Sri Lankan shares hit over 8-wk closing high on earnings hope

(Reuters) - Sri Lankan shares edged up to their highest closing level in more than eight weeks on Thursday, as retail investors picked up risky assets in moderate volumes on hopes companies would report better earnings and as low rates perked up sentiment.

The passage of constitutional reforms that would help establish independent bodies for good governance also buoyed the market, analysts said, adding however concerns over political stability remained.

Sri Lanka's parliament passed reforms Tuesday to reduce some of the president's powers, although they were far fewer than President Maithripala Sirisena had promised.

The main stock index edged up 0.08 percent to 7,179, its highest closing level since March 6. It has gained 4 percent since the central bank cut key rates on April 15, while yields on t-bills have fallen 41-51 basis points since then.

The index gained 5.26 percent in April.

"We saw a bit of activity taking place with select buying on fundamentally sound stocks on earning expectations," said Dimantha Mathew, research manager at First Capital Equities (Pvt) Ltd.

Turnover stood at 801.8 million rupees ($6.02 million), compared with this year's daily average of around 1.06 billion rupees.

The market saw net foreign outflow of 65 million rupees worth of shares on Thursday. Foreign investors have bought net 3.74 billion rupees worth shares so far this year.

Analysts said the market could be dull until the perception of political uncertainty is addressed and many investors would be in a wait-and-watch mode before the parliamentary elections.

Shares of leading mobile phone operator Dialog Axiata Plc rose 1.77 percent, while Finlays Colombo Plc jumped 9.41 percent.

The index lost 6.6 percent last month, its biggest monthly drop since October 2012, as investors sold holdings to settle margin trades amid concerns about political stability and a rise in interest rates.

Sri Lanka's stock and foreign exchange markets will be closed on Friday for May Day and on Monday for a Buddhist religious holiday. Normal trading will resume on Tuesday.

($1 = 133.1000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)

Sri Lanka to get US$400mn from RBI tomorrow

COLOMBO (EconomyNext) – Sri Lanka’s Central Bank said it will get the first US 400 million dollar tranche in a currency swap with the Reserve Bank of India on Thursday, 30th April, 2015.

Another 1.1 billion US dollars has been approved by the Union Cabinet of the Indian government for augmenting the currency swap arrangement between the two Central Banks. 

“This additional amount is expected to be made available in due course,” a central bank statement said.

The currency swap facility was agreed on during the visit of Indian prime Minister Narendra Modi to Sri Lanka on 14th March, 2015.

The funds are from Reserve Bank of India’s financing facility for South Asian Association for Regional
Cooperation (SAARC) member country Central Banks.

Textured Jersey Lanka PLC recorded its highest ever annual net profit of Rs.1.3bn for the FY 2014/15

Textured Jersey Lanka PLC (TJL) recorded its highest ever annual net profit of Rs.1.3bn for the year ended 31st March 2015, an increase of 16% year on year. This result was achieved on the back of Rs. 512mn net profit for the quarter ended 31st March 2015, representing an impressive 46% year on year increase. The strong quarterly performance enabled the company to conclude the year with a record profit despite the slowdown in sales experienced in the early part of the year, attributed to unusual and extreme weather conditions in the United States. 

With demand from its main customers back on track, TJL reported a notable Rs.3.8bn in sales during 4Q FY2014/15, up 16% year on year. Improved demand conditions coupled with recently added capacity enabled TJL to optimize capacity utilisation and product mix to achieve gross profit margins of 15% for 4Q FY 2014/15 compared to 12% during the same quarter last year. This in turn allowed the company to increase its gross profit by 45% to Rs.583mn for 4Q FY2014/15 and drive its annual gross profit to Rs.1.6bn, up 11% compared to the year before. 

The strong performance at gross profit level allowed TJL to post an operating profit of approximately Rs.476mn for 4Q FY 2014/15, recording 52% year on year growth at the operating profit level. TJL’s annual operating profit for the year ended 31st March 2015 came in at Rs.1.2bn, 14% higher year on year. 

TJL continued to maintain its near debt-free balance sheet as at 31st March 2015, with a net cash position of Rs.1.9bn. Lower interest rates, combined with a marginally lower cash position versus a year before led to net finance income dropping to Rs.14mn for 4Q FY2014/15. The net finance income for the year ended 31st March 2015 came in at Rs.58mn, down 36% compared to the year before.

Despite the reduction in finance income, the quarter concluded with a net profit of Rs.512mn growing 46% year on year. The combined effect of added capacity and strong demand recovery in the latter part of the financial year coupled with solid cost and productivity management enabled TJL to report a record annual net profit of Rs.1.3bn for FY2014/15 despite challenges. 

Additionally, during the quarter TJL engaged Ernst & Young to carry out an independent valuation of Ocean India Private Limited and Quenby Lanka Prints Private Limited as a part of the initial discussions to further its acquisition plans. Additional updates will be provided on the outcome of these discussions in due course. 

Looking towards the future; recently enhanced capacity and strategic investments coming into fruition will place TJL on a solid growth platform for the coming year. As regional expansion plans move forward to secure TJL’s long term growth trajectory, the prospects of GSP Plus in the future would further augment TJL’s current momentum. 

Sri Lankan shares at over 8-wk closing high after reforms approved

(Reuters) - Sri Lankan shares edged up to their highest close in more than eight weeks on Wednesday, a day after the country's parliament overwhelmingly approved some diluted reforms, but concerns over political stability remained.

The parliament passed the reforms on Tuesday reducing some of the president's powers, in a move that did not go as far as President Maithripala Sirisena had promised but is nevertheless seen as a victory for the leader.

The main stock index ended up 0.55 percent at 7,173.37, its highest close since March 6. It has gained 3.95 percent since the central bank cut key rates on April 15, while yields on t-bills have fallen 41-51 basis points since then.

"Market is up on positive sentiment but people will be a little wary till the elections are over," said Reshan Kurukulasuriya, chief operating officer of Richard Pieris Securities (Pvt) Ltd.

The day's turnover was 974.7 million rupees ($7.33 million), compared with this year's daily average of around 1.06 billion rupees.

The market saw a net foreign inflow of 2.73 million rupees worth of shares on Wednesday, extending the net foreign inflow so far this year to 3.81 billion rupees.

Analysts said the market could be dull until the perception of political uncertainty is addressed and many investors were in a wait-and-watch mode before the parliamentary elections.

Shares of Carson Cumberbatch Plc jumped 4.17 percent, while C T Holdings Plc rose 0.08 percent.

Some analysts said the markets would stay volatile until parliamentary elections.

Investors have been cautious due to political uncertainty as Prime Minister Ranil Wickremesinghe's party does not have a majority in parliament and Sirisena promised to dissolve parliament after the end of his 100-day programme on April 23.

The index lost 6.6 percent last month, its biggest monthly drop since October 2012, as investors sold holdings to settle margin trades amid concerns about political stability and a rise in interest rates. 

($1 = 132.9000 Sri Lankan rupees) 

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

Kalpitiya Beach Resort requested to postpone EGM

The Securities and Exchange Commission of Sri Lanka (SEC) yesterday requested Kalpitiya Beach Resort PLC to postpone the scheduled Extraordinary General Meeting (which was scheduled by the said Company in response to a Directive of the SEC) by another month from the date of scheduled EGM.   This was to enable the company to come up with a precise direction on the future course of action on how the company proposes to safeguard the minority shareholder interests prejudiced by the delays caused in constructing the resort hotel, Citrus Kalpitiya.

The SEC made this request from the company after perusing the circular issued to the shareholders of Kalpitiya Beach Resort PLC, in consequence of the above said directive of the SEC as the SEC was of the opinion that the alternate courses of action stated in the circular to the shareholders lacked specific direction with regard to providing adequate recourse to the minority shareholders in respect of their investment.

The company by way of a prospectus issued to the public raised approximately Rupees two hundred and eighty three million (Rs. 283 million) to part finance the construction of a resort hotel within the stipulated period of twenty four to thirty months.   The company gave this undertaking in the prospectus issued to the public on or about December 2011.   The company has been requested by the SEC that in the event the company is unable to rectify the issues in respect of the construction of the hotel, that it is required to propose a viable alternate scheme to redress the shareholders who have been prejudiced by the failure of the company to carry out its objectives as stated in the prospectus. (SEC)

19th Amendment passed with a vast majority

The 19th Amendment to the Constitution was passed with a vast majority in Parliament, a short while ago on Tuesday (28), with the government gaining 212 votes in favour. 

Upon the conclusion of the voting, President Maithripala Sirisena said that the approval of the 19th Amendment with a two-third majority was a historic victory of the public. He earlier expressed with the much awaited enactment of the new amendment, the people of Sri Lanka will experience the true meaning of ‘democracy and peace’.

The new legislation, which suggested the removal of the Executive Powers of the President, was passed with a majority of 211 votes with 212 voting for and one against.

Ten Parliamentarians including Keheliya Rambukwella, Premalal Jayasekara, Susantha Punchinilame, Jagath Balasuriya, Ven. Ellawala Medhananda Thera, Janaka Bandara, and Basil Rajapaksa were absent at the voting.

