Colombo Stock Market

අතුරු අයවැය සමාලෝචන

2015-02-02T00:01:00.002-08:00

' 2 % ක වියදමින් 98% ක් ' සේවය කිරීමට ඉලක්ක කර නව රජය ප්රමුඛ අයවැය. එම යෝජනාව ' සුපිරි ලාභ බදු ' දී රජය ' උපයා ගත් ජයග්රහන ' ප්රතිලාභ සහ අමතරව එක වර , 25 % ක බදු යෝජනා කිරීමෙන් වර්ෂයට සමගාමීව 2103/14 දී LKR2bn ඉක්මවන තුළ එක සතයකවත් ලාභයක් ලබා නැති බව සියලු සමාගම් තෝරා තනි බදු දැනටමත් ගෙවා . අපි (විශේෂයෙන් දෙස නෙත් යොමා ක්රියාත්මක වන අය සමඟ) ප්රතිපත්තිය එවැනි නොගැලපීම් ශ්රී ලංකා සුරැකුම්පත් දීර්ඝ කාලීන ආයෝජකයන්ට භයානක සංඥා යැවීම හැකි විශ්වාස කරනවා. අයවැය ද දැඩි ලෙස ( මත්පැන් දී තවත් දිගුවක් ලෙසින් සැලකිය හැකියි සහ ලයන් දී අමතා, ටෙලිකොම් ) අපි සංඝටක බලපානු විශ්වාස කරන විදුලි සංදේශ හා මත්පැන් කර්මාන්ත මත අධික බදු , අතුල් පහර දුන්හ.

Bridging closer the deficit, despite setting a dicey precedence

The foremost budget of the new Government aimed to serve ‘the 98% at the expense of the 2%’. In the proposal ‘the super gains tax’, the Government singled out all companies that made a profit in excess of LKR2bn in FY 2103/14 as having benefited from ‘ill gotten gains’ and proposed a one time, 25% tax in addition to the taxes already paid. We believe such inconsistencies in policy (particularly with ones with retrospective effect) could send dangerous signals to the long term investors of Sri Lankan securities. The budget also slapped heavy taxes on telecom and alcohol industries which we believe would affect the constituents (DIAL & SLTL in Telco and LION in liquor) severely.

Sri Lanka blue-chips tumble

2014-06-02T18:49:00.000-07:00

May 27 (As Reuters article) - Sri Lanka stocks fell to a three-week low on Tuesday led by select blue-chips like Sri Lanka Telecom PLC and conglomerate John Keells Holdings PLC, while trading in shares of some financial firms boosted turnover.

The main stock index ended 0.41 percent, or 25.58 points, lower at 6,267.44, its lowest close since May 7.

The day's turnover stood at 1.38 billion rupees ($10.58 million), more than this year's daily average of 1.02 billion, helped by Multi Finance PLC, Entrust Securities PLC , and Asia Asset Finance Ltd.

The bourse saw a net foreign inflow of 35.6 million rupees on Tuesday, extending the year-to-date net foreign inflow to 1.87 billion rupees.

Stockbrokers expect the market to gain in the near future due to lower interest rates after the central bank kept key rates at multi-year lows on Tuesday for the fourth straight month, as expected.

Shares of Sri Lanka Telecom PLC fell 5.74 percent to 46.00 rupees, while John Keells Holdings PLC fell 0.38 percent to 233.10 rupees. Both stocks dragged the overall index.

After the market closed, Keells said its March-quarter net profit fell 9 percent to 4.68 billion rupees.

Multi Finance PLC ended 0.6 percent up at 16.70 rupees, while Entrust Securities PLC rose 1.46 percent to 20.80 rupees. Asia Asset Finance PLC ended flat at 1.80 rupees a share.

The market has been on a rising trend since mid-March as many investors were compelled to return to the stock market because low interest rates have made fixed-income assets less attractive, stockbrokers said.

However, analysts have raised concerns over sluggish economic growth due to lower credit growth and consumer spending.

Despite a multi-year low interest rate regime, data showed private sector credit grew 4.3 percent in March from a year earlier, the slowest expansion since May 2010.

The latest trade data, released on Monday, showed imports have gained 8.2 percent in March, while exports hit a record high of $1.07 billion helping to narrow the March trade deficit by 15.5 percent compared to a year ago.

Central bank Governor Ajith Nivard Cabraal on May 19 said Sri Lanka's private sector credit growth would pick up to around 15 percent by the end of this year and continue to improve through 2016.

Initial Public Offerings (IPOs) in Sri Lanka

2014-04-08T19:05:00.003-07:00

The Colombo Stock Exchange (CSE) witnessed an increase in Initial Public Offerings (IPOs) since the beginning of the year as a result of the incentives given by the budget for the year 2014 and the prudent measures taken by market stakeholders.

The current trend attracts many investors to the market. These investors will be able to maximize opportunities only if they make informed decisions. They should refrain from making unwise decisions as done in the past. Hence, this article will give out some useful tips when investing.

Seek — and secure — objective research
It’s not as easy as you might think to find good objective information or research on a private company on the cusp of going public, yet doing so is absolutely essential.
Start by scouring the web for information on the company — particularly any details regarding financing as well as past and current press releases. They can inform you of any news, research or analysis of your IPO, the anticipated price for the offering and perhaps even how the company’s major executives and shareholders have been buying and selling their stocks.

There are still other firms that specialize in performing in-depth IPO researching and reporting. They may charge a nominal fee for this extra information but ensuring you’re well-informed on your prospective IPO is often worth the extra expense. By performing good research, you’ll be able to determine whether your IPO is a stable company, or if it’s just being over-hyped.

It’s also a good idea to take a look at the health of the overall sector in which the company you’re interested in belongs to (e.g., manufacturing, information technology, health care, bank finance and insurance, hotels and travels, etc.). For example, if you’re considering an IPO in the manufacturing sector but that particular sector hasn’t been faring well, you may want to reconsider.

