Morning Notes seall14 21gpgppivg

seall14 21gpgppivg
Morning Notes
10 November 2014
Market Diary
ASI Outlook (based on charts)
Today:
Anilana Hotels & Properties - Right Issue – Provision of Allotment
Richard Pieris Exports - XD Date (LKR 6.40 per share)
Tomorrow:
Namunukula Plantations - XD Date (LKR 2.00 per share)
Anilana Hotels & Properties - Right Issue – XR Date
Renuka Holdings – voting & non-voting - Right Issue – Provision of Allotment
Corporate Announcements
Interim Financial Statements 30-09-2014 - Amana Bank (ABL), C T Land
Development (CTLD), Lanka Tiles (TILE), Lanka Walltiles LWL), Swisstek (Ceylon)
(PARQ) & Horana Plantations (HOPL).
Comments (short term trend): ASI is trading near a moderate
resistance level. Several other technical indicators suggest a
possible consolidation in the near term. Cautions approach is
advised.
Royal Ceramics Lanka – Interim Dividend of LKR 1.00 per share:
XD – 18th Nov 2014
Payment date – 21st Nov 2014
ASI - Pivot Points
Previous day’s close
Pivot Point
R1
R2
Lanka Tile – Interim Dividend of LKR 2.00 per share:
XD – 18th Nov 2014
Payment date – 25th Nov 2014
ASI - Moving Averages
07 day
14 day
21 day
Lanka Walltiles – Interim Dividend of LKR 2.00 per share:
XD – 18th Nov 2014
Payment date – 27th Nov 2014
Vallibel Power Erathna – Dr.T.Senthilverl has increased his stake to 14.4%:
Dr.T.Senthilverl has purchased approx. 106mn shares on 04 th November 2014.
Subsequent to the above transaction, the total no. of shares held by Dr.T.Senthilverl in
VPEL has increased to approx. 108mn shares constituting 14.432% of the shares in
issue.
50 day
100 day
200 day
7,210.99
6,940.26
6,530.03
100% allotment
A minimum 20,000 debentures plus 20.133% of
the balance
Orient Garments – Winding up court case:
The winding up case (HC/CIVIL/34/2014/CO) came up for hearing on 31st October
2014, and was extended until 11th November 2014.
BRAC Lanka Finance – Mandatory offer made by Commercial Leasing & Finance:
The mandatory offer made by Commercial Leasing & Finance was expired on 05 th
November 2014.
Total no. of shares for which acceptances of the offer have been received – 37,033,733
ordinary shares of NIFL (35.02% of issued shares of NIFL)
Total no. of shares held by Commercial Leasing & Finance before the offer period –
62,745,908 ordinary shares of NIFL (59.33% of issued shares of NIFL)
Royal Ceramic Lanka – Proposed investment in Australia:
Rocell Pty Ltd has been incorporated under the laws of Australia, as a fully owned
subsidiary of RCL, to engage in the wholesale and retail business of floor and walltiles
and bath ware, in Australia. The proposed initial investment in the said subsidiary is
AUD 525,000 (equivalent to LKR 61.5mn).
Quantity
S&P 500 (USA)
FTSE 100 (UK)
NIKKEI 225 (Japan)
Shanghai Comp (China)
BSE Sensex (India)
KSE All (Pakistan)
MSCI frontier markets
MSCI emerging markets
Index
2,031.92
6,567.24
16,756.36
2,441.20
27,868.63
30,930.04
646.04
991.32
Change
+0.71
+16.09
-124.02
+23.03
-47.25
+266.26
-10.15
-7.12
% Change
+0.03
+0.25
-0.73
+0.95
-0.17
+0.87
-1.55
-0.71
Global Business News
Mercantile Investments & Finance – Debenture issue – Basis of Allotment:
No. of debentures applied
Basis of allotment
Dealings by Directors
Company
Purchase
Citizen Development
30
Business
Finance
Dipped Products
Sale
7,383.25
7,350.35
Global Equity Indices
Ceylon Tobacco Company – Third Interim Dividend of LKR 11.10 per share:
XD – 18th Nov 2014
Payment date – 26th Nov 2014
Dividends declared during the FY14 – LKR 35.10
Dividends declared during the FY13 – LKR 48.75
Above 20,000 debentures
7,333.68
7,271.15
7,277.84
S1
S2
Short-term Technical Indicators
RSI
67
MACD
The MACD line has crossed the signal
line from below.
