Sunshine Healthcare optimistic of 20% growth

By Charumini de Silva

Ceylon Finance Today: Despite the challenging factors in the market, Sunshine Healthcare Lanka Ltd., is optimistic of achieving a 15%-20% growth by the end of the year, a senior official said.

Sunshine Healthcare Lanka Ltd., Managing Director Shyam Sathasivam told Ceylon FT that it would be positive for the business if the firm can grow at about 15% -20% despite the challenging environment; hence pushing for 15% -20% was quite possible.

"In 2015, we would be concentrating more on investing in our current product portfolio and driving volumes, while making the product available all over the country. We find that wellness is a growing market, where people chose to buy products that help them to be healthier. Therefore, in that space we have launched a few products and we will continue to invest in that sector as we look for products in that space. The wellness market overall will grow significantly, because it is marketed to the consumer and would take a different approach.

The key areas that we intend to invest more are, non-communicable diseases (NCD), which includes products for cardiovascular, diabetes, chronic kidney failure, and products on pain management, dermatology, nutraceutical and so forth," he added.

Commenting on the new drug policy, Sathasivam said there was lack of clarity in terms of the new drug regulations, and since, pharmaceuticals were a regulated market across the world as it added value to the economy. The question according to Sathasivam was how it was being regulated, what could be learnt from across the world, and what the outcome would be. He stressed that in regulating business, clarity was vital, and that the key stakeholders were engaging with the authorities towards this end.

"The sooner the authorities are going to figure out where the new regulations would take the industry, the better for the stakeholders," he noted.
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Taprobane Holdings CEO's family sells shares

By J. Kurukulasuriya

Ceylon Finance Today: There were a series of dealings by directors, in the shares of their own companies, this week up to Thursday 11 December. Disclosures are required under section 200 of the Companies Act 2007.

The largest of these was on 4 December, when a close family member of CEO Ruwan Sugathadasa of Taprobane Holdings PLC, namely Anuja Sugathadasa, sold 1,300,000 shares at Rs 4.70 each.

On 5 December, S. A. B. Ekanayake, S. Sirisena and S. G. Amarasuriya who are directors of Asia Siyake Commodities PLC, sold 52,500 ordinary shares through Lanka Commodity Brokers Ltd., of which they are directors at a price of Rs 3.40 each.

On 4 December, Swisstec Ceylon PLC., Managing Director, J. A. P. M. Jayasekera purchased 10,000 ordinary shares at Rs 36.50 each.

On 9 December the directors of Shalimar (Malay) PLC., disclosed a relevant interest in the purchase of 771 shares by Goodhope Asia Holdings Ltd., at a price of Rs 1,602 each.
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12 % interest offer to senior citizens with restrictions

The recent budget offer of 12 per cent interest on deposits held by senior citizens, aged 60 years and over, in state banks is being restricted to a cap of Rs.1 million and strictly one account per person, bankers said.

The Central Bank (CB) has directed that applicants should make a declaration that they have one account that would be entitled to this above-market interest rate to prevent senior citizens from having multiple accounts and getting 12 per cent interest on all.

Several senior citizens said that the post-budget developments were very misleading as the proposal itself implied the 12 per cent interest rate was for any eligible person and no amount was stated. “Now they are imposing a limit, which means the first announcement was misleading,” one pensioner said.

Bankers said that no clear instructions have been issued as yet except for verbal directives on the Rs.1 million cap (limit) and one account per person. They said that based on past practice, senior citizens, who have several accounts that total less than Rs. 1 million, may be able to transfer them to one existing account or open a new, single account and apply for this interest rate on the cumulative amount.

Data shows that some 750,000 senior citizens hold accounts worth Rs. 750 billion in 33 banks.
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DFCC-NDB merger on hold in view of polls

The merger between the National Development Bank (NDB) and Development Finance Corporation (DFCC) Bank has been temporarily halted till the conclusion of the January 8 presidential poll due to ‘procedural’ matters relating to the gazette notification, official sources said.

The two banks are being merged under this year’s budget with the banks jointly hiring a foreign consultancy firm to recommend a proper merger structure.

A bill paving the way for the merger was passed by parliament in October this year and the Finance Ministry was expected to issue the required gazette notification within two months of the bill being approved.
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Sri Lanka policy rates unchanged: Inflation declines due to crude oil prices: Central Bank

Dec 12, 2014 (LBO) – Sri Lanka Central Bank says the current monetary policy stance is appropriate and accordingly decided to unchange the policy rate corridor at 6.50 percent to 8.00 percent, respectively.

 

The island’s inflation continued to remain in low single digit levels, for 70 consecutive months and at levels below 5 percent in the last 12 months.

In October and November 2014, headline inflation (YOY) was at 1.6 percent and 1.5 percent, mainly due to the downward revisions to domestic fuel and electricity prices, the bank said in its December monetary policy review.

“The recent decline in crude oil prices in the international market is likely to impact inflation and Inflation expectations favorably,” the regulator said in the policy review.

“Given Sri Lanka’s large dependence on imported sources of energy, lower inflation resulting from declining energy prices would support the expansion of economic activity domestically,” the Central Bank said.

