Sri Lankan shares hit over 3-month high; turnover up

May 2 (Reuters) - Sri Lankan shares rose to a more than three-month high on Friday in high turnover as investors bought large caps as sentiment was boosted by low interest rates.

A lower interest rate regime helped the market, with turnover hitting a three-week high, though foreign investors sold the island nation's risky assets.

The country's main stock index rose 0.4 percent, or 24.77 points, to 6,248.44, its highest close since Jan. 29.

The market gained 4.28 percent in April as some retail investors started buying risky assets in the face of low interest rates.

"Investors are positive over the low interest rates," said a stockbroker.

Lower interest rates have helped the market gain in the past few weeks and we have seen activity across the board, stockbrokers said.

Last week the central bank kept policy rates steady at multi-year lows.

The day's turnover was 1.31 billion rupees ($10.03 million), its highest since April 9 and more than this year's daily average of 961 million rupees.

Shares of Expolanka Holdings Plc rose 3.88 percent to 10.70 rupees, while Carson Cumberbatch Plc rose 8.03 percent to 405.10 rupees. Ceylon Tobacco Co advanced 0.98 percent to 1,110.00 rupees.

The Sri Lankan parliament on last week approved two projects for luxury resorts, worth up to $1,250 million, by John Keells, that will include hotels and shopping malls, and by Australian gaming tycoon James Packer's Crown Ltd.

Shares in Keells fell 0.42 percent to 237 rupees. Vallibel One, which ended 4.71 percent at 20.00 rupees, got parliamentary approval on April 24 to invest $300 million in an integrated luxury tourist resort in the island nation's proposed exclusive gaming zone.

Offshore investors were net sellers of 217 million rupees worth of stocks on Friday, extending the net foreign selling so far this year to 7.41 billion rupees. 

($1 = 130.6400 Sri Lanka Rupees) 

(Reporting by Ranga Sirilal)

Sri Lanka stocks close up 0.4-pct

May 02, 2014 (LBO) - Sri Lanka's stocks close 0.40 percent higher Friday with tobacco and diversified stocks gaining amid strong foreign selling, brokers said.

The Colombo benchmark All Share Price Index closed 24.77 points higher at 6,248.44 up 0.40 percent. The S&P SL20 closed 17.62 points higher at 3,435.81, up 0.52 percent.

Turnover was 1.31 billion rupees, up from 1.23 billion rupees last Wednesday with 131 stocks close positive against 76 negative.

Expolanka Holdings closed 40 cents higher at 10.70 rupees with market transactions of 195.61 million rupees contributing 15 percent of the turnover.

All off market deals accounted for 7 percent of the daily turnover.

George Steuart Finance closed 4.50 rupees lower at 60.00 rupees, attracting most number of trades.

Softlogic Holdings closed 50 cents higher at 12.10 rupees and Vallibel One closed 90 cents higher at 20.00 rupees, trading heavily on the market.

Foreign investors bought 116.61 million rupees worth shares while selling 333.62 million rupees worth shares.

Carson Cumberbatch closed 30.10 rupees higher at 405.10 rupees and Ceylon Tobacco Company closed 10.80 rupees higher at 1,110.00 rupees, contributing most to the index gain.

Bukit Darah closed 13.00 rupees higher at 600.00 rupees.

John Keells Hotels closed 60 cents higher at 13.80 rupees and John Keells Holdings closed 1.00 rupee lower at 237.00 rupees.

JKH’s W0022 warrants closed 60 cents lower at 66.10 rupees and its W0023 warrants closed 40 cents lower at 72.00 rupees.

Ceylinco Insurance closed 89.50 rupees lower at 1,270.50 rupees and Lion Brewery Ceylon closed 13.50 rupees lower at 420.50 rupees.

Finance sector consolidation not an ad-hoc move: Cabraal

Consolidation of the banking and non-banking sectors is not an ad-hoc arrangement but is part of an overall strategy and is being done at the most suitable time for the country, Sri Lanka’s Central Bank Governor, Ajith Nivard Cabraal said.

He pointed out that certain Latin American countries such as Argentina, Venezuela etc. had to bring consolidation up at a time when they had no choice but to do so, since they were under stress.

