Sri Lanka seeks billion dollar 3-year loan

ECONOMYNEXT - Sri Lanka has called proposals from banks to borrow one billion US dollar for up to three years, which lenders can provide on a floating or a fixed rate, the Ministry of National Policies and Economic Affairs said.

Interested international and domestic banks should make offers by January 20, 2017, with rates quoted being valid for the next two months.

Banks investment houses should submit proposals in multiples of 50 million US dollars up to a maximum of 1000 million dollars.

Repayments can be in bullet or in tranches. Interest can be paid half yearly.

Group Lease appoints two directors to Commercial Credit board

Group Lease Holdings, a Singaporean subsidiary of Thai-listed Group Lease Public Company Limited (GL), has appointed two directors to the Colombo Stock Exchange listed Commercial Credit and Finance PLC after purchasing a 29.9 percent stake in the Sri Lankan entity. 

GL Group Chairman and CEO Mitsuji Konoshita, and GL Director and CFO Regis Martin, a Frenchman, were appointed as directors of Commercial Credit and Finance last week, with approval from the Central Bank of Sri Lanka. Konoshita, who graduated from the Osaka University in Japan with a Masters and Bachelors in Law, has been the Chairman of the GL Group since 2007, and had taken on the role of the CEO in 2012 as well. 

In addition to heading GL subsidiaries, he is also the Chairman of the Engine Holdings Asia Pte. Ltd, another subsidiary of GL’s parent Wedge Holdings Co. Ltd, which is based in Osaka. Martin has a Bachelors and Masters of Science in Applied Economics and an MA in International Business from the University of Paris IX Dauphine. He had been employed at the French Ministry of Economy and Finance prior to transitioning to the private sector, where he has since held many portfolios, including but not limited to being the L’Oreal Paris Sales Forecast Controller, Morison Kak & Associes Senior Auditor and Finance and Devenco Investment Portfolio Manager. 

Since joining as the Business Performance Manager at GL Finance Plc, Martin has gone on to become a director at various GL Group companies. 

The GL Group recently bought 29.99 percent of the shares of Commercial Credit and Finance for Rs.10.56 billion, and also purchased a controlling share of Commercial Credit and Finance’s associate company BG Microfinance Myanmar Co. Ltd.
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Sri Lanka’s Abans Finance to raise capital with Rs277mn rights issue

(LBO) – Sri Lanka’s finance sector player, Abans Finance, is to raise 277.34 million rupees by way of a rights issue, the company said in a stock exchange filing.

The company has obtained the Central Bank approval in compliance with Finance Companies (Structural Changes) Direction No. 01 of 2013 by their letter dated 27th December, 2016.

Subject to the exchange and shareholder approval, the company is to issue 11,093,595 ordinary shares at 25 rupees each in the ratio of one new share for every five shares held.

“The proceeds will be utilized to expand the lending and investment activities of the company,” Abans Finance said.

“Proceeds will also be utilized to upgrade the company into a well capitalized status to meet any possible increases in the minimum capital requirements applicable for Finance Companies.”

The current stated capital of the company is 844,073,080 rupees represented by 55,467,978 ordinary shares.

If the rights issue is fully subscribed the stated capital will increase by a further 277,339,875 rupees represented by 11,093,595 ordinary shares.

Sri Lanka 03-month Treasuries yield rises to 8.72-pct

ECONOMYNEXT – Yields on Sri Lankan Treasury Bills rose at Wednesday’s auction with the 03-month bill yield up 07 basis points to 8.72 percent, the debt office of the Central Bank said.

The 06-month t-bill yield rose 02 bp to 9.63 percent at the auction while the yield on one-year bills rose 03 bp to 10.17 percent, a statement said.

The debt office got Rs23 billion worth of bids and accepted bids worth Rs8.5 billion.

Colombo Stock Exchange Market Review – 28th Dec 2016

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Colombo Stock Exchange Trade Summary 28-Dec-2016

Colombo Bourse closed higher on Wednesday led by gains in banking sector stocks. ASI closed 25.68 points (+0.4%) higher at 6,228.51 while S&P SL 20 index closed 28.76 index points (+0.8%) higher at 3,505.78.

