Sri Lanka’s new vehicles registrations surge to a new high

Sri Lanka’s new vehicles registrations have surged to a new high of 611,551 up to November this year compared to 371,906 in the same period last year, Sri Lanka Motor Traffic Department data showed.The demand for vehicles has increased mainly from state sector employees who benefited from the government pay hike and the interest rate reduction on bank and finance company loans and leasing facilities, a top official of the Motor Traffic Department (MTD) revealed.

Vehicle registrations recorded a an increase to 63,824 in September 2015 from 40,573 in the same month last year, but fell from a record 66,889 set in March ,MTD data showed.The increase in vehicle sales in September was possibly due to the confusion over the loan-to-value (LTV) ratio for vehicle leasing set by the Central Bank, MTD official said.”It is evident that the LTV rule has had a major impact on three-wheelers where volumes dropped from around 12,000 in September to 8,000 In October this year,” he added.

Even though the 70 percent LTV cap was announced on September 15 to come into effect for letters of credit opened after October 18, the Central Bank later said that it will come into effect only after December 1.Customers in large number have obtained 90 per cent leasing facility from those companies, before the 70 percent LTV come into effect to buy cars, three wheelers and motor cycles to beat the dead line.97,539 cars have been registered up to November this year; up from 32,858 in the same period last year

Registrations of three wheelers also recoded a new high of 118,494 up to November in 2015 compared to 71,347 up to November 2014. Registrations of motorcycles recorded an increase 338,285 up to November compared to 23,3787in the same period of 2014.Rajapaksa regime’s motor cycle distribution programme for public sector workers including the police has contributed immensely towards the increasing of motor cycle registrations in 2014 and 2015. 

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Hutch valued around $ 100M

By Ishara Gamage

Ceylon Finance Today: Sri Lanka Telecom (SLT) is planning to conclude the Mobitel- Hutchison deal as early as possible, a senior company official told Ceylon FT.

"A reputed International audit firm has submitted lower and upper range of pricing for this deal. It is around the US$ 100 million range," he said.

He also said that there are several government protocols to follow before making any final decision.

"At the moment, Mobitel has only an 'interrupted' spectrum. If they tie up with Hutch, Mobitel will be a powerful mobile operator with a better spectrum", telecoms sector analysts said.

Government sources alleged that the Mobitel- Hutchison Lanka deal is now before the Mobitel evaluation committee.
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Company to list - Sri Lankan Catering (Private) Ltd

By Ishara Gamage

Ceylon Finance Today: Government of Sri Lanka (GoSL) is planning to list a minority stake (30 to 49%) of the Sri Lankan Catering (Private) Ltd., the fully owned subsidiary of state owned SriLankan Airlines Ltd., via a competitive, open bidding process, GoSL sources told Ceylon FT on Friday.

This will be the first State-owned enterprise to be listed on the Colombo Stock Exchange under the present government's economic sector liberalization process. "There were seven parties/consortiums which have had already submitted their voluntary expression of interest (EoIs) to this catering business." they said.

No indicative rate was immediately available, neither whether the management control of Catering would be in the possession of the successful bidder.

Ceylon FT also learns that out of these seven parties which had submitted EoIs, three of those were from financial services companies, namely, Acuity Partners (Pvt.) Ltd., NDB Investment...Bank Ltd. and CT CLSA SECURITIES (PVT.) LTD.

Meanwhile, SriLankan Catering General Manager P.L.P. Vithana speaking to Ceylon FT said that they will consider all possible options to grow their business.

"I cannot reveal our plans to the media. We will reveal it when it happens", he said.
SriLankan Catering is currently the caterer sole airline operating at the Bandaranaike International Airport.

"The government may follow an 'all-or-nothing bidding' process to list this entity," sources said. But when contacted, Colombo Stock Market authorities said that there were no such 'all-or-nothing bidding' process, but they can adopt a suitable procedure when required.

The sources also said that the government is also planning to list the Ground Handling wing of SriLankan Airlines Ltd, which is 100% owned by GoSL, caters to ground handling requirements of a large number of airlines that operate out of Colombo's Bandaranaike International Airport, including SriLankan.

Fact sheet of SriLankan Catering:-

• Yearly Productions-5.6 million meals; 
• Peak Season (November-March)16,066 meals per day; 
• Off Peak Season (April - October) –14,990 meals per day; 
• Daily Average Production: 15,501 meals per day; 
• Number of Flights per Year – 27,835; 
• 'Number of Flights per Day' – 76 flights; 
• Total Number of Catering High-loaders – 19; 
• Number of Refrigerated Catering High – loaders:12; 
• Number of Commissary Vehicles – 7;
• Total Number of Employees – 882 (Including Executive Staff up to 31/05/15)

-Source of fact sheet only –Company web page


Attracting State-Owned Enterprises (SOEs) to get listed was a must to improve market liquidity and confidence, Colombo Stock Exchange (CSE) Chairman Vajira Kulatilaka earlier told Ceylon FT.

Meanwhile, CSE CEO Rajeeva Bandaranaike then said that in addition to the proposed new Board of Investment companies & Small & Medium Enterprise listing boards, the CSE will also consider to introduce a separate SOE Board as well.

Speaking to Ceylon FT recently, Kulatilaka also highlighted that the lack of market liquidity had been a negative factor in attracting foreign investors to Sri Lanka's capital market.

