Sri Lanka stocks edge up from 3-week low in thin volume

(Reuters) - Sri Lanka stocks edged up on Wednesday led by financials in thin trade trading volume, and stockbrokers said the outlook remained positive due to lower interest rates.

The main stock index ended 0.08 percent, or 5.32 points, up at 6,272.76, edging up from its lowest close since May 7 hit on Tuesday.

The day's turnover was at 451.16 million rupees ($3.46 million), well below this year's daily average of 1.01 billion rupees.

The bourse saw a net foreign outflow for the first time in six sessions. Foreign investors sold a net 27.3 million rupees worth of shares on Wednesday. But they are net buyers of 1.84 billion rupees so far this year.

Stockbrokers expect the market to gain in the near future due to lower interest rates after the central bank kept key rates at multi-year lows on Tuesday for the fourth straight month, as expected.

Shares of Ceylinco Insurance PLC rose 3.94 percent to 1351 rupees a share, while Bukit Darah PLC rose 2.2 percent to 650 rupees. 

($1 = 130.4000 Sri Lanka Rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Jeremy Laurence)

Sri Lanka stocks close higher

May 28, 2014 (LBO) - Sri Lanka's stocks closed in positive directions on Wednesday despite relatively low foreign participation on the bourse, brokers said.

The Colombo benchmark All Share Price Index closed 5.32 points higher at 6,272.76 up 0.08 percent. The S&P SL20 closed 3.40 points higher at 3,450.65, up 0.10 percent.

Turnover was 451.16 million rupees, down from 1.39 billion rupees a day earlier with 71 stocks closed positive against 114 negative.

Ceylinco Insurance closed 51.20 rupees higher at 1,351.00 rupees with two off-market transactions of 64.40 million rupees changing hands at 1,400.00 rupees per share contributing 14 percent of the daily turnover.

Commercial Bank closed flat at 126.40 rupees with an off-the-floor deal of 42.30 million rupees changing hands at 126.50 rupees per share contributing 9 percent of the turnover.

George Steuart Finance closed 3.50 rupees lower at 40.30 rupees, attracting most number of trades during the day.

Foreign investors bought 71.50 million rupees worth shares while selling 98.81 million rupees worth shares.

Bukit Darah closed 14.00 rupees higher at 650.00 rupees, contributing most to the index gain.

Commercial Leasing and Finance closed 10 cents higher at 4.00 rupees and People’s Leasing and Finance closed flat at 15.70 rupees.

Dialog Axiata closed 10 cents higher at 9.90 rupees and Sri Lanka Telecom closed 30 cents lower at 45.70 rupees.

Ceylon Tobacco Company closed 5.00 rupees lower at 1,065.00 rupees and Cargills Ceylon closed 3.00 rupees lower at 145.00 rupees.

Aitken Spence closed 1.00 rupee lower at 101.00 rupees.

Textured Jersey in ‘very generous dividend payouts’

‘Textured Jersey Lanka PLC (TJL) reported a 14% year-on-year growth in net profit to Rs. 1.2bn for the year ended 31st March 2014, supported by growth in turnover. The company’s cash position has allowed TJL to maintain its trend of "very generous dividend" pay-outs with Rs. 0.80 per share being declared as the final dividend for FY2013/14.

‘This boosted the total dividend for the year to Rs. 1.30 per share representing an impressive pay-out of 74% of total net profit for the year. According to Bill Lam, chairman of Textured Jersey, the company managed another year of impressive results despite recent adverse weather conditions faced in the United States, softening retailer demand growth, according to a press release.

It adds: ‘During the year under review, sales reached Rs. 12.7bn, 16% higher than that of last year. The company maintained its gross margin for FY2013/14 at 11% levels, and was able to achieve a 15% year-on-year growth in gross profit to Rs. 1.5bn. The gross profit for 4Q FY2013/14 also increased 14% year-on-year reaching Rs. 403mn. The same trend continued at the operating profit level, with FY2013/14 margins maintained around 8%, with Rs. 1.1bn reported as the annual operating profit, up 10% year-on-year. This annual operating profit was achieved on the back of a strong quarterly profit of Rs. 313mn for 4Q FY2013/14 up 9% year-on-year.

‘TJL’s strong cash generation ability has enabled it to maintain a near debt-free balance sheet and a healthy cash position throughout the period. The company was able to record Rs. 91mn in finance income for FY2013/14, representing a substantial 15% growth year-on-year. As per the results released, the company had no borrowings and a strong cash position of Rs. 2.1bn as at 31st March 2014.

‘Net profit for 4Q FY2013/14 was Rs. 352mn, representing a growth of 9% year-on-year. Net profit for the year ended 31st March 2014 displayed a strong 14% year-on-year growth pushing up the net profit to Rs. 1.2bn.

‘The 10-12% capacity added through the modernisation and expansion project will be utilized during 1Q FY2014/15. In addition, with the revised timelines, the multi-fuel boiler plant should be in operation in 2Q FY2014/15. According to a statement released to the CSE by Mr. Lam, "The envisaged cost savings from the multi-fuel boiler plant and the added capacity places TJL on a strong footing for future profit growth".
www.island.lk

Aitken Spence – RIU Hotels of Spain tie-up to build 500-room luxury resort

During the period, 2013/2014 Aitken Spence Hotel Holdings PLC, the Aitken Spence Group’s hotel owning strategic business unit, entered into a shareholders’ agreement with RIU Hotels of Spain to build a 500-room luxury resort in Ahungalla, costing approximately USD 100 million. The construction of the hotel is expected to commence during the second half of the financial year 2014/15, a press release said.

