Sri LankNDB to be headed by ex-Pan Asia, HSBC banker

ECONOMYNEXT - Sri Lanka's NDB Bank said Dimantha Seneviratne, who ran Colombo-based Pan Asia Bank for three year would be its chief executive.

Seneviratne is a 15-year veteran at HSBC, where he had worked in Thailand, Bangladesh and Saudi Arabia, NDB said in a stock exchange filing.

Seneviratne had started at Sri Lanka's Sampath Bank and worked at Overseas Trust Bank and Saudi British Bank before joining HSBC.

He counts 26 years in banking.

Sri Lanka to bring new foreign exchange controls

ECONOMYNEXT - Sri Lanka will bring a new foreign exchange law 'to protect foreign reserves from irregular transactions' a budget for 2017 has said moving sideways from an earlier stance that foreign exchange controls will be abolished.

The budget however said the existing Exchange Control Act will be repealed.

Sri Lanka brought draconian foreign exchange controls after a money printing central was set up in 1951, generating dollar shortages and pressure on the currency.

Before 1951, Sri Lanka had a currency board where the exchange rate was fixed to the Indian rupee (silver).

The rupee did not move from 1885 until the creation of the central bank as money printing was legally prohibited.

The current administration also imposed exchange controls on exporters after printing money to finance a deficit and keep rates low.

Sri Lanka is trying to make Colombo a financial centre, but analysts say without a complete overhaul or abolition of the central bank, the idea will be a pipe dream.

Sri Lanka has held Dubai, Singapore and Hong Kong as examples.

But Hong Kong has an orthodox currency board, Singapore a modified one, and Dubai mimics US interest rates and operates almost like a currency board.

Market momentum decelerate over budget concerns: Acuity

Market momentum continued to decelerate last week as concerns surrounding certain Budget 2017 proposals weighed on investor sentiment, Acuity Stockbrokers said in their Share Market Weekly.

"The broad-share ASPI fell a further 73.9 points last week as retailers continued to look for direction and institutional/high net worth investors remained on the sidelines. Turnover levels meanwhile, continued to dwindle, with daily average turnover levels remaining in the LKR 0.32-0.39Bn range for the fifth consecutive week," the report said.

It noted that turnover levels which have averaged ~LKR 0.75Bn over the first nine months of the year have fallen to ~LKR 0.4Bn over the months of October and November.

Corporate earnings from the recently concluded earnings season however, indicated stronger performance over the September quarter, with ~95% of the market recording earnings totalling LKR 60Bn.

"The increase of ~25% Y-o-Y was helped largely by strong performance by Banks, Insurance, Manufacturing, Telecos, F&B and Hotels & Travels," Acuity said. "The Diversified sector however lost 27% Y-o-Y to LKR4.3Bn (cf. LKR 5.9Bn in Sept’15) while the Construction sector lost 15% Y-o-Y over the quarter to LKR 0.7Bn (cf. LKR 0.8Bn in Sept’15).

The report projected that markets in the week ahead are likely to remain dull, with investor’s looking for direction from this week’s monetary policy decisions.

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Distilleries – Melstacorp ‘Arrangement’ still in limbo

May happen this week according to informed sources

Several inquiries have been made by shareholders of the Distilleries Company of Sri Lanka regarding the swap of Distilleries shares for those of Melstacorp Ltd. finalized by an ‘Arrangement’ approved both by shareholders and the Commercial High Court of Colombo.

Under this arrangement, the swap had been concluded from Oct. 1 and Melstacorp has become the holding company of Distilleries, according to a Stock Exchange filing by Distilleries earlier this month.

However, the physical transfer of shares to and from shareholders has not yet taken place. In its Nov. 1 Stock Exchange filing, Distilleries said that this would take place when approvals are received from the Colombo Stock Exchange and the Securities and Exchange Commission of Sri Lanka to transfer Distilleries shares from shareholder accounts to Melstacorp as a private transfer and Melstacorp shares are listed.

Well informed sources said yesterday that the arrangements would be concluded possibly this week with Melstacorp listed. Regulatory approval for private transfer of shares must be obtained from the SEC and this too is likely within days.

"The depositing of Melstacorp Ltd. (shares) to the CDS accounts of the shareholders will take place once the above approvals are received," Distilleries said in the filing.

It further said that company has made an application to the SEC for the transfer outside the trading floor of the CSE (private transfer) of 300 million Distilleries shares in consideration for the allotment of 1,200 million new shares of Melstacorp to shareholders of Distilleries as at Sept. 30.

"The board of Distilleries and Melstacorp with the support of officers of the SEC and CSE is taking their best endeavors to ensure that the planned transfer of shares would soon take place," the filing published on the CSE website said.

However, there has been no further information on the subject with Melstacorp still unlisted and Distilleries shares remaining in the CDS accounts of shareholders who have agreed to the swap.

www.island.lk

Union Assurance Maintains Steady Growth in Core Life Insurance Business

Union Assurance (UA) reported steady progress in the life insurance business, recording Rs. 6 billion gross written premium, a 20% growth compared with the previous year and profit of Rs. 190 million compared with Rs. 1.5 billion in 2015. The previous year figure was boosted by the gain from sale of 78% stake in the general insurance business. Excluding this transaction, the profit for the period was lower than the previous period due to a decrease in interest income as a result of reduction in funds available due to the share repurchase effected in September 2015.

