Macht und Ohnmacht der Daten – Umweltbeobachtung für - BAFU

Gradient
Alliance
M ont hly Bullet in: Novem b e r 2 0 1 4
In Economic news:
• Less than 10 days after the budget 2015 speech the
government expenditure increased by 16%.
• COPE reveals another series of state institution losses.
• Private sector credit continues to grow in Sep 2014, up 4.6%
YoY to Rs.2,581.9bn.
• Demand for cement declines as the construction industry
impacted by high costs.
• Sri Lanka drops to 62nd in the Prosperity Index.
• Sri Lanka wins Offshoring Destination of the year, for the
second year running.
• All Share Price Index closes at 7,115.89, down 2.9% MoM.
• Inflation rose 1.5% YoY in Nov 14 (-10bps MoM).
• Rupee ended the month at 130.02/133.15 vs. USD (Rupee
weaker 0.50% MoM).
In Business news:
• Tourist arrivals in Oct 2014 were 121,576, up 13.6% YoY resulting in Jan-Oct
traffic reaching 1.2m about 45,000 short of 2013.
• Vehicle registrations up 71.5% YoY in Oct 2014, 34,976 motorcycles booked as
government distributed them among its field officers.
• Sri Lanka’s tea production increased to 28.9mkgs (+15.3% YoY) in Sep 14.
• Trade deficit in Sep 2014 expands to USD 764.2m (+30.1% YoY), exports (USD
903.3m, +0.5% YoY) and imports (USD 1.5bn, +15.5% YoY).
• LMD-Nielsen business confidence index slides for the third consecutive month,
drops to 128 in Oct 14 an eight month low.
In Consumer news:
• Tommy Hilfiger to open its first store in
Sri Lanka in Dec 2014.
• Credit credits in Jun 14 rose to
974,144, up a modest 4.6% YoY with
outstanding balance growing a
significant 14.1% YoY to Rs.53.6bn.
• Nielsen consumer confidence
index in Oct 2014 edges up to 65
(+3 points MoM).
Gradient
Alliance
M ont hly Bullet in: Novem b e r 2 0 1 4
Government Revenue Vs. Expenditure (Rs.bn)
In Economic news:
Total revenue and grants
Total expenditure
Budget deficit
% GDP
3,000.0
9.0%
2,500.0
8.0%
2 000 0
2,000.0
7.0%
6.0%
1,500.0
5.0%
1,000.0
4.0%
500.0
3.0%
-
2.0%
(500.0)
1.0%
(1,000.0)
0.0%
2012
2013
2014E Revised
2015E Original
Budget
2015E with
Additional
Expenditure
Source: Ministry of Finance and Planning and Gradient Estimates
by Rs.356bn for 2015. This would increase overall government
expenditure by a staggering 16% to Rs.2,566bn, causing budget
deficit to expand to Rs.877bn, with the deficit to GDP rising to
7.7% from the proposed 4.6%. This is to be funded through debt
as the Prime Minister also sought an increase in the debt ceiling
from Rs.1340bn to Rs.1,780bn. Credit growth is likely to continue
in the upcoming months driven by current low inflation, reduced
electricity tariffs boosting disposable income and VAT adjusted to
11% from 12% decreasing prices of select consumer goods.
Govt. expenditure for 2015 increased, defense
and urban development to benefit. Less than10 days
after the budget 2015 speech Mr. D.M Jayaratne, Prime Minister
presented an ‘Appropriation Bill 2015-Amendments in Committee
’in Parliament seeking to increase government expenditure
Private sector credit continues to grow in Sep
2014. Credit to private businesses and personal customers
loose credit in the market. Credit growth is likely to continue in
the upcoming months driven by current low inflation, reduced
electricity tariffs boosting disposable income and VAT adjusted to
11% from 12% decreasing prices of select consumer goods.
