Shangri-La wants more land at Sri Lanka’s Gall Face

The Hong Kong based Shangri-La Group which is already engaged in two hotel projects at Galle Face in Colombo and Hambantota has requested for a further plot of land at Galle Face, says the Urban Development Authority (UDA) Chairman.

During an exclusive interview with Adaderanabiz.lk UDA Chairman Nimal Perera said that Shangri-La had requested for a further plot of land in close proximity to its present project at Galle Face.

“They have requested for this property for another hotel project. No firm decision has been taken regarding this. They have said they would like to have the property,” said Nimal Perera.

AdaderanaBiz.lk recently revealed that the initial plan of the hotel being constructed by Shangri La had been revised to add around 125 additional rooms and that according to the new plan even the high tension electricity cables in close proximity to the site have to be shifted.

The investment for this hotel project had been increased up to USD 450 million.

Preliminary work on this hotel has already begun and it is expected to be completed by 2017.

Meanwhile, the 375 room Shangri-La hotel project in Hambantota has reached its final phase and is to be opened next year as scheduled.

The Shangri-La Group manages more than 80 hotels world-wide under its brand name with more than 34,000 rooms.
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Janashakthi Rs. 1 b debenture issue closed

Janashakthi Ltd’s Rs. 1 billion debenture issue has been closed following an oversubscription on its official opening day yesterday.

The company offered 5 million rated, senior, unsecured, redeemable debentures of Rs. 100 each with an option to issue a further five million in the event of an oversubscription of the original amount.

Janashakthi said the issue was oversubscribed as it had received applications in excess of Rs. 1 billion. The basis of allotment and final status of applications received will be revealed in due course.
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Central Finance buys 90% of Isuru Leasing for Rs. 310.4 m

Central Finance Plc said yesterday that it has purchased 90.1% stake in Isuru Leasing Company Ltd., for Rs. 310.4 million.

The acquisition was conducted with the approval of the Central Bank as part of the financial sector consolidation.
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AIA Sri Lanka posts solid premium growth

The Board of Directors of AIA Insurance Lanka Plc yesterday announced the financial results of the company and its subsidiaries for the nine months ended 30 September 2014.

The main performance highlights were solid premium growth in both Life and General insurance businesses, with Gross Written Premium (GWP) up by 8% to Rs. 7,571 million; Life insurance GWP up by 7% to Rs. 5,358 million, including growth in conventional Life products of 19% to Rs. 4,272 million; and growth in General insurance GWP of 9% to Rs. 2,212 million.

Consolidated profit after tax increased to Rs. 199 million from Rs. 135 million in 2013. The prior year figure included expenses associated with rebranding to AIA Sri Lanka
General insurance business delivered a strong operating performance with a claims ratio of 64.3%. Consolidated revenue grew by 9% to Rs. 10,648 million, including investment income up 14% to Rs. 3,698 million.

AIA Sri Lanka Chief Executive Officer Shah Rouf said: “In the first nine months of 2014, we have further strengthened our distribution platform to address the rapidly growing real life protection and savings needs of the Sri Lankan market. We continued to invest in growing our business with the opening of 25 new branch offices and the addition of 2,150 new Wealth Planners to provide high-quality products and services to our customers.

“Our focus remains on executing our clear strategy through our experienced management team and high-quality Wealth Planners, employees and partners. We believe that AIA’s platform and depth of understanding of the Sri Lankan insurance market are key competitive advantages and central to sustaining our success.”

AIA Sri Lanka Chairman Gordon Watson said: “AIA Sri Lanka has made solid progress in the third quarter of 2014 from the consistent execution of our strategy for delivering sustainable growth. Sri Lanka is a dynamic country with strong economic growth prospects and we look forward to continuing to play a leadership role in the development of Sri Lanka’s insurance sector.”
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Sri Lanka stocks end at 3-1/2-year high

Nov 12 (Reuters) - Sri Lankan stocks hit a 3-1/2-year high on Wednesday as investors picked up banking and construction shares on hopes of growth in the sectors, while continued foreign buying, low interest rates and better earnings expectations kept investor appetite for risky assets intact.

Sri Lanka's main stock index ended up 0.76 percent at 7,469.41, its highest closing level since May 20, 2011.

Shares in Access Engineering Plc, which led the overall gain, rose 6.67 percent to 36.8 rupees while People's Leasing and Finance Plc rose 5.73 percent to 24 rupees.

Traders said expectations over a boost in vehicle leasing business for People's Leasing and Finance Plc after the 2015 budget announcement last month reduced vehicle taxes and Access Engineering being awarded a multi-million dollar contract for a new highway helped boost their share prices.

Foreign investors bought a net 187.4 million rupees ($1.43 million) worth of shares, extending the net foreign inflow so far this year to 16.75 billion rupees, exchange data showed.

Wednesday's turnover was 2.68 billion rupees, well above 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 rupee) 

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

Sri Lanka Treasuries yield unchanged

Nov 12, 2014 (LBO) – Sri Lanka's 6-month and 12-month Treasuries yields were flat at Wednesday's auction without issuing any bills for the 3-month, data from the state debt office showed.

The debt office which is part of the island's central bank said 6-month Treasuries yield unchanged at 5.84 percent and 12-month Treasuries yield unchanged at 6.00 percent.

The debt office said it accepted 13.51 million rupees in 6-month bills and 10.20 million rupees in 12-month bills.

Sri Lanka stocks close up 0.8-pct

Nov 12, 2014 (LBO) - Sri Lanka's stocks closed higher with the price gains of Access Engineering and People’s Leasing and Finance amid foreigners remained active closing as net buyers, brokers said.

