurt, curd, ghee, cream) and fruit juice.

 The flagship brands are Renuka, Richlife and Cheers. The cluster operates five factories, five processing centres, two plantations and has an out-grower network exceeding 5,000 farmer families. The organisation also exports to 61 countries.

 Renuka Consumer Foods Ltd. and its subsidiaries namely Shaw Wallace Ceylon Ltd., Shaw Wallace Food Services Ltd. and Renuka Products (Pvt.) Ltd. are engaged in manufacturing and distribution to retail and foodservice of fish products (jack mackerel, mackerel, tuna), flavour enhancers, instant drink powders, soya meat, colourings and essences.

 The company owned flagship brands are Captain, Plaza, Sun Gold and Rainers’. The company is also the exclusive distributor for Ajinomoto in Sri Lanka. The cluster operates a state-of-the-art warehouse and logistics centre and has a manufacturing facility. The products are sold to over 65,000 grocery outlets island-wide as well as to hotel, restaurants, catering establishments among others.

 Executive Director of the company Shamindra Rajiyah said, “Today the business encompasses the complete value chain including plantations, manufacturing, international marketing and local distribution of food and beverage products.

“As an integrated food and beverage organisation the company has ambitious plans to develop its product portfolio and distribution capabilities with its investment in Renuka Consumer Foods Ltd.

We are committed to delivering value added, innovative products for the evolving global consumer through our meticulous process involving quality, research and development.

“To this effect, the island wide distribution network that Shaw Wallace Ceylon Ltd. (SWCL) possesses will be an essential prerequisite towards achieving this goal. Additionally, the investment is expected to create significant synergies to the existing businesses of Coco Lanka PLC.”

The Colombo Stock Exchange release also stated that Coco Lanka PLC is to be renamed Renuka Shaw Wallace PLC, to raise Rs. 1,008 million by way of a rights issue of five new voting and non-voting shares for every four voting and non-voting shares held in the capital of the company and post rights subdivide every one existing voting and non-voting share into two new voting and non-voting shares respectively.

 Rajiyah further said, “Our future plans include the extension of existing brands to new food and beverage products, building an international coconut water brand, becoming the most innovative dairy products manufacturer, increasing our general trade outlet coverage and efficiency through the sales force automation system currently under implementation, setting up a dedicated group brand custodian team to increase visibility and brand recall, and, manufacturing new food and beverage products in response to market needs of the evolving consumer.”

Coco Lanka PLC is a member company of the Renuka Holdings PLC group. The board of directors consist of Dr. S.R. Rajiyah (Chairman), I.R. Rajiyah, C.J. De. S. Amaratunge, T.K. Bandaranayake, L.M. Abeywickrama, S. Vasanthakumara and S.V. Rajiyah.

source - www.ft.lk

Sri Lanka stocks closed down 1.47 pct

October 15, 2012 (LBO) – Sri Lanka stocks closed down 1.47 percent Monday with most blue-chips trading below previous closing prices. Coco Lanka fell with investors giving thumbs down to a cash call to move into fast moving consumer goods retailing.

 The Colombo All Share Index closed at 5,653.80 down 84.44 points and the S & P SL 20 Index closed 42.56 points lower at 3055.86 down 1.37 percent.

 Turnover was 1,574 million rupees. Top contributors to the day's turnover were Keells Holdings with 785 million rupees, Environmental Resource Investments with 307.2 million rupees and Environmental Resource Investments (warrant-6) with 105.6 million rupees.

Coco Lanka PLC dropped 9.70 rupees to close at 47.70 rupees down 16.90 percent.

Aitken Spence PLC slipped 2.70 rupees to close at 129.00 rupees down 2.05 percent. AVIVA NDB Insurance PLC lost 0.20 cents to close at 370.00 down 0.05 percent.

Commercial Bank slipped 0.70 cents to close at 92.50 rupees down 0.75 percent. DFCC Bank slipped 2.80 rupees to close at 111.20 rupees down 2.46 percent.

