Single applicant dominates Sri Lanka Orient Finance IPO

ECONOMYNEXT –A single applicant accounted for over two-thirds of applications for shares in the initial public offer of Sri Lanka’s Orient Finance on its opening day, a stock exchange filing showed.

Orient Finance offered 71.5 million shares at 15 rupees each to raise 1.07 billion rupees.

The statement said the company got 263 applications for almost 65.8 million shares worth 987 million rupees with one application alone for 56.7 million shares worth 850.9 million rupees.

The other 262 applications were for just over nine million shares worth 136 million rupees, the company said.

Sri Lanka Watawala Plantations December net profit up 28-pct

ECONOMYNEXT – Sri Lanka’s Watawala Plantations said net profit for the December 2015 quarter rose 28 percent to 188 million rupees from a year ago as costs and tax expense fell while tea and palm oil generated profits.

Earnings per share for the quarter were 75 cents. Sales fell 15 percent to 1.4 billion rupees, a stock exchange filing said.

EPS for the nine months to December 2015 rose to 1.85 rupees from 1.73 rupees the year before although sales fell.

Tea plantations made a profit of 30 million rupees in the December 2015 quarter against a loss of 54 million rupees the year before and profits from tea exports rose while palm oil profits fell to 122 million rupees from 198 million rupees.

Watawala Plantations Managing Director Vish Govindasamy said its tea plantations business reduced losses to 213 million rupees in the nine months to December 2015 from 253 million rupees a year ago.

“The decline in the tea sector performance is attributed to the decrease in production year-on-year,” he said.

Palm oil sales fell four percent in the nine months to 1,179 million rupees from the year before mainly because of a reduction in crop and Crude Palm Oil production, while prices fell marginally with the drop in global palm oil prices.

“However the segment made a significant contribution to company’s profitability, having made a net profit of 558 million rupees compared to 619 million rupees (the year before),” Govindasamy said.

Sri Lankan shares fall for 2nd day to near 1-wk closing low

Reuters: Sri Lankan shares fell for a second straight session on Tuesday to their near one-week closing low in thin trade after the central bank kept its key policy rates unchanged and as investors worried over volatile global markets and rising returns on risk-free assets.

Turnover slumped to 341.3 million rupees, the lowest since Dec. 31, and well below this year's daily average of 791.7 million rupees.

The main stock index ended 0.5 percent, or 31.96 points, lower at 6,322.87, the lowest close since Jan. 20.

"There is nothing much happening. The market is lying on the back of retailers," said Yohan Samarakkody, head of research, SC Securities (Pvt) Ltd.

"It'll try to consolidate at these levels with the earning season to start. But the market cannot sustain unless proper measures are taken to draw more foreign investment."

The index has fallen 8.3 percent so far this year as foreign investors, unnerved by global concerns over China's economy, have cut their exposure.

Foreign investors, who have been net sellers of 2.28 billion rupees worth of equities so far this year, were net buyers of 3.79 million rupees worth of shares on Tuesday.

The central bank, as expected, kept its key policy interest rates unchanged after market hours on Monday, saying the effects of previous adjustments were still trickling down into the economy and expected private sector credit growth to decelerate slowly.

The yield on one-year t-bills rose 32 basis points to a more than two-year high of 7.80 percent at a weekly auction on Wednesday. Analysts expect market interest rates to rise in tandem.

Shares of conglomerate John Keells Holdings Plc dropped 2.1 percent, Ceylon Cold Stores Plc fell 3.65 percent and Distilleries Company of Sri Lanka Plc declined 2.10 percent.

Commercial Bank of Ceylon Plc, the country's biggest listed lender, declined 0.47 percent. 

($1 = 143.9000 Sri Lankan rupees) 

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

Sri Lanka No. 1 importer of Japanese used cars

ECONOMYNEXT – Sri Lanka was the top importer of used cars from Japan in terms of value in 2015 with imports being relatively new cars, mainly hybrids and electrics, an analysis of vehicle registry data has showed.

The main reason for the heightened demand for this category of vehicles was “aggressive” lending by commercial banks, according to the analysis of vehicle registry data by JB Securities, a Colombo based equities brokerage.

The sharp fall in financing rates last year increased affordability which coupled with an overvalued exchange rate till September “fuelled a massive increase in demand,” JB Securities said.

