Sri Lankan shares close at lowest since mid-July

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

The main stock index ended down 0.08 percent at 7,107.87, its lowest close since July 15.

"There are not many local investors. They are awaiting clear policy direction," said Harsha Fernando CEO at the Sampath securities in Colombo.

Turnover stood at 529.4 million rupees ($3.8 million), less than half of 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.

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 slightly weaker on thin importer dollar demand a day after recovering in the previous session from a record low.

Foreign investors were net sellers of 46.5 million rupees worth of shares on Friday extending the year to date net foreign outflow to 2.99 billion rupees.

Shares in conglomerate John Keells Holdings Plc declined 0.58 percent, and brokers attributed the fall to new shares coming in with the expiration of warrants.

Shares in Dialog Axiata Plc fell 0.89 percent while C T Holdings Plc slipped 3.05 percent. 

($1 = 140.4000 Sri Lankan rupees) 

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

CBSL to study CIFL restructuring plan

By Ishara Gamage

Ceylon Finance Today: Sri Lanka's failed Central Investment and Finance Limted (CIFL) controversial former Group Chairman Deepthi Perera had submitted his restructuring plan for CIFL to the Colombo Magistrate Court, a Central Bank of Sri Lanka official said.

"The Court has instructed us to study his proposal in consultation with all stakeholders, but the future cash flow status he has submitted, is doubtful," he said.

According to Deepthi Perera's restructuring plan, the promoters whose names are unknown, will invest Rs 100 million initially, CBSL Officials added.

"He is expecting to get Rs One billion from the CBSL Deposit Insurance Scheme and another Rs one billion via foreign investors (names unknown) .In addition to that Deepthi Perera is requesting to sell CIFL his own 100 acre land in Sri Lanka's southeast coast at Arugam Bay area. It was estimated Rs 1.4 billion."

"He also mentioned that some Rs 3.5 billion worth one acre land also exists in Rajagiriya but exact location of it is still unknown ," he remarked.

The Colombo Commercial Court recently ordered Seylan Bank to stop its possible auction of CIFL Colombo Headquarter premises due to nonpayment of Rs 35 million overdraft facilities which was obtained by CIFL.

The Fraud Bureau in late 2013 started special investigations against this Deepthi Perera alias Chulaka Gunawardena who is married to a Thai Woman while running some Colombo night clubs and later took off money from CIFL, leaving the beleaguered CIFL bankrupt and its depositors to run off on the streets The former Chairman who had an International Red Alert against him was produced before the Colombo Magistrates Court on 11 August and now, he is under remand custody.

The CIFL Depositors' Association says that a former chairman of CIFL had defrauded a sum of Rs 1.6 billion from depositors.

The CIFL Depositors Association noted that 4,200 persons had deposited a sum of around Rs 3.5 billion in the company. A majority of the depositors are pensioners who had deposited their gratuity payments. 
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Lucky Lanka to introduce soya yoghurt to Lanka

Vishmi Wijeratne

The Lucky Lanka Milk Processing Company will introduce 'Sogurt', the first soya based yoghurt in Sri Lanka.

Lucky Lanka's latest product targets individuals who are predominantly concerned with health.

Sogurt will be produced using Soya blended with milk and will attract those who are fans of Soya and yoghurt. It is believed that this product will help boost the company's sales considerably.

Among its other new products Lucky Lanka has introduced 'Gedarata lucky' that delivers dairy items to consumer homes. At present the service is only available around Colombo and suburbs.

However Lucky Lanka hopes to extend this service islandwide giving their consumers the opportunity enjoy yoghurt at any time of the day. The chosen product will be delivered to the doorstep within one hour.

Within the year 2015, Lucky Lanka has invested over Rs. 2.2 million in property and plant equipment. It was stated that the company invested the majority of Rs. 51.5 million on equipment, which will guarantee the quality of production.

Managing Director Namalee Gunawardhana said she believed that the same will be true of the year to come.

The company recorded revenue of Rs. 368,249,352 which is a slight increase when compared to last year's Rs. 365,290,290. The revenue of the sales of yoghurt and fresh milk recorded revenue of Rs. 962,911,905 which is a slight increase when compared to the Rs. 893,123,959 recorded in the same segment in 2014.

"Our top line has increased by 8 % and it was 7% in last year. Though product margins are decreased due to high cost in raw materials, our company did its best to make the operation stable.Significant investments have been made to ensure future stabilization and growth of our company," Gunawardhana said.
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LIOC to keep fuel prices at current level

Hiran H. Senewiratne hsenewiratne@gmail.com

Lanka IOC (LIOC) will not be reducing local petroleum prices despite world oil prices going down. At present world oil prices have come down to US$ 60 a barrel.

The company’s loss per litre loss has come down to Rs. 15 from the earlier loss of Rs. 30. However the company is still incurring a Rs. 15 loss per litre, LIOC’s Senior Vice President (Finance) Anuj Jain said.

“From January this year the new government reduced fuel prices by Rs. 48 per liter and also increased the Customs Duty by Rs. 25 per liter. This made the company incur a loss of Rs 30 per every single litre we sold.

With the world market price drop we were able to reduce the loss by Rs. 15 for a litre,’ Jain told the Daily News Business.

The company imports 20,000 tonnes of oil into the country for a month and enjoys a 20 percent market share. Therefore the company is not in a position to reduce local oil prices at any cost but will go ahead with the retail business expansions in the country, Jain said.

The LIOC said it had written to the Ministry and the Treasury, expressing their concern over the continuous losses faced after the government reduced prices in January this year.

According to reports, the LIOC had to bear a loss of Rs. 25 to 30 per litre of petrol due to the current pricing. Accordingly, the price of a barrel of crude oil was US$ 45 when fuel prices were reduced in January and it had now increased to US$ 60.

Ceylon Petroleum Corporation (CPC) also stated that they had recorded losses during the past few months after the government reduced fuel prices in January.
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