Sri Lanka’s Access shares fall on cancellation of mega highway

Access Engineering shares fell by 11 per cent or Rs. 3.40 per share to Rs. 26.60 on Monday at the Colombo bourse days after the new Sri Lankan Government announced the cancellation of a major highway project. 

Traders appeared to panic with more than 800 separate transactions all amounting to 3.4 million shares at a turnover of Rs 95 million. 

Access is one of the most powerful contractors in the country and involved in several major road, highway and other development projects. 

At the weekend, the new Government of President Maithripala Sirisena – dismantling some of the costly projects of the former administration – said it was cancelling the proposed northern expressway project saying it was too expensive. 

Five contractors including Access had been selected for the project. 

www.sundaytimes.lk

One man hospitalised in Ceylinco Insurance shareholders fracas

One person was hospitalised after arguments and fisticuffs broke out at a stormy Ceylinco Insurance meeting of shareholders in Colombo on Tuesday morning, shareholders said. 

Officials from the Global Rubber Industries (Pvt) Ltd (GRI) which has a 22.86 per cent stake in the company, at a hastily-called media briefing alleged that Ceylinco staff was behind the assault and vowed to file a complaint with the Securities and Exchange Commission (SEC) seeking action. 

They also showed a video of how shareholders were assaulted. 

Earlier in the morning, one shareholder present told the Business Times that at one point during the meeting a shareholder bit a security guard’s chest which turned bloody when guards intervened to break up opposing factions. 

More than 200 shareholders were present at the meeting. 

The company was holding two meetings, one at the request of a shareholder, and the second one to endorse a proposal for segregation of life and general units as separate entities. 

The trouble flared at the first meeting where GRI had wanted an explanation accusing the company of ‘surreptitiously transferring the business and assets without shareholder approval’. 

www.sundaytimes.lk

Sri Lankan shares steady near 2-wk low; political woes trim volume

Jan 20 (Reuters) - Sri Lankan shares ended steady on Tuesday, near a more than two-week low hit in the previous session, but trading volume slumped to a three-week low as investors awaited the new government's interim budget scheduled for next week.

Investors are also waiting for the government's economic policies amid political uncertainty and a lack of clarity on the future of the projects initiated by the previous government.

The main stock index ended 0.02 percent, or 1.82 points firmer, at 7,368.50, edging up from its lowest since Jan. 2 hit on Monday.

The day's turnover was 626.2 million rupees ($4.75 million), the lowest since Dec. 29 and less than half of last year's daily average of 1.42 billion rupees, exchange data showed.

President Maithripala Sirisena's coalition has promised a 100-day programme to restore democracy and the economy before he dissolves parliament for a general election after April 23.

Sirisena's government will present an interim budget on Jan. 29 with an aim of reducing cost of living.

"The market is steady in low volumes with the political uncertainty. Investors will be cautious at least until the budget," said Reshan Kurukulasuriya, chief operating officer of Richard Pieris Securities (Pvt) Ltd.

Analysts said investors are concerned about political stability after Sirisena announced an interim cabinet last week that he said would carry out reforms to fight corruption in the 100 days to a parliamentary election.

Gains were led by Ceylon Tobacco Company Plc, which rose 1.18 percent.

Leading the decliners was Carson Cumberbatch Plc, which fell 3.17 percent.

Analysts said the market was closely monitoring the government's bureaucratic appointments to check if they were in line with its pledge of good governance and transparency.

Foreign investors, who bought a net 22.07 billion rupees worth of stocks last year, were net sellers of 21.4 million rupees of shares on Tuesday.

($1 = 131.7000 Sri Lankan rupees)

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Anupama Dwivedi)

Lanka Orix Finance Rs. 5 b debenture oversubscribed

Lanka Orix Finance Plc’s Rs. 5 billion debenture issue has been oversubscribed and closed on its official opening day itself which was yesterday.

The company issued 50 million five-year listed, rated, unsecured, subordinated redeemable debentures at Rs. 100 each.

The basis of allotment and final application figures will be notified in due course.

Rated BBB+ by ICRA Lanka Ltd., there were three debenture types on offer with a fixed rate. Type A was 9% per annum (9.31% annual effective rate) payable quarterly, Type B 9.10% per annum (9.31% annual effective rate) payable semi-annually and Type C was 9.25% per annum (9.25% annual effective rate) payable annually.

Lanka Orix Finance plans to utilise 60% of the funds raised to enhance Tier 2 capital to improve total capital adequacy ratio and the balance for the same purpose on the completion of the annual audit.
www.ft.lk

CAL ends 2014 as market leader in listed debentures

Capital Alliance, Sri Lanka’s leading full service investment bank has ended 2014 as the market leader in listed debentures, delivering greater results than all of its competitors.

During the year, the company advised clients on five debenture issues worth a total value of Rs18 billion. A total of Rs10 billion was raised in the month of December alone. The company’s portfolio comprises a cross-section of clients including commercial banks, leading corporates and finance companies across Sri Lanka.

CAL raised the entirety of the aforesaid Rs 18 billion single digit interest rates, further showcasing the company’s ability to raise long-term funds despite the current low interest rate environment. Some of CAL’s notable deals in 2014 included the country’s first single digit interest rate debenture, a Rs.5 billion issue for DFCC Bank at an interest rate of 8.5% and the year’s largest private sector debenture issue to the tune of Rs 7 billion for Sampath Bank PLC at an interest rate of 8.25%. Investors for these debentures extended across the country’s leading insurance companies, pension funds, commercial banks, mutual funds, corporates and high net worth individuals.

Deshan Pushparajah, Head of Investment Banking, CAL said, “We are pleased to have gained the trust of some of the leading institutions in the country for the purpose of raising debt financing.

Interest in listed debentures as an asset class has exploded over the last two years, with over Rs 100 billion being raised. Whilst this market is still in its infancy, we believe that we can help our clients, both investors and issuers, to build a meaningful and long-lasting relationship with the market, thereby providing them with another avenue to raise and invest funds.”

CAL’s success in 2014 is largely attributed to its holistic three-pronged approach to debt issuances, which focuses on best in class structuring, efficient placement utilizing relationships with an unprecedented number of investors and continuous post-transaction support.

The company’s in-house fixed income trading desk (the largest dealer in corporate debentures) continues to “make a market”, providing investors with ready liquidity and a continuous market value for their debentures.

This allows clients to raise funds in subsequent rounds at a significantly more competitive interest rate.

Capital Alliance (CAL) is continuously striving to become the preferred partner in financial markets.

Having commenced operations in October 2000, CAL has established itself as a leading player in the financial markets of Sri Lanka. The company specializes in the origination, trading and investment of debt and equity securities and this mix of expertise and services allows CAL to offer integrated and customized solutions to its customers across the entire financial spectrum.
www.dailynews.lk