Imports by Malaysia, the next highest importer of used Japanese cars, was almost 40 percent lower than Sri Lanka, according to an analysis of January to November 2015 statistics.

JB Securities said the largest volume of Japanese used car imports was to New Zealand but the unit value was low since the shipments were mostly old cars.

Since the local agents for new cars in Sri Lanka don’t have the same offerings available in the Japanese domestic market, “the demand is heavily skewed towards Japanese used car imports,” the report said.

Sri Lanka imported 48,402 Japanese used cars in the January to November 2015 period with a unit value if 1.75 million yen and a total value of 84,547 million yen.

Malaysia was the next highest in terms of value, importing 19,409 units with a unit value of 2.58 million yen and a total value of 49,994 million yen.

The largest volume of used Japanese cars was to New Zealand – 102,487 units - but the unit value was a low 0.46 million yen with the total value being 47,280 million yen.

Sri Lanka Laugfs group starts e-commerce business

ECONOMYNEXT - Sri Lanka Laugfs Holdings group said it had started an e-commerce business offering a range of over 2,000 products and services with free delivery within the Colombo city.

A statement said Lfinity Pvt Limited launched the clickNshop.lk ‘Virtual Hyper Mall’with guaranteed 2-3 day island-wide delivery.

“With increasing traffic congestion, parking tolls on some of the main shopping areas and hectic time schedules leaving little time for shopping, people are increasingly choosing online shopping,” said a company spokesperson.

ClickNshop features an extensive range of products and services, including electronics, household appliances, clothing and cosmetics, automobile accessories and kitchen appliances, the statement said.

It offers Cash-On-Delivery and Pay & Pickup services, product warranties by vendor partners as well as return and refund policies for faulty or damaged goods.

“We are currently working on a Grocery Box feature, to serve our customers’ daily grocery needs through the simple process of ‘click, pack and deliver’ to their doorstep,” the spokesperson added.

ESOP to be dissolved

Ceylon Finance Today: Richard Pieris and Company plc recently informed the Colombo Stock Exchange (CSE) that it will be dissolving its employee share scheme on 24 August, 2018 as per CSE's listing rules.

The number of shares currently available under the Employee Share Option Plan (ESOP) is 7.42 million at an option price of Rs 3.15 a share which could be exercised up to 24 August, 2018 by eligible optionees, and those would be listed. Richard Pieris' shares last week closed at Rs 7.90 a share.

The company further said that when the ESOP was first adopted, which was on 29 July, 2005; it allowed the issuing of shares equal to 5% of the issued capital of the company, which at that time comprised 2.96 million shares. The option price at that time was Rs 100 a share. Consequent to further issues by the company, the number of option shares and the option price of the ESOP were revised. (PGA)

www.ceylontoday.lk

Rajaiyas up stake

Ceylon Finance Today: Renuka Foods plc upped its stake in Renuka Agri Foods plc to 56.27%, after buying 34.76 million shares of the latter company from Gracekennedy Ltd., of Jamaica for a total consideration of Rs 139.02 million. These shares were bought at Rs 4 per share. 

The Renuka Group of companies is controlled by its Executive Chairman Dr. S. R. Rajiyah and his wife I.R.Rajaiyah, its Executive Deputy Chairperson. (PGA)

www.ceylontoday.lk

FMO gets 14% stake

Ceylon Finance Today: Softlogic Finance plc, a company controlled by business magnate Ashok Pathirage, from a US$ four million loan received from FMO, a development bank controlled by the Netherlands Government, has converted $ two million of this loan to equity, accordingly giving FMO a 13.95% stake in the company.

The conversion is equivalent to the acquisition of 8.24 million shares of Softlogic Finance at Rs 34.96 a share for a total consideration of Rs 288.09 million. The pricing is based on the book value of this finance company's shares as at 31 March, 2014. Conversions have been made, on the basis that one US dollar is equivalent to Rs 144.05.

Prior to this acquisition, Softlogic Finance had a total number of 50.83 million issued shares, of which the public holding constituted 17.62 million or a 34.66% equity stake in the company, while 32.19 million shares were held by Softlogic Capital plc.

After the acquisition, the public holding in Softlogic Finance has been diluted to 29.83%. (PGA)
www.ceylontoday.lk