Sri Lanka’s three month treasury bill yields up

June 10, 2015 (LBO) – Sri Lanka’s six and twelve month treasury bill yields close flat at Wednesday’s auction with the three month yield up by one basis point, data from the state debt office showed.

3-month yield was up at 6.08 percent with 13,974 million rupees were accepted from 19,770 million rupees of bids.

6-month yield was unchanged at 6.18 percent after 5,997 million rupees were accepted from 13,799 million rupees.

12-month yield was also unchanged at 6.29 percent with 5,712 million rupees were accepted from 18,483 million rupees of bids.

It was decided to accept 25,683 million rupees from the whole auction that received 52,052 million rupees of bids.

Sri Lankan shares end at 8-week low on political uncertainty

Sri Lanka's stock index fell for a third straight session on Wednesday to close at its lowest level in eight weeks, with turnover slumping to a near three-month low as concerns over political uncertainty dented demand for risky assets.

President Maithripala Sirisena's government has said it would dissolve parliament once some crucial reforms including an electoral bill are passed, but has yet to fix a date for the election.

The main stock index ended down 0.05 percent at 7,063.45, slipping to its lowest closing level since April 15.

"The market is getting slower day by day as everybody is awaiting to see some kind of a direction amid political instability and confusion," said a stock broker asking not to be named.

Some stockbrokers said investors were waiting for the right moment, and sellers were not ready to dispose of holdings at low prices given the lack of buying interest.

Turnover was 363.6 million rupees ($2.72 million), hovering around its lowest since March 13 and well below this year's daily average of about 1.1 billion rupees.

Analysts said foreign investors have been selling shares amid expectations the U.S. would hike key interest rates sooner than expected. An upbeat U.S. nonfarm payrolls in May, the largest gain since December, has raised chances for a rate hike as early as September.

Foreign investors bought a net 60.2 million rupees ($449,925.26) worth of shares, but the bourse saw a net foreign outflow to 1.52 billion rupees worth shares in the past 11 sessions through Wednesday.

The bourse has seen net inflows of 4.42 billion rupees in equities so far this year.

Political uncertainty due to the Ranil Wickremesinghe-led coalition government not having a parliament 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.

Stockbrokers said better corporate earnings would help the market gain.

Shares in No.1 fixed telephone operator Sri Lanka Telecom Plc eased 1.94 percent while Lanka ORIX Leasing Company Plc fell 3.37 percent.

Conglomerate John Keells Holdings Plc fell 0.52 percent. 

($1 = 133.8000 Sri Lankan rupees) 

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

SEC asks EAP to get another rating from independent agency

* Conflict of interests between LRA and issuer company having common director and two directors being on LRA’s Rating Committee including former SEC Chief and DG
Dr. Dayanath Jayasuriya

* Directs CSE to defer opening of Rs. 3 b BBB rated debenture issue

The Securities and Exchange Commission (SEC) has directed the Colombo Stock Exchange to defer the opening date of the subscription of the proposed debenture issue of EAP Broadcasting Company until a rating is obtained from an independent agency.

EAP’s Rs. 3 billion debenture issue was scheduled to officially open on 11 June.

The SEC directive came following deliberations at a meeting of commissioners yesterday. 

The SEC said there was a prima facie conflict of interest in the rating of the proposed debenture issue of EAP Broadcasting by Lanka Rating Agency (LRA). This arises from having a common director on the respective Boards of Directors of both the issue company and the credit rating agency and two of the directors of the issuing company being members of the Rating Committee of LRA.

“The commission was of the view that the integrity of the process adopted by LRA does not appear to support the credibility of the rating,” the SEC said. It added that the commission took serious note of the fact that LRA was in breach of Part VD (vi) of the Schedule to the SEC Act, which stipulates the terms and conditions a Credit Rating Agency has to comply with in order to be registered with the SEC.

The commission, having afforded a hearing to the Boards of Directors of EAP Broadcasting Company Ltd. and Lanka Rating Agency Ltd., decided to direct the Colombo Stock Exchange with regard to deferment of the opening date.

LRA has originally issued a BBB rating for the company and the instrument. The managers to the issue are People’s Bank Investment Banking Unit.

Though the SEC did not name the persons concerned, the Common Director reference is M.P. Jayawardena who is Chairman of LRA and a Director on the EAP Broadcasting Board. 

The two directors of the company serving on LRA’s Rating Committee are none other than the former SEC Chairman and one-time Director General Dr. Dayanath Jayasuriya (Chairman of EAP Broadcasting) and former NDB CEO veteran banker Russell de Mel (Director of EAP Broadcasting)

EAP Broadcasting last month announced an issue of 15 million Listed Rated Redeemable Debentures (with a Sinking Fund Mortgaged in favour of the Trustee) of Rs. 100 each with an option to issue up to a further 15 million debentures in the event of an over subscription of the initial 15 million debentures.

There are two types of debenture issue. Type A has a fixed rate of 10.50% payable annually for four years and Type B was 11% fixed interest rate payable quarterly for five years.

