Sri Lanka bourse edges up; heavy foreign outflows in Keells

(Reuters) - Sri Lankan stocks edged up on Tuesday to near three-year highs, but the exit of a U.S. fund which sold shares of John Keells Holdings resulted in heavy outflows, though the sentiment was still positive due to lower interest rates.

U.S.-based fund Janus' selling in Keells resulted in net foreign outflows of 4.52 billion rupees ($34.7 million) on Tuesday, the worst since March 25, 2010.

Foreign investors have been net buyers of 7.49 billion rupees worth of shares so far this year.

"Janus exited after five years, and some local and foreigners bought the shares," said a stockbroker with knowledge of the deal, asking not to be named.

Another stockbroker said Janus had been looking for an exit for some time and was looking for a better price in Keells.

The main stock index closed up 0.1 percent, or 6.75 points, at 6,981.46, its highest finish since Sept. 9, 2011.

The index has gained 18 percent so far this year.

Turnover was 8.19 billion rupees, its highest since March 16 2012.

Conglomerate John Keells, which accounted for 88.77 percent of the day's turnover, rose 1.83 percent to 244.40 rupees a share. Foreign investors sold a net 18.9 million Keells shares, bourse data showed.

United Motors Lanka Plc, which led the gains in the overall index, rose 48.8 percent to 148.80 rupees. 

(1 US dollar = 130.1000 Sri Lankan rupee) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Prateek Chatterjee)

Sri Lanka shares close up 0.1-pct

Aug 19, 2014 (LBO) - Sri Lanka's shares closed in the green Tuesday, recording the highest turnover since March 2012 with the off-market transactions of John Keells Holdings despite strong foreign selling, brokers said.

The Colombo benchmark All Share Price Index closed 6.75 points higher at 6,981.46, up 0.10 percent. The S&P SL20 closed 17.93 points higher at 3,848.50, up 0.47 percent.

Turnover was 8.19 billion rupees, up from 1.79 billion rupees a day earlier with 82 stocks closed positive against 121 negative.

John Keells Holdings closed 4.40 rupees higher at 244.40 rupees with significant off-market transactions totalling 7.20 billion rupees changing hands at 240.00 rupees per share contributing 88 percent of the daily turnover.

JKH’s W0022 warrants closed flat at 70.00 rupees and its W0023 warrants closed 10 cents lower at 79.90 rupees.

MTD Walkers closed 2.40 rupees higher at 44.10 rupees, attracting most number of trades during the day.

Foreign investors bought 2.77 billion rupees worth shares while selling 7.30 billion rupees worth shares.

Index heavy John Keells Holdings contributed most to the index gain.

Dialog Axiata closed 10 cents higher at 11.10 rupees and Sri Lanka Telecom closed 80 cents lower at 55.00 rupees.

Ceylon Tobacco Company closed 7.70 rupees lower at 1,217.00 rupees.

Orient Garment share trading suspended pending explanation

The Colombo Stock Exchange has suspended trading of Orient Garment PLC (OGL.N0000) shares pending explanation of a news report published today (19 August).

As revealed, this news report has been carried by a business section of an English daily.
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Janashakthi acquires Bartleet Finance

The Monetary Board of the Central Bank of Sri Lanka by their letter dated August 7, 2014 has approved the acquisition of Bartlett Finance (BFP) by Janashakthi Ltd (JL) on behalf of Orient Finance PLC (OF P) and subsequent amalgamation of BFP with OFP subject to the compliance with the statutory requirements of Securities and Exchange Commission of Sri Lanka, Colombo Stock Exchange, Companies Act No.7 of 2007, Finance Business Act No.42 of 2011 and other relevant statutes.

The shareholders of both entities are to be be informed about this acquisition.

The Board of Bartleet Finance is aware that pursuant to negotiations Bartleet Transcapital Limited has reached agreement with Janashakthi Limited to sell 86.79% of the issued and fully paid share capital of Bartleet Finance PLC.
www.dailynews.lk

Aitken Spence to build 501 rooms in RIU Resorts Ahungalle

Aitken Spence Hotels and RIU Hotels and Resorts Spain will invest US$ 100 million to build 501 rooms 'RIU Resort hotel in Ahungalle. The Resort is expected to open in mid 2016.

