Stock Watch: TESS

Tess Agro starts EU marketing unit


Tess Agro Plc, an exporter of sea fish said it had set up a marketing unit in Belgium to gain direct access to the European Union and better prices.

The key markets of the firm are the EU, US and Japan.

"The company has opened a branch in Belgium to expand its presence in the EU," chairperson S F Fernando told shareholders in the annual report.

"The European Branch will open the door to new opportunities to improve the margins and stabilize prices in an otherwise volatile turbulent economy in the EU."

Fernando said the Belgian unit will import fish from the company and supply it to restaurants, hotel and supermarkets.

Tess Agro was building facility in near Sri Lanka’s Dikkowita fishery harbhour to upgrade its cold chain.

In the year to March 2013, revenues had dropped to 507 million rupees from 566 million a year earlier. The firm had loss 15.8 million rupees compared to a profit of 17.6 million rupees a year earlier as interest costs doubled to 22.5 million rupees from 11.8 million.

But there was a 35.7 million rupee gain on property revaluation.
reported in The Island
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...by i3gconsultants@ 22:09:05 on 2013-09-17

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Stock Watch: BLUE

Blue Diamonds back to loss making mode


Chairman hopeful about imminent turnaround


Blue Diamonds Jewellery Worldwide PLC has been able to grow revenue during the year ended March 31, 2013 but has reported a loss of Rs.26.2 million, down from a profit of Rs. 11.9 million a year earlier, demonstrating that the revenue of the company has to be substantially enhanced and its cost structure needed reorganization, Mr. J.H. P. Ratnayeke, the company’s Chairman has told shareholders in its annual report.

"The company has embarked on strategies which would allow it to increase orders with existing customers and at the same time to secure new customers. New product lines and concepts are being added to the company which would assist the it to increase the revenue substantially," he said.

Ratnayeke noted that the administrative cost was down to Rs.41.8 million from the previous year’s Rs.55.5 million and it is intended to be further reduced by implementing an aggressive cost reduction plan.

The company has appointed a new Managing Director and a Chief Executive Officer who have been entrusted with the task of re-vitalizing it to achieve sustainable profitability," he said.

"The reduction in the cost structure would enable the company to be more competitive in pricing and be able to attract new customers and orders."

Ratnayeke said that they are making every effort to return to sustainable profitability and believed the next year would be a ground breaking year for the company.

Although the company’s Auditors, KPMG, has certified that the financial statements give a true and fair view of its financial position as at balance sheet date, they have without qualifying their opinion drawn attention to two notes in the financial statements.

These relate to a credit facility of USD 2.75 million obtained by Blue Diamonds from the Seylan Bank in previous years by pledging inventory of jewellery as security.

During the year ended March 31, 2005, the directors resolved to write back the balance outstanding to Seylan in respect of the credit facility on the basis the company had handed over the jewellery in lieu of this credit facility as a full and final settlement of the balance due to the bank.

Blue Diamonds took the view that there was no further liability on this credit facility but the Seylan Bank had by letter dated December 2009 demanded a sum of USD 4.32 million together with interest being the total outstanding sum due on this facility.

The two parties had agreed to appoint an arbitrator on this matter on November 21, 2003 in respect of the sale of jewellery that was obtained by Seylan Bank in 1999 in lieu of the credit facilities obtained.

This arbitration had commenced and is now at the trial state, the auditors said. Its ultimate outcome cannot be currently determined and hence the effect of the financial statements is uncertain.

Blue Diamonds has a stated capital of Rs.208.4 million, a general reserve of Rs.135 million, a revaluation reserve of Rs.17.5 million and accumulated loss of Rs.59.6 million in its books.

Total assets were running at Rs.319.9 million and total liabilities at Rs.18.8 million.

The major shareholder of the company is ECL Soft (Pvt) Ltd (17.73%) followed by the General Fund of the Sri Lanka Insurance Corporation with 10.22%, Ceylinco Insurance Co. Ltd – Life and General Funds with 4.64%, The Finance Portfolio Management Co. Ltd (1.26%), The Finance Co. Ltd. (0.81%) and Mr. J.L.B. Kotelawala (0.79%) are among the top 20 voting shareholders.

Public holding was down to 72.05% during the year under review from 78.50% the previous year.

Blue Diamonds had lost 23 cents per share during the year under review, up from 11 cents the previous year.

The voting share traded at a high of Rs.3.10 and a low of Rs.1.30 during the year under review against a trading range of Rs.4.40 to Rs.1.30 the previous year.

The directors of the company are: Messrs. J.H.P. Ratnayeke (Chairman), W.D.J.R. Silva (MD), B.M.A.L.A. Fernando (Deputy Chairman), W.M.R.B. Bandara and S.A. Hettiarachchi.
reported on The Island
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...by i3gconsultants@ 22:09:47 on 2013-09-17

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Stock Watch: CFLB

Some of the worst trading conditions since end of war seen in 2012/13


Bad weather, increased interest & weak rupee hurt CFLB group


The Chairman of The Colombo Fort Land & Building PLC (CFLB), the parent of nine companies listed on the CSE, has said that the financial year 2012/13 "has seen some of the worst trading conditions witnessed since the end of the conflict.

"Inclement climatic conditions have severely impacted the profitability of group companies engaged in the chemical and plantation sectors. Increased interest rates and the weak Sri Lanka rupee have also been a drag on the profitability of many other group companies," Mr. A. Rajaratnam, the company’s chairman said in its recently released annual report.

"One area that has reversed this trend is the leisure sector. With the increase in the arrivals of tourists into Sri Lanka, three of the group’s hotels have made profits for the year under review. With a further increase in tourist arrivals expected, the future outlook for the industry and the group’s properties remains bright."

The quoted members of The Colombo Fort Land & Building group are Colonial Motors PLC, 65.39% owned by CFLB, E.B. Creasy (59.89%), Muller &Phipps (Ceylon) PLC (30.72%), York Arcade Holdings PLC (49.84%), Lankem Ceylon PLC (60.27%), Marawila Resorts PLC (33.72%), Sigiriya Village Hotels PLC (40.93%), C.W. Mackie PLC (36.72%) and Beruwala Resorts PLC (49.10%).

Rajaratnam said that re-imposition of punitive motor vehicle import duties has had a negative impact on their businesses in the automotive sector. Group companies are authorized distributors for KIA Motors of Korea and the Mazda Corporation of Japan.

"The unpredictability of government policy with regard to taxation in this area of business remains an area of risk for the group. With the government introducing a new regime of fully transferable duty free permits, it can be expected that those group companies in this sector should return to robust growth in the years ahead," Rajaratnam hoped.

He also reported that the lingering recession in the European Union and declining demand for commodities from China had an impact on the prices of commodities produced by the group companies.

"With successive seasons of drought and flood, crop quantities produced by both Kotagala Plantations PLC and Agarapatana Plantations Limited have come down significantly. These crop reductions and the resulting increased cost of production have drastically impacted the profitability of both companies," he said.

The operations of their three major group companies involved in trading activities – E.B. Creasy, Lankem Ceylon and C.W. Mackie – had been mixed during the year under review.

As product lines of E.B. Creasy are not directly affected by the weather, their performance and profitability had improved. But those products marketed and distributed by Lankem and C.W. Mackie had been hurt by the unstable weather patterns experienced during the year, the chairman said.

Group turnover for the year was down to Rs.29.9 billion from 31.8 billion the previous year and the profit after-tax to Rs.1.2 billion from Rs.2.1 billion. At company level turnover was down to Rs.30 million from Rs.36.6 million and the profit to Rs.99.9 million from Rs.140.8 million.

The company’s Auditors, KPMG, without qualifying their opinion on the accounts have drawn attention in a note in the financial statements saying that matters covered "may cast significant doubt that the respective group companies will be able to continuing as going concerns."

These relate to several of these companies carrying large accumulated losses with total liabilities exceeding total assets in some. However they enjoy the backing of the parent and the directors have assessed that they can continue as going concerns.

The Colombo Fort Land & Building PLC has a stated capital of Rs.327 million, capital reserves of Rs.20.1 million and other reserves of Rs.7.7 billion. Total assets ran at Rs.33.75 billion and total liabilities at Rs.20.21 billion.

The major shareholders of the company are: Property & Investment Holdings (Pvt) Ltd (15.78%), Investment Trust PLC (13.94%), Capital Investments Ltd (12.91%), Colombo Fort Investments PLC (12.05%) and R. Senathi Rajah (Deceased) 4%.

Its share with net assets of Rs.44.64 per share, up from Rs.41.91 a year earlier, traded at a high of Rs.45.50 and a low of Rs.21.90 during the year under review . This compared with a high of Rs.492 and a low of Rs.30 the previous year.

The directors of the company are: Messrs. R. Rajaratnam (Chairman – Alternate Anushman Rajaratnam), S.D.R. Arudpragasam, N.H.B.S. Perera, A.M. de S. Jayaratne, R. Seevaratnam, Anushman Rajaratnam, Ms. A.K. Gunawardhana and C.P.R. Perera.
reported on The Island
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...by i3gconsultants@ 22:09:01 on 2013-09-17

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Stock Watch: TFC

The Finance sees prospects serving migrant workers


Office opened at Foreign Employment Bureau, key operations being restructured

The Finance Company PLC (TFC), now carrying accumulated losses of Rs.12.58 billion with total liabilities Rs.6.6 billion over total assets, is "strongly set in the process of restructuring key operations of the company" with the involvement of an eminent consultancy firm, its Chairman, Mr. Preethi Jayawardena has told shareholders in the company’s annual report.

TFC is the country’s oldest finance company. Jayawardena was hopeful that their "unparalleled" branch network strategically located countrywide would help it the company bounce back on a platform of efficiency and customer service.

The company which posted a loss of Rs.1.5 billion during the year ended March 31, 2013, down from a modest profit of Rs.13.3 million (re-stated) explained there was a one-off gain through extraordinary transactions the previous year including income generated from the sale of company owned commercial property and reversal of provisions made against doubtful debts.

"The negative impact created by a share transaction of the company during the early part of the year under review hampered the planned growth in the deposits, loan disbursements and real estate sector," Mr. K.J. Yatawara, Director/CEO of the company, said in the report.

"This however was rectified during the latter part of the year."

Yatawara was hopeful of realizing what he called "immense potential" for the company from the Rataviru Rekavarana Seva program to provide special financial solutions to the migrant worker segment of the country.

He saw this market worth around USD 6 billion annually as a "blue ocean of untapped market space which held immense potential for the company.’’

"A memorandum of understanding between the Sri Lanka Bureau of Foreign Employment, the Sri Lanka Red Cross and The Finance Company PLC was signed, followed by a dedicated Rativiruwo Service Centre opened by the company to provide an efficient service to migrant workers at the Bureau of Foreign Employment Office premises," he said.

Yatawara reported that the intake of fresh deposits had grown 23% during the financial year under review with savings deposits accepted up 20% from the previous year.

He said that they were focusing on persuading customers to opt for long term deposits to strike a balance within the deposit portfolio and also with the planned promotional campaign.

Their real estate business which was contributing strongly in increasing land ownership in the country was mainly focused on small projects that can be completed within six months. This would enable them to have a proper product mix despite adverse conditions prevailing in the gold pawning markets at present.

Their brand has been ranked the 46th most valuable in the country by Brand Finance PLC/UK in an annual survey this year. The brand had moved up nine places from No.55 being the highest gainers among non-bank financial institutions with the brand value up 97% to Rs.984 million.

TFC had seen public deposits grown to Rs.22.77 billion during the year from Rs.21.57 billion the previous year.

Earnings per share were a negative Rs.9.47, down from the positive Rs.0.08 the previous year and the net assets per share were down to a negative Rs.41.05 from the previous year’s negative Rs.31.59.

The company’s voting share traded at a high of Rs.45 and a low of Rs.11.90 during the year under review against a trading range of Rs.48 to Rs.26 a year earlier.

Dr. T. Senthilverl with 20% of the company’s voting shares through two accounts is its biggest shareholder followed by Ceylinco Investments with 11.04%, EPF with 8.43%, Seylan Bank with 7.44% and Ceybank Unit Trust with 6.18%l.

The directors of the company are: Messrs. Preethi Jayawardena (Chairman), A.P. Lekamge (Deputy Chairman), K.J. Yatawara (Director/CEO), T.B. Ekanayake, Mrs. V.W. Dissanayake, R. Nadarajah, Ms. Cherille Rosa and Dr. T. Senthilverl
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...by i3gconsultants@ 22:09:04 on 2013-09-17

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Stock Watch: CABO

Full occupancy at Cargo Boat properties, good returns on shares


Cargo Boat Development Company PLC, a property developer owning a commercial building at Janadhipathi Mw., Colombo Fort as well as a quoted share portfolio worth over a billion rupees has completed what its Chairman, Mr. R.B. Thambiayah has told shareholders "a satisfactory year" with all floors of the Renuka building in the Fort tenanted for the entire year.

Julius & Creasy and other prestigious tenants continued to have offices in the Fort building and the company’s property at Braybrooke Street, which was also tenanted throughout the year, has contributed to profitability, Thambiayah said.

"Though Janadhipathi Mawatha still continues to be closed, all other roads leading to the Renuka building are now open and this has significantly improved the accessibility to our building. We are, therefore, in a better position to demand a higher rent for the office space in our building in future," he said.

"The company has continued with the maintenance and upgrading of the Renuka Building and the property at Braybrooke Street which has helped to maintain the buildings in a pristine state."

The year ended March 31, 2013 had seen the company posting a record pre-tax profit of Rs.100.6 million with non-operating income comprising interest, dividends and profits on share trading being Rs.65.7 million.

Thambiayah said that the company continued to maintain its investments in outside enterprises. The value of this share portfolio topped Rs.1.2 billion at the close of the year under review with the market value of investments up 120% over the cost as at 31.3.2013.

Investment income during the year was recorded at Rs.51.3 million, the Chairman said.

The after-tax profit of Rs.85.5 million was down from Rs.103.4 million from the previous year but total comprehensive income including fair value gain of investments at Rs.225.8 million was up from a negative Rs.110.7 million the previous year.

Earnings per share on profit attributable to shareholders were down to Rs.8.41 from Rs.10.14 the previous year and the company had declared a dividend per share of Rs.1.50, down from Rs.2 the previous year.

Cargo Boat Development has a stated capital of Rs.119 million, a general reserve of Rs.599 million and an available for sale reserve of Rs.665.1 million together with retained earnings of Rs.105.7 million in its books. Total assets ran at Rs.1.52 billion and total liabilities at Rs.32.5 million.

Lancaster Holdings Ltd with 30.13%, Renuka Properties Ltd with 22.12% and Associated Electricals Corporation Ltd with 10.76% are the top shareholders of the company.

Its share traded at a high of Rs.108.50 and a low of Rs.58 during the year under review against a trading range of Rs.175 to Rs.65.10 the previous year.

The directors of the company are: Mr. R. B. Thambiayah (Chairman/MD), Mr. Merrill J. Fernando, Mrs. N.A. Thambiayah, Mrs. M.A. Jayawardena, Ms. S.R. Thambiayah, Mr. R.S. Tissanayagam, Mr. C. S. Wijeyaratne, Ms. A.L. Thambiayah and Ms. N.R. Thambiayah.
reported on The Island
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...by i3gconsultants@ 22:09:49 on 2013-09-17

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Stock Watch: COMB

ComBank half-year profit down as margins narrow


The Commercial Bank of Ceylon PLC, one of the biggest privately owned banks in the country, has reported that the banking industry had continued to experience narrow margins and recorded comparatively lower growth in business volumes during the second quarter of the current year.

This was reflected in its half-year bottom line which was down from a year earlier despite marginal net interest growth and 8.6% deposit growth.

"Despite the challenging environment that prevailed in the industry, the bank was able to record a healthy net interest income of Rs.11.932 billion for the first half of 2013, compared to Rs.11.231 billion recorded in the corresponding period last year," the bank said in a statement included with its second quarter financials.

"During the period under review the total deposits of the bank continued to grow and stood at Rs.429.537 billion as at June 30, 2013 reflecting a growth of Rs.34.162 billion or 8.64% compared to Rs.395.375 billion recorded as at December 31, 2012.

"The loans and advances too recorded an increase of Rs.16.576 billion or 4.46% during the review period and reached a figure of Rs.390.119 billion as at the end of June 2013, compared to Rs.373.544 billion recorded as at December 31, 2012."

The Commercial Bank group had recorded a pre-tax profit of Rs.6.55 billion in the first half of this year, down from Rs.7.52 billion earned a year earlier.

The group’s after-tax profit of Rs.4.49 billion compared to Rs.5.16 billion recorded in the first half of 2012.

The DFCC Bank remains the single largest shareholder of ComBank with 14.85% followed by EPF with 9.56% and the Franklin Templeton Investment Fund with 7.21%. The Life and General Funds of the Sri Lanka Insurance Corporation has a stake over 10%.

The directors of the Bank are: Messrs. D.S. Weerakkody (Chairman), K.G.D.D. Dheerasinghe (Deputy Chairman), W.M.R.S. Dias (MD/CEO), Prof. U.P. Liyanage, L. Hulugalle, M.P. Jayawardena, S. Swarnajothi and J. Durairatnam.
reported on The Island
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...by i3gconsultants@ 22:09:25 on 2013-09-17

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Stock Watch: TAJ

Taj profitable for third year running but accumulated losses still a drag


Tal Lanka Hotels PLC, owners of the 33-year old Taj Samudra Hotel in Colombo, has posted a profitable year ended March 31, 2013, the third such profit making year running, but still retains accumulated losses of Rs. 764.3 million in its books.

The parent company, Tal Hotels and Resorts Ltd., via a hotel operating agreement and an incentive fee are entitled to over Rs. 100 million while shareholders will get no dividend. Their only perk is a complimentary luncheon voucher for two, issued every year along with the annual report.

The entry of various global hotel chains into Sri Lanka’s city hotel segment is expected to result in the new players positioning themselves in different price segments, Mr. Raymond Bickson, chairman of Tal Lanka Hotel PLC has said in the l report.

He also reported that the minimum room rates enforced by government on the big Colombo city hotel properties in the latter part of 2009 followed by the room rate of five-star hotels increased to USD 125 per room night remained unchanged at present.

The government’s minimum rate initiative, he said, was a bid to support the industry’s profitability and was hugely beneficial.

"The government decision to impose the minimum rate on Colombo hotels continues to hugely benefit the industry as a whole in terms of increase in profitability, increased service charge benefit to the staff and prevention of price undercutting," Bickson said.

"This has encouraged investment in new properties, upgrading of existing hotels and development of human capital in this sector."

Gross revenue of the Taj was up 18% to Rs.1.94 billion from the previous year’s Rs.1.64 billion and gross margins had increased by 16% over the previous year on account of increase in revenues.

The company had undertaken and completed major projects totaling Rs.45 million during the year to upgrade the Colombo property.

This involved the installation of new roof tiles, façade painting and complete renovation of the swimming pool. The year ended March 31, 2013 had seen the company recording a net profit of Rs.221 million against Rs.127 million the previous year.

The Taj had also initiated a major renovation project of USD 20 million during the year covering guest rooms, restaurants and banquet venues with renovation of guest rooms and the lobby to be taken up in the first phase of the project.

Bickson said that the country was on course to develop into a major tourist destination and with arrivals crossing one million during the year under review, "the sector is firmly on track."

"The company is poised to exploit this opportunity and is undertaking the renovation project to position the hotel as one of the leading hotels in Sri Lanka," he said.

"The company will also be well placed to compete against international hotel brands that are expected to launch in Sri Lanka."

Leading industry consultants continued to forecast a demand-supply gap in hotel room inventories, a situation that will benefit existing hotels.

"In the long term, with the entrance of more international brands and maturing of the tourism industry, Sri Lanka is set to change from a budget destination to a more exotic one offering a variety of experiences to a diverse segment of travelers," he said.

Bickson expected the CHOGM meeting to be held in November to showcase Sri Lanka as a tourist and business destination.

Tal Lanka Hotels PLC has entered into a hotel operating agreement with Tal Hotels and Resorts Limited under which management fees comprising a basic fee of Rs.58.2 million (Rs. 49.1 million the previous year) and an incentive fee of Rs.52.5 million (Rs.49.2 million the previous year) are payable to Tal Lanka Hotels and Resorts Limited for the period under review. Tal Hotels and Resorts Limited is the parent company of Tal Lanka Hotels and Resorts owning 58.14%.

Tal Lanka has a stated capital of Rs.1.4 billion, a revaluation reserve of Rs.1.7 billion, an available for sale reserve of Rs.106.5 million and accumulated losses of Rs.764.3 million in its books.

Total assets of the company ran at Rs.3.43 billion and total liabilities at Rs.12.1 billion.

Tal Hotels and Resorts Limited with 58.14% followed by The Indian Hotels Company Limited (24.62%), Employees Provident Fund (4.75%) are the major shareholders of the company. The public shareholding is 15.76%) of the issued share capital.

The directors of the company are Messrs: R.N.E. Bickson (Chairman), A.P. Goel, U.L. Kadurugamuwa, B.K. Chaudhary, RK. Chaudhary, T.de Zoysa, V.V. Singh, Ms. D.M. Harris, Dr. G. Sundaram, Vish Govindasamy, J.P. Kanoria, S.J oshi (Alternate to J.P. Kanoria) and C. Subramanian (Alternate to R.K. Chaudhary).
reported on The Island
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...by i3gconsultants@ 22:09:58 on 2013-09-17

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Stock Watch: KGAL

Kegalle continues to replant despite lower profits


Kegalle Plantations PLC, the largest producer of natural rubber in the country, has continued to invest in replanting on all its plantations despite a downturn in profitability in the year ended march 31, 2013, when earnings fell sharply to Rs.495 million from Rs.679.8 million the previous year.


The company’s Chairman, Dr. Sena Yaddehige, said in the company’s annual report that adverse weather conditions pushed down the rubber production to 4,066 mt from the previous year’s 4,155 mt and prices too dropped 10%. Despite this, the company had maintained a turnover of Rs.2.6 billion for the year with a gross profit of Rs.730 million, he noted.


The Chairman announced that Kegalle was looking forward to building profitable relationships with foreign partners to expand its plantation sectors overseas and they were also confident that recent budget proposals to increase funding for plantations from low cost external sources would serve them well.


"This is indeed a timely proposal for our industry which will no doubt reap rich and long-term rewards for all our stakeholders," Yaddehige said.


The company had invested Rs.254 million in the year under review replanting 223 ha of rubber and maintaining the new plantation at a cost of Rs.184 million. Tea replanting expenditure and maintenance stood at Rs.24 million while replanting of coconuts and other crops amounted to Rs.15 million. The company had also invested Rs.30 million on factory development and new machinery.


Yaddehige said that Kegalle’s total assets had grown 19% to Rs.5.7 billion while total shareholder funds were up 17% to Rs.3.3 billion.


He also commented on the 20% wage increase which confronted them with fresh challenges and stressed the need for productivity improvement of employees.


"The cost of tea production in Sri Lanka is still the highest in the world; hence in order for teas to be globally competitive, it is imperative to have in place a wage system linked to productivity," he said.


Kegalle has a stated capital of Rs.250 million, a general reserve of Rs.225 million, timber reserves of Rs.8.6 million and retained earnings of Rs.2.85 billion in its books. Total assets were running at Rs.3.03 billion and total liabilities at Rs.2.31 billion.


RPC Plantation Management Services with 73.03% is the largest shareholder of Kegalle with JB. Cocoshell (2.3%) being the only other shareholder owning over one percent of the company.


Net assets per share were up to Rs.133.48 from Rs.113.68 the previous year and the share traded at a high of Rs.119.50 and a low of Rs.86.20 against a trading range of Rs.234.90 and Rs.76 the previous year.


The directors of the company are: Dr. Sena Yaddehige (Chairman), Mr. J.H.P. Ratnayeke (Deputy Chairman), Mr. S.S. Poholiyadde (CEO), Prof. R.C.W.M.R.A. Nugawela and Dr. S.S.B.D.G. Jayawardena.

......

...by i3gconsultants@ 18:06:08 on 2013-06-23

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Stock Watch: SLT

SLT receives TRCSL nod to commence NBN operations


Sri Lanka Telecom (SLT), the national telecommunication service provider was awarded with the license as the National Backbone Network (NBN) Service Provider in Sri Lanka. Under this new license, SLT will function as the NBN operator, delivering NBN services via the company’s advanced fibre optic based nation-wide communication backbone. The license was formally presented to Lalith De Silva, Group CEO of Sri Lanka Telecom by Anusha Palpita, Director General, Telecommunications Regulatory Commission of Sri Lanka (TRCSL), at a formal ceremony held recently at TRCSL.


Anusha Palpita, DG TRCSL handing over NBN license to Lalith De Silva, Group CEO SLT
The Government’s vision to reach a US$ 4,000 per capita income by 2016 and US$100 billion GDP economy is a vision shared by SLT as well.

The company is fully committed to achieving the ultimate objective of NBN in facilitating broadband connectivity across the entire country. In line with country’s ICT development plans, SLT plans to cover all the 329 Divisional Secretariats and 24 districts in the country with high speed broadband connectivity over the NBN, within the next five years.

The Government’s initiative establishes a fundamental enabler for achieving its objective of a digital economy for Sri Lanka, through which internet/broadband penetration can be expedited into all corners of the country,thus empowering the masses with a wealth of information, education and entertainment at their fingertips and completely revolutionizing the way people work, study, communicate, relax and play.

NBN will allow all the telecommunication service providers to use it to transmit their data traffic for the delivery of broadband services to consumers and businesses located throughout the country, expediting the bridging of the country’s digital divide.

Palpita commenting on the issuance of the NBN license to SLT said, “We have worked closely with SLT for the implementation of the NBN to fulfil the national objective of facilitating high speed broadband over the NBN. We are delighted with the progress of the entire project.”

Palpita said, “Many initiatives have already been taken by SLT to strengthen the implementation of the NBN while working more closely with the TRCSL and the industry.” Lalith De Silva, Group CEO of SLT said, “We stand proud to receive the NBN license to serve the country towards achieving its goals. Sri Lanka is

now positioned on a platform of fast track development and ICT has emerged as a key driver of development and economic growth. SLT’s network is ready with the necessary flexibility, capacity and capability to respond to the demands of customers, including supporting the additional demands of other telecommunication service providers in line with the government’s vision. Our comprehensive fibre rollout provides the basis for the NBN to provide coverage, capacity and capability that allows for the increased demand.”

He added, “Our NBN coverage is already substantial and the capacity is engineered to be highly scalable, supported by state-of-the-art technology while providing essential quality features such as resilience and restoration. Through the NBN, SLT will not only aim to bridge the digital divide, but will also fast track its ICT development goals, taking the industry towards achieving its vision of making Sri Lanka the ‘Wonder of Asia’.”

Furthermore, other service providers in the industry are provided with the option to obtain backbone services at attractive prices, which, along with the elimination of high investment costs in their own network developments, gives added benefits to the operators, customers as well as the entire economy by the overall reduction of space, money and other resources otherwise wasted on the replication of networks across the country.

NBN will ensure that everyone is better connected with fast and

uninterrupted access to online applications such as e-learning, e-commerce and e-health platforms which will also help to enhance lifestyles and uplift the educational standards of Sri Lankans throughout the country, bringing online capabilities to a level previously not available in Sri Lanka. It will ensure Customer Satisfaction (Speed + Quality + Reliability), Telephony, High Speed Internet Access, Private Business Networking, Interactive Entertainment, Smart Grid, Distance Learning etc., bridge the digital divide, backhaul capacity for wholesale, high speed

broadband access at affordable and competitive prices and world class access for broadband services. Therefore the increase in broadband penetration will have a direct impact on economic growth in the country as have been highlighted by many global research outcomes. In terms of social impact, it will result in increased literacy rates, the creation of more job opportunities and the introduction of innovations that will uplift living standards and bring about changed lifestyles through social developments.

Through ICT growth, the country will be empowered to become a key geographic position in the region for research and development through cutting edge technology and industry innovations.
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...by i3gconsultants@ 21:06:00 on 2013-06-11

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Stock Watch: UML

United Motors earnings slowdown


United Motors group (UML) net profits fell 13 percent to Rs. 2 billion in a challenging year ended March 31, 2013 while net profit at company level grew 41 percent to Rs. 1.89 billion.

Commenting on the financial performance Chanaka Yatawara, Chief Executive Officer of UML noted that "UML’s success is due to a number of factors. One of our main strengths is our continuous cost management framework in all our operations. In addition, the group enjoyed success in the market for vehicle permit-holders, we were able to give our customers the best value for money products. We are offering the diesel Montero-sport and the Montero for the permits, after successful negotiations with our principles. We understood early that the permit scheme would be a great opportunity during a time where taxes are extremely high for retail sales, among other challenges. Today these two vehicles we offer have become the most popular options in the market".

He further emphasized that a strategic decision the company had taken a few years ago to minimize the impact from various macro-economic factors that affect the industry had paid off. "Today we have products for almost every application and requirement," Yatawara said.

In support of this point, the group’s provisional financial statement revealed an impressive contribution to its bottom-line from Unimo Enterprises Ltd and Orient Motor Company Ltd which are both fully owned subsidiaries of UML, marketing brands such as Perodua, and Chinese brands, namely JMC, Zotye and DFSK.

The group’s earnings per share for the year under review was Rs. 29.92 which was a 12% drop from Rs. 33.91 achieved last year. The strong balance sheet is reflected in the 109.57 NAV per share achieved as at 31st March 2013.

"United Motors Group is looking ahead to exciting new possibilities in the year ahead with launches of several new products during the course of the year. It has partnerships with some of the world renowned brands, including Mitsubishi passenger and Fuso commercial vehicles from Japan, Perodua compact cars from Malaysia, JMC commercial vehicles, DFSK mini trucks and Zotye compact SUVs from China, Yokohama tyres from Japan, JK tyres and Mak lubricants from India, Valvoline lubricants and Eagle One car care products from the US, and TVS motorcycles and three-wheelers from India."
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...by i3gconsultants@ 21:06:13 on 2013-06-11

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Stock Watch: NEST

Nestlé declares highest ever dividend at 32nd AGMa


Nestlé Lanka PLC held its 32nd Annual General meeting in Colombo last week, chaired by its Chairman and Head of Nestlé in the South Asian Region, Antonio Helio Waszyk.

Shareholders re-elected Pierre Schaufelberger and Mahen Dayananda to the Board and approved a final dividend of Rs. 24.00. With an interim dividend of Rs. 30.00 paid in March 2013, the full year dividend payout of Rs. 54.00 per share is the highest ever paid by the company, a statement said.

At the meeting, Nestlé Lanka Chairman Antonio Helio Waszyk highlighted Nestlé’s commitment to Sri Lanka: "Nestlé and Sri Lanka have a long, strong bond. We are the country’s largest private sector buyer of fresh milk and the largest exporter of value added coconut products. In 2012, in line with our Creating Shared Value strategy, we extended our relationships with local farmers across the island. We procured a record high of 54 million kilograms of milk and 54 million coconuts; marking our highest ever contribution of Rs. 4 billion to the rural economy by way of raw material procurement." Nestlé Lanka directly employs 1,223 people and contributes to the livelihoods of over 23,000 more. The company has significantly accelerated its investment in Sri Lanka over the last two years; with LKR 3.2 billion in capacity expansion alone.

Reviewing the Group’s 2012 results, the Chairman stated that the company was able to deliver 11.7% growth despite difficult market conditions and was named Sri Lanka’s tenth most valuable brand in LMD’s recently published Brands Annual publication, which ranks the country’s Top 100 Most Valuable Brands for 2013. It is the only food company to be ranked within the top 10.

Underlining Nestlé’s ambition to be the recognised leader in Nutrition, Health and Wellness, Waszyk said: "As a leading Nutrition, Health and Wellness Company, we recognise that food is a conscious way to bring health and nutrition benefits. We want to offer our consumers tastier and healthier food and beverage choices. We are therefore constantly improving the nutritional value of our products - such as reducing sugar and sodium - while making sure that our products continue to taste good. We are also continuing to identify nutritional ‘gaps’ in diets and are focusing on fortifying our products with essential micronutrients such as iron, vitamin A and zinc. It is this strategy that creates value for our consumers, creates value for society, creates value for our company."

Speaking on the company’s future plans, the Chairman stated that Nestlé had a cautiously optimistic outlook for the year "We do not expect 2013 to be any easier but remain focused as always on the long term regardless of short term challenges. We will continue to deliver to the very best of our ability".
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...by i3gconsultants@ 21:06:42 on 2013-06-11

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Stock Watch: SUN

Sunshine Holdings, Tata Global Beverages partner with Pyramid Wilmar Plantations to strengthen presence in Sri Lanka


Sunshine Holdings PLC and Tata Global Beverages Ltd. announced today the successful completion of Pyramid Wilmar Plantations (Private) Limited’s proposed investment into Estate Management Services (Private) Limited (EMSPL). EMSPL is a joint venture between Sunshine Holdings and Tata Global Beverages Ltd.

This follows the initial announcement to the Colombo Stock Exchange on Nov 28th, 2012 made by SUN.

Pyramid Wilmar Plantations (Private) Limited (PWPPL) is a joint venture between Asia’s leading agribusiness group, Wilmar International Limited (WIL:SP), listed on the Singapore Stock Exchange and Wressle Holdings Ltd.

In accordance with the terms of the agreements signed today, SUN and TGBL will divest their shares proportionally to accommodate PWPPL’s investment into EMSPL. This move will help further strengthen EMSPL’s presence in Sri Lanka, by leveraging on PWPPL’s expertise in the agricultural commodities value chain.

According to VishGovindasamy, Group Managing Director of Sunshine Holdings PLC, "Our 20 year partnership with TGBL has been a wonderful journey from Plantations to Branded business. When we formulated the JV in 1992, there were high expectations all around and am happy to note that we have exceeded all stakeholder expectations."

"Today, it’s with that same enthusiasm, we embark on another journey through the partnership with Pyramid Wilmar Plantations." he added.

"The partnership will bring in Wilmar’s expertise in the entire value chain of the agricultural commodity processing business to the EMSPL Group. We look forward to building on the value that has been nurtured through our partnership with TGBL for the last 20 years."

Post divestment, Sunshine Holdings shareholding in EMSPL would be reduced from 51% to 33.15%.

Harish Bhat, Chief Executive Officer and Managing Director of TGBL, who was in Colombo for the signing also commented, "Tatas’ Sri Lanka entry would not have happened without Sunshine Holdings. At Tata Global Beverages, we have had an excellent and rewarding partnership with Sunshine over the past two decades and more, and jointly own and share with our partners, an ambitious vision for this Company. Our future in Sri Lanka will be further strengthened by this new partnership with Pyramid Wilmar Plantations".

"We are very excited to work with both Sunshine and TGBL in the plantation sector to expand our value chain in Sri Lanka"echoed SajadMawzoon, Managing Director of Pyramid Wilmar Plantations.

He said"Understandably, expectations are high and we look forward to working closely in creating sustainable value all around". The EMSPL Group owns oil palm plantations in Sri Lanka in excess of 3,000 ha, which are of interest to Wilmar as it operates the largest palm oil refinery in Sri Lanka, in a separate joint venture with Wressle Holdings. Wilmar plans to develop further oil palm estates jointly with its partners to increase domestic sourcing of crude palm oil.
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...by i3gconsultants@ 21:06:39 on 2013-06-11

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Stock Watch: LFIN

LB Finance posts Rs. 2.5 b pre-tax profit


Deposits up 42.5% to Rs. 38.74 b , Turnover up 40.6% to Rs. 11.1 b

Financial powerhouse LB finance PLC yesterday announced its 2012/13 financial results, highlighting yet another outstanding year of phenomenal highs.
Income swelled by a voluminous 40.68% over the previous year to a record of Rs. 11.17 billion during 2012/13, while interest income expanded by 41.49% to reach Rs. 10.32 billion during the year.
The company’s pre-tax profit marginally increased by 3.63% to Rs. 2.53 billion on the back of the company’s renowned operational strategies and its impressive lending portfolio, stemmed mainly from leasing and gold loans. Overall, post-tax profit was recorded at Rs. 1.70 billion, despite many challenges in the economic environment.
LB Finance Managing Director Sumith Adhihetty said that his team was quite happy with the company’s performance achieved in what has been described as a difficult year for the economy. He stated that the company is reaping the sustained benefits of a far-sighted business and operational strategy that turned the four-decade old giant to the forefront as a trailblazer under the inspirational leadership of Dhammika Perera.
LB…
The company’s product portfolio led by its trademark easy leasing and hire-purchase facilities. Leasing is the largest contributor to the company’s loan portfolio accounting for 48.52% of its lending portfolio. The veteran financier said that the results assume significance considering the fluctuating and unfavourable conditions that prevailed in the market.
Deposits, the chief indicator of a finance company’s standing in society showed heartening growth accumulating up to Rs. 38.74 billion. This is a 42.58% increase over the previous year’s figure of Rs. 27.17 billion. “What has been most gratifying is the continued confidence investors place in LB Finance,” Adhihetty stated.
Vallibel One, a diversified holding company with strategic investments, has a 51% stake in LB Finance. The Vallibel group continues to cement its position in the Sri Lankan corporate sphere with far-encompassing interests including PABC Bank, Hayleys, Amaya Resorts, Royal Ceramics, Fortress Resort, Delmege and Lanka Walltiles. With its vision to bring easy-to-use financial tools to the people of the country, LB Finance is poised to rise further into the upper echelons of the Sri Lankan corporate world over the new financial year.
As per the audited financial statements published at the Colombo Stock Exchange (CSE) for the year 2012/13, the company has experienced steady growth in its asset-base of 27.17% despite fluctuating and unfavourable market conditions.
The statement of financial position, statement of comprehensive income, statement of changes in equity and cash flow statement as at 31 March 2013 and for the year ended have been prepared in accordance with Sri Lanka Accounting Standards; comprising of Sri Lanka Financial Reporting Standards   (SLFRSs) and Lanka Accounting Standards (LKASs) laid down by the Institute of Chartered Accountants of Sri Lanka and in compliance with the requirements of the Companies Act No. 07 of 2007. These SLFRSs were effective from 1 January 2012 and comparatives (2012 and 2011) are reclassified and re-measured.
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...by i3gconsultants@ 21:06:12 on 2013-06-11

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Stock Watch: AEL

Access Engineering reports 37% growth in profit in 2012-13 year


Access Engineering says it recorded an ‘impressive’ profit attributable to equity holders of Rs. 2.4 billion for the financial year ending March 31, 2013, compared to a profit of Rs. 1.7 billion last year.
Turnover for the year was nearly Rs. 14 billion and Rs. 11.4 billion at group and company level.
“This is the second consecutive year that the company was able to almost double its turnover in view of the growth taking place in infrastructure development and the construction industry in the country,” the Access statement said.
At group level, the company’s subsidiary Sathosa Motors contributed Rs. 2.3 billion to the top line. The company’s fully owned subsidiary, Access Realties (Pvt) Ltd also contributed to the top line with a turnover of Rs.170 million.
Access Engineering has increased its ownership in its subsidiary Sathosa Motors PLC to 84.4 per cent during the period under review.
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...by i3gconsultants@ 21:06:13 on 2013-06-10

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Stock Watch: EXPO

Expolanka Holdings posts Rs. 1.67 bln pre-tax profit


Expolanka Group reached an annual turnover of Rs. 50 billion for the first time, recording a 41 per cent year-on-year growth (for 2012/13) helped by a 64 per cent spurt in the Freight and Logistics sector.

The company sustained its consolidated pre-tax profit at Rs. 1.28 billion and a consolidated pre-tax profit at Rs. 1.67 billion.
The Freight and Logistics Sector recorded of Rs. 1.18 billion post-tax profit, up 6.6 per cent from the previous year. The other three key sectors

- Travel and Leisure, International Trading and Manufacturing, and, Investments and Services in total contributed Rs. 101 million to the post-tax profit of the group.

“The group’s year end results reflect the challenges that we continue to face in a volatile global macro-economic environment,” Expolanka Holdings PLC Group CEO Hanif Yusoof said.

“The group’s performance was challenged given the trade slowdown in European markets and longer gestation periods in new investments made by the company during the year. We have taken measures to mitigate some of these challenges by moving into markets where growth is evident.”

The company is nearing completion of its flagship, state-of-the-art warehouse in Orugodawatte which will address every logistical need, not only with storage but also by providing value-added processing.

Investments in the US, China and Hong Kong in the Freight and Logistics Sector have performed beyond expectations.
-SundayTimes
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...by i3gconsultants@ 21:06:19 on 2013-06-10

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Stock Watch: CARG

Profits fall for Cargills group as VAT affects ‘Food City’ retail sales


The Cargills Group, operating the biggest supermarket chain in Sri Lanka, has reported below-par results for the 2012/13 financial year saying the retail sector peak sales period was heavily impacted by the Value Added Tax (VAT).

Post-tax profit fell by nearly half (45.6 per cent) from last year to Rs 594.8 million with the steep rise in finance costs and increased debt levels also contributing to this decline.

“While the overall group results for the year are below expectation, the management has already initiated measures towards turning around this performance. In the year ahead, Cargills would be increasingly focused on building the value-for-money advantage in its product portfolios while rationalizing inputs costs and enhancing efficiencies to sustain profitability. The group remains confident of the long term potential of its businesses and continues to be steadfastly committed to its ethos of creating sustainable value for its stakeholders,” the provisional annual report said.

The lack of transitional provisions to allow for the claiming of input VAT on the closing stock as at 31 December 2012 had a significant impact on the group’s retail business which enjoys peaks sales during the 3rd and 4th quarters. Despite the inadequate time provided to adjust to the new policy, the retail team partly mitigated the adverse one-off impact of the policy change by curtailing inventory, the report noted. While the challenges in the external environment remain, Cargills Food City says it is committed to maintaining its consistent ‘low price’ positioning across all categories and has not passed on the VAT to its customers.

Group revenue rose by 14.8 per cent to Rs 55.4 billion while operating profit for the period gained by 3.3 per cent to Rs 2.3 billion, despite the VAT impact and the soft alcohol and biscuits segments performing below potential.

Post-war (after May 2009) investments in dairy, agriculture, confectionaries, real estate, property and financial services topped Rs 12 billion creating 2466 new jobs.

A sum of over Rs 12 billion was also invested in organic and inorganic growth over the past three years. This includes acquisition and capacity enhancement in dairy, agriculture, soft alcohol, and confectionaries sectors as well as investments in real estate, property development and financial services. “However the fast-paced investment drive has resulted in increased group debt and corresponding increase in finance cost. Finance cost for the year concluded amounted to Rs 1.2 billion compared to Rs 630 million in the previous year while total group debt at the year-end stands at Rs 14.1 billion,” the report said.

Millers Brewery Ltd, a wholly owned subsidiary of the Cargills Group, issued a further Rs. 1 billion worth of ordinary shares on March 22, 2013, which was entirely subscribed by the company.

The company also invested Rs 660 million in the ordinary shares of Cargills Agriculture and Commercial Bank on March 19, 2013.
The largest shareholder of the group is CT Holdings (CTH) with 70 per cent followed by Deputy Chairman/CEO Ranjit Page with 6.43 per cent and Anthony Page (director) with 2.27 per cent as the biggest individual shareholders. CTH recently sold off its subsidiary, Lanka Ceramics to the Dhammika Perera-owned Royal Ceramics group. Anthony Page, who continues as chairman of Lanka Ceramics, is set to purchase 30 per cent of the stock during the mandatory share offer.
-SundayTimes
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...by i3gconsultants@ 21:06:41 on 2013-06-10

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Stock Watch: PIRA

Piramal Glass plans to expand export foothold this year


Piramal Glass plans to increase its export markets this year, officials said.

“We are exploring new markets and will further diversify revenue streams,” Sanjay Tiwari, CEO Piramal Glass told the Business Times. He said they expect to expand to high margin yielding coloured bottles segment.

Piramal is the only manufacturer of glass bottles in the country and caters to the food and beverages, cosmetics, perfumery and pharmaceutical industries.

The company has now reduced significant exposure to the Indian market and diversified to Australia, New Zealand, Mauritius, Maldives, East Africa and the UK.

Analysts say that Piramal Glass’s energy cost containing 50 per cent of furnace oil, 30 per cent of electricity and 20 per cent of LPG is expected to see an increase of 18 per cent on its energy bill (with effect from April 1st 2013) as a result of the 15 per cent (weighted average) increase in industry tariff.

They said the major proportion of the company’s sales consist of alcohol and beverage bottles. The rise in tourist arrivals will create more demand especially for soft liquor and result in increased sales volumes for Piramal as Lion Brewery continues to be one of its main buyers, according to analysts.

Piramal’s fourth quarter saw a net earnings growth of 11 per cent year on year at Rs. 110 million while full year earnings grew 6 per cent year on year to Rs. 724 million.
-SundayTimes
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...by i3gconsultants@ 21:06:55 on 2013-06-10

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Stock Watch: HAYC

Hayleys Fibre posts Rs 30.7 m PBT


Hayleys Fibre PLC, formerly known as Hayleys Exports, a global player in the natural fibre products market, recorded a commendable performance in the financial year 2012/2013.

Despite a drop in turnover to Rs. 487 million during the year from Rs. 595 million in the previous financial year, due largely to consolidation of operations and a moving away from non-value generating product portfolios, the company posted a Profit Before Tax of Rs. 30.7 million, compared to a Loss Before Tax of Rs. 7.2 million in 2011/2012.

In a filing to the Colombo Stock Exchange, Hayleys Fibre reported a PAT of Rs. 26.1 million, and an appreciation in Earnings Per Share to Rs 3.24 from a Deficit Per Share of Re. 1.00 in the previous financial year.

Managing Director, Hayleys Fibre, Prasanna de Silva said, “The turnaround is largely attributable to our focus during the year to consolidate operations from three manufacturing facilities to one, thereby benefitting from leaner production, associated efficiencies, synergised use of resources and better controls.”

During the period, Hayleys Fibre moved away from a number of traditional product segments due to their negligible contribution to profitability.

“We have developed a number of variations to our existing product range in 2012/2013 and have a number of patents pending for our innovations,” said de Silva.

However, the company continued to grapple with challenges posed by a constrained global economy, with many of its traditional markets in Europe and the United States demonstrating declining demand. De Silva is confident of the company's ability to develop on the turnaround demonstrated during the year.

“A number of breakthrough innovations is undergoing testing with the support of external technical partners," he said.
-SundayObserver
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...by i3gconsultants@ 21:06:16 on 2013-06-10

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Stock Watch: CDB

CDB records steady growth for 2012/13


Citizens Development Business Finance PLC (CDB) has recorded steady growth in all aspects of business for 2012/13 according to the unaudited results released to the Colombo Stock Exchange (CSE).

The current year's figures have been stated in compliance with the LKAS/SLFRS while the comparative figures are based on SLAS in accordance with the ruling issued by the Institute of Chartered Accountants of Sri Lanka.

The balance sheet has recorded a growth of 48% documenting 24.49 billion. Revenue grew 50% recording 4.31 billion.

Net interest income recorded a growth of 36% at 1.70 billion. Interest income increased 60% while interest expenses increased by 83% due to increases in market interest rates during most parts of the period under review. Profit before tax stood at 669.99 million compared to last year's 644.27 million.

Profit after tax of Rs. 534.87 million compared to Rs. 630.43 million in the corresponding period of the past year has been in the backdrop of a over nine-fold increase in income tax expenses. Total comprehensive income for the year stood at 761.32 million.
-SundayObserver
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...by i3gconsultants@ 21:06:40 on 2013-06-10

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Stock Watch: ATL

Amãna Takaful holds 14th AGM of shareholders


Amãna Takaful, said to be one of Sri Lanka’s fastest growing composite insurers, recently held its 14th Annual General Meeting (AGM) with the participation of the directors, shareholders and staff members in Colombo.

The company said it has secured consolidated revenue of Rs 463.4 million, up 15 per cent from last year while posting a pre-tax profit of Rs. 22.9 million, up 55 per cent from 2011/12.

Amãna Takaful now operates in 22 locations with plans to expand its footprint.
-SundayTimes
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...by i3gconsultants@ 21:06:12 on 2013-06-10

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Stock Watch: MERC

Nilaveli Beach Hotel wins Trip Advisor accolade


Nilaveli Beach Hotel, Trincomalee, the longest standing beach front hotel on the East Coast which will celebrate its 40th anniversary next year, has been awarded the Trip Advisor Certificate of Excellence for the second consecutive year.

The property commissioned in 1974 was the first hotel to be built by Mr. George Ondaatjie who later built Tangerine Beach and Royal Palm Beach hotels in Kalutara and also acquired the Grand Hotel, Nuwara Eliya, and developed what was a crumbling edifice to its present grandeur.

Ondaatjie has also acquired sizable stakes in quoted hotel companies and he and his Mercantile Investment Group are in the top twenty shareholders in many such companies including city five stars.

The Trip Advisor accolade, which honours hospitality excellence, is given only to establishments that consistently achieve outstanding traveler reviews on Trip Advisor, and is extended to qualifying businesses worldwide. Only the top-performing 10 per cent of businesses listed on Trip Advisor receive this prestigious award.

To qualify for a Certificate of Excellence, businesses must maintain an overall rating of four or higher, out of a possible five, as reviewed by travelers on Trip Advisor, and must have been listed on Trip Advisor for at least 12 months. Additional criteria include the volume of reviews received within the last 12 months.

"As the longest standing hotel in the East Coast, we are truly honoured to have been recognized by our customers through Trip Advisor once again." said Travice Ondaatjie, the Managing Director Nilaveli Beach.

"Since reopening after the Tsunami in 2007, we have continued to improve our guest facilities and quality of service offered to our long standing loyal customers. The resident manager, Ravi Ramsay and his team have made great strides in customer service by making all our guests feel that they have come to a place that’s a home away from home, so they enjoy a wholesome family oriented holiday.

"The Executive Chef, Aruna Ekanayake and his team have also contributed immensely to provide a high quality of food, so our guests truly are treated to the great flavours and variety of the East Coast"

The hotel sits amidst over 12 acres of lush tropical tree canopy, located on one of Sri Lanka’s most pristine stretches of beach front, just 2km from the Pigeon Island National Marine Park.

The resort currently operates 45 rooms in Standards and Deluxe categories and will be opening two new luxury beach suites by end of the year. A further development of 24 Villa Rooms and guest facilities which will include conference/banquet hall, spa, gym, shopping arcade and diving school is also in process of being granted approval by the Sri Lanka Tourism Development Authority, the owners said.
-TheIsland
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...by i3gconsultants@ 20:06:46 on 2013-06-10

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Stock Watch: VFIN

Impressive 32% increase in gross profits for Vallibel Finance


Vallibel Finance PLC recently announced its provisional financial performance for the recently concluded Fiscal Year 2012/2013, recording exponential growth in profits, asset base, public deposits and branch expansion.

Total Interest Income of Vallibel Finance grew by 59% year-on-year from the Rs. 1,106 Mn recorded as at March 31st 2012, to stand at Rs. 1,763 Mn as at March 31st 2013. Pre-Tax profit rose to an impressive Rs. 466 Mn as at the end of the Fiscal Year, ascending 18% from the previous year’s figures of Rs. 394 Mn. Profit After Taxation also raised by 23% over the year to stand at Rs. 293 Mn at the end of the year.

It is noteworthy that during the previous year, the company was ranked amongst the most respected entities in the country by LMD in its 2011 survey and also that its significant rise in brand equity was recognized in LMD’s Most Valuable Brand Survey 2013; Vallibel Finance standing alongside some of the greats of the banking and finance sectors.

"The positive trajectory of the company’s profits is certainly very encouraging for all of us at Vallibel Finance", stated Mr. Jayantha Rangamuwa, Managing Director. He opined that the upward trend has been made possible through careful investment in profit-worthy ventures as well as diligent management of overheads by the company. "We have also be able to increase our asset base by a pronounced 40% over the year", states Mr. Rangamuwa as the company records a total asset base of Rs. 9.3Bn at the end of the current financial year, a steep climb from the previous year’s Rs. 6.7Bn and moreover, well above the industry average.

The young company is headed by some of Banking and finance’s most respected personalities including Mr. Dhammika Perera (Chairman- Samapth Bank), Mr. Nimal Perera (Chairman-PABC Bank ), Mr. Sumith Adhihetty (Managing Director-LB Finance ) . Visionary entrepreneur and Chairman of Vallibel Mr. Dhammika Perera was quick to commend the momentous development shown by Vallibel Finance, "Stellar financial performance has once again proven that Vallibel Finance is a rising force in the financial sphere" he states emphatically, "It has far surpassed expectations and continues to move up the ranks of the financial sphere over a very short period amid fierce competition. I applaud the efforts of my capable Board of Directors and our dedicated staff"

Under the expert guidance of the dynamic Mr. Dhammika Perera, the Vallibel group continues to cement its position in the Sri Lankan corporate sphere with far-encompassing interests including PABC Bank, Hayleys PLC, Amaya Resorts, Royal Ceramics, Fortress Resort, LB Finance, Delmege and Lanka Walltile. With its vision to bring easy-to-use financial tools to the people of the county, Vallibel Finance is poised to climb further into the upper echelons of the Sri Lankan corporate world over the new financial year.
-TheIsland
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...by i3gconsultants@ 20:06:54 on 2013-06-10

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Stock Watch: SUN

Sunshine sells down in joint venture deal


Sunshine Holdings PLC has last week completed a deal worth Rs.910.3 million under which it sold 5.6 million shares it held in Estate Management Services (Pvt) Ltd to Pyramid Plantations (Pvt) Ltd, 4 2/1, Lauries Road, R.A. de Mel Mawatha, Colombo.


This follows the successful completion of discussions on a joint venture agreement between Sunshine, Tata Global Beverages Ltd and Pyramid Wilmar Plantations (Pvt) Ltd last November.


Sunshine’s holding in Estate Management Services would consequently come down to 33.15% from the previous 51%.


Estate Management Services (Pvt) Ltd is a joint venture with Tata Global Beverages Ltd of India.


It owns a 53.75 percent stake in Watawala Plantations which produces tea, rubber and palm oil.


Pyramid Wilmar, a unit of the Singapore based firm is in the palm oil business.


An analyst said that Wilmar have effectively acquired just under 10% of WATA from SUN for Rs910 mn - at an effective stake of 22.7 mn WATA shares, that works out to over Rs40 per WATA share which seems rather steep.


WATA’s EPS for FY13 (which was one of its best years - FY14 is poised to be more challenging) was Rs2.90 and its book value is Rs16 per share.


Estate Management Services though gains the management fees of WATA which amounted to Rs138 mn in FY13 - so Wilmar will benefit from this.

-TheIsland

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...by i3gconsultants@ 20:06:36 on 2013-06-10

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Stock Watch: PHAR

Colombo Pharmacy Company exits pharms, changes name


The Colombo Pharmacy Company PLC, now controlled by Environment Resource Investments PLC last week unanimously adopted a special resolution at an EGM to discontinue the pharmaceutical business carried out by the company for nearly 100 years and to change its name to Colombo City Holdings PLC.

Changes to the Articles to enable implementation of these resolutions had been made the company said in a Stock Exchange filing.

The company will focus on property development and other activities related to that object.
-TheIsland
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...by i3gconsultants@ 20:06:47 on 2013-06-10

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Stock Watch: LGL

LAUGFS’ Wega ready to supercharge growth


Having pioneered the auto gas industry, set up a chain of Laugfs fuel stations and supermarkets along with a string of new businesses, the founder of LAUGFS Holdings, says his dream is to alter local people’s lifestyles.

W.H.K. Wegapitiya says this is why he got into the leisure business in the first instance, responding to critics who challenge his diversification strategy into hotels. LAUGFS Eco Sri, LAUGFS Leisure and a few other firms were preparing to go public but the plans were shattered when a crisis hit the share market two years ago. He still wants to do it but will do so when the All Share Price Index to cross 7000. He says supercharging growth is what he’s good at.


LAUGFS’ founder W.H.K. Wegapitiya during the interview. Pix by Athula Devapriya.
In an interview with the Business Times, he spoke on a range of issues dealing with current and future plans of the mega business empire. Here are excerpts of the conversation:

Your plans for the next three years:

We want to be in the first top 10 companies’ bracket in the next 10 years – or maybe even earlier . More than that we want to be in the first 10 Sri Lankan brands that have a high brand loyalty rate with the consumers.

Where do you see the company positioned in the next 10 years?

We have done our business planning. In the next 10 years our business planning includes diversification, improving infrastructure and resources. It’s a journey. Our human resources, technical resources, etc – we got all this figured out in the next 10 years.

What’s your business model?

It will always be related expansion, forward or backward diversification. We feel that strong brands such as LAUGFS can be extended into very diverse business areas. We also want our business diversification strategy to look forward along the supply chain for opportunities to tighten our grip on the market.

Critics say that your companies are getting into many unrelated businesses:

Our expansion will always be close to our core objective which is being close to the day to day lifestyles of Sri Lankan people. The businesses that we get into will always be in line with the daily lives of our people. That is how we see our business model.

This diversification strategy can put you on the fast track to growth but if the strategy fails it can also burn up your money:

The decision to enter one or more new areas is primarily done to take advantage of the company’s existing distinctive competencies. In this respect, how far you are in the value chain determines how strong you are as a company, which in turn will give you an idea of what areas to get into. With the right people, business plan and structure in place, diversification can help to supercharge growth.

In terms of strategy was getting into hotels a good thing?

Diversifying into hotels is also trying to alter local people’s lifestyles, which is in line with our core objective. Suddenly we see an opportunity and we grab it and it might be a success.

It might also be otherwise. Then it’s an experience.

What new ventures will you get into?

We want to shift from orthodox energy sources and get into renewable energy sources. We want to get into transport fuels. Now we use hydrocarbon such as petrol and diesel and we are dependant on them. One third of our foreign exchange goes to importing oil.LAUGFS might find a solution through renewable energy for this. It’ll be something which no one has introduced before.

We’re also looking at value addition to local mineral resources. We’re producing high quality materials, adding value to them and substitute imports in these materials.

In this regard we have already started a joint venture with the Sri Lanka Institute of Nanotechnology to add value to Ilmenite and produce nano titanium dioxide, which is a raw material for products such as paints. Most ilmenite is mined for titanium dioxide production.

Finely ground titanium dioxide is a bright white powder widely used as a base pigment in paint, paper and plastics. We’re setting up this factory at the Nano Park in Homagama.

Weren’t you planning to go public with some six of your companies?

LAUGFS Holdings, LAUGFS Eco Sri, LAUGFS Leisure and a few other firms were readying to go public, before the crisis hit the share market. Arrangements to improve are internal processes, etc, were made as these essential for listing, but plans were dragged due to this unhealthy situation market. We’re waiting for the All Share Price Index to cross 7000 to list these companies. Our leisure company is something that we’re seriously looking at going public with.

Your hotels are taking a long time?

It was mostly due to bad weather. In two months’ time, we’ll open our ‘Ananthaya’ resort in Chilaw. The Chilaw resort hotel, which is a 4-star resort with 88 rooms costs Rs 1.5 billion, while the 110 room resort at Pasikudah will cost Rs. 2.5 billion. This is also a 4-star resort and we plan to complete this project within 18 to 24 months.

Will you be buying or building hotels and where are you interested in?

We’re a cash rich company and we have the capacity to acquire or build hotels. Currently we’re looking at hotels in the deep South, Central and North Central Province. Many hotels which are for sale are also approaching us. We’re evaluating them.

What’re the new product line up that you’ll launch?

We plan to bring alternate energy products which are solar and wind based. We plan to set up power generation through solar and wind power.

Are there any expansion plans in other countries?

We looked at many regional countries and there are many opportunities in Bangladesh, Vietnam, Cambodia and Australia to expand in energy – LPG Petroleum, but we realised that we have more opportunities here.

How is your retailing business doing?

Electricity increases and taxes are affecting retailing business and it’s really bleeding.

Have you got any favours from the government?

No favours. The only favour is that they saved this country from terrorism. As a Sri Lankan I’m forever being grateful for that. Also they are national minded when it comes to businesses.
-SundayTimes
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...by i3gconsultants@ 20:06:37 on 2013-06-10

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Stock Watch: JKH

JKH annual report silent on mega development plan


John Keells Holdings, Sri Lanka’s top conglomerate, now preparing to embark on a mega development project within the Colombo city has maintained near silence on these plans in the company’s annual report released last week.

The only reference to the project is a single sentence in Chairman/CEO Susantha Ratnayake’s message where he says: "Progress continues to be made on our plans for a large scale development on one of our existing sites."

There is an eloquent silence on the site itself and ht the project entails.w

Analysts believe that JKH is not willing to say anything about this project which will include redeveloping the Glennie Street site where the group’s headquarters are located and adjoining several acres belonging to Ceylon Cold Stores which is predominantly owned by JKH until all necessary regulatory clearances and approvals are received.

``There’s many a slip between cup and lip,’’ said a senior JKH executive.

However, arrangements are being made for offices and staff located at Glennie Street to move to alternative premises including office space at Vauxhall Street which came under the JKH umbrella with the Whittals acquisition several years ago as well as comercial space available at Cinnamon Lakeside Hotel.

"Nobody has moved out yet although we have reserved the space," a senior JKH executive said.

The year ended March 31, 2013 saw JKH post group revenue of Rs.85.6 billion, up 10% from the previous year, and group profit after-tax of Rs.13.6 billion, up 24% from the previous year. The group profit attributable to shareholders stood at Rs.12.2 billion against the previous year’s Rs.9.7 billion.

Ratnayake said in his review that with the exception of leisure and property, all other industry groups had achieved returns on capital employed (ROCE) in excess of the group’s hurdle rate of 15%.

"Leisure which accounts for 37.1% of total capital employed by the company improved its ROCE to 14%," Ratnayake said.

JKH has a stated capital of Rs.26.48 billion, revenue reserves of Rs.42.7 billion and other components of equity of Rs.20.6 billion in its books. Total assets ran at Rs.159.1 billion, non-current liabilities at Rs.32.4 billion and current liabilities at Rs.25.5 billion.

The JKH share traded at a high of Rs.249.70 and a low of Rs.172 during the year under review against a trading range of Rs.228.68 and Rs.158.20 the previous year.

The directors of the company are: Messrs. Susantha Ratnayake (Chairman), A.D. Gunewardene (Deputy Chairman), J.R.F. Peiris, E.F.G. Amerasinghe, I. Coomaraswamy, T. Das, A.R. Gunasekara, M.A. Omar and S.S. Tiruchelvam.
-TheIsland
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...by i3gconsultants@ 20:06:32 on 2013-06-10

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Stock Watch: PLC

People’s Leasing in negotiations with ME banks to raise US$ 50 million


People’s Leasing and Finance Plc (PLF) is in negotiation with Middle Eastern banks to raise US$ 50 million, officials said.

“We recently raised US$10 million from the Middle East under the External Commercial Borrowing Scheme introduced in the government’s 2013 Budget. This is a similar attempt,” a PLC official told the Business Times. He said they made contact with these parties during the Investor Forum ‘Invest Sri Lanka’ organised by the Colombo Stock Exchange (CSE), in association with Bloomberg Data Services early this week in Dubai.

The forum attracted over a 100 institutional, high networth investors and fund managers to be introduced to the value proposition for investing in Sri Lanka’s capital market.

The earlier $10 million borrowing of one year tenure is from a leading bank based in the Middle East and PLF will use new funds to boost its working capital to improve its lending portfolio. The official added that the proposed $50 million is a part of a

planned Rs. 30 billion fund raising for the 2013/14 financial year for PLF.

Sri Lanka is fast gaining pace as the hotspot for investment for funds and several fund managers have been making many trips to the country more frequently since the start of this year. Most recently a 2-day presentation of 10 leading local companies to some 20 foreign fund managers was hosted by C T Smith Stockbrokers in Colombo. “There’s a genuine interest in Sri Lanka and they want to put money in this country,” a CT official told the Business Times.

Janus Overseas Fund has become the largest foreign shareholder of John Keells Holdings, according to its latest annual report. It shows Janus on top of the 20 largest shareholder list of JKH as at 31 March 2013 with a 10.1 per cent.

Sanjay Kulatunga, Director Odel told the Business Times that apart from Janus which has been in the country for some time, a new breed of funds are also coming in. He said the challenge is to convert this interest into investment.

Some 15 new funds have invested in different firms – most in those with foreign affiliations such as Nestlé’s, CTC and Caltex, according to industry analysts.

Dr Nalaka Godahewa, Chairman – Securities and Exchange Commission (SEC) told the Business Times that the SEC and the CSE, in association with the Sri Lankan Consulate General in Dubai also held a successful event for the Sri Lankan Diaspora on June 1.
“We showcased the investment opportunities for the Sri Lankan Diaspora. This was a neglected sector and we focused on them more,” he added.

He said some 100 professionals earning $10,000 monthly and residing in the UAE for more than 15 years were met by the local team. “They were really interested and had many discussions with us,” he said.

Dr. Godahewa added that they have invited 15 funds to Sri Lanka in September.
-SundayTimes
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...by i3gconsultants@ 20:06:59 on 2013-06-10

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Stock Watch: CIC

CIC eyes Kenya, Ethiopia and Uganda for agri investments


CIC Holdings PLC is in the process of finalising joint venture partners in Africa to invest in agricultural farming, officials said.
“We’re planning to go to Kenya, Ethiopia and Uganda with horticulture and rice production through our partners in the Middle East,” Samantha Ranatunga Managing Director/CEO CIC told the Business Times. He said this is at the preliminary stage and the company is trying to first identify land in these countries. Mr. Ranatunga said CIC wants to start the projects by next year.

He said that CIC is discussing with two partners – one in Qatar and another in Saudi Arabia – in this regard.

CIC’s agriculture and livestock sector stands as the core business contributing nearly 64 per cent of total revenue and 72 per cent of total net earnings in financial year 2012/13. This sector is involved in producing agricultural inputs such as seeds, planting material, livestock products, distribution of machineries plus blending and marketing fertilizer.

Mr. Ranatunga said that in a bid to beat the uncertainties of the weather, the company has made a strategic decision to shift to value addition in their products and large dairy projects. “We are the largest exporter of high quality rice. We also increased exports in banana and other fruits. We’re going into other areas such as fruit varieties, mangoes, pineapples, etc.”

The company’s Rs 600 million dairy milk processing operation in Dambulla will be commissioned in July. “We’re trying to set up a production facility in Dambulla for dairy products,” Mr. Ranatunga said, adding that this facility will have around 25,000 litre capacity per day and all the products will be used for local consumption.

He also said that CIC’s Hingurakgoda Farms and newly commissioned Siddapura and Muthuwella farms are expected to cater to the growing demand of the dairy industry in the country.

The group recorded a net earnings dip of 53 per cent year on year to Rs 55.3 million in the last quarter of the 2012/13 financial year and 73 per cent to Rs 230.9 million for the whole year largely due to a poor performance from its agriculture sector.
-SundayTimes
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...by i3gconsultants@ 20:06:34 on 2013-06-10

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Stock Watch: JFIN

Finlays Colombo announces board room changes


Kumar Jayasuriya, Executive Chairman and Managing Director, Finlays Colombo PLC, will be retiring with effect from 31st August, 2013. He will continue to remain as a Director, and the Board, at its meeting on 4th June 2013, appointed him as its Non Executive Chairman with effect from 1st September, 2013.

At the same meeting the Board also appointed S. C. (Sam) Swire as the Managing Director and Chief Executive Officer, with effect from 1st September, 2013.

Kumar Jayasuriya joined the Finlays Group in 1981 and held positions of Management Accountant, Financial Controller, Finance Director and Deputy Chairman, prior to being appointed as Executive Chairman and Managing Director on 1st April, 2006. He has been associated with the diversification initiatives of the Company which has seen Finlays being transformed from a, largely, tea related business, to a conglomerate.

Sam Swire was educated at Eton College, Windsor, U.K., and holds a BA Hons: Degree in Modern History from the University of Oxford, U.K. He has been employed in the Swire Group since 2003 and has held positions in Hong Kong, China, U.S.A., and Singapore, in several Group Companies. His last posting, prior to joining Finlays as its Chief Operating Officer in October 2012, was as General Manager of Cathay Pacific Airways in Beijing.

The Swire Group of Companies include investments in Shipping, Aviation, Agriculture, Industry, Property Development, and Trading. John Swire & Sons Limited, U.K., the parent Company of the Group, is the holding company of James Finlay Limited of the U.K., of which Finlays Colombo PLC is a subsidiary.
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...by i3gconsultants@ 21:06:00 on 2013-06-08

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Stock Watch: CDB

CDB profits down 15%


Citizens Development Business Finance PLC (CDB) saw profits fall 15 percent to Rs. 534.8 million for the financial year ended March 31, 2013, from Rs. 630.4 million a year earlier on rising interest expenditure.

The balance sheet recorded a growth of 48 percent documenting a figure of 24.49 billion. Revenue reflected a growth of 50 percent recording a figure of 4.31billion. Net interest income has recorded a growth of 36 percent at 1.70 billion. Interest income reflected an increase of 60 percent whilst interest expenses increased by 83 percent indicating the adverse impact on margins due to increases in market interest rates during most part of the period under review, CDB said in a statement.

Profit before tax stood at 669.99 million up 4 percent from 644.27 million a year ago. Profit after tax of Rs.534.87 million in comparison to Rs.630.43mn in the corresponding previous period has been in the backdrop of over 9 fold increase in income tax expenses, the company said.

Total comprehensive income for the year stood at 761.32mn

Balance sheet growth has been strongly supported by a loan book growth of 47 percent and a deposit base growth of 56 percent recording figures of 19.45 billion and 17.8 billion respectively. The net and gross non performing loan ratios (NPL) stood at 1.27 percent and 2.32 percent respectively.

Strong liquidity position reflecting 90 percent of the balance sheet assets in regular income and cash flow generating assets coupled with statutory liquidity ratio of 14.65 percent at the year end well above the regulatory requirement of 10 percent. CDB also enjoyed a strong capital position with capital adequacy ratio of 14.43 percent well above the regulatory requirement of 10 percent and Shareholders’ Fund standing at 3.00bn reflecting a growth of 30 percent.

Earnings per share recorded a figure of Rs.9.98 whilst net assets value per share stood at Rs.55.32.

The impact of the drop in gold prices has had minimum impact on CDB as exposure to gold-backed assets stood at 4.3 percent of balance sheet assets, CDB said.

Board of Directors has proposed a first and final dividend of Rs.2.75 per share for the approval of the shareholders.
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...by i3gconsultants@ 21:06:46 on 2013-06-08

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Stock Watch: RICH

Richard Pieris records turnover growth of 8%


The Richard Pieris Group ended its performance in financial year 2012/13 reporting a Group revenue of Rs. 34.7 b with a steady profit before tax of Rs. 3 b. The reported profit for the year does not include any gains of a capital nature.
The Retail sector faced a challenging period of three months from January to March 2013 where consumer confidence was low and the adverse financial and operational effects of the implementation of VAT on retail businesses was evidenced. The company continued focusing heavily on managing overheads and inventory levels during the period under review as a result of above.
The period under review and the financial year 2012/13 was successful for the Plastics and Distribution sector of the Group. The sector reported the highest-ever sofa sales in the month of March 2013. The sector managed to maintain its sales on PVC fittings at a healthy level at a time there was a drop in the overall market due to adverse weather conditions.
The Plantation sector continued to enjoy healthy tea prices. The declining trend in rubber prices continued, which affected the turnover of the sector. There was a drop in the production of both tea and rubber crops when compared with the corresponding period of the previous year which is largely due to the harsh weather conditions which prevailed during the period under review.
There was an increase in the total production of tea and oil palm when compared with the fourth quarter of the previous year.
During the period under review the Tyre sector performed well and ended the financial year with outstanding results. Commercial operations proved to be successful on the new tyres which were introduced to the market during the previous quarters. With the expansion of product portfolio and brands the sector restructured its sales team during the period under review to enable operational efficiencies.                           
The Rubber Manufacturing sector ended the financial year on a very positive note where it reaped the benefits of many restructuring activities which took place over the last 24 months. The latex foam business which was turned around last year recorded its highest-ever revenue and profits during 2012/13 financial year. The shoe soling business had a challenging year and is expected to have better prospects during 2013/14 financial year.
The Group continues to capitalise on its solid business base and the key sectors of Retail, Tyre, Plantations and Plastics. The expansion of the Retail sector is expected to continue in the coming year and plans are underway to aggressively drive the furniture business of the Group.
The entry into financial services was further strengthened with the commencement of commercial operations of Richard Pieris Arpico Finance Company during April 2013. The Group continues to add value in all its activities as it steps into its 82nd year of business operations in 2013/14.
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...by i3gconsultants@ 21:06:12 on 2013-06-08

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Stock Watch: SHL

Softlogic tops Rs. 25 b revenue mark, profits down in FY13


Says future outlook positive on the back of changing macro dynamics
Softlogic Holdings Plc (SHL) which saw bottom line dip despite healthy growth in revenue in FY13, is maintaining that the future outlook was positive on the back of changing macro dynamics.
SHL said it reached one of its most historic business milestones with revenue crossing the Rs. 25 billion mark, up by 15.6% year-on-year for FY13, despite the quarter recording a marginal growth of 4.6% year-on-year to Rs. 6.1 billion.
Group net profit slowed down to Rs. 878.7 million for FY13 with profit attributable to equity holders at Rs. 301.1 million. However, the quarter recorded over a ten-fold growth in bottom line to Rs. 224.6 million, primarily generated by upstream dividends and other operating income.
Softlogic Holdings is one of Sri Lanka’s fastest growing listed conglomerates with a notable presence in the ICT, retail, healthcare, automobile, leisure and financial services sectors.
Group revenue was driven by strong growth in the financial services segment (FY13 – up 81.6% year-on-year, 4Q FY13 – 15.4% year-on-year) with the consolidation of Asian Alliance Insurance PLC, whose turnover exceeded Rs. 3 billion for FY13.
Asian Alliance Insurance’s non-Life insurance business growth was led by its fast tracked island-wide expansion mode, now standing at 34 general branches (versus eight as at 31 March 2012) whilst equally strong performance was seen in its Life assurance segment on the back of focused sales efforts driving business in the mid to higher personal market segments.
The leasing and finance business of the group moved forward with Softlogic Capital’s top line also exceeding Rs. 2 billion during FY13. The financial services sector’s last quarter performance reaffirms the value in the business enterprise and the potential to beat forecast levels is now more promising than what was anticipated in the aftermath of FMO and DEG swapping bank debt for equity.
The Asiri Group of Hospitals’ growth momentum remained strong with top line up by 17% year-on-year to reach Rs. 7.1 billion in FY13, (Rs. 1.8 billion – up 20% 4Q FY13). Significant performance was noted in Asiri Surgical Hospital (32% of sector revenue), Asiri Hospital Holdings (30% of sector revenue) and by the most recent 264-bed hospital, The Central Hospitals, which reported improved occupancy levels.
The expanding retail sector (sector revenue up 33.6% year-on-year at Rs. 6.2 billion – FY13) proved to be yet another significant contributor, making 25% of the consolidated revenue for FY13.
The sector’s expansion strategy is underway with an island-wide showroom strength of 214 (with distributors, 150). The opening of the first mini-multi brand departmental store in the island, Galleria, and the acquisition of the global baby care brand, Mothercare, occurred during the period under review.
New acquisitions such as Charles & Keith and Splash will make their debut shortly in upmarket locations. With these new acquisitions coming in along with network expansion, the retail arm is set to capitalise on improving per capita income levels of the upper segment.
The information and communications technology sector recorded a 19.8% year-on-year dip in revenue during FY13 (Rs. 5.6 billion) owing to a number of macro-economic adversities such as currency devaluation, upward trend in interest rates and price wars among industry rivals.
The automobile sector contribution remained sluggish but was within expectations after the escalation of duties for vehicles, made worse by the currency depreciation.
The gross profit of the group for FY13 improved by 14.2% year-on-year, surpassing Rs. 8 billion. The gross profit margin held strong at 33%. Operating cost margins were under strict control during FY13 with the administrative cost margin only seeing a 200 bps rise, reflecting the expanding operations of the group.
Hence, EBITDA remained healthy at Rs. 4.9 billion (up 20% year-on-year), ensuring that the company’s operational performance is acceptable. Finance costs rose 57% year-on-year during the quarter, taking the total for FY13 to Rs. 2.7 billion (up 41.6% year-on-year). Interest bearing loans as at 31 March 2013 was Rs. 22.3 billion compared with the previous year’s exposure of Rs. 22.7 billion.
The rise in interest cost was primarily led by the increase in interest rates in the economy and the delay in the disbursal of the IFC facility of US$ 10 million for retail sector expansion. Interest costs are expected to reduce in the coming year with a balanced debt mix of local currency to foreign currency borrowing in light of the fact that the rupee’s stability is likely to hold, considering Central Bank’s prudent management of the exchange rate risk and the potential for higher FDI inflows expected this year.
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...by i3gconsultants@ 20:06:14 on 2013-06-03

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Stock Watch: EXPO

Expolanka profits up 5.7%, turnover tops Rs. 50bn


Expolanka Group reached an annual turnover of 50 billion for the first time, recording a 41 percent year-on-year growth propelled by a 64 percent growth in the Freight and Logistics sector. Expolanka Holdings PLC sustained its consolidated NPAT for the FY 2012/13 at Rs. 1.28 billion, up 5.7 percent from a year ago with a consolidated NPBT at Rs. 1.67 billion, up a marginal 0.36 percent.


The Freight and Logistics Sector recorded of Rs. 1.18 billion PAT which was an increase of 6.6 percent for the FY 2012/13. The other three key sectors – Travel and Leisure, International Trading and Manufacturing, and, Investments and Services in total contributed a Rs. 101 million PAT to the Group.


"The Group’s year end results reflect the challenges that we continue to face in a volatile global macro-economic environment," Expolanka Holdings PLC Group CEO Hanif Yusoof said in his quarterly review."The Group’s performance was challenged given the trade slowdown in European markets and longer gestation periods in new investments made by the company during the year. We have taken measures to mitigate some of these challenges by moving into markets where growth is evident".


"The Freight sector however, recorded a phenomenal 64 percent in growth in revenue during the year under review, thus further consolidating Expolanka’s position as a key regional player in the freight and logistics industry. Having comfortably secured a bigger slice of the freight industry, we are moving forward and have set our sights on improving operational efficiency while consolidating volumes. We believe that the returns of our new investments will greatly strengthen our bottom line in the near term. We are nearing the completion of our flagship, state-of-the-art warehouse in Orugodawatte which will address every logistical need, not only with storage but also by providing value-added processing. This will propel our business to the next level by providing a total solution to our customers around the world especially in the fashion vertical. Our investments in USA, China and Hong Kong in the Freight and Logistics Sector have performed beyond expectations. The results are encouragingin its first year of operations and we expect a robust contribution from these investments in the near future", Yusoof added.

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...by i3gconsultants@ 20:06:52 on 2013-06-03

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Stock Watch: CERA

Dhammika Perera seen reducing stake in Lanka Ceramic


Anthony Page, Chairman Lanka Ceramic PLC is expected to buy 30 per cent in this company from businessman Dhammika Perera who would still hold a 51 per cent stake, officials close to Mr. Perera said.

A consortium of investors led by Mr. Perera’s Royal Ceramics bought over 24 million shares or 80 per cent of Lanka Ceramic PLC held by the Page family-owned Ceylon Theatres Group early this month at Rs 2.9 billion which saw a share traded at Rs.120.

In the transaction, Vallibel One PLC controlled by Mr. Perera bought 1 million shares while Vallibel subsidiary, Royal Ceramic bought 21 million shares. The 80 per cent stake which Mr. Perera’s companies’ bought included Lanka Ceramic and its subsidiaries Lanka Tiles, Lanka Walltiles, Talawakele Plantations, and Horana Plantations.

Mr. Page also bought 1 million shares. “In the mandatory offer to purchase the remaining shares, Mr. Page will buy 30 per cent for Rs 1 billion. Royal Ceramics has made an application to the Colombo Stock Exchange pertaining to this arrangement at the mandatory offer stage and its pending approval,” the official the Business Times. He said that the mandatory offer which will start on June 7 will see Mr. Page purchasing the shares at the same price it was sold at – Rs 120.

He said that this is a substantial personal investment for Mr. Page and that he has organised his finances to buy the 30 per cent.
Analysts said that this strategic purchase now enables Royal ceramics to enjoy the monopoly in the country’s tile manufacturing industry with imported tiles being the company’s only competitor controlling some 25 per cent market share at present. “This would almost double the floor tile manufacturing capacity to 27,000 square metres per day, they said.
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...by i3gconsultants@ 22:06:55 on 2013-06-02

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Stock Watch: BRWN

Browns’ MD Murali resigning, company says


Browns Group Managing Director/CEO Murali Prakash is resigning from the company with Ishara Nanayakkara taking over as the top official, the company said on Wednesday.
The Business Times last week exclusively reported this development quoting Mr. Prakash as saying he was quitting due to some personal commitments in Australia from August onwards.
In a filing to the Colombo Stock Exchange (CSE), the company said Ishara Nanayakara, Executive chairman of Browns Group and Deputy Chairman of the LOLC Group will lead the company with the support of the experienced and ‘highly skilled management team’.
It said the move is expected to further enhance the synergy between the two groups – LOLC and Browns. Mr. Prakash has served the company for the past seven years. The statement didn’t say whether a new managing director/CEO would be appointed or not. Browns’ is controlled by the LOLC Group whose main stakeholder is the Nanayakkara family
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...by i3gconsultants@ 22:06:59 on 2013-06-02

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Stock Watch: HEMS

Hemas acquires J. L. Morison Son & Jones (Ceylon) PLC


Hemas Holdings on Thursday purchased a 71.5% voting stake and a 50% non-voting stake in J.L. Morison Son & Jones (Ceylon) (JLM) valued at Rs. 1.7 billion.

The JLM Group has a portfolio of well-established consumer brands including Lacto Calamine, Valmelix, Morrison’s Gripe Mixture and Morrison’s Baby products. In addition, the company distributes leading consumer brands Good Knight, Kiwi, Wipro, Nivea, Garnier and L’Oreal as well as manufacturing and distributing pharmaceutical products island wide, Hemas said in a media release.

Incumbent Chairman, R. Abeyawira, who has been part of the JLM Group for 61 years, and due to retire from the business said, “When the time came for us to look for a new parent for the business, our priority was to find the right partner, a party capable of taking the business forward. Having discussed with several prospective partners, we selected Hemas since it has the best fit with our business portfolio and is capable of taking this business to greater heights, building on our people-oriented culture and values”. 

CEO of Hemas Holdings, Husein Esufally noted, “We look forward to working closely with the team at JLM bringing our deep insights into consumer and pharmaceutical business, helping to develop JLM as a leading consumer and wellness company”

Trihan Perera takes over as the CEO of JLM from outgoing CEO Nihal Samaranayake 
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...by i3gconsultants@ 22:06:44 on 2013-06-02

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Stock Watch: HDFC

HDFC Bank Posts Impressive 1Q Results


Housing Development Finance Corporation Bank of Sri Lanka (HDFC Bank) has registered an after Tax Profit of Rs. 38.4 Mn for the 1Q ending 31.03.2013 as against Rs. 4.9 Mn during the corresponding period in the year 2012. The operating profit before Tax was Rs.84.9 Mn as against Rs. 27.3 Mn compared with the corresponding period with the previous year. The Bank’s deposit base has increased from Rs. 11.9 Bn to Rs. 14.5 Bn during the 1Q of 2013 registering the year-on-year (YOY) growth of 22%. The advances increased from Rs. 14.6 Bn to Rs. 16.8 Bn showing the YOY growth of 15%. According to HDFC Bank’s General Manager/CEO, NimalMamaduwa, the Bank continues to develop the new products and focus on expanding the savings base to strengthen low-cost fund base.

Interest Income improved by 26% in the period under review whilst Interest Expenses increased by 30% during this period due to rising interest rates and the increase of Deposit base. However the Net Interest Income has shown 19% growth during the corresponding period. Fee Base Income of the Bank has also shown an improvement registering the growth of 52% when compared with 1Q during last year. The Bank was also able to reduce the Operating Expenses by 19% during the 1Q 2013 as against the previous year.

The Bank’s Tier I Capital Adequacy Ratio stood at 18.4% while the Total Capital Adequacy Ratio stood at 19.4% well above the regulatory requirement of the 5% and 10% respectively as at 31.03.2013.

Commenting further on way forward during the year 2013, Mamaduwa emphasized that "We believe diversification is a permanent and sustainable solution to reduce operational risks while opening up avenues of future growth. Therefore, we are in the process of changing our business model by rebalancing our business operations while long term housing finance will remain our core business. We are expanding the Bank’s short term asset base through new products and services which will promote greater operational flexibility while helping to spread the operational risk."

With the amendment of the HDFC Act in 2011, HDFC is also able to diversify business operations. Under our new broader operations mandate, the Bank plan to enter the Country’s leasing, Micro Finance, SME and Agriculture Markets. For this purpose, the Bank has already initiated a funding scheme with the Central Bank of Sri Lanka and the Bank hope to negotiate more such funding arrangements with specialized agencies. Through the Central Bank’s refinance scheme, HDFC is now ready to gain a foothold in Micro Finance, SME lending and Agricultural Financing.

During the year 2013, the Bank will also continue to promote the highly successful gold loans scheme. Expansion of the Bank’s savings base will continue to remain a priority for the Bank, for the purpose of mobilizing an ongoing stream or low cost funding. The Bank will continue to consolidate the operations in 2013 by improving the systems, processes and skill base to deal with future growth opportunities and to compete successfully in an increasingly competitive market. As part of this process, the Bank has already strengthened the Regional Management structure by giving greater decision making autonomy to Regional Managers.

HDFC Bank was one of the first Banks that published quarterly statements in line with IFRS Standards and the Bank’s final accounts for 2012 have been prepared in compliance with IFRS Standards.

The NPL Ratio saw an improvement at 20.52% as against 22.21% in 2011, due to the implementation of more stringent credit evaluation processes coupled with a strong emphasis on recoveries. However it is noteworthy to mention that this includes NPL Loans backed by EPF Balances which are guaranteed by the Central Bank of Sri Lanka (CBSL). The ratio excluding EPF category stands at 7.8% as at 31.12.2012 as against 11.37% in 2011.

Improving Technology remains a priority during the year to capitalize on efficiency and productivity gains that can be facilitated through the creative use of IT and other Technologies. The Bank is in the process of introducing a new Core Banking Solutions to meet the future requirements.

