Sri Lanka rupee edges up on exporter dollar sales; stocks gain

Reuters: ** Sri Lanka’s rupee closed slightly firmer on Thursday due to dollar selling by exporters, while stocks edged higher for a second straight session, moving away from an eight-week closing low hit early this week. 

** The rupee closed at 181.60/80 per dollar, compared with 182.15/25 in the previous session, market sources said. On Jan. 3, the rupee fell to an all-time low of 183.00 against the dollar. 

** The currency has appreciated 0.6 percent so far this year, Refinitiv data showed. 

** Worries over heavy debt repayment after a 51-day political crisis have dented investor sentiment as the county is struggling to repay its foreign loans, with a record $5.9 billion due this year including $2.6 billion in the first three months. 

** The central bank chief last week said around $5 billion borrowing in the pipeline could help debt repayments.

** The International Monetary Fund last week said it would resume discussions for further disbursal of part of a $1.5 billion loan amid investor worries of heavy debt repayments. 

** The rupee fell 16 percent in 2018, according to the central bank data. It was one of the worst-performing currencies in Asia, Refinitiv data showed, due to heavy foreign outflows. 

** The rupee has declined 4.9 percent since a political crisis started in October. That crisis had dented investor sentiment and delayed Sri Lanka’s borrowing plans. 

** A series of credit rating downgrades after the political crisis have made it harder for Sri Lanka to borrow as it faces record high repayments. 

** The Colombo Stock Index ended 0.15 percent firmer at 5,960.34 on Thursday. The benchmark index lost 5 percent in 2018. 

** Turnover was 725.2 million rupees, less than last year’s daily average of 834 million rupees. 

** Foreign investors were net buyers for a third straight session on Thursday, buying a net 310.7 million rupees worth of shares. But they have been net sellers of 2.05 billion rupees worth of stocks so far this year and 15.4 billion rupees since a political crisis began on Oct. 26. 

** The bond market saw outflows of 86.7 billion rupees between Oct. 25 and Jan. 16, the latest central bank data showed. 

($1 = 182.0000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)

Fitch downgrades HDFC Bank to ‘BB+(lka)’ as government support weakening

LBO – Fitch Ratings has downgraded the National Long-Term Rating and senior unsecured debentures of Housing Development Finance Corporation Bank (HDFC Bank) to ‘BB+(lka)’ from ‘BBB-(lka)’ reflecting the weakening of the sovereign’s ability to provide support.

“The downgrade reflects Fitch’s assessment of HDFC Bank’s standalone strength, as we believe timely support from the sovereign cannot be relied upon,” Fitch Ratings said.

“Our assessment takes into consideration that the state, as a major shareholder, has not injected new capital into HDFC that the bank would need to meet the minimum regulatory capital requirement of LKR5 billion that came into force in 1 January 2016.”

All ratings have been removed from Rating Watch Negative, and the Outlook is Stable.

Key Rating Drivers

NATIONAL RATINGS

The downgrade reflects Fitch’s assessment of HDFC Bank’s standalone strength, as we believe timely support from the sovereign cannot be relied upon. Our assessment takes into consideration that the state, as a major shareholder, has not injected new capital into HDFC that the bank would need to meet the minimum regulatory capital requirement of LKR5 billion that came into force in 1 January 2016. Our view also reflects the weakening of the sovereign’s ability to provide support following the downgrade of the sovereign rating to ‘B’/Stable from ‘B+’/Stable on 3 December 2018.

HDFC Bank’s current rating reflects its high risk appetite and potential challenges in accessing capital, when required. The rating also captures asset quality and profitability which is weaker than its peers. This reflects a large exposure to low- and middle-income customers, who are particularly susceptible to economic and interest-rate cycles.

