Sri Lanka shares dip to 2-1/2 month low on political uncertainty

Sri Lankan shares fell on Friday to near 2-1/2 month lows due to foreign outflows, with diversified and telecommunication companies leading the drop as uncertainty around a parliamentary election hit investor appetite.

Analysts expect the trend to continue until President Maithripala Sirisena dissolves parliament and goes for an election. Sirisena has said he will dissolve parliament once some crucial reforms, including an electoral bill, are passed.

The main stock index ended 0.22 percent, or 15.13 points, lower at 7,016.20, its lowest since April 15.

Turnover stood at 861.3 million rupees ($6.4 million), less than this year's daily average of about 1.1 billion rupees.

The market saw net foreign outflows of 460.3 million rupees on Friday, extending net foreign outflows over the past 23 sessions to 4.09 billion rupees in stocks.

"Foreigners are selling due to global redemptions, expectations of a Federal Reserve rate hike, possible market corrections in frontier and emerging markets and the directionless political scenario unravelling in Sri Lanka," said Danushka Samarasinghe, head of research at Softlogic Securities.

Shares of leading mobile phone operator Dialog Axiata Plc fell 2.8 percent, while large-cap Ceylon Tobacco Co Plc lost 0.99 percent.

Conglomerate John Keells Plc fell 0.54 percent a day after disclosing that its subsidiary Waterfront Properties (Private) Ltd had finalised a $395-million syndicated project development facility with Standard Chartered Bank for debt financing of its luxury real estate project.

($1 = 133.7000 Sri Lankan rupees) 

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

Loss-making Sri Lanka plantations companies supported by parent firms

COLOMBO (EconomyNext) – The collapse in commodity prices have cause such severe losses at Sri Lanka’s regional plantation companies that some of them have to be supported by their parent firms through cash infusions, industry officials said.

The Planters’ Association, which represents 20 regional plantation companies growing tea, rubber and oil palm, said their collective losses were 3.4 billion rupees in 2014.

PA Chairman Roshan Rajadurai said the downturn in tea and rubber prices had been steep and sustained, a phenomenon not experienced before, owing to political and economic problems in key markets like Russia and the Middle East.

“We are finding it difficult to pay wages,” he told a news conference held to discuss talks with labour unions demanding higher wages with the renewal of their collective agreement.

Secretary General Malin Goonetileke said most RPCs have deficit cash flow every month.

“The parent companies are pumping money to bridge the deficit. They have gone to banks and borrowed.”

The PA said it was trying to get relief from the government and had asked for concessionary long term funding.

The government Thursday announced a subsidised loan scheme for tea factories.

Nation Lanka finance to issue Rs502mn right issue

June 26, 2015 (LBO) – Sri Lanka’s Nation Lanka finance, a finance company to issue 502 million right issue to existing shareholders to strengthen the core capital of the company.

The company will issue 502,326,522 shares in a proportion of two shares for every one share held, the company said in a stock filing.

A share will be issued at a price of 1 rupee per share.

The group has reported a loss of 447,548 million rupees for the 12 months ended March 2015 from a profit of 46,033 million rupees reported in 2014, the interim report showed.

The group’s amount due to customers was increased to 5,605,767 million rupees in the March 2015 from 3,806,042 million rupees in the corresponding period last year.

The total equity of the company was declined to 144,200 million rupees in the March 2015 from 275,529 million rupees in the same period in 2014.

The company is a licensed finance company by Central Bank of Sri Lanka.

Softlogic targets tourism industry

By Chanaka de Silva

Ceylon Finance Today: The growing tourism industry has paved the way for Softlogic to invest in the import and supply of customized luxury tourist buses to suit the customers' requirements, is a first in its field today.

Today the demand for luxury tourist buses is high. The purchase of reconditioned Japanese buses are both expensive and a little out of date as they are not the current models. However, these buses from Xiamen King Long Ltd in China are very advantageous to us. Primarily the buses are new and further they can be factory customized to suit individual requirements. These models have both 37 and 45 seater versions respectively said, Softlogic Automobiles (Pvt) Ltd, Head of Operations, Shehan de Tissera speaking at the function of handing over the first two vehicles to Viluxur Tourism yesterday.

Speaking of the choice of the particular vehicle Viluxur Tourism, Managing Director, Cammy Gunasekara said, that Xiamen King Long Ltd is the largest auto manufacturer in China. Also having seen the extensive use of these vehicles in China thought it would be the best choice for this country. There is also a pending order for 4 more buses towards the end of the year.

Finally Tissera added that Softlogic had entered the automobile market just over a year ago. Up to now they had experienced rapid expansion. This is very encouraging he said. These buses are to cater to the luxury segment of tourism, once the others sees these buses in use I am sure we will be having enough new orders he said.
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