Sri Lanka shares hit one-week high as banks rise

Feb 9 (Reuters) - Sri Lankan shares ended at a more than one-week high on Monday, led by financials, though the turnover was lower than usual because of the ongoing political uncertainty.

The main stock index ended up 0.5 percent, or 35.69 points, at 7,198.44, its highest close since Jan.30.

Analysts, however, said political uncertainty weighed on the bourse, with the Opposition bringing in a no-confidence motion against a cabinet minister and the Prime Minister threatening to dissolve parliament if it goes through.

"Bit of a slow day. The turnover was comparatively low. This slowdown might there for some days until they settle at the parliament," said Dimantha Mathew, manager, research at First Capital Equities (pvt) Ltd.

Monday's turnover was 930 million rupees ($7 million), well below this year's daily average of 1.43 billion rupees.

Shares of Hatton National Bank Plc rose 5.59 percent, while conglomerate John Keells Holdings Plc gained 1.44 percent.

Foreign investors bought a net 92.2 million rupees worth of shares on Monday, extending net foreign inflows this year to 825.4 million rupees worth of shares. The bourse had net foreign inflows of 22.07 billion rupees last year.

($1 = 132.8000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Prateek Chatterjee)

Even without Packer Sri Lanka’s Ravi to the fore with new investor

Prominent Sri Lankan businessman Ravi Wijeratne who was planning to set up a hotel complex opposite Lake House in Colombo in collaboration with Australian businessman James Packer told www.adaderanabiz.lk that he was planning to continue this project in collaboration with another investor.

He added that future discussions would be held on this issue and that he has already paid the government for the land opposite Lake House where this project is to be implemented.

Ravi Wijeratne also added that this project would go ahead without a casino since Colombo needs more hotels with luxury facilities to meet the fast developing tourism industry.

James Packer pulled out of this hotel project recently after the new government refusing to provide concessions to the casino business under the Strategic Projects Development Act.

“The construction of this hotel project will not be stopped. There are future plans to continue with this project with a new investor,” said Ravi Wijeratne.

The new government imposed a massive tax of Rs. 01 billion on each casino license through its interim budget and proposed to collect a total of Rs. 05 billion through this.
www.adaderana.lk

Market will be bullish as before – SEC Chief

By Ravi Ladduwahetty

Ceylon Finance Today: The Colombo Stock Market will continue to be bullish as before, through there were a few setbacks during the time of the Interim Budget which was passed in Parliament on Friday, Chairman of the Securities and Exchange Commission Tilak Karunaratne said.

There were some turbulent times during the Interim Budget and the market is now returning to being bullish he told Ceylon FT.

The market does not need any intervention or probing at this stage as everything was going on smoothly, he said, adding that all transactions were being carefully monitored.

He also said that the SEC was not so concerned about market performance, but on the regulatory aspects.

Meanwhile, the Securities and Exchange Commission was in the process of appointing a ten member Board of Directors. Four of them, according to the SEC Act, had to include a Deputy Governor of the Central Bank of Sri Lanka, a Deputy Secretary to the. would be from the legal fraternity and some members of the business community, but all ten members of the SEC Board would have to be appointed by Prime MInister Ranil Wickremesinghe as Minister of Policy Planning and Economic Development (The SEC now comes under the PM).

The SEC Chief also said the Board members have already been appointed, but the names have not submitted to him yet. It is also learnt that a full time Director General, would be appointed after interviews, but that process would also have to be completed when all the members of the SEC Board of Directors are appointed.
www.ceylontoday.lk

Northern expressway: Rs 245 B brought down by Rs 60 B

By Ravi Ladduwahetty

Ceylon Finance Today: Finance Minister Ravi Karunanayake, in a startling revelation, said that the Northern expressway, for which the bids from the five contractors had been estimated at Rs 245 Billion, during the previous regime had overnight reduced by Rs 60 Billion!

Karunanayake was addressing the members of the Organization of Professional Associations on Friday night.

We summoned the five contractors and queried about the bids that they submitted to the previous government which, they said, totalled to Rs 245 Billion. When we questioned them, they said that they could do it for Rs 60 Billion less. When we asked them how, there was deft silence, which said it all, the Minister quipped.

This is the corrupt economy that we inherited, he said.

