Colombo Stock Exchange Market Review – 11th Nov 2016

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Colombo Stock Exchange Trade Summary 11-Nov-2016

Budget proposals failed to turn the investor sentiments on Friday and both indices closed with negative returns. All Share index lost 5.19 index points or 0.08% to end at 6,415.59 while 20-scrip S&P SL index shed 3.68 index points of 0.10% to end at 3,589.97. 

Price depreciations in Hemas Holdings (closed at LKR 98.20, -4.7), Nestle Lanka (closed at LKR 2,065.80, -1.6%) and Dialog Axiata (closed at LKR 11.20, -0.9%) drove the index down.

Daily market turnover recorded 32 month low of LKR 112mn. Tokyo Cement topped the turnover with LKR 28mn followed by Serendib Hotels (LKR 16mn), Ceylon Grain Elevators (LKR 7mn) and Tokyo Cement non-voting (LKR 6mn). No crossings were recorded during the session. 

Market breadth was negative where out of 186 counters, 65 slipped, 48 advanced while 73 counters remained unchanged. High investor activity was witnessed in Tokyo Cement, Access Engineering, Ceylon Grain Elevators and Tokyo Cement non-voting. 

Ceylon Tobacco declared the third interim dividend of LKR 16.00 per share. So far during the FY2016, company has declared dividends of LKR 48.30 per share against the total dividend of LKR 45.15 per share in FY2015. 

Foreign investors were net buyers with a net foreign inflow of LKR 2mn. Foreign participation was 4%. Net foreign inflows were seen in Sampath Bank (LKR 3mn) and Watawala Plantations (LKR 0.4mn). Net foreign outflow was mainly seen in John Keells Holdings (LKR 1mn).

Please note that the Colombo Stock Exchange will be closed on Monday (14th November 2016) due to public holiday.

Source: LSL

Sri Lankan shares edge down; volume slumps to 32-mth low after budget

Reuters: Sri Lankan shares closed slightly weaker on Friday while volume slumped to a 32-month low after budget proposals on Thursday to revise corporate and withholding taxes to boost revenue.

The government aims to boost its 2017 tax revenue by 27 percent to 1.82 trillion rupees ($12.36 billion) year on year, to meet a commitment given to the International Monetary Fund in return for a $1.5 billion loan in May.

"There is nothing much to see in the budget. It has failed to give the expected boost to the market," said Danushka Samarasinghe, research head at Softlogic Stockbrokers.

"Increases in various taxes, including the corporate tax, will now add to the continuing negative momentum and also increases in various fees and taxes will reduce disposable income of the people. This will challenge the consumption-led growth."

Turnover was 112.4 million rupees, the lowest since March 17, 2014, and well below this year's daily average of 711.3 million rupees.

The benchmark index of the Colombo Stock Exchange ended 0.08 percent, or 5.19 points, weaker at 6,415.59. It fell 0.4 percent for the week.

Foreign investors bought stocks for an eighth straight session, picking up a net 1.6 million rupees. They have net sold 882.95 million rupees worth of shares so far this year.

Shares of Hemas Holdings Plc fell 4.66 percent while Nestle Lanka Plc declined 1.61 percent and Dialog Axiata Plc dropped 0.88 percent.

($1 = 147.3000 Sri Lankan rupees) 

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

Sri Lanka to list Mobitel, Hyatt other state enterprises: Budget 2017

(LBO) – Sri Lanka’s Finance Minister Ravi Karunanayake said several state-owned enterprises such as Mobitel, Hyatt, Waters Edge, Grand Oriental Hotel will be listed on the Colombo Stock Exchange.

The firms are to be listed during 2017, he said presenting budget proposals for 2017.

“We will also list non-strategic enterprises such as Hyatt, Grand Oriental Hotel, Waters Edge, West Coast, Manthai Salt, Hambanthota Salt and Hilton during 2017,” Karunanayake said, adding the company Mobitel too has requested a listing.

“Broad basing the ownership, it is expected that such listing will allow the government to raise at least USD 1,000 million, to settle our existing uneconomical, questionable and high cost debt that we inherited from the previous regime.”

“We will also inform the Parliament of any other planned listing that may be undertaken during 2017.”

He also proposed that 25 new firms should list on the Colombo Stock Exchange (CSE) during 2017.

The new securities act will be presented in the first quarter in 2017, and a separate board will be set up on the CSE for Small and Medium Enterprises.

SriLankan and Mihin air which has been running at colossal losses are now being commercialised, he added.

