Sept 30, 2011 (LBO) - Sri Lanka's Sampath Bank said deputy managing director M Y A Perera will take-over as managing director from January 01, 2012, as current managing director Harris Premaratne is leaving.
Sri Lanka's Daily FT newspaper said Premaratne will take over as the head of a new bank started by Sri Lanka's Cargills group.
Sampath closed at 218.10 rupees, down 70 cents.
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
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
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
Gives quit notice as MD at Sampath Bank, to take up new post from 1 January
Proven industry leader Harris Premaratane is to head the country’s newest entrant to the financial services sector, Cargills Agriculture and Commercial Bank, from 1 January 2012.
The move follows Premaratne giving quit notice to Sampath Bank yesterday from his current post as Managing Director by end this year.
Daily FT learns Premaratne will be the Managing Director and CEO of Cargills Agriculture and Commercial Bank, which early this month received provisional approval from the Central Bank.
Its promoters are diversified blue chip CT Holdings Plc and FMCG specialist Cargills (Ceylon) Plc. The approval is subject to fulfilling routine terms and conditions, with which the promoters are currently busy.
Premaratne joined Sampath Bank as CEO designate in October 2008 and was inducted to the Board in November the same year, before being appointed Managing Director from January this year.
Some industry analysts have credited the recent revival in Sampath Bank to the leadership of Premaratne, who had previously had a long career at the country’s biggest private sector bank, Commercial.
An Associate Member of the Chartered Institute of Bankers, London, Premaratne was a Senior Deputy General Manager Corporate Banking at Commercial Bank Plc when he retired. He has 42 years of overall banking experience with expertise in the areas of trade services, trade finance, corporate credit, corporate finance, recoveries and correspondent relations.
He was a Director of the Sri Lanka Credit Information Bureau and was the Chairman of the Technical Advisory Committee of the Sri Lanka Banks’ Association.
Premaratne is the present Chairman of the Sri Lanka Banks’ Association (Guarantee) Ltd. and Chairman of the Financial Ombudsman Sri Lanka (Guarantee) Ltd. He is a Director of the Asiri Hospital Group of Companies. He also held the position of Director of Softlogic Group of Companies.
source - www.ft.lk
Hectic trading on and sharp rise in share prices of Asian Cotton Mills and Asian Alliance Insurance yesterday dominated the Colombo Bourse triggering regulatory action.
The duo accounted for 27% or Rs. 771 million of the day’s turnover of Rs. 2.8 billion and topped the list of gainers. Their meteoric rise landed both under the SEC’s price band. For Asian Alliance it was a repeat after being released from its first ever price band on Tuesday.
ASCOT saw over 3 million of its shares traded before closing at Rs. 188.90 (up 45.3%) after hitting a 52-week high of Rs. 196.30. Asian Alliance saw only 0.78 million shares traded but rose by Rs. 116.80 or 50% to close at Rs. 350.60 which was its highest as well.
Both stocks net asset value are fraction of the prices at which they are currently trading. Play by high networth investors triggered a retail rally, analysts said. Some even suspected a pump and dump scenario but this could only be confirmed if the parties concerned had sold mid-way.
The blind and speculative play on these stocks were midst the more fundamental shares remaining depressed relatively though some lost early gains at close of trading.
Overall the All Share Index posted a welcome gain of 0.5% whilst Milanka was almost flat.
“Renewed interest in speculative stocks was witnessed while Ascot Holdings helped boost the turnover.
Institutional or high networth investor participation was rejuvenated to a certain extent,” NDB Stockbrokers said.
Interest was witnessed in Regnis (Lanka) and Radiant Gems.
The share price of Regnis (Lanka) increased by Rs.23.40 (5.90%) and closed at Rs. 420.30.
Foreigners continued to be net sellers with foreign selling worth of Rs. 221.39 million whilst foreign
buying was only Rs. 87.3 million, resulting in a net foreign outflow of Rs. 134 million.
“Retail involvement in the less liquid counters continued to heighten with today’s trading being mostly taken up by the speculative counters taking the lead in terms of turnover whilst dominating the price gainers’ assemblage with new levels of 52-week highs,” Arrenga Capital said.
Heavy index, John Keells Holdings registered two crossings counting to 373,400 shares in total with each block being crossed off at Rs. 205.0 and Rs. 207.9 price levels. Accumulation was evident in Vallibel One as it saw a parcel containing 2.9mn shares being dealt at Rs. 27.4. Other finance sector players, Ceylinco Insurance too witnessed a parcel of 137,000 shares being traded at Rs. 780 with Union Bank registering a one million block at Rs. 22.0.
“Despite the few large deals drawn on the fundamentally steady counters, prices of such counters registered dips,” Arrenga added. Citrus Leisure along with its Warrant 0017 continued to see some interest with Convenience Foods continuing to register a further gain of 8.3%.
source - www.ft.lk
Ascot Holdings (ASCO) yesterday crossed new territory as its share hit a lifetime high of Rs.196.30 during the day with 38 percent of the company trading.
Brokers said that although no sellers were on the board for ASCO at the close of trading, there were 1.4 million buyers and 88, 800 buyers at Rs.195 and 196.30 on the board respectively.
The share started trading at Rs.130 and shot up 50 percent to a record high of Rs.196.30 and closed at the same price. ASCO also became the number one turnover contributor for the day with Rs.537 million.
The number of shares traded was 3.07 million and no crossings were recorded. In fact, the largest single trade that was executed was 47, 700 shares.ASCO has 8 million shares in issue and high net worth investor Nimal Perera had 17.7 percent stake as at June 30, 2011. After the trading hours, the share was slapped with regulator’s 10 percent price band.
source - www.dailymirror.lk
By Channa Fernandopulle
Ceylinco Investment Cooperation Ltd (CICL), a fully owned subsidiary of Nation Lanka Finance PLC (NLF), announced that it will be handing over more than 300 land transfer deeds which had been purchased prior to the Ceylinco crisis.
The announcement was made during a special ceremony on October 5, at the Wayamba Provincial Council Auditorium in Kurunegala under the patronage of Central Bank Governor Ajith Nivard Cabraal.
Four hundred and twenty deeds in total had been paid for in full, but due to financial and legal problems caused by the collapse of the Ceylinco group, which CICL was previously a part of; the deeds were never handed over.
According to Nalin Jayetileke, Director CICL, issues regarding the registration of remaining 120 deeds will mean a delay of approximately another two weeks before the remainder too will be handed over.
Additionally, it was announced that 52 investors who had invested a sum below
Rs.100,000 would also be given investment certificates at the ceremony.
Explaining the rationale behind this decision, Jayetileke said: “Most of these investors come from the middle-lower income group. They had put in their EPF money to these investments. The board of directors therefore decided to settle the dues of the 52 people on the same day.”
CICL received funds to release 914 plots of mortgaged land, through a loan facility of Rs 109 million from Asanga Seneviratne, Director, NLF
Jayetileke stated that as soon as payment on the land in question, which had been proceeding along easy payment terms was completed, the company would hand over deeds to those plots of land as well.
Nation Lanka AGM today
NLF will hold its 24th Annual General Meeting today, at the Auditorium of the Institute of Chartered Accountants.
The company, which has undergone a restructuring process after it was acquired by investor Access Equities Pvt Ltd, a company headed by Asanga Seneviratne, has performed well this year largely due to profit after tax of Rs 59million being recorded by its subsidiary, Nation Lanka Equities (Pvt) Ltd, formerly Ceylinco Stock Brokering.
source - www.dailymirror.lk
E-channelling PLC (ECL) is investing Rs. 150 million in a subsidiary which would diversify in to several sectors, the company said in a stock exchange filing.
