1. business and industrial
2. energy
3. oil

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Morning Notes
11 February 2015
Market Diary
ASI Outlook (based on charts)
Today:
Textured Jersey Lanka - XD Date (LKR 0.50 per share)
John Keells Holdings - XD Date (LKR 1.00 per share)
Tomorrow:
No Alerts
Corporate Announcements
Interim Financial Statements 31-12-2014 - Central Finance Company (CFIN), Tal Lanka
Hotels (TAJ), Trade Finance & Investments (TFIL), The Fortress Resorts (RHTL), Royal
Ceramics Lanka (RCL), Millennium Housing Developers (MHDL), The Nuwara Eliya Hotels
Company (NEH), The Lighthouse Hotel (LHL), A I A Insurance Lanka (CTCE), Piramal Glass
(GLAS).
Vidullanka – Acquisition of 15% stake by Aberdeen Holdings:
Aberdeen Holdings acquired approx. 73mn shares (15.3% of issued shares) of Vidullanka at
a price of 6.00 per share from Dr. T. Senthilverl on 10th February 2015.
Millennium Housing Developers – Acquisition of 10% stake by Mr.V.R.Ramanan:
Mr.V.R.Ramanan has purchased approx. 13mn shares amounting to 10% issued shares of
Millennium Housing Developers at a price of LKR 6.70 per share from Nawaloka
Construction Company (Pvt) Ltd on 10th February 2015.
CT Holdings – Interim Dividend of LKR 0.80 per share:
XD – 20th Feb 2015
Payment date – 03rd Mar 2015
Central Industries – Acquisition of 13% stake by Dr. T. Senthilverl:
Dr. T. Senthilverl acquired approx. 1.3mn shares (13.1% of issued shares) of Central
Industries at a price of 85.00 per share from D.G. Wijemanne on 10 th February 2015.
Dealings by Directors
Company
Purchase
Alumex
Indo-Malay
Good Hope
Sale
Asia Asset Finance
Director
Date
R.P.Pathirana
Goodhope Asia
Holdings
Goodhope Asia
Holdings
06 Feb
06 Feb
H.L.L.M.Nanayakkara
Quantity
Price (LKR)
3,749
100
15.90
1,656.00
06-09 Feb
301
1,600.001,620.00
05-06 Feb
4,150,000
1.70
Comments (short term trend): Most of the technical
indicators suggest a clear downtrend. Cautions approach is
advised.
ASI - Pivot Points
Previous day’s close
Pivot Point
R1
R2
ASI - Moving Averages
07 day
14 day
21 day
7,304.70
7,271.07
7,346.14
7,387.58
7,181.40
7,260.57
7,342.24
S1
S2
7,229.63
7,154.56
50 day
100 day
200 day
7,288.48
7,295.10
6,914.58
Short-term Technical Indicators
RSI
51
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
2,068.59
6,829.12
17,652.68
3,155.27
28,355.62
34,432.89
590.10
972.83
Change
+21.85
-8.03
-59.25
+13.68
+128.23
-137.41
-2.48
-5.74
% Change
+1.07
-0.12
-0.33
+0.44
+0.45
-0.40
-0.42
-0.59
Global Business News
Local Business News
Sri Lanka to strengthen the SOEs without privatizing them: Harsha De Silva: Sri
Lanka’s State Owned Enterprises (SOE) management should be strengthened by removing
political interference without privatizing, Deputy Policy Planning and Economic Affairs
Minister Harsha de Silva has said. “Our position is to strengthen the management of the State
Owned Enterprises. Give them the freedom to make their own decisions and also ensure that
they work in an environment where then can adjust prices based on the cost of production,”
he said. State enterprise losses which are financed by bank debt requires higher interest
rates to crowd out private investment and slow growth, but the State usually prints money
to keep interest rates down, triggering high inflation and currency depreciation. “All this
time we were expecting them to be profitable, but they were not given the ability to price
according to market.” (LBO)
Brent crude rally ends as China inflation hits five-year low:
Brent fell below $ 58 a barrel on Tuesday after China’s consumer
inflation came in at a five-year low for January, raising worries
about oil demand in the world’s second-largest economy. The