HDFC Bank’s reported non-performing loan (NPL) ratio has been increasing over the past few years – standing at 20.5% at end-3Q18, well above the industry average. This has been due mainly to defaults from housing finance backed by the Employees’ Provident Fund (EPF), which contributed more than half of the bank’s total housing NPLs at end-3Q18. Nevertheless, the Central Bank of Sri Lanka reimburses HDFC Bank annually for EPF-backed loans in arrears for more than three months. The bank’s NPL ratio remained high even without the EPF-backed housing loans, at 10.0% (9.0% at end-2017), which reflects the concentration of its credit risk in the low- and middle-income housing-finance market.

The bank’s Fitch Core Capital ratio improved marginally in 3Q18 to 17.3% owing to muted balance-sheet expansion. Nevertheless, we see capitalisation as weak because of its substantial unreserved NPLs. Profitability is likely to remain soft in light of its high cost structure and rising credit costs.

Fitch expects HDFC Bank’s asset and liability mismatches to persist due to its longer-tenor loan book and short-tenor deposit base, exerting pressure on liquidity. Dependence on high-cost term deposits also weighs on the net interest margin and profitability.

SENIOR DEBT RATINGS

The bank’s outstanding senior unsecured debentures are rated in line with its National Long-Term Rating, and rank equally with the claims of other senior unsecured creditors.

Rating Sensitivities

NATIONAL RATINGS AND SENIOR DEBT

HDFC Bank’s rating could be downgraded if there is a sustained deterioration in capitalisation, either through aggressive loan growth or higher unprovisioned NPLs. An upgrade would be contingent on moderation of its risk appetite and a sustained improvement in asset quality and profitability.

The ratings of the senior unsecured debentures will move in tandem with HDFC Bank’s National Long-Term Ratings.

Sri Lanka’s First Capital Holdings [SL]A- rating confirmed

ECONOMYNEXT - ICRA Lanka has confirmed the [SL]A- rating of First Capital Holdings, which controls primary dealer First Capital Treasuries, noting it would be crucial for the firm to reduce inter-group lending and improve liquidity levels.

The rating agency, a subsidiary of ICRA Limited, a group company of Moody’s Investors Service, retained the stable outlook for First Capital Holdings PLC (FCH), a statement said.

“Rating also takes cognizance of FCH’s exposure to group and related parties that have a modest credit profile, although it is envisaged that such exposures will reduce in the future,” it said.

“Going forward, it would be crucial for FCH to further bring down its inter-group exposures, improve liquidity profile, as well as maintain satisfactory leverage indicators.”

The full statement follows:

Rating action

ICRA Lanka Limited, subsidiary of ICRA Limited, a group company of Moody’s Investors Service, has reaffirmed the issuer rating of [SL]A- (pronounced SL A minus) with stable outlook for First Capital Holdings PLC (FCH or the Company).

ICRA Lanka has also reaffirmed the issue rating of [SL]A- (pronounced SL A minus) with stable outlook for balance outstanding LKR 185 Mn senior unsecured redeemable debenture programme of the company. ICRA Lanka has also reaffirmed the [SL]A2+ (pronounced SL A two plus) rating for the LKR 1,500 Mn commercial paper programme of FCH.

ICRA Lanka has also withdrawn the outstanding issue rating of [SL]A-(stable) on the LKR 129 Mn senior unsecured redeemable debentures of the Company, as the said debentures matured and there is no amount outstanding against the rated instruments.

Rationale

The ratings continue to factor in FCH’s status as the holding company of First Capital Treasuries PLC (FCT), a leading standalone primary dealer in Sri Lanka (Issuer rating of [SL]A- with stable outlook); FCH is also the holding company for other financial services entities in the First Capital group, although the contribution from these entities remains modest, at present.

As observed in the past, FCH’s performance is dependent on the performance of FCT, making it susceptible to the risks inherent to the primary dealer.

The ratings take cognizance of the recent increase in the non-treasury related investments and lending by FCH, through its subsidiary First Capital Limited (FCL); this has also impacted FCH’s liquidity position as funding was largely via short term borrowings.

ICRA Lanka however, notes that the non- treasury and inter-group exposures have moderated during Q3FY2019 from the peak in September 2018.