Shareholders had decided at an extraordinary general meeting on Thursday (29) to invest Rs. 150 million in the company’s subsidiary ECL Soft (Pvt) Ltd in order to fund projects such as leisure, consultancy and training, media and advertising, financial services, international marketing of the ECL group, BPO in the healthcare sector and strategic investments, ECL said.
source - www.island.lk
CORPORATE circles were abuzz with an alleged bizarre development of first a deal and then no deal between J.L. Morison Sons and Jones (Ceylon) Plc controlling shareholders and prospective buyer United Motors Lanka Plc.
Market talk was that the two had signed a Sales and Purchase Agreement at Rs. 4,300 per share but when the transaction was due for execution, the seller had backed out.
If stories doing the corporate rounds are true, then neither of the listed parties had disclosed the first development concerning the signing of the sales and purchase agreement irrespective of whether the deal was on or not subsequently.
J.L. Morison which has 580,829 voting shares in issue last traded on Monday at Rs. 3,400 whilst its all time high is Rs. 4,500. Last week the share price closed at Rs. 3,300, down by Rs. 401. It also has 174,249 non-voting shares in issue which traded yesterday at Rs. 2,400, down by Rs. 245 from its previous close.
source - www.ft.lk
Conceding to requests from various stakeholders, the regulator of the country’s capital market, the Securities and Exchange Commission (SEC), says it would create a ‘Capital Market Industry Consultative Committee’ which would bring together representatives from the range of stakeholders who would meet on a quarterly basis.
"The current positive economic and political environment in the country has emphasised the need for a capital market which can adapt to meet new challenges. Furthermore, the SEC’s task in determining policy has increased in complexity," the capital market watchdog said in a statement.
"A key recommendation which was put forward by industry participants at the recently concluded Capital Market Development Workshop was to establish a well represented Capital Market Industry Consultative Committee, which will take into account the views of various stakeholders that will have an impact on the capital market of Sri Lanka. This was to ensure that a more robust and inclusive development of the industry as well as to make recommendations for formulation of policy.
"The SEC at its 283rd meeting gave its concurrence to establish a Capital Market Industry Consultative Committee comprising of the following: Chairperson – SEC, Commission Member – SEC, Director General – SEC, A Deputy Governor of the Central Bank of Sri Lanka, Chairman - Colombo Stock Exchange, Chief Executive Officer - Colombo Stock Exchange, President - Colombo Stock Brokers Association or his nominee, President - Unit Trust Association of Sri Lanka or his nominee, President - Margin Provider’s Association, President – CFA, Debt Market Specialist, Equity Market Specialist, Equity Market Legal Specialist and an Investor Representative.
"It is believed that the expertise and experience of a well represented Committee will benefit the entire capital market of Sri Lanka and this committee is expected to meet on a quarterly basis," the SEC said.
source - www.island.lk
* Company settles outstanding issues as it makes recovery
* 914 land buyers not received transfer deeds=164 depositors waiting for Rs. 116mn
By Mario Andree
After the strategic investment of Rs. 109 million at an eight to nine percent interest rate made by Investor Access Equity headed by Asanga Seneviratne to resolve longstanding issues of Ceylinco Investment Cooperation Limited (CICL), it is expected to receive another Rs. 1 billion to commence operations.
Seneviratne told The Island Financial Review that his company had loaned Rs. 109 million to CICL, a subsidy of Nation Lanka Finance PLC, with no security from the company at a low interest rate and expects to invest another Rs. 1 billion within six months for its operations, which according to him, has a bright future.
With the infusion of Rs. 109 million in March this year CICL, has been able to address several issues and hoped to transfer deeds to 420 out of 914 buyers next month who had paid the amounts in full.
According to the company investors have been waiting for more than three years to receive their deeds even after making the payments in full.
Also, CICL would settle 52 investors who had invested less than Rs. 100,000 in full with no interest component. There are 164 investors who made deposits at CICL valued at Rs. 116 million.
Answering a query raised by The Island Financial Review, CICL Director Nalin Jayetileke said the land value of the 420 deeds which would be released was Rs. 195 million
The other 494 buyers had been requested to continue making their payments after a sudden backdrop and according to Jayetileke 90 percent of them have reactivated payments. However, the company has failed to attract any new investors so far.
He said the company has identified several free hold plots of land worth Rs. 300 million mortgaged in banks which they hoped to release soon.
So far, the company has released land worth Rs. 450 million which will be given to the buyers.
source - www.island.lk
Sept 28, 2011 (LBO) - Sri Lankan stocks closed weaker Wednesday after being stagnant for two days on rather thin turnover, brokers said.
The main All Share Price Index fell 0.40 percent (27.01 points) to 6,710.67, while the more liquid Milanka index fell 0.47 percent (28.21 points) to close below the 5,000 mark at 5,999.28, according to stock exchange figures.
Turnover was 1.5 billion rupees.
Nestle Lanka accounted for the day's highest turnover, closing at 875.70 rupees, down 14.30 with 234,800 shares traded, the bulk in three crossings or off-market private deals all at 875 rupees a share.
HVA Foods was the third biggest loser, falling 4.90 rupees to close at 54.50 with 522,600 shares traded.
Colombo Land & Development Company was the most actively traded stock, closing at 65.90 rupees, up 50 cents with over 2.7 million shares changing hands.
Fridge maker Regnis (Lanka) which had been pushed up by speculators, closed at 396.90 rupees, up 56.20, after hitting a high of 403 rupees.
Sept 28, 2011 (LBO) - Sri Lankan mobile operator Dialog Axiata has struck a deal with Singapore's StarHub mobile firm to offer customized international connectivity solutions to customers.
"The partnership is focused on delivering the lowest cost connectivity solutions with strict service levels between Sri Lanka and Singapore using each other’s network," a statement said
"Pre-activated bandwidth between Dialog and StarHub will enable faster roll out times for any connectivity solutions."
The firms will provide single point of service delivery for voice, data, video and TV requirements.
Kevin Lim, Vice President of Business Solutions, StarHub, said it will offer businesses in Singapore alternative routing capability to Sri Lanka as well as interconnection to other key South Asian countries such as Bangladesh and Pakistan.
"We are confident that those companies in Singapore with operations in southern Asia will benefit from this link which provides high-speed Internet access, business data exchange, video-conferencing and other forms of telecommunication services.”
Suresh Sidhu, Dialog Axiata’s Chief Officer-Enterprise and Global Business said Dialog continues to expand its international footprint with the partnership with StarHub.
source - www.lbo.lk
Sept 28, 2011 (LBO) - Sri Lanka’s Securities and Exchange Commission (SEC) has formed a consultative body that includes regulators, stock brokers and an investor representative to ensure a wide range of views in policy making.
The markets watchdog at its latest meeting gave its concurrence to establish a Capital Market Industry Consultative Committee, a statement said.
A committee was a key recommendation put forward by industry participants at a recent capital market development workshop held by the SEC.
The recommendation was for a consultative committee "which will take into account the views of various stakeholders that will have an impact on the capital market of Sri Lanka," the statement said.
"This was to ensure that a more robust and inclusive development of the industry as well as to make recommendations for formulation of policy."
The Capital Market Industry Consultative Committee comprises of the SEC chairperson, commission member and director general, a central bank deputy governor, chairman of the Colombo Stock Exchange and its chief executive among regulator participation.