Commercial Bank (LKR 145.00, +2.1%) and Hatton National Bank (LKR 228.30,+2.7%) drove the index to the positive territory along with John Keells Holdings (LKR 144.90,+1.1%) and Trans Asia Hotels (LKR 94.00, +8.7%). Market breadth remained positive with gainers outweighing losers 77 to 46.

Bulk trades in Sunshine Holdings (16mn shares at LKR 47.50 per share) and Commercial Bank (5.0mn shares at LKR 145.00) pushed the turnover to LKR 1.7bn and the negotiated deals accounted for 86% of the market turnover. Apart from Commercial Bank (LKR 835mn) and Sunshine Holdings (LKR 761mn), John Keells Holdings (LKR 32mn), Ceylinco Insurance (LKR 11mn) and Hatton National Bank (LKR 8mn) made noteworthy contributions to the turnover.

Retail activity was mostly centered on Lanka IOC (LKR 30.60, +0.7%), John Keells Holdings and Ceylon Grain Elevators (LKR 83.00, +1.8%). Subsequent to the announcement of the rights issue, Abans Finance declined 10.9% to LKR 32.00. The company intends to raise LKR 277mn via rights issue in the proportion of one new share for every five existing shares at the price of LKR 25.00 per share.

Foreign investors were net buyers of LKR 16mn worth of equities. Foreign participation accounted for 51% of the market activity. Top net inflows were seen in Commercial Bank (LKR 13mn), Hatton National Bank (LKR 6mn) and Three Acre Farms (LKR 1mn). Top net outflow was seen in Chevron Lubricants (LKR 2mn).

At the weekly Treasury bill auction held today, the yields increased across the board with 3-month yield increasing by 7bps to 8.72%, 6-month yields increasing by 2bps to 9.63% and 12-month yield increasing by 3bps to 10.17%. Central Bank offered LKR 11.5bn worth of T-bills and the auction was oversubscribed by two times. It was decided to accept LKR 8.5bn worth of T-bills.
Source: LSL

Sri Lankan shares rise nearly 0.5 pct in high turnover

Reuters: Sri Lankan shares closed about half a percent higher on Wednesday, recovering from a more than eight-month closing low hit in the previous session, led by blue chips such as John Keells Holdings and Hatton National Bank.

Turnover was 1.73 billion rupees ($11.59 million), more than twice the daily average of 739.5 million rupees for this year. Commercial Bank of Ceylon and Sunshine Holdings accounted for 48.3 percent and 44 percent of the turnover, respectively.

The Colombo stock index finished 0.41 percent higher at 6,228.51, bouncing back from its lowest close since April 6 hit in the prior session. It shed around 2.1 percent in the 10 sessions through Tuesday.

"Blue chips lifted the market. I think it was mostly due to window dressing ahead of the year-end," said Atchuthan Srirangan, a senior research analyst with First Capital Equities (Pvt) Ltd.

Foreign investors bought a net 16.2 million rupees worth shares on Wednesday, extending the year-to-date net foreign inflows to 627.5 million rupees in equities.

Top conglomerate John Keells rose 1.1 percent, while Hatton National Bank gained 2.65 percent. Commercial Bank of Ceylon closed 2.1 percent higher, while Sunshine ended flat. 

($1 = 149.3000 Sri Lankan rupees) 

(Reporting by Shihar Aneez; Editing by Subhranshu Sahu)

Businessman Dhammika Perera buys Beach Resorts for Rs330mn

(LBO) – Sri Lankan business tycoon Dhammika Perera has bought control of Beach Resorts limited for 330 million rupees, Amaya Leisure said.

The Board of Directors of Amaya Leisure announced to the Colombo Stock Exchange that it has taken a decision to divest its entire shareholding in The Beach Resorts Ltd, a subsidiary of the Company.

“Board of Directors has taken this decision to rationalize the investment portfolio of the company,” Amaya Leisure said.

As a result, the Company disposed 6,176,790 shares which constitute 84.30 percent of the equity stake of The Beach Resorts Ltd today.

The company has sold the stake for 330.11 million rupees to K.D. Dhammika Perera who is also a Director of Amaya Leisure and The Beach Resorts Ltd.

La Forteresse buys into Alila Hotels with Rs 364 mn investment

La Forteresse (Private) Limited, a fully owned subsidiary of The Fortress Resorts, made an initial investment of Rs.364 million in Alila Hotels and Resorts for a 66 roomed five star hotel at Thalaramba,Weligama to at an estimated cost of Rs.2.1 billion, which includes the cost of land for over Rs.345 million.

