Sri Lanka stocks down despite foreign inflows

(Reuters) - Sri Lankan shares fell for a second straight session on Tuesday despite foreign inflows as a proposed United Nations resolution, which may have an impact on the country's economy, dented sentiment, brokers said.

Analysts said most investors were waiting for direction ahead of voting on the resolution later this month and to assess the impact it would have on the economy and risky assets.

The main stock index fell 0.22 percent, or 13.04 points to 5,944.57.

Shares of top conglomerate John Keells Holdings PLC fell 2 percent to 225.00 rupees.

Foreign investors bought a net 69.2 million rupees worth of shares on Tuesday, extending the net foreign inflow during the last five sessions to 141 million rupees.

However, Sri Lanka has seen net selling worth 5.29 billion rupees in the last 22 sessions as some offshore funds exited, while net outflows so far in 2014 stood at 3.9 billion rupees, after net inflows of 22.88 billion rupees last year.

Sri Lanka last week hit back at a report by the U.N. human rights chief, questioning the independence of the human rights office of the U.N. after the United States asked it to investigate violations by the Sri Lankan government.

The day's turnover was 804.5 million rupees ($6.16 million), less than this year's daily average of about 980.3 million rupees.

($1 = 130.5450 Sri Lanka rupees) 

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

Sri Lanka stocks down 0.2-pct, rupee stronger

Mar 11, 2014 (LBO) - Sri Lanka's stocks close 0.22 percent lower Tuesday with index heavy John Keells Holdings losing ground and the rupee was allowed to appreciate slightly by authorities, brokers and dealers said.

The Colombo benchmark All Share Price Index closed 13.04 points lower at 5,944.57 down 0.22 percent. The S&P SL20 closed 12.17 points lower at 3,240.12, down 0.37 percent.

Turnover was 804.56 million rupees, up from 304.30 million rupees a day earlier with 42 stocks close positive against 122 negative.

Foreign investors bought 201.59 million rupees worth shares while selling 132.35 million rupees of shares.

In forex markets the rupee was allowed to appreciate 05 cents by authorities to 130.50/55 to the US dollar in the spot market Tuesday.

State banks which usually act for the Central Bank was on the buying side, preventing a sharper appreciation of the currency. In late trading the rupee was quoted around 130.53/60 to the US dollar amid higher import demand dealers said.

The Central Bank also bought most of the proceeds of a billion US dollar bond in January, preventing the appreciation of the currency.

The policy rate gap between Sri Lanka and its de facto anchor currency the US dollar is wide enough to easily keep the currency stable, analysts say, as long as exchange and monetary policies do not contradict each other.

Meanwhile in equity markets United Motors Lanka closed 1.90 rupees lower at 124.00 rupees with an off market transaction of 468.92 million rupees contributing to 58 percent of the turnover.

John Keell Holdings closed 2.00 rupees lower at 225.00 rupees contributing most to the index drop and attracting most number of trades during the day.

JKH’s W0022 warrants closed 1.70 rupees lower at 62.00 rupees and its W0023 warrants closed 2.40 rupees lower at 65.50 rupees.

Ceylon Cold Stores closed 8.90 rupees lower at 139.10 rupees and Bukit Darah closed 7.00 rupees lower at 538.00 rupees.

Lion Brewery Ceylon closed 14.00 rupees lower at 386.00 rupees.

Ceylon Tobacco Company closed 21.00 rupees higher at 1,141.00 rupees and Nestle Lanka closed 40.00 rupees higher at 2,040.00 rupees.

Lanka Orix Leasing Company closed 1.70 rupees higher at 76.90 rupees and HNB closed 90 cents higher at 154.00 rupees.

SLT closed 60 cents higher at 44.70 rupees and Dialog Axiata closed 10 cents lower at 9.00 rupees.

Sri Lanka Lee Hedges in US$9mn office complex

Mar 11, 2015 (LBO) - Lee Hedges Plc, a unit of Sri Lanka's Pioneer group of companies will build a 1.2 billion rupee, 15-floor office complex, the state investment promotion agency said.

