Sri Lanka rejects all treasury bids

Oct 01, 2014 (LBO) – Sri Lanka has rejected all treasury bids at a weekly auction on Wednesday, the government's debt office said.

The debt office which is part of the island's central bank said it has offered 1.5 billion rupees in 6-month bills and 4.5 billion rupees in 12-month bills.

The office did not offer 3-month treasury bills for the second straight week.

The auction has oversubscribed with bids amounting to 75.64 billion rupees being received.

Sri Lanka stocks close up 0.6-pct

Oct 01, 2014 (LBO) - Sri Lanka's stocks closed 0.56 percent higher with telco and diversified stocks gaining amid net foreign buying, brokers said.

The Colombo benchmark All Share Price Index closed 40.94 points higher at 7,293.08, up 0.56 percent. The S&P SL20 closed 26.81 points higher at 4,065.11, up 0.66 percent.

Turnover was 2.65 billion rupees, down from 4.29 billion rupees a day earlier with 110 stocks closed positive against 87 negative.

Arpico Finance closed 1.90 rupees lower at 160.40 rupees with an off-market transaction of 501.09 million rupees changing hands at 166.00 rupees per share contributing 19 percent of the turnover.

The aggregate value of all off-the-floor deals represented 37 percent of the daily turnover.

Singer Finance Lanka closed 1.70 rupees higher at 19.90 rupees, attracting most number of trades during the day.

Foreign investors bought 620.94 million rupees worth shares while selling 545.86 million rupees worth shares.

Domestic investors bought 2.03 billion rupees worth shares while selling 2.11 billion rupees worth shares.

Dialog Axiata closed 50 cents higher at 12.00 rupees and John Keells Holdings closed 2.00 rupees higher at 255.70 rupees, contributing most to the index gain.

JKH’s W0022 warrants closed 50 cents higher at 76.00 rupees and its W0023 warrants closed 2.20 rupees higher at 82.20 rupees.

Commercial Bank of Ceylon closed 2.10 rupees higher at 158.00 rupees and DFCC Bank closed 5.50 rupees higher at 205.80 rupees.

Hatton National Bank closed 3.70 rupees higher at 194.10 rupees.

UB Finance posts Rs 92 m profit in last financial year

The UB Finance Co. Ltd. Annual General Meeting (AGM) was held on September 25 at the Post Graduate Institute of Management, Colombo 8.

UB Finance Chairman Alexis Lovell highlighted the significant progress made by the company during the financial year in concern,in terms of Asset and Revenue Growth and Profitability.

The Company made a profit before taxation (PBT) of Rs 146 million and a profit after taxation (PAT) of Rs 92 million respectively.

He stressed that “the Company is committed to achieving its vision of being Sri Lanka’s preferred financial services solutions provider.”

He further said that“in the coming year,UB Finance would open avenues to improve the SME Sector and the personal aspirations and lifestyles of the Sri Lankan people”.

He also elaborated on the ground breaking investment into Union Bank of Colombo PLC by one of the leaders in global equity,TPG Asia VI L.P.,taking a controlling interest in the bank and making it the fifth largest bank in terms of equity in Sri Lanka.

With this investment, the Union Bank Group, which currently includes Union Bank, UB Finance and NAMAL, is poised to make serious inroads into the financial services sector.

In response to a concern raised by some of the Non Voting Shareholders with regard to listing the Company on the Colombo Stock Exchange, Chief Executive Officer, Ransith Karunaratne said in addition to the restructuring of the company, the Management is committed to resolving this matter expeditiously. He further stated that the major obstacle in expediting the listing was the erroneous Non Voting Shareholder Register handed over by the Previous Management and that the New Management has taken numerous steps to rectify the said register. Lovell, thanked the Governor and officials of the Central Bank of Sri Lanka for the extended cooperation and consultation to UB Finance, stating that the strong fundamentals implemented in the recent past and continuously adhering to the policies and procedures have undoubtedly been the truss that gave UB Finance the strength and stability seen today. He also acknowledged the Board of Directors for their continued support and extended his gratitude towards the Company’s loyal stakeholders for their unrestrained confidence.
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Culture Financial buys 68% of Union Bank

Culture Financial Holdings Ltd acquired 742,156,249 ordinary shares in Union Bank of Colombo PLC representing 68% of the voting rights of Union Bank for rupees 15.30 per share through a private placement. 

Accordingly, Culture presently holds a total of 742,156,249 ordinary shares in Union Bank with 68% of the voting rights of Union Bank.

Established in 1995, as the eighthth indigenous Bank, Union Bank is positioned to be the preferred Bank for the Small and Medium Enterprises and Retail sectors in Sri Lanka. As one of Sri Lanka’s fastest growing Banks, Union Bank offers its preferred customer segments a range of comprehensive financial solutions to support the development and growth of these sectors. Known for its strong shareholder strength which includes high caliber local and foreign investors, financial stability, innovative range of technology-driven products, supported by superior service delivery enables Union Bank to forge ahead as a key player in the Banking industry in Sri Lanka.