grew 4.6% YoY in the month to Rs.2,581.9bn. CBSL kept policy
rates unchanged for the tenth consecutive month. An uptick
in credit growth since September is driven by low inflation and
YoY%
40%
400
Credit to State Corporations (Rs. bn)
YoY%
35%
30%
2,400
25%
2,300
350
300
20%
15%
2,200
0%
Jan-12
Feb-12
Mar-12
Apr-12
May-12
Jun-12
Jul-12
Aug-12
Sep-12
Oct-12
Nov-12
Dec-12
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
2,000
Source: CBSL
200
150
Jan-12
Feb-12
Mar-12
Apr-12
May-12
Jun-12
Jul-12
Aug-12
Sep-12
Oct-12
Nov-12
Dec-12
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
5%
1,450
102%
1,350
82%
1,250
62%
1,150
42%
1,050
22%
950
2%
850
10%
-18%
750
0%
Net Credit to Government (Rs. bn)
YoY%
60%
50%
40%
30%
250
10%
2,100
122%
Source: CBSL
20%
Jan-12
Feb-12
Mar-12
Apr-12
May-12
Jun-12
Jul-12
Aug-12
Sep-12
Oct-12
Nov-12
Dec-12
Jan-13
Feb-13
Mar-13
Apr-13
May-13
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Credit to the Private Sector (Rs. bn)
2,500
Source: CBSL
Sri Lanka drops to 62nd in the Prosperity Index.
Legatum Institute ranked Sri Lanka 62nd from 142 countries in
its Prosperity Index for 2014, a drop of two places from 2013. The
index measures the well-being of country’s people and its wealth.
Norway topped the ranking with Switzerland and New Zealand
making the top three.
Sri Lanka was ahead of its South Asian neighbours, Nepal (96th),
India (102nd), Bangladesh (104th), Pakistan (127th) and Afghanistan
(137th).The Index ranks countries on eight sub-indices – Economy,
Entrepreneurship & Opportunity, Governance, Education, Personal
Freedom, Health, Safety & Security and Social Capital.
2
Gradient
Alliance
M ont hly Bullet in: Novem b e r 2 0 1 4
In Economic news:
COPE reveals another series of state institution losses. The Committee on Public
Enterprises (COPE) presented yet another damaging report on government institutions for the period
ending September 2014. Despite such disclosure there is little evidence that state institutions’ key
officials will be held accountable, deterred or implicated. Select COPEfindings;
• Ceylon Petroleum Corporation, National Paper Company and SriLankan Airlines incurred a combined
loss of Rs.40.2bn in 2013.
• The Sri Lanka Ports Authority (SLPA) had not settled a bill of Rs.4.8bn in relation to the construction of
Sooriyawewa Cricket Ground, Hambantota, a venue for the ICC World Cup 2011.
• Sri Lanka Cricket (SLC)’s granting of local television broadcasting rights in 2011 was deemed not
transparent. Only one bid was received to the tender notice which had not been given enough
publicity due to the small size of the advertisement and short time to respond. Broadcasting rights was
awarded to a company in which the SLC secretary was CEO, giving rise to a clear conflict of interest.
Receivables amounting to about Rs.316m had been written off and Rs.1.1bn relating to the construction
of a World Cup Stadium was considered as bad debts.
• In spite of the initial estimate of Rs.2.5m, the tender related to refurbish13 hotel rooms at the Taj
Samudra Hotel had been awarded by the Sri Lanka Institute of Tourism and Hotel Management at
Rs.3.9m per room.
• Investigations leading to the misplacement of 5000MT of fertilizer valued at Rs.388m, which
commenced in 2008 were yet to be completed, despite the distributor having being found
responsible.
• Due to the lower depth (a construction flaw) at the Oluvil Port only small vessels can be accommodated.
The Port cost a staggering Rs.7.2bn.
• Rs.391m was wasted on improving the efficiency of the Colombo Port as the project was abandoned
midway since the government changed policy.
• State Printing Corporation was fined Rs.54.9m for delays in printing books and not printing in
according to specifications.
