PLC recognised by ‘Business Today’ as Listed Top Finance Company

People’s Leasing & Finance PLC (PLC), the flagship subsidiary of People’s Bank, retained the ranking amongst ‘Top 25’ listed companies for the second consecutive year with the improvement of four notches from 18th last year to 14th this year at the ‘Business Today Top 25- 2013/14 Awards’ held at the Hilton Hotel, Colombo recently. The award was received by N. Vasantha Kumar, Director and K.S. Bandaranayake, DGM – Finance and Administration of PLC.

The corporate management of PLC at the award ceremony recently held at Hilton Hotel, Colombo

Being the largest non bank finance company in terms of its asset base and profitability, PLC consolidated its strong position and retained its supremacy by being recognised and ranks as the top listed finance company by this prestigious business magazine.

The selection criteria was based on financial performance during the financial year 2013/14 and published information of companies listed on the Colombo Stock Exchange. 

Financial criteria considered include share turnover, revenue, profit after tax, return on equity, earnings per share, market capitalisation, value of shares transacted and value addition.

People’s Bank CEO/GM, PLC Director N. Vasantha Kumar and DGM – Finance and Administration Sanjeewa Bandaranayake receiving the award

PLC was incorporate in August 1995, and became a listed company on 24 November 2011. People’s Leasing Group consists of five subsidiaries engaged in business activities including general insurance, microfinance, fleet management and property development.
PLC is the only finance company with two international credit ratings from Fitch Rating International and Standard & Poor’s. PLC also retained the market leadership in leasing for the last 12 years consecutively.

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Sri Lanka’s Sampath Bank proposed debt issue rated 'A+(lka): Fitch

Nov 26, 2014 (LBO) – Sri Lanka’s Fitch Ratings has assigned Sampath Bank proposed subordinated debentures of up to seven billion rupees a final national long term rating of 'A+(lka)'.

The full statement is reproduced below:

Fitch Rates Sampath Bank's Subordinated Debentures Final 'A+(lka)'

Fitch Ratings-Colombo/Hong Kong-26 November 2014: Fitch Ratings Lanka has assigned Sampath Bank PLC's (Sampath; AA-(lka)/Stable) proposed subordinated debentures of up to LKR7bn a final National Long-Term Rating of 'A+(lka)'.

The assignment of the final rating follows the receipt of final documents that conform to information previously received. The final rating is at the same level as the expected rating assigned on 11 November 2014.

The debentures, which will have a tenor of five years and carry a fixed coupon, 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.

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 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)'

Sri Lanka’s Siyapatha Finance subordinated debt rated 'A-(lka)' by Fitch

Nov 26, 2014 (LBO) – Sri Lanka’s Fitch Ratings has assigned Siyapatha Finance proposed subordinated redeemable debentures of up to one billion rupees a final national long term rating of 'A-(lka)'.

The full statement is reproduced below:

Fitch Rates Siyapatha Finance's Subordinated Debt Final 'A-(lka)'

Fitch Ratings-Colombo/Taipei-26 November 2014: Fitch Ratings Lanka has assigned Siyapatha Finance Ltd's (SLFL; A(lka)/Stable) proposed subordinated redeemable debentures of up to LKR1bn a final National Long-Term Rating of 'A-(lka)'.

The assignment of the final rating follows the receipt of final documents that conform to information previously received. The final rating is at the same level as the expected rating assigned on 2 October 2014.

The proposed debentures will have a five-year tenor with bullet principal repayment at maturity. Coupon payments will be made annually at 8.90%. The debentures are to be listed on the Colombo Stock Exchange. SLFL expects to use the proceeds to strengthen its regulatory Tier 2 capital and to reduce maturity mismatches between assets and liabilities.

KEY RATING DRIVERS

The proposed debentures are rated one notched below SLFL's National Long-Term Rating to reflect their subordination to senior unsecured creditors.

SLFL's rating reflects support from its parent, Sampath Bank PLC (AA-(lka)/Stable). SLFL is rated two notches below its parent because Fitch classifies SLFL as strategically important to Sampath Bank. This view is premised on Sampath Bank's 100% ownership of SLFL, involvement in the strategic direction of SLFL through board representation, and the potential reputational repercussions on Sampath Bank should it allow SLFL to fail.

RATING SENSITIVITIES

Any changes to SLFL's National Long-Term Rating would impact the issue's National Long-Term Rating. SLFL's rating could change if Sampath Bank's rating changes or if SLFL's strategic importance to Sampath Bank changes.

Sri Lanka Treasury bill yields frozen

Nov 26, 2014 (LBO) – Sri Lanka's Treasury bill yields were flat at Wednesday's auction with the 12-month yield unchanged at 6.00 percent, data from the state debt office showed.

6-month yield was also frozen at 5.84 percent though the debt office not offered 6-month bills at the last auction.

The debt office offered 12.00 billion rupees of maturing debt for roll-over and sold 10.55 billion rupees in bills.

The debt office which is part of the island's central bank not offered 3-month short term bills for the auction.

Stockbrokers Say No Reason To Panic

The political games taking place in the country seem to have created a sense of panic in the minds of some investors in the Colombo Stock Exchange, which should not be the case, according to top brokers, who seem to be largely unconcerned about the proceedings.“Various unconfirmed crossover stories have scared off retail investors but we still see a foreign inflow into the fundamentally strong stocks. We expect the market to rebound soon,” Capital Trust Securities CEO and MD Tushan Wickramasinghe said.

The main All-Share Price Index, which opened on 7,530 and closed on 7,401 last Friday, closed further down on 7,235 yesterday.Colombo Stock Brokers Association Chairman and Softlogic Stockbrokers CEO Dihan Dedigama said that the uncertainty of the political sphere has been the biggest influence on the situation and added that a statement of economic policies by the opposition’s common candidate could help the situation.“We’ve seen how much the market gained this year under the current political and economic environment, so it is the other side which has to make a statement,” he said.