Read and understand the prospectus
For most people, thoroughly reading their investment prospectus can seem nothing more than a tedious — if not entirely soporific — endeavour they’d rather not undertake. Investing in stocks, however, and particularly investing in IPOs, requires that you do more than just skim the prospectus — you must read it from cover to cover. While the material may be a bit dry, the information contained within the prospectus such as the company’s opportunities/risks and how the funds the IPO raises are proposed to be used is invaluable.
Highlighted below are some of the sections of an IPO prospectus that an investor should consider.

Legal proceedings disclose the significant litigation involving the company.
Management’s discussion and analysis gives the management an opportunity to discuss in narrative form the management’s perspective on the company’s financial condition, changes in financial condition and results of operations. This narrative section should provide investors with information to help them understand how and why the company’s financial results have changed over the time period covered by the financial statements and factors that management thinks might affect the company’s future financial condition or operating results.
Dilution illustrates the usually significant disparity between the price that investors are paying for shares in the company’s IPO to both the book value of such shares and the average price paid by the existing shareholders that include founders, officers and early investors.
Use of proceeds specifies what the company plans to do with the money it raises in the offering.
Prospectus summary briefly summarizes information that is disclosed in greater detail throughout the prospectus, including the company’s business, strategy, plans for using the funds raised in the IPO, financial condition and as well as the terms of the IPO itself.
Risk factors identify risks that the company’s management feels could significantly impact the company’s business, operations or performance or an investment in the securities being offered.
Dividend policy describes the company’s history of paying and possibly its plans to pay, dividends to shareholders.
Selected financial data discloses certain key financial and other data in a summarized column format. The information and presentation can highlight significant trends in the companys financial condition and results of operations. Companies are generally required to disclose selected financial data for the past years. You should also study the projected accounting figures in the prospectus carefully. If the IPO’s future earnings projections look too good to be true, well, that just might be the case. This is perhaps one of the biggest red flags you should look for when performing your research.
Business describes the company’s lines of business, its principal products or services and their markets, any significant suppliers and customers on whom the company’s business depends and its competitive landscape and principal methods of competition. This section may also provide information regarding the relative contribution to the company’s financial results from different significant lines of business or operations in foreign countries.
The management offers biographical information regarding the directors and executive officers of the company.

It’s also worth remembering that while most companies do their best to disclose everything about the IPO in their prospectuses and provide as much information as possible, all the data and information are written by the company, not a disinterested third party or group.

Watch out for lock-up period
Lock-up agreements are legally binding documents that prevent existing shareholders from selling any shares of stock for a specified period of time. The problem is, when lockups expire all the insiders are permitted to sell their stock. The result is a rush of people trying to sell their stock to realize their profit. This excess supply can put severe downward pressure on the stock price.

Evaluate the offering price
The company and the investment bank make the decision on where to set the offering price. It is important to understand that the offering price is determined by a mix of market conditions, analysis and the companys performance. Competing interests affect the determination of the offering price.

From the perspective of the company offering its shares in the IPO, the higher the offering price, the more capital the company can raise.

Under-pricing an IPO creates a discount for the initial investors and increase the quantity of shares applied for. This in turn could once again generate more capital to the company. Under-pricing may also affect how much, if at all, the stock’s price rises on its first trading day. If there is a large increase, or ‘bump’, from the offering price during the initial trading, the underwriters client-investors may be satisfied because the value of their investment will have increased. However, the company may be unsatisfied in that case, as it might have been able to sell its shares at a higher initial offering price and thereby raise more capital.

All of the foregoing factor into the determination of the offering price. Whether you have an opportunity to participate directly in an IPO or are buying shares in the open market, it is important to realize that the offering price reflects a negotiated estimate as to the value of the company. The offering price may bear little relationship to the trading price of the securities and it is not uncommon for the closing price of the shares shortly after the IPO to be well above or below the offering price.

Bottom line
Successful companies go public but it is difficult to sift through and find the investments with the most potential. Just keep in mind that when it comes to dealing with the IPO market an informed investor is likely to perform much better than one who is not.

source- dailymirror.lk

Bansei Royal Resorts IPO

2014-03-18T20:28:00.000-07:00

Sri Lanka based Bansei Royal Resorts Hikkaduwa Limited has decided to list the firm in the Colombo Stock Exchange.

Accordingly, the resort firm will list the firm in the Colombo bourse as an introduction.

CSE has given approval to the firm to list 53,728,000 ordinary voting shares by way of an introduction.

The shares would be listed on the Diri Savi Board of the CSE.

Asiri Central Hospital delist from CSE

2014-03-18T20:27:00.003-07:00

The latest company to announce delisting is Asiri Central Hospitals, which announced this decision on Thursday to the CSE. This followed an announcement by loss-making Beruwala Walk Inn PLC on Monday seeking permission from the CSE to delist the company in a bid to turn-around the organization and return to profits have failed over the past few years. “The company has been reporting losses almost every year since the tsunami as the hotel was extensively damaged and rendered non-operational unless huge capital is injected to demolish and reconstruct the hotel”.

Last month Kuruwita Textile Mills announced it was delisting for the same reasons as Beruwala Walk Inn.

The three companies said that they will take all necessary steps in accordance with the terms of the regulations issued by SEC pertaining to delisting of shares, including the convening of an Extra-Ordinary General Meeting of the shareholders to seek their approval.

Earnings Review Q3 FY 14- Aitken Spence Hotel Holdings PLC

2014-03-10T00:57:00.001-07:00

An increase in overall occupancies drove AHUN’s revenue growth in Q3 FY 14. Gross revenue grew 15.8% YoY to LKR 3.4bn to which the Sri Lankan (SL) and South Asian (SA) segments contributed ~27% and 73% respectively. The SL and SA segments recorded gross revenues of LKR 933mn (+16.2% YoY) and LKR 2.5bn (+15.7% YoY) respectively. AHUN recorded an EBIT of LKR 948mn (+ 31.7% YoY) on higher revenue. During the period AHUN entered into an agreement with Spanish hotel group ‘RIU Hotels’ to construct a 500 room resort in Ahungalla. The expected cost of the project is ~USD 100mn. Further, an additional 240 rooms will be added to the group portfolio in FY 2015E. Based on DCF valuation we have arrived at a TP of LKR 82 with an upside of 13% to CMP. We recommend BUY.

