Sri Lankan stocks end at 2-wk low;, diesel duty hike hurts

Reuters: Sri Lankan shares ended at a two-week low on Friday in moderate volume as investors booked profits, while an increase in excise duty on diesel dragged on Lanka OIC, pulling down the overall index.

Sri Lanka's finance ministry on Friday said it had increased the excise duty on diesel by 10 rupees with effect from Aug. 20, but there will not be any price increase in diesel at pumps. .

Shares in Lanka IOC fell 9.8 percent on Friday after the news on excise duty hike reached the market, stockbrokers said.

The benchmark Colombo stock index ended 0.59 percent down at 6,550.91, its lowest close since Aug. 12. It hit its highest close since May 20 on Tuesday.

"Investors have been taking profit and retail investors have been on the sidelines," said Prashan Fernando, COO at Acuity Stockbrokers.

Foreign investors bought a net 12.1 million rupees worth of shares on Friday, but they have been net sellers so far this year of 3.94 billion rupees worth of shares.

Turnover stood at 678.7 million rupees ($4.67 million), below this year's daily average of around 750 million rupees.

Conglomerate John Keells Holdings Plc fell 2.4 percent, while Nestle Lanka closed 1.3 percent down.

($1 = 145.2500 Sri Lankan rupees) 

(Reporting by Shihar Aneez; Editing by Sunil Nair)

Sri Lanka’s Agalawatte Plantations loss widens in June 2016 quarter

ECONOMYNEXT – Loses at Sri Lanka’s Agalawatte Plantations Plc widened in the June 2016 quarter, with the tea business continuing in the red and lower earnings from oil palm.

The plantation company, whose controversial sale by Mackwoods to Browns is in dispute, reported a loss of Rs166 million in the quarter, up 84 percent from a year ago.

June 2016 quarter sales fell 43 percent to Rs245 million during the period, according to a stock exchange filing.

Agalawatte Plantations’ loss came despite a sharp rise in other income, with finance costs having tripled, the accounts showed.

The firm’s loss per share was Rs6.63 in the June 2016 quarter, up from Rs3.60 the year before.

In the six months to June 2016, the loss per share was Rs7.45, with sales down to Rs698 million.

Sri Lanka plantations say unable to continue to justify large losses to shareholders

ECONOMYNEXT – Sri Lankan plantation companies said they cannot justify large loses to shareholders and remain in business if worker labour unions do not sign a new productivity-linked wage deal agreed upon with government mediation.

The Planters’ Association of Ceylon, representing Regional Plantation Companies (RPCs), said that continuing to resist the revision of the present archaic attendance-based wage as losses increase, without any other viable alternative, is putting the industry in peril.

“At the request of the government and considering the aspirations of the workers, the RPCs provided a daily interim allowance of Rs100 to their workers for June and July 2016 despite being under significant financial pressure, by utilising loans of Rs800 million provided by state banks via the Tea Board,” a statement said.

“The interim allowance was paid for the two months based on the written understanding reached between the RPCs, the government and the trade unions that a productivity-based Collective Agreement will be signed prior to the payment of wages for August 2016.”

Such an agreement “is essential to the put the industry on a more sustainable footing,” the RPCs have pointed out, saying that “they cannot continue to be in business and sustain the large population residing in RPC plantations with the current state of the industry.”

The RPCs said that by continuing to “reject the ground reality by postponing the much-needed revision of the wage structure, the industry is being put in a perilous situation – with RPCs unable to continue to justify large and further accumulating losses to their shareholders”.
(COLOMBO, August 23, 2016)

Sri Lanka Treasuries yields edge up

ECONOMYNEXT - Sri Lanka's 03-month and 01-year Treasuries yields edged up at Wednesday's auction, while 06-month yield was flat, data from the state debt office showed.

The yield on 03-month T-Bills rose 03 basis point to 9.04 percent, while that on 12-month bills rose 10bps to 10.75 percent.

The 06-month bill yield was flat at 9.94 percent.

The debt office got bids worth Rs67.5 billion and sold Rs23.8 billion of bills, mostly 06 and 12 month.

Sri Lanka sells Rs16.8bn in 10-year bonds at auction

ECONOMYNEXT - Sri Lanka has sold Rs16.8 billion rupees of 09 year and 11 month bonds at an auction Wednesday at a weighted average yield of 12.52%, the debt office said in a statement.

It got bids worth almost Rs110 billion for the bonds offered at an annual coupon rate of 11.50%.

The debt office also sold Rs17 billion of 08 year bonds with a yield of 12.24% for which it got bids of Rs59 billion.

