Sri Lanka Newspapers Saturday 24/03/2012

CSE shrugs off losing streak
*Indices up sharply, turnover tops Rs. 927 mn.

The Colombo bourse yesterday shrugged off a four-day losing streak posting a turnover of Rs.927.08 million, up from the previous day’s Rs.354.1 million, with both indices gaining sharply – the All Share by 72.63 points (1.36%) and the Milanka by 67.04 points (1.40%) with 176 gainers strongly outpacing 34 losers.

JKH dominated activity with nearly a million shares traded including some crossings between Rs.191.10 and Rs.195.10 closing Rs.3.70 up at Rs.191.50 posting the day’s top turnover of Rs.183.5 million.

There was a crossing of over 1.1 million JKH at Rs.191.50 with board buying at Rs.192. The stock eventually moved higher to close at Rs.195.

``Foreign interest in JKH is evident,’’ a broker said.

Commercial Bank followed closing flat at Rs.100 on slightly over 0.6 million shares done with Ceylinco Insurance coming third on the turnover league closing 25 cents down at Rs.725 on 42,820 shares traded.

Among the other most traded stock included PC Pharma up 10 cents to Rs.21 on 0.9 million shares, Lion up Rs.5 to Rs.200 on 89,529 shares and LIOC up 30 cents to Rs.21 on nearly 0.7 million shares.

Blue Diamonds saw over 1.9 million shares done closing 50 cents up at Rs.6.20. However, there was an off the floor crossing of 8 million plus shares one at Rs.8, about Rs.2 above the market at the time of the transaction.
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A surge in global wheat prices would be ‘especially’ painful for Sri Lanka, a new report released by the Asian Development Bank (ADB) shows.

A spike in the cost of food staples like rice and wheat could push tens of millions more people into extreme poverty in South Asia but food subsidies targeted at the very poorest in the region would help them cope with still-high prices, the report said.

South Asia’s high population growth rates and the high number of people already living on or close to the extreme poverty line of $1.25 a day means it is one of the most vulnerable regions in the world to food price shocks. Spending on food already accounts for half the total budget of low-income households.

"Subsidizing the cost of a basic meal for the poorest and most vulnerable in places like India means the help goes to those who need it the most without putting an excessive burden on government finances," said Hiranya Mukhopadhyay, an economist in ADB’s South Asia Department and an author of the report.

The study says that a 10% rise in prices could push almost 30 million more Indians and nearly 4 million more Bangladeshis into extreme poverty. Pakistan is also at risk, with the same price leap causing an additional 3.5 million more people to drop to or below the $1.25-a-day income mark.

Nepal and Sri Lanka would be less affected, although a further surge in wheat prices would be especially painful for Sri Lanka, which is completely dependent on imports of the staple and has already seen prices hit historical highs in recent years.

The report – Food Price Escalation in South Asia – A Serious and Growing Concern - notes that after peaks in 2008 and 2011, prices of key food commodities have eased somewhat, although the rate of decline has been slower in South Asia than the international average. In addition, the region suffers from higher overall food inflation rates than the rest of developing Asia, with food making up a bigger share of items measured by the consumer price index.

Short-term weather shocks and costlier oil account for some of the past price upside but the study says rapid population growth, changing food consumption patterns linked to higher incomes, and stagnating agricultural output are more critical factors driving rising food demand and inflation.

Although governments in the region have taken steps to counter higher prices, some measures may not be helpful to neighboring countries. India’s temporary food export restrictions, for example, could have had adverse impact on prices in neighboring countries, as India is the world’s second largest rice producer.

Long term, governments must step up support for agricultural research to spark another "green revolution" to lift output and help develop crops more resistant to weather extremes. More investment in infrastructure, such as irrigation systems and farm-to-market roads to improve distribution and reduce post harvest losses is also essential.

Strengthening home-grown initiatives such as the food bank established in 2008 by the South Asian Association for Regional Cooperation may also help to smooth out price volatility and improve food security in the South Asian region during times of shortage, the report says.

ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members – 48 from the region.
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