      Business Editor : Eriq Dewanarayana |
Business Editor : Eriq Dewanarayana |
Market rises further
The Colombo market registered further gains throughout the week to close at 517.9. The all share price index gained 1.45% WOW. Foreign activity increased to 63.14% compared to 44.2% last week. Average daily turnover increased Rs. 84.7 m. from Rs. 35.6 m. last week.September Inflation falls to 10.3%
The Colombo Consumer Price Index (CCPI) rose 7.5% YoY in October bringing the rotting 12 month average to 10.3% up from 10.2% in September. We were expecting a rise of 11.8% YoY as against the actual 7.5%. Since July actual inflation numbers have been coming in less than our forecasts. Our current inflation forecast for the year is 12% but in light of these latest numbers we have revised it down to 10.1%. Our forecast for 1999 inflation as measured by the CCPI REMAINS AT 10.8%.
Corporate results for the week
9M FY 98 results for the National Development Bank (NDB)
Income has risen 13% in the period to Rs. 2,621 m. while PAT fell 12%. The bank had provisions of Rs. 424 m. which consisted of.
• provisions for bad and doubtful debts and fall in value of non-quoted investments — a write back of Rs. 132 m.
• provision for fall in value of quoted investment — a write off of Rs. 417 m.
The bank has changed the method of making the general provision for the performing loan portfolio from a flat 3% to a percentage provision method that takes into account: loan and client ratings, the level of NPl expected in each category and the level of actual write-offs expected as a percentage of NPLs. As a result of this new method provisions of Rs. 311 m. have been released. BUY
9M FY98 results Sampath Bank
Loans and advances has grown by 34.2% while recording a growth of 23.4 in deposits. PAT has risen 27.1% to Rs. 299 m. Sampath’s earnings for next year will be boosted by the concessions introduced by the budget on IT expenses. SAMP will spend about US$ 5 m. spread between 1998 and 1999. BUY
9M FY98 results Commercial Bank
Loan growth for the nine months was 34.85% to Rs. 17.4 b. and the bank has recorded a deposit growth of 27.1% to Rs. 23.6 b. PAT has risen 22.6% to Rs. 229 m. BUY
9M FY98 results HNB
Loans and advances has risen by 28.8% to Rs. 34 b. the largest of the four listed commercial banks. Deposit growth was 8.9% Profit after tax has risen 22.8% to Rs. 448 m. BUY.
6 M FY98 results JKH
Turnover has increased by 21% to Rs. 4.98 bn. PAT has decreased by 8% to Rs. 278.4 m. BUY.
6M FY 98 results RICH
Turnover is up by 2.2% YoY to Rs. 1.16 bn. PAT after minority interest but prior to extraordinary items has come in at Rs. 133.8 m. up by 12.2% YoY. BUY
6M FY 98 results SPEN
Aitken Spence & Company Ltd (SPEN), results indicate an increase in turnover of 6.7% YoY to Rs. 1.55 bn. Trading profits are up by 23% YoY to Rs. 17.2 m. Other income for the period has come in at Rs. 16.6 m. up by 120% YoY. Associate company profits are Rs. 25.8 m. up by 580% YoY. PAT is up by 91% YoY to Rs. 42.8 m. BUY. (JF — HNB Research)
Diversification with high value crops for plantation sector
National Horticultural Association of Sri Lanka (NHASL) in cooperation with the Agro Enterprise Development Project (AgEnt), a USAID funded private sector for Agro enterprise development project will conduct the above seminar for the benefit of the Plantation Industry in Sri Lanka on the 30th November 1998 at the Colombo Hilton from 8.30 to 2.00 p.m.
The objective of this seminar is to explore a range of options for diversifying into fruit and vegetable, livestock and agro-forestry products. Export market potential will also be assessed at this seminar, along with diversification strategies and feasibility.
For further information and registration, please contact Mr. H. B. Tennakoon NHASL (508755) or AgEnt (574922). Ms Fiona Manickam.
Nov. 13, 1998
Significant changes are remote.
Monday
Nov 9Tuesday
Nov. 10Wednesday
Nov. 11Thursday
Nov. 12Friday
Nov. 13All Share
Index (ASI0511.09 513.91 514.85 513.70 517.89 Sensitive
Index (SPI)748.64 760.11 758.11 750.77 760.06 Turnover 78.96 159.48 45.37 17.25 126.54 Foreign
Percentage65.9% 81.2% 47.9% 0.2% 50.7% Foreign
Purchases62.34 136.80 34.72 0.08 50.59 Foreign
Sales41.78 122.10 8.73 0.02 77.79 It’s was a cool and calm week in the international economy, with the exception of deteriorating US- Iraq relations. Nothing significant is expected with crude oil prices reaching its lowest since 1973. Last week, North sea prices stood at $13 per barrel. Some of the regional markets experienced fluctuations while Singapore decided to cut national wages by 5-10%.
The much awaited final budget for this century did not generate enough enthusiasm among investors. The only good news was the moderate earnings growth of commercial banks whereas conglomerates, plantation companies and the rest recorded low earnings compared to the same period of the previous year. Overall the year ended with an earnings growth of 10%.
The week ended on a positive sentiment with the All Share closing at 517! Up by 7 points from last week. The Sensitive Index too gained 17 points for the week. The foreign investors were largely responsible for the increased turnover levels. Lack of retail activities kept trades at minimum levels while institutional investors played a safe game.
It was good to see nett foreign, purchases of Rs. 34 million for a charge. The focus was on few selected bluechips while foreigners disposed stocks mainly in the manufacturing sector.
The current outlook takes no direction as at present. While the Rupee continues its fall, the Central Bank re-introduced reverse repos in order to stabilize call money rates, which appears to be a positive step towards stabilization of interest rates.
It continues to be a long-term investors’ market with little room for speculation. For medium to long investments, JKH, DFCC, NDB, Commercial Bank, Dockyard, Spence, Sampath and Lubricants offers excellent returns. Debentures too offer above market return with Vanik’s 15% being the most attractive in the market. Investors should have at least a single debt instrument in their portfolio.
MMBL Group Research
