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Morning Notes
19 December 2014
Market Diary
ASI Outlook (based on charts)
Today:
Central Finance Company - Dividend payment date (LKR 0.85 per share)
Alliance Finance Company – Debenture Issue – Opening for subscription
Monday:
Chevron Lubricants Lanka – Dividend payment date (LKR 5.50 per share)
Corporate Announcements
John Keells Holdings – Project funding obtained by Waterfront Properties:
Waterfront Properties (Pvt) Ltd, a subsidiary controlled by the company, has entered
into a USD 445mn syndicated project development facility with Standard Chartered
Bank.
Sampath Bank – Debenture Issue:
The debentures of the above bank will be listed on 19th December 2014.
Debenture Type
Security ID
ISIN Number
5 Year Fixed Rate Debentures (8.25%)
payable annually
SAMP-BD-14/12/19C2271-8.25
LK0090D22713
5 Year Fixed Rate Debentures (8.10%)
payable bi-annually
SAMP-BD-14/12/19C2273-8.10
LK0090D22739
PCHH Holdings – Extension of Mandatory offer made by Adam Investments:
AINV has decided to extend the given offer period for mandatory offer. This is due to the
delay of PCHH to forward views, comments and advice of the board of directors PCHH
on the offer and the independent advisor’s report, by the board of directors of the
offeree. Therefore the offer period will be extended for a further period of 5 market
days from 18th December 2014. Accordingly please be informed that the offer will be
kept open till 4.30pm on 26th December 2014 for acceptance.
Siyapatha Finance – Debenture Issue:
Company has received applications for over LKR 500mn for the debenture issue and
accordingly the initial issue has been oversubscribed. Siyapatha Finance Limited has
informed the registrars that they will be exercising the oversubscription option and the
issue closed on 18th December 2014 as per the prospectus.
Orient Finance – Debenture Issue:
Company has received applications for over LKR 1bn for the debenture issue and
accordingly the issue has been oversubscribed. Therefore, the issue closed on 18 th
December 2014 as per the prospectus.
Abans – Debenture Issue:
Company has received applications for over LKR 2bn for the debenture issue and
accordingly the issue has been oversubscribed. Therefore, the issue closed on 18 th
December 2014 as per the prospectus.
Asian Alliance Insurance – Segregation of general insurance business:
AAIC has obtained all requisite approvals for the segregation of its general insurance
business from its life insurance business. (Refer attachment for more details).
Dealings by Directors
Company
Purchase
Lion Brewery
Director
Date
Carson
Cumberbatch
17 Dec
Quantity
599,737
Price (LKR)
605.00
Sale
Local Business News
Ceramic and Glass Council wants price of Furnace Oil reduced: Sri Lanka Ceramic
and Glass Council appeals to Government asking a price reduction in furnace oil due to
international price reduction of crude oil, the Council said in a media release. The council
said the industry was heavily dependent on all three energy sources -electricity, furnace oil
and LPG. “The future for the Ceramics and Glass industry in Sri Lanka is greatly dependent
on energy,” said Mahendra Jayasekara, President of the Sri Lanka Ceramic and Glass Council.
“On the supply side, Sri Lanka does not have the oil and natural gas deposits at its disposal as
some of its Asian competitors such as Indonesia, India and Malaysia. Thus we are dependent
on imports to meet most of our energy needs,” he said. Jayasekara said the high energy costs
over
30 the past few years especially the sharp furnace oil price increases, which took place
between April 2011 to Feb 2012 (From Rs.40/- to Rs.90/- per liter) had affected the industry
adversely. “Although Petrol, Diesel and LPG prices were reduced recently Furnace Oil prices
remain unchanged,” he said. “The Ceramic and Glass Industry has reached a point where the
negative effects are seen in the form of loss of orders and the industry is being saddled with
excess capacities. (LBO)
Comments (short term trend): ASI is trading near lower
Bollinger level. Several other technical indicators suggest a
possible uptrend in the near term.
ASI - Pivot Points
Previous day’s close
Pivot Point
R1
R2
ASI - Moving Averages
07 day
14 day
21 day
7,230.52
7,219.75
7,242.73
7,254.95
7,231.15
7,239.42
7,248.00
S1
S2
7,207.53
7,184.55
50 day
100 day
200 day
7,298.13
7,174.24
6,701.03
Short-term Technical Indicators
RSI
46
MACD
The MACD line has crossed the signal
line from above.