The ground breaking ceremony of the hotel was held recently with President Mahinda Rajapaksa as the chief guest.

Chairman of Aitken Spence Harry Jayawardene, said that the timing of the hotel's opening would be right since the Southern Highway to Hambantota is expected to reach completion by that time. "We have the Mattala Airport facility already in place, giving us an ideal mix for our business model. Aitken Spence has always encouraged infrastructure development in the country and our investment is proof of our confidence and support of the Government's development plans."

"The strategy for all our beach resorts in the South including the new RIU Resorts is in line with the Government's vision for the further development of the country, especially in the tourism segment."

"That a lot has been done and more is being done is clearly evident. Therefore it is now our turn to deliver on our promise. We have delivered on the promise of developing overseas, and continue to do so in Sri Lanka. RIU Hotels and Resorts is a giant step in that direction."

The international RIU chain traces its history back to 1953, when it was founded by the Riu family in Mallorca. RIU has made its name for its acclaimed all inclusive holiday services, for guests who are looking for perfect relaxation in a single location. In co-ownership with TUI, a long standing partner of Aitken Spence, RIU Resorts is run by the third generation of the Riu family. The Company boasts of more than 100 properties in 16 countries catering to 3.2 million guests a year.

The new venture in Ahungalla offers all the promise of RIU combined with the expertise Aitken Spence Hotels has gained over the years in the hotel industry both in Sri Lanka and overseas. The 501 room resort will have 438 double rooms, 30 family rooms, 20 single rooms and 13 suites. Facilities will include restaurants with common buffet areas, theme restaurants, shops, lobby bar, gym and a spa with separate steam and sauna and many other facilities.
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AIA Sri Lanka grows business further in 1H

The Board of Directors of AIA Insurance Lanka PLC yesterday announced the financial results of the Company and its subsidiaries for the six months ended 30 June 2014, with solid growth in both Life and General businesses.

Gross Written Premium (GWP) of Life insurance grew by 5% to Rs. 3,516 million, largely driven by strong sales of conventional Life products. GWP of General insurance increased by 3% to Rs. 1,432 million.

Consolidated profit after tax was Rs. 146 million, compared with Rs. 195 million of the first half of 2013 which excluded rebranding spend, a one-off item in 2013.
Consolidated revenue of Rs. 6,768 million included net earned premium of Rs. 4,189 million and investment income of Rs. 2,250 million. This compared with the net earned premium of Rs. 4,143 million and investment income of Rs. 2,514 million in the first half of 2013.

AIA Sri Lanka Chief Executive Officer Shah Rouf said: “The first half of this year has seen AIA Sri Lanka maintain its growth momentum and continued investment in its business, adding 16 new branches and 1,440 new Wealth Planners. Armed with the latest of technology including iPad mobile devices and Interactive Point of Sales (iPoS) Systems, our Wealth Planners are equipped to provide a unique customer experience which enhances our policyholder service.”

He added: “AIA Sri Lanka is committed to delivering value to all stakeholders through the consistent execution of our clear strategy and disciplined financial management.”

AIA Sri Lanka Chairman Gordon Watson said: “The company has made good progress in expanding its distribution capabilities for sustainable and profitable growth. I am confident that AIA Sri Lanka, being ‘The Real Life Company,’ is well positioned to capture the growth opportunities that exist.”
www.ft.lk

NSB 1H pre-tax profit soars by 206% to Rs. 2.7 b

* Net profit up 184% to Rs. 1.8 b
* Interest income crosses Rs. 35 billion mark for the first time
* Deposits mobilised up Rs. 23.7 b or 5% to Rs. 522.4 b
* Total assets up 4% to Rs. 680.7 billion

Savings giant NSB has recorded a profit before tax of Rs. 2.7 billion for 1H 2014, up by 206% from Rs. 0.9 billion recorded in the corresponding period last year.

Net profit recorded an increase of 184% to Rs. 1.8 billion from Rs. 642 million recorded in the same period last year.

In a statement NSB said it reached a new milestone with half year interest income crossing the Rs. 35 billion mark for the first time. It delivered a significantly improved financial performance in the first half of 2014 with improved margins and showed a notable growth in fee based income and trading gains.

