Sri Lanka shares end at near 8-week high on stability hopes, earnings

Sri Lankan shares closed at their highest level in about eight weeks on Thursday on strong foreign inflows for a second session as hopes of political stability after Aug. 17 parliamentary polls and better earnings lifted sentiment, brokers said.

The main stock index ended 0.18 percent, or 12.99 points up at 7,212.62, its highest since May 29.

Turnover was at 2.21 billion rupees ($16.5 million), boosted by foreign buying. This was the highest turnover since July 3 and more than double of this year's daily average of 1.06 billion rupees.

Foreign investors were net buyers of 930.7 million rupees on Thursday, but they have been net sellers of 478.4 million rupees worth of shares so far this year.

"Investors are buying because they are confident of getting a stable government after the elections," Danushka Samarasinghe, research head at Softlogic Stockbrokers said.

Samarasinghe expects Sri Lankan companies to post strong results this quarter.

Analysts also said hopes over political stability after Aug. 17 parliament election also helped sentiment. They expect next month's election to help strengthen President Maithripala Sirisena's political position.

Conglomerate John Keells Holdings Plc rose 0.64 percent, while Hemas Holdings Plc rose 4.12 percent, pushing the overall index up.

($1 = 133.6000 Sri Lankan rupees) 

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

Union Bank posts Rs 60 m PAT in Q2

Union Bank has posted a net profit of Rs 60 million in the second quarter of 2015.

Union Bank Director and CEO Indrajit Wickramasinghe said the first half of 2015 was a crucial period with the Bank restructuring itself.

“I am pleased to see the results of the many strategic development initiatives and investments gathering a strong growth momentum and its results evident with the performance the bank as highlighted as at June 2015”,he said. Second quarter results have highlighted an impressive growth reflecting on the rapid development initiatives the Bank embarked. From page iv

“The growth trajectory that is envisioned will deliver continuous value propositions and benefits to our customers for greater banking convenience. We have ensured greater process efficiencies and aligned our teams to deliver the best value and service.”

The Bank recorded a significant increase in revenue for 1H15, in comparison to the corresponding period in 2014. Total operating income for 1H15 grew by 37% YoY to Rs 1,350 Mn. Net Interest Income of the Bank grew by 43%YoY, to Rs.1,039 Mn for 1H15. Fees and Other operating income grew by 21% in comparison to the corresponding reporting period.

The Group recorded a significant increase in revenue for 1H15 in comparison to the corresponding period. Total operating income for 1H15 grew by 28% YoY to Rs 1,617Mn. This is mainly due to the strong Net Interest Income growth of 51%.

The Bank reported a profit before tax and financial services VAT of Rs.135Mn for the period.

This is a 291% increase in comparison to the previous period. Furthermore the Bank reported a Net profit after tax of Rs.60Mn for the 6 months period.

This is despite the significant investments that have been made, which are in line with the new strategic initiatives.
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Fitch rates ComBank the strongest Bank

The National Long-Term Rating of Commercial Bank of Ceylon PLC has been affirmed at ‘AA(lka); Stable Outlook’ by Fitch Ratings Lanka (FRL).

Commercial Bank’s Basel II compliant outstanding subordinated debentures have been affirmed by Fitch at ‘AA-(lka)’.

In a recent report, the agency said: “Fitch considers Commercial Bank as the strongest bank in this peer group. Its rating captures its more measured risk appetite, solid franchise, sound track record, and strong funding profile. The bank’s provision coverage has been improving and asset quality has remained satisfactory. The ratings reflect our expectation that its operations in Bangladesh will remain small.” “Sustained improvements in Commercial Bank’s asset quality and enhanced resilience against a volatile operating environment could be positive for the rating,” Fitch said.
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Sri Lanka Treasury Bill auction held on 22 July 2015