Renuka Holdings embarks on notable real estate development

Sri Lankan conglomerate Renuka Holdings PLC received shareholder approval at the EGM held on 11th November 2014 to proceed with the group’s ambitious project to date – The Renuka Tower - at Galle Face Terrace.

The Renuka Tower will be a modern 28 storey tower providing ‘A’ grade office facilities built on company owned land at Galle Face Terrace and Uttrananda Mawatha, Colombo 03. Once completed, the tower will have 200,000 sq. ft. of rentable office space and parking for more than 200 cars. The tower will also have corporate entertainment areas, conference facilities, dining, recreation and all the modern necessities required to create a pleasant and safe working environment.

Renuka Holdings PLC is a diversified conglomerate listed on the Colombo Stock Exchange (CSE) and is the holding company for subsidiaries engaged in Agri Food Exports (Plantations, Manufacturing, Global Marketing), Dairy, FMCG, Automotive plus Investment and Services. Property development has been a long term vision of the company as it has land parcels in key locations around the commercial zone and the central business district of Colombo.

Adding further insights into the project Executive Director, Shamindra Rajiyah said "We believe the time is right for us to develop our land bank and create a new revenue stream for the company from these resources. The group already has in operation the Renuka Building in Colombo 08, an eight storey 66,000 sq ft office complex housing group subsidiaries and many reputed tenants. Using our past experience, we aim to make the Renuka Tower a preferred business address in the city".

The circular sent to shareholders further stated, "The project will be carried out in two stages and currently planning and conceptualising of the development have been completed. Renuka believes that the expected growth trajectory of Sri Lanka’s economy, and its increasing integration with the rest of the world via its hub status will result in a lack of high quality office space within the central business district over the next three to five years, as such, the construction of class ‘A’ office spaces is expected to generate an attractive rental yield for the company".

The total project cost of the two stage development is estimated at Rs 3.2 Bn which will be partly financed by the ongoing rights issue of Rs 1.03 Bn. The company is offering a total of 44,517,313 ordinary voting shares at Rs. 21 each and 6,428,415 million non-voting shares at Rs. 15 each to be issued. The project is expected to begin in the year 2015 and is planned for completion in the year 2018.
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Sri Lankan bourse near 3-1/2-year high on banks

Nov 11 (Reuters) - Sri Lankan stocks ended up on Tuesday, hovering near 3-1/2-year high hit last week as investors picked up banking shares, while continued foreign buying, low interest rates and better earnings expectations kept investor appetite for risky assets intact.

Sri Lanka's main stock index closed 0.13 percent, or 9.34 points, up at 7,412.72, near its highest closing level since May 31, 2011 hit on Friday.

Shares in Commercial Leasing & Finance Plc, which led the overall gain, rose 4.55 percent to 4.60 rupees.

Shares in top mobile phone operator Dialog Axiata Plc , which reported a 15.6 percent jump in third-quarter net profit last week, rose 0.81 percent to 12.50 rupees.

Shares in Overseas Realty (Ceylon) Plc rose 3.97 percent to 28.80 rupees.

Conglomerate John Keells Holdings (JKH) Plc fell 0.35 percent to 258 rupees, while Lanka ORIX Leasing Co Plc (LOLC) fell 2.27 percent to 86 rupees.

"Gains in Commercial Leasing and Overseas Realty offset negative pressure from JKH and LOLC which helped the overall index. Market turnover continued to fall although net foreign inflow strengthened mainly due to a significant decline in foreign sales," First Capital Equities (Pvt) Ltd said in a note to investors.

Foreign investors bought a net 684.4 million rupees ($5.23 million) worth of shares, extending the net foreign inflow so far this year to 16.56 billion rupees, exchange data showed.

Tuesday's turnover was 1.64 billion rupees, more than this year's daily average of 1.40 billion rupees.

Analysts expect trading to be choppy in the near term due to the revised presidential poll schedule in January and a possible bottoming out of interest rates.

The country's central bank has kept key policy rates steady for a ninth straight month, saying private sector credit growth was picking up and long-term lending rates were adjusting downwards. 

