Sri Lanka sells US$375mn in short term dollar paper, bonds

ECONOMYNEXT - Sri Lanka has sold 375 million dollars in 3 and 6 month paper and 1 and 2 year dollar denominated bonds at an auction Wednesday, where yields edged up, data from the state debt office showed.

The debt office sold 10.3 million dollars 3 month bills at 472.12 basis points fixed, down from 475 basis points on March 09.

The debt office also sold 38.88 million dollars in six month paper, at a floating rate of 407.14 basis points above 6-month London Interbank Offered rate. On March 09, five month paper was sold at 381.22 basis points above Libor.

In one year bonds, 203.46 million dollars were old at 439.2 basis points above 60month Libor, up from up from 430.89 basis points above Libor on March 09.

In 2-year bonds 71 million dollars' worth were sold at 448.73 basis points, higher than 444.58 basis points above Libor paid for 2 years and 1 month paper on March 09.

About 0.04 million dollars of 1 year bonds were also sold at a fixed rate of 525 basis points.

The Sri Lanka Development Bonds are sold to resident and non-resident investors who can hold dollar assets, under Sri Lanka law.

Watawala Plantations, Duxton Asset Management invest in Sri Lankan dairy farm

ECONOMYNEXT – Singapore-based fund manager Duxton Asset Management has tied up with Watawala Plantations to set up a Sri Lankan dairy farm with an investment of 11.5 million US dollars, aiming to improve local yields and replace imported milk products.

Vish Govindasamy, Group Managing Director of Sunshine Holdings, the parent firm of Watawala, said he expects a return on investment of about 17 percent, with the farm using imported cows and expertise on an estate where tea cultivation is no longer profitable.

The two companies will invest total equity of over six million US dollars in almost equal proportions and raise the remaining funds as debt.

The farm, on Lonach Estate, Ginigathhena, will import about 1,000 milking cows and produce about 30,000 litres of milk when running by the end of year, up from 1,500 litres of milk a day now.

“We have to build the farm and import the cows and get them acclimatized to the climate,” he told a news conference.

“Lonach Estate has a lot of workers and because tea is not doing well now, we unable to give them work,” he said. “With the farm coming, we can grow different types of feed stock which means more people will be employed.”

Desmond Sheehy, co-founder and Chief Investment Officer of Duxton Asset Management, said the fund mainly invests in the agricultural field, being the largest investor in dairy in Australia and having also invested in tea in India.

A subsidiary, Watawala Dairy Ltd., will run the dairy farm and will use imported, very efficient cows, and farming expertise to improve local farm practices, he said.

Duxton manages assets of 690 million dollars of which 460 million dollars in agricultural investments

“The dairy operation is expected to further diversity and strengthen the revenue streams of Watawala Plantations, which has benefitted from strategic diversification into palm oil,” a statement said.

“Once in full operation Watawala Dairy will expand its herd to 1,000 dairy cows and is forecast to generate over a billion rupees in revenue from the fourth year of operation” with significant potential for further expansion, it said.

Sri Lanka shares firm up on foreign buying, hit more than 3-wk closing high

Reuters: Sri Lankan shares rose in thin trade to hit a more than three-week closing high on Thursday as foreign investors net bought stocks for the first time in nine sessions, but growth woes and rising bond yields capped gains ahead of a long weekend.

Foreign investors bought a net 33.1 million rupees worth of shares on Thursday, but they have net sold 2.06 billion rupees worth shares so far this year.

Sri Lanka's economy is expected to expand 5.3 percent in 2016, government data showed last week, but analysts say tight monetary and fiscal policies may curb growth.

Rising yields on treasury bills, which have been on the up following an unexpected interest rate hike by the central bank in mid-February, have spurred investor appetite for fixed interest-rate bearing assets, dealers said.

Yields on t-bills, which are hovering at more than two-year highs, jumped by 62-90 basis points at a weekly auction on Monday.

The benchmark share index, ended 0.31 percent, or 18.95 points firmer, at 6,092.45, the highest since March 1.

"We expect this volatility to continue and market to trade between 5,800 and 6,000. Many investors are on the sidelines waiting to see the direction of the economy," said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

Shares in conglomerate John Keells Holdings Plc rose 1.33 percent, while Ceylon Tobacco Company Plc rose 0.52 percent.

Turnover stood at 488.2 million rupees ($3.34 million) on Thursday, less than this year's daily average of 796.9 million rupees.

The Sri Lankan stock market will be closed on Friday for a public holiday.

