Aitken Spence to buy 20-pct stake in Fiji Ports Corporation

(LBO) – Sri Lanka’s diversified conglomerate Aitken Spence and Fiji National Provident Fund is planning to buy 59 percent stake in Fiji Ports Corporation, Aitken Spence said in a stock exchange filing.

An agreement has been signed with the Fiji government to acquire the corporation, an entity wholly owned by the government which manages all ports in Fiji.

Aitken Spence alone will invest 34.6 Fijian Dollars to acquire 20 percent of the corporation subject to necessary approvals.

Sri Lanka to suspend one off, retrospective taxes: PM

ECONOMYNEXT - Sri Lanka will suspend one-off and retrospective taxes introduced during an interim budget in 2015, Prime Minister Ranil Wicrkramasinghe said.

"One of taxes that was subject to controversy to be suspended, (vivardayater luckwoo, ekwarak pamanak aya karana badoo athhitoowanawar)" he said.

"Retrospective taxes that undermined business confidence to be suspended (vyaparer vishwasaneeyathwaya doobaler kireemeter hethuwaner atheethayater balaparner badhoo athhituweemer."

The 'super gains tax' was no longer needed because general consumption has now started, Wickramasinghe told parliament. The tax was supposed to have been paid in several instalments.

Sri Lanka shares end firmer; PM's statement seen boosting stocks

Reuters: Sri Lankan stocks ended firmer on Thursday led by blue chips, and stockbrokers expect the market to react positively to the prime minister's medium-term economic policy statement, which focused on raising revenue through reforms.

The main stock index ended 0.2 percent higher at 7,017.39.

The day's turnover was 779.8 million rupees ($5.51 million), less than the year's daily average of 1.1 billion rupees.

Prime Minister Wickremesinghe, outlining the government's economic priorities ahead of the 2016 budget announcement, said the government would minimise tax holidays and aim to garner more revenues from the rich through direct taxes, a move that could be praised by the International Monetary Fund.

"All in all, it looks positive. This is what people have been waiting for," said Dimantha Mathew, a research manager at First Capital Equities (Pvt) Ltd, adding that he expected the market to react positively to the prime minister's statement.

The next trigger for the markets would be the budget scheduled for Nov. 20, analysts said.

Shares in Hemas Holdings Plc rose 3.13 percent while conglomerate John Keells Holdings Plc gained 1.40 percent.

Foreign investors, who have been net sellers of 3.71 billion rupees worth of equities so far this year, bought a net 16.5 million rupees worth shares on Thursday. 

($1 = 141.4000 Sri Lankan rupees) 

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

The Asian Banker pronounces BoC the "Strongest Bank" in Sri Lanka

Sri Lanka’s No.1 Bank, the Bank of Ceylon was named as the only "Strongest Bank" in Sri Lanka for the year 2015 by the Asian Banker, in an independent research carried by the region’s most authoritative provider of strategic business intelligence to the financial services community. The announcement was made at a ceremony held in conjunction with SWIFT’s SIBOS convention at Sands Expo and Convention Centre, Marina Bay Sands, Singapore.

The Asian Banker 500 ranking is the most comprehensive annual evaluation that captures the quality and sustainability of the balance sheets of the banks in the region. All data are sourced from Central Banks and miscellaneous publications or via informed estimates. The evaluation was based on the balance sheet growth, scale of operations, risk profile, profitability, asset quality and liquidity for the year 2014. The Bank of Ceylon is among the winners, who are Standard Chartered Bank Hong- Kong, HSBC Hong-Kong, Bank of China, DBS Group, West-Pac Banking Corporation-AUS, ANZ Bank New Zealand and May Bank Malaysia.

The Bank of Ceylon closed its 75th year on a magnificently high note in 2014, by recording the highest ever profit before tax (PBT) in the bank’s history as well as in the Sri Lankan banking industry of Rs.20.3 billion, achieving a growth of 29% compared to the previous year. This was the highest profit earned by a single Sri Lankan business entity for the year. Post tax profit stood at Rs. 13.6 billion -a 12% growth. Banks assets grew by 11% to Rs.1.3 trillion for the year 2014.

The Bank has grown enormously in scale and sophistication in both operations and products and services offered over its years. Being true to its title "Bankers to the Nation", the Bank of Ceylon offers banking products to a broader spectrum of customers, from individuals, SMEs to Corporate businesses. BOC has over 1000 customer touch points including, 622 branch network across the country, SME Centres, its own 522 island-wide ATM Network and newest Cash Deposit Machines. With this vast network BOC has been able to provide banking services to a wider customer base of over ten million, coming from all walks of life. The first Sri Lankan Bank to operate its branch overseas BOC London branch was established in 1949 and later converted into a fully owned banking subsidiary. Since then bank’s overseas branch network has been expanded to Male, Chennai and Seychelles. - BoC

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PLC Group posts Rs. 2.35 b profit in record first half

PLC Group declared the highest ever first half results in its history with an outstanding profit after tax (PAT) of Rs. 2.35 billion.

