Sri Lanka Newspapers Saturday 17/03/2012

Shares move up, rupee strengthens...then falls

Turnover at the Colombo Stock Exchange reached a whopping Rs. 15.7 billion with a major deal going through involving a JKH stake held by the EPF (see lead story) which lifted up the bourse but only temporarily strengthened the rupee.

The All Share Price Index rose 0.96 percent to close 51.85 points higher at 5,449.05 while the Milanka Price Index of more liquid stocks gained 0.63 percent to close at 4,864.25, up 30.57 points.

Around 113.5 million shares changed hands during the day.

The huge Rs. 14.5 billion sale of JKH shares held with the EPF raised sentiments in other counters as well with 154 counters closing in positive territory as against 53 that closed in the red. This deal also buoyed the rupee but only for a while.

News of the EPF sale of JKH shares strengthen the rupee against the dollar, but when it became apparent the foreign inflow to the stock exchange was locked in by the Central Bank, the rupee plummeted.

The rupee began the day at Rs. 125.0/25 against the greenback but strengthened to around Rs. 124 on the news that a Malaysian Fund, state-owned Khazana Nasional Berhard had brought US$ 114 million worth of JKH shares.

"The Central Bank kept the dollars so importers had to come to the market for their dollar requirements which resulted in the rupee falling to around Rs. 126.40/60 at one stage," a currency dealer said.

Soon after, the rupee strengthened somewhat, reaching Rs. 125.50/126.0 half an hour before the close of the day’s trading. The rupee finally settled around Rs. 125.50.
http://island.lk/index.php?page_cat=article-details&page=article-details&code_title=47565

*Huge encouragement for the Colombo Stock Exchange- CSE Chairman Krishan Balendra
*Foray into equity, bond markets, measure to stabilize currency peg - CB Governor Ajith Nivard Cabraal

By Ravi Ladduwahetty

Khazana Nasional Berhard, the investment holding arm of the Government of Malaysia, yesterday acquired the 8.4% equity stake in premier diversified blue chip conglomerate John Keells Holdings PLC for Rs. 14.5 billion where 71 million shares crossed the floor of the Colombo Stock Exchange in one of the largest market transactions in recent times.

Market indices shot up with Colombo Stock Market’s turnover boosting over Rs.5 billion, initially when 23 million shares changed at Rs.194 per share. Sources close to the deal said that a representative from Bank of America’s Merryl Lynch’s Director Investment Banking (Khazanah Nasional’s stock broker) Sharhan Muhseen, was in Colombo to execute the deal. The deal was expected to go through on Friday as The Island reported the previous day.

Foreign Fund Managers have evinced keen interest in the Sri Lankan equity markets of late where they have sourced value and the current buying was a huge encouragement in the current context of the market, an elated Chairman of the Colombo Stock Exchange Krishan Balendra told The Island Financial Review yesterday

Balendra who is also President of John Keells Capital, said that the interest evinced by the Foreign Fund Managers in John Keells Holdings shows the level of confidence in the valuation of the JKH share and the general valuation of the Sri Lankan equities market. This is a very positive development as they are one of the long term investors who have looked at positively at the Sri Lankan equities market.

John Keells Stockbrokers CEO Thivanka Ratnayaka said his firm facilitated the trade as the lone sponsoring broker for the buyers while it was among one of the 25 plus brokers for the sellers. The entry of a new Foreign Fund of the stature of Khazanah was a positive sign for the country and a source of encouragement for the Sri Lankan equity market.

Central Bank Governor Ajith Nivard Cabraal had said the deal was part of the several forays into equity and bond markets that would help stabilize a currency peg. The Sri Lankan rupee had opened stronger yesterday below 124 to the US dollar, from a close of 125.00/25 on Thursday.

Central Bank’s Superintendent of EPF Kalyani Gunatilleke said: "The enormous profit that the EPF made has brought in the much needed liquidity to the market which was very thin before while also propping up investor confidence

Responding to criticisms that the government was selling this EPF stake to set off the losses in defending the rupee against the dollar and also allegations that the EPF was recouping losses sustained from the earlier market transactions of buying equities of other blue chips whose prices have dipped, she said: "Sri Lanka has the freedom of speech and anyone can say anything. The EPF was a professionally run outfit and we thought that this was the best time to sell the JKH stake at a huge profit. That also brought in the market confidence and the liquidity, she said

Khazanah Nasional Berhad is the investment holding arm of the Government of Malaysia entrusted to hold and manage the commercial assets of the government and to undertake strategic investments. Khazanah was incorporated under the Companies Act 1965 on September 3, 1993 as a public limited company. The share capital of Khazanah is owned by the Minister of Finance, a body corporate incorporated pursuant to the Minister of Finance (Incorporation) Act, 1957. Khazanah has a nine member board comprising representatives from the public and private sectors. Najib Tun Razak, the current Prime Minister of Malaysia is the Chairman of the Board of Directors. Khazanah has stakes in more than 50 companies with assets valued in excess of RM (Malaysian Ringgit) 113 billion.
http://island.lk/index.php?page_cat=article-details&page=article-details&code_title=47562

