market experienced a full scale bear run during the
four market-day week while retailers were on the
sideline. All Share Price Index (ASPI) shed 40.3
points WoW to 1,694.1 while more sensitive Milanka
Price Index (MPI) reported a loss of 69.8 points WoW
to close at 1,773.9. Negative outlook of corporate
earnings hampered the investor sentiment despite the
positive developments on the northern battle front.
The government intervention to reduce interest rates
and strategies to pump liquidity to the banking
system did not have a positive impact on the Colombo
Average daily turnover for the week was Rs.188.5mn.
Foreigners ended the week as net sellers of
Rs.42.9mn while contributing 16.8% to the total
On Tuesday, the first trading day of the week,
market closed on negative grounds with ASPI loosing
7.5 points to close at 1,726.9 and MPI plunging 9.8
points to end at 1,833.8. Thin volumes and low
activity levels were witnessed during the day. John
Keells Holdings registered the highest turnover for
the day of Rs.11.6mn while total market turnover for
the day amounted to Rs.65.6mn.
Market continued its negative momentum on Wednesday
where ASPI dropped 20.6 points to 1,706.3 and MPI
decreased 45.2 to 1,788.7. Activity levels remained
low throughout the day. Ceylinco
Insurance injected Rs.31.5mn as the highest turnover
of the day while total market turnover amounted to
Yet again, the market ended in red on Thursday
reporting further losses for both the indices. ASPI
dropped marginally by 7.7 points to stand at
1,698.6. MPI plunged 9.2 points to close at 1,779.5.
Substantial volumes changed hands in Union Assurance
(crossing of 1,299,000 shares @ Rs.72.0), John
Keells Holdings (crossing of 500,000 shares @
Rs.60.0), Commercial Bank (crossing of 300,500
shares @ Rs.85.75) and Aitken Spence pumped up the
day’s turnover to high Rs.275.3mn.
On Friday, the last trading day of the week, market
ended flat while ASPI declined marginally by 4.5
points to 1,694.1 and MPI dropped 5.6 points to
1,773.9. Two crossings in Ceylinco Insurance
(1,418,444 shares @ Rs.166.0) boosted the day’s
turnover to Rs.306.9mn. A crossing recorded in
Sampath Bank (143,000 shares @ Rs.70.0 ) and
relatively large volumes of John Keells Holdings
were also notable during the day.
Economic crisis hits Dankotuwa
Global economic turmoil has taken its pound of flesh from
Dankotuwa Porcelain as the company yesterday revealed that one
of its major US buyers has ceased placing orders.
The company in a stock exchange filing said Crate and Barrel of
USA who has been doing business with the company since 1998,
have stopped placing orders with the company with effect from
It further said during the past 3 years, on average they have
purchased goods to the value of USD 1 million per annum, and for
2008 Crate and Barrel amounted to approximately 9% of the export
As stock market analysts point out, Dankotuwa had been exporting
white ware to Crate and Barrel over a decade. Though the margins
for white ware were not very attractive, the company had been
exporting great volumes.
However according to company sources majority of its US exports
are sent to a US retail chain called Macys.
Dankotuwa also exports designed ware to the US and EU markets at
According to stock market analysts around more than 30 percent
of Dankotuwa Porcelain’s exports go to the US market while
another 44 percent and 6 percent go to European Union and Japan
The company also exports some selected products to Russia, India
Dankotuwa made a rights issue of 22.6 million ordinary shares in
April 2008 to settle its short term debts and also went for a
share consolidation in the mid part of 2007.
It’s service with a
smile as usual at Waters Edge
Waters Edge - the
venue that created a bench mark in the hospitality industry has
announced its plans for the organisation’s maintenance and
‘Waters Edge’, which is currently managed by ‘Waters Edge
Limited’ with a new Board of Directors headed by the Chairman -
Dr. Prathap Ramanujam, who also serves as Secretary to the
Ministry of Urban Development & Sacred Areas, now operates under
the auspices of the Urban Develoment Authority ( UDA).
The Board of Directors appointed by the Supreme Court includes
the following prominent business personnel some of who are well
known to the hospitality and banking industry supported with
design consultants and they are Hiran Cooray - Chairman - Jet
Wing Hotels & Resorts, Prema Cooray - Head of Sri Lanka
Conventions Bureau, Kirmali Fernando - Chief Executive Officer -
Pan Asia Bank Corp., S. G. Gardiner - Chairman - Galle Face
Hotel, Sugath Karunanayake - prominent Attorney-at-law and
Ismeth Rahim - well known Architect.
