Sri Lankan shares end at near one-month closing high

Reuters: Sri Lankan stocks on Thursday posted a third straight session of gains to end at a near one-month closing high, led by gains in financial stocks, a day after yields in T-bills dropped.

The benchmark index of the Colombo Stock Exchange ended up 0.25 percent, or 15.98 points, at 6,528.30, its highest close since Sept. 2.

The central bank's widely expected decision on Wednesday to hold the rates steady suggested that policy makers were keen to support a slowing economy even as they kept a tight leash on rampant credit growth.

Treasury bill yields fell between 16 basis points and 33 basis points after the rate decision.

Analysts said they expected the stock index to rise this week due to the fall in the return on fixed income assets.

The bank has tightened policy three times since December.

After four consecutive weekly losses, the index had posted a weekly gain of 0.1 percent last week.

"The market is poised to move up. We see retail buying coming into the market," said Reshan Kurukulasuriya, chief operating officer, Richard Pieris Securities (Pvt) Ltd.

"All economic indicators are also helping the market to move up. Market will move further up after the budget," he said referring to 2017 budget, scheduled to be presented in the parliament on Nov. 10.

Foreign investors bought a net 6.9 million rupees worth of shares on Thursday. But they have been net sellers of 2.95 billion rupees worth of equities so far this year.

Turnover stood at 479.4 million rupees ($3.27 million), less than this year's daily average of 753.2 million rupees.

Shares in Lanka ORIX Leasing Company Plc climbed 2.5 percent while the biggest-listed lender Commercial Bank of Ceylon Plc edged up 0.7 percent. 

($1 = 146.0000 Sri Lankan rupees) 

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

Pegasus Reef goes for Rs 215 mn refurbishment

Pegasus Reef Hotel Wattala, the first five star hotel in Sri Lanka is investing over Rs. 215million to refurbish the hotel after a lapse of a decade.

The refurbishment is currently underway and the owning company, Carsons Management Services, which also own and operate the Giritale Hotel, will add 78 deluxe rooms and four suites with jaquzies and other modern facilities under this investment.

The suites are also offered to both local and foreign honeymoon couples. With the current 42 rooms that are in operation, the hotel inventory will increase to 124 keys. It will be maintained as a four star hotel.

Hotel's General Manager Harsha Jayasinghe said that with several famed international players opening up hotels in the city they too wanted to compete with them.

"This is why we are investing and refurbishing the hotel to offer five star standard to guests and be the best hotel in Colombo.."

He said that the hotels' main income was from banquets for which the hotel has made a reputation for the past four decades.

"We can accommodate over 500 guests and could even offer facilities to cater to two functions of 200 to 300 guests in each venue. In addition there are conference facilities with multimedia for another 100 guests."

The hotel is one of the largest hotels in Sri Lanka boasting of 11 acres and there are plenty of recreation facilities including two synthetic tennis courts, squash courts, modern gym and indoor sports.

"This is the only tennis court after Colombo upto Negombo and we offer them to school children and visitors as well."

Due to the demand of their Sunday buffet which is almost sold over every Sunday, the hotel has also introduced 'The Fishery', an outdoor restaurant overlooking the sea where one could see two harbours. (Colombo and Fisheries harbor) This has been built to cater to 200 guests and with the large garden and live cooking; it's very popular for private functions.

The hotel also boasts of a large garden which can accommodate over 4,000 visitors and is a popular pick for host 'mega' outdoor events in the beach. Mrs. World and Miss World and similar high profile events were hosted at Pegasus Reef Hotel, Wattala.

The hotel currently being operated with 42 rooms is maintaining over 60% occupancy and with the new wing to be ready by November this year both revenue and occupancy will further increase.

"We see a growing market from Indian, Japanese and Chinese markets and also a very big response form online bookings. The hotel has also been winning several international awards including the Trip Advisor and Holiday Check award. Pegasus is among the exclusive holders of ISO 14001:2004 and OHSAS 18001:2007 certifications.

The General Manager counts over two decades in the hospitality field having started in the F&B department in Cyprus and Holland and moving out to Germany, Austria, Luxemburg and Asia.

Chief Accountant Kapila Gunatilleke said the investment is made from profits generated with the hotel. "We don't have any borrowings." The current refurbishment programme commenced last June and will be ready for the 2016 winter season.
(SS)

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Fitch affirms Alliance Finance at ‘BB+(lka)’

Fitch Ratings Lanka has today affirmed Alliance Finance Company’s National Long-Term Rating at ‘BB+(lka)’ with a Stable Outlook.

At the same time Fitch affirmed AFC’s outstanding senior unsecured debentures at ‘BB+(lka)’ and outstanding subordinated debentures at ‘BB(lka)’. AFC’s rating reflects its established but modest franchise and weaker capitalisation given its growth track record. This is balanced against recent improvements in risk controls. Execution of management’s strategic plan to expand its loan book and adherence to sustainable growth targets underpin the Stable Outlook, and meaningful deviation from the plan may place downward pressure on AFC’s ratings.

Fitch expects AFC to expand at a pace commensurate with its current capitalisation levels over the medium term, led by growth in vehicle financing and other term loans. Consequently, Fitch expects AFC’s capital ratios to remain at current levels, with capital being supported by gains from planned asset disposals and a planned Rs 72 m rights issue.

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Fitch affirms Abans at ‘BBB+(lka) with Stable Outlook

Fitch Ratings has affirmed Abans PLC’s National Long-Term Rating at ‘BBB+(lka)’ with a Stable outlook. Fitch has also affirmed the National Long-Term Rating on Abans’ unsecured redeemable debentures at ‘BBB+(lka)’ and its outstanding commercial paper at National Short-term Rating of ‘F2(lka)’.

The ratings reflects Fitch’s expectation that the company will maintain net leverage, as measured by lease-adjusted net debt to operating EBITDAR (excluding Abans Finance PLC), below 5.5x, the level at which Fitch would consider negative rating action, over FY17-FY20 (financial year ending 31 March).

Abans’ leverage will be restrained by modest levels of capex and better working capital management amid the weakening operating environment. However, Fitch does not expect Abans’ credit profile to improve to the extent that positive rating action will be warranted, unless there is significant deleveraging.

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ICRA Lanka assigns [SL]BB+ rating to Orient Finance Lanka Limited

ICRA Lanka Limited, a group company of Moody’s Investors Service has assigned the Issuer rating of [SL]BB+ with a stable outlook to Orient Finance.

ICRA Lanka has also assigned the issue rating of [SL]A-(SO)with a stable outlook to the Rs 1,000 million Rated Guaranteed Redeemable Debentures programme of OFP. The issuer rating assigned to OFP draws comfort from OFP’s parent company Janashakthi PLC’s support onfinancial, managerial and operational aspects along with its experienced Board and senior management team.

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Fitch rates DFCC Bank’s Subordinate Debentures ‘A+(lka) (EXP)’

Fitch Ratings has assigned DFCC Bank PLC’s (DFCC; AA-(lka)/Negative) proposed subordinated debentures of up to LKR7bn an expected National Long-Term Rating of ‘A+(lka)(EXP)’. The proposed debentures, which will have tenors of five and seven years and carry fixed coupons, will be listed on the Colombo Stock Exchange. DFCC expects to use the proceeds to strengthen its Tier II capital base and manage maturity mismatches.

The final rating is subject to the receipt of final documentation conforming to information already received. The proposed subordinated debentures are rated one notch below DFCC’s National Long-Term Rating to reflect the subordination to senior unsecured debt.

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