FCH was also faced with a moderate increase in reported net leverage to 2.13 times as in September 2018 from 1.59 times as in March 2016 (same witnessed some improvement from 2.23 times in March 2018).

Rating also takes cognizance of FCH’s exposure to group and related parties that have a modest credit profile, although it is envisaged that such exposures will reduce in the future.

Going forward, it would be crucial for FCH to further bring down its inter-group exposures, improve liquidity profile, as well as maintain satisfactory leverage indicators.

Outlook: Stable

The outlook may be revised to “Positive” based on FCH’s ability to improve its liquidity profile and leverage indicators. The outlook may be revised to “Negative” in case of higher leverage going forward or further weakening in its liquidity or exposure profile.

Key rating drivers

Credit strengths

Holding company of FCT: FCT is a leading stand-alone primary dealer in Sri Lanka and is 94% owned by FCH. FCH is expected to continue benefitting from the dividend flow from FCT.

Good market position offering diverse financial services: Presence of group entities offering various financial services augurs well with the initiative of the group to diversify its income sources; the same however is quite modest presently, as group performance continues to be driven by the performance of its primary dealer business, FCT. First Capital Limited (FCL), which is 100% held by FCH and involved in corporate debt structuring, corporate finance advisory services and investments reported a total fee income of LKR 84 Mn in FY2018 (LKR 42 Mn in FY2017) from transaction advisory activities. The company also generated about LKR 1.4 Bn investment income from proprietary lending and investment activities. The asset management arm of the group, First Capital Asset Management Limited (FCAM) reported a total income of LKR 38 Mn in FY2018 (LKR 38Mn in FY2017), with total assets under management of about LKR 5.1Bn as in 31 March 2018. First Capital Equities (PVT) Limited (FCE), which is a licensed stock broker on the Colombo Stock Exchange, made a total income of LKR 58 Mn in FY2018 (LKR 47 Mn in FY2017). During FY2018, company has decided to discontinue its margin trading services business undertaken by First Capital Markets Limited (FCM); it reported a total income of LKR 44Mn in FY2018 (LKR 70 Mn in FY2017).

Strong senior management team and the risk management processes reduce market and operation risks: FCH has a fairly well-experienced management team and a healthy governance structure, with 7 of the 9 board directors being non-executive and 5 directors being independent. The ratings take note of steps taken to improve the governance framework, risk management systems and policies. Notwithstanding, the recent increase in related party lending, ICRA Lanka is cognizant that the same were done at arms-length terms.

Credit challenges

Increase in credit risk due to exposure to group companies with weaker credit profile: As a group, FCH’s (consolidated) exposures are largely towards treasury backed investments, through its primary dealer subsidiary, FCT. However, ICRA Lanka notes the recent increase in the exposure to non-treasury related investments during FY2018, mainly in the form of lending to various group and related parties. These lending activities are done through its direct subsidiary, FCL and ICRA Lanka takes cognizance of the modest credit profile of these group entities. As in September 2018, FCL’s short term lending and investment portfolio stood at about LKR 13.2 Bn (net exposure adjusted for cash backed transactions was about LKR 9.7 Bn), out of which about 27% (LKR 2.6 Bn) comprised of lending to group and related companies; exposure to group entities stood at about 3.5 times of the cost-based net worth (Adjusted for the equity-based accounting and deferred tax asset) of FCH (about 0.7 times based on reported net worth) as in September 2018. However, ICRA Lanka takes note of the recent moderation of these exposures during Q3FY2019 and further moderation of the same is expected over the next 3-4 months. Going forward, ICRA Lanka will continue to monitor the movement of FCH’s group/ related party exposures.