The Board, has pledged its fullest support and keen interest in
the future business plans of the facility.
With a large expanse of land of over 200 acres, Waters Edge will
now use the water retentive golf course area to convert it to an
ecologically conducive environment.
It is believed this process of ecological balance would promote
the natural spread of both fauna and flora, whilst acting as a
water retention basin for the areas surrounding Battaramulla.
Waters Edge will continue to offer its customers the exclusive
products and services it has been famed for. Its kitchens will
continue to emanate the familiar and welcoming aroma of baking
of the finest of cakes and pastries. At its restaurants, the
stewards will proudly wheel in the most elaborate A La Carte
meals, making the simplest dish a work of art, making every meal
a gastronomic delight to the customer.
Parakrama to address TOC ASIA
Dr. Parakrama Dissanayake – Chairman,
Aitken Spence Maritime and Director, Aitken Spence Group, has
been invited to address the prestigious Terminal Operators
Conference (TOC Asia), the largest global annual event in the
Ports Industry, which will be held in Shenzhen from March 3- 5,
Amongst those who will address the Conference are: Dr. Sun
Jiakang, Managing Director COSCO Container Lines, John Elliott,
CEO – Asia Container Lines Ltd., Ken Soerensen – President,
United Arab Shipping Company.
Dr. Dissanayake who has served on the UN/UNCTAD Panel as an
expert on Ports and Shipping, has in the past held the positions
of Chairman – Sri Lanka Ports Authority, Chairman – Jaya
Container Terminals, Chairman – Chartered Institute of Logistics
and Transport, Chairman – Institute of Chartered Shipbrokers –
Sri Lanka Branch.
Dr. Dissanayake is also Chairman Central Advisory Board of Sri
Lankan Transport Board and is the Co-Chairman of the Transport
Cluster of the National Council for Economic Development.
He has also been conferred with the Lifetime Distinguished
service to society Award by PIMMA of the University of Sri
Jayawardenapura and Best Shipping Personality Award by the
Institute of Chartered Shipbrokers.
AIVA PLC reports significant
growth, Global, Life sales for 12 months, 2008
Aviva PLC, the fifth largest insurance group in the world which
acquired the controlling interest in Eagle Insurance PLC in
2006, has reported significant growth in Global long-term
savings sales and Life and pensions sales in 2008; Today Aviva
is the biggest insurer in the UK. The group has 57,000 employees
serving 45 million customers worldwide with more than GBP 359
billion of assets under management.
• Sales have continued to grow
- Global long-term savings sales up 1% to £40.3 billion (down 7%
on local currency basis)
- Life and pensions sales up 11% to £36.3 billion (up 2% on
local currency basis)
- Sales figures reported on Market Consistent Embedded Value (MCEV)
basis for the first time
• Strength from our geographic spread and range of distribution
- UK: highest ever life and pensions sales at £11.9 billion
- Europe: life and pension sales up 8% to £17.0 billion, buoyed
by strength of the euro (down 7% on local currency basis)
- North America: target to double sales in three years achieved
a year ahead of plan, up 57% (up 45% on local currency basis)
- Asia Pacific: life and pension sales up 8% (down 1% on local
currency basis) - led by 66% growth in China (up 40% on local
• Capital and liquidity position remains strong
- Consistent strategy through global crisis has ensured the
financial health of Aviva
- Estimated £2.0 billion IGD surplus as at 31 December 2008
- Strong liquidity position maintained
- Group dividend policy remains unchanged
Aviva’s Chief Executive, Andrew Moss commented:
“In a year of unprecedented turbulence, our sales have continued
to grow. Operating across 27 markets with a range of products
and varied distribution has served us well, and has brought us
an additional real benefit from currency appreciation. Growth in
developing economies such as Asia and central and eastern Europe
has offset difficult conditions in more mature markets such as
Ireland and Italy. Our capital position remains strong and Aviva
continues to be attractive to customers seeking security for
their long-term savings. Our priorities are to maintain our
financial strength and continue to transform Aviva for the
benefit of customers and shareholders.”
A.P.S Knitters awarded 150
9001/2000 int’l certification
A. P. S. Knitters (Pvt) Ltd a leading textile
manufacturing institution in Sri Lanka was awarded
150 9001/2000 international certification recently.
