Sri Lankan shares edge up in dull trade ahead of long weekend

Reuters: Sri Lankan shares ended slightly firmer on Thursday ahead of a long weekend, edging up from a more than two-month closing low hit early in the week in thin trade as investors awaited direction on political and economic fronts.

The Colombo Stock Index ended 0.1 percent up at 6,411.84, edging up from its lowest close since Sept. 15, on Tuesday. The index fell 0.3 percent during the week recording its fourth straight weekly fall, but is up 3 percent in the year.

Currency, bond, and stock markets will be closed on Friday for a public holiday. Normal trading will resume on Monday.

Analysts said political worries over a delay in local government polls and a lack of clarity over the budget and two other key policy measures weighed on sentiment.

Shares in Ceylon Cold Stores Plc rose 2.2 percent while Commercial Leasing and Finance Plc ended 7.4 percent up.

“The market is stagnant with the year coming to an end. We expect the market to remain stagnant during the month with most funds and investors closing their books,” said Dimantha Mathew, head of research at First Capital Holdings.

Turnover was 451.1 million Sri Lankan rupees ($2.94 million) on Thursday, about half of this year’s daily average of 944.4 million rupees.

Foreign investors were net sellers of equities worth 4.1 million rupees on Thursday. They have been net buyers of 18.2 billion rupees worth of shares this year.

Analysts said domestic investors were concerned about political stability as coalition partners in President Maithripala Sirisena government had decided to contest separately in delayed local council polls, which have yet to be scheduled.

Finance Minister Mangala Samaraweera imposed new taxes on motor vehicles, telecoms, banks and liquor in the 2018 budget presented this month, with a final budget vote scheduled for Dec. 9.

Analysts said market participants were seeking more clarity on those taxes and that there could be some amendments before the final vote.

The government also released gazette notifications on the Inland Revenue Act and the Exchange Control Act, with investors waiting for clarification on the new legislation. 

($1 = 153.4500 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez)

Sri Lankan shares flat near 2-mth closing low; financials fall

Reuters: Sri Lankan shares ended largely unchanged on Wednesday, hovering near an over two-month closing low hit in the previous session, as gains in diversified shares offset losses in financials.

The Colombo Stock Index ended 0.31 points up at 6,405.53, near its lowest close since Sept. 15 hit on Tuesday. The index fell 1.1 percent last week, but is up 3 percent in the year so far.

Analysts said political worries over a delay in local government polls and a lack of clarity over the budget and two other key policy measures continued to weigh on sentiment.

Market heavyweight John Keells Holdings Plc ended 0.5 percent up while top private lender Commercial Bank of Ceylon Plc, which accounted for over 50 percent of the day’s turnover, ended 1.3 percent lower.

“There was foreign selling in Commercial Bank. Investors are concerned over possible hit on profitability due to a new tax in the budget,” said Jaliya Wijeratne, CEO at First Capital Equities.

“Investors are waiting for some direction and for the political and economic uncertainties to get cleared.”

Turnover stood at 799.7 million rupees ($5.20 million) on Wednesday, less than this year’s daily average of 946.6 million rupees.

Foreign investors net sold equities worth 216.5 million rupees on Wednesday. They have been net buyers of 18.2 billion rupees worth of shares so far this year.

Last week, a court issued a stay order on a legislation that cleared the island nation’s Election Commission to hold local government polls in which the coalition partners of the government have decided to contest separately.

Finance Minister Mangala Samaraweera imposed new taxes on motor vehicles, telecoms, banks and liquor in the 2018 budget presented earlier this month, with the final budget vote scheduled for Dec. 9.

Analysts said market participants have sought more clarity on these taxes and that there could be some amendments to these proposals before the final vote.

The government also released gazette notifications on the Inland Revenue Act and the Exchange Control Act, with investors waiting for clarification on the new legislations. 

($1 = 153.7500 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Vyas Mohan)

Sri Lanka Treasuries yields fall across maturities

ECONOMYNEXT – Sri Lankan Treasury Bill yields fell across maturities at an auction Tuesday with the 03-month bill yield down 20 basis points to 8.20 percent from 8.40 percent at the last auction.

The public debt department of the central bank said the 06-month Treasury Bill yield fell 02 basis points to 8.88 percent at from 8.90 percent at the last auction.

The 01-year bill yield fell 02 basis points to 9.44 percent from 9.46 percent at the last auction.

The statement said the public debt department got bids worth Rs82.6 billion and accepted bids worth Rs22.7 billion.

Sri Lankan shares hit over 2-mth closing low

Reuters: Sri Lankan shares touched a more than two-month closing low on Tuesday, dragged down by financials, even as investors waited for clarity on new taxes and key legislations amid political uncertainty.

The Colombo stock index ended 0.19 percent lower at 6,405.22, its lowest close since Sept. 15. The index fell 1.1 percent last week, but is up 3 percent in the year so far.


Shares in Sampath Bank Plc fell 1.5 percent, while Commercial Bank of Ceylon Plc ended 0.7 percent weaker and Colombo Cold Stores Plc dropped 2.9 percent, dragging down the index.

Turnover stood at 238.9 million rupees ($1.55 million) on Tuesday, a quarter of this year’s daily average.

“It’s a very slow day with low turnover level, as market is very dull with lower investor confidence,” said Dimantha Mathew, head of research at First Capital Holdings.

Foreign investors net bought equities worth 35.8 million rupees on Tuesday, extending the year-to-date net foreign inflow to 18.4 billion rupees worth of stocks.

Analysts said political worries over a delay in local government polls and a lack of clarity over the budget and two other key policy measures continued to weigh on sentiment.

Last week, a court issued a stay order on a legislation that cleared the island nation’s Election Commission to hold local government polls in which the coalition partners of the government have decided to contest separately.

Finance Minister Mangala Samaraweera imposed new taxes on motor vehicles, telecoms, banks and liquor in the 2018 budget presented earlier this month, with the final budget vote scheduled for Dec. 9.

Analysts said market participants have sought more clarity on these taxes and that there could be some amendments to these proposals before the final vote.

The government also released gazette notifications on the Inland Revenue Act and the Exchange Control Act, with investors waiting for clarification on the new legislations. 

($1 = 153.7500 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)

Sri Lankan shares recover from 2-mth closing low as large caps gain

Reuters: Sri Lankan shares ended marginally higher on Monday in dull trade, recovering from a near two-month closing low hit in the previous session, even as investors awaited clarity on new taxes and key legislations.

The Colombo stock index ended 0.05 percent firmer at 6,417.15, edging up from its lowest close since Sept. 26 hit on Friday. The index fell 1.1 percent last week, but is still up 3 percent in the year so far.


Turnover stood at 342.7 million rupees ($2.23 million) on Monday, around a third of this year’s average.

“Investors are on wait-and-see approach with continued political uncertainty,” said Atchuthan Srirangan, senior research analyst, First Capital Holdings PLC.

“The good sign is that the foreign participation is high.”

Foreign investors net bought equities worth 42.9 million rupees on Monday, extending the year-to-date net foreign inflow to 18.4 billion rupees worth of stocks.

Shares in Ceylon Tobacco Company Plc rose 2.1 percent, while Lion Brewery Plc ended 2.3 percent up and Hatton National Bank Plc ended 0.7 percent firmer, pushing the overall index up.

Analysts said political worries over delay in local government polls and a lack of clarity over budget and two other key policy measures continued to weigh on sentiment.

A court on Wednesday issued a stay order on a legislation that cleared the island nation’s Election Commission to hold local government polls in which the coalition partners of the government have decided to contest separately.

Finance Minister Mangala Samaraweera imposed new taxes on motor vehicles, telecoms, banks and liquor in the 2018 budget presented earlier this month, with the final budget vote scheduled for Dec. 9.

Analysts said market participants have sought more clarity on these taxes and that there could be some amendments to these proposals before the final vote.

The government also released gazette notifications on the Inland Revenue Act and the Exchange Control Act, with investors waiting for clarification on the new legislations. 

($1 = 153.6500 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Vyas Mohan)

First Capital ties up with foreign brokerages

First Capital Equities, the equity arm of First Capital Holdings PLC, has taken several steps to strengthen its business by establishing strategic partnerships with brokering houses based in Asia and the US, in addition to reinforcing its local efforts through the group’s expanding branch network.

Director/Group CEO, Dilshan Wirasekara told the Business Times that they have tied up with foreign brokerages in Japan and New York who will promote local equities amongst their clients.

He added that the group sees its earnings moderating in the second half with interest rates stabilising resulting in lower trading opportunities for the primary dealer business. The group recorded a profit after tax of Rs. 731 million for the first half of 2017/18, a substantial increase compared to Rs. 406 million in the corresponding period of the previous year. Total comprehensive income for the first half was Rs. 641 million (2016/17 – Rs. 406 million).

The primary dealer business dominated the group’s earnings reporting a profit after tax of Rs. 538 million for the first half (2016/17 – Rs. 371 million), Mr. Wirasekara said. First Capital Treasuries PLC capitalised on opportunities created by declining interest rates in the secondary market realising significant trading gains, he added noting that it has a capital base of Rs. 2.2 billion.

A strategic approach has led to improved activity in the corporate finance business, mobilising Rs. 13 billion for clients through structuring and placement of corporate debt securities and recording a fee income of Rs. 42 million (2016/17 – Rs. 30 million) during the period under review.

First Capital Asset Management Ltd recorded a growth in funds under management to end with Rs. 6.7 billion as at 30th September2017.

“Our main focus is to enhance the fee based activities and the management of risk,” Mr. Wirasekara added.