Meanwhile, according to Acuity Stockbrokers Executive Deputy Chairman Deva Ellepola, policies of both parties in the past have been investor friendly from t he stock market’s point of view and said that in his opinion, a change in regime will not affect the market significantly.

“I feel it should bounce back, I see no reason for panic,” he said and added that most investors are still sitting on profits.

However, he also reasoned that since the market was in its second highest position since 2011, some people may have seen an opportunity for profitmaking and coupled with the political situation, may have sold their stocks.Candor Equities CEO RaviAbeysuriya said that these stocks sold by retail investors only create jitters and are being bought over by high-net-worth investors who see their worth in the long run.“The macroeconomic indicators show there’s much more room for growth. This is a time for buying,” he said, based on the strong growth rates, dividends and the growth of credit.He also expressed sentiments that any change i n t he country’s rule will have miniscule impact on the functioning of the stock market.

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41 financial consolidation plans approved - CB

By Charumini de Silva

Ceylon Finance Today: Sri Lanka's banking watchdog, the Central Bank yesterday confirmed that 41 financial consolidation plans have been implemented of which 36 have been approved by the Monetary Board.

Central Bank Governor, Ajith Nivard Cabraal said that they are on track to achieve the targets that were set by the bank to monitor, identify and track the sources of systemic risk over time to ensure financial system stability.

He said that the biggest function that they undertook this year was the consolidation process. There are 36 confirmed consolidation plans, which have been approved by the Monetary Board and altogether 41 plans have been implemented. Cabraal said, "Over a long period of time we have seen that there were many weaknesses in our financial system. We have been responding to those weaknesses in various ways and each year we have been made improvements, but overall we have not dealt with the root causes which caused instability.

So, there were times where financial companies failed, banks were shaken, and the knock-on effect felt by the other players for a long time and this had become a bit of a habitual situation as well." Reflecting on the measures taken by the Central Bank he said, "We also took some bold decisions. One was to change the laws in order to provide the incentives for mergers to take place, engaged the key consultancy free of charge to the recipients in order to ensure fair play in the due diligence activity as well as there were no constraints as a result of fees having to be paid.

"It was a cohesive effort and not something suddenly thought through however, many thought it was ambitious, yes it was ambitious. But we have diligently worked through that, in order to make it real. Today, we have seen that those efforts are bearing fruits," he added.
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Union Assurance maintains growth momentum

Union Assurance PLC (UA), a leading player in the Sri Lankan insurance sector maintained a steady growth momentum in gross written premium and profits as at the end of the third quarter of 2014.

GWP from life and general insurance for the nine months of 2014 amounted toRs. 8 billion compared to Rs. 7.7 billion in the preceding period. Life insurance premiums contributed Rs. 4.3 billion and non-life premiums contributed Rs. 3.7 billion.

Total net revenue of the company grew by 16% to Rs. 10.1 billion in 2014 from Rs. 8.7 billion in 2013 mainly due to increase in investment income. Benefits, losses and expenses including the increase in the life fund, grew by 16% as well.

Profit after tax (PAT) increased by 5% from Rs. 291 million in 2013 to Rs. 305 million in 2014. PAT excludes the surplus from life insurance business which is determined after an actuarial valuation at the end of the year.

As at September 30 2014, UA’s life fund stood at Rs. 23 billion with a healthy solvency ratio indicating the financial strength of the business. UA was recognised among the top 3 Service Brands in the country for the 3rd consecutive year being awarded the Silver in the “Service Brand of the Year” category at the recently concluded SLIM Brand Excellence Awards.The company was also recogniseda Great Place to Work by the Great Place to Work Institute,celebrating UA’s many initiatives to ensure employee engagement, satisfaction and welfare. UA also received the Gold Award in category 01at the SLITAD People Development Awards 2014 organised by the Sri Lanka Institute of Training and Development.

The Union Assurance brand is positioned on the promise of “trust” and strives to deliver this promise by being transparent, convenient and respectful when dealing with all stakeholders.
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Bourse recovers after Budget vote, but investors cautious

Reuters: Stocks recovered on Tuesday from the previous session’s near-four-week closing low, a day after President Mahinda Rajapaksa won the final 2015 Budget vote, contrary to speculation that he might lose it.

Analysts expect the market to be volatile due to political uncertainty before a snap presidential poll on 8 January. Rajapaksa, who is facing a split in his ruling coalition ahead of the poll, won the final vote on the 2015 Budget with a strong majority.

The main stock index, which rose 1.32% intra-day, ended 0.06% up at 7,239.36, recovering from its lowest close since 28 October, hit on Monday.

Stockbrokers said the market was volatile and late selling saw early gains being surrendered as investors were cautious due to the prevailing political uncertainty ahead of the elections.

Already, seven legislators, including Health Minister Mithripala Sirisena, the main Opposition candidate, have defected from Rajapaksa’s ruling coalition.

Stockbrokers and research analysts said some investors are buying stocks quietly. They said fears of a possible change in the political leadership could be highly volatile to the market, while some investors still remain optimistic about the change.

Continued foreign buying, low interest rates and hopes of better earnings pushed the bourse into the overbought zone by 18 November, before it slipped on political woes. The Bourse is in the oversold region since Friday, Thomson Reuters data showed.

Tuesday’s turnover was Rs. 1.08 billion ($ 8.24 million), exchange data showed, less than this year’s daily average of Rs. 1.44 billion. Foreign investors were net buyers of Rs. 5.2 million, extending foreign buying for this year to Rs. 19.4 billion, exchange data showed.

Shares in Hatton National Bank Plc rose 1.55%, leading the overall gain.
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