Sri Lankan shares fall to over 2-wk closing low on foreign selling

COLOMBO, Feb 6 (Reuters) - Sri Lankan shares fell on Thursday to a more than two-week closing low as foreign investors sold the most equities in over two years. 

The main stock index fell 0.12 percent, or 7.13 points, to 6,168.50, its lowest closing level since Jan. 21. 

Foreign investors sold net 2.96 billion rupees worth of shares, the highest since Sept. 7, 2011 and reversing the year-to-date foreign inflow to a net 1.57 billion rupees outflow. 

"The market is down on foreign selling as a part of sell-off in emerging markets and it was absorbed by local investors. But how sustainable it will be is the question," said a stockbroker. 

Foreign investors bought 22.88 billion rupees worth of stocks last year. Shares of conglomerate John Keells Holdings PLC fell 1.38 percent to 229.00 rupees, while top mobile phone operator Dialog Axiata fell 1.09 percent to 9.10 rupees. 

Foreign investors sold net 9.8 million and 10 million shares in Keells and Dialog, respectively. 

They also sold 5.6 million shares in top listed lender Commercial Bank of Ceylon PLC, which rose 2.16 percent to 123.00 rupees. Keells said in a disclosure to the exchange after market hours that it had divested its 24.6 percent stake in unlisted Central Hospitals Limited for 1.59 billion rupees with a capital gain of 662 million rupees.

Analysts said investors have been waiting for directions from December-quarter earnings and an upcoming UNHRC session in March where Sri Lanka is facing a US-sponsored resolution for alleged human rights violations. 

Some stockbrokers said investors will shrug off political risks from renewed pressure by the United States to bring a fresh resolution against Sri Lanka at the UNHRC meeting in March, because the market had been expecting the worst. 

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

The index has risen 4.32 percent so far this year, following a 4.8 percent gain in 2013. It fell in the previous two years. 

The day's turnover was 3.75 billion rupees, well above last year's daily average of about 828.4 million rupees. 

($1 = 130.6350 Sri Lanka rupees) 

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

Commercial Bank to pump up investment banking business

Commercial Bank of Ceylon has signalled its intentions to sharpen its focus on the sphere of investment banking, with the relaunch and renaming of its Corporate Finance Unit as ‘Commercial Bank Investment Banking’ to reflect the broader dimensions of the unit.

Commercial Bank Investment Banking will leverage t he status of Commercial Bank as the largest private bank in the country to offer potential issuers of listed securities in equity and debt forms, a comprehensive geographical reach for distribution of informational and documentary material such as prospectuses and application forms, to a large proportion of the potential investing public, Commercial Bank Assistant General Manager Corporate and Investment Banking Naveen Sooriyarachchi said.

“The extensive and broad customer relationships forged by the bank over its long history facilitate successful marketing of equity and debt issues. These strengths enable Commercial Bank Investment Banking to synthesise investment and commercial banking activities of the bank and function as managers and bankers to the issue of securities offerings,” he said.

One of the biggest strengths of Commercial Bank Investment Banking, Sooriyarachchi explained, is the fact that it is supported by the immense investment capability of Commercial Bank.

“Besides structuring debt issues for our clients, we have the financial strength to invest substantially in such instruments, as is proven by our investments in debentures in the concluded financial year,” he pointed out.

Commercial Bank Investment Banking has a dedicated team of experienced officers and is seeking to create some new innovations in the market in order to carve out a distinctive niche for itself, he disclosed.

“As a start, we have transitioned from the Corporate Finance Unit to Commercial Bank Investment Banking, the name change reflecting and indicating the greater scope of what we are trying to achieve,” Sooriyarachchi added.

Commercial Bank Investment Banking is now fully geared to offer a wide spectrum of fund-based and fee-based services, including financial instrument structures such as securitisations, project loans, syndicated term loans and margin trading, along with securities such as custodian services and escrow services and structuring and management of equity and debt issues.
http://www.dailymirror.lk/business/other/42726-commercial-bank-to-pump-up-investment-banking-business-.html

Sri Lanka shares end lower

Feb 06, 2014 (LBO) – Sri Lanka shares closed weaker Thursday with tobacco and index heavy stocks losing ground amid strong foreign selling, brokers said.

The Colombo benchmark All Share Price Index closed 7.13 points lower at 6,168.50, down 0.12 percent. The S&P SL20 closed 0.95 points higher at 3,383.77, up 0.03 percent.

Turnover was 3.74 billion rupees, up from 1.16 billion rupees a day earlier, with stocks of 116 firms closing in the red against 73 gainers.

JKH topped the turnover contribution with massive 2,324.5 million rupees of three off market transactions contributing to 62 percent of the turnover.

The aggregate value of off market deals accounted for 83 percent of the daily market turnover.

Nation Lanka Finance closed 50 cents lower at 9.00 rupees, attracting most number of trades during the day.

Foreigners bought 205 million rupees worth shares while selling 3,163 million rupees of shares.

JKH closed 3.20 rupees lower at 229.00 rupees and Ceylon Tobacco Company closed 11.20 rupees lower at 1,265.00 rupees, contributing most to the index drop.

JKH’s W0022 warrants closed 1.10 rupees higher at 71.10 rupees and its W0023 warrants closed 60 cents lower at 74.70 rupees.

Carson Cumberbatch ended 4.80 rupees lower at 342.20 rupees and Dialog ended 10 cents lower at 9.10 rupees.

Sri Lanka Telecom ended 1.60 rupees higher at 37.70 rupees and Commercial Bank closed 2.60 rupees higher at 123.00 rupees.

Distilleries closed 3.90 rupees higher at 215.00 rupees and Cargills Ceylon closed 60 cents higher at 149.60 rupees.

