Fitch withdraws ratings on Sri Lanka’s Asian Alliance Insurance due to insufficient information

Dec 22,2014 (LBO) - Fitch Ratings Lanka has withdrawn Asian Alliance Insurance PLC's National Insurer Financial Strength Rating and National Long-Term Rating of 'BBB(lka)', the rating agency said in a media release.

The Sri Lanka-based company's Insurer Financial Strength Rating of 'B' has also been withdrawn. All the ratings were on Rating Watch Negative.

The ratings have been withdrawn due to insufficient information to maintain them.

Fitch will no longer provide rating or analytical coverage of this issuer, the release said.

Sri Lankan stocks end steady; political uncertainty weighs

Dec 22 (Reuters) - Sri Lankan stocks ended little changed on Monday amid moderate trading, but stockbrokers expect volatility until the Jan. 8 presidential poll with fresh defections from the ruling party raising political uncertainty.

The main stock index ended 0.01 percent weaker at 7,251.57.

After market hours on Monday, two ruling party legislators, including a cabinet minister, defected President Mahinda Rajapaksa's United People's Freedom Alliance to join the opposition camp for the upcoming presidential poll.

With the latest defection, Rajapaksa has lost his two-third majority for the first time in more than four years.

Thirteen legislators, including former health minister Mithripala Sirisena, who is challenging Rajapaksa's bid for a third term as the consensus candidate of a united opposition, have defected after the president announced snap elections last month. Two opposition legislators have defected to the ruling party.

"With the new defections there could be volatility," a stockbroker said on condition of anonymity.

"A majority of market players, including the stockbroker community, had expected Rajapaksa to win the election convincingly. But with more defections the chances of his re-election look difficult."

Speculation over more defections also weighed on sentiment, analysts said.

The day's turnover stood at 867.8 million rupees ($6.62 million), stock exchange data showed, lower than this year's daily average of 1.41 billion rupees.

The bourse saw a net foreign outflow of 179.6 million rupees this session, but it has seen a net inflow of 21.5 billion rupee worth stocks so far this year, exchange data showed.

Gains led by financials were offset by losses mainly in conglomerates.

DFCC Bank gained 3.03 percent to 224 rupees, while construction firm Access Engineering fell 1.9 percent to 36.10 rupees.

($1 = 131.1000 Sri Lankan rupees) 

(Reporting by Shihar Aneez; Editing by Subhranshu Sahu)

Trend in increase of cars in Sri Lanka

Currently some 5,000 motor vehicles are being registered per month in Sri Lanka and around 50,000 have been registered during this year alone, says the Commissioner General of Motor Traffic.

Commissioner General of Motor Traffic S.H. Harischandra told www.adaderanabiz.lk, “Around 5,000 motor vehicles are being registered since August. Before this it was somewhere around 3,000 only.”

The reason for this increase motor vehicle registration is the considerable decrease in taxes on smaller motor vehicles through the 2015 budget proposals.

According to the Commissioner General of Motor Traffic some 8,000 three-wheelers are being registered each month.

Accordingly, around 400,000 vehicles are expected to be registered by end this year whereas the number was around 325,000 last year, added the Commissioner General.
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Sri Lanka’s Amãna Takaful PLC to transfer its long-term business to Amãna Takaful Life Ltd

Dec 22, 2014 (LBO) - Sri Lanka’s Amãna Takaful PLC to transfer its life insurance business, Family Takaful to Amãna Takaful Life Limited with effect from 1st of January 2015, the company said in a media release.

Media Release Reproduced

The separation of Amãna Takaful’s life and general insurance businesses will enable the company to run the two categories of insurance as separate business entities.

The transfer is taking place following a mandatory requirement introduced by Section 53 of the Regulation of Insurance Industry Amendment, Act No. 3 of 2011 which requires all composite insurance providers to segregate their long-term and general insurance businesses.

With effect from 1 January 2015, all Life insurance policies held by policyholders of Amãna Takaful PLC will be transferred to Amãna Takaful Life Limited, which will operate as a wholly owned subsidiary.

