Stock Market Update – 29-08-2008.

The All Share Price Index fell 12.60 points to 2,408.64 while the Milanka also ended down 16.57 points at 2,788.98.
Heavy trading reported in JKH & CIC. Market fell due to profit taking by retail investors.
DCSL closed LKR 80.25 (Down by 50 cents) JKH closed at LKR 100 (Up by 25 cents).
More quarterly company results can be expected coming week.

CSE Trading Activity 28-08-2008.

The All Share Price Index went up 14.85 points to 2,421.24 while the Milanka also ended strong up 12.68 points at 2,805.55.
Turnover was LKR 342,819,707.75.
Foreign investors are looking at stocks with strong fundamentals.
Shares of Equity One went up on speculative buying. Equity one shares closed at 33.75 (up by LKR 12).
Vallibel Power closed at LKR 4.60.

Dividend Announcements

RENUKA CITY HOTELS LIMITED - DIVIDEND

Company ID:- RENUDate of Announcement:- 28 .Aug. 2008Rate of Dividend:- Rs.5.00 Per Share - First & Final DividendFinancial Year:- 2007/2008AGM:- 29. Sep .2008XD:- 30. Sep .2008Payment:- 07. Oct . 2008Share Transfer Book Open

CARGO BOAT DEVELOPMENT COMPANY LIMITED - DIVIDEND

Company ID:- CABODate of Announcement:- 28 .Aug. 2008Rate of Dividend:- Rs.1.00 Per Share - First & Final DividendFinancial Year:- 2007/2008AGM:- 29. Sep .2008XD:- 30. Sep .2008Payment:- 07. Oct . 2008Share Transfer Book Open

THE COLOMBO PHARMACY COMPANY PLC - DIVIDEND

Company ID:- PHARDate of Announcement:- 28 .Aug. 2008Rate of Dividend:- Rs.3.75 Per Share - Final DividendFinancial Year:- 2007/2008AGM:- 30. Sep .2008XD:- 02. Oct .2008Payment:- 08. Oct . 2008Share Transfer Book Open


LANKA ALUMINIUM INDUSTRIES PLC - DIVIDEND

Company ID:- LALUDate of Announcement:- 28 .Aug. 2008Rate of Dividend:- Rs.1.25 Per Share - Final DividendFinancial Year:- 2007/2008AGM:- 25. Sep .2008XD:- 26. Sep. 2008Payment:- 02. Oct . 2008Share Transfer Book Open

ACL PLASTIC PLC - DIVIDEND

Company ID:- APLADate of Announcement:- 28 .Aug. 2008Rate of Dividend:- Rs.0.75 Per Share - Interim DividendFinancial Year:- 2007/2008XD:- 15. Sep. 2008Payment:- 25. Sep . 2008Share Transfer Book Open

ALLIANCE FINANCE COMPANY PLC - DIVIDEND

Company ID:- ALLIDate of Announcement:- 28 .Aug. 2008Rate of Dividend:- Rs.4.00 Per Share - First & Final DividendFinancial Year:- 2007/2008AGM:- 24. Sep .2008XD:- 25. Sep. 2008Payment:- 29. Sep . 2008Share Transfer Book Open

KELANI CABLES PLC - DIVIDEND

Company ID:- KCABDate of Announcement:- 28 .Aug. 2008Rate of Dividend:- Rs.2.25 Per Share - Interim DividendFinancial Year:- 2007/2008XD:- 15. Sep. 2008Payment:- 25. Sep . 2008Share Transfer Book Open

Information – Colombo Stock Exchange.

CSE Trading Activity 27-08-2008.

The All Share Price Index closed up 2.39 points at 2,406.39 while the Milanka also ended positive up 8.55 points at 2,792.87.
Both Small & institutional investors actively participated. Heavy trading seen in AMW shares.
Turnover was LKR 491 Million.
There was also speculative trading in 'small cap' stocks like VALLIBEL POWER ERATHNA PLC

Colombo Market Activity 26-08-2008.

All share Index fell 5.63 points to 2404.00 while the more sensitive Milanka Index fell 19.28 points to 2784.32. Turnover was LKR 0.5 billion. A Dubai investor bought the controlling interest of Associated Motor Ways PLC.
SLT fell 75 cents & closed at 45.25.
Distilleries dropped to LKR 79.
Dialog Telekom closed flat at 11.50 rupees.
Currency 1 US$ = 108.25 LKR.

Market Update – 25-08-2008.

All Share Index closed 4.74 points lower at 2409.63 & Milanka Price Index closed the day 8.36 points lower at 2803.60.