Source: Company data and BRS Research

BRS Equity Research | Bartleet Religare Securities (Pvt) Ltd, Sri Lanka

CIC Holdings PLC- (CIC-LKR 45.50) - Initiation Report

2014-03-06T02:28:00.001-08:00

Looking for a clear direction : HOLD

CIC is a diversified company with a majority exposure to agriculture. With the top line forecasted to grow tamely at 1.6% three-year CAGR, CIC is attempting to realign strategy by shedding some of the loss making units. While we are positive of the efforts’ medium term results, we are concerned about the working capital financing CIC is likely to endure caused by the delay in the Government payment of the fertilizer subsidy. A DCF based valuation suggests a Target Price (TP) of LKR 48. CIC trades at 10.3x PE ratio in FY 2015E after a forecast loss in FY 2014E. We feel with the uncertainty of the subsidy payments coupled with the thin margins of the key business segments and the low forward ROEs, these forward trading multiples are not a bargain. We recommend HOLD.

Source: Company data and BRS Research

BRS Equity Research | Bartleet Religare Securities (Pvt) Ltd, Sri Lanka

Sri Lankan IT-BPO and Knowledge Services industry taught importance of going public by CSE

2014-03-04T19:50:00.001-08:00

Sri Lanka's Colombo Stock Exchange (CSE) and the regulator, Securities and Exchange Commission (SEC), in association with the Sri Lanka Association of Software and Service Companies (SLASSCOM) is scheduled to host a forum to educate the IT-BPO and Knowledge Services industry on the importance of going public.

The Forum is another step to attract companies that are of high value and worth to the capital market, in order for them to enter into a mutually beneficial partnership of wealth creation and value addition with the public, the CSE said in a statement.

The potential-issuer relations forum will be held on the 5th of March at the Dialog Future World Auditorium, from 08.30 a.m. to 11.00 a.m.

The programme will commence with an introduction to the benefits of listing by CEO of CSE Rajeeva Bandaranaike, followed by a presentation on "Valuing your Company" by Vice-President of Copal Amba (A Moody's Subsidiary) Asanka Herath. Chairman of SLASSCOM Madu Ratnayake will also speak at the event.

The CEOs and CFOs of potential-issuer companies from the target industry will be given an opportunity to pose their questions to a distinguished panel of the capital market.

The panel will comprise Director of CSE Ray Abeywardena, AGM of Regulatory Affairs at CSE Renuke Wijayawardhane, and Deputy Director General & Officer-in-Charge of SEC Dhammika Perera. The panel will be moderated by Executive Director of SLASSCOM Imran Furkan.

The forum is further seen as an ideal opportunity for the decision makers of these entrepreneurial endeavors to mingle and network with the senior management representatives of Investment Banks, to build mutually beneficial relationships for the future, the statement said.

"Sri Lankan IT/BPM industry is on a rapid growth trajectory and gaining increasing attention globally. We would anticipate a growth of over 23% YoY this year at industry level, therefore many of the SLASSCOM companies are now gearing for their next phase of growth. Listing on the Stock Market would create avenues for companies to raise funds for this growth acceleration and will provide the general public an opportunity to participate in this very exciting growth phase of the industry, as investors. We are delighted to work with SEC and CSE to help companies understand the journey of raising funds from the capital market," Chairman of SLASSCOM Mr. Madu Ratnayake said.

"The Sri Lankan Capital Market is a vibrant atmosphere where long established, as well as entrepreneurial businesses can thrive by raising capital and maintaining a high standard of accountability to their stakeholders. By entering this affirmative environment, members of the knowledge services industry in Sri Lanka can benefit a great deal," Deputy Director General and Officer-in-Charge of SEC Dhammika Perera said.

"Listing on the Stock Exchange helps a company enhance its corporate profile and gives it a competitive advantage, while helping the company increase its worth by attracting strategic investors and high value employees. These benefits boost the prestige of a company and can thereby be utilized to fund the next stage of a company's expansion strategy," CEO of CSE Rajeeva Bandaranaike said.

-colombo page

Australian solar panels manufacturer will in CSE?

2014-02-25T19:18:00.003-08:00

The Sydney-based Australian solar panels manufacturer, Energy Puzzle Group will invest US$ 190 million to set up a state-of-the-art factory in Sri Lanka to manufacture solar panels.

Sri Lanka's investment promotion agency, the Board of Investment (BoI) said the Energy Puzzle Group will set up its plant in the BOI's new Export Processing Zone at Mirijjawela, near Hambantota in the deep south.
Chairman of Energy Puzzle, Patrick Featherston and Chairman of the Board of Investment of Sri Lanka Dr. Lakshman Jayaweera signed the agreement recently in Colombo.
Energy Puzzle will be developing their operations in Sri Lanka under several phases and in the first phase, which is covered under the agreement with the BOI, the company will manufacture solar cells and panels of up to 150 MW/year.

"However the company envisages a greater production of Solar Panels and Energy Technology in the future," the BoI said.
The company will originally employ 150 staff of which there would be a mix of Sri Lankan and some Australian managers and workers.
According to the BoI, Energy Puzzle has a vast experience in solar power projects and provides consultancy services to the governments of Australia, the USA and Sri Lanka in this form of alternative energy.

Production of solar panels will be mainly exported but some of this production will also be made available to the local market. The Company could be listed in the Colombo Stock Exchange under a new scheme which is being set up by the BoI and Stock Exchange.