Printcare – Interim Dividend of LKR 0.45 per share:
XD – 18th Nov 2014
Payment date – 26th Nov 2014
Up to 20,000 debentures
7,416.15
7,399.70
7,432.60
7,449.05
Director
Date
Price (LKR)
K.M.Weerasuriya
03 Nov
8,500
94.30
S.P.Peiris
05 Nov
4,800
140.00
Gold Declines After Biggest Gain Since June as SPDR Assets
Fall: Gold fell from the highest level in a week on expectations that
U.S. borrowing costs will increase, and as assets in the largest
exchange-traded product backed by the metal extended declines.
Silver and platinum dropped. Gold for immediate delivery lost as
much as 0.7 percent to $1,170.09 an ounce, and was at $1,170.91 at
8:01 a.m. in Singapore, according to Bloomberg generic pricing. On
Nov. 7, the metal surged to $1,178.82, rallying from a more than
four-year low of $1,132.16, after U.S. jobs data trailed estimates,
weakening the dollar. (Bloomberg)
Brent Gains as China Exports Rise More Than Estimated;
WTI Holds: Brent crude rose for the third time in four days as
Chinese export data signaled that foreign demand may help sustain
the economy in the world’s second-biggest oil consumer. WTI was
steady in New York. Futures gained as much as 0.6 percent in
London. Overseas shipments increased 11.6 percent from a year
earlier, according to Chinese customs data on Nov. 8, exceeding the
10.6 percent median estimate in a Bloomberg News survey. The
number of rigs drilling for oil in the U.S. last week shrank to the
lowest since August, Baker Hughes Inc. said Nov. 7. (Bloomberg)
Libya’s Biggest Oil Field to Resume Pumping by Tomorrow:
Libya, holder of Africa’s largest oil reserves, plans to restart
production by tomorrow at its biggest field at Sharara while an
export terminal in the country’s east remains closed. The Sharara
and Elephant fields in southwestern Libya will resume output after
gunmen returned equipment they had stolen from the sites, staterun National Oil Corp. spokesman Mohamed Elharari said by
telephone from Tripoli. Crude shipments from the Hariga terminal
remain halted, said Ihab Said, an inspector at the facility.
(Bloomberg)
Morning Notes
Local Business News
Exports lose steam in Sept. as imports take off: As the growth of imports weighed on the
export earnings, the country’s trade deficit in September widened to $ 764 million compared
to $ 587 million in September 2013. However, on a cumulative basis, the trade deficit during
the first nine months of 2014 narrowed by 3.6% compared to the corresponding period in
2013. The Central Bank said earnings from exports increased by 0.5%, year-on-year, in
September 2014 to $ 903 million while the cumulative earnings increased by 13.0% to $ 8,288
million during the first nine months of 2014. The largest contribution to the export growth in
September 2014 was from textiles and garments followed by coconut and printing industry
products. Export earnings of textiles and garments grew by 4.4% in September 2014
supported by a substantial improvement in exports of outerwear. Expenditure on imports
increased by 12.2%, year-on-year, to $ 1,667 million in September 2014, while on a
cumulative basis, imports grew by 5.4% to $ 14,222 million during the first nine months of
2014. The increase in import expenditure in September 2014 was mainly due to the significant
increase in imports of transport equipment, particularly a dredger vessel followed by imports
of vehicles such as motorcycles and motorcars for personal use. (DFT)
Tourist arrivals up by 13.6%: Sri Lanka’s tourist arrivals had shown an increase of 13.6%
to 121,576 in October 2014 with tourist arrivals being boosted from countries such as India,
China and the United Kingdom. For the past nine months of this year, arrivals were up by
21.5% to 1,228,754 when compared to the same time period last year. South Asian tourists
were down 10.7% to 35,718 when compared to the same month last year with arrivals from
India, Sri Lanka’s top market, up 19.8% to 26,148. Maldivian tourists were down 0.04% to
6,460 and Pakistan was down 33% to 1,725. Arrivals from the United Kingdom, the second
biggest market for Sri Lanka was up 2.7% to 10,112 when compared to the same month last
year. (DN)
CBSL's reserves dip due to commitments: With Central Bank of Sri Lanka (CBSL)
continuing to exercise moral suasion (MS) on the 'spot' on importer (buyer) banks for the
fourth consecutive week according to records maintained by Ceylon FT, trading continued to
revolve round 'spot next' and 'spot next next,' at Friday's trading, market sources told Ceylon
FT. MS was maintained on the 'spot' at Rs 130.85 to the US dollar in interbank trading, with
'spot next' and 'spot next next' therefore being traded at Rs 131 and Rs 131.05 to the dollar
respectively, however, on thin volumes. 'Spot' trades are settled two market days after the
date of transaction, 'spot next' after three and 'spot next next' after four. "Import demand is
building, but there is no visible trading on forwards," they further said. In the unfolding
developments, statistics further showed that a minimum of US$ 132.31 million exited from
CBSL's foreign exchange (FX) reserves, either to sell certain selected banks, dollars at the
discounted price of Rs 130.85 to the dollar from its reserves, or to meet Government of Sri
Lanka's (GoSL's) foreign debt servicing commitments, or due to a mix of both. (CFT)
Commercial banks seek CB relief on 12 per cent interest move: The Sri Lanka Banks’
Association is urging the Central Bank (CB) and the Treasury to extend a scheme applicable to
