Sri Lankan shares edge down to one-week low; Keells leads

(Reuters) - Sri Lankan shares edged down to hit a one-week closing low on Thursday in moderate volume, led by a fall in shares of market heavyweight John Keells Holdings .

However, analysts said the index would be on a slow rising trend this year due to lower interest rate.

The main stock index fell 0.07 percent or 4.41 points to 6,313.20, its lowest since June 11. It hit a more than one-year high on Tuesday.

"We expect the index to gain this year due to lower interest rates," said Danushka Samarasinghe, chief operating officer at Softlogic Finance. "But the gain will be slower and sticky because we don't see a growth in profits in businesses."

The bourse saw a net foreign inflow of 105.9 million rupees, extending the inflows to 5.92 billion rupees ($45.47 million) so far this year.

The market has been on a rising trend since late February due to the continued foreign buying and lower interest rates. It fell on Wednesday after the central bank held the key policy rates steady, though some had expected a rate cut.

Dealers said investors were waiting to see the impact of weekend violence that killed at least three people and left 75 people seriously injured on the market and tourism sector.

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. April private sector credit growth contracted 3.3 percent year-on-year, its worst performance since January 2010.

Turnover was 683.6 million rupees, less than this year's daily average of 1 billion rupees.

Shares of Conglomerate John Keells fell 2.20 percent to 222.10 rupees.

($1 = 130.2000 Sri Lankan Rupees) 

(Reporting by Shihar Aneez; Editing by Anand Basu)

Sri Lanka stocks close down 0.1-pct

June 19, 2014 (LBO) - Sri Lanka's stocks closed 0.07 percent lower with index heavy John Keells Holdings losing ground despite net foreign buying, brokers said.

The Colombo benchmark All Share Price Index closed 4.41 points lower at 6,313.20, down 0.07 percent. The S&P SL20 closed 8.82 points lower at 3,490.67, down 0.25 percent.

Turnover was 683.59 million rupees, down from 713.88 million rupees a day earlier with 67 stocks closed positive against 106 negative.

Foreign investors bought 248.45 million rupees worth shares while selling 142.52 million rupees worth shares.

Index heavy John Keells Holdings closed 5.00 rupees lower at 222.10 rupees, contributing most to the index drop for the second consecutive day while attracting most number of trades during the day.

The diversified conglomerate also had three off-market transactions of 102.39 million rupees changing hands at 233.20 rupees per share contributing 15 percent of the daily turnover.

JKH’s W0022 warrants closed 90 cents lower at 59.10 rupees and its W0023 warrants closed 40 cents lower at 69.10 rupees.

Commercial Bank closed 30 cents higher at 135.00 rupees with market transactions of 103.58 million rupees changing hands at the same price per share contributing 15 percent of the turnover.

Ceylon Tobacco Company closed 5.00 rupees lower at 990.00 rupees and Nestle Lanka closed 52.00 rupees higher at 1,975.00 rupees.

Hayleys closed 6.80 rupees lower at 292.20 rupees and Dialog Axiata closed 20 cents higher at 10.40 rupees.

State to take over Sri Lanka listed company land

June 19, 2014 (LBO) - Dunamis Capital Plc said property valued at over 500 million rupees in a popular hill resort is to be taken over by the state.

The firm said in a stock exchange filing that the property in Upper Lake Road is 76 percent owned by the company and had a carrying value of 536 million rupees. Another 120 million rupees in interest had also been spent.

It had received an acquisition order dated June 10.

Two listed firms have been expropriated by the state in its entirety in the recent past and no compensation has yet been paid even to minority shareholders.

Related News:

http://www.cse.lk/cmt/upload_cse_announcements/3391403058477_.pdf

Hayleys Fibre gross profit declines

By Sanath Nanayakkare

Hayleys Fibre PLC turnover increased to Rs.535 million compared to Rs. 487 million the previous year. However, its profit before tax was Rs.28.5 million, down from Rs. 30.2 million the previous year, Hayleys Fibre PLC Annual Report 2013-14 said.

According to the report, Gross Profit of the company last year which stood at Rs.50.88 million decreased to Rs. 34.39 million this year.

Hayleys Chairman A.M. Pandithage reviewing the company’s Annual Report said the scarcity of fibre in the global market affected the bottom line.

"The global demand for fibre products increased during the year with new markets opening up. However, the continued demand for fibre imports to China plus the scarcity of fibre in the market, resulted in raw material prices escalating impacting profitability," he said.

"Nevertheless, with the present demand for environmental-friendly renewable resources being on the increase, the company is confident coir fibre products will continue to grow having a competitive edge."

"Therefore, the company will further consolidate its business in existing markets and drive new product development, and will continue our quest to achieve operational efficiencies to move forward as a leaner and more productive organization," he further said.

