Vidullanka acquires more shares

Vidullanka PLC has acquired 10,500,000 ordinary shares on December 22. Subsequent to this share transaction the shareholding of Vidullanka PLC now amounts 50,858,630 shares coming on to 10.172% voting rights of Panasian Power PLC.

A BOI approved company founded in 1997, Vidullanka constructs and operates hydroelectric power projects.

This company was also the first power company to be listed in the Colombo Stock Exchange (CSE). 

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Colombo Stock Exchange records stellar performance in 2014

The CSE is on an upward growth trajectory and has recorded positive growth in the past year, surpassing several previous records. In 2014 the S&P SL20 crossed the 4000 mark for the first time since its launch, market capitalization reached Rs 3 trillion closing the year on Rs 3, 104.9 Mn and the All Share Price Index (ASPI) crossed the 7500 mark and closed the year on 7, 298.95.

The daily average turnover increased by 71 percent over the previous year from Rs 828 Mn in 2013 to 1.415 Bn in 2014.

Most notably foreign purchases have been the highest in history, a record
Rs 105,812. 5 Mn as at 31st December 2014. Continuing its strategy of attracting high net-worth foreign investors to the market, the CSE in association with the Securities and Exchange Commission of Sri Lanka held Investor Forums in Singapore, London and New York. There is widespread interest among overseas institutional investors as indicated through the Capital Market Conference held in October; which showcased the multifarious sectors of the capital market to over 80 International Institutional Fund Managers and over 250 local industry participants .

The primary market remained active during 2014 with over Rs 77. 7 Billion being raised through equity and debt IPO's, rights issues, and private placements.

During the course of 2014, there have been five Equity IPO's, one Equity Introduction and 20 Debt IPO's. The five equity IPO's raised a total of Rs 2,693.8 Million, the highest since 2011.

The market is also performing positively in comparison to global markets; being within the top six best performing markets internationally and within the top five best performing markets in the region, with the ASPI showing a year to date growth of 23.4%.

The technological infrastructure of the CSE has undergone numerous advancements in 2014; with the replacement of the 19 year old legacy Central Depository System (CDS) with a new generation Central Depository System in November 2014 - laying the platform for future enhancements relating to post trade Clearing and Settlement services and moving to a Delivery Versus Payment" (DVP) system of settlement and a Central Counter Party (CCP) System.

Investors are now able to access and monitor their investments in the stock market, easily and cost effectively as a result of a range of new services introduced by the CSE. Investors can subscribe for SMS alerts for secondary market transactions and CDS monthly statements are also available on email. Meanwhile the CSE mobile phone apps, available both on android and iOS, provides live market data.

Furthermore the CSE online properties have made the foray into social media with active Facebook, Twitter and LinkedIn pages providing users with timely information.
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Adam Investments increases stake in PCH Holdings to 53.51%

Adam Investments Ltd has increased its stake in PCH Holdings PLC to 53.51%, following the latter's mandatory offer.

Prior to the mandatory offer, Adam Investments had 108,248,291 ordinary shares of PCH Holdings PLC amounting to around 42.96% of the equity.

Following Adam Investment's acquisition of 20 million shares in PCH Holdings PLC it will hold 53.51% of the shares of PCH Holdings PLC. These shares were purchased on the trading floor of the Colombo Stock Exchange between 21 July and 26 December 2014, for which acceptance has been received as of 26 December, and where a total of 4,935,285 shares have been completed and a further 1,661,697 have been completed and with the approval of the Colombo Stock Exchange for the transfer of the shares accepted to Adam Investments.
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CSE looking at a Champagne Year! Based on low interest, low inflation regime

By Ravi Ladduwahetty

Ceylon Finance Today: The Colombo Stock Exchange is expected to perform even better in 2015 than it did in 2014 based on the prevailing low inflation and low interest regime, a frontline stock broker said.

"The Colombo bourse performed well till the announcement of the 8 January Presidential elections where the All Share Price Index was up 29% based on the low interest and low inflation regime, which by itself was good," Chairman of the Colombo Stock Brokers' Association, Dihan Dedigama told Ceylon FT yesterday.

Dedigama, who is also CEO of Softlogic Stockbrokers (Pvt) Ltd, said that the market sought a correction with the announcement of the Presidential polls and declined to 21%, but remained one of the best performing markets in the region. "The Colombo Stock Exchange would be looking for direction after the Presidential polls ends," he said.

He also said that foreigners were accumulating stocks which was a positive sign and added that there would be continued growth in the market.

Meanwhile, Colombo Stock Exchange Manager Market Development, Niroshan Wijesundera told Ceylon FT yesterday that the overall performance of the market for 2014 was much better than for 2013.

