Wednesday, 20 September 2017

Sri Lankan shares hit over 5-wk closing high on foreign buying

Reuters: Sri Lankan shares gained for a fifth straight session on Wednesday to hit a more than five-week closing high as foreign investors bought into blue-chips, boosting sentiment.

Foreign investors bought a net 556.6 million rupees ($3.64 million) worth of shares, extending the year-to-date net foreign inflow to 17.7 billion rupees.

The Colombo stock index ended up 0.39 percent at 6,452.91, its highest close since Aug. 14.

“We have seen major transactions in blue chips which drive the market these days,” said Dimantha Mathew, head of research at First Capital Holdings.

“Foreigners are active and they are taking positions while the locals are a bit silent. But we can see them also slowly returning to market with high foreign activities.”

Shares of Dialog Axiata Plc rose 4.3 percent, while the biggest listed lender Commercial Bank of Ceylon Plc ended 2.9 percent firmer.

Melstacrop Ltd rose 3.4 percent, while conglomerate John Keells Holdings Plc gained 0.2 percent.

Turnover stood at 1.6 billion rupees, well above this year’s daily average of around 926.2 million rupees. 

($1 = 152.8000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)

LB Finance’s Senior and Subordinated Debt rated

Fitch Ratings has assigned LB Finance PLC's (LB; A-(lka)/Stable) proposed senior unsecured and subordinated debentures expected National Long-Term Ratings of 'A-(lka)(EXP)' and 'BBB+(lka)(EXP)' respectively.

The issuance is to total LKR3 billion, with the debentures to mature in five years and carry fixed coupons. The debentures are to be listed on the Colombo Stock Exchange. LB expects to use the proceeds to fund loan book growth, reduce asset and liability maturity mismatches and to improve its Tier II capital base.

The final ratings on the debentures are subject to the receipt of final documentation conforming to information already received.

The proposed senior debentures are rated at the same level as LB's National Long-Term Rating as they constitute unsecured and unsubordinated obligations of the company. The proposed subordinated debentures are rated one notch below its National Long-Term Rating to reflect the subordination to its senior unsecured obligations.

The rating of LB captures its established franchise, and satisfactory levels of capital, which are supported by sound profitability through its higher-yielding products.

These are counterbalanced by its relatively higher risk appetite as seen from its exposure to gold-backed lending. The rating also reflects increasing liquidity risk, which could reduce its liquidity buffer.

The ratings on the proposed debentures will move in tandem with LB's National Long-Term Rating.
www.island.lk

Fitch rates Sampath Bank’s Basel III sub debt ‘A (lka) (EXP)’

Fitch Ratings has assigned Sampath Bank PLC’s (A+(lka)/Negative) proposed Basel III compliant subordinated debentures an expected National Long-Term Rating of ‘A(lka)(EXP)’.

The notes, the first Basel III compliant subordinated debt in Sri Lanka, will total Rs 6 billion, mature in five years and carry fixed coupons. The notes include a non-viability clause and will qualify as regulatory Tier II capital for the bank. The bank plans to use the proceeds to support its loan book expansion and to strengthen its Tier II capital base. The debentures are to be listed on the Colombo Stock Exchange.

The final rating is subject to the receipt of final documentation conforming to information already received.
www.dailynews.lk

Lankan equities still attractive amid foreign outflow blip

Bloomberg: The biggest single-day outflow in at least 11 years from Sri Lankan stocks is a blip and foreigners, the key drivers of the nation’s equities this year, will likely overlook the negative reading.

Retail Holdings Sri Lanka BV on Wednesday agreed to sell its 61.73% stake in Singer Sri Lanka, a maker of sewing machines, to Hayleys Plc for about $ 71 million. A matching outflow was reported by the exchange on Friday.

“This is a one-off deal that has nothing to do with inflows,” said Sanjeewa Fernando, strategist at CT CLSA Securities in Colombo. “We have to adjust for this outflow.”

Foreigners have been buyers of Sri Lankan stocks for seven straight months through August, the longest streak since May 2015, drawn by the growth in company earnings and renewed confidence in the Government’s policies. The nation’s benchmark equity index trades at 10 times one-year forward earnings, versus a multiple of 15 for the MSCI Frontier Emerging Markets Index.

“Our price-to-earnings is still about the cheapest,” Fernando said. “Until we reach valuation of 14 times, foreigners are likely to transfer some of their funds from pricier markets.”
www.ft.lk

Tuesday, 19 September 2017

Sri Lankan shares mark 4-wk closing high on foreign buying

Reuters: Sri Lankan shares gained for a fourth straight session on Tuesday to mark a four-week closing high on foreign buying in blue-chips.
Foreign investors bought a net 129.9 million rupees ($848,188) worth of shares on Tuesday, extending the year-to-date net foreign inflow to 17.1 billion rupees.