In the past few days, there were certain obstacles with regard to presenting of this 19th Amendment to Parliament. The 19th Amendment, which was a major aspect among the key targets to be achieved in the government’s 100-day pledge, had been stuck in a deadlock as the Opposition opposed to extend its support to pass the new legislation.

The Sri Lanka Freedom Party expressed the 19th Amendment and the electoral reforms should come hand in hand.

However, President Sirisena later appealed to all political parties to assist in passing the 19th Amendment to the Constitution in order to firmly establishing freedom and democracy in the country.

www.adaderana.lk

Two-thirds majority for 19A

At its second reading in Parliament a short while ago, the 19th Amendment to the Constitution was passed by a two-thirds majority with 214 MPs voting in favour. SLFP MP Sarath Weerasekara voted against while one MP abstained. Seven MPs were absent at the time of voting.
www.dailymirror.lk/

BoC GM reinstated after compulsory leave

General manager of the Bank of Ceylon D.M. Gunasekara was reinstated yesterday (27) after being sent on compulsory leave.

His suspension has been annulled after the BoC employees union threatened to strike, alleging it was an authoritarian decision to suspend him.

Gunasekara has been accused of opening of a BoC branch in Seychelles without proper permission, making improper recruitment and over the releasing of money to Perpetual Treasuries for investment in the controversial treasury bonds issue of the Central Bank.

Sri Lanka raises $81.25 mln through development bonds

(Reuters) - Sri Lanka raised $81.25 million through two- and three-year dollar-denominated development bonds on Tuesday, the central bank said.

The government sold $30 million two-year bonds at 6-month LIBOR plus 360 basis points (bps) after receiving bids worth $45 million, while it raised $51.25 million in three-year bonds at 6-month LIBOR plus 377.20 basis points.

The central bank received $63.25 million worth of bids for three-year development bonds.

It had offered $25 million each in two- and three-year bonds. 

(Reporting by Ranga Sirilaland Shihar Aneez; Editing by Clarence Fernandez)

Sri Lankan shares at 7-week closing high; political woes weigh

(Reuters) - Sri Lankan shares edged up to their highest close in seven weeks on Tuesday led by diversified shares, but volume was light as investors awaited cues from the political front ahead of a parliamentary vote on proposed constitutional reforms.

The main stock index ended up 0.13 percent at 7,134.43, its highest close since March 9. It has gained 3.38 percent since the central bank cut key rates on April 15, while yields on t-bills have fallen 41-51 basis points since then.

Investors have been cautious due to political uncertainty as Prime Minister Ranil Wickremesinghe's party does not have a majority in parliament and President Maithripala Sirisena promised to dissolve parliament after the end of his 100-day programme on April 23.

The passage of reform measures, including establishing independent police, judiciary, and election and public service commissions, is seen as a test for Sirisena's government.

"Market was volatile with continued upward trend, but investors are still waiting for a stable political framework," said Reshan Wediwardana, research analyst at First Capital Equities (Pvt) Ltd.

Investors awaited the outcome of the vote on constitutional reforms which could help boost investor sentiment, dealers said.

The day's turnover was 756 million rupees ($5.69 million), compared with this year's daily average of around 1.07 billion rupees.

The market saw a net foreign inflow of 21.2 million rupees worth of shares on Tuesday, extending the net foreign inflow so far this year to 3.8 billion rupees.

Analysts said the market could be dull until the perception of political uncertainty is addressed and many investors were in a wait-and-watch mode before the parliamentary elections.

Shares of Hemas Holdings Plc rose 0.39 percent, while Distilleries Company of Sri Lanka Plc gained 1.49 percent.

Some analysts said the markets would stay volatile until parliamentary elections are announced.

The index lost 6.6 percent last month, its biggest monthly drop since October 2012, as investors sold holdings to settle margin trades amid concerns about political stability and a rise in interest rates. 

($1 = 132.9000 Sri Lankan rupees) 

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

CSE takes over SAFE Chairmanship

The Chairman of the Colombo Stock Exchange (CSE) was unanimously elected as the Chairman of the South Asian Federation of Exchanges (SAFE) at the Annual General Meeting of SAFE concluded on April 26th, 2015. Accordingly, the CSE Chairman Mr. Vajira Kulatilaka succeeds Dr. Muhammad Abdul Mazid as the Chairman of SAFE for a two year term of office. 

Dr. Muhammed Abdul Mazid, Chairman of the Chittagong Stock Exchange and Mr. Nayan Mehta, Chief Financial Officer of the Bombay Stock Exchange were elected as Senior Vice Chairmen while Mr.Rashed Al Balooshi, Chief Executive Officer of the Abu Dhabi Securities Exchange was elected as the Vice Chairman. 

The CSE was one of the founder members of SAFE which was established in 2000 with the objective of promoting the development and harmonization of securities markets in the South Asian Region. 

Presently SAFE has 15 primary members comprising of stock and commodity exchanges from India, Pakistan, Bangladesh, Sri Lanka, Nepal, Maldives, Mauritius, Bhutan and the UAE. It also has several depositories and clearing houses in the region as associate members. 

The permanent secretariat is located in Islamabad, Pakistan. 

The new Executive Board of SAFE would have its first meeting under the Chairmanship of the CSE in Kunming China to develop a ten year vision and plan for the association in June 2015 while the next Annual SAFE conference is to be hosted by the Bombay Stock Exchange in 2016.

CSE

Sri Lankan shares close steady, political woes weigh

(Reuters) - Sri Lankan shares ended steady on Monday, hovering near their more than six-week closing high hit in the previous session, while investors waited for cues on the political front as the country's parliament started a two-day debate on proposed constitutional reforms.

Investors have been cautious due to political uncertainty as Prime Minister Ranil Wickremesinghe's party does not have a majority in the parliament and President Maithripala Sirisena promised to dissolve the parliament after the end of his 100-day programme on April 23.

The passage of reform measures, including establishing independent police, judiciary, and election and public service commissions, is seen as a test for President Maithripala Sirisena's government.

The main stock index ended 0.07 percent, or 4.66 points, weaker at 7,125.12, hovering near its highest close since March 10 hit on Friday. It has gained 3.25 percent since the central bank cut key rates on April 15 through Monday, while yields on t-bills have fallen 37-48 basis points since then.

"Political stability is the main concern. Many (investors) are waiting to see the outcome of the debate and when the parliamentary elections will be," said Reshan Wediwardana, research analyst at First Capital Equities (Pvt) Ltd.

The parliament on Monday started the two-day debate on constitutional reforms.

Some analysts said the markets would stay volatile until parliamentary elections are announced.

The market saw a net foreign inflow for the first time in four sessions. Foreign investors were net buyers of 149.3 million rupees ($1.12 million) worth shares, extending the net foreign inflow so far this year to 3.78 billion rupees.

Turnover was 670.3 million rupees, compared with this year's daily average of around 1.07 billion rupees.

Analysts said the market could be dull until the perception on political uncertainty is addressed and many investors were in a wait-and-watch mode before the parliamentary elections.

Shares of Ceylon Brewery Plc fell 5.44 percent, while DFCC Bank Plc dropped 0.37 percent. Diversified conglomerate Hayleys gained 2.56 percent.

The index lost 6.6 percent last month, its biggest monthly drop since October 2012, as investors sold holdings to settle margin trades amid concerns about political stability and a rise in interest rates. 

($1 = 132.9000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)

South Asian Exchanges formulate road map for the future, at regional conference in Colombo

Colombo:

The South Asian Investment Conference (SAIC) organised by the Colombo Stock Exchange (CSE) in association with the South Asian Federation of Exchanges (SAFE), took place today (27th April) at the Galadari Hotel, Colombo. The Minister of Finance Hon. Ravi Karunanayake, the Deputy Minister of Policy Planning, Economic Affairs, Child, Youth and Cultural Affairs Dr. Harsha De Silva, the Chairman of the Securities and Exchange Commission of Sri Lanka Mr.Tilak Karunaratne, Chairman of SAFE and Chairman of CSE Mr. Vajira Kulatilaka and outgoing Chairman of SAFE Dr. Muhammad Abdul Mazid addressed the audience at the inaugural ceremony. 

Following the inaugural session, decision makers from Member Exchanges of SAFE made presentations and took part in panel discussions; charting the course for the future development of regional Exchanges. 

“South Asia has emerged as the 2nd fastest growing region in the world, with predicted growth rates of 6 to 8 percent to be continued until 2025. Confidence of the investors will rest not only on growth rates, but will also on market integrity, good governance and transparency coupled with political stability and the political will to embrace foreign investment with the right spirit. All such ingredients are abundant in the current political regime in power,” Minister of Finance Hon. Ravi Karunanayake said. 