The All Share Price Index had gained 23.4% in 2014 over the 4.8% in 2013 while the Standard and Poor Index had gained up to 25.3% over the 5.8 % in 2013.

The Market Capitalization had also increased to Rs. 3.1 Trillion from the Rs. 2.4 trillion a year ago. The Average daily turnover had also risen 70% to Rs. 1415 million from the Rs. 828.4 million, a year ago.

The Capital raised also increased to Rs. 2.6 billion through equity in 2014 from the Rs. 494 million in 2013 which was the highest ever since the Rs. 1.7 billion in 2012. The highest ever foreign inflow was also reported in 2014 which was Rs. 105 billion, he said.

He also said that the highlights for 2014 were that there were 5 Initial Public Offerings, one introduction and 19 Debt IPOs. He added that the Colombo Stock Exchange was the sixth best performing bourse in Asia after Shanghai, the National Stock Exchange (New Delhi), Bombay and Karachi and sixth in the overall World Equity Index as per Bloomberg.
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Lanka Rating Agency upgrades Amana Takaful’s rating to BBB/P3/Stable

Lanka Rating Agency (LRA) has upgraded Amana Takaful Plc’s (ATL) long- and short-term claims-paying ability rating from BBB- and P3 to BBB and P3, respectively. The outlook on the long-term rating is to be stable.

The upgrade is premised on ATL’s improving performance, above-average general insurance underwriting performance and average capitalisation levels. Meanwhile, the ratings are tempered by the group’s small market share, its above-average claims ratios for life insurance and limited investment avenues owing to adherence to Shari’ah-compliant investments.

ATL made its debut in 2002, and is engaged in both life and general insurance. Currently it is the only composite takaful or non-conventional insurer in Sri Lanka. Amana Takaful also operates a sub-subsidiary Amana Takaful Maldives Plc (ATM) which was established in 2003.

Despite providing Shari’ah-compliant insurance services, the group also competes against conventional insurers with established track records. In terms of gross written premiums, ATL was 9th in the life segment and 13th in the general segment as at end-FY 2013.

While the group accounted for 1.88% of total industry GWPs as at end-FY Dec 2013 (FY 

December 2012 :1.79%), it is somewhat insulated from competition within the traditional insurance sphere given its sole presence in the takaful business.

The group’s improving general insurance underwriting performance is evidenced by its ability to maintain a better-than-industry claims ratio. The claims ratio stood at 52.55% as at end-FY December 2013. Improving from 55.35% from fiscal 2012 (Industry: 58.65%). The better ratio can also be attributed to the company’s more conservative retention policy.

Lanka Ratings considers ATL’s long-term insurance underwriting standards to be weighed down, reflected by the division’s claims ratio and lower net underwriting margins relative to peers, mainly owing to high surrenders and part withdrawals.

However, with the introduction of unit-linked life insurance policies, the company’s life GWPs grew at a higher pace than the industry, although driven by a small initial base. The group’s life GWPs grew 48.86% in FY December 2013, after having increased 14.74% y-o-y in FY December 2012.

This was mainly due to the group’s life products having been redesigned with more customer focus and the targeted marketing of products in line with renewed strategies. 

Within the investment portfolio government securities accounted for 22.22% of the company’s investments as at FY December 2013, while mudarabha deposits made up 45.53%. The rest of the portfolio consisted of investments in property, equity, unit trusts and gold.

While Shari’ah-compliant investment opportunities continue to remain limited, an investment income of Rs. 152.9 million (2012: Rs. 104.2 million) was realised by the group despite a significant decline in value of gold bullion and a lacklustre equity market.

The management’s decision to move its investments to fixed income-based assets helped to reduce the adverse effect brought on by a global fall in the bullion market.

The group reported its highest profit after tax of Rs. 157.86 million in FY December 2013 (FY December 2012: Rs. 120.12 million).

ATL’s overall underwriting performance was average in fiscal 2013, supported by both its general and life insurance segments amid a reducing trend in its claims ratio. On the other hand, the group held its expense ratio at 46.38% in FY December 2013 (FY 2012: 47.32%). The management intends to continue its drive on rationalising the expense ratio by focusing on improving productivity.

The company’s non-life solvency margin stood at 1.85 times in FY December 2013 reducing marginally from 1.89 as at end-December FY 2012. As a result of increased investments in mudarabha deposits and government securities, the solvency margin has been maintained at adequate levels. ATL’s life solvency margin reduced from 3.71 times at end-December 2012 to 2.02 times as at end-December 2013.
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