Sampath Bank has along with five other investors, purchased the entire share capital of Specialists Centre Limited from the Nawaloka Group of companies, the Bank said. The other names associated with the Bank are, Southern Investments Ltd. (an offshore company, represented in Sri Lanka by Malik Samrawickrema), Penguin Sportswear Ltd., Development Finance Corporation of Ceylon, National Development Bank and a German investor.
The purchase consideration of Rs. 695 mn. has been financed through 50% equity and 50% debt. Sampath Bank will hold 60% of the equity.
The Specialists Centre is equipped with all facilities associated with a modern high grade building situated at 110, Sir James Pieris Mawatha, Colombo 2. It is serviced by escalators on the lower floors and five lifts as well as private underground parking for 135 vehicles: the complex comprises approximately 222,000 sq.ft. on 157 perches of land and is 8 floors high from the basement.
The Bank will occupy three floors initially. Telia Lanka has committed themselves for one and a half floors and CSIDC Ltd., for half floor. In addition two other foreign companies are discussing terms.
Both the ASPI and sensitive Price Index declined during the period of review. The decline in this review period was steeper than any of the previous weeks, because retailers and a few foreign investors were selling out to cut their losses
The Sri Lankan market looks cheaper if comparisons are made with 1995 and 1994 prices. But if earnings are calculated to compute EPS/PE and other fundamental ratios, total picture shows an average P/E of 10 of which in this economic environment looks too high, compared with emerging markets like Turkey - P/E 7-8 Poland, Czech Republic P/E 7-8, and most of the other Eastern-Europe and of with market P/E less than 7:.
With seemingly poor planning of privatization countries state ventures and the customary bureaucratic red-tape acting on deterrent, investors local and foreign are investing in South and East Asian markets like Mumbai, Dhakka, Malaysia and Nepal. This has left the Sri Lanka Market illiquid.
Treasury Bill rates have been rising steadily as the government is in need of funds and is expected to increase to 20-22% within next 2-3 months, from the 16% during this period of review.
The optimism of an early end to the North-East war which was prevalent during the beginning of the year has dispersed due to recent developments in the war front - with the LTTE regrouping itself.
Because of large parcel of Shares and Companies which are not traded frequently (40% of the company listed the Sri Lanka Market is very illiquid. Transaction rules and procedure under the take-overs and Narzars Code etc are too cumbersome which has driven major market makers (Individuals / Institutions ) to other less bureaucratic stock markets like Mumbai and Madras .
Most markets in the world have introduced the forward sales contract system of trading which is very speculative, but has the added advantage of theoretically minimizing a fall on a price of a share on a given day which also could increase the daily turnover at the market significantly the most advanced computerized market (screen based trading in September), procedurely it is within our grasp.
Over the counter trading which was introduced recently should include more companies listed in the 'OTC' market.
In the near future (1700 public Ltd. Companies). New companies also have the opportunity of raising funds through. the 'OTC' market. Hopefully more OTC market trading in a built situation.
The present scenario in the stock market is that panic selling by all and sundry will pull down the ASPI to 517 levels (which is a resistant point). If the Economic/Political situation improves the market may increase to ASPI 600 levels, but if the situation becomes worst ASPI 450 is also not far off.
High priced shares will be the most severely hit of all companies listed on the 'CSE'
Sunset Reef, a real estate development backed by an investment company was launched with the National Savings Bank and the Union Bank collaborating to provide a syndicated loan of Rs. 100 million to the project.
Promoter Leisure Homes, a wholly owned subsidiary of Prudentia Investment Corporation, said the project, a spectacular ocean front luxury resort just outside Colombo, would cost about Rs. 200 million in Phase I which involves the construction of 35 Mediterranean style garden homes supported by comprehensive infrastructural and recreational facilities.
The company also announced that the National Savings Bank (NSB) had developed an attractive long term mortgage financing package that would provide prospective investors with up to 75 per cent of their financial requirements with a repayment period of upto 20 years.
“The project and our investors could not have asked for a better start”, says Hiran Perera, Managing Director and Chief Executive Officer of Leisure Homes and Prudentia. “This is a major vote of confidence in the project’s viability, and makes purchasing a home much easier for our customers”.
Each home of about 2300 square feet complete with facilities usually available only in five star luxury hotels, cost between Rs. 5.5 and Rs. 7 million. The National Savings Bank’s mortgage scheme will provide 75 per cent of the cost of a unit up to a maximum of Rs. 5 million to each qualified customer.
“With repayment spread over 20 years, this makes the mortgage easily affordable to Sri Lankan companies and individuals seeking an investment property and holiday home,” Mr. Perera said. “It is also an appealing option for Sri Lankan expatriates based overseas”.
The luxury resort which is located at Uswetakeiyawa 8.5 miles north of Colombo, comprises 35 garden homes built around a club house, swimming pool, tennis court, fitness centre and gymnasium set in private landscaped gardens with a 350ft. ocean trontage.
Each home would have its own central air conditioning unit and will he provided with uninterrupted power supply, telecommunications, water treatment and storage, central satellite television and hot and cold water.
Sri Lanka is becoming an important customer of Tata Iron and Steel Company (TISCO), its Managing Director, Dr. Jamshed J. Irani said.
