Sri Lanka shares end down on capital gains tax jitters

Reuters: Sri Lankan shares fell for an eighth straight session on Wednesday as sentiment continued to be lacklustre following a minister's comments a day earlier on the imposition of capital gains tax on equities.

Sri Lanka will impose a capital gains tax on profits from equities, a senior government minister said late on Monday, as the government tries to shore up its finances to meet conditions for an IMF loan.

The benchmark Colombo stock index ended 0.26 percent down at 6,290.89.

"Activity level was very low today after yesterday's capital gain tax news. Investors took a much cautious stance. Investors are waiting to know about the new central bank governor," said a stockbroker, asking not to be identified.

"Despite the regional markets being up, the market is down on local worries."

Sri Lankan President Maithripala Sirisena on Wednesday said he would appoint a new central bank governor within hours, a week after incumbent Arjuna Mahendran said he would not seek an extension of his term until a parliamentary committee clears his name of allegations against him.

Turnover stood at 356 million rupees ($2.44 million), nearly half of this year's daily average of around 746.3 million rupees.

European and Asian stock markets built on a recovery from the shattering aftermath of last week's Brexit vote as investors wagered central banks would ultimately ride to the rescue with more stimulus.

Global uncertainty after Britain's decision to leave the EU also weighed on the market with continued foreign selling.

Overseas funds offloaded 6.15 billion rupees worth of equities so far this year, but they have been net buyers of 28.2 million rupees worth of shares on Wednesday, recording the first net inflow in the last five sessions.

Shares in CT Holdings Plc fell 3.85 percent while biggest listed lender Commercial Bank of Ceylon Plc fell 0.57 percent.

($1 = 146.2000 Sri Lankan rupees) 

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

HNB Grameen PAT tops Rs. 1 billion

Pioneers in microfinance HNB Grameen today announced a stellar performance for the financial year ended 2015/16 with all key performance indicators showing strong year-on-year growth.

The company’s key operating results recorded the highest ever profitability in the history of the company, achieving a profit after tax of Rs. 1.11 billion, a 108% increase over the previous year.

The company’s profit before tax also grew exponentially by 122% to Rs. 1.82 billion from Rs. 819 million earned last year. The total revenue of the company recorded a 58% growth, while net interest income also mirrored this trend recording a 66% increase.

These results were possible through the adoption of several key strategies which included growing the company’s savings portfolio, increasing advances and tenaciously managing its non-performing assets ratio (NPA), focusing on fee based income growth, and new product diversification including the introduction of leasing services and loan products for small sector enterprises.

The results also reflect the company’s focus on prudential cost management, supported by a strong digitization effort, including a comprehensive IT platform, a new core banking system, and introduction of POS machines. These enabled the company to deliver greater operational efficiencies.

The company’s total assets recorded a 43% growth to Rs. 14.38 Billion, whilst loans and advances rose by 60%. The company’s deposit base grew by 38% to cross Rs. 10 Billion and other income increased by 52% while savings recorded a growth of 56% for the year.

Speaking about the performance of the company for the financial year 2015/16, Jonathan Alles, Chairman of HNB Grameen and Managing Director/CEO of Hatton National Bank PLC said, “We are extremely delighted to announce the outstanding performance of HNB Grameen during the year 2015/16. With the synergies formed through the association with HNB, we have ‘grown together stronger’ and we comprehend that the ‘possibilities are bigger’ for us in the future. As such, we remain focused and committed to continue our journey towards reaching the pinnacle.”

Commenting on the performance B. M. D. C. Prabhath, the Managing Director/CEO of HNB Grameen said, “One of the key priorities for the financial year was to top the Rs. 1 billion mark and we had employed several effective strategies to deliver this remarkable financial performance. I would like to thank our Chairman, Deputy Chairman and the Board of Directors for their guidance and support and our staff for their unstinted commitment which enabled us to achieve this performance. I would also like to humbly thank our customers and other stakeholders who made this a reality. Our journey does not end here and the company will strive to achieve greater heights in the future.”
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Sri Lanka shares end down; capital gains tax, Brexit weigh

Reuters: Sri Lankan shares ended weaker on Tuesday, falling for the seventh straight session, as comments from a senior minister on the imposition of capital gains tax on equities dented sentiment while fresh woes after Brexit also weighed.

Sri Lanka intends to impose a capital gains tax on profits from equities, a senior government minister said late on Monday, as the government attempts to shore up its finances to qualify for an IMF loan.

The benchmark Colombo stock index ended 0.17 percent down at 6,307.40, after having risen early in the session.

"Market was gaining momentum after yesterday's drop. But once the news of capital gains tax on stocks broke, the index started to fall," said a stockbroker, asking not to be identified.