Dialog Axiata posts Rs 7.8 bn profit for first nine months

Dialog Axiata PLC has posted a net profit after tax of Rs. 7.8 bn for the nine months ended 30 September 30, 2016.

The Group continued its strong growth momentum across Mobile, Digital Pay Television, Tele-infrastructure and Fixed Line businesses to record a consolidated Revenue of Rs. 21.7 Bn for Q3 2016 and Rs. 64.0 bn for the nine months ended September 30, 2016, demonstrating a robust growth of 3% Quarter on Quarter (QoQ) and 19% Year to Date (“YTD”) respectively.

On the backdrop of strong Revenue growth, Group EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) grew by 9% QoQ to be recorded at Rs 7.7 bn for Q3 2016.

Group EBITDA for the first nine months of 2016 was recorded at Rs 21.8 bn, a significant increase of 20% relative to the corresponding period in 2015 translating to an EBITDA margin of 34.1%.

Group NPAT (Net Profit After Tax) grew 24% QoQ to be recorded at Rs. 2.8 bn. NPAT for the first nine months of 2016 demonstrated a significant YTD growth of 71% to be recorded at Rs. 7.8 bn.

The Sri Lankan Rupee depreciated at a moderate 1.7% YTD resulting in a non-cash translational foreign exchange loss of Rs 0.2 bn compared to Rs 1.7 bn during the corresponding period in 2015.

The Dialog Group continued to be a significant contributor to state revenues, remitting a total of Rs 23.7 bn to the Government of Sri Lanka (GoSL) during the nine months ended September 30, 2016.

Total remittances included direct taxes and levies as well as consumption taxes collected on behalf of the GoSL. Direct taxes, fees and levies contributed by the Dialog Group totalled to Rs 8.6 Bn inclusive of income tax.

The Group additionally collected consumption taxes and levies, totalling to Rs 15.1 Bn on behalf of the GoSL for the first nine month of 2016, comprising in the main of Telecom Levy collections amounting to Rs 10.0Bn. At an entity level, Dialog Axiata PLC (the Company) featuring the Mobile, International and Tele-Infrastructure segments of the Group portfolio continued to contribute a major share of Group Revenue (84%) and Group EBITDA (87%).

Company Revenue for the nine months ended September 30,2016 was recorded at Rs. 53.9 bn, up 17% compared to the corresponding period in 2015.

Revenue for the third Quarter grew by 4% QoQ to be recorded at Rs. 18.3 bn. Company EBITDA for the quarter increased by 13% QoQ to reach Rs. 6.7 Bn on the backdrop of Revenue growth.

On an YTD basis, Company EBITDA for the first nine months of 2016 grew by 21% to be recorded at Rs18.8Bn, translating to an EBITDA margin of 34.9%. Company NPAT was recorded at Rs. 3.0 Bn for Q3 2016 and Rs. 8.4 Bn for the first nine months of 2016 respectively, representing an increase of 31% QoQ and an increase of 74% YTD. Dialog Television (DTV), the Digital Pay Television business of the Group continued its positive growth momentum, recording a Revenue growth of 7% YTD to reach Rs 4.6 Bn for the nine months ended 30th September 2016. Cost expansion arising from aggressive customer acquisition alongside service and product expansion activities, resulted in a medium term contraction of DTV EBITDA by 47% on an YTD basis to be recorded at Rs. 310 Mn.

The contraction of DTV EBITDA translated to an equivalent negative impact on NPAT leading to a Net Loss of Rs. 346 Mn for the first nine months of 2016 compared to a Net Loss of Rs. 130 Mn in the corresponding period of 2015.

Dialog Broadband Networks (DBN) featuring the Group’s Fixed Telecommunications and Broadband Business recorded Revenue of Rs. 6.8 Bn for the nine months ended 30th September 2016, representing an increase of 27% YTD.

Downstream of robust Revenue performance, DBN EBITDA for the first nine months of 2016 was recorded at Rs. 2.8 Bn, representing an increase of 34% YTD. 

www.dailynews.lk

SLT group profits up by 13.6% during first nine months

Sri Lanka Telecom PLC reported revenue of Rs 55.7 bn during the first nine months of 2016 exhibiting a year on year (YoY) growth of 9.5%.

The growth was largely driven by an increased demand for data and broadband related products that were introduced to the market through LTE coverage expansion and fiber optic based ultra-high speed broadband for higher data volumes.