Speaking of the other corrupt practices of the previous regime, he said that there was the US$ 500 million deal for MIG aircraft where each of the helicopters which had cost only US$ 12 million, had been purchased for US $ 20 million each.

He also said that there was Rs 22 billion spent on the Defence Academy which no one was aware of the receipts and tender procedures.

He also pointed out that the funds from the sale of the land for the Shangri la Project and the CATC project at Galle Face had been remitted to the Defence Secretary's Account and not the Consolidated Fund of which Rs 7 billion had been spent without Treasury approval.

There was also another Rs 2.5 billion which was spent out of that as Architectural costs where the first instalment was Rs 800 million. There were no quotations for that at all.

There had been another Rs 30-40 billion which has been paid and nobody knows where the money had gone and what it was spent for, the Minister said.

He also said that the government had inherited a debt amortization of
Rs 1828 Billion, out of which Rs 458 billion was interest payments and the balance was capital expenditure. We are unable to pay the debt amortization with the projected revenue for 2015 Rs 1532 billion and that was how the economy was bankrupt, he said.

He also said that the original thinking was that the government debt was a whopping Rs 6.9 trillion, but, now, it was at Rs 9.3 trillion, which had transpired within the last 24 days. The External Reserves, which were believed to be at US$ 9 billion, was now only US$ 7 billion," he said.

He also cautioned the mafia which attempted to manipulate the stock market earlier and added that defaulters would be brought to book.
www.ceylontoday.lk

MTD Walkers PLC ventures in to real estate business

Acquires Wincon Development Ceylon for Rs. 2.17 b; raises Rs. 2.42 b via Rights Issue

Integrated infrastructure and engineering solutions provider MTD Walkers PLC, recently completed the 100% acquisition of Wincon Development Ceylon Ltd for a consideration of Rs. 2.17 billion, marking its foray into real estate and property development. MTD Walkers PLC raised Rs. 2.42 billion on the recently oversubscribed rights issue.

Wincon Development Ceylon Ltd is a company registered with the Board of Investment of Sri Lanka, for the purpose of constructing approximately 25,000 homes under the Nila Sevana public servants housing project. The company has built over 1,000 affordable apartment units in the Galle District (512 in Wakunugoda and 576 in Habaraduwa) which will be available for sale in the near future. Although public sector employees are given preferred pricing, the homes are available for the private sector as well; unit prices vary from Rs. 2 to 5 million.

Wakunagoda is approximately 3 kilometres from Galle town and within 1.5 kilometres from the prestigious Richmond College. The 512 homes at Wakunagoda are available in a three bedroom 695 square foot home priced between Rs. 3.2 to 3.7 million or in a three bedroom 776 square foot home prices between Rs. 3.8 to 4.5 million. The community offers landscaped gardens with play areas for children, proximity to public transport, spectacular views from the top floors and is within the Galle Municipal Council area.

As per the tripartite agreement between the Board of Investment of Sri Lanka, Wincon and the Ministry of Public Administration, the Nila Sevana public servants housing project will extend to all districts to meet the growing demand for quality built, affordable homes for public sector employees. According to Wincon Development Ceylon management, the next project will commence in Kundasale, Kandy, for which several thousand inquiries have been made. Reservations for the Kandy project will be taken soon, as it is already in the design phase with construction planned for mid-2015.

The acquisition of Wincon Development Ceylon Ltd is the latest move by MTD Walkers PLC to expand and diversify into areas related to its core business, as the company establishes itself on a path of sustainable growth that reflect the company’s strength.

Commenting on the acquisition, MTD Walkers PLC Executive Deputy Chairman Jehan 
Amaratunga stated: “Increasing land prices have already restricted villa and plotted developments to fringe areas of the city, and such developments will be pushed even further out as land becomes more expensive. The growing demand for commercial office spaces, retail establishments, high rise condominiums and increasing per capita income of the country makes real estate the right business to be in considering the Group’s vision. 