The credit rating of First Capital Holdings PLC and First Capital Treasuries PLC was reaffirmed by ICRA Lanka Ltd in October 2017 at “A-”.

www.sundaytimes.lk

People’s Insurance PLC records consecutive underwriting profits

The Sri Lankan insurance industry continues its growth as a result of increased awareness on life insurance, introduction of new life insurance products to cater to customer requirements such as retirement solutions and investment products, enhanced customer service, etc, insurance sector experts said in Colombo.

The country has a Rs. 498 billion insurance industry in terms of total assets dividing it as Rs. 332 billion and Rs. 166 between Life and General insurance, respectively.

Twelve insurers operate in the life insurance business along with another three other insurers handling both general and life while 13 companies operate as general insurers, they disclosed.

Sri Lanka’s aging population is going to be a major concern and life insurance will play a vital role towards the welfare of these aged people, they said adding that with frequent occurrence of natural disasters, the risks in the life of normal people are also increasing.

Chairman of People’s Insurance PLC. Jehan P. Amaratunga and newly appointed CEO Deepal Abeysekara expressed these views at a ceremony organised in connection with the re-launching of its insurance brand in Colombo recently.

Outlining the performance of the company, Mr. Amaratunga noted that they commenced business seven years back and today People’s Insurance PLC has emerged as one of the most profitable insurers in the country with consecutive underwriting profits during last five years.

It is part of the country’s largest financial group, consisting of People’s Bank and People’s Leasing & Finance PLC and is backed by strong international re-insurers (rated above the minimum standards set by the IBSL), he pointed out.

Newly appointed Chief Executive Officer of People’s Insurance PLC Mr. Abeysekara told the gathering that the company is in the forefront of the non-life insurance industry.

“We are well known among our insured public for our prudent underwriting and efficiency of service. Our successful journey reached a culmination in 2016 when our company was positioned among the biggest stakeholders in the insurance sector after recording an investment portfolio which surpassed Rs. 5 billion,” he said.

www.sundaytimes.lk

Brush manufacturer BPPL faced tough six months

By Duruthu Edirimuni Chandrasekera

Brush manufacture, and exporter of sanitary maintenance tools, BPPL Holdings PLC has had a tough six months ending September this year.

The impact of floods in May/June affected timber supplies, restricting their sales growth during the period. In a bid to avoid such hardships in the future, the company has opted to import some timber for manufacturing their products, BPPL Managing Director Dr. Anush Amarasinghe told the Business Times.

“We now carry a limited quantity of imported timber as a safety measure to manufacture our products.” Although the situation had normalised by July 2017, inventory replenishment took longer than anticipated due to the threat of landslides affecting tree uprooting early on. Inventories only normalised by September 2017, which meant that shipments could only be regularised towards the end of the reported period.

Dr. Amarasinghe added the order pipeline for the next few quarters is strong with substantial order flows from customers in the disaster management and janitorial sectors in the US. “The need to replenish inventory rapidly following the recent hurricanes has boosted orders from the disaster management sector. We have also had significant wins from customers in the janitorial sector for our synthetic fiber/monofilament products. Revenue from these orders is expected to flow through from the Oct-Dec’ 2017 quarter onwards,” he has said in the quarterly statement.

Supply of the yarn extrusion machinery is also on track with deliveries expected during November – December 2017. Machinery will be commissioned during the January to March quarter of 2018 and contribute to revenue from April 2018.

Consolidated revenue for the period was Rs. 1.2 billion, up 7 per cent over the corresponding period in the previous year. The North American region remained the dominant contributor, accounting for 82 per cent of reported revenue. The region saw a 9 per cent increase in revenue over the previous financial year. Robust growth was also seen in Australia, and the European region, Dr. Amarasinghe has said.

BPPL has continued to roll out their own brand of cleaning products in the South-East Asian region. A distributor was appointed in Malaysia during the past quarter and another national hypermarket chain undertook to carry its products in Indonesia. “Now there are four national hypermarket chains and seven local stores in the Jakarta region that retail our products,” Dr. Amarasinghe has added.

BPPL’s gross profit was slightly down to Rs. 439 million for the six month period as gross margins fell due to wage escalation as a result of the floods. Irregular timber supplies increased overtime payments as workers had to process the timber as and when it arrived.

www.sundaytimes.lk

Only Sri Lanka’s top five stockbrokers profitable

Out of the 29 stockbrokers operating at the Colombo Stock Exchange (CSE), only the top five are profitable, the next 10 may be breaking even while the rest are full of woes, market analyst say.

Some stockbrokers are closing their outstation branches in a move to cut costs and manage bottom-lines and some who boasted over 25 branches have cut this number by four fold to end up at just five, they say.

While the broking companies are faced with several serious issues with strapped cash flows, some firms are shedding staff. The Securities and Exchange Commission (SEC)’s new rules in capital adequacy which direct the implementation of a risk based Capital Adequacy Requirement (CAR) of 1.2 times the risk requirement of stock brokers subject to a minimum liquid capital requirement of Rs. 35 million is also curtailing their operation, they said.

Broking firms have cost cuts on many items since the crisis in the CSE nearly three years ago, but to no avail. It’s hard to rally in profits and some new firms are selling their licenses.

At least three firms are in the market for sale, according to analysts. Some others who are chugging along had hinted at reintroducing margin credit, but the SEC is firm on not doing so. Margin credit is to extend credit facilities to clients in broking firms through margin providers registered with the SEC.

“In the wrong hands margin credit will be disaster and it’ll be a repeat of the 2011-2013 era,” a SEC official said.

They said that some run their branches on CSE premises which are subsidised by the CSE. “Branches at Matara, Kandy, Kurunegala, Negombo and Jaffna are highly subsidised. They pay a minimal rent only and no utilities,” a CSE official said. But this isn’t enough, many in the industry say.

“There should be a stronger pull to attract retailers, otherwise many firms in the trade will sink,” a CEO at a broking firm added.

The CSE insists that the market continues to trade at a discount compared to regional peers and offers further opportunities for investors – with a market price to earnings (P/E) recorded at 10.99 as of the end of October. “The market has also continued to attract foreign investment throughout 2017 with Rs. 98 billion in foreign buying contributing to a net foreign inflow of Rs. 19.6 billion year-to-date, a figure that is substantial compared to foreign activity in 2015/16. 2017 also recorded an all-time high for foreign investor buying recorded in the first half of a calendar year,” the CSE said in a statement earlier this month.

While acknowledging all this, brokers reiterate their issue lies with the retailers. To be fair by them, the CSE tries hard.

“The CSE through its market development activities has embarked on an awareness drive in 2017, reaching out to multiple investor segments around the country and in international markets. Such efforts have seen the CSE work with the SEC on ‘Invest Sri Lanka’ investor forums in the US, Australia and New Zealand in 2017 and an island-wide local retail investor focused Investor Forum campaign to create awareness on stock market investment. The CSE branch network has also conducted over 500 educational programmes so far in 2017. In addition, CSE and the Colombo Stock Brokers Association is also presently conducting a series of events presenting investment research on companies featured on the S&P SL 20 Index, to an exclusive audience of Local Institutional Investors,” the CSE statement said.

It added that the Benchmark All Share Price Index (ASPI) has made a 2.78 per cent gain in October alone and a 6.31 per cent gain year-to-date, while the S&P SL 20 index, which features the CSE’s 20 largest and most liquid stocks has also improved consistently, making a 5.74 per cent gain in October and a 11.50 per cent gain since the start of 2017. “The positive growth of the indices mark a reversal of the declining trend recorded in 2015 and 2016, during which the ASPI recorded a decline of 5.54 per cent and 9.66 per cent, respectively. The performance of the market has also resulted in an improved involvement among investors, where the Daily Average Turnover is recorded at Rs. 943 million year-to-date, which is a 28 per cent increase from Rs. 737 million in 2016.”

www.sundaytimes.lk

Sri Lankan shares hit 2-month closing low on foreign selling

Reuters: Sri Lankan shares fell to a near two-month closing low on Friday on foreign selling, while investors waited for clarity on new taxes introduced in the national budget and on key legislations.

The Colombo stock index ended 0.66 percent weaker at 6,413.68, its lowest close since Sept. 26. The index fell 1.1 percent during the week, but is still up 3 percent for the year so far.

Turnover stood at 596.4 million rupees on Friday, less than this year’s average of around 953.3 million rupees.

“It is turning into a typical year-end market. But, we expect to see foreign activity supporting the market. They see value in some select shares,” said Hussain Gani, deputy CEO at Softlogic Stockbrokers.

Foreign investors net sold equities worth 117.5 million rupees ($764,476) on Friday, but they have bought a net 18.4 billion rupees worth of stocks so far this year.

Top fixed-line phone operator Sri Lanka Telecom fell 5.4 percent and Lion Brewery Ceylon Plc lost 4.9 percent, dragging the overall index down.

Analysts said political worries over delay in local government polls and a lack of clarity over budget and two other key policy measures also weighed on sentiment.

A court on Wednesday issued a stay order on a legislation that cleared the island nation’s Election Commission to hold local government polls in which the coalition partners of the government have decided to contest separately.

Finance Minister Mangala Samaraweera imposed new taxes on motor vehicles, telecoms, banks and liquor in the 2018 budget presented earlier this month, with the final budget vote scheduled for Dec. 9.

Analysts said market participants have sought more clarity on these taxes and that there could be some amendments to these proposals before the final vote.

The government also released gazette notifications on the Inland Revenue Act and the Exchange Control Act, with investors waiting for clarification on the new legislations. 

