Sri Lankan shares end steady despite foreign selling

May 28 Sri Lankan shares ended steady near a two-week low on Thursday as local buying offset foreign selling in blue-chips.

Stockbrokers, however, said that most investors have been cautiously optimistic in a lower interest rate environment as concerns about political stability and the timing of a parliamentary election weigh on sentiment.

The main stock index ended a tad firmer, up 0.03 percent to 7,255.71, and near its lowest close since May 14 hit in the previous session.

Foreign investors sold a net 451.3 million rupees ($3.4 million) worth of shares on Thursday, extending foreign outflows to 1.13 billion in the last three sessions. But the bourse has seen net inflows of 4.63 billion rupees in equities so far this year.

Turnover was 1.38 billion rupees, beating this year's daily average of about 1.14 billion rupees.

Among the gainers, Distilleries Company of Sri Lanka Plc rose 2.87 percent, while Bukit Darah Plc added 1.2 percent.

Political uncertainty due to the Ranil Wickremesinghe-led government not having a majority has been a drag on the market, though the trend reversed after the central bank cut key monetary policy rates to record lows on April 15.

The index has gained 5.2 percent since the rate cut.

Analysts say a new stable government after the election coupled with strong economic measures would boost confidence.

($1 = 133.9000 Sri Lankan rupees) (Reporting by Shihar Aneez; Editing by Prateek Chatterjee)

Sri Lanka Treasuries yields edge lower at auction

COLOMBO (EconomyNext) - Sri Lanka's Treasury bill yields eased across maturities at Wednesday's auction with the 12-month yield falling 02 basis points to 6.29 percent, data from the state debt office showed.

The 03-month yield fell 01 basis points to 6.07 percent and the 6-month yield also fell 01 basis point to 6.18 percent.

The debt office sold 10.1 billion rupees of 3-month bills, 13.4 billion rupees of 6-month bills and 4.3 billion rupees of 12-month bills totalling 27.9 billion rupees.

The debt office, which is a unit of the Central Bank offered 21 billion rupees of bills for sale.

MTD Walkers posts impressive profit increase

MTD Walkers PLC for the year ended March 31, 2015 posted Rs. 1.148 billion profit after tax on a revenue of Rs.14.014 billion, up from Rs. 10.092 billion last year.

This is its sixth consecutive year of 39.1% compound annual revenue growth, ending the year posting a 91.0% growth in profit after tax.

“As we head into a new financial year, we are confident that our interest in the fields of infrastructure related diversification and continued focus on our core areas will yield us strong growth across our businesses as we look to maintain and build on our industry leading position,” MTD Walkers Executive Deputy Chairman Jehan Amaratunga said.

MTD Walkers recently acquired Wincon Development Ceylon (Private) Limited, a property development company registered with the Board of Investment of Sri Lanka, for the purpose of residential property development for both public and private sector.

“Acquiring this through the Rs. 2.4 billion rights issue completed in Q4 2015 has completely restructured our balance sheet and we are now ready to support our planned diversification strategy in property development and marine engineering,” Amaratunga said.

“Despite the market remaining competitive and challenging, the company continued to deliver consistent growth and an increase in profit after tax from 6.0% in 2014 to 8.2% in 2015. To ensure our long-term sustainable success we invested in effective management, cost control measures, innovative engineering and building capabilities of our people,” MTD Walkers Group Chief Financial Officer Viraj De Silva said .
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Central Finance Rs 3 b debenture oversubscribed

The issue of Central Finance Company's 30,000,000 Rated Secured Redeemable Debentures for the value of Rs 3 billion has been oversubscribed.

Therefore, the issue was closed at 4.30 p.m. yesterday as per the Prospectus. The basis of allotment will be notified to the CSE in the due course.
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Dealers report increase in car sales in past twelve months

Carmudi launched its white paper on ‘The Booming Automotive Industry in Emerging Markets’ yesterday.

The Carmudi study found that 70% of car dealers in Sri Lanka reported an increase in car sales over the past twelve months due to the changing economic climate, while 20% of car dealers surveyed reported a decrease.

The findings in this report are the result of Carmudi’s surveys conducted online with both car buyers and car dealers, and in-depth interviews with industry influencers throughout Sri Lanka.

New motor vehicle registrations in 2011 jumped 46% higher than the previous 12 months. Import duties were revised in 2012 to regulate the rising motor vehicle imports, presenting a

The motor industry in Sri Lanka has witnessed a number of changes in recent years. Prices fell sharply in 2010 due to cutback of duty charges, which resulted in a surge of vehicle imports.

New motor vehicle registrations in 2011 jumped 46% higher than the previous 12 months. Import duties were revised in 2012 to regulate the rising motor vehicle imports, presenting a major impact on the volume of imports.

Global automotive sales for 2015 are expected to reach close to $89M, a 2.4% growth from 2014. Emerging markets’ share of global sales will rise from 50% in 2012 to 60% by 2020, while their share of global profits is also set to rise by 10%. When it comes to new cars, purchase intent is strongest in Asia, where 65% of respondents say they will buy new cars in the next two years, compared with 7% who plan to buy used cars.

The President of Sri Lanka’s Vehicle Importers Association stated to the media that reductions up to Rs. 300,000 for the prices of vehicles with 1000cc or less engine capacities are in the plans.

These plans were later executed in hopes of reviving the sluggish attitude of the overall motor sector and to allow all motor sector players a positive impact.

