Packer faces a new set of hurdles in SL

James Packer’s Crown group faces a new set of hurdles in his quest to open a $US400 ($457) million casino in Sri Lanka after threats by the country’s president that new gaming levies will be imposed should he win the upcoming January elections, the Age news agency reported.

Sri Lankan President, Mahinda Rajapaksa announced new funding measures in his latest budget.

This includes a $100 entrance fee and a 10 per cent gaming levy on three proposed casino resorts, including one venture that includes Mr Packer’s Crown Ltd.

Crown confirmed that it is still in discussions with the Sri Lankan government and did not comment further.

Mr Packer has been actively pursuing clearance for his proposed mixed-use resort development in Sri Lanka.

In May this year the government gave approval for all three projects to go ahead, without the casinos, and also granted 10-year tax breaks – despite strong opposition.

The opposition UNP and some of Mr Rajapaksa’s own coalition partners who broke ranks voted against the tax concessions but the government has a comfortable majority in the 225-member legislature and the legislation was passed.

There has been speculation that the three projects would be able to operate as casinos by transplanting the licences already held by local partners.

Crown is undertaking the push into Sri Lanka with a local partner, Rank Holdings, which holds two casino licences. Mr Packer has previously remarked that Sri Lanka’s ambitious tourism targets were “only achievable with the right tourism infrastructure and attractions” and cited the success of Singapore in turning around its performance as a tourism destination with the development of two casino resorts.
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Sri Lanka stocks at more than 43-month high ahead of rate announcement

Nov 17 (Reuters) - Sri Lankan stocks rose for a fifth straight session on Monday to 43-month highs, led by beverage and telecom shares a day ahead of the central bank's monetary policy announcement, when it is expected to hold rates.

Continued foreign buying, low interest rates and hopes for better earnings from companies helped boost investor sentiment.

Sri Lanka's main stock index rose 0.31 percent, or 22.91 points, to 7,524.00, its highest closing level since April 18, 2011.

"Today, there was lot more retail interest. A lot of funds are getting into the equity market. That is why retail interest is increasing," said Dimantha Mathew, manager, research at First Capital Equities (pvt) Ltd.

Monday's turnover was 2.4 billion rupees ($18.3 million), exchange data showed, well above this year's daily average of 1.43 billion rupees.

The bourse has witnessed foreign inflows of 18.06 billion rupees so far this year through Friday, exchange data showed. Foreign trading figures were not available for Monday due to some technical fault, an exchange official told Reuters.

Nestle Lanka Plc rose 0.13 percent, leading the overall gains, while Dialog Axiata Plc added 4.80 percent.

Access Engineering Ltd rose 5.76 percent. Traders said hopes for a boost in the construction businesses helped the company's shares.

Sri Lanka's central bank is expected to hold its key monetary policy rates steady at their record low level on Tuesday for a tenth straight month as policymakers aim to sustain an economic rebound, a Reuters poll showed. 

($1 = 130.9500 Sri Lankan rupee) 

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

Sri Lanka stocks close up 0.3-pct

Nov 17, 2014 (LBO) - Sri Lanka's stocks closed higher with the positive price movements in Dialog Axiata and Access Engineering, brokers said.

The Colombo benchmark All Share Price Index closed 22.91 points higher at 7,524.00, up 0.31 percent.

The S&P SL20 closed 14.26 points higher at 4,170.08, up 0.34 percent.

Turnover was 2.43 billion rupees, up from 2.40 billion rupees last Friday with 105 stocks closed positive against 95 negative.

Dialog Axiata closed 60 cents higher at 13.10 rupees with off market transactions of 242.82 million rupees changing hands at 12.50 rupees per share contributing 10 percent of the turnover.

The aggregate value of all off-the-floor deals represented 27 percent of the daily turnover.

Access Engineering closed 2.30 rupees higher at 42.20 rupees and Union Bank of Colombo closed 70 cents higher at 26.80 rupees, attracting most number of trades during the day.

