Colombo bourse witnessed a volatile nature during the week with improved retail investor participation causing high activity levels. All Share Price Index (ASPI) increased 59.4 points WoW to 1,821.2 while blue chip price tracker Milanka Price Index (MPI) increased 35.2 points to 1,965.0. Retail investors dominated the market with more attraction for speculative counters while institutional investors too showed some active participation during the week. Positive developments in the war front boosted the investor sentiment despite the gloomy economic outlook in the country.

The market commenced operations on Monday with ASPI gaining 56.25 points to close at 1,818.1 and MPI jumping 93.2 points to stand at 2,025.9. Active retail investor participation was cited throughout the day and resulted in a turnover of Rs.278.6mn. John Keells Holdings was the top contributor with a turnover of Rs.75.5mn (includes a crossing of 150,000 @ Rs.70.0). Seylan Bank non-voting registered the highest volume (2.4mn shares) while Banking and Plantation counters were amongst the heavily traded counters.

The positive sentiment did not continue on Tuesday while ASPI drop 17.1 points to 1,801.0 and more sensitive MPI lost 7.5 points to 2,015.4 due to profit taking by retail investors. C.W Mackie was the mostly sought counter for the day while John Keells Holdings, Commercial Bank and Seylan Bank were also contributed materially to the day’s turnover.

The market demonstrated mix results on Wednesday where ASPI gained 11.2 points and MPI shed 5.3 points to 1,812.2 and 2,010.1 respectively. Retailers set the market direction with speculative buying on Lanka Cement. Lanka Cement was the most actively traded stock for the day while Palawatte Sugar and C.W Mackie were also positive on the day’s turnover. Turnover amounted to Rs.96.1mn.

The bourse revived on Thursday and ASPI augmented 22.7 points to close at 1,834.9 while MPI gained 2.1 to 2,012.2. Lanka Cement continued to dominate the day’s turnover with heavy activity levels while trading on Overseas Reality, Laxapana Batteries and Hotel sector companies were also notable during the day. Turnover for the day stood at Rs.170.3mn. This includes the Cargills crossing transaction (500000 shares at Rs.28.0).

Market could not retained the momentum on Friday, ASPI plunged 13.7 points to 1,821.2 while more sensitive MPI lost 47.2 points to 1,965.0. The days turnover was recorded at Rs.300.9mn. Stocks which encountered more trading volumes were Dialog, Keells Hotels, Lanka Cement, Asian Hotel Properties (500,000 shares crossed hands at Rs.32.00) and Overseas Reality.

Average daily turnover for the week was Rs.189.7mn and average daily volume was 12.8mn shares.
Net foreign sales stood at Rs.65.8mn while the foreign participation represented a low 12.1% of the total market activity for the week.


CTC contributes Rs. 50 billion to govt. in 2008

Ceylon Tobacco Company, contributed Rs.50 billion to the government in 2008, up Rs. Nine billion from 2007. The sales volumes however declined in 2008, impacted by higher excise-led price increases, and diminishing consumer affordability. The Rs. 50 billion contribution to the government consists of Excise Duties, VAT, Provincial Council Tax and Corporate Tax.

Last year, despite economic challenges faced by many Corporates world wide, CTC remained one of the largest contributors to government revenue. The Rs.50 billion contributed in 2008(up from a Rs. 41 billion rupees contributed in 2007,) is mainly attributed to the excise led price increases, and declining volumes of illegal and counterfeit products in the local market. In 2008, more than 740 raids were carried out by law enforcement officials, in a concerted effort to minimise the presence of illegal cigarettes. The confiscated illegal tobacco products amounted to the value of over Rs.335 million.

Bold and innovative initiatives in consolidating the distribution network, further localisation of material inputs, and on going organisational restructuring, have continued to deliver significant savings for the company. These savings contributed to the profit after tax increase of Rs.867Million in 2008.

The Company doubled its investments in its flagship community project; Sustainable Agricultural Development Programme (SADP) which is targetted at poverty alleviation, and has over the last three years touched lives of 3578 families in rural Sri Lanka, unfolding a simple formula to achieve sustainable development through their own effort. During the year 2008, 205 families exited the programme achieving self sufficiency and taking the project on to a different level. The Company has extended its SADP project to the Eastern province in line with the Government’s Re-building the East programme- “Nagenahira Navodaya”. The SADP formula will be replicated in identified areas in the Eastern province. This is expected to benefit a large number of families, now re-located in the East of the country.