3
Gradient
Alliance
M ont hly Bullet in: Novem b e r 2 0 1 4
In Economic news:
costs. Demand for cement during Jan – Aug 14 was 3.7m MT
Demand for cement declines as the
construction industry is impacted by high
(-10.2% YoY). During this period local production was only 1.2m
MT (-2.5% YoY) and imports were 2.5m MT (-13.5% YoY). Drop in
demand can be attributed to the cost of construction rising to a
historic high in 2Q14 as the industry is dependent on imported
raw materials for almost 90% of its requirements.
GreaterColomboHousingApprovals
3,500
GreaterColomboOtherBuildingApprovals
Number of houses approved (Greater Colombo-GC)
680
All Housing Construction Cost Index
660
450
640
400
585
620
350
565
600
300
545
580
250
525
200
505
150
485
100
465
50
445
0
425
3,000
2 500
2,500
2,000
1,500
560
540
1,000
520
500
500
0
Other building approvals
Non residential building construction cost Index (1990=100)
500
625
605
480
1Q09
1Q10
1Q11
1Q12
1Q13
1Q14
Source: CBSL
Source: CBSL
Key industry news,
• Maga Engineering says it has nearly Rs.80bn worth of projects
to be launched in the current financial year. According to its MD
“We’ve submitted a proposal to the government to undertake a 28km
stretch of the Northern Highway. It’s worth Rs.54bn. Past years have
seen a growth of 20 - 25%, with the incoming Chinese investments
for construction, the industry has only seen an annual growth of 13
- 15%.”
• Renuka Land, a joint venture between Renuka Hotels and Cargo
Boat Development is to construct a Rs.2.0bn modern rentable
‘Class A’ office building complex on No. 29, Braybrooke Street,
Colombo 2. The property will cover an area of 204,343 sq. ft.
of which 108,138 sq. ft. will be available for rent. Operations to
commence Apr 2017.
• Renuka Holdings is to construct “The Renuka Tower” a 28 storey
tower providing ‘A’ grade office facilities on Galle Face Terrace and
Uttrananda Mawatha, Col. 3. Once completed, the tower will have
200,000 sq. ft. of rentable office space. The total project cost is
estimated at Rs.3.2bn.
Sri Lanka 71st in Global Entrepreneurship Index.
Sri Lanka was placed 71st among 130 countries in the US-based
Global Entrepreneurship and Development Institute’s Global
Entrepreneurship Index for 2014. The country was placed 11th in
the Asia Pacific region and best in South Asia.
The Index focuses on efficiency of national startup ecosystems
through sub index, Attitudes, Abilities and Aspirations. Sri Lanka
is ranked at 103rd in the Attitudes sub index, 54th in Abilities sub
index and 59th in Aspirations sub index.
The US is number one followed by Canada and Australia. The
14 pillars of entrepreneurship as per the Index are Opportunity
Perception; Startup Skills; International isation; Networking; Process
Innovation; Risk Acceptance; Cultural Support; Human Capital;
Technology Absorption; Opportunity Startup; Competition; High
Growth; Product Innovation and Risk Capital.
4
Gradient
Alliance
M ont hly Bullet in: Novem b e r 2 0 1 4
In Economic news:
Inflation YoY%
Inflation rose 1.5% YoY in Nov 14 (-10bps
MoM). CBSL acknowledged the continuing reduction in
inflation to “Prices of items in the Non food category decreased on
average, supported by the declines in prices in the Housing, Water,
Electricity, Gas and other Fuels sub group. Downward revision of LP
Gas prices with effect from October 10, 2014 contributed significantly
to this decrease.”
CCPI
CAL UPI
11.0%
9 0%
9.0%
7.0%
5.0%
3.0%
1.0%
-1.0%
-3.0%
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Jan-14
Mar-14
May-14
Jul-14
Sep-14
Nov-14
Source: CBSL,CAL
The Department of Census and Statistics (DCS) is to introduce
a new inflation basket in 2015. According to Mr. D C A
Gunawardena, DCS, “We are going to change the inflation basket
next year and introduce a national index covering all the districts.
There is price stability with the government policies introduced in
2006 and every five years we change the inflation basket. So now
it’s high time to change it. Because the inflation now measured
taking 2006/2007 as the base year.”