state banks to cover losses in paying high interest rates to senior citizens, to all banks. The
association has made the request in writing to the CB. In the 2015 budget, state banks have
been instructed to offer a 12 per cent annual interest rate for deposits of pensioners and
elders. To cover any deficit between lending and borrowing rates, the Treasury is to float a
$30 billion bond issue at 12 per cent interest in which state banks can invest. (ST)
Sri Lanka to harness benefits from AIIB, moving away from WB, ADB : Sri Lanka is
drawing up ambitious development project plans to harness maximum benefits from the
newly launched Asian Infrastructure Investment Bank (AIIB), moving away from its
dependence on the World Bank (WB), International Monetary Fund (IMF) and the Asian
Development Bank(ADB), government officials said. Deputy Secretary to the Treasury, Dr.
B.M.S Batagoda told the Business Times that the new lender would fund the construction of
roads, power plants and telecommunications networks in the country at concessionary terms
and conditions without attaching strings which will keep the country’s economy buzzing. (ST)
Good time to mull consolidating the insurance sector, CB Governor says: With Sri
Lanka’s Non Bank Financial Institutions (NBFI) sector consolidation nearing completion, the
time has come to consider a similar move in the insurance sector, Nivard Cabraal, Governor
Central Bank (CB) says. “Now that we have a good body of knowledge built with the
experience in consolidating the NBFI sector, it’s a good time to consider consolidation in the
insurance sector,” he told the Business Times in a recent interview. He said mandating the
splitting of composite insurance companies separately to that of general insurance and life
insurance firms by next year makes a strong case for this move. (ST)
Restricted land ownership laws for foreigners impact on all SL businesses, says JKH
chief: The Land (Restrictions on Alienation) Act recently passed by Parliament poses several
challenges to Sri Lanka’s business community, John Keells Holdings (JKH) Chairman Susantha
Ratnayake has said. Commenting in the latest report on the group results for the second
quarter of 2014-15, he said, “impact to the Group, if any will be assessed once the specifics in
the Act are interpreted and understood”. (ST)
Britannia explores Sri Lankan re-entry: Britannia Industries Ltd, an Indian food-products
corporation based in Kolkata is aiming to return to the Sri Lankan market, officials said. “We
had a presence in Sri Lanka some years ago and now we are planning a re-entry. The
fundamentals of the economy are great. That’s what attracts us,” Manjunath Desai, company
Vice President Strategy and Business Development told the Business Times in a telephone
interview from India. (ST)
10 November 2014
Global Business News
China to establish $ 40 b Silk Road infrastructure fund:
China will contribute $ 40 billion to set up a Silk Road
infrastructure fund to boost connectivity across Asia, President Xi
Jinping announced on Saturday, the latest Chinese project to
spread the largesse of its own economic growth. China has dangled
financial and trade incentives before, mostly to Central Asia but
also to countries in South Asia, backing efforts to resurrect the old
Silk Road trading route that once carried treasures between China
and the Mediterranean. The fund will be for investing in
infrastructure, resources and industrial and financial cooperation,
among other projects, Xi said, according to Xinhua. (DFT)
Russia, China Add to $400 Billion Gas Deal With Accord:
Russia and China signed a second initial natural-gas supply
agreement, following a $400 billion deal earlier this year, as
President Vladimir Putin broadens links with the world’s secondbiggest economy. OAO Gazprom is discussing the supply of as
much as 30 billion cubic meters of gas annually from West Siberia
over 30 years, the company said yesterday. Russia may start
selling gas to China within four to six years as part of an
agreement with state-owned China National Petroleum Corp.,
Gazprom Chief Executive Officer Alexey Miller told reporters in
Beijing. (Bloomberg)
Morning Notes
Local Business News
Pelwatte Dairy to commission Rs 700m milk powder plant: The second Rs. 700 million
state-of-the-art milk powder manufacturing facility at Pelawatte will be commissioned by the
end of this year, said Pelwatte Dairy, Chairman Ariyaseela Wickramanayake. He said that the
foundation for the ultra-modern facility was laid last week and work on the plant will be
launched this month. "We hope to produce an additional 3,500 tonnes per annum and save the
huge drain of foreign exchange on imports of dairy products. We completed the preliminary
work of the project within a short time due to the procurement of machinery early this year
from Europe," Wickramanayake said. Sri Lanka spends around US $ 15 million per annum on
the import of milk powder. The present facility produces around 3,500 tonnes. (SO)
Coconut industry targets Rs 100b by 2015: The coconut industry is turning out to be one
of the main modes of income for the country and US$ 1 billion is targeted from coconut
product exports by 2020. The Rs. 100 billion target can be achieved by next year, Coconut
Development Authority Chairman Aruna Gunawardane told the Sunday Observer. Sri Lanka
also plans to capture markets in Europe, Russia, the USA, Australia, the Chairman said.
