Sri Lanka stocks surge 1.2-pct, rupee stronger

Feb 28, 2014 (LBO) - Sri Lanka's stocks surged 1.2 percent Friday with index heavy John Keells Holdings extending gains, while the rupee strengthened against the greenback, brokers and dealers said.

The Colombo benchmark All Share Price Index closed 67.50 points higher at 5,940.31, up 1.15 percent. The S&P SL20 closed 34.86 points higher at 3,223.66, up 1.09 percent.

Turnover was 851.64 million rupees, up from 446.57 million rupees last Wednesday.

JKH closed 8.70 rupees higher at 220.70 rupees, contributing most to the index gain.

JKH also closed 5.70 rupees higher at 212.00 rupees on Wednesday, with brokers say foreign selling pressure is easing.

JKH’s W0022 warrants closed 3.90 rupees higher at 64.30 rupees and its W0023 warrants closed 3.90 rupees higher at 67.70 rupees.

In forex markets the rupee rose to 130.80/95 levels to the US dollar in the spot market amid strong inflows, dealers said.

Sri Lanka's rupee has come under pressure in recent days dipping below 131.00 to the US dollar amid excess rupee liquidity in money markets generated by earlier Central Bank dollar purchases.

In stock markets, foreign investors bought 140.33 million rupees worth shares while selling 115.87 million rupees of shares.

With more confidence returning to the broader market 153 stocks closed up against 46 going down.

SLT closed 1.80 rupees higher at 44.30 rupees and Lanka Orix Leasing Company closed 3.80 rupees higher at 78.90 rupees.

Sampath Bank ended 2.00 rupees higher at 172.00 rupees and HNB closed 60 cents higher at 152.00 rupees.

Ceylon Tobacco Company closed 9.00 rupees lower at 1,089.40 rupees and Distilleries closed 1.90 rupees lower at 203.00 rupees.

Nestle Lanka ended 6.60 rupees lower at 2,010.00 rupees and Carson Cumberbatch ended 80 cents lower at 349.70 rupees.

Ceylinco Insurance closed 1.20 rupees lower at 1,373.30 rupees and Ceylon Grain Elevators closed 70 cents lower at 34.30 rupees.

Sri Lankan stocks at 1-wk high; John Keells gains

Feb 28 (Reuters) - Sri Lankan shares gained for a second straight session on Friday, moving further away from a near 10-week closing low, led by top conglomerate John Keells Holdings despite foreigners investors selling risky assets.

The main stock index gained 1.15 percent, or 67.50 points, to close at 5,940.31, its highest since Feb. 21. It hit a near 10-week closing low on Tuesday.

The index has dropped nearly 7 percent in the last 15 sessions through Tuesday. It returned to its neutral territory from an oversold zone, Thomson Reuters data showed.

Foreign investors sold a net 43.4 million rupees ($331,200) worth of shares on Friday, extending the net outflow in the past 15 sessions to 5.43 billion rupees as some offshore funds exited the market.

It has seen a net 4.04 billion rupees of foreign outflows in so far 2014, after enjoying net inflows of 22.88 billion rupees last year.

Analysts said investors were concerned about further outflows, though local investors are still optimistic about risky assets due to falling interest rates.

Top conglomerate John Keells Holdings gained 4.10 percent to 220.70 rupees as local and forging investors snapped up the battered share.

The day's turnover was 851.6 million rupees, less than this year's daily average of about 1.09 billion rupees.

($1 = 131.0500 Sri Lanka rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil Nair)

Sri Lanka inflation at 4.2-pct in February

Feb 28, 2013 (LBO) - Sri Lanka's consumer prices rose 4.2 percent in the 12-months February 2014, down from 4.4 percent in January, the state statistics office said.

The widely watched Colombo Consumer Price Index rose 0.2 percent during the month.

Annual average inflation, a lagging indicator averaged across two years eased to 6.0 percent in February 2014 from 6.5 a month earlier, the statistics office said.

Inflation showed up a rise in the food sub-index rose 0.2 percent in February after falling 0.9 percent a month earlier. Non-foods rose 0.1 percent in after rising 1.7 percent a month earlier.

Sri Lanka's inflation spiked to 9.8 percent in February 2013 following a balance of payments crisis in 2012 which sent the rupee spiraling down to 130 to the US dollars from 110 levels and has since moderated amid weak credit growth.