-colombopage.com

SLT’s revenues climb 5.9%

2014-02-25T18:25:00.001-08:00

During the full-year 2013, the Sri Lanka Telecom (SLT) group reported LKR60.1 billion (USD456 million) consolidated net revenue, up by 5.9% compared to the previous year, driven by revenue increases at both SLT’s fixed network division and cellular subsidiary Mobitel. The group reported operational costs of LKR41.2 billion, with a ‘sustainable increase’ of 6.2% year-on-year, and recorded a 5.3% rise in EBITDA to LKR18.9 billion, attributed to ‘healthy revenue growth coupled with operating cost management’. EBITDA margin remained steady at 31.5%, while the rising EBITDA plus non-operational transactions drove a 38.2% y-o-y increase in group net profit to LKR5.4 billion. Net profit in 4Q 2013 dropped by 3.1% quarter-on-quarter to LKR1.5 billion due to the impact of taxation.

SLT which also has Mobitel, a mobile unit, said group revenues rose 7 percent in the December quarter, while operating costs fell 01 percent to 10.5 billion rupees, helping profits before depreciation to go up 31 percent to 5.0 billion rupees. Mobitel recorded gross turnover of LKR27.5 billion in 2013, up by LKR2.6 billion from the previous year, while for the fourth quarter the cellco’s revenue increased 9% y-o-y to above LKR7 billion. Mobitel added that its subscriber base crossed the five million mark.

SLT reported fixed division gross revenue of LKR36.8 billion for FY 2013, with 5.9% growth driven by broadband and IPTV uptake, while reporting 5.8% q-o-q turnover growth to LKR9.9 billion in 4Q13.

People's Leasing Company Limited PLC IPO

2011-10-17T19:43:00.001-07:00

People's Leasing Company, the market leader in the growing leasing industry, will go public with an IPO on 3rd November 2011. At the offer price of LKR 18.00, we believe PLC, a subsidiary of the state owned People's Bank, offers compelling investment value. In addition to the access to captive leasing portfolios of the parent, PLC is also able to operate on a significantly lower cost model with their ability to piggyback on the parent's branch network. With a leasing portfolio of 25% of the specialized leasing companies' asset base, PLC's disbursements dwarf even the Licensed Commercial Banks' leasing segments. Our TP of LKR 22.00 is based on relative multiples (earnings and book) considering PLC's competitive positioning. SUBSCRIBE.

BRS Equity Research | Bartleet Religare Securities (Pvt) Ltd, Sri Lanka

Lion Brewery (Ceylon) PLC - BRS Equity Research

2011-10-17T19:40:00.000-07:00

Stable revenue growth in FY 2012E and FY 2013E

We expect LION to post a revenue of LKR 15.06bn in FY 2012E. Growing local demand for soft liquor and the Company’s increasing focus on capacity expansion would create top line growth in our view. We expect Gross Profit margins to remain healthy at 34% in FY 2012E and 35% in FY 2013E . Our forecasts have factored in a price increase of 3% for both FY 2012E and FY 2013E.

Consistent healthy margins, EBIT margin 16% (FY 2012E)

The Company recorded a recurring EBIT of LKR 1.75bn for FY 2011. We expect the EBIT to reach LKR 2.40bn in FY 2012E. EBIT margins are expected to be 16% in FY 2012E and FY 2013E. We believe the Company will have to manage its administration and distribution cost in order to maintain margins.

EPS estimates – LKR 15.25 (FY 2012E) and LKR 22.21 (FY 2013E)

BRS adjusted EPS for LION stands at LKR 12.11 for FY 2011. We expect the EPS to reach LKR 15.25 (+26% YoY) by FY 2012E and LKR 22.21 (+44% YoY) by FY 2013E. DPS is maintained at LKR 4.00.

Valuation – Attractive, potential value of LKR 252.50

Our valuation is based on the free cash flow method. Based on our forecast the stock has a potential value of LKR 252.50 on a WACC of ~ 10.3% and terminal growth rate of 3%. The cost of equity is based on a beta of 0.87 (based on ASPI vs. stock price movements), risk free rate of 7.4% and an equity risk premium of 5%. The stock has a forward PE multiple of 13.0x on FY 2012E EPS of LKR 15.25 and the current price of LKR 198.00. Based on FY 2013E EPS the stock has a PE multiple of 8.9x. The Food and Beverage sector PE stands at 15.1x as at 13th October 2011.

Sri Lanka climbs 10 places in the Global Competitiveness Report

2011-09-09T00:29:00.001-07:00

The Annual Global Competitiveness Report (GCR) from the World Economic Forum (WEF) shows that Sri Lanka has made impressive progress over the last year. The country has climbed 10 places to the 52^nd rank in 2011-12. The GCR finds Asia has become globally more competitive as a result of its rise in economic prominence. Over the past five years, China, Indonesia, Vietnam, and Sri Lanka have made important strides in the GCI rankings.

The GCR report assesses the ability of countries to provide high levels of prosperity to their citizens, which in turn depends on how productively a country uses available resources. Therefore, the Global Competitiveness Index measures the set of institutions, policies, and factors that set the sustainable current and medium-term levels of economic prosperity.

Across all indicators, Sri Lanka shows improvements on 80% of them - 80-90 of the 110 indicators - both in terms of scores as well as rank. Sri Lanka made the greatest improvements in scores, year-on-year, in the pillars of ‘macroeconomic stability’ (up by 0.48 points) and ‘infrastructure’ (up by 0.33 points). Meanwhile, the most noteworthy decline in scores was in the pillar of ‘labour market efficiency’ (down by 0.11 points).

The dramatic jump by Sri Lanka in the last few years in GCR rankings might not be sustainable going forward. Also, it may be easier to bring in improvements in smaller economies, unlike India. But it may be noted that these strides are not only from peace dividends due to a strong positive sentiment since the end of the civil war. Indeed, most macroeconomic indicators also support the high growth and prosperity in the economy. The report lists inflation, access to financing, inefficient government bureaucracy, political instability, corruption and inadequate infrastructure as the main problems faced while doing business in Sri Lanka. We believe that many of these concerns are likely to wane with proactive policy intervention by the Sri Lankan government, while a few of them might just stay put, being ‘generic’ in nature.We remain positive on the sustainability of growth process in the economy.