It adds: ‘Annual revenue for the Maritime Cargo Logistics sector increased 15.3% to Rs. 7.3 billion whilst profits before tax for the sector increase by 26% to Rs. 709 million. Entry into a strategic partnership in Fiji for port management services through the acquisition of a 51% shareholding in Ports Terminal Ltd - the first- ever public-private partnership overseas by a Sri Lankan company recorded to date, was a highlight for the year.

‘Blue chip conglomerate Aitken Spence PLC reported its annual unaudited financial results 2013/14 to the Colombo Stock Exchange on Monday, reporting profit attributable to shareholders of Rs 3.7 billion, an increase of 11.7% over the previous year’s profit of Rs 3.3 billion. Profit before tax was Rs 5.4 billion and profit after tax was Rs.4.5, recording growth of 7.6% and 5.5% respectively. The diversified Group’s annual revenue declined marginally to Rs. 36.6 billion whilst earnings per share improved by 11.7% to Rs. 9.04 for the financial year.

The Group’s bottom line was driven primarily by the Tourism sector. Sri Lanka welcomed over 1.27 million tourists during the year 2013, with a target of 1.5 million set for 2014.The boom in the tourism industry was reflected in the Group’s performance with the revenue of the Tourism sector for the financial year growing by 9.4 % to Rs. 16.9 billion and profit before tax surging by 26.3 % to Rs. 4.4 billion.

Services sector reported a revenue of Rs. 819.6 million for the financial year under consideration which was a growth of 11.5 %, and a profit before tax of Rs 180.5 million, a growth of 10.2% compared to the previous year. Strategic Investments sector reported a year on year decrease of 16.1% in revenue to Rs. 15.3 billion, while the profit before tax dropped by 81.1% to Rs. 159.8 million for the financial year primarily due to the Aitken Spence power plants in Matara and Horana not being operational during the reporting period consequent to the cessation of the Power Purchase Agreements. Further, a provision for impairment of approximately Rs. 400 million was made in respect of the remaining assets of these two companies, which dragged down the profits of the sector.

The company disposed of the Horana power plant during the financial year, while the 100 MW power plant at Embilipitiya remained operational, albeit with lower generation due to excessive rainfall during the first nine months of the financial year. During the period under review the Group inaugurated a land mark project by investing in a luxury retirement homes complex that will comprise of 140 villas and associated high-end facilities located at a 30 acre site in Negombo. The project aims to attract Sri Lankans living overseas who wish to return to their homeland as well as foreign nationals who wish to retire and live in Sri Lanka.
www.island.lk

Nomura, Thomson Reuters partner SL capital market

By Waruni Paranagamage
Japan’s Nomura Research Institute, a subsidiary of Nomura Holdings, announced its partnership with Thomson Reuters by introducing, for the first time in the country, an information solution that will provide up-to-the-minute information for the Sri Lankan capital market.

Although Thomson Reuters has been an active participant in the local capital market for over 20 years, the entrance of Nomura marks the first time that a Japanese financial services technology firm has sought to enter Sri Lanka. Both companies will be looking to provide Sri Lankan stockbrokers with a world-leading order management system and broker back office solution.

Addressing the launch event held at the Taj Samudra Hotel on Monday, Nomura Research Institute Financial Technologies India Vice President/Head of Business Development Arun Mitra emphasised: “While our solution is one that has evolved over 10 years in the world’s major financial markets supporting high volume real-time back office STP, Nomura Research Institute is committed to bringing this advanced technology to emerging markets in an affordable ‘pay-as-they-go’ software-as-a-service mode.”

Mitra also said that the company was very aware of how important it was for Nomura to guarantee its commitment to the local broking community by ‘localising’ its offerings through adapting its global best practices to local requirements.

Mitra added: “This is our mantra for our approach in Mongolia, Vietnam and now Sri Lanka, and in Thomson Reuters we have a likeminded partner who is also committed to the same long term vision for the Sri Lankan capital market.”

Nomura Research Institute Group Manager Tohru Watanabe, Omnesys Technologies Managing Director Shrikant Pandit, Thomson Reuters Head of Solutions Burgess Ghyara, Omnesys Technologies Product Manager – Algorithmic Trading Prabhakar Kadva and Nomura Research Institute Principal Business Analyst Partha Chowdhary also addressed the gathering.

Nomura Holdings is Japan’s largest asset manager and investment bank. Nomura Research Institute provides solutions to clients across a broad range of industrial IT solutions for the distribution, manufacturing and service industries as well as the healthcare business.

It supports eight of the top 10 Japanese equity brokerage firms by trading volume, 16 of the top 20 global asset management firms, 80% of Japanese mutual funds, and 60% of all order flows through the Tokyo Stock Exchange.

Having been active in Sri Lanka for over 20 years, Thomson Reuters was the first company to report Sri Lankan financial news to the world. The team is focused on the opportunity to reshape the Sri Lankan transactions market, by bringing in global best practises and connecting Sri Lanka on the global equities map.

The Thomson Reuters Autex trade route, which is one of the largest global FIX based order routing networks, will provide Sri Lankan brokers with simplified trading connectivity and will also expedite broker-client on-boarding by providing a plug-in to an extensive global ecosystem of EMS/OMS partners.

Currently more than 200 of the top firms in India use the TR system, in addition to various exchanges that offer TR OMNESYS NEST as a front office service to their customers.
The software as a service model is available to all members of partnering national stock exchanges and covers the entire trading community. Over 650 brokers log in through the co-located hosted solution, which is the same model proposed for Sri Lanka.
www.ft.lk