Car dealers in Sri Lanka have reported that over 30% of car buyers mentioned turning to the Internet and 10% of car buyers are turning to dealer sites when researching for cars. Car dealers also reported that 60% of car buyers are still using offline media such as newspaper classifieds as a source of information when searching for a car.
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BoC starts the year with Rs.4.4 bn PBT for 1Q 2015

After completing its 75th anniversary year with a commendable achievement of Rs.20.3 billion PBT, BoC has reported Rs. 4.4 billion PBT for the 1Q 2015 by achieving a 15% growth over 1Q of the previous year. Profit After Tax (PAT) stood at Rs.3.0billion resulting 15% growth. The Group reported Rs.4.3 billion PBT resulting in a 10% growth over the corresponding period of the previous year and the Bank dominates the results of the Group accounting for 96% of earnings and 97% of the Group’s assets.

A press release said: ‘PBT has mainly accelerated due to increased net interest income and fee income. The Bank has been able to achieve lower interest expenses through improved CASA mix (Current Account and Savings Account to total deposits) resulting in a 34% increase in net interest income over 1Q 2014.Net fee and commission income have also increased by 25% to Rs. 2.1 billion contributing 14% to total operating income.

‘Impairment charge on loans and advances has increased by 17% to Rs.3.9 billion mainly due to increase in individual impairment compared to that of the corresponding period of 2014. However, collective impairment provision showed a marginal increase of 6% reflecting quality of the portfolio and prudential methods adopted in credit management.

‘Preserving its position as the first domestic bank to achieve a trillion assets Balance Sheet the Bank’s assets grew by 5% to Rs.1.4trillion as of end March 2015.Loans and advances accounted for 58% of the Bank’s assets base and gross loans stood at Rs.845.5 billion as at end 1Q 2015 and showed a marginal growth of 9% recovering from the slower credit growth that prevailed during last year. Deposits accounted for 70% of the Bank’s liabilities as at the end of 1Q 2015 and showed a slight decrease compared to end 2014.

‘As at end of 1Q 2015 the Bank’s Return on Average Assets (ROAA) ratio stood at 1.3% and Return on Average Equity (ROAE) ratio stood at 15.7% indicating slight dip compared to end 2014 mainly due to increased assets base and the Rs. 5 billion capital infusion made in December 2014. Meanwhile cost to income ratio showed an improvement from 42% to 39% in line with the improved operational efficiencies.

‘The Bank’s domestic liquid asset ratio was 26.6% as at the end of 1Q 2015 while the off-shore liquid asset ratio was 31.7%. Both ratios stand well above the Central Bank’s required benchmark of 20%.The Bank managed to maintain a better trade off between liquidity and interest earning assets continuously under the excess liquidity scenario which prevailed last year. Capital infusion of Rs. 5 billion and issue of Rs.8 billion debentures helped to improve Tier I and Tier II Capital Adequacy Ratios (CAR) as of end 2014. The Bank managed to sustain CAR by maintaining Tier I at 8.6% and Tier II at 12.4% levels against the Central Bank’s minimum requirements of 5% and 10% respectively.

‘ In view of the promising results and the strong fundamentals, it is anticipated that the Bank will be able to sustain the ratings it currently possesses. While we deploy strategies to implement our Corporate Plan for the year 2015 by capturing the growing in credit demand, we will continue to invest in developing the human capital and technological infrastructure to enhance robustness, efficiency and effectiveness in all areas of the Bank. www.island.lk

First Capital Holdings successfully concludes 2014/15 with solid financial performance

First Capital Holdings PLC has reported notable growth in performance during the 2014/15financial year. The company has recorded a consolidated profit after tax of LKR 997Mn for the year 2014/15. The results reflect anincrease of 200% from the previous financial year.

Reflecting on the results, Chief Executive Officer of First Capital Holdings PLC, Dilshan Wirasekara, said: "We are delighted with our financial performance and remarkable business momentum during the past year and will endeavour to keep raising the bar for investment banking services in Sri Lanka. Our commitment towards becoming the country’s leading investment bank has beenvalidated over the year through our performance, management discipline and perpetual emphasis on ethics".

First Capital Holdings PLC comprises of First Capital Treasuries Limited, First Capital Asset Management Limited, First Capital Equities (Private) Limited, First Capital Markets Limited and First Capital Limited. The Group’s largest subsidiary, First Capital Treasuries Limited, was the prime contributor towards the Group’s Net Earnings (Net Profit after Tax) for this year. First Capital Treasuries Limited capitalized on opportunities arising from the continuous decline in secondary market interest rates and realized net trading gains of LKR 900Mn during the period under review. This is a significant increase in comparison to LKR 227Mn reported during the previous year. First Capital Treasuries Limited also fortified its long term capital base (Tier II) through a Listed Debenture Issue of 500Mn in the fourth quarter of the financial year.

Recording its highest ever fee income, First Capital Limited mobilized LKR 22Bn through corporate debt for its clients during the financial year under review. The company reported a fee income of LKR 124Mn during 2014/15, reflecting almost a 3.2 times growth from the previous year. First Capital Limited also achieved significant milestones during 2014/15. The company recorded its largest ever listed debenture issue of LKR 5Bn; managed its largest asset backed securitization of LKR 1Bn and reported its first private equity placement of LKR 100Mn. During the year 2014/15, the company became the leader in managing listed corporate debentures through its management of listed debenture Issues worth LKR 10Bn. The Group’s other subsidiaries also reflected positive growth over the period under review. The Group’s investment management arm, First Capital Asset Management Limited, reported assets under management amounting to LKR 4.2Bn as at 31 March 2015 compared to LKR 1.3Bn the previous year. As per industry reports,  First Capital Wealth Fund was recognized as the  best performing Fixed Income Fund in Sri Lanka  for the second consecutive year, with a return of 15.48% (31 March 2015).
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