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Morning Notes
18 November 2014
Market Diary
ASI Outlook (based on charts)
Today:
Central Bank of Sri Lanka - Monetary Policy Review – November 2014
Chevron Lubricants Lanka - Dividend Payment Date (LKR 5.50 per share)
Richard Pieris Exports - Dividend Payment Date (LKR 6.40 per share)
Royal Ceramics Lanka - XD date (LKR 1.00 per share)
Lanka Tiles - XD date (LKR 2.00 per share)
Ceylon Tobacco Company - XD date (LKR 11.10 per share)
Printcare - XD date (LKR 0.45 per share)
Lanka Walltiles - XD date (LKR 2.00 per share)
Sanasa Development Bank - Right Issue – Provision of Allotment
Comments (short term trend): ASI is trading near a moderate
resistance level. Several other technical indicators suggest a
possible consolidation in the near term. Cautions approach is
advised.
Tomorrow:
Sanasa Development Bank - Right Issue – XR Date
Corporate Announcements
Interim Financial Statements 30-09-2014 - Blue Diamonds Jewellery Worldwide
(BLUE), Industrial Asphalts (Ceylon) (ASPH), Vallibel One (VONE), Swadeshi Industrial
Works (SWAD), Agalawatte Plantations (AGAL), Radiant Gems International (RGEM),
Tess Agro (TESS), Serendib Engineering Group (IDL), Kotmale Holdings (LAMB),
Kalpitiya Beach Resort (CITK), Citrus Leisure (REEF), Hikkaduwa Beach Resort (CITH),
BRAC Lanka Finance (NIFL), Mackwoods Energy (MEL), Abans Electricals (ABAN),
Waskaduwa Beach Resort (CITW), Cargills (Ceylon) (CARG).
Richard Pieris and Company – Interim Dividend of LKR 0.25 per share:
XD – 26th Nov 2014
Payment date – 04th Dec 2014
Lion Brewery (Ceylon) – Debenture Issue of LKR 2bn:
Rated, unsecured, redeemable debentures for an initial issue of 10mn with an option to
issue up to a further 10mn debenture at an issue price of LKR 100.00 each.
Issue Rating – AA-(lka) – Fitch Rating
Issuer Rating – AA-(lka)/Stable – Fitch Rating
Date of opening of the subscription – 28th November 2014
Date on which the prospectus would be delivered – 19th November 2014
Expolanka Holdings – Divestment of 8 companies to Aberdeen Holdings:
Expolanka Holdings announced that company has fully divested its investments in
companies such as Expolanka Teas (Pvt) Ltd, Expolanka Plantations (Pvt) Ltd, World
Spices & Teas (Pvt) Ltd, Neptune Holdings (Pvt) Ltd, Castle Commercial (Pvt) Ltd,
Expolanka Pharmaceuticals (Pvt) Ltd, Bio Extracts (Pvt) Ltd and Saffron Foods (Pvt) Ltd
for a total consideration of LKR 740mn to Aberdeen Holdings (Pvt) Ltd. Meanwhile
company entered into an agreement to sell its land located in Avissawella Road to
Aberdeen Holdings (Pvt) Ltd for a consideration of LKR 421mn. (Refer attachment for
more details)
Dealings by Directors
Company
Purchase
Sale
Trade Finance &
Investments
Director
Date
W.A.T.Fernando
11 Nov
(Close family
member)
Quantity
5,000
Price (LKR)
32.20-32.30
Local Business News
Sri Lanka EPF Share Portfolio’s Unrealized Profits passes Rs14Bn mark: Sri Lanka's
Employee's Provident Fund’s unrealized profits of the share portfolio of investments in
equity passed 14 billion rupees on Novemebr this year, Central Bank said in a media release.
The bank says the “mark to market” value of EPF’s investments in equities as at 14
November 2014 comfortably exceeded 14 billion rupees, in the background of the
favourable equity market performances. The EPF has also realized 6.7 billion rupees by way
of dividends, debenture interest and capital gains from its investments in equities and
corporate debt instruments, to date this year. During the first half of 2014, there were
allegations levelled at the Employee Provident Fund or EPF that its share portfolio had
suffered large unrealized losses during the period spanning early 2012 to early 2014 the
bank said in an earlier press statement in September. (LBO)
Bourse draws highest-ever foreign inflows: In a year that has proved to be recordbreaking, the Colombo Stock Exchange has reached yet another milestone in 2014 by
recording its highest-ever inflow of foreign investment into the equity secondary market.