Picture shows the managing director of the firm,
Kaushalya Samarasinghe receiving the certificate
from the Minister of Industries Kumara Welgama.
Director Deepani Samarasinghe too was present on the
A Guide to equity investment part 3
After gaining a sound knowledge about the company after going
through the profit and loss account it is necessarily important
to understand the financial position of the company. Balance
Sheet is a statement of financial position and reveals a
company’s assets, liabilities and the capital structure
(including the owners’ equity) at the end of a given accounting
In a Balance Sheet, assets and liabilities are mainly
categorised in to two segments as Short-term and Long-term.
Assets are classified based on the life span and liabilities are
segmented based on the due period. Current assets have a life
span of one year or less and assets that have a more than one
year life span is called Long-term assets. Liabilities that must
be paid within one year is called short-term liabilities and
liabilities that will be payable after one year are categorised
as Long-term liabilities. Entries in a balance sheet are
arranged to the level of liquidity where least liquid asset is
recorded first and most liquid asset is recorded last. For
instance, Land and Property is recorded first and Cash and Cash
Equivalents are recorded last.
In addition balance sheet also displays the capital structure of
the company and the amount of reserves maintained by them.
Stated Capital is the funds collected from the equity holders
(includes share capital and share premium). In financial
accounting Preference shares and Debentures are categorised as
debt capital since the cost of funds (dividend and interest) are
fixed, which is similar to obtaining a loan.
Most of the important investor ratios are based on the balance
sheet figures. Gearing ratios, Liquidity ratios and other
important investor ratios based the balance sheet entries.
Gearing Ratios demonstrate the degree to which a company’s
activities are funded by borrowings or debt. Debt is considered
as all interest and non-interest bearing borrowings (this
includes both short and long term borrowings, debentures and
preference shares). Conventionally, gearing ratio demonstrates
the total debt of the company as a percentage of the total
capital (Gearing ratio = Debt Capital / Debt + Equity Capital).
As an equity investor, when considering the gearing position,
the best practice is to calculate the Net debt to Equity to
understand the debt position of the company exclusively from an
equity point of view (Net Debt to Equity = (Total interest and
non interest bearing borrowings – Cash and cash equivalent) /
Share Holders Funds).
Liquidity Ratio evaluates the ability of the company to settle
its short term liabilities using the company’s short term
assets. Basically, this shows how many short term assets a
company possessed to a single unit of short term liability
(Liquidity ratio = Current Assets / Current Liabilities). The
adequate level is said to be two assets for one liability.
Return on capital employed (ROCE) measures the returns that a
company has generated from its capital employed (ROCE =
Operating profit / debt and equity capital employed). This can
be used to assess whether a business generates enough returns
for its investors.
Return on assets (ROA) measures the returns generated by the
company to its total assets invested (ROA = Operating profit /
total assets). This gives an idea as to how efficient the
management has managed its assets.
Book value per share (BVPS) is the amount of money that an
ordinary shareholder will receive if the company is ceased. It
is important to note that if the assets are maintained at cost
and not revalued for a reasonable time period, then the ratios
will be unrealistic. Therefore it is advisable to workout the
present market value of the company’s assets to identify the Net
Assets Value in order to understand the actual position of the
equity holder in a case of liquidation.
After a careful analysis of the Balance Sheet and respective
ratios it is vital to compare the company’s financial position
with industry averages and competitors. This will help you to
gain insight in to a company’s competitiveness and ability to
survive and face the potential challenges. Furthermore, returns
can be compared easily with other alternatives to select better
powered BOC delegation visit Jaffna
A high powered
team of senior officials of the Bank of Ceylon, visited Jaffna
to make a preliminary assessment of the rehabilitation process
and development work to be carried out in the Northern Province.
They will have discussions with government officials, bank
staff, representatives of NGO’s, social workers, to offer
assistance for rehabilitation and development work in the area.
The delegation will also take this opportunity to meet the IDP’s
to assess their needs and provide possible assistance.
The Bank delegation is headed by M Kiritharan, Chief Legal
Officer,C Samarasinghe, Deputy General Manager(Product &
Development Banking), H M A B Weerasekara, Deputy General
Manager (International & Treasury) and W D F Wimalaratne, Deputy
General Manager (Human Resources Development) and N Sivaratnam,
Assistant General Manager (Northern province) is co-ordinating
the arrangements, and scheduling the meeting and the visits of