Value of Nation Lanka Finance appreciated with listing of subsidiary

Charith Amarasekara

'The recently oversubscribed public offer of Millennium Housing Developers Ltd. (MHDL) has led its parent company Nation Lanka Finance PLC (NLF) to increase the net value of NLF by Rs.400 million and to experience a capital appreciation despite diluting its stake in MHDL to 68% from previous 77%. Market analysts identify the public offer as a prudent decision taken to increase the financial flexibility on both the holding company and its subsidiary - NLF and MHDL in terms of meeting future development goals and to support the current operations, a press release says.

'A part of the funds raised through the public offer will help MHDL to cater to the growing demand for quality houses in valued residential areas offered at attractive prices. NLF Chief Executive Officer Charith Amarasekara, elaborating on the objectives of the issue and its success said: "There are plans to launch five key housing projects in the Greater Colombo area, each consisting 150 housing units. In addition to this, MHDL expects to expand the ongoing three projects in the Urban Range into seven projects. MHDL is also looking at increasing its Urban Range – Gated housing projects into two large scale housing projects and seven urban range 40 – 50 housing unit projects. Most of these projects will be completed before 2017, the release adds.

"MHDL is a key subsidiary of ours where we held controlling stake. But with the successful completion of IPO, our shareholding was reduced to 68%, a strategic move, allowing the public to invest. MHDL incorporated in 1998 has a vibrant history. The company was the pioneers in mega township projects in Sri Lanka including the Millennium City in Athurugiriya. In 2012 MHDL entered into urban and semi development projects, launched millennium urban range in Maharagama & Piliyandala, launched the project in Seeduwa, and launched the Millennium Terrace project. MHDL has recorded Rs.98 million in net profits during the last financial year and well on its way to secure Rs.120 million this financial year. MHDL will continue as a strong subsidiary of NLF continuing to support our future plans," he added.

http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=96952

Sri Lanka shares rise on foreign, retail buying

COLOMBO, Jan 31 (Reuters) - Sri Lankan shares gained on Friday, helped by foreign buying in blue chips and retail buying in mid caps on earning hopes after bellwether John Keells Holdings posted strong December-quarter earnings. 

The main stock index gained 0.33 percent, or 20.82 points, to 6,248.08, hovering near its seven-month high hit on Jan. 24. 

"Retail buying is coming slowly into the market and retailers are buying mid caps as the interest rates are coming down. 

Foreigners bought some blue chips," a stockbroker said on condition of anonymity. 

Shares in Asiri Hospital Holdings Plc rose 8.38 percent to 20.70 rupees, while Aitken Spence gained 3.30 percent to 103.40 rupees. 

Foreign investors were net buyers of 208.8 million rupees ($1.60 million) worth of shares on Friday extending the year to date net foreign inflow to 1.03 billion rupees. 

They bought 22.88 billion rupees of stocks last year. 

Stockbrokers said retail and institutional investors were active in the market after interest rates in treasury bills eased at a weekly auction on Wednesday to multi-year lows, making fixed-income assets unattractive. 

The index has been in an overbought region since Jan. 7, Thomson Reuters data shows. 

It has risen 5.67 percent so far this year, following a 4.8 percent gain in 2013, after having fallen in the previous two years. 

The day's turnover was 1.34 billion rupees, more than last year's daily average of about 828.4 million rupees. 

($1 = 130.6750 Sri Lanka rupees) 

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

Sri Lanka’s ‘The Finance’ to separate finance and real estate businesses

Sri Lanka’s ‘The Finance Company PLC’ says it has decided to separate the finance and real estate businesses, so there will be substantial growth in both sectors.

The company says the latest move comes as a part of its decisions to concentrate on key areas of the firm’s business.

Already the firm has a separate arm for its education business.

Earlier in the week, the company announced that discussions are underway to merge the firm with an another finance sector firm, but said no final decision has been taken yet on the proposed move.

The entity believes the latest move to separate its finance and real estate business will no doubt facilitate the policy expressed by the Central Bank and enable the firm to source investor/s to merge on an individual basis or as a group.
www.news360.lk

Sri Lanka stocks close up 0.3-pct

Jan 31, 2014 (LBO) – Sri Lanka stocks close higher Friday with healthcare and beverage firms gaining amid improved US growth numbers, brokers said.

The Colombo benchmark All Share Price Index closed 20.82 points higher at 6,248.08, up 0.33 percent. The S&P SL20 closed 1.62 points lower at 3,442.94, down 0.05 percent.

Turnover was 1.33 billion rupees, up from 808.33 million rupees a day earlier, with stocks of 79 firms closing in the red against 116 gainers.

Brown and Company closed 50 cents lower at 91.00 rupees with an off market transaction of 89.15 million rupees contributing to 6.7 percent of the turnover.

The aggregate value of all off market deals accounted for 17 percent of the daily market turnover.

Commercial Credit closed 1.50 rupees higher at 17.60 rupees and Trade Finance closed 1.40 rupees higher at 19.70 rupees, attracting most number of trades during the day.

