Parliament nod for DFCC-NDB merger

* New bill passed to facilitate Budget 2014 proposal, insists move will avoid market volatility

By Ashwin Hemmathagama Lobby Correspondent

Paving the way for the proposed merger of DFCC Bank, DFCC Vardhana Bank and NDB Bank, the Repeal and Consequential Provisions Bill was passed in Parliament yesterday
Moving the bill that delivered the provisions for the registering of DFCC Bank as a public limited company with the name DFCC Bank PLC and to provide for the provisions consequential to such registration by repealing the DFCC Bank Act Chapter 165, Minister of International Monetary Co-operation and Deputy Minister of Finance and Planning Dr. Sarath Amunugama found the consolidation of the finance sector a “must to avoid market volatility”.

According to Minister Dr. Amunugama, the merger of the three financial institutions will “establish a firm asset base and steady source of funds,” essential for the “development program of both the private and the State sectors”.

He went on to point out: “The merger was announced in Budget 2014. There are 22 local banks and 12 foreign banks operating Sri Lanka. The total value of the banking sector comes to Rs. 6.3 trillion, where five of the local banks enjoy an asset base exceeding Rs. 500 billion; so all the other banks are depending on these five banks to do their key transactions. Small banks lack stability. We want to establish the stability by going ahead with the financial sector consolidation.”

Joining the debate, UNP MP Dr. Harsha de Silva announced the Opposition’s disapproval and demanded the Government discontinue the merging of DFCC Varadhana Bank, DFCC Bank and NDB Bank as planned.

Pointing out the issues with interest rates prevailing in the country and the limited access to funds, Dr. de Silva charged: “The income of an average household stood at Rs. 26,000 based on a survey conducted by the Government in 2007. Three years after the it has increased to Rs. 45,000, which is a nominal growth. If you analyse the private sector, credit growth has declined drastically. Today it is at 0.8%, which is not healthy at all. 

What is required is to encourage private sector participation in development rather than borrowing at high rates from China.”
www.ft.lk

Sri Lanka’s Touchwood Investments has not handed over plantations to third party

Touchwood Investments PLC which is under liquidation has not handed over the management of any of its plantations to a third party, its liquidator G.K. Sudath Kumar has informed the Colombo Stock Exchange.

This is in response to an article in a newspaper which he claims had stated that ‘a JAT subsidiary manages some Touchwood plantations.’

Sudath Kumara says that this article contains false, unsubstantiated and misleading information and has written to the publication for clarification in is next issue.
www.adaderana.lk

Sri Lanka’s Hemas Holdings disposes of Serendib Hotels shares

Hemas Holdings PLC has disposed has disposed of 1,020,000 of its ordinary voting shares of Serendib Hotels PLC.

Accordingly, as at 20 October 2014, public holding of voting shares is 20.02 per cent and the number of shares in the hands of the public shareholders are 15,114,358.
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Sri Lanka’s Browns Investments to develop Maldives property to 4 Star hotel

Browns Hotels and Resorts (Pvt) Limited, a fully owned subsidiary of Browns Investments PLC has signed an agreement with Alpha Kinam Holdings (Pvt) Ltd and NPH Investment (Pvt) Ltd to develop a property in the Male Island in the Maldives.

The agreement is to develop this property to a 4 Star hotel of approximately 150 rooms and 100 apartments with an initial investment of USD 9.5 million subject to statutory approvals and obtaining controlling interest.

Browns Investments has made a number of significant acquisitions and this is its first overseas investment.
www.adaderana.lk

Amana Takaful in Rights Issue for subsidiary in Sri Lanka

Amana Takaful PLC is preparing for a Rights Issue of 500,000,360 ordinary shares with one ordinary share to every two existing shares at cents 80 per share.

These shares are to be issues to raise Rs. 400,000,288 for its fully owned subsidiary Amana Takaful Life Limited.
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Sri Lankan stocks at 6-wk closing low on profit taking; earnings awaited

(Reuters) - Sri Lankan stocks fell for the fourth straight session on Tuesday to hit a 6-week closing low, a day after the government announced it would hold a presidential election in January, nearly two years ahead of schedule. Most local investors offloaded positions to cut losses, dealers said.

President Mahinda Rajapaksa is expected to run for a third six-year term. The poll schedule announcement came amid signs Rajapaksa's popularity is fading after accusations that his party is abusing power.

Analysts said investors were waiting for cues from the 2015 budget scheduled for Friday and a raft of September quarterly earnings expected next week.

Sri Lanka's main stock index fell 0.72 percent, or 52.29 points, to 7,161.16, its lowest since Sept. 9.

"Some people are taking profits and there is no strong local buying. Some local retail investors also sold their shares to cut losses as the index has been on a downward trend," said Danushka Samarasinghe, COO at Softlogic Stockbrokers.

Stockbrokers said trading in local shares may be volatile due to the revised poll schedule and a possible bottoming out of interest rates.

The day's turnover was 897.4 million rupees ($6.87 million), less than this year's daily average of 1.36 billion rupees.

Foreign investors bought a net 165.1 million rupees worth of shares on Tuesday, extending the year-to-date net foreign inflow to 10.3 billion rupees, exchange data showed.

The country's biggest listed lender Commercial Bank of Ceylon Plc, which led the overall fall of the index, lost 1.43 percent at 158.60 rupees.

Shares in conglomerate John Keells Holdings fell 0.20 percent to 246.50 rupees, while Dialog Axiata Plc ended 0.83 percent down at 12 rupees.

Both the currency and stock markets will be closed for a holiday on Wednesday. Trading will resume on Thursday. 

($1 = 130.7000 Sri Lankan rupee) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)

Sri Lanka stocks close down 0.7-pct

Oct 21, 2014 (LBO) - Sri Lanka's stocks closed 0.72 percent lower with banking stocks losing ground despite net foreign buying, brokers said.

The Colombo benchmark All Share Price Index closed 52.29 points lower at 7,161.16, down 0.72 percent. The S&P SL20 closed 25.09 points lower at 3,983.07, down 0.63 percent.

Turnover was 898.24 million rupees, up from 864.49 million rupees a day earlier with 35 stocks closed positive against 160 negative.

First Capital Holdings closed 2.50 rupees lower at 50.40 rupees and Madulsima Plantations closed 1.20 rupees higher at 18.00 rupees, attracting most number of trades during the day.

Foreign investors bought 439.23 million rupees worth shares while selling 274.16 million rupees worth shares.

Commercial Bank of Ceylon closed 2.30 rupees lower at 158.60 rupees and Commercial Leasing and Finance closed 20 cents lower at 4.60 rupees, contributing most to the index drop.

Ceylinco Insurance closed 48.00 rupees lower at 1,302.00 rupees and Cargills Ceylon closed 4.00 rupees lower at 156.00 rupees.

Dialog Axiata closed 10 cents lower at 12.00 rupees.