Sri Lanka shares at 15-week closing high; banks lead gains

Reuters: Sri Lankan shares rose for a second straight session on Wednesday to hit a 15-week closing high, led by financial and diversified shares, a day after the central bank kept the key interest rates steady.

However, analysts said investors were cautious, ahead of an imminent loan deal with the International Monetary Fund.

The central bank kept benchmark rates steady, as expected, as it gauges the effect of the recent tightening amid final stages of talks with the IMF for a $1.5-billion loan to tide over a payments crisis.

The benchmark stock index ended up 0.45 percent, or 28.95 points, at 6,434.24, its highest close since January 14.

"With the central bank holding rates steady and the news of finalising the IMF loan coming closer, investors turned positive," said Yohan Samarakkody, head of research, SC Securities (Pvt) Ltd.

A visiting IMF mission said it expected to complete negotiations with Sri Lanka for a three-year loan programme in the next two weeks.

Sri Lanka is expected to reach a staff level agreement with the IMF for a loan as early as this week, the central bank deputy governor said on Tuesday.

Foreign investors were net sellers of 41.9 million rupees ($288,309.36) worth of equities on Wednesday, extending the net foreign outflow so far this year to 2.99 billion rupees.

Turnover stood at 591.1 million rupees, less than this year's daily average of around 770.6 million rupees.

Shares in Ceylon Cold Stores Plc rose 5.42 percent while Carson Cumberbatch Plc ended up 3.77 percent and Commercial Bank of Ceylon Plc gained 0.76 percent.

($1 = 145.3300 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sherry Jacob-Phillips)

BOC confirms its place as the ‘No.1 Brand in the Country’

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Most Valuable Brands of Sri Lanka - 2016

BOC once again was bestowed as the No.1 Brand among all the brands in Sri Lanka for the 8th consecutive year by the renowned Brand Finance Lanka through an independent and stringent analysis. Brand Finance Lanka is partnered with the Brand Finance UK with its global network spread in 17 countries. The Brand "BOC" now boasts for overwhelming Rs. 41 Billion, a growth of 8.78% in 2016 compared to Rs. 38 Billion in 2015.

The chairman of the Bank of Ceylon President’s Counsel Ronald C. Perera had this to say, "Our prime objective at all times has been to create and enhance value for all our stakeholders that includes all Sri Lankans. As the country moves on in the progressive path for a more refined and long term economic and social development the Bank of Ceylon, the leader in the banking industry will take up the responsibility to assist this endevuor, financially connecting every other sector in the country to walk towards the same goal. Therefore it is such an honor to be valued as the No.1 Brand in the country for the 8th successive year as recognition of our tireless effort." With the confidence and trust the Bank of Ceylon has build in the Sri Lankan banking and finance industry over 76 years as the leader it has been able to set many key benchmarks that have elevated the Sri Lankan banking industry. Since its inception in year 1939 the Bank of Ceylon has been at the epicenter for enriching the lives of Sri Lankans through banking services. As of today BOCs local market reach consists of 626 Braches, 15 SME Centers and 605 ATMs and Cash Deposit Machines (CDMs) that counts to over 1200 customer touch points which are spread throughout the country and currently serve customers ranging from individuals to corporate of all walks of life. Bank maintains over 12 million accounts which amount to more than half of the population in the country.

"Developing the brand identity in the international banking and finance arena is also in focus as it is one of the needs for the country, in order to ensure our success we have adapted visionary thoughts of the digital world that could also transform the country’s banking landscapes. " the chairman further added. (BoC)

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Fitch rates Sampath Bank’s Debt ‘A(lka)(EXP)’

Fitch Ratings has assigned Sampath Bank PLC’s (A+(lka)/Stable) proposed Basel II-compliant subordinated debentures an expected National Long-Term Rating of ‘A(lka) (EXP)’.

