Sri Lankan shares end little changed

(Reuters) - Sri Lankan shares ended little changed on Tuesday as gains in beverage stocks were offset by losses in diversified holdings, while expectation of a rate cut at the central bank's policy review this week boosted sentiment, stockbrokers said.

The main stock index rose 0.31 points to 6,344.41, its highest close since June 6, 2013.

Continued foreign buying and expectation of an interest rate cut have boosted sentiment, and the market has been on a rising trend since late February.

The bourse saw a net foreign inflow for the 13th straight session. Foreign investors bought 56.3 million rupees ($432,400) worth of shares on Tuesday, extending the net inflow for the past 13 days to 3.97 billion rupees. They have been net buyers of 5.81 billion rupees so far this year.

Dealers said investors were waiting to see whether the weekend violence that killed at least three people and left 75 people seriously injured will continue and what impact it could have on the tourism sector.

Analysts said the market broadly expects a 50 basis point rate cut this week.

"Local interest is seen picking up with interest rates coming down and there are not much of opportunities seen for them to invest," a stockbroker said on condition on anonymity.

The central bank has reduced its key policy rates to multi-year lows, but has not yet seen any improvement in credit and import growth. March credit growth slowed to a four-year low of 4.3 percent year-on-year.

Central bank Governor Ajith Nivard Cabraal told Reuters on May 30 that the bank was creating room to cut interest rates further.

The central bank will announce its June monetary policy rates on Wednesday.

Turnover was 1.08 million rupees, in line with this year's daily average of 1.01 billion rupees.

Shares of Nestle Lanka PLC rose 1.21 percent to 1,949.40 rupees while conglomerate John Keells Holdings PLC fell 0.60 percent to 232.60 rupees. 

($1 = 130.2000 Sri Lankan Rupees) 

(Reporting by Ranga Sirilal; Editing by Subhranshu Sahu)

Sri Lanka shares close flat

June 17, 2014 (LBO) - Sri Lanka's shares closed flat Tuesday despite net foreign buying, brokers said.

The Colombo benchmark All Share Price Index closed 0.31 points higher at 6,344.41. The S&P SL20 closed 0.40 points higher at 3,521.07, up 0.01 percent.

Turnover was 1.08 billion rupees, up from 957.31 million rupees a day earlier with 93 stocks closed positive against 89 negative.

Hayleys Mgt Knitting Mills closed 1.20 rupees higher at 12.40 rupees with two off-market transactions of 282.39 million rupees changing hands at 12.50 rupees per share contributing 26 percent of the turnover.

The company also had market transactions of 105.15 million rupees contributing 10 percent of the daily turnover.

Lanka IOC closed 90 cents lower at 39.00 rupees, attracting most number of trades during the day.

Foreign investors bought 296.18 million rupees worth shares while selling 239.93 million rupees worth shares.

Nestle Lanka closed 23.40 rupees higher at 1,949.40 rupees and Distilleries closed 1.50 rupees higher at 207.50 rupees.

Dialog Axiata closed 10 cents higher at 10.30 rupees and Sri Lanka Telecom also closed 10 cents higher at 48.00 rupees.

Ceylinco Insurance closed 47.30 rupees higher at 1,399.30 rupees and Commercial Leasing and Finance closed 10 cents lower at 4.00 rupees.

Asian Hotels and Properties closed 1.50 rupees higher at 71.50 rupees and Aitken Spence Hotel Holdings closed 1.90 rupees lower at 75.00 rupees.

Carson Cumberbatch closed 3.90 rupees lower at 402.30 rupees and John Keells Holdings closed 1.40 rupees lower at 232.60 rupees.

JKH’s W0022 warrants closed 1.20 rupees lower at 61.00 rupees and its W0023 warrants closed 1.50 rupees lower at 70.50 rupees.

Ceylon Tobacco Company closed 2.90 rupees lower at 995.60 rupees.

India's Ashok Leyland receives order from Sri Lanka for 2,200 buses

June 16, Colombo: The Government of Sri Lanka has placed an order with India's Ashok Leyland for 2,200 buses in a move to revitalize the state-run bus service.

The order is one of the largest purchases by the state-owned Sri Lankan Transport Board (SLTB), as the government aims to modernize its existing fleet and significantly improve the country's public transport network, Automotive World said.

The government received Cabinet approval in March to award the contract to Ashok Leyland to supply the buses.

Accordingly, the Indian company is to supply 800 two- door, 42-seat buses at the unit price of US$ 31,100 and 1,400 semi luxury 54-seat buses at the unit price of US$ 34,100 as recommended by the Cabinet Appointed Negotiating Committee (CANC).

Ashok Leyland is expected to supply the 2,200 buses within the next six months.

According to the company with the latest order, Ashok Leyland reinforces its position as the market leader in Sri Lanka and as an important stake holder in Sri Lankan transport.

Commenting on the new order, Vinod K. Dasari, Managing Director, Ashok Leyland said, "This is a huge order especially at a time when the domestic market is just about to bounce back. This order reaffirms our strategy to substantially enhance our sales outside India."
www.colombopage.com

Sri Lanka commercial vehicle registrations down in May

By Anushika Kamburugamuwa
June 17, 2014 (LBO) - Sri Lanka's car, sports utility vehicles and motor bike registrations were up in May 2014 from a year earlier, but commercial vehicle were sharply down amid lease defaults.