HDFC Bank’s transparency in communications is gaining recognition. HDFC Bank won the ACCA Sustainability Reporting Award for the 3rd consecutive year in the small scale category for the Bank’s 2011 Annual Report. This was HDFC’s first integrated report in line with international integrated reporting standards and was also a first for the local banking industry.
recorded on The Island
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...by i3gconsultants@ 22:06:32 on 2013-06-02

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Stock Watch: SUN

Sunshine Holdings profit tops Rs. 1 b mark in FY13


Sunshine Holdings PLC yesterday announced another year of earnings and profitability growth for the year ending 31 March 2013.
The Company has delivered broad-based growth, increase in operational efficiencies and market expansion, in an environment that continues to be challenging.
“We ended the year with a strong quarter despite the mixed economic environment,” said Sunshine Holdings PLC Group Managing Director Vish Govindasamy. “The outlook for Healthcare, Agri Business and FMCG remains challenging, but at the same time we see growth and we have great momentum going into 2013/14.”
“Our core businesses continue to be a dominant force in respective industry and we will strive for further market expansion.”
For Q4 ending 31 March 2013, Group revenue was Rs. 3.6 billion, a Y-on-Y revenue growth of 10%. EBIT was Rs. 389 million while PAT was Rs. 298 million.
For the FY 2012/13, revenues were Rs. 13.1 billion, up 20% Y-o-Y, while EBIT grew 59% Y-o-Y to post Rs. 1.7 billion. PAT for the fiscal year was Rs. 1.25 billion, a significant jump from 2011/12 PAT of Rs. 565 million.
Healthcare, one of the largest contributors to the Group, posted revenue of Rs. 5.3 billion, a 14% growth Y-o-Y. Despite the increase in revenue, there was a 15% decline in PAT to Rs. 366 million Y-o-Y, underlying the challenging operating environment.
SBL, the company’s fully-owned healthcare subsidiary, is present in five categories –Pharmaceuticals, Surgicals, Diagnostics, Wellness/OTC and Retail.
The pharmaceutical category continues to be the largest contributor, had a robust 15% growth, while Diagnostics saw 12% growth. Largest growth came from the Wellness category, which has been boosted by new products launched during the fiscal year. In the Retail category, the Healthguard Pharmacy chain with over 20 stores has shown increased customer footfall in their new stores, which supported the 13% growth for the year under review.
The Group’s Agri Business, the largest revenue contributor to the Group in 2012/13, continues the momentum from the previous quarter, registering another good earnings, paying rich dividends to the Company’s multi-crop diversification strategy undertaken a few years back.
Posting a revenue of Rs. 5.4 billion for the year, a 27% growth Y-o-Y and PAT of Rs. 727 million, a 62% growth Y-o-Y, the diversified Agri Business is a consistent top-line contributor to the group.
Palm oil has clearly established itself as the corner stone of the Agri Business, while tea is having a turn-around year, driven largely by quality improvements in the field, resulting in increased production, aided by favourable market conditions.
Palm oil production increased 14% to 7.5 mkgs, being the largest producer of CPO in the country.
The tea segment recorded a Rs. 66 million profit, a far cry from the Rs. 501 million loss in the previous year.
Own production of tea increased 9% to 6.36 mkgs while bought leaf operation held its volumes against previous years at around 3.5 mkgs.
There was a decrease in turnover in the Rubber segment, contributed by a 185% drop in production and a Rs. 76 drop in NSA.
The FMCG segment crossed the Rs. 2 billion revenue mark for the first time in its history, posting an increase of 14% Y-o-Y to post Rs. 2 billion (against Rs. 1.8 billion for 2011/12). Despite crossing a major revenue milestone, PAT decreased 6% to Rs. 198 million against same period last year (Y-o-Y), mainly due to a rise in raw materials.
The tea category was again the largest contributor with revenue and volume growth in both Watawala (popular brand) and Zesta (premium brand), while Oliate (Edible Oil segment) came under some pressure, which impacted its profitability growth.
Overall, a 15% volume growth was recorded in the Tea, Edible Oil and Packaged Water segment in volumes, a tremendous achievement given the high cost raw material environment, which prevailed last fiscal year.
The Energy segment recorded revenue of Rs. 100 m for FY 2012/13, while posting a negative PAT of Rs. 6 million. FY 2012/13 was its full year of production for its energy subsidiary.
reported on DailyFT
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...by i3gconsultants@ 22:06:06 on 2013-06-02

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Stock Watch: LGL

Laugfs Gas lights up record results, declares dividends for third consecutive year


Laugfs Gas PLC and its subsidiaries, in a stock exchange filing of the unaudited financial statements for the fourth quarter ended 31 March 2013, had indicated a record performance with group revenue for the year under review crossing the Rs. 10 billion mark to reach Rs. 10.6 billion.
It is a landmark for the group of companies in its comparatively short history of business operations. It has achieved this feat despite the many unprecedented changes that have taken place over one and a half decades of its existence in virtually all aspects of the business environment that it was operating in. The group was able to withstand turbulent times and preserved the core of the business by staying focused on the fundamentals of the operation, while being willing to change everything else necessary to win and retain customers.
The profit before tax of the group was Rs. 1.3 billion, which is a remarkable growth of 29% over the previous financial year. The group’s total comprehensive income for the year, net of tax, was a commendable Rs. 1 billion as against Rs. 597 million last year, which is a creditable improvement. The total group assets increased by 3% to a position of Rs. 10.6 billion. The property, plant and equipment alone increased to Rs. 6.5 billion, with a net of depreciation increase of 18% over previous year. The productive investments made in this manner would accrue benefits to the shareholders in the ensuing years in the form of better returns, having comparatively shorter gestation periods and early paybacks.
The group’s retained earnings increased by 16% to Rs. 3.5 billion, while net assets increased by 8% to Rs. 6.5 billion. The net asset value per share increased to Rs. 16.76 from Rs. 15.58 last year. The earnings per share increased by 28%, from Rs. 2.14 to Rs. 2.74 per share. The group is determined to keep up this momentum uninterrupted in order to maximise the value of the shareholders’ investments in the future as well.
The downstream operations of LP gas once again recorded the highest ever revenue of Rs. 9.7 billion, an increase of 16% over the preceding year. The gross profit margin, however, reduced to 11% from the previous year’s 14%, mainly due to the escalation of world market prices of LP gas and due to the impact of the upward movement of foreign exchange rates that prevailed during the greater part of the financial year under review.
The company’s EBITDA surged to Rs. 1.6 billion, which is an increase of 62% over last year and is a creditable achievement in the wake of the uncertainties and slowdown of economic activities that were faced. The profit before tax of the company from continuing operations was Rs. 1.4 billion, an increase of 72% over the previous year.
The most striking and commendable achievement in terms of core business activity is that the organisation has more than doubled the total comprehensive income net of tax to Rs. 1.2 billion during the year under review from Rs.  411 million recorded last year. The company’s total liabilities reduced by 4% during the year to Rs. 3.9 billion. The company’s retained earnings had a notable surge of 27% from Rs. 2.3 billion last year to Rs. 3 billion in the current year.
This array of achievements, for both for the group and for the company in its core business activity, converged to underscore the strength of a financially healthy organisation that always meets its growth targets and maintains uninterrupted momentum, despite uncertain external environment forces that usually prevail. Despite all these impressive achievements, the company believes that Laugfs Gas’ best and most exciting days are yet to be seen.
The Board of Directors, having considered the financial performance, decided to declare first and final dividend of Rs. 1.50 per share for the financial year ended 31 March 2013. This is the third consecutive time the company declared dividends after its historic IPO in December 2010.
The LP gas industry globally is in the midst of a profound structural change as new sources of supply compete for market share and as cleaner sources of energy take a greater share of primary energy consumption. The industry globally can take heart that consumption so far has managed to keep pace with this production surge, despite the uncertainty created by the global economic slowdown. With the LP gas demand and supply equilibrium maintained at optimum levels, world market price stability is ensured at least in the short to medium term.
The company said that the LP gas industry locally has immense potential as a cleaner source of energy, also since penetration levels are comparatively very low in comparison to some Asian countries. There is a significant imbalance in energy usage which has to be adjusted with cleaner and more economic sources of energy like LP gas in this country. However, the key challenges facing the LP gas industry in the country in the ensuing years will be educating the authorities and decision makers concerned regarding the use of LP gas.
“In order to do so, the stakeholders involved are in need of effective, consistent communication using rigorous evidence based on data and analysis. Therefore, it is imperative that the industry must speak with a strong, unified voice to persuade the authorities, other stakeholders and financial markets to support the use of LP gas where appropriate,” a spokesman from Laugfs Gas Plc said.
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...by i3gconsultants@ 22:06:01 on 2013-06-02

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Stock Watch: HDFC

HDFC profits up


Siromi Wickramasinghe, Chairman (left) and Nimal Mamaduwa, General Manager/CEO

Housing Development Finance Corporation Bank of Sri Lanka (HDFC Bank) has registered an after Tax Profit of Rs. 38.4 Mn for the 1Q ending 31.03.2013 as against Rs. 4.9 Mn during the corresponding period in the year 2012.  The operating profit before Tax was Rs.84.9 Mn as against Rs. 27.3 Mn compared with the corresponding period with the previous year. The Bank’s deposit base has increased from Rs. 11.9 Bn to Rs. 14.5 Bn during the 1Q of 2013 registering the year-on-year (YOY) growth of 22%.  The advances increased from Rs. 14.6 Bn to Rs. 16.8 Bn showing the YOY growth of 15%. According to HDFC Bank’s General Manager/CEO, Nimal Mamaduwa, the Bank continues to develop the new products and focus on expanding the savings base to strengthen low-cost fund base.

Interest Income improved by 26% in the period under review whilst Interest Expenses increased by 30% during this period due to rising interest rates and the increase of Deposit base.  However the Net Interest Income has shown 19% growth during the corresponding period.  Fee Base Income of the Bank has also shown an improvement registering the growth of 52% when compared with 1Q during last year.  The Bank was also able to reduce the Operating Expenses by 19% during the 1Q 2013 as against the previous year.  

The Bank’s Tier I Capital Adequacy Ratio stood at 18.4% while the Total Capital Adequacy Ratio stood at 19.4% well above the regulatory requirement of the 5% and 10% respectively as at 31.03.2013.

Commenting further on way forward during the year 2013, Mamaduwa emphasized that "We believe diversification is a permanent and sustainable solution to reduce operational risks while opening up avenues of future growth.  Therefore, we are in the process of changing our business model by rebalancing our business operations while long term housing finance will remain our core business.  We are expanding the Bank’s short term asset base through new products and services which will promote greater operational flexibility while helping to spread the operational risk."

With the amendment of the HDFC Act in 2011, HDFC is also able to diversify business operations.  Under our new broader operations mandate, the Bank plan to enter the Country’s leasing, Micro Finance, SME and Agriculture Markets.  For this purpose, the Bank has already initiated a funding scheme with the Central Bank of Sri Lanka and the Bank hope to negotiate more such funding arrangements with specialized agencies.  Through the Central Bank’s refinance scheme, HDFC is now ready to gain a foothold in Micro Finance, SME lending and Agricultural Financing.

During the year 2013, the Bank will also continue to promote the highly successful gold loans scheme.  Expansion of the Bank’s savings base will continue to remain a priority for the Bank, for the purpose of mobilizing an ongoing stream or low cost funding.  The Bank will continue to consolidate the operations in 2013 by improving the systems, processes and skill base to deal with future growth opportunities and to compete successfully in an increasingly competitive market.  As part of this process, the Bank has already strengthened the Regional Management structure by giving greater decision making autonomy to Regional Managers.

HDFC Bank was one of the first Banks that published quarterly statements in line with IFRS Standards and the Bank’s final accounts for 2012 have been prepared in compliance with IFRS Standards.

The NPL Ratio saw an improvement at 20.52% as against 22.21% in 2011, due to the implementation of more stringent credit evaluation processes coupled with a strong emphasis on recoveries. However it is noteworthy to mention that this includes NPL Loans backed by EPF Balances which are guaranteed by the Central Bank of Sri Lanka (CBSL).  The ratio excluding EPF category stands at 7.8% as at 31.12.2012 as against 11.37% in 2011.

Improving Technology remains a priority during the year to capitalize on efficiency and productivity gains that can be facilitated through the creative use of IT and other Technologies.  The Bank is in the process of introducing a new Core Banking Solutions to meet the future requirements.

HDFC Bank’s transparency in communications is gaining recognition.  HDFC Bank won the ACCA Sustainability Reporting Award for the 3rd consecutive year in the small scale category for the Bank’s 2011 Annual Report.  This was HDFC’s first integrated report in line with  international integrated reporting standards and was also a first for the local banking industry.
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...by i3gconsultants@ 20:05:41 on 2013-05-25

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Stock Watch: WATA

Watawala Plantations records Rs. 726 m in PAT for FY 2012/13


Watawala Plantations PLC (WATA) – a member of the Sunshine Enterprise – has posted a 62% growth in profits (YoY) to report Rs. 726 million PAT for the year ending 31 March 2013 (FY 2012/13).
Boosted by strong palm oil performances, company continues to benefit from its diversified crop portfolio in a volatile commodity environment.
The diversified portfolio for Watawala has recorded strong revenue growth to post Rs. 5.3 billion, a 28% increase from the previous year. Good agricultural practices by the company saw record yields in their diversified crop portfolio.
The increase in production and yields in palm oil has once again contributed significantly to the bottom line growth and Watawala is confident the momentum can be maintained for the next year.
Palm oil output (crude palm oil) grew 13% to 7.4 million kgs while tea production output increased 7.5% to 6.2 million kgs. Rubber production saw an 18% decrease, mainly due to adverse weather conditions and reduced hectarage to 0.53 million kgs.
The largest palm oil producer in the country, is also the largest profit earner for the company, posted a PAT of Rs. 545 million for the year, a growth of 28.5% YoY while revenue was Rs. 1.3 billion. The production of palm oil improved as the company adopted several modern agricultural practices, which is now producing results. Further several new fields came in for harvesting during the year under review.
Tea experienced a renaissance year, posting a PAT of Rs. 66 million on a revenue of Rs. 3.6 billion. A substantial turnaround given the segment posted a loss of Rs. 407 million for last year.
Improved agronomical practices implemented by the company, now appear to be showing good results.
The rubber production dropped by almost 18% and the average NSA for the year dipped by Rs. 76, thus creating a marginal profit during the year under review. Several hectares of rubber were abandoned due to old age, which is due for uprooting and replanting.
Despite the uncertainties in the global economy, the Group remains positive on its long-term prospects due to continued increase in the production of palm oil.
A member of the Sunshine Enterprise, Watawala Plantations PLC is a diversified plantation company in Sri Lanka, managed by the Group’s subsidiary, Estate Management Services Ltd., a joint venture with the TATA Global Beverages Ltd.
The company manages a total land extent of over 12,000 Ha in palm oil, tea and rubber with a workforce of approximately 12,000 people.  The company has the largest palm oil plantation and the largest rubber factory in Sri Lanka to augment the production of more than nine million kgs of Ceylon Tea annually.
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...by i3gconsultants@ 19:05:18 on 2013-05-25

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Stock Watch: HNB

HNB’s Rs. 4 b debenture issue opens 6 June


HNB’s Rs. 4 billion listed debenture issue will have its official opening on 6 June whilst the public can begin subscribing to it from 28 May.
This is following the Colombo Stock Exchange approving in principle an Application for listing the debt securities of the Bank on the Main Board.
HNB will issue 20 million Unsecured, Subordinated, Redeemable Debentures at Rs. 100 each with an option to issue up to a further 20 million debentures in the event the initial offer is oversubscribed.
Managers to the issue is Acuity Partners Ltd. and SSP Corporate Services is the Registrars to the Issue.
Fitch has assigned A+ rating to HNB’s latest debentures. They are rated one notch below HNB’s National Long-Term rating of ‘AA-(lka)’ to reflect their subordinated status. The debentures have a five-year tenure with bullet principal repayment at maturity. Coupon payments are at a fixed rate, and paid annually, helping the bank to reduce its exposure to interest rate risk.
HNB is to use the proceeds to fund its projected lending activities and to strengthen the bank’s regulatory Tier 2 capital base.
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...by i3gconsultants@ 22:05:26 on 2013-05-21

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Stock Watch: HNB

Fitch affirms HNB at ‘AA-’


Fitch Ratings has affirmed Hatton National Bank PLC’s (HNB) National Long-term rating at ‘AA-(lka)’. The Outlook is Stable. The agency also affirmed HNB’s outstanding subordinated redeemable debentures of Rs. 6 b at ‘A+(lka)’.
Rating Action Rationale: HNB’s ratings reflect its strong domestic franchise in lending and deposit mobilisation as the fourth-largest bank in Sri Lanka, as well as its satisfactory capitalisation and stable operating performance. However, HNB exhibits weaker asset quality than higher-rated peers, partly owing to higher and more volatile non-performing loan (NPL) ratios and lower provisions coverage, which constrain its ratings.
HNB’s subordinated redeemable debentures are rated one notch lower than its National Long-Term Rating, to reflect their gone-concern loss-absorption qualities in the event of liquidation, and is in line with Fitch’s criteria for rating such securities.
Key Rating Drivers: HNB had a 9% share of loans and deposits each at end-2012. HNB has the fourth-largest foreign-currency deposit base, which provides the bank with a competitive edge. Current and savings accounts remain strong as a share of total deposits, albeit reduced to 39% in 2012 in line with the sector as market interest rates rose, from around 6.2% (average weighted deposit rate) since April 2011.
HNB was one of two banks among rated domestic peers to have raised fresh shareholder funds during buoyant domestic equity markets. At the same time, HNB’s higher exposure to the retail and SME segments than peers may necessitate a higher capital buffer to compensate for the additional risk, all else remaining equal.
HNB’s Tier 1 capital adequacy ratio (CAR) was 14.1% at end-2012 and is strong in a domestic context. This ratio falls to 11.85% if HNB were to set aside the full regulatory capital requirement against its gold-backed lending (pawning) portfolio (currently zero capital allocation based on domestic regulations). The adjusted figure would be modest compared with systemically important banks in the region.
HNB’s NPL concentrations are high, stemming in particular from loans to three tourism projects in Maldives, which were disbursed in 2008-09. Although the bank is optimistic, Fitch notes that recovery of these exposures could remain challenging in the near term, and will continue to put pressure on HNB’s asset quality.
The bank’s greater focus on the SME/retail sector in 2012, as a part of their long term strategy, can improve profitability if managed prudently, but also increases business risk insofar as these segments are more susceptible to economic downturns than corporates.
Pawning advances accounted for 16% of HNB’s loans in 2012 (2011: 14%). At end-2012, the average loan-to-value (LTV) ratio on the pawning book stood at 70%, but increased to 82% as at end-March 2013 due to falling gold prices. HNB has since cut pawning growth to reduce risk, with monthly portfolio growth slowing to 0.4% in April 2013 (January 2013: 1.7%). Comparatively the bank’s overall loans grew 1.5% in the first three months of 2013.
Rating sensitivities: A notable increase in HNB’s risk appetite, or a weakening of underwriting standards, which results in higher volatility in financial performance and asset quality could lead to a downgrade. In particular, a weakening of asset quality accompanied by a faster-than-expected dip in capitalisation and provisions for non-performing loans could also lead to downward rating pressure.
HNB has a higher business risk profile than higher-rated peers’, stemming from its higher exposure to retail and SME loans. Consequently the bank’s asset quality swings have been more pronounced. This, combined with weak economic conditions at present, leads the agency to believe that a rating upgrade is less likely in the medium-term.
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...by i3gconsultants@ 22:05:11 on 2013-05-21

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Stock Watch: HAYL

Hayleys profits surge, a historic year says Chairman Pandithage


The Hayleys Group, one of Sri Lanka’s leading conglomerates, recorded an exceptional financial performance for 2012/13 with net profits surging 119 percent, "despite challenging conditions in the group’s key global markets and tight macroeconomic policies in the domestic arena", the company said in a statement.

In a filing to the Colombo Stock Exchange, the blue chip conglomerate reported a turnover of Rs. 74.3 billion, a 13 percent growth from the previous financial year. The PBT grew to Rs. 5 billion, up 96 percent from Rs. 2.6 billion in 2011/12, which was restated in line with SLFRS/LKAS requirements. Earnings per share of the group rose to Rs. 24.73 from Rs.13.90 in 11/12.

"The Group’s performance this financial year is very significant as most sectors posted commendable returns, making 2012/13 a historic year for Hayleys", noted Mohan Pandithage, Chairman and Chief Executive of Hayleys PLC. "Three of our key sectors; Hand Protection, Purification Products and Transportation & Logistics all individually surpassed a PBT of Rs. 1 billion., which is truly remarkable" he added.

The other sectors of the Group showed continued improvement.

The Construction Materials Sector demonstrated a strong growth and the Fibre Sector, following the implementation of a number of strategies to streamline operational processes, consolidated its turnaround. Losses in the Textiles Sector were curtailed as the company implemented a number of strategic and leadership changes.

The Group benefited from the exceptional performance of the Plantations Sector whilst the Agriculture Sector posted commendable results despite adverse climatic conditions. In Leisure and Aviation, the Amaya Group made a significant contribution to the bottom line whilst The Kingsbury Hotel commenced operations in December 2012, after a major expansion program.

Power and Energy made a strong impact to the Group, with contributions from Wind Power and Industrial Input segments. However, the Consumer Sector was affected by higher interest rates, lower consumer spending and a weaker currency.

Speaking on the conglomerate’s future outlook, Pandithage noted, "This year’s performance is reflective of our movement towards consolidation of growth. We have ably demonstrated our capability to withstand challenges, and will continue to grow the businesses through market enlargement, product and brand development, R&D, value addition and constant innovation".

The Board of Directors of Hayleys PLC comprises Messrs Mohan Pandithage (Chairman and Chief Executive), Dhammika Perera (Deputy Chairman), Rizvi Zaheed, Nimal Perera, Sarath Ganegoda, Rajitha Kariyawasan, Dr. Harsha Cabral PC, Dr. Mahesha Ranasoma, Mangala Goonatileke, Ranil Pathirana, Lalin Samarawickrama and Ruwan Waidyaratne.
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...by i3gconsultants@ 22:05:47 on 2013-05-21

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Stock Watch: OSEA

Overseas Realty profits grow 33%


Consolidated profits of Overseas Realty (Ceylon) PLC recorded a strong performance in the 1st quarter of 2013, with a group profit of Rs. 504 million, growing 33 percent from a year earlier.

"Growth in profits was driven by strong performance from leasing of office space at the World Trade Center (WTC) Colombo where revenue grew 19 percent to Rs. 344 million with the occupancy at the WTC Colombo being maintained above 95 percent. Additionally, growth in profits was also driven by the recognizing of revenue and profitability of the apartments sold in Phase 2, in the quarter, where revenue from apartment sales of Rs. 547 million grew 227 percent over the previous year’s corresponding quarter," the company said in a statement.

"The Group expects to maintain high occupancy levels throughout the year at the WTC Colombo and continue its robust sales of apartments at Havelock City Residential," it said.
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...by i3gconsultants@ 00:05:55 on 2013-05-18

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Stock Watch: ATL

Intense price cutting: Amãna Takaful group profits down


Amidst intense price cutting and a volatile macroeconomic environment, Amãna Takaful PLC group profits fell 9 percent to Rs. 41.42 million for the quarter ended March 31, 2013 from Rs. 45.36 million a year earlier. Gross written premium (GWP) grew 23 percent to Rs. 594.01 million during the quarter from Rs. 484.2 million a year earlier.

"The start to 2013 was extremely volatile and highly charged due to un-warranted and extraneous influences that adversely impacted our client base and trading partners. This was exacerbated by intense price cutting. Nonetheless, we stayed the course and weathered the storm, growing on par with industry while defending our market share," said CEO Fazal Ghaffoor, commenting on the first quarter performance.

"It is heartening that our strategy to deliver sustainable growth in our people’s performance, our quest for a balanced portfolio and real achievements on the productivity front while delivering real value to our customers, is well on track to achieve the desired outcomes," he concluded.

Income from investments fell 59 percent to Rs. 24.35 million.

Fair value gains fell 80 percent to Rs. 571 thousand.Insurance claims and benefits fell 2 percent to Rs. 190.9 million.

Acquisition costs grew 61 percent to Rs. 33.4 million.

Operating and administration costs grew 18 percent to Rs. 161.44 million.

At company level, profits grew 33 percent to Rs. 23.46 million. Revenue grew 15 percent to Rs. 463.38 million.

"Amidst many challenges, Non-Life business kept pace with the industry and grew by 10% to Rs. 357 million in which all classes delivered product-line profitability, notably Motor. Prudent and speedy management of motor claims and its supply chain continue to impact positively among all stakeholders. Consequently the combined ratio too improved substantially to 86% from 98% a year ago, the company said in a statement.

Gross Written Premium of the Life segment improved significantly to 105.8 million, up 34% over the corresponding period in 2012, over-performing industry growth performance of 7%.

Lack luster performance in the white-listed equities coupled with volatility in bullion virtually halved investment income to Rs. 22 million compared to the corresponding quarter in 2012. Importantly, a 46% improvement in the Under-writing result at Rs. 134.7 million helped to mitigate the under-performance in investment income.

Meanwhile, Amãna Takaful Group which also includes Amãna Takaful Maldives reported first Quarter profit of Rs. 41.3Mn. "The Groups first quarter results are a good start to the year, despite the challenging trading environment more particularly here at home. The operation in the Maldives is progressing steadily on all fronts," commented Chairman Tyeab Akbarally. "While great and real opportunities are yet to be fully optimised with prudent risk management and innovative product offers in our pipeline, I remain optimistic of our growth momentum. For sure, the industry has to get its act together in responsible tariff management practices" the Chairman concluded.

The company’s re-fashioned strategic route map to build sustainable balanced growth and profits has begun to deliver results. The plan took flight last year and reached grass root levels in the organisation together with the establishment of new branches, refurbishment of existing locations and leveraging information communication technology to boost service at customer touch-points. One of a few ISO certified insurance operators in Sri Lanka, Amãna Takaful now operates in 22 locations with plans of expanding its footprint further. ATPLC also operates 3 key strategic business units that specialise in Life, General and Medical Takaful, which is unique in its approach to serve the respective developing customer segments. Furthermore, by keeping to its tenet of mutuality, the company also offers financial protection through the Takaful concept to the needy of the Sri Lankan populace by providing Navodhaya - ATPLC’s Micro-Takaful (insurance) solution.

The current Board of Amãna Takaful PLC includes, Tyeab Akbarally (Chairman), Ehsan Zaheed (Executive Director), Non-Executive Directors- Osman Kassim, Dr. A.A.M. Haroon, Dr. T. Senthilverl, Dr.Ifthikar Ismail and Non-Executive Independent Directors M.H.M. Rafiq, Dato’ Fadzli Yusof, A.S.M. Muzzamil, Ali Sabry and, R. Gopinath.
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...by i3gconsultants@ 00:05:41 on 2013-05-18

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Stock Watch: UAL

Union Assurance profits up 31%


Union Assurance PLC (UA) saw profits grow 31 percent to Rs. 111.36 million for the quarter ended March 31, 2013 from Rs. 85.2 million a year earlier.

The insurer reported a growth of 11 percent in combined gross written premium (GWP) up Rs. 251 million to Rs. 2.7 billion in the 1st quarter of 2013 from Rs. 2.4 billion a year ago. Non Life contributed Rs. 1.4 billion to the combined GWP, compared Rs. 1.1 billion in 2012. The life insurance segment contributed Rs. 1.3 billion to the combined GWP.

Total net revenue for the quarter increased to Rs. 2.8 billion (2012 - Rs. 2.4 billion), a 16 percent growth when compared to the same period in 2012. Profit before tax amounted to Rs. 135 million, a 32 percent increase over the same period last year. Profit after tax increased by 31 percent to Rs.111 million from Rs. 85 million in the first quarter 2012,excluding the surplus from life insurance business which is determined after an actuarial valuation conducted at the end of the year, the company said in a statement.
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...by i3gconsultants@ 00:05:14 on 2013-05-18

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Stock Watch: NEST

Nestlé Lanka profits surge 97.2%


Nestlé Lanka PLC reported a strong 97.2 percent growth in net profits to Rs. 914 million for the March 2013 quarter from Rs. 461.8 million a year earlier, helped by a falling rupee and stable raw material costs.

The company reported a revenue of Rs. 7.74 billion during the quarter, up 6.7 percent from a year earlier.

"Operating in challenging market conditions, the company delivered a revenue growth of 6.7 percent and profit of Rs. 914 million benefitting from stable raw material costs and favourable currency in the current year, whilst currency depreciation significantly impacted the comparative period," the company said in a statement.

"2013 market conditions continue to be challenging but our people have persevered in delivering consistent, good results. Our product innovations continue to be relevant to local consumer needs and I’m proud to say that our ‘Creating Shared Value’ strategy creates joint benefit for Nestlé and society at every stage of our value chain. We continue to strive to make a difference to the lives of our all stakeholders with sustainable, responsible operations and safe food and beverages of the highest quality. Despite the many challenges, we remain cautiously optimistic," said Ganesan Ampalavanar, Managing Director of Nestlé Lanka PLC.
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...by i3gconsultants@ 00:05:10 on 2013-05-18

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Stock Watch: HEMS

Hemas Holdings Plc: Challenging the norm : A study in change management


Hemas Holdings PLC is a company listed on the Colombo Stock Exchange (CSE) and is the holding company of the Hemas Group (HEMAS), a leading conglomerate in Sri Lanka with a portfolio of diversified interests.

A multi-faceted organisation, Hemas’ vision is in tandem with facilitating Sri Lanka in its capacity as an emerging economy. As such, Hemas’ portfolio of interests predominantly focuses on the Fast Moving Consumer Goods (FMCG), healthcare, leisure, transportation and power sectors.

 

The Business Case
Introduction

The broad-based nature and scale of Hemas’s business functions demand a gamut of sourcing requirements, ranging from raw materials and packaging for FMCG, medical equipment for hospitals and machinery for power plants to routine administrative services such as security, staff facilities, insurance etc. The process of determining and fulfilling these highly specific needs included each strategic business unit (SBU) sourcing of suppliers manually.

 

 

The need for change
Despite conventional wisdom of the acclaimed diligence of the Manual Procurement Process (MPP), it was a time-consuming and labour-intensive approach. Much effort and expense went into ensuring the quality and integrity of the materials sourced through the MPP. As our corporate sourcing requirements escalated, the cumbersome MPP weighed us down, culminating in the decision by the management to seek a redress.
This prompted the management to move decisively away from the conventional decentralised MPP in favour of an automated alternative. It was a foray into unchartered territory, but the management remained steadfast in their resolve that change was imminent. The new software platform would primarily need to serve the complex sourcing requirements of a multi-dimensional conglomerate like Hemas. However, it should not merely be a replacement for the current MPP but also be a key value creator.
To justify the investment, the new system should be equipped to facilitate as far as possible a seamless transition from the MPP with minimal disruptions. This was by no means an easy task given the parameters that we had set. Many options to improve the sourcing processes were evaluated. Due to the substantial financial and non-financial benefits offered, a decision was made in favour of the Ariba Sourcing Module offered by Consus Consulting Group of India (CCG).

Methodology

The road map for change

The monumental task of the changeover process needed to be determined. A road map for change was developed.

The changeover process was driven with the support of the Board of Management (BOM), representing the Managing Directors of Hemas. It was their exemplary leadership, strengthened by the steadfast belief in the virtues of change that became the key drivers of the process.

As a first step, the strategic focus of the entire group was realigned to embrace the new sourcing module. The changeover process acted as the catalyst in redefining the overall group procurement policy. It was vital that the new system be successfully integrated, not only to maximise savings but also to ensure compliance, transparency and visibility in the procurement process of the group.

The BOM assigned a team of Champions across the group, responsible for a smooth transition, as change agents to ensure clarity and precision of project deliverables. The selection of Champions was done carefully, including representatives from each SBU across the group, hailing from multi-disciplinary backgrounds such as finance, engineering and marketing. In addition to their inherent expertise, it was vital that Champions possess the following skills and attributes:

 

 

 

Readiness Assessment Study

To supplement our business case, the Champions were commissioned to conduct a Readiness Assessment. This study would not only determine the group’s sensitivity to change but also act as a primary tool in the subsequent implementation of the change management process.

Core elements

 Determining the underlying human impact: Change usually triggers a multitude of human behavioural elements that strain the boundaries of established culture by challenging the norm. It is natural for some to whole heartedly embrace the forces of change while others to completely reject it. We found that the change from our MPP to ASM was no different. However, we remained steadfast in our belief that effective change management would help in overcoming these challenges.

 

Determining the type of change: We proceeded to delve deep in order to determine the scale of the changeover process. A study was done to determine the quantum of spend requirements that would be routed through ASM by analysing spend details for the FY 2010/11.The study revealed that approximately 75% of spend could be channelled through ASM leading to an estimated annual saving of Rs. 30 million. This necessitated an immediate and total revamp of organisational attitudes toward sourcing, resulting in fundamental changes to the existing procurement process

 

Identifying the restraining forces: We found that proponents of the MPP had developed a unique mindset which was difficult to penetrate. Their cognitive skills had been conditioned by years of working with the MPP. Face-to-face negotiations were a key component of the MPP resulting in long established business relationships with suppliers. It was argued that since ASM was done on a software platform it could not effectively facilitate a like-with-like product comparison. They believed that this would compromise the quality of the raw materials sourced and ultimately impact the quality of the final output. It was believed that raw materials sourced through ASM would not conform to accepted quality norms. E.g.: raw materials used for toothpaste would have an impact on its taste. Despite the obvious competitive edge, the buyers were reluctant to move away from their comfort zones to consider an alternative supplier. Furthermore, advocates of the MPP stubbornly maintained their view that in certain areas, our volumes were insufficient to realise any significant savings by way of competitive price bidding in comparison to global multinational organisations. Under these circumstances, resistance to change was the unwillingness to deviate from manual process to the Ariba platform. They were reluctant to accept the subsequent paradigm shift with the implementation of ASM. Majority held the opinion that e-sourcing module could not be used as a practical solution for all types of procurement. ASM demanded a planned approach to sourcing, with the requirement to submit supplier details in well-structured forms enabling the buyer to clearly evaluate strengths and weaknesses of each supplier. Our staff was hesitant to follow this process of obtaining supplier information as they were more familiar with a procurement process led by face-to-face negotiations. The key deterrent at this point was the perception of the existing suppliers for initial preparation and the training required for the online auction process.

 

 Evaluating existing processes: During the course of our study, we evaluated the existing procurement system of each SBU and identified that there were wide variations in prices and quality across the group for the same category of product or services. Our process mapping exercise focused on eliciting as much information as possible not only on the formal documented templates but also the informal practices in place.  

 

Assessing organisational culture: Hemas, by virtue of its size alone, had accumulated a complex organisational culture that extended to a great many sub-cultural aspects. We proceeded to conduct an in-depth study on the organisational culture prevalent at Hemas. It was revealed that there were many different methods of sourcing adopted, not only within the Group but also within the same SBU, due to the fact that procurement was solely within the control of the procurement manager of the respective division. As a result controls were less effective because there was no uniformity in the procurement process. Lack of information hindered traceability of transactions. Certain staff had undue power over the negotiating process. Various arguments were made by buyers to justify the impracticality of changing the existing suppliers or opening the bidding process to new suppliers as they were reluctant to move to a new process opposed to their routine framework for procurement.

 

 

CIMA Business Insights

 

CIMA Business Insights strives to enhance the community’s awareness of successful application of core business knowledge in the local context, showcasing next practices through case studies of actual business scenarios.

This issue features the case study presented by a team representing Hemas Holdings at the CIMA Business Case Awards, for which they were highly commended. The team comprised Priyanthi de Silva, Prasenna Balachandran and Vathsala Wijekoon.

The CIMA Business Case Awards is a competition that awards the best business case recognising a turnaround or a success story. The aim of the competition is to enhance knowledge on how success is achieved and sustained in an organisation, and the ability to effectively communicate such cases. It also aims to facilitate cross-company knowledge sharing by showcasing organisational success stories.

Disclaimer: Opinions expressed represent the authors’ attempt to apply business theory to analyse a Sri Lankan business case and do not necessarily represent the views of the institution or the organisations by which they are employed.

Phase 2 – Implementation and management of change

We then felt confident of our readiness to continue with the next phase of the change process. We re-evaluated our position and set out our identified philosophy for change. Our goal was to strengthen the driving forces and weaken the restraining forces so as to successfully manage change. The management reiterated the importance of meticulous planning at each progressive stage. It was vital to identify all possible loopholes and address these so as to avoid anyone circumventing the new system.

Our communication plan was designed to regulate the flow of information and highlight persistent dysfunctional areas that may exist. All bottlenecks of the changeover process were identified and ironed out by improving communication among the user groups. It was the responsibility of the Champions to ensure that all procurement requirements of the group were routed through the central sourcing unit (CSU) and auctioned on the online platform to provide an equal level playing field for the suppliers.

We began the implementation of ASM gradually. Packing materials were the first to be sourced through this module. Next, we sourced more complex products such as medical equipment, security services, raw materials etc. Subsequently, the entire HEMAS procurement requirements of photocopy paper, computers, and televisions were auctioned on ASM. Despite being in relative infancy, ASM is now responsible for procuring more than 80% of the group spend requirements.

There were a number of challenges faced during the implementation process. We continued to stress on the importance of our change philosophy and sought the guidance of the senior management when necessary. The management adopted a “top-down” approach to ensure that the crucial operational aspects of ASM were effectively filtered down to all stakeholders. The Champions played a pivotal role towards achieving this goal. Staff education was done through a series of familiarisation programs conducted by the in-house CCG representative. The sessions comprehensively covered all features of the system. In response to cultural issues that surfaced proactive measures were taken by the champions to inculcate a cultural mind shift. With the intention of easing the transition process, the management advocated an open door policy to facilitate greater communication between staff and the Champions.

Several coaching sessions were conducted to expose our existing vendors and suppliers to ASM culture in which they were educated on the drawbacks of the MPP and ensuing benefits of ASM. Recognising the imperative need for change, the management encouraged the staff through a series of consultative programs to encourage them to provide extensive support to existing suppliers and vendors in a bid to facilitate ASM platform.

 

Phase 3 – Reinforcing change

We recognised that an integral part of the change process is to ensure that offline transactions are minimised. Following a study done by our team of consultants, on photocopy paper bought by our SBUs, it was evident that major savings could be obtained by grouping the Group’s requirements according to the categories of goods and services purchased, would bring in significant savings. The analysis further justified ASM and strongly persuaded the BOM to send their spend details to the CSU.

There were many instances where the selection process was intentionally manipulated in favour of preferred suppliers. These issues not only drew attention to the possible loopholes in the system but also provided the impetus to initiate corrective action.

We ensured that the fundamental issues were duly targeted by corrective action. Firstly, greater facilitation in terms of training or ground support was offered to resolve the issues evolved. Should the issues remain unresolved, intense discussions and negotiations would take place between the Champion and the respective staff.

We witnessed the frequency in which the ASM is used for procuring has increased, reflecting a considerable degree of success resulting from strategically managing change. The synergies derived from combining change management strategies with ASM, resulted in a host of tangible and intangible benefits that justified the move from the MPP to ASM. Foremost among them is the Rs. 25 million saving in the first year alone resulting from routing procurements through ASM. The increased competitiveness supported by the multiple bid platforms was one of the key catalysts of these savings.

 


Conclusion

It was indeed a revolutionary move on the part of Hemas, as the first company in corporate Sri Lanka to foray into the world of online sourcing. We never doubted our ability to successfully manage the change and challenge the norm and emerge victorious. Our approach would be the yardstick used to measure the success of change management within an ever changing organisational paradigm. We are overwhelmed with the outcome of the past year since commencement of this project and have no doubt that the group would continue to consistently accrue the benefits from the system far outweighing the initial investment.

reported on Daily FT

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...by i3gconsultants@ 08:05:49 on 2013-05-15

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Stock Watch: MBSL

MBSL group losses contract


The Merchant Bank of Sri Lanka PLC (MBSL), controlled by state banking giant Bank of Ceylon, saw group level losses contract during the quarter ending March 31, 2013 to Rs. 39 thousand, down 99.5 percent from Rs. 8.75 million a year earlier, interim financial statements filed with the Colombo Stock Exchange showed.

At company level, MBSL saw profits grow to Rs. 9.79 million during the quarter, up 18 percent from Rs. 8.29 million a year ago.

At group level, income grew to Rs. 1.36 billion from Rs. 918.8 million a year earlier. Net interest income amounted to Rs. 362.6 million, up from Rs. 349 million a year ago.

Total operating income amounted to Rs. 441.6 million, up from Rs. 350.11 million a year ago.

Group profits before income tax amounted to Rs. 15.83 million, compared to Rs. 7.8 million a year earlier. Income tax amounted to Rs. 15.87 million, down from Rs. 16.55 million a year ago.

MBSL group’s balance sheet grew by 20.9 percent year-on-year to Rs. 23.9 billion as at March 31, 2013.
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...by i3gconsultants@ 08:05:59 on 2013-05-15

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Stock Watch: NDB

NDB: Bank profits surge, group profits fall


While NDB Bank reported a net profit of Rs. 6.2 billion for the quarter ended March 31, 2013, up a massive 387 percent from the previous year, NDB Group profits fell 53 percent to Rs. 499.9 million from Rs. 1.07 billion a year earlier, interim financial results showed.

"National Development Bank PLC (NDB) continued its strong growth momentum by posting impressive results for Q1 2013 in the backdrop of intense competition which placed severe pressure on interest margins and posed many challenges to the banking industry during the first quarter," the bank said in a statement.

Despite these challenges, NDB recorded a strong performance for the first quarter of 2013, posting a commendable Profit After Tax (PAT) of Rs. 6.2 Bn to its shareholders, which is an increase of 387% compared to the corresponding period of last year. The Bank’s Profit Before Tax (PBT) rose to Rs. 6.8 Bn during the said period reflecting an increase of Rs. 5.1 Bn (294%) over the PBT of Rs.1.7 Bn for the quarter ended March 2012. The reported earnings of the Bank are mainly due to the significant growth in Net Interest Income of 21% and Equity Income of Rs. 5.3 Bn. The Bank’s PBT excluding the exceptional equity income of Rs 5.3 Bn and the one off reversals of loan loss provisions made in the prior period, have recorded a growth of 4% over the prior period. In addition to this, costs saving strategic initiatives implemented by the Bank to eliminate non-value adding activities and streamline its internal processes have contributed positively towards improving the Core Banking Profits and setting the stage for a strong 2013.

The Bank continued to benefit from the group synergies and provides unique value proposition to its shareholders. The strategic disposal within the Group by selling the investment in AVIVA NDB Insurance PLC to American International Assurance Company Limited (AIA) of Hong Kong during the fourth quarter of 2012 earned impressive capital gains for NDB Capital Holdings PLC (NCAP) which is a subsidiary of the Bank. Following the share buyback agreement that was entered into, NCAP, bought back its shares in March 2013 posting a Rs. 5.3 Bn capital gain to the Bank’s Equity Income.

The Group share of profits increased tremendously by 224% compared to March 2012 as a result of improved performance by NCAP. The NDB Investment Bank and NDB Stock Brokers recorded modest profits due to the prevailing slow moving and inactive capital market conditions in the first quarter.

The Bank’s Earning per Share (EPS) of Rs. 43.52 indicates a significant increase of 145% over December 2012. The Bank’s Return on Average Assets (ROA) and Equity (ROE) for the first quarter stood at 4.05% and 42.42% respectively due to the exceptional Equity Income of Rs. 5.3 Bn.

The deposit base of the Bank grew by Rs. 20 Bn compared to the corresponding period under review posting a 22% growth to reach Rs. 110 Bn as at 31 March 2013. The Bank’s newly introduced ‘NDB Real Saver" account which offers a true savings proposition to its customers has been able to attract over Rs. 500 Mn in deposits while inculcating the saving habit amongst all Sri Lankans.

The growth in loans and advances of the banking sector was at its lowest since end 2010, and thus comparative interest income earned dropped at a higher rate. Average Weighted Prime Lending Rate (AWPLR) has remained high and volatile in 2013, increasing the cost of borrowings to customers. Despite these challenges, the Bank’s loans and advances portfolio increased to Rs. 119 Bn as at 31 March 2013, an increase of Rs. 13 Bn, or 13% compared to March 2012. The NPLs to gross lending portfolio was 1.56% with a provision cover of 54% as at 31 March 2013. The NPL ratio of the Bank continues to remain healthy due to the prudent risk management practices adopted by the Bank and is well below the industry average. The liquidity position of the Bank is managed exceptionally well and the ratio of 24.69% (DBU) is well above the required statutory limit of 20%.

The regulatory Tier I and II Capital Adequacy Ratio (CAR) improved to 15.86% from 12.41% as at December 2012 due to the realized capital gains from the share buyback transaction effected during this period. Accordingly, the Bank’s capital base increased by Rs. 4.3 Bn. The Bank’s very strong Tier I capital base and the cushioning capacity to absorb any vulnerability or uncertainty in the market supports the future growth potential through profitable avenues to grow its balance sheet aggressively in the coming months.

Commenting on the Q 1 2013 performance, Russell De Mel, CEO of NDB said, "The impressive performance during the period results from our continued focus on achieving a number of main objectives, including re-focusing on our core business and pursuing a growth agenda. Key initiatives aimed at developing our SME and retail segments and improving asset quality remain on track. We have expanded our distribution network and are continuing to work on a number of IT initiatives which will enable us to offer service enhancements for our customers and bring sustainable improvements in our operational efficiency".

Hemaka Amarasuriya, Chairman stated that "Our solid foundation, cemented by our strong capital base has undoubtedly expanded our horizons. We strongly believe in our ability to achieve higher returns through improved performance, intensified cost reduction drives and disciplined approach to capital and funding costs".

Further he said, "The Bank will continue to grow through aggressive channel expansion, introducing innovative and personalized product propositions and service offerings to fulfill the financial needs of a diverse clientele supplemented by streamlined business processes during the rest of the year".
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...by i3gconsultants@ 08:05:21 on 2013-05-15

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Stock Watch: NTB

NTB profits grow 15% to Rs.502mn


The Bank closed the financial quarter ender 31st March 2013 with a post-tax profit of Rs 502 million, a growth of 15 percent over the corresponding period 2012. First quarter achievement was driven by good growth in top line revenue, well diversified across business segments and under pinned by the growth in loans and advances portfolio, the bank said in a statement yesterday (14).

NTB recorded improved NIMs over the previous period due to well managed asset and liability re-pricing strategies along with the shifting of the asset mix to more high yielding assets. Net interest income recorded a growth of 21 percent over the previous period. Liquidity diminished along side with the push for growth in customer advances whilst deposit growth was strategically managed during the quarter. Bank continued its efforts to grow low cost balances which reaped good results recording an 8 percent growth and improving low cost mix over the level reported for the year end 2012.

Fees and commission income recorded a moderate growth of 15 percent whilst net trading income recorded a significant drop for the current year. Credit cards recorded a growth of 38 percent mainly attributable to higher card fees and merchant commission income. Card business drivers on spend, new cards and receivables increased over 20 percent compared to previous period. Bank also witnessed negative growth in Foreign Exchange and Trade finance income due to challenging market dynamics. In contrast to the market volatility experienced in the previous period due to the currency devaluation resulting in exceptionally high FX income, subdued market activity prevailed during the current quarter. Both FX income and trade finance income were also impacted by the slow movement in imports, with exports yet to show increasing trends by end of the quarter. Trading gains on FIS portfolio for the current year compared to a corresponding loss for the previous year had a favourable impact on the net trading income for the Bank.

Operating expenses recorded an increase of 19 percent over previous year with the cost of expansion, branding and tariff increases adding up to the operating cost base. Highest increase over previous year was on account of other operating expenses mainly attributable to consultancy fees whilst depreciation recorded a drop due to most of the pre 2009 acquired assets being fully depreciated. Group cost income ratio stood at 58 percent, with the Bank remaining committed in driving this ratio below 50 percent in the medium term.

Bank NPL ratio stood at 3.1 percent compared to 2.9 percent reported in December 2012. The impact of the growth in absolute NPLs by 15 percent was somewhat mitigated by the growth recorded in the loan book. Bank continued efforts in improving its risk management framework with close monitoring of portfolios.

The capital position was at a sound Rs.12.5Bn with Capital Adequacy Ratios both at Tier 1 and 2 maintained at comfortable levels.

Commenting on the results and achievements, Renuka Fernando Director/CEO stated "We have recorded a noteworthy financial performance in the quarter which reflects continuing momentum and sustainable returns. We have also embarked on our five year strategic plan aligned to the medium term growth prospects of the country. 2013 being the year of execution will no doubt be challenging, but we are confident that results of strategy execution will have a significant impact in a short time frame on our growth and profitability to become one of the leading players in the banking industry in Sri Lanka".
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...by i3gconsultants@ 08:05:43 on 2013-05-15

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Stock Watch: UBC

Union Bank group profits plunge 57%


Union Bank of Colombo PLC saw group net profits plunge 56.98 percent to Rs. 53.13 million for the quarter ended March 31, 2013 from Rs. 123.53 million a year earlier, while at bank level, net profits fell 38.69 percent to Rs. 62.96 million from Rs. 102.7 million a year ago, interim financial statements filed with the Colombo Stock Exchange showed.

The bank released the following statement yesterday (14): "Anil Amarasuriya, Director / Chief Executive Officer of Union Bank of Colombo PLC (UBC) strongly iterated that the Bank has continued to successfully journey towards its aspirations of positioning itself as the ‘Top of the Mind’ SME Bank

in Sri Lanka during the first quarter of 2013 amidst the challenges in the Banking sector.

Despite challenges in the Banking sector in the first quarter of 2013, Union Bank reported a post tax profit of Rs.62.9 Mn for the first three months of 2013. The Bank has shown progress in its core banking operations recording growth in its Loans and Advances of 9% resulting from an increase in the loan portfolio to Rs.21.9Bn. Total deposits also increased by 7% to Rs.25.3Bn during the same period.

Interest Income grew by 34% in comparison to the comparative due to the combined reasons of increases in the loan portfolio and interest rates. Similarly, due to the increase in the deposit base and the interest rates, interest expense also reported a 70% increase. A reduction of Rs. 49 Mn in foreign exchange income was recorded in comparison to the first quarter of 2012 due to the stabilisation of the Rupee. A 16.3% increase in overheads was also reported as a result of the expansion in Branch Network and increase in Staff required for the new branches to be opened.

‘At Union Bank our focus is clear,’ says Mr. Amarasuriya. "We want to become the ‘SME Bank’ in Sri Lanka because we know our fundamentals are apt for us to add value to this consumer sector". This is in line with the Bank’s vision of becoming the preferred bank for Small and Medium entrepreneurs.

Given the unwavering focus of the SME sector by Union Bank, the Bank has rapidly expanded its presence, taking its total network to 38 branches by May 2013. "We hope to expand our network to fifty branches by the end of this year,’ said Mr. Amarasuriya. This expansion has been honed and focused and geared specially to grow Union Bank’s SME portfolio.

Realising the vital role that IT plays in customer outreach, Mr. Amarasuriya stated ‘Union Bank’s has invested in excess of Rupees 600 million to also introduce a new Core Banking System, which will complete rollout this year. This will help to give the Bank a significant upward momentum in technological advancements and assist the Bank to move towards its objective of being an IT premiered Bank in the country.’

He also commented that with the intention of accelerating Union Bank’s SME presence, a sophisticated robust risk management system was acquired enabling more responsiveness to customers. In addition the Bank has launched a host of new products and ancillary services adding value to the Bank’s promise of providing total financial solutions to SME and retail customers. To further augment its SME focus, Union Bank has also partnered German organization GIZ to improve access to finance for SMEs assisting them through banking products, procedures, methodologies, setting-up of special SME branches and SME service centres, development and organising of staff training programmes and SME customer training which will enable the Bank to sustainably enhance their credit portfolio to its SMEs customers. It will help generate employment, impact income, reduce poverty and enhance regional development."
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...by i3gconsultants@ 08:05:51 on 2013-05-15

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Stock Watch: SFIN

Singer Finance profits up 7%


Singer Finance (Lanka) PLC (SFL), a unit of Singer (Sri Lanka) PLC reported a net profit of Rs. 235.4 million for the year ended March 31, 2013, up 7 percent from Rs. 219.5 million a year earlier while profits fell 17 percent to Rs. 57 million during the March quarter.

Net interest income grew 9 percent to Rs. 811.2 million while total income grew 37 percent to Rs. 1,748 million, interim financial statements filed with the Colombo Stock Exchange showed.

Personnel costs fell 47 percent to Rs. 171.9 million while administration and selling expenses fell 2 percent to Rs. 437.2 million.

Impairment on loans receivables grew 579 percent to Rs. 62.5 million from Rs. 9.2 million while loan loss recoveries amounted to Rs. 7.2 million, up 193 percent from a year earlier.

VAT on financial services grew 39 percent to Rs. 16.15 million while income tax grew 29 percent to Rs. 90 million.

The company’s balance sheet grew by 7.27 percent to Rs. 7.23 billion as at end March 2013, from Rs. 6.74 billion a year ago.

Public deposits stood at Rs. 3.17 billion as at March 31, 2013, up from Rs. 2.64 billion a year earlier.

SFL’s borrowings fell to Rs. 1 billion from Rs. 1.21 billion a year earlier. Loans from related parties amounted to Rs. 661.65 million, up from Rs. 490 million.

Hire purchase receivables amounted to Rs. 2.18 billion, down from Rs. 2.3 billion a year ago. Finance lease receivables picked up to Rs. 3.45 billion from Rs. 2.46 billion and loans and advances amounted to Rs. 915.4 million, down from Rs. 1.37 billion.
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...by i3gconsultants@ 08:05:52 on 2013-05-15

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Stock Watch: COMB

Commercial Bank profits down 20%


The country’s largest private bank, Commercial Bank of Ceylon PLC, reported a net profit of Rs. 2,241 million for the quarter ended March 31, 2013, down 20 percent from Rs. 2,804 million a year earlier, while group net profits fell 19.72 percent to Rs. 2,256.7 million.

Releasing its first quarterly statement based on new Sri Lanka Accounting Standards (SLFRS) which are based on International Financial Reporting Standards (IFRS) for interim accounts, the bank said foreign exchange income had declined by Rs 1.47 billion or 65% over the corresponding quarter of the previous year, due to the appreciation of the Sri Lanka Rupee against the US Dollar during the reporting period as against a depreciation during the corresponding quarter of the previous year.

Interest income improved by 24% to Rs 14.487 billion in the period under review, but interest expenses increased at a higher rate of 44% to Rs 8.874 billion, exerting pressure on interest margins, the Bank said. Consequently, the interest margin for the quarter declined to 4.34% from the 4.85% reported for 2012.

As a result of these factors, the Bank’s profit after tax of Rs 2.241 billion for the three months was lower by Rs 563 million over the first quarter of 2012.

The Commercial Bank of Ceylon PLC has posted profit before tax of Rs 3.23 billion on gross income of Rs 16.77 billion for the three months ended 31st March 2013, despite the challenges of reduced foreign exchange income and narrowing margins in the reporting period, the bank said in a statement.

"The Bank continued its trend of steady growth as reflected by the increase in deposits and interest earning assets as well as improved capital adequacy ratios and other key indicators," Commercial Bank Chairman, Dinesh Weerakkody said.

"The impact of lower translation gains and income from foreign currency operations on profit was anticipated following the strengthening of the Rupee commencing the latter part of 2012," Commercial Bank’s Managing Director/CEO Ravi Dias said.

Total deposits of the Bank grew by Rs 13.570 billion over the three months since December 2012, surpassing Rs 400 billion to Rs 408.945 billion at 31st March 2013, recording a growth of approximately 4%, while its interest earning assets too increased by the same percentage, growing by Rs 15.907 billion to Rs 389.451 billion at the end of the quarter reviewed. Total assets of the Bank increased by 4.91% to Rs 536.9 billion from Rs 511.7 billion at the end of 2012.

The Bank’s Tier I Capital Adequacy Ratio improved to 12.72% as at 31st March 2013 from 12.64% at 31st December 2012, while total capital adequacy (Tier I and Tier II) increased to 16.62% from 13.85%, largely due to a sum of US$ 75 million raised by the Bank from the International Finance Corporation (IFC) as a ten year Subordinated Term Debt that qualifies for Tier II Capital.

Commercial Bank’s Chief Financial Officer Nandika Buddhipala said the Bank had made a reversal of Rs 100.654 million in its individual impairment provisions in the quarter reviewed. This was mainly due to efforts of the Bank to recover part of such loans and also due to the reduction in the number of loans considered for individual impairment during the first quarter of 2013.

Collective impairment provisions had also reduced from Rs 1.258 billion in the first quarter of last year to Rs 610 million in the reviewed three months, largely due to a change in the mix of the loans subjected to collective impairment that was favourable to the Bank. Consequent to this, the total impairment charges for the period was only Rs. 516.925 million which reflected a drop of Rs 514 million, or an improvement of 49.86% compared to the first quarter 2012.

Total expenses including personnel costs, depreciation, amortisation and other expenses for the three months was Rs 3.508 billion, an increase of 7.2%.

Taken as a group, the Commercial Bank, its subsidiaries and associates posted pre-tax profits of Rs 3.255 billion for the quarter reviewed. Profit after tax for the three months was Rs 2.257 billion.
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...by i3gconsultants@ 08:05:53 on 2013-05-15

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Stock Watch: DIAL

Dialog Broadband to expand LTE service with Rs. 800 m Sky TV buy


Dialog Axiata Plc yesterday announced that its wholly-owned subsidiary Dialog Broadband Networks Ltd. (DBN) had entered into a Share Purchase Agreement (SPA) with the shareholders of Sky Television and Radio Network Ltd. (Sky) for the acquisition of 100% of the ordinary shares in issue of Sky at a consideration of Rs. 800 million.
Following the completion of the acquisition, Sky will be amalgamated with DBN.
Sky is a licensed pay television operator and is currently in possession of spectrum resources in the 2.3GHz spectrum band, assigned to Sky by the Telecommunications Regulatory Commission of Sri Lanka (TRCSL) for the provision of pay television services.
The 2.3GHz spectrum band has been adopted globally for the provision of LTE services and DBN’s fixed LTE service launched in December 2012 is based on a 15MHz allocation within the said band.
The acquisition of a further spectrum resource in the same band would enable DBN to expand its fixed LTE service resulting in the expansion of its high speed broadband delivery capacity via LTE technology.
The enhanced spectrum resource will also enable DBN to enhance its fixed 4G-LTE services in terms of capacity, burst speeds and bandwidth delivered to Sri Lankan homes and enterprises.
DBN has received the approval of the TRCSL for the acquisition of Sky and the amalgamation of Sky with DBN along with its spectrum resources. The TRCSL has also granted approval for the redeployment of the afore-referenced spectrum for the purpose of expanding the broadband services delivered via LTE technology.
DBN launched Sri Lanka’s first 4G-LTE service in December 2012 in the city of Colombo, propelling Sri Lanka’s telecommunications sector in to the 4G era. DBN’s 4G-LTE service has since expanded to the cities of Kandy, Jaffna and Galle and delivers Fixed Broadband services to a rapidly increasing number of Sri Lankan homes.
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...by i3gconsultants@ 21:05:58 on 2013-05-14

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Stock Watch: MGT

Hayley’s MGT cuts losses


Hayley's MGT Knitting Mills Plc, a knit fabric maker has cut losses 32 percent to 2.0 million US dollars in the March 2013 quarter and is expecting to turnaround this year.

The firm reported losses of one US cents per share, the firm said in interim accounts filed with the Colombo Stock Exchange.

Revenues rose 15 percent to 8.9 million US dollars and expenses rose at a slower 10 percent allowing gross losses to fall to 47 percent to 467,949 dollars.

Chairman Mohan Pandithage said the company was now focusing on customers who wanted higher value added products.

Administration expenses were reduced to 922,665 dollars from 2.0 million the previous year, which came partly from one off provisioning.

The troubled company is being turned around by new chief executive Rohan Goonetilleke who has made process changes which had reduced wastage, Pandithage said.

"The Order Book for the coming six months looks promising and I am confident that a turnaround is imminent during the ensuing year," he said.
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...by i3gconsultants@ 21:05:40 on 2013-05-14

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Stock Watch: HNB

HNB profits dip


HNB Group net profits fell 3.78 percent to Rs. 1.27 billion for the first quarter of 2012/13 from Rs. 1.32 billion a year earlier while at bank level, net profit fell 5.69 percent to Rs. 1.16 billion from Rs. 1.23 billion a year ago.

Profit before tax of HNB for Q1 2013 was Rs. 1.69 billion, down 7.14 from Rs. 1.82 billion recorded in Q1 2012 while group pre-tax profits stood at Rs. 1.81 billion, down 5.23 percent from Rs. 1.91 billion a year ago.

Commenting on the performance, Dr. Ranee Jayamaha, Chairperson of HNB PLC stated that HNB has recorded good firstquarter results despite challenging market conditions and sluggish credit growth.

However, with the expected turnaround, HNB is poised to take advantage of all opportunities available to grow its business.

"Q1 2013 continued to be challenging for the banking sector with demand for credit slowing down further, nevertheless HNB recorded a growth of 36 percent in interest income to Rs. 13,683 million in Q1 2013 from Rs.10,035 million in Q1 2012 due to 11 percent yoy expansion in its loan book  and  relatively higher rates of interest," the bank said in a statement.

Interest expenses too increased by 46 percent from Rs. 5,187 million in Q1 2012 to Rs. 7,584 million for Q1 2013 on account of the increase of Rs. 34 billion in the deposit base, which is a growth of 11 percent yoy as well as the higher rate of interest compared to the previous period and the shift witnessed towards high yielding deposits.

As a result, HNBs Net interest income witnessed a growth of 26 percent for Q1 2013 as against the corresponding period of 2012.

The net income from fees and commission recorded an improvement of 10 percent despite, slowdown in foreign trade during the period.

However, the Bank incurred a loss of Rs. 1,022 million, compared to the gain of Rs. 805 million made in 2012 on account of the revaluation of forward contracts and swaps. The gain made in 2012 was largely on account of the significant depreciation of the rupee witnessed during Q1 2012 while exchange rate volatility in the current period resulted in the loss due to revaluation of forwards and swaps. HNBs other operating income grew by Rs. 1,210 million during the first quarter of 2013 from a loss of Rs. 379 million during first 3 months of  2012 due to exchange gains/losses from non-derivative assets and liabilities. The fluctuation in the exchange rates as well as the change in composition of the Bank’s non-derivative assets / liabilities,resulted in the Bank posting an exchange gain in the current period compared to 2012.

With the implementation of SLFRSs the Bank replaced the CBSL time based provision with an impairment loss computed based on incurred loss model and accordingly the Individual impairment on individually significant loans improved by  27 percent while Collective impairment on individually insignificant loans increased by 119 percent for the Q1 2013.

Operating expenses for Q1 2013 increased by 12 percent primarily due to salary revision to all grades of staff, fair valuation of the liability under Employee Share Benefit Trust under SLFRS and increase in general charges.

Jonathan Alles, the Acting CEO of HNB PLC commented that he was happy with HNB’s performance in what could be termed a somewhat flat first quarter. He too stated that HNB had made good progress in technology and process enhancements and that the execution of the 2013/15 strategic plan is on course. The launch of Mobile Banking is one such initiative in 1Q2013 and is in line with HNB’s strategy to advance in technology with a view to maximize operational efficiency.

The price of the voting share of HNB improved by 13 percent during the first quarter 2013, with the price at Rs.167.30 as at end of the first quarter 2013 compared to Rs. 148.00 at the end of December 2012 while the non-voting share recorded a gain of 17.2 percent to Rs.131.80 from Rs.112.50 at the end of 2012.
reported on DailyFT
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...by i3gconsultants@ 21:05:01 on 2013-05-14

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Stock Watch: CIFL

Blind leading the blind?


Once high flying Touchwood Investments Plc (TWOD) is apparently facing rough weather with incomplete disclosure given the part sell out by key Directors whilst they themselves have taken up additional responsibilities in troubled CIFL throwing open a barrage of questions over good governance and effectiveness of the regulatory role from shareholders and investment analysts alike.
In what some analysts termed as bizarre developments, troubled finance company, Central Investments and Finance Plc, on Friday in a filing to the Colombo Stock Exchange (CSE), said three new members Roscoe Meloney, Swarna J. Meloney (Chairman and Vice Chairperson of Touchwood) and Dulan Hettiarachchi have been appointed to the Board effective 2 May 2013. Meloney has been appointed as the new Chairman of CIFL replacing K. A. L. Rupasinghe who had resigned whilst CEO Gamini Karunathilake too has resigned with Swarna J. Meloney appointed as Acting CEO until a permanent appointment is made.
This was after CIFL in early April in response to a Sunday newspaper article which referred to change of ownership responded saying the company has been notified by a new investor by the name of Roscoe Meloney that they have concluded the acquisition of the holding company Aspic Corporation along with nine subsidiary companies.
Accordingly they have claimed to be major shareholders of CIFL and they have copied some of their communications with the Central Bank on the same subject which indicate that they intend infusing approximately US$ 12 million to CIFL and bring in a high level of corporate governance and financial integrity.
“We are currently communicating with this party and the Central Bank in getting the necessary approvals etc for this purpose. We will arrange to keep you informed about the future development in this respect,” said the 2 April 2013 filing to CSE by CIFL Chairman Lakshman Rupasinghe.
With no further updates, CIFL last Friday merely stated the change in the Board of Directors leaving many shareholder and investment analyst’s questions unanswered.
Yesterday Touchwood Plc announced that eChannelling Plc Chairman and CEO Ruwan Silva has been appointed with immediate effect to be the Principal Consultant and Advisor to the Board of Directors.
Silva would be assisting Touchwood with regard to mergers and acquisitions, investor relations and the restructuring of the Company in addition to other responsibilities. He would assist the Company in identifying and introducing strategic investors to Touchwood.
The connection between Silva and Touchwood owners wasn’t explained or on what basis he was handpicked except that he was described as been instrumental in the turnaround of eChannelling and has been involved in many other company restructuring projects.
Touchwood’s filing to the CSE signed by Deputy Chairperson Swarna J. Maloney also said “The Chairman and Deputy Chairman of Touchwood Investments Plc are committed to strengthen and improving Touchwood Investment Plc and are embarking on a substantial restructuring of the company which would enhance profitability, which would benefit all stakeholders including the shareholders”.
The revelation of strengthening and improving Touchwood and “substantial restructuring” comes out of the blues as there had been no other prior disclosure from the company in recent months.
Company analysts were perturbed on what basis did Touchwood controlling shareholders agree to infuse money into the troubled finance company (CIFL) when their own venture was under distress. They also questioned on what basis did the Central Bank approve this deal and whether proper due diligence was done?
Ironically, Touchwood Plc’s Chairman and Deputy Chairperson are yet to make good corporate governance practice-linked timely disclosure of their own acts with regard to divesting of some of their shareholdings in the Company.
The Daily FT learns Mr. and Mrs. Maloney sold a substantial part of their shareholding in Touchwood in the market to retailers in recent weeks but to date there has been no disclosure as part of Director’s dealings in company shares. Mr. Maloney had at least sold around over Rs. 80 million worth of Touchwood shares and Ms. Maloney around Rs. 40 million in recent weeks as per one analyst.
As per 31 December 2012 shareholdings, Mr. Maloney held 17.5 million shares or 16.36% stake in Touchwood whilst Mrs. Maloney held 9.6 million or 9% stake.
The selling by Mrs. Maloney comes after she was appointed Vice Chairperson in April.
As per Daily FT analysis, Touchwood saw heavy trading in recent weeks. For example in the week ended 3 May 2013, around 30% stake of the company traded followed by 18% last week. A large number of retailers were active whilst several were seen recycling trades. Some may have been engaging in speculative trading whilst others could have been told an untrue “upturn” story.
Touchwood has a retained loss of Rs. 367.56 million at group level as at 31 December 2012, up from Rs. 321 million a year earlier. Its assets amounted to Rs. 7.7 billion including Rs. 6 billion as biological assets, valuation of which in the past had raised concerns among investment analysts. Group noncurrent liabilities amounted to Rs. 4.4 billion and Rs. 146 million in current liabilities.
Revenue in the first nine months of FY13 was down to Rs. 899 million from Rs. 943 million a year earlier whilst net profit was Rs. 130 million up from Rs. 110 million.
The new Principal Consultant and Advisor has an arduous task as per analysts. He is also the Chairman of British American Technologies which is the major shareholder of eChanneling. Previously he was the CEO of Blue Diamonds Jewellery Worldwide Plc and served as CFO at Sri Lanka Telecom and Ericsson Algeria and Sri Lanka.
On the other hand CIFL’s first nine months revenue for FY13 was up 14% to Rs. 513 million, whilst net income was down by 46% to Rs. 116 million owing to an 83% dip in other operating income and 81% rise in interest expense.
Operating losses were Rs. 261.7 million, up by 30% over the first nine months of FY12. Profit loss before loan losses and provisions was Rs. 145.4 million as against a profit of Rs. 13 million a year earlier.
Net losses for nine months of FY13 were Rs. 147 million as against a profit of Rs. 7 million.
CIFL was saddled with negative revenue reserves of Rs. 92 million as at 31 December 2013 as again a positive Rs. 55 million a year earlier and 31 March 2012.
Assets amounted to Rs. 3.8 billion, up from Rs. 3.3 billion a year earlier and Rs. 3.6 billion as at end FY12.
Liabilities amounted to Rs. 3.2 billion, up from Rs. 2.6 billion as at 31 December 2012 and Rs. 2.9 billion as FY12.
 
Week ended     No of Shares    Value        Closing Price/Change
10.5.2013    18.8m         Rs. 112.73     Rs. 6.30/+ Rs. 0.30
03.05.2013     32.8m        Rs. 214.8 m     Rs. 6.00/- Rs. 1.70
26.04.2013    14.87m        Rs. 101.2    Rs. 7.70/+Rs. 2.10
19.04.2013    4.8m        Rs. 27.0        Rs. 5.60/0.00
12.04.2013    1.22m        Rs. 6.8        Rs. 5.60/-Rs. 0.10
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...by i3gconsultants@ 21:05:55 on 2013-05-14

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Stock Watch: TJL

Textured Jersey surpasses Rs. 1 b net profit milestone


Textured Jersey Lanka PLC (TJL), Sri Lanka’s leading provider of knit fabric, has delivered an impressive Rs. 1.02 b in net profit for the full year ended 31 March 2013 (FY2012/13), an increase of 62% year-on-year, as per the latest results released to the Colombo Stock Exchange (CSE).
combination of a strong order book consisting of major customers such as Victoria’s Secret, Marks & Spencer, Intimissimi and Decathlon, improved operational efficiencies and strict control of overheads supported by a strong balance sheet allowed TJL to surpass the Rs. 1 b milestone in net profit for the year.
Besides this impressive performance, Textured Jersey has also maintained its generous dividend policy and paid out an interim dividend of Rs. 0.66 per share in March 2013, representing a pay-out of 62% of its nine-month profit ending 31 December 2012. Further, its share price has outperformed the ASPI with an increase of 54% during the 12-month period ending 6 May 2013 versus a 13% increase in the ASPI.
For the quarter ended 31 March 2013 (4Q FY2012/13) TJL reported a profit of Rs. 323 m – a 48% year-on-year increase. However, as per the release to the CSE by the Chairman of TJL Bill Lam, although the company achieved improved efficiencies and a better product mix, quarterly margins were affected by a rise in cotton prices and the typical lag in selling price adjustments. As a result, gross profit for the quarter came in at Rs. 355 m – a 31% decrease year-on-year.
In addition to this, according to Lam’s statement, during the corresponding quarter last year TJL benefitted from a sharp drop in cotton prices, which makes the year-on-year decline during 4Q FY2012/13 more pronounced. However, on an annual basis, the improved margins during the year resulted in gross profit for FY2012/13 remaining at Rs. 1.3 b, a marginal 1.5% below last year’s figure despite revenue for the year being 10.5% lower compared to last year.  
Referring to the overheads, Lam stated: “TJL maintained a tight control on overheads, reducing administrative expenses by 64% and selling and distribution expenses by 12%in 4QFY2012/13 compared to the same period in the last financial year.”
Despite this, due to the lower quarterly gross profit, TJL’s operating profit for 4Q FY2012/13 was Rs. 288 m, a 21% decrease year on year. The annual operating profit for TJL, however, was 15% higher than the previous year, reaching Rs. 956 m for FY2012/13. Lam attributed this to the strict approach taken towards cost control during the year.   
Additionally, TJL recorded a finance income of Rs. 33 m for the quarter, compared to a finance expense of Rs. 112 m during the same period of the last financial year. In his statement, Lam attributed this to TJL’s strong balance sheet position as at 31 March 2013, with zero long-term borrowings, Rs. 371 m in short-term borrowings compared with Rs. 657 m as at 31 March 2012 and a healthy cash balance of Rs. 2.21 b.
Lam stated that tight control of overheads and a strong cash position allowed TJL to record a net profit of Rs. 323 m for 4Q FY2012/13, up 48% compared with the same period in the last financial year. He also pointed out that this, combined with an impressive performance during the rest of the year, pushed TJL’s net profit over the Rs. 1 b mark to Rs. 1.02 b for the year ended 31 March 2013, a 62% year-over-year increase.
Further, according to Lam’s statement, a strong order book with new product lines and continued interest from TJL’s top clients will enable the company to maintain sales volumes for the next quarter as well, and as TJL begins to pass through cotton price increases, the management expects to regain margins in the coming quarters.
Commenting on the strategic initiatives, Lam stated: “The construction phase of TJL’s multi-fuel boiler plant is progressing according to plan. The plant, which will reduce TJL’s energy cost substantially, is scheduled to be commissioned during 2H FY2013/14.” He also stated that TJL’s expansion strategy is moving forward with detailed evaluations to ensure strong Return on Equity (ROE).
Lam concluded his statement by mentioning that given the positive outcome thus far, TJL’s management remains confident that the company will continue to enhance shareholder value and deliver strong results in the coming quarter and the next financial year.
- reported on DAILYFT
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...by i3gconsultants@ 21:05:18 on 2013-05-07

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Stock Watch: ABAN

Abans becomes authorised retail channel partner for Micromax in Sri Lanka


India’s largest mobile brand now available at Abans retail showroom island-wide 10th October 2012: Micromax’ national distributor Metropolitan Telecom has tied-up with Abans (Pvt) Ltd as the authorised retail channel partner for India’s largest mobile handset company.







Tharindra Niroshan (Brand Manager-Micromax), Nalaka Dharmasooriya (Head of Channels), Roshan Tissera (CEO Metropolitan Telecom Services), Dinesh Perera (Deputy Director- Abans (Pvt) Ltd), Fritz Fernando (Assistant Brand Manager - Abans) and Sanjeev Ariaratnam (Country Manager - Micromax).


“Abans is presently the authorised channel partner for a range of mobile devices, stocking the largest collection of the world’s leading brands” elaborates Dinesh Perera, Deputy Director - Abans. “The company is one of the largest importers and retailers of mobile phones in Sri Lanka with more than 400 retail showrooms island-wide”. All the products are sold with warranty and guaranteed after sales service by Micromax’ national distributor, Metropolitan Telecom. “Tying up with Abans gives Micromax an opportunity to make our devices easily accessible to Sri Lankan consumers by leveraging on Abans’ strong showroom network” explains Sanjeev Ariaratnam, Country Manager, Micromax. With a selection of over 50 handsets ranging from 3G technology handsets to android models, the Indian mobile handset heavyweight offers consumers an extensive portfolio of options to choose from. Chief Executive of Metropolitan Telecom, Micromax’ national distributor, Roshan Tissera commented in this regard; “Micromax is a strong, vibrant brand and we look forward to collaborating with Abans to strengthen Micromax’ brand presence in Sri Lanka”. Micromax is the largest Indian mobile handset company and the 12th largest handset manufacturer in the World (According to Global Handset Vendor Market share report from Strategy Analytics). The Indian brand is reaching out to the global frontier with innovative products that challenge the status quo that innovation comes with a price. Micromax has strong sales presence across India and global presence in Hong Kong, Bangladesh, Nepal, Sri-Lanka, Maldives, UAE, Kingdom of Saudi Arabia, Kuwait, Qatar, Oman, Afghanistan and Brazil and domestic offices across India and global presence in Hong Kong, Bangladesh, Nepal, Sri-Lanka, UAE and Brazil.


Dialynews

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...by i3gconsultants@ 13:10:39 on 2012-10-15

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Stock Watch: MGT

Hayleys MGT streamlines operations with SAP


In a bid to provide management with improved control and to enable service excellence, Hayleys MGT Knitting Mills PLC has adopted SAP AG’s (NYSE: SAP) SAP ERP 6.0 Enhancement Package 5 (EHP5). Providing real time information from across the enterprise, the solution will expedite decision making at Hayleys MGT enabling better management of the business as a whole. attune Consulting, a SAP Channel partner, supported Hayleys MGT in the execution of this project. Hayleys MGT, a major cotton and synthetic fabric manufacturer based in Sri Lanka, is the second company within the Hayleys Group to adopt SAP solutions. “The introduction of SAP was essential for Hayleys MGT, as the Company had grown beyond the abilities of the previously utilized home-grown systems. Processes are now streamlined and visible across all departments, providing for quicker response and greater efficiency. The investment is future oriented and reflects the company’s vision to enhance customer responsiveness and improve service delivery.” stated Dr. Emerick Fernando, Chief Executive Officer, Hayleys MGT. Through the implementation of SAP ERP 6.0 EHP5, Hayleys MGT has integrated its legacy systems and consolidated all IT applications, and transformed and streamlined internal business processes and functions to bring in improved efficiencies, discipline and control. The integration also allows for end to end information sharing and management within a unified platform, enabling accurate and timely management control. “The garment sector being a key foreign exchange earner for Sri Lanka has had to face competition from around the globe. Our industry specific solutions continue to help customers with real-time, trustworthy decision making,” said Priyadarshi Mohapatra, Vice President - Emerging Business, SAP Indian Subcontinent. “We share a long standing relationship with the Hayleys group who has always been keen on using our solutions as a means to drive business”. “We are confident that by streamlining information flow across the different business processes, SAP ERP 6.0 EHP 5 will help Hayleys MGT achieve greater business results,” he added. Hayleys MGT is a major supplier to top international brands such as Marks & Spencer, Decathlon, NEXT, Intimissimi, George, Nike and Tesco and has a production capacity of four million metres of fabric per month at plant at Narthupana Estate in the Kalutara District. As market leader in enterprise application software, SAP (NYSE: SAP) helps companies of all sizes and industries run better. attune is a privately held company owned by MAS Holdings (Pvt) Ltd. The attune group is solely dedicated to global fashion and lifestyle companies.


Dailynews

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...by i3gconsultants@ 13:10:14 on 2012-10-15

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Stock Watch: SMOT

Sri Lanka Sathosa Motors profits flat


Sathosa Motors, a unit of Sri Lanka's Access group which has the agency for Isuzu, has maintained profits for the September 2012 quarter at 40.7 million rupees, up 2 percent from a year earlier, interim accounts showed.The firm reported earnings of 6.76 rupees per share for the quarter, in accounts filed with the Colombo Stock Exchange. In the six months to September 2012, profits fell 12 percent to 77.9 million giving earnings of 12.91 rupees per share. Sathosa Motors was the first to report results in the September 2012, earnings season. In the September quarter the firm said revenues grew 15 percent to 562 million rupees, cost of sales also grew 15 percent to 466 million rupees and gross profit grew 16 percent to 89.5 million rupees. Though Sri Lanka hiked taxes on motor cars through a mid-night gazette in the second quarter of 2012, commercial vehicles were not included. Other operating income fell 66 percent to 4.6 million rupees and there were no finance expenses. The firm had 363 million rupees in cash equivalents. By end September inventories had gone up to 587 million rupees from 232 million a year earlier, but were down from 714 million rupees in December 2011.


LBO

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...by i3gconsultants@ 13:10:40 on 2012-10-15

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Stock Watch: NTB

NTB increases customer convenience in Kotahena


Nations Trust Bank is expanding rapidly taking 365 day banking and extended banking hours to different geographies across the country. At the same time the bank is also continuously enhancing their existing branches by moving to more spacious and convenient branch locations to serve their customers better.








Opening of the Kotahena branch.


The refurbished Kotahena branch is now relocated at 258, George R De Silva Mawatha, Colombo 13, and is in line with the proprietary design concept that has been rolled out across the entire network creating an ambience that is warm and customer friendly. This has facilitated serving the customers in Kotahena with a more spacious banking hall that includes a large transactional area with safety deposit locker facilities and dedicated counters for Pawning Services, Leasing and Trade. The bank offers end to end financial solutions from a range of Savings and Current accounts, Investment plans, attractive Fixed Deposits, Home Loans, Vehicle Loans, Remittance services, Mobile Banking, etc; to suit the needs of varied customer segments. Nations Trust Bank in Kotahena will continue to offer residential as well as the business customers customized propositions to suit all their financial needs. Nations Trust Bank has embarked on a vision of “Making life simple by being the benchmark of convenience”. To date the bank has provided a number of initiatives that has created a new dimension in the financial industry. The Private Banking and Inner Circle Memberships, The Nations Business Banking proposition which awards Platinum and Gold membership privileges that translate to a lucrative rewards scheme, the ‘Bank At Your Doorstep Service’, Personal Banking Centers at Keells Supermarkets, the ‘Nations Business Centre’ which is a one stop shop for our SME clientele and the 24x7, 365 day contact centre are some of the key offerings which have helped the bank to continue to win over and maintain a strong and loyal customer relationships that keep growing. Commenting at the Opening, Director/Chief Executive Officer Renuka Fernando said; “We are now pleased to offer our customers in Kotahena dedicated counters for Leasing, the Inner Circle Membership and a spacious transactional area with a larger banking hall. Services such as the Safety deposit locker facilities together with Pawning services and the American Express Card membership will continue to be offered at this premises. We will also keep delivering the exceptional customer service that you have been enjoying over the years and hope that you will benefit from this newly refurbished and convenient branch location by making it your one stop shop that will cater to all your financial needs” The Bank has been in operation for the past 13 years and has successfully grown in strength and stability and is today recognized as one of the fastest growing yet financially sound institutions in the country. The Bank continues to progress well in diversifying its portfolio and earnings base while optimizing returns in a controlled growth environment.


Dailynews

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...by i3gconsultants@ 16:10:09 on 2012-10-14

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Stock Watch: ACL

ACL upgrades XLPE technology


ACL is the largest cable manufacturer in Sri Lanka, who pioneered the cable industry way back in 1962 with technical assistance from Mitsui of Japan, currently possessing state-of-the-art production facilities and a fully equipped and modernized laboratory. Continued acquisition of technology since 1962 and continued pioneering of introduction of each and every cable manufactured and marketed in Sri Lanka, has made ACL - the Technological Leader in the Cable Industry.


ACL pioneered XLPE extrusion in Sri Lanka in1989 by acquiring technology from Nokia Cables from Finland.


We also formed the ACL Nokia joint venture and were successful in winning a tender for the supply of 800 Kms of Aerial Bundled Cables floated by LECO, the same year. Since then, ACL has upgraded its XLPE technology to National French Standard (NFC-33-209) under its own R&D to meet CEB standards for XLPE insulated aerial bundled cables. All the advantages of NFC-33-209 have been incorporated in our XLPE Insulated Power Cables which guarantee durability and trouble free functioning.


We firmly believe that ACL is No. 01 in South and South East Asia, when it comes to Low Voltage XLPE extrusion. This is further confirmed by the fact that we export significant quantities of XLPE insulated Power Cables to OLEX of Australia and New Zealand. In 2003, ACL was invited by the largest corporate of India to introduce and design AB Cables to BSES - the power utility in New Delhi, despite having many Indian manufacturers - reflecting the technical superiority of ACL in the region.


The PVC compound used by ACL for insulation, possess "Fire Retardant" properties and is made at our own plant. ACL has the only laboratory in Sri Lanka which has the equipment for testing of fire rated cables. Many claim label products as FR, FRLS as the case may be, but no company nor any buyer has the capability to test and prove same. But those buying FR or FRLS cables from ACL, could satisfy themselves by testing the products at the fully equipped laboratory of ACL. ACL has been manufacturing and supplying armoured cables since 1985 and is by far the most experienced manufacturer in Sri Lanka. In recognition of superior technological advancement in the year 2008, ACL was awarded the topmost award of Asia Pacific Quality Organization called the World Class Award beating other applicants nominated from 46 Asia Pacific region countries which included Japan, Singapore, China and Korea.


Dailynews

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...by i3gconsultants@ 16:10:49 on 2012-10-14

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Stock Watch: COCO

Sri Lanka agri firm in cash call, moves to FMCG


Coco Lanka Ltd, a food processing and exporting firm said it was making a billion rupees cash call on shareholders to move into fast moving consumer goods retailing and become a holding company.Coco Lanka, will be re-named Renuka Shaw Wallace Plc, with Shaw Wallace Ceylon Ltd, an old-established which has agencies for tinned fish, food essences and instant drinks being brought under its umbrella from a related firm. The firm said it had bought 59 percent of Shaw Wallace Ceylon Ltd from Renuka Holdings Plc for 406 million rupees, through Renuka Consumer Foods Ltd (RCL), a fully owned unit. A valuation had been done by Kreston MNS & Co, an accounting firm and Merchant Bank of Sri Lanka. "RCL has ambitious plans to develop its product portfolio and distribution capabilities with its investment in Shaw Wallace Ceylon ltd and future investments in other food and beverage FMCG brands and businesses," the firm said in a stock exchange filing. The firm said it will exit and investment in Coco Hotels and Properties (Pvt) Ltd, as it no longer fit its strategy and will get back 285 million rupees. Directors have resolved that both deals "do not constitute major transactions as defined by section 185 of the Companies Act No.7 of 2007," the firm said. The firm was planning to sell 27 million ordinary shares for 35 rupees in the proportion of five new shares for every five existing, and 2.2 million non-voting shares in the same proportion at 28 rupees a share. The firm now had 21.6 million ordinary shares and 1.8 million non-voting stock. The share sale would bring in 1,008 million rupees of which 690 million rupees would be invested in RCL and 300 million rupees would be used to settle short term borrowings of another unit, Renuka Agro Exports Ltd.


LBO

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...by i3gconsultants@ 14:10:18 on 2012-10-14

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Stock Watch: NEST

Nestlé Lanka reports highest intake of fresh milk collection to President


Nestlé Lanka PLC, the largest private sector fresh milk collector in Sri Lanka celebrated its highest monthly fresh milk intake of over five million liters in the month of September 2012 and expects to pay Rs. 2.6 billion, the highest in Nestlé’s history, to the rural farmers this year. Nestlé Lanka Managing Director Alois Hofbauer paid a visit to President Mahinda Rajapaksa to share an overview of the company’s contribution towards Sri Lanka’s rural economy through dairy development.To highlight this significant milestone for Nestlé Lanka, Alois Hofbauer presented a symbolical token – a dairy milk can to the President at the Temple Trees recently. Also present is Bandula Egodage, Assistant Vice President of Nestlé Lanka PLC – Pic courtesy President’s Media Unit
Dailyft

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...by i3gconsultants@ 13:10:05 on 2012-10-10

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Stock Watch: DAIL

Sri Lanka Dialog Axiata 'AAA(lka)' rating confirmed


Fitch Ratings has confirmed an 'AAA(lka)' rating with a stable outlook citing support from its Malaysia-based parent and said its stand alone credit profile had improved to 'AA 'AA+(lka)' from 'AA(lka)'."Dialog's standalone credit profile is strong, and has improved between 2010 and 2012, helped by a benign competitive environment and improving usage across most service segments," Fitch said. "The agency expects Dialog's standalone profile to continue to improve over the medium term, driven by the company's ability to fund its capex from strong operating cash flows." Fitch said Dialog foreign and local currency cashflows were strong enough to cover upcoming repayments.

The full statement is reproduced below:-

Fitch Affirms Dialog Axiata at 'AAA(lka)'/Stable

Fitch Ratings-Singapore/Colombo-08 October 2012: Fitch Ratings has affirmed Sri Lanka-based telecom operator Dialog Axiata PLC's (Dialog) National Long-Term rating at 'AAA(lka)' with a Stable Outlook. The rating factors in support from its 83%-parent Axiata Group Berhad (Axiata), underpinned by the latter's board control, brand-sharing, and the strategic and some operational integration between the two companies. Axiata has provided tangible support to Dialog throughout its history, most recently in 2009 via a shareholder loan and a corporate guarantee on a long-term offshore bank credit line.



Dialog's standalone credit profile is strong, and has improved between 2010 and 2012, helped by a benign competitive environment and improving usage across most service segments. Fitch has therefore reassessed Dialog's standalone profile at 'AA+(lka)', up from 'AA(lka)' earlier. The agency expects Dialog's standalone profile to continue to improve over the medium term, driven by the company's ability to fund its capex from strong operating cash flows.

Dialog's revenue exposure to the overcrowded domestic mobile telecoms industry has reduced to 54% at end-June 2012 (H112) from 65% in 2009. Mobile as a share of revenue is likely to remain at current levels over the long term, aided by potential faster growth in the fixed-line and television segments. Fitch expects subscriber acquisition and retention costs to remain high, exerting moderate pressure on EBITDAR margins, as the country's five telecom operators compete for a larger share of Sri Lanka's 21 million population. Over the longer-term, consolidation among mobile operators will be positive for the industry.

Dialog's liquidity is strong in both local and foreign currency, with sufficient available cash balances and free cash flows (FCF, defined as cash from operations less dividends and capex) to cover upcoming debt maturities. The company's annual USD-denominated operating cash flows of approximately USD50m are sufficient to cover repayments on its USD debt through to 2016. At end-2011 67% of Dialog group debt was denominated in USD.

Dialog is Sri Lanka's largest mobile telecom operator with a subscriber market share of approximately 39% at end-H112. As the incumbent 2G and 3G mobile operator in the country, its revenue market share is higher than its peers. Apart from mobile, Dialog also provides fixed- line and pay TV services.

WHAT COULD TRIGGER A RATING ACTION?

Negative: Future developments that may, individually or collectively, lead to negative rating action include:

- A material dilution in Axiata Berhad's ownership or board control in Dialog, removal of the common brand name, or a weakening of the current strategic and operational ties between the companies

Positive: There is no scope for upgrade as the company is at the highest rating on the Sri Lankan National Rating scale.

LBO

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...by i3gconsultants@ 13:10:18 on 2012-10-10

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Stock Watch: DIMO

DIMO drives 33rd National Conference of Chartered Accountants with a bronze sponsorship


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One of Sri Lanka’s leading engineering organisations, the Diesel & Motor Engineering PLC (DIMO) – the authorized distributor for Mercedes-Benz vehicles in Sri Lanka - will steer the 33rd National Conference of Chartered Accountants organized by the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) with a bronze sponsorship.This year’s conference from October 18th including two days of technical sessions will centre around the inspiring theme ‘Winning: Country, Corporate, Citizen’ and will see a fully-fledged panel of experts who will steer chartered accountants and professionals from other disciplines to ensure they achieve success at all levels.DIMO Chairman, Ranjith Pandithage said, "It is indeed a pleasure to partner with an esteemed institution such as the Institute of Chartered Accountants Sri Lanka on their National Conference. CA Sri Lanka has been in the forefront of developing professionals in accountancy and finance and is one of the largest professional organizations in Sri Lanka. DIMO is in the business of touching the lives of people and making a difference in their lifestyles, by partnering with the world’s best names including Mercedes-Benz. We believe our partnership with the National Conference is in-line with our tribal approach."Welcoming DIMO onboard, CA Sri Lanka President Sujeewa Rajapakse said that the sponsorship by DIMO is testament to the reputation that the conference has built over the years since its inauguration in 1979 as one the most looked forward to business summits in the country."We will see an exceptional panel of speakers this year too like in the previous years that will explore and guide the country’s professionals on ways to win against all odds, while maintaining a winning attitude despite the challenges thrown at them at regular intervals," he said.


The Island

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...by i3gconsultants@ 15:10:20 on 2012-10-02

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Stock Watch: UML

Historic visit by the President of Mitsubishi Motors Corporation


Osamu Masuko, the President of Japan’s leading automaker Mitsubishi Motors Corporation (MMC) made a historic three days visit to United Motors Lanka PLC (UML) from September 2 to 4, 2012. Mr.Masuko’s visit to Sri Lanka is the first ever by an MMC President since UML entered into a distributor agreement with MMC as the sole distributor for brand new MMC vehicles in Sri Lanka in 1985.Masuko’s visit to Sri Lanka is an acknowledgement of the long-standing relationship maintained between UML and MMC, and the importance of Sri Lanka as a market for MMC vehicles. The visit further recognizes the excellent sales standards that UML upholds as the largest supplier of permit vehicles in Sri Lanka.Despite setbacks caused by additional import costs arising from the depreciation of the Rupee and other negative factors, the past financial year saw UML doubling the sale of MMC vehicles to record a historic turnover in excess of Rs 8 billion, the best achieved by the Company since its inception. UML expanded its Mitsubishi Motors portfolio during the 2011/2012 financial year by adding the highly anticipated new Lancer Evolution RS as well as the latest Montero Sport.A red carpet reception was held at the Cinnamon Grand hotel in honour of Masuko’s visit where he met with top executives of UML. Also, another reception was held at the Galle Face Hotel where he met with the Japanese Ambassador to Sri Lanka, Nobuhito Hobo and Sri Lanka’s leading businessmen and professionals.At the red carpet reception, Masuko, joined by other key representatives from MMC as well as Sojitz Corporation (a partner trading house of MMC and UML), presented UML Chief Executive Officer / Executive Director, Mr. Chanaka Yatawara with an award on behalf of UML for achieving outstanding sales performance for the 2011/2012 financial year.