“All of us in the SAFE are facing similar situations as developing countries, the need to and are elevate poverty and create a strong middle class. However Exchanges always develop instruments for the rich, for those who can invest Millions; they don’t pay enough attention to the small and medium enterprises. In order to create a market where, various investors are able to invest, we need to provide diverse asset classes for investment. Therefore we need to cooperate and create these various asset classes and present South Asia to the world as a unified whole that also serves the bottom of the pyramid. We also need to compete amongst ourselves I do not think that the extremes can compete, however markets of similar size can. However we need to formulate a structure where we can all compete and we all win,” Deputy Minister of Policy Planning, Economic Affairs, Child, Youth and Cultural Affairs Dr. Harsha De Silva said. 

“As we begin to show the various facets of our Exchanges, international investors who have been viewing this market cautiously as a risky investment have now changed their minds. All international investors now want to come to this part of the world, mainly because of high growth and the possibility of diversification. Therefore, I think we have a great opportunity to take SAFE to a different level. This conference which is aimed at exploring the true investment potential of our region, is a relevant forum to highlight the combined strength of South Asia. The conference has looked at the development of new products, and towards bringing diversity in investment choices to international investors,” Chairman of SAFE and Chairman of CSE Mr. Vajira Kulatilaka said. 

“Traditionally capital markets are considered as powerful engines of economic growth that mobilize savings towards productive corporate financing. Even though the role of the capital market is widely accepted, developing a robust and efficient capital market is a difficult task for many emerging economies – nonetheless we should work towards developing significant improvements in the capital markets of the region ,”Chairman of the SEC Mr.Tilak Karunaratne said. 

“South Asia is at the very brink of attaining new heights in the global order and this is witnessed through our capital markets. It is vital to sustain this momentum of growth, which is in our collective best interest. Thereby, integration allows for the less developed markets to grow exponentially by exposure to higher developed markets,” Outgoing Chairman of SAFE Dr. Muhammad Abdul Mazid said. 

Local Capital Market representatives, including CEO’s from Member Firms of the CSE and CEO’s from Unit Trusts and other market intermediaries will also attend the event. 

The sponsors of the SAIC are Thomson Reuters, MillenniumIT, Treet Corporation Limited, the Chittagong Stock Exchange, NDB Bank, BNP Paribas, Cyan Limited, Efu General Insurance, Hascol Petroleum, AKD Securities and Softlogic Stockbrokers and Lanka Securities (Bronze sponsor for Gala Cultural Night ). 

Chevron Lanka 1Q15 net profit down

Says would be liable to pay a total of Rs.847.3 million as Super Gains Tax 
Chevron Lubricants Lanka PLC, the local unit of US-based multi national saw its net profit for the quarter ended March 31, 2015 (1Q15) falling Rs.210 million amid subdued top line growth, the interim financial accounts released to the Colombo Stock Exchange showed. 

The earnings per share deteriorated to Rs.6.19 from Rs.6.36. The revenue for the quarter under review fell by Rs.177 million to Rs.2.81 billion while the gross profit fell to Rs.1.19 billion from previous year’s Rs.1.24 billion despite a considerable fall in cost of sales from Rs.1.74 billion to Rs.1.161 billion. 

The administrative expenses also edged down to Rs.108 million from Rs.115 million. 

The finance income fell to Rs.28.7 million from Rs.45 million. 

The company said it would be liable to pay a total of Rs.847.3 million as Super Gains Tax in three equal installments in May, July and September if the Draft Act gazetted by the government for the imposition of the tax is enacted by Parliament. 

 However Chevron Lubricants Lanka said it had not provided for the liability. The company has announced Rs.5 per share as first interim dividend. 

www.dailymirror.lk

BOC posts Rs. 20.3 billion profit before tax

The Bank of Ceylon (BOC) closed its 75th year by recording the highest ever profit before tax (PBT) in the bank’s history as well as in the Sri Lankan banking industry of Rs.20.3 billion, up 29 per cent compared to the previous year, according to a BOC media release.

Post tax profit stood at Rs. 13.6 billion – a 12 per cent growth. “The group has reported Rs.21.4 billion PBT recording a 33 per cent growth over last year with the bank dominating the results of the group accounting for 95 per cent of earnings and 97 per cent of the group’s assets,” the release added.

Despite the dip in interest margin due to the low interest rate regime, PBT was boosted by fee income, trading income and gains from financial investments. Fee income increased by 42 per cent to Rs.9.2 billion due mainly to the increase in export and import transactions and guarantees fees, it said, adding that net gains from trading in treasury bills and dealing securities grew by 50 per cent to Rs.4.9 billion. “Increase in these income bases shows the bank’s ability to find alternative income generating channels at difficult times.”

Amidst the challenging operating environment which prevailed throughout most of the year, the bank’s assets grew by 11 per cent to Rs.1.3 trillion, the release said. The bank is the first domestic bank to achieve a trillion assets balance sheet and continues as the only bank to have done it so far. BOC is the largest provider of finance to both Government and private sectors.

Loans and advances account for 56 per cent of the bank’s one trillion asset base and gross loans stood at Rs.777.5 billion as at end 2014. The release said that the growth of the assets was also supported by the increase in financial investments and reverse repurchase agreements. “Even though the asset growth is at a moderate level, BOC continues to secure its market leadership in terms of assets, advances, deposits, profits, NRFC deposits and Inward Remittances.”

Deposits accounted for 74 per cent of the bank’s liabilities as at the end of 2014, according to the release which said that the total customer deposit base has grown from Rs.842.1billion in December 2013 to Rs.934 billion as of end 2014 amidst interest rate margin pressure.

“This is an 11 per cent growth and is in line with the industry growth rate which reflects the strong domestic franchise of the bank. The CASA ratio also has been improved to 43 per cent from 38 per cent resulting in a favourable deposit mix.”
www.sundaytimes.lk

LAUGFS to buy second ship

By Duruthu Edirimuni Chandrasekera

Laugfs Gas PLC’s new subsidiary, Laugfs Maritime Services (P) Ltd (LMS) with plans to strike partnerships in international shipping, logistics and maritime services, is to ink its second cargo ship deal next week, officials said.

“We were on the lookout for a second liquefied petroleum gas (LPG) vessel, having secured our first last September and we’ll finalise this deal in a few days time,” an official told the Business Times.

The company has been inspecting many ships over the past few months. According to him, the first cargo ship had an initial investment of US$ 6.9 million while the new ship will cost about the same. “Our first ship was named as ‘Gas Challenger’ and we will appropriately name the second one which will sail under the Sri Lankan flag,” he added.

He said that plans to sign with international partners for business in this area are also progressing. “Many international firms are talking to us,” an official told the Business Times, adding that those in discussion are mostly British and Middle Eastern firms.

LMS will own, operate, hire and charter various types and sizes of ships including LPG vessel and other type of vessel that can carry various energy products and depending on the need each year LMS has plans to acquire a ship.

The official said that Laugfs Gas PLC wants to collaborate with their suppliers in a bid to trade LP Gas and oil in the South Asian region as well. The LP Gas supply in Asia is mostly linked to refining. In the Middle East, it’s linked mostly to associated gas with a growing linkage to non-associated gas, whilst North America is essentially linked to non-ssociated gas, he said, noting that the company is surveying all these aspects in its decision to enter countries in the South Asian region.

The company also has plans to set up a LPG storage terminal to be commissioned in two years.
www.sundaytimes.lk

Stockmarket and bond market mafia in for a rude shock

By Duruthu Edirimuni Chandrasekera

Sri Lanka’s so-called stock and bond market mafia dons seem to have no bearing in the change in government, but they’ll wake up to a ‘rude shock’, a top government minister 

warns.

“This mafia whether in the stock or bond market seem to have no bearing to the change in government. Well, they’re living in false hope. They’ll wake up to a rude shock one day,” Harsha de Silva, Deputy Minister of Policy Planning and Economic Affairs, told the Business Times recently.
In this light, he said that probes on malpractices in related sectors are now on full speed.

Pertaining to the Securities and Exchange Commission (SEC) probes, Dr. De Silva added that delay in these investigations was mainly due to inadequate staff and some insider dealings’ of a unique kind. “The issue was with not having the right staff and also these probes were hampered by people within/inside (the SEC) who are connected to the stockmarket mafia,” he said, adding that, “Now with the new Director General at the SEC, share market manipulations are being investigated and the SEC chairman would have the ability to quickly move this process.”

On April 10, Vajira Wijegunawardane was appointed as the SEC Director General.

The SEC recently called for information from the Colombo Stock Exchange (CSE) on suspect transactions during 2011-2013, sources close to CSE said.

Dr. De Silva added that large scale and significant reforms in the financial markets are being done.

“We want to remove the conflicts of interests that the Central Bank (CB) has with Public Debt Department and the Employee Provident Fund (EPF).”

He reiterated that the country needs a good public debt management strategy.

“There were so many adhoc decisions in the past that may not have resulted in the optimum borrowing strategy for the country.” He added that now, some Rs. 672 billion worth of bills need to be settled for which no proper allocation seem to have been made in the earlier regime.

“There has been a window dressing of accounts. Despite the earlier regime saying that debt to GDP was falling, the actual debt burden hasn’t been captured. It’s outside of contingent liabilities.” He added that as a result, debt sustainability is different to what was said at that time.