Today the top gainer CFT closed the day at LKR 36.00. (up by LKR 8.75)

Dividend Announcements

Lanka Milk Food PLC – LKR 1.20 per share.

Central Industries PLC – LKR 4.50 per share.

Quick update – (Sri Lanka PC Pools) 25-08-2008

Two Provincial Council Elections concluded on last Saturday. Ruling party won the majority of both councils.

I personally don’t expect big change in Colombo Stock Market direction due to this result.

The only risk is we may have more elections with this government victory. (Probably Snap General Election)

Distilleries court case

The case is with regard to the privatization of Sri Lanka Insurance Corporation (SLIC), which has been challenged on grounds that there were irregularities. The judgment is expected soon.

SLIC (Unlisted Insurance Company) is controlled by the Distilleries.

Distilleries closed Friday at LKR 82.75

The World of Stock Market

By: Dori Kelsey

NYSE, NASDAQ, Amex, Paris Bourse, Deutsche Borse, London Stock Exchange are just a few of the highly observed and traded stock exchanges in the world. The size of the global stock market is approximately $51 trillion. While the derivatives market is estimated to be worth roughly $480 trillion or 12 times the value of the world economy. No wonder why the stock market plays a big role in defining the financial institution of every nation.

The Dutch East India Company was the first company to issue stock and bonds. In 1602, it issued the first shares on the Amsterdam Stock Exchange. Also known as Amsterdam Beurs, the Amsterdam Stock Exchange is believed to have been the first stock exchange to establish a continuous trading during the early 17th century. The Dutch initiated option trading, short selling, debt-equity exchanges, unit trusts, merchant banking and other speculative instruments; according to the London Review of Books of 2001.

Below are the very basic of stock trading, what is it all about? Who are the parties involved in buying and selling stocks? How does it work? And how does it affect the economy? Read on and you will learn the core of stock market…

What
A stock market, also known as equity market, is either a public or private market in which company stocks and derivates are traded at an agreed price. The stocks are traded on a stock exchange, a specialized mutual organization that brings sellers and buyers of stocks and securities together.

Who
In the past, only wealthy investors and businessmen with long family affiliations to particular corporations are interested in the stock market. Nowadays, buyers and sellers in the stock market can be individual investors, insurance companies, banks, mutual funds, investor groups, and hedge funds. The growth of institutional investor also provided some improvements on the stock market.

Where
The trading of buyers and sellers can be physically or virtually. A sample of physical exchange, also referred to as listed exchange, is the New York Stock Exchange (NYSE) where transactions are accomplished on a trading floor. The NASDAQ on the other hand is a virtual exchange where trades are done electronically or via a network of computers.

How
Stock trading involves a potential buyer bidding a definite price for a stock and a potential seller asks a specific price for the stock. When the bid and ask prices match, then a sales occurs on a first come first served basis in case there were several askers or bidders at a given stock price. In a physical stock exchange like the NYSE, commodity exchanges are traded and bided verbally on a trading floor. This procedure of verbal bidding is called outcry. While virtual listed exchange like NASDAQ matches potential buyers and sellers electronically.

Why
Apparently, the stock market is one of the most essential sources for companies to raise fund. Also, the liquidity of stock trading provides investors the ability to sell securities easily and quickly. Though the behavior of stock market is still quite surprising and unpredictable to many, there has been a significant increase in shift of household financial assets from traditional bank deposits to the more risky securities of stock market.

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Dori Kelsey:
Stock Exchange, stock trading, stock market .

Weekly Stock Market Update – Week ended 22nd August 2008.

Price Indices

CSE All Share 2414.37

Milanka Price Index 2811.96

Market recorded negative growth during the week. Foreigners were net buyers with inflow of 106 Million Rupees.

Top gainer of the week was HUEJAY (Up by 30.65% over previous week) closed LKR 60.75 & the top looser was SHAW WALLACE (Down by 8.96%) closed LKR 122.

CSE Activity Report 22-08-2008

Downward trend continues.
All Share Index closes the day at 2414.37 (-10.34 Points) & Milanka Index closed at 2811.96 (-16.78).
Turnover was LKR 136 Million.

Positive Contributors (No.) 40
Negative Contributors (No.) 68

JKH closed unchanged at LKR 100, Commercial Bank closed one Rupee higher at 124.25.
Colombo Dockyard closed LKR 68 (Down by 0.50)

CSE Market Activity –21-08-2008.

Colombo stocks closed marginally down today, the indices dragged down by falls in blue chips.The All Share Price Index was virtually unchanged, just half a point down at 2,424.71 while the more liquid Milanka dropped 0.17 percent (4.82 points) to 2,828.74.
Turnover was 148 million rupees.
Dialog Telekom fell 2.08 percent (0.25) to 11.75 rupees and Distilleries dropped 1.19 percent (one rupee) to 83 rupees.
Commercial Bank ended at 123.25, down 75 cents, and John Keells Holdings also closed 25 cents weaker at 100 rupees.

