MID-WEEK WATCH - SMB Securities

SMB SECURITIES (PVT) LTD
March 25, 2015
Colombo Stock Exchange
MID-WEEK WATCH
By SMB Securities Research
Average Weekly figures
ASPI as at
S&P SL20 Index as at
Daily Turnover (LKR Mn)
Domestic Purchases (LKR Mn)
Domestic Sales (LKR Mn)
Foreign purchases (LKR Mn)
Foreign sales (LKR Mn)
Market Cap (LKR Bn) as at
Market PER (X) as at
th
th
%
Change
25 Mar
18 Mar
6,973.03
7,043.90
-1.01
3,961.31
4,013.82
-1.31
698.06
893.05
-21.83
614.68
637.42
-3.57
635.07
767.16
-17.22
83.37
255.63
-67.38
62.98
125.88
-49.97
2,955.80
2,985.67
-1.00
18.79
18.98
N/A
2.06
2.08
N/A
Market PBV (X) as at
M ARKET A NALYSIS
Activities at the Colombo Stock Exchange plunged for another
week with thin trading volumes. Investors were remained
cautious to invest in the market due to lack of positive news
on both future corporate earnings and the economy.
The ASPI broke the psychological support barrier of 7,000
points and edged down (70.87) points to 6973.03 while the
S&P SL20 index closed at 3961.31, a -1.31% decrease. Total
turnover for the week was LKR 3490 .28 Mn while the average
daily turnover for the week amounted to LKR 698.05 Mn.
Footwear & textiles sector became the highest contributor
towards the market turnover with 81.31% contribution. The
sector turnover was increased due to sales of DOEL PLC shares
to Softlogic Retail Ltd by softlogic holdings PLC.
The week witnessed net foreign inflow of LKR 101.96 Mn.
Foreigners bought LKR 416.88 Mn worth of shares while foreign
selling amounted to LKR 314.91 Mn.
Page | 1
SMB SECURITIES (PVT) LTD
March 25, 2015
Contribution made by the Sectors during the week
Sector Index
25/03/2015 18/03/2015
Banks Finance and Insurance
Beverage Food and Tobacco
Chemicals and
Pharmaceuticals
Closed End Funds
Construction and Engineering
Diversified Holdings
Footwear and Textiles
Health Care
Hotels and Travels
Investment Trusts
Information Technology
Land and Property
Manufacturing
Motors
Oil Palms
Plantations
Power and Energy
Services
Stores and Supplies
Telecommunications
Trading
IN
THE
Turnover
18,183.87
21,862.62
6,907.31
18,444.52
21,790.56
6,867.23
%
Change
-1.41%
0.33%
0.58%
95.57
2,831.56
1,838.55
1,004.20
807.74
3,336.51
19,737.94
70.54
682.21
4,113.67
17,009.22
116,004.84
765.20
165.02
26,744.77
23,729.64
192.92
16,132.83
94.84
3,123.21
1,861.02
1,004.56
852.40
3,365.74
20,143.48
75.00
706.12
4,100.15
16,989.49
116,026.13
776.86
167.45
25,480.57
24,428.42
194.33
16,680.95
0.77%
-9.34%
-1.21%
-0.04%
-5.24%
-0.87%
-2.01%
-5.95%
-3.39%
0.33%
0.12%
-0.02%
-1.50%
-1.45%
4.96%
-2.86%
-0.73%
-3.29%
Value
%
Contribution
205,424,697
10.58%
33,977,481
1.75%
1,370,297
0.07%
9,073
17,788,340
43,776,915
1,578,089,174
6,676,832
1,849,301
8,155,613
129,821
2,375,815
22,031,444
567,232
215,668
2,306,541
12,950,799
423,618
346,089
224,576
2,096,076
0.00%
0.92%
2.26%
81.31%
0.34%
0.10%
0.42%
0.01%
0.12%
1.14%
0.03%
0.01%
0.12%
0.67%
0.02%
0.02%
0.01%
0.11%
W EEK A HEAD
Since April is a quite month with the holiday season we don’t expect the market momentum to improve
and investors are likely to follow a cautious approach in selecting opportunities under the present market
condition. Therefore, we advise investors to look in to more fundamentally sound counters in making their
investment decisions.