“It’s in this context that we are trying to bring in a transparent, realistic and appropriate debt management programme,” he added.
www.sundaytimes.lk

Fresh Interpol alert to arrest former CIFL chairman

By Quintus Perera

President intervenes to help desperate depositors

President Maithripala Sirisena’s intervention in the crisis at the battered CIFL (Central Investment and Finance Ltd) where depositors are struggling to get their money back has led to a renewed Interpol alert to arrest the company’s former chairman Deepthi Perera said to be hiding in Thailand.

K.W. Gunawardena, President, CIFL Depositors’ Association (CIFLDA), told the Business Times that on April 17 at the request of the President, a 4-member association delegation met him at his official residence at Wijerama Mawatha, Colombo.

The President told the delegation that he has submitted all the documents that were tendered to him by CIFLDA (prior to the presidential election) to the relevant officials to process them in order to settle the dues to the CIFL depositors, according to Mr Gunawardena.

He said that in the meantime, Senior Advisor to the President, Thilak Ranavirajah who has been assigned by the President to coordinate the issues between the association and the authorities has sent a memorandum to the CIFLDA, the Central Bank and the CID.

The CID Interpol OIC is taking necessary steps to bring down former CIFL Chairman Deepthi Perera, accused of misappropriating Rs. 1.6 billion of CIFL money, from Thailand where he is learnt to be at the moment. When the President was told that a similar alert had been issued some months back but little action had been taken, he had instructed the authorities to pursue the matter vigorously.

The CID, which has already alerted the Interpol on this matter, will renew the request.

Mr. Gunawardena said that the CID also has submitted a B Report to the Attorney General in a bid to file a court case against Mr. Perera. He said the President’s intervention in this manner was a blessing since 30 of their members who were senior citizens have died unable to meet their medical expenses as these elderly persons were living on the interest they received on the lifetime savings deposited in CIFL.

He said that 75 per cent of their members are all senior citizens and out of them more than 50 are in a pathetic situation having cancer, heart failure, kidney problems, high cholesterol and diabetic as they find it very difficult to get necessary funds to meet their medical expenses.

Mr. Gunawardena said that President Sirisena has instructed the Finance Ministry Secretary to take all necessary action to settle the CIFL crisis. He said that most probably, as a result of persistent media coverage on CIFLDA agitations (particularly the Business Times), the Central Bank recently inserted a newspaper advertisement in all three languages requesting all CIFL depositors to submit details of their deposits on a format given in the advertisement and that this information would be directed to the KPMG audit firm.
www.sundaytimes.lk

Sri Lanka shares rise to over 6-week high on banks

(Reuters) - Sri Lankan shares rose to over six-week high on Friday, despite foreign outflow from risky assets, as investors picked up shares of finance companies on expectations of better earnings, with positive sentiment continuing due to lower interest rates.

The main stock index ended 0.22 percent or 15.39 points firmer at 7,129.78, its highest close since March 10. It has, gained 3.31 percent since the central bank cut key rates on April 15, while yields on t-bills have fallen 26-36 basis points since then.

"There is lot of interest in finance companies specially on the micro financing with low interest rates," a stockbroker said on condition of anonymity.

"Still people are not sure of the elections."

Some analysts said the markets would stay volatile until parliamentary elections are announced.

The market saw a net foreign outflow for the third straight session on Friday. They have been net sellers of 35.1 million rupees worth shares on Friday extending the net foreign outflow for the past three sessions to 168.8 million rupees. But foreign buying stood at 3.63 billion rupees so far this year.

Turnover was 615.4 million rupees, compared with this year's daily average of around 1.08 billion rupees.

Analysts said the market could be dull until the perception on political uncertainty is addressed and many investors were in a wait-and-watch mode before the parliamentary elections.

Shares of Commercial Credit and Finance Plc rose 13.01 percent, while Leading fixed-line telephone operator Sri Lanka Telecom Plc advanced 1.28 percent.

The index lost 6.6 percent last month, its biggest monthly drop since October 2012, as investors sold holdings to settle margin trades amid concerns about political stability and a rise in interest rates.

Investors have been cautious due to political uncertainty as Prime Minister Ranil Wickremesinghe's party does not have a majority in parliament and President Maithripala Sirisena promised to dissolve the parliament after the end of his 100-day programme on April 23.

The government will present constitutional reforms, including establishing independent police, judiciary, and election and public service commissions in the parliament on Monday and debate on them for two days before voting. 

($1 = 132.9000 Sri Lankan rupees) 

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

Sri Lanka shares end steady; President's speech awaited

(Reuters) - Sri Lankan shares ended steady in thin trade on Thursday, hovering around their highest in more than six weeks hit in the previous session with investors offloading telecom and diversified shares, as they awaited President Maithripala Sirisena's address to the nation later in the day.

Analysts expect Sirisena, who promised to dissolve parliament after 100 days from his election, to explain his policies for political stability and implement the promised constitutional and electoral reforms.

"Investors are awaiting for directions from his speech, which may give some clarity on how he would achieve political stability," a stockbroker said on condition of anonymity.

The bourse hit a six-week high on Wednesday on hopes of better earnings, with positive sentiment continuing due to lower interest rates.

The main stock index ended 0.04 percent lower at 7,114.39, slipping from its highest close since March 10 hit on Wednesday. It has, however, gained 3.13 percent since the central bank cut key rates on April 15, while yields on t-bills have fallen 26-36 basis points since then.

Some analysts said the markets would stay volatile until parliamentary elections are announced.

The market saw a net foreign outflow of 1.77 million rupees ($13,318) on Thursday, but net foreign buying stood at 3.67 billion rupees so far this year.

Turnover was 592.5 million rupees, just above half of this year's daily average of around 1.08 billion rupees.

Analysts said the market could be dull until the perception on political uncertainty is addressed and many investors were in a wait-and-watch mode before the parliamentary elections.

Shares of leading mobile phone operator Dialog Axiata Plc fell 2.59 percent, while Hemas Holdings Plc fell 2.57 percent. Leading fixed-line telephone operator Sri Lanka Telecom Plc fell 1.47 percent.

The index lost 6.6 percent last month, its biggest monthly drop since October 2012, as investors sold holdings to settle margin trades amid concerns about political stability and a rise in interest rates.

Investors have been cautious due to political uncertainty as Prime Minister Ranil Wickremesinghe's party does not have a majority in parliament, stockbrokers said. 

($1 = 132.9000 Sri Lankan rupees) 

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

Sri Lanka c.bank head resumes duty after bond probe report

(Reuters) - Sri Lanka's central bank Governor Arjuna Mahendran has resumed his duties after a more than five-week voluntary leave of absence after being cleared by a panel investigating a controversial government bond auction.

The panel of legal experts probing the Feb. 27 auction said on Sunday that it had cleared the central bank chief of any direct role in the decision to increase the size of the sale by 10 times, while calling for tighter supervision of the government's borrowing office.

"The governor is in office today for the first time after he went on leave," a central bank official said on Thursday condition of anonymity because he is not authorised to speak to media.

Mahendran, when contacted, declined to comment, saying he was busy in a meeting.

Mahendran went on leave of absence on March 16 after opposition parties pressed Prime Minister Ranil Wickremesinghe's government to sack him and hold an independent investigation into the bond auction. The prime minister appointed the three-member panel to probe the deal.

Mahendran, a Sri Lankan-born Singapore national, was questioned by Sri Lanka's anti-corruption authority and banned from traveling abroad.

At the auction, the government raised more than 10 billion rupees ($75.2 million) from the sale of a 30-year treasury bonds at a yield of 11.73 percent, after initially offering just 1 billion rupees with an indicative price of 9.5 percent.

The main opposition says the higher yield would cost the government an extra 45 billion rupees ($338.60 million) and has alleged that the government has been trying to cover up the issue with a simple commission report.

Deputy Investment Minister Eran Wickramaratne rejected the opposition claim on the losses, but said the deal has caused damage to the Wickremesinghe government.

"Once the report on the probe is tabled, the parliament should decide if there should be any further investigation into it," he told reporters. 

($1 = 132.9000 Sri Lankan rupees) 

(Reporting by Shihar Aneez; Editing by Kim Coghill)

Sri Lanka's Union Bank March net up 71-pct

COLOMBO (EconomyNext) - Sri Lanka's Union Bank said group net profit rose 71 percent to 32 million rupees in the March 31, 2015 quarter from a year ago on strong loan growth and better interest margins and income.

Net interest income rose 60 percent to 615 million rupees as interest income rose two percent to 1.1 billion rupees while interest costs came down sharply, by 28 percent to 526 million rupees, a stock exchange filing said.

Fee income grew nine percent to 62 million rupees while provision for bad loans fell 44 percent to 40 million rupees.

Union Bank group diluted earnings per share were two cents for the March quarter.

At bank level, net profit grew by 228 percent to 25.1 million rupees from the year before.

"The bank recorded a significant increase in revenues for the 1Q15 in comparison to the
corresponding quarter in 2014," a statement said.

Total operating income for the March quarter grew by 46 percent to 662.5 million rupees from the year before.

"The primary reasons for this were the strong growth in loans and advances, improvement in margins and the quality of the loan book," the statement said.