It includes the Colombo Stock Brokers Association president, president of the Unit Trust Association, president, Margin Provider’s Association, president of the Chartered Financial Analyst programme, and specialists on debt and equity markets, an equity market legal specialist and an investor representative.
"It is believed that the expertise and experience of a well represented Committee will benefit the entire capital market of Sri Lanka and this committee is expected to meet on a quarterly basis," the SEC statement said.
source - http://www.lbo.lk/
The shares of Asian Alliance Insurance PLC (AAIC) yesterday hit another record high of Rs.234.60, surpassing the previous high of Rs.221.60.The share opened trading at the previous day’s closing/highest price of Rs.221.60 and closed at Rs.233. The lowest price it traded during the day was Rs.215.10.
In contrast to the previous day’s trading, where the single largest trade was only 5, 000 shares, there were two crossings of 100, 000 shares and 98, 900 shares, both at Rs. 234.
Total volume of shares traded was 355, 300. The 10 percent price band imposed on the share will be removed today.
Following Richard Pieris group divesting 25 per cent stake at the mandatory offer, Softlogic Holdings PLC and Softlogic Capital PLC together held 98.59 per cent of AAIC.
On September 20, 1.8 million AAIC shares traded with two crossings of 750, 000 shares, each at Rs.121, which were believed to have bought by investor Dilith Jayaweera.
source - www.dailymirror.lk
The mandatory offer extended by S.H. M Rishan and PCH Holdings for the remaining shares of Orient Garments PLC (OGL) concluded yesterday with no shareholders acceptance.
Currently Rishan and PCH hold 29.95% and 21.05% of OGL respectively.
As reported by the Mirror Business yesterday, majority of the valuation methods utilized by the independent advisor concluded that the offer price of Rs.28 was not attractive. However they also said that according to the net assets of OGL, the offer price was at a significant premium.
source - www.dailymirror.lk
The Colombo bourse closed virtually flat yesterday on a turnover of Rs.1.39 billion, down from the previous day’s Rs.1.42 billion, with both indices edging up marginally – the all Share by 1.66 points (0.02%) and the Milanka by 1.68 points (0.03%) with 106 decliners leading 88 gainers.
"The indices were up during early trading, at one stage by 30 points, but moved down by the close of trading in what was essentially a dull day," Prashan Fernando of Acuity Stockbrokers said. "Some counters like Regnis and Colombo Land that had been doing well recently moved up."
HVA Foods was the day’s top turnover generator gaining 80 cents to close at Rs.57 on 3.2 million shares traded between Rs.56 and Rs.62.80 contributing Rs.194.5 million to turnover. A couple of large parcels at Rs. 60 a share were among the trades.
Regnis followed, up Rs.22.30 to Rs.342.50 on over 0.3 million shares done between Rs.318.40 and Rs.342.90. Radiant Gems saw some volume but lost Rs.2.60 to close at Rs.204.10 on nearly 0.4 million shares done between Rs.203.10 and Rs.206.50.
Asian Alliance Insurance continued to gain, closing Rs.20.70 up at Rs.233 on nearly 0.4 million shares traded between Rs.215.10 and Rs.234.60. Colombo Land too was up Rs.3.20 to close at Rs.65 on nearly a million shares done between Rs.62.70 and Rs.66.90.
Other shares that showed volume included Tess Agro down 60 cents to close at Rs.6 on 10 million shares, Blue Diamonds, up 20 cents to close at Rs.8.90 on 6.7 million shares, Lanka Orix Finance up 30 cents to close at Rs.10.80 on 4.7 million shares and Blue Diamonds (non-voting) up 10 cents to close at Rs.4.10 on nearly 9 million shares.
Brokers said there was a considerable focus on what was described as ``punting stock’’ and no crossings had been posted.
Kandy Hotels announced a final dividend of Rs.0.16 per share for 2010/11 after shareholder approval at an AGM on Sept. 27. The share will trade XD on Sept. 28 with payment on Oct. 6
source - www.island.lk
String of other PPPs in the pipeline; Paranthan to also restart next year and Rs.1.2 b investment offered
Getting enthusiastic on Public-Private Partnerships, the Sri Lankan Government is planning to resume operations at the Kankesanthurai (KKS) cement factory with private sector investments by next year after the current renovation work is completed.
The State Resources and Investment Promotions Ministry is seeking a private sector investor for the venture and is hopeful that the matter can be settled before the end of the year.
The Paranthan chemical factory is also expected to restart operations with private investment next year. These will be the first two large scale factories beginning operations in the north if plans work out as expected.
The Sri Lanka Cement Corporation has already commenced restoring the KKS cement factory while taking action to assess the quality of the stock of clinker available within the premises.
Sri Lanka Cement Corporation Chairman Sisira Paranagama noted that the corporation was currently looking at several options to resume cement production.
The factory ceased operations in 1990 when the war between the security forces and the LTTE intensified. Despite hostilities ending two years ago, the factory has remained without private investment.
The corporation had imported 36,260 metric tonnes of ordinary Portland cement in 2010 under the ‘Kankesan’ brand and sold it at prices below market prices in order to supply quality cement at affordable prices, Paranagama said.
Construction industry experts have called on the factory to be restored to full capacity to reduce dependence on imports and provide cement at reasonable prices. They insist that the venture would provide encouragement to Sri Lanka’s Rs. 250 million building industry.
The State Resources and Investment Promotions Ministry is also planning a string of other PPPS including an Rs. 600 million Australian investor for the Embilipitiya paper factory.
A total of Rs. 1.2 billion has been offered for four loss-making State-owned enterprises that the Government is hoping to restructure with the help of private investors. The Government is in the process of restructuring 23 State enterprises and the first phase included four enterprises.
The Embilipitiya Paper Corporation, Kantale Sugar Company, Sri Lanka Rubber Products and Exports Company and the Ceylon Ceramics Corporation are the four institutions to be restructured.
The Ministry is currently in the process of studying the Expressions of Interest (EoIs) sent by private investors for the Kantale Sugar Company, Sri Lanka Rubber Products and Exports Company and the Ceylon Ceramics Corporation.
source - www.ft.lk
Sept 27, 2011 (LBO) - The Colombo Stock Exchange (CSE) plans to introduce a delivery verses payment and risk management system by mid-2012, minimising risk by ensuring both ownership transfer and payment for securities occur simultaneously.
The CSE said it has hired the National Stock Exchange of India (NSE) to act as a consultant to implement the system for the settlement of all secondary market transactions in equity securities traded on the bourse.
"Delivery versus Payment (DVP) (provides for) a link between a securities transfer system and a funds transfer system that ensures that delivery occurs if, and only if, payment occurs," a stock exchange statement said.
"For the successful completion of the process brokers and other participants would have to take steps to convert to the new settlement mechanism and risk management practices," it said.
"This would entail meeting necessary technical requirements, streamlining of back office operations, participating in related training and adopting of certain procedures in particular with respect to the maintaining of liquid assets for margining requirements."
The CSE said its strategy for implementation of risk plans at the bourse envisions an extensive consultation process with market participants, custodians, investors and regulators.
CSE chairman Krishan Balendra said the introduction of a progressive risk management model will help modernise the CSE.
"In addition to size and liquidity, post-trade risk mitigation features prominently on leading market index selection criteria.
"As a frontier market, our transition to the more accepted emerging market level depends on these enhancements."
The statement said DVP is one of the best practices advocated by the International Organization of Securities Commissions and currently has been implemented in all leading bourses.