Godrej, one of India’s largest and most respected conglomerates with businesses spanning industrial engineering, appliances, FMCGs, furniture, security solutions, agri-care and real estate, and a pioneer, innovator and key player in refrigerator manufacture, launched its hi-tech, and stylishly designed range of refrigerators in several models and colours under the Godrej EON brand. Their partner in marketing the range in Sri Lanka is none other than Sri Lanka’s premier retailer of white goods and electronics, Singer.

A US$ 3.3 billion company, founded by visionary Indian entrepreneur Ardeshir Godrej, the Godrej Group has a presence in over 60 countries with its various products with 25% of its business coming from overseas. In 1958, it was the first Indian company to manufacture refrigerators and became synonymous with the category. It was also the first to manufacture 100% CFC-free environmental friendly refrigerators and remains a leader in the field operating with advanced technology and patent rights. Godrej currently manufactures 1.3 million entry-level to high end refrigerators annually, and have penetrated markets in the Middle East, Africa, and now Asia.

Commenting on the link up with Godrej, Singer Group CEO Asoka Pieris said: “We are proud to join hands with a company like Godrej, with their reputation as a pioneer, innovator and key player in the Indian consumer durables market. With our commitment to offer the best and widest choice of appliances to our customers we are happy to include this international class range of refrigerators from Godrej and provide the extensive distribution and after sales services we are famed for, to support this brand.”

Godrej’s EON refrigerator range will initially bringing to Sri Lanka comprises four two-door models of varying capacities to suit newly-weds or large families. They are of the easy-to-upkeep frost-free type and are built with many freshness-protecting, convenience-providing and green technology features.

These include Godrej’s patented Cool Shower Technology which comprises shelves with in-built air vents to ensure uniform cooling, silver-enriched air vents, fruit tray and freezer box to ensure anti-bacterial action and keep food fresh, a unique Godrej invention to conveniently hang poly bags of frozen foods in the freezer, palladium-carbon based deodorisers, jog-dial moisture controls, together with toughened glass shelves and zinc-oxide anti-rust protection (ZOP) to provide enhanced durability. In terms of its ‘green’ features, Godrej fridges help save energy with their 5 Star energy saving rating and are 100% CFC free.

Singer’s Marketing Director Nasser Majeed speaking about the launch stated that while Singer offers multiple brands as a part of their philosophy of providing the widest customer choice, the new Godrej range they are introducing has some unique features and appeals particularly in terms of relevant technology, fine styling and a range of contemporary colours including a crimson, silver and black to suit the modern household. He said that he was confident that this range will particularly appeal to a segment of new, younger consumers who may be buying their first fridge, those making a move for the better, and those keen on style and tech.
The launch event which elegantly demonstrated the Godrej brand through dance was graced by Godrej Appliance’s Vice President for Sales and Marketing Kamal Nandi, who was responsible for rejuvenating the Godrej brand into a youthful, contemporary and vibrant one, making it ‘Mind Leader’ in the refrigerator industry, and winning accolades like the Reader’s Digest ‘Most Trusted Refrigerator Brand’, CNBC’s ‘Most Preferred Refrigerator Brand’, Brand Equity’s ‘Most Trusted Brand’, the Business World award for ‘The Most Innovative Company’ and the ‘Consumer Superbrand’ status. He was joined by Godrej’s Senior GM for Appliance Exports Diptendu Bhattacharya.

The range will be marketed through Singer’s Sisil World, Singer Mega and selected Singer Plus stores and independent retail dealers in order to provide maximum distribution coverage for the brand.
http://www.ft.lk/2012/03/17/godrej-introduces-stylish-hi-tech-refrigerators-range-with-singer/

sriranga wrote:Godrej, one of India’s largest and most respected conglomerates with businesses spanning industrial engineering, appliances, FMCGs, furniture, security solutions, agri-care and real estate, and a pioneer, innovator and key player in refrigerator manufacture, launched its hi-tech, and stylishly designed range of refrigerators in several models and colours under the Godrej EON brand. Their partner in marketing the range in Sri Lanka is none other than Sri Lanka’s premier retailer of white goods and electronics, Singer.

http://www.ft.lk/2012/03/17/godrej-introduces-stylish-hi-tech-refrigerators-range-with-singer/.....................................

How this news effect on REG share price in the future?
Do they bring parts to SL and assemble them here or buy the whole thing and sell it here??