CSE News Updates

June 18, 2014 (LBO) - Colombo Stock Exchange said Lucky Lanka Milk Processing Company Limited, a dairy firm has been given the nod to raise 300 million rupees from an initial public offer.
The firm plans to offer for subscription 38 million voting shares at 6.00 rupees per share and 24 million non-voting shares at 3.00 rupees per share.

The subscription list will open on July 07, 2014. Merchant Bank of Sri Lanka Plc will manage the sale.

June 19, 2014 (LBO) - Dunamis Capital Plc said property valued at over 500 million rupees in a popular hill resort is to be taken over by the state.
The firm said in a stock exchange filing that the property in Upper Lake Road is 76 percent owned by the company and had a carrying value of 536 million rupees. Another 120 million rupees in interest had also been spent.

It had received an acquisition order dated June 10.
Two listed firms have been expropriated by the state in its entirety in the recent past and no compensation has yet been paid even to minority shareholders.

June 19, 2014 (LBO) - A group of Japanese electronic component makers have visited Sri Lanka to look at the possibility of setting up factories in the island, the state investment promotion agency said.
A delegation from Japan Electronics and Information Technology Industries Association (JEITA).

The companies were evaluating alternative manufacturing locations as part of a 'China +1' strategy of diversifying overseas production facilities, Sri Lanka's Board of Investment said.

The delegation was brought by Nihal Trading Company.

The BOI had presented them opportunities to set up plants in industrial zones in Suriyawewa and Mirijjawila in the Hambantota district.

Japanese component makers including FDK group are already in Sri Lanka.

June 19, 2014 (LBO) - Sri Lanka's information technology sector is setting up an online portal to collaborate with universities, academics and students, an industry chamber said.
Sri Lanka Association of Software and Service Companies (SLASSCOM), an industry body said its 'Campus Direct Link' will allow universities and industry to collaborate on projects and for industry practitioners to mentor students.

The portal was developed by IFS R &D International (Pvt) Ltd, a member firm of the chamber.

"The portal has been designed based on state-of-the-art social computing concepts to keep everyone connected together…" SLASSCOM said.

Companies, academics, undergraduate and post graduates students could be linked to the system.

Exports of IT and knowledge services had reached an estimated 720 million US dollars in 2013 and a billion dollars in revenue is expected by 2016.

SLASSCOM says the industry want to reach 5 billion US dollars in revenue and create 200,000 direct jobs and 1,000 start ups by 2022, for which active collaboration with the academia is needed.

June 20, 2014 (LBO) - Sri Lanka's exports grew 9.4 percent to 762.2 million US dollars, while imports fell 5.3 percent in April from a year earlier, amid weak domestic credit, allowing foreign reserves to grow, official data showed.
Apparel exports grew 22.5 percent in April to 336.8 million dollars from a year earlier with strong demand from the US and EU, the Central Bank said. Small markets like Russia and also seen a strong growth.

Agricultural products grew 13.7 percent to 199.7 million dollars. Tea grew 9.8 percent to 116.8 million US dollars with both price and volume gains helping.

Rubber product exports fell 0.6 percent to 57.9 million US dollars.

Imports fell 5.3 percent to 1,444.5 million US dollars with consumer goods down 3.2 percent to 263.9 million US dollars. Food and beverages fell 14.2 percent to 108.8 million US dollars.

Intermediate goods grew 0.2 percent to 889.3 million US dollars with textile related imports up 16.6 percent to 179.8 million US dollars, amid strong apparel exports.

Fuel was down 8.8 percent to 316 million US dollars.

Investment goods were down 20.4 percent to 289.2 million US dollars. Machinery was down 17.7 percent to 153.5 million US dollars and transport equipment was down 42.1 percent to 34.9 million US dollars.

Building material imports were down 13.6 percent to 100.5 million US dollars.

The trade gap in April fell 17.7 percent to 682.2 million US dollars.

In the five months to April, exports rose 16.9 percent to 3,571.1 million US dollars, and imports rose only 2.6 percent to 6,192.4 million US dollars, The trade gap declined 12.1 percent to 2,621 million US dollars.

The trade gap is caused when inflows to the financial accounts such as government foreign borrowings (exports of debt) and remittances (exports of labour) are spent by their recipients.

However Sri Lanka's credit growth has been weak or negative in the past few months.

When domestic credit is weak, all inflows are not quickly spent and resulting in liquidity build ups in the domestic banking system and an increase in foreign reserves at the Central Bank.

Foreign reserves rose to 8.9 billion US dollar by end April partly helped by a 500 million US sovereign dollar bond sale.

June 20, 2014 (LBO) - Sri Lanka's shares closed 0.17 percent lower for the third straight session amid strong foreign selling, brokers said.
The Colombo benchmark All Share Price Index closed 10.75 points lower at 6,302.45, down 0.17 percent. The S&P SL20 closed 11.81 points lower at 3,478.86, down 0.34 percent.

Turnover was 1.21 billion rupees, up from 683.59 million rupees a day earlier with 93 stocks closed positive against 87 negative.

Amana Takaful closed flat at 1.80 rupees with two off-market transactions of 180.25 million rupees changing hands at 2.00 rupees per share contributing 15 percent of the turnover.

The aggregate value of all off-the-floor deals represented 47 percent of the daily turnover.

John Keells Holdings closed 1.40 rupees lower at 220.70 rupees with market transactions of 268.26 million rupees contributing 22 percent of the turnover.

JKH’s W0022 warrants closed 1.40 rupees higher at 60.50 rupees and its W0023 warrants closed 1.50 rupees higher at 70.60 rupees.

Ceylon Leather Products W0014 warrants closed 20 cents higher at 1.80 rupees, attracting most number of trades during the day.

Foreign investors bought 196.45 million rupees worth shares while selling 386.54 million rupees worth shares.

Sri Lanka Telecom closed 1.30 rupees lower at 46.60 rupees and Dialog Axiata closed flat at 10.40 rupees.

Asian Hotels and Properties closed 3.80 rupees lower at 67.20 rupees and Trans Asia Hotels closed 1.40 rupees lower at 96.50 rupees.

Commercial Bank closed 2.00 rupees lower at 133.00 rupees and Commercial Leasing and Finance closed 10 cents higher at 4.10 rupees.

Bukit Darah closed 12.00 rupees higher at 660.00 rupees and Indo-Malay closed 98.70 rupees higher at 1,800.00 rupees.

Ceylon Beverage Holdings closed 39.10 rupees higher at 548.10 rupees and Lion Brewery Ceylon closed 8.90 rupees higher at 443.90 rupees.

June 20, 2014 (LBO) - Sri Lanka's Carsons Cumberbatch group said it has struck a deal to buy Millers Brewery Limited, from Cargills Ceylon Plc for 5.15 billion rupees.
The acquisition will be through Lion Brewery (Ceylon) Plc and Pearl Springs (Pvt) Ltd.

Cargills said in a stock exchange filing that it will give the firm to Carsons, debt free.

Cargills acquired the brewer during a credit bubble fired by low interest rates and also invested in improving its facilities, but became more leveraged in the process.

Many Sri Lankan firms that became highly leveraged are reducing debt and fixing their balance sheets, resulting in weak credit growth.