To reflect our investment in the sector, Wincon will be renamed Walkers CML Properties.”
MTD Walkers PLC Head of Corporate Finance and Treasury Mahesh Yogarajan commented saying, “With the acquisition of Wincon through the rights issue, MTD Walkers PLC is ideally positioned as a serious real estate player, with a large inventory of apartments for sale, with cash inflows ahead helping to further strengthen our balance sheet and liquidity position. The unique position Walkers CML Properties will have is the ability to leverage on our building construction, piling and mechanical engineering businesses to generate high returns for shareholders. We are committed to supporting the national program of accelerated housing development for the public sector through the Nilasevana Project. Further, to balance our real estate portfolio we are also actively evaluating joint ventures to develop private properties, whilst also unlocking value through utilisation of our own land bank for projects.”

MTD Walkers is believed to be the country’s only infrastructure developer able to perform the entire spectrum of infrastructure development activities through its seven subsidiaries, specialised in civil, mechanical and electrical engineering, power generation and now, real estate.
www.ft.lk

Touchwood winding-up gets more entangled; inquiry to resume on 25 February

Case for the winding-up of Touchwood Investments PLC was taken up in the Commercial High Court of Colombo on Friday to support a motion filed on behalf of seven investors who have invested in the plantation schemes promoted by the company being wound-up.

The motion dated 11 December 2014 was filed by JAT Holding Ltd. and six other individuals claiming ownership of their plots of land under the contract entered into by the said individuals with the company being wound-up.

A motion dated 2 February was filed by the Official Liquidator appointed by Court in the winding-up proceedings raising a preliminary objection and several other objections to the application made by the seven parties by way of a motion.

The case was taken up on Friday to support the said motions and to record the submissions of the parties in the case.

Court after hearing the brief submissions made by the Counsel for the Liquidator Dammika Gabadage, Counsel for the seven parties who have filed the afore mentioned motion, Kuwera de Soyza President’s Counsel, and Counsel for the Petitioner Avindra Rodrigo, allowed the Counsel for the Liquidator to record his submissions objecting to the application filed by the seven parties.

Counsel for the Liquidator elaborated on the basis on which a preliminary objection was raised against the motion and application made by the said parties. The Preliminary objection was raised on a strict legal issue pertaining to the procedure that must be adhered to in winding-up proceedings. Counsel further submitted that the seven parties who have made this application to Court have no locus standii to make such applications as they are not party to this action.

Counsel further reiterated that in the event they intended to make such an application to Court they ought to have complied with the Winding-up rules, more specifically Rule 13, which stipulates the procedure to be followed by all parties who wish to make their applications in Court in winding-up proceedings. Counsel further stated that the said parties do not qualify even under Rule 116 of the Winding-up Rules to make this application.

He also stated that the seven parties who have made an application at this juncture have not complied with mandatory rule of serving notice on the Petitioner and Court during the stipulated time period. In the event of such failure, the parties cannot appear and make application in Court at this juncture unless they are shareholder, creditors or directors of the Company. Counsel further stated that all parties who intended to intervene in the winding-up proceedings and make their applications had ample time to serve notice on the Petitioner and intervene on this matter. However, the seven parties in concern have failed to do so.

In response to a question raised by Court Counsel further submitted that the Commercial High Court has no jurisdiction to inquire into the matter or make an order in relation to the ownership of land. Counsel further submitted that if the parties wished to claim ownership to the plots of land, such action ought to have been filed in the relevant Court having jurisdiction to hear such matters in pursuance of declaration of title or ownership.

Counsel for the liquidator took up the position that no party who has failed to give notice to the Petitioner and Court can be allowed to intervene or make application in winding-up proceedings subsequent to the winding-up order being granted.

Counsel for the Petitioner, Avindra Rodrigo objected to the said motion filed by the said parties and further stated that the Court has no jurisdiction to hear or determine such application. Counsel further stated that notice of this application should have been filed on the Petitioner and raised his objections to the procedure followed by the parties who have filed a motion.

Counsel for the seven parties, Kuwera de Soyza, President’s Counsel admitted that the seven parties who are making this application are not party to this action and have no interest in the winding up proceedings and that the application has been made only to seek an order from Court pertaining to their interest in the plots of land.

The inquiry will be resumed on 25 February on which date Counsel for the Petitioner and the seven parties who have made an application to Court will make their submissions.
www.ft.lk

Access Engineering says making steady progress

Access Engineering Plc said on Friday in a statement that the Company was making steady progress with satisfactory results for the third quarter and first nine months.