Deteriorating ALM position in short term buckets: The stand-alone funding profile of FCH largely comprises of short-term borrowing in the form of commercial papers and short-term loans, against which FCH has extended credit to FCL (about LKR 7.4 Bn as in March 2018, LKR 9.8 Bn in September 2018), which in turn has undertaken various non-treasury related lending and investments. As in October 2018, the combined short-term asset and liability mis-match (<1 year) for FCH and FCL stood at about negative 50% of the total earnings assets, while the same adjusted for repo borrowings on long term treasury securities stood at about negative 38%. As in December 2018, the liquidity profile of the company has somewhat improved with recovery of certain related party exposures; the short-term asset and liability mis-match (<1 year) stood at negative 15% as in December 2018. While ICRA Lanka takes comfort from group’s access to funding from banks and other financial institutions (as in December 2018, group had unutilised facilities in excess of LKR 1 Bn from financial institutions), it would be crucial to maintain a healthy liquidity profile, going forwards.

High leverage over the last two fiscals: Combined leverage of FCH and FCL (Adjusted for deferred tax, deposit-based lending) stood at about 2.90 times in September 2018 as compared to 2.91 times in March 2018 (2.30 times in March 2016). Leverage based on the consolidated cost-based net worth of FCH and FCL is estimated to be about 8 times (after adjusting for deposit-based lending) as in September 2018 and close to 9 times as in March 2018; same has somewhat improved to about 7.8 times by December 2018. Going forward, it will be crucial for the company to further bring-down its leverage from current levels and reduce its inter-group lending and exposures to entities with weaker credit risk profile.

Modest operating income being a holding company: Notwithstanding the efforts to diversify the operating income, overall performance of FCH is highly dependent on the performance of the primary dealer, FCT. Stand-alone operating profitability of FCH stood modest at 3.1% and 3.4% respectively for FY2018 and FY2017.

About the company:

Incorporated in year 1992, FCH is a public limited company listed on the Colombo Stock Exchange. FCH is the holding company for the financial services businesses of Dunamis Capital PLC (DCP), which holds 78.14% in FCH. Janashakthi PLC (JPLC) is the ultimate parent of FCH via DCP. The company is engaged in making investments and managing its subsidiaries i.e. First Capital Treasuries PLC (FCT) which is an authorized Primary Dealer in Government Securities, First Capital Limited (FCL) involved in structuring and placement of corporate debt and corporate finance advisory services and investments, First Capital Asset Management Limited (FCAM) involved in unit trust and portfolio management, First Capital Trustee Services (Pvt) Limited (FCTS) which is a trustee services provider for corporate debt securities and First Capital Equities (Pvt) Limited (FCE) which is engaged in stock broking activities.

On September 13, 2018, JPLC announced the acquisition of 31.14% of the shareholding in DCP, for a total purchase consideration of LKR 1.4 Bn (price per share of LKR 36.6). With the said acquisition, JPLC increased its stake in DCP to 41.14%, representing 50.6 Mn shares (previously, JPLC held a 10% stake in DCP as of June 30, 2018). On October 19, 2018, JPLC announced a voluntary offer to acquire the remaining ordinary shares of DCP (72.4 Mn shares at LKR 36.6 per share). The said offer subsequently resulted in increase in stake of the investee company from 41.14% to 98.08%. Thus, JPLC became the ultimate parent of FCH.

For the financial year ended March 31, 2018 FCH on a stand-alone basis reported a net profit of LKR 1,872 Mn, on a total asset base of LKR 10.8 Bn, vis-à-vis net profit of LKR 212 Mn on a total asset base of LKR 10.2 Bn during the previous fiscal. For the financial year ended March 31, 2018 FCH group (consolidated) reported a net profit of LKR 1,966 Mn, on a total asset base of LKR 35.2 Bn, vis-à-vis net profit of LKR 232 Mn on a total asset base of LKR 31.7 Bn during the previous fiscal. For the 6M ended September 30, 2018, FCH reported a stand-alone net loss of LKR 64.6 Mn on a total asset base of LKR 13.1 Bn and a consolidated loss of LKR 64.9 Mn on a total asset base of LKR 39.4 Bn.

Sri Lanka’s Talawakelle Tea December quarter profit up 16-pct

ECONOMYNEXT – Sri Lanka’s Talawakelle Tea Estates said net profit rose 16 percent to 178 million rupees in the December 2018 quarter from a year ago.

