Gains in Hemas Holdings Plc (HHL) & John Keells Holdings Plc (JKH) pushed the ASI to 4250.99, up 24.5 points while MPI which represent more liquid stocks closed 39.57 points higher at 4761.35. Turnover was 1.09 billion rupees.

HHL has announced a share split of 5 for 1 & closed the day Rs 10.75 higher at 148.25 while JKH closed at Rs 180.00, up 2.50. Confifi Hotel Holdings made an extra ordinary gain of Rs 101.00 to close at Rs 318.00. There was huge demand for hotel sector stocks during the day.  Trans Asia Hotels Plc was up by 15.00 to close at Rs 240.00 while Sigiriya Village Hotels Plc closed at Rs 68.50, up 7.75.

Total of 84 companies made gains while 53 stocks lost their value during the day. Hayleys Plc was down by 7.75 to close at Rs 294.25 while Lanka Orix Leasing Company Plc (LOLC) lost 11.50 to end the day at Rs 265.25.

Foreign investors bought Rs 73.09 million worth of stocks & sold stocks valued at Rs 139.86 million.

Colombo Stock Exchange Negombo branch is going to conduct an Investor Education seminar series on 4^th, 11^th & 18^th of June 2010. You can get more information by calling Tel No – 031-2227859/61. It will cost you only Rs 300/-. The seminar will be conducted in Sinhala Language. If you are residing around Negombo don’t forget to participate.

Colombo Stock Exchange will be closed for trading on 27^th & 28^th May 2010 due to Vesak Poya (A Buddhist Religious Holiday).

Colombo Market faced selling pressure due to profit taking by retail investors on gains made during the past few weeks. ASI lost 6.43 points to close at 4226.49 while MPI lost 10.34 points to close at 4721.78. Turnover was 2.76 billion rupees.  

Turnover was boosted by heavy trading in Confifi Hotels & Commercial Bank. LOLC purchased 3,119,691 (43.33% of the stated capital) in Confifi Hotel Holdings Plc at Rs 210/- per share. In recent past there were several listed Hotels subjected to takeovers. Sri Lanka’s tourism sector is expected to take off due to current peaceful environment prevailing in the country.  

Index heavy JKH & SLT lost Rs 1.75 & 50 cents respectively. JKH closed at Rs 177.50 while Sri Lanka Telecom closed at Rs 36.75.

Central Finance Company Plc the Sri Lanka’s biggest listed finance company closed at Rs 400.00, up 10.50. Lanka Orix Leasing Plc gained Rs 16.25 to close at 276.50. Riverina Hotels Plc was up by Rs 19.00 to close at 129.00.

Foreign investors were net sellers with Rs 978.8 million sales & Rs 606.1 million in purchases.

Around the world, there are a number of regional stock markets that deal in trading stocks in companies based or operating in their regions. Some of the major markets include the United States’ New York Stock Exchange, the Japan Stock Exchange, and markets in Hong Kong and India. One relatively small market that is making huge gains for investors that trade on it is the Colombo Stock Exchange (CSE). Here, we will attempt to establish a comparison between the CSE based in Sri Lanka and other major world markets.

An analysis of market trends in graphic form shows that the CSE has not been subject to as many major drops in prices as the larger markets. In fact, the leading index used to measure the performance of stocks on this market, the All Shares Price Index, shows that this market has enjoyed an almost steady climb over the past year.

The CSE is currently at an all time high with the graph trend showing that it has more climbing to do before it tops out and drops off slightly. The current increase over last year is approximately 126 percent. This is growth that is unparalleled in any of the other world stock markets. Investors who are looking for rapid growth of their portfolios would be more than happy to see growth potential like this in any market.

While all of the markets are somewhat higher than they were at this time last year, growth has been considerably slower. There have also been many more instances of the market making gains one day and losing them the next, usually with the release of financial data from large corporations or the federal governments of the countries these markets are located in.

