Sri Lanka’s government signs USD 150 Mn loan agreement with ADB

(LBO) – Sri Lanka’s government signed a 150 million US dollar loan agreement with the ADB to address the water scarcity in the islands dry zone, the Asian Development Bank said in a statement.

The loan is the first tranche of a 453 million US dollar multi-tranche financing facility to help complete Sri Lanka’s ongoing drive to deliver surplus water from the Mahaweli river basin to its dry zone, it said.

“Lack of year-round access to water resources constrains the agricultural and commercial production of the region, suppressing social and economic development,” said Sri Widowati, ADB’s country director in Sri Lanka.

Widowati signed the loan on behalf of ADB while R.H.S. Samarathunga, Secretary, Ministry of Finance, signed for the Government of Sri Lanka.

The loan will help to construct 6.2 km of open canals and associated structures of the Upper Elhahera Canal.

It will also help with two new reservoirs namely Mahakitula and Mahakirula along with 27 km open canals linking these reservoirs with the existing Wemedilla reservoir, along with a 940 m tunnel of the North Western Province Canal.

The project, Mahaweli Water Security Investment Program will accelerate the economic activities of Sri Lanka’s northern dry zone region by transferring surplus water of the Mahaweli river basin for irrigation, drinking, and commercial purposes, the statement said.

“It will also develop bulk water conveyance and storage infrastructure planned under the North Central Province Canal Program (NCPCP).”

Sri Lanka’s government to extend Colombo port city agreement

(LBO) – Sri Lanka’s cabinet has approved extending the much talked Colombo port city development project agreement for further six months, the government said.

The agreement signed between the government and the relevant project company, CHEC Port City Colombo (Pvt) Ltd, on 16th of September 2014 expired on 15th of this month.

The proposal made by Arjuna Ranatunge, the minister of ports and shipping, to extend the above agreement for further 06 months from 15-09-2015, was approved by the Cabinet of Ministers.

The 1.4 billion US dollar Chinese Port City is to be constructed between the Southern edge of the new Colombo South Port and the Fort Lighthouse.

The total area of sea to be reclaimed is 252 hectares.

In a recent interview with LBO, the builders of Sri Lanka’s Chinese-funded port city project said discussions are still ongoing but in a positive direction.

The new regime suspended the project in March this year due to a pending investigation report.

Sri Lanka’s MTD Walkers to sell Rs3.0bn in listed debt

(LBO) – Sri Lanka’s construction and engineering sector player MTD Walkers is planning to sell 3.0 billion rupees of listed debt, the Colombo Stock Exchange said.

The CSE said it had approved an application by MTD Walkers to offer 25 million debentures of 100 rupees each and a further 5 million if the first tranche is oversubscribed.

Subscriptions will open on September 28 with NDB Investment Bank and Arpico Ataraxia Asset Management Private Limited is jointly managing the debt issue.

Sri Lankan shares fall; end at lowest since mid-July

Reuters: Sri Lankan shares ended at their lowest in more than two months on Thursday, slipping for a third straight session, led by diversified shares as cautious investors awaited direction amid a weakening rupee and an upward trend in interest rates.

The main stock index ended down 0.33 percent at 7,113.51, its lowest close since July 15.

Turnover stood at 658 million rupees ($4.69 million), well below this year's daily average of 1.12 billion rupees. The turnover has been about half of this year's daily average since Aug. 31, stock exchange data showed.

"Policy directive is not clear and the rupee depreciation is also affecting the manufacturing sector," said Dimantha Mathew, a research manager at First Capital Equities (Pvt) Ltd.

Analysts said investors were waiting to see how the government would bridge the budget deficit and where the revenue would come from, in its November budget.

A weak rupee curbed investor risk appetite and rising market interest rates also hit sentiment, with t-bill yields at their highest level in more than five months at the last auction.

The rupee ended a tad firmer on Thursday, after hitting a record low for a fourth session in a row on Wednesday.

Foreign investors were net buyers of 29.6 million rupees worth of shares on Thursday, but they have been net sellers of 2.94 billion rupees worth of equities so far this year.

Shares in conglomerate John Keells Holdings Plc fell 0.97 percent, and brokers attributed the fall to new shares coming in with the expiration of warrants.

Shares in Lanka ORIX Leasing Company Plc slipped 1.80 percent. 

($1 = 140.3000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil Nair)

GDP grows to 6.7% in second quarter

Lanka’s economy has grown 6.7% in the second quarter of 2015 against the 6.4% growth rate recorded in the first quarter, the Census and Statistics Department said.

The highest contribution to the GDP in the second quarter of 2015, was once again the Services sector which was at 61.2%. Agriculture sector grew 5% and industry grew 2.0%. Industry and Agriculture, forestry and fishing activities has shared the GDP by 23.5 percent and 7.5 percent respectively.

After a re-basing exercise in July this year the department said the new growth rate for the first quarter of 2015 was 5.1 percent.

The Department said GDP for the second quarter 2015 is based on production approach following the re-basing exercise. Sri Lanka’s GDP is now compiled by using the production approach, within 75 days.
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First Capital Holdings posts Rs 730 m profit this year

Vishmi Wijeratne

First Capital Holdings has recorded revenue of Rs. 1.9 billion this financial year. Chairperson, Manjula Mathews stated that this was 36% increase when compared to the previous financial year.

This achievement according to the company is due to the capitalisation of trading opportunities that arose in the secondary market as a result of reduction in interest rates.

In terms of trading grain on the sale of government securities the company recorded Rs. 900 million as opposed to the Rs. 227 million recorded in the previous year. Furthermore the profit after tax increased by 41% to Rs. 730 million which is a significant raise when compared to the Rs. 518 recorded in the financial year 2013/14.

First Capital Holdings provide investment in commercial paper, promissory notes, asset backed paper and debentures.
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Sri Lanka leasing stocks slide after limits on car loans

ECONOMYNEXT – Sri Lankan stocks closed slightly weaker in thin trade with share prices of finance and leasing firms falling after the central bank restricted lending for car imports, brokers said.

The All Share Price Index lost 15 points or 0.2 percent to close at 7,137.40 while the S&P SL 20 index, which tracks the top 20 largest and most liquid stocks, lost 15.5 points (0.4 percent) to close at 3,899.63.

Turnover was a low 771 million rupees compared with the 12-months average daily turnover of 1.4 billion rupees.

The Central Bank decision to limit the loan-to-value ratio of motor vehicle leases to 70 percent coupled with rise in vehicle prices dampened the interest in finance companies and most of the stocks closed with negative returns,” Lanka Securities said.

Peoples Leasing slumped 4.7 percent to 22.50 rupees, Commercial Leasing fell 2.3 percent to 4.20 rupees, Lanka Orix Leasing ended at 100.00, down 5.5 percent, LB Finance lost 1.5 percent to end at 121.10, and Vallibel Finance closed 4.5 percent lower at 64.00.

Sampath Securities said foreigners were net buyers with a net inflow of 47 million rupees. Foreign investors bought 300,000 shares of Textured Jersey and 200,000 shares of Vallibel One.

There were crossings or off-the-floor negotiated deals in Hatton National Bank (non-voting) and Citizens Development Business Finance.

Asia Securities said Kelani Tyres was the largest contributor to the day’s total turnover helped by a crossing and block trades on the normal board and it also became the day’s most actively traded stock.