Sri Lanka Newspapers 01/02/2012

Colombo second worst stock exchange in the world

The Colombo Stock Exchange has seen a dramatic reversal from being the world’s best performing stock exchange to the second worst ahead of the Dhaka exchange in Bangladesh.

According to country stock exchange data compiled by Bespoke Investment Group based on year-to-date performance of leading indices as of January 26, 2012, Sri Lanka had the second worst performing stock exchange which fell 7.94 percent, ahead of Bangladesh which fell 14.66 percent.

"Of the 78 countries analysed, 59 (75 percent) are in the black for the year, while 19 are in the red. Twelve countries have posted double digit gains already in 2012, with Argentina leading the way at 18.11 percent. Russia ranks second with a gain of 13.70% percent followed by Hungary in third and Greece (yes, Greece) in fourth," Bespoke Investment Group (BIG) said.

"The US currently ranks 33rd on the list with a gain of 4.73 percent year to date. The US ranks fourth among G7 countries behind Germany (10.88 percent), Italy (6.77 percent) and France (6.44 percent). The UK has been the worst performing G7 country so far in 2012 with a gain of 4 percent.

"Last year the BRICs were significant underperformers versus the rest of the world, but they’ve bounced back so far in 2012. As mentioned above, Russia is up 13.70 percent year to date, which is the best of the BRICs. Brazil ranks second with a gain of 10.92%, India isn’t far behind at 10.50 percent, and China ranks fourth with a gain of 5.44 percent.

The once-best performing stock exchange in the world, which grew 125 percent in 2009 and 96 percent in 2010, registered an 8.46 percent dip last year as controversy rocked an already overvalued market, analysts said.

Influential investors were successful in having the then Director General of the watchdog Securities and Exchange Commission (SEC) Malik Cader removed from his post and promoted as an advisor in the Treasury. SEC Chairperson Ms. Indrani Sugathadasa resigned soon after as a ‘matter of principle’. The watchdog had been clamping down on market manipulation and malpractice.

Limits on broker credit and price bands were also introduced to cool down what many thought to be an overheated market. Also, several actions had been taken against market offenders.

The slump in the Colombo Stock Exchange was put down to over regulation by some players in the market.

The removal of the Director General towards the end of last year resulted in a brief rally but the market soon fell.

Later, brokers who had been clamouring for a relaxation of credit restrictions had their request granted when the SEC relaxed limits, effectively releasing Rs. 5 billion in to the market. As expected, the market rallied for a while, only to fall again.

Yesterday (Jan. 31) the market fell 1.07 percent after a few days of closing in positive territory. Year-to-date, the All Share Price Index had fallen 6.26 percent.

Brokers say the exchange is plagued by deep-rooted problems. Foreign inflows would also be needed to create funds for the market to grow.
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The rate at which general price levels increase slowed down to a 25 month low in January 2012, the Department of Census and Statistics said yesterday (Jan. 31).

Inflation, as measured by the country’s official inflation index (the Colombo Consumers’ Price Index) CCPI), slowed to 3.8 percent in January 2012 from 4.9 percent in December 2011.

"The rate of inflation as measured by the CCPI on a year-on-year basis decreased to 3.8 percent in January 2012 from 4.9 percent in December 2011. This is the lowest inflation rate recorded after twenty-five months from December 2009. As against the higher base prevalence in January 2011, the year-on-year inflation in January 2012 shows a significant decrease," the government statistics office said."The highest contribution to the overall increase in prices came from non-food commodities which increased by 4 percent in January 2012. The combined effects of both domestically produced and imported food commodities contributed to the increase in the food sub Index.

"Among the food commodities, rice, wheat flour and vegetables, which have significant weights in the CCPI basket, recorded price increases on a year to year basis. Under the non-food category, the prices of Kerosene Oil, Petrol, Diesel and Gas rose by 39 percent, 19 percent, 15 percent and 28 percent respectively," the department said.

Price levels have increased by 0.3 percent from December 2011 to end January 2012.

However, the food category recorded a decline of 0.12 percent or Rs. 51.01 on better supply of most food items on the CCPI basket with prices increasing for fish and sea food, pepper powder, eggs, chicken and coconut.

Clothing and footwear, housing, water, electricity, gas and other fuels, furnishing, household equipment and routine household maintenance, health, transport, recreation, culture and education. Communication costs remained unchanged.

Meanwhile, the annual average rate of inflation continued to slowdown further since peaking at 7.2 percent in September 2011, reaching 6.5 percent in January 2012, the statistics office showed.
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*Indices down, turnover low
Fading foreign buying momentum, some modest profit taking and settling of month-end accounts pushed down the Colombo bourse to a losing mode with both indices down and turnover below Rs. 1 billion, brokers said.

Both JKH and Commercial Bank saw their prices edging down.

Business was lackluster on a turnover of Rs. 0.84 billion, down from the previous day’s Rs. 1.4 bn., with the All Share Price Index down 61.64 points (1.07%) and the Milanka losing 50.30 points (1.01%) with 144 losers strongly outpacing 62 gainers.

``The foreign buying momentum seemed to have reduced,’’ a broker said. ``It’s hard to attribute the fall to profit taking because there wasn’t all that much profit to take. Being the last day of the month, there could have been some selling to square accounts.’’