The building will be in a 3 acre plot in Kollupitiya, an upmarket suburb of Colombo, the Board of Investment of Sri Lanka said. The BOI gives tax breaks for large investments.

The building will have a colonial façade. Its architects are Design Consortium, a Colombo-based firm.

It will have 112,000 square feet of office space, three floor of parking.

The Pioneer group chaired by S R Vamathevan has built several apartment complexes, the BOI said.

The project is implemented through Lee Hedges Investments Ltd, a unit of Lee Hedges Plc which is in the pioneer group.

Sri Lanka graphite mine asks for industry consultations on proposed laws

Mar 11, 2014 (LBO) - Bogala Graphite Lanka Plc, a unit of AMG Mining AG of Germany has asked for the industry to be consulted before new regulations are imposed and capital expenditure has been curtailed.

The firm said Sri Lanka's Geological Survey and Mines Bureau, the industry regulator, has informed the mining industry that the related ministry is change regulations.

"We trust the relevant authorities will consult with us prior to promulgating new regulations," chief executive officer Amila Jayasinghe said.

"We on our part would be in a position to contribute positively towards formulation of regulations considering that the Company has a history of 150 years in mining in Sri Lanka.

Sri Lankan authorities have previously said that more 'value addition' is expected from domestic raw materials including minerals.

Already rubber and tea producers are being taxed and being given lower than the market prices available to producers in other countries if they export in raw form.

Meanwhile Bogala Graphite Chairman Vijaya Malalasekara said the firm was continuing to focus on cost reductions, productivity improvement and process changes.

"The process improvements that have been carried out should enable us to cater to the high end graphite market," he said.

"However, we are monitoring closely the regulatory changes in that are being proposed. We earnestly hope that the authorities concerned will consult us as we have been in this industry for the last 150 years.

"Regulations, we believe should be done in consultation with parties who could be affected.

Bogala Graphite had sought clarifications from the ministry.

"Pending response of the Ministry, our capital expenditure plans have been temporarily reduced," Jayasinghe said.

The graphite industry has been previously expropriated from the people by the elected ruling class in a European style exercise shortly after the island gained independence from the British.

Bogala Graphite itself was privatized in the 1990s control later went to a specialist mining firm.

There has been strong foreign investor interest, especially in Graphite following the end of a civil war in 2009.

Union Bank profits down 79.5%

Ceylon FT: Union Bank of Colombo PLC (UBC) profits fell 79.56% from a year ago to Rs 99.06 million in 2013 as the bank continues to invest in infrastructure and focus on servicing small and medium enterprises (SMEs) with foreign investments sought to boost its corporate portfolio.

Interest income grew 21% to Rs 4.4 billion and interest expenses grew 39.97% to Rs 3.12 billion leading to an 8.8% dip in net interest income to Rs 1.28 billion. Credit loss expenses grew 306.5% to Rs 292.4 million.

“Our focus on SMEs will continue because we strongly believe that growth does lie in this segment of business and this focus is a national responsibility to us as it is one that gives us the opportunity to partner the state in developing a crucial conduit in its development agenda. However, we are a small bank and it is vital that we identify our customer base in line with our capabilities,” UBC Chairman Alexis Lovell told shareholders in the bank’s 2013 annual report.

“We have continued to grow our SME and Retail customer base, which now accounts....for 60% of the business, thereby aligning with the Bank’s vision of being a bank of choice for SMEs. We are working on an astute mix to infuse the right balance.

“We realise the inherent challenges in the corporate customer base which accounts for 40% of the business currently, primarily because being a small bank, our cost of borrowing is high and as would be prudent, the corporate sector pursues better rates from us. Introducing massive capital infusion would be the solution in managing this challenge,

which leads us to the options of either obtaining this capital from our existing shareholders or introducing a global brand as an investor. Given our strategic plans, it is rational for UBC to pursue the option of a global investor, to invest in a progressive bank like ours. With this capital infusion, cost of borrowing will naturally reduce and we can be a firm contender in gaining the best corporates into our customer base,” Lovell said.

The bank’s deposit base increased 22.5% to Rs 28.3 billion as falling gold prices and sluggish credit demand dampened the bank’s performance.
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