Union Bank said its business strategy was being transformed after it was bought by Culture Financial Holdings, an affiliate of private equity fund, TPG Capital Management LP, in 2014.

Lanka’s highest yield from New Peacock Estate of Elpitiya Plantations

Aitken Spence Plantations managed Elpitiya Plantations PLC’s New Peacock Estate in Pussellawa recorded the highest ever yield-per-hectare of 3,008 Kgs/ha for the financial year 2014/15 in Sri Lanka for a tea plantation estate with an extent of over 260 ha.

The achievement came in spite of the unfavorable weather conditions that prevailed in the region during the last four months of 2014.

New Peacock estate in the mid-country region continues to be one of Elpitiya’s exceptionally performing contributors of its 13 estates.

Undertaking of best practices in agriculture as emphasized by the management, making available the essential inputs to the tea fields at the right time and the commitment of all executives, staff and workers in the estate made the results possible,” said Senerath Pahathkumbura, General Manager in charge of New Peacock Estate and the Mid Country Cluster of Elpitiya Plantations PLC.

In keeping with the policy of the Company, our prime focus was to retain the workers available on the estate by giving them proper recognition and treating them as partners.

To spearhead this acknowledgement across all levels, a number of benefits have been included in addition to the current welfare and social activities undertaken at the estate. Some of these benefits include workers name tags provided in all three languages and called by name; as well as uniforms for all workers, transport to workplace, rest rooms at all leaf weighing points with refreshment between meals during the rush cropping months,’ added Pahathkumbura.

All these measures have motivated the workers to improve their productivity and as a way forward, the Management continues to provide training to the workers in improving their skills and undertakes mechanical plucking and other agricultural works such as pruning, motorized spraying of foliar nutrients and fungicide. We would like to thank all those who have contributed in many ways to achieve the record and highest ever yield,”said Pahathkumbura.

New Peacock Tea Processing Centre produces approximately 1.2 Mn. Kgs of premium quality CTC teas per annum, and maintains the highest level of food safety standards. The estate is awarded with ISO 22000:2005, Rain Forest Alliance, Ethical Tea Partnership (ETF) and Forest Stewardship Council (FSC) certificates, which have attracted the leading buyers’ support at the Colombo tea auctions, based on the merits of its quality.

Elpitiya’s estates are situated in the upper, mid and low country regions of Sri Lanka, cultivating tea, rubber, oil palm and coconut. The Company has a significant stake in Sri Lanka’s only privately-owned palm oil mill and operates several mini-hydro power plants. At the point of takeover by blue-chip conglomerate Aitken Spence in 1997, Elpitiya Plantations was dependent on tea. The new management embarked on a strategy of crop diversification, efficiency improvement and human resources development for the company’s growth.
www.dailynews.lk

Fitch withdraws rating on DSI

Fitch Ratings has withdrawn DSI Holdings Limited's National Long-Term Rating of 'BBB(lka)' with a Stable Outlook. The withdrawal follows the amalgamation of DSI Holdings Limited with its ultimate parent, DSI Samson Group (Private) Limited. DSI Samson Group is the surviving entity, and, under the provisions of the Companies Act is the successor of all outstanding liabilities and obligations of the amalgamated companies.
www.dailynews.lk

Union Bank posts strong Q1 results

Union Bank’s first quarter results in 2015 have been very positive, which is a clear reflection of the new strategy that is in place. Subsequent to the change in strategy, the Bank’s rapid transition to a fully fledged commercial Bank with wider focus on Retail, SME and Corporate sectors saw several key changes.

The bank’s operating income for 1Q15 grew by 46% YoY to Rs 662.5 mn while the net profit grew by 228% YoY to Rs 25.1 millin. The bank’s CASA grew by 12% YTD to Rs 7.8 bn while Customer Deposits grew by 5% YTD to Rs 29.2 bn. The banks net profit grew by 64% YoY to Rs 37.9 mn.

Director and Chief Executive Officer Indrajit Wickramasinghe said the bank has realigned its infrastructure, human capital, systems and processes and is confidently gearing to take on the challenges of the highly competitive Banking industry. The significant capital infusion of Rs. 11.4 bn received from Culture Financial Holdings, an affiliate of TPG, one of the largest private global investment firms in the latter part of 2014 placed Union Bank (UBC) within the top five private sector Banks in Sri Lanka, in terms of market capitalisation which paved the way for a complete transformation in its business strategy.
www.dailynews.lk

Sri Lanka shares close at 6-week high; financials lead

(Reuters) - Sri Lankan shares closed at their highest in more than a month on Wednesday, led by financials on hopes of better earnings, with positive sentiment continuing due to lower interest rates, dealers said.

The main stock index ended 0.26 percent up 7,117.13, its highest close since March 10. It had gained 3.13 percent since the central bank cut key rates on April 15, while yields on government securities have fallen 26-36 basis points since then.

"There was some interest in some of the finance companies and micro finance companies with low interest rates," said Dimantha Mathew, research manager at First Capital Equities (Pvt) Ltd.

"There was buying interest on earning expectation," he added but cautioned that this would not last long as markets would stay volatile until parliamentary elections are announced.

The market saw a net foreign outflow of 131.9 million rupees ($992,476) on Wednesday, but net foreign buying stood at 3.7 billion rupees so far this year.

Turnover was 1.04 billion rupees, in line with this year's daily average of around 1.09 billion rupees.

Analysts said the market would be dull due to political uncertainty and that many investors were in a wait-and-watch mode before the parliamentary elections.

Shares of Lanka Orix Leasing Company Plc rose 2.96 percent, while Ceylon Tea Services Plc jumped 12.61 percent.

The index lost 6.6 percent last month, its biggest monthly drop since October 2012, as investors sold holdings to settle margin trades amid concerns about political stability and a rise in interest rates.

Investors have been cautious due to political uncertainty as Prime Minister Ranil Wickremesinghe's party does not have a majority in parliament, stockbrokers said. 

($1 = 132.9000 Sri Lankan rupees) 

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

Sri Lankan shares slip on profit taking

(Reuters) - Sri Lankan shares slipped on Monday from their more than one-month closing high hit in the previous session, as investors booked profits after three straight sessions of gains, brokers said.

The main index slipped 0.09 percent, or 6.03 points, to 7,080.38, after closing at its highest since March 16 on Friday. It had gained 2.7 percent as of Friday since the central bank cut rate on Wednesday, while yields on government securities have fallen 30-50 basis points.

Stockbrokers said there was some profit-taking during the day with local investors mainly on the buying side.

The market saw a net foreign inflow of 184.9 million rupees ($1.39 million), extending the net foreign inflow so far this year to 3.58 billion rupees.

Turnover was 493.3 million rupees, the lowest since April 8 and less than a half of this year's daily average of around 1.1 billion rupees.

The market is dull due to political uncertainty and many are on a wait-and-see mode before the parliamentary elections, said Dimantha Mathew, research manager at First Capital Equities (Pvt) Ltd.

Shares of Hatton National Bank Plc fell 1.39 percent, while conglomerate John Keells Holdings Plc fell 0.48 percent.

The index lost 6.6 percent last month, its biggest monthly drop since October 2012, as investors sold their holdings to settle margin trades amid concerns about political stability and a rise in interest rates.

Investors have been cautious due to political uncertainty as Prime Minister Ranil Wickremesinghe's party did not have a majority in parliament, stockbrokers said.

They said, however, efforts by both ruling and opposition parties for a stable government have helped to improve investor confidence, adding that investors were still largely on a wait-and-see mode ahead of parliamentary elections possibly in June.

($1 = 132.9000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)

Cairn India pulling out of fuel, gas explorations in Sri Lanka

Since Cairn India is reportedly to pull out of its offshore fuel and natural gas explorations within the Mannar Basin in Sri Lankan waters, it has been revealed that the government has been compelled to look for new entities to continue drilling these deposits.

According to reports, with increasing pressure on Cairn India due to the fall of fuel prices in the world market, it has decided that the offshore fuel exploration in the Mannar Basin of Sri Lanka is not a priority.

The company has instead decided to further strengthen its oil production from its fields in Rajasthan in India.

According to reports, the Sri Lankan government has not abandoned its efforts of commercially exploiting the natural gas deposits discovered by Cairn India within the Mannar Basin, it has begun negotiations to attract other entities for this process.

It is still not clear how Cairn India is to recover it investments already made for these fuel explorations.

Cairn Lanka, which is a subsidiary of Cairn India has reportedly not renewed its fuel storage facilities it has obtained from the Colombo port and this confirms that it is to pull out of fuel and natural gas explorations in Sri Lanka.

On 05 March Cairn India announced that it was taking steps to cut its costs since fuel prices were falling rapidly in the world market.

It has been further revealed that Cairn India is to pull out of fuel and natural gas explorations in Sri Lanka from next October.

When Cairn India began fuel and natural gas explorations in Sri Lanka, it was owned by Cairn Energy PLC of Scotland and later acquired by Vedanta Resources of India in 2010. Hence, Cairn India is currently a subsidiary of Vedanta Resources.

