Ceylon Cold Stores March net up 61-pct

ECONOMYNEXT - Ceylon Cold Stores said March 2016 quarter net profit rose 61% to 967 million rupees from a year ago as the firm benefitted from higher consumer spending as disposable incomes increased.

Sales grew 28% to 9.5 billion rupees during the quarter, interim accounts filed with the stock exchange showed.

Earnings per share for the period were 10.17 rupees, said the firm, part of the John Keells Holdings group.

In the year ended 31 March 2016, EPS was30.25 rupees with net profit up 88% to 2.9 billion rupees while sales rose 23% to 34 billion rupees.

Sri Lankan shares hit 4-wk closing low; rising rates weigh

Reuters: Sri Lankan shares closed at a four-week low in thin trade on Thursday, led by blue chips amid foreign investor outflow as investor sentiment took a hit on rising interest rates despite the central bank keeping key policy rates steady last week.

Yields on treasury bills edged up by between 5 and 27 basis points to near three-year highs at a weekly auction on Wednesday. The central bank left key policy rates steady for a third straight month.

The benchmark stock index fell 0.22 percent, or 14.73 points, to 6,568.76, its lowest close since April 29. It fell 1.12 percent last week, its first weekly fall in seven weeks.

"We expect negative trend to continue with the rising interest rates and also on the continued foreign outflow," said Dimantha Mathew, head of research of First Capital Equities (Pvt) Ltd.

"We expect the market to bounce back once the expected IMF and sovereign bond inflows come."

Foreign investors net sold 205.8 million rupees ($1.41 million) worth of shares on Thursday, extending the year to date net foreign outflow to 4.91 billion rupees worth of shares.

Turnover stood at 398.1 million rupees ($2.71 million), the lowest since March 26 and nearly half this year's daily average of around 797.8 million rupees.

Top conglomerate John Keells Holdings, which on Tuesday announced a share subdivision, fell 1.71 percent. Keells posted a 13 percent fall in March quarter earnings on Wednesday.

Shares in Sri Lanka Telecom Plc fell 0.73 percent while Cargills (Ceylon) Plc lost 3.13 percent, dragging down the overall index.

Concerns over a government move to increase the value added tax and impose new taxes effective May 2, which could hit the bottom line of many companies, also dented sentiment, analysts said. 

($1 = 146.9000 Sri Lankan rupees) 

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

Sri Lanka Blue Diamonds Jewellery audit reveals fraud: SEC

ECONOMYNEXT - Sri Lanka's Securities and Exchange Commission said an audit ordered of the books of Blue Diamonds Jewellery Worldwide Plc, has found possible misappropriation of public funds and capital market offences and offences under the penal code.

A statement said the SEC will conduct further investigations into the company and was taking all steps necessary to protect the interests of investors.

The audit by Ernst and Young, an accounting firm, was ordered by the SEC over allegations of accounting fraud and mis-use of funds in a rights issue.

The SEC said the audit by found “several irregularities in the conduct of business affairs of Blue Diamonds by the management which may point to the possible misappropriation of public funds” raised by the rights issue.

It also found “possible commission of one or more capital market offences as well as offences under the penal code,” the SEC said.

It said Blue Diamonds Jewellery Worldwide had sought time to respond to the audit report.

SLI expects flood damage claims to exceed Rs. 1 bn

By Hiran H.Senewiratne

"We are are expecting more than Rs one billion in claims from our clients, which we could recover from our re-insurers,among whom are several of the world's leading insurance companies. Therefore, it is not a big deal for us, Managing Director, Sri Lanka Insurance T. M. R. Bangsa Jayah said.

He told The island Financial Review that SLI is now waiting until claims are made by their customers for settlement.

Rs.7 billion in insurance payments for compensation and reconstruction, following destruction caused by the recent floods, will be borne by foreign reinsurers due to appropriate transfer of risks, some local insurance industry officials said.

