CSE News Updates

Indices gained during early trading amidst interest witnessed in selected counters but started to drop during the latter half to close in red with continuous forced selling.

However, heavy trading witnessed in counters like and Lanka Orix Finance Company and Regnis (Lanka) boosted the turnover.

Banks, Finance and Insurance sector was the main contributor to the market turnover (due to Lanka Orix Finance Company) and the sector index decreased by 0.31%. Lanka Orix Finance Company was the main contributor to the market turnover with a crossing of 52,000,000 shares at Rs 12.

The share price decreased by Rs 0.10 (0.91%) and closed at Rs 11. Foreign holding of the company decreased by 52,000,000 shares. Manufacturing sector also contributed significantly to the market turnover (due to Regnis (Lanka)) and the sector index decreased by 0.57%. The share price of Regnis (Lanka)) increased by Rs 45.50 (19.57%) and closed at Rs 275.

Interest was witnessed in Radiant Gems and Colonial Motors while profit taking took place in The Finance Company and Colombo Land & Development. The share price of Radiant Gems increased by Rs 18.90 (11.48%) and closed at Rs 185.

source - www.dailymirror.lk

 Sept 24, 2011 (LBO) - People's Leasing Company, Sri Lanka's largest leasing firm is planning to raise 70 million US dollars in the country's second largest initial public offer so far, an official said.
The sale is managed by NDB Investment Bank, a unit of listed NDB Bank, group which also completed the island's largest IPO so far for Dialog Axiata, Sri Lanka largest mobile firm.

Vajira Kulatilake who heads the investing banking operations of NDB said a part of the issue would also be placed overseas.

NDB this week struck a deal with Singapore's DBS Bank gain access to it distribution channels and for the two co-operate in large equity and debt sales and mergers and acquisitions.

"The Sri Lankan market can cater to a certain amount," Kulatilake, who heads NDB's investment banking cluster told reporters in Colombo.

"But beyond that you have to go abroad."

He said Sri Lanka's market could easily absorb a 20 million dollar equity sale.

Eric Ang who heads DBS Bank's capital markets division said the bank would be helping in IPOs managed by NDB.

"What DBS can do is to showcase this opportunity to our investor base in Asia," Ang said.

"DBS customers will now have an opportunity to look at NDB's investment opportunities from Sri Lanka."

Ang said there was a lot of liquidity in Asia that was looking for a home though valuations have come down over the past two years. A company that has a strong competitive edge could however stand out.

People's Leasing Company group posted profits of 2.6 billion rupees in the year to March 2011 on revenues of 10.6 billion rupees.

The group had gross assets of 63.8 billion rupees and equity of 8.4 billion rupees.

Sept 23, 2011 (LBO) - Sri Lankan stocks slumped again Friday closing lower for the fourth straight day with turnover also falling amid continued trade in stocks that have drawn speculators, brokers said.
The main All Share Price Index fell 0.41 percent (27.78 points) to 6,734.60, while the more liquid Milanka index fell 1.37 percent (83.67 points) to close at 6,023.93, according to stock exchange figures.

Turnover was 1.1 billion rupees.

Refrigerator manufacturer Regnis (Lanka), whose price was pumped up by speculators Thursday, was the most actively traded stock, rising to a new high.

It closed at 304.30 rupees, up 26.30, after hitting an intra-day high of 315 rupees, with 630,000 shares changing hands and accounting for the day's highest turnover.

Analysts said the firm's share price had been as low as 166 rupees as recently as last week.

"All round investor play continued which helped Regnis to record a gain of 9.46 percent over yesterday's close," SC Securities said.

Radiant Gems, an illiquid firm that reported losses in the June quarter, and which was also pumped up by speculators was sent up again to close at 192.50 rupees, up 8.90, after hitting a high of 197 rupees.

Tess Agro was also actively traded, closing at 5.80 rupees, up 70 cents with 6.7 million shares done.

East West was another heavily traded stock, closing at 34.90 rupees, down 70 cents.

Renuka Holdings accounted for the second highest turnover and closed at 64.20 rupees, up 3.50, with 2.2 million shares traded.

There was one crossing or off-market private deal of just over a million shares and another of 791,000 shares, both at 65.50 rupees a share.

"Renewed institutional interest was seen on Renuka Holdings," SC Securities said in a report.

Lanka Orix Finance Company (LOFC) which is a subsidiary company of Lanka Orix Leasing Company PLC yesterday became the top contributor to the day’s turnover, as the market witnessed a single crossing of 52 million shares, each at Rs.12 generating Rs.624 million. Unconfirmed reports suggested that sellers and buyers are both local parties. According to the shareholder list presented with the introductory document of the LOFC that was released last May, there are only three parties that held over 52 million shares besides the largest shareholder LOLC with 90 percent stake.

The three parties who had over 52 million shares were India Focus Cardinal Fund (100 million shares or 3.57%,), Saakya Capital Private Limited (65.6 million shares or  2.34%,) and Infinity Capital Limited (60 million shares or 2.14%). Meanwhile Indian media reports said yesterday that Securities and Exchange Board of India (SEBI) banned India Focus Cardinal Fund, which was the second largest shareholder of LOFC and four other international funds from the Indian stock market for their alleged role in stock manipulation.

