Sri Lanka vehicle registration down in Nov 2018

LBO - Vehicle registration momentum across most categories came down in the month of November relative to October 2018, a new report said.

Data compiled by JB Securities equities research shows total car registrations recorded 3,354 units in Nov down from 5,826 units in Oct but up from 2,400 units 12 months ago.

The measures taken by the fiscal authorities (increase of duty on small cars to a minimum of Rs 1.25 mn on 1 August) and margin requirements on car imports (100% margin from 19 Sep and 200% from 29 Sep) have finally taken effect,  the research firm said.

Brand new car registrations recorded 365 units in November down from 683 units in October and marginally up from 475 units 12 months ago.

Suzuki/Maruti accounted for 187 units of which Wagon R sold by the agents were 131 units. Financing share was 42.2% down from the normal monthly figure of 50-55% indicative of lesser credit financing these vehicles.

The full report is below

Vehicle registration momentum across most categories came down in the month of Nov relative to October. The measures taken by the fiscal authorities (increase of duty on small cars to a minimum of Rs 1.25 mn on 1 August) and margin requirements on car imports (100% margin from 19 Sep and 200% from 29 Sep) have finally taken effect.

• Total car registrations recorded 3,354 units in Nov down from 5,826 units in Oct but up from 2,400 units 12 months ago.
• Brand new car registrations recorded 365 units in Nov down from 683 units in Oct and marginally up from 475 units 12 months ago. Suzuki/Maruti accounted for 187 units of which Wagon R sold by the agents were 131 units. Financing share was 42.2% down from the normal monthly figure of 50-55% indicative of lesser credit financing these vehicles.
• Pre-owned car registrations recorded 2,989 units in Nov significantly down from 5,143 units in Oct but up from 1,925 units 12 months ago. The monthly registration figure is the lowest number for the year, contraction in Wagon R volumes to 665 units from an all time high of 2,846 units in July was the main contributor to the monthly decline. Toyota accounted for 1,544 units followed by Suzuki with 1,041 units. Financing share was 42.6% below the normal monthly average of 50-60% indicative of falling credit funding purchases in this segment.
• Premium branded motor cars recorded 158 units in Nov down from 207 units in Oct. Brand new accounted for a mere 28 units with Mercedes accounting for 11 units (C class 8 units) and BMW 9 units (5-series 4). Preowned accounted for 130 units of which Mercedes accounted for 31 units (C class 27 units), BMW accounted for 54 units (3-series 36 units) and Audi 45 units (A1 45 units, A3 10 units, A4 5 units).

Notable premium cars in Nov were a Porsche Cayenne-S, 3 Jaguar XF/XE and a Mercedes Benz C Coupe. In Oct there were 3 BMW i8s, 1 Jaguar XE, 1 Porsche 718 Boxter and 1 Ferrari 488 Spider.