The transfer will come with the assurance that all obligations and responsibilities that the insurer has undertaken will continue unchanged. Amãna Takaful remains dedicated to providing all policyholders with a range of high quality insurance products and exceptional standards of service.

Amãna Takaful products in the Life category include; ‘Prosper’ Sri Lanka’s first Shari’ah compliant unit linked life insurance plan, ‘Adhyapana’, a long-term protection and saving plan that will fund the education of children whilst providing their parents with health cover and ‘Surakshitha’, an affordable life insurance cover. Also included in the Life portfolio is ‘Platinum’, which is designed to suit those who want to provide the best money can buy for the ones dearest to them, ‘Group Life’, a life insurance cover created especially for employees and ‘Safeguard’ a mortgage protection cover.

In 2014, Amãna Takaful also introduced several innovations and unique insurance policies to effectively meet the needs of the market.

The ‘Suwasiri’ health insurance policy priced at Rs.2222 /- (annually) gives all Sri Lankans access to medical insurance in order to continue peace of mind throughout bouts of poor health. The ‘Crystalline’ cover specially designed for ladies was introduced to support the health and well-being by providing comprehensive insurance cover for common ailments faced by women.

Piramal Glass in waste glass collection drive

The Centre for Sustainability (CFS) of the Department of Forestry and Environmental Science, University of Sri Jayewardenepura (USJ) together with one of their programme sponsors from the commercial sector, Piramal Glass Ceylon Plc launched a campaign to streamline the waste glass collection mechanism in the university. Under this project Piramal Glass Ceylon Plc will be collecting all glass waste disposed from the University for recycling purposes.

This is another successful initiative under the “Be the Change” campaign that was launched by the CFS few months back, which is aimed at raising community awareness on responsible waste disposal and the importance of using environmental friendly packaging material with a focus of making Sri Lanka a “Greener and Cleaner” place for the future.

Discussing about this initiative Prof. Nilanthi Bandara, Head, Department of Forestry and Environmental Science of USJ said, “This is an extension of the public awareness programme we launched a few weeks ago under the theme ‘Be the Change.’ Today we are pledging our own efforts towards this campaign by introducing a method to streamline the collection of waste glass in our own university. Through this we project we are pioneering the change we like to see in our society.” 

Discussing their assistance towards this programme, Sanjay Tiwari, Chief Executive Officer, Piramal Glass Ceylon Plc said, “We have 21 waste glass collection locations Islandwide and this will be the newest addition to our system. We readily partnered with USJ as we saw a strategic fit between this programme and our business/manufacturing systems, which are based on environmental friendly practices. We are planning to partner with the CFS for a few more practical, focused and value adding initiatives of similar nature in the future too which will help drive awareness and action among various communities in making Sri Lanka a cleaner place.”
www.dailynews.lk

Lanka Aluminium receives SLS

Lanka Aluminium Industries PLC, the pioneer manufacturer of high quality aluminium extrusions in Sri Lanka was awarded the prestigious SLS certification recently. Lanka Aluminium is the very first aluminium extrusion manufacturer in the country to have received the SLS certification for some of its products. The company is also ISO 9001:2008 certified.

The company manufactures aluminium extrusions both in anodized and powder coated finishes which is the current standard for architectural applications. Lanka Aluminium maintains consistent quality in the anodizing and electro colouring plant utilizing German technology and Henkel’s proprietary colour systems. The all-important sealing process is tested for each and every batch to ensure consistent quality. The anodic coating thicknesses are as per the British standards. The company is the first extruder to manufacture powder coated finishes and has established a reputation for excellent colour fastness and adhesion. This too is due to their rigorous attention to detail.

“As a policy, we always improve our products on an ongoing basis and try to be innovative to provide the customers with a high quality product, at a reasonable price” said Dinal Peiris-Managing Director, Lanka Aluminium.