Rupee ended the month at 130.02/133.15 vs. USD
(Rupee weaker 0.50% MoM).
140
135
130
125
120
115
110
105
USD/LKR Exchange Rate
Oct-14
Nov-14
Jul-14
Sep-14
7.5
6.5
5.5
4.5
3.5
2.5
1.5
Aug-14
Jun-14
Apr-14
May-14
Jan-14
Feb-14
Mar-14
Oct-13
Dec-13
Nov-13
Jul-13
Sep-13
Aug-13
Jun-13
Apr-13
Bid - Ask spread (Rs. per US$)
May-13
Jan-13
Feb-13
Mar-13
Oct-12
Dec-12
Nov-12
Jul-12
Sep-12
Jun-12
Aug-12
Apr-12
May-12
Feb-12
Mar-12
Mid point (Rs. per US$)
Source: CBSL
All Share Price Index
7,700
All Share Price Index closes at 7,115.89, down
2.9% MoM. Best performing sectors were construction &
engineering (+8.4% MoM), oil palms (+5.3% MoM) and power &
energy (+1.4% MoM). Worst performing sectors were information
technology (-15.7% MoM), footwear & textile (-13.2%) and
plantations (-10.4% MoM).
7,327
7,400
7,034
7 100
7,100
6,814
7,116
7 252
7,252
6,800
6,463
6,500
6,121
6,200
5,900
5,953
5,817
5,636
5,736
6,248
6,037
5,834 5,807
5,955
5,775
5,913
5,968
5,940
6,224
6,263
6,379
5,600
Source: CSE
5
Gradient
Alliance
M ont hly Bullet in: Novem b e r 2 0 1 4
In Business news:
Tourists arrivals cross 1.2m for the year. Tourist
arrivals in Oct 2014 were 121,576, up 13.6% YoY resulting in JanOct traffic reaching 1.2m about 45,000 short of 2013 full year
level. According to Sri Lanka Tourism Development Authority
key sector performance;
Sri Lanka targets 1.5m tourist arrivals for 2014 and 2.5 million by
2016. In related industry news;
Tourist Arrivals '000'
2013
2014
160
150
140
• Browns Hotel and Resorts signed an agreement with Starwood
Hotels & Resorts which will give Starwood the management
rights to the five-star Sheraton Kosgoda Turtle Beach Resort. The
172 room hotel is to open in 2015.
130
120
110
100
90
80
70
60
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Source: Sri Lanka Tourism Development Authority • Indian arrivals were 26,148 (+19.8% YoY).
• Western Europe: U.K: 10,112 (+2.7% YoY), Germany: 7,996
(+23.8% YoY) and France: 4,523 (+7.9% YoY).
• East Asia arrivals were up significantly, with 11,894 tourists
coming from China and Hong Kong (+120.7% YoY).
• Russian arrivals declined 4.0% YoY to 5,512, while North America
traffic was 5,206 (+10.4% YoY).
• ITC, an Indian conglomerate will build a USD300m hotel and
apartment complex opposite Colombo’s Galle Face beachfront.
The investment was increased from USD 140m. ITC Colombo will
have 350 rooms, 170 luxury residences, banquet facilities, retail
and office space. Operations to start by Aug 2017.
• SriLankan Airlines to start flights to Kunming, China from Dec14
adding to its current 15 weekly flights to Beijing, Shanghai,
Canton and Hong Kong.
Tea production at 28.9mkgs in Sep 2014. According
to Forbes & WalkerSri Lanka’s tea production increased to
28.9mkgs (+15.3% YoY) in Sep. High grown tea production was
5.6mkgs (-2.5% YoY), medium grown was 3.8mkgs (-0.9% YoY)
and low grown was 19.3mkgs (+26.8% YoY). Tea exports during
the month was down to 26.7mkgs (-7.3% YoY) as auction prices
for high, low and medium grown were -12.0%, -10.5%, -7.1% YoY
in the month.