The Colombo stock index ended up 0.29 percent at 6,428.07, its highest close since Aug. 18.

“Foreign investors were active today, helping to push the turnover above one billion. Foreign interest were buying blue-chips and that helped boost local investor confidence,” said Hussain Gani, deputy CEO of Softlogic Stockbrokers.

Shares of Ceylon Cold Stores Plc rose 1.5 percent, while Trans Asia Hotel Plc ended 6.7 percent firmer and conglomerate John Keells Holdings Plc gained 0.2 percent.

Turnover stood at 1.6 billion rupees, well above this year’s daily average of around 922.4 million rupees.

Recent block deals also helped boost sentiment, traders said.

Last Wednesday, after market hours, diversified conglomerate Hayleys Plc said it had agreed to purchase 61.73 percent of Singer Sri Lanka Plc for 10.9 billion rupees from Retail Holdings (Sri Lanka) BV a subsidiary of Retail Holdings NV.

Hayleys in a corporate disclosure said on Friday that Hayleys Plc and its subsidiaries purchased 231.9 million shares or 61.73 percent of Singer Sri Lanka Plc at a price of 47 rupees per share.

Last week, top mobile phone operator Dialog Axiata Plc said it acquired 80.34 percent of Colombo Trust Finance Plc for 1.072 billion rupees ($7 million). 

($1 = 153.1500 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil Nair)

Mercantile Investments and Finance records PAT of Rs 202 mn for 2016-17

Mercantile Investments and Finance has recorded a steady pre-tax profit of Rs 314 million and a post- tax profit of Rs 202 million for the financial year ending March 31, 2017.

However both pre and post-tax profits reported a notable decline of 61% and 60% respectively, when compared with the previous year mainly on account of recording impairment charges.

Further, as witnessed across the finance industry, the continued upward movement in interest rates and its resulting re-pricing effect impacted the cost of funding and core business margins which pegged back profitability levels against what was envisaged, Mercantile Investments and Finance Chairman Saro Weerasuriya told shareholders in company’s Annual Report for the financial year 2016/17.

“We experienced steady growth in our lending volumes which resulted in the loan book growing buoyantly by 14% year-on-year. In contrast, the deposit base grew moderately increasing by 8% year-on-year.

In the backdrop of rising market interest rates, we were conservative in the mobilisation of deposits that were deemed relatively more costly than other sources of funding available, and hence, we were able to access less costly sources of funding through borrowings on the strength of our brand.”
www.dailynews.lk

Monday, 18 September 2017

Sri Lankan shares hit 3-week closing high as blue chips gain

Reuters: Sri Lankan shares rose for a third straight session on Monday and ended at a three-week closing high as investors picked up diversified and telecom shares, brokers said.

The Colombo stock index ended 0.12 percent firmer at 6,409.65, its highest close since Aug.28.

The bourse rose 0.4 percent last week, ending an eight-week long losing streak.

“We are yet to see the bullish trend, but it is slowly coming into the market with some foreign buying,” said Dimantha Mathew, head of research, First Capital Holdings.

“The Locals are a bit more conservative and are looking at only blue chips yet.”

Shares of conglomerate John Keells Holdings Plc gain 1.2 percent while Sri Lanka Telecom Plc ended 4.6 percent firmer, Melstacorp Ltd rose 1.7 percent and Dialog Axiata Plc ended 0.9 percent higher.

Foreign investors net bought 97.7 billion rupees worth of shares on Monday, extending the year-to-date net foreign inflow to 17 billion rupees worth of equities.

Turnover stood at 459.2 million rupees, half of this year’s daily average of around 918.3 million rupees.

According to traders, recent block deals also helped boost the market sentiment.

On Wednesday after market hours, diversified conglomerate Hayleys Plc said it had agreed to purchase 61.73 percent of Singer Sri Lanka Plc for 10.9 billion rupees from Retail Holdings (Sri Lanka) BV a subsidiary of Retail Holdings NV.

Hayleys in a corporate disclosure said on Friday that Hayleys Plc and its subsidiaries purchased 231.9 million shares or 61.73 percent of Singer Sri Lanka Plc at a price of 47 rupees per share.

Last week, top mobile phone operator Dialog Axiata Plc said that it acquired 80.34 percent of Colombo Trust Finance Plc for 1.072 billion rupees 
($7 million). 

($1 = 152.9500 Sri Lankan rupees) 

(Reporting by Ranga Sirilal; Editing by Vyas Mohan)