Colombo Stock Market

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.

September interim results

2010-10-24T20:12:00.000-07:00

Bairaha Farms Ltd (BFL) has posted attractive interim results for the September quarter with a revenue figure of LKR 599.8mn which is a YoY increase of 16%. Their Gross Profit margin is at 27% in comparison to 17% last year. The EBIT margin has risen to 22% from 7.8% last year and Net profit margin has accelerated to 19% from 4.8% which is mainly due to the significant decrease in finance cost, in our view.

ODEL Limited (ODEL) has also seen an exciting quarter with revenue climbing ~ 50% YoY to KR 836.2mn. Gross Profit margins have also strengthened from 36.15% to 38.5% during the period. ODEL has posted a net profit of LKR 63.6mn, up 18% YoY.

Historical day in CSE Oct 13 - 2010

2010-10-13T20:09:00.000-07:00

The market saw a major slide during today’s morning session owing to panic selling and this resulted in the ASPI shedding more than 250 points. The CSE imposeding halt on all stocks for a 30minutes till 10.59 a.m. as the MPI fell more than 5%. However the bourse took a ‘U’ turn and headed towards North once the trading halt was lifted, and ended the day in the green. The benchmark ASPI jumped 94.81 points (1.45%) to close at 6628.83 points while the MPI climbed 47.13 points (0.66%) to close at 7166.88 points.

Price gainers dominated the market with 117 stocks seeing price hikes and 94 seeing price falls.

Unit Trust Sri Lanka

2010-10-10T21:57:00.000-07:00

UNIT TRUST MANAGEMENT COMPANIES IN SRI LANKA

Background to the Unit Trust Industry

The Unit Trusts commenced operations in Sri Lanka during the year 1991 and in the following year, three more management companies were licensed to operate, and each of them launched Balanced Funds, to provide income and growth by investing in equity and fixed income securities. As a result, during the lean years of the Stock Market from 1994 to 2001, the performance of Unit Trusts suffered along with the decline in the overall share market. During the period 1996-1997, six new funds were formed to offer diversity of investment schemes. This enabled formation of growth funds and investment into Government securities and the debt market thereby introducing Gilt Edged Funds and Income Funds.

Currently, the Securities and Exchange Commission of Sri Lanka has licensed five management companies to operate thirteen open ended Funds. They comprise of four Balanced Funds, three Growth Funds, three Income Funds, one Gilt Edged Fund, one Money Market Fund and one Index Fund. Fund Investors comprise both Institutional and retail investors. However, the Institutional investors hold a majority of the units issued whilst among the unitholders majority of them are individual unit holders.

The Unit Trust Association of Srilanka (UTA) is an apex body of licensed unit trust management companies in Srilanka. The UTA was formed in 1992 to facilitate and promote investor awareness and express unit trust industry perspectives in related matters. It also functions as self governing body and contributes development of good practices and represents on any grievances of the industry to create an equitable platform for all member companies.

Related websites
Unit Trust Association of Sri Lanka : www.unittrust.lk
http://www.sec.gov.lk/UT_Companies.html

7th October 2010

2010-10-07T20:18:00.000-07:00

The ASPI moved down by 91.93 points (1.34%) and closed at 6770.74 while the MPI also recorded a decline of 108.02 points(1.44%) and closed at 7412.94.

Price losers out numbered the gainers with 174 counters recording losses while only 27 counters recorded gains.

Sri Lankan stocks running hot on local capital: brokers

2010-09-28T01:41:00.000-07:00

Sri Lanka markets 18 month bull-run, driven nearly 85 percent on local liquidity will soon run out of steam if foreign investors don't join the action, a senior official at Bartleet Mallory Stockbrokers said.

"The way the figures are, about 80 percent is a local driven market," Eraj Wijesinghe, chairman of Bartleet Mallory Stockbrokers (BMS) said.

"We just can't go on the foreign funds need to coming in, foreign investors coming in for us to get into the international arena."

BMS last week struck a strategic partnership with Religare, an Indian based asset management company which bought a 50 percent share for over 10 million dollars.

The bourse, once a sleepy index is now the toast of the region, second only to the Mongolian Index as the world's best performing market.

However despite the euphoria and high fives at the end of another record breaking day is still flying below the radar of foreign investors.

Year to date there was a net foreign outflow of 14.7 billion rupees.

State controlled pension funds who shunned on investing equities just over two years ago are now the big investors. They already have controlling or near controlling stakes on several leading commercial banks and blue chip stocks.

Analysts say the market is now showing signs of slowing down.

On Monday, Sri Lankan stocks in early morning trade on Monday passed 7,000 points mark for the first time in history, but could lost momentum due to investors cashing-in to cover margin trades, brokers said.

