Sri Lanka sells Rs20.7bn in bonds; 2041 bonds at 12.15-pct

ECONOMYNEXT - Sri Lanka has sold 20.6 billion rupees in bond with a 25 year bond maturing in January 01, 2041 sold at a weighted average yield of 12.15 percent, up from 12.09 on January 01.

The debt office sold 10.45 billion rupees of 14 year bonds maturing on 15.05.2030, at an average yield of 11.66 percent after offering only 3.0 billion rupees.

The debt office sold 10.25 billion rupees of the 2041 bond after offering 5.0 billion rupees.

Bids for 4-year bonds were rejected.

On January 08, the debt office sold 19.6 billion rupees of 2041 bonds at a weighted average yield of 12.09 percent.

After the auction the yield fell sharply (the price of the bond rose) and a state managed fund was seen buying them as yields fell to around 10.80 percent giving large profits to primary dealers who bought at the auction and shortly after.

The bond prices started to fall (yield started to rise) from around January 27 when another long bond auction announced.

The 2041 bond closed on 11.75/12.10 on Wednesday. After the auction on Friday the bond was quoted 11.60/75 percent dealers said.

High volatility had been observed in several longer tenor bonds in recent auctions.

There has been concern that the high volatility of bond yeilds, which gives opportunities dump bonds at low yields (high prices) on state managed funds.

While some volatilty is inevitable when auctions are conducted Sri Lanka also accepts higher than offered volumes at bond auctions, which allows auctions to be rigged, by giving misleading information to the broader market, critics have said.

Sri Lankan shares steady in dull trade

Reuters: Sri Lankan shares ended steady on Friday in thin trading volume as investors awaited cues on the macro economy amid a rise in interest rates and as global economic concerns dented sentiment.

The main stock index ended 0.03 percent firmer at 6,404.64.

Stockbrokers said local participation was low as some investors were on holiday in the short trading week. Markets were closed on Thursday for independence day.

"Interest rates are slowly picking up and the market is concerned over that," a stockbroker said on condition of anonymity.

Turnover was 307.9 million rupees ($2.14 million), less than half of this year's daily average of 828.5 million rupees.

The index had fallen 7.1 percent this year through Friday as foreign investors, unnerved by global concerns over China's economy, cut their exposure.

Foreign investors sold a net 60.6 million rupees worth of shares on Friday, extending the year-to-date net foreign outflow to 259.3 million rupees.

Analysts said a rising trend in local interest rates has been a concern and local stocks could come under further pressure.

Yields on treasury bills rose between 7 and 23 basis points at a weekly auction on Tuesday with yields on 182-day and 364-day T-bills rising to more-than-two-year highs, signalling a further rise in market interest rates, which move in tandem with the yields.

Shares of market heavyweight John Keells Holdings Plc rose 0.31 percent, while Sri Lanka Telecom lost 3.6 percent.

($1 = 143.9500 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Anupama Dwivedi)

Rs 800 M Chick Mill upgrade

Bairaha, together with Crysbro, is engaged in a Rs 800 million venture, to meet the working capital requirements of its feed mill located at Gampola.

The two chicken producers operate a feed mill in Gampola under the umbrella Fortune Agro Industries (Pvt.) Ltd. Bairaha in this connection has raised Rs 400 million from Amana Bank and Fortune the balance, from MCB Bank.

Fortune is a Rs 1.65 billion investment between the two poultry giants. It was set-up two years ago. The other poultry giant in the country is Prima, a Singapore based conglomerate. From being a back-yard type of an industry, poultry industry of Sri Lanka has developed into a commercial industry over the past three decades.

In early 1950s the government of Sri Lanka launched a programme to upgrade local indigenous poultry population in the country. Since then, this sector has shown a phenomenal growth, most prominently in the broiler sector, mainly due to active participation of the private sector. The industry today is in the hands of the private sector; the role of the State being confined mostly for implementation of poultry health management programmes, research and policy development for further consolidation of the industry.

About 70% of the contribution to livestock sub-sector in Sri Lanka comes from chicken meat and eggs.

With the current purchasing levels of consumers, the industry is capable of producing all local requirements of chicken meat and eggs. Chicken meat and eggs becoming relatively cheap compared to other animal products have thus made these products the most consumed animal protein sources in the average Sri Lankan diets.

Chicken meat and eggs are available throughout the country, in supermarket chains in the main cities up to small retail shops in rural areas. Current per capita availability of chicken meat and eggs estimated to be 4.8 kg and 57 eggs respectively.

The broiler industry is mostly integrated and employment opportunities are provided through contract grower system. Branded chicken is marketed through 15 large and medium scale broiler processors.

Manufacture of value added products have become a lucrative industry with export potential. Already four (04) broiler processors and five (05) further processing companies have obtained certification under internationally accepted HACCP system.

Two (02) local grand-parent farms produce around 70% of country's requirements of parent birds. Quality poultry feed are produced by local feed manufactures and two multinational companies are also engaged in the feed business in the country. However, around 85% of feed raw material requirements are currently being imported. With the ever-increasing world market prices of raw materials, and possible shortage in the global market due to conversion of maize into 'bio – fuel', the Livestock Ministry together with the Ministry of Agriculture and the Central Bank of Sri Lanka has taken steps to develop and expand maize cultivation in Sri Lanka. The government imposed a 20 percent cess in April 2005 on the imported maize to influence a better producer price for maize growers. There is a greater interest now by the private sector in maize growing using contract farmers and this will soon have a positive effect on the poultry sector. (PGA)

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City hoteliers want minimum rate maintained

Colombo City Hoteliers Association President M. Shanthikumar said that the minimum rate for city hotels should be further maintained.