The hotel project is undertaken by Alila Hotels & Resorts and La Forteresse (Private) Limited now holds 99.99% of the issued shares of Alila Hotels & Resorts which will be subsequently diluted to 51%.

Citing the rationale for entering into this transaction, the company said that as any expansion of the existing hotel ‘The Fortress’ is limited, the board has decided to invest in a new hotel project to maximise future potential in the long run by optimising strengths within the company and harnessing the expected growth in the tourism sector. (IH)
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Sri Lanka’s Hayleys plans 55-storey twin towers at Deans Road

ECONOMYNEXT – Hayleys said it plans a property development project at its head office premises in the Sri Lankan capital Colombo consisting of twin 55-floor towers each with 3.8 million square feet of “A” Grade commercial space.

The proposed venture would be carried out by a newly incorporated company with 100% of initial equity investment made by Hayleys.

The towers will come at the Hayleys head office premises at No. 400, Deans Road, Colombo 10, a stock exchange filing said.

The implementation of the proposed venture would depend on it receiving infrastructure development incentives offered by the government in the recent past to similar development projects in the country, it said.

Sri Lanka’s Fortress Resorts to build Rs2.1bn 5-star beach hotel

ECONOMYNEXT – The Fortress Resorts, a hotel that’s part of the group of businesses controlled by Sri Lankan businessman Dhammika Perera, is to build a 66-room five-star beach resort on the south coast for Rs2.1 billion.

The Fortress Resorts said in a stock exchange filing that its fully owned subsidiary La Forteresse (Private) Ltd. invested Rs364 million in Alila Hotels & Resorts (Pvt) Ltd. to set up the hotel at Thalaramba, Weligama.

The hotel is to be built by Alila Hotels & Resorts (Pvt) Ltd. at a cost of Rs 2.1 billion which includes the cost of land of Rs345.8 million.

La Forteresse now owns 99.9% of Alila Hotels & Resorts (Pvt) Ltd. which will be subsequently diluted to 51%, the statement said.

The investment by La Forteresse in Alila Hotels is to finance the purchase of three acres of land at Weligama which Alila had bought for Rs345.8 million from LB Finance, a finance firm controlled by Perera.

Sri Lanka sells Rs55bn in bonds below secondary yields

ECONOMYNEXT - Sri Lanka sold 55.58 billion rupees of 4, 7 and 10-year bonds after calling offers for 57 billion rupees, at yields below the secondary market prices earlier in the day, auction data show.

The debt office, which is a unit of the Central Bank sold 18.58 billion rupees of 4-year bonds maturing on 01 March 2021 to yield an average of 11.94 percent.

The same 4-year bonds were quoted at 11.95/05 percent before the auction dealers said.

18.6 billion rupees of 7-year bonds maturing on 01 August 2024 were sold to yield an average of 11.98 percent.

The exact maturity was quoted around 12.20/40 percent before the auction.

18.4 billion rupees of 10-year bonds maturing on 01 August 2026 were sold to yield an average of 12.11 percent.

10-year bonds were quoted around 12.30/45 percent before the auction.

It is not clear who bid at rates below secondary market at the auction. Whether state-controlled (captive source) bid at lower yields or real investors bid low expecting yields to drop is not known. In January some sales proceeds of Hambantota Harbhour is expected. Revenues will also be up, with no salary hikes.

After the auction secondary yields did not drop, but dealers say due to late auction results, there was no active trading.

If secondary rates drop exiting foreign investors who could only sell a 7-year bonds at 98.62 rupees (12.20-pct) would be able to sell at 99.56 rupees (12.00 percent) tomorrow.

A foreign investors who sold a 2026 bond today at 100.22 rupees (12.30 percent) would be able to sell at 101.31 (12.10 percent) tomorrow, if rates fall. A similar profit would be found if the rupee appreciated by one rupee.

Sri Lanka's central bank printed money for 70 days or more through outright purchases of Treasuries, from November loosening policy, pushing longer yields also down rates down, (Sri Lanka loosens policy; signals longer term rates) giving larger profits to exiting foreign investors than if credit markets operated freely, critics say.

Over the last three years, money markets show excess liquidity which is usually the result of dollar inflows or a central bank profit transfer.