Sri Lanka Tea Production and Exports
40
Tea Production (m kgs)
Tea Exports (m kgs)
35
30
25
20
15
Jan 13 Feb 13 Mar 13 Apr 13 May 13 Jun 13 Jul 13 Aug 13 Sep 13 Oct 13 Nov 13 Dec 13 Jan 14 Feb 14 Mar 14 Apr 14 May 14 Jun 14 Jul 14 Aug 14 Sep 14
Source: Forbes and Walker
6
Gradient
Alliance
M ont hly Bullet in: Novem b e r 2 0 1 4
In Business news:
Sri Lanka wins Offshoring
Destination of the year, for the
second year running. Sri Lanka
won the National Outsourcing Association’s
Offshoring Destination of the year award 2014 for the second
consecutive year. The accolade confirms the country’s status as
leading destination for outsourcing of information technology
and business process management, with revenue rising from
USD213m in 2007 to USD720m in 2014. According to Mr.
Jayantha De Silva, Chairman, SLASSCOM “I’m proud to have Sri
Lanka recognised with a second award as a destination for offshoring
businesses. The award itself is a testimony to the exceptional quality
being offered from Sri Lanka”.
SLASSCOM is the country’s IT/BPM industry body. In an
outstanding year for the industry, it was shortlisted for the
European Outsourcing Association (EOA) Offshoring Destination
of the Year Award 2014.
• Motor cycle registrations grew to 34,976 (+120.3% YoY)
”2-wheeler registrations hit an all-time monthly high. The
government made a decision to provide 100,000 2-wheelers to field
officers at Rs 50,000 a unit, the level of subsidy is a lot less taken from
the duty free price. A lot more 2-wheelers will be registered in Nov as
part of this program.”
A vehicle registrations up 71.5% YoY in Oct
2014. According to JB Securities total vehicle registrations were
• Truck registrations declined to 1,995 (-8.7% YoY) “Pickup trucks
registrations recorded 254 units in Oct slightly down from 265 units
in Sep but significantly up from 100 units 12 months ago. Tata
recorded 162 units comprising of 83 207Di and 79 Xenon.”
49,957 in the month.
In related news;
• Motor cars registrations were 2,635 (+23.6% YoY) “Maruti recorded
336 units in Oct(564 units in Sep). The tariffs reductions should help
volumes going forward in the small car segment. In the preowned
segment - the main driver of volumes are from hybrids – 624 Aqua,
256 Axio, 304 Prius and 527 Honda Fit.SUV registrations were 1,359
(569 units Oct 13) - 1,065 units of Honda Vezel.”
• Sri Lankan company Code Gen is to introduce a fully electric
super car called ‘Vega’. The two motors and the battery cell
will be imported from the US whilst all other parts are to be
manufactured in Sri Lanka. The car can reportedly travel 240
miles on one charge and will be available from USD 400,000
onwards.
In other
relatedwere
news;
• 3 wheeler
registrations
7,195 (+7.4% YoY).
• According to Associated Motorways (AMW) post the Budget
• Ashok Leyland received an order to supply 630 buses to Sri Lankan
at a cost prices
of USDof17m.
Themotor
order vehicles
follows ahave
2015operators
announcements
select
Motor Vehicle Registrations (New/Used)
recent order for 2,200 buses.
reduced. It noted that current high demand meant buyers
to wait
about
three
months.
Select already
prices from
• Hyrax Oil from Malaysia is to establish a lubricant oil mixing planthaving
in Sri Lanka
at afor
cost
of USD
10m.
The company
AMW
and
United
Motors;
markets its products in collaboration with the CPC.
35,000
30,000
25 000
25,000
20,000
Type of vehicle
Previous price
Latest price
Suzuki Celerio
Suzuki Omni van
Suzuki Swift
ViVA (850cc)
Panda GB
Panda GS
Panda Cross
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
• According to Minister, Mr. Rohitha Abeygunawardena vehicles exporters
from Japan and Thailand
the
Alto
Rs.1,850,000are looking to use
Rs.1,498,000
Suzuki Wagon R
Rs. 2,765,000
Rs. 2,450,000
Hambantota harbour as a transshipment port.