Profit for the nine month period ending September does not include a surplus from the life business which is actuarially valued at year end.

As at 30th September 2016, UA’s life fund stood at Rs. 30 billion with a healthy capital adequacy ratio indicating the financial strength of the business.

Union Assurance recently launched an exclusive health and life insurance policy for senior citizens i.e. "Union 60 Plus." The product offers health and life insurance to citizens between the ages of 50 to 70 years. UA also launched an island-wide campaign branded "Sarthakathwaye Piyawara" to create awareness on how UA’s insurance solutions can fulfill key needs such as health and protection, education, investment and retirement.

UA is positioned on the promise of "trust" and strives to deliver this promise by being transparent, convenient, and respectful when dealing with all stakeholders.

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LB Finance records Rs 3.2 Billion PBT for the First six Months, achieving 24% growth…

LB Finance PLC building upon its tremendous success in the previous year achieved a 24% growth in profit before tax (PBT) to Rs 3.2 Billion in the first half of the current year. The company reported a profit after tax (PAT) of Rs 1.8 Billion for the period under review, a 17% increase from the corresponding period.

Key performance indicators were on the up with Net Interest Income increasing to Rs 4.7 Billion, a 15% growth over the Rs 4.1 Billion achieved in the previous year’s first half. The Operating Income increased from Rs 4.7 Billion to Rs 5.34 Billion while the Net Operating Income rose by 23% to Rs 5.32 billion compared with Rs 4.3 Billion recorded in the previous corresponding period. The Impairment Charges demonstrated a significant reduction of 96% to Rs 15 Million as result of prudent asset quality management.

The Total Assets base reached Rs 89 Billion, an increase of 23% over the previous year’s figure of Rs 73 Billion while the Total Loans and Advances Portfolio stood at Rs 79 Billion. The Core Capital to Risk Weighted Asset Ratio and Total Capital to Risk Weighted Asset Ratio were maintained at 13.84% and 15.64% respectively, well above the 5% and 10% statutory requirement.

LB Finance PLC’s long term rating of ‘A-(lka)’? Outlook Stable was affirmed by Fitch Ratings Lanka Ltd during their annual ratings review of NBFI’s on 2nd August 2016. According to the rating agency the rating of LB captures its established franchise as the third largest non-bank financial institution in Sri Lanka in terms of assets, and its satisfactory levels of capital, which are supported by healthy revenue generation and sound profitability through its higher yielding products.

LB Finance PLC operates with an extensive branch network spread across the country as the NBFI with the largest reach in Sri Lanka and caters the financial needs of a growing customer base through a diversified portfolio of products. The company’s sustained success is a result of consistent service quality provided through a customer centric culture which amplifies the brand value of the company. LB Finance expects to continue to further strengthen its dominant position as the market leader for many product segments including Gold Loans.

Established in 1971, LB Finance PLC through the years has built a strong reputation as one of Sri Lanka’s most trusted financial organizations. With a total deposit base of over Rs. 53 billion, LB Finance remains as one of the largest non-banking deposit mobilizers in the industry.

The Company also offers a variety of other services including Leasing, Factoring, Hire Purchasing, Micro Finance, Mortgage Loans and Gold Loans. LB Finance is licensed by the Monetary Board of the Central Bank of Sri Lanka under the Finance Business Act No. 42 of 2011.

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Sri Lanka shares end little changed; turnover slumps

Reuters: Sri Lankan shares ended little changed on Friday, hovering near eight-month lows, while turnover slumped as investors kept to the sidelines on concerns over recent tax proposals.

The Colombo stock index ended 0.02 percent down at 6,252.12, and lost 1.17 percent during the week, marking its third straight weekly fall.

The bourse hit its lowest close since April 7 on Wednesday on caution over the budget tax proposals, including revisions in corporate and withholding taxes.

The government aims to boost its 2017 tax revenue by 27 percent to 1.82 trillion rupees year-on-year, and meet a commitment given to the International Monetary Fund in return for a $1.5 billion loan in May.

"Investors area worried and staying on the sideline with the uncertainty haunting the markets," said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

Analysts said the increase in various taxes and fees would reduce disposable income and challenge consumption-led growth.

Turnover was 110.5 million rupees ($745,614.04), the lowest since March 17, 2014 and well below this year's daily average of 695.1 million rupees.

Foreign investors bought a net 19.6 million rupees worth of shares on Friday, but have been net sellers of 1.25 billion rupees worth of shares so far this year.

Shares of Ceylon Cold Store Plc fell 7.35 percent while conglomerate John Keells Holdings Plc fell 0.89 percent and Dialog Axiata Plc fell 1.92 percent. 

($1 = 148.2000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal; Editing by Sunil Nair)