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Retailers step up their play on Lanka IOC shares

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Major transaction announced between James Finlay and Browns Investments

By Hiran H. Senewiratne

Trading activities on the Colombo Stock Exchange (CSE) was positive throughout yesterday with investor sentiment bouncing back pushing both indices by over 1 percent.

Retailers stepped up their play on Lanka IOC shares with over Rs. 1.4 billion traded, pumping its price by over 32 percent, as a result of the fuel hike which made it attractive, stock market analysts said.

Meanwhile, a major transaction was announced between James Finlay’s and Browns  Investments. Browns Investments entered into a transactions agreement with James Finlays’ company to purchase 90 percent each shares in two companies; namely Happugasthanna Plantations and Uddupussalawa Plantations. James Finlays being the owner of both entities sold 41.7 million shares in Hapugastenne Plantation at Rs 28.30 per share and 17.4 million shares of Udupussalaawa Plantations at a share price of Rs 42. The total considerations would be Rs 1.9 billion, stock market analysts said.

With these two transactions  LOLC group will strengthen its positions in the plantation sectors because Browns Investments is one of the subsidiaries of LOLC group, market analysts said. Following two previous sessions of losses, the indices bounced back strongly with selected front-line counters across sectors gaining further ground as investors re-entered into these stocks capitalizing on recent price declines due to profit-taking.

Amid those developments both indices moved upwards. All Share Price Index up by 136 points and S and P SL20 up by 32 points. Turnover stood at 6.6 billion with three crossings. Those crossings were reported in HNB (Voting) 500,000 shares crossed for Rs 67.5 million and its share price traded at Rs 135, HNB (Non Voting) 182,000 shares crossed for Rs 22.3 million and its share price traded at Rs 123 and Richard Peiris one million shares crossed for Rs 20 million and its share price traded at Rs 20.

In the retail market top seven companies that mainly contributed to the turnover were Lanka IOC Rs 1.4 billion (19.6 million shares traded), Browns Investments Rs 655 million  (45.2 million shares traded), Expolanka Hotel Rs 609 million (1.5 million shares traded), Browns Investments Rs 361 million (995,000 shares traded), Kelani Tyres Rs 240 million (2.4 million shares traded), Softlogic Capital Rs 240 million (31.3 million shares traded) and Sunshine Holdings Rs 207.9 million (4.4 million shares traded).



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Business

Seven factors of concern at upcoming Monetary Policy Review

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by Sanath Nanayakkare

The Central Bank of Sri Lanka (CBSL) is scheduled to announce its latest monetary policy review on 20th January 2022, with all eyes on dwindling foreign reserves and foreign currency exchange in the country.

In this context, First Capital Research has named 7 factors of concern that could be taken into account at the upcoming monetary policy review. They are as follows.

* Foreign Reserves USD 3.1 billion – Dec 2021

* Inflation CCPI 12.1% – Dec 2021

* GDP Growth -1.5% – 3Q2021

* Private Credit LKR 60.5 billion – Nov 2021

* 03M T-Bill rate 8.38% as at 12.01.22

Liquidity and CBSL Holdings LKR -364.0 billion and LKR 1.42 trillion

Balance of Trade (BOT) and Balance of Payment (BOP) USD -6.5 billion and USD -3.3 billion for Jan-Oct 21

First Capital Research’s Policy Rate Forecast – Jan 2022-Apr 2022 notes that they believe the CBSL may highly consider tightening the monetary policy rates in this policy review but given the concerns over economic growth, there is a probability of 40% for CBSL to maintain its policy stance at current levels.

“With high frequent indicators improving in line with expectations, we have eliminated any probability of a rate cut. We expect a continued increase in probability for a rate hike in order to prevent overheating of the economy amidst the given fiscal and monetary stimulus,” they said.

As per First Capital’s view, CBSL either can choose to hike policy rates by 50bps or 100bps or hold policy rates steady, while a rate cut is off the table due to the high debt repayment and the high domestic borrowing requirement.

First Capital believes that there is a 60% probability for a rate hike due to the remedial actions required in achieving external stability.

However, there is also a 40% probability to maintain the policy rates at its current level in order to further improve the high frequency indicators.30%, they noted.

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Sri Lanka’s dash brand enters international markets

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Multichemi International Ltd, which manufactures and distributes a wide range of products under dash, one of Sri Lanka’s leading detergent and household care brands, has begun exporting its products to several international markets in Asia and Oceania, with plans also to enter Africa. The dash brand includes a wide range of products in car care, household care, home fragrances and laundry care sectors. Multichemi International Ltd, which has been awarded ISO 9001:2015 certification, is a Sri Lankan pioneer in environment-friendly cleaning products, having launched the country’s first biodegradable, safe cleaning products over 28 years ago.

Amila Wijesinghe, General Manager of the Company said,”Having conquered the domestic market, we are now ready to capture the international market. We are confident that our products which are of high quality will receive a good demand overseas as well. The feedback we have received so far from our overseas customers is extremely encouraging. We are dedicated to taking our products to the international market, to bring in foreign currency to the country and help uplift the economy”,

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Janaka Abeysinghe appointed SLT CEO

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Sri Lanka Telecom PLC has announced the appointment of Janaka Abeysinghe as its Chief Executive Officer (CEO) with effect from February 1, 2022.

The incumbent CEO Kiththi Perera will be overseas on leave for a period of two years to pursue higher studies, according to a stock market filing by the company.

Abeysinghe joined SLT in 1991. In his present role, he leads the enterprise and wholesale business of SLT that provides integrated voice and data solutions to enterprises, government institutions, domestic telco operators and global wholesale carriers.

In his career at SLT spanning 29 years, he has held a number of senior positions, including general manager Enterprise and International Sales and has extensive experience in the areas of Enterprise Digital Services, Enterprise Communications Solutions, Data Communications, Business Development, Domestic and International Switching Operations and Global Wholesale Voice & Data Business.

He holds a Master’s Degree in Electrical and Computer Engineering from the University of Kansas, USA and a BSc degree in Electronics and Telecommunications Engineering with a First Class Honours from the University of Moratuwa.

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