Dialog Axiata contributed most to the index gain.

Carson Cumberbatch closed 11.10 rupees higher at 440.00 rupees and John Keells Holdings closed 4.10 rupees lower at 253.80 rupees.

Sri Lanka NDB reports 49 pct profit Q3 2014

Nov 17, 2014 (LBO) Sri Lanka National Development Bank and its group companies posted a growth of 49 percent in Profit attributable to shareholders, recording 3,276 million rupees for the nine months ended 30 September 2014 the company said in a media release.

The growth is due to the results of the business volumes, effective management of portfolio quality and concerted cost management efforts carried out across the Group, keeping in line with the Bank’s focused business strategy.

The Group profit after tax for the nine months ended was 3,309 million rupees which was a 50 percent growth over the comparative period, while profit before income tax was 4,422 million rupees, which was a 34 percent increase, the bank said.

The Group total operating income increased by 16 percent to 9,673 million rupees.

Net interest up from 15 percent to 5,781 million rupees.

Impairment charges for loans and other losses was 324 million rupees for the nine months ended 30 September 2014 as compared to a provision charge of 226 million rupees in 2013.

The group operating expenses for the nine months increased 7 percent to 4,305 million rupees.

The loans and receivables grew by 34 percent to 165 billion rupees over the prior period, and by 20 percent over the year-end, the bank said. The bank’s customer deposits reached 151 billion up 27 percent over the prior period and grew by 16 percent as compared with 31 December 2013.

The group earnings per share (EPS) for the nine months ended 30 September 2014 was 27.26 rupees with a 65 percent increase over 2013. Return on Shareholder Funds (ROE) was 16.57 rupees and has increased by 54 percent from 2013.

The share price of the Bank closed at 257.50 rupees on 30 September 2014 with a market capitalization of 42.5 billion rupees. The resultant Price Earning (PE) Ratio was 9.5 (times).

Union Bank Group posts Rs.57.9 m PAT in last quarter

Union Bank Group reported a profit after tax (PAT) of Rs.57.9 mn for the quarter ending September 30, 2014, an increase of 28% in comparison to the same quarter in 2013.

During the same period, the Bank reported a profit after tax of Rs.36.4 mn compared to Rs.37.4mn in the corresponding period of 2013.

At the end of the nine months, the group profit after tax stood at Rs 116.2 mn and the Bank at Rs. 55.7 mn respectively. The Bank's subsidiaries, UB Finance and National Asset Management have recorded Rs 68 mn and Rs 30 mn PAT respectively, contributing positively towards the Group profitability. Union Bank's recent investment agreement with TPG the US based global private investment firm has placed the Bank amongst the top 5 commercial Banks in Sri Lanka in market capitalization. The investment comprises a combination of primary equity, secondary shares and warrants, and upon exercise of the warrants, could be up to $117 mn.

Union Bank is poised for the next phase of growth with a wider focus on retail, SME and corporate banking sectors. Highlighting its performance for 3Q, 2014, the

Net Interest income of the Bank, for the period of nine months highlighted strong performance of 27% growth (Rs.1, 165.8 mn) in comparison to the corresponding period of last year and is attributed to the effective liability management initiatives. The group highlighted a 30% growth amounting to Rs.1, 305.8 mn for the same period.

Director and CEO Anil Amarasuriya said, “Union Bank is geared to face the challenges of tomorrow and move to the next phase of growth.”
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HNB Group PAT records 7% growth

HNB Group Post-tax profits grew to Rs 6.23Bn while the Bank recorded a PAT of Rs 5.69 Bn during the 9 months ended September 2014. It is commendable that this performance was achieved despite declining margins and lower loan growth witnessed in the early part of the year.