XD In The Week Ahead
COMPANY
Gestetner of Ceylon PLC
PROPORTION
XR DATE
LAST DATE OF ACCEPTANCE
& PAYMENT
TRADING OF RIGHTS
COMMENCES ON
01 for 06
26-03-2015
16-04-2015
06-04-2015
Page | 2
SMB SECURITIES (PVT) LTD
March 25, 2015
XD In The Week Ahead
COMPANY NAME
DPS (RS.)
FINAL/INTERIM
XD FROM
DATE OF PAYMENT
HNB Assurance PLC
3.75
Final
30-03-2015
08-04-2015
Ceylon Investment PLC
2.50
First Interim
30-03-2015
08-04-2015
Hatton National Bank PLC
7.00
Final
31-03-2015
09-04-2015
Finlays Colombo PLC
1.00
Final
31-03-2015
09-04-2015
Janashakthi Insurance Company PLC
1.00
Final
01-04-2015
09-04-2015
Sampath Bank PLC
5.00
First & Final
01-04-2015
10-04-2015
Seylan Bank PLC
2.50
First & Final
01-04-2015
10-04-2015
Nations Trust Bank PLC
2.10
First & Final
01-04-2015
10-04-2015
Seylan Developments PLC
0.50
First & Final
01-04-2015
10-04-2015
Commercial Bank of Ceylon PLC
2.00
Final
01-04-2015
10-04-2015
Page | 3
SMB SECURITIES (PVT) LTD
KEY BUYS
COMMERCIAL CREDIT AND FINANCE PLC (VFIN.N0000)
Commercial Credit and Finance PLC is a reputed
finance company with an asset base of LKR 49.28
Bn.The company has recorded strong performance
during 3Q-2014/2015 with 65% increase in net
interest income and 115% growth in net profit. During
9M (From April 2015 to December 2015) loans and
other advances witnessed a 39% growth. Currently,
the company operates 117 service centers and plans
are in place to expand its presence further. The new
branches will be established in areas with lower
penetration and expect to be profitable within a
shorter period of time. We consider moving into new
areas as a very strategic entry and would contribute
into company’s profitability immensely.
Volume
7
Price
6
25,000
5
20,000
4
15,000
3
10,000
2
LKR 24.40
2/17/2015
1/17/2015
12/17/2014
11/17/2014
9/17/2014
Manufacturing Sector
Thousands
TJL-Price Vs Volume
Volume
30
Price
25
20
15
10
LKR 50.00
Thousands
2,000
0
1/17/2015
12/17/20…
11/17/20…
10/17/20…
9/17/2014
8/17/2014
7/17/2014
5
6/17/2014
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
10/17/2014
8/17/2014
7/17/2014
6/17/2014
5/17/2014
0
4/17/2014
0
3/17/2014
1
2/17/2014
5,000
5/17/2014
The long standing relationship with its main clients as
well as company’s efforts to serve new clients
guarantees a strong demand for TJL’s products. TJL’s
increased focus on value-added products has helped
expand TJL’s product & service offerings and is likely
boost revenue of the company. The recovery in the
US and Europe economies is expected to increase the
demand for TJL’s products further. The capacity
expansion that was carried out last year eliminates
the risk of capacity constraints and allows the
company to meet this increased demand. The easing
of production cost due to lowering yarn prices, energy
cost saving from the multi- fuel boiler power plant and
reduced dependence on outsourced orders should
strengthen TJL’s margins.
GLAS - Price Vs Volume
Thousands
30,000
4/17/2014
TEXTURED JERSEY LANKA PLC (TJL.N0000)
Manufacturing Sector
3/17/2014
GLAS is the sole producer of glass bottles in the
country and its clientele is spread across a diverse
array of sectors such as food and beverages, agro
chemicals, pharmaceuticals, cosmetics and perfumery.