NSE, India's largest exchange by daily turnover and number of trades for both equities and derivative trading, would be acting as a consultant throughout the implementation process.
The NSE, based in Mumbai, is also the third largest stock exchange in the world in terms of the number of trades in equities.
NSE joint managing director Chitra Ramkrishna said NSE has a long-standing relationship with the Colombo Stock Exchange.
"We will assist CSE in setting up market infrastructure and implementing global best practices that enables CSE to further strengthen market safety and integrity."
source - www.lbo.lk
Indices started off the week on a positive note only to fall gradually during the latter half of trading while global markets continued to decline. However, indices closed marginally in green amidst renewed retail investor interest witnessed in certain counters, NDB Stockbrokers said.
The All Share Price Index closed 0.02 percent higher on Monday at 6,736.02 while the Milanka Price Index of more liquid shares closed 0.03 higher at 6,025.81. Turnover reached Rs. 1.42 billion on a trading volume of 88.8 million shares.
"The trading sector was the main contributor to the market turnover (due to Tess Agro) and the sector index increased by 0.32%. Tess Agro was the main contributor to the market turnover. The share price increased by Rs.0.80 (13.79%) and closed at Rs.6.60,"NDB Stockbrokers said.
"Bank Finance and Insurance sector also contributed significantly to the market turnover and the sector index decreased by 0.73%.
"HVA Foods also contributed significantly to the market turnover. The share price increased Rs.8.60 (17.20%) to close at Rs.58.
"A continued interest was witnessed in Regnis (Lanka) and Radiant Gems. The share price of Regnis (Lanka) increased by Rs 14.10 (4.63%) and closed at Rs 315 while the share price of Radiant Gems increased by Rs 19.80 (10.29%) and closed at Rs 218. Healthcare sector was on the up amidst a renewed interest witnessed in Asiri Hospitals and Lanka Hospitals."
source - www.island.lk
By Indika Sakalasooriya
Shares of Asian Alliance Insurance PLC (AAIC) yesterday hit a record high of Rs.221.60 with 132, 700 shares trading while concluding with no sellers on the board. However, the largest single trade for the day was just 5, 000 shares.
The AAIC share opened trading at Rs.194.1 and hit the intraday high of Rs.221.60, which is a record high for AAIC, and closed at the same price. The lowest price it traded during the day was Rs.194. Since Softlogic Holdings (SHL) and/or Soflogic Capital (SCAP) was believed to have sold 1.5 million shares or 4 per cent of AAIC to investor Dilith Jayaweera at Rs.121 per share, nearly 900, 000 AAIC shares have traded in the Colombo bourse to date. On September 21, 214, 500 AAIC shares traded between Rs.180-Rs.202 while on September 22, 183, 600 shares traded between Rs.190-Rs.202. On September 23, 363, 500 shares traded between Rs.174-Rs.209.
On September 20 alone, 1.8 million AAIC shares traded with two crossings of 750, 000 shares, each at Rs.121, which were believed to have bought by Jayaweera.
According to brokers, the seller of shares should be SHL and/or SCAP as with the closing of the AAIC mandatory offer, following Richard Pieris group divesting its 25 per cent stake, SHL and SCAP together held 98.59 per cent of AAIC.
However, despite both SHL and SCAP being public companies, no disclosure has been filed to the Colombo Stock Exchange relating to a sale of shares so far.
source - www.dailymirror.lk
Reuters: Sri Lanka’s stock market narrowly edged up on Monday from a seven-week low, ending four straight falls as investors snapped up battered shares though a liquidity shortage and global worries cooled sentiments, dealers said.
The island nation’s main share index closed 0.02 per cent or 1.42 points up at 6,736.02, from the lowest since 28 July. It is still Asia’s best performer with a return of 1.51 per cent on the year.
Traders said some market players tried to boost the trend by buying large-cap shares at higher prices in small quantities, though they failed to sustain an early gain of 0.7 per cent.
Food and soap manufacturer Harischandra jumped 50 per cent to Rs. 2,400 with only 100 shares trading.
The day’s turnover was Rs. 1.43 billion ($ 13 million), less than last year’s average of 2.4 billion and this year’s 2.7 billion.
The bourse witnessed a foreign outflow of Rs. 43.9 million on Monday, and thus far in 2011, offshore investors have sold 16.6 billion after a record 26.4 billion in 2010.
On Monday, Asian shares and the euro fell before recovering as investors reacted cautiously to reports that European leaders were working on new ways to stop the fallout from the euro zone sovereign debt crisis.
The diversified and telecommunication sectors pushed the market up with losers and gainers nearly at par at 102 and 101 respectively, Thomson Reuters data showed. Monday’s total volume was 88.8 million, against a five-day average of 118.2 million. The 30-day and 90-day average trading volumes were 160.1 million and 143.1 million. Last year’s daily average was 67.9 million.
The rupee closed flat at 110.29/110.30 a dollar amid heavy importer dollar demand which pushed the currency to 110.35 during trading but closed steady as a state bank sold the greenback at a flat rate of 110.30, dealers said.
The Central Bank mopped up Rs. 23.52 billion from the market on Monday through a repo auction at 7.08 per cent.
By Channa Fernandopulle
The independent advisors’ report on the mandatory offer by S. H. M. Rishan, together with PCH Holdings Pvt Limited, for Orient Garments PLC has stated that the price offered is unattractive according to the current market price as well as three of the four methodologies used in its valuation.
The three methods—which concluded the offer price as unattractive— employed by the independent advisor in its valuation were based on the company’s Price to Book Value, Market PER (Price Earnings Ration) and Sector PER.
Based on the market price to book value basis, the offer is at a discount of 22.37% according to the report.
The report has further stated that the offer is at a discount of 17.2% according to the sector price to book value and at a 46.59% discount according to the market price earnings ratio with a share price of Rs.52.43 as at March 31, 2011.
However, the report carried out by B. R. De Silva & Co Chartered Accountants said that according to the Net Assets of the company, the offer of Rs.28.00 per share presents a premium of 148.38% per share.
PCH Holdings and Rishan, its Chairman, acquired a 51% stake in OGL at a total price of nearly Rs.600 million in early August.
OGL was previously owned by the Finco Group. Managing Director of OGL, Priyanjith Weerasooria, at the time of acquisition had stated that OGL was seeking to expand operations into Bangladesh and China and was looking for a partner in this venture.
Weerasooria had been quoted at the time as saying: “Finco group will continue with its remaining 19% stake of the company and I will be on board during this smooth transition period until the company expands in to region.”
In June, OGL started trading at a reference price of Rs.23 when high net-worth investor Dr. T. Senthilverl at the time bought 9 million shares or 16.39% stake at Rs.28 per share in a deal worth Rs.252 million. The company’s issued share capital stands at 54.9 million shares
.
PCH acquires internet research company
PC House PLC yesterday said that it acquired 90 per cent of Infoserve Private Limited, a Board of Investment approved Sri Lanka based company that provides internet research for Rs.45 million.
Inforserve operates under the brand name "athandz" and specializes in gather, filtering, and summarizing data on behalf of clients to suit their needs.
"This data is gathered by doing extensive research on the internet using both free and paid information sources including search engines, market intelligence portals and specialized and general press website,” PC House said in its disclosure which announced the acquisition.
It also said that the acquisition is in line with the PCH group's stated policy of increasing its reach in the Business Process Outsourcing and Knowledge Process space of the IT industry.
source - www.dailymirror.lk
A staggering 78 securities had played the Securities and Exchange Commission (SEC) imposed price band during its first year of operation as of last week.