Sales rose 11 percent to 969 million rupees, according to interim accounts filed with the Colombo stock exchange.

December quarter earnings per share were 7.50 rupees. The share last traded at 49 rupees.

In the nine months to December 2018 EPS fell to 9.82 rupees from 12.16 rupees the year before with net profit at 233 million rupees. Sales fell two percent to 2.89 billion rupees.

The accounts of the Hayleys group firm showed that earnings from tea fell slightly while rubber made a loss.

Profits doubled in the firm’s mini hydro power business to 34 million rupees compared from a year ago.

Sri Lanka’s MTD Walkers shifts subsidiaries to Malaysian parent to settle debt

ECONOMYNEXT – Sri Lanka’s MTD Walkers, which is carrying heavy losses, has transferred three subsidiaries including a shipyard, to its Malaysian parent for 19 million US dollars with a buy back deal, to help a subsidiary settle debt.

The group has transferred full ownership of Walkers Shipyard, Northern Power Company, and Colombo Fort Heritage Company to MTD Capital Berhad, a stock exchange filing said.

MTD Capital Berhad, an investment holding company with interest from civil engineering and real estate to energy, ports, and manufacturing of construction related materials, owns 90.78 percent of MTD Walkers, a construction group.

The aim of the deal is to help MTD Walkers settle an outstanding loan of 19 million US dollars payable by its subsidiary CML-MTD Joint Venture Ltd. to Export-Import Bank of Malaysia
Berhad as part of a group restructuring.

The stock exchange filing said MTD Walkers has the option to buy back the shares in its three subsidiaries for the same amount under a call option agreement with the Malaysian parent firm.

MTD Walkers said the transfer took place on January 11, 2019 and was not prejudicial to the interests of minority shareholders.

On January 17, the company told the stock exchange, in response to a query, that it had not engaged in any undisclosed price sensitive business activities or transactions to raise its share price and that it was unware of the reason for the increase in its share price.

Sri Lanka's Hayleys Fabric profits surge in December quarter

ECONOMYNEXT - Profits at Sri Lanka's Hayleys Fabrics Plc surged to 107.6 million rupees in the December 2018 quarter, compared to a 10.8 million rupee-loss a year earlier on improving sales, interim results showed.

Earnings were 52 cents a share in the December quarter, interim results filed with the stock exchange showed.

The reinstatement of GSP Plus and directly marketing its own brands of fabric has helped Hayleys Fabric achieve better margins, and recover losses of 105.6 million rupees sustained the previous financial year.

In the nine months to end December 2018, earnings were 93 cents a share on a profit of 193.8 million rupees, up 1,017 percent from a 21.1 million loss a year earlier with sales growing 32 percent in the period to 8.6 billion rupees.

The stock closed Monday down 10 cents to 9.40 rupees.

In the December quarter, revenue grew 64 percent from a year earlier to 3.5 billion rupees, and cost of sales also increased 64 percent to 3.1 billion rupees leading to gross profits of 374 million rupees, up 63 percent from a year earlier.

In US dollar terms, revenue had increased 41 percent to 19.5 million US dollars.

Administrative expenses grew 2 percent to 192.2 million rupees and distribution costs increased 121 percent to 31 million rupees.

Net finance costs fell 38 percent to 23.8 million rupees.

Sri Lanka's Keells Food Products Dec net down 5-pct

ECONOMYNEXT - Profits at Sri Lanka's Keells Food Products Plc fell 5 percent from a year earlier to 82.4 million rupees in the December 2018 quarter on higher costs despite sales growth, interim accounts showed.

Earnings at the meat processing company, a unit of listed John Keells Holdings Plc, amounted to 3.23 rupees a share in the quarter, interim results filed with the Colombo Stock Exchange showed.

The share last traded at 136 rupees.

In the nine months to end December 2018 earnings were 4 rupees a share as profits grew 15 percent from a year earlier to 204.4 million rupees while revenue increased 11 percent to 2.6 billion rupees.