Ceylinco Insurance PLC 6 Months Report released (For the Month ended 30th June2008)

Total revenue up by 23% to LKR 9.4 Billion. Net profit after tax was LKR 252 Million (up by 18 % over previous 6moths).

Net Asset value per share also increased to LKR 246.67.

Ceylinco Insurance PLC is one of the best performing insurance company in Sri Lanka.

Its market value per share as at 20^th August 2008 was LKR 216.25.

The Ill Effects Of Terrorism To The Stock Market

Our present world is crammed with terrorism. It doesn't only affects peace but it also brings severe damages to the economy. There has been much written about the short-term macroeconomic impact of terrorism attacks on investors’ risk aversion, equity market valuations, bond yields, oil prices, aggregate consumption and investment activity and even the medium-term effects in the regulatory, trade and fiscal policy responses by governments and the private sector, but much less is known about how this potentially long-lasting heightened terrorist threat affects the stock prices of individual firms.Some studies have argued it may reveal itself in the psychological fear of terrorism that can affect economic behavior. Let us recall the 9/11 bombing. After that terrorist attack, insurers reduced or even rendered inexistent the supply of terrorism insurance throughout the economy, delaying or preventing many projects from going forward – mostly construction in large cities because of creditor or investor concerns. The unprecedented terrorist attacks on that dreaded September 11, 2001 caused massive casualties and damage and ushered in an era of great uncertainty. That shocking display of brute force also changed the way we think about terrorism and moved the topic to the front-burner of academic and public attention. One important way in which we have changed our perspective about terrorism is as a geopolitical risk that affects the global economy and financial markets.
G. Andrew Karolyi and Rodolfo Martell, examined the stock price impact of terrorist attacks. Using an official list of terrorism-related incidents compiled by the Counter-terrorism Office of the U.S. Department of State, they identified 75 attacks between 1995 and 2002 in which publicly traded firms are targets. Looking at the event study analysis around the day of the attacks uncovers evidence of a statistically significant negative stock price reaction of -0.83%, which corresponds to an average loss per firm per attack of $401 million in firm market capitalization. A cross sectional analysis of the abnormal returns suggests that the impact of terrorist attacks differs according to the home country of the target firm and the country in which the incident occurred. Terrorist attacks in countries that are wealthier and more democratic are associated with larger negative share price reactions. Most intriguingly, we see that human capital losses, such as kidnappings of company executives, are associated with larger negative stock price reactions than physical losses, such as bombings of facilities or buildings. The passage of U.S. Terrorism Risk Insurance Act (TRIA) in 2002, with its backstop provision of up to $100 billion zero-cost reinsurance for terrorism events, was indeed an important U.S. legislative event. But sadly, it did not provide for any long-term scheme for terrorism insurance and, even today, it is not clear which course of action the industry and government is to follow once TRIA expires in December 2005. Some argue that “America cannot risk a gamble on terror insurance” and that “renewal of TRIA is critical as a private insurance market will never develop. Some experts goes on to saying that, catastrophic terrorism risk is uninsurable by the private market because its true dimensions are incalculable, whether you live in London, Madrid or New York.With these dramatic view realizations of the market for terrorism insurance, we can argue that it is even more important now to develop new measures of the economic consequences of terrorism events to guide policy. In this article, the stock price reaction of publicly-traded firms that have been affected or targeted by a terrorist attack providing average estimates of the losses caused by these events has been used. Karolyi and Martells' subsequent analysis of the cross-sectional variation in the stock price reactions suggests that losses inflicted by terrorist attacks are larger when they take the form of kidnappings. They also showed that these losses are greater when the firm is located in a richer country or in a country with a more democratic regime. It is important, though, to remember that their results were obtained using only a subset of the universe of terrorist incidents classified as such by the State Department, since they are studying only the reaction associated with publicly-traded companies. Also, in their study, they opted for a simplified approach and they only studied the short-term reaction of firms to these attacks and ignored potential longer-term effects on cash-flows or cost of capital (risk premium) effects. The re-emergence of a market for terrorism risk insurance demands that insurers generate better models to assess the likelihood and potential losses derived from terrorism. Their results suggest that characteristics of the attack (kidnappings vs. property destruction) and characteristics of the country of the targeted firms provide help in assessing the losses. They hope the results presented in their study may serve at least as a useful starting point in the current debate surrounding terrorism insurance, the renewal of TRIA and the characteristics of the legislation that will replace it.In conclusion, to put it in a nutshell, an understanding of the nature of terrorism and the magnitudes of its effects is a prerequisite for designing successful policies to prevent terror, to alleviate the costs of terrorism, or to reduce an economy’s vulnerability to attacks.
By: Sir Bidz dela Cruz
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The Author is also the Content Provider for Track and Field, Notting Hill and Florida Fishing.