• SUV and crossover registrations accounted for 1,301 units in Nov down from 1,517 units in Oct but up from 576 units 12 months ago. Brand new vehicles accounted for 397 units – MG 136 units, Peugeot 89 units (3008 68 units), etc. and Pre-owned vehicles accounted for 767 units – Toyota 344 units (CH-R 338 units), Honda 258 units (Vezel 195 units), etc. This segment is continuing to show buoyancy due to a strong performance from Crossovers (see attachment titled ‘Selection of crossovers”) – vehicles with engines less than 1.5L comprise 94.5% of total volumes.
• Electrical car registrations recorded 6 units in Nov down from 5 units in Oct and 5 units 12 months ago. Nissan Leaf accounted for 3 units.
• Hybrid vehicle registrations recorded 1,585 units in Nov significantly down from 2,917 units in Oct and 2,039 units 12 months ago. Motor cars accounted for 1,369 units followed by SUVs accounting for 215 units. Suzuki hybrid cars recorded 948 units in the month down from 2,038 units the previous month and high 3,559 units in July.
• Van registrations recorded 451 units in Nov down from 713 units in Oct and 643 units 12 months ago. Mini vans (< 1,000cc) accounted for 338 units, the balance 113 units were accounted for by mid-size vans. Suzuki Every which is a minivan accounted for 208 units. Financing share was 57.6% down from the normal monthly figure of 65-70%.
• 3-wheelers recorded a low 1,314 registrations in Nov down from 1,932 units the previous month and 2,270 units 12 months ago. Bajaj continues to be the segment leader with a 90.9% share. Financing share was 71.5% in line with previous months.
• 2-wheelers registrations recorded 22,373 units in Nov down from 30,889 units in Oct and 28,334 12 months ago. Scooters accounted for 14,476 units with the balance 7,897 units being motor cycles. Honda continues its dominance in the scooter category with a 60.9% share and an overall segment share of 42% followed distantly by Bajaj, TVS and Yamaha with 14.6%, 15.6% and 16.5% segment share, respectively. Financing share was 73.6% in line with prior months.
• Pickup truck registrations recorded 207 units in Nov up from 146 units the previous months and 175 units previously. Tata recorded 120 units (Xenon 111 units) almost double its normal number claiming a 58% segment share. Financing share was 30.9% below prior month levels of 60% indicative of an institutional purchase of Xenon trucks.
• Mini truck registrations recorded 222 units in Nov down from 359 units in Oct and 334 units 12 months ago. Tata is the category leader with a 86.8% share. Financing share of 85.6% is in line with prior months.
• Light truck registrations recorded 233 units in Nov down from 336 units in Oct and 374 units 12 months ago. Mahindra is the category leader with a 79.1% share. Financing share was 85.8% in line with prior months.
• Medium truck (between 2 MT and 5 MT) registrations recorded 240 units in Nov down from 314 units in Oct and 355 units 12 months ago. Unlike in other truck categories in this category preowned units make up 47.5% of the total. Isuzu is the category leader with a 49.2% share. Tipper registrations recorded 29 units in line with previous months. Financing share was 89.6% in line with prior months.
• Heavy truck registrations recorded 152 units in Nov down from 167 units in Oct and 209 units 12 months ago. Tata is the category leader with a 45% share followed by Lanka Ashok Leyland with a 36.4%. Tipper registrations recorded 25 units significantly down from prior months. Financing share was 87.5% in line with prior months.
• Bus registrations recorded 130 units in Nov down from 201 units in Oct and 381 units 12 months ago. Lanka Ashok Leyland is the segment leader with a 45% share. Financing share was 76.9% lower than the normal monthly rate of 90% indicative of an institutional purchase.

Leapfrog group buys Sri Lanka Soflogic Life Insurance stake from FMO

ECONOMYNEXT - A 19-percent stake in Sri Lanka's Softlogic Life Insurance has been sold by the Netherlands-based FMO to the Leapfrog Investments group, which has a focus on Asia and Africa.

"This investment reveals our positive view of Sri Lanka's long-term trajectory, and its financial services industry," Leapfrog Chie Executive Andrew Kuper said in a statement.

Softlogic Chairman Ashok Pathirage said exiting partner FMO helped strenghten the firm.

He hoped the investment in his insurance unit woudl be the first of many investments in Sri Lanka.

The stake changed hands in two blocks, one of 35.6 million shares at 30.80 rupees each and the other of 35.6 million shares at 30.70 rupees each, down 19-20 percent from the previous, opening trade.

The total value of the 71.2 million shares traded was 2.18 billion rupees. The transaction amounted to a 19 percent stake in Softlogic Life Insurance, formerly Asian Alliance Insurance.

Sri Lanka’s Commercial Bank to raise Rs7.5bn through debenture issue

ECONOMYNEXT – Sri Lanka’s Commercial Bank of Ceylon said it plans to raise 7.5 billion rupees through a new debenture issue with an option to double the amount in the event of an oversubscription.

A statement said the bank will issue 75 million listed, unsecured, rated, redeemable subordinated Basel III compliant debentures at 100 rupees each with a non-viability conversion feature,making them hybrid instruments convertible into equity.
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The debentures, which will have a minimum tenure of five years and maximum tenure of 10 year, are subject to shareholder and regulatory aproval.