Hayleys Fibre PLC Managing Director H.C.S. Mendis commenting on the company’s fiscal performance said, "Despite being a challenging year, Hayleys Fibre has been resilient and will continue to expand implementing new product, marketing and process development strategies.

"Competing producers in other countries influenced market dynamics in the local industry. The relevant authorities must make conscious efforts to promote the use of new technology to suppliers, millers and value added exporters on a priority basis," he added.
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SG Holdings concludes mandatory offer; now owns over 51% stake in Expo

SG Holdings, Japan completed its investment in Expolanka Holdings by acquiring a controlling stake in the group amounting to more than 51% of issued share capital with the close of the mandatory offer period ending on 17 June.

In May this year, SG Holdings entered into an agreement with the top five major shareholders of Expolanka Holdings PLC to buy a 30% stake of the company at Rs. 10.70 per share. SG Holdings, the holding company for the Sagawa Group, is a leading logistics company in Japan with a presence in the Asian region. SG Holdings Representative Director Nobuaki Kondo said: “By unifying Expolanka’s freight forwarding global network with SGH Group’s operation bases in Japan, East Asia and ASEAN, our international transportation services will further broaden. We have complete faith in the current management team including Hanif Yusoof as CEO who plans to continue at the current position, and our Group intends to entrust the business operation of the company to this management team.”

Expolanka Holdings and SGH group have considerable expertise in apparel freight forwarding. Both groups will unify their collective strength to provide excellent services to the specialized requirements of the apparel industry. Expolanka Holdings PLC Group CEO/Director Hanif Yusoof said: “This strategic move will help us move to the next level in the international arena. We will be able to leverage on the fresh network strength to offer even better services to our customer base.”

SG Holdings currently owns 24 locally-incorporated subsidiaries in 10 countries outside Japan, including China, Vietnam, and Singapore. The Group has identified strengthening their overseas operation in the area of global freight forwarding as one of the core pillars.

Freight and logistics is a core business of Expolanka Holdings which has over the last three decades established itself as a premier provider of freight forwarding and supply chain management solutions in Sri Lanka and the Indian subcontinent. With a cluster of companies focusing on multi-modal freight and logistics solutions, Expolanka has a global footprint spanning four continents and 18 countries.


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Tyre market leader CEAT zooms in on motorcycle segment

Achieves 20% market share and plans further expansion of capacity and range

CEAT Kelani Holdings, the company that manufactures half of Sri Lanka’s tyre requirements, has reported strong sales of motorcycle tyres since December 2013, enabling the company to end the financial year with a market share of 20% in the segment.

The company has added six new sizes of motorcycle tyres to its portfolio over the past six months and said it plans to add another seven before the end of 2014, by which time it will offer 25 of the most popular sizes in the local market.

“We now sell more than 13,500 motorcycle tyres per month, and are looking at investing in expansion of capacity and range to further grow our market share,” the company’s Managing Director N.C. Venugopal said.

A Rs. 11 billion company (2013-14), CEAT has accounted for nearly 50% of the country’s tyre requirements since the second quarter of the concluded financial year, contributing to a massive saving of foreign exchange for Sri Lanka through import substitution. The brand currently has market shares of 57% for tyres in the Truck/Light Truck category, 32% in radials, 46% in 3-Wheeler and 73% in the agricultural segments.

In November last year, as part of the company’s renewed focus on the two-wheel segment CEAT Kelani introduced five new tubeless nylon-cased motorcycle tyres with unique new tread compounds and trendy directional patterns. These exciting new tyres are in the sizes of 90/90-17 (6PR), 3.00-17 (6PR), 3.00-18 (6PR), 100/90-18 (6PR) and 3.50-10 (4PR). They fit popular motorcycle models such as TVS Apache RTR, Bajaj Pulsar, Discovery and Platina, TVS Star Sport, Hero Glamour, Honda Unicorn, Hero Karisma, Honda Dio and Hero Pleasure.

This was followed by the launch in March this year of the tube type 2.75-14 (4PR) tyre for the Honda MD90, popularly known in Sri Lanka as the ‘Thapal 90’.

“All of these tyres are specially designed for excellent handling and grip, better cornering stability and durability, and represent the design and production values that have made CEAT the leading tyre brand in Sri Lanka in the radial and commercial vehicle segments,” Venugopal added.

A global tyre brand present in 110 countries and now headquartered in India, CEAT is an acronym that stands for Cavi Electrici Affini Torino, or Electrical Cables & Allied Products of Turin, with origins that date back to 1924 in Italy. A National Business Excellence Award winner in 2010, 2011, and 2012 and a National Quality Award winner in the ‘Manufacturing – Large’ category in 2013, CEAT – Kelani Holdings is a successful Indo-Sri Lanka joint venture between the RPG Group of India and Kelani Tyre – Sri Lanka. The company operates three manufacturing units in Sri Lanka and employs a workforce of 1,000 people.
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