In July 2008 Sri Lanka entered into an agreement with Cairn India for fuel and natural gas exploration in one block of the Mannar Basin.

The extent of this block is 3,400 square kilometres, the government had allowed Cairn India to drill to a depth of between 200 to 1,800 metres.

A Norwegian company, TGS-NOPEC Geophysical Company discovered fuel deposits off the coasts of Mannar and following this the Sri Lankan government divided this area into eight blocks.

Petroleum Resources Development Secretariat (PRDS) responsible for fuel explorations in Sri Lanka and which was under the purview of the President during the tenure of the former government has been brought under the Ministry of Power and Energy by the new government.

Hence, Sri Lanka’s the responsibilities of Sri Lanka’s fuel and gas explorations have now come under Minister Patali Champika Ranawaka.
www.adaderana.lk

Colombo to get its first electric train

A master plan to modernize the intercity train service to bring it on par with the existing well-developed railway systems is soon to be introduced.

Under the master plan, serious modernization will take place and specific routes to identified destinations will be rehabilitated and news features will be introduced, making train travel a comfortable and safe one, Minister of Internal Transport Ranjith Madduma Bandara told the Sunday Observer. A Cabinet paper is to be submitted in the coming weeks, proposing specific improvements to the railway service, after which the master plan will be implemented.

The master plan includes details on modernizing the intercity train services, construction of new railway tracks, development of existing tracks and installation of double tracks to identified destination, he said.

The Government of India is likely to assist the development of track between Anuradhapura and Vavuniya. In addition, eight locomotive engines and 30 coaches too will be requested from India, Maddumabandara said.

The first electric train service will be from Colombo to Battaramulla, a fast developing township with many government ministries and departments located there. A feasibility study is currently in progress. Plans are underway to extend the double track on the coastal line up to Aluthgama railway station and another double track between Kurunegala and Polgahawela. The railway track from Maho to Trincomalee and up to Batticaloa too are identified priorities. A new railway track from Kurunegala to Habarana via Dambulla is also to be constructed, the Minister said. -PK

www.sundayobserver.lk

Galadari makes Rs. 157 mn. profit for 2014, optimistic about future

Galadari Hotel (Lanka) PLC has made a small dent in the accumulated losses of Rs. 9.28 Billion in its balance sheet with a profit after tax of Rs. 156.6 million earned in the year ended Dec 31, 2014, down from Rs. 285.8 million earned in the previous year, according to the company’s recently released annual report.

These earnings translated to 32 cents per share against 84 cents per share earned the previous year.

The company’s chairman, Mr. Khaled Aly Soliman has said in the report that last year’s profit "reflects a sustained performance" comparable to the previous year.

He noted that the performance was "noteworthy and headed in the direction towards realizing greater potential in the coming years" and made the point that this profit had been earned in the context of developments in the political environment and the advent of new and refurbished competition in the hotel sector during the year as well as the current position of the Galadari property.

Soliman said that with Sri Lanka emerging as one of the world’s key tourism destination and the Sri Lanka Tourism Development Authority targeting 2.6 million tourist arrivals by 2016, "we see enhanced potential in the hospitality sector over the coming years."

This was likely to present both opportunities and challenges to Galadari Hotels, he said.

Galadari Brothers Company ( LLC) with 63.57% of Galadari Hotels is the controlling shareholder of the company, with several members of the Galadari family having individual holdings of slightly below 2% and 1% each. The top local shareholder is the EPF with 4.73% ranked number three among the top twenty shareholders.

The directors of Galadari Hotels are Messrs. Khaled Soliman – Chairman, Sharif Hashim Ahmed Khoory, Mohamed Hisham Al Garf, Amit Chib, Hatim Abdelaziz Mohamed, Dr. John Anthony Shivaji Felix and Lalith Rukman De Silva. 
www.island.lk

Sri Lanka vehicle registrations soar to new historic high

COLOMBO (EconomyNext) - Sri Lanka vehicle registrations hit a historic new high of 66,664 up 147 percent from a year earlier, with 2 and 3 wheeler registrations doubling from a year earlier, analysis of vehicle registry data shows.

JB Securities, an equities brokerage in Colombo said in an analysis that motor cycle registration hit 42,221 in March, up from 163 percent from 15,997 and also sharply up from the 25,155 levels seen earlier.

Three wheelers which are mostly used as taxis were up 104 percent from a year earlier to 12,347. In February 2015 only 7,994 vehicles were registered.

JB Securities said motor cycle registration were probably driven up cut price bikes given to policemen but it was less clear why three wheeler taxi registrations were going up.

Motor car registrations were up rose 245 percent from a year earlier to 5,856 unit in March led by hybrids.

The financing share of cars were 56.7 percent, 2-wheelers 41 percent and three wheelers 92 percent, according to JB Securities data.

Sri Lanka's interest rates are now at three decade lows and analysts who are watching credit and liquidity trends have warned that higher government consumption was pushing domestic demand up and higher interest rates were needed to correct the imbalance.

Fuel prices are also low pushing down vehicle operating costs.

Motor car and other vehicle registration are now at levels higher than seen before February 2012, when a balance of payments crisis force interest rates to be pushed up.

Sri Lanka's central bank however loosened monetary policy on April 15, cutting policy rates by 50 basis points despite loose fiscal policy.

The Central Bank has also been engaging in type of 'quantity easing' by steadily releasing temporarily sterilized excess liquidity, which have disappearing through the balance of payments at alarming speed.

Sri Lanka shares gain for third session; lower rates help

(Reuters) - Sri Lanka's main stock index gained for a third straight session on Friday to a more-than-one-month closing high, on buying by local investors as lower interest rates dissuaded them from investing in risk-free government bonds.

Since the central bank cut the key policy rates by 50 basis points to record lows on Wednesday, yields on government securities have fallen 30-50 basis points, dealers said.

The main index gained 0.13 percent to 7,086.41, its highest close since March 16. It has gained 2.7 percent since the central bank's rate cut.

Stockbrokers said there was some profit-taking during the day with local investors mainly on the buying side.

The market saw a net foreign outflow 31.7 million rupees ($238,525), but it has seen a net foreign inflow of 3.4 billion rupees so far this year.

The day's turnover was 717.1 million rupees, well below this year's daily average of around 1.1 billion rupees.

Infrastructure firm Access Engineering jumped 6.7 percent, while Aitken Spence Hotel Holdings gained 5.1 percent, helping to boost the index.

The index had lost 6.6 percent last month, its biggest monthly drop since October 2012, as investors sold their holdings to settle margin trades amid concerns about political stability and a rise in interest rates.

Investors have been cautious due to political uncertainty as Prime Minister Ranil Wickremesinghe's party did not have a majority in parliament, stockbrokers said.

They said, however, efforts by both ruling and opposition parties for a stable government have helped to improve investor confidence, adding that investors were still largely on a wait-and-see mode ahead of parliamentary elections possibly in June.

($1 = 132.9000 Sri Lankan rupees) 

(Reporting by Shihar Aneez; Editing by Sunil Nair)

Sri Lankan stocks jump to near 4-wk high after surprising rate cut

(Reuters) - Sri Lankan shares rose more than 1 percent to a near four-week high on Thursday, extending gains from the previous session after the central bank in a surprise move cut key monetary policy rates by 50 basis points.

The main stock index advanced as much as 1.01 percent to 7,051.43, its highest since March 23, in early trade.

The central bank early on Wednesday surprised markets by cutting key policy rates to record lows in a move aimed at boosting economic growth amid near zero inflation.

"Now the direction on the interest rate is very clear and the gains could be sustained after the rate cut," said Hussain Gani, deputy CEO at Softlogic Stockbrokers (Pvt) Ltd.

"We see more participation of local investors including retailers. Foreigners are also trading in high volume. Investors were uncertain about the interest rates, but now it is evident that the new government wants to lower interest rates further."

Turnover stood at 744.1 million rupees ($5.60 million) at 0655 GMT.

Investors have been cautious due to political uncertainty as Prime Minister Ranil Wickremesinghe's party did not have a majority in parliament, stockbrokers said.

However, efforts by both ruling and opposition parties for a stable government have helped to improve investor confidence, they said, adding they were still largely on a wait-and-see mode ahead of parliamentary elections possibly in June.

Sri Lankan rupee forwards traded weaker on Thursday on importer dollar demand in dull trade, dealers said.

Actively traded two-week forwards were at 133.90/95 per dollar at 0712 GMT, compared with Wednesday's close of 133.78/85. One-week forwards were steady at 133.60 per dollar amid moral suasion by central bank.

Dealers said one-month forwards were down at 134.15/25 per dollar, compared with the previous close of 134.05/15.

They said the rupee might be under downward pressure after the central bank cut interest rates.

The central bank through moral suasion prevented the spot rupee from dropping below 132.90/133.20, a limit it set in February.

Central bank officials were not available for comment. 