Commenting on the performance over the period, Dr Ranee Jayamaha, Chairperson of HNB PLC stated that “the industry witnessed the much anticipated acceleration in credit growth during the third quarter and HNB too recorded a strong growth reinforcing its lead position”.Third quarter saw net loans and advances of HNB increasing by Rs 14.7Bn driven by concerted sales efforts in corporate, SME and retail segments. On a year on year basis, net loans and advances of the Bank recorded a 9.3% growth surpassing the industry growth rate for the period, in spite of a drop of Rs 24Bn in the pawning portfolio of the Bank.During the 9 months period HNB also successfully improved its Current and Savings Account (CASA) ratio to approximately 44% from 40% as at end of December 2013 through a focused approach on mobilizing low cost deposits.

The Bank recorded an 8% increase in total operating income to Rs 23.9Bn for the 9months ended September 2014, despite a marginal drop of 3% in net interest income as a result of interest margins coming under pressure.

Jonathan Alles Managing Director / CEO of HNB PLC stated that “through our strategic intent on enhancing fee income and operational efficiency we successfully improved our cost to income ratio to 48% during the period under review, notwithstanding a drop in interest margins. Going forward, we believe that the investments made to upgrade technology and to improve the electronic banking platform as well our continuous focus on streamlining processes would result in realising greater benefits and together with the expectation of credit growth to pick up in the coming months, we would be able to record far superior results”.
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First Capital to become investment bank, records Rs 868 m PAT in first Half

Fizel Jabir

First Capital Holdings will be transformed into a fully fledged investment bank, said Dilshan Wirasekara, Chief Executive Officer, First Capital Holdings at a reception hosted to celebrate a resounding 2014/15 first half performance of Rs 868 mn profit after tax (PAT).

Attributing the overwhelming success to hard work and dedication from its staff, the CEO said First Capital Holdings has been able to identify market opportunities that prevailed both in the interest rate front as well at the equity side of their business by properly analyzing the economic fundamentals and predicting in terms of direction of inflation and various other factors.

Wirasekara said, “We have been a constantly monitoring and following the macro economic fundamentals and have been able to read the market. Our research plays a big part and we have an in house research department for that purpose.”

He said the company carries out a very in depth analysis of various factors and they consider volatility as always an opportunity to make money, if one was on the right side of it and made the right calls on the majority of the time. “We already have the different business functions in place and are expanding our corporate finance advisory function into mergers and acquisitions, advisory on balance sheet restructuring and so on and so forth.

The first half of the financial year 2014/15 saw First Capital Holdings receiving an upgrade in its National long-term and short-term Corporate Credit Rating to A-/P2.

The company reached several milestones during that period such as the launch of a Platinum Bond, the first ever long term repo investment product which pioneered the first ever Micro Finance backed securitization and the introduction of three new units trusts including a gilt-edged and money market unit trust. The First Capital Wealth Fund was lauded as the best performing fixed income unit over the past 12 months with returns of over 25%.
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Softlogic Holdings revenue up 20.7%

Softlogic Holdings PLC consolidated revenue for the Interim quarter ending September 30, 2014 increased by 20.7% to Rs.8.7 bilion taking the cumulative revenue to near Rs.17 Bn, (up 17.7%).

Retail cluster outperformed with a 25.6% contribution to the Group’s cumulative turnover for 1HFY15 followed by Healthcare Services with a 25.1%, Financial Services and ICT each contributing 24.4% and 22.4% respectively. We expect 2HFY15 to report much stronger numbers with most of our business segments skewed towards the seasonal peak, viz, Retail, Insurance, Healthcare and Leisure.

Consolidated Gross Profit increased 18.7% to reach Rs. 3.1 Bn during the second quarter of the financial year with cumulative first half Gross Profit increasing 19.3% to Rs. 6.1 Bn.

Finance Income, which registered an exceptional three-fold growth to Rs. 1.2 Bn (Rs. 800.3 Mn during the quarter), was primarily led by investment portfolio gains at Asian Alliance Insurance PLC which registered Rs. 1.1 Bn gain in its fixed and equity investments for the cumulative period under review. Finance expenses declined to Rs.684.3 Mn as opposed to Rs.733.1 Million in the comparative quarter.

