Sri Lanka’s Sanasa Bank Sept net profit up 16-pct

ECONOMYNEXT – Sri Lanka’s Sanasa Development Bank said September 2015 quarter net profit rose 16 percent to 160 million rupees from a year ago with bad loans falling and interest margins improving.

Net interest income rose 23 percent to 841 million rupees with interest income up 41 percent to 1.7 billion rupees and interest expenses up 52 percent to 876 million rupees, a stock exchange filing said.

Net fee and commission income fell six percent to 61 million rupees.

Earnings per share for the September 2015 quarter were 4.13 rupees, up from 4.14 rupees the year before.

In the nine months to 30 September, EPS rose to 14.41 rupees from 12.50 rupees the year before.

Loans and receivables increased 35 percent to 43 billion rupees as at 30 September 2015 while liabilities went up 30 percent to 39 billion rupees from the previous year.

Sanasa Development Bank’s interest margin improved to 7.28 percent as at 30 September 2015 from 6.97 percent the year before while the bad loans ratio fell to 2.95 percent from 3.76 percent.

Sri Lanka Textured Jersey Sept net up 66-pct

ECONOMYNEXT – Sri Lankan fabric maker Textured Jersey Lanka PLC said September 2015 quarter net profit rose 66 percent to 468 million rupees from a year ago as it reaped gains from new acquisitions and kept costs under control.

Sales rose 16 percent to four billion rupees. Earnings per share for the quarter rose to 71 cents from 43 cents the year before, a stock exchange filing said.

Net profit margin rose to 9.15 percent for the period ended 30 September 2015 from 7.27 percent a year ago.

Chairman Bill Lam said the company has completed a “very strong quarter”, which included its first month of successful consolidation of Indian fabric maker Ocean India (Private) Limited (OCI) and a full quarter in the case of Quenby Lanka Prints (Private) Limited (QPL), an Indian fabric printer.

For the quarter ending 30 September 2015, TJL as a standalone company recorded a net profit of 379 million rupees, up 34 percent, he said.

“The bottom-line growth is driven primarily from economies of scale, tight cost management and improved operating efficiencies, which is reflected in the gross profit growth of 41 percent,” Lam said.

“TJL’s standalone performance was reinforced with the consolidation of both QPL and OCI, resulting in the group’s consolidated results reporting an impressive revenue growth of 16 percent and bottom-line growth of 66 percent.

“The group gross margin growth of 84 percent is driven by the envisaged sourcing synergies and group level cost management strategies, coupled with the successful turnaround that the teams have helped execute in each of the acquired entities,” Lam said.

Sri Lankan shares down, led by Commercial Bank

Reuters: Sri Lankan shares ended lower on Thursday for the first time in seven straight sessions as foreign investors sold shares in Commercial Bank of Ceylon amid uncertainty as the U.S. Federal Reserve revived expectations it may raise interest rates by year-end.

Foreign investors were net sellers of 319.1 million rupees ($2.26 million) worth of shares on Thursday, extending the year-to-date net foreign outflow to 3.44 billion rupees.

The main stock index ended down 0.34 percent at 7,070.13, from its highest close since Oct. 12 hit in the previous session.

The day's turnover was 898.8 million rupees, less than this year's daily average of 1.1 billion rupees.

Shares in top lender Commercial Bank of Ceylon fell 1.38 percent, leading the fall in the overall index.

"Foreign selling in Commercial Bank brought down the market," a stockbroker said on condition of anonymity. "We see some volatility until the Fed raises the rates."

Stockbrokers also said the market is waiting for some clear direction from the government.

Prime Minister Ranil Wickremesinghe is expected to announce the country's economic policy on Nov. 5, government sources said, outlining the government's economic priorities ahead of the 2016 budget scheduled for Nov. 20.

($1 = 140.9000 Sri Lankan rupees) 

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

90-pct vehicle leasing facility to come into effect today

(LBO) – Sri Lanka’s Finance Ministry said that a 90 percent leasing facility for motor vehicles will come into effect from Thursday.

An official notice will be sent out to the government and private financial institutions today, the ministry said.

From September 15, 2015, the 100 percent loan to value was limited to 70 percent by the Central Bank of Sri Lanka.

However, considering the negative impact this might have on the market the Finance Minister stated that a 90 percent leasing facility will be given for motor vehicles.

Sri Lanka's Lighthouse Hotel profits down on forex loss

ECONOMYNEXT - Profits at Sri Lanka's Lighthouse Hotel fell 21 percent to 6.2 million rupees in the September 2015 quarter from a year hit by a forex loss, while revenues remained flat.

The firm reported earnings of 14 cents per share for the quarter. In the six month to September profits were down 72 percent to 6.6 million rupees.