"There is a possibility the market will slowdown in the coming weeks due to new regulations on credit effective from January next year, while some investors took profits," Thakshila Hulangamuwa, vice president at Asha Phillip Securities told LBR.

"Due to a lack of participation we won't see turnover levels improving from the current range of four to five billion rupees."

Market watchdog the Securities & Exchange Commission effective from January 01, 2011, has banned all stock brokering firms granting credit to customers in fear of possible systemic risk in future.

Sysmatic risks arise when stock brokering firms default on transaction settlements.

The current trade settlement system is based on T (time) 3 or times plus three where transaction have to be settled within three working days.

This allows day traders to buy and sell securities for millions of rupees on credit, if the brokering firm is willing to take the credit risk.

--Riyad RiffaiLBR,Monday 27 September 2010

Bartleet TransCapital entered into alliance with global financial services giant Religare Enterprises Limited (REL)

2010-09-15T20:01:00.000-07:00

Colombo, Monday, 15th September 2010: Sri Lanka’s hi-octane stock market will reach new horizons
with the entry of the global financial services giant Religare Enterprises Limited (REL) in a milestone
strategic alliance announced today with Bartleet TransCapital.
The New Delhi-headquartered Religare Group (www.religare.in) which serves over a million clients
including corporates, institutions, high net worth families and individuals and retail investors in Asia,
Africa, the Middle East, Europe and the Americas, plans to establish its footprint in Sri Lanka initially in
stock broking by taking a 50 per cent stake in Bartleet Mallory Stockbrokers (BMS), the announcement
said. The transaction is subject to regulatory approval.
Bartleet Mallory Stockbrokers (www.bartleetstock.com) which is fully-owned by Bartleet TransCapital
(www.bartleettranscapital.com), has decided to increase its share capital to accommodate Religare
Enterprises.
The partnership will bring in best practices in non-banking financial services including broking operations
to the Sri Lankan market and leverage Bartleet’s established brand reputation, client relationships and
market leading stock broking presence in Sri Lanka to attract more international investors to the Colombo
Stock Exchange and to facilitate an extension of services to regional markets such as Bangladesh,
Maldives and Pakistan, Bartleet TransCapital Chairman and former Central Bank Governor Deshamanya
A S Jayawardena said.
It will also result in Colombo being integrated into Religare’s global network of investment banking
centres across emerging markets and London and bring to the attention of international fund managers the
increasing opportunities in well-managed Sri Lankan companies.
For Religare, the tie-up represents a significant addition to its emerging market pan Asian vision and
takes forward the Religare strategy of creating an emerging markets investment banking and stock
broking leader.
Commenting on the partnership, Religare Group CEO Shachindra Nath said: “With the upsurge in
economic and capital markets indicators over the last one year, Sri Lanka is a key market for Religare,
especially considering its proximity both physically and culturally to India. We are delighted to bring
such an impressive team into the Religare fold that would add considerable depth to our South Asia
investment banking and stock broking business.”
“Consistent with our view that high-growth developing markets represent an overwhelming opportunity
in terms of business flows, we are quickly positioning ourselves to provide the advice and distribution
capability that our global investor and corporate client base will require. Bartleet absolutely stands out for
its reputation and trustworthiness in the Sri Lankan financial sector.”
Eraj Wijesinghe, Chairman of the Bartleet Group added: “The post-conflict resurgence of Sri Lanka has
sparked new interest in business opportunities here. In this context, integrating Bartleet Mallory
Stockbrokers’ presence and reach in Sri Lanka in delivering results for clients with Religare’s scale and
ambition makes perfect sense. As a team we’re excited to become part of Religare’s carefully-conceived
vision to create a pan-emerging markets fully-integrated financial services group with a focus on
investment banking and to give our client base access to the wealth of opportunities that provides.”
The Religare Group employs more than 10,000 people across multiple geographies. In India, Religare’s
largest market, the group offers a wide array of products and services ranging from insurance, asset
management, broking and lending solutions to investment banking and wealth management. The group
also pioneered the concept of investments in alternative asset classes such as arts and films.
Bartleet TransCapital encompasses the non-banking financial services companies in the Bartleet Group
led by Eraj Wijesinghe, a former Chairman of the Colombo Stock Exchange. Bartleet TransCapital has
interests in stock broking, financial services, independent investment advisory, equity research, online
trading, life insurance advisory and Asset Management. Bartleet Mallory Stock Brokers (Pvt) Limited
was established in 1989 and is one of the pioneering members of Colombo Stock Exchange. The
company has a wide retail base with a large number of registered CDS accounts. It is ranked among the
top few stock broking firms in Sri Lanka by market share and has a well spread network across the island.

