Sri Lanka stocks fall on profit-taking
Jan 07, 2010 (LBO) – Sri Lankan shares ended slightly lower Thursday as profit taking interrupted the steady rise in the bourse which was Asia’s best performing last year, brokers and analysts said.
The All Share Price Index closed at 3,478.56, down 0.88 percent (30.80 points) while the more liquid Milanka index fell 1.01 percent (40.68 points) to close at 4,001.24.
Turnover was 1.6 billion rupees, according to stock exchange provisional figures.
Nikita Tissera, manager research at SC Securities, said investors booked profits after the recent rally.
“Profit taking brought the market down. The fundamentals are the same and the market’s overall direction is still up,” he said. “It’s just that it’s not a straight climb.”
Hotel stocks, which had rallied the day before, fell on profit taking by retail investors.
Conglomerate John Keells Holdings closed flat at 175.25 rupees with over 4.8 million shares traded.
Overseas Realty, the most actively traded stock of the day, closed at 16.25 rupees, up 25 cents, with over 2.3 million shares traded.
Environmental Resources Investments, which was also heavily traded, closed at 59.50, down 50 cents Renuka Agri Foods, which began trading this week, closed flat at 3.30 rupees, after peaking at 4.25 when it debuted Monday.
Sri Lanka December tourist arrivals up 16-pct, annual up 2-pct
Jan 07, 2010 (LBO) – Sri Lanka’s December tourist arrivals rose 16.2 percent to 56,862 from a year earlier as travel warnings were removed while annual visitors grew 2.1 percent to 447,890, tourist promotion office data showed.
India retained its position as the top market for generating visitors last year, with the UK remaining in second place, for the second year running.
The December 2009 increase in arrivals was the seventh straight monthly rise in arrivals. It followed the end of the ethnic war in May 2009 and easing of travel advisories by key tourist generating markets like Britain against their citizens in traveling to Sri Lanka.
The tourist arrivals from Western Europe rose 15.6 percent to 19,962 in December 2009 from a year ago with arrivals from the UK up 12.1 percent to 8,726, France up 31.6 percent to 1,833 and Germany up 13.2 percent to 3,614. In South Asia, the number of Indian tourist arrivals rose from 49.6 percent to 10,418. Overall, number of tourist arrivals from South Asia in December went up 22.1 percent to 15,339 although there was an 18.1 percent decrease in arrivals from the Maldives to 3,924.
India was the biggest source of tourists for the second year running although arrivals from there dipped 1.9 percent to 83,634 in 2009 from 2008 . Overall arrivals from South Asia for last year fell 1.5 percent to 126,205 as opposed to 2008. The number of visitors from Western Europe rose 1.8 percent to 170,123 last year boosted by more visitors from France which went up 50.0 percent to 15,886.
But arrivals from the UK, a big market, were up only 0.3 percent to 81,594 last year compared with 2008 while those from Germany, another big market, actually fell 3.2 percent to 29,654. The number of visitors from Eastern Europe fell 10.6 percent to 26,310 last year with tourist arrivals from Russia plunging 25.1 percent to 11,834 while arrivals picked up 6.1 percent to 14,476 from other Eastern European countries.
Sri Lanka also got more visitors from the Middle Eastern market from where arrivals rose 41.5 percent to 23,741. Arrivals from East Asia too increased 7.5 percent to 48,329 due to the promotions done by the government to promote the island during the year.
Sri Lanka ship fuel price war hurts supplier
Jan 07 2010 (LBO) – A Sri Lankan ship fuel supplier has said it has reduced imports and is contemplating legal action against a rival over alleged anti-competitive practices at Colombo port.
Mohamed Reza, director of Lanka Maritime Services, said the price war had driven bunker prices too low to be remunerative.
“We’re trimming down our operations due to anti-competitive practices by competitors who sell below cost.” Lanka IOC, a unit of Indian Oil Corp., has been accused of predatory pricing where fuel is sold below cost to drive competition out of business. LIOC is the newest supplier to enter the market after it was liberalised. LIOC managing director K R Suresh Kumar told LBO they get their fuel by floating international tenders and that prices fluctuate depending on market conditions.
Variable Costs In some jurisdictions, where predatory pricing is a formally outlawed, it has been defined as selling a product below variable cost. To recover fixed costs or overhead, a firm has to price its products at a margin above variable costs A firm competes by keeping overhead low, and procuring supplies as low as possible to keep variable costs down and not by selling below variable costs.
In general, larger buyers could command better prices. Kumar said LIOC has been making profits from bunkering when considered over a period of time, with losses at some points and profits at other times. “Of course, we do (make profits). No company would like to do business at a loss,” Kumar said. “It’s a dynamic market and prices keep changing. What LIOC does is what every other player does. We don’t do anything
different from other players. “It all depends on the price at which you import, today’s price in Singapore and what price you’re selling at.”
Ship fuel sales have improved steadily in recent months with the country situation improving, Kumar said. The island’s 30-year ethnic war ended in May 2009, when government forces defeated Tamil Tiger separatists, leading to an economic revival. Lower Volumes
But Reza said his company had reduced imports and was shipping in smaller parcels as it could not compete at current price levels.
“We want to wait and see how long they will continue with current price levels.” He said the company was also seeking legal opinion to take up the issue with the Consumer Protection Authority which is charged with ensuring fair competition in the market. Reza said bunker fuel
volumes sold in Colombo peaked in October and November when prices fell below that of Singapore but have fallen since then as imports were reduced.