Sri Lanka's United Motors net down 61-pct

ECONOMYNEXT - Profits at Sri Lanka's United Motors Plc, which has agencies for Mitsubishi and Perodua, fell 61 percent to 226 million rupees in the December 2016 quarter amid flat revenues and narrower margins, interim accounts show.

The group reported earnings of 2.24 rupees per share for the quarter. In the nine months to December the group reported earnings of 8.57 rupees per share on total profits of 861 million rupees, which were down 41 percent.

Sri Lanka's car imports plunged in 2016 amid tax and interest rates hikes and an administrative credit squeeze.

Vehicle registration data shows steep falls in sports utility vehicles as Mitsubishi Montero and Outlander. However smaller Perodua vehicles sales have been resilient, according to data compiled by JB Securities.

Revenues at United Motors rose 4.1 percent in the December quarter to 4.8 billion rupees, but cost of sales grew at a faster 15 percent to 3.9 billion rupees, shrinking gross profits 26 percent to 895 million rupees.

Sri Lanka fabric maker net down 30-pct; hopes up on GSP+

ECONOMYNEXT - Teejay Lanka Plc, a Sri Lanka-based fabric maker said profits fell 30 percent to 473 million rupees in the December 2016 quarter amid higher raw material costs and the end of a tax holiday but future growth will be helped by resumed trade access to the European Union.

The setbacks were temporary and the group was also expanding capacity in India.

"As regional expansion plans move forward to secure Teejay’s long term growth trajectory, the prospects of GSP Plus in the future would further augment the Group’s progress in to the future," Chairman Bill Lam told shareholders.

The group reported earnings of 68 cents per share for the quarter. For the nine months to December it reported earnings of 2.10 rupees per share on profits of 1,462 million rupees up 9 percent from a year earlier.

Teejay group revenues rose 14 percent to 6.34 billion rupees, cost of sales rose at a faster 20 percent to 5.5 billion rupees making gross profits fall 15 percent to 831 million rupees.

Chairman Bill Lam said higher raw material costs, lack of coal in the island which pushed up energy prices were among reasons for lower gross profits.

The firm's tax holiday at also ended in the latter half of the year, pushing the income tax bill to 78 million rupees from 22 million a year earlier.

Sri Lanka’s Watawala Plantations December net up 163-pct

ECONOMYNEXT – Sri Lanka’s Watawala Plantations said December 2016 quarter net profit rose 163% to Rs466 million from a year ago helped largely by sharp gains in palm oil sales and prices.

Group sales grew 5% to Rs1.4 billion during the period, according to interim accounts filed with the stock exchange.

Earnings per share for the December quarter were Rs1.97 compared with 75 cents the year before.

Palm oil business profits rose to Rs238 million from Rs122 million a year ago while the tea sector profits rose to Rs194 million from Rs30 million.

EPS for the nine months to December 2016 rose to Rs4.28 from Rs1.85 the year before with sales up 03% to Rs4.7 billion.

Watawala Plantations Managing Director Vish Govindasamy said the palm oil segment grew 47% to reach Rs1.7 billion.

“The growth in revenue is primarily driven by price and volume growth of 25% and 19% respectively,” he said. “The segment made a significant contribution to the profitability of the company, recording a net profit of Rs979 million for the nine month period.”

But he warned: “We see some negative impact on selling price of Crude Palm oil following the recent reduction in import duty by Rs20 a kilo.”

Tea segment sales fell 8% to Rs2.7 billion.

“However, currently the tea market is seen to be improving and as reported in the last quarter, the management continues to lead on the decision to change the tea sector strategy by driving through the perspective of quality instead of quantity,” Govindasamy said.

“This change of strategy has reaped benefit by gaining higher NSA over the last year and above the budget.”

The tea business faced many challenges and adverse weather conditions, which negatively impacted the business resulting in a crop loss of 1,325,010 kgs (18%) YoY, he said.

The net profit on exports fell 35% YOY mainly due to lower volume of business.