CB clarifies on reserve position

The attention of the Central Bank of Sri Lanka is drawn to some incorrect data with respect to the country’s foreign reserves, as published in recent media reports, as those are grossly misleading the public and business community. Therefore, this statement is issued to clarify the position.

The country’s total reserves as at November 2008 end, stood at US Dollars 3,914 million which is sufficient to finance 3.3 months of imports. Country’s total external reserves include gross official reserves held by the Central Bank and government, and external reserves of domestic commercial banks. As already published, the Gross official reserves as at November 2008 end stood at US Dollars 2,608 million which was sufficient to cover 2.2 months of imports.

Despite the well known difference between country’s total reserves and gross official reserves, some economic analysts contributing their views to certain weekend newspapers have mixed up those two reserve figures and provided a misleading analysis on external reserves, comparing country’s total reserves until end 2007 with gross official reserves at end November 2008.


World Prize for Sri Lankan student at CIMA November 2008 exams

CIMA (The Chartered Institute of Management Accountants) the world’s leading and largest professional body of Management Accountants, announced that Sri Lanka was only one of two countries worldwide to secure a World Prize winner at the November 2008 examinations.

Dilshani Gunawardena won the CIMA world prize for P7 Financial Accounting and Tax Principles at the Managerial level by obtaining 96 marks, proving that dedication and study can produce exemplary results. This is the second Sri Lankan to win a world prize in 2008, the first being Nilusha Fonseka for P2 Management Accounting Decision Management.

The November 2008 exam results which marks the eighth diet of exams for CIMA’s current syllabus, has brought some welcome increases in pass rates, at both the Strategic level and TOPCIMA (Test of Professional Competence in Management Accounting). It also saw the emergence of 258 Passed Finalists making 2008 a very successful year for CIMA with the passing out of 550 graduates.

Overall, the global and the Sri Lankan pass rates have improved particularly for two of the three Strategic level papers and TOPCIMA has improved when compared with May 2008. There were some good performances at Managerial level, with global pass rates for Paper P4, Organisational Management and Information Systems and P8, Financial Analysis their highest ever. The significant improvements in the pass rates are a testimony for the dedication and the competence of the CIMA tutors in Sri Lanka.

CIMA has an on-line dedicated area for student support, full of tips and advice for exam success in the official student section of the cimaglobal.com website. The site consists of student guides and post-exam guides which focus on performance in all past papers. These are invaluable tools for exam success, and CIMA recommends that this area of the website is accessed regularly.


Birmingham Business School Professor to address CIM Branding Summit

Prof. Leslie de Chernatony from the Birmingham University Business School has been invited by the Chartered Institute of Marketing Sri Lanka Region to address the forthcoming CIM Branding Summit, scheduled for February 6, at the Oak Room, Cinnamon Grand Colombo. Sri Lanka Telecom is the Strategic Partner of this full day effort, which is one of the key events for 2009, in The Institute’s calendar.

Leslie de Chernatony is Professor of Brand Marketing and Director of the Centre for Research in Brand Marketing at Birmingham University Business School. With a doctorate in brand marketing, he has a substantial number of publications in American, European and Asian journals, and is a regular presenter at international conferences. He has authored several books on brand marketing: the two most recent publications being ‘Creating Powerful Brands’ and ‘From Brand Vision to Brand Evaluation’.

A winner of several research grants, his two most recent grants have supported research into areas associated with high performance brands and services branding. He is a Visiting Professor at Thammasat University, Bangkok and University of Lugano, Switzerland. Professor Chernatony is a Fellow of The Chartered Institute of Marketing and a Fellow of the Market Research Society.

Giving a preface to the programme, Prof. Chernatony says “In an era of cost cutting and highly screened proposals for investments, managers increasingly have to find more creative ways of leveraging scarce resources to add greater value to their brands. Building more value into brands necessitates organisations going beyond the competitive status quo. A new type of corporation is now thriving, by refusing to accept the old traditions of being driven by markets, and instead they are driving markets. These new challenger brands are achieving leaps in value by creatively redeploying assets, refusing to accept market conventions and having new business models. In an e-based era, the market driving brands are thriving by involving customers and making them co-producers of value through open source platforms.”