Jayah said that the bottom lines of insurance companies are of no concern and that the insurance companies are currently focused on processing all insurance claims, evaluating them, and paying back the right amounts to their customers.

"However, it is too early to forecast the value of claims that would be paid by the industry, which implies the importance of insuring properties to minimize the loss, he said.

"The economic losses are quite high and there would be a significant impact on insurance companies, because they have re-insured their risks with international re-insurers, Insurance Association of Sri Lanka chairman Dirk Pereira said.

Finance Minister Ravi Karunanayake on Monday said the post flooding reconstruction costs would likely be between Rs.150 and 250 billion.

About 30 percent of the liabilities of insurance companies are required to be reinsured with the National Insurance Trust Fund (NITF) by law. "We still haven’t got adequate information, but the losses are heavy. We’re predicting it to be Rs. 4-5 billion or more. In a worse case situation, the claims could run up to Rs. 10 billion, NITF chairman Manjula Silva said.

"A lot of people are not insured. Some have insurance policies, but we have to look at the little man. We will have to evaluate if the houses are fully damaged or partially damaged. In some instances, we just have to clean and reframe. It’s difficult to give a number but it may run into a couple of million rupees, he said.

Silva said the NITF, which is worth Rs. 10 billion, has to only pay for 30 percent of the reinsurance of private sector claims, which would run up to about Rs. 1.5 billion. For government claims, NITF has to pay Rs.500 million, plus an additional 20 percent of the remainder. "The rest, we have reinsured with top weighted insurance companies around the world, he said.

Fitch assigns Sampath Bank’s subordinated debt final ‘A(lka)

Fitch Ratings-Colombo-24 May 2016: Fitch Ratings has assigned Sampath Bank PLC's (A+(lka)/Stable) Basel II-compliant subordinated debentures of up to LKR6bn a final National Long-Term Rating of 'A(lka)'.

The final rating is the same as the expected rating assigned on April 26 and follows the receipt of documents conforming to information already received.

The debentures will mature in five years and carry fixed and floating coupons. Sampath Bank plans to use the proceeds to strengthen its Tier 2 capital base. The debentures are to be listed on the Colombo Stock Exchange.

The issue is 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.

The rating on the proposed debentures will move in tandem with Sampath Bank's National Long-Term Ratings.

Fitch views the upside potential of Sampath Bank's ratings as limited as long as the trend of higher risktaking and declining capitalisation persists. A sharp decline in its asset quality could result in a rating downgrade.

www.island.lk

Vehicle imports up 60%, registrations up 56% in 2015: CCC Vehicle Market Report

Expenditure on imports of motor vehicles into Sri Lanka recorded a 60% growth in 2015 compared to 2014 according to the latest edition of the ‘ Statistical Analysis and Industrial Overview of Sri Lanka’s Vehicle Market 2015,’ an annual publication issued by the Ceylon Chamber of Commerce.

According to the release, which is now available for purchase, Sri Lanka’s expenditure on motor vehicle imports during 2015 has accounted for 7% of the total import bill of the country and took up 13% of total export earnings.

With sharply increased vehicle imports, the registration of motor vehicles also has risen by 56% during 2015, thus pushing the country’s total vehicle population to 6.3 million.

Import of passenger vehicles recorded the highest growth in vehicle imports, growing by 88% year-on-year, mainly driven by imports of motor cars.

According to the report, more than half (53%) of the current vehicle population consists of motor bicycles followed by three-wheelers (17%) and motor cars (11%).

The report, compiled by the Economic Intelligence Unit of the CCC, features latest information on vehicle registration; vehicle population; imports of vehicles by vehicle category, popularity of key vehicle brands; and an overview on the global vehicle market. The newest addition to this year’s report is the information provided on the hybrid and electric vehicles market.

To obtain a copy of the report, contact Saumya Amarasiriwardene, Research Analyst, Economic Intelligence Unit of the CCC on 011-55-888-83 or saumya@chamber.lk.

www.ft.lk