GLAS currently caters to all the leading companies in
these sectors. The demand for GLAS’s products has a
strong positive relationship with the country’s
standard of living and income levels. The liquor and
beer segment is expected to generate bulk of its
revenue with growing demand for custom-made
bottles. Company’s exports are being targeted at high
end luxury cosmetics and wine markets and demand
for these segments also can increase with the
Increasing global consumption levels.
LKR 5.60
2/17/2014
PIRAMAL GLASS CEYLON PLC (GLAS.N0000)
Bank Finance & Insurance Sector
COCR - Price Vs Volume
Volume
60
Price
50
1,500
40
1,000
30
20
500
0
10
3/26/2014
4/15/2014
5/5/2014
5/25/2014
6/14/2014
7/4/2014
7/24/2014
8/13/2014
9/2/2014
9/22/2014
10/12/2014
11/1/2014
11/21/2014
12/11/2014
12/31/2014
1/20/2015
2/9/2015
3/1/2015
3/21/2015
INVESTMENT F OCUS –
March 25, 2015
0
Page | 4
SMB SECURITIES (PVT) LTD
March 25, 2015
E CONOMIC U PDATE
Monthly Averge USD Vs LKR
LKR /USD
135
133
LKR
131
129
127
125
2013
2014
FEB
JAN
DEC
NOV
OCT
SEP
AUG
JULY
JUNE
MAY
APR
MAR
FEB
JAN
DEC
NOV
OCT
SEP
AUG
JULY
JUNE
MAY
APR
MAR
FEB
121
JAN
123
2015
EXCHANGE RATES
th
th
Week ending 20 Mar
Week ending 13 Mar
133.31
133.69
133.27
133.79
‐ Forward 3 months
Average Middle Rate of Other World Currencies
134.66
134.70
STG
196.86
198.25
EURO
142.37
141.34
JAPANESE YEN
1.10
1.10
INR
2.13
2.12
SDR
183.16
182.19
USD EXCHANGE RATE
‐ Average rate
‐ Forward 1 month
INTEREST RATES
Overnight
07 Days
01 Month
03 Months
06 Months
12 Months
SLIBOR (%)
6.64
6.92
7.17
7.39
7.68
8.09
T-Bill Rates (%)
N/A
N/A
N/A
6.60
6.70
6.80
AWPLR (%)
N/A
6.95
6.45
N/A
6.50
N/A
AWDR (%)
N/A
N/A
5.90
N/A
6.34
N/A
SDFR (%)
N/A
N/A
N/A
N/A
N/A
6.50
SLFR (%)
N/A
N/A
N/A
N/A
N/A
8.00
Page | 5
SMB SECURITIES (PVT) LTD
March 25, 2015
TOURIST ARRIVALS – FEBRUARY 2015
Tourist Arrivals by Month
Month
Tourist Arrivals in February 2015
2014
2015
%
Change
Sri Lanka’s tourist arrivals rose 16.7% YoY to
165,541 arrivals in February 2015, compared to
January
146,575
156,246
6.6
February
141,878
165,541
16.7
March
133,048
April
112,631
cumulative earnings in the two months of the
May
90,046
year also recorded 11.6% growth.
June
103,175
July
133,971
August
140,319
September
105,535
141,878
arrivals
in
February
2014.
The
In February 2015, Western European region
became the largest tourist generating market
October
121,576
November
119,727
for the country, which contributed 38.9% to the
December
178,672
total tourist arrivals. A total of 60,777 tourists
1,527,153
came from this region and it is an increase of
Total
15.5% compared to previous year. Arrivals from
NO. OF ARRIVALS
TOURIST ARRIVALS
UK, Germany and France recorded 6.3%, 15.5%
1,800,000
1,600,000
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000
-
and 20% growth rates respectively.