The Island

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...by i3gconsultants@ 15:10:28 on 2012-10-02

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Stock Watch: SIL

DSI to make further inroads in region








Managing Director Kulatunga Rajapaksa.
Picture by Saliya Rupasingha


D. Samson Industries is looking to open several showrooms in India in a quest to expand their foot print in the region. Managing Director, D. Samson Industries, Kulatunga Rajapaksa said that they are looking at openings in Chennei, Bangalore and Coimbatore.


“We already export rubber slippers, tyres and other products to India and there is an increase demand. We feel that with branches in India we could attract more customers since our brand is already known in India,” he said. Rajapaksa said that he introduced the opening of cluster show rooms where one main town would have several shops thus giving the customer better reach. “This concept has given us tremendous strength and we hope to implement this concept in India as well,” he said. The company which also exports nearly 15 % of their products is also looking at increasing their exports anticipating increase revenue. He said that last year they earned revenue of Rs. one billion and this year they are looking at increasing this by approximately 20 %. DSI main export markets are Australia, Germany, France, Middle East and the region which include 40 countries. “In addition we also manufacture for other global brands.”In 1962, the late D Samson Rajapaksa JP, started the company mainly as a importer of footwear from UK, India and Japan. Due to export restrictions in the 1960 era the company started their own manufacturing and today the Group has 29 companies. Over the past 50 years, the first and second generations have been instrumental towards the success and the market leadership the Group enjoys today. DSI Group (Pvt) Ltd has a 20 percent stake in Kelani Valley Canneries (KVC) a subsidiary of CIC Agribusiness. KVC,is one of the well known process food brands in Sri Lanka. As the increase in natural rubber production is a long term project with gestation period of seven years we have entered into a partnership with several large dry/wet rubber products manufacturing companies to plant rubber in Moneragala District, which is a highly under developed district in collaboration with government and other international funding agencies. The second category of the group is tyres and tubes. Their products account for more than 70 percent of the local market share. “We are hoping to make further investment in this area and also increase our exports in this segment,” he said.


Dailynews

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...by i3gconsultants@ 14:10:41 on 2012-10-02

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Stock Watch: SEYB

Seylan Bank offers senior citizens 1% additional interest, more benefits for FDs


Seylan Bank exemplifying its motto the ‘bank with a heart’, has increased the Fixed Deposit rate with more benefits.The enhancement has been given to maximise the benefit to senior citizens who wish to invest their hard earned funds and enjoy decent returns.
For this purpose customers can now invest their savings in a Seylan Bank Fixed Deposit at an interest rate of 13% (one month), 14.5% (three months) and 15% (six months) or alternatively make investments for periods of one year (15.5%), two years (15%), three years (15%), four years (15%) or even stretch the investment up to a period of five years (16%).
Seylan Bank has identified the requirement of the senior citizens(over 55 years old) and offers 1% additional interest rate over and above the normal rate for all the Fixed Deposits (at maturity and as well as interest paid monthly, the additional rate has been incorporated in the rates stated above).  
Seylan Bank further extends its services to customers who invest in a four or five year fixed deposit by rewarding them with free vouchers in the first year of investment, to the value of 0.1% of the deposit, to pay utility bills (water, electricity and telephone) in order to provide some relief towards the high cost of living.  
Furthermore, an instant loan of up to 90% of the Fixed Deposit or a Seylan Credit Card could be obtained at any given time.
Seylan Bank offers 0.5% additional interest rate for NRFC and RFC accounts of senior citizens for saving in foreign currencies.
The senior citizens could enjoy all the above benefits, even if the spouse is below the age of 55 years old, in the case of a joint account when only one of the spouses is over the age of 55 years.
The customers are offered banking services from Seylan’s countrywide network of branches and banking centres, during weekdays with extended banking hours and during weekends (Saturday or Sunday) till 12 noon. Other convenient banking services such as Internet and SMS banking facilities are also offered free of charge.


Dailyft

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...by i3gconsultants@ 14:10:21 on 2012-10-02

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Stock Watch: COMB

Commercial Bank greets Makola


The Commercial Bank of Ceylon has opened its 224th service point in Sri Lanka at Makola, increasing its presence in the Gampaha District.
Located at No. 31, Makola North, Makola, the new customer service point is computer linked to all other service points of the Bank, enabling online real time banking and provides access to the full range of facilities offered by the Bank. The service point was inaugurated by Commercial Bank DGM – HR Management Isuru Tillakawardana on 27 September. The two ATM terminals installed at the new customer service point expands Commercial Bank’s ATM network to 536, the single largest ATM network owned by a bank in Sri Lanka.




Dailyft

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...by i3gconsultants@ 14:10:20 on 2012-10-02

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Stock Watch: DFCC

Arjun, Shibani on DFCC Vardhana Bank Board


Arjun Fernando and Shibani Renuka Thambiayah have been appointed as Directors of the Board of DFCC Vardhana Bank with effect from 28 September.The announcement follows the Central Bank approving the two appointments.
Fernando is attached to DFCC Bank and is the designated Deputy CEO. He possesses international banking experience having worked for more than 27 years with the HSBC Group in Hong Kong, Sri Lanka and Bangladesh in senior managerial positions.
Fernando holds a BSc (Eng.) degree from the Southern Illinois University USA and MSc (Management) from the Clemson University USA. He is also an Associate Member of the Chartered institute of Bankers of UK.
Thambiayah holds the position of Joint Managing Director of Renuka Hotels Ltd. and Renuka City Hotels PLC, of which she was the General Manager from 2004 to 2010, prior to assuming the current position with the company. She has also worked with several companies in the leisure sector in the USA and Sri Lanka.
Thambiayah is a BA (Hons.) graduate in Economics from the University of Nottingham, UK and holds a Master of Management degree in Hospitality from the Cornell University School of Hotel Administration in USA.


Dailyft

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...by i3gconsultants@ 14:10:12 on 2012-10-02

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Stock Watch: LIOC

LIOC diesel up by Rs. 4


Lanka IOC has increased its price of diesel by Rs. 4 to Rs. 121 per litre with effect from today.


Dailyft

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...by i3gconsultants@ 14:10:35 on 2012-10-02

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Stock Watch: ASIR

Actis completes $ 32 m investment in Asiri Hospitals Group


Actis, the pan-emerging markets private equity firm, yesterday confirmed an investment of US$ 32 m in the Asiri Group, a 604-bed private hospital group in Sri Lanka.Asiri is Sri Lanka’s leading private hospital chain, spread across three sites in Colombo and two sites in the southern city of Matara.
Healthcare is a key focus for Actis as emerging market consumers increasingly seek high-quality medical products and services. Actis’s South Asia team has gained extensive experience in the sector with investments in the largest hospital chain in Gujarat, Sterling Add-Life; clinical research company Veeda; and India’s leading generic pharmaceutical company, Glenmark Pharmaceuticals.
J.M. Trivedi, Head of South Asia at Actis, said: “The rise of lifestyle diseases and increasing household income has created demand for high-quality healthcare provision, which supplements Government-led services. Asiri is a premium private healthcare provider with an excellent reputation, carefully built-up over many years by its management team, led by Ashok Pathirage.”
Managing Director of Asiri Ashok Pathirage commented: “Asiri is committed to providing its customers with compassionate medical care whilst giving them access to state-of-the-art equipment. Patient care is our utmost priority and this investment by Actis will enable us to expand and improve our services, while building our reputation as the country’s leading hospital chain.”
Director at Actis Asanka Rodrigo added: “We are looking for quality investment opportunities in Sri Lanka and are delighted to be partnering with Ashok and Softlogic. Sri Lanka’s Government and private sector healthcare already compares well with its emerging market peers and Asiri is the clear leader in the country due to its best-in-class doctors, staff and infrastructure; it makes a great addition to our portfolio.”Following the investment Asanka Rodrigo and Viraj Mahadevia from Actis will join the Board of Asiri Hospital Holdings Plc.
Sri Lanka, with increasing FDI, sustained GDP growth of over 7% and growing infrastructure, is an attractive investment destination and one where Actis has prior investing experience.
Softlogic is the controlling shareholder of Asiri Hospital Holdings Plc.
Actis invests exclusively in the emerging markets with a growing portfolio of investments in Asia, Africa and Latin America and US$ 5 billion of funds under management. Actis currently has US$ 1.2 billion invested in 16 companies in South Asia.
Actis is proud to actively and positively grow the value of those companies in which it invests and in so doing contribute to broader society. It calls this ethos the positive power of capital.


Dailyft

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...by i3gconsultants@ 14:10:34 on 2012-10-02

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Stock Watch: NDB

Sri Lanka's NDB looks for regional expansion


Sri Lanka's NDB Bank group will use a part of the cash from a 59 million US dollar exit from an insurance unit for regional expansion, chief executive Russel de Mel said."We are looking for regional expansion," de Mel said. "Though we have 30 years of experience as a development banks, the country is now becoming a services hub. We feel now we have to go beyond the shores of Sri Lanka." NDB started as a state initiated development bank and later became a public listed financial group with a commercial banking license, capital market operations, insurance and fund management. It has now signed a deal with AIA group to exit its stake in Sri Lanka'a Aviva NDB Insurance. NDB already has an investment banking operation in Bangladesh and stake in a leasing company in the Maldives. De Mel said they may expand the scope of the activities in Bangladesh beyond investment banking and was also scouting other countries in the region. Many Sri Lankan firms were doing business in Bangladesh now who needed services, he said. Sri Lanka's Commercial Bank of Ceylon has been in Bangladesh for several years. NDB is also expanding domestically, including into former war torn regions in the north and the east, officials said. The bank launched a new deposit product which will pay double the interest if only one withdrawal or less is made a month and a customer makes a minimum agreed deposit each month. The bank now pays 5.25 percent a year on saving deposits but will pay 10.50 percent on the 'Real Saver' branded savings account, which do not issue a debit card. NDB officials say most Sri Lankans use saving accounts as 'operating accounts' and not 'savings' accounts. NDB says a free standing order can be placed on the regular savings account to move cash to the higher yielding account.


LBO

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...by i3gconsultants@ 14:10:10 on 2012-10-02

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Stock Watch: SHL

Sri Lanka Softlogic to sell leasing arm to Laugfs


Softlogic Capital Plc, said it has struck a deal with Laugfs Holdings Limited to sell a 67 percent stake in Softlogic Credit Limited, a licensed leasing company that engages in microfinance.The firm said in a stock exchange filing that Softlogic Credit will be solf for 103.6 million rupees, subject to regulatory approvals. The firm had been on the block for some time. In April Softlogic said it was planning to sell the company to Forbes Capital (Pvt) Ltd.


LBO


 

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...by i3gconsultants@ 14:10:11 on 2012-10-02

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Stock Watch: SAMP

Sampath Bank showcases Rs. 2.5 b debenture issue as sound investment


Sampath Bank is launching a five year debenture worth of Rs. 1.5 billion with an option to increase it by a further Rs. 1 billion if the issue is oversubscribed. The issue will be opened  on Thursday 4 October.The debentures have been rated A + (lka) by Fitch Rating (Lanka) Limited and will be listed on the main board of the Colombo Stock Exchange. This debenture issue is an attractive investment opportunity for investors and general public as it offers three interest rate options to choose from as follows; Fixed interest rate of 15.00% p.a. payable monthly (annual effective rate of 16.08% p.a.); Fixed interest rate of 16.50% p.a. payable annually; Floating interest rate of 2 % above the six months Treasury Bill rate (gross) payable bi-annually.
A total of 15,000,000 unsecured, subordinated redeemable debentures (2012/2017) of Rs. 100 denomination will be on offer with an option to issue a further 10,000,000 if the issue is over-subscribed. The minimum subscription is 100 debentures worth of Rs. 10,000 and any additional subscriptions shall be in multiples of Rs. 5,000. The redemption date would be five years from the date of allotment.
Sampath Bank, which commenced business in 1987, now has a network of 209 branches. The Bank introduced networked ATMs to Sri Lanka for the first time with the popular brand name ‘SET’ and since then numerous innovations have been introduced to Sri Lankan Financial Services as well as to the Asian Region.
Sampath Bank nests 3335 employees who have been branded as ‘Team Sampath’ which is the main thrust and driving force of the bank. “Our highly energetic staff blended with superior technology and the truly Sri Lankan image have been the main ingredients in providing  a unique banking experience to customers,” says a Sampath spokesman.
The Bank has a stated capital of Rs 3,540.8 million comprising 162,444,303 shares as at 30 June 2012.
The Bank’s pre-tax profit which rose to Rs. 4,150.6 million in the 1st H 2012, reflected an increase of Rs. 1,345.3 million or 48.0% over the pre-tax profit of Rs. 2,805.3 million for the 1st H 2011. The post –tax profit of the Bank recorded a growth of 40.4 % over the same period of last year, rising from Rs. 1,987.7 million in 2011 to Rs.2,789.8 Mn in 2012.
The growth rates in deposits and total assets during the 1st H 2012 amounted to 12.2% and 14.6 % respectively and compared well with the industry’s growth rates of 9.3% and 13.7%, during the period.
In 2012 rating assessment, considering the healthy asset quality, better compliance, transparency, capital adequacy, internal control systems and processes of the Bank, RAM Ratings Lanka has reaffirmed AA (stable) rating for Sampath Bank, in their rating assessment and the overall credit rating of the Bank’s “AA-”lka (stable) has been affirmed by Fitch Rating Lanka too.
Sampath Group was recognised as the ‘Best Banking Group in Sri Lanka for the year 2012’ at the World Finance Awards presented by World Finance Magazine.
The Bank has a number of subsidiary companies namely, SC Securities (Pvt.) Ltd., Sampath Leasing and Factoring Ltd., Sampath Information Technology Solutions Ltd. with a stake of 100% and Sampath Centre Ltd. and with a shareholding of 97.14%.
Desutshe Bank, Colombo branch will be the Trustees to this issue and SSP Corporate Services (Pvt.)Ltd. will act as the managers and registrars to the issue.
Prospectus and the applications of the Sampath Bank Debenture issue are now available with your stock broker or at any Sampath Bank branch. Further it can be downloaded from the Sampath Bank web site (www.sampath.lk). Sampath Bank invites the public to enjoy maximum benefits from this opportunity.


Dailymirror

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...by i3gconsultants@ 12:09:29 on 2012-09-30

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Stock Watch: NTB

NTB opens second branch in Pettah offering 365 day banking


Nations Trust Bank (NTB) added an important milestone with the opening of their second branch in the busy bazaars of Pettah offering 365 day banking with extended banking hours.  With the expansion in  Pettah  Nations Trust Bank  reiterates its commitment to service  this time-honoured business district in Colombo  with its’ bustling shops, boutiques, open markets and traders.Located at No. 54A, Bankshall Street, the new branch is based on the proprietary design concept that offers the ultimate in convenience, a modern and comfortable banking hall and exceptional customer service, provided by our energetic and friendly staff.
In its 13 years of operations NTB has grown in strength and stability. The Bank closed the first half with a post tax profit of Rs. 893 million surpassing the comparative period of last year by 21%. Core-earnings posted a good growth over 2011 with revenue increasing at a higher rate of 13%. The Bank continues to progress well in diversifying its portfolio and earnings base while optimising returns in a controlled growth environment.
NTB is focused on providing a wide range of products to the Small and Medium Entrepreneurs (SME).   For business customers, the Nations Business Banking proposition awards customers with Platinum and Gold membership privileges which translate to a special set of benefits including a lucrative rewards scheme. Apart from this the bank offers Trade Services, working capital finance, cash management services leasing, factoring and pawning. To further support the business community  we have specially trained staff who can introduce our customers to  the SME Tool Kit, a web site available in Sinhala, Tamil and English  containing useful  tools and information to further grow their business
NTB offers personal customers a suite of segmented product offerings which includes private banking and inner circle membership with special privileges for individual customers.  The Bank offers a full range of savings and current accounts, attractive fixed deposits, Home Loans, Vehicle Loans remittance services, mobile banking and many other products and services, tailored to our customers requirements.
Commenting at the opening, NTB Director/CEO Renuka Fernando said, “I am happy to note that our customer base keeps growing in locations where we have been operating over the years. It is also noteworthy to say that this trend follows in all the new markets we have entered in to in the recent past. We are now pleased to offer our customers in this second location in Pettah additional services such as pawning and leasing. I am confident that our service levels are unprecedented and are second to none in the financial industry across our branches, Nations Business Centres and the Personal Banking Centres.”
NTB PLC is one of the fastest growing banks in Sri Lanka today. Its market positioning of being the benchmark of customer convenience is ably supported by a host of financial products and services to a wide customer segment. The Bank now operates 55 branches, seven Personal Banking Centres and is the sole issuer and acquirer for American Express cards in Sri Lanka.


Dailymirror

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...by i3gconsultants@ 12:09:21 on 2012-09-30

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Stock Watch: SLTL

Mobitel to play key role in National Information and Communication Technology


Mobitel, the country’s state owned mobile communication company intends to play a key role in national information and communication technology (ICT) transformation. It is going through an organizational revitalization process in order to gear up to make a greater contribution towards national transformation led by President Mahinda Rajapaksa. Under its “Change to Lead. Now” organizational revitalization process, Mobitel intends to enrich it’s workforce, deploy cutting edge technologies and increase its process efficiencies to be in a better position to contribute effectively, keep pace with national transformation and lead the ICT technology transformation in the country.








Lalith De Silva, CEO Mobitel


Mobitel’s CEO Lalith De Silva who is hailed as a global thought leader and a specialist in Telecom, ICT and Project Management, outlined Mobitel’s thinking behind the revitalization process in a recent interview with us.


Q: What is the philosophy behind the ‘Change to Lead. Now’ organizational revitalization ?


A: The telecommunication market in Sri Lanka is fiercely competitive. All local mobile communication companies in the country are backed by global telecommunication giants. Mobitel has to be world class in terms of its’ human resources, processes and technology in order to compete with the rest of the industry. “Change to Lead. Now” aims to make Mobitel a change ready organization which has the agility to adapt to changes in the dynamic business and regulatory environment locally and internationally. The country is going through a rapid transformation driven by the head of the state with his vision and commitment. Peace dividends and national reconciliation efforts will further expedite the transformation in order to realize the nation’s dream to be the Wonder of Asia. The country’s technology adaptation has to keep pace with its development goals in order to realize the high expectations of the government and citizens. Mobile communication will play a vital role in the country’s ICT adaptation as mobile networks become faster and mobile devices more intelligent. Being the national mobile communication service provider, Mobitel has a responsibility to lead the ICT technology transformation in the country to complement and back the national transformation. We as an organization are going through an organizational transformation in terms of people, technology and processes to be more equipped for this task. Once we go through this process of change, we will be in a better position to keep pace with the national transformation and contribute towards it in a bigger way.


Q. Can you be more specific on Mobitel’s contribution towards national transformation?


A: Mobitel is a technology player. More specifically, an Information and communication technology (ICT) player. Our contribution will come from ICT. We are living in the digital age of the 21st century and have the responsibility to ensure that every child has access to the internet and ICT tools in order to be a part of the global village and lead them to be a part of the knowledge economy. Being a nationalistic organization, everything we do will not be profit driven. We will also pay attention to our duty towards national ICT objectives. Particularly towards our contribution towards empowering our future generations to build a model knowledge economy. We recently decided to take some of our business functions to rural areas in order to create ICT based employment opportunities for rural youth. We expanded our call centers to Hambantota and will be opening a second facility in Mullaitivu. We also have started establishing IT development centres out of Colombo and the first such facility was set up in Kegalle. The country is aiming to achieve a US $ 4000 per capita income in the medium term. People will have sophisticated lifestyles and will demand sophisticated ICT services. We will invest in cutting-edge technology infrastructure to offer the most advanced mobile communication services in Asia to Sri Lankan citizens and enterprises, truly delivering our promise. Mobitel being an ICT player, is gearing up to contribute more to the national economy by investing in technologies to offer mobile based ICT services to enterprises which will make them more cost efficient and productive. We believe that it will make Sri Lankan enterprises more competitive so that they can compete with their counterparts. .


Q: You seem to pay emphasis on ICT. How is the country faring in the ICT area?


A: I believe that any nation which does not give due focus for ICT will lose out in the long run. The Sri Lankan Government has recognized the fact that for sustainable development in the contemporary age, ICT has a vital role to play. Today the country has a very clear vision and commitment towards ICT led by the head of state. The appointment of a dedicated Ministry for Telecommunication and Information Technology by the President shows the importance ICT has on the national agenda. The Minister of Telecommunication and Information Technology has formulated a 5 year national ICT plan with clear cut objectives. One of the key objectives is 75% ICT literacy by 2015. The Telecommunication Regulatory Commission of Sri Lanka (TRCSL) is also making special efforts to increase the Internet penetration in the country in partnership with all operators.


Q: How is Mobitel planning to contribute towards national ICT objectives?


A: Mobitel will work closely with the Ministry of Telecommunication and IT and The Telecommunication Regulatory Commission of Sri Lanka (TRCSL) in order to actively contribute towards national ICT objectives. Especially, with mobile devices becoming more and more intelligent and affordable, we are now in a better position to contribute towards the 75% ICT literacy objective. Keeping our commitment to our brand promise “We Care Always”, Mobitel plans to offer more and more citizen services on mobile devices in order to take the benefits of ICT to every citizen of the country irrespective of age, language or literacy differences.


Q. You mentioned about investments in cutting edge technologies? Can you please elaborate?


A: Mobile communication has revolutionized the way humans interact with each other. But we are yet to experience the impact of smart phones on the way we live and do business. Smart phones and the Internet together will make a much bigger impact. Mobitel, as always, is determined to lead the process of mapping benefits of technological revolution to the benefit of the country’s transformation so that both Mobitel and the country are ahead of the technology wave. We recently completed our 6th phase of the footprint expansion to pass the 3500 base station milestone and keep on expanding our coverage by another 1700 base stations in the next phase with a high speed and high capacity network. Mobitel was the first to deploy HSPA+ MIMO technology in Sri Lanka. We are now in the process of deploying a 4th generation LTE (Long Term Evolution) capable network which will be the next generation technology for mobile broadband services. We plan to invest further on extremely smart and high capacity networks and world class ICT infrastructure in order to become one of the most advanced and smartest mobile operators in Asia. However, to be a smart operator we need smart people and innovative processes. “ Change to Lead. Now “ is about investing in people who will take Mobitel to that leadership position.


Q. As an ICT professional who has got a wealth of experience and oversees exposure, what are your closing remarks?


A. ICT is a great tool to increase the productivity of the public and private sectors in our country. One of the areas where there could be improvement is professionalism in the planning, designing and implementation of ICT projects. ICT professionals in the country should adopt international best practices always and follow standards such as CMMI, ITIL, Project and Change management methodologies, in order to efficiently roll out ICT projects.


Dailynews

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...by i3gconsultants@ 12:09:21 on 2012-09-30

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Stock Watch: CINS

Ceylinco Healthcare packages...


 special health screening package which includes a breast cancer risk assessment and discounts on mammograms will be available in October at the Ceylinco Healthcare Centre.

A promotion launched by the Centre to build awareness on the importance of early detection of breast cancer in the month dedicated universally to the cause, the special package also includes a physical examination by a medical officer, and tests such as Body Mass Index (BMI), Vision, Blood Pressure, Fasting Blood Sugar, Lipid Profile, Full Blood Count and a Urine Full Report. Visitors will be educated on the importance of early detection of breast cancer and about breast cancer screening when they meet the medical officer for consultation. The Centre will also offer those who take this package a 10 per cent discount on Mammograms, breast scans and its full cancer screening package. "Breast cancer is more curable than other cancers if detected early," said Dr. Shyama Fernando, the Senior Medical Officer at the Ceylinco Healthcare Centre. "But statistics reveal that breast cancer results in many deaths in Sri Lanka because most often, those cancers are detected at a later stage and are treated only during the advanced stages." She said the dedicated Breast Care Unit of the Ceylinco Healthcare Centre is equipped with state-of-the-art facilities for the detection and treatment of cancer and visitors can undergo screening or treatment in a comfortable non-hospital atmosphere. Appointments for screening at the Centre in October can be made over the telephone. The team at the Centre's Breast Care Unit comprises of female Doctors, Radiologists, a Pathologist, Breast Surgeon, Oncologist, nurses, Radiographers and customer service staff. Located at Park Street, Colombo 02, the Centre offers services ranging from history-based risk assessment to clinical examination, mammography, ultrasound investigation as well as multi-modal treatment options. Established in collaboration with the world renowned Washington Hospital Centre, the Ceylinco Healthcare Centre is a ground-breaking project of Ceylinco Healthcare Services Ltd., (CHSL) a subsidiary of Ceylinco Life, the country's leading life insurer.


Dailynews

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...by i3gconsultants@ 12:09:36 on 2012-09-30

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Stock Watch: ABAN

LG expands Exclusive Brand Store to seven new locations


Partnered by Abans, LG Electronics (LG) a global leader and technology innovator in consumer electronics, building on the overwhelming response of consumers, the LG Brand Shop will expand to seven new exciting locations in Katunayake, Dalugama, Dehiwala, Kalutara, Panadura, Rajagiriya and Welisara from the October 1, comprising of the entire range of LG products these exclusive LG, Brand Shop outlets will give consumers of varied tastes in home appliances, electronic products and high tech smartphones, an exclusive selection of the hottest products in stores worldwide, which are fused with innovative, cutting edge technology. The state-of-the-art technologies behind all LG products, be it on something seemingly simple like a mobile phone or more advanced like the latest Cinema 3D Television, is a result of millions of dollars invested on research, coupled with thousands of hours of R&D undertaken by dedicated LG engineers. A product that has especially become an instant favourite among homemakers is the new LG six Motion Washing Machine, which treats fabrics with the gentleness of traditional hand washing, but delivers cleanliness only possible from a machine. Likewise, whether you desire a Cinematic 3D experience or an on the go Smartphone solution with a stunning display and performance fit for a king, LG epitomizes convenience on a higher scale through all its carefully developed products for its valued consumers. LG is renowned for being highly attentive to the constantly changing tastes and trends of consumers internationally and produce some of the most innovative products in the global marketplace. We encourage you all to come to your nearest new LG - BRAND SHOP outlet and pick from an extensive range of products for the entire family and experience first hand, why LG makes life good. Undoubtedly, it is an experience which can be described as the biggest experience in shopping complemented by truly world class service. These latest products could be picked up at 40% discount.


Dailynews

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...by i3gconsultants@ 12:09:26 on 2012-09-30

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Stock Watch: COMB

Etisalat, ComBank to power mobile banking with USSD technology


Etisalat Sri Lanka has partnered with Commercial Bank to introduce mobile banking via USSD (Unstructured Supplementary Service Data) technology, a global system for mobile communication used to send a text between a mobile phone and an application programme in a network. Etisalat users can now enjoy the convenience of conducting their banking activities with Commercial Bank through their mobile phones while accessing the menu driven USSD portal.








Etisalat Lanka, Deputy Chief Executive Officer/CFO, Riyaaz Rasheed, Head of Strategic Planning Analysis, Mahesh Amarasiri, Asstistant Manager New Business Development, E.A. Kasun Daminda, Assistant Manager, Media and Research, Hiruni Mendis and from Commercial Bank of Ceylon, Deputy General Manager (Operations), S. D. Bandaranayake, Deputy General Manager (Marketing), Hasrath Munasinghe, Executive Officer-eBanking, Chaminda Fernando, Chief Manager, eBanking, Pradeep Banduwansa at the event


The USSD portal can be accessed by simply dialling #8823#. Once a customer who is registered with the Bank for this service, dials into the USSD portal, they simply have to select the required function and enter a Personal Identification Number (PIN) provided by the bank for authentication and the system makes the desired transaction. Through this service, Etisalat users who have accounts at Commercial Bank can make Balance and Credit Card Inquiries, Bill Payments, Fund Transfers, PIN Changes, Top Up credit on prepaid connections and obtain Micro Statements. This service will give users access to a list of essential services excluding withdrawal and deposit of cash. Banking via the USSD menu allows users to remotely pay utility bills without having to wait in queues or physically travel to the bank.


This service enables the reload and bill payments of Etisalat, Water and Electricity bills in just a few minutes, all through any user's mobile phone. This unique service is significantly different from SMS banking available in Sri Lanka. With SMS banking, a customer/ account holder must remember or keep record of short codes which are ties to each banking service. Banking via the USSD portal eliminates the need to remember short codes as it is a menu driven portal which is hassle free and easy to access. Commenting on the launch of this service, Commercial Banks Chief Manager for e-Banking, Pradeeep Banduwansa said, "We are proud to partner with Etisalat to give Sri Lankans the power of mobile banking with USSD technology. It's a service that aligns with our vision to provide our customers with technologically advanced and innovative banking solutions. We understand the time constraints when it comes to business and having to physically come to the bank to conduct transactions. The service is a step into the future as Sri Lanka closes in on a technologically interdependent era. We also offer SMS Banking, ReLoad & Tri-lingual Mobile Banking facilities to our mutual clients." Etisalat Head of Strategic Planning, Mahesh Amarasiri speaking about the launch of banking via USSD said "It's like having a mini-ATM facility in your phone. Etisalat is proud to offer an innovative service that will help change the future. We introduced a user-friendly platform that allows anyone to easily use and conduct transactions without having to physically be present at the transaction point or having to travel to the bank". As one of the most powerful players in Sri Lanka's telecommunications industry, Etisalat continues to discover new horizons and explore new possibilities in the domain. Etisalat further offers Sri Lanka's most cutting-edge Internet solutions with the launch of its DC-HSPA+ technology.


Dailynews

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...by i3gconsultants@ 12:09:36 on 2012-09-30

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Stock Watch: TFC

The Finance Badulla branch refurbished


Badulla Branch refurbished, offering customers greater convenience








The Newly Modernized Badulla Branch


Established in 1979, the Badulla branch of The Finance Company, has been serving the public for 33 years. Having built a reputation on being a trusted household name in financial services, the Badulla Branch has been able to win the confidence of the community it has catered for. The organization is currently taking measures to ensure greater customer convenience within all branches islandwide as part of its overall corporate strategy.


This involves taking steps toward operating a number of its key branches with an upgraded look and feel, geared toward serving its growing customer base more effectively. The newly modernised Badulla branch, offering more spacious surroundings, unveiled its new look in the same well known premises situated at No. 7/9, Ward Street, Badulla. The new branch was ceremoniously declared open on September 20, by Chairman Preethi Jayawardena and the Guest of Honour Upali Nissanka Gunasekara , Mayor of Badulla, in the presence of Director/CEO, Kamal Yatawara and Directors Tissa Ekanayake and Violet Dissanayake. The company had also modernised their Galle Branch which marked 25 years of service last week with many more branches currently in the process of being refurbished.








The Chief Guest - Chairman of TFC handing over the first lease cheque of the new Badulla Branch to a customer


Dailynews


The Finance Company PLC, which is a household name has over 72 years of unmatched experience in the non banking finance sector, serving the Sri Lankan public through a network of 60 branches spread island wide.

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...by i3gconsultants@ 12:09:51 on 2012-09-30

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Stock Watch: RAL

Sri Lanka's Renuka Agri Foods puts Rs250mn in dairy firm


Sri Lanka's Renuka Agri Foods Plc, has injected 250 million rupees in to Rich Life Dairies Ltd, a firm which sells branded milk.Renuka said in a stock exchange filing that it had bought cumulative convertible and redeemable debentures in Rich Life. The breakdown or terms of the securities were not disclosed.


LBO

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...by i3gconsultants@ 12:09:57 on 2012-09-30

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Stock Watch: CTCE

Sri Lanka post war growth potential draws AIA


Being well positioned to take advantage of Sri Lanka's post war growth potential helped drive a 109 million US dollar acquisition of Aviva NDB Insurance (ANI) by American International Assurance group, officials said."After 30 years of war and this is a new beginning for the country so we are so excited to be part of this future," Huynh Thanh Phong regional chief executive of AIA Group Limited said. "When we looked at ANI in Sri Lanka we not only looked at the net worth of the company - the embedded value or value of the book of the company. When we assessed the opportunity, we had to look at the whole macro-economic conditions and the potential. "And we looked at the players within that market who are in the best position to take advantage of that potential." AIA bought into ANI as UK's Aviva decided to exit several Asian markets. AIA has an Asia focus and is present in 15 markets in the region, including Japan, Korea, New Zealand, Australia, Vietnam and Indonesia Thailand India and Sri Lanka. Bill Lisle, group chief distribution officer, AIA Group Limited says the firm's 90-year long experience in Asia will help drive the unit in Sri Lanka. "We looked at the opportunity in Sri Lanka post war with the economy starting to grow. There is a consumer need that needs to be met. Low penetration of all insurance is an opportunity to build on." "Having 90 years of experience across Asia in 15 markets one thing we pride ourselves is making different products that meet customers' life stage needs in those different markets. "So all the experience that we can bring from around the AIA group into Sri Lanka will benefit the company and benefit the customer. "So we will continue product innovation. But again it is about having the right the product for the customer and insurance agents trained appropriately to give the right advice to the customer." AIA bought out both Aviva and Colombo-based joint venture partner NDB Bank group. But it has retained its fund management arm to handle its investments and also struck a long term bankassurance deal to sell AIA products through its banking network. Lisle says AIA is still developing its strategy in Sri Lanka with regulatory approval still pending. General insurance in Sri Lanka has got extremely competitive in Sri Lanka with some are running underwriting losses. Even motor, one of the growth areas, has seen new players coming in with aggressive pricing. Lisle says it is too early to say whether AIA will exit general insurance in Sri Lanka. "We will look at every aspect of the strategy and today it is a successful business. And in the next few months we will review it along with our longer term strategy." Phong is currently in charge of emerging markets in Indonesia, Vietnam, India Thailand and Sri Lanka, once regulators approve the deal and the acquisition is concluded. "We have a 90-year history in the Asia Pacific region and we focus on the Asia Pacific. We intend to make a long term commitment in every market that we go into," he says. ".. [E]merging markets are much more exciting. You can feel the growth and the energy of the people. "So places like Sri Lanka and Indonesia represent the future of Asia."


LBO

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...by i3gconsultants@ 12:09:03 on 2012-09-30

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Stock Watch: CTCE

Sri Lanka Aviva Insurance unit sold to AIA group


Control of Sri Lanka's Aviva NDB Insurance is being bought by AIA Group, for 109 million US dollars, with Aviva and with joint venture partner, Colombo based NDB group, exiting.Aviva said 58.44 percent of Aviva NDB Holdings Lanka (Private) Limited, an unlisted firm will be sold to American International Assurance Company, Limited, a subsidiary of AIA Group Limited. The firm effectively controls about 51 percent of Aviva NDB Insurance, a listed insurer, where the other key shareholder is Sri Lanka's NDB Bank group. "The sale of our stake in Aviva NDB is an example of further progress towards narrowing the group’s focus, as we concentrate on fewer business segments where we can produce attractive returns with a high probability of success," John McFarlane, chairman of Aviva plc said in a statement. Aviva NDB Insurance had been trading around 430 rupees a share in Colombo valuing it around the price paid by AIA group. "The sale price reflects the relative success and growth of the Aviva NDB business. We’re pleased to be selling this business to a strong and committed player in AIA Group, who is well positioned to take the business forward," statement. NDB group said it is selling a 41 percent stake in the unlisted firm, and a 5 percent direct state in Aviva NDB Insurance. Full control Aviva NDB Wealth Management, will go to NDB group, but it will have 20 year contract to manage funds of the insurer. Separately Aviva NDB Insurance said in a Colombo Stock Exchange filing AIA will pay 109 million US dollars for control of the insurer and its fund management unit. After change of ownership the new firm will be re-named as AIA, the statement said.


LBO

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...by i3gconsultants@ 12:09:37 on 2012-09-30

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Stock Watch: SMLL

Sri Lanka People's Leasing to sell Rs500mn 12-m paper


Sri Lanka's People's Leasing Company Plc, a unit of state-run People's Bank is planning to sell 500 million rupees of one year commercial paper which has been rated 'F1+(lka)', Fitch Ratings said.People's Leasing is the largest non-bank financial institution in Sri Lanka by advances, with a 21 percnet share of the market at end-2011, Fitch said. The full statement is reproduced below:

Fitch Rates People's Leasing's Proposed CP 'F1+(lka)'

Fitch Ratings-Colombo/Seoul/Singapore-21 September 2012: Fitch Ratings Lanka has assigned People's Leasing Company PLC's (PLC, 'AA-(lka)'/Stable) proposed commercial paper issue of up to LKR500m a National Short-Term 'F1+(lka)' rating. A full list of PLC's ratings is provided at the end of this commentary. The proposed notes will have a tenor of one year, and will be used to finance the company's working capital requirements. The rating reflects the potential extraordinary support from the government ('BB-'/Stable) through PLC's state-owned parent, People's Bank (PB; 'AA+(lka)'/Stable), in times of distress.



PB owns 75% of PLC. This is based on the strong linkages between PLC and PB, the subsidiary's strategic importance to PB, as well as the consequent reputation risk to the government if PLC were to default on its financial obligations. PB's capacity to support PLC is derived from the financial capacity and propensity of the government of Sri Lanka, given the bank's increasing role in Sri Lanka's post-war economic development and its high systemic importance (18% of system assets and deposits in 2011). PLC is the largest non-bank financial institution in Sri Lanka by advances, with a 21% share of the market at end-2011. At end-June 2012, its total assets and post-tax profits stood at LKR96bn and LKR720m respectively.

LBO

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...by i3gconsultants@ 18:09:45 on 2012-09-22

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Stock Watch: COCR

Commercial Credit on massive branch expansion drive


Enhancing its reputation as one of Sri Lanka's fastest growing finance companies and one of the finance industry's most notable success stories, Commercial Credit recently opened several new branches and service centres throughout the country.








CEO, Commercial Credit Roshan Egodage flanked by Director Susantha Pinto and Working Director Ms. Geya Egodage at the opening of one of the branches


New locations established in areas including Ampara, Kuliyapitiya, Maharagama, Matara, Puttalam and Wennappuwa, expanded the company's reach across the country, bringing its benchmark superior levels of service and expertise within easy reach of its steadily increasing island wide customer base. "The addition of the new branches and service centres brings the Company's presence to 27 locations islandwide, a remarkable achievement within just three years of embarking on a new corporate direction and testament to the company's success", pointed out Roshan Egodage, the Company's CEO. "We're now fully geared to serve the people of these towns and adjoining areas with a bouquet of products and services. Among them are Fixed Deposits, Leasing, Hire Purchase, Gold Loans, Real Estate, Personal Loans, Education Loans and Micro Finance", he added. "This success", Egodage pointed out, "is no accident. It is the result of industry and diligence and a corporate bent on motivating and challenging the company's staff to deliver their best while adhering to the values of the company, thereby ensuring one of the highest performances and service levels in the industry". Following the increase of its islandwide presence to 27 locations, further expansion plans are in the pipeline as the company pursues its goal to becoming one of the leading players within the financial services sector in Sri Lanka.


Dailynews

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...by i3gconsultants@ 18:09:23 on 2012-09-22

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Stock Watch: KFP

SLS Certification endorses Keells Sausages' Premium Quality


The succulent range of Keells Sausages, renowned for being a superior brand that sets standards in the processed meats industry, is still the only brand in the local market that has the SLS 1218 certification. Produced by Keells Food Products PLC, this certification endorses Keells Sausages' premium quality and adherence to stringent manufacturing guidelines.


"Keells Sausages have always maintained high production standards and this certification proves that our products are not only a wide array of tasty sausages, but a hygienically tested brand which ensures the finest quality. We have adhered to a set of strict rules in the entire manufacturing process in order to receive this certification," Lasath Rathnayake, Head of Quality Assurance, Keells Food Products, said. "Furthermore, discerning parents have the assurance that they were providing their children the best and safest product when they buy Keells Sausages." Keells Sausages have improved standards during the past three decades, never compromising on quality and taste and retaining the trust placed in their products by generations. "Since its launch, Keells Sausages have steadily built a strong and diverse consumer base and have successfully managed to become the undisputed Market leader," said Samari Ihalagedera, Head of Marketing, Keells Food Products and Asst. Vice President, John Keells Group. Deputy Director General of Sri Lanka Standards Institution (SLSI), Wasantha Meewaddana, said "The SLS Certification Mark on a product signifies that the Sri Lanka Standards Institution (SLSI) certifies that the product is manufactured in conformity with the requirements given in the relevant Sri Lanka Standards Specification. These requirements could cover aspects such as health, safety, performance and durability." Apart from the SLS product certification, Keells Food Products have obtained the ISO 9001: 2008 and ISO 22,000: 2005 certifications which assure the safety and quality of the entire Keells Sausage product range. KFP have kept abreast of the industry through strategic investments in state-of-the-art food processing technology, quality control systems, an aggressive companywide R&D orientation and ground breaking marketing leadership in the food industry of Sri Lanka. Keells Food Products PLC, (KFP) is Sri Lanka's market leader in the processed meat industry. A subsidiary company of John Keells Holdings, KFP started its operations in the year1983.


Dailynews

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...by i3gconsultants@ 18:09:59 on 2012-09-22

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Stock Watch: CARG

Cargills brings TGI Friday’s restaurant chain to Sri Lanka


Cargills (Ceylon) Plc announced yesterday it has entered into a development agreement with world renowned TGI Friday’s Restaurant Inc as the exclusive franchisee chain in Sri Lanka.TGI Friday is a member of the US based Carlson Group.
Cargills plans to open the first TGI Friday’s in Sri Lanka by the fourth quarter of FY13.
Cargills Group also represents the other world famous restaurant chain KFC in Sri Lanka.
The Carlson Group operates over 900 TGI Friday’s restaurants around the world in over 60 countries. Carlson is a global hospitality company with presence in 150 countries, operating over 1,300 hotels including Radisson Blu, Radisson, Park Plaza etc.


Dailyft

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...by i3gconsultants@ 18:09:22 on 2012-09-22

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Stock Watch: BLUE

Ruwan resigns as Blue Diamonds CEO to concentrate on eChannelling


Ruwan Silva has resigned as the CEO of Blue Diamonds Jewellery Worldwide Plc with effect from 27 September.The move is believed to be part of internal restructuring within the Company and eChannelling Plc Group, which holds a 15% stake in Blue Diamonds. Sri Lanka Insurance holds a 10.5% stake. The move will enable Ruwan to focus more on eChannelling whilst Deputy CEO Asanga Karunaratne is tipped to be promoted as CEO of Blue Diamonds.
Ruwan is also the eChannelling Plc Deputy Chairman in addition to being the Chairman of British American Technologies Ltd., a key shareholder of eChannelling Plc holding 28%, whilst SLIC owns 25%.
Prior to setting up British American Technologies, Ruwan was the Chief Financial Officer at Sri Lanka Telecom PLC and Chief Financial Officer for Ericsson Algeria and Sri Lanka. He has more than 18 years of experience, cutting across varied industries, such as healthcare, electronics, telecommunications, transportation, IT and banking.
Asanga Karunaratne was appointed an Executive Director of eChannelling PLC in January 2012. He was the Chief Executive Officer of eChannelling Plc. He is a Chartered Marketer with a MBA and has over 25 years of managerial experience. He also has management experience in the manufacturing and service industries. Karunaratne also serves as the Director of ECL Soft Ltd.
Following a capital reduction move, retained losses at Blue Diamonds as at 30 June 2012 amounted to Rs. 46 million, down from Rs. 881 million as at end FY12.


Dailyft

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...by i3gconsultants@ 18:09:57 on 2012-09-22

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Stock Watch: HAYC

Haycarb expands activated carbon biz with Thailand JV buying new unit for Rs. 500 m


Haycarb Plc Group has expanded its activated carbon manufacturing capacity by 10% with the acquisition of a new  facility in Thailand.
The company said its 50:50 joint venture in Thailand, Carbokarn Company, has acquired a 100% stake in Shizuka Company Ltd., which owns an activated carbon manufacturing facility located in Ratchaburi Province in Thailand.The investment is estimated to be around $ 4 million (over Rs. 520 million).
 A subsidiary of Hayleys Plc, Haycarb is world’s largest producer of coconut shell-based activated carbon with manufacturing operations in Sri Lanka, Thailand and Indonesia supported by marketing offices in the UK, Australia and USA.
It produces standard, washed and impregnated carbons in granular, pellet, and powder form.
In the first quarter of FY13, Haycarb PLC made a solid start with the expansion of the company’s value added carbon portfolio generating revenue and profit growth.
The company reported that revenue grew  to Rs. 2.7 billion in the three months ending 30 June 2012, while profit before tax improved  to Rs. 259.8 million.
Net profit recorded for the quarter was Rs. 217 million, out of which profit attributable to equity holders of the company was Rs. 179 million.
In comments released along with interim results, Haycarb PLC Managing Director Rajitha Kariyawasan said the company had increased its value added carbon segment and run factories at full capacity in the period under review. The decrease in charcoal prices in Sri Lanka and Indonesia had also helped temporarily to improve margins.
However, the benefit of the reduced charcoal prices had been passed on to customers, and the raw material prices could move up when major producers such as India, Indonesia, Philippines and Sri Lanka move into the lean production season, Kariyawasan cautioned. “Haycarb will continue its strategy of investing in charcoal inventory with a significant funding in working capital to ensure supply security and building stable relationships with the supply chain,” he added.
“The continuing economic slowdown and stagnation in our European, Japanese and US markets will also result in a drop in demand for certain types of carbon,” he said. “Therefore we have to be cautious about the months ahead.”
A significant increase in cost due to last year’s sharp oil price revision and substantial increase in labour cost and overheads will also impact margins, he said. If the Sri Lanka Rupee and other Asian currencies stabilise at or below current levels, the company would be able to mitigate these impacts.
“Our plans for capacity expansions and further value additions coupled with geographic market expansions are expected to achieve the growth targets set by the company,” Kariyawasan said.


Dailyft

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...by i3gconsultants@ 18:09:52 on 2012-09-22

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Stock Watch: HAYC

Investors toast move, share price peaks to new high


Investors yesterday toasted the expansion move by Haycarb Plc with its sharew price hitting a new 52-week high.With 179,022 shares traded, Haycarb stock price peaked to an intra-day high of Rs. 185 before closing at Rs. 183, up by Rs. 15.80 or 9.5%. The previous 52-week highest was Rs. 173.90.


Dailyft

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...by i3gconsultants@ 18:09:09 on 2012-09-22

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Stock Watch: HAYC

Sri Lanka Haycarb buys Thai activated carbon maker


 - Sri Lanka's Haycarb, a unit of listed Hayleys group said it had bought a Thailand based activate carbon maker that will increase group manufacturing capacity by 10 percent.
Shizuka Co. Ltd, based in Ratchburi, Thailand was acquired through Carbokarn Co. Ltd, a 50-percent owned unit of Haycarb, the firm said in a stock exchange filing.Haycarb has production facilities in Sri Lanka, Thailand and Indonesia, making coconut shell charcoal based activated carbon products.In the June 2012 quarter the group reported profits of 179.1 million rupees, up 44 percent from a year earlier, giving earnings of 6.03 rupees per share.
LBO
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...by i3gconsultants@ 17:09:02 on 2012-09-20

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Stock Watch: JINS

Sri Lanka's Janashakthi Insurance targets 15-pct top line growth


- Sri Lanka's Janashakthi Insurance, which marks 18 years of operations in September, is expecting revenues to grow 15 percent to 8.0 billion rupees in 2012, managing director Prakash Schaffter said.
In the six months to June, gross written premium grew 14 percent to 3.8 billion rupees. The composite insurer reported profits of 163.7 million rupees or 45 cents per share for the half year.
Schaffter said the firm's general insurance business was making under-writing profits (before investment income) as a portfolio. Medical insurance was the least profitable he said.
Some segments of general insurance in Sri Lanka have become extremely competitive.
Janashakthi which began in September 1994 now has a 12 percent share in general insurance and 5.5 percent share in life business.
Head of marketing Shehara de Silva said insurance was still under-penetrated in Sri Lanka at 11 percent, partly due to lack of knowledge about its value and prevailing misconceptions Janashakthi was one of the first private insurers to go to former war zones as far back as 2001 and the region was seeing some of the highest growth she said.
LBO
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...by i3gconsultants@ 17:09:14 on 2012-09-20

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Stock Watch: SUGA

Sri Lanka to entertain claims from shareholders of expropriated firms: report


Shareholders of two listed firms that were expropriated by the state last year can lodge claims for compensation from a three member tribunal, a media report said.
Sri Lanka's The Sunday Island newspaper quoting a public notice said the panel wahzas made up of the Government Valuer, former chief valuer P W Senaratne and a third member, Sunil Fernando.
"Such compensation shall be payable to reflect the value of the shares held by each shareholder in affected enterprises or to reflect the value of an under-utilized asset based on its ownership by one or more of the owners," the report said.
Two listed companies, Hotel Developers and Pelwatte Sugar were among enterprises and assets named in the law controversial law, which was passed by a legislature in which the ruling coalition has a two thirds majority.
Violating property rights of citizens by expropriation was a concept that became widespread in Eastern Europe.
Analysts point out that in the feudal era, all property was owned by the king.
But in post-feudal Eastern Europe, newly established property rights of people were re-taken by the 'sovereign' state, which had assumed the powers previously held by the king, especially with the spread of Marxian ideology and fascist-nationalism.
The controversial law has become a valuable example to those who study rule of law, justice, citizen's freedoms, the separation of powers in a free country and absolute majoritarianism.
In naming specific firms and assets as 'under-performing' or 'under-utilized' by unknown criteria by the secretly hatched law, representative who voted against the law pointed out, the legislature trespassed on the functions of the executive.
The main shareholder of Pelwatte Sugar has pointed out that under the criteria set by the law itself - which involved assets given to private investors by the state within 20 years - the firm did not fall within the definition.
However judicial review of the expropriated assets was specifically blocked by the law, which legal analysts said was a case where the legislature trespassed on the functions of the judiciary.
After Sri Lanka gained independence from Britain, citizens and non-citizens were expropriated several times by the elected ruling class, violating property rights and killing newly emergent native entrepreneurs, but they could still go to court.
The law also named a single firm, Hotel Developers, which legal analysts said was ad hominen or targeting a specific victim. Such a law, would have been struck down by courts in a free country.
Before the enactment of Sri Lanka's 1972 constitution, ad hominen laws have been struck down by Britain's Privy Council, to which citizens aggrieved by the state or rulers could petition to.
LBO
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...by i3gconsultants@ 01:09:19 on 2012-09-18

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Stock Watch: HEMS

Sri Lanka's Hemas and Forwardair in logistics venture


 Sri Lanka's Hemas group said it has formed a logistics company with Forwardair Logistics (Pvt) Ltd, taking 50 percent of the joint venture and branding it Hemas Logistics.
"With this joint venture we will expand our integrated logistics solutions capability through container transport and the movement of over-dimensional and project cargo in Sri Lanka," Hemas transportation sector chief Kasturi Chellaraja Wilson said in a statement.
"Parallely we will expand in the sphere of vehicle logistics in Sri Lanka with the opening of the new Hambantota harbour.
"It is our aim to be the preferred choice in Sri Lanka for both containerised, project and other specialised cargo movements."
The venture has a fleet of over 30 prime movers, trailers including skeleton, flat-bed, low-bed trailers and car carriers. It also has lifting equipment and lashing gear for the safe transport of over-sized cargo and skilled staff, the statement said.
"Our long term plans include diversification into other logistics activities such as container depot, warehousing and container freight station activities, thereby enriching our integrated solutions to our customers," Wilson said.
Hemas Transportation also a joint venture with Hellmann Worldwide Logistics (Pvt) Ltd for freight forwarding, and with SKYNET for courier services.
LBO
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...by i3gconsultants@ 01:09:26 on 2012-09-18

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Stock Watch: HVA

Dull year at HVA following successful IPO


HVA Foods PLC, which describes itself as "a truly global company dealing in every kind of tea and tea based products," has posted a lackluster year ended March 31, 2012 with the profit after-tax down to Rs.9.3 million from the previous year’s Rs.46.4 million despite a healthy turnover increase to Rs.741.7 million from the previous year’s Rs.561.6 million.The directors said in their report that the decline in profitability was mainly because of an exchange loss of Rs.14.3 million in comparison to an exchange profit of Rs.18.8 million the previous year and an increase in distribution and administration expenses.The directors have not recommended a dividend for the year under review.HVA had a very successful IPO during the previous boom on the Colombo Stock Exchange. The company has a stated capital of Rs.333.9 million, revaluation reserve of Rs.147.3 million and retained losses of Rs.9.7 million in its books.Its chairman, Mr. Rohan Fernando said in the annual report that the turnover increase coming from business expansion in new markets had the potential to generate a healthy bottom line in the medium to long-term."However venturing into new markets involves a substantial entry cost in the initial years, overriding the gross profits," he said.He added that the continuous depreciation of the rupee against foreign currencies had a negative impact on the bottom line with the company having to provide a substantial book value for exchange losses.Fernando noted that the year started with a strong rupee of Rs.110 to the USD sliding to Rs.127 to the dollar at the end of the last financial year.He was optimistic for the future by pointing out that the company’s Heladiv brand has seen increased demand in established markets in Russia and the Far East and gained new entry points for their brand in the Far East and elsewhere in the world.They had installed tea bagging and packaging machines and production line equipment enhancing quality and controlling production cost and laid a strong foundation to meet the increase in demand for Heladiv teas around the globe.He said that their tea extract plant had also made progress by exporting bulk tea extracts to several Asian and Far Eastern markets for trials as well as introducing several new products in the form of "ready to dilute and drink" tea mixes."These products are still considered novel and require further marketing efforts to grow into regular businesses," he said."It is hoped that before too long the tea extraction plant will return impressive results to be recognized as a novel business model and boost bottom line profitability of the company."HVA Lanka Exports (Pvt) with 61% of the company is the dominant shareholder followed by Divasa Equity (Pvt) Ltd (2.4%) and Lankem Ceylon with 1.4% are the major shareholders.HVA Lanka Exports is owned by Mr. Rohan Fernando, Chairman of HVA Foods PLC with 7.6 million shares and his wife, Mrs. Varuni Ahangama Fernando with one share.Its total assets ran at Rs.938.5 million and total liabilities at Rs.467.9 million.The directors of the company are: Messrs. Rohan Fernando (Chairman), W.I.H.J. Fernando, J. Raddalgoda, Mrs. V.S.A. Fernando, N.C. Vitarana and J.H.P. Ratnayeke


The Island

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...by i3gconsultants@ 19:09:23 on 2012-09-16

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Stock Watch: UML

United Motors Lanka Introduces Valvoline Diesel Synthetic 5W-40


United Motors Lanka PLC (UML) recently introduced the Valvoline diesel synthetic 5W-40 to the Sri Lankan market. The diesel synthetic 5W-40 is formulated with high-quality synthetic base stocks and a boosted additive system.The diesel synthetic 5W-40 boasts hi-performance synthetic technology that meets the stringent demands of modern diesel engines, including those built on emission reduction technologies such as Exhaust Gas Recirculation (EGR), in a wide variety of service conditions. It’s compatibility with EGR-type engines makes the Valvoline diesel synthetic 5W-40 the ideal performance enhancer. In addition, the diesel synthetic 5W-40 is suitable for long drain oil change intervals at 10,000 km. The Valvoline 5W-40 is available in 1 litre and 5 litre cans.The diesel synthetic 5W-40 is also renowned for its resistance to breakdown, with superior protection for engines from heat, deposits and wear.Valvoline has a tradition of providing affordable, superior fully synthetic oil that is field -proven and delivers outstanding fuel economy over other similar products in the market, advanced soot control(reduces black smoke), outstanding viscosity retention and excellent all weather performance.Valvoline, a division of Ashland Inc., boasts 140 years of history and serves more than 100 countries worldwide. It is a leading marketer, distributor and producer of quality branded automotive, and industrial products and services.


The Island

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...by i3gconsultants@ 13:09:37 on 2012-09-16

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Stock Watch: CARG

Cargills investing massively in expanding brewery capacity


Cargills (Ceylon) PLC which entered the soft alcohol industry early last year by acquiring the McCallum Brewery is investing massively in expanding capacity from the present 50,000 hl per annum to 600,000 hl within 12 months with installation of new equipment already begun and the expansion due to be completed during the new financial year, the company’s chairman, Mr. Louis Page has announced in its just released annual report."The investment in this project is substantial and the cost of capital, overheads and depreciation will affect the company’s profits in 2012/2013. However, upon commissioning of the new plant we are confident the brewery would give a substantial boost to your group’s results with our brands emerging as market movers," he said.He noted that their entry to this business ``stemmed from the opportunity arising from a distinct change in consumption pattern stimulated by rising disposable incomes.’’Increasing tourist arrivals expected to hit the million visitors mark this year plus last year’s 22.5% growth in malt liquor production indicated what he called the ``timely nature’’ of their investment.The Three Coins range which re-entered the market in September last year had been well received and had won excellent reviews. However limited brewing capacity was a major constraint. This was being addressed with a twelve-fold expansion within 12 months.Cargills had funded significant investments in its new businesses with had already been funded with debt and the interest on this debt, the anticipated revival cost and related losses have been born by the company’s established businesses. Page expected the new businesses to show attractive returns from the first quarter of 2013/14.Page reported that they will also be investing substantially in a new commercial bank, Cargills Agriculture and Commercial Bank, which is sponsored by Cargills and its parent, CT Holdings PLC."The re-development of the historic Cargills property in Fort into a 6-star hotel would be initiated in collaboration with internationally renowned partners. These investments will also be funded with debt which would result in an increased interest expense over the next two years and steps have been taken to effectively manage this debt burden," he said.


Cargills which owns the country’s leading supermarket chain has concluded a successful year ended March 31, 2012 with group revenue up 30% to Rs.48.26 billion and the group profit after-tax up 0.08% to Rs.1.09 billion.Page has said that retail remained the mainstay of their business with the sector continuing to outperform itself year-on-year with both Cargills Food City and its smaller variant, Cargills Food City Express, enjoying solid same-store growth with improved profit."Our expansion drive remains steady and focused towards meeting the mounting consumer demand from regional Sri Lanka," he said.Despite challenging market conditions of spiralling fuel prices and increased electricity tariff, the retail performance remained robust with the group confident that its unique brand proposition of delivering quality at the most affordable prices anywhere in the island would enable the company to retain its market leadership position in a growing industry."The 100 new outlets program initiated in December 2009 is on target with 31 new outlets opened in the year concluded. The construction of the ‘Retail Mall Project’ in Jaffna is also keeping good time with the property due to open its doors do the public in mid-2013," Page said.In the fast moving consumer goods (FMCG) industry, Cargills manufacturing business had posted 68.7% revenue growth with Magic ice cream doing particularly well with a sharp increase in both sales and profits.Their meat products had also enjoyed steady growth in revenue despite tighter margins attributed to pressure from competition with the company confident that this business would reap the benefits of a rising export demand and the rebounded hospitality industry.The market demand for the Kist range of cordials, jams and sauces was also rising and Kotmale has reported a strong performance in its pasteurized and ultra heat treated flavoured milk range.The group had made substantial investments in the dairy processing business with production and storage capacity added to their dairy ice cream plants. They were also investing in consolidating their dairy facilities in a single location.


Their entering into biscuits manufacturing with a plant acquired the previous financial year had been below expectation with losses from this activity weighing down the otherwise strong manufacturing performance in the year under review."The distribution strategy in the segment has been revisited and the company is focused on reducing its losses in 2012/2013 and breaking even in the following financial year," Page said.He reported that increased rates of taxation payable by their manufacturing units which were previously exempted and higher interest cost of borrowings for their acquisitions had also impacted on profitability.Shareholders would appreciate that the substantial rise in administration cost associated with newly acquired businesses would stabilize in the medium term and the growth in cost would be moderate in the future.The directors have recommended a dividend of Rs.1.30 per share on top of an interim 70 cents paid in January maintaining the previous year’s dividend rate.Cargills has a stated capital of Rs.130.7 million, reserves of Rs.4.6 billion and retained earnings of Rs.2.9 billion in its books. Total assets ran at Rs.24.85 billion and total liabilities at Rs.17.13 billion.CT Holdings with 70% of the company is its major shareholder followed by Mr. V.R. Page with 6.43% and the EPF with 3.09%.The Cargills share with a net asset value of Rs.34.07, up from Rs.31.07 the previous year, traded at a high of Rs.240 and a low of Rs.117 during the year under review. This compared with a trading range of Rs.253 to Rs.70 a year earlier.The directors of the company are: Messrs. L.R. Page (Chairman), V.R. Page (Deputy Chairman/CEO), M.I. Abdul Wahid (MD/Deputy CEO), S.V. Kodikara, P.S. Mathavan, Jayantha Dhanapala, A.T.P. Edirisinghe, S.E.C. Gardiner, Sunil Mendis, Anthony A. Page, J.C. Page and E.A.D. Perera.


The Island

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...by i3gconsultants@ 13:09:01 on 2012-09-16

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Stock Watch: SEYB

Seylan totally service-oriented: Kapila Ariyara


Seylan Bank recorded an impressive 1 H performance with a Profit after Tax of Rs 1.021 billion for the 6 months ended 30 June 2012.  This is a strong testament and proves beyond doubt that the strategies adopted and operational improvements are yielding the desired results. The Bank’s performance indicators are all headed in the right direction and Seylan Bank is well on its way to achieve its Strategic Plan.
The Daily Mirror Business desk spoke to Kapila Ariyaratne, General Manager / Chief Executive Officer of Seylan Bank to get a brief view on the Bank’s performance.  Excerpts:
Q:Could you comment about the Bank’s first half performance this year?
We’ve just released our first half results, and are very proud of what we have achieved in our first half by exceeding last full years’ profits in just six months this year. This has been achieved mainly through  the growth in the core banking areas. In the previous years there were fairly large contributions from the Equity investments as well as Treasury activities.  This year even without that support, the core banking activities, such as the Deposits loans trade and the remittances, have risen up, and started generating good results.  This is a sustainable model rather than a lop-sided model.  We are very happy that we have achieved that kind of reinvigoration of the entire operation.
Q: When it comes to stability as a Bank, where do you stand?
In 2011 we had a rights issue which brought about Four Billion rupees into the capital.  With that, even now we continue to be one of the strongest in Capital adequacy, ratio wise and still above 14%  when the statutory requirement is 10%. Stability wise we remained a strong bank but the challenge was to make sure that our returns are good and our stake holders are happy. We have come through a bit of a rough time during the past three years due to various events, but now we have overcome the negatives and risen up.
Q: Moving forward, what are the key areas you would like to focus on and what new initiatives have you developed?
We have focused on leveraging our skills, looking at Customer service, improving our products and adding value as a next step.  Also building up our own staff, training them, focusing on their skills and their competencies in a very focused manner is what we are concentrating on.  Another area we have  developed  is, improving our risk management framework.  We’ve spent a lot of time improving our risk management infra structure to bring it up to a very high standard. As we move forward from walking to running, our safety net has to be stronger. We did a strategic plan which was a bottoms up process, with every one of our branches getting involved with their own presentation with their own views and planning on this subject.  It brought in a lot of positive attitudes to the plans we are already following now, with additional improvements in various areas.  From the point of the customers, it means better service and more value added product offerings.
Also we want to be the best in the industry when it comes to areas like overall governance and transparency whatever the dealings we have may it be shareholders, regulators, customers suppliers.
Q: What other benefits would a customer get if they were to come to  Seylan?
Seylan Bank has always been known for their excellent customer service from the time they started nearly twenty five years ago.  At that time when banking was a very stiff area to deal with, Seylan Bank re conceptualized customer service excellence in order to make customers have a pleasant banking experience.  Facilities such as long banking hours and Saturday banking which have become standard features now, are some of the facilities Seylan Bank  introduced to make banking a convenience to the people. Our staff is very relationship focused and it helps us immensely in all areas of banking.
Q: Where would you say the bulk of your business is?
We are a middle market SME and retail heavy Bank whilst we have a significant  corporate portfolio as well. Our strength and the bulk of our business is in the SME and the middle market sector.  We have a very strong and diverse portfolio of clients. Our customer base, and focus blends well with the government strategy as well, because they too focused on building the SME, middle market and the lower middle market.  With the awakening of that segment, it was a good time for us to focus more and offer more facilities to that segment, as that segment was our strength as well.  So it worked out well for us.
Q: What are your top products you can boast of?
Needless to say, on the deposit side, we have a very popular products a good example of which  is our  Tikiri Plus. This product has been synonymous with children’s savings for over two decades. Similarly Seylan sure, Seylan Thilina Sayura are some of the others
We have initiated a new innovation and new product development process in the bank and as a result have just re-launched the current account with a number of  value additions.
The bank has also begun to invest on many research projects to facilitate our marketing and new product development initiatives which will be used to launch a number of other products and campaigns in different categories within the next few months. These products would no doubt be focused on delivering greater value to our current and potential customers
Q: With the competitive Banking industry offering various innovative products to customers, what has Seylan got to offer as new schemes?
 Recently we launched our current account, which is a basic product, but we packaged it with a lot of features and a lot of the extra benefits which is not offered by other banks.  The features range from free  Internet/SMS Banking  and   debit cards with enhanced withdrawal limit  of 150,000 per day (gold debit cards). Further value added services such as phone banking  ,utility bill payment facility,,credit cards with special discount offers and 24 hour call centre support. . This is an attractive offer to the customer and brings benefits to the bank as well. Of the new products, we are also focusing on what is critical to the country. North east has been an area we have focused on.  We also do lot of work in the North Central and the agricultural area  to help the farmers with the loans.  We have been a net lender to those areas.
Q: How is your standing on foreign remittances?
When it comes to the expatriate workers market, Seylan Bank had been the leading bank in the remittances  space some time back and unfortunately we had slipped back. We want to regain our market share and we are working very closely with our affiliated representatives outside to build up this area and give the best benefits possible to our customers.  Together with partners like UAE exchange and  Moneygram, we are trying to further improve this service where the money is received by the recipient without delay. This is an essential service we have to develop.
Q: What are your plans and goals for the rest of the year?
This year has been good. We hope to bring in a record performance this year. The maximum after tax profit we had made was 1.2 billion which was in 2010. This year we will exceed this amount, as we are steadily moving towards it.  Our advances have grown by about 19% and our deposits have grown by about 18%. We are well within the Central Bank’s guideline on credit growth. We have just announced a Debenture issue, from which we are hoping to raise anything between one to two billion. These funds will be utilised to support our customers needs and it will also support our capital and expansion of our long term loan portfolio.


Dailymirror

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...by i3gconsultants@ 12:09:58 on 2012-09-15

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Stock Watch: SLTL

Sri Lanka Mobitel adds business master's to mLearning platform


Mobitel, a unit of Sri Lanka Telecom said it was providing a Master of Business curriculim on its 'mLearning' in partnership with Sri Lanka's Kelaniya University.The 'MBus' modules could be accessed through Mobitel's mobile broadband links. Mobitel, chief executive Lalith De Silva said the facility would help as it will help them participate in lectures live or in recorded mode without being physically present at the university. Mobitel had launched its mLearning platform in 2009, with the University of Colombo and later extended to Open University of Sri Lanka, CIMA Sri Lanka, Edinburgh Napier University of Scotland, and the Medical College of Sri Lanka.


LBO

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...by i3gconsultants@ 12:09:46 on 2012-09-15

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Stock Watch: CTCE

HK insurer to buy Aviva shares


All stakes belonging to the British insurer Aviva in NDB – Aviva Insurance Plc will sell to a Hong Kong based insurance giant, theAmerican International Assurance (AIA) and exit the market, market sources said. According to market sources, they have reached the final stages of negotiations for the purchase of 51% of the stake held by Aviva and bids have been approved. Therefore, the company had signed a Memorandum of Understanding (MoU) to go ahead with the transaction. When the Daily News Business contacted Aviva Insurance, they declined to comment on it. The NDB Bank through its subsidiary, the Capital Development and Investment Company (CDIC), controls a stake of 41.6 percent in Aviva NDB Finance Lanka (ANFL), while Aviva Asia Holdings owns the majority stake of 58.4 percent. ANFL in turn, has a stake of 87.3 percent of Aviva NDB Insurance, while the NDB Bank independently has another stake of 5 percent. The company’s market value had been around Rs. 8.4 billion which would give Aviva’s a 51 percent stake, a valuation of Rs. 4.2 billion. When bids had been called in July, seven parties had collected offer documents from Morgan Stanley in Hong Kong who was the investment bankers appointed to handle the deal, insurance sources said. Aviva NDB Insurance which is believed to be the second largest life insurer in Sri Lanka, generated Rs 12.8 million in revenue last year, earning a post-tax profit of Rs 691.6 million. With this development value of a share, which is likely to go up to a Rs 300 level at present, it is selling at Rs 240. AIA is a specialised insurance company mainly operating in Asian markets. With these developments, the share market would increase further, Lanka Securities (Pvt) Limited Research Analyst said. At the end, NDB directly and indirectly has about 41 percent of Aviva NDB Insurance, while Aviva Asia Holdings has about 51 percent. Now the question arises in the market circles whether the NDB will continue to hold their stakes or whether they would sell off their stakes as well to the buyer of the Aviva share. It was also reported earlier, that the AIA Group, Prudential Plc and Manulife Financial Corp, were bidders for Aviva’s stake in the Sri Lankan joint venture. However, some news sources said that a few local parties such as top business man Harry Jayewardene and the Janashakthi Group were also interested in it. But This is as part of Aviva, Britain’s second largest insurer’s announcement earlier to sell underperforming businesses globally, partly to raise money to protect against its euro zone exposure which is bigger than that of its rivals. Reuters news wire reported earlier.


Dailynews

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...by i3gconsultants@ 12:09:49 on 2012-09-15

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Stock Watch: NDB

NDB SME Centre designed with state-of-the-art customer service


NDB's SME Centre is designed around a unique concept which aims to educate, empower and enrich the entrepreneurs of the region. It will be a one stop shop for the diverse needs of today's entrepreneurs and will provide 360 degree solutions; from financial expertise on SME Banking services, industry expertise for those who intend to start up new business ventures to investment and capital management advice and a gamut of customized credit facilities available over the counter.








SME Centre in Kurenegala being formally opened by Indrajit Wickramasinghe, Chief Operating Officer of NDB. Also in the picture are (L-R) Chaminda Jayasingharachchi, Manager, NDB Kurunegala Branch, Ganga Wanigaratne Assistant Vice President and Head of Branch/Cards Operations and Customer Service, Raj Aboobucker, Vice President and Head of SME and Retail Banking and Indika Ranweera, Assitant Vice President and Head of SME Banking


The Centre will also be equipped with self service features which include a computer terminal with internet facility which could be freely accessed by the visitors to obtain detailed information on SME Banking services and new developments in the sector using web resources and a mini library rich with literature related to SMEs, Financial services, industry magazines etc. In addition, dedicated financial advisors at the SME Centre with a wealth of knowledge on SME services, financial management as well as business and investment management will be able to add value to the visitors by providing them with up to date, expert advisory services.Commenting at the opening of the dedicated SME Centre in Kurunegala, Russell De Mel, CEO of NDB said, "SME development has always been an integral component of NDB's strategic intent. As a pioneer in project lending and SME financing in Sri Lanka, with over 30 years of experience NDB has contributed immensely to this sector. Having financially supported over 40,000 ventures and creating more than 600,000 employment opportunities island-wide, NDB remains committed to further empowering the SME sector with the firm belief that an entrepreneurial culture is essential for the sustainable development of a nation. Opening of this dedicated SME centre marks a significant milestone of NDB's commitment towards SME development. This is the first step of an island-wide endeavour, which will see the opening of many more SME Centres of this nature, empowering thousands of entrepreneurs across the country. I would like to invite all entrepreneurs of Kurunegala region to pay a visit to our SME Centre and take advantage of these unique benefits in order to improve and develop their businesses. With a combination of products and services that include SME Banking solutions, expert advisory services, island wide educational sessions and now with the opening of SME Centres; NDB is continuously strengthening its commitment towards SME development with the goal of making a positive change in the Sri Lankan entrepreneurs by providing them with knowledge and capital required to develop their businesses, thereby contributing to the growth of the country's economy.


Dailynews

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...by i3gconsultants@ 12:09:32 on 2012-09-15

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Stock Watch: HASU

New Head of Marketing for HNB Assurance


HNB Assurance has announced the appointment of marketing professional Dilshan Perera as the Company's new Head of Marketing. As Head of Marketing at HNB Assurance, Dilshan will focus on enhancing Marketing Communications and Customer Relations strategies in streamlining the Company's efforts to connect with its stakeholders better, the announcement said. Dilshan brings a wealth of experience and expertise to his role, being backed by an outstanding track record in marketing in the service industry. Dilshan has 09 years of experience in marketing at four well established companies in Sri Lanka, that also includes a leading insurance company and a bank. Perera holds a Bachelor of Business Management (Marketing) Special, with second class upper division honours from the University of Kelaniya and a Professional Post Graduate Diploma in Marketing from the Chartered Institute of Marketing (CIM) - UK. He is a Chartered Marketer, Member of CIM, Member of Sri Lanka Institute of Marketing (SLIM) and also a Member of the Institute of Management (MIM) Sri Lanka and currently reading for his MBA (Final Year) at PIM - University of Sri Jayewardanepura. Dilshan is an old boy of De Mazenod College,Kandana and was awarded as the Most Outstanding Student at De Mazenod College in year 2001. HNB Assurance PLC, is one of the fastest growing insurance companies in Sri Lanka with a network of 50 branches and also been awarded "A (lka)" as its insurer financial strength rating and national long term rating by Fitch Ratings Lanka Ltd.


Dailynews

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...by i3gconsultants@ 12:09:14 on 2012-09-15

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Stock Watch: COMB

Commercial Bank and Central Bank to develop entrepreneurial skills of SMEs


Commercial Bank of Ceylon has launched a programme in collaboration with the Central Bank of Sri Lanka, to enhance entrepreneurship skills in the Small and Medium Scale Enterprise (SME) sector.








In picture Jayantha Abeyratne, Assistant Director and M S K Dharmawardena, Additional Director – Regional Development Department of the Central Bank, Anura Wijekoon, Senior Manager of the Nuwara Eliya Branch of the Commercial Bank and Mohan Fernando, Manager, Development Credit of the Commercial Bank.


The first seminar of this programme was held recently for entrepreneurs who are in the SME and Micro Enterprise sectors in Nuwara Eliya.


Officials of the Central Bank, including M S K Dharmawardena, Additional Director and Jayantha Abeyratne, Assistant Director of the Regional Development Department and representatives of Commercial Bank, including Anura Wijekoon, Senior Manager of the Nuwara Eliya Branch and Mohan Fernando, Manager, Development Credit and around 80 entrepreneurs from areas such as Nuwara Eliya, Labukele, Moon Plains and Hawa Eliya were present at the event. Presentations at the event were made by representatives from the Central Bank and Development Credit Department of Commercial Bank on aspects pertaining to Entrepreneurship, Business Management, Financial Management and Marketing Management. Participants were also educated on these subjects through group discussions and individual activities. This programme is to be replicated in other parts of the country during the ensuing months, the Bank said. "This joint effort by the largest private sector bank in the country, and the Central Bank, can significantly raise the level of entrepreneurship among SMEs and Micro Enterprises, thereby enhancing their viability and potential," Chandana Gunasekera, Assistant General Manager - Personal Banking and SME of Commercial Bank said. "These sectors have been identified for their potential to contribute significantly to the economy of the country. This programme is therefore most timely." The Commercial Bank has also conducted a series of programmes on Financial Literacy together with the Central Bank in various parts of the country including the Northern Province. These programmes have enabled SME's to improve their financial performance, book keeping and debt management. Commercial Bank is the largest private bank in Sri Lanka, and the only Sri Lankan Bank to be listed two years consecutively in the world's Top 1000 Banks. It operates a network of 220 service points in Sri Lanka and a network of 530 ATMs, the single largest ATM network operated by a bank in the island. It also operates 17 service points in Bangladesh and is the 4th largest foreign bank in that country. The Bank has been adjudged 'Best Bank in Sri Lanka' for 14 consecutive years by 'Global Finance' Magazine, and has won multiple awards as the country's best bank from 'The Banker,' 'FinanceAsia,' 'Euromoney' and 'Trade Finance' magazines.


Dailynews

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...by i3gconsultants@ 12:09:49 on 2012-09-15

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Stock Watch: ABAN

Abans looking at exports to India


Abans PLC is looking at setting up a refrigerator and washing machine plant in Sri Lanka. Chairperson of Abans, Mrs. Abani Pestonjee, speaking to the 'Daily News Business' said this would be mainly targetting the Indian and local market. She said that although there are Indian products, they still see an opening for quality Sri Lankan products and this was the reason why they decided to manufacture for the Indian market. She said in addition they are going ahead with the building of a leisure complex at the Abans main office in Colombo 3. "We are also doing a similar project close to the Bera Lake, in Hunupitiya Colombo 2," she disclosed.


Dailynews

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...by i3gconsultants@ 12:09:33 on 2012-09-15

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Stock Watch: NTB

Renuka Fernando appointed CEO/Director of NTB


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Nations Trust Bank Plc announced the appointment of Ms. Renuka Fernando as the new Chief Executive Officer/Director of the Bank with effect from 15 September 2012. Ms. Fernando succeeds the earlier CEO/Director Saliya Rajakaruna who stepped down on the completion of his contract of service.Commenting on the appointment of the new CEO/Director, the Chairman of Nations Trust Bank PLC Ronnie Peiris stated, "We are delighted to welcome Ms. Renuka Fernando as our new Chief Executive Officer/Director. The Bank continues to perform well and is positioned to take advantage of the tremendous growth opportunities in the country. Renuka’s expertise in the industry and sharp business acumen will certainly be an asset to Nations Trust Bank and I am sure that she will guide the Bank to even greater heights in the years to come. I also take this opportunity to extend our gratitude to Saliya Rajakaruna for his services to Nations Trust Bank".Ms. Fernando joined NTB in September 2001 as AGM - Corporate Financial Solutions. With her promotion to the position of DGM in March 2004, Renuka took over the leadership role in the Retail Banking Business. In 2009, she assumed the position of DGM, Consumer Banking with the amalgamation of the Cards and Consumer Assets business with Retail Banking. Following the organisational restructure in 2010, Renuka assumed responsibility for the Retail and SME business. Thereafter, in June 2011 she was appointed as Deputy CEO of the Bank.Prior to joining NTB, Renuka was with ABN AMRO Bank N.V, Sri Lanka, where she held the positions of Vice President/ Head Global Transactional Services and Head of Consumer Banking. Renuka has also worked at Banque Indosuez, Sri Lanka as Manager Corporate Banking and at Nederlandsche Middenstands Bank - Hong KongThe Bank has 53 branches, 27 Leasing Centres and is the sole issuer and acquirer for American Express cards in Sri Lanka.


The Island

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...by i3gconsultants@ 12:09:49 on 2012-09-11

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Stock Watch: DIMO

DIMO opens branch in Trinco



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Gahanath Pandithage, CEO - DIMO cutting the ribbon to the new branch while Channa Weerawardena (left), Director - DIMO looks on.

DIMO recently opened their latest branch in Trincomalee. The new spacious branch is capable of handling sales and services for passenger and commercial vehicles. The Trincomalee branch is situated along the Nilaveli Road."Trincomalee is the administrative capital of the Eastern Province. Trincomalee’s strategic importance both commercially and military wise has shaped the history of Sri Lanka. The European powers contested for the harbour - the Portuguese, the Dutch, the French, and the English, each held it in turn. Geographically the Trincomalee harbour is the fifth largest natural harbour in the world. With the Government of Sri Lanka focusing on the East for rapid development and especially on Trincomalee for its commercially strategic location due to its port, DIMO decided to move into Trincomalee," the company said in a statement.The new branch was opened by Gahanath Pandithage (CEO-DIMO) in the presence of Channa Weerawardena (Director-DIMO), Vijitha Bandara(GM-TATA Commercial Vehicles), Arup Baruah (Country Manager-TATA Motors) and Hemal Ratnayake (Manager-Anuradhapura Branch). The DIMO Trincomalee branch is equipped to carry out sales and service of TATA commercial vehicles, TATA passenger cars and the sales and distribution of TATA genuine parts. The service facility boasts of 10 workshop bays, 2 washing bays and 4 hoists for commercial and passenger vehicles. In addition to the above the branch consists of a modern customer waiting area, latest equipment and tools to repair and diagnose vehicles, a canteen, workmen changing and rest room and a water treatment and purification plant.Apart from TATA commercial and passenger vehicles, the branch also markets Mercedes-Benz passenger cars and trucks, Mahindra tractors, Claas harvesters, Osram lighting, Bosch power tools, Bosch Automotive products, Siemens Delta vega switches, Komatsu heavy machinery, MRF tyres, Kumho tyres and TATA genuine spares for all models.In 1939 DIMO started as a purely automobile company and today has diversified into many facets of engineering including power engineering, medical equipment, building technologies, power tools, lighting, construction machinery, warehouse solutions etc. The relationship between DIMO and TATA Motors celebrated 50 years in 2011, which was a historic milestone for the two giants in the automobile industry.Apart from Trincomalee, DIMO branches can be found in Akkaraipattu, Ambalangoda, Ambalanthota, Ampara, Anuradhapura, Balagolla, Colombo, Dambulla, Embilipitiya, Hatton, Horana, Jaffna, Kandy, Kurunegala, Mannar, Matara, Moneragala, Nikawaratiya, Padaviya, Piliyandala, Puttlam, Rathnapura, Vavuniya, Welimada and Yakkala.


The Island

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...by i3gconsultants@ 12:09:10 on 2012-09-11

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Stock Watch: CTBL

Lower prices, lower production but higher profits for listed tea brokerage


Ceylon Tea Brokers PLC reported a net profit of Rs. 57.26 million during the 2011/12 financial year, up 58 percent from a year earlier, the company said in a statement."The improved performance of the company during the financial year under review compared with the corresponding period the previous year is indeed encouraging given that the country produced less tea, which sold at lower auction prices, which has a direct correlation to the earnings of a tea broking company," Ceylon Tea Brokers said in a statement announcing its financial results."The year under review recoded revenue of Rs.185.69 million, up 17.9 percent compared to Rs. 157.49 million the previous financial year. The company was also able to record a 26.9% return to shareholders," it said.During the year under review, Ceylon Tea Brokers was focused mainly on consolidation."This approach has proved as to be a successful endeavor; based on the feedback received from the industry, clients and the regulators. Along with consolidation, the company has also recorded a moderate growth with the Ceylon Tea Brokers market share based on the volume of tea sold increasing from 8.77 percent to 9.15 percent."Further, in line with the company’s objectives, its’ market shares, in terms of the value of tea sold has grown to 9.51 percent during the financial year."This is of significant importance as it indicates a better quality catalogue, which has always been the aim of Ceylon Tea Brokers on behalf of their clients. The company continues to focus on providing each factory with detailed attention and close monitoring at all times. This strategy continues to help clients to not only to increase the quality of tea produced, but the resultant increase in the prices obtained at the auctions and the increase of quantity produced and improved productivity; thereby improving their bottom line as well."


The Island

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...by i3gconsultants@ 12:09:26 on 2012-09-11

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Stock Watch: HNB

HNB joins hands with DIMO








Picture shows Rajendra Theagarajah, Managing Director/CEO of HNB and Ranjith Pandithage – Chairman/ Managing Director of DIMO are exchanging the MoUs. Keerthi Wijeratne, Chief Manager –Leasing, R M P Dayawansa, Asst. General Manager – Personal Financial Services HNB, Chaminda Ranawana, General Manager and Shantilal De Alwis, Head of Product, Support and Services – Construction and Mining Equipment Division of DIMO are also in the picture.


HNB again joined hands with DIMO to offer leasing facilities to Construction Machinery & Equipment recently.


The objective of this agreement is to facilitate all small, medium and large scale contractors to use financial options enabling them to procure their equipment needs such as, Hydraulic Excavators, Bulldozers, Motor Graders, Wheel Loaders, Concrete Mixer Trucks, Pumps and Batching Plants, Breakers, Road Rollers, Paving Products, Tower & Mobile Crane etc., for construction work island wide. This is due to Government focusing more on infrastructure development in the country extending to Roads, Irrigation, Power, Water, Airport & etc. This agreement will facilitate potential clients around the country to fulfil their needs as strategically DIMO and HNB have a close-knitted branch network in the country. To promote the construction and mining equipment, HNB will provide tailor-made leasing packages to their customers according to their repayment capacity with competitive interest rates. In addition HNB Assurance PLC will provide discounted insurance premium along with Rs.1.2Mn Life Insurance Cover. HNB and DIMO will also have joint customer gathering events around the country displaying machinery together with available financial options and services. Industry experts point out that, this will be a unique feat as this will encourage especially small & medium term contractors to easily approach the Banks where they will receive hassle free financial solutions in their locality enabling them to venture-out into new projects. The country would also be benefited with the boom in new development activities facilitated through this partnership. This would also save on exchange of used machine imports and subsequent expenses on maintenance, as new machines will provide trouble free operations for longer years while producing higher out-put, preserving the environment as well from harmful fumes.


Dailynews

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...by i3gconsultants@ 12:09:22 on 2012-09-11

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Stock Watch: UBC

Union Bank appoints two new directors


Union Bank has appointed Sabry Ghouse and Sunil Karunanayake as independent non executive directors to the bank's Board of Directors with effect from August 30, 2012. The appointment of independent directors is an integral part of the bank’s good governance practices, thus ensuring further commitment to the protection of shareholder interest. In this perspective, the new appointments contribute to the increase of the banks count on independent directors. M.H. Sabry Ghouse counts over 25 years in the banking industry with core experience in retail banking, both locally and overseas. Previously employed at American Express Bank, Standard Charted Bank and the Alrajhi Bank of Saudi Arabia holding Corporate Management /Director positions, he has been instrumental in setting up retail banking, allied operations and crafting strategy, enabling these banks to emerge as market leaders. During his tenure in the banking ind









M.H. Sabry Ghouse Sunil
Karunanayake
ustry, he also spearheaded the successful transition of the Standard Charted Banks global acquisition of Grindlays Franchaise in the Levant region, the launch of the American Express credit card and the launch of “Zero percent”scheme in Sri Lanka. Ghouse holds a MBA from the University of Western Sydney, Australia. Sunil Karunanayake counts over 30 years experience in active Commercial and Financial management of which 25 years had been with Unilever Sri Lanka Tea Division, as the Commercial Controller. He also served as the Director/Secretary at Brooke Bond Ceylon Limited. Karunanayake has extensive exposure in areas of Financial Management, Financial Reporting, restructuring, Project management, Legal/HR functions, Treasury, IT Administration and General Management. He is a Non-Executive Director for three listed companies, chairing the auditing committees in two of the companies. Subsequent to Unilever, Karunanayake was attached to the Institute of Chartered He holds Fellow memberships of the Institute of Chartered Accountants Sri Lanka (FCA), Chartered Institute of Management Accountants UK (FCMA) and also a MBA from the Post Graduate Institute of Management of the University of Sri Jayawardenapura. He also holds a Diploma in Commercial Arbitration from the Institute of Commercial Law & Practice (ICLP) Welcoming on board, the two eminent professionals, Alex Lovell, Chairman of Union Bank of Colombo PLC stated that “their wide experience, expertise and exceptional background is indubitably a valued addition to Union Bank and we look forward to their contribution to the Bank’s continued success”. The Board of Union Bank consists of a blend of high profile local and international directors from diverse fields, among whom are some of the world’s best known investors. The banks independent directors comprises of B. Asoka Keerthi de Silva (Deputy Chairman), Dr. L. J S Harsha Cabral PC, Mohamed Aslam Omar, Priyantha Damian Joseph Fernando, Sunil Karunanayake and Sabry Ghouse. Non Independent Directors consist of Alexis Indrajit Lovell MBE (Chairman), HRH Prince Faisal Al Abdulla Al-Faisal Al-Saud, Kin Leong Chong and Gerard Ewe Keng Lim. Anil Amarasuriya functions as Chief Executive Officer/ Executive Director.


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...by i3gconsultants@ 12:09:40 on 2012-09-11

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Stock Watch: SAMP

Sampath Bank rewards e-remittance customers


Forty two loyal customers of Sampath E-remittance service were in for a bonanza during the Ramadan season participating in the Sampath Cash Wasi promotion.







Participants in the Sampath Cash Wasi promotion with their prizes and Sampath Bank officials


This was the second time that Sampath Bank conducted the Cash Wasi promotion to reward its loyal e-remittance customers. When it was introduced for the first time during the Sinhala New Year season, 32 winners were benefited. Sampath e-remittance Cash Wasi for Ramadan was one such rewards scheme of the bank’s continuous appreciation endeavors. The cash prizes of the e-remittance Cash Wasi for Ramadan were handed over to the winners by Aravinda Perera, Managing Director, Sampath Bank at Sampath Bank Head Office, Colombo, recently. Based on the total e-remittance transactions during the period July 17 to August 19 2012, N.L. Thomas bagged Rs 500,000 winning the Super Draw. The Grand Draw saw five winners collecting Rs 100,000 each. The winners were D. A. Ranjani, A. L. M. Nawpees, R M Chandrawathi, W T Sunitha K. Fernando and M. N. M. Asker. Jubilant Grand prize winner N.L. Thomas from Ragama said: “This came as a total surprise, and I couldn’t believe when I got the call from Sampath Bank. In fact, I wanted to have a fixed deposit with Sampath Bank some day, and ultimately it became a reality as my sister in Italy wanted me to handle her banking transactions in her absence. I was able to win Rs. 500,000 as a result of the money remitted by her.” L.F Nawpees from Horowpathana who won Rs. 100,000 for the money remitted to him by his brother in Qatar through Sampath Bank, said he did his transactions at Kahatagasdigiliya branch and thanked Sampath Bank for initiating such a promotion and making him a winner. Sunitha K. Fernando, from Ethulkotte, one of the winners said it was the first time that she was dealing with Sampath Bank. “My husband in USA, has been remitting money through other banks as well. But I am really satisfied with the service of Sampath Bank; it was so quick and friendly too. In fact, this cash prize was something I never expected.” D. A. Ranjani from Ganemulla said that she had won Rs. 100,000. Thirty six daily winners (two Daily Winners per day) were also rewarded through Daily Draws from the transactions made during the period of August1 to 18 2012. Each won Rs 15,000 in cash. Remittances received through all agents who are linked with Sampath e-remittance service were included in the draw. Tharaka Ranwala, DGM – Marketing & Business Development said that “Sampath Cash Wasi was one of the key draws with huge cash rewards introduced by a bank in Sri Lanka, for e-remittance customers to reward their loyalty”. E-remittances services offered by Sampath Bank are available across the world via 42 agent companies. Therefore anyone, from any part of the world can send money to his or her loved ones in Sri Lanka easily and at their convenience via Sampath E-remittance He said, the service is a big relief for the beneficiaries to get money quickly during an emergency. “You not only get the money in double quick time, but get maximum security for the money transferred. The money sent through e-remittances can be withdrawn in many ways which are very fast and reliable”, he said. If the remitter has made available a mobile phone number of the beneficiary, an SMS alert will be sent no sooner the remitted money is received in real time. This facility is made available free of charge. One of the leading private sector banks in Sri Lanka, Sampath Bank ranks third largest in Total Assets. As a new player, which entered the market just 25 years ago, the Bank faced many challenges and marked many milestones during its brief history. It earned the reputation for initiating many revolutionary changes in the local banking industry, particularly in terms of IT product innovation, e-remittance services and related financial incentive schemes to reward its loyal customers. Sampath Bank commenced its e-remittance services in the year 2000 and since then, Sampath e-remittance services have been widely accepted as a quick and most reliable way to transfer money to Sri Lanka. Sampath e-remittance Cash Wasi Promotions were introduced to reward its loyal customers and so far the bank has conducted two such promotions in Sinhala New Year and during Ramadan season this year. The bank anticipates continuing these initiatives with further value additions in the years to come.


