Singer Finance rights issue approved

Shareholders of Singer Finance at an extraordinary meeting yesterday approved a rights issue to raise Rs. 551 million, the company said in a stock exchange filing.

The company will issue 36,740,741 ordinary voting shares at Rs 15 each in the ratio of two new shares for every nine shares held.

The proceeds will be utilized to further expand the equity base of the company and improve capital adequacy. Proceeds will also be utilized to part finance the growth in the loan portfolio of the company, Singer Finance said.
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Millennium Housing records Rs 169 mn in revenue for H1

Millennium Housing Developers PLC (MHDL), Sri Lanka’s leading township developer, announced their outstanding financial performance for the H1 ending September 30, 2017, posting all-time high H1 revenue of Rs.1378.25 Million with a PAT of Rs.168.89 Million. When compared to H1 performance of last financial year, the company has grown by Rs.794.19 Million in top line and Rs.101.85 Million in profit.

“We are extremely pleased with MHDL’s H1 performance and we are confident that this performance will be continued for the rest of the financial year. Our outstanding business performance affirms a promising future for all stakeholders as we continue to offer affordable luxury for all our customers who seek progressive lifestyles,” Said Harshith Dharmadasa, Chairman, Millennium Housing Developers PLC.

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Foreign investment in stock market hits all-time high in 2017

In what continues to be a record-breaking year for foreign portfolio investment in the Colombo stock market, 2017 has recorded an all-time high in foreign purchases during any given year, with Rs. 105.1 billion (year-to-date) surpassing the previous record of Rs. 104.7 billion set in 2014.

The development follows signs of renewed foreign interest in the stock market in mid-2017, during which foreign purchases recorded for the first half of 2016 doubled in 2017 and recorded an all-time high for foreign purchases in the first half of a calendar year. Such foreign purchases have contributed to a net foreign purchase figure of Rs. 18.9 billion year-to-date, a figure that is substantial compared to foreign activity in 2015/16.

Growing foreign interest in the market has also contributed to a 30% improvement in daily average turnover, where the figure has improved to Rs. 955 million (year-to-date) from Rs. 737 million in 2016.

The record continues to indicate that foreign investors have been quick toidentifythe future potential and the buying opportunities in Sri Lankan stocks.

An attractive market valuation (P/E), strong growth in corporate earnings, dividend payments, and Capital Gains Tax exemptions offered to share transactions are considered to be defining factors in attracting the level of foreign investor interest the market has witnessed in 2017.

Commenting on the development, Colombo Stock Exchange (CSE)Head of Market Development Niroshan Wijesundere stated that the CSE had been aggressively promoting the stock market across all investor segments, in particular foreign institutional investors.

He added that amidst a number of positives so far this year, the market continues to trade at a discount compared to regional peers and offers further opportunities for investors – witha market P/E recorded at 10.72at present and a majority of listed companies trading below book value.

“The macroeconomic outlook continuing to improve will also offer both foreign and local investors further confidence in the Sri Lankan stock market,” Wijesundere added.

The CSE in association with the Securities and Exchange Commission of Sri Lanka (SEC) resumed a concentrated effort to promote the stock market in key foreign marketsthis year, through‘Invest Sri Lanka’ forums in Sydney, Melbourne, Auckland, and most recently in New York.

Foreign institutional investors and Sri Lankans living abroad present at these events have given a broad endorsement of the investment opportunities and potential in the capital market and have been very optimistic on Sri Lanka’s future growth potential.

In a related development, foreign purchases in the stock market originating from Australia in a particular year recorded an all-time high in 2017, with a figure of Rs. 651 million by the week ending 17 November. A strong community of individuals with Sri Lankan origin eager to look at new Sri Lankan investment opportunities and the celebration of 70 years of diplomatic ties between Sri Lanka and Australia presented the CSE with a unique opportunity to promote the capital market in Australia this year.

The CSE and SEC have also launched an island-wide local retail investor focused Investor Forum and a campaign to create awareness on the record foreign investment and the potential opportunities in the market for local investors. The local investor forum serieshas been supported through over 500 awareness programs conducted through the CSE branch network so far in 2017.

In addition, CSE and the Colombo Stock Brokers Association is also presently conducting a series of events presenting investment research on companies featured on the S&P SL 20 Index, to an exclusive audience of local institutional investors – another key investor segment in the Sri Lankan stock market.

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LOLC 1H pre-tax profit up 77% to Rs. 11.7 b

LOLC yesterday announced excellent growth in profitability in the first half of FY18 driven by the financial services sector compared with an year earlier.

