Sri Lanka shares end steady; President's speech awaited

(Reuters) - Sri Lankan shares ended steady in thin trade on Thursday, hovering around their highest in more than six weeks hit in the previous session with investors offloading telecom and diversified shares, as they awaited President Maithripala Sirisena's address to the nation later in the day.

Analysts expect Sirisena, who promised to dissolve parliament after 100 days from his election, to explain his policies for political stability and implement the promised constitutional and electoral reforms.

"Investors are awaiting for directions from his speech, which may give some clarity on how he would achieve political stability," a stockbroker said on condition of anonymity.

The bourse hit a six-week high on Wednesday on hopes of better earnings, with positive sentiment continuing due to lower interest rates.

The main stock index ended 0.04 percent lower at 7,114.39, slipping from its highest close since March 10 hit on Wednesday. It has, however, gained 3.13 percent since the central bank cut key rates on April 15, while yields on t-bills have fallen 26-36 basis points since then.

Some analysts said the markets would stay volatile until parliamentary elections are announced.

The market saw a net foreign outflow of 1.77 million rupees ($13,318) on Thursday, but net foreign buying stood at 3.67 billion rupees so far this year.

Turnover was 592.5 million rupees, just above half of this year's daily average of around 1.08 billion rupees.

Analysts said the market could be dull until the perception on political uncertainty is addressed and many investors were in a wait-and-watch mode before the parliamentary elections.

Shares of leading mobile phone operator Dialog Axiata Plc fell 2.59 percent, while Hemas Holdings Plc fell 2.57 percent. Leading fixed-line telephone operator Sri Lanka Telecom Plc fell 1.47 percent.

The index lost 6.6 percent last month, its biggest monthly drop since October 2012, as investors sold holdings to settle margin trades amid concerns about political stability and a rise in interest rates.

Investors have been cautious due to political uncertainty as Prime Minister Ranil Wickremesinghe's party does not have a majority in parliament, stockbrokers said. 

($1 = 132.9000 Sri Lankan rupees) 

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

Sri Lanka c.bank head resumes duty after bond probe report

(Reuters) - Sri Lanka's central bank Governor Arjuna Mahendran has resumed his duties after a more than five-week voluntary leave of absence after being cleared by a panel investigating a controversial government bond auction.

The panel of legal experts probing the Feb. 27 auction said on Sunday that it had cleared the central bank chief of any direct role in the decision to increase the size of the sale by 10 times, while calling for tighter supervision of the government's borrowing office.

"The governor is in office today for the first time after he went on leave," a central bank official said on Thursday condition of anonymity because he is not authorised to speak to media.

Mahendran, when contacted, declined to comment, saying he was busy in a meeting.

Mahendran went on leave of absence on March 16 after opposition parties pressed Prime Minister Ranil Wickremesinghe's government to sack him and hold an independent investigation into the bond auction. The prime minister appointed the three-member panel to probe the deal.

Mahendran, a Sri Lankan-born Singapore national, was questioned by Sri Lanka's anti-corruption authority and banned from traveling abroad.

At the auction, the government raised more than 10 billion rupees ($75.2 million) from the sale of a 30-year treasury bonds at a yield of 11.73 percent, after initially offering just 1 billion rupees with an indicative price of 9.5 percent.

The main opposition says the higher yield would cost the government an extra 45 billion rupees ($338.60 million) and has alleged that the government has been trying to cover up the issue with a simple commission report.

Deputy Investment Minister Eran Wickramaratne rejected the opposition claim on the losses, but said the deal has caused damage to the Wickremesinghe government.

"Once the report on the probe is tabled, the parliament should decide if there should be any further investigation into it," he told reporters. 

($1 = 132.9000 Sri Lankan rupees) 

(Reporting by Shihar Aneez; Editing by Kim Coghill)

Sri Lanka's Union Bank March net up 71-pct

COLOMBO (EconomyNext) - Sri Lanka's Union Bank said group net profit rose 71 percent to 32 million rupees in the March 31, 2015 quarter from a year ago on strong loan growth and better interest margins and income.

Net interest income rose 60 percent to 615 million rupees as interest income rose two percent to 1.1 billion rupees while interest costs came down sharply, by 28 percent to 526 million rupees, a stock exchange filing said.

Fee income grew nine percent to 62 million rupees while provision for bad loans fell 44 percent to 40 million rupees.

Union Bank group diluted earnings per share were two cents for the March quarter.

At bank level, net profit grew by 228 percent to 25.1 million rupees from the year before.

"The bank recorded a significant increase in revenues for the 1Q15 in comparison to the
corresponding quarter in 2014," a statement said.

Total operating income for the March quarter grew by 46 percent to 662.5 million rupees from the year before.

"The primary reasons for this were the strong growth in loans and advances, improvement in margins and the quality of the loan book," the statement said.

Union Bank said its business strategy was being transformed after it was bought by Culture Financial Holdings, an affiliate of private equity fund, TPG Capital Management LP, in 2014.

Lanka’s highest yield from New Peacock Estate of Elpitiya Plantations

Aitken Spence Plantations managed Elpitiya Plantations PLC’s New Peacock Estate in Pussellawa recorded the highest ever yield-per-hectare of 3,008 Kgs/ha for the financial year 2014/15 in Sri Lanka for a tea plantation estate with an extent of over 260 ha.

The achievement came in spite of the unfavorable weather conditions that prevailed in the region during the last four months of 2014.