($1 = 132.9000 Sri Lankan rupees) 

(Reporting by Shihar Aneez; Editing by Subhranshu Sahu)

Monetary Policy Review – April 2015 - Policy Rate reduced by 50 Basis Points

The Monetary Board at its regular meeting held on 11 April 2015 reviewed the current monetary policy stance and underlying macroeconomic conditions. Accordingly, the Monetary Board made following observations: 

 Headline inflation, on a year-on-year (y-o-y) basis, declined to 0.1 per cent in March 2015 from 0.6 per cent in February 2015. Following the same trend, annual average inflation also declined to 2.5 per cent from 2.9 per cent recorded in the previous month. Significant decline in inflation in March 2015 reflects primarily the first round impact of downward price revisions of domestic energy prices as well as the administratively reduction in prices of a number of consumer items. Meanwhile, core inflation stood at 1.4 per cent on y-o-y basis and 3.0 per cent on annual average basis in March 2015. 

 As expected, a sustained increase in credit granted by commercial banks to the private sector was observed in the past few months. The growth of the private sector credit rose to 12.6 per cent (y-o-y) or Rs. 24.5 billion in absolute terms in February 2015. Reflecting the developments in domestic credit, broad money (M2b) increased by 12.3 per cent (y-o-y) in February 2015, remaining well within the underlying monetary projections. Economic Research Department 15-04-2015 12-12-2012 2 

 The external sector remained resilient with foreign currency inflows from export proceeds, workers’ remittances, and tourist earnings as well as inflows to the government securities and portfolio investments supporting maintenance of the exchange rate against US Dollar without an unhealthy volatility on the strength of official foreign reserves increasing from US dollars 6.8 billion as at end March 2015 to US dollars 7.0 billion at present. The official reserves are projected to strengthen further with the proceeds pending from the currency swap arrangement between Sri Lanka and India and other identified regular investment inflows to a level of official reserves comfortable for supporting the exchange rate stability in the immediate future. Overall, the outlook in the balance of payments in 2015 remains favourable with continued inflows expected from current account related transactions, significantly lower expenditure on petroleum imports and receipts to the government, the banking sector and other private corporates. 

 Current behaviour of market interest rates is viewed to be inconsistent with the continued low inflation and investments needed to address concerns on economic growth for the year. Inflation is projected to remain at low mid-single digit level in 2015. Therefore, there is a further leeway to continue relaxation of monetary policy, primarily through a reduction in policy interest rates of the Central Bank to encourage economic activities by enhanced credit flows and investments due to lower cost of funds and behaviour of market interest rates consistent with economic growth outlook. If any of subsequent interim effects of further monetary relaxation are found to be of concern over other economic variables, a mix of other monetary policy tools is available to fine-tune such effects towards achievement of current objectives of the monetary policy. 

Taking the above observations into consideration, the Monetary Board decided to reduce the policy interest rates by 50 basis points. 

Accordingly, the Standing Deposit Facility Rate (SDFR) and the Standing Lending Facility Rate (SLFR) of the Central Bank are reduced to 6.00 per cent and 7.50 per cent, respectively, with effect from today (15 April 2015). 

The monetary policy tool primarily adopted by the Monetary Board will continue to be the policy interest rates announced to the market with the support of other monetary policy tools. The relaxed monetary policy stance will also be pursued in months 3 to come until concerns over inconsistent behaviour of market interest rates are addressed sufficiently to facilitate the economic growth further in a low single digit inflation environment. 

The date for the release of the next regular statement on monetary policy would be announced in due course.

Sri Lanka finds more 'pump and dump' stock losses at National Savings Bank: Finance Minister

COLOMBO (EconomyNext) - The losses to Sri Lanka's National Savings Bank from being used to dump pumped up stocks during a bubble that broke in 2011 and 2012 was greater than previously imagined Finance Minister Ravi Karunanayake said.

Karunanayake said NSB had so far lost 1,071 billion rupees from stock in 10 companies bought for 2,645 million rupees, mainly in 2011 and 2012, he said.

The National Savings Bank hit the headlines during the last regime when it bought stock of The Finance Company, a troubled finance company.

"The same people who were involved in selling The Finance Company to NSB appeared to be involved in these deals as well," Karunanayake told reporters.

The stock included Browns, Renuka Holdings and Access, Karunanayake said.

In the case of one stock a 500 million rupee loss had made it.

NSB Chairman Ashwin de Silva would complain the anti-corruption commission on the matter, he said.

"You cannot win on every share, that is for sure, but why do you want to buy stocks that are sure to fall?" Karunayake asked.

During the stock market bubble, fired by low interest rates, which broke in 2011 and 2012, many shares were dumped on state-managed funds.

The Employees Provident Fund came to be known in markets as the 'buyer of last resort' as it bought stocks at prices other investors in the market were not buying.

Sri Lanka SEC appoints Vajira Wijegunawardene as Director General

COLOMBO (EconomyNext) - Sri Lanka's capital markets watchdog, the Securities and Exchange Commission (SEC), has appointed Vajira Wijegunawardene as its Director General with immediate effect.

Wijegunawardene had been the SEC's Director -Capital Market Development.

He has a degree in Business Management and Administration from the University of Reading, UK and a Masters Degree in Financial Economics from the University of Colombo. He was an Investment Analyst and Fund Manager for 10 years before joining the SEC.

The Director General’s post had been vacant for some time and Wijegunawardene had been shortlisted along with the SEC's Deputy Director General Dhammika Perera.

Sri Lanka shares end flat ahead of holidays

(Reuters) - Sri Lankan shares closed nearly unchanged on Friday as investors stayed away ahead of a holiday-shortened week, with net buying by foreign investors boosting turnover, dealers said.

The key Sri Lankan index ended up 0.03 percent, or 1.77 points higher, at 6,901.06 on Friday, hovering near its lowest close since March 31 hit on Thursday.

"Most of the investors stayed away due to political uncertainty and ahead of the holidays," said Reshan Wediwardana, research analyst at First Capital Equities (Pvt) Ltd.

He said buying by foreign investors in Dialog Axiata Plc boosted turnover, but the stock closed steady on Friday.

Foreign investors were net buyers of 236.4 million rupees ($1.78 million) worth of shares on Friday, extending the net foreign inflow so far this year to 3.62 billion rupees.

The day's turnover was 605.3 million rupees ($4.55 million), roughly half of this year's daily average of 1.11 billion rupees.

The market will be closed on April 13 and April 14 for the traditional Sinhala-Tamil new year holiday.

The index had lost 6.6 percent last month, its biggest monthly drop since October 2012, as investors sold their holdings to settle margin trades amid concerns about political stability and a rise in interest rates.

The increased borrowing has put pressure on government finances and pushed up yields on treasury bills by between 82 and 99 basis points (bps) since Jan. 7.

($1 = 132.9000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)

Sri Lanka's Colombo Stock Exchange increases listing fees

Apr 09, 2014 (LBO) - Sri Lanka's stock exchange has increased its existing fees that should be payable by companies seeking a listing of its securities, the CSE said in a statement.

The CSE has obtained the necessary approval from the securities and exchange commission with regard to the amendment of section 11 of its listing rules.

The directive has been effective from 06 April 2015.

As per the new rules, the initial listing fee payable when the ordinary voting shares of an entity are listed on the exchange will be 150,000 rupees.

The initial listing fee payable when the ordinary voting shares of an entity are listed on the BOI board of the exchange will be 500,000 rupees.

BOI board is a fresh initiative of the stock exchange that will allow BOI registered companies to list their securities in the stock market.

"Necessary rules have been already finalized and we are waiting for the first company to be listed in the BOI board." CSE head of market development Niroshan Wijesundera told LBO.

Refer the CSE official site to access the full report of the amended rules.

Bogala Graphite Lanka reopens Rangala mine

COLOMBO (EconomyNext) - Bogala Graphite Lanka, a unit of Netherlands-based AMG Advanced Metallurgical Group N.V., said it had resumed production at a disused mine in an effort to reduce costs amid growing competition.

The mine at Rangala, fully owned by Bogala, and located 8 km southeast of the Bogala mines, can produce 300 metric tonnes a year.

"In order to reduce the overall cost of mining we have decided to open Rangala mine, which we kept in maintenance since 1985," the company told shareholders in its just-released annual report.

"This mine has already started to produce and will be capable to produce 300MT per year by the end of the year. Since this mine is very accessible the cost of mining will be very competitive."

Bogala Graphite directors have not recommended a dividend for the year ended 31st December 2014 due to the capital investment requirement to upgrade the production facilities to meet possible competition emerging in the industry, and region.

"We are observing the increasing activities of the competition and new players in Sri Lanka and are well positioned and continuing to prepare the company to face any challenges that might be posed by competitors," the report said.

More foreign firms have begun exploring and getting mining rights in Sri Lanka after he end of the ethnic war.

Consortium makes Rs5.5bn bid for Sri Lanka's Ceylinco Insurance stock in Trust

COLOMBO (EconomyNext) - A consortium of domestic and foreign investors have made a bid in excess of 5.5 billion rupees for 3.5 million Ceylinco Insurance shares held in a trust which is expected to be dissolved under stock exchange rules, sources familiar with the matter said.

The Ceylinco Insurance Employee Share Ownership Trust (CIESOT) holds 4.57 million shares or a 22.8 percent stake in the insurer.