"As we know the government represents the lion's share of our economy. They control our banking, insurance, port, aviation, transport and gas sectors. They also own the largest land bank. With this limited private sector scope, the market growth may get stagnated. So, it is better to list at least 10%-20% of the government's profit making entities," he said.

"State owned commercial banks, Sri Lanka Insurance Corporation, SriLankan Catering (Pvt.) Ltd. and Litro Gas are the possible SOEs that can get listed first, he had then remarked.

This type of suggested (SOE) partial listings cannot be considered as privatization. First of all we have to stop all types of 'politicizations' and we have to introduce independent and impartial management and governance systems. This will bring win-win situations to all stakeholders", he said.
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Seylan Developments PLC records improved performance

Seylan Developments PLC reported another improved financial performance for the nine months period ended 30th September 2015. The results demonstrate the underlying potential of the Company to create financial value to its stakeholders.The company’s profit after tax of Rs: 79.17 million for the nine months ended 30th September 2015 reflected a growth of 12.66 per cent compared to the Rs: 70.27 million recorded for a similar period during the previous year.Operating profit increased from 66.21 million to Rs: 76.43 million showing 15.44% increase compared to the corresponding nine months period in 2014.

The quarterly (Q-3 2015) post tax profit of Rs. 27.77 million was an improvement of 30.78 per cent compared with Rs. 21.23 million reported in corresponding three months of last year.The Company’s Net Asset Value per share as at 30th September 2015 increased by 0.83 per cent to Rs29.00 and the Earnings per Share for the period stood at Rs 0.54.

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Softlogic keen to buy govt’s LHCL shares

By Duruthu Edirimuni Chandrasekera

The Softlogic Group has followed on the heels of the Hemas Group’s interest in buying shares in Lanka Hospitals Corporation PLC (LHCL), should the government decide to divest these shares, saying that they too are interested, Softlogic officials said. “We have also expressed our intent in pursuing such an opportunity (to the government),” a Softlogic official told the Business Times. He said it’s a lucrative opportunity for the group which has controls in Asiri Hospital Holdings PLC (Asiri), Asiri Surgical and The Central Hospital and is the largest listed private hospital group in Sri Lanka in terms of revenue and profits.

Hemas in an announcement to the Colombo Stock Exchange (CSE) said that as a group it has been exploring opportunities in the sectors that they operate in. “We noted the interest expressed by the Government in disposing of shares in ventures such as LHCL. We have therefore, expressed our interest in pursuing this opportunity once the government initiates the official process,” it said. This came on the back of Finance Minister Ravi Karunanayake delivering the 2016 budget in parliament saying that the government is keen to streamline its portfolio of investments and will therefore exit partially or fully from those non-strategic investments in Lanka Hospitals, Hotel Developers PLC (Colombo Hilton), Hyatt Residencies, Waters Edge, Grand Oriental Hotel, Ceylinco Hospital and Mobitel by listing such investments in the Colombo Stock Exchange during 2016.

“We have been in the healthcare sector for a number of years as an innovative leader and have won the hearts and minds of our customers. We are confident of our ability to contribute significantly to the Sri Lankan healthcare services,” the Hemas announcement added.LHCL, previously Apollo Hospitals Colombo is now indirectly owned by the government with the state owned Sri Lanka Insurance Corporation holding 54.61per cent stake. LHCL currently operates with a bed capacity of 240 beds and is at around 90 per cent occupancy, but further increases in competitor capacity expansions could negatively affect LHCL’s margins, according to analysts.

According to data provided by the Central Bank of Sri Lanka, the public sector accounted for 73per cent of the hospitals and 93per cent of the available bed capacity in Sri Lanka, while handling over 90 per cent of the total patient admissions and outpatient visits to hospitals as of end 2014.In the private sector, the top five players – the Dr Neville Fernando Teaching Hospital (NFTH), Asiri, Nawaloka Hospitals PLC (Nawaloka), Durdans Hospitals (Durdans) and The Lanka Hospitals – accounted for nearly 45per cent of the private-sector bed capacity at-end 2014, with NFTH the market leader with 1,002 beds.
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Listed firms that don’t transact, on CSE / SEC radar

The Colombo Stock Exchange (CSE) and the capital market regulator, the Securities and Exchange Commission (SEC) are concerned about some listed firms that have never been traded or only have had a few trades, since they went public a few years ago.”The SEC is going though the history of these firms and the CSE will try to entice them to be more active in trading,” a source told the Business Times. Some were listed about two years ago, through introductions, which are a less-expensive alternative to an initial public offering (IPO). An introduction does not result in shares being traded on the main exchange board, but the Diri Savi Board. With introductions, a company sells equity shares directly to the public without the help of investment bankers.

Aitken Spence Plantation (ASPM) for an example is one such firm that was listed in May 2013 and a single trade hasn’t happened. Its public float is 11.78 per cent. AMW Capital Leasing is another. It’s Public freefloat is stated as 10 per cent, but the share has never traded since listing via introduction on 8 June 2011. “This raises questions as to whether it should still be on the CSE,” analyst said. AMW Capital Leasing is another such company which hasn’t seen a single trade. The CSE and the SEC are presently scrutinising such companies and are likely to have discussions with them on the next plan of action,” the source said. Others say that some firms merely go public for price discovery and that once listed aren’t bothered to trade. “But it isn’t a good reflection on the CSE,” the analyst said
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