In the December quarter, revenue grew 9 percent from a year earlier to 940.2 million rupees. Cost of sales grew 10 percent to 658.5 million rupees leading to gross profits increasing 6 percent to 281.7 million rupees.

Selling and distribution expenses grew 31 percent to 105.5 million rupees and administrative expenses increased 10 percent to 43 million rupees.

Net finance income rose 88 percent to 3.3 million rupees.

Sri Lanka's Anilana Hotels says to get more cash from Singapore’s SOMAP

ECONOMYNEXT – Singapore’s SOMAP International Pte Ltd. is to pump in funds to revive Sri Lanka’s loss-making Anilana Hotels & Properties, which was transferred to the stock exchange’s watch list after auditors gave a qualified opinion on its accounts.

Anilana Hotels said in a stock exchange filing its controlling shareholder Somap has given a written undertaking to support it financially and will infuse more capital to turn it around within three months.

The company is also repaying outstanding loans to reduce interest costs and operational costs, the statement said.

Anilana Hotels & Properties was transferred to the Colombo stock exchange’s watch list on December 14 after auditors Amarasekera & Company gave a qualified opinion on its annual report for 2017-18.

The stock last traded at 1.10 rupees.

Anilana Hotels & Properties also said it was in the process of appointing two independent directors to comply with the stock exchange listing rules.

The company and group have run up accumulated losses of 2.78 billion rupees and 2.28 billion rupees, with current liabilities exceeding total assets by 890 million rupees and one billion rupees, the auditors said.

They said there was uncertainty over the company’s and group’s ability to continue as a going concern.

Anilana Hotels & Properties said the losses were mainly due to finance costs incurred by the group arising from related

Sri Lanka’s 01-year Treasury yield falls to 10.70-pct

ECONOMYNEXT – Sri Lanka’s one-year Treasury Bill yield fell 05 basis points to 10.70 percent at Wednesday’s auction, according to data from the public debt department of the central bank.

The 06-month bill yield was steady at 9.87 percent while 03-month bills were not offered.

The public debt department accepted 21 billion rupees of 01-year bills, having offered bills worth 18.5 billion rupees and getting bids worth 51 billion rupees.

It also accepted 2.6 billion rupees of 06-month bills, having offered bills of 05 billion rupees and getting bids of 7.6 billion rupees.

Sri Lanka’s Kelani Valley Plantations profits soar on capital gain

ECONOMYNEXT - Sri Lanka’s Kelani Valley Plantations said net profit soared to 354 million rupees in the December 2018 quarter from 27 million rupees a year ago, as it booked a gain from selling a stake in a tea extracting unit.

According to interim accounts filed with the stock exchange, sales of the firm, part of Hayleys group, rose 16 percent to 2.2 billion rupees.

Quarterly earnings per share were 10.42 rupees. The stock closed at 93 rupees, up 6.10 rupees or 7.02 percent, Tuesday.

In the nine months to December 2018, EPS was 9.97 rupees with sales up seven percent to 6.8 billion rupees.

A note to the accounts said that on 1st November 2018, Martin Bauer Group of Germany joined Hayleys Global Beverages (Pvt) Ltd. as a strategic partner by investing in a 51 percent stake of the company.

This reduced Kelani Valley Plantations PLC‘s shareholding in Hayleys Global Beverages, now renamed Martin Bauer Hayleys (Pvt) Ltd., to 10 percent.

The subsidiary has ceased to be accounted as an equity accounted investment resulting in a gain on disposal of 205 million rupees.

Sri Lanka’s Singer Finance Dec profit growth flat, deposits fall

ECONOMYNEXT - Sri Lanka’s Singer Finance reported net profit growth for the December 2018 quarter was flat at 131 million rupees from a year ago and there was a fall in customer deposits.

Net interest income rose 25 percent to 550 million rupees with interest income up 27 percent to 984 million rupees while interest costs rose 29 percent to 434 million rupees, interim accounts filed with the stock exchange showed.