For example, on the Japanese market, the key index is identified as the Nikkei. Over the course of the last 12 months, this index has amassed a total gain of only 15.45 percent over the same time last year. The US market has not grown much more than that at 26.40 percent.

Hong Kong and India also host stock markets that have featured growth in the last 12 months at 28.34 percent and 54.99 percent respectively. To most financial analysts, these represent huge gains that are not normally seen in such a short time. Yet, the CSE is outperforming them all in terms of growth.

It is true that there are nowhere near as many shares traded on the CSE each day as there are on the other markets. However, it is also true that those who invest in this market are enjoying much higher returns on their investments than those trading in the world’s larger markets.

Investing in the Sri Lanka based Colombo Stock Market is a strategy that definitely bears some study and consideration. All forecasts indicate that the current growth trends will continue for the foreseeable future. Most stocks traded on this exchange are immune, or protected from the types of conditions that can cause stock prices to plummet on larger markets. This makes the Colombo Stock Market a safer investment market as well as one with much higher growth.

Index heavy weighted Dialog Telecom was the main contributor for today’s positive close of the CSE indices. Dialog closed at Rs 8.50, up 25 cents. Aitken Spence Plc was up by 49.00 rupees to close at Rs 1499.25 while Lanka IOC Plc (LIOC) the local unit of Indian Oil Company closed 2.50 higher at Rs 21.75.

The All Share Index closed at 4242.67, up 13.27 points. Milanka Index of highly liquid stocks was up by 32.09 points to close the day at 4774.2. The total equity turnover for the day was 1.18 billion rupees.

Ceylon Tea Services Plc gained Rs 47.50 to close at Rs 562.50 while Ceylon Cold Stores Plc the Elephant Brand soft drink maker closed at Rs 243.50, up 24.75.

Retail investors were shifting their investments from high valued stocks to lower valued stocks. Good demand was seen on plantation stocks too. Kegall Plantations Plc was up by 2.50 to close at Rs 72.25 while Kotagala Plantations Plc was up by one rupee to close at Rs 66.00. Balangoda Plantations Plc closed at Rs 37.75, up 50 cents.

There were 66 positive contributors & 65 negative contributors for the day. The Bukit Darah Plc lost 147.00 rupees to close at Rs 4553.00 but only 100 shares traded. Environmental Resources Investments Plc was dipped by four rupees to close the day at Rs 87.25.    

The ASI lost 6.82 points to end the day at 4215.22 while MPI closed almost unchanged at 4747.81. Turnover was 1.38 billion rupees. The expected market correction was eased by better than expected corporate results of listed companies for the March quarter. But the possibility of market correction is still there.

The highly illiquid Watapota Investments Plc was up by massive Rs 500.00 to close at Rs 1500.00 on 100 shares. Lanka Orix Leasing Company Plc closed at Rs 276.50, up 27.00. The retailer’s favorite Touchwood Investments Plc was up by twelve rupees to close at Rs 133.50. Haycarb Plc a subsidiary of diversified blue chip Hayleys Plc was closed at Rs 185.50, up 10.50. Government controlled Housing Bank HDFC closed Rs 7.00 higher at 160.25.

Rarely traded The Autodrome Plc lost 33.25 to close at Rs 370.00 while Hunters & Company Ltd was down by 63.00 to end the day at Rs 630.00. There were 62 gainers & 85 losers for the day.

Foreigners purchased Rs 178.5 million worth of stocks while they sold stocks valued at Rs 120.1 million.      

Sri Lanka’s external sector performance showed signs of improvement along with the gradual recovery of the global economy.   Earnings from exports grew by 20.0 per cent in February 2010 to US dollars 629 million led by higher earnings from agricultural and industrial exports. The expenditure on imports also increased by 60.6 per cent to US dollars 973 million, due to the increased demand for imports within all the sub sectors.  Accordingly, the trade deficit expanded to US dollars 344 million in February 2010.