An analysis of Sri Lanka's vehicle registry data by JB Securities, an equities brokerage showed that total new registrations fell 3.3 percent to 26,460 units in May 2014 from a year earlier driven down by commercial vehicles.

Registrations of three wheelers, mainly used as taxis, were down 15.8 percent from a year to 5,724 units in May. JB Securities said finance companies were tightening credit as non performing loans (NPLs) and repossessions picked up.

Mini truck were down 20 percent to 999 units, light trucks were down 20 percent 295 units and medium trucks were down 13 percent to 153 units.

Large trucks were down 41 percent to 70 units.

"The accentuated NPLs faced by finance companies in heavy truck leases is dampening demand since there are a number of repossessed vehicles coming into the market," JB Securities said in a research note.

"Some leasing firms are choosing to reschedule/restructure lease rentals since the loss on liquidation is very high."

But there was a pick-up in private car and motor cycle registrations, a trend seen for several months.

Private car registrations were up 1.8 percent to 1,965, SUV sales were up 21 percent to 404 and motor bike registrations were up 8.7 percent to 15,661.

Private car sales were dominated by hybrids where rulers have reduced taxes. Brand new cars including luxury vehicles and SUV are driven by tax slashed permits given to state workers.

In May 580 units of brand new cars were registered, down from 668 units a year earlier but in line with a month earlier. Micro branded cars, which are locally assembled with parts imported at a lower tax picked up to 172 units from 103 units in April.

Used or re-conditioned car registrations rose to 1,369 units in May 2014 from 1,262 units a year earlier.

Of that 1,115 units were hybrids.

JB Securities said financing share was about 50 percent stimulating credit growth. If high taxes on small imported cars are lowered to more reasonable levels, more economic activity and credit will be stimulated, the brokerage said in a note.

Small cars were hardest hit following tax hikes that started in 2012 in at attempt to fix a balance of payments crisis.

In Sri Lanka there is a belief among rulers and bureaucrats that imports - particularly car imports - are a cause of balance of payments trouble, which is really caused by central bank credit or printed money.

JB Securities said in the premium brands segment 14 Mercedes S-class vehicles have been registered, which could have been cars imported for a commonwealth summit meeting last year.

Printcare continues strong export-led growth

Printcare Plc, Sri Lanka’s global player in the printing and packaging industry, continued its export led growth recording a Turnover of Rs. 4,344 million for the year ended 2013/14 compared with a corresponding figure of Rs. 3,842 million for the previous year, a growth of 13%. Profit before Tax grew to Rs. 358 million in 2013/14 from Rs. 309 million in the previous year, a 16% growth.

The group achieved strong innovation driven growth in its carton, tea bags, and security print businesses. “Again, our products won all three prizes in the packaging segment of the national printing awards in 2014, endorsing our position as the most discerning packaging company in the country,” commented Group Chief Operating Officer David Jeyaraj.

The group is well positioned for growth over the next few years. Rs. 800 million investment in plant and machinery has been committed to enhance technology, improve productivity, and increase capacity, and will be a driver of growth in the medium to long term. It is expected to help maintain the company’s position as market leader and to ensure sustainable value creation for its shareholders in the long term.

“In the second quarter of the 2014-15 financial year, we will bring on stream sophisticated new technology, which will provide an enormous boost to the packaging industry. Our customers will be able to access complex and innovative packaging solutions, which previously were neither available to, nor financially viable for them. It is our belief that our customers’ hand will be greatly strengthened by these new offerings, and as a result, their products will exceed the sophistication of competitor products on the supermarket shelves,” commented Chairman Merrill Fernando.

The group has also just concluded a joint venture agreement with a US based company, currently one of the world’s leading suppliers of branded packaging and trims to the apparel industry, which should provide it with a boost in its commitment to further strengthen its product portfolio in the apparel segment.

The Group also uses its existing digital media expertise to create content that will engage and inspire children to learn. ‘Candela’ is a new e-learning product, which is able to bring modern learning techniques to children regardless of the social and economic status of the child. It has been awarded the E-Swabhimani Award by the Information and Communication Technology Agency of Sri Lanka as well as the National Best Quality Software Gold Award.

Printcare was also recognised as one of the 15 best companies to work for by the Great Place to Work Institute in 2014. “We place strong emphasis on our culture, as we believe it is the key ingredient that drives our ability to deliver great client service and to generate sustainable financial and superior operational performance. We consider ourselves to be on par with any printing factory in the world. The relationship we have with our workforce is very special and all our employees work as if the company is their very own,” commented HR General Manager Gamini Jayawardene.

The only printer selected as a Business Super brand, Printcare is a leader in the printing and packaging industries. For over three decades Printcare has been playing a pivotal role in developing Sri Lanka’s pre-packaged tea industry by providing exporters with high quality packaging.

Well known for being the global leader in tea bag tags and envelopes, supplying the world’s most reputed tea brands, Printcare is now a diversified Group which is also involved in printing and packaging for the FMCG and Apparel sectors, security printing for the Lotteries and Telecom industries, printing and binding for the Publishing industry, and specialised digital media for the Education industry.
www.ft.lk