CSE Market Activity – 20-08-2008.

Bad day for Colombo Stock Exchange. ASI closed 2425.23 down by 13.38 points (-0.55%) & MPI closed the day at 2833.56 down by 24.00 points (-0.84%). Total turnover for the day was Rs. 99,528,677.00.
Sri Lanka Telecom fell 2.16 percent (one rupee) to 45.25 rupees while John Keells Holdings lost 1.47 percent (1.50 rupees) to end at 100.25.
Commercial Bank fell 1.39 percent (1.75 rupees) to 124 rupees.
Dialog Telekom ended flat at 12 rupees.

CSE Recovered! - 19th August 2008

Sri Lankan Stock Market Recovered today due to gains in Sri Lanka Telecom.
ASI closed 2,438.61 (Up by 0.40%)
MPI closed 2,857.56 (Up by 0.72%)
Sri Lanka Telecom Shares ended the day at Rs 46.25 (Up by Rs. 1.75)
CIC closed Rs.43.50 (0.25 cents lower) today but 486,000 shares traded.
My opinion is investors should focus their attention to fundamentally sound stocks such as Dockyard, Distilleries, Commercial Bank PLC, DFCC & NDB.

DIMO June 2008 Quarter Profit Up!

Sri Lanka's Diesel and Motor Engineering (DIMO) said June quarter net profit shot up 290 percent to 17 million rupees from 4.4 million rupees a year ago.

Valuation of Shares.

Before you buy shares it is very important to do some mathematics.
1. Look for shares with high EPS (Earning Per Share )
2. Cheap or expensive? - you can find out it by calculating PER (Price Earnings Ratio) cheap stocks are having low PER. But remember High PER shares may have good growth potential.

For more information on calculating ratios please click the image.

CSE Trading Activity – 18th August 2008.

Market opened on dull note. Both MPI & ASI indexes are down.
ASI 2428.89 (-0.12%)
MPI 2837.03 (-0.12%)
ASHO closed at RS. 382.50 (up by 47.50),CIC closed Rs. 43.75 (up by 3.75) heavy trading seen in Chemical Industries (Colombo) (CIC).
Sri Lanka Telecom fell 1.66 percent (75 cents) to 44.50 rupees.
Heavyweights Dialog Telekom and John Keells Holdings closed flat at 12 rupees and 102 rupees.
Due to lack of market moving news market will stay flat for next few days of the week.

Online Share Trading Now In Sri Lanka!

No matter where you are on Planet Earth, if you have a computer with internet connection you can connect to Colombo Stock Exchange to submit your order. Currently following Stock Brokers are offering online Trading.

Asia Securities.
Asha Philip Securities.
Ceylinco Stock Brokers.
Lanka Securities.
DFCC Stock Brokers.
Capital Alliance.
SMB Securities .

Foreigners are Welcome!

Foreign institutional & individuals, including non-resident Sri Lankans are permitted to buy and/or sell shares in a listed company up to 100% of the issued capital except in the case of few companies, where certain restrictions have been imposed.
Incomes from investment are not subject to Exchange Control Regulations.

First Step to Buy Shares

Local Investors
Go to any member (List of Brokers can be found at www.cse.lk ) of CSE & open CDS Account (The account which hold shares behalf of you until you sell it).
Once your CDS Account is opened you are ready to buy & sell shares.

Foreign Investors
First go to any commercial bank operating in Sri Lanka & open Share Investment External Rupee Account then contact a broker to open CDS account with your Passport Copy.

The Automation

T he CSE was one of the first Exchanges in the region to successfully automate its clearing & settlement function in 1991. With the installation of the Central Depository System and an electronic clearing and settlement system for share transactions, and an Automated Trading System (ATS) in 1997. This has notably enhanced transparency and efficiency of the share trading.

History

Introduction to Colombo Stock Exchange

Share trading in Sri Lanka Commenced in the 19th century. When British Planters needed funds to setup Tea Plantations in Sri Lanka. The Colombo Share Brokers Association commenced trading of shares in limited liability companies in 1896.
A landmark event in the history of share trading in Sri Lanka was formation of “Colombo Securities Exchange (GTE) Ltd 1985, which took over operation of the stock market from the Colombo Share Brokers Association. It was renamed “ Colombo Stock Exchange (CSE) in 1990.