C H C Investment buys 31-pct stake in Sri Lanka's Taprobane Holdings for Rs 1.7bn

ECONOMYNEXT - C H C Investment (Pvt) Ltd. has bought a 31 percent stake in the diversified Taprobane Holdings PLC at 5.50 rupees a share in a deal worth 1,709.4 million rupees, a stock exchange filing said.

C H C Investment (Pvt) Ltd. bought 310.8 million shares of Taprobane Holdings PLC at 5.50 rupees a share amounting to 30.99 percent of the firm’s issued capital,Taprobane Securities,a fully owned subsidiary of Taprobane Holdings, said in a statement to the Colombo bourse.

The trade was in two blocks with Ishara Nanayakkara who held a 22.53 percent stake being one seller and P S W Rupasinghe, with an 8.46 percent stake, the other.

Sri Lanka to auction Rs40bn in 5 to 10 year bonds

ECONOMYNEXT - Sri Lanka has called offers to sell 40 billion rupees of 5, 6, 8 and 10 year bonds ahead of a bond maturity with yields moving up slightly over the past week.

The debt office is offering 4.0 billion rupees of 5-year bonds maturing on 01.05.2020, which is not liquid in the secondary market, dealers said.

Bonds maturing on 01.07.2019 were quoted around 8.18/28 percent Friday, up from 8.20 levels on August 18.

Ten billion rupees of 8-year bonds maturing on 01.09.2023 is also offered. Similar bonds were quoted around 9.45/50 percent.

The debt office is also offering 12.5 billion rupees of 10-year bonds maturing on 01.08.2025 and 15-yaer bonds maturing on 15.05.2030.

Ten year bonds were quoted around 9.65/70 percent on Friday, up from 9.45 percent on August 18.

Indicative quotes for the 15-year bond ranged around 10.05/25 percent.

The auction which closes on August 25, has a settlement date of September 01.

There is a 79.5 billion rupees bond maturity of September 01 and yields tend to spike ahead of suc roll-overs encouraging more investors to buy and also for dealers to bid with leveraged funds and sell-them down later.

However in the short end, the Central Bank has started buying up large volumes of Treasury bills to print money and resist an increase in interest rates, which analysts warn is generating pressure on the balance of payments as well as foreign reserve losses.

Sri Lanka company earnings growth picks up in June quarter

ECONOMYNEXT – Sri Lanka’s company earnings growth picked up in the June 2015 quarter as consumption increased, driven by low borrowing costs and higher disposable incomes, a research report said.

Overall market earnings growth in the June 2015 quarter picked up 10.7 percent year-on-year to 46.7 billion rupees after a slowdown to 2.2 percent year-on-year during the March 2015 quarter, CAL Research said.

Trailing 12 month market earnings grew 16.5 percent from a year ago to 207 billion rupees due to low interest rates and improving disposable incomes driving up consumption, compared with a contraction of 8.4 percent during the same period last year, they said.

CAL Research, the research unit of Capital Alliance Ltd., said the Banks, Finance & Insurance sector of firms listed on the Colombo bourse contributed 40 percent to earnings growth, the largest sector-wise contributors to market earnings in the June 2015 quarter.

They were followed by the Beverage, Food and Tobacco sector with a contribution of 18 percent and Diversified Holdings with 13 percent.

Earnings from firms in the Chemicals and Pharmaceuticals sector grew the fastest, up 180 percent from a year ago, followed by those in the Stores and Supplies sector, up 137 percent, and Motor Sector firms, up 78 percent.

But plantations sector firms suffered the most in the June 2015, with earnings falling by 138 percent from the previous year, followed by those in the Hotels & Travels sector, whose earnings slumped 95 percent, and Investment Trusts whose earnings fell 66 percent.

CAL Research said the Colombo Stock Exchange currently trades on a Trailing Twelve Month Price-to-Earnings Ratio of 14.4x and a Price-to-Book Value of 1.6x.

The largest individual contributors to June 2015 quarter earnings on the CSE came from Ceylon Tobacco Company (6.5 percent), Commercial Bank (5.7 percent), Hatton National Bank (5.1 percent) and John Keells Holdings (4.7 percent).

Lanka India Oil Corp. (LIOC) reported a net profit of 171 million rupees in the June 2015 quarter against 1.2 billion rupees in the same 2014 period.

Carson Cumberbatch and Bukit Darah, whose earnings are influenced by palm oil prices, saw net profit declines of 58 percent and 67 percent from the previous year.

The combined earnings of these three firms accounted for 2 percent of market earnings in the June 2015 compared with 9 percent of market earnings the year before.

Excluding LIOC, Carson and Bukit Darah, overall market earnings grew 18 percent in the June 2015 quarter from the year before, CAL Research said.

Sri Lanka shares fall to near 3-week low on global selloff

Reuters: Sri Lankan shares fell about 2 percent to a near three-week low on Monday, posting their biggest daily fall in nearly seven months, after foreign investors exited risky assets as fears of a China-led global economic slowdown churned world markets.

Alarm bells rang across world markets as a 9 percent dive in Chinese shares and a sharp drop in the dollar and major commodities panicked investors.

The main stock index fell 1.87 percent, or 140.08 points, to 7,331.09, its worst single-day percentage loss since Feb. 2 and hit its lowest since Aug. 4.

"Panic selling came in with the global market meltdown. There was heavy selling in stocks with foreign exposure," said Dimantha Mathew, a research manager at First Capital Equities (Pvt) Ltd.

"This trend will continue for the next couple of days and there could be some margin selling too as the index fell steeply in a very short period," Mathew said.

Foreign investors were net sellers of 163.6 million rupees ($1.2 million) worth of shares on Friday, extending the year to date net foreign outflow to 1.33 billion rupees.

The day's turnover stood at 3.37 billion rupees, the highest since July 29 and about thrice of this year's daily average of 1.16 billion rupees.

Shares in conglomerate John Keells Holdings Plc fell 2.96 percent, while the country's biggest listed lender Commercial Bank of Ceylon Plc fell 2.46 percent, dragging the index down. 

($1 = 134.1000 Sri Lankan rupees) 

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