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...by i3gconsultants@ 11:09:27 on 2012-09-11

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Stock Watch: REEF

Sri Lanka Citrus leisure group to sell time-share villas


Citrus Kalpitiya, a unit of Sri Lanka's Citrus Leisure group said it will build 32 villas bordering a lagoon in the Indian Ocean Island's western coast to be sold on 99-year leases with an offer to manage on a time-share basis.The firm is also planning a hotel in 78 acres of land it has in Kalpitiya, an area made up of a peninsula and lagoon, north of Sri Lanka' capital Colombo. The firm said it had acquired 35 acres for 67 million and secured another 42 acres on a 99-year lease from a company called Asia Sports Management Private Limited. "Under the first stage, we plan to build 32 upmarket villas that overlook the 50-meter wide fresh water way," the group said in its annual report. "Each villa, spread over 40 perches of land, is custom designed for owners with space to entertain on the property. "The villas will have their own gondola to allow residents to access the sea. We hope to sell the villas on a 99-year lease and give owners the option of allowing us to manage on a time share basis." 'Time share' is a concept where a person can 'purchase' the use of a hotel room or property in the same period in each year (such as a week) over the lifetime of the property (such as 25 or 30 years). They can use it or have it rented to other holidaymakers to get some income. In a typical property, times shares in peak seasons where the rooms are easily occupied has a higher value than a low season time share. The holder of one time share could swap it with another in one year and vacation in a different location or country. Time shares can also be sold when a secondary market develops and their value can fluctuate over time. Thought time share has attracted an unsavory reputation in some countries due to deceptive or high pressure selling tactics, and promises of secondary markets that do not exist in reality, in well regulated markets have developed in countries like the US they have become popular. A hotel which will be the second stage in the Citrus Kalpitiya project, will overlook the sea on a one kilometer beachfront and will have 24 individual chalets and 126 resort-style rooms, Citrus Leisure said. It is designed by architect Murad Ismail. The firm said has been earmarked as a future tourist zone, land bordering the lagoon or the sea, blocked off for the hospitality industry. "The area is also popular to spot whales or schools of dolphins, within a short distance from the Mainland," the firm said. "Kalpitiya is also strategically located close to the Wilpattu, wildlife sanctuary that is home to leopards, elephants, the sloth bear and many species of birds."


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...by i3gconsultants@ 16:09:13 on 2012-09-09

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Stock Watch: TYRE

CEAT adds more car sizes to radial range -Milaze


CEAT Kelani Holdings has announced the launch of two more sizes of radial tyres under its new 'Milaze' range for cars, widening choice for users of Sri Lanka's best-selling radial tyre brand. The two new sizes, 185/70 R 13 and 165/70 R 14, fit popular cars such as the Nissan FB - 14, Honda City (2001), Corolla AE 90 and similar models, Mitsubishi Lancer CK 2, Suzuki Swift, Toyota Vitz, Nissan March (Beetle) and Toyota Belta, the company said. The addition of these CEAT Milaze radials to the company's radial tyre portfolio increases the number of sizes offered by the brand in the car tyre segment to ten. "The Milaze range has been an instant hit in the market, encouraging us to offer a wider choice of sizes to match the cars on the roads in Sri Lanka," said Ravi Dadlani, Vice President Sales & Marketing at CEAT Kelani Holdings. "More sizes are on the way to ensure we have a complete portfolio of superior quality radials in the market." Raman Rajagopalan, Vice President Commercial & Business Development at CEAT Kelani said: "The CEAT Milaze tyre has been developed to international design, construction and standards. This will facilitate penetrating the export markets in 14 countries, helping to augment the company's export earnings." The CEAT Milaze range of radials launched earlier this year, represents improved performance features including a stylish tread pattern and improved compounds that offer greater riding comfort and longer tyre life. CEAT's radial tyre segment grew 50 per cent over the last three years, maintaining the brand's position as the number one car tyre in Sri Lanka. CEAT Kelani Holdings also produces a range of radial tyres in popular sizes for vans.A National Business Excellence Award winner in 2010 and 2011, CEAT - Kelani Associated Holdings is an Indo-Sri Lanka joint venture between the RPG Group of India and Kelani Tyre - Sri Lanka. The company operates three manufacturing units manufacturing truck, light truck, radial, motorcycle, three-wheeler and agricultural tyres and employs a workforce of 900 people. Besides its dominance in the radial tyre segment, CEAT's market shares in the Truck & Light Truck, Three-wheeler and motorcycle tyre segments stand at 58 per cent, 40 per cent and 15 per cent respectively, making it the single highest selling brand in Sri Lanka in these categories.


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...by i3gconsultants@ 13:09:48 on 2012-09-08

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Stock Watch: NHL

Nawaloka Radiology Dept. revenue up 40%


The Radiology and Imaging Department of pioneering healthcare leader Nawaloka Hospital, has recorded a significant increase in Radiology investigations to 100,000, for the twelve months to end-August 2012, compared to last year. As a result, revenues for the Radiology Centre have also risen by 40% year-on-year. According to Nawaloka Hospital Director/General Manager Prof. Lal Chandrasena, the rise in the number of medical investigations have been mainly due to a higher grade Siemens MAGNETOM Skyra 3.0 Tesla Magnetic Resonance Imaging (MRI) scanner which had been acquired by the hospital nearly an year ago, costing Rs 240 million. “The Nawaloka Hospital acquired the only 3.0 Tesla MRI Scanner in Sri Lanka just over an year ago. This machine, the Siemens MAGNETOM Skyra, has cost the hospital over Rs. 240 million and produces superior images of the highest quality when compared to the 1.5 Tesla scans which were only available previously,” commented Prof. Chandrasena. This MRI scanner which needs only 20 minutes to run a full body scan and provides more detailed, higher resolution images, had not only allowed Nawaloka Hospital's Radiology department to increase its overall number of MRI scans it schedules. Additionally and maybe more importantly for patients, it has led to a significant reduction in waiting time. Also, this is aside from added benefits such as halving the actual scanning time and more physical space available inside the MRI scanning device itself so that patients are less inclined to feel claustrophobic while in the machine.As part of its ongoing commitment to upgrading its Radiological services, Nawaloka Hospital also recently invested Rs. 120 million on two state-of-the-art digital X-ray units. Digital technology produces X-rays of crystal clear quality with significantly less radiation exposure. Allowing for quicker image processing and delivery as well as a higher resolution overall, these digital X-ray units have quickly become the preferred choice for both consultants and patients alike. Prof. Chandrasena also emphasised that Nawaloka Hospital's ongoing acquisition of the most technologically advanced medical equipment available in the Sri Lankan private healthcare sector today, was aimed at attracting the best medical consultants, as these technologies allow doctors the ability to perform quick and accurate diagnosis which enables better recovery. Prof. Chandrasena further added that the hospital was also in the process of completing the full digitalisation of its Radiology department which would enable consultants to view the radiology scan away from their desks, so that they may continue to produce urgent and life saving reports instantly, irrespective of time and place.


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...by i3gconsultants@ 13:09:48 on 2012-09-08

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Stock Watch: DIST

Sri Lanka's largest distiller says 'illegal' alcohol supply increasing


Illegal alcohol production is on the rise in Sri Lanka, made with 'artificial toddy' and spirits imported under the guise of making paint and baby cologne, Sri Lanka's largest distillery has alleged.D H S Jayewardena, chairman of listed Distilleries Corporation of Sri Lanka Plc (DCSL) told shareholders in the annual report that a sharp increase in 'artificial toddy', a key raw material for alcohol making, has been observed. He alleged that Sri Lanka's excise department is turning a "Nelsonian Eye" towards toddy contractors involved in the business. Toddy that is rejected by DCSL for not meeting quality standards were being bought by the contractors, which could even cause deaths among consumers, he said. "..[T]he Excise Department confesses to not knowing of the transport of such illegal sub-standard produce, although transport permits are given unabated which allows for the movement of such toddy," Jayawardena alleged. In Sri Lanka hard alcohol is heavily taxed, creating a state-induced incentive to smuggle or produce tax unpaid products. Excise authorities raid such operations from time to time. Meanwhile Jayewardene said smuggled imported spirits are also being used to produce hard liquor. "We see the paint industry and baby cologne industry increasingly becoming a façade for the importation of spirits in order to pass through customs, while also becoming a front for the illegal manufacture and sale of liquor..," Jayawardena said. "It is important that the Regulator within the Excise Department remains true to the diktats of his Office, ensuring that the market remains legal and clean, by working to eliminate corruption and ensuring that the law is enforced. "At present, the illegal market is a sizable portion compared to the legal market and if infused into the mainstream, the government can be assured of even more revenue which can in turn be invested in the vital infrastructure of the country." Industry sources say alcohol is a sector where the island's elected ruling class got involved in retail licenses and supporting large scale tax unpaid alcohol-making as rule of law gradually diminished in Sri Lanka over the past four decades. Legal analysts have said that rule of law and justice was undermined by the island's 1972 and 1978 constitutions where a once-independent public service was gradually made subservient to the elected ruling class. Many retail licenses held by those connected to the elected ruling class are 'leased' to those who actually operate the premises, industry sources say. Though small moonshine or 'kasippu' producers have always been a hallmark of the sector, industry sources say large scale distilleries - including those with licensed operations - that produce tax unpaid products, usually operate with political backing. Falls in legal alcohol sales in the past have been associated with political backing for one or more distilleries involved in tax unpaid products, they say. In the year to March 2012, the firm's revenues grew to 15.2 billion rupees from 13.5 billion rupees but profits fell to 4.3 billion rupees from 7.7 billion a year earlier. The firm said 36 billion rupees of excise duty collected from customers had been paid to the state. Jayewardene said there was an increase in demand for 175 millilitre and 375 millilitre bottles from people who were 'budget conscious' but chose to buy legal products. DCSL's fully owned subsidiary Periceyl, had seen a 75 percent sales growth in former war zones in the north and the east where a 30-year battle with Tamil Tiger separatists raged until 2009. "It is noted that during this time, illegal bottling was done in the jungles by some licensed manufacturers aided by terrorists, establishing a thriving albeit illegal industry," Jayewardena told shareholders in another startling revelation. Jayewardene praised the government for allowing retail licenses to be owned by manufactures through a recent change to the country's excise law. "This is assuredly a steppingstone in alleviating the illegal practices that have become characteristic of the current market and is certainly a step in the right direction to maintaining and strengthening a healthy legal industry," he said.


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...by i3gconsultants@ 12:09:48 on 2012-09-08

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Stock Watch: CINS

Ceylinco Life searches for more scholarship candidates


Up to 160 new scholarships with a cumulative value of Rs 8.3 million are to be awarded to students and young people from all districts of Sri Lanka at the 12th round of the annual ‘Ceylinco Life Pranama’ scholarships presented by life insurance leader Ceylinco Life.The company’s flagship policyholder rewards initiative in the field of education has benefited more than 1,461 ‘future leaders’ since the first awards ceremony in January 2002, with scholarships totalling Rs 44 million.Ceylinco Life this week announced that it has commenced the collection of applications from eligible students in all districts of the country, and will close applications on November 30, 2012 for the scholarships presentation in January 2013."The Pranama scholarship scheme continues to be one of the most valuable benefits that accrue to our policyholder community," Ceylinco Life’s Director/Deputy CEO Thushara Ranasinghe said. "However, its impact transcends that of a normal customer rewards scheme because of the size of our policyholder base and our island-wide reach, which ensure that the benefits of the scheme reach a representative segment of the populace."Ceylinco Pranama scholarships are presented to policyholders’ children who achieve the best results in their respective districts at the Year 5 scholarship examination, the GCE Ordinary Level, the GCE Advanced Level or those who excel at the national or international level in sports, culture, arts, drama or invention.Ceylinco Life also pays special cash awards to policyholders’ children who are placed second, third and fourth at district level at the GCE Advanced Level examinations.Applications for Pranama scholarships are available at Ceylinco Life branches island-wide. All examination results provided by applicants are checked and certified by the Department of Examinations. For the next round of scholarships, students who sat the Year 5 scholarship examination in 2012, the GCE (O/L) in 2011 and the GCE (A/L) in 2011 are eligible to apply. The National Merit Awards will consider achievements in 2011/02.


The Island

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...by i3gconsultants@ 12:09:14 on 2012-09-05

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Stock Watch: VFIN

Vallibel Finance reports 23% growth in Pre-Tax Profits


Financial arm of dominant holdings Vallibel Group, Vallibel Finance, showed marked growth in operations as the first quarter (Q1) of the new FY 2012/2013 draws to a close. Branch network expansion was seen as was growth in several key financial markers, the company said in a statement earlier this week.Over the months of July and August, the financier inaugurated branches in the cities of Galle and Chilaw. Speaking on the move, Jayantha Rangamuwa, Managing Director of Vallibel Finance, was confident of the company’s ability to penetrate a substantial customer segment through its aggressive expansion strategy. " We have been gradually evolving over the years, taking operations to areas where demand for financial solutions is high."Wherever we enter, we find customers eager for better access to funding for their small business, cheaper and easier leases, safer places for their earnings to be deposited and other safe and easy financial options. We have been able to deliver all that, while also making the process easier with less documentation."The Galle and Chilaw operations are full-fledged branches deploying the entire Vallibel Finance product range; Fixed Deposits, Leasing, Hire Purchase and Microfinance.The recently concluded first quarter of FY 2012/2013 has proven to be a "resounding success", the company said; Pre-Tax Profits stood at Rs. 107.9Mn, a 23% year-on-year increase from Q1 2011/2012. Total Assets, which were Rs. 6.6Bn at the end of the previous fiscal year, showed a 9% rise over the new quarter to stand at Rs. 7.2Bn. As a result of successful deposit canvassing campaigns, Total Deposits swelled by 16% to Rs. 4.5Bn from the Rs. 3.9Bn recorded at the end of FY 2011/2012. The financier was also able to minimize bad debts and non-performing loans through persistent loan recovery mechanisms and a careful credit policy; Gross Non Performing Loan (NPL) ratio stood at 2.90 and Net NPL at 1.33.Vallibel Finance represents the financial sector interests of the Vallibel Group, a multi-faceted holdings company with entrepreneur Dhammika Perera who is also Chairman of Sampath Bank PLC, at its helm. "While Vallibel itself has been extending its interests into unchartered territories, it is really heartening to see one of our envoys in the financial sector pursuing expansion aggressively and playing and integral role in Sri Lankan economic development. I strongly believe the path it is on will lead to the upper echelons of the sector," Perera said." The Vallibel group continues to cement its position in the Sri Lankan corporate sphere with far-encompassing interests including PABC Bank, Hayleys PLC, Delmege Fosyth and Company Limited, Amaya Resorts, Royal Ceramics PLC, LB Finance, Fortress Resort and Vallibel one etc," the statement said.


The Island

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...by i3gconsultants@ 12:09:14 on 2012-09-05

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Stock Watch: TFC

Real estate rich TFC optimistic


The beleaguered The Finance Company PLC (TFC) is optimistic about its future prospects as the company looks to make full use of its extensive island-wide presence and large land bank to fuel growth while fighting ghosts from the past and present."The Finance Company is on its journey towards greater and sustainable success. We possess in our arsenal an unparalleled network of branches located at the most strategic points spanning the length and breadth of our country. We also possess a very rich and diverse real estate portfolio together with commercial properties, the value of which will only increase given the current stability the country is experiencing. The land bank that is spread across the country and the branch network owned by our company, adds the impetus for further growth and of course excitement in our journey towards achieving greater heights," TFC Chairman Preethi Jayawardena told shareholders in the company’s latest annual report recently uploaded on to the Colombo Stock Exchange website.TFC continues to struggle with its legacy of being part of the Ceylinco Group and the more recent fiasco involving the sale of shares at an inflated price to the National Savings Bank in a deal which was annulled by the country’s executive."The only drawback the company has witnessed during the past year is the negative net-worth which resulted from the heavy losses the company incurred in the past after the Golden Key debacle. This was however resurrected to a certain extent through a new capital infusion of Rs. 1.6 billion and a deposit conversion of Rs. 2 billion which took place in January 2011 and all of us were committed in ensuring a complete and sustainable financial growth. We are now looking at a further infusion of capital for the company to reach its full potential and we are doing everything possible in order to achieve these goals we have set for the future," Jayawardena said."We also recently witnessed a highly publicized issue revolving around the share transaction between the National Savings Bank and The Finance Company. Needless to say, the negative publicity that was generated due to the transaction stifled the gradual growth we were witnessing to a certain extent with public perception turned against us. However, the trust and confidence that was placed in us throughout the entirety of our existence by our clientele and the Lankan public at large still continues to stay strong," he said.All major products of the Company have shown Y-O-Y increases in inflows, the loan disbursements in vehicle related products has improved by 123% and the pawning new investment by 237% in 2011/2012 compared to the previous year. Pawning has also shown 100% growth in market share amongst the RFC’s. Nine new Pawning centres were opened during the financial year 2011/12, increasing the number of pawning centres to thirty nine.The growth in the new intake of fixed deposits was 170% in the year 2011/2012 and the savings deposit intake of the company increased by 54% compared to the last financial year which is a clear indication of the public confidence that has been built up over the past two years, the TFC annual report said."On the Real Estate area of business the company is still the market leader and has had the privilege of being positively contributing the country’s land ownership. We have achieved over 350% growth in real estate stock movement during 2011/12 over the previous year. Taking these factors into consideration we have built the market strategy for real estate and established a product positioning that would also enhance the corporate brand image. TFC was ranked 37 among the top 100 brands in Sri Lanka in the 2011 by Brand Finance PLC – UK," TFC CEO Kamal Yatawara said.TFC reported a loss of Rs. 353.4 million for the financial year 2011/12, a huge improvement considering the Rs. 3.8 billion loss sustained the previous year.In its interim financial results for the June 2012 quarter, TFC sustained a huge Rs. 393.9 million loss, compared with Rs. 26.3 million profit a year earlier. Public deposits grew to Rs. 21.2 billion from Rs. 20.8 billion a year earlier.As at June 30, 2012, the Employees’ Provident Fund managed by the Central Bank was fourth largest shareholder of TFC with an 8.43 percent stake.


The Island

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...by i3gconsultants@ 12:09:14 on 2012-09-05

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Stock Watch: BOGA

Sri Lanka tea estate export unit in profits


BPL Teas (Pvt) Ltd, a tea marketing unit of Sri Lanka's Metropolitan group Bogawantalawa Estates Plc, has started making profits, chairman D J Ambani told shareholders."Besides continuing to service private labels, the company has made steady improvements in selected markets by venturing into establishing our own brand 'Ceylon Tea Gardens', through our partners in those markets through superior product quality," Ambani said. "It is important to continue to invest in development of infrastructure to improve safety and hygienic conditions at the processing centres in order to sustain these marketing efforts." BPL Teas is part of Sri Lanka's Metropolitan group. The firm is exporting to the USA, Europe and Japan. In the year to March 2012 the firm made after tax profits of 68.5 million rupees, against a net loss of 23.4 million rupees a year earlier. The tea growing parent firm said it lost money in tea with a 365 million rupee loss for the year partly due a steep wage increase and falling prices in the second half of the financial year.


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...by i3gconsultants@ 12:09:30 on 2012-09-05

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Stock Watch: LIOC

Sri Lanka IOC unit calls for fuel pricing formula


Indian Oil Corporation's Sri Lanka unit, Lanka IOC has called for a pricing formula for retail fuels which keeps parity with import prices a call that has been echoed by other economists and analysts."It would help everyone if the Government of Sri Lanka could evolve a long-term pricing formula which will provide for adjustment of duties and levies and revision in prices from time to time based on the international prices, with proviso to insulate consumers wherever required," Nene told shareholders in the annual report. "The formula should be such that it provides reasonable margins to the oil companies to invest in energy-related infrastructure, including storage and efficient distribution of petroleum products." Makrand Nene said several developing nations have tried to fix retail prices of fuel, as the volatility of global oil prices increased. "While many of them are resorting to tax and duty structure reforms, and even subsidies, so as to keep the selling prices at affordable levels for the common man, this does not appear to be a viable, long-term solution in the best interest of all the stakeholders," he said. "It is not only impacting the economies of several nations negatively but also affecting the financial stability of the oil companies, both Government-run and private, as they operate in an artificial pricing regime, disconnected from global realities." In the last few years the Indian petroleum sector was also thrown into crisis due to state price controls, and the firms including refiners were later bailed out with treasury bonds. The issuing of Treasury bonds however increases the national debt burden on every citizen. Analysts have pointed out that government trying to insulate consumers through energy price controls is simply a complex deception, practiced on an unsophisticated populace. In 2011 Sri Lanka subsidized power and petroleum with bank credit, pushing the country into a balance of payments crisis which resulted in the rupee falling from 110 to 132 to the US dollar, raising inflation across the board. In Sri Lanka balance of payments crisis in 1999/2000, 2008/2009 and 2011/2012 has been closely tied to energy price manipulations. Analysts trace the price deception through several phases. When international energy prices rise, the state forces utilities to run losses claiming to 'protect' consumers. The utilities then take bank loans to bridge the losses. The central bank then prints money to keep interest rates down in the face of higher credit demand. The state may also reduce taxes, depriving itself of revenue. The central bank will then print further money to bridge the revenue gap. The increase in demand can create economy wide continuous monetary inflation. The injection of rupee reserves in to the banking system, and the resulting credit and demand eventually push up import demand, putting pressure on the exchange rate. Users of imported energy also continue to spend on non-oil imports, as their disposable income is not reduced, putting pressure on the balance of payments through a widening trade deficit. As pressure on the exchange rate mounts, central banks of developing countries typically defend the exchange rate by selling dollars and simultaneously print more money to keep interest rates down, a process known as sterilized foreign exchange sales. The vicious cycle of dollars sales and rupee injections can only be halted by a float of the currency and the resulting depreciation alters the entire price structure in the island, forcing up prices of all goods not just oil. But an automatic fuel adjustment formula immediately cuts the disposal income of oil users reducing their ability to import non-oil goods, keeping the external sector balanced with domestic demand. Sharp spikes in bank credit demand are also avoided requiring no money printing to keep interest rates down, helping keep the exchange rate fixed and inflation low. After fixing oil prices through the second half of 2011, Sri Lanka raised energy prices, allowed interest rates to go up and floated the rupee. Inflation, which had been kept in low single digits since 2009, is now touching 10 percent. Like in India, energy utilities are bailed out with Treasury bonds, increasing the debt burned on future generations. India has taken steps to progressively 'de-control' prices. In countries where there is high public awareness about energy price deceptions, as well as the general understanding that a state can only spend the money taxed from citizens, or by creating inflation and currency depreciation through printing cash, energy prices are changed daily.

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...by i3gconsultants@ 12:09:43 on 2012-09-05

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Stock Watch: HAYL

Hayleys recognised as Sri Lanka’s most nation-minded corporate entit


The Hayleys Group was ranked amongst the top three most respected business entities in Sri Lanka and placed first for Nation-Mindedness in Lanka Monthly Digest’s ‘Most Respected Entities In Sri Lanka’ survey, the Group’s best standing since 2008.
The blue-chip diversified conglomerate displayed a marked improvement from last year in almost every category measured in the survey.
Hayleys Chairman and Chief Executive Mohan Pandithage attributed the rankings, which reflect opinions and perceptions of the corporate sphere, to the manner in which the Group integrates its strategy with goals and policies set out at a national level.
“It is truly pleasing to be placed within the country’s top three. Topping the podium for nation mindedness and ranking third overall amongst Sri Lankan entities is a reflection of our strong position in industries with tremendous future growth potential based on long-term economic and socio-political trends.”
One of the most diversified entities in Sri Lanka, Hayleys has succeeded in keeping its vision and strategy constant across the portfolio in order to yield positive performance and benefits to shareholders, the company said. The Group accounts for 2.51 per cent of the country’s export income and reflects the nation’s manufacturing, agriculture and service industries amongst its portfolio.
Hayleys has made a solid start to 2012-13, with several of its frontier Group Companies making waves at a national level in the first five months of the year.
Most recently the Group commenced wind power generation at Nirmalapura, adding 10MW to its renewable energy portfolio in a drive to cater sustainably to the country’s energy demands.
Earlier this year, Hayleys won a record 14 awards at the National AgBiz 2012 for agricultural excellence and dominated the Regional Plantation Company sector at the first National Plantation Awards by winning a total of 12 awards.
The Transportation sector launched automotive logistics for the Hambantota port, in response to the demands and growth in this segment. Hayleys Business Solutions became the country’s first CarbonNeutral BPO Company – reported to enhance Sri Lanka’s sustainable BPO hub status.
Hand protection specialist Dipped Products Group launched a new high-value range of specialised rubber gloves offering high voltage protection to global markets, while Purifications sector business, Haycarb Group became one of the first companies in Sri Lanka to successfully register and trade-in carbon credits.  Haycarb Group’s purification systems arm was also instrumental in providing waste water treatment infrastructure for the Pasikudah National Holiday Resort.
Commissioned and conceptualised by LMD, and conducted by Nielsen, the survey was designed to rank the Most Respected entities in Sri Lanka, based on opinions expressed by respondents and to find out why they are perceived as being the ‘most respected’.

Dailyft
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...by i3gconsultants@ 10:09:34 on 2012-09-04

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Stock Watch: ECL

Capital Trust Holdings buys 10% of eChannelling for Rs. 54 m


Capital Trust Holdings Ltd., yesterday bought 12.2 million shares amounting to 10% stake in eChannelling Plc. for Rs. 54 million.
eChannelling saw 31.36 million of its shares transacted via 1,513 trades for Rs. 150.1 million. Of that the largest block was 8.7 million shares done at Rs. 4.70 each. It touched a high of Rs. 5.20 before closing at Rs. 5, up by 30 cents.
Sri Lanka Insurance Corporation which as at 31 March 2012 held 25% stake was the biggest seller divesting about Rs. 90 million worth of eChanneling shares including the big block of 8.7 million shares held by the Life Fund.  SLIC’s General Fund held 16.4% and Life held 8.7% as at 31 March 2012. The biggest shareholder at eChannelling is British American Technologies Ltd with 27.4% stake.
In FY12, eChanneling Plc saw 43% rise in revenues to Rs. 88.2 million and net profit swelling by 1000% to Rs. 91.5 million over FY11.
Chairman P. Kudabalage said in the Company’s 2011/2012 Annual Report that eChannelling PLC has embarked on a number of new projects through its subsidiary ECL Soft (Private) Limited  which aims to position the group as a diversified entity focusing on e-business opportunities.
“The company is in the process of launching echannelling services globally which I believe would commence generating revenue in the immediate future. The company is actively looking at opportunities in Asia and the Middle East,” he added.
Deputy Chairman Ruwan Silva said: “The Board of Directors delayed external capital infusion to ECL Soft (Private) Limited since the market conditions  were adverse in the recent past, but looking at raising around US$2-3 Million to fund projects that the company  has embarked and to retire interest bearing borrowing made to partly fund equity investments.”

Dailyft
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...by i3gconsultants@ 10:09:27 on 2012-09-04

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Stock Watch: ATL

Amana Takaful records 32 % growth for 1H of 2012


Amana Takaful, recorded an impressive growth of 32% for the first half of 2012, well above the industry. The first half figures released by the company reflects a total Gross Written Premium(GWP) of Rs 770.8 million up from Rs.584.7 million in the comparative period of 2011. Individually, the first half General and Life businesses’ GWP of Rs. 603.3 million and 167.5 million respectively, grew by 32 % each in the same comparison. This compares with the overall industry growth of 11 % in which General and Life segments moved up by 17 % and 3 % respectively as per industry sources. This performance propelled ATPLC’soverall market position. The General business performance was well supported by the Motor portfolio growth as well as the Non-Motor classes which moved up by 29 %, in which Medical was at the forefront. With the launch of “PROSPER” an Investment-linked Life product in the second half of 2011, ATPLC realized a significant contribution in the overall growth. At an underwriting level, though the result was positive in comparison with the corresponding period last year, the significant increase in the Motor Claims stifled the planned performance goal. Notwithstanding the slide in the equity market conditions, the judicious management of our diversified investment portfolio yielded an upside in investment returns of 263 % over the same period last year. Despite the afore mentioned, ATPLC ended the half year with a loss of Rs. 34 million primarily driven by an over-run in Motor claims, as stated earlier. However, at Group level, a consolidated profit of Rs 43.6 million is reported to which the Maldives Takaful operation contributed substantially among the other subsidiaries. Amana Takaful Maldives (ATM), now in its first year of operation as a PLC, recorded a GWP of MRF 29.7 million Rs 252.3 million) posting a growth of 31 % over 2011.


Dailynews

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...by i3gconsultants@ 18:09:58 on 2012-09-03

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Stock Watch: LIOC

Sri Lanka IOC looks to expand lubricant export business


Lanka IOC, a unit of Indian Oil Corporation said it had exported 118.6 million US dollars of 'SERVO' branded lubricants and was planning to boost foreign sales further in the current year.It has been decided to further expand our business to South-East Asian countries by appointingLube Distributors in Indonesia, Malaysia, Myanmar, Singapore etc," managing director Dubodh Dakwale told shareholder in the annual report. "Assessment of the market and viability is being looked into for entering these countries in a big way." LIOC was now exporting lubricants to Nepal, Mauritius and Maldives. In the domestic market, SERVO has gained a 16 percent share, becoming to second largest brand, the firm said. In the year to March 2012, sales had grown 12 percent. Chairman Makrand Nene said 60 percent of the lubricants were now being made at its Sri Lanka blending plant. About 90 percent of the packaging was also local. LIOC was also supplying lubricants to the Sri Lanka Air Force. Though the firm lost money at time from petrol and diesel due to state taxes and selling price controls, its bunkering, lubricant and bitumen businesses were profitable. Bitumen sales volumes had risen 167 percent with higher demand from road construction, the firm said.

LBO

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...by i3gconsultants@ 18:09:39 on 2012-09-03

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Stock Watch: CINS

Ceylinco Insurance posts impressive half yearly results


Ceylinco Insurance said this week that it “has declared imposing results for the first half of 2012”. In a media statement issued by the company, its Managing Director/CEO Ajith Gunawardena, said, “the first half of 2012 saw the company record a total premium income of Rs.10.5 billion, with the General and Life Divisions contributing a mammoth Rs.5.5 billion and Rs.5 billion, respectively”.At the half way mark of 2012, the company earned a pre-tax profit of Rs.172 .6 million, the statement said. As at 30th June 2012, the total assets of the company increased to Rs.63.2 billion, up by Rs.1.9 billion when compared with Rs.61.3 billion in December 2011.� The statement said the company has paid out Rs.3.7 billion, as claims, during the first half of 2012. “The insurance industry at large recognises Ceylinco Insurance as the only company to settle all claims on the spot; an unmatched achievement as yet,” the statement claimed.


Sundaytimes

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...by i3gconsultants@ 14:09:51 on 2012-09-02

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Stock Watch: SINS

Singer’s working capital will not deteriorate : Fitch


Singer Sri Lanka uses a short-term facility worth Rs. 5 billion to service its working capital requirements, according to ratings agency Fitch. Further, the ratings agency also opined that “it does not expect its working capital dynamics to deteriorate materially in the near term given Singer’s strong market position and strong bargaining power with its suppliers and distributors”.This was revealed as a part of the ratings agency’s recent announcement that it had assigned a National Long-term rating of “A(lka)”, with a “Stable” outlook, to three-year senior unsecured redeemable debentures proposed by Singer. In addition, it was further indicated that the rating “reflects the company’s multi-brand product portfolio that is diversified across price points and its well managed financing operations. Also, Singer has good access to credit from local banks, and regularly accesses capital markets to raise debt which has broadened its funding avenues… Singer expects to utilise part of the issue proceeds to repay maturing debentures, while the remainder will help restructure its balance sheet by lengthening the maturity profile of its debt”.At the same time, Fitch has noted that Singer had unutilised, but approved, bank lines of Rs. 2.1 billion covering term-debt due within a year of Rs. 610 million, as well Rs. 362 million in cash reserves.


Sundaytimes

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...by i3gconsultants@ 14:09:51 on 2012-09-02

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Stock Watch: NDB

NDB raises $ 50m


NDB concluded its debut international loan syndication for $ 50m. NDB became the first bank to break the 12 month tenor and price into an 18 month facility. The transaction attracted interest from a number of Middle Eastern and Asian Banks. HSBC acted as the Lead Arranger and Bookrunner. “NDB’s success in its debut international loan syndication demonstrates the confidence placed by the international financial community on the bank’s strong fundamentals, its standing in the local banking industry and the positive growth outlook of the country,” said Chief Executive Officer, Russell De Mel. “Despite the current global financial uncertainties, the offering drew strong international support. This facility also paves the way to tap new investors and funding partners and reinforces NDB’s acceptance among a wide network of international investors for its future dealings,” a spokesman for the Bank said.


Sundayobserver

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...by i3gconsultants@ 13:09:17 on 2012-09-02

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Stock Watch: COMB

ComBank launches savings account for women


A new savings account with exclusive benefits for women has been launched by the Commercial Bank of Ceylon in recognition of the fact that women are shouldering an increasing number of responsibilities, while heading households, resulting in the economically active female population in Sri Lanka undergoing rapid growth. Branded Anagi Women’s Savings Account, the new account offers an interest rate over the normal savings rate. Gold loans at a concessionary rate for the purchase of jewellery and a Combank shopping debit card will also be given, a spokesman for the Bank said.


Sundayobserver

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...by i3gconsultants@ 13:09:17 on 2012-09-02

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Stock Watch: SLTL

SLT broadband package for Govt employees


Sri Lanka Telecom (SLT) unveiled the 'Abhimaana' broadband package designed exclusively for government sector employees and pensioners. A spokesman for SLT said government sector employees are the lifeblood of the nation and that their tireless contribution was powering Sri Lanka's march towards prosperity and progress. Government sector employees are the 'abhimaana'; pride of the nation. The package is denoted by a 'nil manel' or blue lotus, the national flower of Sri Lanka. At the core of the flower is the blossoming new era of peace and prosperity that Sri Lanka is experiencing currently, while the government sector employees are like the petals, which protect and enable the flower to blossom and grow. SLT Group chairman, Nimal Welgama said, "In keeping with the aim of the Mahinda Chinthana of bringing back glory to Sri Lanka as a centre which disseminates knowledge, SLT has devised this broadband package exclusively for government employees and pensioners. Sri Lanka can become a knowledge hub and the Abhimaana package is a giant step ahead for employees of the government sector to enhance IT literacy and to make 100 percent IT literacy a reality in the public sector, which employs thousands of employees across the country." "SLT partners the growth of the nation and we are hopeful this package serves as a sincere mark of our respect to the valuable contribution made by public sector employees," he said. In keeping with the Mahinda Chinthana in developing ICT literacy in the country, the Government launched many initiatives to transform this vision intro reality. As the largest telecommunications provider, SLT is playing a key role in supporting the government's vision by fostering innovation and driving IT literacy.


Sundayobserver

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...by i3gconsultants@ 13:09:17 on 2012-09-02

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Stock Watch: SEYB

Financial indicators show Seylan's stablity -CEO


Despite high interest rates, core banking activities are increasing and have contributed a major share to Seylan Bank's profits, said the CEO of Seylan Bank, Kapila Ariyaratne. Interest rates have gone up and the Rupee has depreciated and these factors have a negative impact on business activities. People need time to adjust to new conditions, he said in an interview with the Sunday Observer.


Following are excerpts of the interview:


In 2008, Seylan Bank fell into crisis after the collapse of Golden Key Credit Card Company and crisis in the Ceylinco Group. The confidence the people had in the Bank suffered and customers started to pull their money out. The Bank had the ability to pay and the Central Bank and the Government intervened and recapitalised the Bank. Today government institutions hold a large stake in Seylan Bank. Sri Lanka Insurance and the Bank of Ceylon hold 30 percent Seylan shares, while LOLC and Browns account for 25 percent. Today Seylan is independent of the Ceylinco group and has regained its glory and rebuilt the confidence of its customers. The Bank is strong and all indicators show our stability. Our capital adequacy ratio is 14 percent, well ahead of the statutory requirement of 10 percent. The NPL ratio is continuously declining from 30 percent in 2009 to 14 percent in 2012. Some of the non-performing loans include the loans given to mega projects and property development such as Hyatt Regency and we hope to recover them at a compensation tribunal. Our ratings too have improved from BBB+ last year to A - this year. A strategic plan for 2012-2015 is in operation with focus on the customer, new product development and value addition and it has begun to show results. After tax profit of Seylan Bank for the first half of the year was Rs. 1.02b compared to Rs. 1b for 2011. Our half-year profit has exceeded the achievements of the whole of last year. Growth came mainly from our core banking activities. Capital gains and equity market activities were sluggish during the period. Deposits, advances, trade financing, foreign remittances and credit cards were the main source of profit. During the first half of this year advances grew by 19 percent and deposits by 18 percent and net interest income increased by 15 percent to Rs. 4,276m. Non-interest income increased from Rs. 1,171m to Rs. 1,237 million during the period. Foreign exchange income grew by 20 percent in the first half of the year against the corresponding period last year. We have confidence in maintaining this growth momentum. "We have a human resource development plan focused on skills development of the staff and on risk management. We focused on the control of overhead costs by improving cost efficiency and as a result the cost to income ratio improved to 67 percent, a reduction of six percent in the first six months of the year." "There are opportunities in the economy and there is a demand for credit from SMEs, agriculture, fisheries and trade sectors. " "We are strong in these segments and have planned to launch new products for them. New strategies will be implemented to provide a better service for expatriate workers including expansion of our presence overseas." "Last year the Bank expanded its branch network opening new branches in the North, the East and other regions. Today we have 137 branches and another ten will be added during this year." "Our focus today is building customer confidence and we have seen success in this regard. Banking is all about confidence. Our staffers had to work hard to build customer confidence after the crisis we faced in 2008. Despite the intensively competitive environment the deposit base of the Bank grew by Rs. 10.3b." "The Seylan rights issue of Rs. 4.6 b in 2011 was oversubscribed and this year we expect to go for a debenture issue of Rs.1b with the expectation to increase it to Rs. 2b to further improve our capital base." "At the same time it will enable us to strengthen our lending portfolio. The negotiations we had with multilateral agencies and international banks on long-term financing to strengthen our tier two capital were successful," he said.


Sundayobserver

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...by i3gconsultants@ 13:09:15 on 2012-09-02

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Stock Watch: LLUB

Lubricant market growth slows in 2Q


The lubricant industry has not grown since the start of the second quarter this year, though there were prospects in the first quarter, said Chevron Lubricants Lanka PLC CEO, Kishu Gomes. He said that the market failed to keep the momentum of the first quarter due to unexpected volatilities in the macro economy as a result of global and local developments. The market in Bangladesh too is facing a similar or even worse situation, while the market volume of the Maldives grew by double digits. “The increase in duty on vehicle importation to minimise the currency drain out of the country adversely affected vehicle growth in the past two years. Another reason for the lubricant market volume contraction is the preference for products of higher technology, which offer extended oil drain intervals,” Gomes said. “Modern tech savvy consumers keep moving up the value ladder which is encouraging for lubricant companies which believe in technology. ""The brand shift from Lanka brand to Caltex brand has been good for us. We, as the market leader have been investing heavily and put in a huge effort to educate customers in opting for superior technology,” he said. CEO Gomes said that the European economic crisis has an indirect impact on the lubricant industry. If not for the global crisis our income as a country would have been at a much higher level than what we have experienced so far. Tourism, FDIs, expatriate worker remittances and exports would have done much better and it would have had a positive impact on the exchange rate and local inflation.“With the current issues we face, market consumption has reduced not only in the lubricant industry but across many industries due to lower purchasing power. This is true for many markets across the world. So we cannot complain about it as an isolated issue impacting only Sri Lanka,” Gomes said. Depreciation has caused a bad impact on the lubricant industry. The devaluation of the rupee by over 15 percent within four to five months is affecting the economy. No one expected the currency to decline so sharply in such a short period. If it's a one time correction that was needed to create a more healthy medium to long-term economic environment, then there would not be an issue. “The gradual strengthening of the rupee experienced over the past three weeks is a welcome sign and I hope it will gain more strength,” he said.We asked “What are Chevron's plans for expansion?” “Chevron will expand its export market to bring in more foreign revenue into the country. I believe, from the country's perspective, that there is no better time to do this than now. The company is observing the movement of the regional market with a lot of infrastructure development taking place in many parts. This would change the market size in those areas and we have plans to strengthen our distribution network and invest in targeted areas. The North and the East markets continue to grow despite a challenging environment. The two markets will reach around 15 percent market potential which is higher than many industries,” Gomes said.


Sundayobserver

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...by i3gconsultants@ 13:09:15 on 2012-09-02

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Stock Watch: VPEL

Seychelles delegation visits Vallibel hydro power plant


A delegation of senior officials of the Government of the Seychelles who accompanied the President of the Republic of Seychelles, James Alix Michel on his state visit to Sri Lanka, paid a visit to the mini hydropower project of Vallibel in Erathna, Kuruwita. This visit was the result of the interest expressed by the Seychelles Government to study the power generation strategy of Sri Lanka and the suggestion of the Ministry of External Affairs to visit the facility operated by the Vallibel Power Erathna plc. The delegation consisting of Minister of Natural Resources and Industry, Peter Andrew Sinon, Chairman of the Boat Owners Association, Beatty Salome Hoarau, Director General of Trade in the Ministry of Finance, Trade and Investment, Charles Angelin Morin, First Secretary Desk Officer for Sri Lanka, Ms. Johnette Stephen and officials of the Ministry of External Affairs visited the power plant.


Sundayobserver

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...by i3gconsultants@ 13:09:54 on 2012-09-02

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Stock Watch: TANG

Tangerine posts best ever profit since founding


Tangerine Beach Hotels PLC has, 32 years after founding, posted its best ever profit of Rs.127.8 million in the year ended March 31, 2012, up from the previous year’s Rs.73.9 million as the country’s earnings from tourism continued to grow significantly.Tangerine Chairman George Ondaatjie noted in the company’s annual report that the average spend by a tourist for a night had increased to US$ 97 in the year under review from US$ 88 the previous year due to enhanced facilities and increased arrival of high-end tourists.He noted that last year’s tourist arrivals at 855,975, up 30.8% from the previous year, was the highest ever recorded by the country.Tangerine’s 66% occupancy during the year under review was slightly lower than the previous year’s 67% but turnover was up by 31% with revenues of Rs.470.2 million mainly due to higher average room revenue.Ondaatjie said that their profit for the year can be termed "an immense result" as the resort hotel industry is sensitive due to global economic conditions.The company’s Joint Managing Director, Ms. Angeline Ondaatjie, said Tangerine Beach Hotels had posted another great year in 2011/12 growing occupancy and room count faster than the industry."We played vigorously in the marketplace. But we played it safe with our finances, as we enter 2012 with our strongest ever balance sheet," she said. Ondaatjie said this was the company’s strategic plan since the crises receded and it is paying off as they distanced themselves from the competition and accelerated their growth trajectory."Tangerine Beach Hotels has a great outlook as it remains one of the most sought after hotels by tour operators, travel agents and individuals as it’s great value for money in its star category," she said."We have obtained significant increases in pricing but still remain value for money as demand has shifted to the three-four star hotels."Their turnover was up 31.65% to Rs.470.2 million during the year under review and their net profit of Rs.127.8 million compared with a profit of Rs.73.9 million achieved the previous financial year.Occupancy and average room rates had increased to a significant level and with the cessation of hostilities, the hospitality industry had dramatically turned around. She was confident that higher spending holiday makers would be attracted to post war Sri Lanka but said that the industry cannot sit back and relax.There were some major challenges ahead and they have embarked on improving capacity with investments in infrastructure and human resources to harness the full potential of peace and tourism opportunities.The year under review saw 40 rooms refurbished and two more wings of the hotel are also being done up. This work will also cover the banquet facilities and bar lounge with more rooms added to cater to day traffic on week-ends.They are providing wi-fi facilities to all rooms during the upcoming winter season and their suites are now on par with the best in the region.Tangerine Beach has a stated capital of Rs.244.8 million, a revaluation reserve of Rs.1.2 billion and retained earnings of Rs.529.8 million in its books. Total assets ran at Rs.2.2 billion and total liabilities at Rs.214.9 million.Nilaveli Beach Hotels with 26.68%, Mercantile Investments & Finance (19.5%) and Mr. George Ondaatjie (10.13%) are the major shareholders of the company. The EPF too owns 6.76%.The directors have approved a dividend of Rs.0.50 per share for the financial year 2011/12.The directors of the company are: Messrs. George Ondaatjie (Chairman/Jt MD), A.M. Ondaatjie (Jt. MD), G.G. Ondaatjie, T.J. Ondaatjie, V. Balasubramaniam, C.A. Ondaatjie, N.H.V. Perera, S.D. de Silva (Alternate H.A.A. de Silva) and L.H. Jayasinghe.


The Island

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...by i3gconsultants@ 13:09:04 on 2012-09-02

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Stock Watch: LOLC

LOLC says it has aligned with country’s growth trajectory


article_image

LOLC PLC, now sitting at the apex of a fast growing conglomerate as its holding company, has posted a group after-tax profit of Rs.8.93 billion in the year ended March 31, 2012, up from Rs.7.02 billion a year earlier but not declared any dividend to shareholders.The LOLC group which is into a variety of businesses outside its core financial services had total assets of Rs.145.3 billion in its balance sheet as at March 31, 2012 against total liabilities of Rs.102.2 billion.The company’s Chairperson, Mrs. Rohini Nanayakkara, has told shareholders in the annual report that the group had identified itself as the largest non-bank financial institution in the country by growing and diversifying, often in unconventional ways, in response to changing market conditions."We were the pioneers in leasing to small and medium enterprises; SMEs are now the largest contributor by sector to the Sri Lankan economy. We remain the market leader in factoring, another LOLC innovation of particular significance to the SME community. We are also moving strongly into microfinance, a largely-untapped market in most regions, with a diverse product mix ranging from asset financing to group loans and now micro insurance – another first from the LOLC group," she said."The secret of our success remains our sensitivity and responsiveness to market needs."She said that LOLC was eager to exploit opportunities arising from the aggressive development goals of the economy, especially in segments such as leisure, agriculture, construction and renewable energy. Given their flexible business model, extensive footprint and diverse product mix covering the entire financial value chain, she said that the group was well poised to take advantage of emerging opportunities.The group’s Deputy Chairman, Mr. Ishara Nanayakkara, said that the agility of their business model was an essential factor for the group’s continued success. Starting out as a leasing company, they had first transformed themselves into a broad-spectrum financial provider adding businesses as opportunity dictated."Now we have gone further, investing in hotels and tourism, construction, agriculture and plantations, renewable energy, trading and manufacturing and several other growth sectors. Some of these were through mergers and acquisitions. For others we set up new entities ourselves or in collaboration with strategic partners," he said.Nanayakkara disclosed that even today 55% of the group’s income is derived from financial services. Starting out as a leasing company in the early days of the liberalized economy, they had helped revolutionize the small and medium sector by financing assets for productive use. Last year they had transformed themselves into a holding company with controlling interest in six firms offering diversifying financial services.Their newest subsidiary was LOLC Securities Limited launched during the year under review. Though they were new to stock broking, this company had in less than 12 months of operations become a leading stockbroker included among the top 10 based on annualized turnover."The decision to move beyond financial services was not taken lightly. Our main motive was a desire to align ourselves with the economic goals of the nation, since by doing so we are more likely to secure long-term operational viability and profitability. The prospect of developing a sustainable value chain by exploiting synergies between our various investments was another strong inducement," he said.The Browns group was today their subsidiary and, together with that 137-year old company, LOLC maintained a healthy portfolio of investments ranging from banking to hotels, construction to forestry; plantation to agri inputs.In partnership with Browns, LOLC now owns the Confifi group and its portfolio of hotel properties – Eden, Riverina and Club Palm Garden in addition to Tropical Vilas, another hotel closely situated."We are actively looking for a strategic partner to what might be the largest resort complex in the country on completion of the proposed development," Nanayakkara said.He also reported that they have acquired one of the most uniquely-positioned resorts in the Southern coast – Dickwella Resort and Spa, in the year under review. Their investment in the leisure sector, he said, is long-term with a view to being one of the leading players in the nation’s most promising sector."As for our non-finance businesses, they already contributed 45% of group income, we will place them at the centre of our strategic focus, keeping a keen eye out for synergies between them. We have already made our investment choices. Long-term opportunity and a sense of timing will continue to determine our investment strategy. Continuous restructuring, internal and external, will keep us agile and sensitive to economic and social currents," he said.The group’s MD/CEO, Mr. Kapila Jayawardena described the year under review as an exceptional one for the group which had earned an unprecedented pre-tax profit of Rs.10 billion even as they transformed themselves into a diversified business conglomerate through strategic expansion and investments."By aligning its vision with that of the government, the group is on the fast track to pursue its ambition to build one of the strongest conglomerates in the country," he declared.Jayawardena reported that Lanka Orix Finance PLC (LOFC) has taken over its parent company’s leasing and financial services business, including fixed deposits, enabling LOLC itself to function more effectively as a holding company. LOFC has successfully sustained its non-performing loans ratio as among the lowest in the industry.He said that they see a bright prospect ahead for the leisure industry of which the recent uptick in tourist arrivals is merely the first glimmer. Large scale infrastructure development and the commission of the southern expressway are generating opportunities with government’s concentrated focus on tourism beginning to pay dividends."LOLC has created strong links between sectors vital for the country’s economic growth and its core businesses. By aligning its business interests with these sectors, LOLC has placed itself on a strong upward trajectory that will grow steeper as post-war growth and development begin to show returns," Jayawardena concluded.The LOLC’s group’s quoted share portfolio costing Rs.8.3 billion had a market value of nearly Rs.10.3 billion as at balance sheet date. The portfolio included large shareholdings in Acme Printing & Packaging, Browns Beach Hotels, Chemanex, Dialog, HNB, HDFC, Lion Brewery and Seylan Bank among others.The company’s portfolio costing Rs.3.18 billion had a market value of Rs.3.12 billion.Orix Corporation of Japan with 30% of LOLC is the company’s biggest shareholder followed by Mr. R.M. Nanayakkara (29.76%), Mr. I.C. Nanayakkara (12.6%) and Mrs. K.U. Amarasinghe (11.03%). The EPF (3.11%) and the Sri Lanka Insurance Corporation Life Fund (2.26%) are also among the top 20 shareholders.The directors of the company are: Mrs. Rohini Nanayakkara (Chairperson), Messrs. I.C. Nanayakkara (Deputy Chairman), Mr. W.D. Jayawardena (Group MD/CEO), Mrs. K.U. Amarasinghe, R.N. Asirwatham, H. Ichida, M.D.D. Pieris, R.A. Fernando, R.M. Nanayakkara, M. Kawano and Miss C.S. Emmanuel (Secretary).


The Island

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...by i3gconsultants@ 13:09:04 on 2012-09-02

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Stock Watch: JINS

Janashakthi knocks up stellar performance - announces interim dividend


Janashakthi Insurance PLC recorded another strong performance at the half year in 2012 and has announced a dividend of 1 rupee per share. The Company raises the bar in its dividend yield and continues to maintain the highest stated capital structure. The dividend improves on the previous years high, delivering a 9.25%  for 2012 versus 6.25%  and 6.67%  for 2011 and 2010 respectively.  The 2012 dividend helps Janashakthi retain its position as the Insurer with the highest dividend yield in recent years. "Insurance is a long term business and the stated share capital gives a strong signal of commitment and stability to stakeholders of the sustainability of the business," Managing Director Prakash Schaffter said.During the first six months ended in 30th June the Profit After Tax amounted to LKR 164 million. Total assets rose from LKR 13 billion to LKR 14 billion and the Company was able to record a 14% growth rate in its combined Gross Written Premium (GWP) of LKR 3.8 billion. "Janashakthi has recorded a stellar performance and has been consolidating the Company’s products and services to provide our valuable customers an even better quality of service than we have done in the past. We have paid out a high amount on claims and this is indicative of our commitments to our customers in their time of need. It looks like Janashakthi has recorded the highest profit after tax amongst the peer group of insurance companies. This is a consistent performance in keeping with the Company’s performance in the prior year, where the Company again had the best results for profit after tax as at the half year mark," stated Bertal Pinto-Jayawardene, General Manager – Finance and Planning. "Janashakthi continues to reflect a very healthy stated capital structure in having nearly 8 times the required level of capital for its business operation. We have the highest stated share capital of any listed insurance company by a long chalk. Insurance is a long term business and the stated share capital gives a strong signal of commitment and stability to stakeholders of the sustainability of the business."  further added Prakash Schaffter.The net earned premium of Janashakthi was LKR 3.2 billion and the Life Fund rose by 10% from LKR 4.7 billion to LKR 5.2 billion. The Company also recorded a 10% growth in revenue from LKR 3.4 billion to LKR 3.7 billion and marked a motor sector growth of 18% in GWP which rose from LKR 1.7 billion to LKR 2.1 billion. The Company has recorded a stellar growth in all areas of general insurance and is focusing on developing the range of our products for the life segment to ensure that the Company provides unmatched products for the differing needs of the Sri Lankan consumer.  Their Life Unlimited product, for instance, was the first and only product anywhere in the world to offer hospitalisation cover even after the policy matures. The Company has also controlled cost and maintained healthy underwriting profits. The Company has also controlled cost and maintained healthy underwriting profits.This year Janashakthi entered into agreements with both Commercial Bank and Union Bank for bancassurance - providing customers convenient access to a multitude of Janashakthi’s insurance solutions for individuals and corporates. Janashakthi has also been expanding its already widespread branch network with significant growth in the North and East, opening a new branch in Mullativu and upgrading the Chavakachcheri office.Janashakthi has a widespread branch network in all corners of the nation and has a growing market segment in rural Sri Lanka. The company’s stellar performances across the board needs to be taken in the context of the company’s continuing commitment towards social responsibility initiatives. The rural athletes sponsorship program needs to be highlighted as the consistent of the company over the years in this sphere. It paid off when the only female medalists for Sri Lanka at the Junior Asian Athletic Championship were athletes sponsored by Janashakthi. Janashakthi Insurance PLC has served the nation for 18 years, and continues to shine in Sri Lanka’s insurance sector. Janashakthi has an excaeptional track record of financial stability and claim settlement. It has the highest stated capital of LKR 1.49 billion among quoted insurance companies in Sri Lanka, with LKR 14 billion in assets and over LKR 7 billion in annual gross written premiums. Janashakthi has paid over LKR 20 billion in claims to its policy holders.Janashakthi’s Board has established internal control systems, including a comprehensive risk identification, measurement and mitigation process. The composition of the Board is exemplary on many fronts, providing a proper balance of non-executive independent directors and due gender diversity. The Board consists of W. T. Ellawala (Chairman), C. T. A. Schaffter (Deputy Chairman), Prakash Schaffter, L. C. R. de C. Wijetunge, Manjula Mathews, Deshamanya Dr. Nihal Jinasena, Ramesh Schaffter, Eardley Perera and Anushya Coomaraswamy.


The Island

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...by i3gconsultants@ 13:09:04 on 2012-09-02

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Stock Watch: TYRE

Kelani posts good results in the teeth of challenges


Kelani Tyres PLC has posted an exceptional result in the year ended March 31, 2012 in the teeth of challenges including import duties on truck and bus tyres being slashed by 50% in the last budget and unanticipated exchange losses due to the depreciation of the rupee, the company’s Chairman, Mr. Chanaka de Silva has told shareholders in the company’s recently released annual report.He said that their joint venture companies had achieved a sales turnover of Rs.9.64 billion and earned a pre-tax profit of Rs.823 million in the year under review.These companies have been boosting production, sales and export earnings in recent years with average production during the year under review at 14,705 mt, average sales at Rs.9.64 billion, average operational profit Rs.962 million and the average profit after-tax Rs.639.2 million.De Silva said that their CEAT radial passenger car tyre was the largest single branded radial car tyre in the market and they were moving towards adding new sizes to the product range.They had developed and introduced a special T+20 compound in all their truck/bus tyres for enhanced mileage and were introducing other features that will enable this range to perform in line with other premium Indian Bias tyre brands.Further, 94% of installed downstream capacity was being utilized with exports now amounting to 32% of total sales. The company was working towards a target of over 40% exports.De Silva also announced that his board, after much study, has decided to invest approximately Rs.1 billion to more than doubling their radial car/van tyre production to 500,000 per annum to cater to domestic and export sales."This is a very exciting project for all of us since successful completion of this project will recognize us as a relatively high-tech steel belted radial tyre manufacturer in the region," de Silva said.He complained that Kelani continued to face unfair competition from under-invoiced imports into the country but were thankful to the authorities for taking measures to combat this serious problem.The directors have approved the payment of an interim dividend of Rs.1.45 per share absorbing Rs.104.9 million for 2012/13. This was slightly up from Rs.1.40 (gross) dividend declared the previous year which absorbed Rs.101.3 million.Kelani Tyres itself posted a group revenue of Rs.4.6 billion, up from Rs.3.9 billion the previous year and a profit after-tax of Rs.299.2 million, up from Rs260.8 million the previous year.At company level revenue was up to Rs.181.1 million from Rs.129.1 million a year earlier and the net profit up to Rs.132.9 million from Rs.91.3 million.The company has a stated capital of Rs.402 million, revaluation and other reserves of Rs.439.6 million and accumulated losses of Rs.149.7 million in its books.Total assets for the company ran at Rs.578.2 million and total liabilities at Rs.86.3 million. At group level total assets stood at Rs.2.82 billion and total liabilities at Rs.1.41 billion.Silverstock Limited with 41.69% was the largest shareholder of the company followed by UBS AG Zurich (9.01%), Mr. N. Ganarajah (7.87%) and Mr. M.M. Udeshi (6.05%).The directors of the company are: Messrs. Chanaka de Silva (Chairman), Rohan T. Fernando (MD), Lasantha P. Fernando, T. Bevan Perera, H.S. de Silva, Ranjit M.S. Fernando and D.S.K. Amarasekera.


The Island

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...by i3gconsultants@ 13:09:04 on 2012-09-02

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Stock Watch: SWAD

Swadeshi posts Rs. 18 mn. group profit after tax


The Swadeshi Industrial Works PLC, the old established and modestly capitalized company manufacturing toilet soap, laundry soap, detergents and personal care products has posted a group profit after-tax of Rs.18 million in the year ended March 31,2012, up from Rs.0.6 million a year earlier on a turnover of Rs.2.27 billion, up from Rs.1.92 million the previous year.At company level, turnover was Rs.1.5 billion, up from Rs.1.3 billion the previous year, and the profit after-tax Rs.32.8 million, up from Rs.3.3 million a year earlier.Mrs. A.M. Wijewardene, Chairperson/MD of the company, said that turnover was up 18.1% during the year under review while the pre-tax profit of Rs.40.3 million was slightly lower than the previous year’s Rs.41.1 million."We will continue to focus on improving distribution and the availability of our products across the country. We will further consolidate our efforts to enhance the brand image of our products during the year," she has told shareholders in the company’s annual report."Measures implemented to improve our working capital management will be streamlined further with the objective of reducing interest costs."Swadeshi has a stated capital of Rs.1.3 million, reserves of Rs.8.6 million and retained earnings of Rs.113.8 million in its books.Total assets ran at Rs.766.7 million and total liabilities at Rs.643.1 million.The directors have recommended a dividend of Re.1 per share to shareholders.Dr. T. Senthilverl is the largest single shareholder of the company with 35.41% followed by Mrs. A.M. Wijewardene (33.65%) and Sedawatte Exports Limited (19.43%).The directors of the company are: Mrs. A.M. Wijewardene (Chairperson/MD), Messrs. V.M.J.A. Perera, T. Wijemanna, P.D. Samarasinghe, Mrs. C.S.M. Samarasinghe and D.L. de Saram.


The Island

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...by i3gconsultants@ 13:09:04 on 2012-09-02

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Stock Watch: EDEN

Eden posts best ever profit,embarks on ‘rolling refurbishment’


Eden Hotel Lanka PLC, now under the banner of LOLC Leisure, has posted its best ever profit in the year ended March 31, 2012 reporting a pre-tax profit of Rs.171.6 million, 52% up from a year earlier and a profit after-tax of Rs.146 million with revenues seeing steady growth over the years."These positive results were achieved while maintaining a healthy average occupancy rate of 64% throughout the year," Mr. Kapila Jayawardena, the company’s chairman said."While achieving steady growth in bottom line, the company strengthened its balance sheet with a steady reduction in debt funding achieving a strong debt to equity ratio."The owners have begun a `rolling refurbishment’, keeping the hotel open and operational while upgrading infrastructure and facilities encompassing all areas of the property from its car park and conference hall to the restaurants. All standard rooms have also been refurbished.Jayawardena said that the steady arrival of tourists to Sri Lanka had created confidence among investors in the leisure segment and as a result many projects, including rapid development in the North East, are currently underway."It is estimated that many leisure projects will be completed during the next two years preparing for the estimated 2.5 million arrivals in 2016," he noted.Jayawardena was confidante that there will be greater focus on building destination awareness both by the authorities and stakeholders projecting the country as a most desirable holiday location in coming years.Eden is a well-established 158-room five-Star property with an excellent reputation among visitors, agents and tour operators, the chairman said.During the year, the owners had focused on improving the standard of service delivery and product offering with Rs.76 million spent on soft refurbishing of the property.Guest facilities had been further improved and food and beverage and guest related activities within the hotel enhanced.Much attention had been paid to strategic advertising both globally and locally to present the property as a desirable holiday location promising quality and diversity in an effort to strengthen the occupancy rate.The opening of the southern highway had helped the hotel, making it accessible from Colombo within an hour.Eden employs 85% of its staff from the nearby villages and also procures much of their supplies locally. They had invested almost Rs.6 million on improving their biological sewage plant to meet environmental standards. They had also improved banquet services and equipment at the hotel to cater to people living in the area without easy access to facilities in Colombo.Jayawardena said that they look forward equally to the expansion in the tourism sector and increased tourist arrivals with medium term strategies already placed to position Eden as a preferred holiday destination with unmatched service delivered by skilled and trained staff.Eden has a stated capital of Rs.528 million, revaluation reserve of Rs.826.4 million and retained profits of Rs.169.1 million in its books. Total assets ran at Rs.1.9 billion and total liabilities at Rs.365.8 million.Riverina Hotels PLC with 24.38% is the biggest individual shareholder of the company followed by Palm Garden Hotel PLC with 21.82% and Confifi Management Services with 10.69%. LOLC is the ultimate controlling shareholder following its acquisition of the Confifi Hotels in Beruwala.The EPF with 7.59% and the ETF with 2.4% are also major shareholders.The directors of the company are: Messrs. W.D.K. Jayawardena (Chairman), Mrs. K.U. Amarasinghe, D.S.K. Amarasekera, M.T.A. Furkhan, S. Furkhan, J.M. Swaminathan, A.L. Devasurendra (Resigned 24.11.2011), I.C. Nanayakkara (Resigned 30.11.2011) and R.N. Asirwatham (Resigned 29.05.2012).


The Island

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...by i3gconsultants@ 13:09:04 on 2012-09-02

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Stock Watch: ATL

Amana Bank - Lead Strategic Partner for IFN Roadshow Sri Lanka.


The world renowned Islamic Finance News (IFN) Roadshow will hit the shores of Sri Lanka this September, bringing together the country’s Islamic Finance industry and its key regulatory stakeholders to one forum to discuss the issues, challenges and potential of the industry. Having pioneered the concept of Islamic banking in Sri Lanka, Amana Bank has partnered with the Malaysia based RedMoney group to bring the IFN Roadshow to Sri Lanka.
The IFN Roadshow is a one-day event held in key developing Islamic Financial markets. Since 2008, the IFN Roadshow has completed over 35 events, in 16 countries with over 7,000 delegates attending.
The Roadshow is scheduled to take place at the Colombo Hilton on 6 September 2012. Governor of the Central Bank of Sri Lanka, Ajith Nivard Cabraal will be the key note speaker with many other key officials of the Sri Lankan Islamic banking and finance industry in attendance.
Amana Bank takes pride in being the Lead Strategic Partner for the event. Being Sri Lanka’s first Licensed Commercial Bank to operate in complete harmony with the principles of Islamic banking, Amana Bank presents a new way forward enriched with Honour, Humanity, Stability and Uniqueness. Being the market leader in Islamic banking in Sri Lanka, the Bank is focused on capitalizing on the growing market potential for this unique banking concept among all communities in the country.
Dailymirror

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...by i3gconsultants@ 13:09:04 on 2012-09-02

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Stock Watch: CLPL

Local footwear producers lobby for import duty increase


Local footwear manufacturers are calling for an import duty increase through the next budget, to safeguard the domestic industry.
“The duty for imported footwear was reduced from the Budget 2011. This will definitely have an adverse impact on the local shoe industry especially for companies producing high quality, up market footwear. There is a high expectation amongst the manufacturers that the government will intervene to protect local manufacturers and prevent import dumping.” Managing Director and Chief Executive Officer, Ceylon Leather Products PLC, Sitendra Senaratne said.
Protectionist measures from the government will be crucial to the development of the local industry which, according to Chairman, Ceylon Leather Products PLC, Lalith Heengama, stands to benefit from an increase in disposable income amongst urban and semi urban consumers.
“There is a demand for up-market, high-value footwear by urban and semi urban consumers, and the company has made arrangements to cater to this segment whilst competing with imported footwear,” Heengama said.
CLP will also be looking for new export markets through its recently acquired subsidiary, Palla & Co. (Pvt) Ltd, a ladies shoe manufacturer located in the Katunayake Export Promotion Zone.
Senaratne stated that economic turmoil in traditional export markets in North America and Europe had necessitated a search for new markets, adding that the company was looking at developing new markets within the Asian region.

Dailymirror
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...by i3gconsultants@ 16:08:46 on 2012-08-31

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Stock Watch: BRWN

Excel World has re-opened with new look.


Excel World Entertainment Park, formerly known as Excel World has re opened with a new look. A fully owned subsidiary of Browns Investments PLC, the venue offers host of entertainment including an EAP- Excel Cinema- with a seating capacity for 80 is already screening films. In addition to a well orchestrated entertainment package, facilities for indoor sports and dining have been upgraded and additional facilities included. It also provides a 200+ hassle free parking facility in the spacious premises covering over five acres. The entire park is covered with CCTV cameras’ for the safety and security of the customers. Here children enjoying the luxury of the facility.
Reported in Dailynews
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...by i3gconsultants@ 16:08:27 on 2012-08-31

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Stock Watch: HEMS

Minor, Hemas Groups to invest Rs 2.6 b in Kalutara


Minor Hotel Group one of the biggest hotel chains in Asia in partnership with Hemas Group would invest over Rs. 2.6 billion to refurbish and build two hotels in Kalutara.
Ranil de Silva Managing Director, Serendib Leisure
The management had already invested around Rs. 550 million to refurbish Avani Kalutara, formally known as Kani Lanka and also Hotel Sinbad.
Avani Kalutara repositioned as an up skilled four star, would be opened on October 1.Ranil De Silva Managing Director, Serendib Leisure said that the second hotel would be constructed for the Minor group’s high end Anantara Brand and it would be a five star hotel offering 150 rooms.“The investment for this would be around Rs two billion and the construction is expected to start next year,” he said.
The proposed five star on a ten acre land adjoining Avani Kalutara would be branded as ‘Anantara Kalutara.’
“The previous management had made an attempt to build a large hotel, and the shell remains. We would use this shell to build a five star hotel or dismantle it and build a new one,” he said.
“One of the biggest advantages would be that with a four star property (Avani Kalutara) next door, some of the facilities could be shared,” he said.
He said that Avani Kalutara which is located in a prime property between the lagoon and the sea in Kalutara was neglected for some time and needed a major face lift.
“This is the reason the management decided to go in for a complete overhaul of the property and also to prepare the hotel for the up coming winter season,” he said.
In addition the hotel also had to be upgraded to meet the high Avani standards maintained in all their properties spread all over Asia. This refurbishment included the upgrading of all the 105 rooms with flat screen TV, DVD, wifi,tea coffer facility, modern bathrooms and new furniture and color schemes.
It would also have four categories, with 16 court yard , 43 lagoon and 40 sea view rooms, and six suites.
The management will also offer three different accommodation plans which include all an inclusive package.
“The property has not being high priced and we are looking at offering ‘bed and breakfast’ for around US $ 100.An international spa too would be in offer.
He said that they would mainly concentrate on the European and Asian markets and already they received many forward bookings from UK.
The investments for the property had been made mainly through borrowings and investments made from both Minor Group and Serendib.
“With the current healthy travel pattern the group expects ‘pay back’ in three and a half years.” Serendib Leisure Management is a subsidiary of the Hemas Group, one of the top diversified listed conglomerates in Sri Lanka with a focus on five key sectors, FMCG, healthcare, transportation, leisure and power.Hemas which also manages Avani Bentota Resort and Spa opened last year recently announced the arrival of its 1000th guest less then three months in operation.

Dailynews
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...by i3gconsultants@ 16:08:29 on 2012-08-31

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Stock Watch: JINS

Janashakthi six months PAT Rs. 164mn, Gross Written Premium Rs.3.8bn


Janashakthi Insurance PLC recorded another strong performance at the half year in 2012 and has announced a dividend of 1 rupee per share.
The Company raises the bar in its dividend yield and continues to maintain the highest stated capital structure. The dividend improves on the previous years high, delivering a 9.25%  for 2012 versus 6.25%  and 6.67%  for 2011 and 2010 respectively.  The 2012 dividend helps Janashakthi retain its position as the Insurer with the highest dividend yield in recent years, the insurer said in a statement.
"Insurance is a long term business and the stated share capital gives a strong signal of commitment and stability to stakeholders of the sustainability of the business," Managing Director Prakash Schaffter said.
During the first six months ended in 30th June the Profit After Tax amounted to LKR 164 million. Total assets rose from LKR 13 billion to LKR 14 billion and the Company was able to record a 14% growth rate in its combined Gross Written Premium (GWP) of LKR 3.8 billion. 
"Janashakthi has recorded a stellar performance and has been consolidating the Company’s products and services to provide our valuable customers an even better quality of service than we have done in the past. We have paid out a high amount on claims and this is indicative of our commitments to our customers in their time of need. It looks like Janashakthi has recorded the highest profit after tax amongst the peer group of insurance companies. This is a consistent performance in keeping with the Company’s performance in the prior year, where the Company again had the best results for profit after tax as at the half year mark," stated Bertal Pinto-Jayawardene, General Manager – Finance and Planning. 
"Janashakthi continues to reflect a very healthy stated capital structure in having nearly 8 times the required level of capital for its business operation. We have the highest stated share capital of any listed insurance company by a long chalk. Insurance is a long term business and the stated share capital gives a strong signal of commitment and stability to stakeholders of the sustainability of the business."  further added Prakash Schaffter.

"The net earned premium of Janashakthi was LKR 3.2 billion and the Life Fund rose by 10% from LKR 4.7 billion to LKR 5.2 billion. The Company also recorded a 10% growth in revenue from LKR 3.4 billion to LKR 3.7 billion and marked a motor sector growth of 18% in GWP which rose from LKR 1.7 billion to LKR 2.1 billion. 
"The Company has recorded a stellar growth in all areas of general insurance and is focusing on developing the range of our products for the life segment to ensure that the Company provides unmatched products for the differing needs of the Sri Lankan consumer.  Their Life Unlimited product, for instance, was the first and only product anywhere in the world to offer hospitalisation cover even after the policy matures. The Company has also controlled cost and maintained healthy underwriting profits. The Company has also controlled cost and maintained healthy underwriting profits.

"This year Janashakthi entered into agreements with both Commercial Bank and Union Bank for bancassurance - providing customers convenient access to a multitude of Janashakthi’s insurance solutions for individuals and corporates. Janashakthi has also been expanding its already widespread branch network with significant growth in the North and East, opening a new branch in Mullativu and upgrading the Chavakachcheri office.
"Janashakthi has a widespread branch network in all corners of the nation and has a growing market segment in rural Sri Lanka. The company’s stellar performances across the board needs to be taken in the context of the company’s continuing commitment towards social responsibility initiatives. The rural athletes sponsorship program needs to be highlighted as the consistent of the company over the years in this sphere. It paid off when the only female medalists for Sri Lanka at the Junior Asian Athletic Championship were athletes sponsored by Janashakthi. 

"Janashakthi Insurance PLC has served the nation for 18 years, and continues to shine in Sri Lanka’s insurance sector. Janashakthi has an exceptional track record of financial stability and claim settlement. It has the highest stated capital of LKR 1.49 billion among quoted insurance companies in Sri Lanka, with LKR 14 billion in assets and over LKR 7 billion in annual gross written premiums. Janashakthi has paid over LKR 20 billion in claims to its policy holders."
Janashakthi’s Board has established internal control systems, including a comprehensive risk identification, measurement and mitigation process. The composition of the Board is exemplary on many fronts, providing a proper balance of non-executive independent directors and due gender diversity. The Board consists of W. T. Ellawala (Chairman), C. T. A. Schaffter (Deputy Chairman), Prakash Schaffter, L. C. R. de C. Wijetunge, Manjula Mathews, Deshamanya Dr. Nihal Jinasena, Ramesh Schaffter, Eardley Perera and Anushya Coomaraswamy.

The Island
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...by i3gconsultants@ 16:08:44 on 2012-08-31

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Stock Watch: SINS

Fitch Ratings Lanka has assigned Singer (Sri Lanka) Debenture


Fitch Ratings Lanka has assigned Singer (Sri Lanka) PLC’s (Singer) proposed three-year senior unsecured redeemable debentures of up to Rs. 1 billion a National Long-Term rating of ‘A(lka)’. The Outlook is Stable.The rating reflects Singer’s market position as one of Sri Lanka’s largest consumer durables retailers, as well as its established franchise and extensive distribution network.
The rating also reflects the company’s multi-brand product portfolio that is diversified across price points and its well managed financing operations. Also, Singer has good access to credit from local banks, and regularly accesses capital markets to raise debt which has broadened its funding avenues.
Singer expects to utilise part of the issue proceeds to repay maturing debentures, while the remainder will help restructure its balance sheet by lengthening the maturity profile of its debt.  The debenture will have a bullet repayment of principal at maturity, which is in three years post-issuance, and quarterly coupon payments at either a fixed or floating rate. Singer’s financial leverage (adjusted debt net of cash/operating EBITDAR), excluding debt of its subsidiary Singer Finance (Lanka) PLC (SFL, ‘BBB+(lka)’/Stable), was low at around 2.4x, and well below the 4.5x threshold for its current rating.
The company’s liquidity was sufficient at end-June 2012, with cash reserves of Rs. 362 million and unutilised but approved bank lines of Rs. 2.1 billion covering term-debt due within a year of Rs. 610 million.
A further Rs. 5 billion of Singer’s company-level debt consists of short-term facilities, and is used to fund its working capital requirements.
Fitch does not expect its working capital dynamics to deteriorate materially in the near term given Singer’s strong market position and strong bargaining power with its suppliers and distributors.

Reported in Dailyft
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...by i3gconsultants@ 01:08:31 on 2012-08-31

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Stock Watch: mask

Maskeliya to raise Rs. 324 m via 1 for 1 Rights


Maskeliya Plantations Plc has decided to raise Rs. 323.7 million via a Rights Issue of one for one.Given the current number of shares in issue, the Rights involve issuance of 26.97 million new shares at Rs. 12 each.Proceeds will be used to meet working capital requirement, settle liabilities as well as avoid additional interest charges on obtaining new loans.The Maskeliya Board of Directors is of the view that the Rights’ pricing is fair and reasonable.  An EGM will be convened shortly for shareholder approval.

Reported in Dailyft
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...by i3gconsultants@ 01:08:19 on 2012-08-31

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Stock Watch: LGL

Sri Lanka Laugfs expects 398-room hotel chain by end 2014


Sri Lanka's Laugfs group is expecting to have 398 hotel rooms operational by end 2014 under its 'Ananthaya' branded chain, chairman W K H Wegapitiya said. The chain includes a 75 room hotel in Sigiriya, a 125 room hotel in Waskaduwa a 110 room hotel in Passikudah and an 88 room hotel in Chilaw."We hope to open the Chilaw hotel soon," Wegapitiya said. "We also want to build the hotel in Waskaduwa quickly."
He said the group will invest 9.0 billion rupees in hotels.
Separately Wegapitiya told shareholders in the firm's latest annual report that a 15-acre block in Waskaduwa with a 500 metre beachfront was acquired by Laugfs Leisure Ltd and international architects have submitted iconic designs for the project.
Architectural designs were also being prepared for the Passikudah property.Sri Lanka has seen a boom in tourist arrivals following the end of a 30-year war in 2009 and many business groups are getting in to the business.Sri Lanka's tourism authorities are expecting 45,000 room to be available by 2016 from the current 23,000 when arrivals are expected to reach 2.5 million. In 2012, authorities are expecting 1,050,000 tourists, up 22 percent from 2011.

Reported in LBO
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...by i3gconsultants@ 01:08:33 on 2012-08-31

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Stock Watch: AAIC

DMS Software helps revamp Asian Alliance Insurance


DMS Software Technologies (Pvt) Ltd (DMS SWT), a Gold Level Member of the Oracle PartnerNetwork (OPN), helped revamp the claims processing system for Asian Alliance Insurance PLC (AAI) by successfully completing the implementation of the Oracle E-Business Suite Release 12 solution. The new system enables claims to be processed in approximately five hours as opposed to the three day period that was required previously.









Seated f1–Ramal Jasinghe, Director/CEO, AAI. Standing from L – Palitha Rodrigo, Director/GM , DMS SWT; Saliya Wickramasinghe, GM (Finance) AAI, Dilan Christostom, Senior Manager Finance Planning, AAI Amal Dharmapriya,
AGM (IT), AAI.


Headquartered in Colombo, Sri Lanka, Asian Alliance Insurance PLC provides life and general insurance services to about 45,000 policyholders. Commencing operations in 1999, the company had grown to 35 branches, more than 1,050 employees and agents, and had US$20 million in annual revenues as of early 2011. Due to its continuous growth, in 2009, the company determined the requirement for a replacement ERP system and invited vendors and partners to submit proposals. Following a comprehensive review, Asian Alliance Insurance selected Oracle E-Business Suite Release 12 and engaged Oracle Partner, DMS SWT to implement it. DMS Software Technologies started deploying Oracle Financials Release 12, Oracle Inventory Management Release 12, and Oracle Purchasing Release 12 in February 2010. By implementing Oracle E-Business Suite Release 12, Asian Alliance Insurance has improved general insurance customer retention by 12% and first-year life insurance customer retention by 10%. The company has also reduced the staff required to manually input and process data from 25 to 18, with further cuts planned. It has lowered end of the month financial reporting times by 10 days; and gained the ability to monitor costs more closely and take corrective action when spikes occur. "Oracle E-Business Suite Release 12 has helped us satisfy customer expectations in our general and life insurance segments, while providing timely, relevant, information to fulfill statutory and regulatory reporting requirements," said Saliya Wickramasinghe, General Manager Finance, Asian Alliance Insurance PLC. "We conducted an intensive review process with the guidance of Ernst & Young and determined that Oracle E-Business Suite Release 12 met more than 80% of the requirements, whereas other systems fell short of that mark," explained Wickramasinghe. "We also felt that Oracle was used significantly in the insurance industry, and its vertical models may benefit us in future if we decide to replace our home-grown system." Oracle E-Business Suite Release 12 exceeded the capabilities of its rivals in enabling Asian Alliance Insurance to manage its financial requirements. "The ability of the other solutions to manage our financial processes was not very clear to us," said Wickramasinghe. Asian Alliance Insurance started implementing Oracle E-Business Suite Release 12 in February 2010, and the project went live in September 2010. DMS Software Technologies provided solution design and implementation services, trained Asian Alliance Insurance staff in using the system, and supported the company's efforts to build knowledge of the Oracle products. The insurance company also engaged DMS Software Technologies for Post-Implementation support. With a partnership dating back to 1991, DMS Software Technologies (Pvt) Ltd is an Oracle Gold Partner in Sri Lanka, specializing in Oracle Applications. The company provides a full range of services including Consulting, Development, Support, and Training. DMS's focus on Oracle has lead to the development of skills and technology, capable of supporting many Oracle products on multiple platforms in an array of industries including Finance, Telecommunications, Public Sector enterprises and large conglomerates. DMS SWTis the only Oracle Implementation partner in Sri Lanka with over 15 years of Oracle ERP implementation experience. "We have been working with Oracle for over twenty years and are extremely proud to be the largest local Oracle EBS implementer. As the local partner for Oracle e-business suites in particular, we look forward to expanding our product portfolio further in the next couple of years," said Palitha Rodrigo, General Manager of DMS Software Technologies (Pvt) Ltd. Over 65,000 customers worldwide rely on Oracle's complete, open and integrated enterprise applications to achieve superior results. Oracle provides a secure path for customers to benefit from the latest technology advances that improve the customer software experience and drive better business performance. Oracle Applications Unlimited is Oracle's commitment to customer choice through continuous investment and innovation in current applications offering.


Reported in Dailynews

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...by i3gconsultants@ 12:08:18 on 2012-08-29

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Stock Watch: MBSL

MBSL expands Investment Management services


MBSL investment management service is designed to provide investors a diversified range of securities listed on the CSE as well as on fixed income securities such as Treasury bills and bonds according to the investment objectives of the investors. Since every investor is different, the MBSL Investment Management process is designed to identify individual needs, and present a portfolio that is appropriate and adaptable to any future changes in circumstances. It has never been more important to plan for future financial security. However, there are more investment opportunities available now and hence we have constructed a range of solutions with the aim of providing active ongoing financial management to achieve results and guarantee peace of mind to investors. MBSL Investment Management aims to offer a professional and tailor-made fund management service to investors achieved by: A precise and simple risk analysis assessment process that identifies each individual investor's risk profile and investment requirements, Actively managed investment portfolios that are subject to constant review and due diligence checks, Optional access to Alternative Investment funds where preferred by the investor and appropriate within the risk profile assessment process, Regular investor risk profile assessment and protecting the investor and The Manager through detailed reporting when required by the investor. As clients' needs change, so will their investment profile; between that of a higher risk, more aggressive strategy and a low risk, defensive (less volatile) strategy. Realigning the investment strategy is straightforward - all that required is a consultation and the completion of a risk profile assessment form, which is then processed by MBSL. The correct investment strategy will always be maintained by regular reviews of the clients' needs and objectives, based on the risk appetite of the investors. The first consideration is the investment time horizon, which is pivotal to deciding on the degree of risk that can be taken. Here risk is measured as the extent to which a paper (or an actual) loss of value can be tolerated over a given period, and the level of gains the investor ideally wishes to achieve over the life of the investment. Although the stock market has generally provided greater upside potential over the longer term, there will almost certainly be periods (possibly of several years) when stock markets will fall. Stock market exposure therefore has a lesser allocation in the defensive portfolio categories and a higher allocation in the aggressive portfolios. As an organization MBSL is able to keep these qualities intact, leading to a proven track record in the investment arena. The investment team therefore makes its allocation decisions objectively, on the merits of asset class, manager skill and the client's chosen risk profile.


Reported in Dailynews

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...by i3gconsultants@ 12:08:18 on 2012-08-29

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Stock Watch: AMF

Unregulated leasing bites!



An unregulated leasing industry is eating into market shares of companies registered with the Central Bank of Sri Lanka while the present macroeconomic environment was posing a challenge for business, an official said."We view with concern the presence of unregulated leasing companies that have encroached into this market and secured a substantial share of business of the Licensed Finance Companies and Licensed Leasing Companies," Associated Motor Finance PLC (AMF) Managing Director Nalatha Dayawansa told shareholders in the company’s recently published annual report."The financial year 2011/12 was one of great challenges for the Company. The still lingering ill effects of the global financial crisis and an uncertain local economic environment still struggling to throw off the legacy of a thirty year war formed the backdrop to enterprise over the recent past. Whilst our performance through history has been robust, we feel that the best is yet to come given the current economic climate which is conducive for business. Despite short term hiccups, the Company is poised to take centre stage and to reach expected heights," he said.AMF turns 50 this year and was only recently listed on the Colombo Stock Exchange.The company made strong gains in 2009/10 during the domestic financial crisis triggered by the collapse of the Ceylinco Group on the back of the Rs. 26 billion Golden Key Credit Card Company fraud, and was one of two LFCs/LLCs to receive a rating upgrade during this troubled period."We pioneered the leasing of Motorcycles at a time when other institutions were reluctant to cater to this segment - the latter viewing it as high risk lending with low asset quality. Despite the inherent risk of this particular market segment, we have been able to leverage the opportunities on offer to our advantage and our latest financial returns bear testimony to our success."We have recorded an NPL of 1.69 percent, RO A of 13.73 percent and ROE of 35.80 percent as against the industry norms (CBSL), which stand at NPL - 5.7 percent, RO A - 4.5 percent and ROE -30.2 percent. These statistics clearly indicate how well the company has mobilised its resources to optimise returns that are well above industry averages, whilst maintaining a healthy NPL ratio which is well below the industry," Dayawansa said.AMF’s revenue grew by 70 percent in 2011/12 over the previous year and it achieved a record profit after tax of Rs. 140.71 million and surpassed the Rs. 150 million profit before tax which was just over a 90 percent increase over the previous financial year.The company’s ROA stood at 13.7 percent as against the industry RO A of 4.5 percent."The Company has been growing steadily. We recorded an asset growth of over 73 percent this year and have now reached the category of a medium size finance company. The main driver of growth of the asset base was the impressive growth recorded in the Leasing portfolio. The total asset base of the Company increased to Rs. 1,425.1 million for the year under review from Rs. 825.9 million recorded last year. The net leasing portfolio increased to Rs. 1,061.4 million for the year under review from Rs. 501.7 million in the previous year, which is a growth of 111.6 percent," AMF CEO T.M.A. Sallay said."The total disbursements reached Rs. 869.3 million in 2011/12, compared to Rs. 454.3 million In 2010/11, which amounts to a 91.3 percent increase over the previous year. This significant rise in disbursements contributed tremendously to increase our profits and also the asset base of the Company during the year. Our public deposit base grew by 87 percent in 2011/12 compared to a growth of 9 percent in 2010/11," he said.With interest rates on the rise, many financial institutions have higher than usual loans to deposits ratios and several ratings agencies have warned that these would have to be contained.A separate recovery office is established to manage the credit risk faced by AFC. It adopts strict credit risk evaluation processes by assessing credit worthiness of the customers, monitoring debt collection process and remedial actions and effective recovery processes. This has been evidenced by a low NPL (Non-Performing Loans) ratio of 1.69% compared to the industry average of 5.7% for the year ended 31st March 2012. Further, AFC’s exposure to credit risk is less due to low level of average single borrowing. (The single borrowing exposure on average was about Rs. 100,000/- per customer in the year ended 31st March 2012.), the company’s annual report said.The AMF Board of Directors comprise, Dr. Rohan Karunaratne, Chairman, Nalatha Dayawansa, Managing Director, Mrs. W.A.S. Dayawansa, Director, Shanil Dayawansa, Executive Director, K.D.L. Nanayakkara, Non-Executive Independent Director and L.C.W. Edirisooriya, Non-Executive Independent Director.


Reported in The Island

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...by i3gconsultants@ 12:08:53 on 2012-08-29

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Stock Watch: BLUE

Paul takes over as Blue Diamonds Chairman, Anura as Deputy


Top lawyer Paul Ratnayeke has been appointed as the Chairman of the struggling Blue Diamonds Jewellery Worldwide Plc.
This is following his appointment to the Board of Blue Diamonds on Friday and the resignation of W.A.D.V. Perera with effect from 1 September.
The company also announced the appointment of Anura Fernando as Deputy Chairman with effect from Friday.




