Omani firms eye tourism, property investments in Sri Lanka

ECONOMYNEXT – Investors from Oman are keen on big projects in Sri Lanka including in property and tourism, the Ceylon Chamber of Commerce said.

It said in a statement it hosted a visit by the Omani Chamber of Commerce and Industry.

“We like to invest in big projects, which Sri Lanka is planning to launch. Give us information on those projects,” Omani Chamber of Commerce and Industry Chairman Said Saleh Said Al Kiyumi was quoted as saying.

Kiyumi and his team, in the country to attend the Eastern Investment forum, said that they are willing to look at projects in the areas of tourism, property development and SME development.

Transparent bids for Sri Lanka airport duty free shops

ECONOMYNEXT – Companies wanting to operate duty free shops at Sri Lanka’s Bandaranaike International Airport in Katunayake, earlier given to two firms without bids, will now have to go through a transparent bidding process, a government spokesman said.

Duty free shops play a key role in airport trade activities and the maintenance of these shops in the arrival and departure terminals had been given as a franchise right shared among two operators, said Health Minister Rajitha Seneratne.

“No tender procedure or calling for competitive bidding had been done in the selection,” he told a news conference.

The Cabinet of minister approved a proposal by Minister of Transport and Civil Aviation Nimal Siripala de Silva to appoint a Cabinet Appointed Procurement Committee and Technical Evaluation Committee to award duty free shop operations for a five-year period.

“This will be done according to the tender procedure in a more transparent manner with the intention of gaining more benefits to Airport and Aviation Services Limited,” Senaratne said.

CSE suspends PCH share trading with immediate effect

The Colombo Stock Exchange (CSE) today (28 January) decided to suspend the trading of PC House PLC and PC Pharma PLC due to non-submission of Annual Reports for the year ended 31 March 2014 and 31 March 2015 to the CSE in compliance with CSE Listing Rules and Sri Lanka Accounting Standards.

Several weeks ago, the CSE suspended trading of Entrust Securities PLC and the suspension is yet to be lifted.

Meanwhile, this morning the CSE also halted the trading of Lanka Ashok Leyland PLC pending a clarification from the Company regarding a press article on the financial results as at 31 December 2015. Subsequently, this trading halt was lifted at 11.00 am today (28 January) after the interim financial statements as at 31 December 2015 were uploaded on the CSE website.

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Sri Lankan shares snap three-session losing streak

Reuters: Sri Lankan shares snapped a three-session losing streak and closed marginally higher on Thursday as investors picked up some beaten-down large-cap stocks.

The main stock index ended 0.05 percent, or 3.43 points, higher at 6,319.89, after posting its lowest close since Jan. 20 on Wednesday.

The index had fallen 8.4 percent so far this year through Wednesday as foreign investors, unnerved by global concerns over China's economy, have cut their exposure.

Foreign investors sold a net 13.9 million rupees ($97,081) worth of shares on Thursday, extending the year-to-date net foreign outflow to 2.71 billion rupees worth of equities.

Turnover was 548.4 million rupees, lower than this year's daily average of 768.3 million rupees.

The central bank rejected all bids at an auction on Wednesday, signalling it would not tolerate much increase in yields after the yield on the 364-day t-bill jumped 32 basis points to a more than two-year high of 7.80 percent last week.

This move could help investors return to the market, analysts said. The central bank, as expected, kept its key policy interest rates unchanged on Monday.

Shares of Lanka ORIX Leasing Company Plc rose 3.85 percent, while Ceylon Tobacco Company Plc gained 0.60 percent.

Dialog Axiata Plc rose 0.99 percent, while conglomerate John Keells Holdings Plc ended steady . 

($1 = 143.1800 Sri Lankan rupees) 

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

IRCON sees Sri Lanka rail upgrade investments at US$1.5bn

ECONOMYNEXT – Sri Lanka will need investments of about 1.5 billion US dollars to upgrade the rest of its railway network to modern standards, said S L Gupta, Country Head of IRCON International Ltd.

The Indian government-owned firm has completed all the major projects it was hired to do and will bid for any new ones offered, he told a news conference.

“There is a need to further improve rail transportation in Sri Lanka,” Gupta said. “Rail transportation is a capital intensive business – you need a lot of money.”

He said he estimates investments of 1.5 billion dollars are needed to upgrade parts of the railway that had so far not been included in the post-war modernization of infrastructure underway.

