Sri Lanka stocks gain to near 8-week high on Keells

(Reuters) - The Sri Lankan share index rose to a near eight-week high on Tuesday, led by top conglomerate John Keells Holdings Plc amid foreign buying in the island nation's risky assets.

The main stock index ended 0.39 percent, or 23.78 points, firmer at 6,072.16, its highest close since Feb. 13.

"Lower interest rate is driving the market," a stockbroker said on condition of anonymity.

The stock market is gradually attracting investors who are looking for higher returns as the deposit rates in banks and financial companies are not beyond 6-6.5 percent, the broker said.

Analysts, however, said foreign investor sentiment is yet to recover after the United Nations on March 27 announced it would probe alleged war crimes by the island nation.

The bourse has suffered 5.16 billion rupees in foreign outflows in the eight sessions since March 28 due to the exit of a large foreign fund.

The day's turnover was 645.1 million rupees ($4.93 million) turnover, well below this year's daily average of 995.6 million rupees.

The bourse saw net foreign inflows of 93.6 million rupees, though foreigners have net sold 9.29 billion rupees worth of shares so far this year.

Shares in John Keells Holdings rose 1.88 percent to 238.80 rupees a share while Commercial Leasing and Finance PLC gained 5.26 percent to 4.00 rupees.

The United Nations has launched an inquiry into war crimes allegedly committed by both Sri Lankan state forces and Tamil rebels during a conflict that ended in 2009, saying the government had failed to investigate properly.

Analysts said the outcome of the resolution was expected, but investors' sentiment has been dented over concerns it could hurt the country's economy.

Several potential buyers of risky assets are waiting for a clear direction. 

($1 = 130.7300 Sri Lanka Rupees) 

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

Sri Lanka shares close up 0.4-pct

Apr 08, 2014 (LBO) - Sri Lanka's shares close up 0.39 percent higher with diversified John Keells Holdings gaining amid favorable bond market conditions, brokers said.

The Colombo benchmark All Share Price Index closed 23.78 points higher at 6,072.16 up 0.39 percent. The S&P SL20 closed 5.27 points higher at 3,326.70, up 0.16 percent.

Turnover was 645.14 million rupees, up from 537.61 million rupees a day earlier with 104 stocks close positive against 52 negative.

John Keells Holdings closed 4.40 rupees higher at 238.80 rupees with an off market transaction of 96.62 million rupees contributing to 15 percent of the daily turnover while contributing most to the index gain.

JKH’s W0022 warrants closed 1.30 rupees higher at 69.30 rupees and its W0023 warrants closed 2.10 rupees higher at 73.20 rupees.

All off market transactions accounted for 23 percent of the turnover.

East West Properties closed 70 cents higher at 13.00 rupees and Colombo Land and Development Company closed 3.90 rupees higher at 41.90 rupees, attracting most number of trades during the day.

Foreign investors bought 250.85 million rupees worth shares while selling 157.28 million rupees worth shares.

Commercial Leasing and Finance closed 20 cents higher at 4.00 rupees and LOLC closed 1.90 rupees higher at 77.00 rupees.

Asian Hotels and Properties closed 2.00 rupees higher at 65.00 rupees and HNB closed 2.80 rupees lower at 150.20 rupees.

Carson Cumberbatch closed 4.00 rupees lower at 361.00 rupees and SLT closed 30 cents lower at 48.90 rupees.

Sri Lanka sells US$500mn bonds at 5.125-pct; oversubscribed 8.3 times

Apr 08, 2014 (LBO) - Sri Lanka has sold a 500 million dollar 5-year bond to yield 5.125 percent a year, lower than a 6.0 percent paid in January, with the offer oversubscribed 8.3 times.

"This tighter yield reflects the continued confidence that the international investors have placed in the sovereign bond issuance of Sri Lanka," Sri Lanka's Central Bank which manages debt sales for the Treasury said in a statement.

US investors bought 46 percent of the bonds, Asia 32 percent and Europe 22 percent.

The bond drew strong orders with 4 billion US dollars of orders being topped shortly after US markets opened, financial market sources said.

Citigroup, HSBC and Standard Chartered managed the sale.

Analysts say Sri Lanka investors in Sri Lanka's bonds were now familiar with the issuer and it helped draw strong interest, with several new investors coming in. Orders of 4.25 billion US dollars had come from 187 accounts.

Fund managers took 81 percent of, banks 13 percent, private banks 3 percent and insurers 3 percent.

Sri Lankan bonds have now also become more liquid in secondary markets with active trading, which analysts say is also a point in favour.

The bond was initially offered at a price guidance of around 5.5 percent but was narrowed later to 5.125 - 5.25 percent levels amid strong orders.

A 5-year bond sold in January was trading around 4.8 to 4.9 percent in the run up to the latest sale.

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http://slbiznews.blogspot.co.uk/2014/04/sri-lanka-launches-sovereign-bond-price.html

Sri Lanka's Hemas Holdings billion rupees debt offer to open April 23

April 08, 2014 (LBO) - A billion rupee listed debt offer by Sri Lanka's Hemas Holdings will open on April 23, the Colombo Stock Exchange said.

Hemas will offer 5 million 100 rupee debentures and another 5 million debentures if the first tranche is oversubscribed.

Fitch has rated the debt 'A+(lka)'.