Sri Lanka's Lighthouse Hotel in Rs450mn upgrade

ECONOMYNEXT – Sri Lanka’s Lighthouse Hotel said it will invest 450 million rupees to refurbish and upgrade rooms, public and service areas and plant and equipment next year.

A stock exchange filing said 63 out of 85 rooms of the Jetwing Lighthouse on the south coast will be upgraded from May to July 2019.

The remaining 22 rooms will be operational during the period, usually considered the ‘off-season’ when tourist arrivals fall.

The hotel will be fully operational by August 2019.

Sri Lankan rupee hits record low on foreign outflows

Reuters: ** The Sri Lankan rupee fell to a record low on Wednesday due to continued outflows of foreign funds mainly from government bonds as political uncertainty dented investor sentiment.

** The rupee hit an all-time low of 181.85 to the dollar in early trade, surpassing its previous record of 181.67 marked in the previous session. It has weakened about 4.8 percent since Sri Lanka’s political crisis began on Oct. 26, and lost 18.4 percent so far this year. 

** The rupee ended at 181.80/182.00 per dollar, compared with 181.50/70 in the previous session.

** President Maithripala Sirisena appointed a 30-member cabinet last week after he was forced to reinstate Ranil Wickremeinghe as prime minister, 51 days after he was sacked.

** The political crisis was expected to ease, though uneasy relations between the two men could cause fiscal problems, analysts have said. Parliament approved 1.77 trillion rupees ($9.39 billion) to meet four months of expenditures and avert a government shutdown from Jan. 1. 

** The Colombo stock index ended 0.09 percent weaker at 6,019.62 on Wednesday. Turnover was 670.9 million rupees, below this year’s daily average of 840 million rupees.

** Foreigners were net buyers of 344.7 million rupees ($1.9 million) of stocks on Wednesday. They have been net sellers of 13.3 billion rupees since the political crisis began. The bond market saw outflows of about 56.7 billion rupees between Oct. 25 and Dec. 19, central bank data showed. 

** Five-year government bond yields have risen 25 basis points since the political crisis began. 

** Credit agencies Fitch and S&P downgraded Sri Lanka’s sovereign rating in early December, citing refinancing risks and an uncertain policy outlook.

($1 = 181.4000 Sri Lankan rupees) 

(Reporting by Shihar Aneez; editing by John Stonestreet)

Sri Lankan rupee hits record low as foreign outflows continue

Reuters: ** The Sri Lankan rupee fell to a record low on Monday due to continued outflows of foreign funds from bonds and stocks as political uncertainty dented investor sentiment.

** The rupee hit an all-time low of 181.67 to the dollar in early trade, surpassing its previous record of 181.25 marked in the previous session. It has weakened about 4.7 percent since the political crisis began. The currency dropped 1.8 percent in November, and has lost 18.2 percent this year. 

** Sri Lankan President Maithripala Sirisena appointed a 30-member cabinet on Thursday, retaining control over the police while they investigate an alleged plot to kill him that triggered a row with the premier and led to a lengthy political crisis.

** The political crisis was expected to ease after Sirisena reinstated Ranil Wickremesinghe, whom he had ousted in October. The country plunged into a 51-day crisis following the ouster. However, a delay in appointing cabinet ministers dented sentiment, dealers said.

** Political paralysis remained the main concern for investors since Sirisena abruptly sacked Wickremesinghe and replaced him with Mahinda Rajapaksa, who failed to win a parliamentary majority and resigned on Dec. 15 as a government shutdown loomed.

** Sri Lanka’s parliament passed a 1.77 trillion rupee ($9.39 billion) vote on account on Friday to meet the expenditures of first four months to avert a government shutdown from Jan. 1.

** Wickremesinghe was sworn in as Sri Lanka’s prime minister on Dec. 16, making a remarkable comeback weeks after being ousted by Sirisena under controversial circumstances. 