($1 = 153.7000 Sri Lankan rupees) 

(Reporting by Shihar Aneez; Editing by Vyas Mohan)

Amana Takaful Group nets Rs.128.5 mn pre-tax profit in 3Q

Amana Takaful Groups’ growth and profit momentum continued into the 3rd Quarter netting in a pre-tax result of Rs. 128.5 million for the period ending September 2017. This compares with a loss of Rs 96.5 million in the same period last year.

With a modest 7% upside on Gross Written Premium(GWP) of Rs. 2.8 billion for the 9 months, the re-structured group has been able to harness a return of Rs. 285 Million on its investment assets in a relatively lackluster environment. Amana Takaful PLC, Amana Takaful Life PLC and Amana Takaful Maldives have all positively contributed to this performance.

“Steering a delicate balance of Portfolio restructure, a selective Under-writing & prudent risk appetite, tight productivity measures together with a robust claims management ethos, the Group is better positioned now to meet and exceed stakeholder expectations,” Group Chairman, Tyeab Akbarally said.

Amana Takaful PLC generated a GWP of 1.32 billion, 10% ahead over the corresponding period in 2016. The profit efore tax out-turn of Rs.46 million compares with a loss of Rs 111 million in 2016. A better than expected performance of 32% on the non-Motor classes, Medical and Micro Takaful segments totally mitigated the downside in motor revenue. Claims on account of the recent flood were disbursed on time and in full. Motor loss ratios improved significantly to 58% vs 76% a year ago. Performance of the company’s new product lines has been exemplary.

The combined ratio has improved markedly to 102% from 118% a year earlier. Following a conscious decision to re-align its portfolio strategy, Amana Takaful Life PLC, listed on the CSE in August 2016, more than doubled its profit to Rs. 32 Million in the nine months to September, from the previous period’s result of Rs. 14 Million.

On account of phasing out a product line, the total GWP in the nine months is 95% of the previous year. However, the long term endowment life plans continue to grow in line with expectations, boosting the Life Fund by 11%.

The off-shore operation Amana Takaful Maldives PLC, the only listed entity among industry players in the Maldives Stock Exchange, chugged along steadily with 7% growth in GWP, 61% upside in profit before tax compared to the previous year, while defending its market share despite the advent of new competition. Hereto, new product lines have delivered promising performance. Productivity measures have mitigated the rise in re-takaful expenditure and an upsurge in claims cost.

Both Amana Takaful PLC and Amana Takaful Maldives PLC emerged winners of the Gold Award for single entity Takaful operators at the recent Islamic Finance Forum for South Asia.
www.dailynews.lk

Sri Lankan shares hit 1-wk closing low amid heavy foreign outflow

Reuters: Sri Lankan shares hit a one-week closing low on Thursday, as investors waited for clarity on new taxes in the national budget and on key legislations, although selling by foreign investors in Commercial Bank of Ceylon helped boost turnover.

The Colombo stock index ended 0.13 percent weaker at 6,456.11, its lowest close since Nov. 16.

Commercial Bank, which accounted for 82.3 percent of the day’s turnover, closed 0.5 percent firmer. The index was, however, dragged down by large caps, with Ceylon Tobacco Company falling 1 percent and Nestle Lanka Plc slipping 1.1 percent.

“Banks were actively traded and Commercial Bank foreign selling was the main contributor for the turnover. Other than that, the market was very dull,” said Atchuthan Srirangan, senior research analyst at First Capital Holdings PLC.

The day’s turnover stood at 1.49 billion rupees, more than this year’s average of around 954.9 million rupees.

Foreign investors net sold equities worth 1.23 billion rupees ($8 million) on Thursday, but they have bought a net 18.5 billion rupees worth stocks so far this year.

“It is a bit weak market. There is also some political uncertainty after a court decision related to local government election. But we expect foreign trading to continue,” Srirangan said.

A court on Wednesday issued a stay order on a legislation that cleared the island nation’s Election Commission to hold local government polls in which the coalition partners of the government have decided to contest separately.

Finance Minister Mangala Samaraweera imposed new taxes on motor vehicles, telecoms, banks and liquor in the 2018 budget presented earlier this month, with the final budget vote scheduled for Dec. 9.

Analysts said market participants have sought more clarity on these taxes and that there could be some amendments to these proposals before the final vote.

The government also released gazette notifications on the Inland Revenue Act and the Exchange Control Act, with investors waiting for clarification on the new legislations. 

($1 = 153.6500 Sri Lankan rupees) 

(Reporting by Shihar Aneez; Editing by Biju Dwarakanath)

Sri Lanka's central bank cancels CIFL licence

ECONOMYNEXT – Sri Lanka’s central bank said it has decided to cancel the licence of Central Investment and Finance (CIFL) , a troubled finance company, under the provision of the Finance Business Act no.42 of 2011.

Notice of cancellation has been issued to the company, a stock exchange filing said. Trading of CIFL shares were suspended pending the accouncement.

The central bank said CIFL can object to the cancellation in writing to its Monetary Board.

Sri Lanka 03-month Treasuries yield falls to 8.40-pct

ECONOMYNEXT – The yield on Sri Lanka’s 03-month Treasury Bills fell 14 basis points to 8.40 percent at an auction Wednesday from 8.54 percent last week, the Central Bank’s Public Debt Department said.

The yield on the 06-month bill fell 03 basis points to 8.90 percent from 8.93 percent last week, a statement said.

The 01-year Treasury bill yield remained unchanged at 9.46 percent.

The Public Debt Department for Rs60.5 billion worth of bids and accepted bids worth Rs20.3 billion.

SEC approves Citrus Group restructure

The Securities and Exchange Commission (SEC) has approved the restructure of the Citrus Group, which includes Citrus Leisure Plc, Hikkaduwa Beach Resort Plc, Waskaduwa Beach Resort Plc, Kalpitiya Beach Resort Plc and Passikuddah Beach Resorts Ltd.

Citrus Leisure Plc said the SEC has granted approval to the application made by Hikkaduwa Beach Resort (CITH) to issue new shares of CITH as part of the restructuring plan of the Citrus Group.

This will be done by way of a private placement to the shareholders of Kalpitiya Beach Resort (CITK) and to the sole shareholder of Passikudah Beach Resorts Ltd. and the issue of shares to the shareholders of Waskaduwa Beach Resort (CITW) accepting the proposed voluntary offer.

CITH expects to complete the amalgamations and voluntary offer, subject to required regulatory approvals, by mid-January 2018.

www.ft.lk

Fitch assigns final ratings to LB Finance's senior, subordinated debt

Fitch Ratings has assigned LB Finance PLC's (LB; A-(lka)/Stable) proposed senior unsecured and subordinated debentures final National Long-Term Ratings of 'A-(lka)' and 'BBB+(lka)' respectively.

The assignment of the final ratings follow the receipt of documents conforming to information already received. The final ratings are the same as the expected rating assigned to the senior unsecured and subordinated debt on September 19, 2017.

The proposed issuance, which will have a tenor of five years and carry fixed coupons, will be listed on the Colombo Stock Exchange.

LB expects to use the proceeds to fund loan book growth, reduce asset and liability maturity mismatches and to improve its Tier II capital base through the subordinated debt.

www.dailynews.lk

Singer Finance rights issue approved

Shareholders of Singer Finance at an extraordinary meeting yesterday approved a rights issue to raise Rs. 551 million, the company said in a stock exchange filing.

The company will issue 36,740,741 ordinary voting shares at Rs 15 each in the ratio of two new shares for every nine shares held.

The proceeds will be utilized to further expand the equity base of the company and improve capital adequacy. Proceeds will also be utilized to part finance the growth in the loan portfolio of the company, Singer Finance said.
www.dailynews.lk

Millennium Housing records Rs 169 mn in revenue for H1

Millennium Housing Developers PLC (MHDL), Sri Lanka’s leading township developer, announced their outstanding financial performance for the H1 ending September 30, 2017, posting all-time high H1 revenue of Rs.1378.25 Million with a PAT of Rs.168.89 Million. When compared to H1 performance of last financial year, the company has grown by Rs.794.19 Million in top line and Rs.101.85 Million in profit.

“We are extremely pleased with MHDL’s H1 performance and we are confident that this performance will be continued for the rest of the financial year. Our outstanding business performance affirms a promising future for all stakeholders as we continue to offer affordable luxury for all our customers who seek progressive lifestyles,” Said Harshith Dharmadasa, Chairman, Millennium Housing Developers PLC.

www.dailynews.lk

Foreign investment in stock market hits all-time high in 2017

In what continues to be a record-breaking year for foreign portfolio investment in the Colombo stock market, 2017 has recorded an all-time high in foreign purchases during any given year, with Rs. 105.1 billion (year-to-date) surpassing the previous record of Rs. 104.7 billion set in 2014.

The development follows signs of renewed foreign interest in the stock market in mid-2017, during which foreign purchases recorded for the first half of 2016 doubled in 2017 and recorded an all-time high for foreign purchases in the first half of a calendar year. Such foreign purchases have contributed to a net foreign purchase figure of Rs. 18.9 billion year-to-date, a figure that is substantial compared to foreign activity in 2015/16.

Growing foreign interest in the market has also contributed to a 30% improvement in daily average turnover, where the figure has improved to Rs. 955 million (year-to-date) from Rs. 737 million in 2016.

The record continues to indicate that foreign investors have been quick toidentifythe future potential and the buying opportunities in Sri Lankan stocks.

An attractive market valuation (P/E), strong growth in corporate earnings, dividend payments, and Capital Gains Tax exemptions offered to share transactions are considered to be defining factors in attracting the level of foreign investor interest the market has witnessed in 2017.