IRCON started its work in the island when it was hired to rebuild rail tracks on the south coast that was devastated by the December 2004 Indian Ocean tsunami.

After the island’s 30-year ethnic war ended in 2009, IRCON was also given the contract to repair and modernise the rail network in the north.

“We will be only too happy to have more projects,” said Gupta. “I am a railway man. I will always suggest to any government to go for rail transportation which is cheaper and more efficient and comfortable than road travel. Rail transport is backbone of any economy.”

Rejection causes fall

Ceylon Finance Today: Yesterday's rejection of bids at the Treasury (T)-Bill primary auction (see connected story found elsewhere on this page), resulted in treasury yields fall in secondary market trading afterwards, sources told this reporter.

While the shorter tenures (ie those maturing this year) declined sharply by 20 basis points (bps) those of the longer tenures decreased by 10 bps (after going up by around 50 bps on Monday), they said.

Meanwhile, Central Bank of Sri Lanka (CBSL) on behalf of the Government of Sri Lanka (GoSL) will hold a T-Bond auction for the sale of Rs 15,000 million worth of T-Bonds to the market today .Those comprise Rs 2,000 million worth of T-Bonds maturing in 2020 (four years and 10 months), Rs 3,000 million worth of......T Bonds of 2026 maturity (maturing on 1 June, 2026), Rs 5,000 million worth of 2030 maturities (14 years and three months) maturing on 15 May, 2030 and Rs 5,000 million worth of 2045 maturities, i.e. 29 years an one month, maturing on 1 March, 2045 respectively.

When this announcement was made on Monday, that caused the yields of the longer tenures, which market sources said that there was no demand, to rise by 50 bps in secondary market trading on that day, while on the following day Tuesday, the market was placid, probably waiting for the outcome of yesterday's T Bill auction before making their next move.
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Ashok Leyland ups nine month revenue driving sales volume up 40% YOY

Lanka Ashok Leyland recorded a top line of Rs 7.4 bn, a 27% increase over Rs 5.8 bn recorded for the same period last year.

The third quarter recorded a turnover of Rs 2.7bn with robust demand from the private sector driving sales volume up 40% year on year.

Profitability was squeezed as import costs rose with the weakening rupee and some additional provisioning resulted in a profit before tax of Rs 242.5mn, a 51% decrease on 2014/15. The gross profit margin fell from 11% to 8% while the net profit margin fell to 2% from 6% for the same period last year, the depreciation and lack of currency stability is a key factor to us.

“We continue to have a sizeable outstanding amount due from the Government sector which has put pressure on our working capital, resulting increased borrowings which rose 22% to Rs 2.0 bn. Finance costs, net of exchange rate losses and gains remained flat year on year at Rs 37.8 mn.

Lanka Ashok Leyland CEO Umesh Gautam said they are thrilled with the demand response from the private sector and the robust sales performance is indicative of that.

“We are buoyed by our efforts to increase and improve our sales in the light commercial vehicle segment. Sales have jumped 104% year on year but we still have bigger inroads to make in this segment. We have built up our inventory levels since 1Q2014 and this will act as a hedge against the USD volatility if the volatility continues and we cut down our imports till it becomes stable again.

www.dailynews.lk

Tea production declines to three year low in 2015

Sri Lanka's tea production in 2015 has declined to a three year low of 328.96 Mn kg, down nine Mn kg (-3%) on the 2014 figure of 338.03 Mn kg.

The highest annual production was 340 Mnkg recorded in 2013. Since 2010 national production has hovered around these levels.

According to published data by the Sri Lanka Tea Board (SLTB) analyzed by Siyaka Research, both High and Low Growns declined year on year with the latter elevation accounting for almost 85% of the national crop loss in 2015.

Medium production figures however were maintained, likely through movement of tea from other elevations. In the Low country sub districts Galle accounted for 50% of the production loss in 2015 YoY 2014. Deniyaya and Ratnapura too recorded losses, but were around a third of the Galle figure.

Amongst the higher elevations Demodara / Hali Ella / Badulla recorded the sharpest losts. Other districts recorded nominal crop losses on the 2014 figures. A key factor would be the dry conditions projected for Q1 2016 and this could play a significant part in Q2 as well. Reduced fertilizer subsidy and banning of cost effective weedicide would place both Estate and SmallHolders under pressure considering the added restriction of lower prices.

