Trading Friday - Sri Lankan Shares Closed at a Record High Today

02nd October 2009, www.lankabusinessonline.com

Sri Lankan shares closed at a record high Friday, as investors expecting the bull run to continue on the short term with periodical profit taking, while upcoming quarterly results will point at the bourses long term direction, brokers said.

The All Share Price Index (ASPI) was up 0.68 percent (20.41 points) to end at 3,018.01 while Milanka index liquid stocks gained 1.25 percent (42.00 points) to close at 3,394.86, according to provisional stock exchange figures.

Turnover was 1.07 billion rupees, with a year-to-date turnover of 89.2 billion rupees, the stock exchange said.

The ASPI has shot up 100.8 percent this year, while the Milanka is up 108.1 percent, a stock exchange statement said.

According to Bloomberg Newswire the Colombo Stock Exchange is the best performing market in Asia and the fourth best performing index in the world, the exchange said.

"Today is a day that goes down in history with the ASPI reaching 3,018 points and a market capitalization of 967 billion rupees reflecting the positive attitude of investors," Thakshila Hulangamuwa, of stock brokering house Asha Phillip Securities said.

"The sustainability of the market will purely depend on the positive outcome of financial results in the forthcoming quarters as the market has adjusted to the post-war euphoria."

Index heavy conglomerate John Keells Holdings (JKH) closed at 154.00 rupees, up 1.00, while Distilleries Company of Sri Lanka closed at 89.25 rupees, up 2.25.

Brokers said 18 million Seylan Merchant Bank non-voting shares changed hands. It closed at 80 cents, up 10 cents.

Commercial Bank of Ceylon closed at 176.25 rupees, up 2.25, while National Development Bank closed at 190.75 rupees, down 1.00.

Sampath Bank closed at 179.50 rupees, up 8.50, while DFCC Bank closed at 153.00 rupees, up 1.00.

Nestles Lanka, a unit of Swiss based food company Nestles closed at 411.50 rupees, up 1.75, while Ceylon Tobacco, Sri Lankan unit of British American Tobacco closed at 185.00 rupees, up 2.50.

Celco Dialog Telekom, the Sri Lankan unit of Telekom Malaysia closed at 7.00 rupees, up 25 cents, while Sri Lanka Telecom closed 45.00 rupees, down 50 cents.

Cultivation of Vegetables and Onions on a Large Scale in Jaffna, Sri Lanka

02nd October 2009, firstlanka.com

Plans are afoot to bring thousands of acres in Jaffna under the cultivation of onions. Many farmers have taken to the cultivation of vegetables on a large scale with the ending of LTTE terrorism. They have received the opportunity of improving their production due to the fertilizer subsidy given by the Government.

Many programmes have been launched to resuscitate the agricultural industry under the guidance of Chief of the “Uthuru Wasanthaya” Task Force and Senior Presidential Advisor and Parliamentarian Basil Rajapaksa and on the instructions of the President. The removal of landmines planted by the terrorists on agricultural land is continuing.

Farmers are now engaged in cultivation in the Tanankilappu fields in Jaffna which were neglected for several years.

Czech Investments to Set Up BPO/Call Centre in Sri Lanka

01st October 2009, www.dailynews.lk

The Board of Investment of Sri Lanka (BOI) granted investment approval to Quaestus Lanka to commence a BPO/Call Centre. BOI Chairman/Director General Dhammika Perera signed the agreement on behalf of the BOI and presented the BOI Certificate of Registration to Quaestus Lanka Chairman Tomas Plojhar.

Quaestus Lanka signed the agreement to set up a BPO/Call Centre in Colombo. The venture will provide telemarketing facilities for glogster.com solution. The company is an initial investment of US $ 160,000 providing employment for 40 at initial stages. Glogster.com is an online educational tool developed based on online social networking tool principals.

Quaestus Lanka will be engaging in marketing education licence for the glogster solution to schools around the world. The online teaching tool is used in over 200 countries including Australia, United States and United Kingdom. Glogster is an educational resource for innovative and interactive learning. Glogster was conceived to imaginatively, productively, and collaboratively respond to the dynamic educational landscape and exceed the needs of today's educators and learners. Educators from all over the world are integrating Glogster's resourceful platform to make traditional learning more dynamic, more interactive and more in tune with learners today.

This is the second BOI venture for these investors from the Czech Republic, which shows the confidence they have in the Sri Lankan economy and the BOI. The investors also operate Lanka-Cat, a web designing and software development venture. Chairman, Tomas Plojhar and Director, Brian Kurera signed the agreement on behalf of the company. Investors Stanislav Sramek and Vladimir Ondrousek were also present.