This broad-based performance enabled the bank to continue its growth.

The bank mobilised Rs. 23.7 billion deposits during the first six months of the year, recording a growth of 5%, on par with industry growth, and its deposit base stood at Rs. 522.4 billion as of 30 June 2014.

Total assets grew by 4% to Rs. 680.7 billion as of 30 June 2014 underpinned by the growth of investments.

Held-to-maturity financial assets which mainly consist of Treasury bonds grew by 5.5% to reach Rs. 456.3 billion. Held-for-trading portfolio also increased by 4% to Rs.14.3 billion by the end of June, which was mainly due to the increase in trading the Government securities portfolio to explore trading opportunities in declining market interest rates scenario.

Loans and advances to customers recorded a favourable growth of 2.5% as against the growth of 1.4% during the first half of 2013 and also compared with the movements in the industry during the first six months of 2014. The lower growth of loans and advances was attributable to the decreasing value of pawning portfolio.

Interest income increased by Rs. 6 billion to Rs. 36 billion recording a growth of 20% while interest expenses increased only by 5% to Rs. 27 billion in 1H 2014 from Rs. 26 billion recorded in the same period last year. Higher growth of interest income and comparatively lower increase in interest cost contributed to increase net interest income by 116% to Rs. 8.7 billion in 1H 2014 from Rs. 4.0 billion in 1H 2013. This resulted in improving the net interest margin to 2.60% by end June 2014 from 1.67% recorded at end 2013.

Return on average assets (before tax) improved to 0.81% at 30 June 2014 from 0.39% recorded at the end of 2013. Return on average equity rose to 15.8% by the end of June 2014 from 5.2% recorded at the end of 2013. The cost to income ratio improved to 49.4% in 1H 2014 from 76.5% in 1H 2013 and the improvement was mainly due to the increase in net interest income.

The bank’s capital strength was reflected in ratios that were well above the regulatory standards for well-capitalised banks, with a Tier 1 ratio of 17.8%, and total capital adequacy ratio of 16.31% at 30 June 2014. Liquidity ratio of the bank stood at 89.5% at 30 June 2014, which is well above the regulatory requirement of 20%.

The Group’s post tax profit increased by 155% to Rs. 1.9 billion in 1H 2014 from Rs. 753 million in 1H 2013.

The first six months’ performance reflects the successful implementation of the business strategies indentified in the strategic business plan of the Bank. Some of the areas focused during the period were expansion of retail lending, providing financial support for mega infrastructure projects, mobilisation of low cost deposits, introduction of long term savings plans, new banking products and improved efficiency of customer services.

The bank’s AAA local credit rating was reaffirmed for the 12th successive year by Fitch Ratings Lanka. NSB is the first local bank to receive an AAA credit rating from Fitch and to maintain the same for 12 consecutive years. The international credit rating of the bank which is on par with the sovereign rating was reaffirmed in July 2014. The bank obtained international credit rating for the first time in 2013 from Fitch Ratings (BB-) and S&P Rating Agency (B+).
www.ft.lk

MTD Walkers 1Q bottom line up by an impressive 96%

MTD Walkers PLC posted a net profit of Rs. 370 million, recording an impressive growth of 96% for the first quarter FY 2014/2015 when compared to the first quarter of the previous financial year. Group revenue for the period grew by 76% to Rs. 3.3 billion.

Due to the drop in the market lending rates and the introduction of an effective financial management policy, the Group was able to reduce its finance cost by 4.7% for 1Q when compared with the previous year whilst the earnings per share for the three months ended June 2014 was Rs. 2.46.

Commenting on this record-breaking performance, MTD Walkers’ Group Executive Deputy Chairman Jehan Amaratunga said: “MTD Walkers was able to achieve this milestone by capitalising on the synergies between the Group’s subsidiary companies. We have effectively harnessed the Group’s expertise to become a fully integrated infrastructure and engineering solutions provider within Sri Lanka’s rapidly growing construction sector.”

Amaratunga added: “While the Group’s focus on service delivery and expertise was a significant competitive advantage in growing the order book to attract large-scale projects, we will in the future continue to remain focused in order to ensure that all our stakeholders benefit from our underlying philosophy of timely delivery of quality, responsibly.”
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