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Market Comment
Export credit nowThe Sri Lanka Tea Board now finalised the scheme to grant special insurance cover for teas exported to Russia. The scheme will come into operation from 15th October 1998. It will be operative for a period of four months ending February 1999. The scheme would be operated by SLECIC. The main features of this scheme are:
i) The maximum limit for the total exposure for the four months will be US$ 15 million.
ii) The insurance policy would cover both DA and DP terms.
iii) A special concessionary premia is offered for the cover. One half of the premia will be payable by the exporter and the other by the Tea Board.
iv) Indeminification by SLECIC will be limited to a maximum of 75% of the insurance cover. The effectiveness of this package will be known no sooner buyers move to take advantage of the opportunity. It has been suggested that the scheme be extended to include exports to the CIS as well.
In the Ex Estate catalogues there was more demand for tea for Price BOP and BOPF. It is welcome turnaround of an extended declining trend. This will be watched closely in the context of an anticipated increase in demand for Russia, which would be subject of exporters acceptance of the new insurance cover. There has been no significant change in the situation in Russia however, that would signal more demand Best Leafy Low Growns were a weaker feature. The failure of poorer OPAs to attract significant interest is a matter of concern for producers from both Low and Higher elevations. - Asia Siyaka
b
How to gain from Share Market with your capital intact...The Unit Trust Management Co (Pvt) Ltd., the managers of Ceybank Unit Trust and Ceybank Century Growth Fund is to launch Capital Guaranteed Investment Account, which will provide investors with an opportunity to gain by share market without assuming the risk of losing the initial capital invested. The approval of the Securities and Exchange Commission of Sri Lanka and the Trustee, Bank of Ceylon has been obtained to offer Capital Guaranteed Investment Account as a scheme linked to the Ceybank Unit Trust.
The Capital Guaranteed Investment Account is an innovative product which combines both treasury backed securities such as treasury bills along with Ceybank Unit Trust to enable an investor to enjoy the benefits of the stock market while keeping his initial capital intact thus guaranteeing the original amount invested, if the investment is held for more than one year.
At the same time the investor would be able to earn more than the treasury bill returns if the share market does well during the holding period. It also offers greater flexibility to investors by giving the choice to select a longer period than one year of holding to obtain the capital guarantee in pursuit of a higher return.
This product offers the investor easy access to his investment partially or fully before the period of one year however, in such instances the investor may not be in a position to receive the total value originally invested if the market moves adversely during the holding period. Applications for investment may be made directly to the company, any Bank of Ceylon branch, any authorized agent or through a representative who may call on the applicant commencing 21st October 1998.
On receipt of the application together with the funds, a portfolio account is opened by the company in the name of the investor and a proportion of investments as determined based on the prevailing interest rate, is invested in treasury bills or other government backed instruments to yield the exact value of the initial investment at the end of one year.
The balance funds, which is equivalent to the discount received in advance on the treasury bills, will be invested in Ceybank Unit Trust without charging front end fee.
The unique feature of this product is that the investor's initial investment will be intact even in the event the stock market does not perform well, while the prevailing market value of the Ceybank Unit Trust will be the investor's return over and above the initial investment. Hence, it will provide an investor with the opportunity to ride the waves of the stock market in pursuit of higher returns while keeping his initial investment intact even in a market crash.
The Unit Trust Management Co (Pvt) Ltd. believes that it will provide good opportunities for an investor at a time like today when there is a very high level of uncertainty with regard to the stock market direction. The investor can obtain an exposure to the equity market through the Capital Guaranteed Market Account with confidence that his initial investment will be intact, while he holds on to the investment for at least one year. Further, it will attract conservative investors who hitherto depended on conventional savings products to start tasting the fruit of the share market without being exposed to undue risk which such investor is not prepared to take.