How Sri lanka stock market works?

2010-09-10T00:14:00.000-07:00

Please visit Colombo Stock Exchange (CSE) web site at http://www.cse.lk. It gives most of the information that one need to know to enter into Stock Market. From your wording it looks like you are not in Sri Lanka.
It is good to read the section at Getting Started --> Foreign Investment in Shares.

Basically there are more than 230 companies divided into 20 different sectors. Investing in CSE stocks is investing (buying shares) in one of the 230 odd companies. There is only one equity fund listed in CSE.

You can read most of the information (quarterly financial reports, Annual reports, major announcements) about each company via CSE web site
Trading is open from 09:30 to 14:30 hrs. (Local time) from Monday to Friday except on public and Bank holidays.
Each investor has to register with one of the broker companies. There are more than 15 broker companies that allow to trade via Internet where ever you are. You can register with more than one company and is free as at this day. Few companies use versatile more informative programs to interact with CSE. To my knowledge Asia Securities (Pvt) Ltd. http://www.asiacapital.lk and Asha Phillip Securities (Pvt) Ltd. http://www.ashaphillip.net facilitate to trade using DirectFM (you can read more in the Internet) client program to trade. You can do your technical analysis at any time of the day. Many other broker firms use a client program called CDAX and some of them have web base trading facility too.

Each trade will cost you about 1.02% as various taxes and commissions. As at these days CSE have introduced a new rule where each company share price can only vary 10% from the previous day closing price.

Good luck.

Advice from vpwvpw
for a question ask by sunny in investnow.lk

MPI & ASPI passed 6000 points

2010-09-09T19:26:00.000-07:00

During the holiday shortened week the All Share Price Index (ASPI) increased 142.92 points to close at a new all time high of 6023.41 points, while the Milanka Price Index (MPI) also increased by 211.50 points to a new high of 6278.31 points. The daily average turnover was SLRs.4.3bn compared to SLRs.3bn last week and the week ended with foreign buying amounting to SLRs.1.9bn whilst foreign selling was SLRs.4.4bn.

The week started off on a negative note with both indices recording losses on Monday.
However the market picked up towards the end of the week with both the ASPI
& MPI recording gains on Wednesday & Thursday. Both the MPI & ASPI passed
6000 points on Thursday. The ASPI recorded an increase of 60.79points (1.02%)
WoW to close at 6023.41 points. The liquid MPI also jumped 125.38points (2.04%)
WoW to close at 6066.81points.

The market will continue its upsurge at a more moderate phase in the coming week, despite possible profit taking by investors on counters which have reported unprecedented growth in price in the recent week.

Share index rose to a new record

2010-09-01T19:41:00.000-07:00

Sri Lanka shares hit new peak amid new SEC rule

Sept 1 (Reuters) - Sri Lanka's benchmark share index rose to a new record on Wednesday, and the Securities and Exchange Commission (SEC) ordered listed companies to immediately disclose related party transactions.

Institutional and foreign investors have long clamoured for prompter disclosure of insider dealings, amid complaints of manipulation. Previously, related-party transactions were only only required disclosure in annual reports.

According to the ruling issued after trading closed on Wednesday, immediate disclosure is required for any related-party transaction which exceeds 10 percent of equity or 5 percent of total corporate assets.

ODEL breaks records in CSE

2010-08-04T02:12:00.000-07:00

ODEL.N0000 reocrds more than 12,000 trades and more than 30% increase in a day today (2010 Aug 4th)!!

ODEL LIMITED (“THE COMPANY”) – LKR 250.5 MILLION worth ordinary shares of the above company was listed today (on 4th August 2010) on the Diri Savi Board of the CSE and
classified under the Footwear and Textile Sector.

The assigned security code is ODEL-N-0000. A total number of 144,950,000 ordinary shares of the company was listed. Deposits would be
accepted by the Central Depository Systems (Pvt) Ltd (“CDS”) with immediate effect.

ODEL shares rocketed up to Rs. 38.50 in its first day of trading before setting back to a sober Rs. 35.40 at the time this article was published. Almost 13 million shares were traded in more than 10,000 trades. Prices opened at Rs. 15 this morning in what was a much anticipated IPO by one of the leading clothing retailers/ department stores in the country.

Founded 20 years ago, the ODEL chain of definitive fashion and lifestyle stores now comprises of 12 outlets at Alexandra Place, Kohuwala, Mount Lavinia, Moratuwa, Panadura, Maharagama, Nugegoda (Warehouse), Dickman's Road, Ja-ela, Majestic City, Crescat (Backstage) and at the Bandaranaike International Airport. ODEL's 13th store opens at Battaramulla , 16th July.