Cumulative finance expenses also reduced to Rs.1.3 Bn with declining interest rates in the wider economy which has assisted the Group’s rapid growth momentum. At this juncture, debt is a much cheaper source of funds in comparison to equity. However, necessary steps are being taken to address Group’s gearing position to bring it to an acceptable level.

Group PBT registered over a two-fold growth to Rs.427.0 Mn during the quarter taking cumulative PBT to 721.8 Mn (Rs. 343.0 Mn in 1HFY14). Profit for the six-month period amounted to Rs.579.1 Mn (up by a strong 91%) with the 2QFY14 reporting Rs.353.8 Mn (up 198.8%).

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Sampath Bank's nine-month PAT grows by 56%

Sampath Bank recorded an impressive profit after tax growth of 56% during the nine month period ended 30th September 2014.

The post -tax profit of the Bank during the period was Rs 3.71 Bn, as compared to Rs 2.38 Bn, achieved in the corresponding period in 2013. Improvements in all sources of income namely, net interest income (Rs.420 Mn), net fee and commission income (Rs.385 Mn), net trading income (Rs.501 Mn), other operating income (Rs. 979 Mn) and drop in impairment charge for loans ( Rs.1,020 Mn), contributed towards this growth in profit.

Sampath Bank Group too recorded a profit after tax of Rs. 3.93Bn for the nine month period ended 30th September 2014, a growth of 54% compared to Rs 2.55 Bn for the same period in 2013.

NII, which is the main source of income from the fund based operations and representing over 66% of the total operating income, increased from Rs 11,267 Mn for the nine months ended 30th September 2013 to Rs 11,686 Mn for the nine months ended 30th September 2014, recording a modest growth of 3.7%. .
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Foreign inflows to CSE hit all-time high

The strategy to conduct road shows in overseas locations has been successful in attracting foreign institutional investors to invest in the Lankan capital market

In a year that has proved to be record breaking, the Colombo Stock Exchange has reached yet another milestone in 2014 by recording its highest-ever inflow of foreign investment into the equity secondary market.

Foreign purchases in 2014 as at 14th November is Rs. 95,083.8 Million surpassing the previous highest foreign purchases of Rs.92, 425. 5 Million recorded in 2010.

The CSE in association with the Securities and Exchange Commission (SEC) initiated a strategy to attract foreign investors to the market, over the past two years. The strategy to conduct road shows in overseas locations has been successful in attracting foreign institutional investors to invest in the Lankan Capital Market.

These Forums have generated wide interest amongst international Fund managers and generated tangible results in the form of investments in equity and debt.

The "Invest Sri Lanka" Investor Forums were held in Mumbai, Dubai, Hong Kong, Singapore, London and New York and the purchases originating from these countries account for 60.3 per-cent of overall foreign purchases within 2014. The CSE also attractednew foreign entrants to the market, in 2014, from locations where these Investor Forums were hosted and they accounted for 44.4%.

Investors from the United Kingdom showed a remarkable interest in the market with the positive inflow from 2013 showing a phenomenal increase in 2014.

"It is only in the past 18 months that we have put serious capital to work and that is why I would say now is an excellent time to invest in Sri Lanka. I am very positive about the outlook of the Sri Lankan economy; in my opinion the best economic growth stories are very supply side led, here Sri Lanka can excel adding infrastructure where it did not exist before, Sri Lanka is adding port capacity to leverage its position on east-west shipment routes, developing itself into a transhipment hub, and working on more efficient and powerful power capacity - these very simple improvements will have a very large impact on the productive potential of the economy," Gordon Fraser, a Fund Manager, Member of the Emerging Markets Specialists Team, Blackrock said, during the Forum in London this May.
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