On the global economy, Xavier Sala-i-Martin, Professor of Economics, Columbia University, USA, and co-author of the GCR, notes in the report - “Amid re-emerging concerns about the global economic outlook, policy-makers must not lose sight of long-term competitiveness fundamentals. For the recovery to be put on a more stable footing, emerging and developing economies must ensure that growth is based on productivity enhancements. Advanced economies, many of which struggle with fiscal challenges and anaemic growth, need to focus on competitiveness-enhancing measures in order to create a virtuous cycle of growth and ensure solid economic recovery.”

Market gain on speculation

2011-07-27T20:05:00.000-07:00

* Market oversold; Amana accounts for 78 pct of
volume
* Banks help gain on earnings hope; Keells posts 35 pct
profit
* State bank protects rupee amid importer dlr demand

COLOMBO, July 27 (Reuters) - Sri Lanka's stock market edged
up on Wednesday mainly on retail buying of banking shares in an
oversold bourse, fuelled by speculation the Securities and
Exchange Commission (SEC) may relax an order to end margin
trading.
The main share index gained 0.2 percent or 11.98
points to 6,505.56. It hit a more-than seven-month low on Monday
after negative comments on insider trading.
Analysts said retail investors were snapping up beaten
shares on a rumour the SEC may relax a directive to eliminate
margin trading by the year's end, which have hit the market
badly.
Since June 1, the index has shed 11.9 percent, mainly due to
forced selling to meet the deadline.
The 14-day Relative Strength Index gained to 29.3 from
Tuesday's 28, but was still below the oversold level of 30,
Thomsonreuters data showed.
Banks led the gain on earning hopes with the fourth largest
lender DFCC gaining 4.8 percent and top lender
Commercial Bank of Ceylon rising 1.4 percent. The
second biggest bank HNB closed 1.9 percent firmer.
Market heavyweight John Keells Holdings added 0.4
percent before posting a 35 percent gain in its June quarter net
profit.
Islamic lender Amana Bank, which will start commercial
banking operations shortly, bought 15 percent of Amana Takaful
, boosting the turnover.
Amana, which closed flat, accounted for 78 percent of the
day's total volume of 191.3 million. The bourse' five-day
average is 104.8 million. The 30-day and 90-day average trading
volumes were 101.2 million and 105.7 million, respectively. Last
year's daily average was 67.9 million.
The day's turnover was 1.97 billion Sri Lanka rupees ($18
million), below last year's average of 2.4 billion and this
year's 2.7 billion.
The bourse is down 1.96 percent so far this year, after
being Asia's best performer in 2009 and 2010, with 124 percent
and 96 percent respectively due to optimism over the economy
after the end of a 25-year war in May 2009.
Foreign investors were net sellers of 10.2 million rupees
worth of shares on Wednesday. They have sold 7.7 billion rupees
in 2011 after a record outflow of 26.4 billion in 2010.
The rupee ended steady at 109.49/50 a dollar for
an eighth straight day after gaining to 109.42 due to panic
dollar sales by exporters, who expected a sharp rise after a $1
billion inflow from a sovereign bond sale last week.
However, dealers said a state bank, through which the
central bank directs the market, bought dollars at 109.50 to
keep the currency steady.

FACTORS TO WATCH:
- June quarter earnings of listed firms
- If foreign investors buy shares in large volumes.
- The extent of the rupee's appreciation.

DATA
Colombo Stock Exchange:
Stock Market Volume (Shares)
Current Volume Average Volume 30 Days
191,253,747 101,161,176

Yield and Price of Sri Lanka's sovereign bonds:
Maturing year Tenure amount Reuters yield
2012 5-yr $500 mln 3.031-2.634
2014 5-yr $500 mln 4.193-3.901
2020 10-yr $1,000 mln 5.8920-5.7525
2021 10-yr $1,000 mln 5.9838-5.8519

* For Sri Lankan treasury securities benchmarks and data,
please click and
* For interbank lending rate or call money rate or

* For secondary market rates, please see <0#LKBMK=>.
($1 = 109.495 Sri Lanka Rupees)

(Reporting by Ranga Sirilal; Editing by Shihar Aneez and Bryson
Hull)

LSE in talks with Sri Lanka exchange over share trading

2011-07-10T19:32:00.001-07:00

(Reuters) - The London Stock Exchange is in talks with Sri Lanka's Securities and Exchange Commission over allowing trading of some of the island nation's shares on the London bourse and vice versa, a regulator official said on Monday.

An agreement will help Sri Lanka's selected blue chips to be traded in London, opening up its market to foreign investors.

"This is still in an initial stage. We hope to progress after the discussion and if happens, it will be a great opportunity for Sri Lanka," Malik Cader, the director general of the SEC told Reuters in the sidelines of a national economic forum in Sri Lanka's capital, Colombo.

Cader declined to comment on the time frame for the process.

The LSE (LSE.L), which was forced to abort its $3.5 billion merger with Canada's TMX Group last week, has links with Sri Lanka after buying Sri Lankan technology company, Millennium IT.

The SEC is encouraging foreign companies to list on the Colombo Stock Exchange .CSE in order to get access to trade their shares in London market.

(Reporting by Shihar Aneez; Editing by Louise Heavens)

Q411 Earnings Review - Royal Ceramics PLC (RCL)- bartleetstock

2011-05-20T04:44:00.001-07:00

Net Revenue up 29.2% YoY to LKR 5,751mn from LKR 4,451mn

We believe the growth in volumes to be the key catalyst that led to top line growth. The prices have remained constant for both its Tile and Sanitary ware segment; indicating that the growth in volumes drove revenue in FY 2011. We expect a Net Revenue growth of 19.1% to LKR 6,848mn (previous estimate- LKR 7,460mn) for FY 2012E and a growth of 20.9% to LKR 8,279mn for FY 2013E, further steered by increased volumes.