The company is certain that it will be able to mobilize significant amount of funds through this product as this is the first time the local investor has the ability to test the high return potential of the stock market while avoiding the possible downside risk associated with a high risk investment. It reflects the commitment of The Unit Trust Management Co (Pvt) Ltd. to offer products to meet the needs of the local investors by introducing innovative investment products rather than duplicating products available in highly developed markets which rarely have local market appeal.
The Unit Trust Management Co (Pvt) Ltd, backed by Bank of Ceylon which has a clear understanding of the grassroot saving market, the Unit Trust of India with its depth of experience in a range of innovative products and the support of the other local and foreign shareholders is committed to mobilise a significant slice of rural money for growth in the capital and money market by providing investment products which meet the needs of the investing public.
It was a much better sale this week with better buyer participation resulting in fewer teas remaining unsold. The Ex-Estate market for Liquoring Teas witnessed steady levels with best, in the categories of Western's, Nuwara-Eliya's and CTC Fannings selling above Rs. 150. Middle Eastern and CIS inquiry enabled Neat Lain Teas to hold last levels between Rs. 80 and Rs. 90, and only a few Poor Leaf Teas fell below this level. In the Low Grown sale too there was a better absorption rate even though, the prices tended to fluctuate between grades. Although, some Off Grades dropped a couple of rupees, the Dust grades more than compensated by advancing several rupees.
Although, this week's sale could be considered satisfactory considering Russian crisis and the increased world productions, the ensuing sales may not be as attractive particularly for teas from the higher elevations, since the cup characteristis reflects a slight drop on one hand, and the customary stoppage for the Deepawali holidays likely to affect overall product quality from next week's manufacture, on the other.
- John Keells
Kangaroo Brand fresh fruit juice from Australia
Pership Import & Export (Pvt) Ltd., a member of the Pership Group, exclusive marketers and distributors of Meadow Lea and Mother's Choice range of products were appointed by Orange Circle Austrlaia Ltd (OCA) as their marketers and distributors for Kangaroo brand products in Sri Lanka.
From left to right - Mr. Harold Speldewinde, Managing Director- Pership Import & Export, Mr. Suren Salgado, Managing Director - Orange Circle Australia Ltd (OCA) ~ Mr. Parakrama Dissanayake, Marketing Consultant - Pership Import& Export Ltd.
Kangaroo brand 100% pure fruit juices, Apple, Orange and Grape, without any artificial colours or flavours with NO Added sugar, packed in attractive l litre bottles will soon be available in retail stores in Sri Lanka, for-all to enjoy. Keenly priced, to make fruit juices more affordable to a much wider section of the local population, it's a welcome initiative undertaken by the company's Sri Lankan born Managing Director - Suren Salgado.
Orange Circle Australia are growers and exporters of fine quality fresh produce to several countries in the Asia Pacific region. Large International Airlines, such as Thai, Cathay Pacific, Korean, are some of OCA's highly quality conscious customers in the region, along with several upmarket restaurant chains and food stores in Japan and Hong Kong.
While staying very much in the food business, OCA has recently diversified from fresh food to several lines of processed foods, selling under the brand name of "Kangaroo".
1 Fruit juices being a great success in other countries, OCA strongly feels Sri Lanka too will respond favourably to the company's sales policy of "low margin & high volume". OCA proposes to introduce few other appropriate products in the months to come.
FHASL is 40 years on Monday
From Cyril WimalasurendreThe Finance Houses' Association of Sri Lanka (FHASL) is to hold its 40th anniversary celebrations and National Conference on Monday 19th.
The anniversary theme will be ÔThe Role of the Finance Company in the National Economy'.
The Finance Houses Association of Sri Lanka is a body representing 24 registered and licensed finance companies of the island. The FHASL with its membership which played an important role in the financial sector and the national economy has today gained the recognition as a highly professional body carrying out operation with the Central Bank.
