Browns buys into FLC JV

Browns Investments PLC has acquired 50,000,000 shares of F L C Joint Venture Company (Pvt) Ltd, which is 50% of the stated capital of the Company, from Perpetual Holdings Limited on March 3, 2015 for Rs. 651,200,000.

FLC Joint Venture Company (Pvt) Ltd was a joint venture between Browns Investment PLC and Perpetual Holdings Limited. FLC Joint Venture Company (Pvt) Ltd holds 747,600,000 shares amounting to 54.65% in FLC Holdings PLC.

Subsequent to the said acquisition Browns Investments PLC will be the sole shareholder of F L C Joint Venture Company (Pvt) Ltd.
www.dailynews.lk

Sri Lankan stocks fall to 3-wk closing low after spike in market rates

(Reuters) - Sri Lankan stocks fell to a three-week closing low on Wednesday in thin trade a day after a sudden spike in market interest rates, while political uncertainty also weighed on investor sentiment.

The central bank raised yields on treasury bills between 86 basis points and 91 basis points at a weekly auction on Tuesday, a day after a lower repo penalty rate of 5 percent was scrapped, allowing market interest rates move upward.

The main stock index fell 0.45 percent, or 32.72 points, to 7,202.20, its lowest close since Feb. 9 and marking the fourth straight session of losses.

"The sudden spike in the interest rate was not expected, though the market was expecting an upward trend after the new government came to power," a stockbroker said on condition of anonymity.

"The same sluggish trend will remain until we see political stability."

Elections to Sri Lanka's 225-member parliament are expected to be announced after April 23 and it is unclear whether the ruling coalition led by President Maithripala Sirisena would contest unitedly or go to the polls separately.

The country's top fixed-line phone operator, Sri Lanka Telecom, fell 1.26 percent, while market heavyweight John Keells Holdings Plc ended 0.1 percent lower.

Turnover was 638.9 million rupees ($4.81 million), lower than this year's daily average of 1.37 billion rupees.

Foreign investors were net buyers of 42.9 million rupees worth of shares, extending the year-to-date foreign inflow to 1.84 billion rupees.

Both stock and currency markets will be closed on Thursday for a Buddhist religious holiday. Normal trading will resume on Friday. 

($1 = 132.9000 Sri Lankan rupees) 

(Reporting by Shihar Aneez; Editing by Subhranshu Sahu)

CSE increases stakeholder engagement on social media

The Colombo Stock Exchange (CSE) launched its Facebook and LinkedInPages to ensure greater engagement with stakeholders through social media channels, in its endeavour to broad-base investment amongst the masses.

The Facebook Page intends on reaching retail investors and students who are eager to receive information on upcoming awareness programmes and informational snippets on investing in the Stock Market. Correspondingly, the LinkedIn page seeks to engage professionals by providing them information on the Sri Lankan Capital Market, furthermore it is seen as a medium of attracting new talent to the industry.

The Facebook and LinkedIn pages hope to provide a broader overview of the professional opportunities, educational and awareness programmes to be conducted by the CSE.

“It is vital that investment is broad-based and retail investors both within and outside of Colombo have the familiarity necessary to trade in shares. Social Media, especially Facebook, has a high rate of proliferation amongst the urban and rural demographics therefore this is an easily accessible method of reaching out to the masses,” CSE Chairman Vajira Kulatilaka said.

“We believe in attracting well trained and experienced personnel, in order to serve the interests of the Sri Lankan Capital Market and the industry as a whole” CSE CEO Rajeeva Bandaranaike said.
www.dailynews.lk

DVB total assets cross 100bn

DFCC Vardhana Bank (DVB) ended 2014 on an ‘excellent note’ which saw the Bank passing the important threshold of LKR 1Bn in profits and LKR 100 Bn in total assets. The Bank recorded a PAT of LKR 1.12 Bn for the year 2014 which is an 80% growth over 2013.

DVB’s achievement becomes more significant as 2014 was a difficult year due to challenging market conditions that prevailed throughout the year. The Banks NII grew by 7% to record LKR 3.3 Bn as at 31st December 2014. DVB did extremely well in fee income generation recording a 25% increase. Treasury operations too recorded a significant growth of 206% spurred by the two main business lines FX and fixed income securities.

DVB consistently applied the revised impairment assessment methodology implemented during the second quarter throughout 2014. The yearend cumulative allowance for impairment for loans and advances was maintained at a healthy level of 64% of the impaired loans and advances of the Bank.

This stellar performance by DVB has been achieved despite a significant increase incurred by them for personnel expenses which amounted to an increase of 18% over previous year. However, going by the financials this investment in the staff seemed to have paid rich dividend to the bank. DVB’s overall operating cost was well contained at only a 14% increase over 2013 through stringent cost management initiatives implemented by the bank.

In a year where corporate investment was lethargic and retail banking demand was sluggish, DVB has done well to record a credit growth in 2014 of 21% compared to the previous year despite the pawning portfolio of the Bank shrinking. This commendable achievement took the Bank’s loans and receivables to other customers at end of December 2014 to an all time high of LKR 65 Bn.

The Bank also recorded a significant growth of 26% in total assets to surpass the LKR 100 Bn in 2014 compared to LKR 79.8 Bn in 2013. The overall deposit base which stood at LKR 70.7 Bn as at end of December 2014 grew in value by LKR 5.6 Bn during the year, an increase of 9% compared to that of December 2013.