Continuing uncertainty over wage negotiations could trigger disruption of work on estates. On the other hand, any negotiated wage increase would further pressurize the Regional Plantation Companies and will have a domino effect of increasing costs for Small Holders; struggling with low green leaf prices.

Overall the country would need exceptional growing conditions and revival in the market at least through a depreciation of the Rupee; if 2016 annual production figure is to reach a 330 + Mnkg level.

The El Nino Phenomenon could cause extremes of weather ranging from drought to excessive rain and storms.

www.dailynews.lk

New Hilton Board, Cabinet to decide today

A new Board of Directors is to be appointed by the government to the management of Colombo Hilton soon. The appointments are to be made by Highways and Investment Promotion Minister, Kabir Hashim.

Some of the board members have refused to resign despite the Prime Minister's office making representations for them to resign and pave way for the appointment of a new board.

They had maintained that they were appointed by the Finance Ministry and a directive has to be issued by the ministry if they were to resign. The final decision is to be taken at today's Cabinet meeting.

www.dailynews.lk

Rs 580 mn Heights Residencies begins work

M. C. Urban Developers Ltd, a subsidiary of Millennium Housing Developers PLC, will invest Rs. 580 million to build The Heights Residencies at Edmonton Road, Colombo 5.

The project will be completed in 18 months. 'The Heights', which marks their foray into the world of vertical living, will comprise 30 apartments with 3 bedrooms each, boasting a host of luxury, fitness, safety and environment-friendly features. The price range will be from Rs. 22 million upwards.

Millennium Housing Developers Chairman Sisira Weerabahu said that already 12 apartments have been sold out. He said they have several ground breaking features. "Solar panels provide electricity for use in all common spaces, thereby reducing the apartment owners' financial contribution towards their maintenance. Rainwater harvesting is another feature, which provides water for maintenance of common spaces, including the gardens and all greenery within the apartment complex."

Nawaloka Holdings Director and CEO Harshith Dharmadasa and Millennium Housing Developers Chairman Sisira Weerabahu at the ground breaking.

In addition to 24-hour security within the apartment complex and standby generators,each apartment comes with video doors. The images from the video doors can be accessed by smartphone.

Well-known brands such as Grohe, Toshiba, Mitsubishi, American Standard and Elba are represented in the apartments' fixtures and fittings, which lend them a touch of elegance, in addition to reliability and durability. Wi-fi and satellite TV facilities are available for all residents.

A jogging track, on the rooftop, provides ample space for jogging and brisk walking, while a fully equipped gymnasium with treadmills, machines and free-weights cater to the needs of manytypes of fitness enthusiasts. A separate area has been allocated for aerobics and yoga, which helps in maintaining all-round fitness.

The apartments are ergonomically designed in a manner that maximises the efficient the use of space, resulting in larger bedrooms and living spaces, as well as more natural lighting and ventilation. It also optimises the feeling of 'homeliness', while living in an apartment. The barbeque area is ideal for residents to get together and socialise on those special occasions or whenever they are in a mood to have a good time. A well-stocked library also adds to joy of being among those with similar cerebral pursuits.

M C Urban Developers Ltd, a subsidiary of Millennium Housing Developers PLC, has undertaken The Heights as a BOI project, which is governed by BOI laws.

It is also a Public Quoted Company, thereby assuring apartment owners of ample legal protection. This project is backed by the Nawaloka Holdings. (SS)

www.dailynews.lk

Court action bars Seylan Bank from dissolving share owning schemes

Zahida Rizvi

Seylan Bank, has failed to dissolve the share owning schemes before March 1, 2015.A Colombo Stock Exchange statement listed the reasons as to why the Bank did not meet with the said requirements.

Six share owning trust companies were established in 1995, 1999 and 2000 which have acquired shares of the Bank from time to time at the market prices prevailed at that time. The Bank was the Settlor of the trusts and the purchase of the shares were fully funded by the Bank. These six trust companies currently hold a total of 12,752,994 shares of the Bank's Ordinary (Voting) Shares. These shares are the subject matter of Court actions where the contention of the Bank and the Trust Companies is that the shares which are held in the Trust Companies are not being held for the benefit of employees and consequently the shares need to be sold and the proceeds credited to the Bank.

The Companies will not be able to dispose of or transfer these shares until the final determination of the Court actions as there are interim injunctions which have been issued by the District Court preventing each of the above trust companies from transferring the shares held.

Therefore, the Bank is not in a position to comply the Listing Rules of the CSE until final determination of the said court actions.
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