Foreign purchases in 2014 as at 14 November was Rs. 95,083.8 million, surpassing the
previous highest foreign purchases of Rs. 92,425.5 million recorded in 2010. The CSE in
association with the Securities and Exchange Commission (SEC) initiated a strategy to attract
foreign investors to the market over the past two years. (DFT)
ASI - Pivot Points
Previous day’s close
Pivot Point
R1
R2
ASI - Moving Averages
07 day
14 day
21 day
7,524.00
7,525.12
7,545.59
7,567.18
7,458.06
7,382.37
7,325.88
S1
S2
7,503.53
7,483.06
50 day
100 day
200 day
7,266.02
7,008.58
6,570.88
Short-term Technical Indicators
RSI
74
MACD
The MACD line has crossed the signal
line from below.
Global Equity Indices
S&P 500 (USA)
FTSE 100 (UK)
NIKKEI 225 (Japan)
Shanghai Comp (China)
BSE Sensex (India)
KSE All (Pakistan)
MSCI frontier markets
MSCI emerging markets
Index
2,041.32
6,671.97
17,258.97
2,464.42
28,177.88
31,702.79
646.90
990.81
Change
+1.50
+17.60
+285.17
-9.59
+131.22
+358.72
+0.20
-1.91
% Change
+0.07
+0.26
+1.68
-0.39
+0.47
+1.14
+0.03
-0.19
Global Business News
Gold Holds Decline From Two-Week High as Dollar Gains,
Oil Drops: Gold held a retreat from the highest level in two weeks
after the dollar strengthened and energy prices dropped, curbing
demand for the metal as an investment. Silver, platinum and
palladium declined. Bullion for immediate delivery traded at
$1,184.72 an ounce at 9:12 a.m. in Singapore from $1,186.57
yesterday, Bloomberg generic pricing showed. The metal yesterday
rose to $1,194.38, the highest price since Oct. 31, before erasing
gains to end 0.2 percent lower. (Bloomberg)
Oil Drops as Investors Weigh OPEC Decisions Amid
Weakened Demand: West Texas Intermediate and Brent fell for
a second day as investors weighed the likelihood of an output cut
by OPEC when the group meets next week amid signs of weakening
global demand. Futures dropped as much as 0.5 percent in New
York. Venezuela, a member of the Organization of Petroleum
Exporting Countries, met with Russia to discuss ways to support
falling oil prices, according to the Latin American nation. A large
output cut by OPEC isn’t in the group’s interest because it’s likely to
bolster U.S. shale production, according to Goldman Sachs Group
Inc. (Bloomberg)
Modi Seeks to Accelerate India Trade Pact Talks With
Australia: Prime Minister Narendra Modi said he wants to speed
up negotiations on a comprehensive economic partnership
agreement with Australia as he seeks better access for Indian
businesses to the nation’s markets. “This is a natural partnership
arising from our shared values, interests and strategic maritime
location,” Modi told reporters in Canberra today before addressing
the Australian Parliament. Modi’s address comes a day after China
and Australia completed negotiations on a free-trade agreement
and President Xi Jinping told parliament he wants greater security
ties with Australia. (Bloomberg)
Morning Notes
Local Business News
Sri Lanka Central Bank issues a new series of 10 rupee coins: Sri Lanka’s Central Bank
yesterday issued a new series of 25 coins of 10 rupee denomination in order to recognize and
portray unique characteristics and/or iconic landmarks and/or special features of each
administrative district of Sri Lanka. Sri Lanka has 25 administrative districts. The first set of
coins presented by the Governor of the Central Bank of Sri Lanka, Nivard Cabraal to President
Mahinda Rajapaksa yesterday in an event at Central Bank premises. The new coins would be
released via the banks and the Central Bank Provincial Offices for circulation, the bank said.