Three other new Directors, Tirol Perera, P.B. Vinoth Kumar and Raveen Bandara, too have been appointed.
Price of both voting and non-voting shares of the company moved up by 10 cents to Rs. 4.40 and Rs. 1.80 respectively yesterday after touching an intra-day high of Rs. 450 and Rs. 1.90.
The fresh round of appointments marked yet another change on the Board of Blue, which continues to make losses. Last month, longstanding Executive Director and former Deputy Chairman Godfrey de Kretser resigned, whilst in November last year, Chairman and Managing Director Bandula Ranaweera resigned.Blue Diamonds major shareholders are ECL Soft (15.3%) and Sri Lanka Insurance Corporation – General Fund (10.5%), whilst it has a public holding of 74%.The company in the first quarter of FY13 suffered a loss of Rs. 21.4 million, as opposed to a profit of Rs. 22.3 million. The latter was due to the benefit of write back of Rs. 23.8 million over a past due. Gross profit in the 1Q was Rs. 3.6 million, down by 20% over Rs. 4.5 million in the corresponding period of FY12. Turnover was down by 22% to Rs. 14 million.In May this year, the company announced that two litigations (with a contingent liabilities worth over Rs. 2 billion and interest thereon) between the company and co-founder and former Deputy Chairman Daya Senanayake were withdrawn without cost. As settlement Blue agreed to pay Rs. 12 million to Senanayake and he was appointed Chairman Emeritus – a position that does not involve any representation on the Board or any financial commitment.
As at 31 March 2012, Blue Diamonds had Rs. 881 million in accumulated losses. The stated capital of the company was reduced from Rs. 1.06 billion to Rs. 208.4 million as per the special resolution adopted by the shareholders at the Extraordinary General Meeting held on 4 May 2012.
The new Chairman Ratnayeke is a senior corporate lawyer who is also the precedent partner of Paul Ratnayeke Associates, a leading law firm in Sri Lanka, which he founded in 1987 handling all areas of law and international legal consultancy work.Ratnayeke is a Solicitor of England and Wales and an Attorney of the Supreme Court of Sri Lanka. He holds a Bachelors Degree in Law with honours and has been awarded a Master’s Degree in Law by the University of London.
Currently Ratnayeke holds Directorship in several companies including public quoted companies. He has also been elected/appointed as Chairman/ Deputy Chairman to several of these companies.Aruna Fernando, having a wide network base with the Government and private sector, holds work experience of over 20 years. Fernando is the Managing Director of Micronet Information Systems Pvt Ltd., which is the pioneer in the information technology industry. He also serves as a Director of Micronet Global Services and Sri Lanka State Plantation Corporation.Fernando, a Fellow member of the Chartered Institute of Management Accountant (UK), was the Past President of the CIMA Sri Lanka division and was a member of the Governing Council of National Institute of Business Management (NIBM) and has held several senior positions in other organisations.Perera is an Associate Member of the Institute of Chartered Accountants of Sri Lanka and obtained the membership in 2003. He holds a B.Sc. Accountancy (SpI) Degree from the University of Sri Jayewardenepura.
Perera is presently working as the Chief Accountant of Blue Diamonds Jewellery Worldwide PLC, serving for more than five years. He has held senior positions at Ceylinco Healthcare Services Ltd. and KPMG.
Kumar, a qualified marketer by profession, has wide experience in marketing, covering more than 15 years of managerial experience in sales and marketing both in Sri Lanka and overseas. He is presently working in the capacity of Marketing Manager of Blue Diamonds Jewellery Worldwide PLC.Kumar is a graduate from the University of Colombo – BBA (Special) in Marketing and obtained a Post Graduate Diploma in Marketing from CIM (UK).Bandara, a marketer by profession, is presently working as the project manager of echannelling PLC and counts over 11 years of experience in the healthcare industry. He has also held several senior positions at IMAC International Association of Sri Lanka. Bandara is a corporate trainer and consultant who specialises in motivation.


Reported in LBO

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...by i3gconsultants@ 12:08:15 on 2012-08-28

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Stock Watch: AMSL

Asiri Surgical to buy preference shares held by parent for Rs. 1.48 b


Asiri Surgical Hospital Plc yesterday announced its decision to repurchase the entirety of the 210 million preference shares for Rs. 1.482 billion held by parent Asiri Hospital Holdings Plc.The consideration at which the repurchase of unlisted preference shares would be made is Rs. 7.06 each. The move is subject to shareholder approval.


Reported in LBO

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...by i3gconsultants@ 12:08:15 on 2012-08-28

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Stock Watch: ASIR

Sri Lanka hospital group to get US$21mn from Actis


Sri Lanka's Asiri hospital group will get a 2.26 billion rupee cash injection from Actis, a private equity group, on top of a 604 million rupees last week, taking the total to 2.87 billion rupees (21 million US dollars) so far.Asiri Hospital Holdings said it planned to place 209 million shares with Actis Investment Holdings SL Ltd, at 10.80 a share. Actis will then hold 19.09 percent of the hospital firm. The company will use the money to clear cross holdings in equity and preference shares in the group and reduce debt. Asiri Hospital Holdings will buy 7.303 million shares in Asiri Central Hospital, which has land in Colombo's Horton Place for 250 rupees a share (1.8 billon rupees) from Asiri Surgical Hospital. It will also buy 15.88 million shares in Central Hospital (a new hospital in Colombo's Norris Canal Road) for 25 rupees (397 million rupees) held by Asiri Surgical Hospital. Asiri Surgical Hospital will use 1.48 billion rupees to redeem preference shares held by Asiri Hospital Holdings Ltd. The firm said it will also increase its shareholding in Asiri Central Hospital and Asiri Surgical Hospital by an unspecified amount and reduce loans in the group with any left-over cash. Last week Actis invested 604 million rupees in Asiri Central Hospitals Ltd, buying a 10.8 percent stake.

Reported in LBO

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...by i3gconsultants@ 12:08:25 on 2012-08-28

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Stock Watch: HVA

Sri Lanka exporter warns against tea nationalism


An exporter of branded teas that has catered to emerging global consumer needs has warned that nationalism and protectionism in tea was losing Sri Lanka an opportunity to play a bigger role in the global tea industry."The tea industry in Sri Lanka has unfortunately got stuck in a time capsule and vested interests have prevailed upon decision market to adopt a protectionist policy to stop any Sri Lankan brand builder from becoming a multinational operating out of Sri Lanka," Rohan Fernado, head of HVA Foods, told shareholders in the firm's annual report. "This will perhaps make Sri Lanka ship more bulk tea in the years to come and branding activities under pure Ceylon tea will be limited only to the best quality Ceylon Tea, totaling not more than 100 million kilograms of 30 percent of the national production." HVA Foods already makes 'Heladiv' branded ready to drink tea and said it is researching the sale of ready to dilute and drink (RTDD) tea. Sri Lanka has banned the import of orthodox teas to the country using a legislating system and law enforcement systems including customs authorities inherited from Europe. Protectionism is a type of economic nationalism that downgrades producers located outside the geographical borders of a country by robbing the freedom of choice of the citizens within the national borders of that country using trade controls. Sri Lanka saw a raft of trade controls in under the Mercantilist Dutch East India Company. Mercantilists used state mandated controls to earn excessive profits (rents) at the expense of mainly poorer consumers. Economic analysts say that British civil servants who ran the country during the 19th century progressively dismantled many trade controls. Residents of Sri Lanka - then Ceylon - therefore enjoyed much more economic freedoms than India, which was under the grip of the British East India Company, an exponent of Mercantilism and trade controls. But trade restrictions saw a revival in Sri Lanka after independence from British rule, especially after the establishment of soft-pegged central bank created 'foreign exchange shortages' restraining Sri Lankan citizen's economic freedoms. When individual citizen's freedoms are restricted a country lags behind other nations where citizens have more freedom. Most of Sri Lanka's tea exporters, including HVA have been pressing the state to lift an import ban on orthodox tea so that they could blend and export multi origin tea. However some pure Ceylon Tea exporters fear that it could damage their reputation have been blocking the move. But exporters like HVA insist that both types of tea can exist side by side. HVA said amid a global economic downturn, manufacturers were looking for ways to be efficient and make products more affordable to the consumer. "Refusal to accept the changes brought out by modern day consumer demands will push the traditionalists to demand a protectionist cocoon for survival," Fernando sid. Fernando said tea exports worldwide have increased from 14 billion kilograms in 2011 to 1.87 billion kilograms in 2010. Tea production has increased from 3.05 to 4.16 billion kilograms. "Any entrepreneur who would like to expand his business in the tea industry will not turn a blind eye to these stark figures indicating potential to grow bypassing the objectives set up bureaucrats of the local tea industry compelling exporters to focus on the local tea crop of 300 million kilograms or less than 10 percent of the world tea crop." Fernando said industry stakeholders should find a mechanism to protect the good image of pure Ceylon tea "without making irrational assessments on a nationalistic" basis. He said special export hub could be established to allow import and blending of multi-origin tea. Sri Lankan now had to go to other countries to do that. He said demands to ban such an export hub will require Sri Lankans to set up operations in a third country to achieve that objective.

Reported in LBO

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...by i3gconsultants@ 12:08:57 on 2012-08-28

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Stock Watch: LMF

Sri Lanka dairy firm eyes former war zones, exports


Lanka Milk Foods, a unit of Sri Lanka's Stassen group said it was eyeing former war zones in the north and east of the country for expansion, while it operated within complex state interventions.LMR's imported milk business was hit by state price controls and import duties but it also has liquid milk and other products including two dairy farms which had made profits. While the liquid milk sector was helped by protectionism, imported milk powder sector was hit by both price controls and higher tariffs. "In fact, there were situations where the selling price was less than the price of importation, which badly affected the industry," LMF chairman Harry Jayewardene told shareholders in the firm's annual report. "Even though global milk powder prices rose considerably, we were unable to increase prices locally in accordance with these increases as the Consumer Affairs Authority did not give us permission to make a price increase for a long time. "This led to many milk powder brands curbing their advertising and promotional spend, as the returns generated did not justify the investments." "Your company has been fortunate that the falls in the powdered milk segment have been offset by our other product categories, given the strategic diversification of our product portfolio." Analysts say the situation with milk powder was a classic display of state interventionism and nationalism clashing head on. Days after the consumer affairs ministry refused to relax price controls on imported milk following a weakening of the exchange rate, the finance ministry jacked up import taxes to give profits to rent seeking dairy farmers at the expense of the poorest consumers. Imported powdered milk had given a affordable alternative to expensive liquid milk - especially for poorer people who do not have refrigerators. But Sri Lanka's ruling class as well as 'self sufficiency' nationalists have long tried to suppress freedom of the people to consumer powdered milk using legislative power and taxation by midnight gazette, while citizens were literally asleep. The efforts at making dairy products more expensive, including mandating higher prices to be paid to farmers effectively making daiy products a 'luxury good' are ostensibly aimed at improving 'food security'. Meanwhile Jayewardene said the state has launched an 'effective' marketing drive to push liquid milk consumption. Taxes on imported high yielding cows and diary equipment have been relaxed. "This will undoubtedly benefit the local dairy industry as an attitudinal change among consumers is needed to realise the nation’s vision of being self sufficient in milk," Jayewardene said. Self-sufficiency or autarky was a goal pursued by national-socialist Germany. 'Food security' itself, analysts say, gained ground in nationalist Germany after Britain and other allies blockaded the country and its allies during World War I, threatening global free trade. Jayewardene said the firm's Ambewela Farm made profits of 23.3 million rupees and the Pattipola Farm made 32.3 million rupees in the year to March 2012. In former war zones in the north and east the dairy industry was now developing. It also had market potential. "In terms of market penetration locally, I see further potential in the Northern and Eastern markets which we will pursue intensely during the coming year," Jayewardene said. LMF's sells powdered milk under its 'Lakspray' brand, 'My Juicee' fruit drinks, and 'Ambewela' branded liquid milk, cheese and yoghurt. A malted drink 'Daily Active' and an energy drink had also been launched in 2012. "We will make continued efforts to penetrate export markets with our juice and milk packs. Already, our Daily brand has become a leading dairy product in the Maldivian market," Jayewardene said. The firm was planning to expand it liquid milk segment with health based products and was developing new cheese to "to better suit the local palate." "Such niche value-added products will enable us to combat imported options which retail at higher prices," Jayewardene said. "We have also planned to re-launch our Ambewela Ball cheese range with an international design, during the year."


Reported in LBO

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...by i3gconsultants@ 12:08:57 on 2012-08-28

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Stock Watch: LWL

Great synergies for Lankan ceramic corporates in India for global export


He was responding to a question as to whether there lay opportunities for such opportunities in Sri Lanka where Indian investors come here in the light of External Affairs Minister Prof. G.L. Peiris recent calling for increase of intra- regional trade within SAARC.He also said that anti-dumping legislation for the ceramic industry has been in the pipe line for many years but unfortunately no government has taken serious consideration in enacting it.Here, he is in conversation with the Island Financial Review.


Q: What is the current status of the sales in the local tile industry in the local market? ( a) Your company and (b) the entire industry ?


A: The first three months of the year 2012 generated strong sales. However, since April it has not been encouraging for the entire tile industry. In fact we have experienced a sharp decline in sales across the country. As a result we are seeing a rapid build up of inventories among the local tile manufacturers.


Q: You have often complained to the government that the market is being flooded with imported tiles of varying quality. What is the position there?


A: Yes, we have complained and continue to do so as a matter of urgency to save the industry as well as the consumer. However, it is my duty to mention that the SLSI is doing a thankless job in trying to enforce SLS standards on imported tiles. As a result we have seen a reduction in low quality imports. Please get me right here, we are not at all against the importation of high quality tiles, which even we ourselves do.


Q: Are you expecting any relief from the government in the 2013 Budget on this important issue?


A: Yes, perhaps even earlier.


Q: Do you believe that there is dumping of below- cost and below- quality tiles?


A: Yes.


Q: So, have you proposed to the government of bringing in anti-dumping legislation?


A: Yes, it has been in the pipe line for many years but unfortunately no government has taken serious consideration in enacting it.


Q: Now, what percentage is the production costs are the energy costs?


A: 40%


Q: Have you thought of using subsidized fuel such as furnace oil?


A: No, we have never relied on subsidized fuel as a primary source of energy. As a matter of fact we have been relying of LPG, a cleaner fuel, even when we have options to use subsidized fuel. This is because as a responsible group we didn’t want to convert government subsidies into corporate profits. In this context it is also pertinent to mention that we purchase LPG not at government administered LPG cylinder prices but at world market prices.


Q: How competitive are your products in the export markets Vis-a-Vis competition from India, China and Vietnam?


A: In export markets where there are Anti dumping legislation our products are very price and quality competitive. This is one reason why we have been able to retain and grow in sophisticated markets such as Australia, Canada, USA, Japan and Europe. Further the quality of our products, the superior designs, our image as a reliable supplier, after sales service and the strong brand image have helped us to sustain these valuable markets.


Q: There has been some import duties imposed by the European Union on Chinese tiles. How will that influence Sri Lankan exports and exporters?


A: We will have less price competition which augurs well for all Sri Lankan exporters. However on the downside, the construction industry has been dealt a severe blow in the current recession in Europe. New construction is virtually at a standstill. This has resulted in a drastic reduction in the overall usage of tiles all over Europe in the past few years.With the restriction on the imports of Chinese tiles to Europe, Chinese exporters are now more aggressive in other Export markets. So, this aggressive behavior by Chinese exporters in other markets poses a big challenge to other exporting countries. In this context, I must take pride in saying that Sri Lanka is the only country that increased ceramic exports to Australia in 2011.


Q: Do you see a similar duty being imposed for Sri Lankan exports as well?A: No. We do not foresee such a thing.


Q: Do you have problems in sourcing your raw materials in the light of ball clay which is one of the major ones which is extracted by digging paddy fields and also in the context of legal implications regarding digging abandoned paddy fields ?


A: Yes. Ball clay is found in low lying areas used for paddy cultivation. The industry has been sourcing the requirements of clay from abandoned paddy fields. After mining they are re-claimed by filling with suitable soil and after some years the land will be suitable for paddy or other crop cultivation. We need clear and consistent policy on the mining of ball clay in such fields, so that the industry can progress.The existing legislation vis-à-vis ball clay mining is not conducive to the development of the mining industry. I feel that the ball clay mining is over regulated. When there is over regulation undue exploitation of resource occurs. We have made repeated representations over the last ten years or so to revisit this piece of legislation, sadly it has not happened so far. This I would say is the single biggest obstacle to the growth of the industry.


Q Any plans for expansions?


A: Not in the near future considering that we had expansions and modernization in late 2011 and early 2012 at both our factories in Meepe and Jalthara at a combined cost of Rs.2 billion. Now the task ahead of us is to sell this expanded capacity in a profitable manner.


Q: Why did you close down your Balangoda factory last year?


A: This was a very old plant using outdated technology. It was very labour intensive and at the current rates of wages not competitive. The productivity was low and we also had difficulties in retaining qualified technical staff in Balangoda due to the remote location. Practically all the raw materials and fuel had to be transported a long distance and the entire stocks of finished goods had to be transported back to Colombo for distribution. This involved in a high transport bill. With the restricted technology we could only produce relatively small sized tiles in the Balangoda factory with the largest size being 8" x 8". The demand for these sizes especially in the domestic market saw a rapid decline with the introduction of larger formats of wall tiles. In the later years nearly 80% of the production was exported mainly to North America and Europe. However, with the start of the recession in these markets in 2008, the construction sector took a severe beating and we were very badly affected. Production in that plant had to be curtailed and even with that we built up nearly eight months of production in stock. The future in these markets in the short to medium term looked bleak. Upgrading the technology required that practically the entire factory had to be replaced with new machinery and equipment. This was not viable at the time. Hence the painful and very difficult decision was made to wind up the factory. I must also say that in winding up the factory we laid off 600 employees and paid a very generous VRS. It was a very smooth and cordial winding up. I must say "a text book example and a good case study".


Q: How would you comment on the financial performance of the company?A: The financial year 2011/2012 was the best year in terms of performance and profitability for both Lanka Walltiles PLC and Lanka Floortiles PLC. It is too early to comment with regard to the current financial year.


Q: This government rode to power on (inter- alia) a pledge and a mandate to protect local industries, but now we find that the government projects are using the imported tiles for same. Aren’t you even protesting?


A: Yes we have, and we hope very much that we will receive a positive response.


Q: How would you comment on export markets in the light of recession in the US and European Union?


A: It is very tough. Europe was the cradle of the ceramic tile industry until quite recently. Italy and Spain were the largest tile producing countries until China came along and overtook them. Today so many factories in Italy and Spain have closed due to the recession as well as the competition from cheap imports.


The US market has also been badly affected with the recession. The start of the downtown in the USA was the collapse in the property market in 2008. Therefore, the construction industry was the first to take a beating and is, in fact yet to recover. Lanka Walltiles had a good market in Europe and USA, which practically dried up in this environment. However, we have developed new high value products with a view to re-entering these markets, especially the niche markets where the price competition is less. We have to keep our strong brand image afloat so that when these markets turn around it will be easier to re-establish ourselves, without having to start all over again from the basics, as it were.


Furthermore, we are constantly pursuing new opportunities in other markets, especially in Australia, Canada, India, Middle-East etc, for both companies.


Q: What are the consumer trends in tiles – wall and floor in export markets? Do they change as the apparel industry where fashions last only a year or so?


A: No, I would not say that the consumer trends change as quickly as it does in the Apparel industry. Tiles too are a fashion item unlike in the past when it was a utility item, where one used a simple tile in a bathroom or kitchen, mainly to maintain hygiene. Today there are so many colours, textures, designs, sizes and types of tiles. Tiles follow or are associated with the trends in fabric colours to complement curtaining, upholstery, linen etc. so that they can be coordinated in a house.The tiles sizes have been getting larger and larger with the currently popular wall tiles being in 30cm x 60 cm (12" x 24") and floortiles being ever larger, going up to 90 cm x 270 cm (36" x 108"). There are many reasons for this. Machinery manufacturers are constantly upgrading the technology to produce large sized tiles, the higher cost of laying small sized tiles, less grouting gaps with large tiles making it easier to clean and maintain. You may not know that, especially in western countries the labour cost to lay a square meter of tiles is about three to four times the cost of the tile itself.


Q: Are you mulling new export markets? What about the BRIC nations?


A: Yes, we are actively pursuing new export markets. We are in the process of re-entering the European and North American markets. Our participation in the COVERINGS 2012 exhibition in Orlando, Florida, USA in April brought good results. The COVERINGS is the largest exhibition in North America for the Ceramic Tiles industry.Brazil is a very distant market and therefore the freight is very high. Brazil also has a large tile manufacturing industry. China is the largest manufacturer of ceramic tiles and the price competition is severe. Therefore, it is difficult for us to operate in these markets.However, we were quite successful in India upto a few years ago; having taken advantage of the opportunities that arose with the Indo-Sri Lanka Free Trade Agreement. There was a sharp decline in demand for tiles in India about three years ago, but things are turning around now and we are hoping to re-enter the Indian market shortly. We have had no success in the Russian market either.


Q: Given the recent clarion calls of External Affairs Minister Prof. G.L. Perris of the need to boost intra- regional trade, do you see synergies and joint ventures with India to be located here for export to discerning western markets?


A: No, I didn’t see synergies for joint ventures to be set up in Sri Lanka in our industry. To be honest it is vice versa. I see greater opportunities for Sri Lankan Companies to set up such industry in India considering the wider availability of resources, a lower cost structure, vast market and more importantly the consistent protection accorded to the local industries.


Q: How do you see the financial performance top line and bottom line growth of your company?


A: You will see from our financial results that both companies have had consistent and impressive top and bottom lines. Although challenges are many in the current year I am optimistic that we can sustain this momentum.


Q: Finally, transparency facilitates accountability and creates the conditions for engendering trust. What measures does Lanka Tiles implement in boardroom process for greater disclosure? In your opinion does this facilitate or hinder desired changes in boardroom behavior?


A: No, I believe that it is accountability that facilitates transparency, because if one is not accountable he or she will resist transparency. It applies to corporates too.As far as Lanka Walltiles PLC and Lanka Floortiles PLC are concerned, I must say that we abide by best practices in corporate disclosure. Honestly, this is largely dictated by the quality and demands of the shareholders and the Directors of the Companies. The fact that we work with the three leading Audit firms in the country has helped us to draw from resources and ideas of an experienced pool. This ensures a holistic approach to disseminating corporate information to our stakeholders. Lanka Tiles Board’s attitude is that we should be open companies. What it means is that we have a healthy dialogue with all stakeholders. So it is not limited to measures but the whole attitude of the board and the management. This in turn translates to a healthy and trustworthy relationship between the shareholders, the Board of Directors and the Management of the Companies.


The Island

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...by i3gconsultants@ 12:08:40 on 2012-08-27

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Stock Watch: TESS

TESS opens canned fish factory in Sri Lanka



Economic Development Minister Basil Rajapaksa (centre) along with Fisheries and Aquatic Resources Development Minister Rajitha Senaratne (right) examining a few salmon tins (Pic by: Chaminda Hittatiya)
Senior Adviser to the President and Minister of Economic Development Basil Rajapaksa, declared open the largest canned fish factory in Sri Lanka, TESS Mackerel Canned Fish of TESS Agro PLC, in Peliyagoda recently.
The TESS (Tropic Engineering Supplies and Services) group is a diversified group of companies engaged in engineering, deep sea fishing and export of marine products from Sri Lanka. TESS group was established in 1980 and it is the largest exporter of tuna from Sri Lanka to the European markets.
The TESS group has established the fish canning factory with a total investment of Rs.170 million. The canning factory capacity is 12,000 to 15,000 cans per shift of eight hours. Hence, production per day is 24,000 cans. With the addition of retort, using the same line, the capacity can be doubled up to 48,000 cans per day. Cans manufactured are made to Sri Lankan taste.Minister of Fisheries and Aquatic Resources Development Dr. Rajitha Senaratne, Chairman H.N.O.P. Fernando, CEO/Executive Director Shiran Fernando also participated at this occasion.

Reported in Dailymirror
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...by i3gconsultants@ 17:08:08 on 2012-08-26

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Stock Watch: MAL

Malwatte Valley Plantation scores high


The Malwatte Valley Plantation has established an all time record at the public tea auction held on August 14,15 for BOPF grade tea from Uva Highlands Estate. Managing Director Malwatte Valley Plantation W. L Bogtstra said this surpassed the record price of Rs 930 for the same grade established by Uva Highlands estate and it is for the second consecutive week this company achieved this proud distinction. The company has made a profit of Rs 216 million for the second quarter ended June 30, 2012.


Reported in Dailynews

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...by i3gconsultants@ 17:08:05 on 2012-08-26

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Stock Watch: SAMP

Sri Lanka Sampath Bank outlook cut to stable, 'AA-(lka)' confirmed


Fitch Ratings has confirmed an 'AA(lka)' rating of Sri Lanka's Sampath Bank but cut its outlook to stable from positive, saying its core capital build-up was weaker than expected though still above the regulatory minimum."The Outlook revision reflects the weaker-than-expected build-up of SB's core capitalisation relative to higher rated peers and the need to achieve a sustainable improvement in the bank's core profitability by improving its funding structure and operating scale," the rating agency said. "The ratings reflect SB's strong asset quality supported by structural improvements initiated in 2009, its high loan loss reserves in a local context, and its growing franchise in terms of its market share of banking sector assets, loans and deposits." The full statement is reproduced below:

Fitch Revises Sampath Bank's Outlook to Stable; Affirms 'AA-(lka)'

Fitch Ratings-Colombo/Mumbai/Singapore-23 August 2012: Fitch Ratings Lanka has revised Sampath Bank PLC's (SB) Outlook to Stable from Positive. Its National Long-Term rating has been affirmed at 'AA-(lka)'. Fitch has also affirmed SB's subordinated debentures at 'A+(lka)'. The Outlook revision reflects the weaker-than-expected build-up of SB's core capitalisation relative to higher rated peers and the need to achieve a sustainable improvement in the bank's core profitability by improving its funding structure and operating scale.



The ratings reflect SB's strong asset quality supported by structural improvements initiated in 2009, its high loan loss reserves in a local context, and its growing franchise in terms of its market share of banking sector assets, loans and deposits. The ratings may be upgraded if the bank were to able to sustain its core capitalisation levels on par with higher rated peers, alongside an improvement in core profitability and the achievement of an enhanced franchise, while maintaining strong asset quality. Conversely, a rating downgrade may stem from an increase in the bank's risk appetite that may pressure its asset quality and capital profile. Fitch expects SB's core capitalisation to remain above the regulatory minimum but below that of higher rated commercial bank peers. Equity/assets decreased to 8.1% at H112 from 8.4% at end-2011 and 9.0% at end-2010 alongside strong lending. Its core capital adequacy ratio stood at 10.96% at H112 and 10.47% at end-2011. Management indicates that internal earnings retention will remain the main source of equity accretion. SB has continued to sustain its strong asset quality compared with most commercial bank peers' (gross non-performing loan (NPL) ratio: 2.5% at H112) through tighter credit controls and from the presence of minimal NPLs on its pawning (gold-backed) advances portfolio (22% of loans at end-2011). Specific provision coverage remained high in a local context at 73% of NPLs at H112. Fitch, however, believes that asset quality risks could emanate from the more interest-sensitive consumer /retail and SME customer segments and sectors such as imports and exports which are susceptible to external sector pressures. Fitch expects the pace of lending at SB in 2012 to be limited through the credit ceiling imposed by the regulator but remain close to the 23% upper limit. This is in contrast to the rapid loan expansion (2011: 36%; 2010: 30%) that exceeded that of the sector since the bank embarked upon its expansion drive in 2009. The loan book is likely to remain mainly exposed to the consumer/ retail segment (52% at end-2011). Established in 1986, SB is the fifth-largest domestic bank in Sri Lanka, accounting for 5.9% of banking sector assets at end-2011 and operating through a network of 206 branches.

Reported in LBO

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...by i3gconsultants@ 17:08:17 on 2012-08-26

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Stock Watch: CARS

Sri Lanka’s Carsons hit by falling palm oil prices; forex losses


Sri Lanka’s Carson Cumberbatch PLC, with investments ranging from oil palms and beer to financial services, said falling palm oil prices and exchange rate losses have hurt its bottomline during the June quarter.During the first quarter of this year, group revenues rose to 19.7 billion rupees from 12.7 billion rupees in the same period 2011, the group said in a stock exchange filing on Thursday. Pre-tax profits dived to 634.3 million rupees in the June quarter of 2012, from 6.8 billion rupees reported in the same quarter a year earlier. Net profits slipped to 27.3 million rupees from 5.7 billion rupees in the June quarter of 2011. Carsons said its core business has not been eroded in anyway. “Quarter earnings were hit by falling palm oil prices by seven percent year-on-year, drop in palm production of 11 percent year-on-year due to weather conditions, export duty changes in Indonesia affecting oils and fats segment of the industry operating in Malaysia,” the statement said. A weak Indonesian Rupiah and the Sri Lankan rupee against the US dollar also hurt the bottomline, the group said. Carsons also saw a drop in mark-to-market valuation due to fall in Colombo Stock Exchange during the quarter under review. Carson’s stock closed up 2.40 rupees on Thursday to 452.40 rupees. The disclosure was made after trading hours.


Reported in LBO

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...by i3gconsultants@ 17:08:15 on 2012-08-26

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Stock Watch: ODEL

Sri Lanka's Odel exploring joint expansion overseas


Sri Lanka's fashion retailer Odel Plc is looking at joint expansion possibilities overseas with its new East Asian partner, Parksons Retail Asia, Otara Gunewardene, Odel's founder and chief executive said.Parkson Retail Asia, a department store with operations in Malaysia,Vietnam and Indonesia recently bought a 41.8 percent stake in Odel for 1.424 billion rupees. "We have been looking at different options for our next stage of growth," Gunewardene said. "Managing director of Parksons had indicated that there are interests to look at other countries from Sri Lanka like Bangladesh, Pakistan and India," "Obviously they have lot of stores already in countries in the region. We have to see what opportunities are there for us to jointly do expansion," she said. Odel has franchise of its chic women's fashion accessory brand 'Backstage' in Singapore and Male and is looking to push its Odel range of products overseas. With Parksons's entry into the company Odel will stand a better chance of taking its brands overseas. "I have always been keen to take the brand out-side Sri Lanka and now it will be a better opportunity to do that," Gunewardene said. "It will be something that will be looked at to be done as soon as we can," she said She says the company's success in building its own unique brands such as 'Odel', 'embark', 'Backstage' and 'LuvSL' has made them stand out from other fashion retail chains. "We are very strong in our own brands and it has been a good portion of our business," Gunewardena said. The company says they will continue developing their own brands to keep in line with global department store trends. "Global department stores are trying to develop their own private labels and be more unique otherwise all department stores around the world tend to be the same because all of them have the same brands," she said. Odel which has seventeen retail chain outlets across the island opened a series of stores in Colombo's suburbs in 2011 with the latest opening in Wattala owing to increased urbanization and changing customer lifestyle trends. Odel Plc posted a turnover of 3.8 billion rupees in the financial year of 2011-2012 ending 31st March, a growth of fifteen percent from a year earlier. "The year 2011/2012 was a year of expansion with a strategy to add stores in key locations that have market potential", the company said in its annual report. The company employs around 430 people and gets products from about 1000 suppliers including 200 local and foreign factories. Odel says everyday over 3000 people on average walking in to their main retail store in Alexandra place, Colombo with seventy to eighty percent of them making purchases including tourists.


Reported in LBO

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...by i3gconsultants@ 17:08:47 on 2012-08-26

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Stock Watch: SLTL

Sri Lanka Telecom June profits down 39 pct


Sri Lanka Telecom group profits fell 39 percent to 696 million rupees in the June 2012 quarter, hit by exchange losses, through operation profits improved, interim accounts showedThe group reported earnings of 39 cents per share for the quarter. The stock traded 36.60 up 20 on Monday. Sri Lanka Telecom is 44 percent owned by Malaysia's UT group and 49.5 percent by Sri Lanka's Treasury. Revenues in the first six months to June rose 11 percent to 27.4 billion rupees. Operating profit after depreciation grew 15 percent to 1.5 billion rupees. Revenues of fixed line operations declined 4.8 percent to 7543 million rupees in the first six months ending June. Revenue from mobile telephone operations rose 8.0 percent to 9047 million rupees within this first six months compared to the same period a year earlier.


Reported in LBO

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...by i3gconsultants@ 17:08:19 on 2012-08-26

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Stock Watch: CARG

Sri Lanka's Cargills (Ceylon) net down 24-pct


Profits of Sri Lanka's Cargills (Ceylon) Plc, which interests in retailing and fast moving consumer goods fell 24 percent to 245 million rupees, as higher interest costs bit into the bottom line, interim accounts showed.

The group reported earnings of 1.10 rupees for the quarter. Revenues rose 25 percent to 14.1 billion rupees and cost of sales rose 25 percent to 12.6 billion rupees but the firm also managed to grow gross profits 26 percent to 1.46 billion rupees. But interest costs rose 115 percent to 274 million rupees. The group reported current borrowings of 8.7 billion rupees. Cargills said newly acquired businesses are "yet to realize their expected potential." Cargills bought into confectionary and beer businesses when interest rates in Sri Lanka were low. The firm said major investments were planned for the newly acquired units. Cargills runs Sri Lanka's largest retail chain and holds the franchise for KFC in Sri Lanka. The group would continue to expand the retail chain and KFC outlets with 'utmost confidence' the firm told shareholders.


Reported in LBO
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...by i3gconsultants@ 17:08:31 on 2012-08-26

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Stock Watch: HVA

Sri Lanka tea brand expands China café franchise, R&Ds new products


Sri Lanka's HVA Foods, a branded tea producer and exporter said a franchise tea café network in China had expanded to 25 in the past year, while the firm was also researching new forms of delivering tea to customers.

First established in 2009, the franchise network grew to 20 by the past year. In Sri Lanka, the firm has also established a luxury tea lounge 'Heladiv Tea Club' at an old Dutch Hospital in Colombo's central commercial district. In earlier years HVA launched ready to drink tea pack under its 'Heladiv' brand. "Our marketing efforts in attracting consumers are totally different to traditional methods practiced by the vast majority of companies," chairman Rohan Fernando told sharesholder in the annual report. "We have strategized the designing of consumer packs to virtually talk to the consumer and thereby create a bond between the purchaser and the product." The firm's tea extraction plant has exported bulk tea extracts to several Asian and Far Eastern markets for trials. It was also introducing 'ready to dilute and drink (RTDD) tea mixes. "These products are still considered novel and require further marketing efforts to grow into regular business," chairman Rohan Fernando told shareholders in the annual report. "It is hoped that before too long the tea extraction plant will return impressive results to be recognized as a novel business model and boost bottomline profitability of the company." The firm said revenues in the year to March 2012 rose to 717 million rupees from 545 million rupees. Sales to Russia and CIS countries fell to 328 million rupees from 338 million rupees. Exports to Asia and the Far East rose to 197 million rupees from 93 million rupees, sales to Europe rose to 198 million rupees from 105 million and sales to USA and Canda fell to 14.9 million rupees from 25 million rupees in the period. The firm was also hit a 14 million rupee foreign exchange loss. Administration expenses were also up with director's emoluments and non executive director's consultation fees doubling to 20.9 million rupees from 10.2 million rupees a year earlier. Profits fell to 9.2 million rupees from 46.3 million rupees a year earlier, giving earnings of 14 cents per share.

 

Reported in LBO
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...by i3gconsultants@ 18:08:11 on 2012-08-25

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Stock Watch: BHR

Sri Lanka listed firms to merge, build new hotel


Sri Lanka's listed Palm Gardens and Riverina Hotels said they would merge through a share swap and the new entity would build a 500 room hotel.

Investors holding 14.1 million Riverina shares would get one share of Palm Garden for every two held, the two firms said in stock exchange filings. The merged entity would be known as Palm Garden Hotels. The company will build a 500 room hotel through a wholly owned subsidiary allowing it to gain state investment incentives.

Reported in LBO

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...by i3gconsultants@ 18:08:00 on 2012-08-25

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Stock Watch: SHAW

Sri Lanka’s Shaw Wallace sells land to foreign hotel developer


Sri Lanka’s Shaw Wallace and Hedges PLC has entered into an agreement to sell a prime block of land in Colombo for 1.8 billion rupees to a foreign hotel developer. The block of 264.65 perches in Colombo’s upmarket Colpetty area was bought by Avic International Hotels Lanka Limited. “The purpose of the sale, is to finance the ongoing 30-storied development project in the adjoining land, where the piling and sub-structure work has been completed,” Shaw Wallace said in a stock exchange filing on Friday.

The company said the buyer planned to develop the land to build a “mega hotel.” Shaw Wallace plans to convene an extraordinary general meeting shortly to get shareholder approval for the sale.

 

Reported in LBO
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...by i3gconsultants@ 18:08:58 on 2012-08-25

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Stock Watch: LGL

Sri Lanka's Laugfs gets lubricant scientist


Veteran Sri Lanka scientist in the petroleum industry, Dr Gamini Amarasekera has joined Laugfs Lubricants Limited as a consultant to improve its lubricant brand and services, the company releasing a statement said. Dr. Gamini Amarasekera holds a phD in Chemistry from Australia's Swinburne University and is also a member of the Royal Australian Chemical Society. Amarasekera had started his career in the Ceylon Petroleum Corporation in 1979 as a Deputy Technical Manager. In 1998 he joined Caltex as the Chief Technological Manager sharing expertise in the regional market including Bangladesh, Maldives and Sri Lanka. Laugfs said Amarasekera's 27 year career in the industry has given him the opportunity to closely work with international manufacturing organizations, power generation plants, government institutions & leading automotive companies in resolving problems and educating them on oils and their applications. Amarasekera will bring expertise in new generation oils for modern engines and environmentally friendly lubricants in automotive applications, Laugfs said. Amarasekera has also been instrumental in taking the lubricant knowledge to the end user. His working experience also includes visiting of number of major oil and additive manufacturing plants in the UK, Italy, Belgium, Holland, India, Dubai, Australia and Singapore Laugfs Holdings entered the lubricant market in 2008. The firm also sells LP gas and has a supermarket chain. Chevron Lubricants Lanka, formerly known as Caltex, currently dominates the island lubricants market with Indian Oil Corporation (LIOC) coming in second.


Reported in LBO

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...by i3gconsultants@ 17:08:46 on 2012-08-25

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Stock Watch: DIPD

Sri Lanka Dipped Products net down 33%


Sri Lanka's Dipped Products Plc (DPL), which grows rubber and tea and makes rubber gloves, has seen a 33 percent drop in profits during the second quarter of June this year. A unit of conglomerate Hayleys PLC, Dipped reported profits of 327.6 million rupees for the June quarter over 486.5 million rupees reported in the same quarter a year earlier.  Revenues grew 16 percent to 5.5 billion rupees and expenses grew at a slower 15 percent to 423.4 million rupees allowing gross profits to fall 30 percent to 397.4 million rupees. The firm reported earnings of 4.77 rupees per share for the quarter. The group blamed lower profitability on poor contribution from Plantations as a result of lower rubber prices, a drop in tea and rubber volumes and increased wages. Dipped Products Managing Director Mahesha Ranasoma said Hand Protection had contributed 293 million rupees to profit before tax, an improvement of seven percent. One of the highlights of the quarter reviewed was the commissioning of a bio-mass heater at Hanwella Rubber Products to reduce energy costs, he said. Sales of ICOGUANTI S.p.A, DPL’s Italian marketing company rose 13 per cent to 1 billion rupees, while Dipped Products Thailand (DPTL) recorded a turnover of 575 million rupees.


Reported in LBO

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...by i3gconsultants@ 17:08:46 on 2012-08-25

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Stock Watch: TYRE

Sri Lanka India J/V to double car tyre capacity


CEAT Kelani Tyres a Sri Lanka India joint venture is planning to double capacity to produce up to 500,000 car and van tyres a year, at a cost of billion rupees, chairman Rohan Fernando has said.

"This is a very exciting project for all of us since successful completion of this project will recognize us as a relatively high-tech steel belted radial tyre manufacturer in the region," Fernando told shareholders in the annual report. The firm had produced 14,700 metric tonnes of tyres in the year to March 2011. Fernando said 32 percent of its sales were from export markets and the group was working towards a 40 percent target. Fernando also complained about imports saying that the results were achieved despite a 50 percent cut in import duty. Since gaining independence from British rule all kinds of Sri Lankan businesses have got used to earning rents under the protection of import duties at the expense of the poorest of sections of society.Critics say rent seeking businesses have perfected the art of playing the nationalist card to oppress ordinary citizens and deny them the right to trade freely with fellow human beings across borders using money earned through honest hard work. Protected businesses, which tend to be inefficient and produce low quality goods cannot win export customers. However Kelani Tyres, backed with India's CEAT is now competing in export markets successfully. In the year to March 2012, group export turnover rose to 1.11 billion rupees from 972 million rupees a year earlier. Domestic sales rose to 3.9 billion rupees from 3.3 billion a year earlier. Group profits rose to 299 million rupees in the year t March 2012 from 260 million a year earlier. The firm reported earnings 3.72 rupees per share.

 

Reported in LBO
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...by i3gconsultants@ 17:08:05 on 2012-08-25

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Stock Watch: SLTL

Transforming towards broadband Sri Lanka


The rollout of broadband in Sri Lanka was pioneered by the country’s national telecommunications provider, Sri Lanka Telecom (SLT), which counts over 300,000customers in the country for its fixed broadband service. Also the company played a crucial and significant role as the infrastructure facilitator for the country’s mobile broadband boost. Over the years, SLT has been able to add value to its broadband facility, thereby enhancing user experience.








Colombo Night

Understanding and delivering the right customer experience has been critical to the retention of customers and expansion of business across the island. Despite being a mammoth organisation and a large scale employer, the company demonstrates agility in the manner in which it has deployed world class broadband technology.SLT Broadband has had a positive impact on the economic development by boosting economic activities and by connecting Sri Lanka to the rest of the world. It has been the key driver of Sri Lanka’s quest to be the most advanced ICT developed country in the region. By boosting the penetration of ICT into rural areas, SLT has been directly & indirectly responsible for job creation and knowledge enhancement. Currently, the company’s deployment of next generation products and services have enabled a host of online applications such as e-commerce, e-learning, e-governance, telemedicine and so on, which has enhanced capabilities, governance and benefitted millions of citizens.
Brand new identity to serve future generation
Recently, the company rejuvenated its corporate image with a new corporate brand identity that combined an emotional platform with a unified stance for development. SLT’s vision for the country is reflected in brand identity of ‘One Country. One Voice’ brand theme. While all corporate branding was changed to reflect the portrayal of values, togetherness and a singular vision, the company also analysed the future journey of its products and services and aligned its offering to the future expectations of customers.
Broadband to suit lifestyles and needs
While the market embraced SLT’s superior broadband platform with enthusiasm, the company remained committed to enhancing the user experience at regular intervals. The company has carefully designed its broadband packages to suit every lifestyle and needs. New packages with higher data volumes and high speeds, allowed users to select download speeds of 2Mbps, 4Mbps, 8Mbps and 16Mbps. Volume based packages were also introduced to improve users’ internet experience with data volumes starting 2.5GB to 300GB per month. In keeping with its vision to provide affordable services for all, the company introduced discounted Night Time (Off-peak) Broadband Offers from January, 2012 with additional free usage volume 1GB to 100GB.
On-demand bandwidth and Broadband usage meter facility
SLT has kept its finger on the pulse of customer needs and added ‘Bandwidth On Demand’, which enables users to request additional volume with same speed by simply calling SLT Call Centre through charge free 1212 hotline, once threshold limits were reached. The objective was to offer a wide variety of broadband experiences to suit different needs of consumers.
The Company offers internet users the Broadband usage meter facility (www.slt.lk/broadband) which enables internet users to monitor their broadband usage, which will help them to remain within the broadband data limit for a definite period according to the packages they are using. All SLT Broadband package users have this facility through which they can enter their Internet login username and corresponding password and view their data usage and manage their budgets and data volumes each month.
Triple-play platform The company interlinked the broadband platform with existing services to devise SLT Megaline which was launched with Single Play (Telephone only), Double Play (Telephone and Broadband/PeoTV) and Triple Play (Telephone, Broadband and PeoTV) positioning ‘One line offering three unique experiences’. SLT’s internet protocol enabled PeoTV services offered customers a reliable platform to enjoy the best of local and international news and entertainment from around the world at a click of a button, thereby revolutionising traditional television viewing with characteristic features such as digital quality pictures, Time Shifted TV, Rewind TV to play pause live TV and Video on Demand with content such as movies, music, educational shows and more.
TV banking on PeoTV
Not content to rest on its laurels, the company added the ground-breaking TV Banking option on PeoTV, another first, together with one of Sri Lanka’s fastest growing banks, Union Bank. TV Banking is a novel banking portal that facilitates online banking services using the TV as an interface. Any of PEO TV’s 55,000 plus customers who also bank with Union Bank can avail themselves of this amazing service.
Broadband enhancements
The broadband journey that SLT has embarked on has been path-breaking and pioneering in equal measure. Looking back at the odyssey, there are some clear milestones: No. 1 ISP in the country to provide dedicated (free of bandwidth contention) broadband for its customers
Introduction of 16Mbps high speed package to the broadband market in the country Launched ‘Happy Broadband New Year’ annual promotional campaign with many offers Major enhancements done for the volume based users by increasing download speeds from 512Kbps to 2Mbps
Substantial upgrades in international internet backbone capacity by increasing to over 20Gbps total bandwidth Delivered up to 135% average automatic speed increase and a significant increase in free data usage at no extra charge
Introduced 4-port WiFi routers at a very special price to facilitate with limited mobility for broadband customers Bringing mobility with WiFi
Promoting wireless internet access over Home/Office WiFi by bringing increased flexibility customers to adopt company’s flagship product, ‘SLT Broadband’. The company is adept at gauging and adopting best in class telecom developments taking place around the world. Social media is gaining ground as one of the vital modes of communication globally and SLT has also kept in step by garnering over 1 million active Facebook subscribers in Sri Lanka. Further, WiFi enabled Smartphones and SmartTabs are demonstrating a considerable demand for WiFi access and the company is alert to this growing market segment.
Deploying Futuristic Technology – Next Generation Network
The introduction of broadband has forever transformed the manner in which people conduct their personal and professional lives. Evolving lifestyles have created the need for High speed internet, Video on demand & Time Shift TV, seamlessly fitting in with today’s hectic schedules. SLT’s reliable and cost effective broadband service also aspired to access emerging social media, cloud services, eCommerce and mCommerce, all areas which will witness rapid growth over the next few years.
Along with the plethora of unique broadband services being offered by the company, its success lies in its heavy investment in network modernisation and improving capacity. SLT’s Next Generation Network implementation includes converging all access networks into a singular platform, which lies at the core of its Next Generation Network (NGN) strategy. Shedding historic legacy platforms which are cumbersome and expensive, will bring about cost savings, improved efficiencies, faster service delivery, increased speed and performance and new capabilities for future services.
The company is currently in the process of implementing NGN Phase four, which commenced in 2011 and when completed in 2013 will serve an additional 600,000 customers on the NGN platform. The explosive growth and demand for high speed Broadband bodes well for SLT’s investments in infrastructure and its marketing plans too have been integrated to ensure that NGN benefits can be delivered island wide.
Working tirelessly to ensure that the citizens do not suffer from lack of broadband advances, SLT demonstrated that its Backbone Network (SBN) could meet the requirements of the TRCSL’s (Telecommunication Regulatory Commission of Sri Lanka) National Backbone Network requirements. SBN is now truly national with an ultra modern fibre network now covering 100% of the 168 electorates around the country and given its wholesale characteristics, conforms ideally to the company’s wholesale business strategy. SLT’s internet protocol (IP) technology will bring multiple services over the single connection.
i-Sri Lanka Project
SLT launched the i-Sri Lanka project in 2011 to enhance and upgrade the existing fixed access network, by expanding the fibre network through FTTN (Fiber to the Node) deployment. By reducing the copper cable length, reliability is improved as are quality and broadband data speeds. Fully integrated into the NGN Modernisation Program, believes that the growth and strong market share in Broadband is evidence that i-Sri Lanka is adding the required foundation for future plans. This will ensure that SLT’s quality and range of services remain on par with developed countries, a definite competitive edge in the current context. The i-Sri Lanka program targets a broadband data speed of up to 20Mbps within a two km copper cable length, with a plan to achieve this for more than 90% of our fixed customers by the end 2013.
Eventually, the company aims to ensure homes and businesses receive ultra high speed internet and high quality PeoTV services, to connect unconnected homes and businesses with high speed broadband and PeoTV facility while supporting businesses to grow and enhance business capabilities via superior broadband services.
Demonstrating corporate stewardship
The company is an ideal corporate citizen, simultaneously supporting the broader national ICT vision by partnering government initiatives aimed at creating an enabling ICT environment. By popularising broadband services in Sri Lanka, SLT aims to boost national GDP, support online education initiatives such as connecting universities (LEARN), connecting schools (SchoolNet) and vocational training institutes, National Online Distance Education Service (NODES) and Rural ICT centres (Nenasala).
SLT has rendered yeoman’s service to the nation by establishing superior ICT communications and transforming businesses through the deployment of high speed broadband.
The company sustains its position as the largest investor towards the economic development of the country.  It holds the distinction of being the single largest telecommunication company in the country, investing billions of rupees to build telecommunications infrastructure in Sri Lanka for the future requirements.
In 2011, the SLT Group was infused with a significant capital investment which was focused on its NGN, capacity enhancement and fixed network modernisation program and mobile network expansions, and other investments for the future. Projects like i-Sri Lanka require immediate and significant investment, as do network modernisation, increasing fixed and mobile Broadband capacity and coverage, expansion of fibre aggregation and access networks.
SLT’s plan for 2012 will see yet another significant capital infusion, as it continues its dynamic journey. SLT will invest Rs. 25 billion during this year towards the expansion of both SLT and Mobitel as well as to expand their network infrastructure. Company would invest Rs. 17.5 billion for SLT, the highest ever capital infusion in the history of the company and the balance would be invested on Sri Lanka Telecom Mobitel.


Reported in Dailyft

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...by i3gconsultants@ 17:08:28 on 2012-08-25

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Stock Watch: KCAB

Kelani Cables export first consignment to Australia


Kelani Cables PLC, Sri Lanka’s leading cable brand, sent their first cable consignment to a leading Australian electrical contractor recently.
This was the very first time a local company exported cables to the domestic cable market in Australia and the consignment was produced to meet the Australian standards. This project was carried out as an integral part of their global market acquisition program in the cable industry.Kelani Cables PLC has their footprints in Japan, India, African continent, Bangladesh and Maldives. Kelani Cables PLC has established their representative based in Maldives and operates a distribution network which is a significant achievement. The revenue generated through exports exceeds 15% of the total revenue of the company and this is an exceptional percentage compared to the other players in the market.
A ceremony was held at Kelani Cables office to mark the first consignment to Australia and Chief Executive Officer, Mahinda Saranapala addressing the media said: “Getting into the international cable market and a massive development of exports within a very short period of time is a testimony to the quality of our products. We started to export our products a couple of years back and the remarkable growth we achieved and the increased number of countries and suppliers was due to the high standards of our company and the commitment to meet the standards of each country that we export to. Today the export revenue is around 15% of the total revenue and our aim is to bring that to 25%.”
Enlightening the gathering, Sales Manager (Exports), Devinda Lorensuhewa said: “This consignment to Australia is a part of the export project initiated by our CEO, Mahinda Saranapala. The company that we sent this consignment is a giant in the construction industry in Australia and the high quality standards that we maintain was a key aspect in securing this deal. We are the proud supplier of enamel winding wires to Noratel Group, a global manufacturer of transformers which has operations in 12 countries with staff strength of over 2,750, America and Europe being the main market for their products. Transformers operate without any intervals so that the raw materials have to be the best in order.  We believe that the success we have achieved and the confidence of the leading cable users of the world will open new markets to Kelani Cables in the future.”
Kelani Cables is a 100% Sri Lankan own company serving the nation for 43 years manufacturing electrical and communication cables. Kelani Cables is the proud recipient of ISO 9000:2008 for quality, ISO 14001:2004 for better environment management and gold winner of Taiki Akimoto 5S award. Kelani Cable received the ‘Super Brands’ accreditation for electrical and telecommunication sector in year 2008.


Reported in Dailyft
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...by i3gconsultants@ 16:08:05 on 2012-08-25

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Stock Watch: NHL

Significant increase in Nawaloka Hospitals revenue, profit


Growing patient numbers, medical investigations and pharmacy sales have significantly increased Group Revenue and Group Net Profit for Sri Lankan private healthcare pioneer Nawaloka Hospitals PLC.In Nawaloka Hospitals most recent interim financial statement filed with the Colombo Stock Exchange, for the three months to end-June 2012, the hospital showed a group revenue of Rs. 1.05 billion, up from Rs. 805.12 million for the same period last year, while its Group Net Profit was Rs. 98.04 million, rising from Rs. 2.18 million previously.On the other hand, while group revenue rose over the abovementioned period, the first quarter of the hospital’s 2012/2013 financial year, Group Cost of Sales fell to Rs. 525.81 million, from Rs. 438.47 million for the corresponding period the year before.
In addition, Group Operating Profit went up to Rs. 142.58 million, compared to Rs. 30.83 million prior, with Group Earnings per Share also climbing to Rs. 0.28, from its previous Rs. 0.006, and Group Net Assets per Share rising to Rs. 2.32, up from Rs. 2.11.
At the same time, Nawaloka Hospitals has already made known its plans to upgrade in-house facilities, including rooms, while also adding 50 new consultation rooms and a multi-storey car park. Further, operating theatres have been improved with more modern instruments such as a holmium laser for urology procedures and a high-definition laparoscopy system as well as ceiling mounted LED theatre lamps, higher grade anaesthesia units, etc. In addition, digital imaging facilities have been updated with the acquisition of Digital X-ray units and four-dimensional (4D) digital ultrasound scanners, all of which cost the hospital in excess of Rs. 120 million. With more than 400 beds and 600 visiting consultants, Nawaloka Hospitals comprises the largest local private hospital in terms of beds in a single location, which is also the country’s first private healthcare institution, opened in 1985. Responsible for the well-being of over 1.5 million patients over the financial year to end-March 2012 alone, during which it also carried out close to 15,000 surgeries, Nawaloka Hospitals also has plans to open two more 50-bed hospitals outside of Colombo over the coming months.


Reported in Dailyft

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...by i3gconsultants@ 16:08:05 on 2012-08-25

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Stock Watch: CIND

Central Industries lay foundation stones of new factory complex


Central Industries, manufacturer of well known National PVC pipes and fittings laid foundation stones to their new factory complex in Yakkala recently.The new plant is set to meet the increasing demands for their brand National PVC and Krypton Switches and accessories. The new plant designed to construct in three stages and the first stage is planned to be completed and to start production by December this year. The new factory will facilitate their existing manufacturing plant in Kerawalapitiya.







From left: Director/CEO Newton Wickramasuriya, Civil Engineer H.M.S. Ellapitawatta, HRD Manager Nihal Perera and Chairman S.V. Wanigasekera

Central Industries commenced its businesses in 1985 being the first PVC pipes and fittings manufacturer to meet Sri Lankan Standards (SLS) instead of the Japanese standards which others were following at the time and became the first PVC pipes and fittings brand to receive ISO 9001 certificate. Central Industries expanded their product portfolio from PVC pipes and fittings to switches and accessories under the brand name Krypton manufactured in Sri Lanka. Kryptonhas become a durable and reliable household name for Switches, circuit breakers, trip switches and main switches.
At the ceremony the Central Industries Director/CEO and Chartered Engineer Newton Wickramasuriya said, “From the inception the company’s our main focus is to maintain the highest quality standards. Well trained quality assurance team of the company is supported by an ultra-modern laboratory, which always checked the quality of the product before it is released to the market and the raw materials as well. The quality of our products has made us a significant player in the industry and today we laid these foundation stones for a larger factory in a nine acre land because we could not meet the increasing demand for our products.”
Being the proud manufacturer and owner of the brands National PVC and Krypton, Central Industries is the sole distributor of Hitachi Power Tools – Japan and FRISCHHUT DI Fittings (Suitable for PVC Pipes) – Germany. During the 27 year journey in the Sri Lankan market Central Industries received ISO 9001, SLS 147, SLS 659 SLS 935, SLS 948 and SLS 1000. Central Industries is a public quoted company and subsidiary of Central Finance.


Reported in Dailyft
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...by i3gconsultants@ 15:08:04 on 2012-08-25

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Stock Watch: DFCC

Strong growth at DFCC Vardhana Bank in 1H


DFCC Vardhana Bank PLC (DVB)’s interim financial results for six months ended 30 June 2012, reflecting strong overall growth in both gross income and net earnings.A commercial banking subsidiary company of DFCC Bank, DVB’s unaudited interim financial results indicated a total income of Rs. 3,261 million on fund-based and fee-based activities.
The bank recorded a pre-tax profit of Rs. 466 million and an after-tax profit of Rs. 278 million during the period. Significantly, its total income for the first half of the year displayed an increase of 77% over the gross income earned during the corresponding period in 2011, while its net earnings show an increase of 84% as compared to the same period in the previous year.
The sharp increase in the gross income and profit after tax for the six months ended in June 2012 has been the result of corresponding high growth in total assets and fee-earning commitments and contingent liabilities achieved during the latter half of 2011.Further, total assets of the Bank stood at Rs. 56,057 million at the end of the first quarter compared to a corresponding figure of Rs. 35,434 million in the previous year, depicting a growth of 58% during this period. In a similar upward trend, the fee-earning commitments and contingent liabilities increased by 52% from Rs. 14.4 billion as at 30 June 2011 to Rs. 21.9 billion at the end of June 2012.
It is evident from these positive growth trends that earnings of the Bank, including total income and profit after tax showed a significantly higher rate of growth above the rate of increase in total income generating assets and fee-generating liabilities during the six months ended 30 June 2012. Though total income increased by 77% compared to first six months of 2011, the operational expenses and loan loss provisions increased by a mere 26.8%, thereby making it possible for net earnings to expand faster. Similarly, the lower rate of corporate taxes also contributed to expand the profit after tax during the first half of 2012.
The gross non-performing asset (NPL) ratio stood at 5.1% as at 30 June 2012. Though this is a reduction of around 50 basis points from the NPL 5.6% by end June 2011, it is higher than the NPL of 4.4% of the Bank as at 31 December 2011. The NPL net of provisions was 2.1% while provision cover for non-performing loans amounted to 58.8% as at 30 June 2012.
The credit/loans ceiling imposed by the regulator on all lending institutions is expected to impact the expansion of the bank’s loan books adversely in the second half of the financial year. Despite this obstacle, the bank’s aggressive deposit mobilisation activities are paying rich dividends in the form of higher deposits and an increase in the customer base.
Commenting on the results DFCC Vardhana Bank CEO Lakshman Silva stated, “Our first half year results for 2012 reflect our continued growth during a tough period for the financial industry both locally and internationally. As one of the fastest growing banks in Sri Lanka we plan for regulatory and market changes while we continue to serve our customers with the most competitive products and services. Our close relationship with our customers is a distinguishing factor that enables us to continue producing notable results.”
DVB’s unique savings campaign has captured the imagination of depositors and the bank’s management is confident that it can leverage on this heightened interest in DVB’s savings products to bridge the gap brought about by new lending regulations.
In the months ahead, the bank aims to concentrate on devising an ideal product mix in tandem with the existing loans and advances portfolio to improve interest yield on lending. DVB plans to forge ahead in the latter half of the year 2012 to consolidate the financial gains achieved in the first half of the year.


Reported in Dailyft

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...by i3gconsultants@ 15:08:04 on 2012-08-25

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Stock Watch: TFC

TFC says no finality in fresh capital infusion


The Finance Plc (TFC) yesterday in a filing to the Colombo Stock Exchange said that company intends to engage in a restructure and would have to seek fresh capital infusions.“Though the Company is examining the possibilities of such an infusion, there is no finality in respect of any such transaction,” the TFC said.


Reported in Dailyft

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...by i3gconsultants@ 15:08:04 on 2012-08-25

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Stock Watch: ESL

Entrust Securities goes for Rs. 300 m debenture


Entrust Securities Plc has decided to go for a Rs. 300 million debenture issue as part of raising its Tier 2 Capital. The move, approved by the Board of Directors this week is subject to Central Bank, Securities and Exchange Commission and shareholder approval.The company plans to raise Rs. 300 million via a three year unlisted unsecured subordinated redeemable debenture issue. Interest of 18% will be paid annually with capital repayment at maturity. A rating for the proposed debenture will be obtained as per SEC regulations as well.


Reported in Dailyft

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...by i3gconsultants@ 15:08:12 on 2012-08-25

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Stock Watch: LFIN

Weerasinghe new Chairman at LB Finance


Existing Board member A.M. Weerasinghe has been appointed as the new Chairman of LB Finance Plc with effect from 21 August 2012.
The new appointment at LB Finance follows Lalith N de S Wijeyeratne who was Acting Chairman deciding to relinquish the office. However he will continue to serve as an independent non executive director on LB Finance Board.




Weerasinghe who has been on the Board of LB Finance since January 2004, was previously Chairman of Royal Ceramics Plc. He is a gem merchant by profession and Chairman of Weerasinghe Gems Lanka (Pvt) Ltd. Has been in the business field for more than 25 years and is involved in the Gem industry, Real Estate, Construction Industry and Transportation and Landed Proprietor.The Board of Directors of LB Finance Plc comprises A.M. Weerasinghe (Chairman), Dhammika Perera (Executive Deputy Chairman), Sumith Adhihetty (Managing Director), Nimal Perera, Kimarli Fernando, K.D. Anurada Perera, Niroshan Udage, B.D.St. A. Perera, and Shirani Jayasekara.


Reported in Dailyft

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...by i3gconsultants@ 15:08:12 on 2012-08-25

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Stock Watch: COMB

Ex-Auditor General Swarnajothi appointed to COMBank Board


Former Auditor General S. Swarnajothi has been appointed to the Board of Directors of Commercial Bank Plc with effect from 20 August 2012.
Swarnajothi held the office as Auditor General from January 2008 to August 2010 and prior to that had held many senior positions in the public sector as well in the private sector.At present he functions as the Project Director of the Public Sector Capacity Building Project which position he had held since September 2010.
Swarnajothi is a Fellow of the Institute of Chartered Accountants of Sri Lanka and a Fellow of the Institute of Certified Management Accountants of Sri Lanka and also a member of the Institute of Certified Management Accountants of Australia.
He holds a BSc Degree in Management from the University of Sri Jayawardenapura and an MSc in Project Management from the University of Moratuwa.


Reported in Dailyft

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...by i3gconsultants@ 15:08:12 on 2012-08-25

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Stock Watch: SEYB

A good year for growth: Seylan CEO


Seylan Bank’s CEO and MD Kapila Ariyaratne recently joined Daily FT for a brief chat on the performance of the bank, future plans and market trends. The bank as at now holds 11% shares in advances and 10.6% in deposits within the private local commercial bank market in the country.


Q: How has the bank’s performance been so far this year compared with the last?Seylan Bank CEO/MD Kapila Ariyaratne – Pic by Upul Abayasekara
A: We had a fairly good half year and as announced exceeded what we made the whole of last year with a profit after tax of Rs. 1.02 billion as at end June this year. The bank recorded a revenue growth of 13% and profit before tax and VAT grew by 142% this year over the previous year. This growth has come through the basic core banking areas as opposed to an equity portfolio or Treasury activities.
The basic deposits, lending, trade finance and remittances have all contributed so we feel it is a very sustainable model as Treasury profits tend to fluctuate with the market. We hope to continue the trend going forward.
 Q: How have you been keeping with the Strategic Plan the bank formulated last year?
A:
Arising from our strategic plan, there was several key focus area that we concentrated on. This includes customer service, internal efficiencies, skill development. We also looked at cost selling and certain market segments we were already strong at. We have a good portfolio of card products which was not marketed aggressively previously which we are currently engaged in doing. We also identified several of our good products we need to tweak and re-launch and did that. We have re-launched our current accounts with benefits while working on ‘Tikiri’ which is already a leading minor accounts brand.
 Q: What areas do the bank aggressively focus on for growth?
A:
We are working very aggressively on the remittance business. We have been a leading player in that market and with the expectation of growing to Rs. 6 billion we are hoping to secure a significant share of the market. We have invested a lot of time, effort and money on improving our offerings to expatriate workers and that segment. We are also growing our foreign currency funding base, therefore is working closely with correspondents and multilateral agencies on improving our funding structure which will help us in the short term. Furthermore, improving our risk management structure is a key highlight. We believe as we grow fast, a good integrated risk management approach is a must. We have invested on improving our risk management infrastructure and the overall governance structure as well.
 Q: There is a proposed issue of subordinated debt of Rs. 2 billion in the pipeline. When will this come in place?
A:
We actually hope to raise one billion and to go to Rs. 2 billion if we feel necessary. We hope to complete it by early November.
 Q: What do you feel about the Fitch rating of BBB+, which is below the Bank’s Long Term Rating?
A: It has been rated one notch below the usual rating. We are always hopeful that the rates should be better. Fitch has justified the rating and we are aware of certain issues which have built up through legacy matters and things that are holding down the ratings such as the non performing asset ratio.
The non performing asset ration however has improved significantly from a height of 30% at one point to a gross ratio of 14%. Net of interest is just over 12% which is a vast improvement. However we acknowledge that the rate is still high and is hopeful that by the end, it will recover by leaps and bounds.
We have aggressive recovery drives and we are engaging the customers who are willing to reschedule and help them through. Also we are taking strong actions where people are not cooperating. It has started showing results. However we are happy with the rating we received and believe we can work with it.
 Q: How is the credit demand as at now?
A:
Currently we have a capital adequacy ratio which is nearly 15%. This is not really an issue as the entire capital is in the core capital area. Therefore we have a significant room in our tier two capital which will further improve the capital adequacy. It will also help us meet the strong credit demand, especially to support customers with longer term facilities since many are looking at capacity improvement such as in the tourism sector. Since such facilities are slightly of a long term nature so we wanted to improve our funding balance by getting in longer term funds.
 Q: How is the current deposit mobilization?
A:
Our focus has been the SME sector and what I would like to call the ‘commercial segment’ rather than the high-end corporates. This has always been Seylan’s trend and will continue to be. That segment has seen fairly good, strong growth and is a segment that gives us good diversity of exposure of credit. This is where our strength lies.
The demand has continued to be strong. However there are CBSL restrictions of 18% and foreign currency funding that we already have which we believe can go higher than the present position. However we have kept a conservative growth rate of 19% and will end the year with 19-20% which is well within the CBSL stipulations.
We have kept our focus on keeping our deposit growth in line to support the stipulations. The market has been highly competitive and rate competitive as well. However with the relationship we have the competitive rates and the good product combination we have offered we have been fairly competitive and seen good growth on both sides of the balance sheet.
 Q: What do you anticipate in the future?
A:
The growth will continue. Deposits will be more challenging because of competition, liquidity and restrictions of different banks for growth. The credit demand will continue through amidst challenges. We will compete hard and will focus on strengths and in actually giving the customer a good service and a value added overall package.
 Q: What of your expansion plans?
A:
Currently we have a network of 137 branches and outlets. In the next few months we hope to grow that to 145/148. We have added seven outlets already.
 Q: Any new product offerings from the bank?
A:
We recently had the ‘Thegi Pita Thegi’ which we thought was a fairly innovative program adding value to our customers. We produced six millionaires and a winner of an Rs.15 million house recently. We are now looking at the continuation of that.
We also just re-launched our current accounts with several added benefits. We have improved our card offerings and are planning to improve several existing products
 Q: Your thoughts on the present state of the banking industry?
A:
Right now the volatility of the currency and the rising interest rates are the challenges we have to look out for. In view of those, people have to adapt and evolve to keep pace. So we have to watch our portfolios and customers to ensure that quality of the portfolio remains the same which means we have to work closely so that customers are not caught unaware in a competitive environment such as exchange rate rises and price increases/cost increases.
We are geared for that. Right now due to weather conditions there are issues in north, east and north central where we have a strong presence. Our hope is to overcome this with little impact.
 Q: How has the growth been in the north and east?
A:
North, east growth has been very good. It has been an area which is slow and steady but we have been large net lenders there. As at end June, our advances portfolio has doubled and our deposits portfolio. We have infused net capital into the area which has been our strategy and it has worked well. We hope with the areas picking up more the relationships we have built will help us be more active and profitable.
 Q: What are your forecasts for the year in terms of the bank?
A:
We have already exceeded last year’s bottom line and we hope to continue the trend and keep on a similar growth rate by the end of the year. Focus areas are that we are working a lot harder on is the overseas channels to improve remittances. We have several new tie ups we hope to offer in the near future and have introduced our own remittances products as well. Then managing and reducing non-performing assets.


Reported in Dailyft

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...by i3gconsultants@ 15:08:12 on 2012-08-25

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Stock Watch: CINS

Ceylinco Life’s Life Fund grows to Rs. 41.7 b in 1H 2012


Life Insurance leader Ceylinco Life has announced a net transfer of Rs. 3.574 billion to its Life Fund in the first six months of 2012, taking the value of the fund to Rs. 41.778 billion as at 30 June 2012.This represents a growth of 13.76 per cent over the value transferred in corresponding six months of 2011, the company said.The growth of the Life Fund is the result of steady business growth in the first half of the current year, with total income improving by 9.18 per cent to Rs. 6.974 billion, an announcement from Ceylinco Life said.Gross Written Premium Income for the six months reviewed recorded growth of 7.22 per cent to Rs. 4.9 billion, while Investment and Other income improved by 14.5 per cent to Rs. 1.975 billion.“Our first half performance is noteworthy when viewed against the challenging environment of escalating costs of living and shrinking disposable incomes,” said Ceylinco Life Managing Director and CEO R. Renganathan. “These figures are a tribute to our hard-working sales team and the solid foundation of market leadership the company has built over the past eight years.”Total assets of Ceylinco Life grew by 2.67 per cent since 31 December 2011 to reach Rs. 49.536 billion.The company paid out Rs. 1.52 billion in gross customer benefits in the six months to 30 June 2012, recording an increase of 3.95 per cent.In the period reviewed, the company investment portfolio comprised of Government Securities (40 per cent); Licensed Private Banks (22 per cent); State Banks (17 per cent); Real Estate (11 per cent); Corporate Debt (5 per cent) and Others (5 per cent). Investments pertaining to the Life Fund are made in conformity with the investment guidelines stipulated under the regulation of the Insurance Industry Act No. 43 of 2000 and are subject to regular monitoring by the Insurance Board of Sri Lanka (IBSL).Ceylinco Life has more than 850,000 lives covered by active policies and has been the market leader in Sri Lanka’s long term insurance sector for the past eight years. The company is acknowledged as the benchmark for innovation in the local insurance industry for its work in product research and development, customer service and professional development.For the year ending 31 December 2011 Ceylinco Life reported total income of Rs. 13.698 billion and Gross Written Premium Income of Rs. 9.816 billion.


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Stock Watch: NTB

Nations Trust Bank takes 365 Day Banking to Trincomalee


Nations Trust Bank added an important milestone and reiterated its commitment towards expansion with the opening of the 53rd branch in Trincomalee, which is its sixth branch in the north eastern territory.
Such expansion also supports the country’s development by moving to locations outside the Western Province. The branch opening took place amongst several distinguished invitees including the bank’s Brand Ambassador Kumar Sangakkara, who addressed the gathering.



The town of Trincomalee, the gateway to some of the finest beaches in the eastern coast of Sri Lanka and a location which is of strategic importance to the country can now experience a new dimension in financial services with 365 Day Banking coupled with extended banking hours now made available with the entry of Nations Trust Bank to the people of Trincomalee.
Located at 96, Main Street, Trincomalee, the new branch is based on their proprietary design concept offering the ultimate in banking standards with greater convenience and simplicity in banking.
Nations Trust Bank, in operation for over 12 years, has grown steadily in strength and stability. The bank closed the first half with a post tax profit of Rs. 893 m, surpassing the comparative period of last year by 21%. Core-earnings posted good growth over 2011 with revenue increasing at a higher rate of 13%. The bank continued to progress well in diversifying its portfolio and earnings base while optimising returns in a controlled growth environment.The people of Trincomalee will now experience a range of customized financial products to suit their individual as well as business requirements. The ongoing Nations Saver account promotion across the branch network offers an array of electrical household appliances to savers which could be won at every branch each quarter.
This promotion will now be extended to customers in Trincomalee who may participate by maintaining a minimum balance of Rs. 5,000 for three months in their savings account. Each additional Rs. 5,000 saved in the account will add multiple chances to the quarterly draws which will be held at every branch.Nations Trust Bank offers Personal Investment Plans and Kidz Investment Plans with guaranteed fixed monthly interest rates which enables customers planning for the future to set aside savings on a monthly basis. The suite of segmented product offerings includes the Private Banking and Inner Circle Membership for individual customers as well as the Platinum and Gold Membership for the Business community.
Nations Trust Bank is also focused on providing a wide range of products to Small and Medium Entrepreneurs (SMEs) which includes working capital finance, long term financing cash management services, trade services for importers/exporters, guarantee facilities, leasing and factoring solutions.
All this is packaged in its Business Banking proposition where it offers the Platinum and Gold membership providing a special set of benefits, including a lucrative Rewards Points scheme. The roll out of Nations Business Centres in a number of key locations serves as a one-stop-shop for Business customers where all their financial needs are taken care of under one roof.
Commenting at the branch opening, Deputy CEO Renuka Fernando stated: “The opening of our 53rd branch is evidence of the thrust we are making in expanding our network to reach out to a larger population in this country and offer diverse banking experiences in these localities. I am confident that through our expansion we will be able to further tailor make our financial propositions to suit varied customer needs.”
Nations Trust Bank PLC is one of the fastest growing banks in Sri Lanka today. Its market positioning of being the benchmark of customer convenience is ably supported by a host of financial products and services to a wide customer segment. The bank now operates 53 branches, seven Personal Banking Centres and is the sole issuer and acquirer for American Express cards in Sri Lanka.


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Stock Watch: SEYB

Seylan Bank’s current account increases benefits and convenience to customers


Seylan Bank continues its innovative approach by providing its existing and prospective customers with highly attractive value-added benefits to its current accounts.In line with its traditions, the Bank has continued with its policies in providing uniquely distinctive benefits and convenience to its customers through a multitude of value-added services coupled with a wide repertoire of the existing Seylan SURE benefits offered on marriage, birth of a child, surgery and on one’s 60th birthday.With a minimum deposit of a mere Rs. 10,000 being the eligibility criteria to open a new personal current account, statute requires that an account holder is over 18 years of age and earns a considerable monthly income.
Among the exciting repertoire of benefits available to Seylan Bank’s current account holders, which essentially differentiates them from other competitors, is a free debit card with a withdrawal limit of Rs. 150,000 per day from any Seylan ATM, depending on one’s account balance. Adding further value to the product are free internet banking and free SMS banking facilities.
Enhancing its array of services and facilities are options to pay utility bills via online banking and at Seylan’s 139 branch network across the country, besides the facility of instant money transfer to any Seylan account. A 24-hour Call Centre support enables customers to check their balances and any other queries they might have. In addition a special credit card facility offers special discounts at over 350 merchants island-wide, while 365 day banking is made possible at Seylan’s Millennium Branch.
Through a number of steps taken by the bank to simplify the account opening process, a Seylan current account can now be opened within minutes at any Seylan Bank branch across the network and carries with it loads of benefits and value-added services which are certain to enhance one’s experience with the ‘Bank with a Heart’.


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Stock Watch: MBSL

MBSL Savings Bank invests in community of Galle with relocated Extension Office


MBSL Savings Bank announced the opening of its relocated Extension Office at Galle recently at No. 57 Wakwella Road Galle. This new office continues the bank’s planned expansion of its Extension Office network.
The relocated office makes it even easier for customers in Galle to access the bank’s wide range of personal and business banking products and signature customer service.MBSL Savings Bank is a subsidiary of Merchant Bank of Sri Lanka (MBSL) and has the backing and stability of both MBSL and the Bank of Ceylon (BOC). The Central Bank approved licensed specialised bank will offer a wide range of services, including fixed deposits for senior citizens, minors and fixed deposits and lending products namely; leasing and hire purchase, commercial lending and investment services to individuals and businesses located in the city and suburbs.  
MBSL Savings Bank is a proven community bank that offers products and services that meet the deposit and financing needs of both consumers and businesses. Customers can be confident knowing that their deposits are fully backed by both MBSL and the Bank of Ceylon. The bank’s residential lending officers are available to guide its customers through the financial process whether it is in looking to purchase or refinance a home.
MBSL Savings Bank Chairman M.R. Shah commented: “While thanking all our customers who have been with us, we welcome their continued patronage in our new journey to success made possible by the untiring efforts of our staff. Our new Extension Office expands our ability to serve the multi-cultural market of Galle by providing a full complement of saving, deposit, loan and cash management products and services to consumers, business owners and professionals. By providing high quality financial services, our goal is to build the trust and relationships so that customers will make MBSL Savings Bank the primary bank for most of their financial needs.”
“We are planning to open new extension offices in other parts of the country with a view to increase the channels of accessing a wider customer base in our primary market areas and in other attractive regions of our country,” said Lloyd Peiris, Acting CEO/Deputy General Manager of MBSL Savings Bank. “We are excited about increasing our retail footprint and the opportunity to serve more middle market businesses and consumers.”
MBSL holds 62% of the stake of MBSL Savings. Further, 72% of MBSL shares are owned by Bank of Ceylon (BOC). Established in 1996, MBSL Savings bank is an approved ‘Licensed Specialised Bank’ by the Central Bank of Sri Lanka.


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...by i3gconsultants@ 15:08:31 on 2012-08-25

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Stock Watch: NTB

Nations Trust Bank holds 2nd Investor Forum


Nations Trust Bank (NTB) last week held its second annual investor forum to highlight some of the salient achievements during its 13 years of operations, as well as first half of this year and a sneak preview of what is in store




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...by i3gconsultants@ 15:08:31 on 2012-08-25

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Stock Watch: UBC

Union Bank launches unique three-month FD


Union Bank of Colombo PLC has launched a new three-month fixed deposit with unique features that will enable customers to take advantage of short-term investments.Union Bank’s new three-month fixed deposit pays an attractive interest of 14% p.a. and in addition pays the entire three months interest upfront to customers and charges no penalty charge on premature withdrawals.
As a bank synonymous for the launch of many innovative financial products which have been the first in the banking industry in Sri Lanka, this is yet another innovative product that will provide high returns to customers as well as the flexibility of managing their savings with greater convenience.
Union Bank is one of Sri Lanka’s fastest growing banks, focusing on Small and Medium Enterprises and retail sectors with a rapidly expanding branch network.


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...by i3gconsultants@ 15:08:31 on 2012-08-25

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Stock Watch: UAL

Union Assurance continues growth momentum in 1H 2012


Union Assurance PLC (UA), a leading player in the Sri Lankan insurance sector, maintained a steady growth momentum in both turnover and profits for the first half of 2012. UA reported a growth rate of 20% in combined gross written premium and 31% growth in profit after tax compared to the same period of the previous year.Combined gross written premium increased from Rs. 3.8 billion for the first six months of 2011 to Rs. 4.6 billion for the six months ended 30 June 2012. Life insurance gross written premium grew by 21% from Rs. 2 billion as at June 2011 to Rs. 2.5 billion as at June 2012.
General Insurance gross written premium recorded a 20% growth from Rs. 1.8 billion in 2011 to Rs.2.1 billion in 2012. Growth was reported from both corporate and retail customer segments, and most classes of General insurance business reported year-on-year growth.
Profit after tax increased by 31% from Rs. 120 million in June 2011 to Rs. 157 million in June 2012, excluding the surplus from Life insurance business, which is determined after an actuarial valuation which is conducted at the end of the year.As at end of 30 June 2012, the Union Assurance Life Fund, including unit linked fund, stood at Rs. 15.3 billion, which is one of the largest life funds in the industry.
UA Chief Executive Officer Dirk Pereira said: “We are very satisfied with the overall performance given the current dynamics in the insurance market. Gross premium increased compared to 2011 and investment performance was also satisfactory.” The financial statements for the period ended 30 June 2012 have been prepared and presented in accordance with Sri Lanka Accounting Standards (SLFRS / LKASs) which have converged with the International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standards Board (IASB).  The Union Assurance brand is positioned on the promise of ‘trust’ and strives to deliver this promise by being transparent, convenient and respectful when dealing with all stakeholders.


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...by i3gconsultants@ 15:08:31 on 2012-08-25

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Stock Watch: CINS

Ceylinco Insurance posts impressive 1H results


Laying the firm foundation for yet another successful year, Ceylinco Insurance declared impressive results for the first half of 2012.
Ceylinco Insurance – General Managing Director and Chief Executive Officer Ajith Gunawardena, announcing the impressive achievement, stated: “The first half of 2012 saw the company record a total premium income of Rs. 10.5 billion, with the General and Life Divisions contributing a mammoth Rs. 5.5 billion and Rs. 5 billion, respectively.Accordingly, at the half way mark of 2012, the company has earned a profit before tax of Rs. 172 .6 million. December 2011 saw Ceylinco Insurance record a profit after tax of Rs. 1,129 million, with the profit after tax of the group declared at a staggering Rs. 1,393 million, signifying a growth of 39% year on year.
Meanwhile, as at 30 June 2012, the total assets of the company increased to Rs. 63.2 billion, signifying an increase of Rs. 1.9 billion, when compared with Rs. 61.3 billion in December 2011. Moreover, the company’s investments stand at Rs. 47.9 billion, with the Share Holders Fund at an impressive Rs. 9.4 billion. Further, the voting share, once again, for the fourth consecutive year, fetched the highest price amongst banks and insurance companies during the first half of the year.
“We take every effort to keep our promise to our customers at every juncture. Although, we have embarked on an unparalleled growth journey, delivering what we promise to our customers is of paramount importance to us. We don’t leave any stone unturned in pursuing and ultimately achieving this objective. It is a partnership of trust that we have formed with our customers; this is the cornerstone of the company’s philosophy,” Gunawardena added.
In keeping with the promise of timely settlement to customers, the company has already paid out Rs. 3.7 billion, as claims, during the first half of 2012. The insurance industry at large recognises Ceylinco Insurance as the only company to settle all claims on the spot; an unmatched achievement as yet.
Ensuring growth and meeting emerging opportunities head-on, the company now maintains the largest branch network in the island, which counts over 290 branches and sales outlets for the General Division and another 185 branches for the Life Division. Meanwhile, the company’s flagship brand, Ceylinco VIP continued to stand tall, delivering unmatched benefits, and once again, establishing trends and setting the benchmark.
Having been hailed as the undisputed market leader in the insurance industry for the eighth consecutive year, Ceylinco Insurance enjoys the distinct privilege of being voted by the Sri Lankan people, as the People’s Insurance Company, for the sixth consecutive year.
The company has also been feted with the Gold Award at the National Business Excellence Awards for the past three years, which further signifies the company’s contribution towards the socio-economic development of Sri Lanka through the adoption of efficient methodologies and proper business ethics. Thus, Ceylinco Insurance continues to display a high degree of sustainable market competitiveness, while advocating best practices.
With the remainder of the year and the future looking secure, Ceylinco Insurance is set to scale even greater heights, going from strength to strength, living by its credo of adopting innovative insurance solutions geared towards actual market needs.


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...by i3gconsultants@ 15:08:49 on 2012-08-25

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Stock Watch: NDB

NDB reports significant profit growth during 1H 2012


The NDB Group has delivered yet another strong performance for the first half year of 2012 recording a commendable profit after tax of Rs. 1,362 million to its shareholders, which is an increase of 36 per cent compared to the previous year.Chairman of the Bank Hemaka Amarasuriya stated: “The impressive results are attributable to the Bank’s overall strong position and the continued focus on providing solid returns and dividends to our shareholders. Results have been achieved in an environment where the impact of the global financial crisis continues to linger and credit growth remains low with business and consumer confidence fragile given the volatility and uncertainty in the markets.Despite volatility in interest rates and growing concerns over higher borrowing cost and the prevailing downward trend in exchange rates, the bank has reported a commendable second half due to the effective execution of our strategic priorities of customer satisfaction, business banking, technology, operational excellence and profit growth.”
The results are characterised by the bank’s net income (NII, fee and forex income) increasing by 52 per cent to Rs. 4,746 million, net interest income of Rs. 2,579 million and fee and forex income of Rs. 1,512 million grew by 27 per cent and 72 per cent respectively over the comparative period. The profit before tax of Rs. 2,757 million recorded an increase of Rs. 1,078 million or 64 per cent compared to the previous year.  
The reported earnings for the bank also include equity income of Rs. 536 million on the sale  in investments of NDB Investment Bank Ltd., NDB Stock Brokers (Pvt) Ltd. and of the five per cent direct holding in AVIVA NDB Insurance PLC, to NDB Capital Holdings PLC (formerly known as Capital Development and Investment Company PLC).
Following a strategic restructuring of the group’s corporate equity holdings, the re-launch of Capital Development and Investment Company PLC under a new corporate identity named ‘NDB Capital Holdings PLC’ further strengthens NDB group’s universal banking capabilities comprising of investment banking, wealth management, stock broking, private equity and insurance. It has no doubt that by leveraging NDB’s unparalleled brand strength, and geographical reach, the subsidiary will play a key role in mainstreaming a substantial part of the shadow economy by providing better access to financial services.
The bank’s basic earnings per share were Rs. 16.17, an increase of 45 per cent over the first half of 2011. The bank’s return on average assets and equity for the current period were 1.83 per cent and 19.96 per cent respectively, compared to 1.62 per cent and 15.29 per cent, respectively, over the first half of 2011.
The bank’s loans and advances increased to Rs. 108.9 billion as at June 30 2012, an increase of Rs. 21.3 billion, or 24 per cent, compared to 30 June 2011. The NPLs to gross lending portfolio was 1.60 per cent as at 30 June 2012. The NPL ratio of the bank continues to remain healthy due to the proactive risk management practices of the bank, and is well below the industry average.The customer deposits portfolio also grew significantly by Rs. 27.2 billion or 40 per cent over the comparative period to reach Rs. 95.1 billion as at 30 June 2012. NDB’s branch network includes 66 branches which are strategically positioned throughout the country, enabling the bank to reap commendable growth levels in the recent past.
The bank’s strong and well managed balance sheet and the liquidity position indicate the ability to maintain a strong capital base, which enables the bank to optimise profits through expansion.During the period under review, the Bank expanded its network to Aluthgama, Embilipitiya, Kaduruwela and Nawalapitiya. NDB continues to be actively engaged in SME banking with the agriculture, handicrafts, manufacturing, trading and distribution, fisheries, and dairy sectors to develop the grass root entrepreneurs in the country. The bank’s aim is to develop this sector by educating and enhancing skills and building their competencies thereby preparing them to face the SME opportunities in the country.Adding on to the bank’s noteworthy performance in the second quarter, the UK based World Finance magazine awarded NDB as the ‘Best Commercial Bank 2012’ in Sri Lanka. The prestigious accolade recognised the bank’s commitment to continued excellence and superior service to its customers.
Meanwhile, NDB Group continued to make history, by NDB Investment Bank Ltd being adjudged the ‘Best Investment Bank in Sri Lanka’ at the recent Awards for Excellence 2012 by Euro Money, the world’s premier financial markets magazine. It was the first time Euro Money awarded an Investment Bank in Sri Lanka and NDB Investment Bank received the prestigious award in recognition of its pioneering efforts in developing the capital market in Sri Lanka.
This achievement was closely followed by the winning of several Annual Report awards at the League of American Communications Professionals (LACP) Vision Awards 2011; where NDB’s Annual Report 2011 gained noteworthy global acclaim being ranked amongst the World’s Top 100 as well as Asia Pacific’s Top 50 whilst winning a Platinum award for the Best Annual Report in the Commercial Bank’s Category, a second Platinum Award for the Most Improved Annual report in the Asia Pacific and a Gold award for the Most Improved Annual report Worldwide.
NDB’s strategic marketing initiatives and brand building activity was commended with an international award presented by the Chief Marketing Officials’ (CMO) Council of Asia. NDB clinched the ‘Award for Brand Excellence’ in the banking and financial sector at the recently concluded CMO Asia Awards. The award was in recognition of NDB’s brand performance based on market dominance, brand longevity, goodwill, customer loyalty and market acceptance.
This was yet another significant achievement for the bank as NDB was the only Sri Lankan bank to be recognised at the CMO Asia Awards and the prestigious accolade corroborates the bank’s aspiration of becoming a household brand in Sri Lanka while building strong relationships with its stakeholders and the wider community.
Commenting on the performance of the second half, CEO of NDB Russell De Mel stated: “Looking forward, the bank’s decisions over the past year to invest in technology and productivity initiatives including core banking modernisation, have placed the bank in a strong position for continuous growth. The challenge now is to ensure that as an organisation we optimise these investments for the benefit of our customers and our shareholders.”


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...by i3gconsultants@ 15:08:44 on 2012-08-25

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Stock Watch: SINS

Singer continues growth momentum


The Singer Group’s recently released results showed that it continued its growth momentum with 2012 first half revenue up 23% to Rs. 12.6 billion and net profit by 21% to Rs. 680 million over the corresponding period of last year.The Group’s results in the first half were impressive considering that they were achieved despite a volatile economy and negative consumer sentiments following the sharp rupee devaluation and sharp increases in interest rates, electricity costs, and fuel prices.
In his Chief Executive’s Review, Singer Sri Lanka Group CEO Asoka Pieris noted that the increase in interest rates was, “A major concern to all in the business sector.” Indeed, the Average Weighted Prime Lending Rate had soared dramatically from 9.4% a year ago to 13.8%. He pointed to the lower taxes in the current year as a key factor in the improvement of after-tax profits for both the group as well as the company.
One of the continuing factors for the group’s consistent success is its position as the country’s leader in consumer durable retailing. It continued to consolidate this position in the first half of the financial year, with impressive growth in a number of product categories. For example, sales of Microwaves increased by 510% compared to the same period of the previous year, while sales of Irons rose by 141%. Other product categories which enjoyed significant growth were refrigerators (27%), domestic and artisan sewing machines (16%), fans (59%), air conditioners (34%), kitchen appliances (42%), rice cookers (99%), water pumps (29%), and bicycles (41%). True to its commitment to raising the living standards of Sri Lankans island-wide, Singer Sri Lanka was successful in launching a number of new product lines and models with high growth in categories such as cameras, mobile phones, water purifiers, sprayers, induction cookers, gas cylinders, air coolers, and Blue Ray players.
Singer Sri Lanka offers its customers the widest selection of brands in these product categories and others, reflecting its commitment to a multi-brand marketing strategy. This value proposition, combined with the most extensive retail network in Sri Lanka, gives customers unrivalled quality, convenience, and choice. Numbering over 365 stores island-wide, the group’s retail network is backed up by the country’s widest-ranging service network. Singer customers all over the country enjoy the peace-of-mind that comes from knowing that their purchases are backed up by the industry’s best after-sales service.
The group’s outstanding performance has been built upon these unbeatable value propositions, as well as the belief that its sustained success is tied to the relationships it has forged with its customers. As it looks forward to scaling new heights in the second half of the financial year, the Singer group has renewed its commitment to offering its customers more vibrant lifestyles by continually enhancing its product and service offerings.