The 78 securities were inclusive of several of those companies which came repeatedly under the price band, which has been in imposition since 23 September 2010. The price band of 10% was originally imposed for 15 market days and was subsequently reduced to five days.
The most gullible was Alufab, which saw itself in the price band six times in different periods, whilst Colombo Land and East West got captured thrice along with Blue Diamonds, though the latter’s securities included non-voting share as well.
Securities of at least over a dozen companies played the band twice, whilst within the 78 were those that came under the band only once.
Penny, speculative and undervalued stocks were frequent players of the band, whilst a few fundamentally solid companies also played. In terms of companies the first year saw 52 firms coming under the band.
Preceding its imposition, Environmental Resources Investments (ERI) and Dankotuwa Porcelain (DPL) along with Blue Diamonds were among target stocks to instil discipline via the price band, while only Blue Diamond remained erratic and susceptible. None of ERI securities and DPL came under the band.
Whilst Vallibel Finance was the first to be slapped with the price band on 23 September last year, Asian Alliance Insurance was the latest, which will finish its five-day languish on Tuesday. On the positive side, no securities were added to the price band as it marked its first anniversary on Friday.
The price band, though revised, has remained contentious. Despite recommendations for its withdrawal and replacement with the more acceptable circuit breaker method, the SEC one year on is yet to feel comfortable and confident.
The first anniversary is replete with multiple cases when securities rose irrespective of being under the price band, though within permissible levels. Of late there have been instances where some scheming investors used the price band as a benchmark to drive the stock up as there was a perception that a security playing the band had greater upside, especially among penny and speculative stocks. The latter scenario proved original critics wrong that the band was a deterrent to check volatility and many investors were happy to cash in on securities which were susceptible.
However, some analysts have remained emphatic with regard to the benefits of price band, hence suggest it should be continued. “The price band is effective to stem any extraordinarily manipulative bull runs as well as extreme volatility,” they opined.
But critics say the price band remains an overhang and is yet another thorn in an already overregulated market. Its continuity also reaffirms the lack of confidence on the part of the regulator.
“Is SEC saying one year on the market hadn’t disciplined itself and if so, the price band and other measures, both old and new, have failed to shore up SEC’s confidence, exposing the regulator’s vulnerability than the very market?” they claimed.
The price band and other regulatory factors are being showcased as key reasons for the persistent bearish sentiments throughout this year. One analyst even quipped that if not for the very stocks that SEC had perceived to be notorious as well as speculative play, the market’s status would have been far worse.
The world’s most consistent best performer for two years until 2010, the Colombo Bourse’s return year to date as of last week was only 1.5% in terms of the All Share Index whilst the Milanka Index was down 15%.
However, independent analyst cited overall lack of interest from foreign and local institutional investors as well as volatile global conditions as contributing factors for the Colombo bourse’s slip, in addition to over-regulation.
Amidst claims and counter arguments, there is consensus that equities in the current scheme of things are most attractive, hence plenty of buying opportunities. Cash however is hard to come by and new investors are relatively small in value though their numbers are increasing.
Sept 26, 2011 (LBO) - PC House, a Sri Lankan information technology company, has bought a 90 percent stake in Infoserve (Private) Limited for 45 million rupees.
Infoserve is a company based in Sri Lanka providing Internet research services which operates under the 'athandz' brand name, a stock exchange filing said.
"This acquisition is in line with the PCH group's stated policy of increasing its reach in the BPO (business process outsourcing) and KPO (knowledge process outsourcing) space of the IT industry," the PCH statement said.
Infoserve is a firm approved by the island's investment promotion agency, Board of Investment, which provides incentives like tax breaks.
"'athandz' specialises in gathering, filtering and summarizing data on behalf of clients to suit their exact needs," the PCH statement said.
The firm gathers data by doing research on the Internet using both free and paid information sources including search engines, market intelligence portals and specialised and general news media websites, it said.
PC House was trading at 17. 40 rupees, up 40 cents, at mid-day Monday on the Colombo bourse.
PC House has said it is planning a 100-seat business process outsourcing centre in the island's northern Jaffna peninsula to provide accounting and back office services to the international market.
The company also has a firm revenue stream from computer hardware and software sales and setting up networks.
Sept 26, 2011 (LBO) - Sri Lankan stocks were barely changed Monday and turnover was also lower than usual with heavy trade in shares that had drawn the interest of speculators, brokers said.
The main All Share Price Index rose 0.02 percent (1.42 points) to 6,736.02, while the more liquid Milanka index rose 0.03 percent (1.88 points) to close at 6,025.81, according to stock exchange figures.
Turnover was 1.4 billion rupees.
HVA Foods, the most actively traded stock, which had been falling steeply in recent days after an equally rapid rise, gained 8.60 to close at 58.60 rupees with over 2.1 million shares done. It was the day's third highest gainer.
Tess Agro, which had drawn speculators recently, was the second most actively traded stock, closing at 6.60, up 80 cents, with 25.6 million shares traded. It accounted for the highest turnover of the day.
Muller and Phipps (Ceylon), another stock that had drawn speculators, closed at 3.30 rupees, up 20 cents with 11 million shares changing hands.
Fridge maker Regnis (Lanka), which had been pumped up by speculators recently, was also heavily traded, closing at 318.40 rupees, up 14.10.
A British Virgin Islands-based investment firm, Gulf East Finance, which has bought up to 59.27 percent of Singalanka Standard Chemicals, made a mandatory offer under trading rules to acquire the remaining shares at 55 rupees a share.
There were no crossings or off-market private deals.
Mr. Dhammika Perera and companies he controls - Royal Ceramics, Vallibel One and LB Finance are seeking 50% control of Hayleys PLC according to a mandatory offer announcement made under the Companies Takeovers and Mergers Code.
Perera currently owns slightly over 34.4% of Hayleys while Royal Ceramics owns 5.04%, Vallibel One 1.52% and LB Finance 0.002% totaling 40.794%.
The mandatory offer is at Rs.380 per Hayleys share - the price at which Perera acquired nearly 6.9 million shares (9.2%) on the trading floor of the CSE on September 1 adding to a previously purchased 25.3% stake some months ago.
The present offer covers 44.4 million shares (59.2%) of the total number of shares in issue in Hayleys, the announcement said.
It says that "the offer shall be unconditional as to acceptance upon the offeror having received acceptances in respect of shares which will result in the offeror and parties acting in concert with the offeror holding shares carrying more than 50% of the voting rights."
Detailed mandatory offer document giving other relevant information including the period during which the offer
would be kept open will be sent to all Hayleys shareholders on or before October 6.
Perera is described in the announcement as "a well-known prominent entrepreneur and investor whose business interests include hydropower generation, manufacturing, hospitality, entertainment, banking and finance."
He serves as Chairman of Vallibel One PLC, L B Finance PLC, The Fortress Resorts PLC, Vallibel Power Erathna PLC, Vallibel Finance PLC and holds directorships in his other private sector companies.
He is the Deputy Chairman of Lewis Brown & Company (Pvt) Limited controlling Delmege Forsyth, Delmege Forsyth & Co. Ltd., Royal Ceramics Lanka PLC and Amaya Leisure PLC and Hayleys PLC.
He is also a Director of Sri Lanka Insurance Corporation Ltd, Sampath Bank PLC, Hayleys PLC, Haycarb PLC, Hayleys-MGT Knitting Mills PLC, Hotel Services (Ceylon) PLC which owns Ceylon Continental Hotel, Colombo, Hunas Falls Hotels PLC, Dipped Products PLC, Nirmalapura Wind Power (Pvt) Ltd and Alutec Anodising & Machine Tools (Pvt) Ltd.