Earnings from agricultural exports, which accounted for 27.0 per cent of total exports, increased in February 2010, year-on-year, led by tea, rubber and minor agricultural exports. Tea and rubber, whose export volumes increased by 20.1 per cent and 44.1 per cent, respectively, continued to fetch higher prices in the international market.  Tea prices increased by 25.7 per cent to US dollars 4.35 per kg mainly due to the finer quality of Ceylon tea exports and the supply shortages in the international market.  Rubber prices increased to US dollars 2.86 per kg, reflecting a 95.4 per cent increase compared to February 2009, mainly due to the recovery in international demand.  Supply shortages due to the adverse weather conditions that prevailed in the major rubber producing countries in Asia also helped increase the international rubber prices.  Earnings from minor agricultural exports increased due to higher prices fetched by fruits, coffee, and cocoa products  and increased volumes of vegetables, arecanuts, cashew and essential oils.  Export earnings from certain spices, such as cinnamon and cloves,  increased led by higher volumes and prices.  The industrial exports, which were affected by the global economic crisis, rebounded in February 2010, led by the exports of processed food and beverages as well as rubber products. Although exports of textile and garments and ceramic products declined in February 2010, year-on-year, they reflect an improvement since January 2010. 

All major categories of imports increased in February 2010. Expenditure on imports of consumer goods increased significantly, with notable increases in food imports such as rice, sugar and wheat.  Expenditure on imports of non-food consumer durables also increased significantly in February 2010. Amongst intermediate goods, expenditure on petroleum imports increased substantially in February, year-on-year, as the average import price of crude oil rose by 71.4 per cent to US dollars 78.23 per barrel.  Import expenditure on fertilizer increased in February 2010, compared with the same period in 2009, mainly due to the substantially higher import volumes.  Imports of investment goods also increased in February 2010 led by higher expenditure on transport equipment, building materials and machinery and equipment, which augurs well for future economic activity.   

During the first two months of 2010, foreign remittances increased by 13.0 per cent over the corresponding period of 2009 to US dollars 564 million.  The gross official reserves, with and without Asian Clearing Union (ACU) funds, were at US dollars 5,408 million and US dollars 5,032 million, respectively, by end February 2010. Based on the previous 12 months average imports of US dollars 921 million per month, the gross official reserves, without ACU funds, were equivalent to 5.5 months of imports.

The performance of external trade during the period is further illustrated in the following table.

                                                                                                           Source: Central Bank of Sri Lanka

                                                                                                                         Sri Lanka Customs

Despite severe competition faced by mobile telecom industry in Sri Lanka Dialog Telekom has managed to turn back to profit.  

For the quarter ended 31^st March 2010 Dialog Group made profit of Rs 705,056,000.00 against loss of Rs 1,868,564.00. Although it is only 0.08 cents per share it was a remarkable achievement in a highly competitive environment. Group turnover has improved to 9.79 billion rupees from 8.47 billion for the comparative period last year.

Sri Lanka’s Telecom industry faced deadly competition after entering fifth mobile player Airtel (Indian Company). Price war was started even before they start their commercial operations early last year.    

Dialog Telekom shares traded at Rs 9.00 in early trading today.

Week ended 7^th March 2010.

The benchmark All Share Index (ASI) closed at 4223.13, up 34.25 points for the week while Milanka Price Index (MPI) was closed at 4762.37, up 49.94 points. There was huge increase in equity turnover to Rs 13.49 billion for the week from 6.75 billion rupees previous week. Market Price Earnings Ratio (PER) has increased to 20.85 from 20.67 while market capitalization also increased to Rs 1,374.9 billion rupees from 1363.3 billion rupees previous week.

Nawaloka Hospital shares received good buying interest after they sold out their stake in lost making hotel group Galadari. Investors believe that the Nawaloka Hospital will improve their performance after this share sale. Nawaloka closed at Rs 6.75, up 2.05 or 43.62 percent. Asia Capital was up by 8.25 to close at Rs 32.00.

 Total foreign purchases were amounted to Rs 4.26 billion & their sales amounted to 2.24 billion rupees. March quarter corporate results were started to getting out & most of them were improved results.