The central bank is targeting inflation of low single digits generally understood to be below 5.0 percent in 2014, after keeping it at single digits for several years.

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Sri Lanka's Sampath Bank net down 31-pct

Feb 28, 2014 (LBO) - Profits at Sri Lanka's Sampath Bank Plc fell 31 percent to 1.0 billion rupees, in the December 2013 quarter from a year earlier, amid higher loan losses, interim accounts showed.

The group reported earnings of 6.37 rupees for the quarter. In the year to December Sampath reported earnings of 21.67 rupees, on total profits of 3.6 billion rupees, down 33 percent.

The group said interest income rose 8.2 percent to 10.2 billion rupees, interest expenses rose 9.8 percent to 6.7 billion rupees and net interest income rose at a slower 5.4 percent to 3.5 billion rupees for the quarter.

Fee income rose 18 percent to 710 million rupees. The group reported 257 million rupees gain on financial instruments.

Loan losses charges rose to 907 million rupees for the quarter with general provisions of 753 million rupees.

The bank reported strong loan growth of 24 percent to 265 billion rupees in the year to December 2013, among the highest recorded in the sector for the year.

Deposits also rose 23 percent to 300 billion rupees.

Gross assets rose 24 percent to 391 billion rupees and net assets rose 14 percent to 31.6 billion rupees.

Sri Lanka's Ceylinco Insurance net up 28-pct

Feb 28, 2014 (LBO)- Profits at Sri Lanka's Ceylinco Insurance Plc, rose 28 percent to 1.8 billion rupees in the December 2013 quarter from a year earlier, helped by investment income and lower claims, despite weak premiums, interim accounts showed.

The group reported earnings of 71.4 rupees per share for the quarter. In the year to December the group reported earnings of 98.7 rupees on total profits of 2.6 billion rupees, which were up 34 percent.

Life insurance gains are included in the December quarter.

Gross written premium fell 01 percent to 5.9 billion rupees in the December 2013 quarter from a year earlier. After re-insurance fees of 868 million rupees, which were flat, net written premiums fell 2 percent to 5.0 billion rupees.

Sri Lanka is recovering from a balance of payments crisis and currency depreciation, which tends to hurt disposable income of people, while interest rates also go up to correct previous imbalances.

Investment income rose 26 percent 2.4 billion rupees. Insurance claims fell 19 percent to 2.1 billion rupees.

Ceylinco Insurance had gross assets of 87.4 billion rupees by December 2013 up from 73 billion rupees a year earlier.

Net assets had grown to 18.3 billion rupees from 14.4 billion rupees.

HSBC, Sampath Bank seal deal for SLT

Ceylon FT: Sri Lanka Telecom PLC received a US$ 100 million five-year loan facility from Sampath Bank and global banking giant HSBC to upgrade its telecommunication infrastructure.

HSBC acted as Lead Arranger and together with Sampath Bank participated in raising this loan.

Patrick J. Gallagher, CEO HSBC Sri Lanka and Maldives said, "This further demonstrates HSBC's capability in structuring and arranging deals of this nature. SLT is a key name in the country and for HSBC Sri Lanka as well, and we hope this will further strengthen our relationship and steer SLT towards achieving their development objectives for the benefit of the country."

This deal stands testimony to HSBC Sri Lanka's strong track record and capabilities in syndicated debt financing and corporate banking capabilities. It also reaffirms HSBC's continued commitment to the development of the local telecommunication industry.

Aravinda Perera, Managing Director Sampath Bank PLC said, "We have always been an active partner with SLT, providing an internet payment gateway and solutions to SLT's client base, conveniences via banking channels harnessing Sampath's edge in technology. Also Sampath Bank has over the years been a partner in Syndicated financing for the SLT Group."

He added that "We are sure that this financing deal will further strengthen our relationship with SLT and contribute our share to the nations' stride towards development through them".

"ICT infrastructure is the backbone of any country, empowering and facilitating all other industries and businesses to function at their best. This is the highest amount raised through a foreign currency loan by SLT so far and is reflective of our commitment and plans to undertake sustainable investments during this year, to support our country's fast track development and vision to achieve a Smart Sri Lanka, through an enhanced ICT infrastructure," commented Lalith De Silva, Group Chief Executive Officer of SLT. "It is a privilege for SLT to partner with two of the leading banks in Sri Lanka, HSBC and Sampath Bank, who have placed their confidence and trust in our financial strength as well as our capabilities and agreed to support us in making our dreams for our nation a reality," he added.