The profit before tax for the first half ended on 30 September 2017 was Rs. 11.7 billion compared with Rs. 6.6 billion reported last year, a growth of 77%. The corresponding PAT increased by a robust 73% to end the quarter at Rs. 8.8 billion.

The Group’s total assets reached Rs. 748 billion, with an advances portfolio of Rs. 488 billion. The Group balance sheet is further strengthened by investment securities held by the financial services sector companies of Rs. 86 billion mainly represented by Government securities and bank deposits.

The Group’s local financial services companies – LOLC Finance PLC(LOFC), Commercial Leasing and Finance PLC(CLC), LOLC Micro Credit Ltd.(LOMC), and BRAC Lanka Finance PLC(BRAC) – performed well and contributed well to the bottom line results.

The lending portfolios of each company recorded steady growth, with LOFC portfolio reaching Rs.94 billion, CLC portfolio reaching Rs.58 billion, LOMC’s portfolio reaching Rs. 55 billionand BRAC portfolio reaching Rs.12 billion over the last 12 months.

Deposit bases of LOFC, CLCand BRAC grew to Rs. 99 billion, Rs. 23 billion and Rs. 6 billion respectively. The total assets of LOFC reached Rs.135 billion, whist CLC’s total assets reached Rs.76 billion, LOMC’s total assets reached Rs.80 billion and BRAC’s total assets reached Rs.15 billion.

The three finance companies hold large portfolios of investments in Government securities and bank deposits as its statutory reserves and other investments, strengthening each balance sheet. LOFC holds Rs.27 billion of such assets, with CLC following suit with Rs.12 billion in statutory reserves and investments.

PRASAC Micro Finance Institution Ltd. in Cambodia became a subsidiary of the Group at the beginning of the year, which positively contributed to the bottom line. LOLC’s other two investments in Cambodia and Myanmar also join in reporting strong financial performance.

The regional expansion of the Group is poised to deliver steady results diversifying and balancing the exposure LOLC has to the local market. The markets reached by LOLC with regional expansion are with great potential for portfolio growth and strong portfolio quality. Therefore, these investments are expected to derive a strong profit signature in the medium to long term enhancing the shareholder value of the Group. Profit contribution from the financial services companies to the Group results was Rs. 10.6 b, with both local companies and companies in the region contributing equally.

The financial services sector’s performance is remarkable given the external challenges faced by the industry including increasing interest rates putting pressure on net interest margins, strain on collection efforts due to rising interest rates and lower economic activity.

Other sectors in the Group delivered moderate results with the leisure sector still being in a stage of development with three of the Group’s local properties being under construction. The properties in Kosgoda, Beruwala (Riverina) and the Maldives are progressing steadily in line with the project plans.

The trading sector consisting of the Browns Group and the plantation sector too recorded moderate results. The plantation company within the Group, Maturata Plantations recorded operating profits before finance costs reversing its long history of making losses, well adopting the restructuring of the estate management operations and producing high quality produce.

Equity accounted investees contributed lower profits compared with last year, mainly as PRASAC was moved to subsidiary category in the financials of the Group.

Commenting on the performance of the Group, LOLC Group Managing Director/CEOKapila Jayawardena stated: “The Group’s fine and consistent performance for the last six months is driven by the financial services companies, led by the four companies in Sri Lanka and our investments in Cambodia and Myanmar. All financial services companies are doing well with strong assets growth and steady profitability. Regional expansion to Myanmar and Cambodia has derived excellent results, with PRASAC and LOLC Cambodia contributing well to the bottom line.”

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Sri Lankan shares edge up on large caps; turnover hits over 2-wk low

Reuters: Sri Lankan shares ended slightly higher on Wednesday in dull trade, as investors stayed on the sidelines awaiting clarifications on new taxes in the national budget and key legislations unveiled earlier this month, analysts said.

The Colombo stock index ended 0.09 percent firmer at 6,464.44. It lost 1 percent last week.

Large caps led the gains, with Ceylon Beverage Holdings Plc jumping 17.8 percent and Lion Brewery Ceylon Plc up 5.6 percent.

“Investors are waiting for clarifications on the budget, Inland Revenue Act, and Exchange Control Act,” said Atchuthan Srirangan, senior research analyst at First Capital Holdings PLC.

“There was interest in blue chips. The index has yet to find a direction after the budget.”

Finance Minister Mangala Samaraweera imposed new taxes on motor vehicles, telecoms, banks and liquor in the 2018 budget presented on Nov. 9 to boost revenues, as the budget deficit for the current year slipped to 5.2 percent of the gross domestic product.

The final budget vote is scheduled for Dec. 9 and the market expects some amendments that could help give it some direction.

