Sri Lanka stocks slip from near 3-year high on profit-taking

(Reuters) - Sri Lankan stocks fell on Friday to end an eight-session winning streak as investors took profits in shares of large-caps, while foreigners also sold in an overbought market.

The main stock index finished lower 0.42 percent, or 29.24 points, at 6,943.85, edging down from its highest close in nearly three years hit on Thursday.

The index has gained 17.4 percent so far this year.

"It's a bit of profit-taking in blue-chips and a correction, since the market is struggling to pass the 7,000 mark we will see selling pressure for a while," said Dimantha Mathew, manager, Research, at First Capital Equities (Pvt) Ltd.

The bourse saw net foreign outflows of 893.8 million rupees ($6.9 million) on Friday, but foreign investors have been net buyers of 11.78 billion rupees worth of shares so far this year.

Turnover, boosted by block deals in John Keells Holdings Plc , hit 2.94 billion rupees, more than double this year's daily average of 1.13 billion rupees.

Conglomerate John Keells, which accounted for 59.8 percent of the day's turnover and saw 4.4 million shares being sold by foreigners, fell 0.38 percent to 238 rupees a share.

Earlier in the day, the central bank held key policy rates at multi-year lows for the seventh straight month.

Union Bank of Colombo Plc fell 9.87 percent to 21 rupees a day after the bank said it had agreed to sell a 70 percent stake to a subsidiary of TPG Capital Management LP for $117 million.

Ceylon Tobacco Co Plc, which led the fall in the overall index, fell 0.91 percent to 1,184.90 rupees, while Carson Cumberbatch Plc fell 1.04 percent to 455 rupees. 

(1 US dollar = 130.1000 Sri Lankan rupee) 

(Reporting by Ranga Sirilal and Shihar Aneez)

Sri Lanka Commercial Credit profits up 184 pct

Aug 15, 2014 (LBO) – Sri Lanka’s Commercial Credit and Finance said profits in the first quarter ending June up 184 percent to 490 million rupees, benefiting from the results earn by the company in financial year ended 31 March 2014.

“The last financial year was a significant milestone in our calendar and we are building on that momentum this year as well”, Roshan Egodage, Chief Executive of Commercial Credit was quoted in a media release by the company.

“We have strived to build positive relationships with the local community around each location we operate in, building a greater level of trust and respect for each other,”

“We have to build on these relationships further to sustain the momentum through the year and into the next.”

The company recorded a profit of one billion rupees in March.

Net interest income rose 86 percent in the quarter to 1,652 million rupees this year.

Total operating income grew to 1,760 million rupees from 974 million rupees while total assets rose to 35,866 million compared to 19,859 million rupees a year earlier.

Sri Lanka stocks close down 0.4-pct

Aug 15, 2014 (LBO) - Sri Lanka's stocks closed 0.42 percent lower on Friday with tobacco stocks losing ground amid strong foreign selling, brokers said.

The Colombo benchmark All Share Price Index closed 29.24 points lower at 6,943.85, down 0.42percent. The S&P SL20 closed 7.79 points lower at 3,820.98, down 0.20 percent.

Turnover was 2.93 billion rupees, up from 2.01 billion rupees a day earlier with 59 stocks closed positive against 154 negative.

John Keells Holdings closed 90 cents lower at 238.00 rupees with eleven off-market transactions of 1.75 billion rupees changing hands at 235.00 rupees per share contributing 60 percent of the daily turnover.

JKH’s W0022 warrants closed 80 cents lower at 70.20 rupees and its W0023 warrants closed 3.10 rupees lower at 76.90 rupees.

The aggregate value of all off-the-floor deals represented 69 percent of the turnover.

Union Bank of Colombo closed 2.30 rupees lower at 21.00 rupees, attracting most number of trades during the day.

Foreign investors bought 694.60 million rupees worth shares while selling 1.59 billion rupees worth shares.

Ceylon Tobacco Company closed 10.90 rupees lower at 1,184.90 rupees, contributing most to the index drop.

Ceylon Beverage Holdings closed 89.50 rupees higher at 800.00 rupees.

Sri Lanka maintains policy rates, as economic growth likely to remain on target in 2014

Aug 15, Colombo: Sri Lanka's Central Bank has decided to maintain current policy interest rates as low inflation environment continued and the real economic growth is likely to remain approximately on target in 2014.

