Sri Lankan shares post near 3-wk closing low in dull trade

Reuters: Sri Lankan shares fell on Wednesday to their lowest close in nearly three weeks as concerns about rising interest rates continued to hurt investor sentiment.

The Colombo stock index ended down 0.21 percent at 6,121.43, its lowest close since Feb. 9.

Turnover was 382.2 million rupees ($2.53 million), around half of this year's daily average of 663.6 million rupees.

"The market is still holding grounds because of good (corporate) results in the last quarter and some dividend announcement," said Prashan Fernando, CEO at Acuity Stockbrokers.

Shares of Ceylon Cold Stores Plc fell 4.11 percent, while conglomerate John Keells Holdings Plc declined 0.21 percent.

Foreign investors were net buyers of 111.9 million rupees worth of shares, extending the year-to-date net foreign inflow to 599.6 million rupees worth of equities.

Yields on treasury bills have risen to a more than four-year high since October, while the central bank has kept key policy rates on hold. 

($1 = 151.2500 Sri Lankan rupees) 

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

Swadeshi Industrial Works to raise Rs. 149 m via Rights to retire part debt

Swadeshi Industrial Works Plc has announced a move to raise Rs. 149.32 million by way of a Rights Issue of one new share for every seven held.

The price at which new shares, amounting to 18,666, will be issued is Rs. 8,000 per share. The share last traded at Rs. 13,500. Net asset value per share as at 31.12.2016 was Rs. 5,107 and in the December quarter the share traded for Rs. 10,500.

Its stated capital is Rs. 1.3 million consisting of 130,667 shares.

The company said proceeds from the Rights Issue subject to shareholder and regulatory approval will be used for reducing the interest bearing loans and borrowings. As at 31 December 2016, the company had Rs. 376.5 million as a current portion of long-term loans.

The major shareholders of the company are A.M. Wijewardene (33.8%), Dr. T. Senthilverl (25%), Seedawatte Exports Ltd. (19.4%) and Sampath Bank Plc (10.5%).

www.ft.lk

Adam Investments, Adam Capital go for Rs. 1.67 b Rights

Adam Investments Plc and Adam Capital Plc yesterday announced plans to raise fresh cash via Rights Issues.

Adam Investments’ Board has resolved to raise Rs.898.55 million via a Rights Issue of 1 for 1 at Re. 1 per share. Its current stated capital is Rs. 714.5 million.

Funds raised via Rights will be to invest in subsidiaries in order of priority to enhance working capital. Adam Capital will raise Rs. 756 million via its Rights Issue of 2 for 1 at Rs. 1.50 per share. Its current stated capital is Rs. 252 million. Funds raised will be used for investments into its subsidiaries and enhance working capital.

Both issues are subject to shareholder and regulatory approval.

Young business leader Ali Asger Shabbir Gulamhusein family controls 74% stake in Adam Investments, which in turn controls 53% stake in Adam Capital. 

www.ft.lk

Sri Lanka’s C W Mackie in fruit drink JV with Denmark’s Co-Ro

ECONOMYNEXT – C W Mackie PLC, the Sri Lankan partner of Denmark’s Co-Ro A/S, has struck a joint venture deal with the Danish provider of fruit-based soft drinks, home-freeze ice-lollies and concentrates to manufacture and sell Co-Ro products.

Two firms are to be set up under the joint venture to make concentrates and ready-to-drink products marketed under the Sunquick brand, a stock exchange filing said.

The agreement “provisionally envisages an investment of Rs1.1 billion jointly,” it said.

Two firms are Sunquick Lanka (Private) Ltd in which CW Mackie will hold 49% and Co-Ro 51% and Sunquick Lanka Properties (Private) Ltd. with Co-Ro holding 49% and CW Mackie 51%.

CW Mackie now bottles and distributes Sunquick concentrated squashes in Sri Lanka under its 40-year partnership with Co-Ro.

Sri Lanka’s Vidullanka issues shares to Timex

ECONOMYNEXT - Sri Lankan mini hydro power firm Vidullanka Plc said it plans to issue new shares to Timex Garments (Pvt) Ltd. in a private placement that will partly fund the acquisition of a 6.5MW minihydro power plant in Uganda.

