Sri Lanka shares jump to 5-wk closing high on retail buying

Reuters: Sri Lankan shares rose 1.3 percent on Tuesday to a five-week closing high, as local retail investors bought beaten-down banking and diversified stocks while continued offloading by foreign investors amid worries over macroeconomic stability weighed on sentiment.

Foreign investors sold a net 226.2 million rupees ($1.57 million) worth of equities, their fourth straight session of selling, and extending the year-to-date outflows to 2.85 billion rupees.

The benchmark share index ended 1.31 percent, or 79.87 points, higher at 6,159.02, its highest close since Feb. 29.

At 907.4 million rupees, turnover surpassed this year's daily average of 793.8 million rupees due to some block deals.

"It's a retail push," said Prashan Fernando, COO, Acuity Securities.

The market will see subdued trade in the coming days due to the Sinhala-Tamil new year on April 13 and 14, traders said.

Shares of the country's biggest listed lender, Commercial Bank of Ceylon Plc, rose 2.88 percent while Lanka ORIX Leasing Company Plc jumped 5.46 percent.

Analysts said investors are cautious about macroeconomic uncertainty after a rating downgrade and unclear capital gain tax.

Sri Lanka on Friday postponed a plan to reintroduce capital gains tax by six months after the move threatened to dent foreign investor sentiment.

Stockbrokers said the concern now is how the government is going to impose the tax, rather than the tax itself.

Higher market interest rates and higher borrowing by the island nation facing a balance-of-payments crisis have also weighed on investor appetite for risky assets, dealers said.

The average weighted prime lending rate has risen 84 basis points to 9.19 percent since Feb. 19, when interest rates were increased by 50 basis points, central bank data showed. 

($1 = 144.5000 Sri Lankan rupees) 

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

Laugfs invests Rs. 1.4 b to boost Bangladesh LPG biz

Makes South Asian venture 100% owned; new investment via subsidiary in Dubai

Laugfs has invested Rs. 1.4 billion to boost its prospects in the Bangladesh LPG business.

This is following Laugfs Gas Plc acquiring a 31% shareholding in Laugfs Gas (Bangladesh) Ltd., from Malaysia’s Elpiki M SDN Bhd.

“As a strategic investment Laugfs Gas Plc has decided to acquire 31% shares through its wholly owned subsidiary Slogal Energy DMCC Incorporated in Dubai, UAE,” the Company said. Laugfs Gas owns 69% of the Bangladesh entity.

As per the share purchase agreement entered between Slogal Energy DMCC and Elpiji M Sdn Mhd, and other regulatory formalities which has to be adhered to, the total cost involved with the transaction inclusive of regulatory and bank charges amounts to approximately $ 9.45 million.

Laugfs Gas Plc as the holding company of Slogal Energy DMCC has decided to invest the total amount with Slogal Energy in its equity which would in return bring a strategic advantage to Laugfs Gas Plc.

Analysts said that Laugfs is the second largest LPG player in Bangladesh and given the low penetration at present, the venture holds great promise. The latter is due to the fact that Bangladesh has a near 200 million population, rising per capita income and a rapidly expanding economy.

For the nine months ended 31 December 2015, Laugfs Gas Plc’s revenue rose by 7% to Rs. 9.4 billion. Operating profit improved by 17% to Rs. 1.7 billion. After tax profit amounted to Rs. 1.2 billion, up by 13% from the first nine months of the previous year. Bottom line improved by 10% to Rs. 1.18 billion. As per provisional results, revenue from overseas energy operations amounted to Rs. 1.03 billion and operating profit was Rs. 136 million.
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Dankotuwa Porcelain to amalgamate with Taprobane Capital

The Dankotuwa Porcelain Plc (DPL) Board of Directors has resolved to amalgamate with its wholly owned subsidiary Taprobane Capital Ltd with the former being the surviving entity.

In a filing to the Colombo Stock Exchange, DPL said management of both companies is of the opinion that it would be administratively and financially beneficial to amalgamate and to operate as one company.