The FHASL with its Chairman Kithsiri Wanigasekera who is also the Chairman of Sinhaputhra Finance Company Ltd. with its headquarters in Kandy and Chairman, Kandy Hotels company (1938) Ltd. with Mr. Dennis Wiswasam as Chairman of the Organising Committee has arranged to mark the anniversary by a special delegates' conference with Minister of Justice, Constitutional Affairs and Deputy Finance Minister Prof. G. L. Peiris and the Governor Central Bank Mr. A. S. Jayawardena as the Chief Guest and the Guest of Honour respectively.
The venue for the event will be the Trans Asia Hotel, Sir Chittampalam A. Gardiner Mawatha, Colombo 2.
The inauguration takes place at 9 a.m. on Monday followed by the technical sessions at 11 a.m.A paper will be presented by Deshamanya Lalith Kotalawala, Chairman and Managing Director of the Finance Co. Ltd., and Chairman, Ceylinco Group of Companies. Another paper will be presented by the Central Bank.
+ Exchange Rates The Central Bank's Spot Rates for transactions with Commercial Banks announced on the morning of October 16, 1998 were as follows:
Buying Selling 100 US Dollars Rs. 6551.28 Rs. 6683.62 The approximate middle exchange rates of following currencies calculated on the basis of cross rates quoted by Gulf International Bank, Bahrain as it appeared in Reuters Financial Information System on October 16, 1998 were as follows:
Saudi Arabia Riyal Rs. 17.64 Bahrain Dinar Rs. 175.54 Kuwait Dinar Rs. 217.63 Qatar Riyal Rs. 18.18 UAE Dirham Rs. 18.02 Oman Riyal Rs. 171.89 Average rates at which the following currencies were quoted by Commercial Banks in Colombo for Telegraphic Transfers at mid-day on October 16, 1998 were as follows:
Buying Selling 100 US Dollars Rs. 6591.00 Rs.6641.60 100 Sterling Pounds Rs. 11249.39 Rs. 11381.29 100 Deutsche Marks Rs. 4061.81 Rs.4134.26 100 French Francs Rs. 1206.97 Rs.1239.50 100 Japanese Yen Rs 56.34 Rs. 57.46 Average Weighted Prime Lending Rate (AWRP) and Lowest Prime Rate (LPR)
The Average Weighted Prime Lending Rate (AWPR) during the week ended October 9th, 1998 was 16.1 per cent for all banks. The Lowest Prime Rate among banks during this week was 13.5 per cent.Average Weighted Deposit Rate of Commercial Banks (AWDR)
The Average Weighted Deposit Rate (AWDR) of Commercial Banks for the month ended September 30th, 1998 was 9.6 percent.
* Unit Trust Prices
Ceybank Unit Trust
Manager's Selling Price Rs. 5.19 (per unit) Managers Buying Price Rs. 4.86 (per unit)
Ceybank Century Growth Fund
Manager's Selling Price Rs. 7.17 (per unit) (Ex - Div.) Managers Buying Price Rs. 7.07 (per unit) (Ex - Div.)
Eagle Gilt Edged Fund
Manager's Selling Price Rs.10.83 (per unit) Managers Buying Price Rs. 10.71* (per unit) Eagle Income Fund
Manager's Selling Price Rs.10.83 (per unit) Managers Buying Price Rs. 10.71* (per unit) Eagle Growth Fund
Manager's Selling Price Rs. 7.84 (per unit) Managers Buying Price Rs. 7.52* (per unit) * After deducting exit fees applicable for the first year
National Equity Fund
Manager's Selling Price Rs. 6.88 (per unit) Managers Buying Price Rs. 6.47 (per unit) Namal Growth Fund
Manager's Selling Price Rs. 7.42 (per unit) Managers Buying Price Rs. 6.97 (per unit) Namal Income Fund
Manager's Selling Price Rs. 10.35 (per unit) Managers Buying Price Rs. 10.24* ( per unit)
Pyramid Unit Trust
Manager's Selling Price Rs. 5.17 (per unit) Managers Buying Price Rs. 4.84 (per unit)
* After deducting exit fees
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