A stock exchange filing said Vidullanka will issues 9.1 million ordinary shares to raise Rs50 million at around Rs5.48 - the three months volume weighted average market price – with a minimum price of Rs 5 per share.

The funds are to be used as part settlement of the cost of buying Timex Bukinda Hydro (U) Ltd. which has got all approvals except a power purchase agreement for the 6.5MW Bukinda small hydro power plant.

The share issue would result in the current stated capital of Vidullanka of Rs1.27 million increasing by 3.9% and a maximum 1.34% increase in the number of shares in issue.

Sri Lanka’s eChannelling reports loss in December quarter

ECONOMYNEXT – eChannelling, Sri Lanka's first listed dotcom, reported a loss of Rs1.8 million in the December 2016 quarter compared with a profit of Rs25 million a year ago as it faced competition in its online medical appointment business.

Sales halved to Rs28 million during the period while income tax costs were sharply higher, according to interim results filed with the stock exchange.

eChannelling reported a loss per share of one cent for the December 2016 quarter. The share was last traded at Rs6.50.

The firm’s earnings per share for the nine months to 31 December 2016 were 22 cents, down from 54 cents a year ago.

September 2016 quarter net profit of eChannelling, which lists Mobitel, a unit of Sri Lanka Telecom, as its controlling shareholder, was Rs13 million, down from Rs21.8 million the year before.

The company, which pioneered online channelling of doctors, now faces competition from Doc.lk, a firm set up by Dialog, Sri Lanka's largest mobile firm, and Asiri Healthcare group.

Ceylon Tobacco unit profits up 8-pct in Dec despite volume drop

(LBO) – Profit after tax at Ceylon Tobacco, a unit of British American Tobacco, rose 8 percent to 2.0 billion rupees in the December quarter, interim accounts showed.

The firm reported earnings of 10.58 rupees per share for the fourth quarter compared to earnings of 9.79 rupees per share posted a year ago.

Gross revenue rose 4 percent in the quarter to 24.7 billion rupees and after deducting government levies, the unit reported net revenue of 7.6 billion rupees for the quarter, up 27 percent a year ago

Excise special provision tax of the government dropped 17 percent to 14.8 billion rupees while value added and other tax introduced in the quarter was 2.4 billion rupees.

Other operating expenses doubled in the quarter to 3.3 billion rupees and income tax expense closed flat at 1.4 billion rupees in the quarter.

In the 12 months to December 2016, the firm reported earnings of 67.05 rupees per share compared to earnings of 56.77 rupees per share posted a year ago on total profits of 12.6 billion rupees, up 18 percent.

Ceylon Tobacco has paid 87.4 billion rupees to the Government in the form of excise tax during the twelve months ended 31 December 2016 driven primarily by relatively stable volumes during the first 9 months of the year.

The company said the significant price hikes in the 4th quarter due to both an excise increase in October and the introduction of 15 percent VAT in November, caused volumes to halve.

“Government revenue through excise declined by 13.2 billion rupees compared to the 3rd quarter of the year,” Ceylon Tobacco said.

“It is anticipated that these price hikes will continue to impact both CTC volumes and government revenue during 2017.”

The company said as a result of the business impact, the company closed 2 leaf depots and reduced factory shifts by a third, in early 2017.

The company added that there was a significant increase in overhead expenditure in 2016 due to the obligations of key business partners and the increase in marketing investment.

“Raw material costs increased by 10 percent through the rise in imported tobacco leaf required as a consequence of continued adverse weather conditions in addition to farmers being pressured to stop cultivating tobacco.”

The Directors recommend a final dividend of 6 rupees per share for 2016 subject to shareholders approval of the AGM to be held on 25th April 2017.

The final dividend will be payable on 5th May 2017, once approved by the shareholders.

Principal operations of the Ceylon Tobacco Company are manufacturing, marketing and selling cigarettes.

The ultimate holding company of Ceylon Tobacco is British American Tobacco through British American Tobacco Holding (Sri Lanka) BV.