Brokers said global uncertainty after Britain's decision to leave the EU also weighed on the local market with continued foreign selling.

Overseas funds offloaded 9.7 million rupees ($65,785) worth of equities on Tuesday, extending the year-to-date net foreign outflow to 6.18 billion rupees worth of shares.

"With the news of capital gain tax, existing high interest rates, and other local negativity, the market will continue to be negative until we see some positive news," said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

Global stocks rose for the first time in three days and sterling and the euro climbed on Tuesday, as investors made a rush for Brexit-bashed assets hammered by some of the biggest falls since the 2008 collapse of Lehman Brothers.

Turnover stood at 640.3 million rupees, less than this year's daily average of around 746.3 million rupees.

Shares in Ceylon Tobacco Company Plc fell 3.50 percent while Lion Brewery Plc fell 3.72 percent. 

($1 = 147.4500 Sri Lankan rupees) 

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

Sri Lanka’s Lion Brewery falls below minimum public holding

(LBO) – The minimum public holding of Sri Lanka’s Lion Brewery has fallen below the stipulated float making it obligatory for the company to make an announcement.

As per the minimum public holding rules, there are two ways to get listed on the main board of the Colombo Stock Exchange.

One option is that a listed entity on the main board should maintain a minimum public holding of 20 percent of its total listed ordinary voting shares in the hands of a minimum of 750 public shareholders.

Second option is that a market capitalization of 5 billion rupees of its public holding in the hands of a minimum of 500 public shareholders while maintaining a minimum public holding of 10 percent.

On 17th May 2016, the Public Holding of Lion Brewery which falls under the above second option has fallen below the required market capitalization of 5 billion rupees.

The company’s market capitalization as at 24th June 2016 was 4.39 billion rupees and its public holding percentage was 13.92 percent represented by 1,174 public shareholders.

Issuing a non-compliance announcement the company said the number of shares held in the hands of the public shareholders as at 24th June 2016 was 11,134,825 ordinary shares.

Sri Lanka’s securities regulator however is reconsidering the minimum public float rule as the intention of introducing such rule was not met.

Few companies have already de-listed and several others have transferred to the secondary Diri Savi Board following the introduction of new rules.

Sri Lanka rejects bids for dollar bond auction

ECONOMYNEXT - Sri Lanka has rejected bids for a 250 million dollar auction of Sri Lanka Development Bond styled securities issued mostly to qualified resident investors, at an auction which closed on July 27, amid uncertainty in global markets.

The debt office said it had received 198.59 million dollars of bids for 1 year 7 month bonds, (no fixed rate bids), 12.21 million dollars of floating rate bids for 2 year 7 month bonds.

For 4-year bonds 0.12 million dollars of bids for fixed rate bonds and 2.30 million dollar of bids for floating rate bids were received.

Sri Lanka sells lower than offered volumes of bonds, yields drop

ECONOMYNEXT - Sri Lanka has sold lower than offered volumes 23.9 billion rupees of 2 to 8 year bonds at Monday's auction at around market rates, data from the state debt office showed, ahead of a coupon maturity on July 01. 

At an auction on June 27, 1.8 billion rupees of 2-year 10 month bonds maturing on 01.05.2019 were sold at 11.55 percent after offering 7.0 billion rupees, lower than the 11.90 levels the in the market. 

The debt office sold 12.14 billion rupees of 4-year bonds maturing on 15.12.2020 at an average yield of 11.93 percent, around the market rate of 12.00 percent. 12.1 billion rupees of bonds were sold after offering 7.0 billion rupees. S

ix year bonds maturing on 01.01.2022 sold to yield 12.03 percent. The debt office offered 7.0 billion rupees and sold a sharply lower 2.55 billion rupees. 

Nine year bonds maturing on 15.03.2025 were sold to yield 12.63 percent, a little higher than the market yield of around 12.45 percent for similar maturities. 

The debt office sold 7.4 billion rupees of bonds, after offering 6.0 billion rupees. The bond have to be settled on July 01. An estimated coupon maturity of over 40 billion rupees is due on July 01. 

Sri Lanka based Abans Finance to raise Rs276mn for share placement

ECONOMYNEXT - Sri Lanka's Abans Finance Plc, a licensed non-bank lender said it would sell 11 million share to a private investment company to raise 276 million rupees and boost its capital.

Ironwood Investment Holdings (Pvt) Ltd, a Colombo-based company will buy 11.067 million shares at 25 rupees each in a private placement, the Abans Finance said in a stock exchange filing.

Abans Finance now had 44.40 million shares in issue and a state capital of 567 million rupees.

The decision by the Board, is subject to shareholder and stock exchange approval.