Foreigners bought 429 million rupees worth shares while selling 220 million rupees of shares.

Asiri Hospital Holdings closed 1.60 rupees higher at 20.70 rupees and Nestle Lanka ended 31.60 rupees higher at 2,181.60 rupees, contributing most to the index gain.

Aitken Spence closed 3.30 rupees higher at 103.40 rupees and JKH closed flat at 240.00 rupees.

JKH’s W0022 warrants closed 1.20 rupees lower at 74.10 rupees and its W0023 warrants closed 1.80 rupees lower at 78.10 rupees.

Ceylon Tobacco Company closed 12.10 rupees lower at 1,287.90 rupees and Distilleries closed 1.00 rupee lower at 210.00 rupees.

Dialog closed 30 cents lower at 9.20 rupees and LOLC closed flat at 74.50 rupees.

Cargills Ceylon closed 3.80 rupees higher at 153.90 rupees and Carson Cumberbatch ended 20 cents lower at 345.00 rupees.

Bukit Darah ended 2.20 rupees lower at 612.60 rupees and Commercial Bank closed flat at 127.00 rupees.

The Finance Company ended flat at 13.40 rupees with the company looking forward to separate it’s financing and real estate business.

Lanka Walltiles closed 1.00 rupee lower at 68.00 rupees despite its interim accounts recording 203.05 million rupees of profit for the third quarter.

Earnings per share of the tiles manufacturer have increased from 4.75 rupees to 5.77 rupees along with a 21.6 percent growth in its 9 months profits over the previous year.

Lanka Tiles closed 80 cents higher at 82.80 rupees after its provisional accounts reporting 196.89 million rupees of profit for the third quarter, a 22.2 percent increase against the previous year.

Sri Lanka inflation at 4.4-pct in January 2014

Jan 31, 2014 (LBO) - Sri Lanka's consumer prices rose 4.4 percent in the 12-months to January 2014, down from 4.7 percent in December, the state statistics office said.

But the Colombo Consumer Price index rose 0.6 percent to 177.5 points in the month with transport and communications costs rising though the food index fell 0.9 percent.

Sri Lanka's inflation has been moderate with a stable exchange rate and weak bank loan growth after a credit bubble burst in 2011 and 2012 in a balance of payments crisis.

Analysts say inflation would have been lower if the Central Bank had allowed the rupee to appreciate in the wake of weak credit growth after the credit bubble burst.

But external inflation usually generated by reserve currency central banks like the Federal Reserve has also started to moderate and if Fed tightens or normalizes monetary policy, an appreciating dollar can help reduce prices.

Amaya Leisure profits down 4.86%

Ceylon FT: Amaya Leisure PLC reported a net profit of Rs 228.25 million for the nine months ended December 2013, down 4.86% from a year ago, interim financial results showed. Revenue grew 12.53% to Rs 807.16 million.

Administrative expenses grew 12.49% to Rs 261.45 million and finance expenses grew 47.8% to 13.63 million.

The company saw revenue grow 19% year-on-year to Rs 305 million during the December quarter and net profit grew 28% to Rs 107.2 million.

Hayleys PLC held a 40.32% stake in the firm as at the balance sheet date.

The company operates seven luxury resorts and spas.

www.ceylontoday.lk

Hunas falls profits down

Ceylon FT: Hunas Falls Hotels PLC reported a net profit of Rs 12.5 million for the nine-month period ending 31 December 2013, down 31% from a year ago, interim financial results showed.

Revenue increased 8% year-on-year to Rs 113.4 million.

Finance charges increased by 700% to Rs 16 million, administration expenses grew 15% to Rs 54.9 million and marketing expenses grew 24% to Rs 12.98 million.

Earnings per share fell to Rs 2.23 as at end December 2013, down from Rs 3.24 a year ago.

The shares hit a high of Rs 55 and a low of Rs 44.10 during the nine-month period.

The share currently trades at Rs 48.00. (JK)

www.ceylontoday.lk

US-registered firm to invest Rs. 1.68 b in Commercial Credit for 25% stake

Commercial Credit and Finance (COCR) yesterday announced that the Board of Directors has approved the investment of Rs. 1.68 billion in the company by way of a private placement of shares at Rs. 21 per ordinary voting share.

US Delaware incorporated Creation Investments Sri Lanka LLC will be the company to which shares are to be allotted. The move has been approved by the Central Bank and the Securities and Exchange Commission but subject to shareholder consent.

The purpose of the issue is to meet the future capital adequacy requirements and for its future investment activities.

The maximum number of shares to be issued is 80 million voting shares (25% stake eventually) via two tranches. The first will be 48 million shares for a consideration of Rs. 1.008 billion and the second tranche will amount to 32 million shares for a value of Rs. 672 million, before March 2015.

Major shareholder of Commercial Credit and Finance is BG Investments Ltd with a 78% stake whilst Mrs. Vagdevi Fernando holds 7%. Company has 238 million shares in issue at present. Share price closed at Rs. 16.10 whilst Net Asset Per Share is around Rs. 8.

www.ft.lk