Sri Lanka stocks close up 0.4-pct

Sep 05, 2014 (LBO) - Sri Lanka's stocks close 0.38 percent higher with index heavy Commercial Bank gaining amid net foreign buying, brokers said.

The Colombo benchmark All Share Price Index closed 26.81 points higher at 7,087.41, up 0.38 percent. The S&P SL20 closed 30.00 points higher at 3,932.81, up 0.77 percent.

Turnover was 1.25 billion rupees, down from 1.63 billion rupees a day earlier with 113 stocks closed positive against 92 negative.

The aggregate value of all off-the-floor deals represented 9 percent of the daily turnover.

John Keells Holdings closed 40 cents higher at 249.90 rupees with market transactions of 158.83 million rupees contributing 13 percent of the turnover.

MTD Walkers closed 4.60 rupees higher at 56.00 rupees, attracting most number of trades during the day.

Foreign investors bought 282.38 million rupees worth shares while selling 84.22 million rupees worth shares.

Commercial Bank of Ceylon closed 4.30 rupees higher at 155.30 rupees, contributing most to the index gain.

Sri Lankan stocks at over 3-yr closing high; banking shares lead

(Reuters) - Sri Lankan stocks hit their highest closing in more than three years on Friday, led by banking shares such as Commercial Bank of Ceylon Plc and DFCC Bank Plc amid low interest rates and continued foreign buying into risky assets.

The main stock index rose 0.38 percent, or 26.81 points, to close at 7,087.41, its highest close since June 14, 2011.

"The market is refusing to bend. Where do you go with the low interest rates? The market gives the better options," said Reshan Kurukulasuriya, chief operating officer of Richard Pieris Securities.

The index has gained nearly 19.87 percent so far this year.

The bourse has been in an overbought region since July. The Relative Strength Index, a momentum indicator tracked by chartists, was at 79.320 on Friday, Thomson Reuters data showed.

Stocks are deemed "overbought" above the 70-mark, which tends to signal a reversal in the near term.

Commercial Bank of Ceylon, the country's biggest listed lender by market capitalisation, led gains with a rise of 2.85 percent at 155.30 rupees, while DFCC Bank rose 1.48 percent to 191.80 rupees.

Shares of Hatton National Bank Plc rose 1.40 percent to 173.30 rupees, while John Keells Holdings Plc rose 0.04 percent to 250 rupees.

After market hours on Wednesday, Fitch Ratings downgraded John Keells' National Long-Term Rating to 'AA+(lka)' from 'AAA(lka)'.

Exchange turnover was 1.25 billion rupees ($9.60 million), in line with this year's daily average of 1.2 billion rupees.

Foreign investors were net buyers of 198.2 million rupees worth of shares, extending the year-to-date net foreign inflows to 9.15 billion rupees.

The central bank did not offer 91-day t-bills at the weekly auction on Wednesday after it rejected all bids in the last two auctions, while yields on the 182-day and the 364-day treasury bills held steady for the third time. 

($1 = 130.1800 Sri Lankan rupee) 

(Reporting by Ranga Sirilal; Editing by Subhranshu Sahu)

Sri Lanka's August tourist arrivals up 13.8 pct yr/yr

Reuters: Tourist arrivals in Sri Lanka rose 13.8 percent year-on-year in August, government data showed on Friday, with the number of foreign visitors rising for the 64th straight month since a nearly-three-decade civil war ended in May 2009. Total arrivals hit a record high in 2013, while revenue from the island nation's leisure sector also hit a peak.

Fitch rates Sri Lanka’s Continental Insurance ‘A-(lka)’/Stable

Fitch Ratings Lanka has assigned Sri Lanka-based Continental Insurance Lanka Ltd. (CILL) a National Insurer Financial Strength Rating and a National Long-Term Rating of ‘A-(lka)’. The Outlook is Stable.

Key rating drivers: The ratings reflect CILL’s satisfactory capitalisation in terms of regulatory solvency, relatively short operating history and modest market share. The ratings also reflect the recent capital infusion by its parent, Distilleries Company of Sri Lanka PLC (DCSL; AAA(lka)/Stable). CILL is fully owned by DCSL through holding company Melsta Corp Ltd.

CILL was established as a non-life insurer in 2010 and by 2013, even though the non-life industry is intensely competitive, it managed to account for a modest 2.5% of the non-life industry’s gross written premiums. CILL’s combined ratio of around 105% for 2013 compares well with its peers’ and is satisfactory, especially given the company’s short operating history. Fitch expects improvements to the ratio to be slow given the intense competition in the non-life industry.

CILL regulatory solvency ratio was 1.7x in 1Q14, comfortably above the regulatory required level of 1x. This ratio is expected to improve with the recent capital infusion, and then trend down with the growth in business. Fitch expects the company to maintain the solvency ratio at above 2x.

The company’s ultimate parent DCSL is a well-established, leading alcoholic beverage manufacturer in Sri Lanka. The company benefits from group business and operational synergies.

Rating sensitivities: Key rating triggers for a downgrade include a sustained weakening in the combined ratio to above 110% or in solvency ratio to below 2x.

A rating upgrade in the short term is unlikely. In the medium to long term, the company’s ratings may be upgraded if it achieves increased scale while maintaining profitability and capitalisation at current levels.
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HSBC facilitates US$ 250 m bond for NSB

HSBC yesterday announced the successful joint arrangement of a US$ 250 million five-year bond issuance due 2019 for National Savings Bank (NSB), a policy bank wholly-owned by the Government of Sri Lanka.

HSBC Sri Lanka and the Maldives Chief Executive Officer Patrick Gallagher said: “This is a significant milestone for HSBC with NSB, having achieved the lowest yield by a Sri Lankan issuer. The transaction attracted overwhelming interest from investors’ achieving an over subscription ratio of 8.5 times. This marks our second issue for NSB and the third sovereign related issue for the year, demonstrating our position as the undisputed leader in the Debt Capital Market in Sri Lanka.”

HSBC acted as Joint Book runner and Joint Lead Manager for this transaction that represented the lowest yield outside of the sovereign itself.

Head of Financial Institutions Group & Public Sector Shamindra Marcelline said: “HSBC is extremely proud to have been associated with NSB in yet another successful international trade. This is a fantastic achievement for the country. An order book in excess of US$ 2.1 b with a well-balanced split across Asia, Europe and the USA, representing an oversubscription of 8.5 times is clearly an indication of the credit credential of the National Savings Bank.”

HSBC Holdings PLC, UK’s Barclays PLC and US-based Citigroup Inc. were the Joint Lead Managers for the transaction.
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