Colombo Stock Exchange Market Review – 26th Oct 2016

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Colombo Stock Exchange Trade Summary 26-Oct-2016

Colombo bourse witnessed another lackluster trading session on Wednesday with both indices closing on flat note. All Share index edged lower by 2.08 index points or 0.03% to end at 6,434.89 while S&P SL20 index slightly down by 1.65 index points or 0.05% to close at 3,585.82.

Losses recorded in Dialog Axiata (closed at LKR 11.50, -0.9%), Dipped Products (closed at LKR 85.10, -5.3%) and Commercial Credit & Finance (closed at LKR 59.20, -1.5%) impacted the index performance negatively.

Daily market turnover was LKR 312mn. John Keells Holdings emerged as the top contributor to the turnover with LKR 79mn underpinned by a single negotiated transaction of 0.5mn shares at LKR 150.00. Counter accounted for 25% of the total turnover. Sampath Bank (LKR 30mn), Lion Brewery (LKR 28mn) and Access Engineering (LKR 20mn) were among top contributors.

Market breadth was negative where out of 200 traded counters, 70 slipped, 50 advanced while 80 scripts remained unchanged.

Tokyo Cement attracted high investor interest and stock closed with a gain of 0.8% at LKR 61.40. Access Engineering, Teejay Lanka and Galadari Hotels were among highly traded counters.

People’s Leasing & Finance declined by 0.6% to LKR 18.10 subsequent to the dip in profit in September quarter. Moreover, Ceylon Cold Stores advanced to LKR 635.30 (+2.5%) supported by 49%YoY earnings growth in 2QFY17.

Foreign investors were net sellers with a net foreign outflow of LKR 50mn, after eleven sessions of inflows. Foreign participation was 29%. Net foreign outflows were seen in John Keells Holdings (LKR 75mn), Commercial Bank non-voting (LKR 8mn) and Teejay Lanka (LKR 1bn). Net foreign inflow was mainly seen in Lion Brewery (LKR 17mn).

Meanwhile, at the Treasury bill auction today, both six month and one year treasury rates increased by 2bps and 5bps to 9.48% and 10.24% respectively. Three month treasury bills were rejected by the CBSL. CBSL received bids amounting to LKR 45.6bn and it was decided to accept LKR 7.6bn worth of Treasury bills.
Source: LSL

Sri Lankan shares end slightly weak, hovering close to 12-wk low

Reuters: Sri Lankan shares ended slightly weaker on Wednesday, largely near a 12-week closing low hit earlier in the week, in dull trading as investors awaited cues from the government budget and five-year plan as well as corporate earnings.

Sri Lanka's quarterly earnings season started two weeks ago, but most of the firms listed locally reports in late October or early November. The national budget is scheduled to be presented on Nov. 10.

The benchmark index of the Colombo Stock Exchange ended 0.03 percent or 2.08 points weaker at 6,434.89. On Monday, the index hit its lowest close since Aug. 1 of 6,418.34.

Wednesday's turnover was 311.6 million rupees ($2.12 million), less than half of this year's daily average of around 734 million rupees.

"Everybody is waiting to see the budget and the government's policy statement," said Reshan Kurukulasuriya, chief operating officer of Richard Pieris Securities (Pvt) Ltd.

"This trend will continue until the budget."

Foreign investors sold a net 49.7 million rupees worth of equities on Wednesday, the first net foreign outflow in 12 sessions. The net foreign inflow for the past eleven sessions through Tuesday was 1.23 billion rupees.

They have sold a net 1.74 billion rupees worth of shares this year.

Shares in Dialog Axiata Plc fell 0.86 percent. 

($1 = 146.7000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Amrutha Gayathri)

Sri Lanka shifts tyre plant location after land owner protests

ECONOMYNEXT – Sri Lanka has shifted the location of a proposed tyre plant by Ceylon Steel Corporation, for which Italy’s Marangoni will supply equipment from a closed plant, after protests by land owners.

The Ministry of Development Strategies and International Trade had originally proposed taking about 100 acres from private coconut estates in Gonapola, Horana, 5km from the southern expressway.

But objections from land owners meant that option was not feasible, the ministry has said.

Instead, a plot of land at Wagawatta, Horana, under the administration of the Board of Investment will now be given for the plant.

The factory is to be set up by the Ceylon Steel Corp with technical collaboration from Marangoni.

Sri Lanka Kelani Valley Plantations losses rise

ECONOMYNEXT – Sri Lanka’s Kelani Valley Plantations sank even further into the red in the September 2016 quarter with losses rising 90% to Rs168 from a year ago, according to interim accounts filed with the stock exchange.

Group sales of the firm, part of the Hayleys conglomerate, rose two percent to Rs1.5 billion but costs rose even more, including sharply higher finance costs.

The accounts showed lower sales in tea and rubber as the firm suffered from dry weather and the continuing commodities slump.

Kelani Valley Plantations reported a loss per share of Rs4.94 compared with a loss of Rs2.60 a year ago.

The tea business made a loss compared to a profit the year before while rubber profits were sharply lower.

The firm has three subsidiaries - Kalupahana Power Company (Private) Limited, Kelani Valley Instant Tea (Private) Limited and Mabroc Teas (Private) Limited.

Sri Lanka’s People’s Leasing & Finance Sept net down 9.8-pct

ECONOMYNEXT – People’s Leasing & Finance’s net profit for the September 2016 quarter fell 9.8% to Rs1.1 billion with lower earnings from its leasing and higher purchase business although interest income from loans grew.

Net interest income of the firm, a subsidiary of People’s Bank, fell 2.3% to Rs2.6 billion with interest income up 19.2% to Rs5.45 billion, while interest expenses rose 49.2% to Rs2.85 billion.

Net earned premiums rose 12.2% to Rs917 million and net fee and commission income rose 41.5% to Rs167 million, interim accounts filed with the stock exchange showed.

There was a sharp increase in net trading income to Rs78 million and a 44% increase in personnel expenses to Rs714 million.

People’s Leasing & Finance’s accounts showed value added tax rose 26.2% to Rs178 million.

Earnings per share for the September quarter were 74 cents. For the six months ended 30 September 2016 EPS was Rs1.44.

Palm oil propels Sri Lanka Watawala Sept profit to Rs309mn

ECONOMYNEXT – Watawala Plantations PLC more than doubled net profit in the September 2016 quarter to Rs309 million from a year ago largely owing to gains from its palm oil business.

Losses in the tea growing business increased while the group’s new dairy business made a modest profit.

According to interim results filed with the stock exchange, group sales rose five percent to Rs1.6 billion in the quarter.

Earnings per share for the quarter were Rs1.31. EPS for the six months ending 30 September 2016 were Rs2.31 with sales up two percent to Rs3.3 billion.

The accounts showed palm oil profits more than doubled in the September quarter while the tea business continued to make losses and dairy yielded a small profit.

“Our company continues to enhance the quality of its teas in order to gain a price advantage, while continuing to increase the palm oil yield,” Watawala Plantations Managing Director Vish Govindasamy told shareholders in a note accompanying the accounts.