Flat Gross Profit Margins

RCL achieved a Gross Profit growth of 25.4% to LKR 2,656mn in FY 2011. We expect RCL’s Gross Profit to grow by 17.4% YoY to LKR 3,120mn (previous estimate- LKR 3,446mn) in FY 2012E and by 22.8% to LKR 3,828 in FY 2013E. Gross Profit margins are expected to be steady at 45.6% for FY 2012E and 46.2% for FY 2013E.

EBIT growth of 27.2% in FY 2011 to LKR 1,579mn (previous estimate – LKR 1,560mn)

EBIT is adjusted for non-recurring gains of LKR 164mn in FY 2011. We expect an EBIT growth of 5.5% to LKR 1,665mn (previous estimate-LKR 1,875mn) in FY 2012E and 25.2% to LKR 2,085mn in FY 2013E. We believe the growth in volumes coupled with cost savings will aid in EBIT growth.

Valuation – Attractive at the current price of LKR 155.60; upside potential of 11.8%

Based on our new estimates we have arrived at a target price of LKR 173.93(previous estimate-LKR 165.28). Our valuations are based on a WACC of ~ 9.4% and terminal growth of 3.0%. The WACC is based on a debt to equity of 50%, beta of 0.91(based on ASPI vs. RCL stock price movements), risk free rate of 7.3% and an equity risk premium of 4.0%.

Regards,

BMS Equity Research Team | Bartleet Mallory Stockbrokers

Recommendations for Expolanka IPO

2011-05-12T00:04:00.000-07:00

Broker pulse on Expolanka IPO
Broker Comment

Acuity Yes
Asha Phillip Yes/Medium to Long Term
Asia Securities Yes
Assetline Neutral/Yes Long Term
Ceylinco Yes
CT Smith Yes
DNH Yes/Medium to Long Term
Heraymila Yes
IIFL Ceylon Yes/Long Term
John Keells Yes
NDB Report Out Today
Richard Peiris Neutral/Yes Long Term
SC Securities Yes
Taprobane Yes

expo ipo

2011-04-26T20:56:00.000-07:00

Expo Lanka Holding Limited - IPO

Sri Lanka's stock exchange has approved an initial public offering by Expolanka Holdings to raise 2.4 billion rupees by issuing 172 million ordinary voting shares at 14 rupees each. The IPO opens May 12 with the prospectus was available on April 25.

The company has said it plans a sell-down of a 25 percent stake including a recent private placement to raise funds for expansion and repay debt.

The company announced after its recent private placement that three independent directors had been appointed to its board.

post by Sinhala Ayojakaya,

Expo Lanka Holding Limited, another IPO.As usual our retails investors are very busy to find cash to apply for said ipo.Some time they sell their good stocks to find cash. Who cares prospectus? Why? Every IPO share price is going up in first day. So no need to read prospectus and best thing is applying all IPOs. Do you think same? We think that most of our retail investors think so. Companies, those come to IPOs, they know how our investors think and they value their IPO price with smart premium and rest will be handed over to our investors. They are doing job well. Finally IPO is oversubscribed by many times.

If above comments is not relevant to you, please forget it.

Here we would like to highlight few points regarding Expo Lanka Holding Limited.

· Stated capital of the company Rs.1,782,915,000/=.its equal to issued no of shares (before IPO).This means promoters cost of shares is Rs.1.if directors sell 127,351,071 shares @14,their cost for the company is zero. They can do this without changing major shareholding.

· 15%, out of IPO shares will be allocated to employees, its means 25,800,000 no of shares. In addition to this another 2,678,500 shares will be allocated on May 2011 under ESOP. some time they may dump their holding in first day,if they feel,price is getting down and they know their company real value.

· 316,667,500 shares were transferred @ rs.6.we can’t say exactly their decision on first trading day. but we know if they sell @14,they will get a wonderful capital gain (14-6).

· ROE of the company is 15%, EPS .711 for nine months ended including major one off income, Book value per shares 2.41 after IPO increased to 3.42.pls make your valuation.

· Company has declared dividend for the nine months ended 31st December 2011,cents 0.121.this reduced further cost of a share of directors

· During the year Rs.100,626,192 has been granted to directors as advance.

Note. If you think that above comments are wrong, please discuss with Sinhala Ayojakaya.

Union Bank IPO

2011-02-25T02:53:00.000-08:00

Sri Lanka bank IPO creates record

Feb 25, 2011 (LBO) - An initial public offer for 375 million rupees of stock in Sri Lanka's Union Bank has drawn record subscriptions of 84 billion rupees or 225 times making it the largest oversubscription ever in the island.
The registrars said 30,100 applications had been received for the issue which closed on Thursday, and from the applications processed so far 3.375 billion shares had been applied for.
The bank only offered 15 million shares to the public.

The previous high was with Singer Finance, a small finance company which attracted subscriptions for 135 times the offer, advisors NDB Investment Bank said.

Softlogic IPO in March

2011-02-01T00:23:00.001-08:00

“The country has a high number of small banks and they are unable to provide massive development loans. The banks need to consolidate to support growth and the development process of the country,” Softlogic Holdings Chairman and Managing Director Ashok Pathirage said.

“The corporate sector needs to undertake projects and support the country’s socio economic development. It is important that top banks merge to provide these funding facilities within the country,” Pathirage said.
“We could manage with three to four solid banks considering the country’s size and population. The banking industry has the necessary regulatory framework to move forward. However, merges within the industry will facilitate the huge capital requirement to carry out the development projects,” he said.
The Softlogic Finance company will focus on high performance in keeping with its brand name and reputation. It has a strategic plan in place to achieve Rs 500 million profitability within the next three years.
“This is the level that we are planning to reach in the next few years. We will expand our branch network to widen the reach and will also introduce more finance products to increase our customer base,” Pathirage said.
Softlogic Holdings will go for an IPO in March to raise funds to further build the company.

Rehan Wijetunge and Investnow.lk

2011-01-26T19:25:00.000-08:00

Investnow.lk bar temporarily!

Letter from Rehan about the suspend of InvestNow.lk

My Apologies...

Dearest Members, Investors and those who are just starting out,

It is with great regret that I write this message to you all that I am temporarily suspending the forum in order to rework our strategy and create a professional entity that will continue to help investors navigate the great depths of the market and act to be a credible guide with the help of you all, the community.