Commenting on the development, Colombo Stock Exchange (CSE)Head of Market Development Niroshan Wijesundere stated that the CSE had been aggressively promoting the stock market across all investor segments, in particular foreign institutional investors.

He added that amidst a number of positives so far this year, the market continues to trade at a discount compared to regional peers and offers further opportunities for investors – witha market P/E recorded at 10.72at present and a majority of listed companies trading below book value.

“The macroeconomic outlook continuing to improve will also offer both foreign and local investors further confidence in the Sri Lankan stock market,” Wijesundere added.

The CSE in association with the Securities and Exchange Commission of Sri Lanka (SEC) resumed a concentrated effort to promote the stock market in key foreign marketsthis year, through‘Invest Sri Lanka’ forums in Sydney, Melbourne, Auckland, and most recently in New York.

Foreign institutional investors and Sri Lankans living abroad present at these events have given a broad endorsement of the investment opportunities and potential in the capital market and have been very optimistic on Sri Lanka’s future growth potential.

In a related development, foreign purchases in the stock market originating from Australia in a particular year recorded an all-time high in 2017, with a figure of Rs. 651 million by the week ending 17 November. A strong community of individuals with Sri Lankan origin eager to look at new Sri Lankan investment opportunities and the celebration of 70 years of diplomatic ties between Sri Lanka and Australia presented the CSE with a unique opportunity to promote the capital market in Australia this year.

The CSE and SEC have also launched an island-wide local retail investor focused Investor Forum and a campaign to create awareness on the record foreign investment and the potential opportunities in the market for local investors. The local investor forum serieshas been supported through over 500 awareness programs conducted through the CSE branch network so far in 2017.

In addition, CSE and the Colombo Stock Brokers Association is also presently conducting a series of events presenting investment research on companies featured on the S&P SL 20 Index, to an exclusive audience of local institutional investors – another key investor segment in the Sri Lankan stock market.

www.ft.lk

LOLC 1H pre-tax profit up 77% to Rs. 11.7 b

LOLC yesterday announced excellent growth in profitability in the first half of FY18 driven by the financial services sector compared with an year earlier.

The profit before tax for the first half ended on 30 September 2017 was Rs. 11.7 billion compared with Rs. 6.6 billion reported last year, a growth of 77%. The corresponding PAT increased by a robust 73% to end the quarter at Rs. 8.8 billion.

The Group’s total assets reached Rs. 748 billion, with an advances portfolio of Rs. 488 billion. The Group balance sheet is further strengthened by investment securities held by the financial services sector companies of Rs. 86 billion mainly represented by Government securities and bank deposits.

The Group’s local financial services companies – LOLC Finance PLC(LOFC), Commercial Leasing and Finance PLC(CLC), LOLC Micro Credit Ltd.(LOMC), and BRAC Lanka Finance PLC(BRAC) – performed well and contributed well to the bottom line results.

The lending portfolios of each company recorded steady growth, with LOFC portfolio reaching Rs.94 billion, CLC portfolio reaching Rs.58 billion, LOMC’s portfolio reaching Rs. 55 billionand BRAC portfolio reaching Rs.12 billion over the last 12 months.

Deposit bases of LOFC, CLCand BRAC grew to Rs. 99 billion, Rs. 23 billion and Rs. 6 billion respectively. The total assets of LOFC reached Rs.135 billion, whist CLC’s total assets reached Rs.76 billion, LOMC’s total assets reached Rs.80 billion and BRAC’s total assets reached Rs.15 billion.

The three finance companies hold large portfolios of investments in Government securities and bank deposits as its statutory reserves and other investments, strengthening each balance sheet. LOFC holds Rs.27 billion of such assets, with CLC following suit with Rs.12 billion in statutory reserves and investments.

PRASAC Micro Finance Institution Ltd. in Cambodia became a subsidiary of the Group at the beginning of the year, which positively contributed to the bottom line. LOLC’s other two investments in Cambodia and Myanmar also join in reporting strong financial performance.

The regional expansion of the Group is poised to deliver steady results diversifying and balancing the exposure LOLC has to the local market. The markets reached by LOLC with regional expansion are with great potential for portfolio growth and strong portfolio quality. Therefore, these investments are expected to derive a strong profit signature in the medium to long term enhancing the shareholder value of the Group. Profit contribution from the financial services companies to the Group results was Rs. 10.6 b, with both local companies and companies in the region contributing equally.

The financial services sector’s performance is remarkable given the external challenges faced by the industry including increasing interest rates putting pressure on net interest margins, strain on collection efforts due to rising interest rates and lower economic activity.

Other sectors in the Group delivered moderate results with the leisure sector still being in a stage of development with three of the Group’s local properties being under construction. The properties in Kosgoda, Beruwala (Riverina) and the Maldives are progressing steadily in line with the project plans.

The trading sector consisting of the Browns Group and the plantation sector too recorded moderate results. The plantation company within the Group, Maturata Plantations recorded operating profits before finance costs reversing its long history of making losses, well adopting the restructuring of the estate management operations and producing high quality produce.

Equity accounted investees contributed lower profits compared with last year, mainly as PRASAC was moved to subsidiary category in the financials of the Group.

Commenting on the performance of the Group, LOLC Group Managing Director/CEOKapila Jayawardena stated: “The Group’s fine and consistent performance for the last six months is driven by the financial services companies, led by the four companies in Sri Lanka and our investments in Cambodia and Myanmar. All financial services companies are doing well with strong assets growth and steady profitability. Regional expansion to Myanmar and Cambodia has derived excellent results, with PRASAC and LOLC Cambodia contributing well to the bottom line.”

www.ft.lk

Sri Lankan shares edge up on large caps; turnover hits over 2-wk low

Reuters: Sri Lankan shares ended slightly higher on Wednesday in dull trade, as investors stayed on the sidelines awaiting clarifications on new taxes in the national budget and key legislations unveiled earlier this month, analysts said.

The Colombo stock index ended 0.09 percent firmer at 6,464.44. It lost 1 percent last week.

Large caps led the gains, with Ceylon Beverage Holdings Plc jumping 17.8 percent and Lion Brewery Ceylon Plc up 5.6 percent.

“Investors are waiting for clarifications on the budget, Inland Revenue Act, and Exchange Control Act,” said Atchuthan Srirangan, senior research analyst at First Capital Holdings PLC.

“There was interest in blue chips. The index has yet to find a direction after the budget.”

Finance Minister Mangala Samaraweera imposed new taxes on motor vehicles, telecoms, banks and liquor in the 2018 budget presented on Nov. 9 to boost revenues, as the budget deficit for the current year slipped to 5.2 percent of the gross domestic product.

The final budget vote is scheduled for Dec. 9 and the market expects some amendments that could help give it some direction.

Analysts said market participants have sought more clarity on these taxes and that there could be some amendments to these proposals before the final vote.

The government also released gazette notifications on the Inland Revenue Act and the Exchange Control Act, with investors waiting for clarifications on the new legislations.

Foreign investors net bought equities worth 20.7 million rupees ($134,678) on Wednesday, extending the net foreign inflow to 19.7 billion rupees so far this year.

The day’s turnover, which hit a more-than two-week low, stood at 324.3 million rupees, around a third of this year’s average of around 952.5 million rupees.

($1 = 153.7000 Sri Lankan rupees) 

(Reporting by Shihar Aneez; Editing by Biju Dwarakanatha)

Claims, benefits paid exceed Rs.11.8 bn Ceylinco Insurance posts Rs. 3.4 bn PAT

“Indicating another remarkable year, Ceylinco Insurance PLC, the holding company, Ceylinco General Insurance Ltd and Ceylinco Life Insurance Ltd, recorded a mammoth consolidated after tax profit of Rs.3.4 billion, resulting in a growth of 41 % for the period ended 30th September 2017 said Ajith Gunawardena, Managing Director / CEO said.

Profit before tax stood at an exceptional Rs. 4.2 billion with a 46 % growth. The Company completed 30 years in existence in 2017 and every year, we’ve grown from strength to strength, with achievements that none can match.”

“Success in life insurance reflects the trust and confidence of customers – our policyholders. Ceylinco Life has had an excellent year thus far, contributing Rs. 11.5 billion in premium income; Rs 2.5 billion in profit before tax and Rs 2 billion in net profit to the company’s consolidated results for the nine months ending 30th September 2017. Our Life Fund has grown by Rs 7.3 billion over this period to Rs 85.2 billion. These are truly noteworthy figures,” Ceylinco Life Insurance Ltd, R. Renganathan, Managing Director/Chief Executive Officer said.

Patrick Alwis, Managing Director of Ceylinco General Insurance Ltd, said: “Up to 30th September 2017, Ceylinco General Insurance recorded a premium income of Rs. 13.3 billion (Rs.13,278 million) with an impressive growth of 10.5 %. This is an increase of Rs.1.2 billion over the previous year for the same period, which I would say is an exceptional achievement.

This trend will no doubt help us to end the year on a resoundingly successful note.”

“Thus, the overall premium income of Ceylinco General and Ceylinco Life reached a staggering Rs.24.8 billion, indicating an increase of Rs.1,748 million or an overall growth of 7.6 % over the same period in the previous year.”

“Ceylinco General Insurance paid claims amounting to Rs. 6.6 billion during the 9-month period ended September 2017. During 2017, Ceylinco General Insurance infused great value into its products and services. For the second consecutive year, all flood victims were paid in record time. Over 3 billion worth of claims were paid in 14 days to over 3,000 flood victims.”
www.dailynews.lk

Sri Lankan shares edge down on CTC; foreign buying boosts turnover

Reuters: Sri Lankan shares ended slightly weaker on Tuesday, led lower by large cap Ceylon Tobacco Company , but heavy buying by foreign investors in blue chips capped the decline.

