20th Feb 2015 - Lanka Securities (Pvt)

udithgpseall14 21gpgppivg
Morning Notes
24 February 2015
Market Diary
ASI Outlook (based on charts)
Today:
Lanka Century Investments - Warrant 0006 – Expiry Date
Central Bank of Sri Lanka - Monetary Policy Review – February 2015
Tomorrow:
Asian Alliance Insurance - XD date (LKR 5.00 per share)
Dunamis Capital - XD date (LKR 1.00 per share)
National Development Bank - XD date (LKR 4.00 per share)
Corporate Announcements
Interim Financial Statements 31-12-2014 - Property Development (PDL) & Commercial
Bank of Ceylon (COMB).
Comments (short term trend): ASI is trading near the lower
Bollinger. Several other technical indicators suggest an uptrend
in the near term.
Commercial Bank – Final Dividend of LKR 2.00 per share:
Dates to be notified
ASI - Pivot Points
Previous day’s close
Pivot Point
R1
R2
Commercial Bank – Scrip Dividend:
Proportion – Voting – 01 share for 99.888889 existing shares
Non-voting – 01 share for 77.222222 existing shares
Quantity offered – Voting – 8,114,083 shares
Non-voting – 719,740 shares
Dates to be notified
ASI - Moving Averages
07 day
14 day
21 day
CIC Holdings – Interim Dividend of LKR 1.00 per share:
XD – 04th March 2015
Payment date – 16th March 2015
ISIN Number
5 Year Fixed rate debentures (9.00%)
payable annually
RDB-BD-29/01/20C2292-9
LK0437D22922
5 Year Fixed rate debentures (8.81%)
payable bi-annually
RDB-BD-29/01/20C2294-8.81
LK0437D22948
5 Year Fixed rate debentures (8.71%)
payable quarterly
RDB-BD-29/01/20C2293-8.71
LK0437D22930
Central Bank of Sri Lanka – Monetary policy review of February 2015:
Policy rates unchanged. Access to SDF
Monetary Policy Decision
remains rationalized.
Standing Deposit Facility Rate (SDFR)
6.50%
Standing Lending Facility Rate (SLFR)
8.00%
Statutory Reserve Ratio
6.00%
Alumex
7,311.67
7,297.04
50 day
100 day
200 day
7,305.21
7,306.10
6,961.77
Global Equity Indices
Pradeshiya Sanwardana Bank – Debenture Issue:
The debentures of the above bank will be listed on 25th February 2015.
Debenture Type
Security ID
Sale
Alumex
7,311.70
7,245.33
7,277.18
S1
S2
Short-term Technical Indicators
RSI
52
MACD
The MACD line has crossed the signal
line from above.
Colombo City Holdings – Interim Dividend of LKR 5.00 per share:
XD – 04th March 2015
Payment date – 16th March 2015
Dealings by Directors
Company
Purchase
Good Hope
7,326.31
7,321.01
7,335.64
7,344.98
Director
Date
Quantity
Price (LKR)
Goodhope Asia
Limited
20 Feb
02
1,601.00
Zenith Insurance
Brokers
Ceylon Knit Trend
Ltd
19 Feb
130,000
17.00-17.20
20 Feb
10,000
17.00
Local Business News
National policy on economy tomorrow: Ravi Karunanayake: Finance Minister
confirmed that a positive outlook over the country’s economy had optimized investor
confidence. He said that the Government would announce its national policy on the economy
next Wednesday (25), which would provide a clear direction as to where the Government
intended to take the economy during the next few years. The Minister was speaking at an
event entitled ‘A discussion with the Finance Minister’, which was held yesterday.
Karunanayake further stated that the Department of Excise was able to collect Rs. 4 billion
during the last 20 days compared to what the previous regime had been collecting in the
corresponding period. Customs revenue too has increased to Rs. 12 billion during the past
12 months. Karunanayake said that the IMF would assist the Government to have more
stability
on the Balance of Payment (BOP) while the World Bank would continue to assist in
30
lending support for better growth. “One of the key requests made by both parties was to
drive the economy in a cleaner, consistent and more transparent basis. We are getting three
or four times more support than we used to get in the past from them. (DFT)
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
2,109.66
6,912.16
18,490.02
3,246.91
28,975.11
33,926.70
603.11
984.42
Change
-0.64
-3.04
+23.10
+24.54
-256.30
-66.30
+1.36
-0.65
% Change
-0.03
-0.04
+0.13
+0.76
-0.88
-0.20
+0.23
-0.07
Global Business News
Singapore Unveils Robin-Hood Budget With Boost to Top
Tax Rate: Singapore took another step toward Western welfare
systems and further from low-tax models like Hong Kong. With the
first increase in its top income tax rate in decades, the Southeast
Asian city’s budget on Monday revealed policy makers’ latest step
to address a widening wealth gap. While the richest 5 percent face
higher levies, beneficiaries will include senior citizens who will get
bigger payouts. (Bloomberg)
Obama warns U.S. security funding lapse would hurt
economy: U.S. President Barack Obama warned on Monday that a
partial shutdown of the Department of Homeland Security would
suspend pay for more than 100,000 border patrol, port inspection
and airport security agents. "It will have a direct impact on your
economy, and it will have a direct impact on America's national
security because their hard work helps to keep us safe," Obama
said in a speech to a meeting of state governors at the White House.