The consortium has made a bid of around 1,600 rupees per share for 3.57 million shares valuing it around 5.5 billion rupees, sources said. It leaves one million shares or 5 percent of the company to be distributed to workers in kind, sources said.

It was not immediately clear whether the trust would reject or consider the offer.

Ajith Gunawardena, head of Ceylinco's general insurance unit and a trustee said, all decisions would be taken according to the trust deed, without elaborating. Any dissolution of the trust would also take place according to the trust deed, he said.

Under Sri Lanka's existing listing rules permanent share trusts for employees are no longer permitted for companies in the Colombo Stock Exchange and new share ownership plans are limited to 5 percent of the total equity at any time.

All legacy plans and trusts have to be dissolved and distributed to the beneficial owners under an allotment plan and any balance sold on the stock exchange and the cash proceeds also distributed.

Several listed companies that had share trusts dissolved them last year, ahead of the dead of the deadline, while CIESOT was embroiled in a court battle.

Sri Lanka's Securities and Exchange Commission declined to comment on any decision they may make on the matter.

The shares of Ceylinco Insurance has drawn investor interest following the collapse of the Ceylinco group, with investors trying to gain control.

Global Rubber Industries (Pvt) Ltd, which holds 22.25 percent of stock and connected shareholders, who do not have board seats, have also gone to court.

Sri Lanka's Supreme Court in a decision this year determined that CIESOT was a share ownership trust where workers were the beneficial owners, thwarting an attempt by depositors of the collapsed Golden Key Credit Card Company to use the shares to make good the losses.

Sri Lanka shares ease in low-volume trade

(Reuters) - Sri Lankan shares fell to a more-than-one-week low on Thursday led by illiquid shares such as Ceylon Tobacco Company Plc and Commercial Leasing & Finance Plc in low-volume trade while many investors and brokers stayed away ahead of holidays, dealers said.

The index ended 0.21 percent down at 6,899.29 on Thursday, its lowest close since March 31.

Shares in Ceylon Tobacco fell 0.97 percent, while Commercial Leasing and Finance declined 4.76 percent. Both shares fell on just one trade each.

"Market is down on illiquid shares. But the turnover was good," said Dimantha Mathew, research manager at First Capital Equities (Pvt) Ltd, adding that blue-chips like John Keells Holdings and Commercial Bank of Ceylon Plc boosted the turnover.

The day's turnover was 657.6 million rupees ($4.95 million), just above half of this year's daily average of 1.12 billion rupees.

The market will be closed on April 13 and April 14 for the traditional Sinhala-Tamil new year holiday.

The index had lost 6.6 percent last month, its biggest monthly drop since October 2012, as investors sold their holdings to settle margin trades amid concerns about political stability and a rise in interest rates.

Yields on T-bills rose at Wednesday's auction by 1 to 15 basis points after it had fallen between 55 basis points and 63 basis points in the three weekly auctions through April 1.

Analysts expect trading to stay thin through mid-April ahead of the New Year holiday and amid political uncertainty.

Shares in John Keells Holdings Plc fell 0.20 percent while Commercial Bank of Ceylon Plc fell 0.36 percent. 

($1 = 132.8000 Sri Lankan rupees) 

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

Sri Lankan index slips on banks, telecommunications; volumes thin

(Reuters) - Sri Lankan shares ended slightly weaker on Wednesday as investors offloaded telecommunications and banking stocks on thin volume as many investors and brokers stayed away ahead of holidays, dealers said.

The index ended 0.2 percent, or 13.52 points, weaker at 6,913.73 on Wednesday.

"Telecom shares were down on a taxation effect impacting the counter and there is no major selling or buying ahead of the holidays," said Dimantha Mathew, research manager at First Capital Equities (Pvt) Ltd.

The new government in January budget reduced mobile call rates by shifting the 25 percent tax from customers to the service provider.

The day's turnover was 394.8 million rupees ($2.97 million), well below this year's daily average of 1.13 billion rupees.

The market will be closed on April 13 and April 14 for traditional Sinhala-Tamil new year holiday.

The main stock index had lost 6.6 percent last month, its biggest monthly drop since October 2012 as investors sold their holdings to settle margin trading amid concerns about political stability and a rise in interest rates.

Yields on T-bills rose first time at the Wednesdays auction by 1 to 15 basis points after it had fallen between 55 basis points and 63 basis points in the three weekly auctions through April 1.

Analysts expect trading to stay thin through mid-April ahead of the New Year holiday and amid political uncertainty.

Shares in top mobile phone operator Dialog Axiata Plc fell 1.79 percent, while leading fixed line telephone operator Sri Lanka Telecom Plc declined 2.92 percent.

Development lender DFCC Bank fell 2.33 percent while Distilleries Co of Sri Lanka Plc edged down 0.84 percent. 

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

Fitch confirms Hemas' debt at 'A+(lka)', outlook positive

COLOMBO (EconomyNext) - Fitch Ratings has confirmed the rating on Hemas Holdings PLC's (Hemas) outstanding senior unsecured debentures at 'A+(lka)'.

It has also published the company's National Long-Term Rating of 'A+(lka)' and revised the outlook on the rating to positive from stable, a statement said.

"The outlook revision reflects Fitch's expectations of an improved business risk profile and stronger earnings growth owing to expansion in its core businesses in the healthcare and fast moving consumer goods (FMCG) sectors," it said.

The full rating report follows:

Fitch Ratings-Colombo/Sydney-08 April 2015: Fitch Ratings has affirmed the rating on Hemas Holdings PLC's (Hemas) outstanding senior unsecured debentures at 'A+(lka)'. It has also published the company's National Long-Term Rating of 'A+(lka)' and revised the Outlook on the rating to Positive from Stable.

The Outlook revision reflects Fitch's expectations of an improved business risk profile and stronger earnings growth owing to expansion in its core businesses in the healthcare and fast moving consumer goods (FMCG) sectors. The Outlook is also supported by Fitch's expectations that the group is likely to improve its leverage (measured as gross adjusted debt / operating EBITDAR) on a sustained basis to below 2.0x following the divestment of its power business, despite significant investments within its core segments.

KEY RATING DRIVERS

Essential Goods and Services: Hemas' rating reflects the essential nature of the products and services of its key operating subsidiaries in healthcare, FMCG and transportation, supported by the company's low financial risk at the holding company and group level. The rating also factors in the businesses' strong brands, leading market share and strong cash flow generation. Hemas also has subsidiaries involved in hotel operation and destination management.

Strong Demand Dynamics: Hemas is Sri Lanka's largest private healthcare company by revenue and is strongly positioned to benefit from favourable macroeconomic factors such as a rapidly aging population and increasing demand for treatment of non-communicable diseases. Changes in regulations of prices of pharmaceuticals by the government remain a key risk. Higher disposable income and prevailing low inflationary and interest rates have created strong demand for Hemas' FMCG segment in Sri Lanka, while this segment's Bangladesh operation benefits from strong growth prospects.

Low Leverage: Fitch expects the group to sustain a lower leverage ratio despite continued investments to expand its core businesses. The divestment of the power segment in the financial year ended 31 March 2015 (FY15) has improved Hemas' financial profile given the significant amount of debt carried by the segment. Hemas' leverage fell to 1.9x at end-December 2014, from 2.2x, or 1.9x excluding the power segment, at end-FY14.

Growth Through Acquisitions: The acquisition of J L Morison Son & Jones PLC, which manufactures and distributes products in the pharmaceutical, healthcare, beauty and agriculture sectors, in FY14 has strengthened Hemas' product portfolio and local manufacturing capabilities. The purchase of J L Morison Son & Jones was in line with the group's strategy to accelerate growth through acquisitions. The company has demonstrated a long-term investment focus and a disciplined approach to capital management. The group's large cash balance of LKR5.0bn at end-2014, strong operating cash flows, and planned equity raising will ensure that Hemas' financial profile is commensurate with its rating even as it expands and makes acquisitions.

Dependence on Dividends: Hemas is dependent on dividends and fees from its operating subsidiaries to service debt at the holding company level. Fitch considers the structural subordination of the holding company's creditors to be low, because Hemas' key subsidiaries are either majority owned or have low leverage. However, should leverage at the operating subsidiaries increase significantly over time, this could weigh negatively on the rating.

KEY ASSUMPTIONS

Fitch's key assumptions within our rating case for the issuer include:

- Revenue growth driven by improved macroeconomic factors, rising tourist arrivals to the country and expansion within company's core segments

- EBITDAR margins to improve with the divestment of the power segment, turnaround in the hospital segment and efficiency improvements across the company

- Significant capex and acquisition spending in the healthcare and FMCG segments during FY16-FY18.

RATING SENSITIVITIES

Positive: Future developments that may, individually or collectively, lead to a rating upgrade include:

- Group gross adjusted debt/ EBITDAR maintained below 2.0x

- No material deviation from company's historical conservative approach to new investments.

Negative: Future developments that may, individually or collectively, lead to an Outlook revision to Stable include

- Group gross adjusted debt/ EBITDAR sustained above 2.0x- Any material integration issues or deviations from company's historical conservative approach to new investments.