(LBO)
A shift in momentum witnessed in secondary bond markets during the week: A shift
in momentum was witnessed in secondary bond markets during the week ending 14
November as the overall yield curve witnessed a parallel shift upwards for the first time in
four weeks. During the week, the weighted averages of the 182 and 364 day bills remained
steady at 5.84% and 6.00% respectively against market expectation with the 364 day bill
holding steady for a fifth consecutive week. The actively quoted maturities of 1 July 2019, 1
July 2022 and 1 January 2024 increased from weekly lows 6.98%, 7.50% and 7.73%
respectively at the beginning of the week to highs of 7.15%, 7.80% and 8.00% towards the
later part of the week. In addition activity was witnessed on the two 2018 maturities (i.e. 1
April 2018 and 15 August 2018) and the 1 May 2021 maturity as well, within the range of
6.80% to 7.00%, 6.88% to 7.05% and 7.30% to 7.40% respectively. (DFT)
18 November 2014
Global Business News
Rupiah Strengthens Most in Three Weeks After Fuel Prices
Raised: Indonesia’s rupiah rose the most in three weeks and
shares advanced after President Joko Widodo raised subsidized
fuel prices, freeing up funds for capital spending in an economy
growing at the slowest pace since 2009. The price of gasoline was
increased by 2,000 rupiah ($0.16) a liter to 8,500 rupiah and that
of diesel to 7,500 rupiah a liter from 5,500 rupiah, Widodo said at
a press conference late yesterday in Jakarta. Prior to the increase,
Indonesia had earmarked 276 trillion rupiah for fuel subsidies in
the 2015 budget, or 13.5 percent of expenditure. (Bloomberg)
Water supply connections up by 100 percent: With high economic development
activities the demand for new water supply connections has been increased by 100 percent.
Therefore the government is now in the process of implementing an ambitious plan to cater to
that demand, Minister of Water Supply and Drainage Dinesh Gunawardena said. “In 2005 the
access for pipe borne water or water supply connections were 900,000 and with the high
economic development it has now reached 1.8 million water connections in the country,”
Minister Gunawardena said at the third Round Table Conference of the Chamber of
Construction Industries, held recently at Hotel Taj Samundra Colombo. Minister Gunawardena
participated as the chief guest of the event. (DN)
African power warms up for historic trade triathlon with Sri Lanka: The newest
entrant to Africa’s top ten list called for renewed trade with Sri Lanka on 12 November-and
the yearning for trade renewal was such, it wants a historic feat of more than three trade pacts
with Sri Lanka in one go by next year itself! “We are looking forward to more trade interaction,
and also a delegation to Nairobi from Sri Lanka next year. By the time of your visit to Nairobi
we are looking forward to conclude current discussions on three agreements being discussed
and to sign them” said (HE) Amb. Nelson Ndirangu Ogn (Director, Economic Affairs and
International Trade of Kenyan Ministry of Foreign Affairs, Nairobi) on 12 November in
Colombo. (ADB)
Packer faces a new set of hurdles in SL: James Packer’s Crown group faces a new set of
hurdles in his quest to open a $US400 ($457) million casino in Sri Lanka after threats by the
country’s president that new gaming levies will be imposed should he win the upcoming
January elections, the Age news agency reported. Sri Lankan President, Mahinda Rajapaksa
announced new funding measures in his latest budget. This includes a $100 entrance fee and a
10 per cent gaming levy on three proposed casino resorts, including one venture that includes
Mr Packer’s Crown Ltd. Crown confirmed that it is still in discussions with the Sri Lankan
government and did not comment further. Mr Packer has been actively pursuing clearance for
his proposed mixed-use resort development in Sri Lanka. In May this year the government
gave approval for all three projects to go ahead, without the casinos, and also granted 10-year
tax breaks – despite strong opposition. (ADB)
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purposes of information do not purport to be complete description of the
subject matter referred to herein. In preparing this report care has been
exercised to collect information from sources which we believe to be reliable
although we do not guarantee the accuracy and completeness thereof. Lanka
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employees shall not in any way be responsible or liable for loss or damage
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Lanka Securities Research