East Asian region became the second largest
tourist generating market and recorded 67.2%
YoY growth. As a single country, China became
the highest tourists generating country and
2010
2011
2012
2013
2014 2015-Up
to Feb
TOURIST ARRIVALS BY COUNTRY OF
RESIDENCE
NORTH AMERICA
2.5%
4.3%
LATIN AMERICA &
THE CARIBBEAN
WESTERN EUROPE
0.3%
18.6%
38.9%
26.8%
27,425 tourists came for the month, which was
an increase of 165.8%
South Asian region accounted for 18.6% of the
total tourist arrivals to the country and
demonstrate a growth of 11.7% YoY. Arrivals
EASTERN EUROPE
from India recorded 14.1% growth to 19,999
AFRICA
arrivals.
MIDDLE EAST
EAST ASIA
11.1%
SOUTH ASIA
AUSTRALASIA
3.0%
0.5%
Page | 6
SMB SECURITIES (PVT) LTD
March 25, 2015
INFLATION - FEBRUARY 2015
%
12
10
8
6
4
2
2013
-4
2014
Feb
Jan
Dec
Nov
Oct
Sep
Aug
July
June
May
Apr
Mar
Feb
Jan
Dec
Nov
Oct
Sep
Aug
July
June
May
Apr
Mar
Feb
-2
Jan
0
2015
INFLATION (CCPI) FEBRUARY 2015 (YOY) 0.6%
Monthly change %
YoY Change %
Annual avg change%
Inflation in February 2015
Inflation, as measured by the Colombo Consumers’ Price Index (CCPI) (2006/07=100) declined to 0.6%
in February 2015 from 4.4% in January 2014, on a year-on-year (YoY) basis. This is the lowest inflation
figure recorded after February 2004.
Annual average inflation also declined to 2.9% in February 2015, from 3.2% recorded in January 2015.
The CCPI for all items for February was 178.9 and recorded a decrease of 4.3 index point or 2.35% from
January 2015 index which was 183.2 This decrease represents expenditure value of LKR 1,201.96 in the
“Market Basket”.
The downward revision of fuel prices affected during January 2015 and the reduction of price and
import duty of both food and non-food items as proposed in the Interim budget 2015 contributed
heavily towards this monthly decline in the index.
Core inflation, which reflects the underlying inflation in the economy, declined significantly from 2.1% in
January 2015 to 0.8% in February 2015 on a year on year basis. Annual average core inflation during
February 2015 was 3.2%, compared to 3.4% recorded in January 2015.
Page | 7
SMB SECURITIES (PVT) LTD
March 25, 2015
GDP GROWTH RATES – 2014
Growth rates of GDP by Industrial Origin - Third Quarter
The Gross Domestic Product (GDP) of the Sri Lanka
was LKR 911,064Mn in 3Q2014 and it was LKR
2014-3Q
Agriculture, Forestry and
Fishing
2013-3Q
846,102 Mn in 3Q2013 (At constant 2002 prices).
-2.0
7.2
Agriculture, Livestock and
Forestry
-1.8
6.8
Fishing
-3.6
9.9
12.6
8.1
14.2
12.5
Manufacturing
8.8
6.0
Electricity, gas and water
8.4
11.2
21.0
10.0
7.0
7.9
8.8
7.6
11.0
13.6
Transport and
communication
7.5
11.8
Banking, insurance and
real-estate etc.
6.8
6.7
has declined to 10.1% from 11.1% in 3Q2013. The
Ownership of dwellings
1.3
2.8
wholesale and retail trade sub sector became the
Government services
1.5
3.6
highest contributor towards the GDP (24.1%) while
Private services
6.8
7.0
manufacturing sub sectors (16.7%) fall on second
Gross Domestic Product
7.7
7.9
Industry
Mining and Quarrying
Construction
Services
Wholesale and retail trade
Hotels and restaurants
The GDP recorded 7.7% in 3Q2014 compared to
7.9% growth in 3Q2013.
Industry and services
sectors recorded positive growth rates of 12.6%
and 7.0% respectively, while agricultural sector
recorded decline of 2.0% .The construction sub
sector
recorded the highest growth rate for
3Q2014 which was 21%. The Mining and Quarrying
sub sector recorded the second highest growth
rate of 14.2%
The services sector is the highest contributor to the
country’s GDP (59%) while industry sector fell on
second place. Contribution from agricultural sector
place.