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...by i3gconsultants@ 15:08:44 on 2012-08-25

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Stock Watch: HASU

Remarkable growth in profits at HNB Assurance


HNB Assurance PLC has recorded remarkable growth rates of 275% and 371% in respect of Profit Before Tax and Profit After Tax respectively for the six months ended 30th June 2012.Accordingly, it has reported a Profit Before Tax of Rs 109.5 Million and a Profit After Tax of Rs. 85 Million as per the interim financial statement released to the Colombo Stock Exchange. This was the first time that the Company submitted its accounts under Sri Lanka Financial Reporting Standards (SLFRS).
One of the key contributory factors to this excellent performance has been the improved underwriting profitability achieved in respect of its General Insurance business. This is reflected by the Company being able to record a combined Ratio of 100% through its unwavering commitment to maintaining professional underwriting standards. This was supplemented by a strong growth in Investment Income largely due to the enhanced fund base resulting from the rights issue carried out last year, higher interest rates and foreign exchange gains. The application of new accounting standards (SLFRS) also had a positive impact on the Company’s performance.
While improving its bottom line, the Company was also able to record a 13 % growth in its turnover as measured by the Gross Written Premium (GWP). Its Life Insurance GWP grew by 20% while the General Insurance GWP grew by 8%. This achievement is consistent with the Company’s desire to grow its life business at a faster rate while managing the growth in general business with the focus on profitability.
According to Manjula de Silva, Managing Director of HNB Assurance PLC, “the Management is pleased with the significant growth in profitability achieved in the midst of a highly competitive market environment. It is the culmination of a process that began several years ago to improve the underwriting profitability of the General Insurance business in anticipation of a possible slowdown in the growth of investment income. We were fortunate that we received a positive contribution from both underwriting and investments during the period under review”.


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Stock Watch: SAMP

Sampath Group ups 1H pre-tax profit by 42.8% to Rs. 4.25 b


The Sampath Group, which consists of Sampath Bank and four subsidiary companies, continued with the growth momentum in the first half 2012, by posting impressive results in many key areas over the last year’s same period, amidst increasing interest rates and shifting of funds towards high cost deposits due to the prevailing market conditions.




Pre-tax profit of Rs. 4, 250.1 million of the Group for the first H 2012 was a growth of Rs. 1,273.2 million or 42.8 %, over the previous year’s 1H pre-tax profit of Rs. 2,976.9 million, with Sampath Bank, as the main entity of the Group contributing bulk (97.7%) of the profit. The post-tax profit of the Group amounted to Rs. 2,855.1 million, recording a growth of Rs. 724.2 million or 34.0%, over the post-tax profit of Rs. 2,131.0 million for the last year’s same period.
The bank’s pre-tax profit, which rose to Rs. 4,150.6 million in 1H 2012, reflected an increase of Rs. 1,345.3 million or 48.0% over the pre-tax profit of Rs. 2,805.3 million for the 1st H 2011. The post –tax profit of the Bank recorded a growth of 40.4 % over the same period of last year, rising from Rs. 1,987.7 million in 2011 to Rs. 2,789.8 million in 2012. The lower PAT growth rate of 34.0% at the group level   was mainly due to the drop in profits of the Stock Brokering subsidiary, SC Securities Company, arising from the current situation in the Colombo Stock market.    
NII, which is the main source of income from the fund based operations and representing over 50% of the total operating income, rose from Rs. 4,192.3 million in the first H 2011 to Rs 5,398.8Mn in the first H 2012, recording a significant growth of 28.8%.
This increase was achieved despite the Net Interest Margin (NIM), which stood at 4.11% in the first H 2011, marginally dropping to 4.08% in 1H 2012, as a result of cost of funds increasing at a faster rate than the rise in average yield rates of both the customer advances and Government securities held.
Hence, this significant growth in NII was largely due to the high growth rates recorded by the bank in key business volumes, namely 30.2% in customer advances, 27.9% in  total assets and 23.6% deposits during the one year period ended 30 June 2012.
The above income, one of the key contributory factors for the high profit growth in 1H 2012, rose from Rs. 238.3 m in the first H 2011 to Rs. 2,336.4 million in 1H 2012, recording a growth of Rs. 2,098.1 million or 880.6%.  This was facilitated mainly by the increase in the revaluation gains on the foreign currency reserves held in the bank’s FCBU, as a result of sharp depreciation of the Rupee against the US Dollar in 2012 (from Rs. 113.9 as at 31 December 2011 to Rs. 133.90 as at 30 June 2012) and the substantial increase in the Dealing Room’s trading profits.
Other income of the bank, the bulk of which is commission and fee-based income, too recorded a growth of Rs. 203.0 million or 15.2% in 1H 2012 over the same period in 2011 as a result of increased economic activity in the market and the rapid growth achieved by the bank in its lending activities.
The only source of other income, which recorded a negative growth (100%) in 1H 2012   was capital gains  on share trading, where the bank realised capital gain of Rs. 411.2 million by selling part of scrip dividend received from Lanka Bangla Finance Ltd during the  1 H 2011.
Operating expenses of the bank, which stood at Rs. 3,747 million in 1H 2011, rose to Rs. 4,458 million in 1H 2012, recording an increase of Rs. 711 million or 19%.  This growth in operating expenses was largely due to the incremental cost incurred in connection with the opening of 18 new branches in the second half of 2011 and the increase of the staff cadre, which too was due to the expansion drive.
The bank anticipates that the cost increase rate would   be somewhat lower in years to come, in view of the moderation expected in the branch expansion program, given the fact that the bank’s branch network has now adequately covered most of the potential locations of the country. Apart from this, effect of the salary increments during the year and inflation in the economy also impacted on the increase in operating expenses over the previous year’s same period.
Though the provision cover recorded a marginal decline and stood at 72.85 % at the end of 1H 2012, due to the recoveries made against the underlining NPLs, the specific provision cover still remained at a higher level, compared to the industry average of 54 % on 30 June 2012. Together with the general provisions, the total provision coverage ratio of the bank stood at 87.20 % as at 30 June 2012.
Similarly, NPL Ratio too came down to 2.42% as at 30 June 2012 from 2.65% as at 31.12.2011. However, the regulatory general provision made against performing advances had to be increased due to significant credit growth recorded in 1H 2012.
The provision against mark to market losses on the trading portfolio of shares and Treasury Bills also increased by Rs. 214 million due to unfavourable market conditions in 1H 2012, as against a net gain of Rs. 129.6 million in the first H 2011, which includes a reversal of an impairment provision of Rs. 275.9 million made against the share investment in Union Bank. This was mainly due to drop in the share prices of the companies listed in the CSE nowadays.
The growth rates in deposits and total assets during 1H 2012 amounted to 12.1% and 14.5 % respectively and compared well with the industry’s growth rates of 9.3% and 13.7%, during the period. In addition, the growth rate in customer advances during 1H 2012 amounted to 14.1%, as against the industry average of 13.0% during the period.   
The NPL volumes net of IIS which stood at Rs. 4,890.5 million as at 30 June 2011 were reduced to Rs 4,825.7 million by Rs. 64.85 million or 1.34%  as at  30 June 2012. Though the NPL volumes rose by Rs. 145.9 million in the first H 2012, the NPL ratio of the bank dropped to 2.42% as at 30 June 2012, from 2.65% as at 31 December 2011, which also compared well with the industry average of 3.8% as at 30 June 2012.
The improved profits paved the way for most of the key financial ratios of the bank to record significant improvements over the previous year.
This ratio rose to a peak level of 59.9% in 2011, mainly due to the additional cost incurred in connection with the accelerated branch expansion program and recruitment of 697 new staff to support the business expansion. However, the ratio in 1H 2012 dropped to 52.26% with the moderation in the branch expansion program and the significant increases in the NII and foreign exchange income.
Both ratios showed  significant improvements in 1H 2012, due to the higher profit growth rate of 40.4.% of the Bank  during the period. The ROA after tax which stood at 1.95% in 2011 rose to 2.12% in 1H 2012, whereas the ROE which stood at 25.16% in 2011 rose to 27.97% during the period under review.
This ratio dropped from 24.95% as at 31 December 2011 to 23.37% as at 30 June 2012, mainly due to the rapid credit expansion.  Though, the ratio was maintained at a reasonably higher level over the minimum of 20%, it was not as high as the industry average of around 31.4%, due to the prudent trade-off maintained between liquid assets and earning assets.
The capital adequacy ratios, Tier I at 10.77% and Total at 11.94%, by the end of first H 2012, recorded marginal deteriorations compared to the level as at 31 December 2011, mainly due to the rapid credit expansion during 1H 2012 and part of the dividend payment for 2011 made in cash. Nevertheless, they remained above the minimum regulatory requirements.
With the objective of strengthening the Tier-II capital, utilising the sizable leeway available in Tier-II, Sampath Bank is taking steps to issue 15,000,000 debentures with an option to issue up to a further 10,000 000 debentures (in the event of over subscription) at a par value of Rs. 100 subject to the necessary regulatory approvals. The bank hopes list these debentures on the Colombo Stock Exchange.
As per the Ruling issued on 2 March 2012 by the Institute of Chartered Accountants of Sri Lanka on ‘Preparation of Interim Financial Statements as per LKAS 34,’ the bank has published the interim financial statements for 1H 2012 under Option 2,  by presenting  them in accordance with the Sri Lanka Accounting Standards (SLAS),  which existed immediately prior to 1 January 2012, with disclosures on the impact on the statement of comprehensive income for the six month period under review  and  net assets (equity)  as at 31 December 2011 and 30 June 2012 respectively.
In the 2012 rating assessment, considering the healthy asset quality, better compliance, transparency, capital adequacy, internal control systems and processes of the bank, RAM Ratings Lanka has reaffirmed AA (stable) rating for Sampath Bank, in their rating assessment. In the last year, the overall credit rating of the bank’s “AA-”lka (positive) has been affirmed by Fitch Rating Lanka too. Sampath Group was recognised as the ‘Best Banking Group in Sri Lanka for the Year 2012’ at the World Finance Awards presented by World Finance Magazine.


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Stock Watch: MBSL

MBSL expands investment management services on a regional level


MBSL Investment Management Service is designed to provide investors a diversified range of securities listed on the CSE as well as on fixed income securities such as treasury bills and bonds according to the investment objectives of the investors.  Since every investor is different, the MBSL Investment Management process is designed to identify individual needs, and present a portfolio that is appropriate and adaptable to any future changes in circumstances. It has never been more important to plan for future financial security. However, there are more investment opportunities available now and hence the company has constructed a range of solutions with the aim of providing active ongoing financial management to achieve results and guarantee peace of mind to investors.
MBSL Investment Management aims to offer a professional and tailor-made fund management service to  investors achieved by: A precise and simple risk analysis assessment process that identifies each individual investor’s risk profile and investment requirements, actively managed investment portfolios that are subject to constant review and due diligence checks, optional access to alternative investment funds where preferred by the investor and appropriate within the risk profile assessment process, regular investor risk profile assessment and protecting the investor and the manager through detailed reporting when required by the investor.
As clients needs change, so will their investment profile; between that of a higher risk, more aggressive strategy and a low risk, defensive (less volatile) strategy. Realigning the investment strategy is straightforward – all that required is a consultation and the completion of a risk profile assessment form, which is then processed by MBSL.
The correct investment strategy will always be maintained by regular reviews of the clients’ needs and objectives, based on the risk appetite of the investors. The first consideration is the investment time horizon, which is pivotal to deciding on the degree of risk that can be taken. Here risk is measured as the extent to which a paper (or an actual) loss of value can be tolerated over a given period, and the level of gains the investor ideally wishes to achieve over the life of the investment.
For example, although stock markets have generally provided greater upside potential over the longer term, there will almost certainly be periods (possibly of several years) when stock markets will fall. Stock market exposure therefore has a lesser allocation in the defensive portfolio categories and a higher allocation in the aggressive portfolios.


Asset allocation examples
The portfolios above are an illustration of the diversification offered by the MBSL Investment Management. It is not indicative of the positions that the fund would hold on an ongoing basis, as these positions would change in line with future investment management decisions.
The portfolio models are initially constructed by deciding asset allocation, which is derived from the risk profile of the investors, then by selecting a range of exceptional fund managers running specialist strategies within each asset class. This method has several objectives, including: Lower risk – a broad spread of underlying investments diversified by asset class; enhanced performance – access to best stocks based on in-depth research; and management – realignment of portfolios within each risk profile.
MBSL Midcap index also providing signals for investment management. As it picks the Midcap stocks of the Colombo Stock Exchange with growth potential as per the guidelines, it provides an indication of stocks that could move to next level of market capitalisation. By keeping a close monitoring of the midcap index high growth potential socks, possibilities of share prices moving were more than the market movement could be picked up. This will help investors to gain beyond average market return.
Managing investor’s money is not just about the numbers – the vital ingredients to success are the people responsible; their expertise, their values and their creativity. MBSL has established an enviable reputation for meeting these criteria: by listening to clients’ needs and addressing them.
As an organisation MBSL is able to keep these qualities intact, leading to a proven track record in the investment arena. The investment team therefore makes its allocation decisions objectively, on the merits of asset class, manager skill and the client’s chosen risk profile.


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...by i3gconsultants@ 15:08:44 on 2012-08-25

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Stock Watch: TFC

The Finance gets ready for a capital infusion


The Finance Company PLC (TFC), which is on a restructuring process, is getting ready for a capital infusion.TFC also said based on the restructuring program carried out under the recommendations of a reputed international restructuring organisation the company is in the process of relocating some of its key branches to strategic locations in order to serve customers with greater convenience. The company has already refurbished and relocated 10 branches to new strategic locations during the recent past, which will facilitate the growth of new products lined up as a part of its restructuring plan.Another key area of this restructuring programme is the centralisation of back office operations, which will focus on reducing costs and improving the efficiency of the front office staff to serve customers more effectively.
The Finance Company PLC has made steady progress during the year with a tremendous year on year growth across all key business areas. Investments grew by 123%, pawning by a mammoth 236%, fixed deposits by 170% whilst savings grew by 54%. Along with the appointment of the new directors, the company is looking for a fresh capital infusion to take the company to the next level of operations.
As part of strengthening the Board, two new appointments have been made recently as well.
They are Aruna Lekamge, who is a specialist in risk management. He has served as an Executive Director at Sri Lanka Insurance Corporation and at Ceylon Asset Management Co Ltd.
His entrepreneurship record has made him a leading business personality in Sri Lanka and he chairs a diversified group of companies including international trading, transport and logistics sectors.
Cherille Rosa brings over 25 years of leadership and management experience in finance, international operations, risk management and information technology as well as in start-up ventures and divisions within Fortune 1000 companies both in the US and Asia Pacific region. She has also served as Vice President of Finance and Operations at City Bank, Singapore.
The company also announced the appointment of T.B. Ekanayake, who previously served in the capacity of Executive Director of the company, as its Director/ Chief Operations Officer in order to support the restructuring that is being done.The appointment of these two new Directors and the new role of T.B. Ekanayake will be an important inclusion to the Board, which will support the vision of the Chairman Preethi Jayawardena, who is also a member of the Monetary Policy Consultative Committee of Sri Lanka.


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...by i3gconsultants@ 15:08:44 on 2012-08-25

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Stock Watch: DFCC

DFCC records Rs. 713 m PAT for 1Q


The DFCC Group recorded a consolidated profit after tax of Rs. 713 m for the first quarter ended 30 June 2012 compared with Rs. 702 m in the corresponding period of the previous year (comparable period).
Apart from the banking business which contributed Rs. 617 m to profit after tax and is analysed below, the investment banking joint venture, Acuity Partners (Pvt) Ltd. (APL) contributed Rs. 49.5 m in the current period marginally lower than Rs. 52 m in the comparable period.The environment was not conducive for investment banking business and the contribution from APL’s core activities was significantly lower than in the previous period. However, APL benefitted from an issue of new shares to minority shareholders by a subsidiary at a premium to net asset value which gave rise to deemed disposal profit of Rs. 142 m attributable to APL and recognised in APL’s consolidated income statement.
The contribution from all other subsidiaries and associate company collectively was Rs. 15.6 m in the current period (Rs. 30.5 m in the comparable period).The banking business of the DFCC Group is undertaken by DFCC Bank (DFCC), a licensed specialised bank and 99 % owned subsidiary DFCC Vardhana Bank (DVB), a licensed commercial bank. Both anks function as one economic entity and as such it is appropriate to analyse the consolidated performance of the two banks as DFCC Banking Business (DBB).A consolidated income statement for DBB has been released to the Colombo Stock Exchange as supplementary financial information. This statement was derived from the interim financial statements with certain adjustments for ease of analysis. Since the financial year of DVB ends in December, the accounts of DVB are consolidated with a three month lag.
The interest income of DBB in the current period was Rs. 3,242 m, an increase of 54% over Rs. 2,099 m in the previous comparable period. The higher interest income was the result of portfolio growth with total loans and advances (excluding interest receivable) increasing 45% from Rs. 65,527 m on 30 June 2011 to Rs. 94,808 m on 30 June 2012, as well as due to the increase in market interest rates by several percentage points during that time.However, the rising trend in interest rates also had an adverse impact on funding cost. The environment was not conducive to raising medium and long term funds from the domestic market as investor appetite for such investments was very low.Mobilisation of demand and lower cost savings deposits also became difficult with investor preference shifting to short tenor time deposits. Thus, although DBB increased its customer deposit base by 98% from Rs. 26,613 m on 30 June 2011 to Rs. 52,634 m on 30 June 2012, there was a shift to higher cost term deposits and this change in the funding mix resulted in interest expense of DBB increasing from Rs. 980 m in the comparable period to Rs. 1,914 m in the current period, an increase of 95%.
The interest margin of DBB thus reduced, as was the case for the overall banking sector, and the net interest income of DBB was Rs. 1,328 m in the current period recording a modest increase of 19% over Rs. 1,119 m in the comparable period.In early 2012 the Central Bank imposed a credit growth ceiling on banks being one of the policy measures taken to address certain macroeconomic concerns. This restriction and the relatively high interest rate environment resulted in the quarter ended 30 June 2012 recording only a 6.5% growth in credit extended by DBB. There are signs that credit demand is weakening which should lead to higher liquidity in the banking system and less pressure on interest rates as the year progresses.
Other income of DBB was Rs. 295 m in the current period, 15% lower when compared to the comparable period. This was mainly due to lower capital gains from disposal of equity investment in an environment where the prices of shares listed on the Colombo Stock Exchange declined on very low turnovers.The gains from the sale of non-affiliated shares reduced from Rs. 166 m in the comparable period to Rs. 58 m in the current period but were offset in part by higher dividend income and higher fees and commission income recorded by DVB.Foreign exchange income of the DBB is primarily derived from DVB, the commercial banking arm. Due to its relatively small size DVB did not benefit from translation gains arising from the depreciation of the rupee as much as some of the larger commercial banks which have built up substantial retained profits in their Foreign Currency Banking Units (FCBUs) over an extended period.
Asset quality was maintained with the gross non-performing loan ratio of DBB being maintained at 4.3%, the same as on 31 March 2012 which was a significant improvement to 6.3% one year ago. While managing portfolio quality, DBB continues to recover delinquent loans as evident from Rs. 179 m recoveries in the current period a 25% increase over the previous comparable period. These recoveries were largely in DFCC.
DBB was successful in containing operating expenses to a modest 4% increase to Rs. 653 m in the current period partly due to the fact that after two years of significant investment, expansion of the distribution network and related increase in head count is not required to be undertaken at the same pace. DBB intends to open five new branches in various parts of the island during 2012 of which one branch in Kilinochchi in the Northern Province was opened after 30 June 2012.
The ratio of operating expenses to operating income was 40% in the current period compared with 43% in the comparable period. However, the full benefit of the expanded distribution network will only accrue at a later time since DVB’s initiative to expand its personal finance services had to be slowed down due to the prevailing credit ceiling.
DBB recorded Rs. 979 m as operating profit before taxes which was an increase of 11% over the comparable period. Profit after tax (both VAT on financial services and income tax) was Rs. 619 m, an increase of 3% over the comparable period. Going forward, the credit ceiling will have an adverse impact on the growth of DVB during the remainder of the year since it had a smaller credit portfolio than DFCC at the end of December 2011. DFCC has room and can expect to grow as previously approved project loans are progressively disbursed.
The quoted equity investment securities of DFCC are carried at a cost of Rs. 4,971 m as at 30 June 2012. The aggregate market value of the investments on 30 June 2012 amounted to Rs. 13,733 m with an unrealised gain of Rs. 8,762 m.
The interim non-audited financial statements are not based on the new accounting standards and therefore this unrealised gain is currently not recognised in the financial statements. However, under the new accounting standards all listed shares currently classified as investment securities would be reclassified as available for sale and marked to market and the unrealised gains recognised in the equity of DBB.
The capital adequacy and liquidity ratios continued to be well above the stipulated regulatory minimum. Specific provision cover for the DBB was 78% and un-provided NPL s as a proportion of equity was under 6%. The latest rating review by Fitch Ratings Lanka Limited announced on 2 August 2012 has reaffirmed AA (lka) for DFCC and AA— (lka) for DVB with outlook stable for both banks.


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Stock Watch: NTB

NTB opens ‘Nations Business Centre’ for SMEs in Batticaloa


Nations Trust Bank (NTB) opens the first ‘Nations Business Centre’ in the Eastern Province taking the total number of dedicated Business Centres for SME Customers to five. Key objectives of these centres are to provide a one-stop-shop for our SME customers, increase access to finance and build capacities among SME customers. Through the Nations Business Centre SME customers can access all financial products and services offered by NTB as well as business advisory services that enhance knowledge and skills which will help them to take their business to the next level.




Subsequent to the opening of the business centre, a seminar was conducted for SME customers, followed by an evening of fellowship. The SME customers who participated in this business forum included traders, importers, exporters, manufactures and distributors in the area. Many business forums of this nature will continue to be organised   across the country on various topics that benefit entrepreneurs and small businesses.
The business forum was conducted by the Business Development Centre resource person, K. Perimbarasa, who is also a Certified SME Toolkit Trainer.  Customers were introduced to the web-based SME Toolkit developed by the International Finance Corporation (IFC) which is managed locally by Dialog Axiata. The Toolkit contains a range of useful financial management tools, which are easy to use and help to improve the running of businesses. A key benefit of the SME Toolkit is that it is available in Sinhalese, Tamil and English languages. The SME Toolkit is also made available at the Nations Business Centre in Batticaloa so that customers could access it with the assistance of the bank’s trained staff.
NTB offers SME customers a range  of product and services  including working capital finance, long term financing for business expansion and investments, cash management services, trade services for importers/exporters, guarantee facilities, leasing and factoring solutions as well as specialised  services such as bank-at-your-doorstep and trade document delivery services for  business customers. All this is packaged in its Business Banking Account where the bank offers have Platinum, Gold and Silver categories each providing a special set of benefits, including lucrative rewards points, for our business customers.
Commenting on this initiative NTB Deputy General Manager, Retail and SME Banking and chief guest  at the opening Keshini Jayawardana said, “We understand that  SME’s are the  driving force of our economy and  NTB will  continuously strive to add value to the financial propositions that we launch from time to time to cater to this business clientele.’’
NTB PLC is one of the fastest growing banks in Sri Lanka today. The bank now has 52 branches, seven personal banking centres and is the sole issuer and acquirer for American Express cards in Sri Lanka.


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Stock Watch: DFCC

DFCC a strategic banking partner to SMEs


In a bid to encourage SMEs to innovate and thrive rather than just survive, the pioneer development bank, DFCC and its almost wholly owned subsidiary DFCC Vardhana Bank is conducting training programmes islandwide to develop managerial skills of Small and Medium Entrepreneurs (SMEs).The programmes which are carried out at regional level are delivered at no cost to the SMEs. A wide range of subjects are covered with emphasis on leadership and motivation, finance and taxation, customer relations, marketing and managing human resources.
Providing managerial skills to entrepreneurs has been an ongoing project of the bank and is part of a larger programme to develop SMEs in the outstations to be sustainable. Around 8,000 people have benefitted from this programme in the last several years. DFCC provides a comprehensive package of financial and allied services to the SME sector through a network of 127 branches and customer service centres islandwide. DFCC has a proven track record of developing SMEs in to big league businesses and is a true partner in enterprise building.


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Stock Watch: LOFC

LOFC footprint widens


Lanka ORIX Finance PLC (LOFC) recently upgraded its customer service points in Dehiattakandiya, Medawachchiya, Aralaganwila and Nikaweratiya to fully fledged branches and expanded the branch in Mahiyanganaya. With this upgrade LOFC is now in a position to offer its entire product range which includes savings and deposits, finance leasing and hire purchases, NRFC and RFC, working capital and Shari’ah compliant Islamic financial services and thereby catering to the Micro and SME requirements of these communities.LOLC Group Branch Network Chief Officer Ashan Nissanka was amongst those from the Management of the LOLC Group present at the openings.
Speaking about LOFC’s rapidly expanding footprint LOFC Managing Director/CEO Brindley de Zylva said, “As a leading financial institution in the non-bank financial services sector, LOFC has become a catalyst to the growing Micro and SME entrepreneur that makes up the regional landscape. With its range of financial products and services, LOFC is continuing to provide an inclusive financial service to communities in every corner of our island through its rapidly expanding branch network, enabling financial empowerment and social mobility to masses.”


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Stock Watch: AAIC

Chula Hettiarachchi appointed COO – Life at Asian Alliance Insurance


Asian Alliance Insurance PLC announced the appointment of Chula Hettiarachchi as the company’s Chief Operating Officer – Life with effect from 1 August 2012.With a career which spans over a decade in AAI, Hettiarachchi has held many leadership positions in the Life Distribution arm as well as in the Marketing Division of the company.He spearheaded the Life operations in distribution since its introduction to AAI in 2001. .
“Chula no doubt gets the fullest credit for the advances and rapid success made in Life insurance at AAI. The company has recognised his contribution, and endows a greater responsibility to take the Life insurance business of the company to the highest levels within the local marketplace, reaching up to top position over the next few years,” stated Ramal Jasinghe, Director/CEO of AAI.The rapid progress of the Life insurance business and being the mainstay of the company has been due to the unique approach, discipline and superior strategies adopted in transacting the Life insurance business at Asian Alliance. This timely decision made by the company is in line with the forthcoming regulatory changes of segregation of Life and Non Life insurance businesses to function as two separate business entities.
Hettiarachchi holds B.Com and M.Com Degrees conferred by the University of Kelaniya. He also holds a Postgraduate Diploma in Finance and Business Management, from the Institute of Chartered Accountants of Sri Lanka. He commenced his career in 1981 at Upali Newspapers (Pvt) Ltd. and served as the Head of Distribution prior to joining the insurance industry in 1995.
Hettiarachchi has undergone extensive training in Life insurance management and sales with Allied Dunbar in the UK, Foundation for the Advancement of Life and Insurance Around the world (FALIA) & Oriental Life Insurance Cultural Development Centre (OLICID) in Japan. He is also the President of the Marketing & Sales Forum of Insurance Association of Sri Lanka (IASL). This Forum is represented by the Marketing & Sales professionals of the insurance companies in Sri Lanka.
Asian Alliance Insurance PLC is a member of the Softlogic Group which is one of the leading, dynamic organisations in Sri Lanka today, having expanded and diversified into the growth sectors of retail, healthcare, ICT, automobiles, travel and leisure and finance, holding authorised distributorships for key global brand names. Softlogic today employs over 5,000 people within its offices located in Sri Lanka, Singapore and Australia.


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...by i3gconsultants@ 14:08:56 on 2012-08-25

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Stock Watch: DFCC

DFCC Vardhana Bank takes ‘Vardhana Prabhu’ priority banking to customers in Panadura


DFCC Vardhana Bank (DVB), Sri Lanka’s fastest growing bank recently launched their exclusive ‘Vardhana Prabhu’ (VP) priority banking services in Panadura. The exclusive priority banking outlet in Panadura allows privileged banking customers to benefit from a host of customised solutions and privileges such as preferential interest rates, waivers of specific charges and fees, extended banking hours and concessions on banking transactions.




The service, fittingly named ‘Vardhana Prabhu,’ offers DVB’s high net worth customers tailored personalised services that take banking convenience to a new level where clients can get their banking needs attended to in the privacy and comfort of an exclusive lounge.
Vardhana Prabhu allows clients the facility of extended hours on both ends of normal business hours with a dedicated officer at their service at all times to provide quick and comprehensive solutions.
Over the years Panadura has rapidly developed into an important town, it is today, the hub for many business ventures and a host of other vibrant trading and economic activities. The convergence of such activities has also resulted in bringing together a healthy mix of entrepreneurs, professionals and corporate executives to adjacent towns such Bandaragama, Moratuwa, Wadduwa.
The opening of this specialised banking service in Panadura gives these busy individuals the opportunity to experience premier banking closer to their base without having to travel to Colombo.
Speaking at the launch of Vardhana Prabhu priority banking services in Panadura, DFCC Vardhana Bank CEO Lakshman Silva stated: “We are delighted to introduce Vardhana Prabhu to our high end clients of Panadura, like everything else banking needs too have changed and individuals with busy schedules are constantly looking at ways to do more in the least amount of time. Discerning clients today, demand speedy customised solutions delivered to them in a professional and convenient manner and that’s what we offer our privileged clients of Panadura with the launch of this service.”
Launched in October 2011 last year, Vardhana Prabhu was first introduced in Jaffna, followed by another centre in Batticaloa, making DFCC Vardhana Bank one of the first in the industry in Sri Lanka to include customers from out of Colombo to be privy to a Centre that offers exclusive, personalised banking services.


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Stock Watch: COCR

RAM upgrades Commercial Credit and Finance ratings to BB+/NP


RAM Ratings Lanka has upgraded Commercial Credit and Finance PLC’s long-term financial institution rating from BB to BB+, while reaffirming the short-term rating at NP. Concurrently, a long-term BB rating has been assigned to the company’s proposed Rs. 500 million Unsecured Subordinated Redeemable debentures. Both long-term ratings have a stable outlook.The upgrade reflects the company’s improving performance indicators and expanding market share. The ratings are, meanwhile, supported by CCF’s healthy performance and adequate funding levels. Nevertheless, the ratings are moderated by the company’s relatively unseasoned loan portfolio given its aggressive growth of late, and also its average capitalisation levels.
CCF is a licensed finance company that has been operating for over 29 years. The company underwent a change in ownership in September 2009, following which it had shifted its focus to micro financing; its previous emphasis had been on leasing and hire-purchase.
Consequently, CCF’s loan portfolio has been expanding robustly, with its market share (company’s assets as a percentage of total industry assets) increasing from 1.42% as at end-March 2010 to 3.35% as at end-March 2012. Concurrently, the company’s performance indicators have also improved; its net interest margin clocked in at 22.38% in FYE 31 March 2012 – from 18.32% the previous year – and was among the highest in the industry. Meanwhile, its return on assets of 13.70% was also among the best in the industry.
Meanwhile, we opine that CCF’s asset quality is moderate, mainly owing to its relatively unseasoned loan portfolio given its aggressive year-on-year loan growth of 94.98% in fiscal 2012. That said, we note that 40% of the portfolio expansion had stemmed from micro financing, which generally exhibits low delinquency rates. Nevertheless, the quality of the company’s key HP segment remained weak, thereby leading to a 15.27% y-o-y increase in gross non-performing loans last year, which translated into a gross NPL ratio of 3.25%. The company’s NPL coverage of 42.24% in fiscal 2012 is also weaker than its peers’.
On a separate note, CCF’s performance is viewed to be healthy owing to its relatively broad NIM and lower cost-to-income ratio. Driven by the aggressive expansion of high-yielding products, its NIM widened to 22.38% in FY Mar 2012. Supported by its improving top line, CCF’s cost-to-income ratio also eased from 63.28% to 44.59% y-o-y – a healthy level compared to its LFC peers. Overall, the company’s performance indicators stayed healthy, although we opine that further weakening of the company’s asset quality may impinge upon its performance.
CCF’s funding profile is dominated by customer deposits, which accounted for 71.89% of its total funding as at end-FY Mar 2012. Meanwhile, the company has increased its debt exposure, which now accounts for 15.75% of its funding base. Amid rapid loan growth, CCF’s loans-to-deposits ratio climbed up to a relatively high 124.84% as at end-FY Mar 2012. Furthermore, its liquidity position is considered adequate. The company’s statutory liquid-asset ratio recovered to historical levels in fiscal 2012, clocking in at 14.40% at the end of the period (end-FY Mar 2011: 9.88%) – more or less in line with those of its similarly rated peers. On a separate note, CCF’s capitalisation levels are still average, albeit better y-o-y; its tier-1 and overall risk-weighted capital-adequacy ratios came up to a respective 10.34% and 10.99% as at end-FY Mar 2012 (end-FY Mar 2011: 6.21% and 7.44%). The company may find it a challenge to maintain its growth momentum, unless further capital can be raised. On this score, the proposed Rs. 500 million subordinated debentures will enable CCF to expand its loan books by approximately 48% while maintaining its RWCAR at current levels.


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Stock Watch: MBSL

MBSL Savings Bank reaffirms commitment in Kalutara


MBSL Savings Bank celebrated the opening of its relocated service Extension Office with a ribbon-cutting ceremony at 426 Galle Road, Kalutara South. The new location with added services reaffirms the bank’s commitment to improving lives and strengthening communities by providing banking services to the Kalutara community.




Situated in an ideal city location, the new Extension Office can be reached on 034 222 4245 and offers its customers the convenience of spaciousness, ample free parking facilities and a courteous friendly customer service staff capable of assisting the different communities.
MBSL Savings Bank is a subsidiary of Merchant Bank of Sri Lanka (MBSL) and has the backing and stability of both MBSL and the Bank of Ceylon (BOC). The Central Bank approved licensed specialised bank will offer a wide range of services, including fixed deposits for senior citizens, minors and fixed deposits and lending products namely; leasing and hire purchase, commercial lending and investment services to individuals and businesses located in the city and suburbs.  
MBSL Savings Bank is a proven community bank that offers products and services that meet the deposit and financing needs of both consumers and businesses. Customers can be confidant knowing that their deposits are fully backed by both MBSL and the Bank of Ceylon. The bank’s residential lending officers are available to guide its customers through the financial process whether it is in looking to purchase or refinance a home.
“We’re very pleased to be opening our new Extension Office in Kalutara,” said M.R. Shah, Chairman of MBSL. He added, “This is an ideal location for our customers and this new office opening is part of our continued commitment and approach to providing outstanding service and convenience to our customers in a way that fits in with their lifestyles.”
“In addition to the great rates we’re offering on our money market accounts, home equity loans and lines of credit, and we will also be offering free financial advice for our customers to help them manage their finances to meet their goals,” stated Lloyd Peiris, Acting CEO/Deputy General Manager.
Free financial advice are one-on-one consultations with a banker who can help the customer select the products and services that best fit their savings, deposits or borrowing needs.
MBSL Savings Bank is a subsidiary of Merchant Bank of Sri Lanka (MBSL). MBSL holds 62% of the stake of MBSL Savings, while 72% of MBSL shares are owned by Bank of Ceylon (BOC).


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Stock Watch: SEYB

Seylan Bank’s Tikiri Plus lures kids with 100 bicycles offer


Seylan Tikiri Plus Accounts, which teaches children on the savings habit the fun way, have come up with yet another innovative promotion, where 100 BMX bicycles are on offer to be won, for 100 lucky Tikiri Plus Account holders.Every Rs.2,000/- deposited in to a Tikiri Plus account during 16th July to 15th September 2012, will be eligible for one chance at the draw. Multiples of Rs.2,000/- will earn multiple chances. For instance a Tikiri Plus account holder who deposits Rs.10,000/- will earn five winning chances at the draw.The uniqueness of this draw is that it is conducted as a branch wise draw and one lucky winner will emerge from each of the branches island wide. In addition to the Bicycle, 20 consolation prizes too, are on offer at each branch.Seylan Tikiri Plus offers the said prizes, in addition to the exciting range of gifts such as mugs, school bags, board games, radios, gift vouchers, organs and bonus interest which are currently being offered without a draw, as the Tikiri Plus account balance grows.
Seylan Bank was the first bank to offer gifts for children’s savings accounts and has been rewarding children with such specific gifts since the year 1992.Seylan Bank also has the distinction of introducing attractive promotions and events such as the Tikiri Carnival, Tikiri trip to Disneyland, Tikiri Trip to Singapore, Bangkok Dream World Tour and Thagi Pita Thagi Draw periodically.Hurry, start saving now for your child’s future today, whilst enjoying all the attractive benefits of Seylan Tikiri Plus.


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Stock Watch: NTB

NTB Maharagama branch refurbished


Nations Trust Bank has been in operation for over 12 years and has grown in strength and stability offering a range of products and services which has enriched its position as a customer centric bank. The bank was awarded ‘Best Private Bank in Sri Lanka’ recently as a tribute to the world class services that are offered to the bank’s varied clientele.







Deputy CEO Renuka Fernando

With the objective of consistently aiming to   provide exceptional service, Nations Trust Bank PLC recently declared open their refurbished branch in the buzzing town of Maharagama offering both residential as well as business customers a more spacious location to transact. The refurbished location is result of the branch concept that was adopted a few years ago to enhance customer convenience and create an ambience that is warm and friendly.  
The refurbished branch is conveniently located at No. 129, High Level Road, Maharagama in the heart of the town making it easy for customers to have access 365 days of the year with extended banking hours.
Apart from providing personal financial solutions to the individual customers, the bank is also focusing on offering a range of financial solutions to Small and Medium Entrepreneurs, (SME). The opening of a number of ‘Nations Business Centres’ within the branch foot print has facilitated to cater to the diverse needs of entrepreneurs in these geographic localities.
Nations Trust Bank has also introduced pawning services at a number of branches located island wide and will continue to attract pawning customers in order to benefit from 365 day banking with extended banking hours. Remittances are also an area of focus as many remittance partners have been signed up from around the globe thus offering convenience for remittance transactions across the  network.
Commenting at the opening, Deputy CEO Renuka Fernando said: “We are now pleased to offer our customers in Maharagama Safe Deposit Locker facilities together with a special area for Pawning, Leasing, the American Express Card membership and Bancassurance. We will also continue to deliver the exceptional customer service we offer across our branch network and hope that they enjoy the ambience in this newly refurbished branch and get all their financial needs attended to under one roof.”
Nations Trust Bank PLC is one of the fastest growing banks in Sri Lanka today. The bank has 52 branches, seven Personal Banking Centres and is the sole issuers and acquirer for American Express credit cards in Sri Lanka.


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Stock Watch: LOFC

ICRA Lanka assigns A- with stable outlook rating to Lanka ORIX Finance


ICRA Lanka Limited, a wholly owned subsidiary of ICRA Ltd., an associate of Moody’s Investors Service, has assigned an Issuer rating of ‘[SL] A-’ (pronounced SL A minus) with stable outlook to Lanka Orix Finance PLC.The rating indicates adequate-credit-quality and the rated entity carries average credit risk. The rating in Sri Lanka is assigned on an eight-point scale developed specifically for the country, and ranges from ‘[SL] AAA’ to ‘[SL] D’. This rating scale ranks the relative default risk associated with issuers in Sri Lanka.The rating factors LOFC’s close operational and financial linkages with the LOLC Group in its position as the flagship subsidiary of Lanka ORIX Leasing Company PLC (HoldCo), which is rated [SL]A-/stable by ICRA Lanka. Given this, ICRA Lanka has taken a consolidated rating view of the HoldCo and its key asset financing subsidiaries.The rating also factors LOFC’s robust franchise, healthy competitive position given its superior market share and a professional and experienced management team. ICRA has taken note of the significant gaps in LOFC’s asset-liability maturity profile, particularly in the short term buckets, arising from the short term nature of funding, both retail deposits and institutional funds.
While LOFC’s refinancing ability remains good through retail and institutional franchise, ICRA Lanka expects the company to raise longer-tenure funds to progressively address this gap.
LOFC’s financial leverage has increased as a result of rapid portfolio growth despite capital infusion from the Parent. However, lower incremental portfolio growth, stable internal accruals are expected to support capitalisation levels.The core profitability has been improving in the past few years backed by higher interest spreads, while operating costs have reduced because of economies of scale. Incrementally, interest spreads could shrink marginally in light of the prevailing interest rate environment; nonetheless ICRA Lanka expects profitability to remain steady provided the level of credit costs are kept under control.
LOFC focuses on lending against Commercial vehicles (63% of portfolio as on March 2012), Working Capital (21%), Equipment Finance (8%), Tractors and others (8%).
 The company registered a compounded annual growth rate (CAGR) of 56% over the past five years, but has been substantially supported by the transfer of incremental business from the HoldCo to LOFC as part of the group reorganisation process.The portfolio growth for the LOLC Group remains moderate at a four-year CAGR of 16%.
Given the volatility in systemic interest rates, LOFC has been focusing increasingly on loans, rather than fixed-rate hire purchases and leases, which gives the company flexibility to adjust interest rates according to its cost of funds. Asset quality, as measured through Gross NPAs, improved from 2.24%3 in FY11 to 1.02% in FY12 through focused recoveries and structured collections process.
However, it would be important to continue to maintain strict control over asset quality through economic downturns and hardening interest rate cycles.
LOFC’s Capital Adequacy Ratio stood at 14.4% as on March 31, 2012 compared to 17.0% as on March 31, 2011, broadly in line with the sector average.While there are no equity infusion plans in the near term, portfolio growth is expected to slow down progressively and the capital requirements would be met through internal accruals.
ICRA Lanka, nonetheless, expects LOFC’s capitalisation to moderate in the near term with expected portfolio growth.
LOFC’s Return on Average Assets (excluding one-time gains) have registered steady improvement to 4.0% in fiscal 2012 from 1.1% in fiscal 2009 supported by a corresponding improvement in interest spreads.
The operating cost levels also remain competitive in relation to industry levels. Incrementally, LOFC could face pressure on cost of domestically mobilised funds given the hardening interest rate scenario, but the long term overseas funding lines being pursued by the management could help control the overall cost levels. ICRA Lanka expects profitability levels to remain stable, provided the company manages to keep credit costs under tight control.LOFC (set up in 2001) established initially as a wholly owned subsidiary of LOLC, has a strong Retail Franchise among Licensed Finance Companies (LFCs) in Sri Lanka.
The LOLC Group as a whole is one of the Largest Financial Services conglomerate in the country, with the parent being the first leasing company to be established in Sri Lanka. LOFC being the largest operational financial services subsidiary (22% of Group Assets as at Mar-12) of the LOLC Group offers Savings and Deposits in Local and Foreign Currency, Leasing and Hire Purchase Loans mainly for financing Auto Vehicles for commercial use. In July 2011, as per the Central Bank of Sri Lanka (CBSL) directions, LOLC divested 10% of its stake in LOFC and obtained a listing on the Colombo Stock Exchange (CSE). During the year ended March 2012, LOFC reported a net profit of Rs. 1.25 billion on a total income of Rs. 6.35 billion compared to net profit of Rs. 1.25 billion on a total income of Rs. 4.01 billion in the previous fiscal.


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Stock Watch: UBC

Union Bank Q2 income up by 58.6%


Reporting on its performance for the six months ended in 2012, Union Bank of Colombo PLC (UBC) stated that a noticeable upturn in performance was seen in several areas.Growth was highlighted in the bank’s core activities and shows a 53.5% year-on-year growth in the bank’s loan book to reach Rs. 19.8 b. Total deposits of the bank reported a year-on-year growth of 45% to Rs. 21.5 b as at 30 June 2012. During the six months period, gross loans and advances increased by 15.49% and the total deposits increased by 11.2%.Interest income of the bank stood at Rs. 1,507 m with a 57.4% growth compared to the previous period. Interest expense showed a 98% growth due to the increasing interest rates and the growth in the base.
The bank showed a noticeable growth of 65.7% in non-interest income for the period. Non-interest expense also increased by 38.7%, mainly due to the expansion of the business operation.Considering the stagnated market conditions, return from the equity portfolio continued with a negative impact for the second continuous quarter of the year. The bank shows a net asset value of Rs. 14.99 per share.  The first dividend after the listing of Rs. 0.15 per share was also declared during the quarter.Union Bank reported a pre-tax profit of Rs. 184.4 m for the first half of 2012. This is a decrease of 10.8% compared to the previous period.
Union Bank Director/Chief Executive Officer Anil Amarasuriya stated that these results were achieved against challenging market conditions.
He emphasised that the bank had been building its core competencies to enhance its future potential and its ability to emerge as a strong performer in the industry.He further stated that with the predicted high economic growth rates, the banking and finance sector would contribute positively in driving the country forward and that UB would stand to gain from this growth in the coming months.As the preferred bank for the SME sector, Union Bank’s rapid expansion plan saw its branch network increasing to 34 branches by June 2012. Four new branches were open in Badulla, Ambalangoda, Horana and Chilaw during the year.


Reported in Dailyft

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...by i3gconsultants@ 14:08:11 on 2012-08-25

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Stock Watch: PABC

Pan Asia 1H operating income up by 22%


The Pan Asia Bank has reported a profit before tax of Rs. 651 million for the first half of 2012 and a profit after tax profit of Rs. 356 m.
The first six months of the bank’s operating income exceeded the same period the previous year by 22%. The improvement in the operating income is mainly on account of growth of net interest income which showed an improvement of 18% and non fund based income which improved by 36% as compared with the same period last year.



This growth is despite the one off commission income that the bank gained from the issue of guarantees during last year for IPOs. The bank maintained its net interest margins at satisfactory levels despite the increasing cost of deposits that prevailed during the year.
The cost of overheads had risen by 43% as compared with the same period the previous year. The overhead increase is mainly due to the branch expansion and related activities that were undertaken during the last 18 months.
The bank grew its branch network by over56% having opened 23 branches in 2011 and seven more branches in 2012 so far. This strategic expansion drive assists the bank in establishing its presence in most parts of the country with 71 branches countrywide.
The bank has continued to maintain its asset quality at high levels. The gross NPA ratio has improved from 4.52% in June 2011 to 3.3% in June 2012. Similarly the net NPA ratio also improved from 2.59% to 2.16% in June 2012. The bank’s total loan portfolio grew by nearly 16% from end of last year and the deposits grew by 17% for the same period reaching a figure of Rs. 41 b as at 30 June 2012.
The earnings reflect a return after tax of nearly 20% on shareholder funds.


Reported in Dailyft

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...by i3gconsultants@ 14:08:30 on 2012-08-25

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Stock Watch: CDB

CDB first non-banking financial institution to partner with Visa in Sri Lanka


Citizens Development Business Finance PLC (CDB) recently entered into a partnership with Visa International as an Associate Member through Commercial Bank of Ceylon PLC to offer Visa Debit cards in Sri Lanka.
The agreement was signed recently at CDB’s Head Office in Colombo, becoming the first ever Sri Lankan non- banking financial institution to tie-up with Visa to offer debit cards in Sri Lanka.







VISA International, India Associate Director-Business Development Nidhi Jakhodia (right) shakes hand with CDB Director/Chief Operations Officer Roshan Abeygoonawardena. Others from left are  CDB AGM IT Imdaad Naguib, Debit Cards Consultant Nalin Wijeratne and CDB Head of Card Operations Chameera Kulatunga

“CDB, as always, strives to offer the best value to all its customers. With time being a precious commodity and with customers expecting an unparalleled service with regards to their day-to-day transactions of funds, this partnership offers the most convenient solution. Since we are the first in the industry to offer this service through VISA International and with our parallel implementation of a core banking solution, it will no doubt create a competitive advantage for us to deliver a superior service to our customers,” said CDB AGM IT Imdaad Naguib.  
“CDB Visa Debit Cards will offer our customers far more convenience than either an ATM card or cash. Carrying the Visa debit card reduces the need for trips to the ATM, by enabling fast, cash-free transactions at millions of locations across the world.
These include supermarkets, restaurants, pharmacies, gas stations, clothing retailers, electronic stores and more.
As well as offering a simpler way to pay, it gives customers 24-hour access to their money, whenever they need it,” he further added.   
Visa Group Country Manager, India and South Asia Uttam Nayak said, “Visa welcomes CBD, our first non-banking financial institute, as our esteemed member from Sri Lanka.They will play an essential role in providing many more Sri Lankan citizens the benefits of electronic payments, especially through the Visa Debit card. I am confident that going forward our partnership will provide great value to Sri Lanka, by further strengthening their cashless economy.”  
With 44 online connected outlets, the brand CDB ranks 50th from among the top 100 Most Valuable Leading Brands in Sri Lanka by Brand Finance Lanka in 2012.


Reported in Dailyft

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...by i3gconsultants@ 14:08:30 on 2012-08-25

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Stock Watch: ARPI

Arpico Finance opens for biz in Narammala


Arpico Finance opened its newest branch in Narammala as part of its strategy to extend the reach countrywide.
The branch was ceremoniously opened by Arpico Finance Managing Director Hafeez Rajudin.
“The trust we have earned through untiring efforts and building strong bonds with customers and provide them with a service that is beyond excellence has been our hallmark,” a spokesman for Arpico Finance said.
With its expertise and knowledge in financing services, the Company via the new branch will offer people and businesses in Narammala and surrounding areas many financing facilities including Fixed deposits, Leasing, Hire Purchase and pawning which will be beneficial to them.
“We will also focus on providing financial support to the rural segment which in turns helps in the overall development of the nation,” the spokesman added.
In addition Arpico Finance will help build business endeavors through Micro Finance to small and medium businessmen in and around Narammala in future.
Reported in Dailyft
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...by i3gconsultants@ 11:08:57 on 2012-08-02

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Stock Watch: JKH

BOI deal today on Cinnamon Air venture by JKH-Brandix-MMBL


THE agreement with the Board of Investment and the joint venture between top firms John Keells Holdings (JKH), Brandix Ltd., and MMBL to start a new domestic air operation will be signed today.
Daily FT learns the new operations will be branded as Cinnamon Air, with JKH holding 40% stake in the joint venture and Brandix and MMBL owning 30% each.  The Daily FT in January exclusively reported the impending deal by the consortium in a bid to tap the post-war rebound in tourism. The venture with an initial investment of $ 7 million will operate two Amphibian aircraft which has the ability to land and take off from both land and water giving it a unique advantage as opposed to some of the existing players in domestic aviation.

Reported in Dailyft
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...by i3gconsultants@ 11:08:38 on 2012-08-02

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Stock Watch: UBC

2Q-Results Updates_Sri Lanka Union Bank June net down 61.5-pct


Sri Lanka's Union Bank group has report net profits of 27.4 million rupees for the June 2012 quarter, down 61.5 percent from a year earlier, amid rising interest rates and expenses.The bank did not separately report earnings per share at group level in quarterly accounts filed with the Colombo Stock Exchange. For the six months to June 2012 profits fell 22.9 percent to 102.3 million rupees. Fee income rose 49.2 percent to 141 million rupees in the June quarter with forex income rising 144 percent to 45.3 million rupees.
Interest income rose 62.1 percent to 813 million rupees and interest expenses rose at a faster 114.7 percent allowing net interest income to increase at a slower 9.2 percent to 273 million rupees. But non-interest operating expense rose 52 percent to 321 million rupees. Performing loans rose 12.4 percent to 18.4 billion rupees and non-performing loans rose 29.8 percent to 3.0 billion rupees. At bank level the firm said the gross non-performing loan ratio rose to 6.83 percent by June 2012 from 6.05 percent a year earlier.
In the June quarter there was a 10.2 million rupee write back on loan loss provisions against 3.8 million a year earlier. At bank level however there was a small 1.2 million rupee provision. Sri Lanka is in the last stages of a balance of payments crisis where interest rates rise steeply and bad loans go up.
Deposits also grew 12.5 percent to 22.0 billion rupees.Group gross assets rose 12.5 percent to 24.2 billion rupees and net assets grew 1.3 percent to 5.2 billion rupees. At stand alone bank level, Union Bank reported capital adequacy at 19.9 percent, down from 32.7 percent a year earlier, but still higher than the regulatory minimum.

Reported in LBO
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...by i3gconsultants@ 11:08:57 on 2012-08-02

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Stock Watch: PABC

2Q-Results Updates_Sri Lanka PABC net down 24-pct


Sri Lanka's PABC Bank has reported profits of 159 million rupees in the June 2012 down 24 percent from a year earlier, amid a steep rise interest expenses, interim accounts showed.
The firm reported earnings of 54 cents for the quarter. For the six months to June the bank reported earnings 1.21 rupees per share on profits of 356 million rupees which fell 12 percent from a year earlier.
In the June quarter interest income rose 57 percent to 1.63 billion rupees but interest expenses rose at a faster 98 percent to 1,033 million rupees though the bank grew net interest income 16 percent to 601 million rupees.
PABC Bank's performing loans rose 18 percent to 39.0 billion rupees from December 2011.Sri Lanka's Central Bank has set a limit of 18 percent for loan growth funded by rupees for this year.Non-performing loans were flat at 2.6 billion rupees. The bank said its gross non-performing loans had improved to 3.3 percent in June 2012 from 4.52 percent a year earlier.
It provided 27 million for loan losses, against a provision reversal a year earlier.Fee income rose 90 percent to 253 million rupees with foreign exchange income doubling 110 percent to 96 million rupees and unspecified other income rose 80 percent to 157 million rupees.
Non-interest expenses also rose 49 percent to 533 million rupees.
"The overhead increase is mainly due to the branch expansion and related activities that were undertaken during the last 18 months," PABC said in a statement."This strategic expansion drive assists the bank in establishing its presence in most parts of the country with 71 branches island wide."It had opened 23 branches in 2011 and 7 in 2012. The bank had grown deposits 17 percent to 41.4 billion rupees. PABC's net assets edged up 2 percent to 3.69 billion rupees and gross assets grew 12 percent to 52.4 billion rupees.

Reported in LBO
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...by i3gconsultants@ 11:08:48 on 2012-08-02

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Stock Watch: CTC

Sri Lanka smokers contributes Rs.31.2 bn via tobacco taxes


Sri Lankan smokers had coughed-up 31.2 billion rupees in taxes through cigarettes sales during the six-months of this year, the island’s sole legal tobacco maker Ceylon Tobacco Company PLC said.
A unit of British American Tobacco Holdings, Ceylon Tobacco Company said it paid eight percent more in taxes during the six-months to June this year, over the same period a year earlier.Sri Lanka’s cigarette consumption has gradually slowed over the years, as the government enacted tough laws and stepped-up awareness campaigns to curb smoking.
In a Stock Exchange filing on its interim financials, the Colombo-based company noted a two-percent drop in cigarette volumes during the period under review.For the three-months to June, CTC reported 20.8 billion rupees in gross revenues, over 19.1 billion reported in the same period 2011. The company paid out 13.5 billion rupees in taxes during the quarter, as against 12.6 billion a year earlier.It reported net revenues of 4.8 billion rupees, over 4.2 billion rupees in the corresponding quarter.Profits grew to 2.4 billion rupees in the June quarter, up from 1.8 billion rupees a year earlier.
The stock reported earnings per share of 12.84 rupees. It is among the top dividend paying firms and paid 12.80 rupees per share during the interim period.For the six-month to June, CTC reported net profits of 3.9 billion rupees over 2.6 billion rupees a year earlier.It said six-months profits were driven largely by one-off improvements in US dollar deposits (due to a weak rupee) and an aggressive cost savings drive.“While overall volume was down, CTC recorded a 56 percent growth in the premium segment, driven by the launch of its innovative variant Dunhill SWITCH, which now accounts for nearly 48.0 percent of the Dunhill business,” the company told shareholders.
Export volume rose 78.0 percent off a small base, which helped sales from overseas shipments to rise to 43.0 million rupees in June, from 19.0 million rupees a year earlier.To remain competitive, CTC has trimmed costs and improved productivity in labour and materials over the years.British America Tobacco owns 84.13 percent of CTC’s stock.

Reported in LBO
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...by i3gconsultants@ 10:08:04 on 2012-08-02

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Stock Watch: RCL

2Q-Results Updates_Sri Lanka Royal Ceramics net down 32 percent


Sri Lanka’s Royal Ceramics Lanka PLC, a tile and bathware maker said net profits for the June 2012 quarter fell 32 percent to 267.78 million rupees dragged down by its main tile segment.
It reported gross revenues grow 22 percent to 1.86 billion rupees, during the June quarter, according to interim financial statements released to the Colombo Stock Exchange.The group reported earnings per share of 2.35 rupees for the quarter.The stock closed down 1.00 rupee to 90.00 rupees on Monday.Group gross revenues grew 23 percent to 5.8 billion rupees.
At the core the firm’s profits fell 70 percent to 33.9 million rupees helped by a 72.58 million rupees share sales.The company made a 134.23 million rupee provisioning for fall in value of investments during the quarter off a zero provisioning the previous year.In April, RCL bought a 51 percent stake of Asia Siyaka Commodities Limited for 337.62 million rupees.
The group reported a ‘substantial increase’ in administrative expenses, trade and other receivables and trade and other payables after Asia Siyaka was included into its portfolio.In a note to shareholders, the group said land and buildings of Royal Ceramics Lanka PLC, Royal Porcelian (Pvt) Limited and Rocell Bathware Limited were revalued during the quarter and the surplus arising from revaluation net of deferred tax was transferred to a revaluation reserve.Profits from the main tile segment fell to 120.84 million rupees in the June quarter from 371.70 million rupees a year earlier.The sanitarywear segment profits rose to 46.91 million rupees over 18.75 million rupees.
Paints and allied products made a loss of 5.73 million rupees over a profit of 1.08 million rupees a year earlier.Share of associate profits was 147 million rupees over a zero-base a year earlier.Businessman Dhammika Perera controlled Vallibel One PLC controls 51 percent of the stock, while state-managed pension fund, the Employees Provident Fund is the third largest shareholder with 7.53 percent of the stock.

Reported in LBO
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...by i3gconsultants@ 10:08:25 on 2012-08-02

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Stock Watch: GHLL

Sri Lanka’s Galadari Hotel sinks further into debt


Sri Lanka’s Galadari Hotels (Lanka) PLC has sunk deeper into debt with a net loss of 323.1 million rupees for the June quarter largely due to exchange losses on foreign exchange debt.
The company, which owns and operates a five star hotel in Sri Lanka's capital Colombo earned 384.3 million rupees in the June quarter, interim accounts filed with the Colombo Stock Exchange showed.
The firm reported losses of 1.77 rupees a share for the quarter. For the six-months to June the hotel reported losses of 5.41 rupees per share on total loss of 986.1 million rupees.Gross profits during the June quarter was up to 326.5 million rupees over 206.8 million rupees in the same quarter a year earlier.For the six-months to June, gross profits were up 691 5 million rupees from 513.1 million rupees a year earlier.The hotel made a 330.9 million rupee foreign exchange loss during the June quarter of a profit of 46.7 million rupees a year earlier.Accumulated foreign exchange losses for the six-months to June went up to 1.1 billion rupees in 2012.
The company’s debt stock climbed to 7.4 billion rupees in June, from 6.0 billion rupees during the same period a year earlier.
Total equity stood at 207.8 million rupees in the June quarter over 1.55 billion rupees a year earlier.
The hotel’s second largest shareholder is the state-run Employees' Provident Fund, which manages the retirement savings of the private sector on behalf of the Central Bank of Sri Lanka. The EPF owns 13 percent of the stock.

Reported in LBO
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...by i3gconsultants@ 10:08:04 on 2012-08-02

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Stock Watch: SLTL

Sri Lanka Telecom targets 600,000 broadband users in two years


Sri Lanka Telecom, the country's only wireline access provider says it is planning to double its broadband users to 600,000 over the next two years with the completion of a network modernization project. 
SLT 'i-Sri Lanka' project was started in 2011 to expand the telco's optical fibre network deploying fiber-to-the-node (FTTN) multi-service access nodes (MSANs) closer to customers. "This reduces the length of the copper connection with a resultant significant increase in reliability, quality and broadband data speeds," SLT said in a statement. "Reducing the copper cable lengths not only improves reliability, but will reduce maintenance and replacement costs. "Through this programme SLT has already brought ultra high speed broadband connectivity at speeds of up to 20Mbps (megabits per second) for many of its fixed customers." The first phase of the project, which has just been completed has added 40,000 new broadband circuits to the network. "We are delivering against our strategy to evolve a world class broadband access network accessible to all Sri Lankans, to increase broadband penetration, which directly contributes to economic growth of the country," Greg Young, chief executive of SLT said in a statement. 
Despite a global decline in fixed line access, SLT says it has increased its fixed customers by providing broadband. SLT says by end 2011 there 844,000 broadband customers including mobile broadband. SLT says over the next 18 months a capacity of 600,000 new broadband connections will be added to the network. Over next two years the firm says it is planning double its 300,000 broadband customer base. At present about 50 percent of SLT's fixed access customers had 2Mbps access and could receive PeoTV, an IPTV service. Young say the when the -Sri Lanka project is complete 90 percent of its fixed service will get 20Mbps access. It also will also improve operational efficiency by reducing maintenance and operational costs, improving network reliability, he said.

Reported in LBO
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...by i3gconsultants@ 19:07:48 on 2012-07-28

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Stock Watch: ATL

Sri Lanka Islamic bank starts Saturday services


Sri Lanka's Amana Bank, an Islamic bank said it has started banking services Saturday.Amana Bank has now opened its doors for banking on Saturdays facilitating greater convenience to its valued customers.
"We are committed to ensure convenience and peace of mind to our valued customers," Amana Bank’s head of consumer banking Siddeeque Akbar said in a statement. "The Saturday Banking initiative is one of the many convenient solutions we intend to roll out. "We are happy to announce that the Saturday Banking service is not restricted to Colombo, ensuring our customers will have access to this convenience in key cities across the island." 
Saturday services were available at its main branch in Colombo 3, Pettah Branch, Galle Branch, Kandy Branch and Kattankudy Branch.

Reported in LBO
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...by i3gconsultants@ 19:07:06 on 2012-07-28

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Stock Watch: SAMP

Sri Lanka Sampath Bank 'AA' rating confirmed: RAM Ratings


RAM Ratings Lanka said it had confirmed an 'AA' rating of Sri Lanka's Sampath Bank with a stable outlook.
"The ratings are supported by the Bank’s healthy asset quality and good market position," RAM Ratings said in a statement.
"On the other hand, the ratings are tempered by the Bank’s moderate capitalisation."
The full statement is reproduced below
RAM Ratings Lanka reaffirms Sampath Bank’s ratings at AA/P1
RAM Ratings Lanka has reaffirmed Sampath Bank PLC’s (“Sampath” or “the Bank”) long- and short-term financial institution ratings at AA and P1 respectively; the long-term rating carries a stable outlook.
The ratings are supported by the Bank’s healthy asset quality and good market position. On the other hand, the ratings are tempered by the Bank’s moderate capitalisation.
Although a relatively new bank, with an operating history of approximately 25 years, Sampath has emerged as the country’s third-largest private-licensed commercial bank (“LCB”), accounting for 6.85% of the industry’s total assets as at end-December 2011. It is also the country’s fifth-largest LCB, in an industry dominated by two state banks that accounted for around 41.92% of industry assets as at the same date.
Sampath’s market position is supported by its wide network of 209 branches and 262 automated teller machines (“ATM”).
Sampath’s asset quality is deemed healthy owing to its better than industry gross non-performing loans (“NPL”) ratio, good NPL coverage and stringent underwriting and monitoring procedures. Despite an aggressive 37.40% yearon- year (“y-o-y”) loan growth during FYE 31 December 2011 (“FY Dec 2011”), the Bank’s gross NPLs declined 8.39% y-o-y to LKR 5.24 billion during the same period, supported by the slower accretion of new NPLs and recoveries.
Consequently, Sampath’s gross NPL ratio improved to 2.65% as at end-FY Dec 2011 (end-FY Dec 2010: 3.89%) and improved further to 2.55% as at end- March 2012 and is among the best in the industry. Meanwhile, the Bank’s gross NPL coverage ratio at 90.60% as at end-FY Dec 2011 remains among the best in the industry. Reflecting the healthy asset quality, the Bank’s credit cost ratio clocked in at 0.09% during FY Dec 2011, comparing better than peers. That said our concerns hinge upon the Bank’s relatively unseasoned lending portfolio given the Bank’s aggressive loan growth in FY Dec 2011.
Meanwhile, Sampath’s performance is considered moderate; its net interest margin (“NIM”) was slightly lower than peers while its cost-to-income ratio compared relatively higher. The Bank’s NIM dipped to 4.20% during FY Dec 2011 (FY Dec 2010: 5.00%) owing to higher funding costs resultant from the tilt in the Bank’s funding composition towards high-cost time deposits and shortterm foreign borrowings. The NIM contracted further to 3.84% during 1Q FY Dec 2012.
Although the contraction in the NIM was an industry wide phenomenon, Sampath’s NIM compared lower than peers reflective of its high cost of funding. Meanwhile, the Bank’s cost-to-income ratio eased to 66.28% during FY Dec 2011 on the back of the aggressive branch expansion, and compares higher than peers.
Although the ratio improved to 54.03% in 1Q FY Dec 2012 this was largely due to a foreign exchange gain stemming from the sharp depreciation of the rupee against the dollar. Overall, the Bank’s pre-tax profits grew 23.95% yo- y to LKR 5.58 billion in FY Dec 2011 supported by its loan expansion and low provisioning charges against the backdrop of its healthy asset quality.
Further, Sampath’s funding is considered good. Deposits continued to dominate the Bank’s funding base with a share of 81.69% as at FY Dec 2011 (FY Dec 2010: 84.30%) supported by the Bank’s good franchise. Due to the rapid loan growth, the Bank’s loans to deposit (“LD”) ratio increased to 89.35% in FY Dec 2011 from 82.78% in FY Dec 2010 although it still remains in line with peers.
On a separate note, the Bank’s liquidity position is opined to be adequate. Sampath’s statutory liquid asset ratio dipped to 24.95% by end FY Dec 2011 from 26.29% as at end FY Dec 2010 and is relatively low when compared to LCB peers. The ratio declined further to 22.03% as at end-March 2012 in light of the aggressive y-o-y loan growth of 33.74% during the same period.
Meanwhile, Sampath’s capitalisation levels compares somewhat lower than industry peers. Its tier 1 and overall risk-weighted capital-adequacy ratios (“RWCARs”) clocked in at 10.24% and 11.45% respectively in FY Dec 2011 (FY Dec 2010: 10.71% and 12.91% respectively) and declined further to 9.83% and 11.04% as at end 1Q FY Dec 2012 due to the rapid credit expansion; however we note that this is excluding the profit generated during the period.
We expect RWCAR to strengthen subsequent to the interim audit in June 2012 on recognition of the audited profit for the period. Elsewhere, Sampath’s net NPL to shareholder’s funds ratio rose slightly to 5.62% in FY Dec 2011 from 3.73% in FY Dec 2010 although it continues to be amongst the best in the industry.

Reported in LBO
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...by i3gconsultants@ 19:07:08 on 2012-07-28

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Stock Watch: SEYB

Sri Lanka Seylan Bank proposed debenture rated 'BBB+(lka)'


Sri Lanka's Seylan Bank has rated given a 'BBB+(lka)' rating for a proposed 2.0 billion rupee subordinated bond rated one notch below the bank's 'A-(lka)' national rating.
"Seylan's National Long-Term Rating is driven by implied extraordinary support from the State of Sri Lanka during financial distress, given the bank's systemic importance as identified by the Central Bank of Sri Lanka," the rating agency said.
"Fitch has notched Seylan's subordinated debt rating off its National Long-Term Rating as the agency expects state support to also flow through to Seylan's subordinated debenture holders in a stressed scenario."
The 5-year debentures will carry annual coupon payments and a bullet principal repayment at maturit The bank is planning to raise a billion rupees or two billion if the issue is oversubscribed. The proceeds will be utilised to supplement the bank's tier 2 capital in the face of expected asset growth, and to reduce maturity mismatches between its assets and liabilities. 
The full statement is reproduced below
Fitch Rates Seylan Bank's Subordinated Debt 'BBB+(lka)' 
Fitch Ratings-Colombo/Mumbai/Singapore-27 July 2012: Fitch Ratings Lanka has assigned Seylan Bank PLC's proposed issue of subordinated debt of up to LKR2bn a 'BBB+(lka)' National Long-Term Rating. A full rating breakdown is provided below. 
The proposed issue is rated one notch below Seylan's National Long-Term rating ('A-(lka)'/Stable) to reflect higher expected losses compared with the bank's senior creditors in the event of a liquidation. 
Seylan's National Long-Term Rating is driven by implied extraordinary support from the State of Sri Lanka during financial distress, given the bank's systemic importance as identified by the Central Bank of Sri Lanka. Fitch has notched Seylan's subordinated debt rating off its National Long-Term Rating as the agency expects state support to also flow through to Seylan's subordinated debenture holders in a stressed scenario. 
State support has been forthcoming since Seylan's failure in December 2008, including liquidity support through Bank of Ceylon ('BB-'/'AA+(lka)'/Stable) and two equity injections totaling LKR7.7bn. As at end-June 2012 the state effectively controlled 32% of Seylan's voting equity. 
The debentures will carry annual coupon payments and a bullet principal repayment at maturity, which is in five years from the issue date. The issue size is expected to be LKR1bn, with an option to increase up to LKR2bn in the event of an oversubscription. The proceeds will be utilised to supplement the bank's tier 2 capital in the face of expected asset growth, and to reduce maturity mismatches between its assets and liabilities. 
Fitch estimates that Seylan's total capital adequacy ratio (total CAR) will improve to 14.90% by end-2012 if the debt issue raises LKR1bn. This is based on the agency's assumption that the bank will achieve 16% annual growth in risk-weighted assets and full-retention of annualised Q112 profits of LKR1.65bn. Total CAR stood at 14.68% at end-March 2012. 
A perceived weakening of the government's capacity to extend support to Seylan, including a downgrade of the Sovereign rating ('BB-'/Stable), could lead to a downgrade of Seylan's ratings. Rating upside is limited in the medium-term, given that the bank's stand-alone profile is still weaker than its support-driven rating despite considerable improvements and restructuring since 2008, and is likely to be solely driven by an upgrade of the Sovereign rating.

Reported in LBO
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...by i3gconsultants@ 19:07:07 on 2012-07-28

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Stock Watch: ODEL

Sri Lanka fashion retailer to be bought by Parkson Retail


A 41.8 percent stake in Sri Lanka's ODEL, a fashion retailer is to be acquired by Parkson Retail Asia, a department store which has operations in Malaysia, Vietnam and Indonesia for 1.424 billion rupees.
The East Asian firm has agreed to pay 23.50 rupees a share to buy the 60.6 million shares from founding siblings, Otara Gunewardene (27.8 percent) and her two brother Ajit (13.6 percent) and Ruchi (0.34 percent), the company said in a statement.The new buyer will make an offer to buy out existing shareholders at the same price. ODEL stock has move up in recent days from around 17 to above 23 rupees on speculation of a take-over.
Otara Gunewardene will retain a 27.8 percent stake and remain its chief executive."The acquisition by Parkson Retail of a significant ownership in ODEL marks a new chapter in the evolution of the company," she said in a statement."Being part of a 22-year journey from a business I started from the boot of my car to becoming part of an international retail company is a great privilege."I am also happy to play a role in an infusion of foreign direct investment to Sri Lanka, while raising capital for the company’s growth.”
"For our customers, employees and shareholders, this development represents exciting new prospects as the ODEL brand will have more opportunities to maximize its potential and together with Parkson to explore new avenues to add value to the company.”
The firm will also make a 1 for 1 rights issue that will raise 2.899 billion rupees for expansion.

Reported in LBO
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...by i3gconsultants@ 09:07:44 on 2012-07-28

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Stock Watch: PABC

2Q-Results Updates_Sri Lanka PABC net down 24-pct


Sri Lanka's PABC Bank has reported profits of 159 million rupees in the June 2012 down 24 percent from a year earlier, amid a steep rise interest expenses, interim accounts showed.
The firm reported earnings of 54 cents for the quarter. For the six months to June the bank reported earnings 1.21 rupees per share on profits of 356 million rupees which fell 12 percent from a year earlier.
In the June quarter interest income rose 57 percent to 1.63 billion rupees but interest expenses rose at a faster 98 percent to 1,033 million rupees though the bank grew net interest income 16 percent to 601 million rupees.
PABC Bank's performing loans rose 18 percent to 39.0 billion rupees from December 2011.Sri Lanka's Central Bank has set a limit of 18 percent for loan growth funded by rupees for this year.Non-performing loans were flat at 2.6 billion rupees. The bank said its gross non-performing loans had improved to 3.3 percent in June 2012 from 4.52 percent a year earlier.
It provided 27 million for loan losses, against a provision reversal a year earlier.Fee income rose 90 percent to 253 million rupees with foreign exchange income doubling 110 percent to 96 million rupees and unspecified other income rose 80 percent to 157 million rupees.
Non-interest expenses also rose 49 percent to 533 million rupees.
"The overhead increase is mainly due to the branch expansion and related activities that were undertaken during the last 18 months," PABC said in a statement."This strategic expansion drive assists the bank in establishing its presence in most parts of the country with 71 branches island wide."
It had opened 23 branches in 2011 and 7 in 2012.
The bank had grown deposits 17 percent to 41.4 billion rupees.
PABC's net assets edged up 2 percent to 3.69 billion rupees and gross assets grew 12 percent to 52.4 billion rupees.

Reported in LBO
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...by i3gconsultants@ 09:07:03 on 2012-07-28

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Stock Watch: JKhl

2Q-Results Updates_Sri Lanka John Keells net up 34-pct


Sri Lanka's John Keells Holdings, which has interests in leisure, ports, consumer durables and financial serviced said net profits for the June quarter rose 34 percent to 1,658 million rupees.
The group reported earnings of 1.95 rupees per share for the quarter. The stock closed at 177.90 up 90 cents. The bottomline included net financial income of 698 million rupees.Revenues grew 26 percent to 20.1 billion rupees, cost of sales grew 22 percent to 15.4 billion rupees and gross profits grew 41 percent to 4.5 billion rupees.
"Although the performance of the Group in the first quarter is encouraging, its sustenance in the immediate future will be challenging…," chairman Susanthe Ratnayake told shareholders.
He said input costs were rising with a weaker rupee, higher duties and tariffs on imported items and higher fuel and electricity tariffs.
The group containers and logistics division brought 957 million rupees in pre-tax profits, leisure 648 million rupees."The performance of the City Hotels sector was strong with both Cinnamon Grand and Cinnamon Lakeside witnessing continued growth," Ratnayake said.
" The occupancies of Sri Lankan Resorts were below expectations. However, this fall was compensated to a certain extent by higher average room rates."We continue to reiterate the need for a concerted marketing campaign to create greater awareness of the destination to support the medium to long term sustainability of the industry.
"In the Maldivian Resorts, higher occupancies coupled with cost saving initiatives resulted in improved results."The property sector brought in 65 million rupees in pre-tax profits and retail brought 393 million rupees, financial services 257 million rupees and information technology 6 million rupees.

Reported in LBO
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...by i3gconsultants@ 09:07:31 on 2012-07-28

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Stock Watch: JINS

2Q-Results Updates_Sri Lanka John Keells net up 34-pct


Sri Lanka's John Keells Holdings, which has interests in leisure, ports, consumer durables and financial serviced said net profits for the June quarter rose 34 percent to 1,658 million rupees.
The group reported earnings of 1.95 rupees per share for the quarter. The stock closed at 177.90 up 90 cents. The bottomline included net financial income of 698 million rupees.Revenues grew 26 percent to 20.1 billion rupees, cost of sales grew 22 percent to 15.4 billion rupees and gross profits grew 41 percent to 4.5 billion rupees.
"Although the performance of the Group in the first quarter is encouraging, its sustenance in the immediate future will be challenging…," chairman Susanthe Ratnayake told shareholders.
He said input costs were rising with a weaker rupee, higher duties and tariffs on imported items and higher fuel and electricity tariffs.
The group containers and logistics division brought 957 million rupees in pre-tax profits, leisure 648 million rupees."The performance of the City Hotels sector was strong with both Cinnamon Grand and Cinnamon Lakeside witnessing continued growth," Ratnayake said.
" The occupancies of Sri Lankan Resorts were below expectations. However, this fall was compensated to a certain extent by higher average room rates."We continue to reiterate the need for a concerted marketing campaign to create greater awareness of the destination to support the medium to long term sustainability of the industry.
"In the Maldivian Resorts, higher occupancies coupled with cost saving initiatives resulted in improved results."The property sector brought in 65 million rupees in pre-tax profits and retail brought 393 million rupees, financial services 257 million rupees and information technology 6 million rupees.

Reported in LBO
......

...by i3gconsultants@ 09:07:31 on 2012-07-28

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Stock Watch: SFL

2Q-Results Updates_Sinhaputhra prefers slow, steady route to success


One of the oldest Central Bank Registered Finance Companies to direct operations and head quartered outside Colombo, Sinhaputhra Finance PLC, posted a profit of Rs. 73 million before tax and continues to adopt a cautious lending strategy.
Director Operations Saliya De Alwis said the company continued to meet its fixed deposit targets, despite low key advertising while lending was cautious.000000
"Sinhaputhra believes in caution and also works on a conservative assumption that however good your credit practices may be, at least 1 out of 10 Sri Lankan borrowers would either try to abscond payment, or find difficulty in making regular payments.  The former due to the blessing of the delays in the court system and the latter due to genuine economic misfortunes of the borrowers.  This delaying structure that is now inherent in our legal system is a silent yet powerful factor which if not addressed by the Justice Ministry will retard economic growth," he said.
Director Finance, Nandana Abeykoon said the company made provision for a large deferred tax liability to post a healthy profit of Rs. 54 million.  The Board of Directors recommended a dividend of Rs. 2 per share.  The Net Book Value per share increased to Rs. 119 at close of FYE 31st March 2012.Located in Kandy where the company commenced operations in 1979 it has now spread its wings Island wide to strategic locations, but grows cautiously backed by its 33 year experience in the field of finance and leasing, the company said in a statement yesterday.  
Managing Director, Ravana Wijeyeratne admits that in size most new comers have surpassed Sinhaputhra Finance PLC which was one time the 5th largest Registered Finance Company in the country.  "At that time when we were one of the largest, there were 48 players in the industry.  However, such haphazard expansions, the total dwindled to about 23 companies with disastrous impacts to the depositors and economy.  Presently, it has grown back beyond the 40s," he said adding that it was essential for the industry that none of these companies failed.
The Board of Directors consisting of Nihal Ratnayake (Chairman), K.R.B. Wijeyeratne (Managing Director), Saliya De Alwis, Nandana Abeykoon, Lal Ekanayake and Dr. Amal Karunaratna are strengthened by the following members who are Senior Consultants K.H.K. Wijayadasa, Ms. Chintha Balalle, Mohan Weerakoon and Sarath Imbuldeniya.
Fitch recently upgraded the company’s rating outlook from negative to stable.
"The outlook revision and affirmation reflect improvements in SFL’s credit risk management practices and the subsequent stabilisation and enhancement in its asset quality, although the latter still remains weaker than its peers’ average. The affirmation also reflects SFL’s weak net non-performing loans (NPLs)/equity ratio and low profitability relative to peers in its rating category, the ratings agency said in a statement," Fitch said. The company is rated ‘B(lka)’.

Reported in The Island
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...by i3gconsultants@ 18:07:11 on 2012-07-25

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Stock Watch: TSML

2Q-Results Updates_Sri Lanka bought leaf factory returns to profit


Tea Smallholder Factories Plc, a unit of Sri Lanka's John Keells Holdings had posted 23.9 million rupees in profits in the June 2012 quarter, turning around from a loss of 9.1 million rupees a year earlier.
The firm reported earnings of 80 cents a share for the quarter.
Tea Smallholder Factories buys greenleaf from small growers and processes them into tea. Tea growers are paid on a formula based on the previous month's sales which makes factories run losses when prices fall.
The firm said revenues rose 22 percent to 620 million rupees in the June 2012 quarter, while cost of sales rose at a slower 13 percent to 570 million rupees, allowing gross margins to grow from 1.7 million rupees to 49.9 million rupees.
Inventory cost had fallen to 260 million rupees from 308 million rupees and short term investments had risen to 22 million rupees from 14.1 million rupees.

Reported in LBO
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...by i3gconsultants@ 20:07:28 on 2012-07-24

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Stock Watch: LLUB

2Q-Results Updates_Sri Lanka Chevron Lubricants net up, tougher times ahead


Sri Lanka's Chevron Lubricants has reported net profits of 533 million rupees in the June 2012 quarter, up 26 percent from an year earlier, but has warned of tougher times ahead. The firm said earnings for the quarter were 4.40 rupees per share. In the half year to June earnings were 9.95 rupees on profits of 1.19 billion rupees, up 42 percent.In the June quarter sales rose 1.4 percent to 2.56 billion rupees but cost of sales fell 3.6 percent allowing gross margins to grow 12.5 percent.
Chief executive Kishu Gomes told shareholders that an economic slowdown was beginning to hit the firm towards the end of the quarter and if conditions persist "the full impact of it will be felt going forward."
Sri Lanka ran into a balance of payments crisis in the second half of 2011 as state energy enterprises borrowed heavily from banks to manipulate prices and the Central Bank kept rates down by printing money.
Though corrective steps were taken in February 2012, it resulted in the rupee falling from 110 to over 130 during the period and interest rates also went up.
Meanwhile in a knee-jerk Mercantilist reaction, authorities also raised taxes on vehicle imports, hurting state revenues and hitting the transport sector.
"The current volatile economic environment and the consequent poor market sentiments can have an adverse impact on the industry growth compounded by industry specific challenges such as high fuel cost, increased duty on vehicle importation and the European market volatility..." Gomes said.
"Recent severe drought experienced in the north western and eastern regions of the country may have an impact on our volume in the short term."
He said volatility in the European market was hurting industrial lubricant exports."Bangladesh market too is faced with severe economic issues affecting our growth plans while the Maldives market has fared well in terms of volume and margin," Gomes said.

Reported in LBo
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...by i3gconsultants@ 20:07:11 on 2012-07-24

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Stock Watch: SIL

DSI projects new vision at 50th anniversary


A young man from Galle gets a job in a shop selling 'Good Year' tyres in Pettah and comes to Colombo. Even though the pay was meagre, he makes an effort to save a little money. When it was sufficient to start a little business, he begins to sell 'sudu redi' - white cloth, which was a scarce commodity at the time. World War II had just begun - in 1939.
Having met a group of Tamil businessmen who imported goods from India via Velvetithurai, he starts going to Jaffna a couple of times a month, brings the cloth and starts selling on the pavements in Colombo. Carrying a bundle of cloth on his shoulder, he moves from place to place. It is tough going, yet he is so persevering.With sales improving, he gets a nephew to assist him. They move one step further - they erect a makeshift rack between the walls of an oil boutique and a dry fish outlet at Fifth Cross Street-Price Street junction and start selling textiles. As business improves the young man looks for a little shop and finds one in First Cross Street.
The Japanese air raid on April 12, 1942 forces the young man to abandon Colombo and get back to his native village Bataduwa. Back in Colombo when things settled down, he resumes business. Keen to expand the business he borrows Rs 250 from a chettiyar at an interest of two rupees per day. (It was increased to five rupees later).
Hearing of a place at Dias Place turning out shoes as a cottage industry, he offers to sell them at his shop on the understanding that the money would be paid after the shoes are sold. The business gradually grows and the sales staff increases to eight.
This is the beginning of the success story of Samson Mudalali - the founder of DSI, a leading footwear manufacturer and distributor in Sri Lanka today.
Diyanuge Samson who lost his parents when he was a child, was a self-made man who had confidence in himself. Hard work and honesty were the secret of his success.
He started importing shoes and at the same time set up a little 'factory' at Kaapiri Mudukkuwa in Pettah to make shoes.
With the restrictions imposed on imported products in 1962, he successfully negotiated with his Japanese business contacts to manufacture shoes in Sri Lanka. Machinery was imported and a workshop was set up in Galle. There was no electricity in the village at that time and the machines were run on a generator.
The range of products gradually widened - starting with ladies Ballerina shoes to slippers and children's shoes. Vehicles were bought to distribute the products throughout the country. The factory was expanded to manufacture other products as well - the first being travelling bags. Suitcases and brief cases were introduced later.
Having got married at the right age, Samson Mudalali brought up a well knit family with five sons and three daughters who, in due course, were groomed to take over the business. He promoted the sons to work with him during their university holidays thus providing them with an opportunity to familiarise themselves with the business.
DSI was established in Galle in May 1962 - Samson Mudalali's 50th birthday. After their graduation, the sons joined the business. The arrival of the second generation marked the beginning of a trend of modernisation.

Third generation directors celebrate 50th anniversary A trip to Japan by the father and son Kulatunga gave them an opportunity to study operations at the Nishin Rubber factory and at the end of the week-long visit the owner offered the old machines which they gladly accepted.
DSI was expanding. With the enactment of the Business Acquisition Act, for fear of a possible takeover it was felt safe to re-name some of the companies handling different businesses. Thus Rajapaksa Engineering Works (fabricating and maintaining machinery), Taiyo Rubber Products (making shoes) and Galle Packaging (manufacturing wooden boxes for export) were born. Once the Act was repealed, these companies were renamed again as Samson Engineering Works and Samson Manufacturers.
Exports to Saudi Arabia was a big breakthrough as a result of the Israeli war.
The second generation saw the need for diversification. A garment factory was opened with Japanese and Koreans providing the expertise. With joint ventures being the order of the day after the liberalisation of the economy in 1977, DSI set up Lanka Polymer Limited as a BOI project in association with the Fiji buyer who was buying rubber products from BOI. Samson Exports Ltd concentrated on exports.
Since the 1980s the expansion has been rapid. Showrooms have been set up in key towns. Factories have been modernised with state-of-the- art facilities. Local and international awards have been won. The product range expanded.
DSI has not looked back and today there are 29 companies in the Group. Samson Mudalai's sons give the lead in managing the entire operation.
Meanwhile, DSI has not forgotten the community. Through numerous CSR projects, DSI maintains a close link with the community.
The second generation has strengthened the company making DSI a household name in Sri Lanka and capturing market leadership in the footwear industry. The third generation is gradually moving in to take the business to further heights.To mark the 50th anniversary of the DSI group, the new vision is 'Local to Global' .There are two main categories of DSI products which have been the main contributors.
The first is the core business - footwear. DSI claims more than 60 percent market share in the local market and the product range is being exported to more than 40 countries.
Specifically manufactured product ranges are sent to specific regions including Europe. The second category is tyres and tubes. Their products account for more than 70 percent of the local market share . Currently, these products are being exported to more than 60 countries.
The export business of these two categories has grown significantly over the years. In addition, the other product export businesses too play a vital role in achieving the global vision.
Over the past 50 years , the first and second generations have been instrumental towards the success and the market leadership the Group enjoys today.They have been able to convert the single business entity in to a conglomerate in keeping with the founder chairman's corporate philosophy.
The task of the third generation will be to firmly establish the DSI brand in the region, increase its global presence and move forward diligently.
As DSI celebrates fifty years from the day it was established in Galle, it has 29 companies in the Group. The key companies are DSI Samson Group (Chairman Dr D S Rajapaksa and Managing Director Kulatunga Rajapaksa), D Samson and Sons (Pvt) Ltd (Chairman Nandadasa Rajapaksa) and D Samson Industries (Pvt) Ltd ( Jt Managing Director Kasun Rajapaksa).
The other second generation directors are D.N Rajapaksa, D. M Rajapaksa, D.R Rajapaksa, and D.A Rajapaksa.
The third generation directors are D.T.R Rajapaksa, D.D.K Rajapaksa, D.K.S Rajapaksa and Ms. D.D.S Rajapaksa. As the Chairman DSI Samson Group, Dr D S Rajapaksa said: "The leadership our father (D Samson Rajapaksa) provided us to achieve our business objectives and the support he gave us to live together and work together under one roof as brothers and sisters is legendary. It is this guidance that has enabled all of us to be united and work together in taking the dream through to its 50th year.

Reported in Sundayobserver
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...by i3gconsultants@ 09:07:19 on 2012-07-23

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Stock Watch: RICH

Arpico Superstore now in Piliyandala


Group Director of Richard Pieris and Company PLC, Prof. Lakshman R. Watawala and Chief Executive Officer of Richard Pieris Distributors Ltd, Michael Andree opened Arpico's 15th superstore at Piliyandala recently.
Andree said that an investment of over Rs. 100m was needed to set up the store to provide an experiential shopping destination to the people of Piliyandala. The Arpico Superstore in Piliyandala is over 20,000 square feet in extent , has 100 slots for parking and retails 45,000 products. Group Director of Richard Pieris and Company PLC, Prof. Lakshman R. Watawala said Richard Pieris Distributors positioned its Arpico Supercentre model over a decade ago to give a better shopping experience to Sri Lankan consumers.
The concept ‘all under one roof’ has been a successful model because, we were the first to identify, understand and develop a Hyper Market as a destination shopping store for the whole family.