($1 = 146.3000 Sri Lankan rupees) 

(Reporting by Shihar Aneez and Ranga Sirilal; Editing by Biju Dwarakanath)

Havelock City launches sales of phase 3 apartments

Havelock City, the premier residential development in Sri Lanka ceremoniously launched the sales of its phase 3 apartment towers. A grand scale cocktail was held at its own clubhouse with over 300 guest attendance.

Phase 3 comprise two residential towers Stratford and Melford with 304 luxurious apartments. These beautifully designed, spacious residencies with garden and sea views are a combination of two, three and four bedroom units and a select number of plush penthouses.

All apartments are released to the market at a special launch price on a limited time offer, continuing with attractive progress payment schemes and loan facilities from reputed banks for potential buyers and investors.

Havelock City, the largest integrated mixed-use development project undertaken in Sri Lanka is built on 18 acres of prime land in the heart of Colombo and comprises residential apartments as well as a commercial complex consisting of a shopping mall and office towers.

Havelock City is a celebration of modern urban living, with 18 astonishing acres of soaring architecture, state-of-the-art facilities and landscaped gardens, making Havelock City a truly private city within the city. Havelock City is being developed in phases. Phase 1 and 2 consisting of 445 apartments in four towers were completed and residents have already taken occupation and are enjoying the lifestyle Havelock City has to offer. The Havelock City Clubhouse, which could possibly be the largest of its kind in any development, is a marvel, with swimming pools, jacuzzi, banquet halls, gymnasium, restaurant, squash courts, audio visual centres, mini supermarket, launderette and many other facilities and amenities. Havelock City also boasts of Sri Lanka’s largest elevated roof garden; an expansive seven acre eco habitat with lush tropical foliage. Residents of Havelock City enjoy a privilege that is unmatched anywhere in Colombo with this uniquely landscaped garden replete with jogging tracks, bamboo pools and exercise corners.

Havelock City is the brainchild of Overseas Realty, a BOI approved flagship status quoted company, who is also the owner, developer and manager of the iconic World Trade Centre, Colombo. The Chairman of Overseas Realty and Havelock City is visionary property tycoon S.P. Tao of Singapore. Havelock City is a joint venture between Overseas Realty and Bank of Ceylon.www.ft.lk

SriLankan Airlines unable to repay $1 b debt: PM tells P’ment

AFP: Sri Lanka’s loss-making national carrier will not be able to repay its debt of nearly $1 billion, Prime Minister Ranil Wickremesinghe told parliament Wednesday.

With its own finances in a rocky state, the government will decide within six weeks whether it can afford to take over SriLankan Airlines’ debt repayments, the premier said.

State enterprise development minister Kabir Hashim, who oversees the carrier, earlier this month put its debt at $933 million but on Wednesday it emerged the figure could be higher.

“The minister says the actual debt is likely to be much more than what we initially feared,” Wickremesinghe said during a parliamentary debate on the economy. 

“SriLankan Airlines will not be able to repay this debt. We will have to take a decision on this.”

A mounting debt crisis of its own has forced the government to request a bailout of its own from the International Monetary Fund.

The beleaguered national carrier has drawn controversy in recent years after an independent investigator last year found evidence of serious corruption in a $2.3 billion deal to buy Airbus aircraft.

Wickremesinghe said Wednesday he was still reviewing the deal, reached under the administration of former President Mahinda Rajapakse despite huge losses at the airline.

The deal is also being probed by the police Financial Crime Investigation Division.

Last month ratings agency Fitch cut Sri Lanka’s credit rating by one notch to B+ with a negative outlook over its debt crisis.

Negotiations are also underway for a $1 billion currency swap with a Chinese state-owned bank to shore up the country’s dwindling foreign reserves.
www.ft.lk

Govt. borrows $ 375 m via Development Bonds

The issue of Sri Lanka Development Bonds (SLDBs) for US$ 150 million has been oversubscribed with total bids received amounting to US$ 380.73 million, the Central Bank said on Wednesday.

Govt. borrows $ 375 m...
The Central Bank on behalf of the government offered to issue of US$ 150 million 3 months, 6 months, 1 year and 2 years tenor to eligible investors for subscription at a rate of either US Dollar 6 month LIBOR plus a margin (floating rate) or at a fixed rate to be determined through competitive bidding.

The issue was open for subscription from 16 to 23 March.

The Central Bank has accepted $ 10.33 million in 3 months bonds after receiving bids worth $ 10.33 million at a fixed rate of weighted average margin over six month LIBOR of 472.12 basis points and $ 38.88 million at a floating rate of weighted average margin over six month LIBOR of 407.14 basis points.