Deshabandu Dr. Senaweera-Director General/CEO of SLSI commented “Lanka Aluminum Industries PLC is the first company in Sri Lanka which obtained the “SLS” mark for selected profiles of Aluminum Extrusions products. Sri Lanka Standards Institution (SLSI) is the only organization that can grant a permit for the use of the well recognized “SLS” mark, which has been a symbol of trust for quality in Sri Lanka since 1980”.

“The SLS mark on a product assures that it is consistently manufactured in accordance of the applicable Sri Lanka Standard Specification which leads to satisfy customer expectations and thereby the product can be purchased with confidence from the very competitive markets. To ensure that the manufacturer maintains the same quality level right throughout the production, SLSI will continually monitor the quality of such products through stringent product focused surveillance visits and also using internationally recognized certification principles” he added.

Lanka Aluminium Industries PLC is a public listed company established in 1986 and its aluminium extrusions are used in some of the finest high-rise buildings in the country.
www.dailynews.lk

Abans Rs. 2 billion debenture oversubscribed

Abans Plc said its Rs. 2 billion debenture has been oversubscribed on its official opening day itself on Friday.

The company offered 10 million senior, unsecured, listed, redeemable, rated debentures of Rs. 100 each and a further 10 million debentures in the event of the original amount being oversubscribed.

On Friday the issue had drawn applications for over Rs. 2 billion hence it was closed. The final figure of applications will be announced later.

The debenture was rated ‘BBB+ ’ by Fitch Ratings Ltd. The issue comprised three types of debentures with tenor spanning 3, 4 and 5 years.

Interest rate offered were 
Type A: Fixed Coupon Rate of 8.25% p.a. payable Semi-annually (AER –8.42%); 

Type B: Fixed Coupon Rate of 8.50% p.a. payable Semi-annually (AER –8.68%) and 

Type C: Fixed Coupon Rate of 9.00% p.a. payable Semi-annually (AER –9.20%).

In the prospects, it was announced that 60% of the issue value will receive preferential allotment and the remaining 40% would be allotted at the discretion of the Board of Directors in a fair manner.

The funds raised by this debenture offering will be utilised to reduce asset and liability maturity mismatches; reduce interest rate risk of the company by way of debentures carrying a fixed interest rate and lock in medium term guaranteed funding.

Joint managers to the issue were Capital Alliance Partners Ltd., People’s Bank Investment Banking Unit and Abans Corporate Finance Division.
www.ft.lk

JKH retains top slot in the LMD 100

* Conglomerates and banks dominate the rankings this year

Media Services, the publisher of pioneering business magazine LMD, has announced that it will release its special edition on Sri Lanka’s leading listed companies – the LMD 100 – to bookstores this week.


LMD’s special edition – the 21st since the rankings were first published in 2004 – notes that “with a turnover of close upon Rs. 90 billion in 2013/14, JKH retains its position at the summit of the premier listed company rankings.”

The magazine notes: “Bukit Darah surrenders its runner-up title from last year to Lanka IOC. Hayleys crawls up by one spot, to third place, and it is followed by Bukit Darah in fourth place. Commercial Bank rounds off the top five.

The rest of the leader board consists of HNB at No. 6 and Dialog Axiata in seventh place, SLT at No. 8, as well as CT Holdings and Cargills – they’re placed ninth and tenth respectively.”

“Combined turnover of the 50 leading listed entities has increased by 10% in the latest rankings, but their aggregated bottom lines contracted by a notable 6%. In 1993/94, revenue rose by 20% year-on-year, while profits expanded by a mammoth 60%,” it observes.

The LMD 100’s cumulative post-tax profit declined by six percent in 2013/14, compared to the previous year, to Rs. 171 billion.

“Even JKH, which ranks No. 1 on the list of profitable entities, saw its bottom line shrink by four percentage points, to Rs. 13 billion.” At the same time, 10 of the LMD 100 ended the 2013/14 financial year in the red, versus a count of only three in the preceding year,” the journal notes.

Royal Ceramics made the most notable progress in LMD’s rankings – it moves into the top 50 listed entities in 2013/14 at No. 37 – up 25 places from the preceding year. People’s Leasing & Finance and LB Finance also make their presence felt, improving their positions by six and five spots respectively.

