Sri Lankan shares edge up from 1-week low; rate concerns weigh

Reuters: Sri Lankan shares closed slightly firmer on Thursday, snapping a three-session losing streak, amid concerns a rise in interest rates could turn investors away from stocks and into fixed income assets, brokers said.

The main stock index ended 0.07 percent, or 5.11 points firmer, at 7,245.50, edging up from its lowest close since Aug. 26 hit on Wednesday.

"Local institutions and investors are on silent mode. People are looking for direction and global stories are also not that great," said a stockbroker asking not to be named.

Results of the weekly t-bill auction on Wednesday showed yields of short-term government securities rose between 20 and 26 basis points, with benchmark 91-day t-bill yields hitting a more-than five-month high of 6.79 percent.

The country's central bank kept key interest rates steady at record lows on Monday, with inflation seen lower in the next few months.

Foreign investors sold a net 196.1 million rupees ($1.46 million) worth of shares on Thursday, extending the year to date net foreign outflow to 3.68 billion rupees.

Turnover stood at 566.7 million rupees, around half of this year's daily average of 1.15 billion rupees.

Shares in Ceylon Tobacco Company Plc rose 0.98 percent, while Aitken Spence Plc gained 1.56 percent.

($1 = 134.7500 Sri Lankan rupees) 

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

Sri Lanka's Bogawantalawa Tea diversifies into palm oil

ECONOMYNEXT – Sri Lanka’s Bogawantalawa Tea Estates says it is diversifying into production of palm oil, good prices for which till recently had helped regional plantations companies compensate for losses in tea and rubber.

The company said it plans to cultivate oil palm on some of its estates in the lower elevations of the Sabaragamuwa region of the island.

“Preliminary work pertaining to oil palm planting adhering to all environmental considerations has already commenced in the low country estates coming under the purview of the company,” D.J Ambani, the firm’s chairman, said.

“We have been able to progress up to the second stage of establishing of nursery plants and the company is now in a position to undertake planting larger extents in Anhettigama and some divisions of Maliboda and Noori estates,” he told shareholders in the firm’s annual report.

Most plantations firms have been badly hit by the prolonged global slump in commodity prices but those with a mix of crop have been able to bear the downturn better.

Till recently profit from palm oil had helped some firms make up for losses in tea and rubber although more recently palm oil prices have also dipped.

Sri Lanka Treasuries yields up across maturities

ECONOMYNEXT - Sri Lanka's Treasuries yields rose across maturities at Wednesday's auction with the 3-month yield up 26 basis points to 6.79 percent, data from the state debt office showed.

The 3-month yield rose 20 basis points to 7.07 percent, and the 12-month yield also rose 20 basis points to 7.17 percent.

The debt office, which is a division of the Central Bank sold only 3.9 billion rupees of bills after offering 12.0 billion rupees for auction, with a little over 10 billion rupees of bills maturing this week.

In times of balance of payments trouble the Central Bank has a habit of rejecting bids and buying Treasury bills to inject more money into banks to sterilize forex sales.

Mackwoods Energy signs power purchase agreement with CEB

Mackwoods Energy signed a power purchase agreement with the Ceylon Electricity Board for connecting the Tudugala Mini Hydro Project to the National Grid.

The plant is now under construction and is intended to be connected to the grid shortly where the power generated will be directly supplied to CEB.

Mackwoods Energy awaits CEB final approval of seven more projects and intend supplying approximately an additional 6 MW in the near future of Hydro and 1 MW of Solar. Further several project proposals have been submitted and feasibilities are ongoing for an additional 30 MW of power which is expected to be supplied to the national grid subject to approval by the CEB.

Mackwoods Energy main focus is the development of Non Conventional Renewable Energy (NCRE) through use of sustainable renewable energy sources such as hydro, solar, wind, biomass, biogas, hydrokinetic and municipal waste to energy conversion including net metering and conducts energy audits for conservation of energy at industrial and institutional level.

Mackwoods has the distinction of being the first company to do net metering of a mini hydro at Labookellie Estate Tea Factory in Nuwara Eliya thus it is expected to qualifying for Global Green Funds.

As a power solutions provider, Mackwoods Energy has undertaken numerous assignments successfully and is firmly committed to achieving excellence in all spheres of activity .

Several non conventional renewable energy solutions has been initiated for industries such as telecommunications, marine, air conditioning and refrigeration with trials are being conducted on solar power generators and solar air conditioning. Mackwoods Energy's reputation has been built on years of providing power solutions to key industries such as Plantations, Telecommunications, Hotels, IT, Hospitals, Educational Institutes, Condominiums, Defence Forces, Construction Sector, Ports, Food and Pharmaceutical Industries to name a few.
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Lanka Telcos in high risk category

Standard & Poor's ratings agency in a report on emerging Asia's telecom industry has stated that Sri Lanka, along with Pakistan has the highest country risk followed by Indonesia and Bangladesh."From a regulatory perspective, we view the greatest risk to telecom operators to be in Bangladesh, India, Pakistan, Sri Lanka, and Thailand, although proposed reforms could help to moderate risks in some of these markets, such as India and Thailand," it said.

Standard & Poor's said it expects competition to remain stiff across most of emerging Asia's telecom markets, particularly in Bangladesh, Pakistan, and Sri Lanka.

"We also see a high degree of telecom regulatory risk in Bangladesh, India, Pakistan, Sri Lanka, and Thailand, although proposed reforms could temper risks in some of these markets."The rating agency said it expects the region's telecom companies will maintain low borrowings to moderate these risks and support their credit quality in the next few years.

Meanwhile several web sites in India have also reported that Airtel was trying to pull out of both Sri Lanka and Bangladesh. However when contacted an official from Airtel Sri Lanka said that these news items appear regularly in Indian web sites. "We do not want to comment on market speculation."
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Lanka Orix Finance changes name

Lanka Orix Finance has changed its name to LOLC Finance PLC in accordance with the provisions of section 8 of the Companies Act No 7 of 2007.
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Eden Hotel to go for rights issue

Eden Hotel Beruwela is planning to go for a right issue mainly with the intension of retiring part of their debt.

The Board of Directors of the company by a circular resolution dated September 1, 2015 resolved to recommend to the shareholders the issue of 52,800,000 ordinary shares by way of a rights issue. Each ordinary share will be at Rs. 20.
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