Local retail investors, however, stayed on the sidelines due to a lack of fresh triggers amid expectations certain amendments in the budget could help boost sentiment, analysts said.


The Colombo stock index ended 0.23 percent lower at 6,458.73. It lost 1 percent last week.

Ceylon Tobacco Company fell 4.6 percent.

“Still, the foreign demand is there and we expect the same trend to continue this year,” said Hussain Gani, Deputy CEO at Softlogic Stockbrokers.

The final budget vote is scheduled for Dec. 9 and the market expects some amendments that could help give it some direction.

Foreign investors net bought equities worth 70 million rupees ($455,285) on Tuesday, extending the net foreign inflow to 19.7 billion rupees so far this year.

Foreign buying accounted for 85 percent of the day’s turnover of 1.58 billion rupees, more than this year’s average of around 955.4 million rupees. Finance Minister Mangala Samaraweera imposed new taxes on motor vehicles, telecoms, banks and liquor in a bid to boost revenues, as the budget deficit for the current year slipped to 5.2 percent of the gross domestic product.

Samaraweera imposed taxes on telecom towers and text messages, and introduced a debt repayment levy of 20 cents per 1,000 rupee bank transaction with effect from April 1 next year.

Analysts said the market players have sought more clarification on these taxes and perhaps there could be amendments to these proposals before the final vote. 

($1 = 153.7500 Sri Lankan rupees) 

(Reporting by Shihar Aneez; Editing by Biju Dwarakanath)

Sri Lankan shares edges down; traders await fresh cues

Reuters: Sri Lankan shares ended marginally lower on Monday, with traders staying on the sidelines for want of fresh triggers amid expectations of certain amendments in the budget.

The Colombo stock index ended 0.15 percent weaker at 6,473.87. It had lost 1 percent last week.

“We expect the market to prevail at these levels for this year. Foreign interest is still there on some select shares,” said Hussain Gani, deputy CEO at Softlogic Stockbrokers.

“They (foreign investors) see value in these stocks and the P/E ratio is also low.”

The final budget vote is scheduled for Dec. 9 and the market expects some amendments that could help give the markets some direction.

Market heavyweight John Keells Holdings fell 0.7 percent while Lanka Orix Leasing Company closed 2.2 percent lower.

Foreign investors net bought equities worth 40.2 million Sri Lankan rupees ($261,548) on Monday, extending the foreign inflows to 19.6 billion rupees so far this year.

Finance Minister Mangala Samaraweera imposed new taxes on motor vehicles, telecoms, banks and liquor in a bid to boost revenues in as the budget deficit for the current year slipped to 5.2 percent of the gross domestic product.

Samaraweera imposed taxes on telecom towers and text messages, and introduced a debt repayment levy of 20 cents per 1,000 rupee bank transaction with effect from April 1 next year.

Analysts said the market players have sought more clarification on these taxes and perhaps there could be amendments to these proposals before the final vote.

Turnover was 707.8 million rupees on Monday, less than this year’s average of around 952.5 million rupees. 

($1 = 153.7000 Sri Lankan rupees)

(Reporting by Shihar Aneez; Editing by Vyas Mohan)

Renuka Hotel shares begin trading on Tuesday

Rs. 139 ‘reference price’ set, 65 for one share split pre-listing

Shares of Renuka Hotels PLC (previously Renuka Hotels Ltd.), the newest company listed on the Colombo Stock Exchange, quoted on the CSE by way of introduction, will begin trading on the Diri Savi board of the CSE from Nov. 21, the CSE announced last week.

The closely-held and largely family-owned and managed company, founded by the well known businessman and Kayts MP Alfred Thambiayah, built the Renuka Hotel on family owned property on Galle Road, Kollupitiya. The hotel was commissioned in 1972.

The 41-room Renuka Hotel is owned by Renuka Hotels Ltd. which has remained unlisted till now. But the company floated and took majority control of Renuka City Hotels PLC, a 58-room hotel built on an adjoining property, which was listed in 1992.

Prior to its introduction to the CSE, Renuka Hotels Ltd. with a modest stated capital of Rs. 6 million with 600,000 shares in issue unlocked its retained value built since inception by increasing its stated capital to Rs. 112.5 million with approx 40.3 million shares in issue by way of capitalization of reserves and a share split.

Reserves of Rs. 106.5 million were capitalized by the issue of one new share for every 30.0571 shares held in Aug. 2015 resulting in the issue of 19,962 new shares followed by a 65 for 1 share split the same day increasing the number of shares presently in issue to 40.3 million.

A ‘reference price’ of Rs. 139 per share has been set for the Renuka share by Chartered Accountants Wijeyeratne and Co. who had done an independent valuation of the company. They have placed a value of Rs.151.24 per share by the discounted cash flow method, Rs. 142.20 by the net assets value method and Rs. 89.77 by the earnings capitalization method.

"Based on the analysis, a value which is within the likely range of Rs. 151.24 to Rs. 89.77 per share can be justified. Hence the reference price of Rs. 139 per share can be considered fair and reasonably," they have said.

The ten largest shareholders of Renuka prior to the listing together owned 78.95% of the company according to the document of introduction. They are Ms. NA Thambiyah, Mr. RB Thambiayah/Ms. SR Thambiayah, Mr. RB Thamiayah/Ms. NR Thambiayah, Mr. R.B. Thambiayah/Ms. AL Thambiayah, Ms. IR Rajiyah, Mr. DJ Nirmalalingam, Mr. RB Thambiayah, Ms. SR Nirmalalingam, Mr. MJ Fernando and Cabraal Consulting Group Pvt. Ltd.

The 13 largest public shareholders pre-listing held 27.4% of the company. This group excludes Mr. Ravi (RB) Thambiayah and his children who run the company but include other family members including his sisters, nephew, brothers-in-law (Cabraal Consulting and Dr. SR Rajiyah) and prominent businessmen Merril. J. Fernando and his son, Dilhan, and Mr. M. Selvanathan.

Mr. Ravi Thambiayah and his daughters controlling and managing the business is not expected to sell down their holding but whether other family members would do so if the price is right remains to be seen, analysts said.

Mr. Thambiayah who trained at the Royal Lancaster Hotel in London after taking an economics degree, has managed the Renuka Hotel since 1972. He developed the group under the Renuka umbrella with group companies, including notably Renuka Hotels and Renuka City, building large quoted share portfolios with market values of over billion rupees including substantial unrealized capital gains.

Both Renuka and Renuka City posts earnings per share substantially above those of other hotel owning companies, both listed and unlisted.

Renuka shares can now be deposited in the Central Depository System and can be transacted, the CSE said.

The directors of Renuka Hotels are Ms. SR Thambiayah (Executive Chairperson and Joint MD), Ms. AL Thambiayah, Executive Joint MD, Mrs. SR Dominic, Messrs. Merril J Fernando, GU Nanayakkara, S. Nagendra, Mrs. M.A. Jayawardena (Executive Director/Company Secretary), Ms. NR Thambiayah and Mr. RN Asirwatham.

www.island.lk

Impairment charge leads to loss at Sri Lanka Guardian Capital Partners

ECONOMYNEXT – Sri Lanka’s Guardian Capital Partners has attributed its loss in the first half of this year to impairment charges arising from alleged fraud at an investee firm, Swiss Institute for Service Industry Development (Pvt) Ltd.

The company, part of the Carson Cumberbatch group, reported a loss of Rs29.9 million in the six months to September 2017, compared with a Rs16 million net profit the year before.

For the September 2017 quarter, Guardian Capital Partners (GCP) said net profit was almost Rs7 million, down 13% from a year ago.

Quarterly earnings per share were 27 cents, down from 31 cents the previous year. The share last traded at Rs33.10.

For the six months to September 2017, it reported a loss per share of Rs1.16 compared with EPS of 61 cents the year before.

“The loss recorded was primarily due to an impairment of Rs. 42.1 million made against the investment in Swiss Institute for Service Industry Development (Pvt) Ltd, as reported in Q1, due to an alleged misappropriation of funds in the said investee company,” a managers’ review accompanying the accounts said.

It has said GCP and the other co-investors of the investee company had filed a complaint with the Criminal Investigation Department about alleged misappropriation of funds by the Managing Director and Promoter of the investee company against whom legal proceedings have been initiated by the CID in the Magistrates Court of Colombo.

Sri Lanka's LVL Energy seeks Rs1.2bn from IPO

ECONOMYNEXT - Sri Lanka's LVL Energy Fund has been given the go ahead by the Colombo Stock Exchange to offer 120 million shares at 10 rupees to raise 1.2 billion rupees from an initial public offer.

Subscriptions will open on December 14, 2017.

LVL Energy Fund is a unit of publicly trade Lanka Ventures Plc.

It has investments in mini hydro plants.

Sri Lanka's LOLC to list 5 & 2-year senior bonds

ECONOMYNEXT - Sri Lanka's Lanka Orix Leasing Company Ltd, is listing 2.7 billion rupees of bonds in 5 and 2 year tenors, which had been issued on July 31.

The 5-year debentures with a coupon on 13.00 percent paid every six months, (effective rate 13.42 percent) will mature in 2022.

The 2-year bond with a coupon on 12.65 percent, (effective rate 13.05 percent), matures in 2019.

The bonds have an [SL] A (stable) by ICRA Lanka Limited.

Sri Lanka Telecom Sept net profit down 60-pct, sales flat

ECONOMYNEXT – Sri Lanka Telecom (SLT) said net profit fell 60.4% to Rs730 million in the September 2017 quarter from a year ago as sales remained flat while costs rose sharply.