Colombo Stock Exchange Market Review – 31st Jan 2017

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Colombo Stock Exchange Trade Summary 31-Jan-2017

Colombo equities edged lower on Tuesday despite higher institutional activity. All Share index declined by 7.86 index points or 0.13% to end at 6,132.68 while 20-scrip S&P SL index shed 3.31 index points or 0.09% to close at 3,489.61.

Price depreciation in high caps namely, Carsons Cumberbatch (closed at LKR 164.10, -3.5%), Ceylon Cold Stores (closed at LKR 731.80, -1.0%) and Ceylon Tobacco (closed at LKR 812.30, -0.3%) impacted the index performance with thin volumes. Losers outweighed the gainers 69 to 47 while 93 stocks remained unchanged.

Daily market turnover reached LKR 1.6bn boosted by negotiated deals in selected high caps which accounted for 85% of the turnover. Asiri Hospital Holdings made the highest contribution of LKR 782mn underpinned by a single crossing of LKR 30.5mn shares which changed hands at LKR 25.50. Dunamis Capital (LKR 402mn), John Keells Holdings (LKR 317mn) and Commercial Bank (LKR 52mn) made notable contribution. 

Several negotiated deals were recorded in Dunamis Capital (16.1mn shares at LKR 25.00), John Keells Holdings (1.2mn shares at LKR 140.00) and Commercial Bank (0.3mn shares at LKR 145.00). 

High investor activity was seen in Teejay Lanka and stock fell to LKR 40.10 but closed at LKR 40.20. Access Engineering, John Keells Holdings and Lanka IOC were among heavily traded stocks.

Foreign investors were net sellers with a net foreign outflow of LKR 21mn. Net foreign outflow was seen in John Keells Holdings (LKR 91mn) while net foreign inflow was seen in Commercial Bank (LKR 52mn). Foreign participation for the day was LKR 66%. 

During the first month of the year, All Share index declined by 95.58 index points or 1.5% while S&P SL20 index lost 6.83 index points or 0.2%. Daily market turnover increased 50%MoM to LKR 648mn. Foreign investors were net sellers with a net foreign outflow of LKR 1.7bn. Foreign participation was 47% against 69% in December 2016. 

According to the data released by Department of Census and Statistics, the annual average inflation rate increased from 4.0% in December 2016 to 4.3% in January 2017. The year-on-year change was 5.5% in January against 4.5% recorded in December. 

Source: LSL

Sri Lankan shares fall on foreign selling amid political uncertainties

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Colombo Stock Exchange Trade Summary 31-Jan-2017

Colombo equities edged lower on Tuesday despite higher institutional activity. All Share index declined by 7.86 index points or 0.13% to end at 6,132.68 while 20-scrip S&P SL index shed 3.31 index points or 0.09% to close at 3,489.61.

Price depreciation in high caps namely, Carsons Cumberbatch (closed at LKR 164.10, -3.5%), Ceylon Cold Stores (closed at LKR 731.80, -1.0%) and Ceylon Tobacco (closed at LKR 812.30, -0.3%) impacted the index performance with thin volumes. Losers outweighed the gainers 69 to 47 while 93 stocks remained unchanged.

Daily market turnover reached LKR 1.6bn boosted by negotiated deals in selected high caps which accounted for 85% of the turnover. Asiri Hospital Holdings made the highest contribution of LKR 782mn underpinned by a single crossing of LKR 30.5mn shares which changed hands at LKR 25.50. Dunamis Capital (LKR 402mn), John Keells Holdings (LKR 317mn) and Commercial Bank (LKR 52mn) made notable contribution.

Several negotiated deals were recorded in Dunamis Capital (16.1mn shares at LKR 25.00), John Keells Holdings (1.2mn shares at LKR 140.00) and Commercial Bank (0.3mn shares at LKR 145.00).

High investor activity was seen in Teejay Lanka and stock fell to LKR 40.10 but closed at LKR 40.20. Access Engineering, John Keells Holdings and Lanka IOC were among heavily traded stocks.