Picture shows BOI Chairman/Director General Dhammika Perera formally presenting the BOI Certificate of Registration to Quaestus Lanka Chairman Tomas Plojhar.

SriLankan Airlines to Boosts Chinese Tourist Arrivals in Sri Lanka

01st October 2009, www.dailymirror.lk

SriLankan Airlines is carrying out a series of promotional activities to increase Chinese tourist arrivals into the Indian Ocean island, and promote closer ties between the two countries.

The National Carrier has in recent months launched several tour packages tailor-made for the Chinese market. The airline’s ‘Ayubowan Sri Lanka’ and ‘Treasures of Sri Lanka’ packages were heavily marketed in China this year, with a number of key incentives being provided to the Chinese travel trade to promote these packages.

Mohamed Fazeel, Head of Worldwide Sales at SriLankan, said: “The centuries-old relationship between Sri Lanka and China has never been stronger than it is today. SriLankan Airlines is aggressively promoting Chinese tourism to Sri Lanka and is working closely with the Sri Lanka Tourism Promotions Bureau in this connection.

The airline has enhanced awareness of Sri Lanka in China by carrying out publicity campaigns in three provincial cities, which were each attended by over 100 Chinese travel agents. Another publicity campaign was carried out in the giant Solama Park Shopping Complex to enhance Sri Lanka’s image, following the dawn of peace.

This year, SriLankan has provided more than 60 complimentary tickets to Chinese travel agents and travel writers for familiarization tours to Sri Lanka. The airline also participated in a number of travel fairs in China, including the Pacific Asia Travel Association Fair in Hangzhou and the Beijing International Tourism Exhibition.

SriLankan Airlines provided 18 free return air tickets to Sri Lankan tour guides to visit China for a 4-month programme to learn Chinese, so as to better serve Chinese tourists. Discounted and complimentary air tickets were provided for officials of the Sri Lanka Tourism Promotions Bureau to visit trade fairs in China, together with other cultural ambassadors such as dance troupes, and to a troupe of Sri Lankan musicians promoting Sri Lankan culture in China.

A special discounted fare was provided to more than 100 Chinese tourists to attend the Esala Perahera in Kandy, a festival sacred to all Buddhists.

Most recently, the airline flew in two chefs from China to train culinary students at the Sri Lanka Institute of Tourism and Hotel Management, and also provide training in authentic Chinese dishes for chefs of many hotels in Sri Lanka.

Senaka Fernando, Regional Manager Asia Pacific, said: “China is an ever-more important business partner of Sri Lanka, and Sri Lanka is an excellent value-for-money destination for the growing number of Chinese tourists travelling overseas. According to Sri Lanka Tourism statistics, Chinese tourist arrivals into Sri Lanka increased by 71% in August in comparison to the same month in the previous year. Tourism from all countries grew by 34% in August 2009.”

The airline has a thrice-weekly service to Beijing via Bangkok , and also flies to Hong Kong three times a week.

The Beijing flights have on board specially trained Chinese Passenger Assistants to help Chinese speaking passengers on board and also at the airport. Passengers get to enjoy SriLankan’s award-winning hospitality, and an entertainment system that features over 40 movie and radio channels, including Chinese movies, and 16 games.The airline is now seeking to promote Sri Lanka as a destination in niche segments such as honeymooners.

Leopard Capital LP to Launch a Fund Focussed on Sri Lanka

01st October 2009, www.lankabusinessonline.com

Leopard Capital LP, a private equity firm that now manages a fund in Cambodia, said it is launching a fund focussed on Sri Lanka after the defeat of Tamil Tiger rebels ended a 30-year war.

It intends to launch a new fund, Leopard Sri Lanka Fund LP, in early 2010 to help mid-market firms expand in the domestic market as well as into other "frontier economies", the fund said in its monthly newsletter.

It has also invited potential investors to attend the inaugural Leopard Sri Lanka Investment Forum 2009 during November 20-21 in Colombo.

"After several decades of civil war, peace has finally returned to Sri Lanka, and a new investment cycle and growth upswing has begun," Leopard Capital said.

Tamil Tiger separatist rebels were defeated by government forces in May, ending a conflict that had retarded economic growth.

The war's end has generated anticipation of an economic revival that has already drawn foreign funds into the island's equities and bond markets.

"Leopard Sri Lanka Fund will provide expansion capital and strategic guidance to mid-market Sri Lankan companies, and also help some expand their businesses into other frontier economies," the newsletter said.

Leopard Sri Lanka will be led by Colombo-based Nirosh De Silva and Ramanan Govindasamy.