Quarterly earnings per share fell to 40 cents from Rs1.02 the previous year, according to interim accounts filed with the stock exchange. The stock was last traded at Rs29.30.

September 2017 quarter sales were flat at Rs19 billion while operating costs rose and depreciation and amortisation costs were sharply higher, the accounts showed. Other income was lower.

In the nine months to September 2017, pre-tax profit from fixed ICT operations fell sharply to Rs994 million from Rs2.4 billion while mobile phone unit profit also fell to Rs3 billion from Rs3.7 billion.

EPS fell to Rs1.79 in the nine months to September 2017 from the previous year’s Rs2.59 with net profit down 32% to Rs3.2 billion from Rs4.7 billion over the period.

Sri Lankan shares rise for 2nd session on John Keells

Reuters: Sri Lankan shares rose half a percent on Friday, climbing for a second straight session, buoyed by gains in market heavyweight John Keells Holdings on bargain hunting.

The Colombo stock index ended 0.54 percent firmer at 6,483.55, recovering from its lowest close since Sept. 27 hit on Wednesday.

It shed 2.6 percent in the five sessions through Wednesday on worries over new taxes on cash-rich telecom and banking sectors. It shed 1 percent this week.

“There was strong interest in Keells shares. The market is recovering after some unclear budget policies,” said Jaliya Wijeratne, CEO at First Capital Equities.

John Keells shares rose 2.3 percent, while Cargills (Ceylon) Plc climbed 2.4 percent.

Foreign investors, who have net bought equities worth 19.6 billion rupees so far this year, net sold shares worth 92.6 million rupees ($602,865) on Friday.

Finance Minister Mangala Samaraweera imposed new taxes on motor vehicles, telecoms, banks and liquor in a bid to boost revenues in its 2018 budget outlined last week, as the budget deficit for the current year slipped to 5.2 percent of the gross domestic product.

Samaraweera imposed taxes on telecom towers and text messages, and introduced a debt repayment levy of 20 cents per 1,000 rupee bank transaction with effect from April 1 next year.

Turnover was 717.6 million rupees on Friday, less than this year’s average of around 953.6 million rupees. 

($1 = 153.6000 Sri Lankan rupees) 

(Reporting by Shihar Aneez; Editing by Subhranshu Sahu)

CSE goes into disaster recovery mode today

The Colombo Stock Exchange (CSE) is to conduct a planned full day of trading from the Disaster Recovery site using ATS Version 7 Disaster Recovery Solution today.

The exercise will be an industry-wide activity with the participation of all stakeholders, to ensure the preparedness of all participants to meet the recovery needs of the industry.
www.dailynews.lk

AIA SL posts PAT of Rs 189 mn for Q3

AIA Insurance Lanka PLC recorded a consolidated profit after tax of Rs 189 million for the nine months ended September 30, 2017.

Pankaj Banerjee, Chief Executive Officer of AIA Sri Lanka, said: “AIA Sri Lanka has delivered a solid set of results for the third quarter of 2017. “It is worth noting that AIA Sri Lanka continued to deliver on our key strategic initiatives against the backdrop of slower economic growthduring the third quarter of 2017. We remain optimistic of the long-term growth prospects of our life insurance business in Sri Lanka.”

William Lisle, Chairman of AIA Sri Lanka, said: “We continue to believe that with our focus on delivering profitable growth and sustainable progress through an enhanced product portfolio and extended distribution reach, AIA Sri Lanka is well on course to becoming the preeminent life insurer in Sri Lanka.”

The Company recorded a consolidated revenue of Rs 12,673 million, an increase of 17%, from Rs 10,794 million reported over the same period in 2016. This growth was mainly driven by the increase in the gross written premium (GWP) of Conventional Life business.

Gross written premium of Life insurance business increased by 13 per cent to Rs 8,415 million, from Rs 7,425 million reported over the same period in 2016. This was attributed to the improvement in persistency.

Gross written premium of Conventional Life business increased by 15 per cent to Rs 7,709 million, from Rs 6,720 million reported over the same period in 2016. Investment income rose by 10 per cent to Rs 3,875 million, benefitting from the interest rate hike and attractive yield locking.
www.dailynews.lk

Lanka IOC reports Rs 177 mn loss for Q3

Since January 2017, Lanka IOC has incurred a loss of Rs. 964 million mainly due to losses being suffered by the company on sale of petrol and diesel.

The company had reported a loss of Rs. 652 million for the period Jan-Mar’ 17, Rs. 135 million for the period Apr-Jun’17 and now has reported a loss of Rs. 177 million for the quarter Jul-Sep’17.

The market prices of auto fuels were last revised in January 2015 and since then, prices have not been revised in the country.

The crude oil prices which touched a bottom of US$ 30/bbl, has now arisen to almost US$ 62/bbl but the retail selling prices have remained the same.

Further, during this period, taxes have been further increased but selling prices have not been increased. Above all, oil companies have to bear the burden of exchange loss too due to depreciation of Sri Lankan rupee by almost 18%.

The recent surge in the international prices of petroleum products have further added to the losses being made by the company.

Although, company has performed well in other business segments, but since 80% of its turnover is derived from auto fuels, the loss/gain on petrol and diesel finally decides the profitability of the company.

LIOC has repeatedly requested the concerned authorities to either increase the selling prices of auto fuels or reduce the taxes. For petrol, out of selling price of Rs. 117/Ltr, Rs. 57/Ltr goes towards taxes apart from other levies. Similarly, for diesel, out of selling price of Rs. 95/Ltr, Rs. 30/Ltr goes towards taxes apart from other levies.

LIOC commands a market share of around 16% in auto fuels and balance is with Government controlled entity. As per the sources, based on the prevailing international prices of petroleum products, oil companies in Sri Lanka are losing around Rs. 24/Ltr on petrol and Rs. 16/Ltr on diesel. In view of the significant losses being incurred by oil companies and its impact on Sri Lankan economy, Government of Sri Lanka is contemplating implementation of pricing formula in the country.
www.dailynews.lk

Palm oil seen supporting Sri Lanka’s Sunshine Holdings profitability

ECONOMYNEXT – Fitch Ratings has confirmed Sri Lanka’s Sunshine Holdings's National Long-Term Rating at 'A(lka)' with a stable outlook, saying its growing palm oil business, the largest contributor to profitability, will support earnings.

The rating on the diversified conglomerate reflects its exposure to defensive end-markets, strong market positions in its diversified products and Fitch's expectations of steady free cash flow generation over the medium term.

“These strengths are counterbalanced by the regulatory risk faced by the pharmaceutical distribution business, the exposure to commodity price volatility in its palm oil business, and the weak tea plantations segment,” the rating agency said in a statement.

The full report follows:

Fitch Ratings-Colombo-16 November 2017: 

Fitch Ratings has affirmed Sri Lanka-based Sunshine Holdings PLC's National Long-Term Rating at 'A(lka)'. The Outlook is Stable.

The rating on the diversified conglomerate reflects its exposure to defensive end-markets, strong market positions in its diversified products and Fitch's expectations of steady free cash flow generation over the medium term. These strengths are counterbalanced by the regulatory risk faced by the pharmaceutical distribution business, the exposure to commodity price volatility in its palm oil business, and the weak tea plantations segment.

The rating also takes into account Fitch's expectations that Sunshine's net leverage, defined as lease-adjusted net debt /operating EBITDAR (including proportionate consolidation of EMSPL, the holding company for the agriculture and consumer goods segments), is likely to remain below 1.5x over the medium term, supported by strong EBITDA generation and modest capex requirements beyond the financial year ending March 2018 (FY18).

KEY RATING DRIVERS

Regulatory Risks in Pharmaceuticals: Fitch believes that Sunshine's operating cash flows will recover after the authorities introduced price ceilings on 48 essential drugs from October 2016. This is because of improving sales volumes in the company's branded generic drug portfolio, which is now sold at lower prices due to the price control.. Nevertheless this underscores that regulatory risk for this business has increased since we first assigned the rating in December 2015.

Healthcare Margins to Recover: Fitch expects the EBITDA margins in the healthcare business to return to around 7.5% over the next two years, after they contracted by 270bp to 5.7% in FY17. The recovery will be driven by increasing contribution from higher-margin diagnostics, wellness and beauty segments. We also believe Sri Lanka's rapidly ageing population and urbanisation will support demand for healthcare over the long term.

Palm Oil Supports Profitability: We believe the palm oil segment will be a key contributor to growth in operating cash flows in the medium term, based on our assumptions that global palm oil prices will average USD665/tonne in 2018 and USD675/tonne in 2019 and in the long-term. Sunshine is the largest palm oil producer in Sri Lanka, accounting for more than 50% of domestic output, and is well-positioned to benefit from the growth in local demand, increased capacity in the near term and the government's protectionist tariffs on imports. Palm oil is the largest contributor to Sunshine's profitability, accounting for 36% of the group's proportionate EBITDA in FY17 (FY16: 24%).

The government reduced import taxes on edible oil by around 20% in November 2017 to make up for lower domestic supply volumes due to adverse weather conditions. This is likely to cause a slight dip in Sunshine's palm oil margins in near term, but we expect margins to recover as taxes rise in line with the historical trend once supply improves over the medium term.

Margin Pressure in Branded Tea: EBITDA margin in Sunshine's branded tea segment weakened by 660bp to 8.9% in FY17, due primarily to the rising tea prices in the Colombo Tea Auction over the last 12-14 months. Intense price competition, particularly in the lower end of the market also limits Sunshine's ability to pass on cost increases to customers in full. Nevertheless, we expect tea costs to moderate with the easing of supply-side pressures, which should benefit the segment's margin. Sunshine's strategy to tap the higher growth hotel, restaurant and catering industries should also support the segment's top-line and profitability growth.