Accordingly, the Standing Deposit Facility Rate (Repurchase Rate) would remain at 6.50 percent while the Standing Lending Facility Rate (Reverse repurchase Rate) remains at 8.50 percent, the Central Bank announced Friday.

Inflation continued to remain in low single digit levels, although it increased to 3.6 percent on a year-on-year basis in July 2014 from 2.8 percent in the previous month reflecting higher prices of certain food items caused by adverse weather conditions.

However, the Central Bank says the outlook for inflation remains benign although supply disturbances triggered by adverse weather conditions could cause temporary price fluctuations.

Market interest rates have continued to adjust downwards in response to monetary policy measures taken by the Central Bank in the recent past.

The monetary authority said the external sector strengthened further in recent months supported by timely and appropriate policies of the Central Bank and the Government.

Favorable developments in exports observed from June 2013 are expected to continue during the remainder of 2014.

Higher inflows from workers' remittances and from tourism along with the lower trade deficit have positively impacted the external current account and led the country's gross official reserves to surpass the historic milestone of US$ 9 billion, and currently standing at around US$ 9.2 billion, the Central Bank said.

In the meantime, the Central Bank has purchased over US$ 1 billion from the domestic foreign exchange market on a net basis so far during the year.Aug 15, Colombo: Sri Lanka's Central Bank has decided to maintain current policy interest rates as low inflation environment continued and the real economic growth is likely to remain approximately on target in 2014.

Accordingly, the Standing Deposit Facility Rate (Repurchase Rate) would remain at 6.50 percent while the Standing Lending Facility Rate (Reverse repurchase Rate) remains at 8.50 percent, the Central Bank announced Friday.

Inflation continued to remain in low single digit levels, although it increased to 3.6 percent on a year-on-year basis in July 2014 from 2.8 percent in the previous month reflecting higher prices of certain food items caused by adverse weather conditions.

However, the Central Bank says the outlook for inflation remains benign although supply disturbances triggered by adverse weather conditions could cause temporary price fluctuations.

Market interest rates have continued to adjust downwards in response to monetary policy measures taken by the Central Bank in the recent past.

The monetary authority said the external sector strengthened further in recent months supported by timely and appropriate policies of the Central Bank and the Government.

Favorable developments in exports observed from June 2013 are expected to continue during the remainder of 2014.

Higher inflows from workers' remittances and from tourism along with the lower trade deficit have positively impacted the external current account and led the country's gross official reserves to surpass the historic milestone of US$ 9 billion, and currently standing at around US$ 9.2 billion, the Central Bank said.

In the meantime, the Central Bank has purchased over US$ 1 billion from the domestic foreign exchange market on a net basis so far during the year.

www.colombopage.com

Richard Pieris ups PAT by 106% in Q1 of 2014/2015

The Richard Pieris Group ended its first quarter on a strong note reporting a growth of 106% in its net profit when compared to the corresponding period of the previous year. The three months ended June 30, 2014 evidenced a steady performance in all its major sectors with a reported quarterly turnover of Rs.8.8bn, which is a 7% growth over and above last year. The reported profits represent business profits, and do not include any gains of a capital nature.

The Retail Sector of the Group comprises of Arpico Super centres and the network of Arpico outlets scattered islandwide. The sector had a dynamic first quarter as usual and the main focal point was the opening of its 16th large format retail outlet in Panadura.

The Plastics and Distribution Sector gained momentum during the period ended June 30, 2014 after a very quiet 2013/14. Several process improvements were made in the Furniture manufacturing business where the product quality and portfolio have been further enhanced. Several marketing activities were carried out to boost mattress sales which has yielded better margins and sales growth. During the period under review there was a significant increase in the sales volumes of water tanks and the sector also introduced Hybrid Water tanks into the market. The sales of rigifoam was adversely affected due to adverse weather conditions.

The Plantation Sector of the Group experienced a successful first quarter with a significant increase in operating profits.

The Richard Pieris Group owns three of the largest plantation companies in the country with diverse crops which includes high grown, mid grown and low grown tea, rubber, oil palm, coconut, cinnamon, cardamom, rambuttan and other crops contributing to more than 20% of Group turnover.