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
2,061.23
6,466.00
17,540.12
3,077.12
27,126.57
30,827.45
569.23
935.12
Change
+48.34
+129.52
+330.07
+19.60
+416.44
+160.31
+6.63
+16.97
% Change
+2.40
+2.04
+1.92
+0.64
+1.56
+0.52
+1.18
+1.85
Global Business News
Oil Rebounds From 5-Year Low as Market Most Volatile
Since 2011: Oil rebounded from the lowest closing price since
May 2009 amid the highest trading volatility in more than three
years as Saudi Arabia’s oil minister said he’s optimistic about global
demand in the future. West Texas Intermediate climbed as much as
2.6 percent in New York, trimming a fourth weekly drop. A
measure of expected futures movements and a gauge of options
value was at the highest level since October 2011, data compiled by
Bloomberg show. Saudi Arabia and OPEC would find it “difficult, if
not impossible” to give up market share by cutting supply,
according to Oil Minister Ali Al-Naimi. (Bloomberg)
Gold Set to Halt Two-Week Advance as Fed Boosts Dollar,
Stocks: Gold headed for the first weekly decline in three as the
Federal Reserve moved closer to raising borrowing costs amid a
slump in energy prices. Bullion for immediate delivery traded at
$1,196.31 an ounce at 8:41 a.m. in Singapore from $1,198.57
yesterday and is 2.2 percent lower this week, according to
Bloomberg generic pricing. The metal slid to a two-week low of
$1,183.89 on Dec. 17 after the U.S. central bank dropped a pledge
to hold rates low for a considerable time while promising to be
patient. Gold retreated as a rally in global equities and the dollar
damped demand for an alternative investment. (Bloomberg)
Wheat Prices Jump to Highest Since May as Russia Slows
Shipments: As the ruble’s collapse increases domestic costs for
bread, Russia is taking steps to stem its grain shipments and
sending wheat prices in Chicago to the highest since May. The
nation is slowing down shipments by denying certificates that
grain sellers and buyers need after sanitary inspections, a grainexport lobby said yesterday. The country’s “main goal is to
replenish the domestic market,” Deputy Prime Minister Arkady
Dvorkovich’s spokeswoman, Aliya Samigullina, said by phone from
Moscow today.
Morning Notes
Local Business News
SLCTIP eyes over US$ 1B Chinese Investments: The Sri Lanka China Trade and
Investment Promotion Chamber (SLTIP) announced upcoming Chinese investments into Sri
Lanka in view of achieving over US$ 1 billion worth of investments into Sri Lanka in 2015.
Some of the investments include an investment of US$ 200 million for the construction of
luxury and semi luxury apartments in Rajagiriya, US$ 500 million into a hotel project in
Wattala, a US$ 20 million investment for the production of saline and a US$ 500 million
investment for the production of building materials. “Our plan is to aggressively work to hit
the US$1 billion in 2015 and the forthcoming FTA signing will generate new exports. A setback
would be not acquiring proper market research but chambers such as us could fulfill these
requirements of studying the demands that economies such as China requires,” SLCTIP
Director General, Mohan Perera said. “By mid-2015, we might receive approval to export
tropical fruit such as plantains, pineapple and papaw. Another potential is canned king
coconut juice,” Aluvihare acknowledged. (DN)
19 December 2014
Global Business News
Cheap oil can benefit Asia says ADB: The growth outlook for
developing Asia remains steady, even though momentum slowed
in the second half of 2014, but the declining oil prices represent a
golden opportunity for many beneficial reforms, the Asian
Development Bank (ADB) says in a new report. In a supplement to
its Asian Development Outlook 2014 Update, ADB forecasts Gross
Domestic Product (GDP) growth for the region of 6.1% in 2014,
down from 6.2% expected in September, and 6.2% in 2015, down
from 6.4%. Developing Asia, comprising the 45 ADB developing
member countries, grew 6.1% in 2013. Growth projections for
Central Asia, East Asia, and Southeast Asia are revised downward.
