Sri Lankan shares rise to over 1-wk closing high; policy awaited

Reuters: Sri Lankan shares rose to a more than one-week closing high on Thursday, led by blue chips such as John Keells holdings, but trading was dull as investors were cautious ahead of a key policy statement by the government.

The main stock index ended 0.19 percent, or 13.18 points, firmer at 7,068.85, its highest close since Oct. 13.

Turnover was 778.8 million rupees ($5.52 million), lower than this year's daily average of 1.1 billion rupees.

"It's a dull day. No big trades took place. But we saw foreigners were slowly entering the market," said Yohan Samarakkody, head of research at SC Securities (Pvt) Ltd.

Foreign investors, who have been net sellers of 2.92 billion rupees worth of equities so far this year, bought a net 2.99 million rupees worth shares on Thursday.

Samarakkody said investors were waiting for the government's economic policy. "The proper direction could be seen after the budget."

Prime Minister Ranil Wickremesinghe is expected announce the government's economic policy in the first week of November outlining the government's economic priorities ahead of the 2016 budget scheduled on Nov. 20, Finance Minister Ravi Karunanayake said.

Analysts said a government move to implement a budget proposal of a retrospective tax targeting corporate has dented sentiment.

Shares of John Keells rose 2.04 percent, while Ceylon Tobacco Co Plc increased 0.26 percent and Cargills (Ceylon) Plc gained 9.57 percent. 

($1 = 141.0000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)

Union Bank 3Q net up 51% over higher loans and lower impairments

Union Bank of Colombo PLC (UBC) group increased its net profit by 51 percent year-on-year (YoY) to Rs.76.7 million for the quarter ended September 30, 2015 on the back of a 15 percent growth in its loans and advances and lower provisions for possible bad loans, the interim results showed.

The earnings per share (EPS) however halved to 7 cents from 15 cents a year ago as the number of shares in issue increased as part of the capital infusion by Culture Financial Holdings Limited (CFHL), an affiliate of TPG, a United States-based private global investment firm. The UBC share ended unchanged at Rs.21.60 at yesterday’s close on the Colombo bourse.

The bank on a standalone basis increased its gross loans and advances by 15 percent or Rs.5 billion to Rs.38.6 billion amid strong pick up in the private credit in the economy. 

The private credit in July and August rose by 40.1 billion and 64.7 billion, respectively.
During the nine months to September end, the growth in the gross loans and advances was a whopping 45 percent or Rs.12 billion.

Despite the growth in its loan book the bank managed to contain its provisions for possible bad loans by 33 percent or Rs.92.1 million during the nine months. The asset quality continued to improve as its gross non-performing loan ratio declined to 4.01 percent from a high of 8.25 percent by the end of December 31, 2014.

The net interest income (NII) in the banking group rose by 23 percent YoY to Rs.603.7 million for the quarter. 

However, the net interest margin (NIM) – the margin between asset and liability portfolio – declined to 3.6 percent from 3.97 percent in the June quarter and 4.2 percent in December 2014. However, the bank managed to increase its return on equity (RoE) to 0.93 percent from 0.72 percent in the June quarter. The RoE in December 2014 was 0.70 percent. During the quarter the bank carried out a strong brand awareness campaign and expanded its branch and the off-site ATM network to 63 branches and 94, respectively.

The bank on a standalone basis has an asset base of Rs.65 billion by the end of 3Q’15. The bank has recruited 187 new staff during the nine months and the total cadre now stands at 911. Meanwhile, for the nine months ended September 30, 2015, the banking group posted a net profit of Rs.144.7 million, up 85 percent from a year ago.

The earnings per share was 13 cents.

“We have continued to strengthen our growth impetus within the third quarter of 2015, while reaping benefits of investments made in strategic restructuring, operational efficiency and the implementation of strategic development initiatives,” UBC Director and CEO Indrajit Wickramasinghe said in a statement.

Culture Financial Holdings Limited (CFHL), an affiliate of TPG, a United States-based private global investment firm, invested Rs.15.44 billion (US $ 117 million) in a 70 percent stake in the bank in September 2014. - See more at: 

http://www.dailymirror.lk/92139/union-bank-3q-net-up-51-over-higher-loans-and-lower-impairments#sthash.mclXapXb.dpuf

Blue Diamond Jewellery to move into different avenues

Vishmi Wijeratne

Blue Diamond Jewellery Worldwide Plc Creators, Manufacturers and marketers of internationally acclaimed floating diamonds in their journey to make market comeback have decided to move into different avenues of marketing so as to gain momentum into being one of Sri Lanka’s largest gem and Jewellery exporters and thus being internationally recognized for the best provider of quality gems and jewellery.