Dialog Axiata PLC slipped 0.10 cents to close at 8.40 rupees down 1.18 percent.

Index heavy John Keells Holdings PLC slipped 0.40 cents to close at 205.00 rupees down 0.19 percent.

source - www.lbo.lk

Coco Lanka to form F&B holding company, rights issue to raise Rs. 1bn

Coco Lanka PLC (Coco) in a Stock Exchange filing last week said it has decided to expand the company’s focus from the Agri Business sector into a full-fledged food and beverage investment holding company. Coco will function with the objective of becoming one of the largest companies in this segment.

"In this light, the company has formed a fully owned subsidiary Renuka Consumer Foods Limited (RCL) which will function as the Fast Moving Consumer Goods (FMCG) arm of Coco while Renuka Agri Foods PLC (RAL) will continue to function as its Agri Business arm. RCL’s mandate will be to invest in and or acquire Fast Moving Consumer Goods (FMCG) brands and companies. To this effect, RCL has acquired 59.76% of the shareholding of Shaw Wallace Ceylon Ltd (SWCL)."

The Colombo Stock Exchange release also stated that Coco Lanka PLC is to be renamed Renuka Shaw Wallace PLC, to raise Rs. 1008 million by way of a Rights Issue of five new voting and non-voting shares for every four voting and non-voting shares held in the capital of the company and post rights subdivide every one existing voting and non-voting share into two new voting and non-voting shares respectively.

Renuka Agri Foods PLC and its subsidiaries namely Renuka Organics (Pvt) Ltd, Renuka Teas Ceylon (Pvt) Ltd, Kandy Plantations Ltd and Richlife Dairies Ltd are engaged in plantations, manufacturing and marketing Ceylon tea, coconut products (coconut milk powder, coconut milk coconut water, de-fatted coconut, virgin coconut oil), organic products, dairy products (plain milk, flavoured milk, yogurt, curd, ghee, cream) and fruit juice.  The flagship brands are Renuka, Richlife and Cheers. The cluster operates five factories, five processing centres, two plantations and has an out-grower network exceeding 5000 farmer families. The organisation also exports to 61 countries.

Renuka Consumer Foods Ltd and its subsidiaries namely Shaw Wallace Ceylon Ltd, Shaw Wallace Food Services Ltd and Renuka Products (Pvt) Ltd are engaged in manufacturing and distribution to retail and foodservice of fish products (Jack Mackerel, Mackerel, Tuna), flavor enhancers, instant drink powders, soya meat, colourings and essences.  The company owned flagship brands are Captain, Plaza, Sun Gold and Rainers’. The company is also the exclusive distributor for Ajinomoto in Sri Lanka. The cluster operates a state-of-the-art warehouse and logistics centre and has a manufacturing facility. The products are sold to over 65,000 grocery outlets island-wide as well as to hotel, restaurants, catering establishments among others.

Executive Director of the Company Shamindra Rajiyah said, "Today the business encompasses the complete value chain including plantations, manufacturing, international marketing and local distribution of food and beverage products.  As an integrated food and beverage organisation the company has ambitious plans to develop its product portfolio and distribution capabilities with its investment in Renuka Consumer Foods Ltd. We are committed to delivering value added, innovative products for the evolving global consumer through our meticulous process involving quality, research and development. To this effect, the island wide distribution network that Shaw Wallace Ceylon Ltd (SWCL) possesses will be an essential pre-requisite towards achieving this goal. Additionally, the investment is expected to create significant synergies to the existing businesses of Coco Lanka PLC."

Rajiyah further said, "Our future plans include the extension of existing brands to new food and beverage products, building an international coconut water brand, becoming the most innovative dairy products manufacturer, increasing our general trade outlet coverage and efficiency through the sales force automation system currently under implementation, setting up a dedicated group brand custodian team to increase visibility and brand recall, and, manufacturing new food and beverage products in response to market needs of the evolving consumer".