During the period under review the tyre sector continued to benefit from favourable raw material prices and savings in energy sources which were introduced last year which resulted in an overall increase in terms of profitability. Products introduced towards the latter part of the last financial year was gaining market acceptance and during the period under review Richard Pieris Tyre Company introduced a new tyre "Hida" which was targeted towards the mini trucks.

The Rubber Manufacturing Sector continued to prosper during the first quarter of 2014/15 in the back drop of a very successful 2013/14. The latex foam business continued to thrive and managed to reduce its debt levels during the quarter through improvements in working capital management.
www.dailynews.lk

SEC issues directives over Adam Investments, PC Pharma and PCH Holdings

The Securities and Exchange Commission (SEC) yesterday issued several directives to Adam Investments Plc following recent developments including original sale of its stake in PC Pharma and subsequent reversal and its mandatory offers including on PCH Holdings.

At their meeting held earlier this week, SEC Commissioners had deliberated on the consequential losses that may arise out of the cancellation of trades of PC Pharma on 7 August effected by SEC directive early in this week. This was because AINV acted in violation of the SEC Takeovers and Mergers Code.

The SEC in one of its directive issued yesterday said in furtherance of protection of interest of investors, the Commissioner decided to direct AINV to compensate investors if any who has suffered consequential losses as a result of the cancelled trades falling within the period (2:12 p.m. and 2:30 p.m.).SEC said AINV will have to settle any qualified claims within one calendar month.

In response to application made by AINV to withdraw from the mandatory offer made in respect of PCH Holdings., the SEC has decided to allow a temporary suspension of the mandatory offer until the final determination of the Case No HC/Civil/23/2014/CO.

During the temporary suspension of the mandatory offer SEC directed AINV to refrain from trading in shares of PCHH without prior approval of the SEC, to acquiesce from exercising the voting rights attached to shares of 30% and over the total shareholding of PCHH and to make an immediate market disclosure stating that mandatory offer to PCHH is suspended.

Pending the final determination of Court in respect of the ownership of Beico Link Carbons Ltd., in Case No HC/Civil/23/2014/CO, the AINV was directed by SEC to revert to the Commission for a decision in respect of the mandatory offer made to PCHH upon final determination of the Commercial High Court and to refrain from trading on the shares of PCHH till the final determination of the Commission in respect of the mandatory offer.
www.ft.lk

Asian Alliance Insurance records 1H PAT of Rs. 339 m

Asian Alliance Insurance PLC (AAI), part of the Softlogic Group, announced profit after tax for the first half of 2014 at Rs. 339 million.

The impressive result comes about on the back of Life premiums growth of 21% for the period at Rs. 1.4 billion, with the absolute increase of Rs. 252 million being the highest by any insurer in the country, and is coupled with an exceptional result achieved on the investment portfolio of the company.

The result also takes into account 1Q Life performance of the company, whilst the 2Q Life result will be reflected at yearend based on the full period performance.

Total premiums for the first half were Rs. 2.3 billion with General insurance premiums at Rs. 831 m and profits after tax were Rs. 326 million for Life business and Rs. 12 million for the General insurance business. The first half performance of the company stands out from the rest of the industry that saw overall growth rates of 7.3% for Life and 0.2% for General.

Asian Alliance Insurance has charted an ambitious blueprint for growth, buoyed by the optimistic outlook for the insurance industry as a whole and also inspired by the key performance indicators of a fast paced Sri Lankan economy. AAI’s strong performance is the result of a strategic vision which leverages on the valuable synergies of the Softlogic Group to re-affirm the company’s journey towards being a leading player in the industry.
AAI Life customers enjoy a level of service and attention that is unmatched in the industry where the focus remains undivided and is always aimed at providing the best protection plans that are perfectly customised to meet specific requirements of a diverse clientele. 

The General insurance business that has seen strong growth over the past two years is in consolidation mode with a number of key initiatives being undertaken across the main classes comprising motor and health. Asian Alliance Insurance PLC is a Composite Insurer rated BBB+ by Fitch Ratings and is one of the few companies in the industry to have obtained an international rating. The shareholders of the company include DEG and FMO that are internationally reputed AAA DFI institutions.

Asian Alliance operates through a network of 54 locations that are positioned in all provinces of the country and is part of the fast growing Softlogic Group that has interests in healthcare, retail, financial services, ICT, leisure, automobiles and restaurants.
www.ft.lk