The events that have taken place over this short period of time have convinced me that we seriously need to make a stand to save what we have all built and act in a manner that best serves the community, our country and that can truly help the Colombo Stock Exchange reach greater heights and be free from manipulative control through education and creating awareness.

In the coming weeks I will be developing a more robust system that can handle these issues and I hope that I can count on your support to do this.

If anyone who like to have a refund for any services paid for that are still valid then please send me an email. I'll be happy to do the needful.

Sorry for the inconvenience.

Kind Regards,

Rehan Wijetunge

in InvestNow.lk post by MukeshAmbani,

Check share trading account of Rehan Wijetunga

I think SEC and CSE should immediately check the share trading account of Rehan Wijetunge because many believe that he is front running share by publishing article on it website through various nominee account. Front running is a criminal offence under the SEC Act. Details of Rehan Wijetunga can be provided to CSE for a immediate investigation.

Reply from Rehan

Well, our moderators had some issues with approving this post since it can be considered as "mud-slinging" but then I decided that maybe this needs to be discussed :)

I do however thank you for your reply to my post, "Message to All Our Members" which you have highlighted the benefit of my proposed system :D

http://investnow.lk/2011/01/24/message-to-all-our-members/11506/32037/

To be honest, I like your initiative; it's bold and if that is what is necessary to bring some credibility to this system then so be it :D

I actually haven't traded in months, not something you might have expected from the guy running this thing; heck I should be rolling in cash and make it open to everyone even without verification like some other sites claiming no responsibility for what happens and leave it entirely to their membership to abuse. Well, that's not the way I like to run things ;)

Let's create an approachable market serviced by professionals who actually care about developing the share market with no agenda and free it from the manipulators whose aim is to ride the market and leave the small guys holding the bag; shame on them!

Consider this a movement; my hope is that we share the same goals and can encourage more reputable organizations to join and create an investment culture that best serves the community and for that we require the assistance of the SEC and all related parties.

This is an invitation to really serve our community :D

Thank you

Rehan

Update on 31 Jan, 2011

An article was published on lbo.lk about the incident..
author: Ishara M Gamage

Sri Lanka stock website shuts after regulator warning
Jan 31, 2011 (LBO) - A Sri Lanka stock investment website has closed after warnings against misleading investors by the capital markets regulator, whose officials said they were cracking down on such sites.
An official at the Securities and Exchange Commission said they warned the people operating the website, saying misleading advice that influence share prices could violate SEC regulations.

The operator of the site, investnow.lk, decided to close last week after the warning by the regulator.

A notice posted on the website said it was "temporarily suspending" the forum in order to "rework" its strategy and create a "professional entity that will continue to help investors navigate the great depths of the market and act to be a credible guide with the help of you all, the community."

It said it would act in a manner that "best serves the community . . . and be free from manipulative control through education and creating awareness."

The site offered to refund members for any services paid for that are still valid.

The SEC official said they were also monitoring other websites that offer advice on investing in the stock market which has been on a bull run since the island's 30-year ethnic war ended in 2009.

The SEC was also investigating stock brokers believed to be behind some of the websites that offer advice to investors, he said.

The Colombo bourse was Asia's second-best performing market last year

IPOs in electronic form

2010-12-16T21:07:00.000-08:00

NEWS ALERT: All 2011 IPOs will be electronic, if u got share CERTIFICATES, need to lodge them

1. All IPOs from Jan 2011 will be in electronic form and no share certificates to be issued.
2. All those holding paper share certificates of currently listed Co's will have to deposit them @ CDS before END 2011.-

The Securities and Exchange Commission of Sri Lanka (SEC) has directed the Colombo Stock Exchange (CSE) and Central Depository Systems (Pvt) Ltd (CDS) to mandate the lodging of securities certificates pertaining to all listed securities at the CDS and thereby implement a system of full dematerialisation of all listed securities at the CDS.

The term full dematerialisation refers to the process of converting physical securities certificates of listed securities to a scripless (paperless) or electronic form by way of lodging the respective physical securities certificates into the respective CDS accounts of shareholders.
At present around 60% of shares are lodged in the CDS and the balance remain in certificate form.
The SEC has directed the CSE/CDS to implement the above process in the following manner.
To mandate securities of new listings to be in dematerialised form (electronic) form with effective from 1 January 2011
All applicants for IPO’s which open for subscription on or after 1.1.2011 must therefore open a CDS account and indicate their respective CDS account numbers in the IPO application form. The Company Secretary/Registrar would not issue securities certificates to the applicants who do not have valid CDS accounts.
To mandate securities of all existing listed companies which have obtained a listed status before 1 January 2011 to be in dematerialised form within a transitional period of one year from 1 January 2011.

BFL Bairaha to build new state-of-the-art chicken farm

2010-12-16T00:52:00.001-08:00

Thursday, 16 December 2010 13:04 Feizal Samath

Sri Lanka’s Bairaha Farms is setting up a state-of-the-art broiler (chicken) farm on 48 acres at Anamaduwa in the Puttalam district, the company announced on Thursday.

The farm will be created in line with international farms and standards. “The size of each poultry house will be much bigger, and the specifications of these buildings will be technically more advanced to enable us to maintain outstanding hygiene and cleanliness than possible with farms currently operating in Sri Lanka,” Yakooth Naleem, Bairaha Managing Director said in the statement.
In a filing at the Colombo Stock Exchange, Bairaha – a pioneer chicken producer – said it signed an agreement with the Board of Investment (BOI) to give effect to this proposal.

The project, to be set-up under a new company subsidiary called Nature’s Best Industry Ltd, will enjoy a 10-year tax holiday from the first year of making profits.
The expected investment in the first year is Rs 120 million with the total, additional investment in the second and third year being Rs 240 million.

“We expect this will increase our commercial broiler production by 20 % in the first year, 20 % in the second year and 15 % in the third year,” Mr Naleem said in the statement. The first batch of chickens from this farm will be ready by April/May 2011.