“Minister Jagath Pushpakumara launched a program in 2011 to plant 32 million coconut trees.
Already 19 million plants have been cultivated. We hope to reap the benefits of the program
between 2016-2018 and coconut production will increase from 600 to 700 million nuts,”
Gunawardane said.“Before a separate Ministry was set up, Rs. 20 billion was earned from the
coconut industry. Following the setting up of a separate Ministry it increased to Rs. 30 billion
in 2011. (SO)
Fonterra to build chilling centre in Gampaha: A chilling centre will be built by Fonterra
Brands Sri Lanka in Gampaha as part of its commitment to develop the local dairy industry.
The chilling centre will enable Fonterra to begin milk collection and support 200 local milk
farmers, Fonterra Brands Sri Lanka, Managing Director Leon Clement said. “We are focused on
improving the local dairy industry. We see Sri Lanka as a profitable market. We hope to
improve milk quality, increase collection and accessibility in Gampaha,” he said. It is necessary
to introduce modern technology to the dairy industry while farmer education and model
farms could also support the growth of the industry. The chilling centre will also help bring
expertise on sustainability to the area. (SO)
Off-budget funding escalates: Off-budget funding of State-owned enterprises continues to
expand at a rapid pace, new data showed.The Treasury has issued off-budget guarantees
amounting to Rs 503.7 billion as at end September 2014, the Fiscal Management Report 2015
of the Ministry of Finance and Planning showed. Such guarantees amounted to Rs 492 billion
as at end May 2014, up sharply from Rs 302.7 billion a year earlier. Issuing such off-budget
guarantees helps the government spend without troubling the budget deficit or debt to GDP
ratios. The International Monetary Fund (IMF) has already cautioned the government on
overly relying on such as guarantees as it understates the overall budget deficit. It has also
cautioned against the practice as it could impact financial sector stability. (CFT)
Singer appointed distributor for Sony products: To strengthen and expand sales,
marketing and distribution of the Sony brand of consumer electronics products including
mobile phones in Sri Lanka, Sony has appointed Singer Sri Lanka PLC as the authorised
distributor of the Japanese consumer electronics brand in Sri Lanka. With this appointment,
Singer, with the present distributor Siedles (Pvt) Ltd, will handle product distribution, sales
and marketing activities of the Sony range of consumer electronic products such as Bravia
televisions, Cyber-shot and a range of digital cameras and Walkman audio products. Besides
this range of products, Singer will also continue their status as distributor for the Xperia range
of mobile phones and tablet devices. “The decision to appoint Singer Sri Lanka PLC was an
easy one to make,” said General Manager, Sony Electronics Singapore, Masaki Matsumae. (SO)
Bill passed to merge three banks: Further progress was made last month by banks and
finance and leasing companies (NBFIs) on the financial sector consolidation process. The Bill
to facilitate the proposed merger of three banks, viz., DFCC Bank, National Development Bank
PLC and the DFCC Vardhana Bank PLC, was passed in Parliament. The joint internal
committees worked closely to ensure that the integration of operations was smooth to form a
strong bank with a focus on development, as envisaged in Budget 2014. The proposed
amalgamation of the Merchant Bank of Sri Lanka PLC, MCSL Financial Services Ltd and MBSL
Savings Bank Ltd has reached the final stage of completion. (SO)
SL targets becoming a US$ 10B rubber industry: Considering the significant value
addition as well as the vast potential for future investment; rubber industry in Sri Lanka can
be a US$ 10 billion business, an industry expert said.The rubber industry in Sri Lanka has the
potential to grow bigger than the garment industry. Unfortunately, foreign investors have not
seen the possibility of this factor. Thus, the country needs to attract large foreign
manufacturers to invest in the tyre trade, as well as to look at other businesses which are
parallel to solid tyre business, Global Rubber Industries (Pvt) Ltd Managing Director,
Prabhash Subasinghe said. (CFT)
Govt’s vision is to enhance ICT literacy to 75%: The vision and key objective of the