An upmarket hotel in Sri Lanka's South West coast near Galle, Lighthouse said revenue fell 1 percent to 169 million rupees while expenses was flat.

The was hit by a 7.8 million loss on a forex loan after Sri Lanka's rupee fell as the Central Bank printed money to finance a budget deficit.

Though a 'loss' is charged to account, assuming the same volume of sales priced in dollars, a fall in the currency increases nominal revenues, giving more rupees to service a forex loan.

Currency deprecation does not actually increase the real liability of dollar loans, but it decreases the real liability of loans and costs priced in domestic currency and real salaries of workers.

Many Sri Lankan hotels and also exporters have borrowed dollars in recent years, and charging the forex loss is important to reduce calls for currency depreciation, whose perceived benefits of devaluationism is an aspect of what is called the 'money illusion' and comes primarily from a fall in real salaries of workers.

Sri Lanka’s Trillion, Pan Asia in asset backed securitisation for hybrid cars

ECONOMYNEXT – Trillion Investments Limited, a Sri Lankan investment manager, launched what it said was the island’s first “green” asset backed securitisation with Pan Asia Bank, providing funding for hybrid vehicles.

Pan Asia Banking Corporation, which is supporting efforts to reduce Sri Lanka’s carbon footprint, has fully subscribed to the 750 million rupee five year issue of asset-backed securities, bond-like instruments that pay investors income based on car leases.

“The real sector has these transactions but there’s a vacuum in the financial sector,” said Kenneth De Zilwa, Chairman of Trillion Investments Limited.

“With the growth phase that Sri Lanka is in we believe that not only equity but debt plays a big part in asset creation and capital formation,” he told a news conference.

Neomal Goonewardena, Partner at Nithya Partners, which acted as Legal Counsel to the issue, said the asset backed securitisation provides funding for ‘green assets’, namely hybrid vehicles.

“Pan Asia Bank is financing the creation of green assets – in this case a pool of hybrid vehicles, which are environmentally-friendly assets,” he said.

Tyrone Hannan, Head – Global Transaction Banking, Deutsche Bank, said the bank is the Trustee and Administrator to the issue.

“This first time issue opens up a new source of funding opportunities for investors.”

Browns Capital buys into Sri Lanka solar power plant

ECONOMYNEXT - Browns Capital PLC said it had invested 407 million rupees to acquire a 50 percent stake in Saga Solar Power (Pvt) Ltd.

The firm said in a stock exchange filing it bought 38.7 million shares of Saga Solar Power (Pvt) Ltd. which operates a 10MW solar power project at Baruthakanda village in southern Hambantota.

The Saga Solar power plant, set up under the Sri Lanka Sustainable Energy Authority, has a 20-year power purchase agreement.

Candor Opportunities Fund IPO draws Rs. 353 m

By Shehana Dain

The Candor Opportunities Fund has so far raised Rs. 353.48 million through its Initial Public Offering.

Candor Asset Management Ltd. said as of Monday the offer had received 306 applications 
via cheques requesting 25.324 million units worth Rs. 253 million and two applications via bank transfer/RTGS transfer for 10 million units worth Rs. 100.25 million.

Candor Opportunities Fund is the first listed fund by CAM. It is offering 50 million units at the initial offer or IPO with the option of increasing the number of units on offer to 75 million, making the total offer value Rs. 750 million.

The IPO which opened on 20 October will remain open until 4:30 p.m. on 9 November or until the offer is fully subscribed.

The fund will be a five-year close-ended fund which would adopt dynamic asset allocation strategies and invest in both listed shares and fixed income securities depending on the investment climate. This strategy is expected to limit any downside risk while capitalising on upward movements in the stock market. While the primary investment objective of the fund is to achieve long-term growth of capital, the fund will also provide annual income to unit holders by way of annual dividends.

Deutsche Bank AG acts as the trustee and custodian for the fund will charge a trustee fee of 0.15% of the net asset value per annum and Rs. 20,000 a month from the whole fund as a custody fee.

The interests of unit holders are safeguarded by the Trustee, and the fund is regulated by the Securities and Exchange Commission of Sri Lanka.

Candor’s parent company; Dubai’s Eagle Proprietary Investment Ltd. invested Rs. 100 million at the IPO to show its confidence in the fund and the Sri Lankan equity market. - www.ft.lk

Lanka raises US$ 1500 m more in bonds

The Central Bank of Sri Lanka (CBSL), on behalf of the Government has raised US$1,500 million 10-year International Sovereign Bonds (Bond) with a coupon of 6.850% per annum at par on October 27.

This marks Sri Lanka's ninth US Dollar benchmark as well as the largest offering in the international bond market since 2007,the Central Bank said.