New Peacock estate in the mid-country region continues to be one of Elpitiya’s exceptionally performing contributors of its 13 estates.

Undertaking of best practices in agriculture as emphasized by the management, making available the essential inputs to the tea fields at the right time and the commitment of all executives, staff and workers in the estate made the results possible,” said Senerath Pahathkumbura, General Manager in charge of New Peacock Estate and the Mid Country Cluster of Elpitiya Plantations PLC.

In keeping with the policy of the Company, our prime focus was to retain the workers available on the estate by giving them proper recognition and treating them as partners.

To spearhead this acknowledgement across all levels, a number of benefits have been included in addition to the current welfare and social activities undertaken at the estate. Some of these benefits include workers name tags provided in all three languages and called by name; as well as uniforms for all workers, transport to workplace, rest rooms at all leaf weighing points with refreshment between meals during the rush cropping months,’ added Pahathkumbura.

All these measures have motivated the workers to improve their productivity and as a way forward, the Management continues to provide training to the workers in improving their skills and undertakes mechanical plucking and other agricultural works such as pruning, motorized spraying of foliar nutrients and fungicide. We would like to thank all those who have contributed in many ways to achieve the record and highest ever yield,”said Pahathkumbura.

New Peacock Tea Processing Centre produces approximately 1.2 Mn. Kgs of premium quality CTC teas per annum, and maintains the highest level of food safety standards. The estate is awarded with ISO 22000:2005, Rain Forest Alliance, Ethical Tea Partnership (ETF) and Forest Stewardship Council (FSC) certificates, which have attracted the leading buyers’ support at the Colombo tea auctions, based on the merits of its quality.

Elpitiya’s estates are situated in the upper, mid and low country regions of Sri Lanka, cultivating tea, rubber, oil palm and coconut. The Company has a significant stake in Sri Lanka’s only privately-owned palm oil mill and operates several mini-hydro power plants. At the point of takeover by blue-chip conglomerate Aitken Spence in 1997, Elpitiya Plantations was dependent on tea. The new management embarked on a strategy of crop diversification, efficiency improvement and human resources development for the company’s growth.
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Fitch withdraws rating on DSI

Fitch Ratings has withdrawn DSI Holdings Limited's National Long-Term Rating of 'BBB(lka)' with a Stable Outlook. The withdrawal follows the amalgamation of DSI Holdings Limited with its ultimate parent, DSI Samson Group (Private) Limited. DSI Samson Group is the surviving entity, and, under the provisions of the Companies Act is the successor of all outstanding liabilities and obligations of the amalgamated companies.
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Union Bank posts strong Q1 results

Union Bank’s first quarter results in 2015 have been very positive, which is a clear reflection of the new strategy that is in place. Subsequent to the change in strategy, the Bank’s rapid transition to a fully fledged commercial Bank with wider focus on Retail, SME and Corporate sectors saw several key changes.

The bank’s operating income for 1Q15 grew by 46% YoY to Rs 662.5 mn while the net profit grew by 228% YoY to Rs 25.1 millin. The bank’s CASA grew by 12% YTD to Rs 7.8 bn while Customer Deposits grew by 5% YTD to Rs 29.2 bn. The banks net profit grew by 64% YoY to Rs 37.9 mn.

Director and Chief Executive Officer Indrajit Wickramasinghe said the bank has realigned its infrastructure, human capital, systems and processes and is confidently gearing to take on the challenges of the highly competitive Banking industry. The significant capital infusion of Rs. 11.4 bn received from Culture Financial Holdings, an affiliate of TPG, one of the largest private global investment firms in the latter part of 2014 placed Union Bank (UBC) within the top five private sector Banks in Sri Lanka, in terms of market capitalisation which paved the way for a complete transformation in its business strategy.
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Sri Lanka shares close at 6-week high; financials lead

(Reuters) - Sri Lankan shares closed at their highest in more than a month on Wednesday, led by financials on hopes of better earnings, with positive sentiment continuing due to lower interest rates, dealers said.

The main stock index ended 0.26 percent up 7,117.13, its highest close since March 10. It had gained 3.13 percent since the central bank cut key rates on April 15, while yields on government securities have fallen 26-36 basis points since then.

"There was some interest in some of the finance companies and micro finance companies with low interest rates," said Dimantha Mathew, research manager at First Capital Equities (Pvt) Ltd.

"There was buying interest on earning expectation," he added but cautioned that this would not last long as markets would stay volatile until parliamentary elections are announced.

The market saw a net foreign outflow of 131.9 million rupees ($992,476) on Wednesday, but net foreign buying stood at 3.7 billion rupees so far this year.

Turnover was 1.04 billion rupees, in line with this year's daily average of around 1.09 billion rupees.

Analysts said the market would be dull due to political uncertainty and that many investors were in a wait-and-watch mode before the parliamentary elections.

Shares of Lanka Orix Leasing Company Plc rose 2.96 percent, while Ceylon Tea Services Plc jumped 12.61 percent.

The index lost 6.6 percent last month, its biggest monthly drop since October 2012, as investors sold holdings to settle margin trades amid concerns about political stability and a rise in interest rates.

Investors have been cautious due to political uncertainty as Prime Minister Ranil Wickremesinghe's party does not have a majority in parliament, stockbrokers said. 

($1 = 132.9000 Sri Lankan rupees) 

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