Sri Lankan shares steady at 7-month high; economic policy awaited

Reuters: Sri Lankan shares ended steady at over seven-month high as investors awaited the Ranil Wickremesinghe-led government to announce its economic policies after the election victory.

Wickremesinghe's centre-right United National Party (UNP) is expected to form a stable government along with President Maithripala Sirisena's centre-left Sri Lanka Freedom Party (SLFP), to help pass promised reforms.

The main stock index ended 0.08 points firmer, at 7,498.78, its highest close since Jan. 16.

"Local investors were active on hopes of a stable government," Danushka Samarasinghe, research head at Softlogic Stockbrokers, told Reuters.

A strong result for the UNP would likely help Ranil Wickremesinghe to continue as the prime minister of a centre-right government that would seek to revive stalled reforms to make the government more open and accountable.

"Improved economic policy credibility and coherence would strengthen Sri Lanka's resilience to growing investor uncertainty towards emerging Asia," Fitch said in a statement.

The day's turnover stood at 2.3 billion rupees ($17.2 million), more than double of this year's daily average of 1.14 billion rupees.

Foreign investors sold a net 61.5 million rupees worth of equities on Wednesday, extending the net foreign outflow to 1.29 billion rupees so far this year.

Shares in Bukit Daraha Plc rose 3.15 percent, while Ceylon Tobacco Co Plc rose 0.17 percent, pushing the index higher. ($1 = 133.9000 Sri Lankan rupees) (Reporting byRanga Sirilal and Shihar Aneez; Editing by Anand Basu)

Sri Lankan shares end at 7-month high on stability hopes after polls

Reuters: Sri Lankan shares closed at their highest level in seven months in a truncated session on Monday on hopes that political stability after the Aug. 17 parliamentary elections would help boost investor sentiment, brokers said.

Sri Lankans went to the polls on Monday to elect a new parliament in what amounts to a referendum on ex-president Mahinda Rajapaksa's comeback bid, with the reformist alliance that swept him from power seeking a stronger mandate.

The trading time was reduced to half from the usual five hours due to the election.

The main stock index ended up 0.4 percent at 7,492.04, the highest close since Jan. 16.

The day's turnover stood at 1.17 billion rupees ($8.74 million) on Monday, in line with this year's daily average of 1.13 billion rupees.

Foreign investors were net buyers of a net 4.79 million rupees worth of equities on Monday. But they have offloaded a net 1.08 billion rupees worth of shares so far this year.

"Heavy retail interest was there. The whole market was dominated by retail investors on the hopes of strong earnings and a stable government after the elections," said Dimantha Mathew, a research manager at First Capital Equities (Pvt) Ltd.

"We expect the market to be very positive after the elections."

Shares in Sri Lanka Telecom Plc jumped 3.59 percent, while Ceylon Theaters Plc rose 7.80 percent, pushing the index higher. 

($1 = 133.9000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Anand Basu)

Citrus Leisure increases revenue in first quarter

Citrus Leisure PLC recorded a revenue increase of over 200% in 1Q FY2016 compared to 1Q FY2015 as Waskaduwa Beach Resort contributed 100 million to the top line, accounting for 62% of total revenue.

Waskaduwa Beach Resort, the largest in the Citrus chain, began commercial operations in June 2014; the addition of its 150 rooms brought the Group's total room inventory to 240.

Despite being new on the tourism landscape, Waskaduwa recorded a satisfactory level of occupancy of 44% while Hikkaduwa achieved an impressive 62% occupancy during the quarter under review which is normally considered the off-season in the tourism calendar.

Gross profit margin improved to 69% in 1Q FY2016 from 67% in 1Q FY2015 largely due to higher GP margin achieved by Waskaduwa at 71%.

The management expects GP margin to further improve in the future with the anticipated higher level of occupancy at Waskaduwa in line with the annual seasonal increase in the expected tourist arrivals.

The room inventory of the group went up to 240 in 1Q FY2016 compared to 90 rooms in 1Q FY2015. Waskaduwa Beach Resort added 150 five star graded rooms to the portfolio.

In June 2015, the group also entered into a management contract to operate The Steuart Hotel in Colombo, a property owned by the George Steuart Group.

The management contract reflected the Group's strong commitment towards the tourism sector by adding another 50 rooms to the portfolio from 2Q FY2016.

The Steuart by Citrus will operate as a boutique business hotel offering the convenience of its prime location.

The management believes that the latest additions to its room inventory position the Group well to cater to the growing tourist arrivals. Citrus Waskaduwa and The Steuart are expected to break even in the near future in line with their growing popularity.

The overall bottom line of the Group has depleted to Rs. 128 mn, primarily due to incremental operational costs incurred by the Group's flagship 5 star hotel in Waskaduwa.

However, the property in Hikkaduwa has shown an approximately 80% increase in bottom line compared to the preceding quarter.
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MBSL demonstrates strong turnaround in Q2

Merchant Bank of Sri Lanka & Finance PLC demonstrated a turnaround in performance during the quarter ending June 30, 2015 to record a net profit of Rs 92.44 million, compared to a loss of Rs 30.26 million in the corresponding quarter of last year.

Meanwhile, the MBSL Group also posted strong recovery to achieve a net profit of Rs 95.07 million, compared to a loss of Rs 46.01 million the previous year.

The robust growth in performance is an attestation to the inherent soundness of the Group’s growth strategy. Organisation wide efforts to develop a unified operational model, priming the organisational objectives to meet the ever changing market needs and requirements synergized the whole process to create win-win options. Clear directions given by a professional board paved the way for the achievement.