The Bonds have been rated 'BB-', 'B1' and 'B+' by Fitch Ratings, Moody's Investors Service and Standard and Poor's respectively. Citigroup, Deutsche Bank, HSBC and Standard Chartered Bank were Joint Lead Managers and Bookrunners of this successful transaction.

Final order books stood at US$3.3 billion from 290 investor accounts, achieving an oversubscription ratio of 2.2 times. The allocation of the Bond was 55% for The US, Europe 29% and Asia 16%. The allocation by investor type was 88% for fund managers, banks 9% and pension / insurance agencies 3%.
www.dailynews.lk

Ceylinco Life named World Finance's 'Best Life Insurer in Sri Lanka'

World Finance, the respected UK-based magazine, has reaffirmed Ceylinco Life as the 'Best Life Insurance Company in Sri Lanka' for a second consecutive year.

This is following an in-depth assessment of key performance indicators.

The accolade is based on scores accorded to the company on multiple parameters pertaining to long term insurance. These include underwriting process/process efficiency; policy maintenance - the process of reviewing clients' policies, appropriateness of coverage and cost per policy; exposure to risk; customer retention rate; time taken to settle claims; new customer acquisition rate and financial stability - premium income, life fund and market share.

"Eleven consecutive years of market leadership in Sri Lanka is by itself an emphatic statement of our status as the country's best life insurer," Ceylinco Life Managing Director and CEO R. Renganathan said.

"However, an independent assessment of key performance indicators by a panel of expert international analysts is always helpful in benchmarking the company."

The World Finance judging panel boasts over 230 years of financial and business journalism, supported by a research team that works round the clock to ensure its award winners are the most deserving in their sector.

For the year ending December 31, 2014,Ceylinco Life reported total income of Rs 18.54 billion with premium income of Rs 12 billion and investment income of Rs 6.83 billion.The value of the company's investment portfolio rose to Rs 57.2 billion, assets to Rs 71.07 billion and its Life Fund to Rs 60.02 billion.

Begun in 2007, World Finance magazine's award programmes are tailored to provide a comprehensive analysis of the very best in each market. The judging panel is required to avoid bias towards criteria such as depth of practice and size of company, in order to get an insight into different geographies and niche areas.
www.dailynews.lk

Lanka ranks 107 in Ease of Doing Business Rankings this year

The World Bank has placed Sri Lanka at 107th out of 189 countries in the latest report on the Ease of Doing Business rankings 2016.

The Doing Business report records 22 economies worldwide with resolution times above 1,000 days and four of them are in the South Asia region, namely Afghanistan, Bangladesh, India and Sri Lanka.

Sri Lanka made starting a business easier by eliminating the requirement to notify the Registrar of Companies of the payment of stamp duty for the initial issuance of shares.

According to the report, Singapore secured the first place followed by New Zealand, Denmark, South Korea, Hong Kong, Britain and the US. India is placed 130th while Pakistan is placed 138th.In protecting minority investors, Sri Lanka ranks 49th while in getting credit it is now placed at the 97th spot.
www.dailynews.lk

Singer revenue grows 34% in 3Q

Singer Sri Lanka continued its 2015 aggressive growth agenda posting impressive third quarter results as Group revenue increased by 34% during the period,the company said.

Year-to-date revenue reached Rs. 27.1 billion, registering a growth of 30% from the previous year.

Contributing significantly to the dominant revenue and profit results were a range of initiatives and expansion plans conducted by the Group. These included the establishing of new shops, dealers and channels of distribution, improving and renovating shops, securing new brands and distributorships and the introduction of new products. A favourable improvement in the local business environment during the first nine months bodes well for the Group.

However, the company remains optimistic that the sharp 5% devaluation of the rupee seen in September and marginal increase in interest rates will not affect growth prospects.

Group Net Profit for the first nine months reached Rs. 830.8 million, surging 63% in comparison to the previous year. Company Net Profit grew to Rs. 578.2 million, an increase of 61% against the same period a year ago.

Singer Sri Lanka Group CEO, Asoka Pieris said they have a marked increase of profits in 2015 over that of 2014 and 2013. "However, we need to be mindful our profit is still 6% below 2012, which was the highest profit recorded at end-September."

Pieris added, "During the third quarter, Net Profit is below the prevision year. However, the previous year third quarter had a reversal of provisions created in first and second quarters for possible liabilities. If the impact of this reversal is discounted, profits for this third quarter will be substantially above prior year."

Sparking revenue growth was the Communication and the Digital Media segment which grew 78% and has become the second highest segment surpassing the Consumer Electronics and Sewing category.
www.dailynews.lk