($1 = 130.8500 Sri Lankan rupee) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Anand Basu)

All set for Sri Lanka’s DFCC Bank to be made public limited company

The Speaker of Parliament has certified the registration of the DFCC Bank as a public limited company incorporated with the name DFCC Bank PLC under the Companies Act on November 01, 2014.

This would enable the DFCC Bank to carry out its activities as a licensed specialized bank from the date specified by the Minister.

The date is to be specified later.
www.adaderana.lk

Sri Lanka’s HNB buys 51 per cent stake in Prime Grameen

The Central Bank of Sri Lanka granted approval for Hatton National Bank PLC to invest in a stake of 51 per cent voting shares in Prime Grameen Micro Finance Limited.

Following this Hatton National Bank has purchased 724,904,118 issued and fully paid up shares representing 51 per cent stake in Prime Grameen Micro Finance Limited for Rs. 660 million.
www.adaderana.lk

Commercial Credit and Finance acquires remaining shares of Trade Finance and Investments

Commercial Credit and Finance PLC has acquired 55,037,154 representing 96.89 per cent remaining shares of Trade Finance and Investments PLC at Rs. 28 per share.

As a result of this acquisition the Commercial Credit and Finance shares in Trade Finance and Investments has exceeded the threshold of 30 per cent and it became obligatory for Commercial Credit and Finance to make a mandatory offer to the shareholders in respect of all the remaining ordinary shares of Trade Finance and Investments.

A mandatory offer was made by Commercial Credit and Finance which resulted in a further 825,340 shares being acquired.

The remaining 937,906 shares of Trade Finance and Investments will be acquired by Commercial Credit and Finance at Rs. 28 each.
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Sri Lanka stocks close higher

Nov 11, 2014 (LBO) - Sri Lanka's stocks closed with mixed results amid foreigners remained active closing as net buyers, brokers said.

The Colombo benchmark All Share Price Index closed 9.34 points higher at 7,412.72, up 0.13 percent.

The S&P SL20 closed 0.87 points lower at 4,120.00, down 0.02 percent.

Turnover was 1.64 billion rupees, down from 1.88 billion rupees a day earlier with 111 stocks closed positive against 86 negative.

The aggregate value of all off-the-floor deals represented 21 percent of the daily turnover.

Swisstek Ceylon closed 2.70 rupees higher at 39.10 rupees and Lanka IOC closed 90 cents higher at 63.90 rupees, receiving most number of trades during the day.

Foreign investors bought 744.16 million rupees worth shares while selling 59.74 million rupees worth shares.

Commercial Leasing and Finance closed 20 cents higher at 4.60 rupees and Overseas Realty Ceylon closed 1.10 rupees higher at 28.80 rupees, contributing most to the index gain.

Lanka Orix Leasing Company closed 2.00 rupees lower at 86.00 rupees and John Keells Holdings closed 90 cents lower at 258.00 rupees.

Fitch Rates Sampath Bank's subordinated debentures 'A+(lka)(EXP)'

Nov 11, 2014 (LBo)- Fitch Ratings Lanka has assigned Sampath Bank PLC's proposed subordinated debentures of up to seven billion rupees an expected National Long-Term Rating of 'A+(lka)(EXP)', the rating agency said in a media statement.

The debentures, which will have tenors of five years and carry fixed coupons, will be listed on the Colombo Stock Exchange.

Sampath expects to use the proceeds to strengthen its Tier 2 capital base and reduce asset and liability maturity mismatches.

The final rating is subject to the receipt of final documentation conforming to information already received.

The Media Statement Reproduced below

KEY RATING DRIVERS

The proposed debentures are rated one notch below Sampath's National Long-Term Rating to reflect their subordination to senior unsecured debt.

Sampath Bank's rating is driven by its modest and expanding franchise, and relatively higher risk appetite as seen in its aggressive loan growth and high gold-backed lending until end-2013, which has put pressure on its asset quality. Fitch believes asset quality indicators could be weaker than those reported should a broader definition of impairment be applied.

This could put pressure on its rating given the bank's lower capitalisation relative to peers.