“But certain other countries like Singapore addressed it at a time when it was suitable for them and we are doing the same thing,” he said delivering the keynote at the MTI Banking Forum held recently on the subject of financial sector consolidation.

The Governor further said that the Banks and Non-Banking Financial Institutions (NBFIs) needed some improvement for a long time but the time was not right.

“Its not something that you can do every day, there has to be a time and a place. Year 2014 seemed to be the ideal period of time for us to introduce a new improvement into our economy, through financial sector consolidation,” he added.

Cabraal noted that as far as Sri Lanka is concerned, it is not under any stress now and it’s a good time for the country to introduce these changes so that it can position the financial sector for the future. He added that by 2025, Sri Lanka will probably have a USD 10,000 per capita income.

“We can’t have problems that would surface at that time. We need to resolve them today when they are at a much lower level. If we don’t address those now, we’ll have to address it at the time when it becomes bigger in 2020,” he said.

Meanwhile, the Governor explained that financial sector consolidation is similar to the various economic and policy measures taken by the Central Bank over the last few years, such as measures to curb currency depreciation, manage debt, having a flexible rupee, the IMF programmes etc.

Cabraal noted various instances since 2006 where Sri Lanka had taken measures necessary for the economy and country as a whole at that particular point of time.

The 2006 treasury bills and bonds issue to foreigners which opened at 5 percent and was increased to 10 percent in 2007, the US$ 500 million international sovereign bond, measures taken in 2008 to deal with inflation, stabilization of the currency and debt management, eradication of terrorism in 2009, various policy changes in 2011 and 2012 in respect of currency depreciation, inflation and sustainability have been such instances.

He further said, as a result of these initiatives the country now has achieved growth of 7.5 percent on average for 5 years, interest structure developed to a fairly high capacity, inflation in single digits, unemployment down to 4.2 percent, poverty down to 6.2 percent, fiscal deficit at 5.9 percent and per capita income at US$ 3,280.

“Still not a fantastic figure but much better than many countries in the region and the US$ 1, 240 we had in 2003. These are major changes from where we were and there is still room for improvement. We can now say to a great extent that we have a balanced economy and Sri Lanka has been put on to a sustainable path.”

Cabraal opined that these measures taken since 2006 gives the assurance that Sri Lanka has had the courage, patience and endurance to do what it has set out to do.

“This consolidation will be another added to the list of achievements as far as our country is concerned to bring it to a solid footing. We can now look to the next wave of development in our country with a lot more confidence,” he said.

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South Korea's Hyundai Engineering & Construction wins US$ 339 million contract to build a resort in Sri Lanka

May 02, Seoul: South Korea's Hyundai Engineering & Construction Co Ltd said on Friday that it had won a US$339.30 million order to build an integrated resort in Sri Lanka for privately owned Waterfront Properties Ltd.

The company had announced this in a regulatory filing, a Reuters report said.

The firm said in a regulatory filing the contract was expected to be completed in March 2018.

Sri Lanka's conglomerate John Keells Holdings, which owns the Waterfront Properties, said Monday the project site for the mixed resort, has been handed over to the contractor and the construction has commenced following the approval received from the parliament.

JKH plans to build a luxury multi-function resort at a cost of over US$ 650 million in the heart of Colombo in the land owned and occupied by the JKH subsidiaries, Ceylon Cold Stores (CCS), John Keells PLC, John Keells Properties and Waterfront Properties in Slave Island in Colombo.
www.colombopage.com

Orient Garments extends losses

Ceylon FT: Orient Garments PLC extended losses to Rs 330.3 million for the year ended 31 March 2014, up 1,170% from a Rs 26 million loss a year ago, unaudited interim financial results filed with the stock exchange showed.

Revenue fell 33.33% to Rs 2.6 billion, down from Rs 3.9 billion a year ago.

Net finance costs rose to Rs 82.5 million during the year, up 13.95% from Rs 72.4 million a year ago. During the year, the company disposed its entire 43.75% stake in Priority Garments for Rs 10 million.

Also during the year, 85.18% of voting shares of Orient Garments PLC was acquired by Adam Investments Ltd and Dr. Senthiverl. The management was taken-over from PCH Holdings by Adam Investments on 8 January 2014.
www.ceylontoday.lk