According to the firm's website, Leopard Capital is a private equity fund management group specializing in Asia's frontier markets.

"By providing early stage access into overlooked transitional economies, Leopard Capital seeks to generate outsized, uncorrelated returns," the website said.

In April 2008 the firm launched Cambodia’s Leopard Cambodia Fund LP, which has attracted 28.65 million dollars from international investors.

Chinese Auto Manufacturers to Set Up Plants in Sri Lanka

27th September 2009, www.nation.lk, By Azhar Razak

Two of China’s leading automobile manufacturing companies are currently negotiating with the Board of Investment in Sri Lanka (BOI) to setup vehicle manufacturing plants in Sri Lanka. China’s largest domestic vehicle manufacturer, Shanghai Automotive Industry Corporation (SAIC) Motor and FAW Car Company Limited, a state-owned enterprise and which is also the China’s first automobile manufacturer are seeking permission from the BOI to export vehicles from Sri Lanka to Latin American countries and to some African countries, Dr. Saman Kelegama, Executive Director of the Institute of Studies told a business forum.

FAW Car Company Limited, a subsidiary of First Automotive Group Corporation is a maker of light, medium, and heavy-duty trucks, automobiles, municipal and touring buses, custom bus chassis, mini-vehicles and auto parts. It was established and listed on the Shenzhen Stock Exchange in 1997. SAIC Motors, the other Chinese automaker ranks the third among the ‘Big Five’ vehicle manufacturing companies in China.

Singapore Based Calamander Group Enhanced the size of Its Private Equity Fund Focussed on Sri Lanka

27th September 2009, www.nation.lk, By Indika Sakalasooriya

Singapore based Calamander Group, which recently started a private equity fund focussed just on Sri Lanka has enhanced the size of the fund following the encouraging reception it has received from interested parties, a top Calamander official, told The Nation Economist.

“At the time of establishing the fund, we expected to raise US $ 50 million. But the response from interested parties was so encouraging that we decided to increase the fund’s size to US $ 75 million,” Mafaz Ishaq, Director, Calamander Capital Ltd/Calamander Group said.

Calamander Capital Ltd is a fully owned subsidiary of Calamander Group which handles the Group’s Sri Lankan operations.

“Because of this we had to extend the date of the first closure which was scheduled on October 31 to November 14. We currently have more than US $ 20 million in commitments and we expect it will reach the US $ 75 million target before the closure”
“However, at the time of the final closure of the fund that falls in March 31, 2010, we expect to raise US $ 100 to 150 million,” Ishaq added.

When asked whether the fund has marked down the properties it plans to invest in, he said that 80 to 90 percent of the potential investments are already earmarked.
At the time of initiating the fund back in June, Calamander said the fund would mainly invest in commodities, banks, ceramics and fisheries.

“I have been in Sri Lanka for the last two years and we know that Sri Lanka’s competitive advantage lies with commodities. Therefore our major emphasis would no doubt be on tea, rubber and coconut”.

“We won’t be investing in plantations but downstream operations such as tea factories and value addition operations. But currently we are following a ‘go slow’ approach for potential ceramic industry investments due to possible energy costs that may hamper the sector” Ishaq remarked.

He also revealed that more than a dozen of tea factories are currently on fund’s radar, but was reluctant to disclose their names.

“The business plan we have mapped for the fund is that, we will be doing buy outs—we will acquire the majority stake of the companies we invest in. Then our approach would be value addition and complete turn around of the entity.”

“We are also looking at the banking sector very eagerly because Sri Lanka has a pretty conservative but very sound banking sector. We will be investing in a few selected blue chip banks listed in the country’s stock market”

Talking about the fund’s exit strategy in the future, Ishaq said it could be done either through trade sales or Initial Public Offerings (IPO).

“For our potential investments in tea, the exit strategy would mainly be trade sales, but for the investments in rubber, coconut and ceramic it could probably be through IPOs”

When queried about the Calamander Group’s investments in Sri Lanka before the private equity fund, Ishaq said that the Group has had investments in properties in the country over a decade.

“Calamander Group currently has more than US $ 4.5 million worth of investments in real estate in almost all the key provinces in the country, under various investment vessels. We have real estate in Colombo, Kandy and Southern and Eastern parts of the country”

“We are planning to set up boutique hotels in some of these properties, possibly as joint ventures, since the country’s tourism sector is expected to do extremely well” he said.

He also said that Calamander Group in its personal capacity may take an interest in the country’s equity market in the future, but cited lack of liquidity in the market and high broker charges as discouraging factors for them to enter Colombo bourse.