There was little activity from morning with Acme being the highest turnover generator with retailers active in the stock with nearly six million shares traded between Rs. 27.10 and Rs. 30.10 closing Rs. 3.30 up at Rs. 30 generating the day’s top turnover of Rs. 170.4 million.

JKH followed, closing 70 cents down at Rs. 169 with nearly 0.3 million shares traded between Rs. 168 and Rs. 172 contributing Rs. 45.6 million to business volumes.

ERI lost 90 cents to close at Rs. 29 on 1.4 million shares done between Rs. 28.90 and Rs. 30.40 generating a turnover of Rs. 41.1 million while Swarnamahal Financial Services gained Rs. 5.50 to close at Rs. 133 on 0.3 million shares done between Rs. 126.10 and Rs. 134 contributing a turnover of Rs. 39.6 million.

Colombo Land was down 90 cents to Rs. 48 one nearly 0.7 million shares done between Rs. 47.20 and Rs. 49 while REgnis gained Rs. 11.10 to close at Rs. 330 on 90,200 shares traded between Rs. 320 and Rs. 348.90.

Among stock that showed both volume and price gains were CT Land, HNB (non-voting), Parquet and Cold stores. Commercial Bank lost 70 cents to close at Rs. 105 on 0.2 million shares while Asia Asset Finance was 10 cents down to close at Rs. 6.60 on nearly 1.6 million shares.
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Hotel Services PLC net profits grew 22%

Feb 1, 2012 (LBT) - According to a stock exchange filing it was said, Sri Lanka’s Hotel Services Plc, the holding company of Ceylon Continental Hotel in Colombo, said net profits for the quarter ending December 2011 grew 22 % year on year to Rs 13.2 mn.

Turnover for the period was up 10% to Rs 182 mn while operating profits fell 24% to Rs 11.5 mn on higher administrative and marketing expenses.

Earnings per share were Rs 0.08 in the December 2011 quarter compared to Rs 0.06 for the corresponding period of 2010.

Capital expenditure for the period amounted to Rs 159 mn. Ceylon Continental Hotel announced earlier this month that it would invest Rs 1.8 bn to refurbish its 229 room property commencing February 2012 and ending in October the same year.

Conglomerate Hayleys acquired 51% of Hotel Services Plc in March 2010 at Rs 21.00 per share.

As at December 31, 2011 the state run Employees Provident Fund (EPF) holds a 9.08% stake in the firm, Bank of Ceylon 4.45%, National Saving Bank 1.54% and Merchant Bank of Sri Lanka 1.52%.http://www.lbt.lk/corporate/results/1103-hotel-profits

Colombo second worst stock exchange in the world
January 31, 2012, 8:57 pm


The Colombo Stock Exchange has seen a dramatic reversal from being the world’s best performing stock exchange to the second worst ahead of the Dhaka exchange in Bangladesh.

According to country stock exchange data compiled by Bespoke Investment Group based on year-to-date performance of leading indices as of January 26, 2012, Sri Lanka had the second worst performing stock exchange which fell 7.94 percent, ahead of Bangladesh which fell 14.66 percent.

"Of the 78 countries analysed, 59 (75 percent) are in the black for the year, while 19 are in the red. Twelve countries have posted double digit gains already in 2012, with Argentina leading the way at 18.11 percent. Russia ranks second with a gain of 13.70% percent followed by Hungary in third and Greece (yes, Greece) in fourth," Bespoke Investment Group (BIG) said.

"The US currently ranks 33rd on the list with a gain of 4.73 percent year to date. The US ranks fourth among G7 countries behind Germany (10.88 percent), Italy (6.77 percent) and France (6.44 percent). The UK has been the worst performing G7 country so far in 2012 with a gain of 4 percent.

"Last year the BRICs were significant underperformers versus the rest of the world, but they’ve bounced back so far in 2012. As mentioned above, Russia is up 13.70 percent year to date, which is the best of the BRICs. Brazil ranks second with a gain of 10.92%, India isn’t far behind at 10.50 percent, and China ranks fourth with a gain of 5.44 percent.

The once-best performing stock exchange in the world, which grew 125 percent in 2009 and 96 percent in 2010, registered an 8.46 percent dip last year as controversy rocked an already overvalued market, analysts said.

Influential investors were successful in having the then Director General of the watchdog Securities and Exchange Commission (SEC) Malik Cader removed from his post and promoted as an advisor in the Treasury. SEC Chairperson Ms. Indrani Sugathadasa resigned soon after as a ‘matter of principle’. The watchdog had been clamping down on market manipulation and malpractice.

Limits on broker credit and price bands were also introduced to cool down what many thought to be an overheated market. Also, several actions had been taken against market offenders.

The slump in the Colombo Stock Exchange was put down to over regulation by some players in the market.

The removal of the Director General towards the end of last year resulted in a brief rally but the market soon fell.

Later, brokers who had been clamouring for a relaxation of credit restrictions had their request granted when the SEC relaxed limits, effectively releasing Rs. 5 billion in to the market. As expected, the market rallied for a while, only to fall again.

Yesterday (Jan. 31) the market fell 1.07 percent after a few days of closing in positive territory. Year-to-date, the All Share Price Index had fallen 6.26 percent.

Brokers say the exchange is plagued by deep-rooted problems. Foreign inflows would also be needed to create funds for the market to grow.

http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=44352

Duplicated post already in News Section.
Moved to News Section.