Sri Lanka’s version of the Fortune 500 can also be viewed online, on LMD’s website (www.lmd.lk).
www.ft.lk

Alliance Finance Rs. 1 b debenture through

Alliance Finance Plc said on Friday that its Rs. 1 billion listed debenture has been oversubscribed and closed on its official opening day.

The company offered 7.5 million senior, unsecured, listed, redeemable, rated debentures of Rs. 100 each with an option to issue a further 2.5 million debentures in the event of an oversubscription of the original amount.

On Friday the issue was oversubscribed with applications received in excess of Rs. 1 billion.

The final figure of the applications will be announced later. The prospectus said 60% of the issue value will receive preferential allotment and the remaining 40% would be allotted at the discretion of the Board of Directors in a fair manner.

The debenture was rated BBB by Lanka Rating Agency Ltd. The company offered two types of debentures of five and four years of tenure.

Type A: Fixed Coupon Rate of 9.00% p.a. payable Annually (AER – 9.00%)

Type B: Fixed Coupon Rate of 9.35% p.a. payable Annually (AER – 9.35%).

The funds raised by this debenture offering will be utilised for to reduce asset and liability maturity mismatches; reduce interest rate risk of the company by way of debentures carrying a fixed interest rate and lock in medium term guaranteed funding.

Manager to the issue was Capital Alliance Partners Ltd.
www.ft.lk

Capital market gathers momentum – SEC

* Rs. 97 b net foreign inflow and Rs. 160 b worth of capital raised during the past three years

* Market capitalisation as a percentage of GDP up from 11.1% to 36% since end of the war

The Securities and Exchange Commission (SEC) is maintaining that the capital market has gathered strong momentum during the past three years and post-war reflecting sustained recovery proving those who once predicted doom and gloom wrong.

The SEC said that thanks to a series of initiatives with the support of all stakeholders, the capital market has reported significant achievements.

A significant development is the net foreign inflow of Rs. 97 billion during the past three years. This achievement is commendable since there were many who warned that foreigners would shun the Colombo Stock Market after it was faced with allegations of manipulation among other ills. During the past three years companies have also raised a staggering Rs. 160 billion in capital reinforcing the attractiveness of of the Colombo Bourse.
Some of the other key achievements post-war of the Colombo Stock Market according to the SEC includes: The main Price Index ASPI has gone up by 278%, Market Capitalisation has appreciated by 631%, the average daily turnover has gone up by 205%, market capitalization as a % of GDP has appreciated from 11.1% to 36%, assets under management in Unit Trusts (Mutual Funds) has increased by 1,708% and the total turnover of the corporate debt market has appreciated by 6,036%.

“Economic growth hinges on an efficient capital market which mobilises savings for productive investments. From the perspective of Sri Lanka’s fast emerging economy status, the role played by the capital market as an integral driver of the overall macro economy is constantly evolving,” the SEC said.
To this effect the SEC said it believes, while regulation is fundamental to ensure the capital market mechanism is fair and transparent, it has to facilitate market development.

“The Sri Lankan Capital Market is one of the key areas which witnessed impressive growth in the post-war period and it is in view of this that the SEC, in consultation with key industry participants, put forward a three-year Capital Market Development Road Map in October 2012 to reposition the market to play an important role in the capital formation and development of the economy,” SEC said.

Apart from the road map, in order to develop the capital market the SEC, together with the CSE, implemented several important initiatives in the recent past. These initiatives were implemented in order to increase liquidity and strengthen regulatory framework.

The SEC said the execution of the road map has progressed steadily over the years and most of the initiatives have reached substantial completion. The broad objectives of the road map are both structural and functional in nature covering many areas such as Regulation, Investor Protection, Market Development, Infrastructure Development and Enhancement of Financial Literacy, Risk Management etc.

“Implementation of these initiatives together with the Capital Market Development Road Map has undoubtedly contributed towards fostering a fair, robust and efficient market to support and complement Sri Lanka’s economic development program. It is heartening to note that during the post-war era the market has grown steadily,” the SEC said.
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