Volatile Tea Segment: Fitch expects the tea plantations' cash flow volatility to persist over the medium term due to lower land and labour productivity, and cost pressures arising from periodic wage increases. The tea plantation business broke even operationally for the first time in three years during FY17, but we believe that the segment's long-term viability is still inhibited by volatile export demand and an escalating cost structure. Sunshine's continued strategy to focus on quality over volume should help it to secure relatively high prices at auctions, which may mitigate the adverse impacts on profitability.

Long-Term Benefits from Investments: Fitch expects the capacity expansions in Sunshine's power and dairy segments to stabilise its cash flows in the long term by reducing the share of contribution from the volatile tea and palm oil businesses. We estimate that the contributions to EBITDA from the power and dairy segments to exceed LKR190 million once the increased capacity goes into operation by FYE19.

Balance-Sheet Strength Intact: Fitch expects Sunshine to maintain its net leverage at below 1.5x over the medium term (FY17: 0.8x) despite short-term operational pressures. Our view is supported by our expectations of steady EBITDA generation, capex reduction from FY19 and already low group debt. Fitch views the structural subordination of the holding company to be limited, given the low net debt at the main operating subsidiaries.

Rating Sensitivities Amended: Fitch believes that a leverage metric net of cash is more appropriate than a gross leverage metric to assess Sunshine's financial risk, because we now expect the company to maintain a conservative approach when deploying its significant cash balance in investments and expansions. However the agency has also tightened Sunshine's negative rating sensitivities on leverage and fixed charge cover as described below, in order to capture the higher regulatory risks associated with the pharmaceuticals business, which is a key driver of Sunshine's 'A(lka)'/Stable rating.

DERIVATION SUMMARY

Sunshine and its close peer Richard Pieris & Company PLC (RPC, A(lka)/Stable) are both exposed to the volatile plantation segments However we believe RPC has a stronger business risk profile, stemming from sizeable cash flows from its defensive grocery retail business and larger operating scale, compared with Sunshine's pharmaceutical and fast-moving consumer goods businesses. However RPC has higher financial risk than Sunshine, which results in both companies being rated at the same level.

Hemas Holdings PLC (AA-(lka)/Stable) is rated two notches above Sunshine to reflect its stronger business risk profile with greater exposure to defensive end-markets and a larger operating scale, as well as its conservative financial profile.

Lion Brewery (Ceylon) PLC (A+(lka)/Negative) is rated one notch above Sunshine because it has stronger EBITDA margins from its dominant market position in the local beer manufacturing industry, which benefits from high entry barriers.

Singer (Sri Lanka) PLC (A-(lka)/Stable) is a leading consumer durables retailer and has larger operating scale than Sunshine, but its cash flows are more volatile during economic downturns, and it has significantly higher leverage than Sunshine, which results in a lower rating.

KEY ASSUMPTIONS

Fitch's key assumptions within the rating case for Sunshine include:

- Revenue growth to slow down in FY18 to low single-digit levels due to price controls in the pharmaceuticals segment and to recover gradually to mid-single digits over the next two years. Recovery will be driven primarily by the expanding palm oil business, the expected rebound in pharmaceuticals, and growing contributions from the diagnostics and healthcare retail segments

- EBITDAR margins to be maintained in the low double digit range over FY18-21 despite challenges faced by the pharmaceuticals and tea planation segments

- Capex of LKR4.5 billion over FY18-21 for expansion across the board

- Sunshine to maintain its current dividend policy

RATING SENSITIVITIES

Developments that May, Individually or Collectively, Lead to Negative Rating Action

- A sustained increase in Sunshine's lease-adjusted debt net of cash/EBITDAR (including proportionate consolidation of EMSPL) over 1.5x (FY17: 0.8x)

- Sunshine's EBITDAR coverage of gross interest + rent (including proportionate consolidation of EMSPL) falling below 3.0x (FY17: 4.3x) on a sustained basis

- Adverse impact on growth and profitability arising from sustained regulatory pressure in the healthcare and agriculture segments

Developments that May, Individually or Collectively, Lead to Positive Rating Action

- No positive rating action is expected in the next 12-18 months given the regulatory risks in the pharmaceuticals segment, cyclical risks of the commodity business and execution risks associated with new business ventures

LIQUIDITY

Satisfactory Liquidity: As at end-FY17, Sunshine had LKR1.9 billion of unrestricted cash and LKR2.9 billion in unutilised credit facilities to meet LKR358 million of contractual maturities falling due in the next 12 months. This places Sunshine in a comfortable liquidity position that will be adequate to meet the company's capex and dividend payout requirements for FY18.

Sri Lankan shares snap 5 sessions of falls on bargain hunting

Reuters: Sri Lankan shares rose on Thursday after five straight sessions of declines, on bargain hunting in beaten-down stocks and foreign buying.

The Colombo stock index ended 0.31 percent firmer at 6,448.98, recovering from its lowest close since Sept. 27 hit in the previous session.

It shed 2.6 percent in the five sessions through Wednesday on worries over new taxes on cash-rich telecom and banking sector.

Big caps helped the market recover, said Hussain Gani, deputy CEO at Softlogic Stockbrokers, adding that he expected it to settle “at these levels as all the main earnings results are out and foreign interest is also back.”

Foreign investors net bought shares worth 287.4 million rupees ($1.87 million), extending the net foreign inflow into equities to 19.7 billion rupees so far this year.

Finance Minister Mangala Samaraweera imposed new taxes on motor vehicles, telecoms, banks and liquor in a bid to boost revenues in its 2018 budget outlined last week, as the budget deficit for the current year slipped to 5.2 percent of the gross domestic product.

Samaraweera imposed taxes on telecom towers and text messages, and introduced a debt repayment levy of 20 cents per 1,000 rupee bank transaction with effect from April 1 next year.

Turnover was 1.02 billion rupees on Thursday, more than this year’s average of around 954.7 million rupees.

Shares in market heavyweight John Keells Holdings ended 0.5 percent firmer, while Ceylon Tobacco Company Plc rose 3.1 percent.

($1 = 153.6000 Sri Lankan rupees) 

(Reporting by Shihar Aneez; Editing by Subhranshu Sahu)

Sri Lanka’s Colombo Dockyard trims losses in Sept quarter

ECONOMYNEXT – Sri Lanka’s Colombo Dockyard said its net loss narrowed to Rs79 million in the September 2017 quarter from Rs189 million a year ago.

Interim results filed with the stock exchange showed a loss per share of Rs1.10, down from a loss of Rs2.63 the previous year. The stock was trading at Rs91.50 Thursday morning.

Sales of the yard, majority owned by Japan’s Onomichi Dockyard Company, fell 2% to Rs3.15 billion in the September 2017 quarter from a year ago.

In the nine months to September 2017 the yard reported a Rs31 million profit compared with a Rs203 million loss the previous year.

Earnings from ship building and heavy engineering business fell while that from ship repair business improved significantly, the accounts showed.

Sri Lanka’s First Capital Sept quarter net profit up 18.6-pct

ECONOMYNEXT – Sri Lanka’s First Capital Holdings PLC said group net profit rose 18.6% to Rs340 million in the September 2017 quarter from a year ago.

Earnings per share rose 18.3% to Rs3.36, according to interim accounts filed with the stock exchange. The share was last traded at Rs37.

The investment bank’s net trading income rose 188% to Rs517 million over the period, the accounts showed. Income rose 12% to Rs1.16 billion while expenses fell almost 25% to Rs635 million.

EPS for the six months to September 2017 were Rs6.92 with net profit at Rs700 million.

“Whilst we are pleased with our performance to date, we expect earnings to moderate in the 2nd half with interest rates stabilizing resulting in lower trading opportunities for the primary dealer business,” said director and group chief executive Dilshan Wirasekara.

“However, we will continue to work throughout the year towards ensuring that our fundamentals remain strong to sustain our business in the long term. Our main focus is to enhance the fee based activities and the management of risk,” said Wirasekara.

“The primary dealer business dominated the group’s earnings, reporting a profit after tax of Rs538 million for the 1st half (2016/17 – Rs. 371Mn), displaying an impressive performance,” a statement said.

First Capital Treasuries PLC capitalized on opportunities created by declining interest rates in the secondary market, realizing significant trading gains, it said.

With a track record of over 25 years, the company was the first licensed primary dealer appointed by the Central Bank, and is also the only listed and rated primary dealer in Sri Lanka, with a capital base of Rs. 2.2 billion.

“A strategic approach has led to improved activity in the corporate finance business, mobilising Rs. 13 billion for clients through structuring and placement of corporate debt securities,” the statement said.

Fee income rose to Rs. 42 million from Rs. 30 million the previous year.

First Capital Asset Management Limited recorded a “substantial growth” in funds under management to end with Rs. 6.7 billion as at 30th September2017, the statement said.

The group’s equity arm, First Capital Equities, took several steps to strengthen its business by establishing strategic partnerships with brokering houses based in Asia and the United States, in addition to reinforcing its local efforts through the group’s expanding branch network.

The credit rating of First Capital Holdings PLC and First Capital Treasuries PLC was reaffirmed by ICRA Lanka Limited in October 2017 at “A-”.

Shangrila-La secures additional 3 ½ acres on 99-year lease

Ahead of mega hotel opening tomorrow

By Shamindra Ferdinando

Hong Kong-based Shangrila-La Group has secured three and a half acres adjoining its latest hotel situated on 10 acres abutting the Galle Face promenade in Colombo.