government is to enhance the ICT literacy rate to 75% by the year 2016 through the
meaningful development of this vital segment in Sri Lanka, says Telecommunications and
Information Technology Minister, Ranjith Siyambalapitiya. “IT-related exhibitions of the
caliber of INFOTEL has played a pivotal role in widening the horizon of knowledge in the
industry and giving an impetus to our sustained effort to achieve the goal of a significantly
high ICT literacy ratio in the country”, the Minister noted. (DN)
10 November 2014
Morning Notes
10 November 2014
Local Business News
Fairway project to open in Galle: Fairway Holdings launches Fairway Galle, its latest
vertical living development project in the heritage city of Galle. Fairway Holdings, a leader in
the field of luxury high-rise development, having introduced many 'firsts' in luxury vertical
living solutions, has embarked on its latest venture - Fairway Galle. Set in the historic city of
Galle, boasting of a heritage spanning over three centuries, Fairway Galle is located on the exit
road to Galle from the Southern Expressway in close proximity to the city itself and a myriad
of significant historical attractions as well as a wide array of other recreational activities. (DN)
President hailed for proposals relating to gem industry: The President’s proposals
relating to the gem industry during the 2015 budget speech have been welcomed by local
businessmen and foreign investors alike, with the initiatives seen as potentially adding a new
dimension to the industry. “Proposed reduction in service fee imposed by the Gem and
Jewellery Authority to 0.25% of FOB value, the proposed establishment of a gem and jewellery
processing zone and gem trading centre in Ratnapura to further the Magampura Ruhuna
Development Plan and increased focus and support of the Government to the gem industry
would have far reaching benefits to the industry and country,” said Ratnapura Lanka
Gemstones Private Limited (“RLGPL”), a subsidiary of Gemfields plc (LSE: AIM. GEM), a global
leader in the coloured gemstone industry with a proven track-record of lifting growth and
transparency in the gemstone sectors of several countries. (DN)
Softlogic launches Dell Latitude 12 and 14 Rugged Extreme notebooks: Softlogic
Information Technologies, one of the premier ICT companies in Sri Lanka and a pioneering
subsidiary of Softlogic Holdings, launched the new Latitude 14 Rugged Extreme notebook and
the Latitude 12 Rugged Extreme convertible notebooks for customers who require powerful
solutions that will survive tough environments. Dell recently introduced a family of
ruggedized laptop solutions from the most durable military grade options to flexible business
ready-solutions designed to resist spills and drops and to handle almost any situation. The
new introduction is the perfect answer by Dell for mission critical tasks in challenging
conditions. (DFT)
Trillium Property Management to invest Rs 1 b on two projects: Trillium Property
Management and Services is planning to invest over Rs. 1 billion to launch two mixed
development properties in Colombo 7 and Nugegoda. Trillium Colombo 7, a super luxury
apartment complex under the Trillium brand, will be developed in a very prestigious location
in Torrington Avenue Colombo 7. The complex will consist of 18 stylish super luxury 3bedroom apartments ranging from 1500 sq ft to 1800 sq ft and two 3000 sq ft penthouses
with an infinity swimming pool and a state-of-the-art gymnasium on the rooftop, the
developers said. Signature features of popular Trillium Brand will be incorporated into this
up-market project. The Trillium Melder Place Luxury Villas Nugegoda project will consist of
eight exclusive single villa houses with modern luxury. (DFT)
The information contained in this report, researched and compiled for
purposes of information do not purport to be complete description of the
subject matter referred to herein. In preparing this report care has been
exercised to collect information from sources which we believe to be reliable
although we do not guarantee the accuracy and completeness thereof. Lanka
Securities (Pvt) Ltd. and/or its affiliates and/or its directors, officers and
employees shall not in any way be responsible or liable for loss or damage
which any person or party may sustain or incur by relying on the contents of
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