Suzuki StingRay
Rs. 2,855,000
Rs. 2,615,000
15,000
10,000
5,000
-
Oct-13
Nov-13
Dec-13
Motor Cars, SUVs and Vans
Source: JB Securities
Jan-14
Feb-14
Mar-14
3Ǧwheelers
Apr-14
May-14
Jun-14
2Ǧwheelers
Jul-14
Aug-14
Sep-14
Trucks
Oct-14
2,540,000
1,850,000
3,150,000
1,925,000
1,545,000
1,670,000
2,075,000
2,465,000
1,675,000
2,850,000
1,760,000
1,245,000
1,395,000
1,825,000
7
Gradient
Alliance
M ont hly Bullet in: Novem b e r 2 0 1 4
In Business news:
Banking sector consolidation continues.
as Hatton National Bank and Prime Grameen Micro Finance were
publicly announced. CBSL commented that “41 Non-Banking
Finance Institutions (NBFIs) and nine banks have confirmed their
consolidation plans. Out of this, 8 NBFIs and 2 banks have already
completed their respective consolidation plans, whilst 33 NBFIs and 7
banks are still progressing and are in different stages in their plans”.
Trade deficit in Sep 2014 expands to USD
764.2m (+30.1% YoY). Exports in Sep 2014 rose a tepid
870.7m, down 5.1% YoY, as fuel imports declined to USD 295.3m
(-24.1% YoY)
During Oct14 consolidation between Central Finance and Isuru
Leasing, Arpico Finance and Associated Motor Finance as well
0.5% YoY to USD 903.3m with imports growing 12.2% YoY to
USD 1.5bn. The resulting trade deficit was financed by USD
575.0m (+3.1% YoY) of worker remittances.
• Agriculture exports (~22% of exports) were USD 231.9m down
2.9% YoY as tea exports declined to USD 133.6m (-4.8% YoY).
• Investment goods imports were USD 428.8m, up 27.9%YoY.
Imports of machinary and equipment were down (USD
177.2m,-10.1% YoY) and transport equipment was up
(USD140.1m,+290.3% YoY)
Trade Balance
Exports (USDm)
Imports (USDm)
Trade deficit (USDm)
2,000.0
• Industrial exports (~77% of exports) were USD 667.9m up 3.3%
YoY on higher apparel exports (USD 403.8m, +4.4% YoY).
1,500.0
1,000.0
500.0
• Consumer goods imports (~18% of imports) were USD 365.5m,
up 56.9% YoY, driven by food and beverages (USD 151.7m,+79.3%
YoY) and motor vehicles (USD 97m,+88.3% YoY).
0.0
-500.0
-1,000.0
May-13
• Intermediate goods imports (~59% of imports) were USD
LMD-Nielsen business confidence index
slides for the third consecutive month. LMD’s
Business Confidence Index dropped to 128 in Oct 14 an eight
month low.
According to Mr. Sheen cader, Managing Director, LMD “Despite
increasing optimism about the economy, the BCI has continued its
Jun-13
Jul-13
Aug-13
Sep-13
Oct-13
Nov-13
Dec-13
Jan-14
Feb-14
Mar-14
Apr-14
May-14
Jun-14
Jul-14
Aug-14
Sep-14
Source: CBSL
gradual decline, as seen in recent months – mainly as a result of
concerns about consumers’ spending power being restricted due to
[the] high cost of goods and services. Another factor which seems
to have a bearing is the increasing concern of political activities
impacting business, which has been an apprehension in the past as
well, when elections occur”.
LMD- Nielsen Business Confidence Index
170
160
150
140
130
120
110
100
90
Oct-14
Sep-14
Jul-14
Jun-14
Aug-14
Apr-14
May-14
Jan-14
Feb-14
Mar-14
Oct-13
Dec-13
Sep-13
Nov-13
Jul-13
Jun-13
Aug-13
Apr-13
May-13
Jan-13
Feb-13
Mar-13
Oct-12
Dec-12
Sep-12
Nov-12
Jul-12
Jun-12
Aug-12
Apr-12
May-12
Jan-12
Feb-12
Mar-12
80
Source: LMD
8
Gradient
Alliance
M ont hly Bullet in: Novem b e r 2 0 1 4
In Business news:
In other news.