This signifies a 25.3% growth over the corresponding period of the previous year.

The Group’s performance has been consistent since the second quarter of the last financial year with profits over Rs. 1 billion for consecutive five quarters. Group’s pre-tax profit reached Rs. 3.38 billion with a 27.8% surge and Group’s total assets stood at Rs. 121.66 billion reflecting a 3.8% rise over the asset base as at March 31, 2015. “A strong asset base, steadfast workforce lead by an abled management paved the way for the Group to achieve exceptional performance in the 1H of 2015/16,” PLC Chairman Hemasiri Fernando said.

People’s Leasing & Finance being the main contributor to the Group’s achievement also evinced its highest ever 1H result with a Rs. 2.26 billion profit after tax reflecting an YoY growth of 29.5%. Profit after tax for second quarter also grew by 16.8% over the corresponding period of the previous year to Rs. 1.26 billion, securing the highest profit achieved for a quarter throughout PLC’s corporate journey. CEO D. P. Kumarage said PLC performed extremely well amidst the challenging business environment to record solid operational and financial results in 1H and we are very optimistic about the rest of the financial year”

Low interest rate regime lessened interest income to Rs. 4.48 billion while interest expenses decreased to Rs. 1.89 billion (-23.4%) resulting a net interest income of Rs. 2.59 billion (+5.6%) in the second quarter of financial year 2015/16.

Despite the growth in business volumes, PLC managed to curtail the growth in operating costs to 2.5% in 2Q which positively contributed to the company’s profitability.
www.dailynews.lk

CSE an ideal place to invest - LSE CEO

London Stock Exchange Chief Executive Officer Nikhil Rathi said the Colombo Stock Exchange is an ideal place for the diversification of risk as its trades at small discount to the regional markets with a market capitalization to GDP ratio among the lowest in the region and a low correlation to developed markets.

Speaking at the “Invest Sri Lanka” Investor Forum hosted in London on October 29 at The Savoy Hotel, he said it’s a good way to broaden out your risk. We are very pleased to welcome companies to London and as you know London has in terms of asset management, international equity under management than any other financial center in the world.

So we hope today, many investors and issuers get a chance to talk about the opportunities in Sri Lanka.

"With the election of a new government we as investors are confident of a new investment environment and prospects for growth will pop up. The growth of CSE and Sri Lanka will only increase in the future,"Rathi said.

Overseas Realty posts Rs. 2.2 b profit in 9 months

Overseas Realty (Ceylon) PLC recorded a group net profit of Rs. 2.2 billion for the nine months ended September 30, 2015, a decrease of 12% over the corresponding period of 2014.

The Group recorded a Revenue of Rs. 2.4 b which was a decrease of 49% over the corresponding period of last year, due mainly to the recognition of lower apartment sales at Havelock City.

The Revenue from Property Leasing grew by 14% to Rs. 1.5 b in comparison over last year due to high occupancy levels and higher rentals at the World Trade Center (WTC), with Other Services Revenue contributing Rs. 131 m , an increase of 36% resulting in a Total Group Revenue of Rs. 2.4 b .

The Company expects to maintain high occupancy levels throughout the year at the WTC.

Piling work of Havelock City Phase 3 and Phase 4 comprising 4 more residential towers with 644 luxury apartments commenced in May 2015 with the superstructure construction planned to start next year.

The Group Net Asset Value per share as at September 30, 2015 increased by 2% to Rs. 31.26 and the Earnings per Share for the period stood at Rs. 2.43. The profit attributable to Equity Holders of the Parent decreased marginally by 3% to Rs. 2.1 bn.

Windfall for State from Super Gain Tax

• Finance Minister Ravi K says Rs. 65 b envisaged as opposed to Rs. 50 b target from one-off retrospective tax
• 22 qualifying companies have paid the first installment by 31 October
• 2016 Budget to be “revolutionary and sensational,” assures Ravi K
• All will be happy but those who should pay tax will be required to comply; 60% of affluent class are not paying taxes Govt. to link Samurdhi support to employment; capital expenditure to be stepped up with preference to local contractors
• Ravi K describes “private sector” in general as “absolute laggards”

By Nisthar Cassim

Widely criticised by the private sector but justified by the ‘Yahapalana’ Government, the one-off Super Gains Tax (SGT) is expected to bring in much higher revenue, Finance Minister Ravi Karunanayake revealed yesterday.