He is the Secretary to the Ministry of Transport and is a member of the Board of Directors of Strategic Enterprise Management Agency (SEMA).
Softlogic Holdings PLC which held its AGM last Friday has in its annual report claimed "perfect timing" bringing what it called "an exciting, diversified and well managed portfolio of products and services to all our clients and other stakeholders."
The highlights of the year ended March 31, 2011 shows that the group which is into retail, financial services, healthcare, information and communication technology, travel and leisure and automobiles had posted spectacular results in the year prior to its listing on the Colombo Stock Exchange.
Group revenue was up 122% to Rs.10.79 billion, profit before-tax up 84% to Rs.1.9 billion and profit after-tax up 528% to Rs.970.8 million and the profit attributable to equity holders of the parent was Rs.829.2 million, up 438% from the previous year.
The group’s Chairman, Mr. Ashok Pathirage, said in the annual report that Softlogic had leveraged on opportunities that presented themselves through the year under review "positioning ourselves for a phase of expansion and consolidation of the existing lines of business."
"Our solid experience in the retail sector and the entrepreneurial culture within the group enabled us to identify valuable opportunities and to form excellent business alliances during the year, further strengthening the group’s balance sheet," Pathirage said.
Against the backdrop of post war macro economic growth, Softlogic had acquired controlling interest of the Asiri group of hospitals and Capital Reach Holdings Limited now re-branded as Softlogic Capital which was listed on the CSE last week.
"We successfully strengthened our market share in the diversified sectors of retail, healthcare, information and communication technology, financial services, automobiles, and travel & leisure sectors in 2010/11," Pathirage told his shareholders.
They were now number one in private healthcare with the most number of beds in the country. The Asiri group of hospitals had posted record profits with the gross profit from the healthcare alone increasing 27% to reach Rs.2.2 billion, Pathirage said.
He revealed that they are on track to meet the target of opening 150 retail outlets by December this year and 250 by December next year.
"These well-appointed showrooms will showcase the world’s best brands in consumer electronics, branded apparel and furniture. Softlogic has built up a vast network of partnerships with reputed global brands, acquiring distributorships for some of the most high profile retail brand names in the world over the years – and these will find pride of place in our showrooms," Pathirage said.
The group recently took control of Asian Alliance Insurance PLC with Pathirage saying that having this company under their banner offers perfect synergies with existing business lines such as financial services, healthcare and automobiles.
The group is the authorized Ford dealer here and also handles the Daihatsu agency.
The year under review saw Nokia maintaining its market leadership of mobile phones selling 767,325 hand sets against the previous year’s 370,390.
The group has also aggressively entered the leisure sector with the takeover of Hotel Sea Sands in Bentota last year. The hotel will be closed for a year from October to be re-launched as what Pathirage called "a world class beach resort and spa under Centara International management in time for the peak winter season next year."
"The beachfront property will be extensively developed and transformed into a luxury 4-star plus resort with 160 well appointed world-class rooms and a full suite of amenities. Guests will have access to both the sea and the lagoon, and water sports will feature heavily in the hotel’s recreation options," he said.
The group has also finalized plans for a 24-storey, 220-room five-star city hotel in Colombo’s business centre in partnership with Movenpick, one of the world’s leading hotel chains.
Pathirage said that their business portfolio "has great balance, with solid cash flows being generated from the healthcare sector."
Softlogic has a stated capital of nearly Rs.1.1 billion, capital reserves of Rs.684.9 million and revenue reserves of nearly Rs.1.3 billion with total assets running at over Rs.29.1 billion.
Non-current liabilities stood at Rs.4.1 billion and current liabilities at nearly Rs.18 billion according to the last published balance sheet.
Pathirage has the controlling shareholding of 50.23% followed by Messrs. H.K. Kaimal (10.08%), R.J. Perera (9.12%) and G.W.D.H.U. Gunawardena (8.91%).
Both Ceylon Investment PLC and Ceylon Guardian Investment PLC are substantial shareholders together owning slightly under 5% of the company.
Softlogic has net assets of Rs.4.75 per share and earnings per share during the last financial year was Rs.1.30. The company was listed on the CSE last July and had 142 shareholders in its register prior to the listing.
The directors of the company are: Messrs. A.K. Pathirage (Chairman/MD), G.W.D.H.U. Gunawardena, R.J. Perera, H.K. Kaimal, M.P.R. Rasool, S.A.B. Rajapaksa, Dr. S. Selliah, P.D. Rodrigo and P.L. de Alwis.
Net assets of Pelwatte Sugar Industries PLC recently taken over by parties connected to business leader Harry Jayawardena have slumped to less than half the company’s stated capital as of March 31, 2011, and the directors are recommending a Rs. 200 million capital infusion through a rights issue
Under terms of the Companies Law, an extraordinary general meeting of Pelwatte Sugar has been summoned for September 30 to table and discuss a report prepared by the directors in terms of Section 220 of the Companies Act No.7 of 2007. The financial position of the company will also be discussed at this meeting.
A report to shareholders signed by Messrs. D.H.S. Jayawardena and L.U.D. Fernando, directors of Pelwatte Sugar, said that the company had posted a loss of Rs.628.8 million as at March 31, 2011, up from a loss of Rs.444.2 million the previous year.
Consequent to these losses, the net asset position of the company as at March 31, 2011 has declined to Rs.262.2 million.
"At this level the net assets of the company as at March 31, 2011 was less than half of the company’s stated capital as of the said date," the report has said.
It explained that high administration cost together with high production related overheads were among the main causes for the losses with the 20% gross profit margin recorded by the company during the last financial year inadequate to cover administration expenses of Rs.522 million.
"The reduction in the gross profit was due to the increase in the purchasing price of cane together with a less than proportionate increase in the sugar selling prices," the report said.
"Reduction of the gross profit margin from 6.3% (Rs.123.4 million) in the last year to 2.0% (Rs.44.8 million) in the current year together with the increase in administrative expenses from Rs.391.1 million to Rs.522.2 million resulted in the loss recorded by the company."
The report said that the increase in the administrative expenses was mainly due to the increase in staff costs including gratuity as a result of granting the agreed revision of salaries and wages in 2010 and 2011.
Pelwatte’s management changed in the latter part of financial year 2010/11 with the purchase of a 47% stake in the company by Melstacorp Limited, a Harry Jayawardena company, and the board was subsequently re-constituted.
The re-constituted board anticipates restructuring the company to ensure the profitability of operations "within a reasonable period of time," the shareholders have been told.
Currently, the directors are focusing on improving the quality of productivity in the plantations with special attention paid to enhancing both labour productivity and machinery utilization.
"The financial strength of the main shareholders will also benefit the company reducing its financing costs," shareholders have been told.
The directors have explained that it takes longer to realize positive changes in an agriculture industry. They announced they were recommending raising Rs.200 million by way of a rights issue.
By Elton R. Ebert
The week commenced on a bad note when the ATS at the Colombo bourse ran into difficulties a few minutes after trading activities got underway. The few transactions which were effected were cancelled, and for the first time there was no trading during the whole day. This caused many problems and various comments were made by brokers and investors some of which are unprintable.
There were a few heated verbal exchanges between some clients and brokers. It was stated that a few of the clients who were badly let down due to the spate of forced selling were most vociferous. In this instance, the problem was the malfunctioning of the ATS in the Colombo Stock Exchange and not the brokers.