International Energy Agency (IEA) also said the United States will
remain the world’s top source of oil supply growth up to 2020,
defying expectations of a dramatic slowdown in shale output and
keeping fears of a continuing glut at the forefront. “The drive down
today would most probably be due to weak China CPI figures which
turned out to be lower than expectations,” said Daniel Ang of
Singapore-based Phillip Futures in the Reuters Global Oil Forum,
referring to monthly consumer price index data released on
Tuesday. (DFT)
Sri Lanka merchandise exports up 6.7-pct to US$11bn in 2014: Sri Lanka’s annual
provisional merchandise exports increased by 6.67% to 11.079 billion rupees, Export
Development board of Sri Lanka (EDB) said in a statement. These provisional numbers do
not yet reflect the service exports values and therefore, actual exports values are expected to
be much higher. Apparels earned 4.9 billion dollars up by 9.26% in 2014, industrial products
at 8 billion rupees increased by 6.1 percent, tea at 1.6 billion up by 5.43% and agriculture
products at 2.7 billion US rising by 9%, data released by EDB showed. Manufactured
products at 2.4 billion US dollars up by 9%. Coconut exports up by 49% to 538 million
dollars while fisheries increased by 8.5% to 265 million dollars. Natural rubber declined by
36% to 46 million dollars and other export crops dropped by a mere 3% to 506 million
dollars. Diamonds and gems too experienced a decline 15% to 372 million dollars. (LBO)
Six Countries Where Inflation Is Surging: hanks to an epic
collapse in the ruble, price growth has hit crisis levels in Russia:
Inflation reached 15 percent in January. Even worse, there's little
respite in sight. Inflation will average 13 percent in 2015, according
to the median forecast of economists surveyed by Bloomberg. Food
prices rose 21 percent in January from last year, with sugar
jumping 68 percent. Grains and legumes saw a 45 percent spike,
while fruit and vegetable prices climbed 41 percent. Luckily,
alcohol inflation has tracked at a relatively tamer 14 percent.
(Bloomberg)
Oman’s S&T inks partnership with Hayleys: Oman's S&T has entered into an exclusive
joint venture agreement with the Hayleys Group to offer a complete range of interior fit-out
contracting services in the Sri Lankan market. Services and Trade Co. LLC (S&T) is a leading
interior fit-out and contracting company headquartered in Oman with operations across 14
Land
countries.
project,
Under the agreement, a new company (S&T Interiors Pvt. Ltd) has been formed to
operate the interior fit-out business in Sri Lanka. This new venture will build on unique local
marketing know-how and will be pivotal in expanding S&T's presence in the country.
Hayleys Chairman and Chief Executive Mohan Pandithage, said this partnership will add
value to the hotel industry in particular given the vast experience that S&T brings to Sri
Lanka.” (DN)
Greece Offers Debt-Talks Compromise: Greece offered
compromises ahead of an emergency meeting with its official
creditors tomorrow as German Chancellor Angela Merkel remained
unyielding over terms of the country’s bailout conditions. Greek
Finance Minister Yanis Varoufakis told lawmakers on Monday that
the government intends to neither tear up the existing bailout
agreement, nor allow the budget to be derailed. He said Greece will
implement about 70 percent of reforms already included in the
current bailout accord. (Bloomberg)
Morning Notes
Local Business News
Amendment to expand tobacco pictorial warning tabled in Parliament: New laws
relating to an increase in the area of coverage of health warnings up to 80% of the front and