Reported in Sundayobserver
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...by i3gconsultants@ 09:07:53 on 2012-07-23

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Stock Watch: LOLC

Hilton likely to manage LOLC’s 500-room resort


LOLC Leisure has almost finalised the international hotel chain operator to manage its planned new Rs 6.5 billion, 500- room resort hotel on a 20-acre beach stretch in the south coast, sources close to the company said.
They said the Hilton chain will most likely manage this new hotel to be constructed in the area which housed two of the Confifi hotels. LOLC bought these properties from the Furkhan family nearly two years ago and a hotel previously owned by Jetwing and Hayleys. The three Confifi hotels are Riverina, Club Palm Garden and the former Jetwing and Hayleys’ hotel, Tropical Villas. They said that negotiations are still on for a partner for Eden, also a former Confifi hotel situated less than half a mile away.
“We are negotiating with the Hilton chain to manage this new hotel we plan to build,” a source told the Business Times, noting that LOLC is working on a letter of understanding with them. He noted that many international brands were interested, but LOLC had felt that Hilton is a strong brand. “The three hotels are closed for business for 18 months from May 1, 2011 to complete building the new hotel,” he said. He added that the company is working with the Board of Investment pertaining to the approval process.
The Furkhans sold some of their stakes in related holding companies of the three Confifi hotels – Club Palm Garden (CPG), Riverina Hotel and Eden to a consortium led by LOLC and Browns two years ago. Further firming its position in the country’s famed golden mile, the company bought a 60% stake in Tropical Villas, a beach resort with 50 luxury villas in Beruwela, through LOLC Leisure last year. Early this year the company acquired a 99.9% stake of Dickwella Resort for Rs 1 billion. The source said that LOLC hasn’t finalised plans for this property as yet.
The sources said that LOLC’s resort project ran into some hot water when a local government authority wanted some of the land that the resort was to be built on for a project of their own, but when higher authorities intervened, it had stopped the forced acquisition.

Reported in Sundaytimes
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...by i3gconsultants@ 14:07:46 on 2012-07-22

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Stock Watch: EXPO

Expolanka Freight expands network to Hong Kong and US


Expolanka Freight Ltd recently opened offices in two key markets – Hong Kong and the US strengthening its position as a global freight forwarder with a specialized niche in the fashion logistics segment.
With over 1,200 employees, Expolanka Freight is one of the largest air and ocean freight forwarders, especially in the South Asian region. While engaged in regular handling of perishables, commodities, telecom equipment, medical equipment, project cargo, machinery and pharmaceuticals; the company primarily focuses on servicing the apparel industry as fashion logistics specialists, according to a company statement.
S. Senthilnathan, Chief Operating Officer, Expolanka International said,”Our movement across markets has been fuelled as much by our clients’ need for us in those markets, and our entry to the key markets of Hong Kong and the USA follows the same principle.”
“As a hub of international trade Hong Kong holds a key position in Asia and it is vital that we be present to ensure smooth functioning of client requirements.”
“The USA has emerged as a key market in our fashion logistics ventures, as we pursue the strategy to service our customers better by being physically present at those markets” Expolanka Freight is building a state-of-the-art storage facility in Sri Lanka at a cost of Rs.600 million this year.
This facility will have over 100,000 square feet of warehousing with high standards delivering energy efficiency and adhering to all health and safety requirements. Present at the opening of the Hong Kong office were Andy Fong, Managing Director Expofreight (Hong Kong); Mr. Senthilnathan, Hanif Yusoof, Group CEO, Expolanka Holdings PLC; Chandana Rodrigo, Director, Expolanka Freight (USA); and Shantanu Nagpal, Head of Strategic Planning and Business Development, Expolanka Holdings PLC.

Reported in Sundaytimes
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...by i3gconsultants@ 14:07:02 on 2012-07-22

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Stock Watch: EXPO

Expolanka Freight expands its network to Hong Kong and USA


Expolanka Freight Limited recently announced its expansion into two key markets, as they opened offices at Hong Kong and the USA, cementing their position as a global freight forwarder with a specialized niche in the Fashion logistics vertical With over 1,200 employees, Expolanka Freight is one of the largest air and ocean freight forwarders, especially in the South Asian region. While engaged in regular handling of perishables, commodities, telecom equipment, medical equipment, project cargo, machinery and pharmaceuticals; the company primarily focuses on servicing the apparel industry as fashion logistics specialists. 
Opening of the Hongkong office (L to R) - Andy Fong, Managing Director Expofreight (Hong Kong), S.Senthilnathan, COO Expolanka International, Hanif Yusoof, Group CEO, Expolanka
Holdings PLC, Chandana Rodrigo, Director, Expolanka Freight (USA ), Shantanu Nagpal, Head of Strategic Planning and Business Development, Expolanka Holdings PLC.
S.Senthilnathan, COO, Expolanka International said "Our movement across markets has been fuelled as much by our clients' need for us in those markets, and our entry to the key markets of Hong Kong and the USA follows the same principle. As a hub of international trade Hong Kong holds a key position in Asia and it is vital that we be present to ensure smooth functioning of client requirements. 
The USA has emerged as a key market in our fashion logistics ventures, as we pursue the strategy to service our customers better by being physically present at those markets" 
Expolanka Freight is a prominent IATA agent in Sri Lanka, India, Bangladesh and Pakistan and have representation in 15 countries, with 45 offices covering Asia, Africa and Middle East, are now in the USA. 
Expolanka Freight's success is built on its strong customer service paradigm characterized by proactive ownership of customers' logistics needs backed by bold investments in recruitment and retention of quality human resource and state-of the- art communications technology. The result is a team of highly motivated, empowered and technically enabled freight professionals providing a proficient and efficient service to their clients across different industries.

"We have always believed in serving clients in a personalized manner, and we have always made it easier for our clients to find us and work with us. Serving some of the biggest designer labels in the world, we've emerged as one of the leading freight solutions providers for retail and fashion" Senthilnathan added. 
Expolanka Freights' infrastructure supports multi model transportation and logistics with Ocean and Air transportation being the core areas with inland trucking and haulage adding value to customers. In line with Sri Lanka's vision to be a maritime hub, a state-of-the-art storage facility with value additions is being built, spending approximately Rs.600 million during 2012.

This facility will have over 100,000 square feet of warehousing with high standard delivering energy efficiency and adhering to all health and safety requirements. 
Expolanka Freight stands as a responsible corporate citizen with the firm belief that sustainable businesses are built with the environment in mind. 
Expolanka Freight was recently awarded a CarbonNeutral Certification by the Carbon Consulting Company thus making it Sri Lanka's first-ever CarbonNeutral Freight and Logistics Company, and, one of the first in Asia. 
Expolanka Freight has received various awards presented by world renowned carriers and consistently commanded an eminent position under the IATA ranking.

Reported in Dailynews
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...by i3gconsultants@ 12:07:43 on 2012-07-21

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Stock Watch: MBSL

MBSL promotes business awareness in Kurunegala for SMEs


Following the success of its IFRS and SLFRS programmes held in Colombo, MBSL continued its thrust in spearheading seminars of vital importance to the revival and development of the economy of the country. The program was conducted on 22 June 2012 at the Kandyan Reach Hotel, Kurunegala.  
The much-required programme reflected the urgent need for the business community of Kurunegala to be better prepared for the challenging business environment. MBSL thus extended its services to the rural sector to provide them with an in depth knowledge of the financial advisory and capital market services available to them.
This proposed interactive business awareness seminar entailed methods of increasing profitability in existing businesses and corporate advice to potential entrepreneurs in the area. Tips on improving the saving and deposit base of enterprises with new capital market instruments like debentures at higher returns annually, financial restructuring, project financing, methods of procuring loan facilities, facing competitive markets efficiently and effectively and the advisory services in various areas of business offered by MBSL were highlighted.
Participants from Small and Medium Enterprises, owners of existing businesses and potential entrepreneurs were the targeted audience for the proposed interactive business awareness program. The presentation was tailor made to enable them to benefit immensely from the knowledge and hands-on experience of a team of qualified experts in MBSL Advisory and Capital Market Division, who after years of experience and identification of key factors, created an itinerary to suit the specific needs of the business sector in order to help them achieve their goals.
MBSL firmly believes that this integration process will increase their accessibility to new markets, generate more inward investment and strengthen their competitiveness in the long run.
A.M.A. Cader, DGM Corporate Advisory and Capital Markets, commented: “In tough economic times, these awareness programmes come as an injection of optimism and trust in the system. Businesses still perceive the vast potential of doing business in the country. The targeted SME sector should make use of this opportunity and proceed with pursuing their interests, creating a stable and transparent cooperation framework making use of the advisory services of the bank as a guarantee for stability and prosperity in the country.”
Merchant Bank of Sri Lanka PLC., incorporated in March 1982, is the pioneer investment/merchant bank in Sri Lanka and was quoted on the Colombo Stock Exchange in 1991. The bank’s largest shareholder is the Bank of Ceylon, which holds a strategic stake of 72% and in 2005 entered into a strategic alliance with SBI Capital Markets Limited, which is the largest investment bank in India.
Its subsidiary companies, Merchant Credit of Sri Lanka Ltd., which has 13 branches islandwide including Jaffna, and MBSL Insurance with 55 branches, add strength and stability to its trade portfolio. In addition, MBSL holds a 29% share of Lanka Securities Pvt. Ltd.

Reported in Dailyft

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...by i3gconsultants@ 12:07:33 on 2012-07-21

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Stock Watch: ATL

Amana Takaful opens relocated branch in Mawanella


Amana Takaful ceremoniously declared open its relocated branch in Mawanella for business recently. The newly opened spacious business premise is conveniently located at No. 207, New Kandy Road, Mawanella, providing easy access to its clientele.
Amana Takaful CEO Fazal Ghaffoor and General Manager Operations Zaid Aboobucker were present at the occasion.
Amana Takaful branch in Mawanella will provide both life and general insurance solutions to its customers. Mawanella branch last year has recorded a growth of over 81% in General Takaful and 22% in Family (life) Takaful amply demonstrating how Amana Takaful’s solutions are accepted by the public. Since its inception Amana Takaful Mawanella has strongly established itself in the local community.
“We are in the process of expanding our operations island-wide, the relocation of this branch has opened up many prospects for Amana Takaful in the area,” Ghaffoor said addressing the distinguished gathering present that included businessmen, financial companies and law enforcement officers.
“This is a memorable moment for our branch. Now our branch is spacious and is equipped with the latest modern facilities. We are ever grateful to our customers for helping us reach this milestone and we look forward to your continuous support in the future as well” said Mawanella Branch Manager Mr. Anfas.
Amana Takaful is the pioneer in Takaful way of insurance in Sri Lanka and has earned a reputation for its professionalism and outstanding customer service and business practices. The Company has further plans to improve its services to satisfy its customers whilst popularising the Amana way of insurance in Sri Lanka. Mawanella branch is a part of a large brand development program undertaken this year by Amana Takaful. The company intends to further establish its presence in the island by opening new branches to serve discerning markets.
Amana Takaful is listed in the Colombo Stock Exchange and the company is among one of the few ISO certified Takaful insurance companies in Sri Lanka. Amana Takaful has expanded its operations into Maldives and listed in the Maldives Stock Exchange as well. It has also won accolades as one of Sri Lanka’s Most Respected Business Entities as published by LMD.

Reported in Dailyft
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...by i3gconsultants@ 12:07:11 on 2012-07-21

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Stock Watch: COMB

RAM reaffirms COMBank’s AA+/P1 ratings


RAM Ratings Lanka said yesterday it has reaffirmed Commercial Bank of Ceylon PLC’s long- and short-term financial institution ratings at AA+ and P1, respectively; the long-term rating has a stable outlook.
The ratings are premised on the Group’s strong market position as Sri Lanka’s largest privately owned licensed commercial bank and third-largest overall LCB. The ratings also reflect COMB’s strong franchise and healthy financial performance, funding and liquidity, as well as good capitalisation levels.
Incorporated in 1969, COMB accounted for 12.34% of the LCB industry’s asset base as at end-December 2011. It ranked behind two State-owned banks, which took up 41.92% of the industry’s total assets. Given its size, COMB is also deemed one of the country’s five systematically important financial institutions by the Central Bank of Sri Lanka.
Moreover, the Government has an 18.82% direct stake in Commercial Bank of Ceylon; this enhances the likelihood of State support if needed.
Commercial Bank of Ceylon’s asset quality is considered adequate in comparison to its peers. While its gross Non-Performing-Loan (NPL) ratio is in line with those of its similarly rated peers, the Group’s asset quality is weighed down by its weaker gross NPL coverage levels and, relatively unseasoned loan portfolio amid strong growth in 2011.
The Group’s credit assets expanded 26.15% y-o-y to Rs. 287.80 billion as at end-fiscal 2011, i.e. faster than the previous year’s 24.85% but slower than the industry’s 31%. On the back of loan expansion, Commercial Bank of Ceylon’s gross NPL ratio had improved to 3.43% as at the end of FYE 31 December 2011 (end-FY Dec 2010: 4.21%). By end-March 2012, the ratio remained relatively stable at 3.57%. Meanwhile, its gross NPL coverage ratio had also remained relatively stable at 51.97% as at end- FY Dec 2011 (end-FY Dec 2010: 52.26%); albeit weaker than similar-rated peers.
In the meantime, the Group’s performance is deemed healthy; although its Net Interest Margin of 4.43% last year was lower than most of its peers’ (FY Dec 2010: 4.73%), easing further to 4.42% in 1Q FY Dec 2012, its performance is supported by its operational cost efficiencies achieved through its low-cost delivery channels and economies of scale.
This is reflected in its cost-to-income ratio of 54.03% as at end-FY Dec 2011, which is better than its peers’; the ratio improved further to 45.87% in 1Q FY Dec 2012, backed by a large quantum of foreign-exchange gains, following the sharp depreciation of the rupee against the US dollar; these gains are expected to moderate to historical levels going forward. In line with rising business volumes and better cost management, its pre-tax profit increased 19.01% y-o-y to Rs. 11.07 billion in FY Dec 2011, translating into a healthier return on assets ratio of 2.73% (end-FY Dec 2010: 2.68%).
Elsewhere, Commercial Bank of Ceylon’s funding position is deemed healthy. Its funding mix is dominated by deposits, backed by its strong franchise and branch network, as reflected by its ability to attract deposits despite the prevalent low interest rate environment in 2011.
Commercial Bank of Ceylon’s deposits accelerated faster than the industry’s pace last year, expanding 22.58% y-o-y to Rs. 318.40 billion (industry: 20.78%). On a related note, its loans-to-deposits ratio was elevated to 86.76% as at end-FY Dec 2011, albeit conservative relative to its peers’ (end-FY Dec 2010: 83.47%). The Group’s liquidity is also deemed healthy; Commercial Bank of Ceylon’s statutory liquid-asset ratio clocked in at 26.21% (end-FY Dec 2010: 29.74%), before easing slightly to 26% as of end-March 2012 on the back of loan growth, but still in line with most of its peers’.
Furthermore, Commercial Bank of Ceylon’s capitalisation levels are deemed good; despite loan expansion, its tier-1 and overall risk-weighted capital-adequacy ratios came up to 12.11% and 13.01%, respectively, as at end-FY Dec 2011 – in line with its peers’. Its capitalisation levels had strengthened following a Rs. 4.86 billion rights issue last year. As at end-March 2012, the ratios had eased to a respective 11.44% and 12.73% due to loan expansion.
Going forward, RAM Ratings Lanka expects Commercial Bank of Ceylon’s RWCAR to dip to just below 12% in line with the Group’s planned expansion. Meanwhile, its ratio on net NPLs to shareholders’ funds stood at 13.10% as at end-FY Dec 2011 (end-FY Dec 2010: 18.44%) – among the industry’s best.

Reported in Dailyft
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...by i3gconsultants@ 12:07:37 on 2012-07-21

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Stock Watch: PLC

People’s Leasing to raise $ 150 m; debt security to list on S’pore Bourse


Industry's biggest People’s Leasing Plc yesterday announced plans to raise $ 150 million (nearly Rs. 20 billion) via senior unsecured notes and to list same on the Singapore Bourse.
The notes will be offered and sold outside the US as per regulations under the US Securities Act as well as outside Sri Lanka.
The company has also made an application for the listing of the notes on the Singapore Exchange Securities and Trading Ltd.
Meanwhile, Fitch Ratings said yesterday it has assigned PLC Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) of ‘B+’ with a Stable Outlook.
PLC’s IDRs reflect the capacity and willingness of its State-owned and systemically important parent – People’s Bank (PB, ‘AA+(lka)’/Stable, a 75% stake) – to extend extraordinary support to the PLC group in an extreme situation. This in turn is driven by PLC’s strong association with the PB brand and its strategic importance to PB.
reported on DailyFT
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...by i3gconsultants@ 18:07:32 on 2012-07-19

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Stock Watch: DFCC

Rupee up on Govt. bond dollar inflows; Stock market fails to cheer


The rupee strengthened on Wednesday, a day after the country sold a $ 1 billion, 10-year euro bond, raising hopes the rupee could reverse its trend of depreciation, dealers said whilst Bourse failed to cheer up.
The rupee closed at 133.50/65 against the dollar, firmer than Tuesday’s close of 133.85/90.
“There were huge inflows into Government bonds,” said a currency dealer. “With the euro bond, the rupee should further strengthen and stabilise.”
Sri Lanka’s latest bond was priced at 5.875 per cent and was more than 10 times oversubscribed when the order book closed on Tuesday.
Lack of dollar liquidity in the market has dragged down the rupee since the Central Bank allowed flexibility in the rupee exchange rate on 9 February. The currency has fallen 14.6 per cent since then.
The Colombo Stock Exchange’s main index meanwhile fell 0.63 per cent or 30.39 points to 4,822.64, its lowest since 12 June.
Turnover was Rs. 383.4 million ($ 2.86 million), well below this year’s daily average of Rs. 921.9 million.
Treasury bill rates rose 2-6 basis points on Wednesday, leaving the 364-day Treasury bill at a three-year high of 13.16 per cent.
reported on DailyFT
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...by i3gconsultants@ 18:07:32 on 2012-07-19

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Stock Watch: UML

Unimo delights dealers at Yokohama convention


Unimo Enterprises Ltd (UEL), a fully owned subsidiary of United Motors Lanka (UML) PLC recently held its annual convention for Yokohama tyre dealers. The Japanese tyre manufacturer's extensive product range had been distributed exclusively by UEL and its network of distributors since 2004.  The convention was held at the Grand Hotel in Nuwara Eliya. Instead of a typical dealer convention, UEL ensured a unique experience for its star performers. The company began the festivities in Colombo, surprising the distributors by booking an entire luxury train compartment to take them to their destination. The journey to Nuwara Eliya was a celebration of the dealers' success and was an opportunity for UEL to strengthen its relationships with its distributors. On the day of the convention, UEL organized a series of star-studded entertainment events, including a performance by the legendary Gypsies. The following dealers and distributors were recognized for their outstanding performances during the year: N & N Enterprises - Winner, distributor category; U & H Wheel Services (Pvt) Ltd - Winner, Dealer category; Universal Tyre Services - First Runner-up, dealer category Kusum Tyre Traders - second runner-up, dealer category; and Jayantha Traders - third runner-up, dealer category. The winners were awarded prizes that included Apple iPads, Blackberry smartphones and Samsung tablets. The event was graced by Imai Takeshi, President Yokohama Asia Section and Satoshi Kanamaru Manager, Marketing Yokohama Asia section.


Reported in Dailynews

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...by i3gconsultants@ 12:07:58 on 2012-07-18

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Stock Watch: UML

Unimo delights dealers at Yokohama convention


Unimo Enterprises Ltd (UEL), a fully owned subsidiary of United Motors Lanka (UML) PLC recently held its annual convention for Yokohama tyre dealers. The Japanese tyre manufacturer's extensive product range had been distributed exclusively by UEL and its network of distributors since 2004.  The convention was held at the Grand Hotel in Nuwara Eliya. Instead of a typical dealer convention, UEL ensured a unique experience for its star performers. The company began the festivities in Colombo, surprising the distributors by booking an entire luxury train compartment to take them to their destination. The journey to Nuwara Eliya was a celebration of the dealers' success and was an opportunity for UEL to strengthen its relationships with its distributors. On the day of the convention, UEL organized a series of star-studded entertainment events, including a performance by the legendary Gypsies. The following dealers and distributors were recognized for their outstanding performances during the year: N & N Enterprises - Winner, distributor category; U & H Wheel Services (Pvt) Ltd - Winner, Dealer category; Universal Tyre Services - First Runner-up, dealer category Kusum Tyre Traders - second runner-up, dealer category; and Jayantha Traders - third runner-up, dealer category. The winners were awarded prizes that included Apple iPads, Blackberry smartphones and Samsung tablets. The event was graced by Imai Takeshi, President Yokohama Asia Section and Satoshi Kanamaru Manager, Marketing Yokohama Asia section.


Reported in Dailynews

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...by i3gconsultants@ 12:07:58 on 2012-07-18

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Stock Watch: SMLL

Sri Lanka People's Leasing to sell US$150mn bond


People's Leasing Company Plc, Sri Lanka's largest lease financier and a unit of state-run People's Bank said it is planning to raise 150 million US dollars from a Euro dollar bond. Standard & Poor's rated the company 'B+' Wednesday with a 'stable' outlook.  "In our view, the People's Bank group has a strong and long-term commitment to support Plc," S & P said in a statement. "The leasing business is an important component of the group and contributed about 13% of the group's total assets in 2011.  "PLC's operating performance is better than that of the parent. The company contributed 26% to the group's profits in 2011." But S & P said the strong credit growth and economic development indicated risks "The high loan growth, coupled with rising competition and evolving risk management practices, could expose the sector to increased credit risk," the rating agency said. "PLC's dependence on wholesale funding and its concentration in commercial vehicle financing also constrain the rating. "The company's strong capital and adequate earnings temper these weaknesses." Financial sources said Barclays and HSBC may lead manage the bond.


Reported in LBO

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...by i3gconsultants@ 12:07:26 on 2012-07-18

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Stock Watch: BRWN

Exide stands in the 16th position


Browns’ business activities cover diversified areas such as investments, plantations, agriculture, power generation, marine, manufacturing, home and office solutions, environment, pharmaceuticals, and travel together with leisure in addition to having Exide batteries, one of the company’s leading brands."Our superior service and longstanding trust makes Browns one of the most sought-after brand names in Sri Lanka," says Murali Prakash, the Group Managing Director and Chief Executive Officer of Brown & Company PLC. "In an effort to ensure brand excellence, we have implemented continuous research through internal and external entities on both customer and dealer perceptions. Brand performance is measured through market-share analysis, and benchmarking is done with other leading brands with a focus on continuous improvement. We are indeed thrilled that our efforts are bearing fruition in taking one of our most leading brands to its current position."As a result of clear focus and concentration of Brown’s leadership in terms of prospering and building remarkable brands for the nation, the boats-to-industrial batteries market leader Exide has entered the top 100 unlisted club of brands, as per the latest ‘Sri Lanka’s Leading Brands’ list by Brand Finance, print-media exclusive to the Lanka Monthly Digest (LMD) in Sri Lanka. Exide was listed at 16th spot this year. The brand’s score is pegged at 8.09, as per the survey done for the ratings where respondents were asked to rank the brand within a score of 1-10. The automotive and motorcycle batteries marketer and distributor has lived and prospered in Sri Lanka for decades now. And with its parent brand – Brown & Company forays through deals, mergers and acquisitions, Exide has been grabbing their share of local headlines. Breaking into the top 100 in the Brand Finance Unlisted Brands rankings is yet another shot in the arm for Exide."We are very proud of the recognition that we have received from Brand Finance’s Top 100 Unlisted Brand Index. A compelling brand is an invaluable tool in their arsenal to appeal to consumers, employees and secure rewarding corporate and government partnerships. Our identification among the top 100 unlisted brands in Sri Lanka is an important recognition of our success and reflects our continued commitment to providing Sri Lankan consumers with leading brands such as Exide, while adding substantially to the nation’s economy," says Panduka Weerasingha the Senior Vice President - Agriculture, Battery, Porcelain and New Business of Brown & Company PLC.According to him, though there is stiff competition amongst local marketers, Exide has retained its market share and market-leader position due to its focus on different specialized segments such as boats and industrial batteries. Currently, the Exide brand holds 56% of vehicle-battery market share – and a growing market with an increased vehicle population has given the brand a solid footing. What’s more, the quality of the Exide brand is proven by the awards it has won for Browns in the recent past. In 2010, Exide was recognized as one of the top 10 brands in Sri Lanka at the SLIM-Neilson People’s Awards, and it became the first brand of batteries to win Superbrand status in 2011/12.


Reported in The Island

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...by i3gconsultants@ 12:07:00 on 2012-07-18

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Stock Watch: COMB

Com Bank opens customer service point in Liberty Plaza


The Commercial Bank of Ceylon has opened its newest customer service point at Liberty Plaza, Colombo 3, for the convenience of visitors to this popular mall.The new service point located at G-74 on the ground floor is open for business from 10.00a.m to 7.30pm, seven days a week. It is equipped with an automated Teller machine that is linked the Bank’s network of 521 ATMs and 219 other service points in Sri Lanka.Commercial Bank is the largest private bank in Sri Lanka, and the highest ranked Sri Lankan Bank in the World’s Top 1000 Banks. The Bank has been adjudged "Best Bank in Sri Lanka" for 14 consecutive years by ‘Global Finance’ magazine and has won multiple awards as the country’s best Bank from ‘The Banker’, ‘Finance Asia’, ‘Euromoney’ and ‘Trade Finance’ magazines.


Reported in The Island

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...by i3gconsultants@ 12:07:00 on 2012-07-18

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Stock Watch: HAYL

Kelani Valley and Talawakelle win four National Plantation Awards


Hayleys Group’s plantation companies dominate RPC sector’s first awards presentationPlantations companies in the Hayleys Group took major honours at the first National Plantation Awards in Sri Lanka, winning four of the 12 awards presented to Regional Plantation Companies (RPCs) by President Mahinda Rajapaksa at Temple Trees last week.
Kelani Valley Plantations PLC (KVPL) received three top awards, for ‘Commitment to Value Addition,’ ‘Innovativeness’ and ‘Highest Investment for Social Welfare Activities and Corporate Social Responsibility’ at this prestigious event.Talawakelle Tea Estates PLC (TTEL) was presented the award for ‘Replanting – Highest Rate (Percentage) and Extent in the Tea Sector’.
KVPL was the only company to win three awards at the presentation, which was also attended by the Minister of Plantation Industries Mahinda Samarasinghe and Deputy Minister Earl Gunasekara.“These awards are a great source of pride and encouragement not only to the respective companies but also to the Hayleys Group,” Hayleys PLC Chairman Mohan Pandithage said. “Over the two decades since the privatisation of the estates, there has been substantial investment and tremendous commitment and passion to build these companies into globally competitive businesses and brands. Being recognised with national awards is therefore most pleasing.”
KVPL’s award for ‘Value Addition’ was based on the volume of tea converted into value added tea, additional income from value addition, ownership of value addition and quantity of value added tea exported over the past five years.The award for ‘Innovation’ recognises environmental innovativeness, social innovativeness and economic innovativeness as recommended by the Tea Research Institute and the Rubber Research Institute.The provision of basic facilities to workers such as re-roofing  of line rooms, provision of latrines, drinking water facilities, child development centres and other activities, and  the total investment made by the company from 2006-2010 for worker welfare activities were considered for the CSR award.TTEL’s award for ‘Replanting’ was based on the total extent of replanting and continuous commitment to Replanting over the last five years.
Kelani Valley Plantations manages 27 estates, over 13,000 hectares in extent, divided almost equally in to tea and rubber. All of the company’s black tea producing factories have been certified as HACCP and ISO 22000-2005 compliant with regard to product and quality standards, ensuring that the product meets the highest international food safety parameters.Talawakelle Tea Estates PLC produces high-quality tea in 17 tea gardens situated in the best tea country of the land. Twelve of these estates, nestled in the Dimbula region manufacture high-grown teas while the rest, situated on the verdant planes of the South bring forth the low-growns that satisfy tea connoisseurs around the world.


Reported in Dailyft

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...by i3gconsultants@ 12:07:00 on 2012-07-18

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Stock Watch: SFL

Sinhaputhra Finance expands SMS cash


The popular Kenyan phone banking application that stormed into rural communities through a mobile operator Safaricom has its distant relative in the form of SMS cash, unique in that it does not require allegiance to a single mobile operator, if SMS works on your phone, SMS cash works for you.Unlike M-Pesa which means M-Mobile, which can function only through Safaricom networks in Kenya, SMS cash has no limitations – as it runs on any mobile line operation, be it Dialog, Mobitel, Airtel, Etisalat etc.
Furthermore, the application has software to run on symbion or android platforms as well as a basic key-in option with security features.
Sinhaputhra Finance Head of Savings Subhashini Wijetunga states that Sinhaputhra launched this project more than five years ago and has lodged the logo with its regulator the Department of Non-Bank supervision of the Central Bank.  
The company has had some enthusiastic customers, but it never met the expected success at first.  In a society having ready access to ATMs and banks, especially in city areas SMS marketing efforts were a complete failure according to Wijetunga who adds, however, that Sinhaputhra’s strategy to market SMS cash in villages though financially less viable, has been highly appreciated and is fast growing.
Recently, in Pussellawa an estate that echoes the name of the most powerful banking family in the world – Rothschild, this scheme was a major hit. The effort was driven personally by of Sinhaputhra Finance Managing Director Ravana Wijeyaratne and a team that used effective media and translators to communicate the advantages to the plantation community that has to walk no less than four km to reach the town of Pussellawa.
SMS cash works in simple ways to allow for balance inquiry transfer funds which either effects a withdrawal, a payment for a good or service or a transfer to any account in Sri Lanka. This is an amazing feature that combines mobile phones and human interaction to provide this unparalleled customer service.  At Sinhaputhra they term this the birth of the Human Teller Machine as opposed to the ATM.
Velusamy Kandiah in Rothschild Estate, Pussellawa can now pay his mobile bill, send money to the BOC account of his mother in Bandarawela, send Rs. 5,000 for his brother in Trincomalee to collect cash by showing his NIC card at the Sinhaputhra branch on Central Street Trincomalee or walk down to the factory and transfer money to the project convener and withdraw cash.  He can check his balance as often as he wishes and see if his monthly salaries requested portion has been credited, check if he has received money that was banked into a designated bank account at a commercial bank of his preference and see it credited to his account within 24 hours.  He can also save that Rs. 200 a month by transferring same to his daughter’s savings account at Sinhaputhra each month.  He receives all this for free whilst he earns a handsome interest and can spend more time with his family and be more productive in the estate.


Reported in Dailyft

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...by i3gconsultants@ 12:07:02 on 2012-07-17

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Stock Watch: ATL

Amana Takaful establishes first micro Takaful branch


Becomes the first Takaful insurance company to offer a micro insurance product in Sri Lanka Amana Takaful, the flag bearer of the Takaful way of insurance in Sri Lanka opened its first Micro Takaful branch in Atulugama, Kalutara taking protection needs to the people who need it most. “Insurance is accessible only for 25% of the population; the rest are almost neglected leaving them vulnerable to the financial burden of accidents and loss of life.Thus, we found it right to engage this need by developing a suitable insurance scheme for this special segment of the population,” said Amana Takaful Manager Business Development Shamail Anam at the opening ceremony of the branch.
Atulugama is a village in the Western province of Sri Lanka, which has a population of 10,000 adults and 4,750 families living in the area. Most of the families living in the village depend on a daily wages and small scale business.
Micro Takaful is an insurance scheme specially designed for low income communities. In a Micro Takaful scheme, usual insurance product offerings are modified to the needs of the low income earning community and are made affordable to ensure they reach the deserving.
Amana Takaful is one of the first Takaful insurance companies to offer a micro insurance product in Sri Lanka. Their Micro Takaful product ‘Navodaya’ has served many communities around Sri Lanka already.
“We have reached many low income earning communities in Sri Lanka and through the years have gained a better understanding of their requirements to serve them better” Imran Naleer, in charge of the Micro Takaful program of Amana Takaful.
Followed by the opening of the branch Amana Takaful held a Risk Management Awareness Seminar for the participants explaining the types of risks faced by them, the impact caused by such risks and the provision of possible ways of managing or mitigating risks. Mr. Imran Naleer further explained, ‘‘With the expertise and experience gained in the field Amana Takaful is in a journey to spread Micro Takaful through education and products.”
As pioneers of the Takaful concept, Amana Takaful has been successful in carving out a strong market for itself in both Life and General Insurance since inception and is also among the top 80 brands in Sri Lanka as published by LMD. The company serves insurance needs across the country covering the East, South, Western, North Western, North Eastern and Central Hills. The company is a Board Member of the Global Takaful Group, which is an international Think-tank for the development of Takaful globally. They also hold membership of International Co-operative and Mutual Insurance Federation (ICMIF) of which they hold the chairmanship of the Micro-Takaful Steering Group.
Takaful in a nutshell is a concept of mutuality and joint guarantee of community. It resolves around the practice of contribution towards the wellbeing of the community. Participants contribute money into a pooling system out of which the affected, due to loss or damage, is benefited by the help of all and the profits of mutually beneficial partnership is shared by all who have participated in the fund. In Takaful, customers participate and their risks are pooled as opposed to the usual transfer of the risk to the company. Hence, they become the joint owner of the fund.


Reported in Dailyft

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...by i3gconsultants@ 12:07:02 on 2012-07-17

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Stock Watch: MARA

Marawila Resorts goes for Rs. 350 m fresh expansion


Marawila Resorts Plc has announced an expansion of the hotel with the addition of 56 rooms via an investment of Rs. 350 million.
The move sans the cost was first announced in the company’s 2011/12 Annual Report.The addition of 56 rooms will be on the land available within the resort. Once completed, these new rooms will greatly improve operational efficiency and overall profitability of the hotel, Chairman A Rajaratnam said. The latest addition comes hot on the heels of Marawila Resorts completing a refurbishment program, upgrading the facilities. In the first quarter of 2011, the company raised Rs. 245 million via a one-for-four Rights Issue at Rs. 10 each for refurbishment, completed recently.
The investments made in upgrades to the rooms resulted in better rates and occupancies over the winter season. The refurbished ballroom was opened to excellent reviews and has attracted significant interest as a venue for weddings, conferences and seminars.
In FY12, Marawila Resorts Plc saw its revenue rise by 22% to Rs. 256.7 million whilst profit amounted to Rs. 15 million, down from Rs. 19.2 million in FY11. The latter was adversely affected by a charge of Rs. 52.7 million due to the revaluation of the company’s dollar denominated debt following the devaluation of the rupee.


Reported in Dailyft

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...by i3gconsultants@ 11:07:06 on 2012-07-17

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Stock Watch: CONN

Wayamba officials sign up Amaya Leisure for upmarket, wayside restaurant


The Wayamba Development Authority (WDA) of the Wayamba Provincial Council has signed an agreement with hotel and resort group, Amaya Leisure PLC to operate a top-notch restaurant three kilometres away from Kurunegala on the Kurunegala – Dambulla Road just before the Forest Reserve.The company will operated the Badagamuwa Centre which would be a boon to local and foreign travellers, the regional agency said in a media release.The main restaurant is on the first floor while the Pastry Corner and the High Tea Lounge will be on the ground floor with a shopping arcade. Breakfast, lunch and dinner buffets with the touch of A La Carte would be available. “Special Theme Nights and Fashion Shows at weekends with a musical extravaganza will be a certainty to attract the passing traveller,” it said.The statement said this is feather in the cap for Wayamba Development Authority whose Director General Wasantha Premathileka was preparing for the opening of the restaurant on August 2. Mr Premathileka said Amaya Leisure will market the Badagamuwa Centre in its websites and during overseas travel markets.

Reported in Sundaytimes
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...by i3gconsultants@ 02:07:26 on 2012-07-16

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Stock Watch: CTHR

Foray into Sri Lanka is ‘strategic and timely’ says Keppel Land CEO


Singapore giant and property development specialist Keppel Land has described its entry into Sri Lanka via a joint venture with CT Holdings to build luxury condominiums as strategic and timely.“Our first foray into Sri Lanka is strategic and timely given the country’s positive growth as well as with growing affluence amongst its population. The improved political and economic conditions also bode well for the country as it looks to attract more foreign direct investments,” Keppel Land Group CEO Kevin Wong said in the statement which announced the joint venture with CT.
“Sri Lanka is experiencing rapid growth and the sound fundamentals are expected to drive demand for homes. This is where Keppel, with our trusted brand and reputation as a premier developer, can meet the demand for well-located quality homes,” Wong added.
Keppel Land via its subsidiary Edmonton Ltd., has formed a 60:40 joint venture CT’s subsidiary CT Properties Ltd., for a $ 70 million (around Rs. 9 billion) venture to build about 260 high-end condominiums on a 1.25-acre prime site in the Kotahena.Keppel Land is the property arm of Keppel Corporation, one of Singapore’s largest multinational groups with key businesses in offshore and marine, infrastructure, and property. Keppel Land is one of the largest listed property companies by total assets on the Singapore Exchange. Its total assets amounted $10.1 billion as at 31 March 2012.
The foray into Sri Lanka expands Keppel’s geographical reach in Asia which includes Singapore, China, Vietnam, Indonesia and India at present. It has a strategic focus on two core businesses of property development and property fund management.With a pipeline of over 75,000 homes across Asia, Keppel Land said it is poised to tap on the demand for quality housing driven by homeownership aspirations.
One of Asia’s premier property companies, Keppel Land is recognised for its sterling portfolio of award-winning residential developments and investment-grade commercial properties as well as high standards of corporate governance and transparency.In Singapore Keppel’s landmark developments include Marina Bay Financial Centre, Ocean Financial Centre and One Raffles Quay. It is also the developer behind world-class iconic waterfront homes at Keppel Bay and Marina Bay in Singapore. In property fund management Keppel Land has K-REIT Asia, a pan-Asian commercial real estate investment trust, and Alpha Investment Partners (Alpha).
In the joint announcement CT Properties Chairman Ranjit Page said, “Leveraging our in-depth knowledge and keen understanding of the local market, CT Properties looks forward to partner Keppel Land in their first project in Sri Lanka.”
“CT Properties has taken a very calculated approach in venturing into projects to ensure that we make a mark with each of our projects. Our latest initiative in this new environment aims to not simply ride the growth opportunity but bring international expertise and benchmarks to the industry and thereby make a long term impact,” Page added.
According to Page, the condominium market in Colombo is a growing segment, especially for high-end developments. “The stable government and positive economic outlook will contribute to higher disposable income, which will boost the purchasing power of local homebuyers and overseas Sri Lankans keen on the potential capital appreciation of well-located and high-end property developments,” CT Properties Chief added.
Targeted at the well-heeled local and overseas Sri Lankans, the development is located north of Fort, the central business district (CBD) of Colombo. It is well-connected via major roads and will provide residents easy and direct access to the CBD. The Kotahena area, where the new development is sited,  is well-served by numerous amenities including schools, retail outlets, banks, medical facilities as well as sports and entertainment centres. Majority of the homes are also expected to enjoy panoramic views of the Indian Ocean.
Keppel Land’s participation in the proposed development is subject to the satisfaction of conditions precedent including but not limited to the joint venture company obtaining planning and regulatory approvals by the relevant authorities.

Reported in Dailyft
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...by i3gconsultants@ 02:07:04 on 2012-07-16

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Stock Watch: LOLC

LOLC Group ‘buys’ top Rs. 7 b in two and half years


Gaining effective control in Browns and Moody’s linked unit’s A- rating are positive developments say analysts.Further improvements likely as LOLC progresses towards diversified holding company milestone LOLC last week effected what could be estimated as Rs. 7 billion mark topping acquisition since January 2010 as part of properly repositioning it as a diversified holding company. On Friday, the Company said it has signed an agreement to get controlling interest in diversified blue chip Brown and Company Plc for Rs. 1.32 billion.
LOLC will get control of Browns by owning 100% from previously 50% in Diriya Investments, which holds 49.8% in Browns via stakes held by four entities (Engineering Services Ltd., – 23.41%, Mason’s Mixture, Mutugala Estates Ltd. and Pathregalla Estates) all of which comes under the Taprobane Fund. Prior to Friday’s deal, LOLC directly held 4.8% stake and with the latest move it will control nearly 55% stake.
LOLC advanced Rs. 600 million initially for the deal with balance to be paid over a one year period. Diriya’s 50% stake was sold by Browns Deputy Chairman Ajith Devasurendra.As per Daily FT’s analysis with the latest move, LOLC Group is estimated to have spent Rs. 7.4 billion in various acquisitions since January 2010 spanning leisure, entertainment, power and others. However it also booked divestments worth around Rs. 10 billion during this period including 10% stakes in subsidiaries Orix Finance (Rs. 3.8 billion) and Commercial Leasing (Rs. 4.1 billion) in FY12. LOLC’s acquisition spree has seen its asset base swell to Rs. 146 billion in FY12 from Rs. 33 billion in FY08 after the pioneering leasing firm’s control was acquired by young Deputy Chairman Ishara Nanayakkara in early 2000 and entry of ex-Citibank Country CEO Kapila Jayawardena as Group MD/CEO from mid-2007.
Orix Corporation of Japan owns 30% stake in LOLC. Equally long term borrowings had swelled from Rs. 12 billion to over Rs. 60 billion over the four years.Browns was treated as a subsidiary even before Friday’s move but clear control will enable LOLC to consolidate the former iconic engineering firm in a greater way from now onwards.In FY12, net profit attributable to equity holders of Browns was Rs. 1.168 billion, down by 47% over the previous year. Group post-tax profit was down by 7% to Rs. 3.05 billion whilst gross profit improved by 6% to Rs. 3.4 billion and turnover by 20% to Rs. 14.5 billion.

Diriya Investments number of shares in issue is 216 million and the price paid for 50% stake (108 million shares) works out to Rs. 12 per share. In that context, LOLC got effective control of Browns at a fraction of latter’s Net Asset Value which was Rs. 113 (company) and Rs. 205 (Group) as at end FY2012. The announcement was made after the market was closed and Browns ended on Friday up Rs. 3 to 108.
“This strategic acquisition will create a strong platform for the LOLC Group to maximise the potential for growth with the strong synergies available in the two groups of companies and function as an even stronger conglomerate,” LOLC said in a statement. Analysts also described the move as positive for LOLC which has been busy restructuring its operations as part of its transition to become a diversified holding company. Its core business leasing and factoring is done via Commercial Leasing, finance via Orix Finance, and micro finance lending via another subsidiary LOMC (LOLC Micro Credit Ltd)
At the end of March 2012, financial services contributed 72% of the operating profits of the Group and leisure contributed 23%, while interests in trading, plantations and insurance contributed the rest.
During the year ended March 2012, LOLC group reported net profit of Rs. 8.9 billion on a gross income of Rs. 37.8 billion compared to net profit of Rs. 7.0 billion on a total income of Rs. 32.5 billion in the corresponding period of the previous fiscal. During fiscal 2012, LOLC’s profitability was supported by investment gains of Rs. 5.2 billion and had suffered an operational loss of Rs. 777 million.
Moody’s-linked unit ICRA Sri Lanka last week announced A- rating for LOLC with outlook stable. This is also likely to reinforce confidence on LOLC which last year suffered a downgrade from Fitch. Differences of opinion saw LOLC dropping Fitch and opting for Moody’s unit to get a fresh or proper assessment.
According to ICRA, as on March 31, 2012, 74% of LOLC’s Rs. 15.6 billion investment book was into subsidiaries and other group companies while the treasury investments book portfolio stood at Rs. 4.1 billion. Over the past two years, LOLC has invested Rs. 2.1 billion in leisure ventures and Rs. 200 million in a start-up general insurance venture. The company also recapitalised its financial services subsidiaries through an infusion of Rs. 2.3 billion. Over the medium term, the holding company does not expect any significant equity infusion into any of its subsidiaries.


It also said the asset quality of LOLC Group’s lending portfolio (Rs. 40 billion as at end FY12) has been better than that of its peers though marginally affected in the current financial year reducing to 1.8% as on March 31, 2012 from 1.6% as on March 31, 2011.
Given the significant operational and financial linkages with the subsidiaries (especially pertaining to financial services), ICRA took a consolidated rating view of the HoldCo and the key asset financing subsidiaries. It said the view is corroborated by the service level agreements between LOLC and its subsidiaries to upstream cash flows.
“LOLC’s standalone earnings would mainly comprise of shared services fees and dividends from subsidiaries and investment gains. ICRA has also taken note of the management’s commitment to de-leverage the HoldCo from the current gearing of 2x as on March 2012 to 1.2x by March 2013 by reducing intra-group exposures and the run-down of its lending book,” ICRA said adding maintaining stable cash flows and a deleveraging of the HoldCo would remain key sensitivities.
The trading giant Brown and Company, which has been in operation for 135 years, is a diversified conglomerate with operations in several key industry sectors including  investments, plantation and agriculture, power generation, marine and manufacturing, home and office solutions, environment and pharma as well as travel and leisure.
The Browns Group holds several leading local and global brands, including Exide Batteries, Tafe, Sifang, Massey Ferguson,  Austrian Airlines, BG, Continental Airlines, Eclipse, Intervet, Oce, Olympus, Sharp, Eukanuba, Zagro, Yanmar Marine Engines, Ashok Leyland Marine, Pitney Bowes, Scandinavian Airlines, Makita, Maktec, F.G. Wilson, Yamasha, Daelim Royal Boiler Co and MFG.

Reported in Dailyft
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...by i3gconsultants@ 02:07:11 on 2012-07-16

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Stock Watch: LOLC

Sri Lanka LOLC gains full control of Browns


July 14, 2012 (LBO) - Sri Lanka's Lanka Orix Leasing Company Pltc (LOLC) said it is buying out a 50 percent shareholder in an investment vehicle that will give it full control of Brown & Company Plc.
LOLC said it is buying a 50 percent stake of Diriya Investments, an investment vehicle which owns 49.8 percent of Browns from Ajith Devasurendra, for 1.32 billion rupees which will be paid in two installments.
LOLC had an additional direct holding of 4.7 percent in Browns.

LOLC will pay 660 million rupees to Devasurendra and the balance will be settled in one year.

Nithya Partners, a law firm will act as escrow agents.

Browns & Company is a 135 year old company which has agencies for several global brands. It is the island's top seller of tractors having the brands Tafe and Massey Fergusen, F G Wilson, Yanmar Marine engines, consumer brands Olympus and Sharp among others.

The firm also has the agencies for Continental Airlines, Scandinavian and Austrian Airlines.
LBO
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...by i3gconsultants@ 16:07:11 on 2012-07-15

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Stock Watch: SLTL

Mobitel and SLMA launch 'Doc Call'


Sri Lanka Telecom Mobitel and the Sri Lanka Medical Association(SLMA) launched an advisory service permitting Mobitel customers to obtain initial medical advice from doctors who are members of the SLMA over the phone. Mobitel 'Doc Call' enables Mobitel customers to contact doctors through a Mobitel portal and receive immediate initial medical advice. This service allows customers to contact doctors by dialling 247. "As the national mobile service provider we are proud to be the first to introduce this facility to the Sri Lankan market. 'Doc Call' provides Mobitel customers with the convenience of speaking directly to doctors who are members of the SLMA to get initial medical advice. The service makes access to doctors convenient for Mobitel customers around the island. The introduction of this service further affirms our brand promise 'We care Always'." said Mobitel CEO, Lalith De Silva. The 'Doc Call' Medical Advice service is available 24 hours, seven days a week. After dialling 247, the customer is connected to the Mobitel 'Doc Call' System where customers can select their preferred language for initial medical advice. Customers are then assisted by a call centre agent who will check the availability of a doctor and connect him or her to speak directly with a doctor. President, SLMA Prof. Vajira H. W. Dissanayake said, "We are happy to partner with Mobitel to bring a service that would be useful to patients. Such services are available in other parts of the world and the launch of this service in Sri Lanka is timely. Health is considered the wealth of a nation. With Mobitel we now bring the best preliminary medical advice to a patient when needed. The SLMA is supportive of new technology to deliver medical services and this is our way of caring for patients we serve. We congratulate Mobitel for delivering a technological solution with 'Care'as its foundation".


Reported in Sundayobserver

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...by i3gconsultants@ 12:07:29 on 2012-07-15

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Stock Watch: MBSL

RAM Ratings Lanka reaffirms MBSL's ratings at AA-/P1


Ram Ratings Lanka reaffirmed Merchant Bank of Sri Lanka (MBSL) long and short term ratings at AA - and P1 concurrently the long term rating of the company's Rs. i million senior unsecured Redeemable debentures (2011/2015) and the short term rating of its Rs. 500m unsecured commercial paper (2011/2012) have been reaffirmed at AA-and Pl. Ram Ratings Lanka has assigned a short term P1 rating to MBSL's proposed Rs. 1 b. Commercial paper (2012/2013). All the long term ratings have a stable outlook. The ratings are supported by MBSL's strong capitalisation and the financial flexibility derived from its parent, the state owned BoC. The ratings are weighed down by the Company''s weak asset quality. MBSL is a 72 percent owned subsidiary of BoC and is a medium sized specialised leasing company that accounted for 7.41 percent of the industry's asset base as at end of 2011. The MBSL group asset base stood at Rs. 19.24b as at December 2011. Although MBSL had intended to merge with MCSL and Ceylease Financial Services Ltd and convert to a licensed specialised bank these plans have now been shelved. MBSL has entered into an agreement with a consortium of investors to dispose of its interest in MBSL Savings Bank. The sale is anticipated to be completed shortly.


Reported in Sundayobserver

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...by i3gconsultants@ 12:07:29 on 2012-07-15

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Stock Watch: ABAN

Abans introduces Philips food processor


Abans Ltd recently introduced the adaptable Philips HR7761/00 Food Processor. This product comes with accessories that allows it to accommodate more than 28 different types of functions. Some accessories include a bowl, blender and grinder mill, as well as four additional steel discs that allow you to complete a variety of cooking techniques. The processor’s 2 speed power helps in preparation techniques. The low speed setting is good for whipping cream, beating eggs or making dough for bread and pastries. To help you keep track of the add-ons, all the accessories are colour coded to match the speed to which they are set for. All parts are dishwasher safe.


Reported in Sundayobserver

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...by i3gconsultants@ 12:07:29 on 2012-07-15

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Stock Watch: MBSL

MBSL supports IFRS, SLFRS implementation


Merchant Bank of Sri Lanka PLC (MBSL) held a seminar on "Easy ways of implementing International Financial Reporting Standards (IFRS) Sri Lanka Financial Reporting Standards (SLFRS) for quoted public companies, banks, insurance companies and SME Sector" at the Taj Samudra Hotel recently. The guest speaker at the event was the well known Accounting Standards Specialist Sujeewa Mudalige, Partner PricewaterhouseCoopers. A diverse cross section of the financial sector who attended the event comprised Chief Executive Officers, Chief Financial Officers, Finance Managers, SAP Specialists, ERP Specialists, Analysts, Financial Accountants, Management Accountants, Staff of Audit Firms, Financial Advisory and Consultancy Firm staff, IFRS Implementation Teams, Accounting System Implementation Teams, Financial Statement Users of SME Sectors, Listed Companies, Banks, Insurance companies and people with special interest in IFRS implementation. The areas covered by the speaker included key aspects related to IFRS & SLFRS, Sectors of importance - Banks, Insurance Companies, Quoted Public Companies SME Sector Lessons learnt to-date Chairman of MBSL M.R. Shah said, "The financial statements help to quantitatively and qualitatively describe the financial health of a company. A benefit of having one worldwide use of financial reporting is to make it easier to compare the financial position of different companies in different countries, thus improving decision making while having an unique form of accounting rules for similar transactions that occur in any part of the world." He said, "We have been successful in conducting a series of seminars from 1997 on many appropriate topics at the opportune time by way of organising seminars, workshops, full day programs and breakfast meetings. The fora were highly sought after due to its need and importance at those crucial junctures". Merchant Bank of Sri Lanka PLC., incorporated in March 1982, is the pioneer Investment/Merchant Bank in Sri Lanka and was quoted on the Colombo Stock Exchange in 1991. The Bank's largest shareholder is the Bank of Ceylon which holds a strategic stake of 72% and in 2005 entered into a strategic alliance with SBI Capital Markets Limited, the largest investment Bank in India. Its subsidiary companies Merchant Credit of Sri Lanka Ltd. which has 13 branches island-wide including Jaffna and MBSL Insurance with 55 branches add strength and stability to its trade portfolio. In addition, MBSL holds a 29% share of Lanka Securities (Pvt) Ltd, an investment advisory firm.


Reported in Sundayobserver

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...by i3gconsultants@ 12:07:29 on 2012-07-15

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Stock Watch: BLI

RAM Ratings Lanka downgrades Bimputh Lanka ratings


RAM Ratings Lanka has downgraded the long-term financial institution rating of Bimputh Lanka investments PLC from BB to BB - The short-term ratings have been reaffirmed at NP. The rating watch on the company has been lifted and the stable outlook on the long-term rating has been reinstated. The downgrade reflects the loss of financial land operational synergies derived from Sevanagala Sugar Industries (Pvt.) Ltd., previouslyone of Bimputh's significant counterparts.


Reported in Sundayobserver

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...by i3gconsultants@ 12:07:29 on 2012-07-15

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Stock Watch: JKHL

Cinnamon Lakeside awarded Best Luxury Hotel


Cinnamon Lakeside Colombo was awarded 'Best Luxury Hotel, Sri Lanka' award at the Business Destinations 2012 Travel Awards. Currently recognised as the 'Best Five Star City Hotel' by Sri Lanka Tourism, the award brings international recognition to the hotel. At the John Keells Leisure Awards under 'I will stand out wherever I am' and 'I will get it right the first time all the time' as well as an award for 'Best Innovation' was also awarded to Cinnamon Lakeside. As the winner of 'Best Luxury Hotel, Sri Lanka', Cinnamon Lakeside Colombo was recognised for achieving overall excellence in innovativeness, unparalleled standards in product and service, corporate values and sustainable practices. Cinnamon Lakeside is the first five star hotel in Sri Lanka to be Green Globe certified and the only one in Sri Lanka to be consequently recertified for its contribution to a greener environment. The Hotel's involvement in corporate social responsibility has been a fundamental aspect in its sustainability drive. In the last year Cinnamon Lakeside Colombo carried out three cultural restoration projects where hotel associates volunteer to restore religious structures around the country such as the restoration of the Abhayagiriya temple, St. Anne's Church Paradise in Kuruwita and the Ayeshwariya Lakshmi Kovil.


Reported in Sundayobserver

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...by i3gconsultants@ 12:07:07 on 2012-07-15

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Stock Watch: PAP

Panasian Power acquires hydropower plant


The Board of Directors of Panasian Power PLC has approved the acquisition of 90 percent of shares of Padiyapellella Hydropower (Pvt) Ltd for Rs. 910m. The purchase price was based on the valuation of the company by NDB Investment Bank Ltd. The Power Project by Padiyapellella Hydropower (Pvt) Ltd is being implemented in two phases with Phase 1 consisting of a 3.6 MW Power Plant which is expected to be commissioned in August/September 2012. The company has already obtained the necessary licenses to construct and commission an additional 3 MW Power Plant in Phase 2. In keeping with the investment strategy spelt out during its IPO in January 2011, with this acquisition Panasian Power Plc will be operating 8 MW of Power by August/September 2012.The company is currently negotiating with the relevant authorities for the expansion of the Rathganga Power Plant from 2 MW to 3 MW. With the acquisition, the capacity expansion of the present plant at Rathganga, and the completion of Phase 2 at Padeyapella, Panasian Power PLC is expected to increase its capacity to 12 MW of Power in 2013 and is well on its way to achieving its aim of a total power generating capacity of 15 MW within the next few years. While investing in its expansion program, Panasian Power Plc has also decided to share part of its profits by offering an interim dividend of 15 cents per share to its shareholders for 2011/2012.


Reported in Sundayobserver

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...by i3gconsultants@ 11:07:47 on 2012-07-15

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Stock Watch: LOLC

LOLC gets control of Browns for Rs. 1.32 b


Subsidiary LOLC Investments signs deal with Ajith Devasurendra to buy balance 50% stake in Diriya Investments, the ultimate holding company of diversified blue chip Lanka Orix Leasing Company Plc (LOLC) yesterday announced moves to get control of diversified blue chip Brown and Company Plc for Rs. 1.32 billion.
LOLC’s fully-owned subsidiary LOLC Investments Ltd. has signed a share sale and purchase agreement to acquire the balance 50% stake in Diriya Investments Ltd., the ultimate holding company of Browns, with a 49.8% stake. Already LOLC directly holds a 4.7% stake in Browns.
The stake in Diriya Investments is held by Browns Director Ajith Devasurendra. By virtue of 50% stake previously in Diriya and the direct stake, Brown to date has been a subsidiary of LOLC.
The terms and conditions of the transaction requires LOLC Investments Ltd. to make an initial payment of Rs. 660 million to the seller with a further period of one year to settle the rest of the consideration.
“This strategic acquisition will create a strong platform for the LOLC Group to maximise the potential for growth with the strong synergies available in the two groups of companies and function as an even stronger conglomerate,” LOLC said.
The senior partners of the leading law firm Nithya Partners will function as the Escrow Agents to the transaction.
Diriya Investments’ number of shares in issue is 216 million and for the 50% balance stake (around 108 million shares) LOLC Investments had paid Rs. 12 per share. Diriya Investments is likely to be the owner of a collective 49.8% stake in Browns held via Engineering Services Ltd., (23.41%), Mason’s Mixture, Mutugala Estates Ltd. and Pathregalla Estates.
The announcement by LOLC was made late evening after the market had closed. Browns stock was trading between Rs. 108 and Rs. 105.50 before closing at the former level, up by Rs. 3. LOLC was down 80 cents to close at Rs. 36.20. EPF holds a near 5% stake in Brown whilst SLIC and NSB also hold 1.5% each.
Browns’ net asset value is Rs. 113 (company) and Rs. 205 (Group) as at end FY2012, down from Rs. 135 and Rs. 214 respectively in the previous year.
Group assets amounted to Rs. 33 billion and that of the Company was Rs. 15.3 billion
In FY12, net profit attributable to equity holders of Browns was Rs. 1.168 billion, down by 47% over the previous year. Group post-tax profit was down by 7% to Rs. 3.05 billion whilst gross profit improved by 6% to Rs. 3.4 billion and turnover by 20% to Rs. 14.5 billion.
LOLC in FY12, its bottom line improve by 66% to Rs. 6.37 billion whilst Group after tax profit rose by 27% to Rs. 8.9 billion. Profit from operating activities however dipped by 9% to Rs. 7.14 billion whilst Group revenue rose by 16% to Rs. 37.8 billion.
The trading giant Brown & Company PLC, which has been in operation for 135 years, is a diversified conglomerate with operations in several key industry sectors including  Investments, Plantation & Agriculture, Power Generation, Marine & Manufacturing, Home & Office solutions, Environment & Pharma as well as Travel & Leisure.
The Browns Group holds several leading local and global brands, including Exide Batteries, Tafe, Sifang, Massey Ferguson,  Austrian Airlines, BG, Continental Airlines, Eclipse, Intervet, Oce, Olympus, Sharp, Eukanuba, Zagro, Yanmar Marine Engines, Ashok Leyland Marine, Pitney Bowes, Scandinavian Airlines, Makita, Maktec, F. G. Wilson, Yamasha, Daelim Royal Boiler Co and MFG.

Reported in Dailyft
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...by i3gconsultants@ 08:07:11 on 2012-07-14

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Stock Watch: CTHR

Sri Lanka CT group in US$52mn condo with Singapore's Keppel


Sri Lanka's CT Holdings is planning to build a 7 billion rupee (52 million US dollar) high end apartment block with Singapore's Keppel group in the capital Colombo, the company said.The project will be carried out through CT Properties Ltd, the firm said in a stock exchange filing.Edmonton Ltd, a unit of the Keppel Land Ltd, will take a 60 percent equity stake and debt in the company.The apartment is earmarked to be built on a 1.25 acre block in Colombo's George R de Silva Mawatha.
CT Holdings said Keppel had entered into a conditional share purchase agreement which includes gaining regulatory approvals before buying its stake.Keppel Land is one of the largest property companies in Singapore.

Reported in LBO
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...by i3gconsultants@ 17:07:25 on 2012-07-13

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Stock Watch: DOCK

Sri Lanka dockyard delivers oilfield support vessel


Colombo Dockyard has delivered the first of a series three vessels to support offshore oil and gas fields for Greatship Global Offshore Services of Singapore.The Multipurpose Platform Supply Vessel (MPSV), delivered Wednesday, is designed by Seatech Solutions International (S) of Singapore, and is the latest new build by the yard which is focussing on the growing offshore petroleum industry."Designed for operation worldwide and with a speed of 13.8 knots, the vessel can get to the desired location around the world as quickly as possible, minimizing downtime," Colombo Dockyard said in a statement.The vessel has an oil recovery arrangement and the capability to operate as advanced platform support vessel as well as a light construction support vessel, with endurance of 35 days and a cruising range of about 9,200 nautical miles.
Greatship Global Offshore Services is a Singapore incorporated subsidiary of Greatship (India) Limited, part of the Great Eastern Shipping group which has a fleet of tugs and supply vessels working in offshore oil and gas fields.
The MPSV is also designed to have an enhanced accommodation area for 50 people, said the yard in which Japan's Onomichi Dockyard Company has a majority stake.
The vessel is classed with “In Water Survey” denoting it could be operated without being dry-docked for five years with underwater surveys being done while afloat instead of having to dry dock as conventionally done.
"This is a huge saving for the owner," the yard said.
In June 2012, Colombo Dockyard said it launched the hull of the Greatship Rachna, the second of the series of three MPSVs for Greatship Global Offshore Services.

Reported in LBO
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...by i3gconsultants@ 17:07:28 on 2012-07-13

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Stock Watch: SAMP

Money2srilanka from Sampath Bank


Competing alongside the top most banks in Sri Lanka which boasts of serving the Lankan market for over a century, Sampath Bank has been successful in reaching another level of the banking operation in Sri Lanka with its latest introduction of money2srilanka operation, just within its 25th anniversary.
One of the leading players in the Indian remittance market and its proprietary online portal, ICICI Bank, which is also one of the largest private sector banks in India, has joined hands with Sampath Bank Sri Lanka, where this service is being piloted in Canada and the United Kingdom at present and as the management hopes for, it would shortly be rolled out in Australia, USA, South East Asia and the Euro Zone during its second phase.
The newly launched money2srilanka operation (M2SL), is a web-based online remittance tracking platform which facilitates remittances from various geographies to beneficiaries in Sri Lanka in a convenient, speedy and economical manner.
In an interview with the Daily News Business, Tharaka Ranawala, Deputy General Manager, Marketing and Business Development, said, "Sampath Bank remains committed to extend its expertise in the cross border payments business and the online tracking service for money transfers, which is the first step towards creating a remittance platform for Sri Lanka.
The need and the timely approach by ICICI Bank was highly welcome by the Sri Lankans in Canada and UK, where it is mostly promoted for the time being, which was a result of the lack of Business Promotion Officers (BPO) that are found in the European region compared to the high number of BPOs found in Gulf countries.
"To use this service, a user needs to complete a simple one-time online registration at M2SL and thereafter could avail the tracking service for money transfers from any bank in the geographies where M2SL has been offered to beneficiaries in Sri Lanka.
"The remittance received is available for account holders of ICICI Bank, Sri Lanka and Sampath Bank instantly on the day of receipt of funds in Sri Lanka and the remittances received on behalf of account holders of other banks in Sri Lanka, which would be disbursed via Sri Lanka Interbank Payment System (SLIPS), with the same day value. An important feature of this service is the availability of online tracking facility to trace the status of a transaction from the point of initiation up to the point of payment to the beneficiary," Ranawala added.
"As pointed out and proved efficiently within the first two months of its operation, money to Sri Lanka is a robust plan with an experienced player with the likes of ICICI, where the same operation had been carried out most successfully in India. It is believed that money2srilanka would be used for the best of one's interest for those who are living in Canada and the UK, to help support the growth of their loved ones back at home", concluded Ranawala.

Reported in Dailynews
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...by i3gconsultants@ 15:07:38 on 2012-07-13

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Stock Watch: ALLI

Alliance Finance post best ever results with 137% growth


Alliance Finance Company PLC, posted the best ever results with a phenomenal 137% growth, witnessed After Tax Profits increase to Rs 466 million during the financial year 2011/2012 and the growth in profits came from the entire spectrum of the company's business segments. Reduction in costs of borrowing, higher disbursements and optimizing margins, had been the key drivers of this performance, whist leasing, hire purchase and gold loans have been the key product segments which contributed during the year under review, Alliance Finance Company PLC Chairperson K.S K De Silva said in the company's annual report.
The company's lending had risen by a significant 75%, whilst the Net Assets had grown by 37% and Net Interest Income increased by 88% during the year. The asset base had increased by 49% whilst, deposits surged ahead by 35% to reach a total deposit base of Rs 6.7 billion during the year under review.The company had been successful in optimizing its Net Interest Margin to 9.8% from 7.4% during the previous year. This achievement had been made more significant, in the context of the high growth in lending of 75% during the year.

Reported in Dailynews
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...by i3gconsultants@ 14:07:31 on 2012-07-13

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Stock Watch: CIC

Unrelated diversification strategies will hedge against seasonal risks


CIC Holdings has looked at unrelated sectors and also looked at methods of value addition in agriculture in order to minimize seasonality. "These initiatives will continue side by side as we look to the future," says Managing Director/ CEO Samantha Ranatunga.
He also said that the forward integration process of the Group in chemicals would be through supplying custom made solutions to the manufacturing industry and other value added chemical industries where it will always strive to offer high technology products
He also justified the change of the company’s corporate logo was a requirement that was needed with the change of identity as it moved essentially from a chemical company to a food related company where the word ‘Chemical’ does not have a hold with our closeness affinity towards nature and natural products.
Here, he is in conversation with The Island Financial Review.
Q: How would CIC Holdings react to the challenges in the agricultural chemical market?
A: It is a reality that with growing awareness amongst the population and with greater environmental awareness and conscience to it, the need for safer chemicals are increasing by the day. We have agreements with the largest research based organizations involved in Agrochemicals, namely M/s Syngenta in Switzerland and DOW Chemicals of USA. Through our principals we hope to bring some of the safest chemicals available to the farmers of Sri Lanka. This will help us to overcome the current challenges.
Q: On your investment in specialty chemical manufacture with the North American partner- Chemcel (Pvt) Ltd and J2 Speciality Chemicals in Canada. You have invested Rs. 200 million and total investments amounts to over Rs. 1 billion with a 100% buy back agreement with the North American partner.What is the expected return per month?
A: The first phase of the project has now been completed and we are in discussions with our partner on the 2nd phase. The returns will be finalized as per the 2nd phase which will be with the involvement of our overseas principal. But we are confident that returns will be substantial.
Q: The agricultural sector accounts for 64% of the Group’s turnover. To what extent has related diversification/synergies within the sector benefited the Group?
A: The company’s involvement in agriculture is focused on two main companies – CIC Agribusinesses and CIC Feeds. CIC Agribusinesses and CIC Feeds acts as a grower/supplier to the other member companies of the Group. They add value to products. The farmer network is built around CIC Agribusinesses. The access to nearly 20,000 farmers provides tremendous synergy to the group companies as it’s a substantial production base.
Q: What are the difficulties in rice variety exports?
A: CIC moved into the rice export market about 4 years ago anticipating the potential peace and good weather could bring a glut like situation in the rice industry impacting on the farmers. Hence we have built state- of- the- art rice Milling facility alongside, developing several varieties of export capable rice. However in order to globally compete, we need to do greater capacity building where the company has to move to a larger farmer base. We have approached the government along these lines and we are awaiting a response.
Q: How would you rate your competition from other low cost rice producing countries in the context of your rice exporting destinations - Australia, US, Canada and France?
A: If you look at the global rice market today the Rice prices vary from around USD 500/PMT. (cheaper rice from Cambodia and Vietnam) which go to the African markets and the Basmati type of Rice sells for around USD 1,000/PMT. As our cost of production of rice cannot meet the Vietnamese cost, we need to produce rice for niche markets where price plays a relatively minor role. Our strategy to overcome competition has been to focus on red varieties of rice which have major health benefits and less competition from the Far Eastern competitors.
Q: What are the forward integration strategies in the chemical and agricultural sectors?
A: Forward integration in chemicals would be through supplying custom made solutions to the manufacturing industry and other value added chemical industries where we always strive to offer high technology product s with in-house technology support at competitive prices. In the agriculture sector, we do high end retaining through our own outlets.

Q: What are the challenges in the poultry industry given the saturated domestic market?

A: The Poultry industry has further expanded due to increase in tourism and also with the opening of the North and East. However the per capita amount has increased from about 2.6 kgs to 5.2 kgs. Most of the chicken in the rural areas are purchased from the unorganized sectors hence there is a large potential for high quality well processed chicken which is sent through an authentic cold chain. This market is expanding with the affluence of the people. However the prices for feed have been climbing and the inability to pass that to the consumer is due to price control which hampers the industry.

Q: What are the challenges in the paints and chemical sectors (CIC paints & adhesives) given the stiff competition from low cost manufacturers?

A: The Paints and the chemical sectors are extremely competitive due to multiple players in the paints and low cost competitors in the chemical industry. However due to the world class technology of our global principals we have been able to outclass competition in the paints business. The high interest regime and credit crunch is also impacting on the smaller traders of chemicals today.
Q: How would you rate future prospects in the CISCO Specialty packaging in export market?
A: CISCO Speciality Packaging (Pvt) Limited faces intense competition in the international market. Hence we are now focused on the local pharmaceutical, beverage and agrochemical industries which need bottles of extremely stringent specifications. We focus to be in the quality segment of the market where high technology products is required.
Q: What are the challenges faced in the industrial product segment and agricultural segment given high interest rates and slowdown in the overall economic activity level in the country? (Low investment level and decline in construction activities is expected.)
A: All business segments will get impacted by the economic slowdown. The rising interest lack of credit and lowering of demand would create a slack in the market. However with our involvement in the food sector, we are sure that it would help us gain some lost ground.
Q: How would you assess the way forward for the CIC Group?
A: CIC which originally started as the chemical company has over the years transformed itself to an agri technology company and then moved into full fledged agri industry. This has been done while maintaining our interest in the Pharmaceutical, FMCG and Industrial sectors. Our high involvement in the agriculture industry with very strong upstream and downstream presence would make us survive and ensure stability and returns in the future.
Q: What are the possibilities of unrelated diversification strategies in order to hedge against seasonal risk?
A: We have looked at unrelated sectors and also looked at methods of value addition in agriculture in order to minimize seasonality. These initiatives will continue side by side as we look to the future
Q: Now, on the flip side, what was the rationale underpinning your logo change?
A: We needed a change in our identity as we moved essentially from a chemical company to a food related company where the word ‘Chemical’ does not have a hold with our closeness affinity towards nature and natural products we have been ‘greening’ our logo and taken the pay off line of nurturing life as it encompasses the food, nutrition, healthcare and industrial sector value addition that we do.

Reported in The Island
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...by i3gconsultants@ 09:07:59 on 2012-07-13

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Stock Watch: SLTL

SLT deploys FTTX technology to boost broadband


Sri Lanka Telecom (SLT), the nation’s number one integrated communications service provider and the leading broadband and backbone infrastructure services provider, is proud to announce the successful implementation of the first phase of its ultra-high speed broadband network under its nation-wide network modernisation project “i-Sri Lanka” which has already driven an increase of 40,000 new broadband connections to the network.
The i-Sri Lanka project is due to be fully completed within a period of 18 months, at which time it will provide ultra-high speed broadband 20Mbps service to more than 90% of our customers by adding capacity for 600,000 new broadband customers to the network. Through the completion of the i-Sri Lanka project, SLT plans to increase the existing customer base of 300,000 customers to 600,000 over the next couple of years to ensure the one million SLT Megaline customers can enjoy broadband and PeoTV (triple play) services.
The i-Sri Lanka project was kicked-off in 2011 to enhance and upgrade SLT’s existing fixed network,  by expanding the fibre network to bring it closer to customers through Fibre-to-the-Node (FTTN) deployment of Multi-Service Access Nodes (MSANs), located within short distances from customers. This reduces the length of the copper connection with a resultant significant increase in reliability, quality and broadband data speeds. Reducing the copper cable lengths not only improves reliability, but will reduce maintenance and replacement costs. Through this programme SLT has already brought ultra high speed broadband connectivity at speeds of up to 20Mbps for many of its fixed customers. This programme is fully integrated with the company’s Next Generation Network (NGN) modernisation project. In addition, most importantly, this expansion will bring SLT’s interactive PeoTV, the multi channel TV network to all Megaline customers for the first time.
SLT CEO Greg Young commenting on the i-Sri Lanka project said, “We are delivering against our Strategy to evolve a world class broadband access network accessible to all Sri Lankans, to increase broadband penetration, which directly contributes to economic growth of the Country. To achieve the predefined goals of the project, we are transforming the traditional, copper based access network architecture to a high speed capable broadband network via NGN and FTTX technologies.”  
With this ongoing i-Sri Lanka project, the company has addressed key network limitations due to inherent characteristics of the older copper network, affordability of services and limited options for the future, which has limited broadband penetration in Sri Lanka. With this modern network architecture, SLT converts its street Cabinets to Access Gateways to provide improved high speed broadband, PeoTV IPTV and to add additional capacity to the network to cater to the growing customer base.
Despite a global trend of declining fixed line subscribers, SLT has consistently driven a steady increase in fixed customers over the last three years. The company’s impressive product range and the demand for high speed uninterrupted Broadband and entertainment through PEO TV has seen fixed PSTN line (SLT Megaline) customers steadily increase. The demand for high speed uninterrupted broadband has fuelled the company’s strategy to deliver double-play and triple-play services, which has contributed to ongoing growth in our fixed customer base and revenues.
According to the CBSL Socio – Economic Report 2011 and TRCSL, both fixed and mobile broadband penetration as at end 2011 were 4.0 % (844,000 subscribers including 1.7% fixed broadband penetration and 2.3% mobile broadband penetration). At present, less than 50% of SLT fixed line (SLT Megaline) customers currently have access to IPTV (PeoTV) and 2Mbps (or higher) broadband. Sri Lanka fixed and wireless broadband penetration is below the developing countries and only a fraction of world average. SLT expects and will drive substantial growth in Sri Lanka broadband over the coming years.
Elaborating further Young said, “The i-Sri Lanka approach is to increase the broadband bandwidth (speed) and footprint (expand services) – 90/20 (90% coverage at 20Mbps), improve broadband quality of service, optimise investment, improve operational efficiency by reducing maintenance and operational costs, improving network reliability; whilst growing the customer base and expanding into under-served areas, to grow market share.

Dailyft
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...by i3gconsultants@ 09:07:50 on 2012-07-13

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Stock Watch: LOLC

Sri Lanka LOLC given (SL) A- rating


Sri Lanka's Lanka Orix Leasing Company Plc, has been rated '[SL] A-' with a stable outlook by ICRA Ltd, an associate of Moody's Investors Service.
"The rating factors the LOLC Group’s long track record of profitable operations, its position as the market leader in the Sri Lankan leasing business market, professional and experienced management team, adequate risk management systems with strong retail franchise," a statement by ICRA said.
"The rating also takes into account the committed support and oversight from its largest investor–ORIX Corporation of Japan (rated Baa2 with stable outlook by Moody’s) which has a 30 percent stake in the entity."
The full statement is reproduced below
ICRA Lanka assigns [SL]A- with stable outlook Issuer Rating to Lanka ORIX Leasing Company PLC
ICRA Lanka Limited, a wholly owned subsidiary of ICRA Ltd., an associate of Moody’s Investors Service, has assigned an Issuer rating of ‘[SL] A-’ with stable outlook to Lanka Orix Leasing Company PLC.
The rating indicates adequate-credit-quality and the rated entity carries average credit risk. The rating in Sri Lanka is assigned on an eight-point scale developed specifically for the country, and ranges from ‘[SL] AAA’ to ‘[SL] D’. This rating scale ranks the relative default risk associated with issuers in Sri Lanka.
The rating factors the LOLC Group’s long track record of profitable operations, its position as the market leader in the Sri Lankan leasing business market, professional and experienced management team, adequate risk management systems with strong retail franchise. The rating also takes into account the committed support and oversight from its largest investor–ORIX Corporation of Japan (rated Baa2 with stable outlook by Moody’s) which has a 30% stake in the entity.ICRA has taken note of the ongoing restructuring exercise wherein it will transition into a holding company and the finance businesses will be carried out in its subsidiaries, leading to moderation of the standalone earnings profile of the HoldCo as the existing lending portfolio runs down.
However, given the significant operational and financial linkages with the subsidiaries (especially pertaining to financial services), ICRA Lanka has taken a consolidated rating view of the HoldCo and the key asset financing subsidiaries. The view is corroborated by the service level agreements between LOLC and its subsidiaries to upstream cash flows. LOLC’s standalone earnings would mainly comprise of shared services fees and dividends from subsidiaries and investment gains. ICRA has also taken note of the management’s commitment to de-leverage the HoldCo from the current gearing of 2x as on March 2012 to 1.2x by March 2013 by reducing intra-group exposures and the run-down of its lending book. Maintaining stable cash flows and a deleveraging of the HoldCo would remain key sensitivities.
The refinancing risk of the Group is low given the strong franchise, good relationship with lenders with adequate back-up lines, its liquid investment portfolio and the key subsidiaries’ access to retail deposits despite LOLC’s short term asset-liability maturity mismatch remaining high as short term borrowings have been used to fund long term investments.
Further, the Group is planning to raise long term funds from overseas lenders which would correct maturity gaps to an extent. ICRA also expects no major equity investments/ acquisitions by the HoldCo in the near term and expects the entity to focus on improving its ALM position going forward. LOLC Group mainly operates in the area of leasing and hire purchase of automobiles (with over 80% share in total portfolio) and its largest customer segment comprises of small and medium business enterprises for working capital finance.The asset quality of the group’s lending portfolio has been better than that of its peers though marginally affected in the current financial year reducing to 1.8% as on March 31, 2012 from 1.6% as on March 31, 2011. Over the past 2 years, the Group has diversified its presence across leisure and energy ventures, but the financial services are likely to remain the group’s mainstay over the medium term.
The HoldCo’s earnings profile would moderate from the past as the shared services fee income from subsidiaries would be the mainstay of the company going forward. Dividends from subsidiaries would remain volatile given that the financial service subsidiaries are likely to plough back earnings into the business, while the earnings profile of the leisure ventures are vulnerable to economic volatilities. During fiscal 2012, LOLC’s profitability was supported by investment gains of Rs. 5.2 billion but suffered an operational loss of Rs. 777 million.
At the end of March 2012, financial services contributed 72% of the operating profits of the group, Leisure contributed 23%, while interests in trading, plantations and insurance contributed the rest.

Reported in LBO
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...by i3gconsultants@ 17:07:03 on 2012-07-12

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Stock Watch: AAIC

Asian Alliance introduces on-line motor assessment reporting


Asian Alliance Insurance (AAI) introduced an enhanced process to speed up the Motor Claim settlements via its in-house developed iSYS front end system recently. This system was introduced to the motor assessors at a demonstration held on 22 June. The newest introduction offers “real time” customer service ensuring speedy and accurate claim settlements to AAI’s motor insurance policyholders.
“At the point of a motor accident taking place, the policy holder is required to immediately report the accident to our call centre on 0772 31 55 55.  Once an accident is reported, intimation will be sent to the respective assessor who will be assigned to assist the policy holder within few minutes.  An immediate notification of the claim reference number will be sent to the policy holder via SMS alert,” stated AAI Assistant General Manager – IT Amal Dharmapriya giving an overview of the newly launched facility by the iSYS team.
Further, this implementation enables the motor assessors to submit necessary documentation and photographs of the assessment on line within just few minutes of inspection which cut shorts the time spent previously in sending these details to the company.
“Amidst the prevailing competitive environment in the motor insurance industry in Sri Lanka, quality of service provided to the policy holder is a key factor in building a long-term partnership with policy holders. AAI is confident that this facility will undoubtedly enhance the benefits offered to the policy holder by way of savings on time and money.  Whilst being a partner in progress, AAI builds long term relationships with policy holders through this facility, which is available to them round the clock throughout the year,” stated AAI General Manager Udeni Kiridena (Non Life).
Expressing his views Dharmapriya further stated, “We are continuously striving to make the lives of our Policy Holders easier, and we recognise the need for simplifying the processes of motor insurance claim settlements, thus we tried the easiest manner and succeeded. The motor claims process launched under the flagship brand iSYS enables our underwriting team to arrive at prudent and timely decisions. It also provides a flexible, robust and user friendly system.”
AAI is focused on strengthening the IT infrastructure with the objective of meeting its expanding business needs. The launch of the ICT Development Centre in year 2008 was an initiative to gain competitive advantage in an ever demanding industry where AAI has set high standards in ICT operations to deliver quality real time insurance solutions to its portfolio of policy holders.  Currently, the in-house ICT development laboratory is a frontrunner in the industry.
This step has resulted in an industry first with the development of AAI’s very own front end system ‘iSYS’ by the in house team of IT professionals. ‘iSYS’ has been audited by Ernst & Young.
 They have certified it to be foolproof whilst being in par with international standards. This test was proven when the company introduced the Oracle Financial Suite, to which the home-grown iSYS front end system was seamlessly linked and implemented.

Reported in Dailyft
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...by i3gconsultants@ 15:07:59 on 2012-07-12

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Stock Watch: LCEY

Rishan and Lankem in double deal at Bourse


Deals between PC House Holdings owner S.H.M. Rishan, who is emerging as a very active high net worth investor in the market, and low profile Lankem Group dominated interest in an otherwise lacklustre Colombo Bourse.
PCH Holdings controlling shareholder Dynaris Holdings (formerly Sansiyo Corporation) owned by Rishan bought 1.66 million shares or a 3% stake in Lankem Development Plc from the latter’s controlling shareholder Lankem Ceylon Plc for Rs. 11.8 million.In turn Lankem Ceylon bought four million shares or a 1.5% stake in PCHH from Dynaris for Rs. 50 million.
As at 31 March 2012, Lankem Ceylon held 3.2 million shares or a 5.45% stake in Lankem Developments Plc, whilst Lankem Plantations (56%) and related party Kotagala Plantations (10%) were the major shareholders.
The buying into Lankem Development by Dynaris though small appears strategic as PCHH has interests in engineering business via several associates.
In a separate deal, Rishan bought 8.6 million shares or an 8.5% stake of PC Pharma for Rs. 103.6 million from M.R.M. Nawas.
Ever since listing recently, Rishan had figured in several large deals on PCHH. On 28 June Dynaris sold 4.4 million shares at Rs. 15 and Rs. 20.50 each. On 6 July Rishan and his wife acquired 3.7 million shares of PCHH at Rs. 13.30 each.These deals involving Rishan were worth Rs. 165.6 million, or 61.5% of the day’s total.

Reported in Dailyft
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...by i3gconsultants@ 04:07:21 on 2012-07-12

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Stock Watch: UBC

UB Finance Co, endeavours to deliver a unique proposition


UB Finance Co, which was formed with the acquisition of The Finance and Guarantee Co Ltd by Sri Lanka’s premier financial institution, Union Bank of Colombo PLC and its international strategic investment partner, ShoreCap II Ltd. has become the latest entrant to the world of finance in Sri Lanka.
This significant move with a capital infusion of Rs 1.1 billion has established UB Finance as the only finance company to be backed by a commercial bank in the private sector in Sri Lanka, highlighting a positive outlook for all stakeholders of the company in delivering a sustainable and mutually benefitting partnership.
UB Finance’s strategic intent is to deliver a unique proposition of economic and social value to all Sri Lankans. Facilitating and nourishing its clients with the long standing Sri Lankan sentiment of being ‘traditional and auspicious’ at every significant step of their journey towards the successful realisation of financial aspirations in life is a key driver of the company. Further, UB Finance has already achieved its distinctive status in the corporate world with its gesture of being uniquely socially responsible in coming forward to the rescue of thousands of customers who were victimised by the collapse of The Finance and Guarantee Co Ltd., under the Ceylinco regime, underpinning its core values of social accountability and economic viability.
The Board of Directors of UB Finance is led by Chairman, Ajita De Zoysa, an eminent business personality and the immediate Past Chairman of Union Bank of Colombo. The directorate comprises of a unique and diverse combination of local and international business professionals including, Alexis Lovell, the Present Chairman of Union Bank of Colombo, Jit Warnakulasuriya, Daman Panditharatne, Davis Golding, Malinda Samaratunga, Toh Yiu Joe, Ajith Wijeyesekera, Upali Wijeyesekera and Rohendra Wijeyesekera, whose expertise will no doubt transform UB Finance to a flagship brand in the financial services industry in Sri Lanka.
UB Finance Co, licensed by the Central Bank of Sri Lanka, will operate on the basis of delivering integrity and empowerment to its customers providing an enhanced range of financial service offerings that include Fixed Deposits, Savings, Real Estate, Leasing, Hire Purchase, Loans and Pawning Solutions.
Backed by the strength of Union Bank of Colombo and the international expertise of ShoreCap II Ltd., UB Finance is now geared to be a key partner in Sri Lanka’s accelerated growth strategy that delivers economic and social values with a difference and be perceived as the finance company who understands the true emotions of Sri Lankans.

Reported in Dailynews
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...by i3gconsultants@ 04:07:59 on 2012-07-12

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Stock Watch: COMB

Commercial Bank wins its third best bank award of 2012


The Commercial Bank of Ceylon has been conferred its third international accolade as Sri Lanka’s Best Bank in 2012, this time from the prestigious FinanceAsia magazine. In March 2012, Global Finance chose Commercial Bank as the Best Bank in Sri Lanka for the 14th consecutive year, and on July 5, the Bank received the award for the Best Sri Lankan Trade Bank from Trade Finance magazine.
“Wining a string of international awards of this calibre does not happen by accident,” said Ravi Dias, Commercial Bank’s Managing Director and CEO. “It takes years of hard work, passion and commitment to fundamentals and best practice by the entire team to consistently be adjudged the best bank in the country.”
The FinanceAsia award is based on the respective banks’ financial performance and considers capital adequacy, liquidity and cost income ratios, pre and post tax profits, provisions for possible losses, return on equity and network of branches, agents and correspondents. The Bank’s Total Assets, Loans and Deposits portfolio, vision and long term strategy, as well as market position versus its nearest competitor are also evaluated by FinanceAsia for the award.
Other winners of FinanceAsia’s Best Bank awards in the region include HSBC – Hong Kong, HDFC Bank – India, DBS – Singapore, Chinatrust Commercial Bank – Taiwan, Hana Bank – South Korea, China Merchants Bank – China, Siam Commercial Bank – Thailand, Public Bank – Malaysia and Standard Chartered Bank – Pakistan.
Commercial Bank is the largest private bank in Sri Lanka, and the only Sri Lankan Bank listed in the world’s Top 1,000 Banks. It operates a network of 219 service points in Sri Lanka and a network of 521 ATMs, the single largest ATM network operated by a bank in the island. The Bank posted profit before tax of Rs 10.987 and profit after tax of Rs 8.047 billion in 2012.

Reported in Dailynews
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...by i3gconsultants@ 04:07:39 on 2012-07-12

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Stock Watch: MFL

Multi Finance completes Rs.350 m Asset-backed Securities Issue


Multi Finance PLC (MF PLC), a fast-growing Central Bank licensed finance company and a listed Company on the Colombo Stock Exchange, has announced its first successful private offering of an asset-backed securities issue of Rs. 350 million.
The core objective of this issue was to finance its new lease and hire purchase portfolio as part of MF PLC_s growth strategy.
MF PLC firmly believes that this process provides effective medium term funding which in turn allows for very attractive medium term return for investors. This transaction was arranged by Investrust Capital Ltd., (formerly known as Investec Capital (Private) Limited), a boutique investment banking institution and a provider of integrated capital markets and strategic corporate services.
Seylan Bank PLC has been appointed as trustee to manage the Trust.
The Group Executive Director/CEO of MF PLC A H M Riyaz said, “we are pleased that, together with Investrust Capital and Seylan Bank we are able to access alternative sources of capital market funding.This issue is not only increases the amount of capital available for disbursement, but it is an important indicator of the strength of our assets and the durability of our business model.
Our continuing ability to access low cost capital in the public and institutional markets gives us considerable competitive advantage to build shareholder value.”
MF PLC, which became a member of the Entrust Group in 2008, is a Central Bank Licensed finance company under the Finance Business Act No 42 of 2011. MF PLC having over 38 years of experience in the finance industry engages in deposit mobilization, leasing & hire purchase of motor vehicles, pawning and also providing other loans. The company obtained its official listing on the Diri Savi board of the Colombo Stock Exchange in year 2011. The company made its visible presence in selected markets and it operates a wide branch network around the country to gain access to the potential market opportunities in different regions.

Reported in Dailynews
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...by i3gconsultants@ 04:07:16 on 2012-07-12

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Stock Watch: HNB

Pathum Vimana – country’s biggest deposit draw scheme: HNB AGM


R. M. P. Dayawansa, Assistant General Manager (AGM) – Personal Financial Services, Hatton National Bank, in an interview with Daily Mirror, talks about Sri Lanka’s biggest and most popular deposit draw scheme, Pathum Vimana. Excerpts:
Q: Can you give us a brief description on the history of HNB Pathum Vimana?
Pathum Vimana was launched by Hatton National Bank in 1993. HNB was the first commercial bank in Sri Lanka to introduce such a savings rewards scheme to incentivize savers in the whole country.  Over the years, it has proven to be the biggest, most attractive and most popular deposit draw scheme in the country which has encouraged customers to save regularly and has rewarded countless Sri Lankans with amazing prizes worth hundreds of millions of rupees.
Q: What is HNB Pathum Vimana all about, and can you explain the process a client has to follow to become eligible for it?
The draw is based on a computerized lottery system and is open to all existing and new Pathum Vimana account holders who maintain the minimum balance requirement. This is a wonderful opportunity for them to win fabulous prizes worth millions of rupees in addition to receiving attractive interest rates.
There are various draws conducted during 2012 as well; such as the Year End Premium Draw, Year End Grand Draw, Year End Car Draw, Divi Diriya Draw, Harvest Draw, Year End Branch Based Draw and Weekly TV Game Show. The prizes on offer are reviewed annually and this year, the year-end draws offer a luxury Mercedes Benz, a house worth over Rs.10 million and a Hyundai Tucson SUV as the top three prizes. The wide array of other attractive prizes customers stand to win are a Dimo Batta, a tractor, dinner sets and cash awards.
HNB has also introduced a new draw under this scheme, namely the “Dividiriya Draw” targeting Small and Medium entrepreneurs while special gifts are on offer for them.  The Harvest Draw targets the farmer community. There are about 4,000 prizes on offer during this year to encourage savers. We are happy that HNB Pathum Vimana has changed many people’s lives during the past two decades.
The process is also very simple. Regular Savings Accounts, Senior Citizen’s Savings Accounts, Minor Savings Accounts such as Singithi Kiriketiyo, Singithi Lama, HNB Teen and also Personal Current Accounts are eligible for the Pathum Vimana draw scheme. Customers can visit any HNB customer centre  ( 243 at present)  island-wide and open  and  maintain  an account with a minimum balance  of Rs.10,000  to be  eligible for the Pathum Vimana draw. Depositors who maintain higher balances will have multiple chances of winning as well as additional gifts such as world tours, household items and free fuel for a year. To be eligible for Year End Premium Draw, a balance of Rs. 100,000 in a savings account or Rs.50,000 in a current account should be maintained and the winner of the luxury house can also opt for cash. 
Q: How does Pathum Vimana differ from other competitor products and what is unique in it?
The uniqueness of the HNB Pathum Vimana deposit draw scheme is that HNB has been able to sustain it satisfactorily for 20 years. Some other commercial banks have followed this rewards concept but had to abandon it after some time. There were also some banks which re-launched the scheme but could not sustain.
We have invested substantially on HNB Pathum Vimana to build the brand through integrated marketing communications over the years. The public awareness about it is very strong. In an island-wide survey conducted by The Nielsen Company Lanka (Pvt) Ltd., the global marketing research firm, Pathum Vimana emerged No. 1 as the best known brand amongst banking products. In fact, Pathum Vimana has  added a lot of value to HNB’s corporate brand.

