Sri Lankan shares post 5-wk closing low on rising interest rates

Reuters: Sri Lankan shares edged down on Thursday, posting their lowest close in nearly five weeks, as rising interest rates weighed on risky assets, while lack of new catalysts also dented sentiment.

Treasury bill yields rose between 4 and 35 basis points to near three-year highs in two weekly auctions through Wednesday despite the central bank leaving key policy rates steady for a third straight month on May 20.

The benchmark Colombo stock index ended 0.29 percent, or 18.91 points, weaker at 6,523.84, its lowest close since April 29. It has fallen 0.72 percent in the four sessions through Thursday after declining 0.94 percent last week.

"There is no market-moving news and the market is moving news," a stockbroker said.

Stockbrokers said a rise in interest rates could be detrimental to risky assets if they jumped beyond 12 percent. The average prime lending rate (AWPR) edged up 15 basis points to 10.15 percent in the week ended May 27.

Analysts said market sentiment remained weak as investors were waiting for catalysts such as a big foreign direct investment or initial public offering or inflows from the International Monetary Fund (IMF).

Investors are also concerned about foreign investment outflows, they added, with overseas investors offloading a net 5.59 billion rupees ($37.68 million) worth of equities so far this year. Foreign investors bought shares worth a net 26.1 million rupees on Thursday.

Turnover stood at 671.9 million rupees, well below this year's daily average of around 791.9 million rupees.

Shares in Nestle Lanka Plc fell 1.95 percent, while those in Bukit Darah dropped 5.31 percent. 

($1 = 148.3500 Sri Lankan rupees) 

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

CDB posts exceptional results with over Rs 1 bn PAT

The Citizens Development Business Finance PLC (CDB) reported exceptional financial results for FY 2015/16, with a profit after tax of over Rs 1 billion.

The entity’s impressive track record in sustainable financial performance has built a robust and resilient foundation that has enabled the Company to be fearless and holistic in its approach.

This was well evidenced in the recognition it received from the Ceylon Chamber of Commerce which placed CDB among the Ten Best Corporate Citizens of 2015 and the winner in the Below Rs 15 bn revenue category, two feats that were added to the ever increasing kudos that CDB continues to collate. CDB Managing Director and CEO Mahesh Nanayakkara said CDB has affirmed its strong presence even more with this year’s results. “CDB’s reputation as a financial entity that has continued to be consistent in its financial performance is well demonstrated in the impressive milestones we notched this year. The Balance Sheet surpassed the Rs 50 bn mark, detailed at Rs 50.6 bn and reflecting a growth of 33%, positioning CDB among the largest NBFIs in the country.”

He said profit after tax too showcased a remarkable upward trajectory, positioning itself beyond the Rs 1 bn milestone, which is a growth of 43%. Revenue is recorded at Rs 7.5 bn, inclining 8%.

Net interest income is recorded at Rs 3 bn, which is an increase of 7%, while impairment charges and disposal deficits are Rs 399 mn, reflecting a reduction of Rs 281 mn or by 41%. The Loan Book recorded a growth of 31% standing at Rs 38.5 bn The narrowing of net interest margins from 8.0% to 6.9% in comparison to last year was a result of the conscious strategy adopted by CDB to change the composition of the lending mix.

The direct positive outcome of this strategy has been that both gross and net Non-Performing Loan ratios reduced from 5.8% to 3.6% and 3.2% to 1.6% respectively, which resulted in the reduction of impairment charges. The deposit base grew by 14% to be posted at Rs30.8Bn, while debt funding, which became the main source of funding, heralded a growth of Rs 7.5 bn, an increase of an impressive 156%. Cost to income ratio stood at 57.58%

Total equity surpassed the Rs 5 bn mark, while Tier I and Tier II in the Capital Adequacy Ratios stood at11.72% and 11.74% respectively, well above regulatory requirements.

The liquidity ratio at 20.04%too was above the regulatory requirement level. 91% of assets are in interest bearing regular cash flow generating investments including the asset backed loan book consisting of 76% of assets. Profit before VAT on Financial Services, NBT and the crop levy is notched at Rs1.43 bn, stipulating an incline of 36%, where profit before income tax stands at Rs 1.25 bn. This an increase of 32%. Return on Equity recorded 21.78%, while Earnings Per Share stands at Rs 18.51 The Net Book Value per share is now Rs 93.03 as per the balance sheet date.

CDB’s specialized leasing subsidiary, changed its name to Unisons Capital Leasing Ltd (UCL) during the year. CDB fully subscribed to the rights issue announced by UCL during the FY 2015/16 investing Rs 82.1mn at Rs 10.50 per share, which increased CDB’s stake in UCL to 90.38%.

For this financial year, UCL contributed Rs 15.6 mn towards the Group’s consolidated results. Judging by the positive trends already experienced, we expect UCL to make a significant contribution to the Group’s bottom line in the coming years.

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Expolanka posts Rs.56 bn revenue, Rs 2 bn PBT

Expolanka recorded a revenue of Rs.56 billion for the twelve months ended in March 31 for the financial year 2015/16 recording a growth of 6% in comparison to the previous financial year.

The Group’s profit before tax (PBT)reached Rs.2 billion at the completion of the financial year 2015/16 recording an increase of 55% in comparison to the previous year. The Group recorded a revenue of Rs. 52 billion and a PBT of Rs.1.3 billion during the financial year 2014/15 (previous financial year).

Expolanka Holdings Group CEO Hanif Yusoof said the year has been one of steady growth. The Group looked to yield the benefits of the restructuring process by focusing on the growth of core business.Our focus remained on improving operational efficiencies on a sustainable platform with a clear vision for the future.

The Group’s core sector Freight and Logistics recorded a revenue of Rs.46 billion for the twelve months ended in March for financial year 2015/16, posting a growth of 15% in comparison to the previous financial year.

The year’s positive results were mainly driven by the sustained performance of the Indian sub continent along with market growth in Indonesia, Vietnam and Hong Kong, USA and China.
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