Global stock markets have tumbled due to fear of slipping back into recession. This factor plus a combination of other factors seem to be pushing down the indices. A further decline would see the emergence of the resistance level which would mean the return of a host of bargain hunters. The ASI, on the decline for the whole week, ended at 6734. Many are curious to see at which point there should be some resistance.
Moving away from this depressing tone we have some constructive news coming from the NDB which is moving into an investment banking alliance with DBS Bank of Singapore, and with the focus on sectors like infrastructure, telecom, power and tourism, should prove beneficial in due course. The share price of the NDB had a marginal gain immediately after the announcement.
The Finance Co witnessed a temporary surge on Wednesday due to a transaction between two high profile players at the bourse. Around 8 million Voting shares and 2 million Non Voting shares were transacted, the closing levels being Rs.45.40 and Rs.15.90, respectively. Both categories, however, contracted as the week progressed.
Commercial Credit which reported very encouraging earnings recently came in for extra market support on Tuesday when transactions were effected in excess of 2 million shares and at enhanced levels. The two insurance companies - Ceylinco Insurance and Asian Alliance Insurance which is now controlled by Softlogic Capital were on a steady upside.
Softlogic Capital which had a reference price of Rs.40 commenced trading on Wednesday when over one million shares was traded. It rose to Rs 75 but began to pull back immediately afterwards. Softlogic Holdings which is now on the main board was also on the decline. The closing levels were Rs 43 and Rs 22, respectively.
Also drawing attention was the heavy dealings in Lanka Orix Finance Co, in which a solitary deal of 52 million shares at Rs 12 was transacted on Thursday. Some are speculating that the seller was a fund based in India.
In the manufacturing sector, Regnis went on the overdrive on Thursday when dealings in excess of 800,000 shares were traded reaching a peak level of Rs 290 before closing for the day at Rs 275. There was a further hike the next day as it reached Rs 315,but closed for the week at Rs 303.70. Capital Alliance Finance have got approval for the listing on the Diri Savi board 33,920.282 ordinary shares.
PRICE BANDS: - Was imposed on Asian Alliance Insurance PLC from 21st to 27th September. It was removed from Muller & Phipps on Thursday.
The turnover for the four days was Rs 6.8 billion against Rs 10.2 billion last week. Both indices were in negative territory, the All Share Price losing 136.32 points or o.1% to end at 6734.60 while the Milanka was also 185.31 or 0.2% lower at 6023.93
LOLC Leisure has finalised the international hotel chain operator to rebrand and manage some of its hotels bought from the Furkhan family one year ago. It is also planning an Initial Public Offering (IPO) in a bid to raise funds for the planned refurbishment and expansion, sources close to the company said.
They said the Hilton chain will most likely manage Riverina, Club Palm Garden and Tropical Villas while negotiations are still on for a partner for Eden. These hotels have been closed for business for 18 months since May to complete an accelerated refurbishment programme.
“We plan to spend roughly US$ 30 million in refurbishing its properties,” a source told the Business Times. He added that the IPO details are also being finalised to fund both the refurbishment and expansion of hotels.
The Furkhans sold some of their stakes in related holding companies of the three Confifi hotels – Club Palm Garden (CPG), Riverina Hotel and Eden to a consortium led by LOLC and Browns last year. This consortium now own 52% in Confifi Hotel Holdings (the owners and managers of CPG), 25.5% in Riverina and 23.71% in Eden. Further firming its position in the country’s famed golden mile, the company bought a 60% stake in Tropical Villas, a beach resort with 50 luxury villas in Beruwela, through a subsidiary LOLC Leisure last August.
By Duruthu Edirimuni Chandrasekera
Renuka Holdings PLC (RHL) is on an aggressive expansion and is pursuing value added food and beverage exports, automotive, Fast Moving Consumer Goods (FMCG) food service, portfolio management and property development on the back of the peace dividend, officials said.
“We reclassified our business areas this financial year into four key segments in order to forge ahead with our expansion plans. The Renuka Agri Foods PLC group (RAL) heads the agribusiness sector, McShaw Automotive Ltd group the automotive sector, Shaw Wallace Ceylon Ltd group, the FMCG and foodservice sector, while Coco Lanka PLC group is our investment arm (portfolio management and property development).” Shamindra Rajiyah, Executive Director RHL told the Business Times in an interview.
RAL has a most diversified coconut factory in the country at Wathupitiwela off Nittambuwa, utilizing many alternative food processing technologies. Mr. Rajiyah said the company’s agribusiness segment is engaged in plantations, manufacturing and marketing, noting that this firm went public two years ago. “We’re currently commissioning our coconut water production plant and hope to be ready by January 2012. These products will mainly be for exports,” he stated. Mr. Rajiyah said that coconut is Sri Lanka’s third major agricultural export crop and that earnings from this sector accounted for 1.8% of last year’s gross domestic product.
“The demand for value added coconut based products are generated mainly through households, catering industry (hotels, restaurants, caterers) and food manufacturing industries,” he said. RAL manufactures coconut milk, coconut milk powder, granulated de-fatted coconut, etc, while its subsidiaries manufacture organic certified products, tea bags, spices, rice products among many other products, the unique feature being that over 50% of their exports are their own brands. Mr. Rajiyah added that after the coconut water project takes off the ground, RAL will venture into a Greenfield plantation project. “We’re exploring about 5,000 acres of state land and this will be in the East and/ or North Western parts of the island," he explained.
Mr. Rajiyah said that RHL’s automotive segment is the leader with Delphi Lockheed having an 80% share in brake oil market. “Shaw Wallace got together with McLarens Holdings early this year to put together a much larger automotive company – McShaw Automotive. Though this firm, we are in tyres, tubes, lubricants and will go into automobile agencies, etc,” he said. He also added that if there are areas for expansion in auto assembly or any other related fields, McShaw will explore these options as well.
As for RHL buying into Shaw Wallace Ceylon Ltd early this year, Mr. Rajiyah noted that this was a good fit for the company which was looking to acquire a distribution arm at the right value. “Shaw Wallace Ceylon is unique that it has more than 70% of their sales outside the Western province and we supply more than 65,000 outlets directly and some 100,000 outlets indirectly. Further 70% of Shaw Wallace sales are from our own brands.” He said Shaw Wallace Ceylon is a corporate icon, nurtured by a lifetime of trust and conviction among the millions of Sri Lankan’s who grew up with its products.
Shaw Wallace's FMCG brands include Captain and Plaza tinned fish, Sun Gold instant drinks, Rainers colourings and essences, Ranposha breakfast cereal, Milk White laundry soap, Ranwan Venivel herbal soap and agencies such as Ajinomoto flavour enhancer, Supermax shaving products, etc.
“We also recently formed a company called Shaw Wallace Food Services Ltd through Shaw Wallace Ceylon Ltd to establish a fully fledged food services arm,” Mr. Rajiyah said. He said that this was done to benefit from the underlying opportunity of the current tourism boom. He added that they are gearing to set up a manufacturing plant for Shaw Wallace.
Mr. Rajiyah explained that Shaw Wallace has a vast portfolio of brands (some not in use in the recent past) and that the company is on a journey of expansion and growth to extend its product portfolio and unlock brand values. “Today, under Renuka, Shaw Wallace possesses manufacturing capabilities (unlike earlier),” he explained.
Mr. Rajiyah added that RHL will forge ahead with its portfolio management activities, investing in the stock market, private equity projects through Coco Lanka. “We’re also looking to develop our portfolio of properties. We’re initially looking at commercial projects in Colombo,” he added.
