SEC – bringing sanity into the market

By Duruthu Edirimuni Chandrasekera

Sanity is slowly being restored at the 28th and 29th floors in the East Tower of the World Trade Centre.

The Securities and Exchange Commission (SEC) situated on these floors with new Chairman Thilak Karunaratne in the hot seat is regaining its lost integrity, according to those close to the regulatory authority.

A new Commission together with a new Director General is likely to be appointed this week. Mr. Karunaratne is to call up a commission meeting in a few days time, informed sources say. A new Director General has also been zeroed in on according to them.

Mr. Karunaratne has held discussions with the departments individually last week. SEC sources said that he wasn’t in favour of the roadshows and investment promotion efforts by the SEC during the past.

“He probably won’t continue with them as there’s been a colossal amount of cash spent on them by the SEC,” a source told the Business Times. Next up was the roadshow to Australia – probably next month, which was to be targeted at the Diaspora. Meanwhile the Colombo share market was positive on Friday with analysts saying that high valued shares were the order of the day.

The core All Share gained by 1.61 per cent to close at 7,160.84 while the S&P SL index ended up by 2.52 per cent at 3,950.94 points on Rs. 2 billion in turnover. Investors reacted adversely to the ‘super gain tax’ of 25 per cent on companies or individuals who earned over 2 billion rupees profits with the market sliding but recovering on Thursday and Friday.

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Textured Jersey third quarter profits up

Textured Jersey Lanka PLC (TJL) reported a net profit of Rs. 376 million for the quarter ended December 31, 2014 (3Q FY2014-15), a significant increase of 25% compared to the corresponding period of last year.

The company's strong cash position has allowed TJL to maintain its trend of generous dividend pay-outs with Rs. .50 per share being declared as an interim dividend for FY2014-15.

According to TJL Chairman, Bill Lam, a combination of increased margins and strong revenue growth enabled TJL to post this impressive result this quarter.

Lam said that with demand from its main customers back on track, TJL recorded strong revenue growth of 12% year-on-year for 3Q FY2014-15 and reported Rs. 3.8 billion in sales.

The better demand conditions also enabled TJL to improve its product mix and achieve higher levels of production efficiencies through optimal capacity use and planning.

This in turn allowed the company to expand its gross profit margins to 12.8% from 10.6% last year, causing gross profits to rise 34% amounting to Rs. 481 million for 3Q, FY2014-15.

The strong performance at gross profit level also enabled TJL to post an operating profit of approximately Rs. 354 million and record 34% year-on-year growth at the operating profit level as well.

www.sundayobserver.lk

Nation Lanka Finance ‘continues strong performance’

‘H. Jackson Brown,  an American author -best known for his inspirational books once said "let you performance do the thinking" meaning that one’s performance does not only do the talking, yet it sparks thinking that will lead to measure the success, a press release said.

‘This statement is quite appropriate to describe the performances of growing Sri Lankan financial entity Nation Lanka Finance PLC (NLF) which has improved its performances with the passage of time on a regular basis, thus demonstrating its crystal clear focus on facing the current challenges in the financial industry, with a long term strategy. While the company has registered higher performances on a year on year and quarter on quarter basis, NLF has also been successful in stretching its key indices such as Lending portfolio, Deposit base, Total Asset base and Net asset per share value. The financial performances alone does not do the talking, yet, its commitment towards the inherited depositors from the previous management, whose deposits were paid back in full amounting to over LKR 1.5 billion, is a vivid depiction of fulfilling the needs of the management change. Thus the company is already in the records as the first and the only financial company to fully repay distressed depositors under the former Ceylinco Management , the release adds.

‘This hinges on the prudent planning initiated by a consortium of high net worth investors, backed by the Nawaloka group who took the reins in 2011 and have steered the company to a solid financial foundation and strong growth. Announcing an outstanding financial performance for the 3rd quarter and for the nine months ended 31st December 2014, NLF presents reflection of the company’s continuous upward growth.

‘Growth in the total asset base is a key attribute, which has exceeded LKR 6.7 bn for the first time in the rich 27 year history of NLF, representing more than a 52 % year-on-year increase. In the previous year the total asset base was at LKR 4.4 bn. The main premises on which the asset base growth occurred is the phenomenal 72% increase in the lending base which compared to the industry growth is "a more than an expected growth". The Lending portfolio of NLF is replete with a range of products such as Micro Finance, Leasing, hire purchases, Personal and business Loans and pawning which are delivered with a series of tailor made solutions. The innovative business loan scheme launched in the latter part of the year viz "Biz Cash" attracts high demand from the entrepreneurs and SMEs is a key feature in the lending portfolio. Micro financing also continued to play a dominant role in NLF’s business model, which caters to only women across the country, where the model has been developed with the intention of enabling and empowering entrepreneurship at the grass root level in order to stimulate economic as well as to ensure sustained SME growth. Hence the NLF balance sheet indicates a growth in lending portfolio of LKR 1.7bn from its base of LKR 2.4bn, as at Dec-13 to end at LKR 4.1bn.

www.island.lk

Sri Lanka shares climb to one-week high with strong turnover

Feb 6 (Reuters) - Sri Lankan shares ended at a one-week high on Friday with strong turnover despite foreign outflows as investors snapped up beaten down blue-chips like John Keells Holdings Plc and Commercial Bank of Ceylon Plc.

The main stock index ended up 1.64 percent, or 115.44 points, at 7,162.75, its highest close since Jan.30.