Page | 8
SMB SECURITIES (PVT) LTD
March 25, 2015
EXTERNAL SECTOR PERFORMANCE - JANUARY 2015
Jan-14
Jan-15
Imports
1,655.5
1,681.60
1,500
Exports
903.9
909.8
1,000
Trade Deficit
-751.5
(771.9)
Earnings from Tourism
233.3
248.7
Workers’ Remittances
555.5
523.5
12.2
0.9
1,375.10
147.6
EXTERNAL SECTOR PERFORMANCE
Jan 2015 vs Jan 2014
2,000
500
0
-500
Imports (USD
Mn)
Exports (USD
Mn)
Trade Deficit
(USD Mn)
Month - USD Mn
Inflows to the CSE (Net)
-1,000
Jan-14
Jan-15
Inflows to the Government
External Sector Performance - January 2015
 In January 2015, earnings from exports recorded YoY growth of 0.6% to USD 910Mn. The largest
contribution to the export earnings in January 2015 was from export of spices and petroleum
products. The petroleum product sales increased 67% to USD 56 Mn. The 73.8% increase in Spices
exports resulted due to both volume and price increases
 In January 2015, expenditure from imports recorded an YoY growth of 1.6% to USD 1,682 Mn. The
increase in import of rice and personal motor vehicles was the main reason for this growth in import
expenditure. The expense on rice imports increased to USD 55 Mn compared to USD 1.6 Mn in the
corresponding month of 2014. The increase of vehicle import expenditure was a result of changes to
the import tariff structure and the depreciation of the Japanese Yen. Increase in investment goods is
mainly lead by imports of transport equipment with significant increase in imports of buses. Import
expenditure on machinery and equipment also rose considerably. Import expenditure on fuel declined
significantly by 41.1% due to the combined effect of lower prices and volumes imported of both crude
oil and refined petroleum products.
 The trade deficit in January 2015 widened to USD 772 Mn in comparison to USD 752 Mn in January 2014.
Accordingly, the trade deficit during 2015 declined 2.03% from USD 788 Mn in December 2014. In January
2015, the BOP is estimated to have recorded a deficit of USD 696.5 Mn, compared to the surplus of US
D 732.9 Mn in the corresponding period of 2014. Sri Lanka’s gross official reserves estimated to be
around USD 7.4 Bn as of end February 2015. Meanwhile, total foreign assets, which include foreign assets
of the banking sector, amounted to USD 8.9 Bn as at end January 2015. In terms of months of imports,
gross official reserves were equivalent to 5.5 months of imports.
Page | 9
SMB SECURITIES (PVT) LTD
March 25, 2015
Research
Subhashi Jayasumana
Randula Harinda
Tel: +94 11 4388136
Sales & Marketing
Lalith Sepalage
Janak Dadallage
Sampath Indika
Nuwan Perera
Mob: +94 722 421003
Mob: +94 715 329612
Mob: +94 715 329605
Mob: +94 715 329609
Shalini Jayatunga
Inoka Lasantha
Sooriya Arachchi
Marlon Fernando
Mob : +94 714 816297
Mob:+94 773 403571
Mob :+94 777 235445
Mob :+94 775 473875
Aruni Attanayaka
Kalhari Madushi
Mob : +94 778 133833
Mob : +94 773 690413
DISCLAIMER:
The information contained in this document has been compiled from sources that we believe to be reliable;
however we do not hold ourselves responsible for its completeness or accuracy. All opinions and estimates included in this report
constitute of our judgment to this date and are subject to change without notice. Information contained in this document is not and
should be construed as an offer, or a solicitation of an offer, to buy or sell any security or other financial instruments, and cannot be
relied upon as a representation for any particular transaction. SMB Securities (Pvt) Ltd or its affiliates and / or its directors, officers and
employees shall not be in any way be responsible or liable for loss or damage which any person or party may sustain or incur by relying
on the content of this document.
SMB Securities (Pvt) Ltd
No: 102/1, Dr. N.M.Perera Mawatha, Colombo 08, Sri Lanka [email protected] www.smbsecurities.lk Tel: 011 4388136
Page | 10