LLUB 4 dividends per annum

2010-12-15T20:07:00.000-08:00

DIVIDEND ANNOUNCEMENT - LLUB

15-Dec-2010 DIVIDEND ANNOUNCEMENT - LLUB

CHEVRON LUBRICANTS LANKA PLC
Company ID: - LLUB
Date of Announcement:-15.Dec.2010
Rate of Dividend: - Rs.3 per share fourth Interim Dividend
Financial Year: - 2010
XD:-27-Dec-2010
Payment: - 05.Jan.2011
Share Transfer Book Open

Sri Lanka Laugfs IPO

2010-10-26T00:31:00.001-07:00

Laugfs group, the second firm that make up the duopoly in Sri Lanka's gas business is going public to raise 2.5 billion rupees by offering 75 million ordinary voting shares at 23 rupees a share, and 52 million ordinary non-voting shares at 15 rupees each.

Steep Discount?

Capital Alliance, joint placement managers for the issue say the firm has a trailing price to earnings multiple of 15 times, and a forward P/E of 8.5 times.

Laugfs group, of which financial accounts end in March made a profit of 229.3 million rupees in 2009, while in the following year its bottom line rocketed 130.4 percent to 528.3 million.

For the first four months ending July 31, the firm has made a profit of 262.3 million rupees.

Capital Alliance is projecting a one billion rupee bottom line by March 2011.

In 2010 group revenues were almost 5.6 billion rupees, up 23 percent from the corresponding period last year.

In 2009, Laugfs group made a profit of 94 cents per share, 2.03 rupees in March 2010, and till July 2010 made an annualized profit of 3.03 rupees per share.

By March 210, Laugfs group assets were down 3.85 percent to almost six billion rupees.

"The valuations were done very conservatively," Deshan Pushparajah, corporate finance manager at Capital Alliance said this at a Luagfs IPO presentation recently.

Pushparajah says the Laugfs Group based on EV (Enterprise Value)/ EBIDTA (earnings before interest, taxes, depreciation and amortization), usually done at mergers and takeovers is worth 39.83 rupees per ordinary share, while non-voting shares are valued at 27.88 rupees.

EV factors in debt and cash stock into valuations.

Capital Alliance values the group at over 77 million dollars, while Merchant Bank of Sri Lanka (MBSL), the lead managers to the issue gives a market cap of 75 million dollars.

EV/EBIDTA multiples are sometimes criticized by analysts for ignoring profitability, which can push up valuation multiples of companies that have lower net margins.

Pushparajah is benchmarking the industry average EV/EBIDTA multiple on US based Amerigas Partners, Suburban Propane Partners and Ferrell Gas Partners at an average P/E of 10.5 times.

An analysis using a developed market as a benchmark may not reflect a true valuation.

For an example a 10 percent interest rate may not stir a hornets' nest in Sri Lanka, but will create quite a stir in developed western markets like the US, EU and UK.

Hijaz Suhair, assistant manager at MBSL says the IPO share price was valued taking the downside into consideration.

The price was calculated to attract the big corporate and high net worth investors who look for capital gains after a couple of years, Suhair said.

Group Structure

The group has four main sub-business units which consist, liquid petroleum gas retail, property development, gas emission testing and leisure.

Laugfs key gas business will be a benefactor with Sri Lanka's per capita income rising and more consumers switching to gas cylinders for their home cooking needs, Pushparajah, said.

By March 31, 2010, Laugfs key gas business contributes 93.5 percent to revenue and 99.2 percent to group profits.

Laufgs to date lays claim to 30 percent share of the domestic cooking gas cylinder market, 60 percent of industrial gas and 90 percent of auto gas.

Achilles Heel

The group's gas business will have high organic growth, but sustaining growth in a politically risk inclined business will be challenging mid to long term, an analyst from FRANDS Consultancy said

About 45 percent of the firm's gas is sourced from state owned Ceylon Petroleum Corporation at world market rates (Ceylon Petroleum Corporation), while the rest is imported at spot rates.

Laugfs Gas saves 25 to 30 percent in freight and insurance costs from buying nearly half of its needs locally, and is blessed with a guaranteed 30 percent mark up on imported gas, thanks to a court ruling.

Independent analyst say Laugfs Gas has an Achilles heel.

"The court order and costs savings from locally sourced gas has helped Laugfs sell gas cheaper (than Shell Gas) and maintain margins," independent analyst said.

"However the chink in Laugfs armour will be exposed if the court order is reversed or if the new state gas company buys the CPC gas for its own need."

Earlier this month the government in a media release said it plans to wrap up the purchase of multinational energy company Royal-Dutch Shell's Sri Lankan gas unit within a month.

The government is paying 63 million US dollars for a 51 percent stake in Shell Gas Lanka in which it already owns 49 percent and for a 100 percent stake in a storage terminal company.

Monopoly Blues

W K H Wegapitiya, chairman of Laugfs Gas in an exclusive interview on LBR said said after his company was beaten by the state in a deal to acquire the local unit of Shell Gas, has now set eyes on managing the new state owned gas company.

Wegapitiya's proposal, if inked to a deal by the government will monopolize the Sri Lankan gas market. Monopoly's hurt consumers, as a single seller with no competition that can up prices and sacrifice quality with no one to challenge.

Monopolies are against free market principals of many players in a single market.

The government granted a five year monopoly to the Anglo Dutch gas firm Shell which ended in 2001 when Laugfs stepped in as the only local rival.

The 37 US dollar investment by Shell was used to build a port delivery terminal and boost distribution network which was in tatters in 1995.

Sri Lanka suffered frequent shortages of gas and new cylinders were not available to prospective new customers when gas distribution was a government monopoly.

"If a foreign company can hold and own a monopoly why can't a local company?" questioned Wegapitiya.

Shell had had running battles with the state over pricing until the island's Supreme Court ruled that gas should be re-priced bi-monthly on a price formula.

The offer is opening for subscription on November 04, 2010.