Coco Lanka PLC is a member company of the Renuka Holdings PLC group. The board of directors consist of Dr. S. R. Rajiyah (Chairman), Mrs. I. R. Rajiyah, C. J. De. S. Amaratunge, T. K. Bandaranayake, L. M. Abeywickrama, S. Vasanthakumara and S. V. Rajiyah.

source - www.island.lk

Kajima Corp. doing survey on prospects in Sri Lanka for Japanese firms

By Nisthar Cassim in Tokyo

 In a move to further bolster bilateral ties the Japanese Government has enlisted a top corporation to do a survey on prospects for its companies and investors in Sri Lanka.

Sri Lanka’s Amba-ssador in Japan Admiral Wasantha Karannagoda said that construction industry specialist Kajima Corporation has been selected by the Japan’s Ministry of Land, Infrastructure, Tourism and Transport to do a study of prospects, opportunities and trends in Sri Lanka’s property and real estate market as well as business and investment climate.

 Karannagoda made this announcement during his address at the Sri Lanka Investment Promotion Conference held last week in Tokyo under a joint initiative by New World Securities Ltd., (NWS) and the Embassy.

 Around 100 representatives from Japanese companies attended the forum and listened to speeches by Senior Minister Dr. Sarath Amunugama and Central Bank Governor Nivard Cabraal in addition to presentations by a group of private sector companies, the Securities and Exchange Commission, and NWS’ partner in Japan A2 Media Ltd.

 Karrannagoda said a team from Kajima had already visited Sri Lanka as part of its exercise recently and met with representatives in the Government and private sector. A follow up visit is also likely.

 He said Kajima’s comprehensive report will be out in March next year and will be widely distributed by the Japan’s Ministry within the Government Ministries, public and private sector organizations as part of promoting opportunities in Sri Lanka.

“This is a major benefit for the country in effectively communicating with Japan’s public and private sector the post-war opportunity in Sri Lanka,” Ambassador Karannagoda told the Daily FT which covered the Investment Conference in Tokyo.

 Kajima has done similar reports on Laos and Cambodia whilst another on Myanmar is underway.

Kajima has strong interests in Construction (Civil Engineering and Building Construction), Real Estate Development, Architectural Design, Civil Engineering Design, Engineering among others.

 The study on Sri Lanka will cover the current status of the overall economic, business and investment climate, socio-economic progress, on-going and planned developments in real estate, property, construction and infrastructure sector. It will also focus on future demand, trends and other relevant factors.

 Ties between Sri Lanka and Japan, one of  the biggest donors and a key trading partner and an investor, are at a high as the two countries celebrate 60 years of diplomatic relations this year. The Embassy in Tokyo has held several key events already promoting investment, economic, tourism and cultural ties whilst a few more major events are scheduled later this year as well.

source - www.ft.lk

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Sri Lanka hikes prices of cement, poultry

Oct 14, 2012 (LBO) - Sri Lanka's consumer affairs authority, which has imposed price controls on chicken and cement, has raised the prices of the items media reports said.

 The price of a 50 kilogram of cement will go up between 68 to 85 rupees from midnight Saturday, Sri Lanka's Daily Mirror newspaper said in its online edition.

 The price of cement made by Holcim, which runs a fully integrated domestic factory, remain unchanged, the report said.

A kilogram of chicken will go up by 30 rupees.

Manufacturers of cement from imported clinker as well as importers were hit by price controls, after energy prices rose and the exchange rate depreciated.

Earlier amid a global rise is cement prices, price controls caused shortages and controversy arose over the import of allegedly low quality cement by a state connected firm.

Sri Lanka's imposes price controls making it difficult for businesses to operate, and also gives tax-arbitrage profits to others with high nationalist import duties.

Sri Lanka state intervention and nationalism clashed earlier in the year when the finance ministry hiked import duties on milk powder to give tax-arbitrage profits to domestic farmers, shortly after the consumer authority refused an industry price increase request.

Poultry which is under price control also has import protection. Sri Lanka's cost of production of poultry is artificially high duty to import protection given to maize farmers, under an autarkist policy.

source - www.lbo.lk