The 6 months bonds received bids amounting to $ 54.0 million and accepted $ 52.0 million at a floating rate of 414.23 basis points.

The Bank accepted all bids of $ 203.46 million received in 1 year bonds at a floating rate of 439.20 basis points and $ 40,000 at a fixed rate of LIBOR plus 525.00 basis points.

The 2 year bonds received bids amounting to $ 72.02 million and accepted $ 71.0 million at a floating rate of 448.73 basis points.

The bonds have a settlement date of 28 March 2016.
www.ft.lk

Govt. borrowed 25% more last year than in 2014: Ravi K

Reuters : Sri Lanka borrowed over 25%more last year than in 2014, Finance Minister Ravi Karunanayake said on Wednesday, blaming the high cost of refinancing loans he said were raised by the previous government without parliamentary approval.

Karunanayake told parliament that total government borrowing rose 25.6% in 2015 to Rs. 1.74 trillion.

That included a 23% rise in domestic borrowing, to Rs. 1.19 trillion ($8.15 billion), and a 32% jump in foreign borrowing, to Rs. 556.4 billion.

“We had to obtain more loans to repay the loans taken by the previous government without informing the parliament and the cabinet,” Karunanayake said. “Of those loans, 89.9% was to repay the expenses of the last government and rest is for the capital expenditure.”

Prime Minister Ranil Wickremesinghe said on 8 March that former president Mahinda Rajapaksa’s government had not included Rs. 1.04 trillion rupees in borrowing by state enterprises in the national debt, which was estimated at Rs. 8.48 trillion at the end of 2015.

Wickremesinghe said the government owed Rs. 9.5 trillion ($65.6 billion). He also announced plans to raise value-added tax and reintroduce capital gains tax to help tackle Sri Lanka’s high debts ahead of talks on a $1.5-billion loan it is seeking from the International Monetary Fund.

A downgrade of Sri Lanka’s credit rating by Fitch to B+ with a negative outlook and an outlook change to negative by Standard & Poor’s this month have intensified scrutiny of the island nation’s public finances.

The $82.2 billion economy faces a balance-of-payments crisis after the Central Bank burned through one-third of its foreign exchange reserves in the 15 months to January defending the rupee currency.

Last year’s budget deficit is meanwhile expected to have increased to 7.2% of gross domestic product, compared with a target of 4.4 %.

On Wednesday, Wickremesinghe said the government is still undecided on how to repay an estimated Rs. 365 billion debt run up by state-run SriLankan Airlines.
Govt. borrows $ 375 m via Development Bonds

The issue of Sri Lanka Development Bonds (SLDBs) for US$ 150 million has been oversubscribed with total bids received amounting to US$ 380.73 million, the Central Bank said on Wednesday.

www.ft.lk

Singer increases free float through share sale to institutional investors

Singer (Sri Lanka) PLC, the country’s leading consumer durable retailer, yesterday announced an increase in its free float following a sale of shares to international and local institutional funds.

In line with parent company, Singer (Sri Lanka) BV divesting a 6.43% stake to institutional investors, Singer Sri Lanka has increased the liquidity of traded shares, broadened its shareholder base and thereby increased its capital market presence.

Singer Sri Lanka saw 8.11 million of its shares changing hands via trades for Rs. 927.5 million or 73% of the day’s turnover. Of the quantity, 7.79 million shares were done via four crossings at Rs. 114.30 each. The share price of Singer Sri Lanka decreased by Rs 5.30 (4.41%) closing at Rs 115.00 whilst foreign holdings decreased by 2.115 million shares.

Around three foreign funds had picked up a collective 5.68% stake whilst the solitary local institutional investor had bought 1.6% stake.

Singer Sri Lanka Group CEO Asoka Peiris told the Daily FT that fresh foreign interests were following successful showcasing of the Company, market and country prospects during one to one investor meetings in London Invest Sri Lanka Forum organised by the CSE, Hong Kong, Thailand and Sri Lanka Summit in Singapore recently.

Following the transaction Singer Sri Lanka BV will continue to hold 99,762,850 shares representing an 79.7% interest in the capital of Singer (Sri Lanka) PLC. The parent company has also assured the Sri Lanka Board of its continued support and commitment towards the ongoing success of the Company.

Singer said through this transaction Singer Sri Lanka has successfully expanded its shareholder base and paved the way to boost its share capital ensuring the continuation of its dynamic growth. 

www.ft.lk