Reported in Dailymirror

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...by i3gconsultants@ 03:07:57 on 2012-07-12

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Stock Watch: DIAL

Dialog TV launches Sri Lanka’s first HD broadcast


Dialog Television (DTV), Sri Lanka’s leading Direct-to-Home (DTH) Digital Satellite TV service recently announced the introduction of the country’s first HD (High Definition) broadcast, leading Sri Lanka into the era of advance digital media.
With enhanced picture quality, vivid colours, sharper images and Dolby digital surround sound, the HD service will enable DTV subscribers to enjoy a breathtaking home entertainment experience. HD channels broadcast by DTV will bring world class content spanning movies, sports, action, drama, edutainment and nature to Sri Lankan homes complete with HD 1080i Resolution and Dolby Digital surround sound.
Homes subscribing to DTV’s HD service would be additionally empowered with advanced viewing features across 38 channels in the DTV bouquet including recording and playback, time shift television and fast forward/rewind and pause facilities.
The HD package  which features National Geographic, Star Movies, AXN and Ten Sports in full HD, also includes Ten Action, BBC Entertainment, Fashion TV and The History TV18 in Standard Definition format at no extra charge.
Customers can avail themselves of the HD service at a monthly fee of Rs.990 as an add-on to their basic DTV subscription. The HD start-up fee of Rs.2,990 inclusive of taxes will be waived off for DTV’s Gold Package customers until July 15.

Reported in Dailymirror
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...by i3gconsultants@ 03:07:45 on 2012-07-12

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Stock Watch: CLPL

DI Leather Boutique opens at Union Place


Ceylon Leather Products PLC (CLPL) opened its latest DI Leather Boutique at Union Place recently at the Colombo Pharmacy Company premises which is an ERI group company. The store was opened by Lalith Heengama, Chairman of Environmental Resources Investment PLC, the holding company of Ceylon Leather Products PLC.Scott Newsome, Dr. Kosala Heengama, Gamini S. Munasinghe, H.B. Dissanayake and Lalith Heengama also participated.The new DI store offers both ladies and gents footwear, gents bags, ladies handbags, and a variety of leather accessories which are produced by award winning leather fashion designers.
The CLPL design department won fourteen awards at the held Footwear and Leather Fair 2012 at the BMICH. The talented design team won the first, second and third prize in the leather goods category and first and second prize in the gent's footwear category along with many other merit awards.
A welcoming and attractive addition to the latest DI store are the ladies shoes which is of export quality produced by Palla and Company, a subsidiary of CLPL. Palla is a genuine leather company catering to a broad array of customers throughout Europe offering high quality woman's footwear.
"Our products, made to the latest trends with the highest of quality is designed by award winning designers of the company and we are very proud to showcase these in all our stores," Sitendra Senaratne, Managing Director, CLPL said.

Reported in Dailynews
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...by i3gconsultants@ 08:07:39 on 2012-07-11

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Stock Watch: DFCC

DFCC Vardhana in Kilinochchi


DFCC Vardhana Bank (DVB), the everyday banking unit of DFCC Bank opened a new branch in Kilinochchi last week, thus adding to its already strong presence in the North. The opening of the 127th Branch / Service Centre of the DVB network in the North is to cater to the ever-growing need for convenient and speedy banking, in a region that is currently seeing rapid development and growth.
The Bank's new branch was opened by Chief Guest, the Bank's CEO, Lakshman Silva. Other dignitaries were, N. D Daluwatte, DIG - Mullativu/Mankulam/Kilinochchi, Brigadier Renuka Rowel - Commander, 578th Division, SL Army and Government Agent, Ms Rubawathy Ketheesuwaran. The opening ceremony was conducted in keeping with local customs practised in the area, with the participation of clergy belonging to the main religious beliefs of the area.
"The rapid development taking place in Kilinochchi, led us to hand-pick this location for DVB's latest branch. It is essential that the people in the area have access to speedy and convenient banking services - all imperative to ensure that they make the most out of their business activities.
Kilinochchi is undergoing huge infrastructural changes and this is one of the most apt times for us to engage with the people in the area and offer our services to them," said Lakshman Silva, CEO, DVB.
Customers can avail the benefit of a wide range of products and services including demand & savings deposits, fixed deposits, foreign currency deposits, personal loans for housing and higher education such as Vardhana Sandella, Vardhana Nenasa and Vardhana Leasing; gold-pledge loans and remittance services through DVB's new branches as well as Vardhana Junior, a savings scheme for minors.To mark the opening of the new branch in Kilinochchi, DVB organized a 'Friendship Trophy': an inter-school volleyball and netball tournament and an inter-club volleyball tournament as well.
The sporting events were organized by the Bank in association with the Community Police Division.

Reported in Dailynews
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...by i3gconsultants@ 08:07:41 on 2012-07-11

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Stock Watch: WATA

Watawala Plantation records highest ever profit of Rs 373m


The Oil Palm sector of the Watawala Plantation (PLC), recorded the highest ever after a tax profit of Rs.373 million, compared to Rs 195 million in 2010/11.This has been the largest contributor to the company.
Chairman, Watawala Plantations G.Sathasivam,revealed this at the AGM held on Saturday in Colombo.
He said a 28% increase in the crop output as a result of improved agricultural practices, had increased in the extent cultivated and a (national sales average) NSA were the factors contributing to the sharp increase in profits.
Sathasivam said the Company's out look on the potential of the oil palm crop was buoyant. The crop's productivity vis a vis other competing cooking oils such as coconut, soya bean and corn, has been significantly higher. Furthermore, harvesting has been considerably as a less labour intensive, compared to tea and rubber. These supply side factors has combined with an increasing demand for the product's value as a cooking oil and as a raw material input in soaps, detergents, cosmetics and pharmaceuticals, as well as a source for bio fuel, underscores the viability and immense potential for expansion of this crop steam.
However,the profits of the company after taxes had declined by 2.17% to Rs 520 million, compared with Rs 532 million in the previous year, due to a down turn in the tea sector.But profitability of rubber and oil palm sectors, have helped to morethan offset the loss in the tea sub sector.
Meanwhile, the rubber sector had recorded a profit of Rs 60 Mn compared to a significant profit of Rs139 Mn achieved during the previous year.
The decline in profits had been mainly due to a fall in the national sales average by around 10 percent over the previous year.

Reported in Dailynews
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...by i3gconsultants@ 08:07:38 on 2012-07-11

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Stock Watch: COMB

Com Bank opens branch in Alawwa


The Commercial Bank of Ceylon has opened its latest branch in Alawwa, expanding its services within the Kurunegala district. Located at No. 61 B, Kurunegala Road, Alawwa, the branch is the Bank’s 219th service point in Sri Lanka. The new branch is computer linked to all other service points of the Bank enabling online real time banking and provides access to the full range of facilities offered by the Bank. The ATM terminal installed at the new branch expands Commercial Bank’s ATM network to 519, the single largest ATM network owned by a bank in Sri Lanka.

Reported in The Island
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...by i3gconsultants@ 08:07:00 on 2012-07-11

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Stock Watch: BLI

Expropriation act hits finance company


* Rating downgraded after govt. takes over sugar factory
* 30% of Bimputh Lanka Investments’ deposits placed by Gamage family
* Family concern moves to finance loans for paddy, maize and peanuts
A listed finance company has seen a downgrade in its credit rating because of the controversial expropriation act.
RAM Ratings Lanka has downgraded the long-term financial institution rating of Bimputh Lanka Investments PLC, from BB to BB-. At the same time, the short-term rating has been reaffirmed at NP. Meanwhile, the Rating Watch (with a negative outlook) on the Company has been lifted and the stable outlook on the long-term rating has been reinstated.
"The downgrade reflects the loss of financial and operational synergies derived from Sevanagala Sugar Industries (Pvt) Ltd (Sevanagala), previously one of Bimputh’s significant counterparties. Meanwhile, Bimputh’s ratings are weighed down by its weak funding, moderate performance, small stature and the lack of seasoning for its new loan products. Nonetheless, the ratings are supported by the Company’s good liquidity and strong capitalisation levels, along with the financial flexibility derived from its ultimate parent, Daya Group (Pvt) Ltd," the ratings agency said in a statement.
"Bimputh’s long-term rating was placed on a Rating Watch (with a negative outlook) in November 2011, premised on our concerns over the Company’s future asset quality, performance and direction following the passing of a bill by Parliament to allow the Government of Sri Lanka (GOSL) to expropriate Sevanagala’s land and building.
"Sevanagala is currently non-operational," RAM Ratings said.
Bimputh, a small licensed finance company (LFC), is part of the Daya Group - a family-held concern with diversified operations focusing on the eastern region of Sri Lanka; Sevanagala had previously been part of the same group.
"Sevanagala, a sugar manufacturer, had formerly acted as an agent of Bimputh in its loan disbursements and collections for sugarcane cultivators; these loans had also been guaranteed by Sevanagala. With the expropriation of Sevanagala, the Company has now moved into other segments such as paddy, maize and peanut, personal loans, pawnbroking and leasing while reducing its exposure to sugarcane-related loans.
"Although loans to sugarcane cultivators declined in the first 9 months of FYE 31 March 2012 (9M FY Mar 2012) - from around 50% to 25.12% - Bimputh had successfully expanded its other loan products. That said, RAM Ratings Lanka opines that the quality of the new loans has yet to be tested as they lack seasoning.
"Bimputh’s asset quality is moderate. Although its loan base has historically been dominated by cultivation loans, the share of general loans – comprising personal, housing and other business loans - increased to 43.12% of its total gross loans as at end-December 2011 (end-December 2010: 24.43%). At the same time, the Company’s non-performing loans (NPLs) worsened by LKR 5.40 million to LKR 11.39 million, driven by few loans to finance agricultural equipment and paddy cultivation. This translated into a gross NPL ratio of 3.24% (end-FY Mar 2011: 2.49%). RAM Ratings Lanka acknowledges that although Bimputh has ventured into other segments, the quality of these new loans has yet to be proven.
"Meanwhile, performance is deemed moderate. On the back of an almost 35% year-on-year loan growth, interest income surged 27.30% in 9M FY Mar 2012, i.e. faster than in fiscal 2011, while interest expenses grew at a slower 7.36% y-o-y (FY Mar 2011: +78.36%) amid receding interest rates. Bimputh’s net interest margin (NIM) remained relatively stable at 9.04% (FY Mar 2011: 9.09%), and broadly in line with those of its similarly rated peers while its cost-to-income ratio at 78.69% is among the highest for LFCs.
"The Company’s funding is weak owing to its limited ability to garner deposits due to its weak franchise and high deposit concentration. Although the Company’s funding composition has historically been dominated by shareholders’ funds, this has now tilted towards deposits. More than 30% of this constitutes deposits placed by members of the Gamage family.
"Meanwhile, Bimputh’s liquidity is considered good; its statutory liquid asset ratio declined to 21.86% as at end-December 2011 (end-FY Mar 2011: 36.03%) on the back of loan growth. Elsewhere, capitalization remains strong; as at end-December 2011, Bimputh’s tier-1 and overall risk-weighted capital-adequacy ratios clocked in at 54%, (end-FY Mar 2011: 55.43%), comparing well above peers," RAM Ratings said.

Reported in The Island
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...by i3gconsultants@ 07:07:07 on 2012-07-11

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Stock Watch: HNB

Foreign fund buys Rs. 221 m of HNB non-voting shares


A foreign fund yesterday picked up Rs. 221 million worth of HNB non-voting shares from locals, boosting net foreign inflow, which is nearing Rs. 24 billion year-to-date.A block of 2.38 million non-voting shares of HNB was done at Rs. 93 each whilst the counter closed at Rs. 92.80, up by Rs. 2.80. The quantity amounted to 3% of HNB non-voting shares.
Major sellers were Bank of Ceylon and Indra Silva. Foreign interest on non-voting share also boosted sentiments on HNB’s voting stock, which gained by Rs. 3 to close at Rs. 144 though on thin volume of 7,346 shares.  
Melstacorp was back in the market collecting available quantities of Aitken Spence as around half a million shares traded for Rs. 56 million, with 474,007 shares done at Rs. 115 each.
Apart from deals on HNB non-voting, related party transfers of stakes in Palm Garden, PCH Holdings and PC Pharma boosted CSE turnover to Rs. 914 million. However, overall investor sentiment remained depressed as indices suffered a double-digit dip.

Reported in Dailyft
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...by i3gconsultants@ 07:07:46 on 2012-07-11

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Stock Watch: WATA

Tea production at Waltrim up 66% in 2012


The annual tea production at Waltrim Estate, a flagship estate owned by listed RPC Watawala Plantations, has shot up by 66 percent to one million kilos of made tea per year after the construction of the new state-of-the-art factory two years ago, while the energy costs have slumped significantly and productivity improved, company officials said.
“Production at the old factory had been around 600 million kilos of made tea per year, but thanks to superior technology at the new factory, the made tea output a year has significantly improved,” General Manager Watawala Plantations, Binesh Pananwala said.
The factory worker output which had been at 48 kilos of made tea per worker at the old factory had also improved to 63 kilos,” he said. The 1,000 acre (400 hectare) Waltrim Estate, was one of the largest estates managed by the Watawala Plantations.
The factory claims an annual output of nearly 1.1 million kilos of black made tea of which 90 percent are main grades.
The specialty of the Waltrim Estate Tea Factory in Lindula, extends beyond its taste and brand to Eco-friendly ethics and innovative technology. Waltrim is Fairtrade certified and a member of the
a non-commercial alliance of international tea companies that work together to improve social and environmental conditions in their supply chains. The estate is progressing towards meeting Rain Forest Alliance standards to ensure that it practices and provides the best in class facilities.
Waltrim is the only complete full scale tea processing factory built after a lapse of 40 years in an island renowned for pure Ceylon tea. The facility had been built from scratch in 2010, within a brief time frame of just 310 days and an investment of Rs 340 Mn, after the original factory built in 1927 had been reduced to ashes in 2008 by an inferno that struck from nowhere.
The new factory is nestled on a hillock on the upper reaches of Sri Lanka's central hills of the Agrapatana mountain range. Amplified fresh air flows through the top floor of the tea processing factory, naturally drying the dew drops on fresh tea leaves plucked early in the morning. “With the automation of the process, the leaves once withered are automatically directed to the rollers downstairs and then to the rotorvane with minimum intervention of labour or physical handling of leaves,” Pananwala explianed.
“This had reduced the number of workers as opposed to the traditional factory, while the chances of leaf being contaminated with 'external' factors is less, thus ensuring quality.”

Reported in Dailynews
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...by i3gconsultants@ 07:07:35 on 2012-07-10

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Stock Watch: SHL

Softlogic Information Tech. wins Dell accolade


Softlogic Information Technologies one of the premier IT companies in Sri Lanka and a pioneering subsidiary of Softlogic Holdings Group was awarded the Dell Most Valuable Partner Award-Consumer Segment, in the recently held ‘Dell Channel Summit 2012” in Kuala Lampur, Malaysia. The “Dell Channel Summit 2012” was an event that provided a networking platform for Dell and its partners around the world highlighting many achievements of its partners and provided a platform to share and learn through an interactive forum.
There was a strong participation of 128 channel partners from 22 countries across the South Asia region. This event was designed to allow all DELL valued CXO distributors and channel partners (Partner Direct) to participate in the General Session by Amit Midha President, Dell Asia Pacific and Japan Region. The event was also organized to allow partners to receive updates on the Enterprise and Storage Solutions Sessions and attend the Consumer GTM strategy discussions. The channel partners were able to learn more about industry trends and directions and the possible impact on future technology and solutions.
Roshan Rassool Director/CEO Softlogic Information Technologies (Pvt) Ltd. commenting about the achievement, “We are pleased to receive this prestigious award from DELL Corporation. This award is a clear indication of the hard work that the team has put in to take Softlogic and DELL to a different level in the highly competitive ICT industry in Sri Lanka. We are always looking for excellence and I am glad that we have been recognized for our efforts. Softlogic Information Technologies is regarded as one of the pioneers and innovators of the information technology industry in Sri Lanka. Through its partnership with Dell, Softlogic Information Technologies can today, claim to be the largest IT solution supplier to the corporate sector, as well a leading player in the ever expanding consumer range market”.
Dell, one of the global giants in the IT industry, has recognized Sri Lanka as a strong emerging market for information technology in the Asian region. In 1993 they chose Softlogic, which established their operations in 1991, as their sole authorized dealer in Sri Lanka. Over the years, Softlogic Information Technologies has won several awards from DELL for achieving and over Achieving its Sales Targets. Notably, Softlogic Information Technologies recently received the prestigious ‘Most valuable partner in Asia Pacific’.
Softlogic Information Technologies received this award in recognition of their trusted and valued relationship of 18 years with Dell and as an appreciation of its commitment to expand the DELL brand in Sri Lanka.Established in 1991, Softlogic Information Technologies (Pvt) Ltd. is one of the premier Information Technology (IT) companies in Sri Lanka and one of the subsidiaries of the Softlogic Holdings PLC.

Reported in Dailynews
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...by i3gconsultants@ 07:07:31 on 2012-07-10

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Stock Watch: SUN

Halt fast-eroding competitiveness of tea, urge officials


hanging a highly politicised wage structure and more value addition are some of the remedies prescribed to halt the eroding competitiveness of the country’s tea industry.
Measures to address the fast eroding competitiveness in the tea sector are a prerequisite that needs to be urgently emphasized. Most significant amongst them is the need to replace the current wage model with one that reflects a long term perspective and a productivity oriented outlook. As has been repeatedly stated in the past, the successive wage increases mandated for the tea sector have been regressive, particularly in the year under review, because mandated increases contain no element for linking wage increases to productivity. We hope that a model formulated together with the involvement of all stakeholders of the tea sector with the long term in mind, will replace the current ad hoc and politicized wage increases which severely challenge the competitiveness of the industry," Sunshine Holdings PLC Group Managing Director V. Govindasamy told shareholders in the company’s latest annual report.
He echoed sentiments expressed by the group’s Chairman, former banker Rienzie T. Wijetilleke, in his message to shareholders.
"We remain confident about the future in the context of the vast untapped potential of the Group’s asset-rich plantations, and the role of agriculture in Sri Lanka’s economy. Innovative thinking that can generate alternatives to reduce the vulnerability of commodities in world market conditions, and replace the current politicized model of recurrent wage increases are critically important to sustain the viability of as plantations that are severely burdened by competitiveness issues. We hope that a model that reflects the urgency and the critical need of productivity will replace the current ad hoc one in order to sustain the ongoing viability of the Tea industry," Wijetilleke said.
Govindasamy further said, "Another important factor is the need for innovative alternatives that would help reduce the vulnerability of commodities to cyclical downswings caused by world market fluctuations. Greater value addition to tea and market diversification, exemplify measures, which have already been initiated by the industry. Crop diversification too that we have already introduced, has helped to sustain plantation companies when adversity affects one crop".
The group, with interest in the healthcare, plantations, packaging, leisure and energy sectors, saw its revenue increase by 4.5 percent to Rs. 11.2 billion during the 2011/12 financial year.
The group’s gross profit declined by 5.9 percent to Rs. 2,284 million. Profit after tax fell 14.9 percent to Rs. 426 million.

Reported in The Island
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...by i3gconsultants@ 07:07:53 on 2012-07-10

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Stock Watch: PMB

State-owned People’s Bank, subsidiaries’ ratings upgraded


Fitch Ratings has upgraded Sri Lanka’s People’s Bank (PB) and its subsidiaries People’s Leasing Company PLC (PLC), and People’s Finance PLC (PF), by a notch each. The Outlooks are Stable.
At the same time the agency has affirmed PB’s associate company People’s Merchant Finance PLC (PMF, 36% effective ownership by PB) at ‘BB+(lka)’ with Stable Outlook.
 article_image
"The upgrade of PB’s rating reflects Fitch’s reassessment of government support to PB in light of its growing importance as Sri Lanka’s second-largest bank. This is underpinned by the agency’s expectations that PB’s role in the post-war development economy will likely further strengthen its linkage with the Sri Lanka government (‘BB-’/Stable Outlook)," the ratings agency said in a statement last week.
PB’s rating reflects Fitch’s expectation of timely support from the government of Sri Lanka if required, given its government ownership, importance to the government in light of the abovementioned role, and high systemic importance (18% of system assets and deposits at end-2011). Changes to Sri Lanka’s sovereign rating will therefore result in changes to PB’s ratings.
PB’s National Long-Term Rating may be upgraded further if there is a demonstration of preferential support for PB.
The upgrade to PLC’s and PF’s ratings reflects the increased capacity of their parent PB to extend support, as indicated by the latter’s rating upgrade. Fitch’s view of support is premised on PLC’s close integration with, and strategic importance to, PB, and PF’s strategic importance to, and integration with, PLC. PB’s majority ownership of PLC and PF also supports the ratings.
The affirmation of PMF’s rating reflects Fitch’s expectations of a moderate level of support from PB due to its low integration with, and limited strategic importance to, PB. Fitch’s view of support is based on PMF’s association with, and the consequent reputation risk to, PB’s franchise. PMF’s rating also reflects its weak standalone financial profile.
Both PLC and PF are strongly associated with the PB brand. PB owns 75% of PLC, and effectively owns 66.5% of PF through PLC. At end-2011, the PLC group accounted for 27% of PB’s consolidated post-tax profits and 14% of net advances. At end-March 2012, PLCand PF’s aggregate retail funding amounted to over LKR23bn, and funded 24% of the PLC group assets.
PB’s capacity to support stems from the government’s own capacity and willingness to support the bank - through which support is expected to flow into both PLC and PF. Fitch believes it is highly likely that government support could flow through to PLC via PB, and to PF via PLC, mainly due to the subsidiaries’ strategic importance and linkages to PB and the consequent reputation risk to the government if PLC or PF should fail.
The two-notch differential between the ratings of PB and PLC, and of PLC and PF reflects the possibility of delay in timely government support due to regulatory restrictions between the entities (e.g. maximum exposure limits) or administrative difficulties usually seen in layered support structures.
Changes to PB’s ratings may result in corresponding changes to PLC’s ratings, providing the linkages between PB and PLC remain intact. PLC’s ratings may be downgraded if PB gives up its controlling stake in PLC, or if its strategic importance to PB diminishes over time. The same is true of PLC’s and PF’s ratings.
Deterioration in PMF’s profitability and/or deterioration in its asset quality and solvency may result in a negative rating action. PMF’s rating could be affected by a change in circumstances that would warrant a review of Fitch’s expectation of support from PB.
PB is a key lender to the government, with assets amounting to LKR663bn at end-2011, accounting for 18.5% of the licensed commercial bank sector. PLC is the largest non-bank financial institution (NBFI) by advances and accounted for almost 20% of NBFI sector assets. At end-March 2012 PLC’s consolidated assets stood at LKR96bn. PMF, which operates as a licensed finance company since April 2012, had a consolidated asset base of LKR2.9bn at end-March 2012."

Reported in The Island

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...by i3gconsultants@ 07:07:17 on 2012-07-10

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Stock Watch: SMLL

tate-owned People’s Bank, subsidiaries’ ratings upgraded


Fitch Ratings has upgraded Sri Lanka’s People’s Bank (PB) and its subsidiaries People’s Leasing Company PLC (PLC), and People’s Finance PLC (PF), by a notch each. The Outlooks are Stable.
At the same time the agency has affirmed PB’s associate company People’s Merchant Finance PLC (PMF, 36% effective ownership by PB) at ‘BB+(lka)’ with Stable Outlook.
 article_image
"The upgrade of PB’s rating reflects Fitch’s reassessment of government support to PB in light of its growing importance as Sri Lanka’s second-largest bank. This is underpinned by the agency’s expectations that PB’s role in the post-war development economy will likely further strengthen its linkage with the Sri Lanka government (‘BB-’/Stable Outlook)," the ratings agency said in a statement last week.
PB’s rating reflects Fitch’s expectation of timely support from the government of Sri Lanka if required, given its government ownership, importance to the government in light of the abovementioned role, and high systemic importance (18% of system assets and deposits at end-2011). Changes to Sri Lanka’s sovereign rating will therefore result in changes to PB’s ratings.
PB’s National Long-Term Rating may be upgraded further if there is a demonstration of preferential support for PB.
The upgrade to PLC’s and PF’s ratings reflects the increased capacity of their parent PB to extend support, as indicated by the latter’s rating upgrade. Fitch’s view of support is premised on PLC’s close integration with, and strategic importance to, PB, and PF’s strategic importance to, and integration with, PLC. PB’s majority ownership of PLC and PF also supports the ratings.
The affirmation of PMF’s rating reflects Fitch’s expectations of a moderate level of support from PB due to its low integration with, and limited strategic importance to, PB. Fitch’s view of support is based on PMF’s association with, and the consequent reputation risk to, PB’s franchise. PMF’s rating also reflects its weak standalone financial profile.
Both PLC and PF are strongly associated with the PB brand. PB owns 75% of PLC, and effectively owns 66.5% of PF through PLC. At end-2011, the PLC group accounted for 27% of PB’s consolidated post-tax profits and 14% of net advances. At end-March 2012, PLCand PF’s aggregate retail funding amounted to over LKR23bn, and funded 24% of the PLC group assets.
PB’s capacity to support stems from the government’s own capacity and willingness to support the bank - through which support is expected to flow into both PLC and PF. Fitch believes it is highly likely that government support could flow through to PLC via PB, and to PF via PLC, mainly due to the subsidiaries’ strategic importance and linkages to PB and the consequent reputation risk to the government if PLC or PF should fail.
The two-notch differential between the ratings of PB and PLC, and of PLC and PF reflects the possibility of delay in timely government support due to regulatory restrictions between the entities (e.g. maximum exposure limits) or administrative difficulties usually seen in layered support structures.
Changes to PB’s ratings may result in corresponding changes to PLC’s ratings, providing the linkages between PB and PLC remain intact. PLC’s ratings may be downgraded if PB gives up its controlling stake in PLC, or if its strategic importance to PB diminishes over time. The same is true of PLC’s and PF’s ratings.
Deterioration in PMF’s profitability and/or deterioration in its asset quality and solvency may result in a negative rating action. PMF’s rating could be affected by a change in circumstances that would warrant a review of Fitch’s expectation of support from PB.
PB is a key lender to the government, with assets amounting to LKR663bn at end-2011, accounting for 18.5% of the licensed commercial bank sector. PLC is the largest non-bank financial institution (NBFI) by advances and accounted for almost 20% of NBFI sector assets. At end-March 2012 PLC’s consolidated assets stood at LKR96bn. PMF, which operates as a licensed finance company since April 2012, had a consolidated asset base of LKR2.9bn at end-March 2012."

Reported in The Island

......

...by i3gconsultants@ 07:07:25 on 2012-07-10

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Stock Watch: PLC

State-owned People’s Bank, subsidiaries’ ratings upgraded


Fitch Ratings has upgraded Sri Lanka’s People’s Bank (PB) and its subsidiaries People’s Leasing Company PLC (PLC), and People’s Finance PLC (PF), by a notch each. The Outlooks are Stable.
At the same time the agency has affirmed PB’s associate company People’s Merchant Finance PLC (PMF, 36% effective ownership by PB) at ‘BB+(lka)’ with Stable Outlook.
article_image
"The upgrade of PB’s rating reflects Fitch’s reassessment of government support to PB in light of its growing importance as Sri Lanka’s second-largest bank. This is underpinned by the agency’s expectations that PB’s role in the post-war development economy will likely further strengthen its linkage with the Sri Lanka government (‘BB-’/Stable Outlook)," the ratings agency said in a statement last week.
PB’s rating reflects Fitch’s expectation of timely support from the government of Sri Lanka if required, given its government ownership, importance to the government in light of the abovementioned role, and high systemic importance (18% of system assets and deposits at end-2011). Changes to Sri Lanka’s sovereign rating will therefore result in changes to PB’s ratings.
PB’s National Long-Term Rating may be upgraded further if there is a demonstration of preferential support for PB.
The upgrade to PLC’s and PF’s ratings reflects the increased capacity of their parent PB to extend support, as indicated by the latter’s rating upgrade. Fitch’s view of support is premised on PLC’s close integration with, and strategic importance to, PB, and PF’s strategic importance to, and integration with, PLC. PB’s majority ownership of PLC and PF also supports the ratings.
The affirmation of PMF’s rating reflects Fitch’s expectations of a moderate level of support from PB due to its low integration with, and limited strategic importance to, PB. Fitch’s view of support is based on PMF’s association with, and the consequent reputation risk to, PB’s franchise. PMF’s rating also reflects its weak standalone financial profile.
Both PLC and PF are strongly associated with the PB brand. PB owns 75% of PLC, and effectively owns 66.5% of PF through PLC. At end-2011, the PLC group accounted for 27% of PB’s consolidated post-tax profits and 14% of net advances. At end-March 2012, PLCand PF’s aggregate retail funding amounted to over LKR23bn, and funded 24% of the PLC group assets.
PB’s capacity to support stems from the government’s own capacity and willingness to support the bank - through which support is expected to flow into both PLC and PF. Fitch believes it is highly likely that government support could flow through to PLC via PB, and to PF via PLC, mainly due to the subsidiaries’ strategic importance and linkages to PB and the consequent reputation risk to the government if PLC or PF should fail.
The two-notch differential between the ratings of PB and PLC, and of PLC and PF reflects the possibility of delay in timely government support due to regulatory restrictions between the entities (e.g. maximum exposure limits) or administrative difficulties usually seen in layered support structures.
Changes to PB’s ratings may result in corresponding changes to PLC’s ratings, providing the linkages between PB and PLC remain intact. PLC’s ratings may be downgraded if PB gives up its controlling stake in PLC, or if its strategic importance to PB diminishes over time. The same is true of PLC’s and PF’s ratings.
Deterioration in PMF’s profitability and/or deterioration in its asset quality and solvency may result in a negative rating action. PMF’s rating could be affected by a change in circumstances that would warrant a review of Fitch’s expectation of support from PB.
PB is a key lender to the government, with assets amounting to LKR663bn at end-2011, accounting for 18.5% of the licensed commercial bank sector. PLC is the largest non-bank financial institution (NBFI) by advances and accounted for almost 20% of NBFI sector assets. At end-March 2012 PLC’s consolidated assets stood at LKR96bn. PMF, which operates as a licensed finance company since April 2012, had a consolidated asset base of LKR2.9bn at end-March 2012."

Reported in The Island
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...by i3gconsultants@ 07:07:45 on 2012-07-10

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Stock Watch: HNB

HNB opens 242nd & 243rd customer centres in Mulliyawalai & Kurumankaddu


Hatton National Bank PLC opened the 242nd & 243rd Customer Centres in Mulliyawalai and Kurumankaddu recently. The Chief Guest for the occasion was P. Sridharan,  Assistant General Manager - Premier and Electronic Banking T Jeyarajasingam – Regional Head (Northern Region) and a large number of senior bank officials, government officials, local businessmen and customers were present at the event
P Sridharan, Asst. General Manager – Premier and Electronic Banking addressing the gathering expressed the following. "Although HNB entered the district of Mullaitivu late, within few months the vast potential for development and prospects for growth was realized. Mulliyawalai, was identified as an ideal location to open the second customer centre in the district since the area is primarily agriculture based and that is one of the core strengths of HNB with its ground breaking microfinance scheme ‘Gami Pubuduwa’. Our focus for the area is mainly on small time credit, supporting the development of agro based economy and also offering a range of personal financial services. We are proud to be the first commercial bank in the area and are positive of the future prospects for growth and expansion".
He also stated that "25 years ago, HNB opened its doors to the customers of the Vavuniya district and at that time identified the potential of Vavuniya to be the gateway to the Southern part of the country. In a post conflict era, the area seems to be flourishing and is showing great potential. The need for a second customer centre in the Vavuniya district prompted HNB to open its Kurumankaddu customer centre to better serve the customers with all modern banking facilities such as mobile banking, electronic banking, etc".

Reported in The Island
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...by i3gconsultants@ 07:07:03 on 2012-07-10

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Stock Watch: SLTL

Low cost internet from Mobitel


Mobitel recently introduced special internet packages which can be activated conveniently via reloads, cards or SMS. Mobitel’s constant strive to lead the country towards an info-com and knowledge rich society further invigorates their mission ‘to offer the best services to their customers’.
As such customers can now enjoy 3 day, 7 day, 21 day or 30 day packages at nominal rates. The 3 day package is priced at Rs. 24 which allows the user up to 100MB of downloads together with 10 free M-to-M SMSs, whilst the 7 day package is priced at Rs. 39 which allows the user up to 200MB of downloads together with 30 free M-to-M SMSs, the 21 day package is priced at Rs. 89 which allows the user up to 450MB of downloads together with 75 free M-to-M SMSs and the 30 day package is priced at Rs. 279 which allows the user up to 1024mb of downloads together with 90 minutes worth of free M-to-M talk time and 200 free M-to-M SMSs.
The launch of these new packages is a remarkable achievement, showcasing Mobitel’s ability to innovate whilst offering the latest and best services to its customers at the most affordable prices.

Reported in The Island
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...by i3gconsultants@ 07:07:10 on 2012-07-10

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Stock Watch: SWAD

Swadeshi wins Apsara Venivel over Vendol after decade long battle


After a decade of hearings, Colombo Commercial High Court has ruled in favour of The Swadeshi Industries over the ownership of Apsara Venivel Ayurvedic Beauty Soap.
Swadeshi Industries, a leading manufacturer of beauty care brands in the country launched an ayurvedic skin care soap Apsara Venivel in 2000. Taking advantage of the popularity of the product, Vendol Lanka Company Ltd, started to market a soap with the same name Apsara Venivel in an identical pack.  
The Swadeshi Industrial Works PLC filed a case against Vendol Lanka Company Ltd., for imitating their Apsara Venivel in 2000 and applied an injunction order against Vendol Lanka Ltd to prevent marketing and distribution of the imitated Apsara Venivel.
At the request, the court ruling ordered the accused an injunction order not to manufacture or market the product until the case is heard.
After considering the evidence of the case High Court judge, Mahinda Samayawardena ruled that Swadeshi Industrial Works PLC is entitled to the ownership of the trade mark Apsara Venivel on 26 June 2012.
Swadeshi Industrial Works Chairperson said, “During the proud history of our company we have introduced many new products to our customers. Each and every product was launched after many research done. Apsara Venivel is the only beauty soap certified by the Indian Ayurvedic Academy and that is enriched with Venivel. We consider the court order has protected our legacy and consumers as well.”
The pioneer and market leader in herbal personal care products in Sri Lanka, Swadeshi Industrial Works, introduced Apsara Venivel in 2000 enriched with Venivel – a good cleansing agent, turmeric – to maintain a glowing skin, aloe vera to maintain the moisture of the skin and Kokum which act as a softening agent. The company manufactures and markets many leading brands including the number one herbal soap brand Khomba Herbal and the heritage beauty soap brand Rani Sandalwood.
Prasanna Jayawardene with Kavinda Dias Abeysinghe and Anisha Yasaratne instructed by Mahinda Wickramaratne for the Plaintiff and Gamini Marapana, PC, with Dinal Philips, PC, and Navin Marapana instructed by Paul Ratnayake Associates for the Defendants.

Reported in Dailyft
......

...by i3gconsultants@ 07:07:13 on 2012-07-10

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Stock Watch: JFIN

Finlay Insurance Brokers obtains ISO certification


Finlay Insurance Brokers Ltd. (FIBL) was recently awarded the ISO 9001:2008 certification for excellence in Quality Management Systems by the DET NORSKE VERITAS, Sri Lanka Branch.
The company, a wholly owned subsidiary of Finlays Colombo PLC, is among the leading property, casualty and liability insurance brokers operating in Sri Lanka. Finlays have been involved as insurance intermediaries in Sri Lanka since 1893 and insurance is the oldest continuing business stream for the parent company.
The subsidiary represents all licensed insurers operating in the market and has representations of a number of well-known global insurance intermediaries including Aon Global Insurance Brokers Pvt. Ltd.  FIBL is therefore able to combine excellent local knowledge and relationships together with globally benchmarked solutions in dealing with its clients.  
Whilst the key focus on the division is on the large corporate segment of the market, in the recent past an additional thrust has been made in offering solutions to the insurance requirements of individuals. Branches in Katunayake, Kurunegala and Kandy (with more planned to be opened in the next two years) help the division in its secondary focus on services to individuals.
FIBL Director T. S. Arulanandan said that he was pleased with the ISO QMS certification of his company. “We are committed to delivering excellence of service and strive to deliver value to any client or principal who chooses to deal with us. This value is contained in the repute of our parent Company, our service delivery, the technical knowledge available with our teams and with our international and local partners. Moreover, we have a unique history of helping many clients with large losses. In what is a traditional and technical industry, we are committed to presenting innovative solutions to our clients for their insurance and risk management requirements,” Arulanandan said.
He also said that given insurance is a highly technical field, the relationship between the insurer and the client can be lopsided with the insurer having a full understanding of the product on offer but the client, at best, having only a rudimentary grasp of the “fine print”.
The insurance broker rights this balance in that the broker represents the interests of client to the insurer, not only during the time the policy is transacted but also at the time of a potential claim. “The ISO certification helps us to streamline our operations and in delivering consistent, reliable services through efficiency in systems and processes,” he said.
“As a company, we are committed to long term relationships and sustainability, and believe the Quality Management System and certification will assist us in constantly improving our level of service delivery,” Arulanandan added.
Finlays Colombo PLC is a member of the Swire Group.

Reported in Dailyft
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...by i3gconsultants@ 07:07:24 on 2012-07-10

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Stock Watch: HASU

HNB Assurance rewards performance


HNB Assurance commemorated the sales teams and individuals able to hit high targets set with prizes ranging from the bronze award to the super gold award, on July 4 at the Hilton.

The company, generally known for its innovation within the insurance industry, successfully brought together both senior and junior staff from around Sri Lanka to share in this momentous occasion.

The theme of the event was how the company is showing steady growth while walking toward the destination of success. Over 200 awards were given out that ranged from the best sales person, group leader, regional leader and best service centre branch.
HNB Assurance PLC has made a steady start in 2012 by posting a 21% growth in turnover and a 17% growth in profit after tax in Q1. Its turnover is measured by the Gross Written Premium (GWP) recorded at Rs. 828.8 million for the three-month period with General insurance contributing Rs. 487.9 million with a 22% growth. Life insurance contributed to Rs. 340.0 million with a 19% growth.
This is the 11th year that HNB Assurance has been around since its inception and it has successfully managed to keep its flag flying high until this day.
HNB PLC Managing Director and HNB Assurance PLC Director Rajendra Theagarajah commenting on how proud he was to share this moment with his team, said: “This event is as important as our Annual General Meeting and our annual Staff Management Convention; the difference is that we are celebrating the success of our faces of the organisation.”
He went on to state how HNB Assurance has a powerful network distribution and a very motivated and committed sales force.
Ending on a powerful note, he asserted: “More business means a greater need for insuring risk, more business means more profit and we want sales but not at the expense of customer integrity and value.”
The Chief Guest at the occasion was the newly-appointed Chairperson of HNB Assurance who is also Chairperson of HNB, Dr. Ranee Jayamaha. “I would like to congratulate all awardees for their tremendous contribution and we as a company must not stop growing,” she emphasised.
The HNB Assurance Chairperson went on to mention how impressed she was by how many people had managed to defend their award for consecutive years. “If we decide to create a museum today, then all of you would be part of history.”
As HNB PLC is one of the largest commercial banks in Sri Lanka and is the single largest shareholder of HNB Assurance, both companies must work in unison to become very powerful and respected. The knock-on effect from HNB Assurance is evident to HNB PLC as through its insurance services it now brings in even more business.
A strong emphasis was made on how HNB staff need to bring market share to a new height and be mindful of their surroundings: “We must prepare for risk especially at this time of the world and convert them into opportunities.”
The year 2011 was too a remarkable year for the company as they recorded Life and General GWP growth of 19% and 27% respectively, surpassing industry growth.

Reported in Dailyft
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...by i3gconsultants@ 07:07:29 on 2012-07-10

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Stock Watch: LGL

LAUGFS Gas Auto Lanka preach converting to auto gas


The LAUGFS group held an awareness presentation at their head office yesterday in a bid to encourage and educate individuals on the benefits of an auto gas conversion.

The life of an engine will be prolonged, you will help protect the environment, but the answer your wallet is listening for is that you will save 40% on fuel. Take for example a car on petrol and a car on auto gas. Given a monthly usage of 200 litres, the monthly cost for a petrol car is Rs. 29,800 and respectively Rs. 17,600. Over a period of 12 months, by converting to auto gas, an individual would be saving a hefty sum of Rs. 146,400 per year.
LAUGFS Group Chairman W.K.H Wegapitiya went into further detail of the positive economic benefits of converting to auto gas. “We are seeing that in a lot of Asian countries today, auto gas is proving very popular and effective. We must enlighten the public, not only for the economic advantage but for the sake of our environment.”
As auto gas is a 100 octane fuel there will be less engine knocks, zero amount of sulphur therefore there is no risk of corrosion to the engine parts and there is no lead so the catalytic converter will remain unharmed. Manager – Gas Conversion H.B.H Pathmasiri explained the mechanics of how such a procedure would take place, “It would only take two to three days in one of our many service centres and would cost Rs. 72,000 for a four cylinder vehicle.”
There is 60% less carbon monoxide emissions and 40% less nitros oxide.
LAUGFS are the pioneer of the auto gas conversions back in 1995 and having already installed over 15,000 units with 100% certified EU equipment. Gas Auto Lanka Ltd has even been accepted in Australia thanks to its solid reputation. A 0% interest scheme is also available with numerous banks such as; HSBC, Standard Chartered, HNB and Amex. In a world were Australia already has 675,000 cars running on auto gas, 50,000 in Italy, 400,000 in Poland and over one million in India, then why in Sri Lanka do we only have 20,000 cars on auto gas. It is time for individuals to fulfil their roles as stewards of this planet and help reduce Sri Lanka’s carbon footprint.
LAUGFS Petroleum Pvt Ltd General Manager Mahesh Weerasena proudly shared that they have even converted V6 and V8 engines to function efficiently on auto gas. To eliminate problems, Gas Auto Lanka Limited match conversion equipment to the requirement of each vehicle brand and technology that is compatible with OEM Standards.
As per all electronic injection systems, a mixer does not aspirate the gaseous fuel, but the correct quantity is determined through the calculations made by the ECU. It allows obtaining the well known advantages of the injection systems such as; no disadvantages in the performances on petrol caused by the absence of a mixer, maximum performances on gas, typical of the injection systems and eliminates the risk of backfire.  
Once again, LAUGFS are trying to help our economy, our people and our environment through the awareness presentation. We should try to take a page from their book and live by a means that is sustainable.

Reported in Dailyft
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...by i3gconsultants@ 07:07:19 on 2012-07-10

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Stock Watch: SEYB

Seylan going ahead with Rs. 2 b private debenture


Seylan Bank is going ahead with a Rs. 2 billion unsecured redeemable debenture issue via a private placement.
Funds will be raised by the issuance of 10 million unsecured redeemable debentures of the par value of Rs. 1,000 each with an option to issue a further 10 million debentures in the event of an oversubscription.
The move, which was approved by a Board resolution on Friday, is subject to regulatory and shareholder approval. Plans to issue these debentures were first announced and approved in October 2010.
This was abandoned subsequently and in February last year, Seylan raised Rs. 4.69 billion by way of a Rights Issue for voting and non voting shareholders at Rs. 75 and Rs. 35 per share on the basis of one for three held.This was to boost Tier 1 capital and to mobilise long term funds to match long-term lending and also to facilitate the bank’s future restructuring and expansion program.

Reported in Dailyft
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...by i3gconsultants@ 07:07:15 on 2012-07-10

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Stock Watch: TWOD

Rienzie steps down as Touchwood Chairman


Veteran banker and business leader Rienzie T. Wijetilleke has stepped down as Chairman and Director of Touchwood Investments Plc with effect from yesterday.
He took up the Chairmanship and the Board position at Touchwood only in January this year. Following the stepping down of Wijetilleke, Roscoe Maloney has been appointed as Chairman of Touchwood. He was the Chairman previously, but stepped down after Wijetilleke accepted the invitation to join the company’s Board.
Maloney is the single largest shareholder of Touchwood with a 16.36% stake.
During FY12, Touchwood Investments Plc posted an after tax profit of Rs. 369 million, up from Rs. 357 million in the previous year. Q4 had produced Rs. 278.3 million in profit, though down from Rs. 426.8 million in the corresponding quarter of last financial year.
This was on account of higher income taxes.
Revenue for FY12 was Rs. 1.38 billion, marginally lower from Rs. 1.46 billion. In Q4, revenue amounted to Rs. 512 million, down from Rs. 976 million in Q4 of FY11.
The Board of Directors of Touchwood Investments comprises Roscoe Maloney (Chairman), S. P. Asitha Koralage, Channa Abeygunawardene, Swarna Maloney, L.L. Kulatunga, A.R. Pereira and D.M. De Silva Wijeyeratne, whilst Alternate Directors are Janath Olaboduwa, Prageeth Herath and Ryan Crowley.

Reported in Dailyft
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...by i3gconsultants@ 07:07:02 on 2012-07-10

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Stock Watch: HAYL

Hayleys says Pedro Estate not suitable for airport


Hayleys Plc yesterday said its subsidiary Kelani Valley Plantations’ (KVP) Pedro Estate in Nuwara Eliya is not suitable for an airport.
“There is no flat land in the Pedro Estate,” Hayleys Chairman Mohan Pandithage said in response to reports that Pedro Estate has been identified for the proposed airport.
He said that Pedro remains a showpiece of KVP as well as the tea industry owing to record auction prices its tea fetches, in addition to its tea served for Queen Elizabeth’s Diamond Jubilee recently.
“Though I am aware of press reports, neither Hayleys nor KVP have been approached or notified about Pedro Estate being identified for the proposed airport,” Pandithage added.
Pedro features a tea bush planted by the Duke of Edinburgh during a State visit to Sri Lanka in 1954.
Tea from Pedro Estate received awards at the Ceylon Specialty Estate Tea of the Year competition organised by the Sri Lanka Tea Board and the Colombo Tea Traders Association last year in association with the Russian Association of Tea and Coffee Producers held in Russia.

Reported in Dailyft
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...by i3gconsultants@ 07:07:35 on 2012-07-09

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Stock Watch: CRL

Softlogic Finance in talks for $ 10 m loan from FMO


Softlogic Finance Plc is negotiating a US$ 10 million loan facility from Netherlands FMO.The planned financing comprises $ 6 million in senior loan and $ 4 million in unsecured convertible subordinated loan.
Softlogic Finance said if this facility is extended the Company would be unique as it has a convertible subordinated facility that has an option to convert in to equity at a pre-agreed strike price based on the Net Asset Value (NAV).
The subordinated loan will form part of the Company’s Tier 2 capital requirements on disbursement that will facilitate the growth envisaged as per the three year business plan approved by the Board recently.
If the option to convert shares is exercised by FMO, the facility would further convert to Tier 1 capital.
The Company also said if extended the facility will enable Softlogic Finance to secure its first overseas funding line from a reputed international development finance institution that could be the catalyst in securing further transactions of this nature and propel Softlogic Finance to the next league.
The $ 10 million facility is subject to regulatory and shareholder approval.
Upon obtaining approval the FMO will commence its due diligence mission, credit approval and legal documentation to arrive at a decision to disburse the facility. Softlogic Finance expects this procedure to be completed within 2 or 3 months. To get shareholder approval an EGM has been convened for 26 July.Softlogic Finance said as per FMO’s letter it is only an indicate term sheet and not intended as nor should be construed to be a commitment of an offer by FMO to arrange or provide any financing whether on the terms set out or on any other terms and that any proposal would be subject to due diligence scheduled for August and approved by their internal credit committee and documentation in a form and substance satisfactory to them.

Reported inn Dailyft
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...by i3gconsultants@ 06:07:42 on 2012-07-09

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Stock Watch: DIAL

Dialog’s new location-based Mobile Deal App


Dialog Axiata is offering its subscribers D-App, a smartphone Application (App), which once downloaded would allow subscribers to get location specific special deals offered at partner merchants that vary from fine dining restaurants to electronic stores, the company announced this week.“Dialog’s ‘free to download’ app will update shoppers on offers such as buy one get one free offers and special promotions on seasonal product ranges Dialog subscribers can easily download the D-App to any smartphone having GPS (Global Positioning System) capability to give locations of Partner Merchants Island wide who offer special deals like discounts and giveaways,” it said.The D-App provides Dialog subscribers with a listing of all nearby deals based on the deal proximity to user’s current location, which is supplemented by a map view as well as an augmented reality view of the geographic locations of merchants who vary from restaurants, cafes, clothes and electronic stores that offer special deals.


Reported in Sundaytimes

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...by i3gconsultants@ 15:07:22 on 2012-07-08

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Stock Watch: TKYO

Encourage more local cement manufacture- urges Tokyo Cement


Sri Lanka’s biggest cement maker, Tokyo Cement has urged the government to encourage more domestic manufacture of cement given the rising demand for this product and the drain on foreign exchange from imports.Cement use in calendar 2011 rose 21.6 per cent to 4.58 million metric tonnes. Local production of cement rose 13.6 per cent to 1.97 million metric tonnes while cement imports increased by 28.4 per cent to 2.58 million metric tonnes.Group revenues rose 39 per cent to Rs 22.9 Billion in the year ending March 31, 2012, from Rs 16.5 billion in the same earlier year.� Gross profits gained 33.6 per cent to Rs 3.9 billion rupees. The company’s joint managing directors S. R. Gnanam and K. Yanagihara, said in their report in the 2011-12 annual report that the industry has benefitted from the post-war economic boom, expanding by 9.3 per cent in 2011, supported by a 12 per cent increase in locally produced building materials. A large share of construction activity remained in the former war-zones of the north and east, where the government and the private sector are busy rebuilding or laying new infrastructure.The report said the government spent 6.2 per cent of GDP or Rs 407.5 billion for infrastructure related activities, throughout the country, in 2011.Tokyo Cement plans to expand production of ready-mix concrete products as well as the range of value added products, currently retailed on a small scale.This year, an independent cement laboratory was opened by the company in Dambulla that offers testing facilities for construction firms, house builders and also competitors.The company marks 30-years of operations in 2012, ironically when Sri Lanka celebrates 60-years of diplomatic relations with Japan. The joint venture is between the Gnanam-led St Anthony’s Group and Mitsui Mining Company, Japan.“Given the superior quality of our products we are confident the government of Sri Lanka will continue to consider us a preferred partner for many, other large scale, national infrastructure projects in the pipeline,” the joint managing directors said.In the energy field, the company launched its 5MW Dendro power project with an investment of Rs. 1.5 billion. This new venture in Mahiyangana will operate parallel to Tokyo Cement’s existing10 MW biomass power plant in Trincomalee.“We are also exploring other areas of possible expansion into the biomass power segment, by using paddy husk and wood chips of the gliricidia tree. We are constantly exploring ways to deploy environmentally friendly energy throughout our operations, to preserve the natural environment,” the joint review said.The company is also launching the A. Y. S. Gnanam Construction Training Academy at Dambulla, in memory of the late A. Y. S. Gnanam, founder of the company and of St Anthony’s Group. This academy will train competent people for the construction industry in Sri Lanka and is expected to also contribute to the economy of the country.The review said the maximum retail price of cement is controlled in Sri Lanka and prior approval of the Consumer Affairs Authority (CAA) is required for any price increases. “However, there is always a time lag between submitting an application to the CAA for a price increase and the CAA granting such approvals. As a result, the company is forced to absorb cost increases until the price increase can be implemented,” it said.


Reported in Sundaytimes

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...by i3gconsultants@ 15:07:22 on 2012-07-08

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Stock Watch: SHOT

Serendib flying high under Avani banner


Serendib Hotels PLC has for the first time topped Rs.1 billion in group revenue despite the six-month closure of the company’s flagship hotel for refurbishing, Serendib Chairman A.N. Esufally has said in the annual report.Previously known as Hotel Serendib, Avani Bentota Resort and Spa as the property is now branded, ``offers an experience that is truly one of a kind and customer feedback that has been received so far has endorsed the property is uniformly excellent,’’ Esufally said.He noted that occupancy levels are higher than predicted and the hotel is now able to command room rates comparable to other luxury beach resorts.The refurbishing of the hotel had been completed within the stipulated budget and the property has been reopened as scheduled, he said.Although group revenue had grown to over Rs.1 billion, group profit after-tax was down to Rs.79.9 million from Rs.129.3 million a year earlier due to the hotel remaining closed for six months for refurbishing.Two other group hotels have also been partly or wholly closed for refurbishing during the period under review.The Serendib group also owns the Avani Kalutara Resort, Club Hotel Dolphin and Hotel Sigiriya in addition to its Bentota property.Avani Kalutara (Formerly known as Kani Lanka) which was acquired early 2011, is currently being refurbished and will be opened in time for the 2012 winter season, Esufally said.The company intends investing Rs.600 million on this make over and funds have been earmarked for this purpose.Esufally noted that the new Avani Bentota Resort and Spa was the first internationally branded hotel to commence operations in post-war Sri Lanka.Avani is Minor International’s new brand which was launched globally with the opening of Avani Bentota."They also own and operate the famed ‘Anantara’ brand of hotels. Plans for the first Anantara hotel in Sri Lanka, adjoining Avani Kalutara are nearing completion," Esufally said.In his message to shareholders, Esufally said that global trends in the tourism industry created challenges for the industry here in Sri Lanka. Asia was poised to become a major force in world tourism with China and India leading the way."The expectations of the travelers from this region are different to those of the European markets which Sri Lanka’s hospitality industry has been accustomed to. Their language, cuisine and habits vary, and as such, the industry needs to respond to the changing requirements of our visitors," he noted."Specialized products like theme parks, soft adventure and sports tourism need to be developed including restaurants, high end shopping malls and entertainment centres."He said much of the credit for the group’s success during the year under review was due to the two subsidiaries, Hotel Dolphin with profit before-tax of Rs.98.5 million and Hotel Sigiriya with a PBT of Rs.52.5 million."These are the best results ever achieved by each of the properties in terms of revenue and net profit," Esufally said.In a management discussion and analysis, the company said that the results were particularly remarkable given the six-month closure of their flagship hotel for refurbishing. The property was re-branded and reopened exactly on schedule in November."(This) is a record in an industry that is infamous for delays and postponements. In addition, and worthy of note, the renovation was completed within the stipulated budget of Rs.650 million."On April 29, 2011, the company sub-divided each of its shares into five followed by a rights issue in May on the basis of one new share for every four held.The three major shareholders of Serendib are Leisure Asia Investments Ltd (28.14%), Hemas Holdings (21.88%) and Lodging Investments (Labuan) Ltd (19.83%). Royal Ceramics has acquired 5.17% of the company and its Managing Director Mr. Nimal Perera owns 3.42%.The Serendib voting share traded at a high of Rs.37.90 and a low of Rs.18 during the year under review against a trading range of Rs.36 to Rs.18.65 the previous year. Net assets per share had grown to Rs.14.18 from Rs.10.01 the previous year.The directors of the company are: Messrs. A.N .Esufally (Chairman- Alternate V.H.A. Perera), D.T.R.de Silva (MD), J.C.L. de Mel, H.N Esufally (Alternate Ms. K.A.C. Wilson), W.M. de F. Arsakularatne, Prof. L.D.K.B. Gamage, E.J.D. Rajakarier, M.A. Jafferjee and R.N. Athukorala.


Reported in The Island

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...by i3gconsultants@ 15:07:22 on 2012-07-08

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Stock Watch: CARE

Printcare posts second best year since inception


Printcare PLC, manufacturers/printers of tea bag tags and envelopes and different types of cartons with a sizable export business, has seen both turnover and profits drop in the year ended March 31, 2012 which had nevertheless remained the second best for the company since its inception 31 years ago.Printcare Chairman Merrill J. Fernando said that turnover for the year at Rs.3.25 billion was down 6% from Rs.3.45 billion the previous year and the profit before-tax of Rs.203.7 million, down 21% from Rs.259.1 million a year earlier, was largely attributable to factors affecting the global tea industry due to turmoil in the Middle East.He said that while the company had experienced a setback in sales in its tea tags and envelopes division due to this reason, direct exports had done well."Our overseas customers are beginning to appreciate the quality of our service and they are steadily increasing their reliance on your company," Fernando told shareholders in the annual report.Their carton division had delivered what the chairman called "encouraging results" boosted by growth in export sales despite overcapacity in this industry which hurt margins.Printcare’s special design capabilities servicing the higher end of the market had stood the company in good stead with their products winning all three packaging segments at the National Awards last year."(This) endorsed our position as the finest printing and packaging company in Sri Lanka," he said.The company’s security printing division, focusing mostly on pre-paid telephone cards, lottery tickets and promotional games, is still unfortunately underperforming despite being the only company in the country equipped to deliver high quality lottery tickets, Fernando said.However their efforts to win the local tender had continued unabated and he was hopeful that ``this situation will change soon."With the company firmly established as the principal supplier of high quality telecom pre-paid cards, their export volumes were making steady progress in the face of "invasive competition offering unsustainable prices and relying on less than ideal manufacturing processes in an effort to win market share."He expected that their digital media operation, "a very small and nascent but exciting part of the business," to be an area that will provide growth over the next decade."This division is currently developing some innovative products and services. I hope to report interesting developments next year," Fernando said.The directors have recommended the payment of a final dividend of Rs.0.40 per share giving a total dividend of Rs.0.75 for the financial year.Printcare has a stated capital of Rs.471.9 million, group reserve of Rs.338.1 million and retained earnings of Rs.519.7 million (group) in its books. The company’s reserves were Rs.96 million and retained earnings Rs.151.5 million.The group comprises nine companies including one in India manufacturing and printing tea bag tags and envelopes. Other subsidiaries are engaged in manufacturing and printing of packaging materials for food-grade and non-food grade consumer items, printing and binding of books, magazines, brochures and catalogues, exporting of printed papers and boards; graphic designs, prepress and pre-media services; specialized printing of products with security features; manufacturing and printing of tea bag tags and envelopes and graphic design.Net assets per share had grown to Rs.13.14 from Rs.11.87 the previous year while the company’s share closed at Rs.31 during the year after subdividing each existing share to five from Rs.128 the previous year.MJF Holdings with 26.87%, Dr. T. Senthilverl with 23.83% and Mr. K.R. Ravindran with 20.83% are the major shareholders of the company.The directors of the company are: Messrs. Merrill J. Fernando (Chairman), Abbas Esufally, K.R. Ravindran, Ejaz Chatoor, Dayasiri Warnakulasooriya, Ms. Anushya Coomaraswamy and Simon Scarff.


Reported in The Island

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...by i3gconsultants@ 15:07:22 on 2012-07-08

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Stock Watch: SMOT

Sathosa Motors looks to diversify under Access Engineering control


Access Engineering Limited which last February acquired the controlling interest of Sathosa Motors PLC sees the acquisition as an opportunity for diversification enabling the future growth of the company, Sathosa shareholders have been told in the companyannual report.Access Chairman, Sumal Perera, who previously served as non-executive Chairman of Sathosa Motors under the control of the previous Japanese controlling interest has now become its Managing Director/CEO.Perera has told shareholders in his Managing Director’s report that in March this year the Itochu Corporation of Japan have sold its full stake in the company to Access Engineering at Rs.235 per share.Subsequently, Access had made a mandatory offer to other shareholders and as at date acquired 81.55% of Sathosa Motors.Mr. Ajita de Zoysa, previously Chairman of AMW has been made Sathosa’s new Non-Executive Chairman. Perera said that de Zoysa’s experience in the commercial and automobile field in Sri Lanka "is in my opinion second to none and (we) look forward to his guidance and advice in this new era of the company."Mr. A.I. Lovell has been made Deputy Chairman of the company with the other directors comprising Perera’s colleagues on the Access board.Sathosa Motors which was set up in 1962 when the CWE obtained the Isuzu agency in Sri Lanka now plans to expand this business into the major cities in the country and also look at complementary business with sustainable growth potential, Perera has told shareholders.The Sathosa annual report says that Sathosa Motors considers Access buying into the company as an opportunity for diversification while Access considers the acquisition a good strategic investment and plans to acquire and partner with reputed brands/agencies for engineering and construction related products without being solely dependent on the Isuzu brand which will continue to be the core business.The year ended March 31, 2012 saw Sathosa Motors posting gross turnover of Rs.1.9 billion, a pre-tax profit of Rs.245.7 million and an after-tax profit of Rs.175.8 million.The company’s Executive DirectorTilak Gunasekera said that the Isuzu was the country’s leading vehicle brand for the light duty commercial categories.The year under review had seen their new vehicle department recording a net turnover of Rs.1.53 billion selling 427 units with their business volumes up 35.53% and the number of vehicles sold 29% up from the previous year.Gunasekera said that the Isuzu N Series Reward has a monthly sale of over 35 units which is a satisfactory figure against the stiff competition they faced."Despite the entry of cheaper Indian and Chinese manufactured vehicles, the company managed to maintain a steady market share throughout the year," Gunasekera said."The Isuzu brand currently has well over 100,000 vehicles on the roads of Sri Lanka which alone speaks brand’s high acceptance in the local market."The company has revalued its property at Peliyagoda with the land valued at Rs.120 million, the buildings at Rs.20 million and plant and machinery at Rs.3.5 million. However these values have not been incorporated into the accounts during the year under review.The directors have proposed a final dividend of Rs.5 per share for approval by shareholders at the company’s AGM later this month.Access Engineering held 77.1% of Sathosa Motors as at March 311, 2012, followed by Lakshmans Housing and Construction (10.07%) and Mr. R.N. Nanayakkara (2.79%).The net asset value per share of the company was up to Rs.98.64 during the year under review from Rs.74.51 a year earlier and the share traded at a high of Rs.469 and a low of Rs.160.20 during the year. This compared to a trading range of Rs.265 to Rs.112.50 the previous year.`The directors of the company are: Messrs. Ajita de Zoysa (Chairman), Sumal Perera (MD), Tilak D. Gunasekera (Executive Director), M.M.N. de Silva, R.J.S. Gomez, J.C. Joshua, S.H.S. Mendis (Alternate to J.C. Joshua), S.D. Munasinghe (Alternate to R.J.S. Gomez) and A.I. Lovell.


Reported in The Island

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...by i3gconsultants@ 15:07:22 on 2012-07-08

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Stock Watch: UDPL

Bad weather and wage increase bites Udapussellawa


Udapussellawa Plantations PLC, a James Finlay company, has posted a substantial loss of Rs.199.1 million, the highest ever, in the year ended December 31, 2011, down from a profit of Rs.138.9 million the previous year, according to the company’s recently released annual report.This was the first loss posted by the company since 2005. In 2006 a string of loss making years ended with a modest earning of Rs.2.6 million after-tax.Udapussellawa Chairman, N.K.H. Ratwatte has told shareholders that the tea industry is currently going through one of its most difficult periods with the average sale price of tea continuously under pressure to keep pace with the escalating cost of production.The year under review however saw the average sale price of tea inadequate to meet rising cost of production resulting mainly from crop shortfall due to erratic weather conditions and the unprecedented increase in the daily wage of workers.The wage increase cost the company an added Rs.194 million during the year with the massive wage hike creating serious concerns about the future viability of the plantation industry."With Sri Lanka’s cost of production being substantially higher than that of its competitors, it is imperative that the wage is linked to productivity to enable our industry to be globally competitive and ensure the long-term viability and sustainability of the plantation industry," Ratwatte said.Financial burdens created by the drop in revenue and the shortfall of working capital during the year had compelled the cut back of tea replanting in the Nuwara Eliya District, Ratwatte said. However, the timber, rubber and minor crop programs had continued with an investment of Rs.21 million.The company’s CEO, Dhayan Madawala, said the year had seen unprecedented rainfall in January and February where four times the usual precipitation was averaged. Thereafter dry weather continues to prevail for long periods with an adverse impact on production during the year."Due to the tea sector going through a tough period, a decision was taken to curtail our planting program for the year, and it was mainly the maintenance of the existing new plantings that was undertaken," Madawala said.With total production of tea down to 3.7 million kg, the cost of production had reached dizzy heights with the estate COP being Rs.362.34 per kilo which was somewhat reduced by the intake of out-grower leaf which brought down the overall cost to Rs.341.74 for the year.During the year they had planted only seven hectares of fuelwood as the company does not have much bare land for planting. But they were embarking on planting minor crops such as cinnamon, pepper and cocoa in small extents so that they will have a wider mix of crops to sustain their business going forward."In the meantime we have also generated much needed revenue by disposing of the mature timber trees where we generated a sum of Rs.11 million during the year," he said.Udapussellawa which has a stated capital of Rs.340 million carried a revaluation reserve of Rs.242.3 million and a general reserve of Rs.108.5 million. Accumulated losses were running at Rs.435.5 million.Total assets ran at Rs.1.48 billion, non-current liabilities at Rs.845.6 million and current liabilities at Rs.377.4 million.James Finlay Plantation Holdings (Lanka) Ltd with 57.78% and James Finlay with 19.02% are the major shareholders of the company which had over 11,800 shareholders, majority of whom own less than thousand shares each.Net assets per share were down to Rs.13.17 from Rs.23.43 the previous year and the company’s share traded at a high of Rs.43.30 and a low of Rs.27 during the year. This compared with a trading range of Rs.63 to Rs.26 the previous year.The directors of the company are: Messrs. N.K.H. Ratwatte, C.L.K.P. Jayasuriya, E.R. Croos Moraes, R.J. Mathison, P.R. Henson, J. Molligoda, J.M. Swaminathan, M. Vamadevan, D.H. Madawala and R.A.D.R. Ramanayake.


Reported in The Island

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...by i3gconsultants@ 15:07:22 on 2012-07-08

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Stock Watch: MADU

Madulsima’s timber assets of "mammoth proportions:’’ Harry


Madulsima Plantations PLC has told shareholders that the decision of the company to value its timber resources "has disclosed hitherto hidden assets of mammoth proportions," the company’s Chairman/MD, Mr. D.H.S. Jayawardena has told shareholders in the company’s annual report.The gain in the change in fair value of biological assets of the company for 2011 of Rs.424.6 million has been credited to the income statement of the company, up from Rs.199 million the previous year, containing its loss for the year to Rs.23.4 million against a loss of Rs.42 million the previous year.


Jayawardena has told shareholders he very much regrets that the directors are not recommending a dividend for the year ended December 31, 2011 for the tenth consecutive year.He said that although valuation of other biological assets are pending with the adoption of international financial reporting standards, the decision of the company to change its accounting policy recognizing timber plantations in the financial statements "should hearten stakeholders" despite the policy and environmental issues needing resolution with government authorities to convert such assets to cash over the medium and long-term.Timber trees of the company have been valued by Mr. K.T.D. Tissera, Independent Chartered Valuer, on January 1, 2010, December 31, 2010 and December 31, 2011 at over Rs.1.9 billion, nearly Rs.2.2 billion and nearly Rs.2.4 billion respectively at a discount rate of 12%.However the directors have used a discount rate of 14.3% to determine fair values of Rs.1.55 billion and Rs.1.75 billion.Jayawardena has said that the company had lost Rs.23.2 million in the year under review against losses of Rs.41.9 million and Rs.175.6 million in the two previous years.The social unrest that spread across the Middle East and North Africa had affected key consumer markets driving prices below economic levels."Despite evidence of growth in production, it was apparent the current model was becoming unsustainable," Jayawardena said."Among other factors influencing the negative tea market was the depressed state of the European economy with its debt crisis with currency fluctuations between euro and the dollar which was impacting negatively on the Russian economy as well. The vagaries of weather often moving towards extremes and mostly remaining inconsistent affected the quality seasons of Uva and Western regions limiting the seasonal teas on offer."The wage increase had cost the company an additional Rs.135.5 million on account of daily paid employees which had been increased 14.5% over the preceding year.However, there had been a significant decline in fertilizer cost mainly due to economic application of fertilizer during the year in view of financial constraints.Madulsima has diversified into fruit plantation and has small extents of avocado and citrus plus slightly over 56 ha of rubber on its plantations in the Madulsima and Bagawantalawa regions, the report reveals.Looking at prospects for this year, Jayawardena said that the tea industry is in crisis with high costs and falling commodity prices which calls for a more supportive role from the state and the stakeholders. The long-term development of the tea industry with short and long term funding would be a prerequisite to implement accelerated development programs."The industry needs to improve land and labour productivity. Land use diversification into areas such as forestry cultivation where tea cannot be cultivated needs to be encouraged with approved forestry management plans and rights to harvest in accordance with an approved plan,’’ Jayawardena said."The current crisis is partly caused by the inordinate wage hikes without being linked to productivity which is amongst the lowest in the global scenario. Work norms are crucial for sustainability and provide a key interdependent relationship for progress."Madulsima has a stated capital of Rs.290 million, a general reserve of Rs.45 million, a revaluation reserve of Rs.335.1 million and accumulated profits of Rs.1.06 billion in its books.Total assets ran at Rs.3.69 billion, non-current liabilities at Rs.847.4 million and current liabilities at Rs.1.1 billion.Stassen Exports with 35.17% of the company, Distilleries (31.03%) and the Secretary to the Treasury with 13.1% are the major shareholders of Madulsima Plantations.Net assets per share were down to Rs.59.56 during the year from Rs.60.36 the previous year. The company’s share traded at a high of Rs.37 and a low of Rs.14.80 during 2011 against a trading range of Rs.21.50 to Rs.13.50 the previous year.The directors of the company are: Messrs. D.H.S. Jayawardena (Chairman/MD), R.K. Obeyesekere, Zaki Alif, Dr. N.M. Abdul Gaffar, S.K.L. Obeyesekere (Director/CEO), Dr. A. Shakthevale and D.S.K. Amarasekera.


Reported in The Island

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...by i3gconsultants@ 15:07:22 on 2012-07-08

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Stock Watch: CLND

Colombo Land subsidiary loses teak plantation to fire


All the teak plantations of Agrispice (Pvt) Limited, a subsidiary of Colombo Land & Development Company PLC, the owners of the Liberty Plaza, has been destroyed by a fire last February and the damage is yet to be assessed by the company, Colombo Land has disclosed as post balance sheet event in its annual report.Colombo Land has two subsidiaries, Liberty Holdings (Pvt) Limited and Agrispice (Pvt) Limited. Agrispice is 49% owned by Colombo Land which has said that it had control of this company cultivating teak and mahogany trees as at December 31, 2011.The report says that planting costs of the immature plantation are wholly incurred by Agrispice on land preparation, rehabilitation, new planting, crop diversification and fertilizing.


Reported in The Island

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...by i3gconsultants@ 15:07:22 on 2012-07-08

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Stock Watch: LHCL

Cheaper rates help Lanka Hospitals to grow profits


The Lanka Hospitals Corporation PLC, owners of what it was previously known as Apollo Hospital, has grown both revenue and profit in 2011 with "price restructuring’’ over the past two years enhancing performance."Price restructuring in the past two years has enabled the company to effectively cater to the healthcare needs of Sri Lankans across a spectrum of demographics," Mr. Gotabaya Rajapaksa, the company’s Chairman has told shareholders in the annual report."Encouragingly, these alterations to the business model have precipitated profitability, ensuring a win-win for both our shareholders and stakeholders including our customers."Rajapaksa made the point that excellence comes at cost. The restructure, development and advancements in the products and services offered by the hospital have been the outcome "of astute yet sizeable investment."He said that such investments have been driven by more than mere commercial motives, being largely influenced by their outcome on society and the industry as a whole.The hospital today was a preferred choice not only among Lankans but also international ``medical tourists,’’ he said.Additionally they have noted that many patients who had previously relied on the service of regional healthcare institutions were now patients of Lanka Hospitals.Rajapaksa said that the government remains "passionate and committed" about its stake in Lanka Hospitals and its interest in the company was strategic and long term."Lanka Hospitals remains critical to the GoSL for many reasons; primarily its ability to provide world-class medical care whilst balancing the equation of affordability, and the role it plays in uplifting the general standard of living of our citizens," Rajapaksa said.The Insurance Corporation through its Life Fund (29.54%) and the General Fund (25.07%) is the controlling shareholder of the company with India’s Fortis Global Healthcare Holdings owning 28.66%.Fortis has three representatives on the Lanka Hospital’s board.The year under review saw revenue grow 17% to Rs.3.68 billion and a profit after-tax of Rs.438.1 million, up 52% from Rs.289.1 million earned a year earlier.The company’s CEO, Mr. Lakith Peiris said that the size of the healthcare industry in the country had remained unchanged during the year with no new major players entering the market. However, many existing players opted for the adoption of new technology for diagnostics and treatment purposes.Companies such as theirs had seen a marked increase in the demand for specialist healthcare in areas such as fertility and renal care, especially by segments of patients who had hitherto depended on treatment abroad.They have also seen growing numbers shifting from the state sector healthcare to Lanka Hospitals with the assurance of predetermined cost for surgery.


"In this respect, we feel that we have not only benefited from this strategic initiative but have also assisted the state sector by lessening the burden on public healthcare," Peiris said.He announced that they will soon be investing in establishing the most up to date and the largest laboratory referral centre with a capability of catering to almost 90% of the country’s lab testing requirements.Their renal care center continued to conduct the highest number of dialyses as well as transplants in the country and in 2011 successfully completed its 300th kidney transplant.He also said that their heart centre which was doing well will benefit from the introduction of a "very unique model" in the near future broadening the scope of cardiac surgery from what is currently being performed in the country.Their fertility centre remained the number one IVF facility in Sri Lanka and is well recognized as a centre for assisted re-production both here and the South Asian region.Over the past two-and-half-years the centre has recorded 520 pregnancies and 275 live births and continues to maintain success rates that are on par with the best fertility clinics across the world.Peiris said that going forward Lanka Hospitals will obviously look to enhance its position both in the domestic and global healthcare arenas by laying emphasis on attracting international patients to Sri Lanka.They will also focus on enhancing the hospital’s capacities both in terms of bed numbers as well as core facilities such as operating theatres in the medium term.For the first time in the company’s history the directors have recommended a dividend of 50 cents per share amounting to a pay out of Rs.111.9 million for the year ended December 31, 2011.The company has a stated capital of Rs.2.67 billion, a revaluation reserve of Rs.874.8 million and retained losses of Rs.202.7 million in its books. Total assets were running at Rs.4 billion and total liabilities at Rs.665.4 million.In addition to the Insurance Corporation and Fortis, Bank of Ceylon subsidiary Property Development owns 9.53% of the company.Net assets per share had grown to Rs.14.94 in 2011 from Rs.12.20 the previous year and the share traded at a high of Rs.64.90 and a low of Rs.35.10 during the year. This compared to a trading range of Rs.38 to Rs.29 the previous year.The directors of the company are: Mr. Gotabhaya Rajapaksa (Chairman), Dr. Nalaka Godahewa, Mr. A.M.M. de Alwis, Prof. D.P.A Fernando, Dr. G.W.K. Wickramasinghe, Mr. P.A. Lionel, Dr. T.R. Ruberu, Mrs. R.S. Cabraal, Mr. M.M. Singh (Alternate Mr. Vishal Bali), Mrs. S.M. Singh (Alternate Mr. B.S. Dhillion), Mr. Sunil Godhwani (Alternate Dr. Amit Varma) and Dr. Bandula Wijesiriwardena.


Reported in The Island

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...by i3gconsultants@ 15:07:16 on 2012-07-08

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Stock Watch: JKH

JKH ink share purchase agreement with Norbert Dentressangle SA


John Keells Holdings PLC and Norbert Dentressangle SA, an international Transport, Logistics and Freight Forwarding company, listed on the Paris stock exchange, operating in 23 countries and employing 33,000 people, announced that Norbert Dentressangle has signed a Share Purchase Agreement recently to acquire the John Keells freight forwarding operations in Sri Lanka and India.
The transaction is due to be finalized at the end of August 2012. The acquisition will enable Norbert Dentressangle to strengthen its growing freight forwarding business, in line with its strategy.

Reported in Dailynews
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...by i3gconsultants@ 09:07:29 on 2012-07-07

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Stock Watch: CTCE

Aviva to exit 16 units. Is Sri Lanka among them?


nsurer Aviva said it would sell or close 16 underperforming businesses as part of a strategic shake-up aimed at bolstering its finances and reinvigorating its flagging share price, Reuters reported.
The businesses earmarked for disposal include its South Korean arm and its British large-scale bulk purchase annuity unit, that contribute 300 million pounds to after-tax profit, Aviva said on Thursday.
“16 segments that are currently producing or will prospectively produce returns below the group’s required return that will be exited, involves £6 billion capital, £300 million operating profit after tax, and 5% return on capital. Examples of these include: South Korea; UK Large-Scale Bulk Purchase Annuities; and small Italian partnerships,” Aviva’s Chairman John McFarlane said in a statement.
The insurer, whose weak stock market performance led to the removal of chief executive Andrew Moss in May, said it had identified a further 27 businesses which “require significant improvement”, including its Irish general insurance arm.The disposal plan is the culmination of a twomonth scrutiny of Aviva’s 58 businesses launched by executive chairman John McFarlane, who took day-to-day control of the group after Moss quit on May 8.“Things are tough and the environment is challenging. However, I am confident we will be successful,” McFarlane was quoted as saying.
It is widely believed that Sri Lankan operation of Aviva, which is a joint operation with NDB is also among the business units that are to be disposed, though Aviva in its statement did not mention the names of all the entities that it will get rid of.

Reported in Dailymirror
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...by i3gconsultants@ 08:07:13 on 2012-07-07

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Stock Watch: SINS

Singer Plus lights up Vakarai


Revealing a new life style for the people in northwest of Batticaloa, Singer Plus opened one of their latest showrooms in Vakarai recently. It was a dream come true for the people in Vakarai to witness Singer Plus coming to their town with hi – tech consumer durables. The company believes that the contribution of this new showroom to the communities would be a great backing for the economic growth of this area and to improve their life style, which was badly affected by the civil war for many years.

The showroom was officially opened by the Chief Executive Officer of Singer Sri Lanka, Asoka Pieris at the opening ceremony held on 12th June, with the participation of the company’s board of directors, company officials and other distinguished guests. Singer plus has made it easier for the people in Vakarai to full fill their needs in a more affordable & an easier way by introducing special hire purchase schemes and financial services such as paying of utility bills & money transferring facilities at the showroom located at corporative building , Trincomalee road ,Vakarai.

Reported in The Island
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...by i3gconsultants@ 08:07:10 on 2012-07-07

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Stock Watch: JKL

Sri Lanka on business traveller map says Colombo hotel


Cinnamon Lakeside, a hotel in Sri Lanka's John Keells group had won an award from a UK-based business travel publication, giving international recognition to high industry standards, officials said.
'Business Destinations', a magazine targeted at corporate buyers and travel professionals, had named Cinnamon Lakeside the best luxury hotel in Sri Lanka."We have not only taken Cinnamon Lakeside but also Sri Lanka to a new level because this is an international award by a very serious magazine," Denis Gruhier, the hotel's general manager said."Up market guests will know that Sri Lanka is a destination that is developing standards through us."
Gruhier says the award by the Business Destinations magazine shows how people look at Sri Lanka and the hospitality industry "through the eyes of a corporate traveler."
The hotel said the award took into account is standards and also environmental friendly practices.The hotel said it began a trolley-less housekeeping service and introduced a priority check-in service under three minutes for high-end guests, mostly business travelers.Sri Lanka is going through a tourism boom after the end of a 30-year civil war in 2009, new hotels are being built, and older hotels are being modernized.
Cinnamon Lakeside, which is by Colombo's Beira Lake, has refurbished its 346 rooms and also launched floating restaurant.
The travel industry is promoting Sri Lanka as a business tourism destination, for meetings, incentive travel and exhibitions. In 2011 arrivals rose 30 percent to 855,000. Up to May 2012 arrivals were up 18 percent.
Bookings in the hotel's executive floor mostly occupied by business travelers have grown 30 percent during January to June this year compared to a year earlier, the hotel said."We have definitely seen a pick up in the corporate market," the hotel's director of sales and marketing Ajantha Perera said.
"There is a significant increase in business travelers from India, China and the UK."Cinnamon Lakeside says it has an occupancy rate of around 60 percent leading to a year round average of 70 percent.

Reported in LBO
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...by i3gconsultants@ 08:07:04 on 2012-07-07

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Stock Watch: AAIC

Asiri Alliance breaks new ground with medical cover at 0% interest with one free instalment


Asian Alliance Insurance PLC, now a Softlogic Group company, has tied up an exclusive understanding with Sampath Bank to offer their latest and affordable healthcare products at 0% interest scheme.
Further, Sampath Bank will waive off one entire instalment as an exclusive benefit to their card holders, making these products even more affordable.
Asiri Alliance Medical – Basic, Executive Empire and Esteem products offer exclusive medical, hospitalisation and surgical covers and has been designed to suite the lifestyles and payment capacities of the customers.
Packages starting from Rs. 75,000 going up to Rs. 1,000,000 at premium rates ranging from Rs. 7,500 to Rs. 145,000 per year even cover the healthcare of the family and can be utilised at any approved private hospital in the country.
Further, with the recent tie-up of Asian Alliance Insurance with the world-renowned Best Doctors programme, Asiri Alliance Medical policyholders get the unique opportunity to access the world’s 5,000 best doctors for free for the first time in Sri Lanka.
“Best of all, these packages cover you from a simple cough and cold to the most serious illnesses such as cancer. With the added benefit of providing cover for 135 day care surgeries, does not require you to be in hospital for more than 24 hours to enjoy the protection on medical expenses that will have to be incurred. Furthermore, this is the only one of its kind that is available in the country to customers to purchase at retail level,” stated Harin Perera, Head of Healthcare Projects of Asian Alliance Insurance.

Reported in Dailyft
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...by i3gconsultants@ 08:07:41 on 2012-07-07

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Stock Watch: UBC

Union Bank to unveil new world class state-of-the-art core banking solution


Union Bank of Colombo Plc (UBC) announced that the bank would be introducing a new state-of-the-art core banking solution that will enable the bank to add further value to improving its management processes and service delivery.
UBC has picked the internationally renowned banking solutions supplier, Silverlake Systems, Malaysia to implement the core banking system that will enhance the bank’s already technologically driven management process to even greater heights.
Union Bank is synonymous for its technology driven innovations and has introduced several firsts to the banking industry in Sri Lanka including internet banking, e-cheques and the recently launched TV Banking solution, taking banking convenience to a new dimension.  
Union Bank Director and CEO Anil Amarasuriya stated: “This is yet another milestone in the bank’s premise to deliver superior customer value. UBC is one of Sri Lanka’s fastest growing banks and the new core banking solution will add greater value to further improving service delivery. It is a universal banking system with robust functionality that provides comprehenstive instrument and product coverage for deposits, lending, trade finance, treasury management and will also enhance and support front-, middle-, and back-office operations of the bank, as well automate financial management, risk, and performance areas.”
 It will also enable UBC to “effectively manage increasing margin pressure and growth by helping in optimising the bank’s balance sheet profile, developing a strategic balance sheet management framework, and to operationalise analysis and learning into executable strategies”.
Nilanth de Silva, Chief Operating Officer of UBC, stated that the bank would be investing in excess of US$ 6 million in implementing the system further highlighting its commitment to operational stability.
Silverlake is one of the largest and most successful financial software vendors in Asia providing banking solutions. Chee Chin Leong, President Business Alliances of Silverlake Systems Sdn Bhd (SLS) of Malysaia, said that the company was happy to partner Union Bank in this initiative.
He said: “Our solutions enable organisations to achieve efficient and effective operations, and position them with a strategic platform for future business needs. The new system with its flexibility in functionality and features will ensure UBC vast technological capabilities in delivering increased customer value and support its rapid expansion smoothly.”
Silverlake is an authorised reseller and certified implementer of the Silverlake Axis Integrated Banking Solution (SIBS). The award-winning SIBS is continuously optimised and maximised by Silverlake Axis Ltd. (a public listed company in the Singapore Stock Exchange) to deliver customer responsive and innovative solutions.
The client list of SIBS includes leading global and local financial institutions across Asia Pacific and Middle East – including 40% of the top 20 largest banks in South East Asia. Silverlake’s uncompromising commitment from the start to the full completion of large-scale core systems migration projects is evident from its marked 100% success track record.
Silverlake will implement the core banking system with the assistance of their accredited local agent Just in Time group.

Reported in Dailyft
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...by i3gconsultants@ 08:07:09 on 2012-07-07

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Stock Watch: AHUN

Heritance Ahungalla walks the talk on sustainability


Heritance Ahungalla, one of Sri Lanka’s Aitken Spence Group’s deluxe hotels, has employed scores of people and sources supplies from the neighbouring villages as part of the ongoing investment drive to embrace sustainability.
More than 65 per cent of the hotel’s staff of 400 have been recruited from the local villages, many of them have not had previous hotel experience.
Those from the local community have risen up the ranks quickly, to enable Heritance Ahungalla to secure multiple awards for cuisine, service and environment practice.
“We are proud of our growing team of young men and women from the surrounding communities, who have quickly adapted to high-levels of hotel management and also readily contribute to expanding our sustainability initiatives,” said Refhan Razeen, General Manager of Heritance Ahungalla.
For instance, Shanika Jayasekara, who joined the Heritance Ahungalla family as a trainee restaurant receptionist in August 2009, rose up the ranks to a Senior Restaurant receptionist in April 2011. Along the way, Jayasekara also tried her hand in mixing cocktails, taking part in many cocktail competitions.
“I don’t want to travel abroad. I’m happy to stay in Sri Lanka. In the future, I would like to specialise, maybe learn about wine and become a sommelier, rather than becoming a general food and beverage manager,” said Jayasekara who won the Best Mixologist of the Island at the 2011 Culinary Art Competition conducted by the Chef Guild.
Another rising star, P.S. Fernando joined Heritance Ahungalla family in August 2007 as a trainee steward and now works as a Trainee Captain. He has also acted as personal butler for many celebrity guests including Indian cricket legend and ruling party legislator, Sachin Tendulkar and legendary British singer, Sir Cliff Richard during their stays at the hotel. A bartender and a deft cocktail mixer, Fernando has taken part in table-top decorating, power observation and tray balancing competitions.
The Heritance Ahungalla family also includes children of retired staff members, differently-abled persons and more than 35 youths from the north and east who secured employment after one-year’s training at the Aitken Spence School of Hospitality.
Razeen said a differently-abled person, employed as a trainee pastry cook, went onto win two golds and a silver medal at the Culinary Art competition in Sri Lanka. He later secured employment overseas and has since won gold medals in similar competitions in Dubai.
Staff also receive training in English, French and German languages, computer skills, leadership training programmes and medical facilities. To enhance soft skills, the hotel conducts English drama competitions and environmental quiz competitions.
Dressed in batik-motif uniforms, these rising stars are among the old-world charm that runs the decades-old 152-room luxury five-star coastal property. The Geoffrey Bawa designed hotel was the first to come under the Heritance brand, which symbolises Aitken Spence’s centuries-old heritage of trust and reliability.
“We take great pains to stick to our core Heritance motto of ‘where tradition is alive,” said Razeen, who has declared 2012 a year of quality for the Heritance Ahungalla family. The hotel’s gastronomy journey deftly weaves the concept of ‘heritage’ and ‘trust’, with its signature Heritance cuisine which is designed around Sri Lanka’s spice heritage, herbs and abundance of local food.
In 2011, Heritance Ahungalla won the best five-star resort trophy during the 2010 Sri Lanka Tourism Awards. Heritance Ahungalle’s roll of honour also includes efforts to conserve energy and preserve the ecological balance around its stunning property. In 2011, the hotel won a Bronze Flame award at the 2011 Sri Lanka National Energy Efficiency Awards.
In 2012, the culinary team made a $35 million ‘Pirate’s Fantasy’ cake that was decorated with some of Sri Lanka’s most expensive gem stones. The cake is a contender for the “world’s most expensive cake”.
The culinary team has also won multiple awards at culinary art competitions including the Best Hotel Team and Best Culinary Team in Sri Lanka after competing against both international and domestic star class hotels at the 14th Culinary Art Competition held in 2011.
Malin Hapugoda, the Managing Director of Aitken Spence Hotels said the group is acutely aware of the role tourism plays to aggravate global warming and environmental degradation.
“Heritance Ahungalla’s energy management system, focuses on effectively managing energy consumption without compromising the guest comfort. It also helps the hotel to meet the current and future mandatory energy efficiency targets and requirements of greenhouse gas emission reduction legislations,” Hapugoda said. Heritance Ahungalla was recently certified for Energy Management System ISO 50001:2011 and is the first resort in the world to receive the said certification.  To minimise social risk in the environment the hotel operates, Heritance Ahungalla offers internships that also helps to build community relations. The hotel donates generously to the local community particularly to help children and elder care programmes.

Reported in Dailyft
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...by i3gconsultants@ 08:07:43 on 2012-07-07

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