The Colombo benchmark All Share Price Index closed 56.69 points higher at 7,469.41, up 0.76 percent.

The S&P SL20 closed 16.59 points higher at 4,136.59, up 0.40 percent.

Turnover was 2.68 billion rupees, up from 1.64 billion rupees a day earlier with 133 stocks closed positive against 67 negative.

Chevron Lubricants Lanka closed 4.40 rupees higher at 348.40 rupees with off market transactions of 234.52 million rupees changing hands at 342.00 rupees per share contributing 9 percent of the turnover.

The aggregate value of all off-the-floor deals represented 14 percent of the daily turnover.

Foreign investors bought 584.82 million rupees worth shares while selling 397.45 million rupees worth shares.

Access Engineering closed 2.30 rupees higher at 36.80 rupees, People’s Leasing and Finance closed 1.30 rupees higher at 24.00 rupees and Lanka IOC closed 3.60 rupees higher at 67.50 rupees attracting most number of trades during the day while contributing most to the index gain.

Two weaker telcos 'may' exit SL: Fitch

Ceylon Finance Today: Over-capacity in Sri Lanka's telecommunications industry could shrink as two weaker operators may exit the sector, which would benefit the remaining players, Fitch Ratings says in a report.

"Data tariffs could rise following consolidation, and this would slow the decline in profitability and prevent duplication of capex. The number of industry participants could fall to three from five. Sri Lanka Telecom (SLT; BB-/AAA(lka)/Stable), the largest integrated operator, plans to acquire Hutchison Lanka; while the third-largest operator, Etisalat Lanka, could merge with the fourth-largest, Airtel Lanka," the ratings agency said.

"The credit profiles for SLT and Dialog Axiata PLC (Dialog; AAA(lka)/Stable) will remain stable; ratings headroom will remain moderate despite a decline in profitability and continued large capex requirements.

"SLT's and Dialog's average operating EBITDAR margins might decline to 30%-31% in 2015 (2014: average of 32%), excluding any benefits of consolidation, due to price-based competition and the substitution of low-margin data services for traditional voice/text services. "Free cash flow (FCF) for both SLT and Dialog is likely to be negative in 2015 as average capex/revenue for the two telcos will remain high, at around 28% (2014: 30%), to expand 3G/4G network coverage and fibre connectivity. We expect SLT's and Dialog's fund flow from operations (FFO)-adjusted net leverage to deteriorate in 2015 to 1.3x and 2.0x, respectively (2014: 1.1x and 1.9x), as cash generated from operations will fall short of capex requirements, and they would require debt funding.

However, leverage will remain at levels appropriate for their current ratings.

"Fitch may revise the outlook for Sri Lanka's telecommunications sector to positive if industry consolidation results in improvement in profitability. The regulator's introduction of a data tariff floor could also ease pressure on profitability.

"Significant debt-funded acquisitions leading to weaker balance sheets could significantly reduce ratings headroom for both SLT and Dialog. SLT's National Long-Term rating would be downgraded to 'AA+(lka)' if it executes a debt-funded acquisition of Hutchison Lanka that raises its FFO-adjusted net leverage to over 1.5x.

"Also, a major dilution in ownership or board control by Dialog's parent, Axiata Berhad, removal of the common brand name, or a weakening of the current strategic and operational ties between the companies, could lead to negative rating action on Dialog's National Long-Term Rating. Fitch assesses Dialog's standalone profile at 'AA+(lka)'," Fitch said.
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Aitken Spence 6-month pre-tax profit up by 13%

Diversified conglomerate Aitken Spence PLC posted a pre-tax profit of Rs. 2.29 b for the six months ended 30 September 2014, an increase of 13% from the corresponding period last year.

The blue chip’s half-year revenue soared by 23.7% to Rs. 19.7 b, results released to the Colombo Stock Exchange revealed. Profit attributable to equity holders rose by 8.1% to Rs. 1.3 b while earnings per share improved by 8.1% to Rs. 3.27, over the corresponding period.

Aitken Spence PLC is among Sri Lanka’s most dynamic and respected corporate entities with operations in South Asia, the Middle East, Africa and the South Pacific. Listed in the CSE since 1983, it has major interests in hotels, travel, maritime services, logistic solutions and power generation.

The group also has a significant presence in plantations, printing, garments, financial services, insurance and information technology.

Inbound travels sector contributed strongly to the broader tourism sector’s performance during the period under review. Aitken Spence Travels, a joint venture with global giant 
TUI, is Sri Lanka’s largest destination management company with a leading presence in the Maldives.

Aitken Spence is presently in the midst of two substantial hotel projects in Sri Lanka worth approximately Rs. 18 billion.

Heritance Negombo, which is expected to be Negombo’s landmark destination, will be a high-end 142-room resort, expected to open in 2015.

A joint venture with globally renowned RIU Hotels, the 500-room RIU Ahungalla will be the largest hotel out of Colombo with opening date set in 2016.

Strong returns from Port Terminals Ltd., which runs ports in Fiji, made a significant contribution to the Maritime Cargo Logistics sector’s performance.

Considerable growth in the printing and garments businesses helped the strategic investments sector record a robust performance during the six months.

In September, the apparel business unit began the refurbishment of a new expanded facility that would double its capacity. The new factory in Koggala, which is expected to be operational in December this year, will be employing 1,500 staff.

Aitken Spence Printing, an industry leader, recently invested in additional machinery to bolster its post-press facilities.

The increased generation by the Group’s Embilipitiya power plant strengthened the performance of the strategic investments sector during the reporting period. The company sold its power plant in Matara during the period under review.

The balance sheet during for period under review reflected the Aitken Spence’s recent acquisition of a hotel property in Chennai.
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