Operating cost of the group increased by 15.2% to Rs 39.7 bn largely due to the increase of International Telecommunication Operators Levy and the restoration of telecommunication infrastructure affected by natural disasters during the second quarter of the year.

Revenue increased by 7.2% YoY to Rs 32.4 bn at the holding Company level, with operating expenses increasing by 10.8% to Rs 24.3 bn.

The Group reflected a YoY Earnings After Tax (EAT) growth of 13.6%, which when compared to the same period last year shows the positive impact of lower foreign currency translation losses.

Releasing the nine month financial results, Group Chief Executive Officer, Dileepa Wijesundera stated, that the continuous and robust top line growth of the group is a direct reflection of the investments made on improving user experience through innovative and high quality Information Communication and Entertainment (ICE) services.

Group Chairman Kumarasinghe Sirisena, also expressed his pleasure on the overall group performance stating that the growth momentum would continue through synergetic strategies.

The group comprises of the holding Company and eight subsidiaries including the mobile arm Mobitel (Pvt) Ltd. 

www.dailynews.lk

Nations Trust Bank ups nett profits to Rs.2,038 mn in first nine months

Nations Trust Bank closed the first nine months of the year ending September 30, 2016 recording a post-tax profit of Rs.2,038 mn which is a 5% growth over the corresponding period.

Higher tax rates applicable for the current year narrowed the bottom line profit growth. Current quarter performance showed significant improvement with revenue growing by 19%, resulting in pre-tax profits for the quarter increasing by 24%.

The gradual narrowing of NIMs contained revenue growth to single digit levels for the 9 month period despite the loan portfolio growing by 12%.

CEO and Executive Director Renuka Fernando said their performance has been resilient, consistently demonstrating sustainable returns. "Our focus for the remainder of the year is to continue the momentum on credit growth and end the year with a strong financial position. Our well penetrated branch network, dynamic business model, enhancing brand image and the energetic team will steer the Bank to even greater heights in the years to come,”she said. Net interest income growth was at a reduced pace of 6% as interest expenses recorded a faster growth of 48% in comparison to the increase in interest income of 25%.

However, the impact of narrowing NIMs is gradually tapering off as seen by the performance in the current quarter which posted a higher NII growth of 16% over the corresponding period. Net fees and commission income recorded a growth of 11% with significant contributions coming from transactional fees related to volumes processed and card related income.

Net trading income recorded a drop of 25% owning to higher cost on foreign exchange funding SWAPs due to the increase in the SWAP book and related premiums.

The impact arising from the FIS portfolio on net trading positions was minimal for the period under review.

Impairment charges recorded a 33% decrease for the 9 month period mainly on account of a one-off provision made on account of specific facilities in the previous period.

Overall, the Bank’s NPL ratio was at a healthy 2.84% marginally up from 2.76% reported as at end of 2015. 

www.dailynews.lk

ComBank’s nine month post-tax profit crosses Rs 10 billion

Commercial Bank of Ceylon has posted profit before VAT and NBT of Rs 16.398 billion for the nine months ending September 30, 2016,reflecting growth of 15.19% .

The Bank said gross income grew by 17.94% over the corresponding nine months of last year to Rs 66.868 billion at the end of the period reviewed. Profit before tax improved by 13.92% to Rs 13.887 billion while profit after tax at Rs 10.151 billion reflected robust growth of 20.48%, the Bank said.

Continuing strong growth in the Bank’s loan book resulted in total interest income growing by Rs 9.587 billion or 19.72% to Rs 58.191 billion. Interest expenses however increased at a higher rate of 29.49% to Rs 33.936 billion due to re-pricing of liabilities following the rise in interest rates, resulting in net interest income growing by 8.29% to Rs 24.255 billion.

“The Bank has done well in the first nine months of the year, considering the high interest rate scenario that prevailed,” Commercial Bank Chairman Dharma Dheerasinghe said. “We recorded the highest three-month growth in the third quarter of the year, and expect to end 2016 on a characteristically strong note.”

Commercial Bank Managing Director and CEO Jegan Durairatnam said the Bank had achieved noteworthy growth in its loan book while continuing to improve the quality of its loan portfolio and significantly reducing impairment charges in the review period. “We continue to focus on key operational indicators as we grow and expand overseas, ensuring that the Bank adapts well to the changing conditions,” he said.

Total assets of the Bank increased by a noteworthy Rs 73.493 billion or 8.35% since end December 2015 to Rs 953.299 billion as at September 30, 2016, reflecting an average assets growth of Rs 8.166 billion per month. 

www.dailynews.lk