Foreign investors were net sellers with a net foreign outflow of LKR 21mn. Net foreign outflow was seen in John Keells Holdings (LKR 91mn) while net foreign inflow was seen in Commercial Bank (LKR 52mn). Foreign participation for the day was LKR 66%.

During the first month of the year, All Share index declined by 95.58 index points or 1.5% while S&P SL20 index lost 6.83 index points or 0.2%. Daily market turnover increased 50%MoM to LKR 648mn. Foreign investors were net sellers with a net foreign outflow of LKR 1.7bn. Foreign participation was 47% against 69% in December 2016.

According to the data released by Department of Census and Statistics, the annual average inflation rate increased from 4.0% in December 2016 to 4.3% in January 2017. The year-on-year change was 5.5% in January against 4.5% recorded in December.
Source: LSL

Sri Lankan shares close slightly higher in dull trade

Reuters: Sri Lankan stocks ended marginally higher on Monday in lacklustre trading as bargain-hunting investors picked up battered shares, but political instability and a rise in interest rates capped gains, brokers said.

The Colombo stock index ended 0.1 percent higher at 6,140.54. It hit a near 10-month closing low on Wednesday, and lost 0.5 percent last week, its second straight weekly decline.

Biggest listed lender Commercial bank of Ceylon Plc rose 2.2 percent while Colombo Cold Stores Plc rose 1.3 percent.

"We saw some bargain-hunting, but there were no big trades," said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

Foreign investors net bought 5.95 million rupees ($39,614) worth of equities on Monday, but they have net sold 1.63 billion rupees worth shares so far this year.

Turnover stood at 179.3 million rupees, its lowest since Jan. 18.

($1 = 150.2000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal; Editing by Amrutha Gayathri)

Colombo Stock Exchange Market Review – 30th Jan 2017

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Colombo Stock Exchange Trade Summary 30-Jan-2017

Colombo equities closed mostly flat in thin trading on Monday. ASI added mere 2.84 index points (+0.1%) to close at 6,140.54 on a turnover of LKR 179mn. However, the blue-chip S&P SL 20 index gained 9.25 index points (+0.3%) to end the session at 3,492.92.

Lackluster sentiments were seen across the board with losers beating gainers 59 to 56 while 91 scripts remained unchanged. Among the blue-chips, Commercial Bank, Ceylon Cold Stores and Sri Lanka Telecom led the gainers while AIA Insurance, Hemas Holdings and Asiri Hospitals were among top losers.

Commercial Bank closed with gains subsequent to the announcement of second interim dividend of LKR 3.00 per share. Commercial Bank voting closed at LKR 145.10, +2.2% while non-voting share closed at LKR 116.90, +3.4%. Further, the positive quarterly reports in Ceylon Cold Stores (LKR 739.10, +1.3%), John Keells Hotels (LKR 11.00, +2.8%) led the shares higher amid thin volumes.

Teejay Lanka (LKR 40mn), Hemas Holdings (LKR 29mn) and Chevron Lubricants (LKR 10mn) contributed most to the turnover. The only crossing of the day was reported in Hemas Holdings which saw 0.3mn shares changing hands at LKR 102.00 per share.

Teejay Lanka continued to witness selling pressure amid the negative quarterly report and the share closed at LKR 40.90, -0.2%. Apart from Teejay Lanka, retail investor activity was mostly concentrated on Chevron Lubricants (LKR 165.40, +0.7%), John Keells Holdings (LKR 140.00) and Sampath Bank (LKR 264.50, +0.2%).

Foreign investors were net buyers with net foreign inflow of LKR 6mn. Top net inflows were seen in Seylan Bank – nonvoting (LKR 4mn), Chevron Lubricants (LKR 4mn) and Watawala Plantations (LKR 2mn) while top net outflow was seen in Teejay Lanka (LKR 9mn). Foreign participation accounted for 36% of the day’s activity.

Source: LSL