The DPL Board is satisfied that the amalgamated company DPL will satisfy solvency test immediately upon the proposed move becoming effective.

The amalgamation will be effective on 31 May 2016 or on such other date as may be determined by the Registrar General of Companies.

The Board of Directors of the Amalgamated company will comprise of Rajan Asirwatham, A.G. Weerasinghe, Mangala Boyagoda, Sanjeev Gardiner, Priyantha Maddumage, Sarinda Unamboowe, Revantha Devasurendra and Murali Prakash.

Ceylon Century Investments Plc holds 58.36% stake in DPL and related party Ceylon Leather Products Plc holds 8.3%.
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Dankotuwa Porcelain enters Mediterranean in deal with Egyptian-based Al-Dahbya

Dankotuwa Porcelain has signed up a sales agreement with Egyptian based Al-Dahbya to export exclusive designs of its products in a bid to take Sri Lankan porcelain brand name to new heights.

This partnership will provide Dankotuwa Porcelain to further expand its presence in the Mediterranean regions.

Despite its tableware is found in prestigious outlets globally such as Macy’s Department Stores, British Home Stores, John Lewis, Jashanmal, El Corte Ingles, Berghoff and Geleria Kaufhof; the thirst for innovation continue to drive the brand’s uniqueness.

The official signing ceremony took place at the Dankotuwa Porcelain Colombo Marketing office between Dankotuwa Porcelain CEO Wasaba Jayasekara, Chief Marketing Officer Shevanthi de Alwis, Shah NoozOzeer, Manager corporate CommiunicationJehankiAnandha, Al-Dahbya CEO Ahmed El Normorsy, CFO AlaaSourour, Senior Designer Sarah Sourour, Marketing Manager YosraSourour.

Celebrating 33 years of success this year, this partnership is a stepping stone of reaching the company’s vision, of taking the Sri Lanka industry capabilities to greater heights.

The firm exports its signature excellence to over 25 countries in five continents. The brand prides itself on the tradition, upholding its art as one of the most beautiful forms of expression. 

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Sri Lanka shares end 3-day winning streak as economic woes resurface

Reuters: Sri Lankan shares closed lower for the first time in four sessions on Monday amid a steep rise in foreign outflow as worries over macroeconomic stability dented investor sentiment, stockbrokers said.

Foreign investors sold a net 406.6 million rupees ($2.80 million) worth of shares, the highest since March 17 and extending net foreign outflows for the year to 2.63 billion rupees.

The benchmark share index ended 0.06 percent lower, or down 3.86 points, at 6,079.15. The index had gained 0.85 percent in the past three trading days.

Turnover was at 643.2 million rupees on some block deals, but still shy of this year's daily average of 791.9 million rupees.

"There is a lot of uncertain area, especially in the macroeconomic side. Investors are concerned over a rating downgrade and the still uncleared capital gain tax," a stockbroker said, asking not to be named.

"The currency has been falling sharply in the last few weeks and the macroeconomic side is pretty pathetic at the moment."

Sri Lanka on Friday postponed a plan to reintroduce capital gains tax by six months after the move threatened to dent foreign investor sentiment.

Stockbrokers said the concern is now more on how the government is going to impose the tax, rather than the tax itself.

Higher market interest rates and higher borrowing by the island nation facing a balance-of-payments crisis have also weighed on investor appetite for risky assets, dealers said.

The average weighted prime lending rate has risen 84 basis points to 9.19 percent since Feb. 19, when interest rates were increased by 50 basis points, central bank data showed.

A downgrade of Sri Lanka's credit rating by Fitch and an outlook change by Standard & Poor's in March have intensified scrutiny of the country's finances. Sri Lanka borrowed over 25 percent more last year than in 2014, the finance minister said last month.

Shares in Carson Cumberbatch CARS.CM. fell 5.3 percent, while conglomerate John Keells Holdings Plc edged down 0.74 percent. 

($1 = 145.0000 Sri Lankan rupees) 

(Reporting by Shihar Aneez; Editing by Savio D'Souza)