Merchant Bank of Sri Lanka (MBSL) was
reported to be planning to sell its stock broking arm Lanka
Securities. This had raised interest as the Colombo Stock
Exchange has been performing really well. MBSL Chairman M.R.
Shah was accused to have trying to rush through a sale and not
having communicated the same prior to the meeting. MBSL
owns a 29% stake in the firm whilst its parent Bank of Ceylon
holds a 20% stake.
• According to the CSE foreign purchases from Jan to 14th Nov
2014 amounted to Rs.95.0bn, surpassing the previous highest
foreign purchases of Rs.92.4bn in 2010. Mr. Vajira Kulatilaka,
Chairman, CSE, “We believe that investors entering the market are
being cautious and basing their decisions on the fundamentals
of companies. Foreign investors therefore have confidence in the
liquidity of their investments, this buoyancy is being reflected in the
foreign inflow over the past months.”
• Aberdeen Holdings acquired Expolanka Teas, Expolanka
Plantation, World Spice and Teas, Castle Commercial, Neptune
Holdings, Expolanka Pharmaceutica, Bio Extracts and Saffron
Foods for Rs.1.16bn. According to Aberdeen Holdings Chief
Executive Officer Mr. Omar Kayaam, “We see a strong business
case and value proposition for the companies we have just
acquired. We have a robust strategy and management expertise to
ensure these companies deliver strong performance and superior
shareholder value.”
• Anilana Hotels and Properties rights issue worth Rs.767m was
oversubscribed. The funds will be used to finance the remaining
construction of Phase-I of the Dambulla hotel and to retire
approximately Rs.167m of debt.
9
Gradient
Alliance
M ont hly Bullet in: Novem b e r 2 0 1 4
In Consumer news:
Tommy Hilfiger to open in Sri Lanka. Tommy Hilfiger
will open its first store in Sri Lanka in Dec 2014. According to LBO
the “Current FH’14 collection that will be launched in Colombo is
inspired from his classic American roots with a signature twist”.
Credit card usage continues to increase. As per
CBSL, the number of active credit credits to Jun 14 rose to
974,144, up a modest 4.6% YoY to its highest level. However
the total outstanding balance grew a significant 14.1% YoY
to Rs.53.6bn, causing debt per card to increase to Rs.55,036 a
historic high.
Outstanding debt volumes will continue to rise as the interest
rates on credit cards have been reduced since June. Cards are
attractive among the 3.6m urban population in the country
whose under pressure disposable income have created
demand. Urban monthly household income only rose at an
annual rate of 8.5% to Rs.68,336 in 2012/13 from 2006/07 lower
than its’ household expenditure growth of 9.0% during the
same period.
Nielsen consumer confidence
index in Oct 2014 edges up to
65 (+3 points MoM).
Credit card usage
No of credit cards (LHS)
O/S balance (Rs.m)
Debt per card (Rs.)
980,000
60,000
960,000
55,000
940,000
920,000
50,000
900,000
45,000
880,000
40,000
860,000
840,000
35,000
Source: CBSL
Source: lmd.lk
10
Gradient Alliance
Helping to shape your Business
We are a management consultancy and financial advisory services provider.
Combining experience and comprehensive capabilities across many industries and
business functions, we work with clients to achieve a higher level of excellence.
We carry out company and market research, developing company financial
models, valuations and competitor analysis. Moreover we perform market surveys,
feasibility & due diligences studies and construct business plans.
Mo n t h l y B u l l e t i n : November 2014
4A, Deal Place A,
Colombo 03
Sri Lanka
M: + 94 773 619800
P: + 94 11 5786787
[email protected]
www.gradientalliance.com
11

Download Report