rear sides of every packet, package and carton of cigarettes and other tobacco products were
brought before Parliament yesterday. The health warning on the front and rear sides will
differ from each other while the manufacturer is also instructed to use different health
warnings on each product in their portfolio. Announcing the notice of conformity received
from the Supreme Court, Deputy Speaker Chandima Weerakkody said: “The Cabinet of
Ministers has certified and approved National Authority on Tobacco and Alcohol Amendment
Bill for the betterment of the nation.” However, opposition lawmaker Dinesh Gunawardena
expressing his concerns for presenting the amendments to the National Authority on Tobacco
and Alcohol Act No.27 of 2006 in the form of an urgent bill noted: “At the party leaders
meeting, it was agreed that a copy of an urgent bill, which is presented to the Supreme Court
for guidance should also be given to the Leader of the Opposition and the party leaders in the
opposition. This is the tradition to which we have agreed to and followed. Unfortunately this
was not followed today.” (DFT)
Indrani reappointed as IBSL Chief: Top civil servant Indrani Sugathadasa has been reappointed as the Chairperson of the Insurance Board of Sri Lanka, the insurance industry
regulator. She was first appointed as IBSL Chairperson in May 2010 and considering her
integrity and professionalism the Minister of Finance Ravi Karunanayake has re-appointed
her. She was also a former Chairperson of the Securities and Exchange Commission. As a
member of the Sri Lanka Administrative Service (SLAS) since in 1977, Sugathadasa has held
various positions including Secretary, Ministry of Child Development and Women’s
Empowerment and Secretary, Ministry of Plantation Industries. (DFT)
BOC signs MoU with Tokyo Bank: The Bank of Tokyo-Mitsubishi UFJ Ltd. (BTMU) entered
into a Memorandum of Understanding recently with the Bank of Ceylon (BOC) with the
purpose of developing tighter cooperation in promoting a wide range of financial services
between Sri Lanka and Japan. The MoU with BOC will strengthen BTMU’s ability to serve
Japanese corporates investing in Sri Lanka, BTMU said in a release. In recent years the Sri
Lankan economy has grown rapidly owing to strong reconstruction demand and expansion of
its tourism industry. In addition, Sri Lanka has been accelerating its investment in
infrastructure projects. With increasing political and social stability, foreign investors,
including Japanese corporations, have been redirecting their focus to Sri Lanka as it offers a
high quality workforce, geographical advantages and abundant tourism resources. (DFT)
Exporting boats to Philippines: With bilateral trade with the Philippines a mere US$ $40
million, Philippines, Asia's second fastest growing nation said that it is ready to renew trade
with Sri Lanka in a 'bigger way.' "We welcome input from your business chambers on the
various sectors that they want to partner in Sri Lanka. Thereafter, we shall facilitate them
towards business matchmaking. We signed a trade agreement with Philippines in 1980 but it
is not active. We need to re-activate this important agreement. The policy and decision-makers
on both sides get involved with their interaction so that the export efforts of President
Maithripala Sirisena could be strengthened." said Vicente Vivencio T. Bandillo (Dhaka based
Philippines Ambassador for Sri Lanka). (CFT)
Abans launch Apple Ipad Mini 3, Ipad Air 2 with smart warranty: Apple iPads have
reigned supreme as market leaders amongst tablet computers for several consecutive years.