LOFC share opened at Rs.11 and closed at Rs.10.20. The total number of LOFC shares traded was 52.1 million. LOFC has 2, 800 million shares in issue, and initially the share came into the market with an indicative price tag of Rs.5.

source - www.dailymirror.lk

Three other state  corporations to be handed  over on 30-year lease
By Hiran H. Senewiratne

Minister of State Resources and Enterprises Development Dayasritha Tissera says the Kankasanturai Cement Factory (KCF) located in the Jaffna peninsula will be commissioned via a public-private partnership before the year-end and would go for a public listing on the Colombo Stock Exchange (CSE).

Speaking to The Island Financial Review he said a 30 percent stake of KCF would be offered to the public while the balance 70 percent would be retained with the state. Currently, a feasibility study is being carried out by a leading bank in the country.

At present the factory is under the Defence Ministry and will be released for operations before the end of the year. However, required renovation and refurbishing activities are being carried out, he said

It is estimated that 1.6 million metric tons of cement could be produced annually. The Sri Lanka Cement Corporation would manage the production process and marketing aspect as well, he said.

Before the 30-years long conflict broke out, the factory had produced 115,000 metric tons of cement annually and was shutdown after it sustained damages.

Meanwhile, several state-owned entities would be revived in due course and are expected to commence commercial activities. The earmarked entities are the Ambilipitiya Paper Corporation, the Kantale Sugar factory and the Sri Lanka Rubber Manufacturing and Export Corporation.

"These entities will be given out on a 30 year lease for suitable foreign investors to run," Tissera said.

The Australian Perth Engineering Company will be taking over the Ambilipitiya Paper Corporation on a 30 year lease. While several investors have expressed interest for the other two entities, the assessment of these projects are yet to be finalised, Tissera said.

Once these entities commence commercial operations, more than 1,000 employment opportunities could be created, he added.

source - www.island.lk

The bourse continued its downtrend yesterday where broad levels of selloff were displayed on stocks. ASI decreased by 35.69 points (-0.52%YoY) to close at 6,792.88 where as sensitive MPI dipped by 30.89 points (-0.50%) to end at 6,138.33.

Market turnover stood at Rs 2.0bn. The Finance Company Plc (Rs 415.3mn) recorded to be the highest contributor to the turnover. The counter also depicted heavy trading during the day.

Furthermore The Finance Company Plc posted two crossing of 5.8mn shares at a price of Rs 48.00.

Additionally, Nawaloka Hospitals Plc (Rs 149.2mn) and Laugfs Gas Plc (Rs 107.9mn) notably contributed to the daily turnover

In the meantime Colombo Land & Development Plc, East West Properties Plc and Nawaloka Hospitals Plc demonstrated active trading.

Softlogic Capital Plc, which commenced its trading today and listed by introduction, witnessed active investor participation. The counter rallied to a high of Rs 75.00 and dropped back at the end of the day to close at Rs 47.00 (up Rs 7.00).

Foreign participation was recorded at 6.2% of the total market activity and at the end of the day foreign investors were the net buyers with a net foreign inflow of Rs 6.99mn.

Lanka Securities Research

Records staggering 334% increase in PAT

Recently listed on the Diri Savi Board of CSE, Multi Finance PLC (MFL) recorded a staggering 334% increase in its Profits After Tax (PAT) for the financial year ending 31 March 2011.

The company achieved its impressive results during a period where the Registered Finance Companies (RFCs) sector experienced stresses and liquidity constraints due to loss of investor confidence, mainly due to collapsed regulated financial institutions.

Though the financial indicators of the sector weakened, the RFCs contributed significantly to the overall growth of the economy since first half of 2010 and also lead to a more transparent era of business activities.

In aligning with the stipulated Central Bank of Sri Lanka imposed regulations, Multi Finance got listed on the CSE by way of an introductory offer. A favourite pick amongst the stock market investors, the share price recorded a high of Rs. 77.50 per share, with the lowest price being Rs. 250 per share.

Multi Finance, which is a subsidiary of Entrust Limited, was incorporated in 1974 and was acquired by the Entrust group in March 2008.

 Headquartered in Kandy, the company has spread out its business activities in key towns such as Colombo, Gampaha, Kurunegala and Matara whilst it is on a progressive mission to open more branches in the months to come.

The company weathered a year full of challenges and posted financial results which exceeded the budgeted figures. Total gross income moved up from Rs. 80.6 m to Rs. 159.5 m in 2011, recording a massive growth of 98%. It was an exceptional year for the company, underscored by an increased emphasis on portfolio quality as opposed to a focus on volume growth.
Group Executive Director/CEO A.H.M. Riyaz commented: “We are proud that the company’s NPL ratio remained at below 2%, which is the lowest in the market for the year under review.”

During the financial year under review, the company’s Profit Before Tax (PBT) grew from Rs. 8.1 m to Rs. 41.9 m, marking a staggering 417% growth, which has given impetus for overall positive growth in the company’s future business activities.

With Entrust Group taking over MFL and reshaping its business operations, the company was able to shift its focus from consumer durable business to being a fully-fledged RFC, offering products such as leasing, hire purchases, fixed deposits, savings accounts, pawning and other loans.

Spearheaded by newly-appointed Chairman Kuvera de Zoysa and Deputy Chairman Mohan Ratnayake, the management is confident that Multi Finance is progressively fast tracking its profitability through sustainable growth strategy.

The company will strategically expand its branch network, whilst simultaneously exploring synergistic diversification opportunities in new products and services, within the purview of Central Bank rules and regulations.

source - www.ft.lk