The issuance is to total Rs 6 bn, with the debentures to mature in five years and carry fixed and floating coupons. The debentures are to be listed on the Colombo Stock Exchange. Sampath Bank plans to use the proceeds to support its Tier 2 capital base.The proposed subordinated debentures are rated one notch below Sampath Bank’s National Long-Term Rating to reflect the subordination to senior unsecured creditors.

Sampath Bank’s rating reflects its lower capitalisation relative to that of its peers and relatively higher risk appetite, which offset benefits from the growth of its franchise. The Outlook is Stable.
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Guardian Acuity Asset Management sees growth

Guardian Acuity Asset Management has recorded steady growth in subscriptions for the year ended 2015.

The company which is a JV of Acuity Partners and Ceylon Guardian Investment Trust PLC has been in operations since 2012 and manages three unit trust funds.

In year under review the funds under management of the company have increased from Rs. 1.9 billion to Rs. 5.8 billion, which is an increase of more than 200%. The Money Market Fund and the Equity Fund, which have been in existence since inception of the company, had seen the number of unit holders top 200. Guardian Acuity launched its Money Market Gilt fund in 2015, drew more than 80 investors and more than Rs. 800 million in funds.As per the annual report recently released, the equity fund which is a long term investment plan which offers access to the stock market for busy professionals has, as at the end of 2015, returned a cumulative 71.6% since inception in February 2012. 

The benchmark All Share Index in the comparable period gained 25.89% making the fund an ideal vehicle in which to build a diversified and dynamic portfolio. The money market fund, which gives access to short term corporate debt products, which are otherwise only accessible to sophisticated investors returned a cumulative 43.5% since inception in February 2012.

The benchmark for the fund, which is the NDBIB-CRISIL 91 day T-Bill Index, had gained 36.64% in the same period. The annualised average returns of both funds are 15.08% and 11.31% respectively in December 2015. For the quarter ending March 2016, the equity fund’s returns were down 10.78% against the ASI’s decline of 11.93%, caused mainly by market volatility. The current yield of the money market fund is 8.65 % p.a. (as of 15 April 2016). The company has embarked on an ambitious rollout plan for it products with clients able to buy their products at selected HNB branches. With interest rates at elevated levels and share prices depressed , the fund managers Sumith Perera and Asanka Jayasekara are of the view that that this is the best time to enter the market in a disciplined way with periodic cash injections to the equity fund for investors looking for a medium to long term return.

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Seylan Bank posts Rs. 720 mn net profit for Q1, 2016

Seylan Bank, recorded a strong quarterly performance with Profits after Income Tax reaching Rs. 720 million, for the three months ended March 31,2016, a 4% increase over the Rs. 691 mn reported in the corresponding period of 2015.

Net Interest income increased from Rs 2,805 million to Rs 2,939 million, a 4.8% increase for the three months ended March 31,2016. Net fee and Commission income increased 23.6% from Rs 562 Million to Rs 695 Million during Q-1 2016, showing a consolidation of the solid growth achieved by Seylan Bank over the past few years.

Other operating income comprising net gains from trading, gains on financial instruments, gains on foreign exchange and other income decreased by 117% from Rs 401 million in 2015 to a net loss of 68 million during Q-1 2016 mainly as a result of mark- to-market losses on Government Securities, due to the upward movement in interest rates.

During the period under review the Bank also focused considerably on cost containment. This was evident by the containment of growth in total expenses of 6.8% from 2,129 million to Rs.2,273 million during Q-1 2016.

The Bank reported a net credit growth of 4.27%, with net advances growing from Rs 193,103 Million to Rs 201,350 Million during Q-1 2016.

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Amana Takaful to raise Rs 200 mn

Amana Takaful Plc is to raise around Rs 200 million via a right issue of shares to raise funds to meet the regulatory capital requirement in terms of risk based capital rules issued by the Insurance Board of Sri Lanka (IBSL).

The company will issue 300,000, 216 ordinary shares at Rs .0.70 cents each in the ratio of one for every five existing shares. The current stated capital of the entity is Rs.1,650,001,188 .(IH)
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