During the quarter, MBSL focused on consolidating and optimising the branch network with the objective of generating positives arising from multiple business lines.

Three branches were relocated during the quarter whilst two city branches were merged. The period under review also saw the Group further widening the product portfolio, with the launch of a special leasing scheme for hybrid vehicles.

The Group generated a total income of Rs 1.32 billion during the quarter, enabling an expansion in net interest income, which grew 7.6% during the period to Rs 503.01 million. Meanwhile, Group net operating income also recorded robust growth of 24.8% during the quarter to Rs 520.66 million.
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LMD releases ‘Most Respected’ Corporate Rankings

• JKH is the most admired corporate house once again
• ComBank, MAS, Unilever and Dialog make up top five

The 11th edition of LMD’s Most Respected entities in Sri Lanka has been released, its publisher Media Services announced yesterday.

The special annual edition notes: “As in the prior year, the 11th issue of this special edition measures peer perceptions of corporate admiration – i.e. the Most Respected rankings – using the Olympic Ranking System, so Sri Lanka’s most admired organisations are being conferred gold, silver and bronze medals, as a show of their strength in the eyes of peers.”

It states that JKH “sits comfortably atop the Most Respected hall of fame for a record 10th occasion. It has 249 gold, 99 silver and 56 bronze medals to its name.

JKH’s aggregate medals tally (404) – although lower than in the prior year – is leaps and bounds ahead of second-placed Commercial Bank, which has 98 gold, 97 silver and 57 bronze. The only other corporate with more than 50 gold medals in the bag is MAS Holdings (it has 61).”

LMD’s 2015 movers and shakers are led by Hemas Holdings (up seven places to No. 11), Lanka Orix Leasing Company (LOLC) and Sri Lanka Telecom (SLT) – both five places higher, at No. 9 and No. 12 respectively, Hatton National Bank (HNB) (up two notches to 14th place) and Sampath Bank (gaining a spot to rest at No. 7).

Three new entrants grace the Most Respected Top 20 this year – People’s Leasing & Finance (at No. 15), Ceylon Biscuits (No. 17) and Central Finance (No. 18).

LMD’s Most Respected rankings are based on an exclusive survey conducted by leading research form Nielsen, of 800 working people from among the LMD 100 companies and other leading corporations in Sri Lanka. The survey was completed in April, says a spokesperson for Media Services.

He says that the special edition is now available at leading supermarkets and bookshops across the island and the main rankings appear on LMD’s website (www.LMD.lk).
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Sri Lankan shares end at 7-month high on stability hopes after polls

Reuters: Sri Lankan shares closed at their highest level in seven months in a truncated session on Monday on hopes that political stability after the Aug. 17 parliamentary elections would help boost investor sentiment, brokers said.

Sri Lankans went to the polls on Monday to elect a new parliament in what amounts to a referendum on ex-president Mahinda Rajapaksa's comeback bid, with the reformist alliance that swept him from power seeking a stronger mandate.

The trading time was reduced to half from the usual five hours due to the election.

The main stock index ended up 0.4 percent at 7,492.04, the highest close since Jan. 16.

The day's turnover stood at 1.17 billion rupees ($8.74 million) on Monday, in line with this year's daily average of 1.13 billion rupees.

Foreign investors were net buyers of a net 4.79 million rupees worth of equities on Monday. But they have offloaded a net 1.08 billion rupees worth of shares so far this year.

"Heavy retail interest was there. The whole market was dominated by retail investors on the hopes of strong earnings and a stable government after the elections," said Dimantha Mathew, a research manager at First Capital Equities (Pvt) Ltd.

"We expect the market to be very positive after the elections."

Shares in Sri Lanka Telecom Plc jumped 3.59 percent, while Ceylon Theaters Plc rose 7.80 percent, pushing the index higher. 

($1 = 133.9000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Anand Basu)

Sunshine Holdings posts Rs 314 m profit in Q1

Healthcare revenue for 1QFY16 grew 17.5% YoY, exceeding management expectations, and stood at LKR1.7bn. This represents 39.8% of Group turnover for the period.

EBIT margin for 1QFY16 contracted by 20 bps to 7.5% in 1QFY16mainly on account of bulk diagnostic sales to the Public sector, and supply side pressure from business partners.

The FMCG sector reported revenues of Rs 685m in 1QFY16, up 16.3% YoY, on the back of both volume and price growth, and the sector accounts for 16.4% of group revenue for the period. The branded tea business within FMCG sold 703 tonnes of branded tea, up 8.5% YoY, primarily driven by their largest brand ‘Watawala Tea’ - which is the number one selling Tea brand in Sri Lanka.

Sunshine Holdings reported consolidated revenues of Rs 4.2 b for the quarter ended 30 June 2015, up 4.9% YoY. Profit after tax grew 10.8% YoY to stand at Rs 162 m for 1QFY16, despite a 3.7% YoY contraction in PAT to Rs 314 m due to weak performance in the agri sector.

All segments, except forAgri contributed towards top-line growth during 1QFY16. Agri, still the biggest contributor to group revenue (40.3% of group revenue), contracted 10.4% YoY, with Healthcare close behind (39.8% of group revenue) grew17.5% YoY. Revenue contribution from FMCG increased to 16.4% of total in 1QFY16, against 14.8% during same quarter last year, and grew 16.3% YoY.
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