Sri Lankan shares end at 22-month low; rising rates weigh

Reuters: Sri Lankan shares fell to 22-month lows on Monday on low volume as rising market interest rates dampened market sentiment and forced some investors to shun risky assets.

Sri Lanka's benchmark share index closed 0.2 percent, or 12.17 points weaker at 6,191.81, the lowest close since April 29, 2014.

The index remained in the oversold territory for the fifth straight session, with the 14-day relative strength index at 27.170, Thomson Reuters data showed.

A level between 70 and 30 indicates the market is neutral.

"The market continued its slow downtrend and selling pressure is continuing," said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd. "Investors are awaiting to see the local interest rates and a statement from IMF."

On Wednesday, 182-day and 364-day t-bill yields rose 50 to 55 basis points at a weekly auction to over two-year high, after the central bank raised key policy rates by 50 basis points from record lows.

Sri Lanka is in initial talks with the IMF about a loan amid concerns over pressures on its balance of payments, outflows from government bonds and a ballooning fiscal deficit.

Turnover was 443.9 million rupees ($3.08 million) on Monday, well below this year's daily average of 709.3 million rupees.

Foreign investors were net buyers for the second straight session. They bought 158.7 million rupees worth of shares on Monday.

Shares in Nestle Lanka Plc fell 1.88 percent, while Lion Brewery Plc slipped 5.77 percent. 

($1 = 143.9000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Anand Basu)

Sri Lanka January tea export earnings slump to six-year low

ECONOMYNEXT – Sri Lanka’s tea exports in January 2016 fell to their lowest level in US dollar terms in six years because of the commodity price slump, brokers said.

Ceylon tea exports fell one percent to 24.1 million kilos in January 2016 from a year ago with earnings down four percent to 14.3 billion rupees, according to data analysed by Asia Siyaka Commodities.

“The US dollar value of exports has dropped sharply by 12 percent year-on-year 2015,” they said.

“Earnings at 99.4 million dollars is the lowest since 2010 when a much lower quantity of 21 million kilos was exported and value of 90 million dollars was achieved.”

Sri Lanka’s tea exports earnings in January 2015 were 113 million dollars.

Asia Siyaka Commodities said the approximate FOB (free on board) value per kilo in January 2016 fell to 4.12 dollars from 4.64 dollars last year and 5.37 dollars in 2014.

Sri Lanka's Janashakthi Insurance Dec net up 37-pct

ECONOMYNEXT - Profits at Sri Lank's Janashakthi Insurance Plc in the December 2015 quarter rose 37 percent from a year earlier to 662 million rupees with assets also growing with the acquisition of another general insurance.

The group reported earnings of 1.68 rupees for the quarter. In the year to December the group reported earnings of 2.45 rupees on total profits of 965 million rupees, down from 1,061 million.

Gross written premium rose 27 percent to 3.1 billion rupees, with net premium up 34 percent to 2.7 billion rupees. Claims rose 35 percent to 1.5 billion rupees.

Investment income rose 38 percent to 467 million rupees.

Group gross asset grew from 20 billion rupees to 31 billion rupees during the year. Net assets grew from 5.2 billion rupees to 8.3 billion rupees.

The firm raised 3.6 billion rupees from a rights issue to acquire the general insurance unit of AIA Insurance in Sri Lanka.

"With the amalgamation now complete, we are working on unveiling a host innovative insurance solutions," Prakash Schaffter, Managing Director, Janashakthi Insurance said in a statement.

The firm had also sold lease rights to land in Staples Street in Colombo to Sanken Construction for 1.93 billion rupees. A 50 percent advance of 965 million had been received in December 23, and the firm expects to book profits in the first quarter of 2016 after regulatory approvals.

Sri Lanka feed mill profits soar amid strong demand for chicken

ECONOMYNEXT - Strong demand for chicken and eggs and farmers shifting from self-mixed to feed helped boost profits 300 percent to 387 million rupees in the December 2015 quarter from a year earlier, Ceylon Grain Elevators, a poultry and feed milling group said.

The group, a unit of Singapore based Prima, said earnings were 6.47 rupees for the quarter. In the year to December earnings were 15.72 rupees per share on total profits of 1,178 million rupees, up from 71 million rupees.

In December revenues rose 21 percent to 3.8 billion rupees and costs rose at a slower 11 percent to 3.2 billion rupees, allowing gross profits to go up 142 percent to 598 million rupees.

"During the quarter under review, the Group was able to post the outstanding results consequent to the increased demand for chicken meat and eggs," the firm told shareholders in a statement.

"Shortage of local raw materials compelled the farmers to move from self-mixing to compound feed also led to an increase in the demand for feed. The Group continued to maintain its market share in all segments during the year 2015."

Sri Lanka taxes imported raw material like maize to keep prices high, making chicken, usually a cheap source of protein, expensive to the poor and children of the poor, in Sri Lanka due to nationalist ideology of self-sufficiency, critics have said.

As a result raw material may run out for chicken farmers causing 'shortages', unlike in countries with free trade.

Chicken meat is also price-controlled by the rulers in Sri Lanka after keeping maize prices up.

As a result there is wide fluctuations and demand in poultry products from year to year.

Sri Lanka saw a strong demand for chicken meat and eggs in 2015, after excess production and low demand in 2014, Three Acre Farms, a CGE unit said.

During the year under review, the Group performance improved significantly with higher demand and stable market prices for Broiler, Layer and Parent Stock Day Old Chicks.

"The glut in Broiler Chicken and Broiler Day Old Chicks in year 2014 caused farmers to curtail their production which limited supply into year 2015," TAFL told shareholders.

"The Group was able to leverage on this with better pricing supported by the increased purchasing power of the consumers."