It also sold Rs15.5 billion worth 04 year and 06 month bonds at a yield of 11.76% after getting bids of Rs74 billion.

Fitch rates HNB’s debenture at ‘A+(lka)(EXP)

Fitch Ratings has assigned Hatton National Bank’s proposed subordinated debenture issue of Rs 6 bn an expected National LongTerm Rating of ‘A+(lka)(EXP)’.

The debentures, which will have tenors of five and seven years and carry fixed coupons, will be listed on the Colombo Stock Exchange. HNB expects to use the proceeds to strengthen its Tier II capital base.The proposed subordinated debentures are rated one notch below HNB’s National LongTerm

Rating to reflect the subordination to senior unsecured debt.Rating of HNB reflects its strong domestic franchise, satisfactory capitalization and strong performance, which are counterbalanced by a higher risk appetite as seen in the sustained high loan growth that has put pressure on its funding and liquidity profile. The ratings on the proposed debentures will move in tandem with HNB’s National LongTerm Rating.

www.dailynews.lk

MJF Exports invests Rs. 165 m in NDB shares

MJF Exports Ltd. has acquired 1 million shares of NDB for Rs. 165 million last week.

The purchase was disclosed by NDB in view of MJF Exports being a company in which Malik Fernando, the spouse of NDB Director Kimarli Fernando, is a Director and shareholder.

Last week NDB was the most traded stock value-wise with Rs. 1.56 billion or 33% of the market’s total turnover. Around 9.4 million NDB shares changed hands. The biggest buyer was SBI of Japan, which picked up five million shares at Rs. 165 each. The stock closed at Rs. 167.90, up by Rs. 3.10. Foreign holding of NDB declined from 25.8% to 23.2% or by 4.3 million shares with a net outflow of Rs. 721.7 million last week.

www.ft.lk

Dr. T. Senthilverl’s Laxapana Batteries stake tops 10%

High net worth but low-profile investor Dr. T. Senthilverl has increased his stake in Laxpana Batteries Plc to over 10%.

This was following him buying 0.44 million shares at Rs. 11 each on top of the 3.66 million shares he held previously.

E.B. Creasy Group and related parties control over 60% stake in Laxapana Batteries. 

www.ft.lk

LOLC posts Rs 3.2 bn profit in first quarter

LOLC’s dominant financial services sector companies, led the Group to record strong profits in the first three months of 2016/17, a PBT of Rs. 3.2 bn when compared to Rs. 2.7 bn recorded in the same period last year.

The current year’s performance, strengthened by the outstanding performance of the Group in 2015/16 of Rs. 11.9 bn of PBT, is a 45% growth over the last year. The financial services companies which account for 82% of the Group’s PBT, showed a remarkable growth in terms of an increase in the lending portfolio consequent to the aggressive growth in their lending books.

As a result, the total Asset base of the Group reached Rs. 380 bn.The contribution to the high growth was achieved, resulting a portfolio growth of 52% to Rs. 213 bn from Rs.140 bn.

LOLC’s Group Managing Director Kapila Jayawardena said LOLC’s outstanding performance in 2015/16 is mainly derived from the financial services sector, where all companies have recorded exceptional performances. “The robust growth in the lending business, supported by the strong funding line, from both local and foreign sources at attractive terms and conditions, improved the income generating capacity of the sector. The strong collections enabled the Group to achieve a better NPL level and enabled all the companies in this sector to perform exceptionally well,”he said.

The leisure business of the Group led by Browns Hotels and Resorts (BHR), The Eden Resort and Spa in Beruwala, The Paradise Resort and Spa in Dambulla, Dickwella Resort and The Calm Resort and Spa in Pasikudah are generating moderate results despite the challenging environment in which they operate.

However, in comparison to the previous year higher profits are expected in 2016/17. The two hotel properties under construction, The Turtle Beach Resort in Kosgoda and Riverina Resort in Beruwala are progressing as planned.

LOLC, one of the largest conglomerates in Sri Lanka, its core business being financial services, comprises of three finance companies and one leasing company falling under the purview of the Central Bank of Sri Lanka.

The flagship finance company LOLC Finance PLC (LOLC Finance), Commercial Leasing and Finance PLC (CLC) and the newly acquired BRAC Lanka Finance PLC (BRAC) together with LOLC Micro Credit Limited (LOMC) recorded a strong financial performance in the year 2015/16 and continued the momentum during the first three months of the current year accounting for 89% of the Group’s PBT.

The strong performance was enhanced by the high yielding overseas investments made in LOLC Cambodia, PRASAC Micro Finance Company in Cambodia and LOLC Myanmar.

www.dailynews.lk