DVB is known as an active player in the commercial banking sphere in the country for its innovative customer solutions. The bank is set for a new phase of growth Spurred by the financial results returned.

www.island.lk

Singer Sri Lanka 2014 revenue up 16.5% to Rs. 29.7 b

Singer Sri Lanka, the country’s premier consumer durables retailer, ended the 2014 financial year on a high note, recording a 27% growth in fourth quarter revenue that helped the Group achieve Rs. 29.7 billion in annual revenue. Annual revenue grew by 16.5% in 2014, an increase driven by rising demand in key product categories.

With the exception of transportation, all other categories notched gains. The Group’s communication and digital media segment grew by 39%, while Agro, sewing products and kitchen-related products, grew by 30%, 27% and 17%, respectively. White goods grew by 15% while consumer electronics and furniture grew by 8% each.

Singer Group CEO Asoka Pieris noted that the 2014 financial year was one characterized by consolidation and recovery, following the economic downturn in 2013. Quarterly revenue growth accelerated over the course of the 2014 financial year, compared to the equivalent period in 2013. Indeed, quarterly revenue increased by 8% in the 1st quarter, 14% in the 2nd quarter, 15% in the 3rd quarter, and 27% in the 4th quarter.

The Group’s management expressed confidence that this growth trend would continue into the first quarter of 2015. Singer Sri Lanka’s net profits also recovered in 2014, rising 50% to reach Rs. 782 million for the year. The company’s net profit for 2014 improved to Rs. 464 million, an increase of 54% over the previous financial year. Singer Finance, a subsidiary company, recorded a 3% increase in revenue and a 12% growth in net profit.

Total comprehensive income for the Group grew to Rs. 891 million, an increase of 72% over the previous financial year, while the Company’s total comprehensive income grew by 92% to reach Rs. 575 million. Although the financial figures reflect an encouraging turnaround for the Group, management cautioned that both profit and total comprehensive income are still below the levels achieved in 2012.

The retail giant expanded its portfolio of brands in 2014, with Singer Sri Lanka being named a distributor for internationally-renowned brands such as Sony, Dell, Sharp, and Mitsubishi air conditioners. The Group’s multi-brand retail strategy has resonated with Sri 
Lankan customers, who appreciate its industry-best brand offering.

Indeed, Singer is the winner of many of the country’s most coveted brand accolades, including ‘People’s Brand of the Year’, ‘Youth Brand of the Year’, and ‘Best Consumer Durable Brand of the Year’. The blue chip corporate is raising the bar in many other spheres of operation as well, having been recognised as one of the island’s ‘Top Ten Corporate Citizens’ and as a ‘Great Place to Work in Sri Lanka’.

These awards have contributed to the Group’s growth momentum and its continued leadership position in the retail industry. As Singer Sri Lanka continues to improve its value proposition by enhancing its portfolio of world-class brands, products and services and strengthening its industry-best retail and service networks, the Group is confident that it will continue to raise the standard for ‘trusted excellence’ in Sri Lanka.
www.ft.lk

Sri Lankan stocks fall to 3-wk closing low on rising market interest rates

(Reuters) - Sri Lankan stocks fell to a three-week closing low on Tuesday and marked their third straight session of losses due to a rise in market interest rates.

The central bank raised yields on treasury bills between 86 basis points and 91 basis points at a weekly auction on Tuesday. It scrapped a lower repo penalty rate of 5 percent from Monday, five months after it adopted the measure to boost credit growth.

The main stock index ended 0.13 percent, or 9.48 points, down at 7,234.92, its lowest close since Feb. 9.

"There'll be a slight slowdown in the market temporally with the rise in interest rates," said Dimantha Mathew, manager, research, at First Capital Equities (pvt) Ltd.

Shares of Selinsing Plc fell 20.13 percent, while Dialog Axiata Plc dropped 1.69 percent.

Market heavyweight John Keells Holdings Plc ended 0.29 percent up and accounted for 54.8 percent of the day's turnover.

Day's turnover was 1.81 billion rupees ($13.62 million), more than this year's daily average of 1.39 billion rupees.

Foreign investors were net buyers of 234.9 million rupees worth of shares, extending the year-to-date foreign inflow to 1.8 billion rupees. 

($1 = 132.9000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)

Removal of the 5 per cent Special Standing Deposit Facility Rate

In September 2014, the Central Bank rationalised the access to the Standing Deposit Facility (SDF) of the Central Bank with a view to encourage commercial banks to utilise the substantially high amount of excess liquidity prevailing in the market to enhance credit flows to the private sector at reasonable interest rates. Consequent to the rationalisation of the SDF, overnight interest rates fell below the policy rate corridor, and the special SDF rate of 5 per cent became the effective floor for overnight money market rates. This has resulted in a faster downward adjustment in market interest rates during the last few months as most market interest rates reached historically low levels in nominal terms. 

Benefiting from lower interest rates and higher demand for bank funds, credit to the private sector revived after a setback recorded particularly in the early part of 2014. Accordingly, private sector credit growth picked up towards the latter part of 2014 recording an increase of Rs. 223.9 billion in 2014 while it increased by Rs. 76 billion during the month of December 2014 recording the highest monthly increase. By end 2014, on a year-on-year basis, private sector credit grew by 8.8 per cent. 

Given the signs of sustained increase in credit flows to the private sector, the view of the Central Bank was that restrictions placed on the access to the SDF is no longer required. Accordingly, the 5 per cent SDF rate was withdrawn with effect from 2 March 2015. The Central Bank is also of the view that removal of the special SDF rate of 5 per cent would help to stabilise overnight interest rates within the policy rate corridor of the Central Bank.

CBSL