Bourse recovers after Budget vote, but investors cautious

Reuters: Stocks recovered on Tuesday from the previous session’s near-four-week closing low, a day after President Mahinda Rajapaksa won the final 2015 Budget vote, contrary to speculation that he might lose it.

Analysts expect the market to be volatile due to political uncertainty before a snap presidential poll on 8 January. Rajapaksa, who is facing a split in his ruling coalition ahead of the poll, won the final vote on the 2015 Budget with a strong majority.

The main stock index, which rose 1.32% intra-day, ended 0.06% up at 7,239.36, recovering from its lowest close since 28 October, hit on Monday.

Stockbrokers said the market was volatile and late selling saw early gains being surrendered as investors were cautious due to the prevailing political uncertainty ahead of the elections.

Already, seven legislators, including Health Minister Mithripala Sirisena, the main Opposition candidate, have defected from Rajapaksa’s ruling coalition.

Stockbrokers and research analysts said some investors are buying stocks quietly. They said fears of a possible change in the political leadership could be highly volatile to the market, while some investors still remain optimistic about the change.

Continued foreign buying, low interest rates and hopes of better earnings pushed the bourse into the overbought zone by 18 November, before it slipped on political woes. The Bourse is in the oversold region since Friday, Thomson Reuters data showed.

Tuesday’s turnover was Rs. 1.08 billion ($ 8.24 million), exchange data showed, less than this year’s daily average of Rs. 1.44 billion. Foreign investors were net buyers of Rs. 5.2 million, extending foreign buying for this year to Rs. 19.4 billion, exchange data showed.

Shares in Hatton National Bank Plc rose 1.55%, leading the overall gain.
www.ft.lk

Sri Lanka stocks close higher

Nov 25, 2014 (LBO) - Sri Lanka's stocks closed 0.06 percent higher with the price gains of Nestle Lanka and C T Holdings, brokers said.

The Colombo benchmark All Share Price Index closed 4.11 points higher at 7,239.36, up 0.06 percent.

The S&P SL20 closed 0.78 points higher at 4,045.72, up 0.02 percent.

Turnover was 1.08 billion rupees, down from 1.70 billion rupees a day earlier with 118 stocks closed positive against 73 negative.

The aggregate value of all off-the-floor deals only represented 7 percent of the daily turnover.

Access Engineering closed 70 cents higher at 38.00 rupees and People’s Leasing & Finance closed 10 cents higher at 23.00 rupees, attracting most number of trades during the day.

Foreign investors bought 262.20 million rupees worth shares while selling 256.99 million rupees worth shares.

Nestle Lanka closed 46.50 rupees higher at 2,157.50 rupees and C T Holdings closed 8.90 rupees higher at 149.00 rupees, contributing most to the index gain.

Ceylon Tobacco Company closed 19.30 rupees lower at 1,076.20 rupees and John Keells Holdings closed 2.90 rupees lower at 244.60 rupees.

Sri Lanka Telecom closed 1.00 rupee lower at 48.20 rupees.

Kandy Hotels shows sparkling results

By J.Kurukulasuriya

Ceylon Finance Today: Recently released results of The Kandy Hotels Co (1938) PLC, shows steady growth of group profit after tax of 31%, reaching Rs 69 million for the six months to 30 September 2014 as compared to the same 2013 period. The company itself made a profit of Rs 81 million in the period.

However, there are several deceased persons on the list of top 20 shareholders — N.V.S. Saackville, P.R.Frossard, Edonard Laravoire, and J.E.I Perera — are all deceased shareholders as per the company's report. Recently, Ceylon FT drew attention to the fact that red tape and bureaucracy at the Central Depository System hindered the representatives of deceased shareholders from selling their shares (particularly when they are foreigners), and predominance of deceased shareholders on the lists of several 'older' companies on the CSE, suggest this.

Kandy Hotels Co, the Co-owners and operators of 'Queens Hotel' and 'Hotel Suisse' in Kandy, are members of the Galle Face Hotels Group, Chaired by Sanjeev Gardiner.

The company has performed remarkably well last year, surpassing all previous records with a turnover of Rs 548 million for the year ended 31 March 2013, and are on target to exceed that in 2014. Hotel Suisse had a turnover of Rs 301 million in 2013, while Queen's Hotel too performed well to have a turnover of Rs 246 million.

Group net finance cost was only Rs 175,000, as compared to Rs 1.12 million in the corresponding period last year, reflecting the way many businesses have benefitted from the prevailing low interest rates and 'cheap' money.

Cash and cash equivalents held by the group have grown to Rs 35 million from the Rs 21 million as at the audited balance sheet date of 31 March. Despite the fall in finance costs, the bank overdraft as at the balance sheet date has increased from Rs 421,000 at 31March, to Rs 28 million on 30 September.

Holders of the 50,000 fully paid 15% cumulative Preference Shares of the company continue to reap rich rewards invariably receiving their 15% dividend each year, at a time when bank interest from fixed deposits are low.

The balance sheet reflects very solid reserves of Rs 5,572 million, plus retained earnings of Rs 476 million as against a Stated Capital of only Rs 16.8 million.

The group has Investment in a joint venture of Rs 186 million.

The shares traded at a high of Rs 10.70 during the quarter, compared to a high of Rs 9.50 in 2013. It fell to a low of Rs 6.80 in the quarter.

The public share Holdings as at 30 September 2014 was 9.05% and there were 1,557 shareholders.