The largest US based investment company TPG and its most recent Asia-focused investment fund TPG Asia VI, L.P and its related entities indirectly hold a 100% equity interest in Cultural Financial Holdings Ltd. through TPG Asia VI SF Pte. Ltd.
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CIC to strengthen pharma sector

To pump Rs 130m in Lifesciences

H.D.H Senewiratne (hsenewiratne@gmail.com)

CIC Holdings Plc will strengthen and expand the pharmaceutical sector business by investing in their pharmaceutical manufacturing plan in CIC Lifesciences Ltd. The company expects to invest more than Rs 130 million for it in order to strengthen its operations, CIC Holdings Managing Director and CEO Samantha Ranatunga said.They have invested Rs 35 m under the first phase.

“This pharmaceutical company came to us having changing its hand from several companies and provided several drugs namely anti-biotic non bacterial, anti- ulcer drugs to government hospitals, which is one of the few local companies that supply it,” Ranatunga told the Daily News Business.

He said that this plant is an ultra modern plant supplying generic products to state hospitals and intend to develop its own brand for the company in the future in order to venture into the export business. Further the company also will strengthen their agriculture sector business throughout the country after the company’s major restructuring plan.The company will focus on food and nutrition, pharmaceutical and industry chemicals, he said.

CIC Lifesciences comprises 60 percent of the current portfolio particularly the antibiotics range which is now working with a consulting firm in India to introduce the technology to manufacture non-penicillin based pharmaceuticals in Sir Lanka, he said.

“This year the company is optimistic to achieve a very high growth compared to last year. Because of last year’s restructuring process our balance sheet and profit and losses account were not done well because we have given more focus on food and nutrition, pharmaceutical and export businesses by channelling our funds into them,” Ranatunga said.

He said having completed a thorough and complete review of the Group,its constituent companies and their operations we were able to determine risk profiles for each company and sector.

“Where the risks were unacceptably high as in food wholesale and distribution we have moved out. In areas with strong profit potential and relatively manageable risk we have stayed. In areas like pharmaceutical and animal feed we have identified capabilities in the pharmaceutical and animal feed business”, he said.
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Union Bank to commence Primary Dealer operations

Union Bank of Colombo PLC (UBC) announced that the Bank has been appointed as a Primary Dealer in Government Securities by the Central Bank of Sri Lanka. UBC will commence its business as a Primary Dealer on 01 October, 2014.

As a Primary Dealer, Union Bank will participate directly in Primary Auctions conducted by the Central Bank of Sri Lanka in order to bid for Treasury Bills, Bonds and other Government Securities. Union Bank’s Primary Dealer Unit will also act as an intermediary in Corporate Bonds and Debentures and will assist in developing the secondary market in Corporate Debt in the future.

"The appointment of UBC as a Primary Dealer highlights our commitment to further strengthen our position in the Government Securities markets and assist the Bank to further enhance its portfolio of financial solutions to its customers", stated Isuru Pethiyagoda, Chief Manager - Primary Dealer Unit of UBC. He further stated that it is a privilege to be associated with the Central Bank’s Public Debt Department partnering in raising and distributing Government debt.

As a Primary Dealer, Union Bank will engage, promote and develop a secondary market in Treasury Bill/Bonds and other Government Securities, whilst providing an enhanced platform to attract new customers, markets and businesses. Union Bank also looks forward to introducing new products and services relating to Government Securities in the future with the assistance and support of our regulator, the Public Debt Department.

Union Bank is one of Sri Lanka’s fastest growing Bank’s focusing on the Small and Medium enterprises and retail sectors. Union Bank’s recent investment agreement for $117Mn with TPG a leading global private investment firm with US $ 60 Bn Asset under Management marks a milestone as one of the largest foreign direct investments to Sri Lanka in the recent years. This investment has placed UBC in second place in stated capital amongst Banks in Sri Lanka and within the top five private banks in equity.
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Sinhaputhra exceeds Rs. 5 b deposits

Sinhaputhra Finance PLC has achieved a deposit base of over Rs. 5 billion with certain customer patronage exceeding three decades, indicating trust and confidence; and this was achieved without any expenditure on advertising.

Director Operations Sarliya De Alwis commented that this growth has been based on personal relationships and word-of-mouth influences.

The company’s resilience has been demonstrated by its stability during economic downturns when larger establishments with hasty growth crumbled, leaving distressed depositors. With nearly 6,000 depositors and 7,521 savings accountholders, Sinhaputhra Finance PLC has established itself as a safe haven for depositors.

Sinhaputhra has progressed steadily towards its Rs. 1 billon plus equity position and Rs. 8 billion in total assets. Sinhaputhra’s annual growth has been greater than 30% on average in its 35 years of operations. This position has been achieved with a long-term focus on customers.