By Duruthu Edirimuni Chandrasekera
Sri Lanka’s Securities Exchange Commission (SEC) has sanctioned First Class International Funds (Pvt) Ltd owned by 27 year-old Dhammika Herath as a fund manager three weeks ago, officials said.
"We were granted a fund management license by the SEC and we hope to start operations by mid next month," Dhammika Herath, Chairman First Class International Funds (Pvt) Ltd told the Business Times. He said that now they are empowered to handle and manage funds of any scale both locally or internationally.
Elaborating on his background, Mr. Herath said that he was a retailer who entered the market some nine years ago. “I was 18 at the time and really interested in trading and was also quite successful at it. Then some of my closest friends wanted me to manage their funds and I made money for them. When the number (of friends) rose (in 2009) then the SEC wanted to regulate my operations and I had to apply for a license,” he explained. Mr. Herath added that he doesn’t possess fancy qualifications and attributed his success to his insight, experience and interest in the Colombo share market. “I made all my monies through trading shares. I managed to enter into other businesses also through the money I made through share trading,” he added.
He said that First Class International Funds has eight staff including two qualified fund managers. "The fund managers need to be qualified as per the SEC requirements. We will expand within the next two months as we foresee many clients and businesses approaching us," he noted. Mr. Herath added that he has already negotiated with about six high networth clients and also an equal number of foreign funds.
He noted that First Class International Funds’ will be investing in companies with a ‘future’.
By Duruthu Edirimuni Chandrasekera
With post Initial Public Offerings (IPOs) price crashes, the initial 60 IPOs on the cards for this year have dwindled by half to 30 as many firms have put on hold their IPOs which were to be issued this year, according to stock market sources.
“With over eight months gone, not more than 30 firms are slated to go public for 2011 mainly due to the weak performance in share prices of IPOs during the past few months (after they started trading in the stock exchange),” an analyst said.
Rationalized the “IPO craze”
He added that certain recent IPOs which didn’t perform as expected may have now rationalized the “IPO craze” as the issuing firms are also apprehensive with investors now more choosy about what they invest their money in.
So far only 25 firms have gone public and more than 70% are through introductions.
“Some of those who applied for IPOs from the Colombo Stock Exchange (CSE) and got the nod are also holding on," a source told the Business Times.
Analysts said that past levels of 60 times oversubscription again is unlikely in the future. "Listings have slowed mainly due to the slowing market condition. So people are not that enthusiastic for going into new listings," Danushka Samarasinghe Director Research TKS Holdings noted.
No fundamentals
Analysts say that some firms that came into the stock market aren't fundamentally strong or credit-worthy. "Everybody knows that some of them don’t even have proper business models and some don’t have any fundamentals. You cannot expect foreign investors to invest in these companies, just because they get oversubscribed by poor pensioners who want to make some quick money.
The investors are losing confidence," Adrian Perera, CEO RAM Ratings (Lanka) Ltd told the Business Times. He added that one cannot build confidence by telling such pension funds to come to the market.
He explained that the CSE must adopt either the western model the (US, UK) or Eastern model (India, Malaysia, HK, China) where only investment grade-rated companies are allowed to come into the market. "The reason is that if the company cannot pay its loan oligations they aren't able to justify a dividend. Only a handful of companies listed in CSE's main board are investment grade-rated," he pointed out. Contd. on page 9
Source - www.sundaytimes.lk
The Softlogic Group, which recently acquired more than 90% in Asian Alliance Insurance Company (AAIC), will only retain about 70% in the firm in the medium term, informed sources say.
Softlogic bought Asia Capital PLC's 73% in AAIC last month and triggered the mandatory code which requires them to offer to buy the balance shareholders out at the highest traded price prior to the (mandatory code) trigger. The Richard Peiris Group (RPG) with 25% accepted this offer made by Softlogic to acquire the ordinary voting shares held by subsidiaries, Richard Pieris and Company PLC and Richard Pieris Distributors in AAIC at Rs.120 per share.
“Immediately after the mandatory offer was accepted by RPG, Softlogic sold less than 2%,” a source close to the company told the Business Times. The buyer was believed to be advertising personality and now major stock market investor Dilith Jayaweera. The source added that Softlogic will sell some 30% over the next few months.
“But they will try not to sell large strategic stakes,” he added. Softlogic, according to officials is bullish on the financial services and is eyeing (to set up/ acquire) a stockbroking company as well.
A 10% price band has been imposed on AAIC with effect from September 21 to 27 (both days inclusive)
Source - www.sundaytimes.lk
Regnis (Lanka) PLC (REG), shares hit record high yesterday with the news that some high net worth investors are interested in the stock.
Consequently 826, 400 REG shares or 17 percent of the company traded at the average price of Rs.246.60, contributing Rs,264.6 million to the day’s turnover.
The shares opened at Rs.235, hit an intra-day record high of Rs.290 and closed at Rs.275. REG has only 4.83 million shares in issue.
According to analysts, REG has been trading on above average volumes during the past with todays being the highest in the past month.
They further pointed out the share price was as low as Rs.166 as at September 15, 2011.
source - www.dailymirror.lk
*Regnis clears Rs. 300 barrier
The Milanka Price Index on the Colombo bourse yesterday suffered one of its sharpest recent single day falls losing 83.56 points (1.37%) while the All Share Price Index was down 27.78 points (0.41%) on a turnover of Rs.1.14 billion, down from the previous day’s Rs.1.9 billion, with 56 gainers trailing 126 losers.
"Overall, sentiment was down the whole of this week with very little happening on the market," Prashan Fernando of Acuity Stockbrokers said.
Regnis, the Singer Sri Lanka subsidiary, continued to fly gaining Rs.26.30 to close at Rs.306 on over 0.6 million shares done between Rs.270 and Rs.315. The counter contributed the day’s highest Rs.183.1 million to turnover.
Renuka Holdings was next best on the turnover league with two crossings of nearly 1.8 million shares at a price of Rs.65.50 being among 2.2 million shares traded during the day. The counter closed Rs.3.50 up at Rs.64.40 generating Rs.144.9 million turnover.
Radiant Gems which had attracted recent interest gained Rs.8.90 to close at Rs.196.50 on nearly 0.4 million shares done between Rs.182 and Rs.197 while Asian Alliance Insurance was up Rs.10.80 to close at Rs.201 on nearly 0.4 million shares done between Rs.174 and Rs.209.
Brokers said that although the market had declined, six of the most traded stock yesterday had all posted price gains. This included Tess Agro up 70 cents to Rs.6 on 6.7 million shares and Singer Sri Lanka up 30 cents to Rs.124 on nearly 0.3 million shares.
"This could be due to the very sharp price movement of Regnis which is a Singer subsidiary," Prashan Fernando of Acuity said.
Many blue chips were among the losers yesterday although mostly on thin volumes. JKH was down to Rs.209 on 80,300 shares, Chevron down to Rs.158.60 on 14,100 shares, Ceylon Tea Services down Rs.5 to Rs.800 on 100 shares and Royal Ceramics down Rs.5.80 to Rs.136 on 11,300 shares.
Among blue chip losers were Hayleys down Rs.2.30, Cold Stores down Rs.2, Asian Hotel Properties down Rs.1.90, Commercial Bank down Rs.2 and Distilleries down Rs.2.30.
ACL Cables announced an interim dividend of 70 cents per share for 2011/12 XD from Oct. 3 and with payment on Oct. 13.
source - www.island.lk