RATING SENSITIVITIES

The rating on the proposed debentures will move in tandem with Sampath's National Long-Term Ratings.

A full list of Sampath's ratings follows: 

National Long-Term Rating: 'AA-(lka)': Stable Outlook

Outstanding Sri Lanka rupee-denominated subordinated debentures: 'A+(lka)'

Proposed Sri Lanka rupee-denominated subordinated debentures: 'A+(lka)(EXP)'

Ceylon Tobacco Company profits steady

Nov 11, 2014 (LBO) - Ceylon Tobacco Company, the Sri Lanka unit British American Tobacco, shows a steady growth of profits after tax (PAT) to 6,631 million rupees for the 9 months ended 30th September 2014 compared to the same period of last year.

The company reported 6,619 million rupees of PAT last year.

The firm is the sole branded cigarette maker in the island.

CTC said smokers had helped the government raise 54 billion rupees in taxes to the state a 12 percent increase over the same period last year.

However the company says this was achieved despite a 10 percent volume drop in the domestic sales, driven pre-dominantly by challenging market conditions.

Sri Lanka Customs statistics indicate that Beedi volumes have grown by almost 200 percent over the past six years.

This growing preference can be attributed to Beedi remaining a cheap substitute to the cigarette smokers in Sri Lanka.

CTC said the growth in Beedi together with the prevalent drought conditions in some parts of the country and its impact on disposable income significantly contributed to the decline in cigarette volumes.

The company says export sales revenue increased by 145 million rupees.

“Although volumes in totality were lower than the same period last year, investments continued to infuse value in our mainstream brand John Player Gold Leaf with the successful implementation of the pack upgrade,” the company said in its interim financial statement.

“The Company will continue its endeavor to improve export performance into the future.” Gross revenues were marginally up to 64,162 million rupees in the September 2014 from 63,858 billion rupees a year earlier.

The accounts showed unspecified other operating costs falling to 2.1 billion rupees in 2014 from 1.9 billion a year earlier.

CTC said it is in the process of implementing pictorial health warnings in compliance with the deadlines set down by the Supreme Court ruling on 11 June 2014.

All cigarette packets manufactured by CTC from 1 January 2015 will carry pictorial warnings covering 60 percent of the front and back surfaces of the packs. All cigarette packets manufactured and issued before 1 January 2015 should be sold before 1 February 2015.

The firm reported earnings per share of 35.40 rupees for the 9 months ended September 2014.

Abans Finance posts Rs 50.6 m pretax earnings

Abans Finance has recorded healthy pretax earnings of Rs. 50.6 million for the first half of 2014/2015. Net interest has improved by 49.1% to Rs.197.8 million with a total operating income of Rs.226 million.

Impairment charges for the period were down to Rs. 39.2 million from Rs. 65.4 million.

The growth recorded is mainly due to higher earnings from leasing of Hero Motor Cycles and from increased deposits. Net operating income was Rs. 186.8 million after charging personal cost of Rs. 52.5 million and other operating expenses of Rs.78.7 million.

The total assets of the company stand at Rs.4320.9 million. The Total deposits increased by Rs. 51.6% and reached Rs.3271.6 million as at September 30, 2014.

Abans Finance Plc is backed by the strength of Abans Plc.
www.dailynews.lk

NTB posts nett profit of Rs 1,987 m in nine months

The Nations Trust Bank (NTB) closed the nine months ending September 30 2014 with a post-tax profit of Rs.1,987 mn recording a growth of 24% over the corresponding period in 2013. The quarter performance was commendable too, with a post-tax profit growth of 35% over the previous period. Revenue growth of 24% for the period of 9 months was driven by net interest income growth of 19% and higher trading income attributed to foreign exchange and realized and M2M gains arising from the FIS portfolio.

Director and CEO Renuka Fernando said the first nine month results are very encouraging and are very much on track to achieve the targets set for the year.”

Our focus for the remainder of the year is to bring stability in our new core banking solution thereby realizing its technical capabilities to the fullest to support our enterprise level priorities. The improved trends in the business landscape is expected to continue and we are hopeful that the positive trends seen in credit growth will continue beyond 2014. We look forward to concluding yet another rewarding year,”she said.