The lower rates offered by banks has created extremely high levels of excess liquidity in Registered Finance Companies, causing lower returns for depositors, yet Sinhaputhra Finance PLC is mindful that such times do not exist forever, and has focused on retaining its loyal and long-standing customers.

Managing Director Ravana Wijeyeratne stated that even though bank loans are now offered at extremely low rates at 200 basis points below average rates paid to depositors, Sinhaputhra’s commitment to depositors and their lowering monthly revenues compels the Sinhaputhra team to offer the best rates they can.
www.ft.lk

Nimal buys control of Mercantile Produce Brokers for Rs. 200 m

High net worth investor Nimal Perera yesterday bought control of well-established Mercantile Produce Brokers Ltd., (MPB) for Rs. 200 million.

The investment is on his personal capacity through his investment arm Don Wilbert Capital and marks his biggest personal move to date.

Nimal acquired the 76% stake from senior management of MPB who sold out and signalled an emphatic move towards produce broking in Sri Lanka. Those who sold out include MPB Chairman Sunil Udalagama, Managing Director Naresh Dhambawinna and CFO A.A.G. Vitharana.

MPB is among the top five produce brokers in the country with a strong clientele whilst it has one of the most modern warehouses in the country at Kadawatha.

Don Wilbert Capital has a subsidiary N Capital, which invested in Tangalle Bay Resorts.Analysts described Nimal’s move as a strategic investment marking his own moves and signals a major foray into produce broking. Through Royal Ceramics Plc, in which he is Managing Director, he dabbled in the produce broking industry temporarily through the acquisition of Asia Siyaka Commodities which was subsequently sold to Lanka Commodities Ltd.

Analysts speculated that with Nimal’s connection to Hayleys plantation business (he serves on the Board of Hayleys Plc) as well as Horana Plantations through Lanka Ceramics Plc, which RCL is the controlling shareholder of, MPB will have captive business.

Following the acquisition, Nimal has appointed two nominees to the MPB Board – Nishantha Wickremsinghe who hails from James Finlays and is currently Chairman of SriLankan Airlines as well as Royal Ceramics CFO Haresh Somashantha. MPB Director Samantha Dombanwela will be the new CEO.
www.ft.lk

Bourse suffers net outflows of Rs 4.4B

By Paneetha Ameresekere

Ceylon Finance Today: The carnage in the bourse continued for the third consecutive day yesterday (30), led by JKH, with an overall net foreign outflow (NFO) of Rs 1.8 billion in the market, taking NFOs in those three days......up to yesterday to Rs 4.4 billion, data showed.

Nevertheless, market sources told Ceylon FT that those net outflows were only on JKH. On the other hand there are also inflows, they said. The bourse in the year-to-date has experienced a net foreign inflow of Rs 7.2 billion.

JKH, the market's largest capitalized stock, also boosted turnover to Rs 4.3 billion yesterday, while CTC, the market's second largest capitalized stock, on nominal volumes, helped the bourse to make marginal gains at yesterday's trading, data further showed.

JKH and its warrants contributed Rs 2.3 billion to the day's turnover, while the ASPI marginally increased by 0.19% to 7,252.14 points and the S&P SL 20 Index by 0.48% to 4,038.30 points. Those gains were backed by CTC's share price increasing by 0.19% to
Rs 1,155 a share whilst contributing a nominal Rs 12,700 to turnover on a measly share volume of 11.

The performance of market indices are directly correlated to the movement of market capitalization (market cap). CTC, which exposure to overall market cap yesterday was 7.45%, has a heavy bearing on the movement of such indices.

Losers out bid gainers by a ratio of 106:100 yesterday. JKH contributed Rs 2 billion to yesterday's turnover on a share volume (SV) of 7.9 million. Its shares closed, up 1.08% to
Rs 253.70 a share. JKH's contribution to overall market cap yesterday was 8.66%.

The market witnessed a SV of 86,867,537; up 8.1% over the previous day's SV.
Among the other stocks which joined the Rs 100 million+ club yesterday were Com Bank, the market's third largest capitalized stock with Rs 368 million, on a SV of 2.4 million. 

Com Bank's shares closed at Rs 155.90 a share, down 0.70%. Its contribution to overall market cap was 4.35%.

Third was Chevron, the market's 17th largest capitalized stock with Rs 171.9 million on a SV of 513,074. Chevron, the market's 17th largest capitalized stock, closed at Rs 335.80 a share, up 0.45%.

Fourth, JKH Warrants (W) 0023, Rs 149.1 million and up, 2.56% to Rs 80 in price. However, 'Ws' are not considered for market cap. And the last in the Rs 100 million club was JKH W0022 (Rs 117.5 million), up 2.30% to Rs 75.50. 
www.ceylontoday.lk

HNB to acquire Prime Grameen

Ceylon Finance Today: Hatton National Bank PLC (HNB) yesterday (30)entered into a shareholders' agreement to purchase a 51% stake in Prime Grameen Micro Finance Ltd. The bank told the Colombo Stock Exchange that the deal would go through on or before 31 October.

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