The newly appointed Director/Advisor and consultant, Dr. M. G. M. S. Zurfick of Blue Diamonds Jewellery in honour of the world Standard day celebration held in Sri Lanka at BMICH , spoke to us about his plans for the company, Zurfick with his forty years of experience in the gemming industry and his wide array of contacts that he has at hand as a well renown businessman, a sportsman and a public figure who has gained and created a name in Japan for Gem and jewellery has recognition in many countries said that he will be taking the challenge of bringing Blue Diamonds PLC to the fore front of the gem and Jewellery industry.

Zurfick, who is also the Chairman of Falcon International was in the fore front of many of the International gem and jewelryexhibitions, had the privilege of exhibiting the star of Lanka the second largest in the world which is nearly 400kt, the Blue Star Sapphire.

“I also took a treasure of Sri Lanka, thecat’s eye to an exhibition in Japan which made building ties with the country all the more easy. I must thank the chairman at that time, Lenorad Gunawardena who took such measures to put Sri Lanka’s gem and jewellery industry on the map, “ he said.

According to Zurfick the key to hold a good market position in the country is by building relationships, he claims with his many years experience and many contacts in the country and around the world he would be able to steer the company in the right direction.

“My assets are my contacts and it is through them that I will be able to cater into the government’s vision of making Sri Lanka an economic hub.

I would like to thank the Minister Susil Premajayantha who was a minister in charge of gem and jewelry, for his influence, and I have managed to bring all the related ministers and high standing officials, such as, Minister Rauf Hakimto the openingof the D. V. S. Lanka, which is the sister organization of Blue diamond.”

“ By taking up the challenge of making the Blue Diamond PLC, internationally recognized, I would be able to bring in foreign exchange that will in turn develop the country’s economy,” Zurfick said.

He stated that he hopes promote the industry through international trade fairs and exhibitions that will undoubtedly give Blue Diamond’s quality products the recognition it deserves. Blue Diamond jewellery Worldwide PLC has been renowned for its spectacular floating diamonds; he hopes to speak to several airlines in addition to Sri Lankan airlines whichis already featuring six of their latest items on their airline catalogue and in their flights to give possible clients an insight into the quality products they hope to offer.

He stated that he along with the staff of the company is fully geared to start creating diversified high quality gems, semi-precious stone s to make quality jewellery, he said that he is currently planning with the top ambassadors and commissioners inviting them to view the their latest productsof the latest designs by having exhibitions.

“I plan to go to Dubai, UAE and Saudi and also to Australia. From Australia I hope to form new connections that will help us import pink diamonds and also the opals which arevarieties that are gaining popularity in the market,” he said.

Zurfick has travelled over forty five countries and had maintained connections with Japan in promoting the Gem industry by opening the gateway for the Japanese to come to Sri Lanka after exhibiting the Blue star Sapphire which dazzled the Japanese by having a special exhibition with the president of the diamond association of Japan, Tastimin who helped penetrate into the Japanese market, he believes connections are of great importance in establishing a business relationship as loyalty plays a great role in keeping the client with the company thus leading to succession.

He also stated that with due assistance from Minister Kabir Hassim who was the minister for investment, Blue Diamonds Plc is now able to penetrate into the local markets. He said however that it is yet to see if the local market proves to be a good area to focus on.

Commenting on the Market Zurfic stated that the Gem and Jewellery industry of Sri Lanka is doing well in the past couple of years. He stated that the country is gaining experience and many of the companies are tapping into the hidden talents found in small players of the industry.

Zurfick stated that Blue diamonds have already received many awards namely the Presidents and the Chamber awards and he is confident that with his guidance and the support of the appointed chairman Henry Xia Liqiang they will be able to make Blue Diamonds a profit making company that will bring foreign revenue to the country.

“The Chairman of the company is currently abroad at a gem and Jwellery exhibition in France doing his level best to make this jeorny we started worthwhile, we also plan on catching the Chinese market as they are a massive market with endless possibilities,” he said.
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