The main objective of the company is to utilise the proceeds of the issue to invest in valuable properties for further development. This objective will be achieved through the establishment of a full subsidiary named Galaxy Landmarks Ltd. The company intends to purchase a portfolio of commercial properties owned by ETI Finance Ltd., recently valued in terms of the restructuring process of the company.
www.ft.lk

Lanka sells 32.6 bn rupees bonds

Sri Lanka has sold 32.6 billion rupees of four and seven year bonds after calling bids for 27 billion rupees of bonds, the state debt office said.

The debt office on Tuesday sold 16.5 billion rupees of four year bonds maturing on May 01, 2020 at weighted average yield of 8.11 percent.

A seven year bond maturing on October 01, 2022 was sold at an average yield of 8.56 percent, raising 16.1 billion rupees.

The state debt office of the Central Bank offered 9.0 billion rupees in four year bonds, 9.0 billion rupees in seven year bonds and another 9.0 billion rupees in nine year bonds.

All bids for the nine year bond was rejected.
www.dailynews.lk

Dipped Products post Rs. 27.7 b turnover in 2014/15

Dipped Products Ltd (DPL) has posted Rs. 27.7 billion turnover, a 20 percent increase for the financial year 2014/15 with a Profit Before Tax (PBT) of Rs. 1.7 billion.

"DPL's performance in the last financial year reflects our commitment to grow our global market share, and the increased efficiencies we have been able to achieve at our manufacturing facilities including the newly established DPL Premier Gloves factory in the Biyagama Industrial Zone.

The Venigros subsidiary of DPL ceased its operations since August, 2013 and there are no plans to revive this operation.

As part of the long-term strategy, we will continue to evaluate investing in appropriate industrial zones both in Sri Lanka and overseas." DPL Managing Director, Dr. Mahesha Ranasoma, said.

DPL also invested in a another glove manufacturing facility namely DPL Universal Gloves Limited which was incorporated this year in the Biyagama Free Trade Zone which will entirely focus on value added industrial glove products.
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ACL Cables profits top Rs 973 m, a 90% growth

ACL Cables has recorded an impressive full-year group turnover of Rs.14.5 billion, for the 2014/2015 financial year, a promising year-on-year (YoY) growth of 27.2 per cent.

At the same time, group Profit After Tax (PAT) for the same period was also posted at Rs. 973.4 million, a 90.4 per cent rise over the previous 12 months (unaudited).

“The ACL Cables Group has delivered remarkable growth over the 2014/2015 financial year. Not only has this performance resulted in maintaining our strong, market leader position in the local cable industry but, even more importantly, it has allowed us to add to the significant confidence felt by our customers and shareholders,”Managing Director Suren Madanayake said.

Meanwhile, ACL Cables Group’s business segment growth was lead by its core, cable-manufacturing concerns,which showed Rs. 13.4 billion in revenue for the 2014/2015 financial year, up significantly from Rs. 11.1 billion in 2013/2014.While PVC manufacturing also raised marginally, to Rs. 87.4million, from Rs. 70.5 million.Additionally, its other business segment also grew, to Rs. 971.8million, from Rs. 192 million previously.
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Kingsbury records best ever performance with Rs.300 m PAT

The Kingsbury PLC, recorded an impressive financial performance for the FY 2014/15, within its second year of operation post-refurbishment.

The company posted a revenue of Rs.2.33 b, a 9% increase from the last year. The profit before tax was a record Rs. 300 mn, its highest ever, almost 9 times of the last year's result of Rs. 34 mn.

Apart from the healthy Gross Profit margins of around 52%, the hotel benefitted from the lower finance costs,with finance cost reducing from Rs.286 mn in FY 2013/14 to Rs. 146 mn during the current year.

The hotel's marketing strategy, positioning Kingsbury as a luxury city hotel in Colombo in many international trade fairs - London, Berlin, Paris & Rome etc. has paved the way for the 229 room hotel to enjoy good occupancy year around, yielding an average of 75% vis-...-vis 69% during the last year. During the year under review, the hotel partnered with William Angliss-Specialist Centre for Hospitality, a Tourism and Culinary Arts Training Institution based in Australia to train its staff to enhance their culinary and soft skills meeting international standards.

The Kingsbury is a recipient of the World Luxury Hotels,in the category of Best Luxury City Hotel in the Indian Ocean.
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Commercial Bank begins Myanmar operations

The Commercial Bank of Ceylon opened its representative office in Yangon on Monday, launching its operations in Myanmar.

It will initially to offer Advisory Services to Sri Lankan and Bangladeshi businesses wishing to enter that country, and to arrange Banking and Advisory facilities, funds transfer and encashment services.

Commercial Bank is the first Sri Lankan bank to be granted a licence by the Central Bank of Myanmar to operate a Representative Office in the country.

The Bank’s Representative Office, located at No 42 A, Pantra Street, Dagon Township, Yangon, Myanmar was opened by Bank’s Chairman Dharma Dheerasinghe. Dheerasinghe said there is significant potential to increase bi-lateral trade between Myanmar and Sri Lanka, and that there is interest among Sri Lanka’s leading apparel exporters and other industries to set up operations in Myanmar.” The presence of a Representative Office of Sri Lanka’s largest private bank would facilitate this process, and be mutually beneficial to the two countries.” Commercial Bank Managing Director and CEO Jegan Durairatnam said it would also be possible for Commercial Bank to build closer relationships with Myanmar banks and offer them its experience in very successfully moving from manual and mechanical systems to high-tech banking.
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