Sri Lankan shares hit over 6-mth closing high on telecom, large-caps

Reuters: Sri Lankan shares erased early losses to close at a more than six-month high on hopes of political stability after the Aug. 17 parliamentary elections and better corporate earnings in the April-June quarter, brokers said.

The main stock index edged up 0.1 percent, or 7.34 points, at 7,377.95 on Monday, its highest close since Jan. 28.

The bourse has gained 6.6 percent in a month through Monday.

"Market recovered from the morning decline with gains in telecom shares and distillers," said Dimantha Mathew, a research manager at First Capital Equities (Pvt) Ltd.

"With some selling pressure, there'll be a bit of profit-taking here and there, but it may not last long."

Distillers Company of Sri Lanka Plc gained 1.83 percent, while Dialog Axiata Plc rose 1.79 percent.

The index was however dragged down by losses in Nestle Lanka Plc, which fell 1.77 percent, and conglomerate John Keells Holdings Plc, which lost 0.78 percent.

The index has been gaining since July 7 on expectation strong corporate earnings and political stability after the election would boost returns, analysts said.

Turnover stood at 1.3 billion rupees ($9.72 million) on Monday, more than this year's daily average of 1.11 billion rupees.

Foreign investors, who sold a net 12.4 million rupees worth equities on Monday, have offloaded a net 195.2 million rupees worth of shares so far this year. 

($1 = 133.7500 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)

Sri Lanka's Peoples' Leasing June net up 41-pct

ECONOMYNEXT - Profits at People's Leasing Company Plc, Sri Lanka's largest non-bank lender, grew 41 percent to 1,110 million rupees in the June 2015 quarter from a year earlier, helped by falling interest costs interim accounts showed.

The group which also has interests in insurance reported earnings of 70 cents per share for the quarter. The stock closed at 24.80 rupees Friday.

Premium income grew 9 percent to 767 million rupees. Other operating income grew 34 percent to 101 million rupees.

Peoples Leasing said interest income fell 8.4 percent to 4.6 billion rupees and interest expenses fell at faster 24.4 billion rupees allowing net interest income to grow 9.4 percent to 2.59 billion rupees.

Loan loss provisions fell 61 percent to 309 million rupees from 634 million a year earlier.

Loans grew only 1.6 percent to 99.5 billion rupees in the three months to June.

Group gross assets grew 0.2 percent to 117.4 billion rupees. Net assets grew 1.8 percent to 22.4 billion rupees.

Foreign investors sell down more Sri Lanka bonds

ECONOMYNEXT - Foreign investors sold down 17 billion rupees of bonds (125 million dollars) in the week to August 05, 2015, official data showed, extending a trend seen since a rate in April and pressure on the country's currency peg due to growing domestic credit.

Foreign investors have sold down 81 billion rupees (604 million dollars) of rupee bonds since the April rate cut.

Some foreign investors also sold out in the last quarter of 2014, but there was renewed buying in the first quarter.

The Central Bank has said it is cutting rates because inflation is low as if they are actually targeting a domestic monetary anchor when in practice they target the exchange (an external anchor).

Sri Lanka has also sold dollar bonds in the domestic market this year, but tenors have been shrinking after April.

The government also sold a 650 million dollar 10-year bond in June

The new administration has ratcheted up spending after January 2008 sending domestic borrowings soaring but has did not raise rates. Instead it released tens of billions of rupees of excess liquidity firing credit, consumption and imports and cut rates in April spooking bondholders.

Lanka Hospitals 2Q15 June profits soar

State-controlled Lanka Hospitals Corporation PLC saw its net profit for the June quarter (2Q15) increasing to Rs.371.3 million from Rs.211.5 million reported in the corresponding quarter of the previous year. 

The earnings per share improved to Rs.1.66 from 95 cents. 

The hospital group also announced a 50 cent dividend. Lanka Hospitals share (LHCL) rose 7.8 percent or Rs.3.80 during yesterday’s trading and closed at Rs.52.10. 

 The revenue for the quarter rose to Rs.2.64 billion in comparison with Rs.2.2 billion in the same quarter of the previous year. 

 The gross profit amounted to Rs.1.53 billion up from Rs.1.26 billion, despite higher yoy cost of services. 

 The group incurred other operating expenses of Rs.376.3 million for the quarter under review, slightly down from Rs.386.4 million in the previous year. 

 For the 6 months ended June 30 ,2015 (1H15), the hospital group recorded a net profit of Rs.371.4 million, against Rs.211.5 million in the same period of the previous year. 

 Group Chairman Dr. Sarath Paranavitane said he foresees numerous challenges in maintaining the leadership position Lanka Hospitals currently enjoys in the private healthcare sector in Sri Lanka. 

 However, he said the director board and the management are confident of their abilities to attain the next level of growth and continue to lead the private healthcare sector in Sri Lanka. 

The state holds over 54 percent of Lanka Hospitals through state-owned Sri Lanka Insurance Corporation. 

 India’s Fortis group, through its subsidiary Fortis Global Healthcare Holdings Pte. Ltd., holds 28.66 percent.

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Ceylon Guardian doubles external funds in unit trust business

Ceylon Guardian Investment Trust has recorded a profit after tax of Rs. 1.92 b given positive market conditions in 2014 and 15.

The consolidated portfolio value increased to Rs.27.34 b, from Rs.24.23 b a year earlier; recording an appreciation of 15% when dividend payouts are factored in. Ceylon Guardian’s above average performance was attributed by the Investment Managers in their report to shareholders “to booking of profits on selected overvalued stocks”. On highlighting the medium term performance inclusive of strategic holdings, five year compounded annualized growth rate was 16.15% p.a. on portfolio value basis and 13.35% p.a. on market capitalisation, an All Share Index growth of 12.86% p.a for the same five year period.

The portfolio is managed by a professional team attached to Guardian Fund Management Limited, a company licensed by the Securities and Exchange Commission of Sri Lanka. Whilst Ceylon Guardian’s own proprietary portfolio forms the anchor funds under management, the Ceylon Guardian Group has now diversified its capital market activity on three fronts - namely client portfolio management, unit trust management (as a joint venture with Acuity Partners) and private equity management. Client portfolio management and unit trusts comprise the fee based business both of which are managed by SEC licensed fund management companies.

The performance of the fixed income and equity unit trusts have been maintained above their respective benchmarks, with the equity fund in particular consistently outperforming the All Share Price Index, returning a total 69% gain to unit holders since its inception approximately three years ago (benchmark ASPI for the same period was 28.2%).

Ceylon Guardian Chairman, I Paulraj said “leverage our in house core investment management competencies to service customized institutional portfolios, as well as a wider base of corporate, high net worth and individual investors through the unit trust business which is carried out as a joint venture. Our fee earning assets under management currently amount to Rs.7.5 b ie, Rs. 3.5 bn in client portfolios and Rs.4 bn in mutual funds”, and this figure has doubled over the last one year.

Guardian Group’s own proprietary portfolio amounts to Rs.27b.
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