To display their confidence in the durability of Apple iPads, Abans, the authorized reseller and
service provider in Sri Lanka, recently introduced a Smart Warranty for iPads purchased
through Abans only. The warranty covers accidental drop damages and water damages. If for
any reason the iPad cannot be repaired, then Abans will give a one to one replacement under
the warranty free of charge. The Smart Warranty also provides for repair or replacement
coverage, both parts and labor, by Apple certified authorized technicians. (DN)
Beauty Central opens unit at Asiri Central Hospital: With a combination of leading
Consultants in cosmetology and dermatology providing first class aesthetics for discerning
patients, 'The Central Hospital'; the newest addition to the Asiri Group of hospitals, recently
opened its doors to their new designated unit dedicated to cosmetic procedures. 'Beauty
Central' is equipped to handle various procedures across a complete spectrum of treatment
options for beauty enhancement, which include laser hair removal, erasing vascular
birthmarks, dermatological procedures and laser treatments, facial rejuvenation and face-lifts,
keloid scar reductions plus a host of aesthetic treatments that do not involve incisions, surgery
or general anesthesia. (DN)
Silvermill mulls foray into Philippines, Indonesia: A. Silva & Sons Lanka (Pvt) Ltd., a
pioneer in the manufacture and export of value added coconut products since 1920, is looking
at investing in Philippines or Indonesia. Chief Executive Officer, S.A. Silva & Sons Ltd, Cedric
Wijegunawardane speaking to Daily News Business said that the main reason for the company
to venture overseas is the lack of coconuts in the local market and the high prices they have to
pay for nuts. “A coconut in these countries is around Rs.18 and almost 350 grams bigger than
the local coconut.” (DN)
11 February 2015
Global Business News
Oil Producers Outside OPEC Caught in Crossfire With
Shale: Oil producers outside OPEC and U.S. shale fields are getting
caught in the confrontation over market supremacy that has
brought crude prices to near six-year lows. High-cost regions from
aging North Sea fields to untapped resources in East Siberia and
deep-water projects off Latin America will suffer the most from
the clash, say Standard Chartered Plc, Citigroup Inc. and BNP
Paribas SA. (Bloomberg)
Chinese economy more sustainable now: China central
bank: China's economy is now more sustainable and domestic
consumption is steadily rising, Chinese Central Bank Vice
Governor Yi Gang told a G20 meeting of finance officials earlier
this week. Yi's remarks came after China posted its slowest
economic growth in 24 years in 2014, with a cooling housing
market, slowing investment and recent underwhelming exports
expected to weigh further on domestic demand this year.
(Reuters)
Crude’s Pain Is Others’ Gain as Consumer Boost Outweighs
Layoffs: Low oil prices are biting deeper into the energy industry
as Halliburton Co. eliminated thousands more jobs and Canadian
producer Talisman Energy Inc. wrote down the value of drilling
assets by $1.3 billion. The global oil industry has cut more than
$40 billion in spending and fired 50,000 or more workers to cope
with oil prices that sank below $50 for most of January.
(Bloomberg)
U.K. Commercial Real Estate Investment Climbs to Record:
Investors spent a record 70.7 billion pounds ($108 billion) on U.K.
commercial real estate last year as they sought alternatives to the
low returns of fixed-income assets. (Bloomberg)
Morning Notes
11 February 2015
Local Business News
Activity continues to remain subdued ahead of weekly bill auction: Activity in
secondary bond markets continued to remain subdued yesterday as well, with a limited
amount of movement witnessed on the six year maturity of 1 May 2021 and the seven year
maturity of 1 July 2022 as its yields were seen increasing to intraday highs of 7.70% each on
very thin volumes in addition to the four year maturity of 1 July 2019 changing hands at levels
of 7.18%. In money markets yesterday, the Open Market Operations (OMO) department of the
Central Bank refrained from conducting any auctions for a second consecutive day as
overnight surplus liquidity dropped to Rs 9.36 billion. The weighted average on overnight call
money and repo rates increased further to 6.50% and 6.31% respectively. (DFT)
Rupee steady; downward pressure remains despite CB moves: The rupee ended
steady on Tuesday despite importer dollar demand, a day after Finance Minister Ravi
Karunanayake said the currency would be held at the current level as the central bank
prevented its fall through moral suasion. Actively traded three-month forwards ended at
134.50/65 per dollar, while all other forwards ceased trading for the second straight session
after the Central Bank narrowed the per day premium to two cents on Monday from Friday’s
five cents, dealers said. “Everything is restricted, nothing is happening,” said a currency dealer
asking not to be named. Another dealer said exporters might convert dollars, which might help
ease the pressure if the Central Bank held the rupee at these levels for the next few days.
Officials from the central bank were not immediately available for comment. The Finance
Minister told Reuters in an interview on Monday that the rupee will be held steady at current
levels and “there won’t be any devaluation at all.” The rupee is under pressure due to higher
imports and rising private sector credit in a lower interest-rate regime. Dealers said policy
uncertainty weighed on the currency as the Government has sent mixed signals on
investment, discouraging exporter dollar sales amid continued importer demand. They expect
the pressure on the rupee to ease with some equity-related inflows. (DN)
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