"It has sent positive signals to potential investors such as international hotel chains looking at opportunities to open hotels in Colombo. When they know there is a minimum guaranteed price they like to invest. Its like having a minimum buy back price for a product."

He said it's this rate that is seeing the investments of top international players like Shangri La and Hyatt, MovenPick coming to Sri Lanka and the city."

City hoteliers are backing minimum room rate policy insisting that it has been highly beneficial and abandoning it will spell doom for the leisure industry. The average occupancy in Colombo across all categories of hotels for 2015 is overall 70% and this brought us good returns too. The present pricing in the Colombo City hotels is considered very reasonable by all hoteliers."

He said in contrast the Jones Lang LaSalle (JLL) report released recently gave other ideas."We don't agree with this report which says to re look at the minimum room rate."
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CDS moves into paperless digital settlements with LankaPay

The Central Depository System (CDS), a fully owned subsidiary of the Colombo Stock Exchange (CSE) partnered with LankaPay, to provide a fully-fledged digital experience to its settlement banks via the CDS - Digitalized Settlement Schedule Signing (DS3) online portal.

This solution was enabled via LankaPay's service arm, LankaSign, which is a trusted digital Certification Authority (CA) in Sri Lanka.

LankaPay is now capable of providing comprehensive CA services including digital signatures to the entire financial sector in Sri Lanka.

The CDS - DS3 solution enables CDS to eliminate physical placement of signatures previously required on the bank settlement schedules that were subsequently hand delivered in physical format to respective banks on a daily basis. This processes caused significant information risk and delays in the entire settlement process, which created a requirement for a more secure and faster solution.

With the new solution provided by LankaPay, CDS signatories can simply sign the settlement schedules using "LankaSign" digital certificates and upload the same instantly onto CDS - DS3 portal to be accessed by the respective settlement bank.

TheLankaSign digital certificates are embedded in USB Crypto Tokens that enable two factor authentication facilitating secure data transmission. This process ensures that both CDS and Settlement Banks use the established secure connectivity prior to any data transmission and that data is not altered during transmission.

The CEO of CSE Mr. Rajeeva Bandaranaike commenting on the initiative said"This product has made a significant change to one of the key CDS processes, which is the settlement coordination with the four settlement banks. It has automated the settlement process, making it very much efficient by eliminating paper-based work. Further, it has also given the opportunity for the CDS to explore possibilities of streamlining the other processes within the same platform".

LankaClear GM and CEO Channa de Silva said LankaPay has revolutionized the ICT industry in Sri Lanka by establishing LankaSign, the first CA in Sri Lanka, primarily targeting the financial sector. In a day and age where information security is of paramount importance, we endevour to partner with more institutions across many sectors to use cost effective digital certificate based solutions for greater autonomy and information security.

This will enable customer focused local service support while bringing down the overheads associated with managing physical documents, paving the way for a paperless environment."

LankaPay National Payment Network is operated under the guidance of the Central Bank of Sri Lanka. LankaSign is the only commercially operating digital Certification Service Provider in the country thatprovides integrated digital security solutions with the use of Digital Certificates, SSL Certificates and End User Certificates (E-mail/Document signing Certificates). Established in accordance with the Electronic Transaction Act No.19 of 2006, LankaSign is also authorized by the Central Bank of Sri Lanka as the Financial Sector Certification Service Provider (CSP).
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Standard Credit Finance depositors seek new investor

The Standard Credit Finance Co Ltd (TSCFCL) depositors are making fresh representations seeking a new investor to take over the company.

TSCFCL, formerly known as Ceylinco investment and reality limited five years ago was given over to Entrust to be managed by the Central Bank (CBSL). “This company too has now crashed and now we are helpless,” the Deposit Protection Society of TSCFCL told Daily News Business.

“We wish to categorically state all of us are fed up of waiting for that tomorrow when our shares will be listed, because for the last 4 years and 11 months our tomorrow never came.”

“The representatives of the TSCFCL said they earlier wanted their shares listed. “However now we don’t want this as it will take a further time. What we now want is an investor to come in and buy back our shares.

We are ready to disperse a share at par value.” The share value will be Rs. 1.95 billion.

For the would be investor, he would be at an advantageous positions since the TSCFCL has number of fixed assets in Colombo, Ja Ela, Naiwala, one and a half floors on Ceylinco House and the Fort and Ruskin Island holiday resort in Bolgoda Lake. “In addition they also get our 1.95 billion shares and a deposit base of Rs 2.7 billion.”

“We have only one thing to ask of this Government and the CBSL.Please forget the shares issued to us and through a new investor with the co-operation of the new Board of Directors appointed by the CBSL, earlier this month, buy back our shares which have been dormant, without yielding any return since 2011, and give us back our hard earned monies and help us,” they appealed.

“We feel very sorry for those of our co-depositors who have gone to their rest without getting back a cent of their deposits, while the rest of us ,mostly senior citizens, are struggling to make ends meet, and purchase our much needed medicine which will help us to live a little longer.”

The members recalled that it was when the SEC sought more time to study the proposal on 10-12-2015, that they sought and obtained an interview with SEC Chairman Tilak Karunaratne and his senior officers.

“Here he told us that it was very unlikely that our shares will get listed due to the poor business performance of TSCFCL and the massive fraud uncovered at Entrust Securities, for which we are very grateful to him, because he actually told us the truth and not fairy tales like the others had done before him.”
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