"Investors are in a positive mindset with the cabinet deciding to go ahead with Chinese port city project. This means the new government is continuing the projects of the past administration," said Reshan Wediwardana, research analyst at First Capital Equities (Pvt) Ltd.

On Thursday, the government said it would allow a $1.5 billion "port city" deal with China to go ahead, apparently dropping its earlier threats to cancel the project, approved by the last government.

Friday's turnover was 2.07 billion rupees ($15.6 million), well above last year's daily average of 1.42 billion rupees, exchange data showed.

John Keells Holdings gained 3.67 percent, while Commercial Bank of Ceylon Plc, the country's biggest listed lender, rose 3.7 percent.

Foreign investors sold a net 174.3 million rupees worth of shares, but have net bought 733.3 million rupees in equities this year. The bourse had net foreign inflows of 22.07 billion rupees last year.

The index fell 5.1 percent in the two sessions through Monday after the new government announced a budget that imposed a one-time 'super gain tax' of 25 percent on companies or individuals who made more than 2 billion rupees in profit in 2013/2014. 

($1 = 132.8000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Prateek Chatterjee)

Haycarb records 3Q Turnover of Rs. 8 billion and PBT of Rs. 601 million

Haycarb PLC, the Sri Lankan multinational of the Hayleys Group, reported a turnover of Rs. 8 billion and profit before tax of Rs. 601 million for the 9 months ending 31st December 2014. The profit after tax stood at Rs. 508 million. 

Haycarb PLC Managing Director, Mr. Rajitha Kariyawasan said, “continuation of the high raw material prices in Sri Lanka and India and the inability to pass on the resultant cost increases to its customers impacted the profitability of the Sri Lanka operations significantly. He further explained that the requirement to increase product prices is evaluated and balanced against the need to retain key customer accounts and strategies formulated to capture new markets to grow the top line. The depreciation of the currencies in some of Haycarb’s key markets, notably the depreciation of the Euro, Australian Dollar and Japanese Yen resulted in exertion of yet more pressure on product pricing. 

The challenges on cost increases were offset to some degree from cost reductions achieved through lean initiatives that helped reduce energy costs in manufacturing operations and increase productivity. The Company is also looking into optimal usage and rebalancing of its manufacturing capacity along with restructuring measures in the supply chain to reduce costs in the medium term. Haycarb continues to invest in development and commercialization of specialized value added products, market expansion and brand presence. 

The Environmental Engineering Solutions arm, Puritas (Pvt) Ltd., made significant progress during the 9 months under review as it increased its local and regional presence for small to medium sized purification projects. This sector will remain a key focus for diversification and future growth of the Group. 

Mr. Kariyawasan also said, “The industry outlook remains strong given the increasing demand for purification solutions globally. Haycarb is a strong and a leading player renowned for its product and technical excellence backed by a formidable supply chain and marketing network. We remain confident of the medium and long term outlook.”

 Haycarb continues to support Maithreepura, a village in Padaviya in the North Central Province, where it implemented a key CSR project to provide purified drinking water to a community of over 1500 families affected by the Chronic Kidney disease (CKD) by constructing and commissioning a Water Purification Plant that includes a Reverse Osmosis (RO) system coupled with an extensive water distribution system. It is with great pleasure and satisfaction that we note other business sectors of the Hayleys Group funding five more villages/projects coordinated and managed through Puritas, to cover a total of six villages under the same Group initiative “Puritas Sath Diyawara”. 

Haycarb is the pioneer manufacturer of coconut shell activated carbon in any coconut producing country with manufacturing facilities in Sri Lanka, Thailand and Indonesia supported by marketing offices in the USA, UK and Australia, contributing net foreign exchange revenues with its value adding processes whilst remaining a leading and technologically superior manufacturer in its chosen segment. 

The Board of Directors of Haycarb PLC comprises of Messrs Mohan Pandithage – Chairman, Rajitha Kariyawasan – Managing Director, Arjun Senaratna, Sarath Ganegoda, Dhammika Perera, Mrs. Jeevani Abeyratne, Dushantha Ranaraja, Nimal Perera, Dr. Sarath Abayawardana and Sujeewa Rajapakse. 

Shaw Wallace acquires 50% shareholding of Richlife Dairies

Shaw Wallace Ceylon Limited, a subsidiary of Renuka Foods Plc has acquired 20,290,000 ordinary shares which amounts to 50 per cent shareholding of Richlife Dairies Limited from Renuka Agri Foods Plc for Rs. 605 million.

Shaw Wallace Ceylon Ltd. will integrate Richlife Dairies Ltd into its operations. www.adaderana.lk.

Sri Lanka ditches Dominique Strauss-Khan as adviser

Sri Lanka’s new government has dropped the services of Dominique Strauss-Kahn like a bad habit — cutting ties with the former IMF chief in the wake of his sensational pimping trial, officials said.

Despite paying him $750,000 to become an adviser to help attract foreign investment, the South Asian island country announced Thursday that it had kicked the 65-year-old to the curb, AFP reports.

“Our (new) government does not feel it necessary to get his services,” said cabinet spokesman Rajitha Senaratne. “We can manage on our own.”

Strauss-Kahn is accused of being at the center of a lavish prostitution ring that held lunchtime sex romps in Brussels, Paris and Washington.

Even though he had already been paid by Sri Lanka officials for his services, it was not clear exactly what type of work was carried out or if any more money was owed, according to AFP.

The Sri Lankan government — which was voted into power in January — would not give a specific reason for distancing itself from the onetime head of the International Monetary Fund, AFP reports.
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