(Reuters)
Modi Wants to Replace Crowded Slums in India With 20
Million Homes: Faced with increased living costs in 2012, Suresh
Kumar sent his wife and children back to their village in eastern
India and took in two migrant workers to share his one-room
apartment on the fringes of Delhi. That brought his rent down to
3,000 rupees ($50), about a third of what he earns each month as a
chauffeur in India’s capital. (Bloomberg)
Euro Holds Slide as Greece Works on Commitments Before
Yellen: The euro stayed lower after a Greek official said the nation
was working to finalize a list of pledges to the European Union as
part of its four-month bailout extension. The currency declined
versus most major peers yesterday after the Greek government
sent a draft list of commitments to auditors. (Bloomberg)
Morning Notes
Local Business News
Market expects uniform SDF rate of 6.5%: Central Bank of Sri Lanka (CBSL) persisted in
preventing the rupee from depreciating, by going above the Rs 132.90 level to the US dollar in
interbank spot trading by moral suasion, as a result of which volumes continued to remain
low, market sources told Ceylon FT. Further, forward premia have been capped at five cents
per day on the administered spot price. Meanwhile, they expected today's monetary policy
statement of CBSL to merge the two band standing deposit facility (SDF) to one, at 6.50% in
order to push rates, due to the twin issues of declining excess liquidity in the market, coupled
with demand for dollars, when interest rates rise that may diminish market's appetite for
dollars due to the higher borrowing costs involved. Currently, CBSL operates a two band SDF
regime, that is a maximum (6.5%) and a minimum (5%) rate. The maximum rate is applicable
when markets park their excess liquidity on the first three days of a calendar month. On all
other days of a month, the lower 5% rate is applicable. (CFT)
Petition filed at Human Rights Commission over Port City: A petition was filed at the
Human Rights Commission of Sri Lanka (HRCSL) yesterday against the Colombo Port City
project by environmental groups. The environmental groups said that the human rights of the
public, including fishermen, had been violated as a result of the Chinese-funded project. They
also alleged that an initial environment assessment report issued by a leading Sri Lankan
university, which had cleared the project, was issued with the involvement of the Chinese. The
environmental groups said that they would stage a protest in Colombo against the project with
the participation of fishermen and others. Prime Minister Ranil had recently said that the
project is still under review and a final decision has yet to be taken. He said that there had
been several concerns and allegations over the project, including allegations of corruption and
a special committee was still investigating those concerns. (DFT)
Malwatte Valley to invest Rs 1b on leisure, real estate: Malwatte Valley Plantations PLC
Company is investing over Rs. one billion to diversify their portfolio mainly into leisure and
real estate sectors. Malwatte Valley Plantations Managing Director and CEO Willem L. Bogtstra
said the tea industry is facing stiff competition and with high manufacturing costs they needed
to diversify. “Firstly we have invested nearly US $ 450,000 in Melbourne to build four town
housing units as a pilot project. This project was very successful as we have sold all four which
has given us confidence to do a bigger project soon.” “We now plan to build a further 12 units
this year under the same concept,” he said. Bogtstra said doing business was easy in Australia
and this was another reason for them to re invest. He said that with the Sri Lanka leisure
sector booming they have decided to build a three star hotel in Hakgala in one of their estates.
“Under a subsidiary company, Uva Resorts and Resorts Pvt Ltd, we will build on a defunct Tea
factory and have 60 rooms.” “This will be mainly targeting the budget travellers and room
rates would start from US$ 60 and we would also offer single occupancy.” (DN)
Redress for Golden Key depositors: Finance Minister Ravi Karunanayake gave an
undertaking yesterday, to redress the grievances of the Golden Key depositors within a short
period. The Minister said he was exploring the prospect of accomplishing this mission before
the end of the government's 100 day programme. The Golden Key depositors continuously
engaged in an extensive struggle staging protests, holding press conferences and appearing
before court seeking redress for their grievances. Addressing the media after meeting the
British High Commissioner at the ministry yesterday, Minister Karunanayake said the present
management of the Ceylinco Group of Companies had given an undertaking in writing to pay
back the money to the Golden Key depositors before the completion of the 100 day
programme of the Maithripala Sirisena government. (DN)
Sri Lanka and nuclear pacts: Best decision for energy security?: President Maithripala
Sirisena during his first official visit since becoming President, entered into a bilateral on
nuclear energy with the Sri Lanka’s neighbour India. The bilateral agreement signed on
cooperation in the peaceful uses of nuclear energy 16 February 2015, envisages transfer and
exchange of knowledge, expertise as well as capacity building and training of personnel on
several areas relating to the use of nuclear energy. These include basic and applied research
in the peaceful uses of nuclear technology, production and utilisation of radioactive isotopes
for use in industry, agriculture and water management, nuclear security, treatment and
management of radio wasters as well as the use of radioactive isotopes for health care
including nuclear medicine. (DM)
Moves to cancel local contracts already offered for Sri Lanka’s Northern
Expressway: The former government has selected local contractors for the Northern
Expressway project, considered the largest such projects in Sri Lanka, not on a competitive
and open basis and hence action would be taken to cancel these contracts, Deputy Minister of
Highways and Investment Promotion Eran Wickramaratne. The Minister said that when the
suspended construction work of the Northern Expressway project is resumed, instead of the
current contractors, the new government would pick a team of local contractors through an
open and competitive process. “These contracts have been offered without any transparency.