Too often firms adopt incremental ways of enhancing their brands, rather than thinking more creatively and devising radical, innovative strategies. “Outside the box” thinking appears to be constrained, amongst other reasons, by benchmarking against current competitors in the current category, and thinking a value added route will emerge primarily because it builds on internal competencies which only superficially add to customers’ value.

The programme will radically revisit the concept of “value” and educate the participants on how their brands can add genuine value through values.


Hayleys MGT’s 3 Q profits decline

Hayleys MGT Knitting Mills, the Hayleys Group’s cotton and synthetic manufacturing business has posted a turnover of US$ 46.5 million for the nine months ending December 31, 2008, a growth of four per cent over the corresponding period of the previous year.

Turnover in the third quarter however, reflected a decline of 10 per cent over the corresponding quarter of the previous year.
This growth was achieved in the face of postponements and reductions in orders from customers as a result of a downturn in retail business in international markets, Hayleys MGT Joint Managing Director Bandula Weerasinghe said. This softening of demand, coupled with higher furnace oil costs in the first two months of the third quarter had impacted adversely on profit growth in the period under review, he disclosed.

According to results released to the Colombo Stock Exchange this week, Hayleys MGT’s profit after tax and Economic Service Charge (ESC) at $ 2.115 million reflected a decline of 48 per cent over the first nine months of 2007- 08, due to the erosion of margins and lesser demand.

However, margins are expected to improve in the final quarter of the year due to a reduction in energy costs as a result of a revision in furnace oil prices, Weerasinghe said. The abolition of the fuel surcharge in January 2009 and depreciation of the Sri Lankan Rupee would also help the company, he said, but cautioned that overall results for the full year would not match those of the previous year.

In order to offset the rising costs of energy, Hayleys MGT Knitting Mills is setting up a biomass steam generator which will be operational in the new financial year,. Weerasinghe said. This is believed to be the biggest firewood fuelled steam energy generator in the country.

A major supplier to top international brands such as Marks & Spencer, Next, Nike, Reebok and Decathlon, Hayleys MGT is the first fabric manufacturer in Sri Lanka to be certified as compliant with the world’s most stringent Social Accountability Standard, SA8000. The standard represents a comprehensive and flexible system for the management of ethical workplace conditions throughout global supply chains and assures a humane workplace through respect for workers rights.

Hayleys MGT has a production capacity of 4 million metres of fabric per month at its state-of-the art plant at Narthupana Estate in the Kalutara District. The company is a key supplier of high quality knitted fabric to the Sri Lankan apparel industry and to export markets.


SLT and SLT Mobitel partners with EDEX 2009

Sri Lanka Telecom, the nation’s number one integrated communications service provider and Sri Lanka Telecom Mobitel, the national mobile services provider entered into a partnership with EDEX 2009, the largest and most prestigious national higher education and careers exhibition in the island, as the Platinum sponsors of the recently concluded exhibition. The EDEX 2009, which was held at the BMICH between January 23 and 25, and in Queens Hotel Kandy from January 27 and 28, housed over 30 stalls and was visited by thousands of viewers.

Commenting on the significance of SLT’s sponsorship of EDEX 2009, Leisha De Silva Chandrasena, Chairperson of SLT said, “SLT wholeheartedly supports EDEX’s vision of empowering Sri Lankan youth to be globally competitive, as we have recognised that Sri Lanka’s future is in the hands of its youth. Keeping this in mind, we have focussed greatly on education as one of our main corporate social responsibility aspects under the theme of empowering education. Thus sponsorship of this exhibition was thus in line with this theme, through which SLT has continuously strived to support the country’s educational institutions and its youth to build and further develop capabilities towards a better Sri Lanka”.

The SLT stall at EDEX 2009 featured some of the latest emerging technologies available in the market such as SLT’s breakthrough communications services provided through Wizz. This included Wizz Personal, which gives you “one number for your life”, video calls, wiz to wiz free calls etc.; Wizz Family through which each family member is given extension numbers no matter which part of the country they are at and free outgoing calls between those numbers; Wizz Duo Unlimited for you and your buddy/lover; Wizz Conferencing which is an easier way of scheduling meetings through a user friendly web portal; other services demonstrated include CDMA, mobile PBX as well as games and 3D displays.

The most important aspect of the exhibition was that visitors were given a chance to experience these technologies and services for themselves at first hand.