Mr. Irani, who was on a recent visit to Colombo, however said that TISCO did not intend to establish an office of its own in Sri Lanka and expressed satisfaction at the marketing effort of authorized agents, Lancon Marketing Services (Pvt) Ltd.
He said his company has plans to sell cement to Sri Lanka. Elaborating on some of the major projects in which TISCO is involved, Dr. Irani said they planned to supply equipment and machinery to all the major port expansion projects in Sri Lanka. On the possibility of setting up a steel factory, he said it was unlikely as Sri Lanka did not possess most of the requirements for the manufacture of steel. He said out of the present Sri Lankan requirement of 200,000 tons per year, TISCO provided 50 per cent. He was of the opinion that if the annual consumption was to reach the figure of 500,000 tons, it would be viable to set up a steel manufacturing plant in the country.
Dr. Irani also commented about TISCO'S effort to maintain high standards in its products. In this regard he said the company did not discriminate between domestic sales and exports when it came to quality. He said TISCO did not want to compete on price alone as it was a company that incurred a lot on employee welfare expenses. Declining to comment on the impact of the recent elections on the Indian business environment, he expressed optimism that TISCO which has a history of more than 90 years in the steel industry, would keep the momentum of growth it had so far maintained.
TISCO, the flagship of the highly diversified TATA Group of India is one of the largest manufacturers of steel not only in India but also in the world. It manufactures a wide range of steel and engineering products and its annual turnover exceeds US$ 1 billion.
The Union Bank of Switzerland (UBS) has been rated the number one research house in the Indian subcontinent, its Sri Lankan associate John Keells Stockbrokers said.
The ratings were given for equities research in India, Pakistan and Sri Lanka.
ING Bearings were ranked second, Jardine Flemings third, W.I. Carr fourth and C S first, Boston fifth.
The survey by Extel, covered 107 fundmanagers. Collectively they managed funds of over US$ 1000 million.
The first John Keells and UBS Research effort in Sri Lanka was the report on plantations titled 'Vineyards in the Sky'.
"The upturn in tea price has resulted in the plantation sector being one of the most sought after in the Colombo market", John Keells Stockbrokers said. In addition to company research, UBS - John Keells have also produced strategy reports on Sri Lanka.
Trade Unions in the Lanka Lubricants Ltd., have issued a statement clarifying their position regarding the sale of shares. The Union, including the Sri Lanka Nidahas Sevaka Sangamaya, Ceylon Mercantile Union and the Jathika Sevaka Sangamaya, say:
"We, The Sri Lanka Nidahas Sevaka Sangamaya, The Jathika Sevaka Sangamaya and The Ceylon Mercantile, Industrial & General Workers Union as the responsible Trade Unions operating at LLL, jointly, strongly condemn firstly, the adverse, false and anonymous statements made to the local and foreign media regarding the share issue and secondly, approaching and offering our membership to purchase the shares of LLL which they currently own at very low prices.
Our organisation was privatised during the regime of the previous government. The staff received 10 percent of the issued capital as a result of a friendly and fruitful dialogue between the Trade Unions and the management. Due to this share ownership all the employees have shown dedication towards their duties in order to achieve organisational growth, while enjoying “above average” benefits.
Some short sighted, unscrupulous organisations/businessmen have ridiculed our company, our employees and our living patterns by issuing ambiguous statements to the media. The motive is to mislead the external world and make the share issue unsuccessful.
Undoubtedly, LLL is one of the very few organisations which were privatised and currently operating with high productivity. This is mainly due to the positive approach by the employees. We should clearly identify that there are external parties looking at this scenario in a jealous manner and trying to obstruct the progress of the company.
We, as the employees of LLL get many benefits from our employer. Amongst them are very attractive and reasonable salary scales, incentive payments, overtime payments, housing and real estate loans, transport allowances, food allowances, medical assistance, annual bonus and EPF/ETF. In addition to these benefits, we have also received a substantial number of shares out of which we receive dividends every quarter. To our knowledge this is the only company in Sri Lanka which pays dividends quarterly.
Also the other welfare activities and the human resource development activities are of a very high standard.
Therefore, we would like to stress that our membership is not so badly off financially to sell shares what we own, at a low price level as it is said and published by external parties, given the value of the share and the current benefits we enjoy.
In the meantime, we strongly condemn the adverse publicity campaigns carried out by some people, in order to gain short term personal benefits".
VANIK Incorporation Limited received the award for the Best Corporate Report & Accounts for 1995 in the New Companies incorporated after April 1, 1990 category, the company said.
The presentation of awards, organized by the Institute of Chartered Accountants of Sri Lanka was held under the patronage of Minister C.V. Gooneratne with David A Cohen, Mission Director, USAID participating as the guest of honour on July 12, at the auditorium of the Institute.
This is the second year in succession that VANIK has carried away an award at this annual event. In 1994, its maiden Corporate Report & Accounts for the very first year of operations, was adjudged the best Corporate Report in the Financial Institutions category and was also awarded an additional certificate of merit.
The competition, organised annually, for the last three decades, recognises excellence in the published annual reports of companies and is aimed primarily at improving the information content of them. VANIK's achievement demonstrates its consistent adherence to the highest standards in the presentation of information to users of its annual reports, the company said.
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