There is no change for South Asia. (DFT)
Industrial Asphalts unveils full range of colour anti-corrosive paints: History is being
made by Industrial Asphalts (Ceylon) PLC by introducing, for the first time in Sri Lanka, the
full range of colour anti-corrosive paints. Up to now anti-corrosive paints were available only
in four basic colours. Britex, the protective coatings range from Industrial Asphalts (Ceylon)
PLC – IAC – has launched a full range of coloured anti-corrosive paints for the Sri Lankan
market. This pioneering move is a result of the new restructuring being carried out at IAC. The
company’s newly-established product development team had carried out a detailed study of
the products available in the market to identify and meet the customers’ evolving
requirements. (DFT)
SL gets US$ 102M FDI for Colombo Port Project: 'Colombo Port City (CPC),' within the
first year of signing agreements with the country's investment promotion agency, has invested
US$ 102 million as at end October this year out of its US$ 1,300 million commitment to Sri
Lanka. The project was on track according to the Board of Investment (BOI), and land
reclamation was taking place. The BOI hopes that the project would help the country achieve
its FDI goals set for the coming years, after failing to meet targets during the last two years.
Investment Promotion Minister Abeywardena has already begun marketing CPC. He implored
investors to explore new business vistas in the upcoming man-made island, in a bid to
improve FDI to the county. China Communication Construction Company (CCCC) signed
agreements with the BOI last year at the Commonwealth Heads of Government Meeting to
invest US$ 1,300 million, to reclaim 233 hectares of land off Colombo. An eight year exemption
on VTA, PAL, Excise Duty, CESS and NBT has been given to CCCC, on top of which an eight year
tax break to China Harbour Engineering Corporation for profits and income generated in the
building of the artificial island have also been given. (CFT)
SriLankan Airlines' second A330-300 arrives: SriLankan Airlines, will take delivery of its
second brand new A330-300 arriving at the Colombo International Airport today, flying from
Toulouse, France. It joins the airlines' existing fleet of A320, A321, A330-200 and A340-300
aircraft. SriLankan will take delivery of a further five A330-300s."We have a reputation as a
global leader in service, comfort, safety, reliability and punctuality; all of which are qualities
reflected in selecting the A330," said Kapila Chandrasena, CEO of SriLankan Airlines. "This
addition of the A330-300 to our family will enable us to drive our offering to new heights."
(DN)
Rupee, interest rates to be capped till polls day: Central Bank of Sri Lanka's (CBSL's)
rejection of more than half the bids received at Wednesday's weekly Treasury (T) Bill primary
auction is a sign that rates are once more looking up, sources told Ceylon FT. Though CBSL had
up for reissue maturing T bills of Rs 12 billion, it accepted bids worth only Rs 5.5 billion, with
the weighted average yield of the benchmark one year T bill increasing by one basis point (bp)
to 5.99%, while that of the six months, which was the other tenure on offer, stagnating at
5.83%. Imports are driven by the prevalence of a low interest rate regime, complemented by
the reduction in import taxes on a variety of items, not least vehicles. This is driving up
demand. They said that the present situation was not dissimilar to what took place 4½ years
ago, in the middle of 2010, when GoSL at that time too reduced vehicle taxes. "The problem is
Sri Lanka is an import driven economy," a banker said. So, when the rupee is depreciated,
everyone is affected. (CFT)
Former SEC DG at DDFC: Deshodaya Development Finance Company Ltd. (DDFC) in its
consolidation drive has appointed Channa de Silva as its Deputy Chairman, said a press
release.He was also appointed as George Steuart Finance PLC Managing Director, subject to
Central Bank of Sri Lanka (CBSL) approval.De Silva was the former Managing Director of
Delmege Group, prior to taking responsibilities at DDFC. He was also the former Securities and
Exchange Commission of Sri Lanka (SEC) Director General and also functioned as Board of
Investments of Sri Lanka (BOI) Executive Director. De Silva has previously served as board
director in many public sector organizations, including the Insurance Board of Sri Lanka
(IBSL), the now defunct Public Enterprise Reform Commission (PERC), Construction
Guarantee Fund, National Council for Economic Development, Sri Lanka Accounting and
Auditing Standards Monitoring Board (SLAASMB) and CBSL's National Payment Gateway.
(CFT)
Lanka Securities Research
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subject matter referred to herein. In preparing this report care has been
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