We will cancel these contracts,” he said. The Colombo-Kandy Expressway is also included in
the first phase of the Northern Expressway. The Kandy Expressway was planned to link with
the Northern Expressway at Pothuhera and up to Gannoruwa via Rambukkana and
Galagedara. (ADB)
24 February 2015
Global Business News
Goldman Sees Value Outside of ‘Stretched’ U.S. Equities:
Seven months after the Federal Reserve warned that valuations of
some smaller, biotechnology and social-media stocks may be
“stretched” in the U.S., Goldman Sachs Group Inc. is using the same
word to describe the whole shebang. “Stocks with attractive
valuation are rare in the current environment of stretched share
prices,” Goldman’s chief U.S. equity strategist David Kostin and
colleagues wrote in a Feb. 20 report, citing the ratio of price to
estimates of future profit and the ratio of enterprise value to
earnings before interest, taxes, depreciation and amortization.
(Bloomberg)
The Fed's Own Data Show U.S. Manufacturers Don't Share
Its Optimism: Tucked away in last week's report on industrial
production from the Federal Reserve was an important piece of
news: Manufacturers, miners and utility companies don't seem as
optimistic as monetary policy makers are that 2015 will be a
markedly better year for the economy. Industrial companies will
raise capacity by 1.8 percent in 2015, the smallest increase since
2011, after boosting it 3.1 percent in 2014, the Fed said in its Feb.
18 release on production. (Bloomberg)
Morning Notes
24 February 2015
Local Business News
Lanka Hospitals creates history at Colombo Stock Exchange: The Board of Directors at
Lanka Hospitals PLC, which comes under the purview of the Finance Ministry, was replaced by
the new government. Venerable Theeniyawala Palitha Thera too has been included in the new
13 member Board of Directors. Thus, Lanka Hospitals PLC enters history as the first Listed
Company at the Colombo Stock Exchange to have a Buddhist monk on its Board of Directors.
(ADB)
SriLankan to exit Mattala ground handling?: The management of the Mattala Airport has
requested SriLankan Airlines to cancel their ground handling management contract at the
airport. This contact was given to SriLankan Airlines for a period of 10 years. An official from
the Mattala Airport said that they are not getting any returns from this deal. “We are planning
to re market the ground handling management once again. And we are looking at attracting a
foreign management company for this whereby we could earn revenue.” (DN)
Ceylon Tea shines at Gulfood in Dubai: Ceylon Tea” which pioneered to help the
popularity of the small Indian Ocean Island to global stardom for more than a century received
a terrific upgrading recently at the world’s largest annual Food and Beverage Exhibition
“Gulfood” in Dubai. The platform was a Ceylon Specialty Estate Tea of the Year Competition
and a Charity Tea Auction focusing on the discerning tea consumers in the Middle East and
Gulf Region. The event portrayed the strength of unity and understanding of another public
and private partnership within the Sri Lanka tea industry. (DN)
Bond yields continue to rise ahead of monetary policy announcement: The upward
trend in secondary market Treasury bond yields continued yesterday as well with yields seen
hitting one month highs ahead of Central Banks monitory policy announcement for the month
of February due today. In money markets, overnight call money and repo rates remained
mostly unchanged to average 6.00% and 5.62% respectively as surplus liquidity in the system
on an overnight basis stood at Rs. 19.24 billion. The Open Market Operations (OMO)
department of Central Bank drained out an amount of Rs. 10 billion on an overnight basis at a
weighted average rate of 5.91%. The removal of the limitation on forward premiums to two
cents per day saw the quote on one week forward contracts depreciate to Rs 133.40/50
yesterday. However, quotes on spot and spot next contracts remained at Rs 132.90/20 and Rs
132.92/20 respectively as activity continued to remain very dull. The total USD/LKR traded
volume for 20 February was at $ 47.80 million. (DFT)
The information contained in this report, researched and compiled for
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
Securities (Pvt) Ltd. and/or its affiliates and/or its directors, officers and
employees shall not in any way be responsible or liable for loss or damage
which any person or party may sustain or incur by relying on the contents of
this report and acting directly or in directly in any manner whatsoever.
Lanka Securities Research