Earnings per share for th quarter were 65 cents. The stock was trading at 13.90 rupees Thursday.

Net fee and commission income rose 28 percent to 61 million rupees while other income fell 68 percent to 16 million rupees.

Value added tax shot up 71 percent to 78 million rupees.

Customer deposits as at 31 December 2018 fell to 4.8 billion rupees from 5.4 billion rupees at the end of the 2018 financial year.

Sri Lanka's EPF loses most from Laugfs, Dockyard, Carsons; gains from banks

ECONOMYNEXT - Sri Lanka's Employees Provident Fund, managed by the central bank has lost 9.2 billion rupees on its stock portfolio up to June 2018 despite investments in banks gaining it about 9 billion rupees led by Sampath Bank, a report from the agency said.

The stocks have been bought at different times, but among the most controversial were those made at the height of a stock market bubble which ended around 2011.

The Employees' Provident Fund (EPF) Department on January 16 said the 2 trillion rupee fund made up of private sector employee retirement savings has lost 8.4 billion rupees in the value of stocks held for investment, since it first purchased each stock, up to June 2018.

This was a fall of 10.9 percent to 68.88 billion rupees.

Stocks held for trading lost 24.9 percent of their value, or 742.7 million rupees, with the biggest hit coming from Aitken Spence and its hotel subsidiary.

The EF had lost about 2.0 billion rupees on Colombo Dockyard shares which It had bought for 2,791 million rupees and was in its books at 765 million rupees, losing about three fourths of the value.

Market value of Laugfs Gas Plc voting and non-voting stocks fell 56.9 percent or 1.9 billion rupees. Voting stock the EFP bought for 2.68 billion rupees was worth 1.15 billion rupees, by June 2018.

A 1.7 billion rupee fall in value came through Carsons Cumberbatch Plc, which is currently attempting to delist most of its companies from the stock exchange, with the initial investment value down 64.5 percent compared to the market value in June 2018.

The EPF had bought Carsons Cumberbatch, which owned several Malaysian oil palm firm, for 2.59 billion rupees, but it was now worth 919 million rupees.

Another 1.7 billion hit came from Carsons oil palm unit Bukit Darah Plc. Bukit stock had been bought for 2.3 billion rupees and was now worth 577 million rupees.

Over a billion rupees each were also slashed from market values of Browns & Co Plc, the troubled The Finance Company Plc and the John Keells hotel subsidiary Asian Hotels & Properties Plc.

In total 43 stocks lost value for EPF shareholders after being bought, out of 66 stocks held in the investment portfolio.

Five of the six bank stocks, adding 9 billion rupees to market value of the investment equity portfolio.

Sampath Bank, Hatton National Bank and Commercial Bank, three of the country's systemically important banks, contributed 88.8 percent to the gain.

Sampath stock bought for 4.8 billion rupees were worth 8.4 billion rupees.

DFCC was the sole bank to lose market value after being purchased by the EPF, devaluing by 842.1 million rupees or 24.8 percent.

The central bank has been criticized for buying bank shares through the EPF, as the central bank then becomes both a controlling shareholder and the regulator, but had bought the most gains.

The EPF had invested 10.8 billion rupees in companies not listed publicly, most of which had generated had not paid dividends up to end-2017, the central bank said in a disclosure under the right to information law in 2018.

Sri Lanka's stock market is now at lower price to earnings multiples, unlike the 2011 bubble, leading to some making a cases for it to enter the market.

Current governor Indrajit Coomaraswamy had said that corporate Sri Lanka was going at 'fire sale' prices.

Coomaraswamy had said he was setting up a more transparent framework for stock market investments.

He had said stock investments make up around 2.5 percent of EPF assets, and the central bank plans to increase this to around 5 percent.

The EPF dealers had earlier made controversial 'pump and dump' deals with some market participants in the run up to 2011, earning it the sobriquet 'buyer of last resort.'

Some critics suspect that the relationships made at the time made the so-called 'bondscam' possible.