It said turnover at Company level for the quarter ended 31 December 2014 was recorded at Rs. 2.38 b. Turnover for the nine months at company level recorded at Rs. 8.78 b is a drop of 10% compared to the corresponding period of the previous year. This is due to the progress of some of the construction work carried out by the company being hampered by delays.

Turnover for the quarter and the nine months at Group level stood at Rs. 4.12 b and Rs.11.84 b respectively.

Profit attributable to owners of the Company during the quarter at Company and Group level were Rs. 317 million and Rs. 531 million respectively.

During the cumulative period up to 31December 2014, the Company recorded earnings to owners amounting to Rs.1.46 b and Rs. 1.71 b respectively at Company and Group level.

During the quarter under review the Company invested in 80% of the equity of Access Projects Ltd. for a consideration of Rs.1 b. Access Projects Ltd. contributed approximately Rs. 86 million to the Group’sbottom line during the quarter.

The Company’s 84%-owned subsidiary Sathosa Motors PLC and fully-owned subsidiary Access Realties Ltd. have contributed approximately Rs. 132 million and Rs. 112 million respectively whilst the 30%-owned associate ZPMC Lanka Ltd. contributed Rs. 9.5 million to the bottom lineduring the nine months under review.

The total asset base of the Group stood at Rs.22.26 b.Equity attributable to owners of the Companyof Rs. 15.62 b at the Group level translates into a net asset per share of Rs.15.62, a growth of 5% since 31March 2014.

The Board of Directors of AEL comprises Sumal Perera (Chairman), Christopher Joshua (Managing Director), Rohana Fernando (COO), ShevanthaMendis, DharshanaMunasinghe, Ranjan Gomez, Dilhan Perera, Professor Malik Ranasinghe, NiroshanGunarathna and Dinesh Weerakkody.
www.ft.lk

Expolanka posts revenue of Rs. 13 b, NPAT of Rs. 408 m for 3Q

Expolanka Holdings Plc has posted a revenue of Rs. 13 billion and a net profit of Rs. 408 million for the third quarter of the financial year 2014/15.

Performance in the quarter has driven the consolidated net profit of the group towards Rs. 760 million for the nine months ended 31December 2014.

In terms of the core business operations of the organisation, Expolanka recorded an underlying profit growth of 24.5% (YOY) during the third quarter excluding the Extraordinary Income related to the restructure activities of the organisation.

Commenting on the results, Expolanka Holdings CEO/Director Hanif Yusoof said: “The key drivers behind the positive shift areour strategic planning, efforts on business growth and focus on operational efficiencies.”

The Group’s core sector Freight and Logistics saw an improvement during the quarter which has driven the sector to record a year to date revenue of Rs. 28 billion and a profit of 716.7 million. The performance during the quarter resulted in a growth of 51% of Profit After Tax compared to the third quarter of last financial year.

From a geographical perspective, the Indian subcontinent performed well during the quarter. The Sri Lankan and Indian entities achieved a profit growth which was a direct result of the business growth achieved particularly on the US trade lane. However the Bangladesh entity continued to be affected by the challenges faced in the local apparel sector of the country.

Indonesian trade continued to maintain the momentum gained in the previous two quarters fuelled by increased volume from Europe and the US.

The Travel and Leisure sector continued to show positive signs during the quarter and have ended the nine months recording a year-to-date revenue of Rs. 2 billion and achieving a 105% growth in net profit (YOY).

Expolanka’s ticketing and outbound travel operations continued to perform well maintaining its market leadership position, whilst the in-bound operations has been able to gradually turn around its performance during the year following the restructure of its business operations and processes.

The International Trading and Manufacturing sector recorded a year-to-date revenue of Rs.7 billion whilst posting a net profit increase of 3% (YOY).

The Group’s perishable exports business maintained its healthy growth from the previous quarter with a turnaround profit growth in fresh and desiccated coconut exports.
Yusoof added: “The continued restructuring of the sector resulted with the divestment of tea, healthcare and food catering businesses during November 2014. Given the high risk exposure and the volatile nature of returns in the divested businesses, we expect these strategic changes to boost sector performance.

“In future we plan to further consolidate the performance of the group and continue with efforts aimed towards driving business growth and further enhancing operational efficiencies. These efforts will be augmented by our continued emphasis on our various restructure projects, working capital optimisation and cost rationalisation activities.”
www.ft.lk