Analysts said market participants have sought more clarity on these taxes and that there could be some amendments to these proposals before the final vote.

The government also released gazette notifications on the Inland Revenue Act and the Exchange Control Act, with investors waiting for clarifications on the new legislations.

Foreign investors net bought equities worth 20.7 million rupees ($134,678) on Wednesday, extending the net foreign inflow to 19.7 billion rupees so far this year.

The day’s turnover, which hit a more-than two-week low, stood at 324.3 million rupees, around a third of this year’s average of around 952.5 million rupees.

($1 = 153.7000 Sri Lankan rupees) 

(Reporting by Shihar Aneez; Editing by Biju Dwarakanatha)

Claims, benefits paid exceed Rs.11.8 bn Ceylinco Insurance posts Rs. 3.4 bn PAT

“Indicating another remarkable year, Ceylinco Insurance PLC, the holding company, Ceylinco General Insurance Ltd and Ceylinco Life Insurance Ltd, recorded a mammoth consolidated after tax profit of Rs.3.4 billion, resulting in a growth of 41 % for the period ended 30th September 2017 said Ajith Gunawardena, Managing Director / CEO said.

Profit before tax stood at an exceptional Rs. 4.2 billion with a 46 % growth. The Company completed 30 years in existence in 2017 and every year, we’ve grown from strength to strength, with achievements that none can match.”

“Success in life insurance reflects the trust and confidence of customers – our policyholders. Ceylinco Life has had an excellent year thus far, contributing Rs. 11.5 billion in premium income; Rs 2.5 billion in profit before tax and Rs 2 billion in net profit to the company’s consolidated results for the nine months ending 30th September 2017. Our Life Fund has grown by Rs 7.3 billion over this period to Rs 85.2 billion. These are truly noteworthy figures,” Ceylinco Life Insurance Ltd, R. Renganathan, Managing Director/Chief Executive Officer said.

Patrick Alwis, Managing Director of Ceylinco General Insurance Ltd, said: “Up to 30th September 2017, Ceylinco General Insurance recorded a premium income of Rs. 13.3 billion (Rs.13,278 million) with an impressive growth of 10.5 %. This is an increase of Rs.1.2 billion over the previous year for the same period, which I would say is an exceptional achievement.

This trend will no doubt help us to end the year on a resoundingly successful note.”

“Thus, the overall premium income of Ceylinco General and Ceylinco Life reached a staggering Rs.24.8 billion, indicating an increase of Rs.1,748 million or an overall growth of 7.6 % over the same period in the previous year.”

“Ceylinco General Insurance paid claims amounting to Rs. 6.6 billion during the 9-month period ended September 2017. During 2017, Ceylinco General Insurance infused great value into its products and services. For the second consecutive year, all flood victims were paid in record time. Over 3 billion worth of claims were paid in 14 days to over 3,000 flood victims.”
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Sri Lankan shares edge down on CTC; foreign buying boosts turnover

Reuters: Sri Lankan shares ended slightly weaker on Tuesday, led lower by large cap Ceylon Tobacco Company , but heavy buying by foreign investors in blue chips capped the decline.

Local retail investors, however, stayed on the sidelines due to a lack of fresh triggers amid expectations certain amendments in the budget could help boost sentiment, analysts said.


The Colombo stock index ended 0.23 percent lower at 6,458.73. It lost 1 percent last week.

Ceylon Tobacco Company fell 4.6 percent.

“Still, the foreign demand is there and we expect the same trend to continue this year,” said Hussain Gani, Deputy CEO at Softlogic Stockbrokers.

The final budget vote is scheduled for Dec. 9 and the market expects some amendments that could help give it some direction.

Foreign investors net bought equities worth 70 million rupees ($455,285) on Tuesday, extending the net foreign inflow to 19.7 billion rupees so far this year.

Foreign buying accounted for 85 percent of the day’s turnover of 1.58 billion rupees, more than this year’s average of around 955.4 million rupees. Finance Minister Mangala Samaraweera imposed new taxes on motor vehicles, telecoms, banks and liquor in a bid to boost revenues, as the budget deficit for the current year slipped to 5.2 percent of the gross domestic product.

Samaraweera imposed taxes on telecom towers and text messages, and introduced a debt repayment levy of 20 cents per 1,000 rupee bank transaction with effect from April 1 next year.

Analysts said the market players have sought more clarification on these taxes and perhaps there could be amendments to these proposals before the final vote. 

($1 = 153.7500 Sri Lankan rupees) 

(Reporting by Shihar Aneez; Editing by Biju Dwarakanath)