The Fitch AAA (lka) rated HSBC, is the largest foreign commercial bank in the island. HSBC Sri Lanka with its global network and local reach offerscustomized client-led solutions in the corporate and investment banking businesses. Sri Lanka Telecom (SLT), an AAA (lka) rated company by Fitch Ratings, is the nation's number one integrated ICT solutions provider and the leading backbone infrastructure services provider. The company is also the major provider of telecommunication networks and services for top enterprises representing all economic sectors and facilitating them with seamless and sophisticated connectivity to carry out local and global business operations. SLT group provides a full range of ICT facilities and services in the areas of voice, data, broadband, wholesale, enterprise, TV and mobile services.
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GAAM outperforms ASPI, S&P SL20

Ceylon FT: Guardian Acuity Asset Management Limited (GAAM) said it recorded healthy gains in unit trusts it manages, outperforming both the All Share Price Index (ASPI) of the Colombo Stock Exchange and the S&P SL20 index of the largest listed firms.

"Two years in operation, GAAM managed to establish a strong footing in the Unit Trust industry with an exceptional growth in the Guardian Acuity Fixed Income (GAFI) Fund which provided an annualized return of 10.11% per annum within the period January 2013 to January 2014. In the meantime GAAM managed to secure high returns on the Guardian Acuity Equity (GAE) Fund which gave a cumulative return of 29.30%, when compared with a growth in the All Share Price Index of 14.09% since inception to January 2014," the company said. Guardian Acuity Asset Management Limited Fund Manager Sumith Perera, said, "The GA Equity Fund has outperformed the All Share Price Index (ASPI) by 4.92% and the S&P SL 20 by 4.66% within the period of January 2013 to January 2014. The investors enjoyed greater returns on their investments despite the relatively low performance of the overall market. Investors should also have a long term outlook on the Equity market if they are to gain better yields as they can stomach the short term volatilities". The performance since inception was 29.30%.

"The Guardian Acuity Fixed Income Fund objective is to give investors the highest possible return by exposing the fund only to high quality instruments and issuers which are investment grade and above.

Investors in the fund have received a competitive return while being able to withdraw the funds at any point in time. Previous year average return was over 12.18% (2013 Return) which is tax free, while one year Treasury Bills gave a comparatively lower yield after tax," Perera said.

GAAM funds consist of Guardian Acuity Equity Fund and Guardian Acuity Fixed Income fund which has varying investment objectives. The equity fund invests in listed equities on the Colombo Stock Exchange, while the fixed income fund invests in high quality corporate debt and bank deposits, with a smaller exposure to government securities which are risk free. The performance of both funds during the last year has been above the market trends and both funds continue to grow even with market uncertainties and volatility.

GAAM is committed to giving better returns to the investors with the least risk and this is mainly due to the investment strategy which GAAM has adopted. The second year performance is evidence of this strategy and how it has helped GAAM to be right on top in terms of fund performance. Unit trusts give the small investor the opportunity to participate in the returns from a large diversity of financial instruments, which have been pooled together.

Guardian Acuity Asset Management Limited was commercially commenced operations in February 2012 with the purpose of bringing together the expertise of the two joint venture partners, Ceylon Guardian Investment Trust PLC and Acuity Partners (PVT) Ltd. 

Acuity Partners is a joint venture between the HNB and DFCC Banks; while Ceylon Guardian is a subsidiary of the Carson Cumberbatch group. Ceylon Guardian's management team contribute to the venture through their fund management expertise, while Acuity bring in their partner network and reach in marketing and distribution of financial products. Currently the unit trusts are marketed through designated branches of the HNB.

The company is an authorized unit trust management company, accredited by the Securities and Exchange Commission of Sri Lanka, holding licences for two unit trust funds – namely the Guardian Acuity Fixed Income Fund and the Guardian Acuity Equity Fund. The company markets a range of investment plans under the brands MoneyMax and MoneyMaker which are structured using these two licensed funds as the underlying investment vehicles.

The Board of Directors of GAAM comprises directors drawn from the two JV partner companies, who carry with them a wealth of experience in the financial services industry.
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