Return on equity improved to 21.55% for the current year showcasing a well balanced performance. The year commenced with a lackluster demand for credit across the industry and mirroring industry performance, the Bank witnessed a sluggish growth in the loan portfolio in the first half of the year which picked up considerably in the current quarter. The loan book recorded a 10% increase for the nine months and a 15% YoY increase.

The reduction in interest rates saw both asset and liability yields declining. However the drop in cost of deposits outweighed the drop in loan yields thereby contributing to improved NIMs. The Bank relentlessly pursued strategies to improve the mix in higher yielding assets whist pushing for growth in low cost deposits. Low cost funds recorded a growth of 22% for the 9 months with CASA improving to 30% of deposits.

The Impairment charge for the current 9 month period amounted to Rs. 788.9Mn with the higher incremental impact over the previous period arising from credit card and leasing portfolios. Retail and SME have shown a significant improvement in portfolio quality whilst impairment on pawning is also at manageable levels. Bank has undertaken appropriate measures to strengthen its leasing and credit card recovery processes to stabilize these portfolios and the resulting impairment charge.

The capital position was sound at Rs.14.5 Bn with the Capital Adequacy Ratios, despite a drop over December 2013 being maintained at comfortable levels. The drop is mainly attributable to the expansion of the balance sheet of the Bank.
www.dailynews.lk

Lanka Ashok Leyland shows strong accumulated profits

By J. Kurukulasuriya

Ceylon Finance Today: Lanka Ashok Leyland's profits for the six months ended 30 September as compared to the 2013/14 financial year were virtually unchanged at Rs 82.0 million – Rs 82.7 million in the prior year.

The company's sales are from – new vehicle sales, diesel generator set sales, vehicle repair income, spare parts sales and local agency commissions. New vehicle sales consist of 94% of the company's income.

The company's net finance costs were down by 76% from Rs 222 million to just
Rs 56 million due to the prevailing low interest regime. Although profit before tax was up 45% to Rs 161 million, income tax was higher resulting in a bottom line of
Rs 82.05 million.

The company's strong balance sheet shows a Stated Capital of Rs 49 million, backed by accumulated reserves of Rs 887 million, and large accumulated profits of Rs 1,551 million on 30 September.

The shares traded at between a high of Rs 1,900 and low of 1,400 between July and September. None of the directors hold shares of the company.

Lanka Leyland holds 41% of the share capital, and Ashok Leyland 28%. L. S. I. Perera holds 15%. The public share holding — 552 shareholders — hold 2.68%.
www.ceylontoday.lk

Sri Lankan shares ease from near 3-1/2 year high on profit-taking

Nov 10 (Reuters) - Sri Lankan stocks edged down on Monday from a near three-and-half-year high hit in the previous session on profit-taking, led by banks and telecommunication shares.

Continued foreign buying, low interest rates and better earnings expectations kept investor appetite for risky assets intact.

Sri Lanka's main stock index closed 0.17 percent weaker at 7,403.38, moving away from its highest closing level since May 31, 2011 hit on Friday.

"Overall, little bit of profit-taking and slight correction were seen as the market went up fast," said Reshan Kurukulasuriya, COO of Richard Pieris Securities (Pvt) Ltd.

Shares in DFCC Bank Plc, which led the overall fall, lost 1.75 percent to 225 rupees.

Shares in top mobile phone operator Dialog Axiata Plc , which reported a 15.6 percent jump in third quarter net profit on Wednesday, fell 0.8 percent to 12.40 rupees.

Foreign investors bought a net 309.9 million rupees ($2.37 million) worth of shares, extending the net foreign inflow so far this year to 15.88 billion rupees, exchange data showed.

Monday's turnover was 1.88 billion rupees, more than this year's daily average of 1.40 billion rupees.

Analysts expect trading to be choppy in the near-term due to the revised presidential poll schedule in January and a possible bottoming out of interest rates.

The country's central bank has kept key policy rates steady for a ninth straight month, saying private sector credit growth was picking up and long-term lending rates were adjusting downwards. 

($1 = 130.9000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil Nair)