The Ceylon Hotels Corporation PLC holds 77% of shares, Hotel International Ltd., holds 2.7%, and Ceylon Hotels Holdings Pvt Ltd., 9.78%.
www.ceylontoday.lk

Amãna Bank records monthly profits with 85% growth in net financing income

Amãna Bank, Sri Lanka’s only licensed commercial bank operating sans interest, has commenced recording monthly operating profits since August 2014.

According to the quarterly financial statements released recently to the Colombo Stock Exchange, the bank’s topline performance has also showcased an impressive growth for the first nine months of 2014.

The bank has achieved a Financing Income of Rs. 1,798 million showcasing a growth of 43% from the corresponding period of last year, whilst Net Financing Income has recorded a growth of 85% to reach Rs. 900 million. The bank achieved a total operating income of Rs. 1,215 million, indicating a growth of 58% for the same period.

As a result of the growing popularity and acceptance of the bank’s unique business proposition, the bank’s advance and deposit portfolios have recorded a significant growth during the nine months ending 30 September 2014.

Total advances recorded a growth of 31% to reach Rs. 19,668 million while total deposits recorded a growth of 46% to reach Rs. 26,302 million, demonstrating the strengthening of customer confidence.

Speaking on the business performance, the Bank’s Chief Executive Officer Mohamed Azmeer said: “I am very happy to note the performance of the bank, especially considering the challenging environment. In the first nine months of 2014 we have seen an impressive growth momentum from all business segments, which include Consumer, SME and Corporate Banking along with Treasury operations. As a result of this momentum, the bank has been able to achieve a break-even level of profitability on a monthly basis since August 2014. We hope to continue this positive trend in line with our plans.”

Apart from the impressive financial performance, Amana Bank was also recently recognized as the World’s Best Up-and-Coming Islamic Bank by ‘Global Finance Magazine’ at the 18th Annual World’s Best Banks Award Ceremony 2014 held in Washington DC, USA, which coincided with the annual IMF and World Bank Conference at the same location.

Amãna Bank is the first licensed commercial bank in Sri Lanka to operate in complete harmony with the non-interest based Islamic banking model and is listed on the Diri Savi Board of the Colombo Stock Exchange.

Powered by the stability and the support of its strategic shareholders including, Bank Islam Malaysia Berhad, AB Bank in Bangladesh and The Islamic Development Bank based in Saudi Arabia, Amãna Bank is making strong inroads within the Sri Lankan banking industry and is focused on capitalising the growing market potential for its unique banking model across the country.
www.ft.lk

2015 Budget passed

The third reading of the 2015 Budget was passed in Parliament with a majority of 95 votes. 152 members voted in favour while 57 voted against. The United National Party, Tamil National Alliance and Democratic National Alliance voted against the budget.

Six parliamentarians who crossed over to the opposition including MP Maithripala Sirisena and the MPs of Jathika Hela Urumaya were absent during the vote.
www.dailymirror.lk

Sri Lanka stocks near fifteen month intra day drop over political turmoil

Nov 24, 2014 (LBO) - Sri Lanka's stocks closed 2.25 percent lower recording the highest intra-day drop in nearly fifteen months while reflecting investor concerns over the current political situation prevailing in the island, brokers said.

The index plunged 170.14 points on August 28, 2013.

The Colombo benchmark All Share Price Index closed 166.37 points lower at 7,235.25, down 2.25 percent.

The S&P SL20 closed 82.32 points lower at 4,044.94, down 1.99 percent.

Turnover was 1.70 billion rupees, down from 2.14 billion rupees last Friday with 14 stocks closed positive against 222 negative.

Laugfs Gas closed 2.80 rupees lower at 40.10 rupees with an off market transaction of 378.00 million rupees changing hands at 43.00 rupees per share contributing 22 percent of the turnover.

The aggregate value of all off-the-floor deals represented 24 percent of the daily turnover.

Access Engineering closed 2.00 rupees lower at 37.30 rupees, attracting most number of trades during the day.

Foreign investors bought 164.45 million rupees worth shares while selling 64.26 million rupees worth shares.

John Keells Holdings closed 5.70 rupees lower at 247.50 rupees and Carson Cumberbatch closed 23.70 rupees lower at 426.20 rupees, contributing most to the index drop.

Commercial Bank of Ceylon closed 5.60 rupees lower at 169.40 rupees and Dialog Axiata closed 30 cents lower at 12.70 rupees.

Nestle Lanka closed 45.40 rupees lower at 2,111.00 rupees.

Bukit Darah closed 26.00 rupees higher at 736.30 rupees.

Monetary policy stance for 2015 unchanged – Cabraal

By Charumini de Silva

Ceylon Finance Today: Sri Lanka's banking watchdog, the Central Bank yesterday confirmed that the monetary policy stance for 2015 would not be materially different from that of 2014, and that they would continue to balance several variables to ensure that economic and price stability is maintained.

Speaking to Ceylon FT Central Bank Governor Ajith Nivard Cabraal said, that by the end of 2014, we would have enjoyed nearly six years of average single digit inflation, and therefore, we would certainly want to ensure that such track record is maintained.

Commenting on the low interest rate regime, he said that the current low interest rate regime. ...would last as long as they maintain inflation at the current low levels, and as of now, that outcome seems quite sustainable.

"We are confident that the inflation would remain stable in the foreseeable future. On that basis, we could also expect the low interest rate regime to continue over the longer term," he added.

Commenting on the growth projections for next year Cabraal said, "We expect growth for 2015 to be around eight per cent, and based on our current macro-fundamentals, it seems to be a realizable target.
www.ceylontoday.lk