“We originally estimated Rs. 50 billion from the one-time Super Gains Tax but we are likely to get around Rs. 65 billion,” Karunanayake told a group of editors yesterday at his Ministry.

He said 22 companies had paid the first instalment of SGT which was due by 30 October.
SGT rate is 25% on the taxable income for 2013/14 for any individual or each company including subsidiaries and holding company (including subsidiaries and holding company in a group of companies notwithstanding that the profit before income tax of any such company in the group does not exceed Rs. 2 billion.

The second instalment is due on 30 November and the final portion is on or before 31 December.

Banks have been offered the option of lending to the Government at 6% interest in lieu of the SGT component.

In a meeting to outline the broader objectives of the upcoming Budget, the Finance Minister told editors that extra revenue via new taxes such as SGT was necessary to finance the relief package announced in the 100-Dayprogram of the Yahapalana Government.

He said the cost of most of the relief and stimulus package under the 100-day program was Rs. 220billion. Of this Rs. 120 billion was to be financed via new one-off taxes, the Mansion Tax and other measures. The balance was met by saving Rs. 90 billion expenditure as part of better fiscal prudence.The Finance Minister also said that Prime Minister Ranil Wickremesinghe would today (5 November) in Parliament outline the broader future direction of the Government as well as the policy framework. “The 2016 Budget to be presented on 20 November will be revolutionary and sensational,”Karunanayake said.Without revealing specific proposals, he said that in terms of taxation, the rich who evade will be compelled to pay taxes whilst those who are compliant will not be burdened. According to the Minister, 60% of the affluent class are not paying taxes. He also suggested that Budget 2016 would benefit all sections of society. “We will make life very easy for people. You won’t believe what we are going to do. The general feeling is that Budget 2016 will be tough. I won’t say what it will be like; I like to give that surprise on the Budget date. All will be happy,” the Finance Minister assured. He was of the view that the economy needed to be properly structured, reformed and strengthened. The 2016 Budget will start this process and lay a strong foundation. Ruling out a financial crisis in the country, Minister Karunanayake however clarified the economy was facing several structural issues which would be addressed by the Government. Budget 2016 will be one exercise. He noted that the public sector salary bill of Rs. 600 billion and pension cost of Rs. 177 billion had to be met, which is 65% of Government income. Additionally, the debt servicing is Rs. 1.3 trillion. To ensure subsidies are better targeted, the Government will link Samurdhi payments to employment of eligible members of the beneficiary families.
He also said that capital expenditure would be stepped up whilst encouraging local contractors to take on projects. Karunanayake also described the private sector as “absolute laggards” as they maintain a “wait-and-see” attitude or wait till things fall into their laps. He also opined that when foreigners seize opportunities, the local private sector complains.
What will Ranil reveal today?

By Shehana Dain
Finance Minister Ravi Karunanayake yesterday gave what could be described as a sneak preview of the policy statement to be delivered by Prime Minister Ranil Wickremesinghe in Parliament today.Speaking at a taxation seminar, Minister Karunanayake said to boost FDIs to the country, Premier Wickremesinghe would be making an announcement today to cancel the leasing rates currently implemented with regard to foreigners, which has been a de-motivator.The Premier is believed to propose the scrapping of controversial Expropriation Act and some changes to land ownership laws during a special statement in Parliament today ahead of the much-anticipated Budget which will be on 20 November.

“Land which is investment related will be given more ease but we will not just open the system. If we be too flexible, it will be too inimical to the Sri Lankan point of view,” Karunanayake said.Expropriation laws that were implemented by the former regime were heavily criticised by the business community following the acquiring of 37 formerly State-owned institutionsunder the 2011 Revival of Underperforming Enterprises and Underutilised Assets Act No. 37.When asked what was stopping the new regime from doing away with the much-debated and criticised Expropriation Act, Karunanayake stressed that there were certain legal limitations that had dragged on which needed rectification. 
Govt.-IMF-WB talks today

The Government will hold talks with officials of the IMF and World Bank to discuss the future support program today.

Finance Minister Ravi Karunanayake, who attended the annual meetings of the IMF-World Bank last month in Lima, Peru, said yesterday that multilateral funding agencies had expressed support to the Government’s future economic and fiscal program.However he categorically denied that the upcoming Budget would be dictated by the IMF or World Bank. “It is not an IMF or World Bank Budget. The Government will implement what is good for Sri Lanka,” he added.The Finance Minister said that there were prospects for $ 4.5 billion support from the IMF on a long-term concessionary basis. He hinted that IMF support would be via an Enhancement Facility to make the Balance of Payments situation for Sri Lanka more comfortable. “This support will be based on the Government’s home-grown future economic program,” he added.
http://www.ft.lk