Core inflation remained unchanged at 3.6 percent in November 2014.

In spite of the ongoing recovery of private sector credit growth, Broad Money growth (YOY) moderated to 11.5 percent in October 2014 as a result of the decline in net foreign assets (NFA) of the banking system.

Broad Money growth has averaged 13.3 percent during the first ten months of the year.

Credit to private sector has grown by 5.1 percent in October 2014, year on year and reported a 42 billion rupee increase during the month. 36 billion rupees was disbursed by Domestic Banking Units (DBUs) of commercial banks.

“The impact of the contraction in pawning advances on the overall credit growth that was observed since early 2013 has now ended,” the regulator said.

The bank says going forward, continued improvements in macroeconomic fundamentals would bolster market confidence and nurture positive investor sentiments enabling the maintenance of a high sustainable growth rate in the medium term.

In the external sector, volatile global conditions, cross currency movements and eased monetary conditions widened the trade deficit somewhat in October 2014.

“Given the continued and expected inflow of earnings from tourism, workers’ remittances and inflows to the financial account, the balance of payments (BOP) is projected to record a higher surplus in 2014 than in the previous year.

Accordingly, gross official reserves are expected to remain at comfortable levels by end 2014,” the Central Bank said.

Union Assurance PLC demerges, incorporates separate entity for General Insurance

Union Assurance PLC has been demerged and will continue to carry on its long term insurance business while its General Insurance will be undertaken by Union Assurance General Limited with its registered offices at No. 20, St. Michael’s Road, Colombo 3.

This is following the demerger of the General Insurance business from the Life Insurance business as sanctioned by courts.

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Sanasa Development Bank profits up 90% in September

September quarter profits at Sanasa Development Bank, a leading financier to rural economy rose 90 percent to 138.2 million rupees compared to the same period in the previous year.

The bank's third quarter income rose 7 percent to 1.2 billion rupees compared to the previous year's September quarter earnings of 1.1 billion rupees. Net interest income has surged 34 percent owing to a 13 percent decline in interest expenditure from 661.5 million rupees in 2013 to 577.9 million rupees in September 2014. The reduction in interest expenditure indicates the bank's adjustments to the recent lowering of interest rates by the Central Bank. The Bank has recorded a net interest income of 636 million rupees in the third quarter of 2014.

Bank charges and commissions in the third quarter of 2014 stands at 35.6 million rupees which is an increase of 15 percent compared to the 31 million rupees earned during the same period of 2013. Total operational income has increased by 28 percent to 723million rupees compared to the 564 million rupees recorded during the same quarter of 2013.Sanasa Development Bank has also shown progress in lowering its provisions for non performing loans. Provisions for non performing loans have reduced by 26 percent to 41.2 million rupees in the third quarter of 2014. This has significantly reduced both the bank's gross and net non performing loan rates. The gross non performing loan rate which stood at 5.08 percent by the end of 2013 has notably reduced to 4.00 percent by the end of September 2014. Net non performing loan rate has also tumbled from 3.03 percent to 2.76 percent.

Operational costs in the third quarter of 2014 have increased by 30 percent to 466 million rupees when compared to the same period in 2013. The bank's total assets as at 30th September 2014 stand at 34.1 billion rupees a growth of 15 percent from 29.7 billion rupees recorded in the year ending 31st December 2013.Compared to December 2013, total deposits have increased by 17 percent to 27.5 billion rupees reflectingthe trust customers have placed on Sanasa Development Bank and the attractive rates the bank has been offering.

By 30th September, 2014, the bank's total capital stood at 3.5 billion rupees, capital adequacy ratio at 11.6 percent, total capital adequacy ratio at 11.47 percent and the liquidity asset ratio at 22.12 percent. These ratios are all well within the Central Bank's stipulated regulations. In September 2014, the return on assets (ROA) increased to 2.13 percent from a previous 1.22 percent in December 2013. The return on equity (ROE) also surged by 14.04 percent in September 2014 compared to the 7.42 percent recorded in December 2013.

Within the nine months ending in September, 2014, Sanasa Development Bank recorded a profit after tax of 365.3 million rupees compared to the 282 million rupees recorded during the same period in 2013. Interest income has grown by 7 percent to 3.5 billion rupees while interest expenditure dipped 4 percent resulting in a total net interest income growth of 23 percent.

Income from bank charges and commissions have surged 11 percent to 90 million rupees while total operating income has grown 21 percent to 1.9 billion rupees during the first nine months of 2014. Provision for loans has declined by 1 percent to 119 million rupees during the third quarter of this year. New recruitment and salary revisions have resulted in a 1.1 billion rupee increase in the bank's operational cost during the nine months ending in September, 2014. New recruits have been deployed to expand the bank branch network and bolster customer services.

"The primary aim of the Sanasa Development Bank is to provide our stakeholders with long term dividends. These objectives are integrated in our business strategies. Our strong risk and dividend management mechanism and efficient business risk management are the drivers of these core objectives. The main factor that has driven this year's growth is the tireless efforts of all staff members," Nimal C. Hapuarachchi, GM and CEO of Sanasa Development Bank said.
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