Related News:

http://www.cse.lk/cmt/upload_cse_announcements/3831396930484_.pdf

Sri Lanka's Citrus Leisure opens second resort; eyes two more

Apr 08, 2014 (LBO) - Citrus Leisure Plc, which opened a 150-room resort in Waskaduwa, on Sri Lanka's South Western coast is planning another two resorts on the Western and Southern coasts, officials said.

Citrus Hikkaduwa, also in the South Western Coast is already in operation.

Sri Lanka's President Mahinda Rajapaksa opened the 2.2 billion rupee resort in Waskaduwa Sunday as tourist arrivals rose 24.8 percent in the first quarter of 2014 from a year earlier, continuing a boom seen since the end of a civil war in 2009.

"The leisure industry is taking a lead in transforming Sri Lanka," Prema Cooray, Chairman of Citrus Leisure said.

"We are nation blessed with multiple resources which when harnessed, can offer a destination unmatched in attentions.

"Achieving targets we have seen an increase number of tourists flowing in to the country from India and China which is good."

The company is planning to build another resort with 150 rooms and 32 self service villas in Kalpitiya north of Colombo.

Last year the project was put on hold until the Waskaduwa property was completed, and a joint venture partner was sought, the firm had said earlier.

The firm also wants to open a resort in Hambantota in the South of the country.

"We have already purchased the land in Kalpitiya and in the process of finalizing the plan. And for Hambantota we have requested a land in the tourism zone and waiting for their reply," Hemantha Ratnayake, Director Operations of Citrus Leisure said.

"Kalpitiya will be our next development. We have got the approval from the tourist board and we have drawn up the plan also.

"It will be a mixed development .The land is divided in to two by a river and the hotel rooms will face the ocean whereas villas will be facing the river."

The Kalpitiya resort will require an investment of around 2.5 billion rupees, Ratnayake said.

He said a 50-room hotel was being planned for Hambantota.

The newly opened resort in Waskaduwa built on an 8-acre land, is rated 5-star, offering 140 superior rooms, 6 deluxe rooms, 1 luxury suite and 1 presidential suite.

The hotel hopes to sell rooms at around 150 to 250 US dollars at introductory prices.

The hotel has 250 employees and says in-house training will help keep service levels high as demand for tourism sector workers pick up as more properties open and emerging new destinations require specialized new skills.

"About 40 percent of the staff is from in and around the area within 30 kilometers radar and we have recruited top management from all over the island," Ratnayake said.

"I believe there won’t be any human resource issue for us as long as we continue training."

Sri Lanka's tourist arrivals rose 17.5 percent to 133,048 in March 2014 from a year earlier with strong arrivals from China, as the country's exchange rate strengthened, inflation fell and living standards rose.

"With that we have a challenge with our staff," Ratnayake said. "Because we were trained to serve the Europe for years, our people know their likes, dislikes, customs, eating patterns and so on.

"But now we have seen an increase number of Chinese tourists coming into Sri Lanka. So when it’s come to a Chinese tourist we are quite dim. So our staff should get trained and used to cater into that market as well."

In the first quarter arrivals from China were up 127 percent to 28,798.

Central, Wayamba businesses keen on CSE listing

Members of the business community within the Central and Wayamba Province showed an avid interest in the possibility of raising capital through listing on the Capital Market, at a forum held recently to inform entrepreneurs on the benefits of going public.

The issuer relations forum, held on the April 05 at the Earl’s Regency in Kandy, was jointly organized by the Securities and Exchange Commission of Sri Lanka (SEC) in association with the Colombo Stock Exchange (CSE) and saw the participation of over 50 businessmen from the region. This was the 2nd Issuer forum organized by the SEC and CSE in regions outside Colombo. The 1st was held in Jaffna recently.

The programme began with a clear elucidation on the benefits of listing both equity and debt through presentations made by the CEO of the CSE Rajeeva Bandaranaike and a presentation on "Debt Finance via Debentures as an alternative to Bank Finance" presented by Chairman of Wealth Lanka Management (Pvt) Ltd Mr. Mangala Boyagoda.

A lively panel discussion which followed these presentations illuminated those present on the vital areas of the listing process while falsifying a number of myths and fears that participants had about the listing process. The panel comprised of the Legal Officer at the Department of Registrar of Companies Heshan Mathugamage, CEO (CSE) Rajeeva Bandaranaike, Director Corporate Affairs (SEC) Harshana Suriyapperuma, Head of Listings & Corporate Affairs (CSE) Mrs. Priyana Gunesekera, Director Finance (Central Finance Plc) G.S.N. Peries and Chairman (Wealth Lanka Management (Pvt) Ltd) Mangala Boyagoda. 

During the discussion a number of key questions were posed by the audience to facilitate a lively and informative dialogue.

"There are a number of myths about the drawbacks of listing; chief among them is the idea that being a listed entity will result in the loss of control. However this is certainly not the case because as a listed company on the Diri Savi Board you need to list only 10 per-cent of your total shares and on the Main Board the percentage is only 25 per-cent. It is also vital to remember that there is no loss of confidentiality or competitive advantage by listing," Officer-in-Charge of the SEC Dhammika Perera said in his opening remarks. "For those who fear losing ownership of their business corporate debt is a prudent option. 

You are able to tap into an alternate source of funding without the dilution of ownership," Chairman of Wealth Lanka Management (Pvt) Ltd Mangala Boyagoda added.

"By listing your company you enhance the visibility of your business entity, are able to ensure good corporate governance and be transparent in your dealings. Further by separating ownership from management you are able to attract the best talent in the market and retain them," CEO (CSE) Rajeeva Bandaranaike said.

 -SEC/ CSE release

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