Nestle Lanka ended 10.00 rupees lower at 2,170.00 rupees and Bukit Darah ended 1.50 rupees lower at 610.50 rupees.

Haycarb reports 3Q PBT of Rs.752 Million under challenging market conditions

Tourism arrivals up 32.6% as promotions pay off

By Mario Andree

Ceylon FT: After successfully surpassing last year's tourist arrival target, the country saw a 32.6% increase in arrivals for the first month of this year, provisional data by Sri Lanka Tourism Development Authority showed.

The country surpassed last year's tourism target after revising the calculation methodology, the country received 1,274,593 arrivals last year after the data revision, which otherwise would have shown at least a 25,000 shortfall for last year's target.

Processed data through the new calculation methodology the country had received 146,575, up 32.6% from 110,543 a year earlier.

Western Europe led the arrivals board followed by South Asia and East Asia in January.

The promotional activities, which were heavily criticized, carried out by Sri Lanka 
Tourism Promotions Bureau seems to have paid off with the number of arrivals from their highly focused markets appearing to have increased considerably. China, Russia and India have shown positive growth.

Sri Lanka hopes to attract more than 1.5 million arrivals this year on its journey to gain more than 2.5 million arrivals by 2016.

The kick start in January has been favourable for the country, as a 30% or more growth is required to achieve this year's and following years' targets.

Tourist arrivals from North America in the first month of this year increased 22.4% to 6,909 from 5,644 a year ago; arrivals from USA increased 31.5% to 3,839 from 2,920 a year ago; while arrivals from Latin America and the Caribbean increased 53.2% to 386 from 252.

Arrivals for Western Europe, the highest contributor to Sri Lankan tourism growth, increased 17.9% to 46,301 from 39,283 with arrivals from UK leading the board with 12,896 arrivals, up 13.6% from 11,350, while arrivals from Eastern Europe increased 63.6% to 24,837 from 15,183, with arrivals from Russia leading the board with 10,700 arrivals, up 91.6% from 5,586.

Arrivals from Middle East (West Asia) increased 9.7% to 6,842 from 6,235 with Saudi Arabia contributing the highest with 2,283 arrivals, up 0.4% from 2,274, while arrivals from Africa increased 52.2% to 875 from 575.

Arrivals from East Asia increased 95.6% to 25,823 from 13,200 a year ago, with arrivals from China which grew 300% during the month contributed 10,779 to arrivals, while arrivals from South Asia 14.6% to 28,392 from 24,774 with India contributing the highest number of arrivals 17,886, up 5.6% from 16,938.

Arrivals from Australasia increased 15.1% to 6,210 from 5,397.
www.ceylontoday.lk

Lanka Walltiles profits up

Lanka Walltiles Plc reported a group net profit of Rs 588 million for the nine month period ended 31 December 2013, a 5.5 % year on year gain, interim financial results showed.

Group revenue of Rs 10,126 million, showed a 15% revenue increase as compared to the same period last year. 

Tiles and Associated items made up 66 %,.. while plantation products made up 17.6% of the group's revenue.

The net profits included Rs 50 million from disposal of investment property. 

The company has now disposed of Rs 80 million worth of investment properties which appeared on its Balance Sheet at 31 March 2013.

The group earned Rs 287 million from Finance Income, of which 159 million came in the current quarter. But the company experienced increases in Distribution, Administration and Finance costs.

The company has a stated capital of Rs 787 million, consisting of 54.6 million shares. Reserves amounted to Rs 1,903 million as at 31 December 2013.

The shares traded between a high of Rs 60 and a low of Rs 52.10 during the 3 months ended 31 December 2013.

Ceylon Ceramics Plc is the major shareholder with a 62% shareholding. The ultimate parent of the company, is Valibel One Plc. (JK)

www.ceylontoday.lk

Nation Lanka Finance strikes Rs. 1.4 b equity deal with GEM

In a major breakthrough for continued success, Nation Lanka Finance Plc said it has entered into an agreement for Rs. 1.4 billion in equity (shares and warrantswith the Global Emerging Markets Group (GEM).

The agreement is with GEM Global Yield Fund LLC SCS, an investment fund of GEM, which is an alternative investment group that handles a diverse set of invest vehicles across the world.

GEM Global Yield Fund LLC SCS will invest in a private placement of new shares to be issued coupled with warrants totalling approximately Rs. 1.4 billion, not exceeding 29.9% of the issued shares of National Lanka Finance Plc subsequent to the said issue.

The issue of new shares by way of a private placement and warrants will be subject to the Company obtaining shareholders and regulatory approval.

At present the company has around 250 million shares in issue and net asset per share is Rs. 1.17. It has assets worth Rs. 4.3 billion as at end September 2013, up from Rs. 3.6 billion a year earlier. Liabilities amounted to Rs. 4 billion, up from Rs. 3.15 billion.

The company in the first half of FY14 posted a profit of Rs. 4.5 million, as against a loss of Rs. 110 million a year earlier. However it has retained loss of Rs. 1.62 billion whilst total equity was Rs. 293.4 million.

Access Equities Ltd. owns a 34% stake in Nation Lanka Finance, Nawaloka Construction has 7% and J. Rudra holds 7.6%. The Board comprises Chairman Jayantha Dharmadasa and Director Asanga Seneviratne.

National Lanka said further details of the private placement and warrants would be released shortly.

NLF is a Public Limited Liability Company incorporated in Sri Lanka on 15 July 1987 under the Companies Act No. 17 of 1982 and re-registered under the Companies Act No. 07 0f 2007. The company is also a finance company approved and regulated by the Central Bank of Sri Lanka.

With 23 branches throughout Sri Lanka during the past 25 years NLF says it has built its reputation on strong connections with local communities; a deepening understanding of sustainability is a commitment to a broader range of stakeholders and interests.
www.ft.lk