** The Sri Lankan rupee strengthened early last week, while bond yields dropped as the political crisis appeared to ebb, but investors took a cautious stance to observe whether Sirisena and Wickremesinghe could work well together.

** Foreigners were net sellers of 5.6 million rupees ($30,888.03) worth of stocks on Monday. They have been net sellers of 13.7 billion rupees since the political crisis began on Oct. 26. The bond market saw outflows of about 56.7 billion rupees between Oct. 25 and Dec. 19, central bank data showed. 

** The rupee ended at 181.50/70 per dollar, compared with 181.30/50 in the previous session. 

** Credit rating agencies Fitch and S&P downgraded Sri Lanka’s sovereign rating early December, citing refinancing risks and an uncertain policy outlook, after Sirisena’s sacking of his prime minister in October triggered the political crisis.


** This year, there have been 23.1 billion rupees of outflows from stocks and 148.9 billion rupees from government securities, the latest data from the bourse and central bank showed.

** Moody’s downgraded Sri Lanka on Nov. 20 for the first time since it started rating the country in 2010.

** Five-year government bond yields have risen 22 basis points since the political crisis began, while yields on Sri Lanka’s dollar bonds due in 2022, which have risen around one percentage point to 8.0 percent through Dec. 14, fell 0.42 percent to 7.6 percent on Monday.

** The Colombo stock index ended 0.32 percent firmer at 6,025.12 on Monday. Turnover was 326.2 million rupees, well below this year’s daily average of 841 million rupees.

($1 = 181.3000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal, Editing by Subhranshu Sahu)

Softlogic Life Insurance, Lanka IOC in S&P Sri Lanka 20 Index

ECONOMYNEXT – The Colombo Stock Exchange (CSE) has included Softlogic Life Insurance and Lanka Indian Oil Corporation in the S&P Sri Lanka 20 index, which tracks the top 20 largest and most liquid stocks, in its latest revision.

Other companies included in the semiannual rebalancing of the index are Ceylon Tobacco Co., Nations Trust Bank and Union Bank of Colombo, , the CSE said in a statement.

They replace Ceylinco Insurance, Hemas Holdings, LOLC Holdings, Melstacorp and Vallibel One at the 2018 year-end index rebalance.

The exclusions and inclusions were announced by S&P Dow Jones Indices, effective from 24 December 2018 (after the market close of 21 December 2018).

The S&P SL 20 index includes the 20 largest companies by total market capitalization listed on the CSE that meet minimum size, liquidity and financial viability thresholds.

The constituents are weighted by float-adjusted market capitalization, subject to a single stock cap of 15%, which is employed to reduce single stock concentration.

The CSE said the S&P SL 20 index has been designed in accordance with international practices and standards.

Effective from 24 December 2018 the stocks in the S&P Sri Lanka 20 in alphabetical order are as follows.

No. COMPANY TICKER
1 Access Engineering PLC AEL.N0000
2 Aitken Spence PLC SPEN.N0000
3 Ceylon Tobacco Co. PLC CTC.N0000
4 Chevron Lubricants Lanka PLC LLUB.N0000
5 Commercial Bank of Ceylon PLC COMB.N0000 COMB.X0000
6 DFCC Bank PLC DFCC.N0000
7 Dialog Axiata PLC DIAL.N0000
8 Hatton National Bank PLC HNB.N0000HNB.X0000
9 John Keells Holdings PLC JKH.N0000
10 Lanka IOC PLC LIOC.N0000
11 National Development Bank PLC NDB.N0000
12 Nations Trust Bank PLC NTB.N0000
13 People's Leasing & Finance PLC PLC.N0000
14 Richard Pieris & Company PLC RICH.N0000
15 Sampath Bank PLC SAMP.N0000
16 Softlogic Holdings PLC SHL.N0000
17 Softlogic Life Insurance PLC AAIC.N0000
18 Teejay Lanka PLC TJL.N0000
19 Tokyo Cement Company (Lanka) TKYO.N0000TKYO.X0000
20 Union Bank of Colombo PLC UBC.N0000