Cabinet spokesperson and Sports Minister Dayasiri Jayasekera yesterday said the government had re-negotiated with the Shangrila-La Group what he called a much better deal than the one struck by the previous administration.

Jayasekera was addressing the post-cabinet media briefing at the Government Information Department. Minister Jayasekera was flanked by Minister Gayantha Karunatilleke and Military Spokesman Maj. Gen. Roshan Seneviratne.

Jayasekera confirmed that the lease was for a period of 99 years.

President Maithripala Sirisena, Prime Minister Ranil Wickremesinghe and industry leaders are scheduled to attend the opening of Shangrila-La, Colombo tomorrow (Nov 17).

The then Economic Development Minister Basil Rajapaksa broke ground in February 2012, three years after the conclusion of the conflict.

Minister Jayasekera said the government had leased three and a half acres of land at a rate of Rs. 13.1 mn per perch whereas the previous administration had agreed to Rs 6.5 mn per perch.

Jayasekera said the previous government in which he, too, was a member leased 10 acres for 99-years and then negotiated a separate agreement on the adjoining three and a half acre property for Rs. 6.6 bn.

The Ministry of Defence and Urban Development were responsible for negotiations with Shangrila-La for 13 and a half acres during the previous administration. After the change of government in 2015 January, the new leaders had called for a fresh valuation to ensure the country received the best possible terms, Minister Jayasekera said.

Cabinet spokesman Jayasekera told The Island yesterday evening that the previous government had leased 10 acres at a rate of Rs 9.5 mn (with taxes) per perch.

In accordance with the plan finalised by former Defence Secretary Gotabhaya Rajapaksa, the Defence Ministry and Army headquarters were to be shifted to Akuregoda defence complex now under construction.

Minister Jayasekera told the media that President Maithripala Sirisena hadn’t been involved in negotiating or promoting the Shangrila-La project. He said the proper procedures had been followed in finalising the second transaction with the Shangrila-La Group.

www.island.lk

‘Unusual selling pressure’ for some blue chip stocks

By Hiran H.Senewiratne

The Colombo Stock Exchange (CSE) witnessed unusual selling pressure, especially for JKH stocks, which dropped their per share price by more than 3 percent compared to the previous day. Because of this trend, prices in other counters also dropped considerably, stock market analysts said.

Amid those developments, both indices showed a downward trend; ie, the All Share Price Index went down by 20.07 points and S and P SL20 was down by 20.11 points. However, the day's turnover stood at Rs. 928.64 million with one crossing. That crossing was from JKH where 2.5 million shares crossed for Rs. 373.33 million and the per share value was Rs. 150.

In the retail market, again JKH became the main contributor to the day's turnover which was Rs. 395 million and 2.5 million shares were traded during the day. Two other companies that mainly contributed to the day's turnover were: Commercial Bank Rs. 22.3 million (163,000 shares traded) and HNB (Non voting) Rs. 16.4 million (80,000 shares traded).

During the day 15.28 million share volumes changed hands in 3928 transactions.. JKH shares dominated the market but other counters in the CSE did not trade in a significant manner. It is said that 83 percent of the day's turnover was contributed by JKH.

Analysts said the release of the government gazette notification on the new Inland Revenue Act will also weigh on the market over the next few days.

Turnover was Rs. 670.3 million on Tuesday, less than this year’s average of around Rs. 928.6 million .

Top private lender Commercial Bank of Ceylon fell 2.3 percent, while market heavyweight and top conglomerate John Keells Holdings closed 3 percent weaker.

Finance Minister Mangala Samaraweera imposed new taxes on motor vehicles, telecoms, banks and liquor in a bid to boost revenues in the 2018 budget as the budget deficit for the current year slipped to 5.2 percent of the gross domestic product.

Meanwhile, JKSB reports -

ASPI: 6,428.83 (-29.07 pts; -0.45%); Val T/O: Rs. 929mn (US$6.05mn); Vol T/O: 15.2mn; Trades: 3,928

Advance/decline ratio: 88/82; Top gainer: HAPU.N (+18.11%) ; Top loser: SEMB.X (-33.33%)

Highlights:

• The ASPI ended lower amid improved turnover levels. JKH, COMB, and HNB.X led market activity with trading in JKH amounting to 83% of total turnover.

• Diversified Holdings was the most actively traded sector (-1.67%)

• Plantations was the best performing sector (+2.34%), supported by gains on MAL (+7.69%)

• Investment Trusts was the worst performing sector (-4.84%), dragged down by declines on CINV (-6.61%)

www.island.lk

Four new taxes added in Budget 2018

The 2018 Budget has added four new taxes and it will increase the number of tax to 39, said Suresh Perera, Principal, Tax and Regulatory, KPMG. He was speaking at a post-Budget seminar organised by the National Chamber of Exporters. The new taxes are the debt repayment levy, carbon tax, cellular taxes levy and SMS advertising levy.

He said that Sri Lanka’s Doing Business Index had deteriorated from 109 to 111 while India’s position has increased a great deal. “I think the reason for this is that the simplification of tax and India hopes to be among top 70 in this raking soon.”

He said the government hopes to collect a revenue of Rs. 12 billion annually from the cellular tower tax per year in addition to tax from sms advertising which would be 25 cents and this has to be borne by the advertiser.

Perera also said that they are very happy about the tax on sugar products for soft drinks and said that this was a welcome move.

“A sugar tax was first implemented in 1922 and it is now being implemented in many countries.” (SS)

www.dailynews.lk

Softlogic suffers loss in 2Q; 1H net profit down 99%

Diversified Softlogic Holdings Plc has suffered a net loss in the second quarter whilst first half net profit had dipped by 99% though the group’s results from operating activities have seen strong positive growth.

Group Revenue grew 6.4% to Rs. 31.1 billion during the first half of the financial year with the quarter also registering a similar growth of 6.5% to Rs. 15.9 billion. Group top-line for the six months was led by Retail (30.8%), ICT (26.4%), Healthcare Services (19.1%), Financial Services (16.5%) and Automobile (3.8%).Gross Profit improved 21.2% to Rs. 11.2 billion during 1HFY18, indicating a healthy improvement in GP margin from 31.5% in 1HFY17 to 35.9% in 1HFY18.

The quarter also registered similar GP margin improvements, taking the quarterly gross profit to 5.7 billion (up 21.1%). Cost control measures and economies of scale helped maintain profit margins amidst systemic challenges.

Results from operating activities rose by 40% to Rs. 4.05 billion in 1H and by 44% to Rs. 2.2 billion in 2Q.

Group EBITDA for the quarter improved 42.1% to Rs. 2.9 billion while the cumulative EBITDA increased 40% to Rs. 5.4 billion Net finance expenses increased 28.2% to Rs. 2.2 billion during 1HFY18 with the quarter increasing 28.6% to Rs. 1.2 billion.

Profit before tax for the cumulative period was Rs. 1 billion (down 16%) while the quarter reported a PBT of Rs. 358.1 million (down 41%). In FY17 Group pre-tax profit was 1.68 billion.

Profit after taxation for the first half of FY2017/18 closed at Rs. 677.9 million (down 25%) with the quarter concluding with a PAT of Rs. 248.2 million (down 37%). In FY17, the figure was Rs. 821 million.

Net profit attributable to equity holders of the parent in 1H was a paltry Rs. 2.46 million, lower by 99% compared to Rs. 196 million in the first half of last year. In 2Q, the net loss of Rs. 41 million was against a profit of Rs. 94 million a year earlier. In FY17, Softlogic’s bottom line amounted to Rs. 108 million.

Softlogic Chairman Ashok Pathirage in his review accompanying interim results said investments in group activities continue especially in the retail arena, with the planned expansion of Odel in Colombo City Centre by March 2018 and Shangri-La by June 2019.

“We expect to benefit from economies of scale and synergies so as to become the only fashion retailer with a portfolio of international and local brands in a captive market,” he said.

“The current macroeconomic conditions, although are challenging, should tourism grow at the expected pace, the leisure and retail sectors would be beneficiaries. The upcoming Asiri Hospital Kandy would undoubtedly be a preferred hospital in the Central Province further boosting this sector thus unlocking cash flows from such new investments,” Pathirage added.

www.ft.lk

Sri Lanka’s 03-month Treasury Bill yield falls to 8.54-pct

ECONOMYNEXT – Sri Lanka's 03-month treasury Bill yield fell 13 basis points to 8.54 percent at this week’s auction from 8.67 percent last week, the public debt department of the central bank said.

The 06-month bill yield fell 09 basis points to 8.93 percent from 9.02 percent, it said in a statement.

The 01-year bill yield rose 02 basis points to 9.46 percent from 9.44 percent last week.

The public debt department received Rs62 billion worth of bids and accepted bids worth Rs20 billion.

Sri Lankan stocks hit 7-week closing low; John Keells drags

Reuters: Sri Lankan shares fell for a fifth straight session on Wednesday, posting their lowest close in seven weeks, pulled down by market heavyweight John Keells Holdings amid continued worries over 2018 budget policies.

The budget imposed taxes on cash-rich telecom and banking sectors to boost revenue.

The Colombo stock index ended 0.45 percent weaker at 6,428.83, its lowest close since Sept. 27. It slipped 2.6 percent in the last five sessions.

“Keells dragged the index down. The market is still awaiting some clarity on budget policies,” said Prashan Fernando, CEO, Acuity Stockbrokers.

Foreign investors, however, net bought shares worth 280 million rupees ($1.82 million), extending the net foreign inflow into equities to 19.4 billion rupees so far this year.

Finance Minister Mangala Samaraweera imposed new taxes on motor vehicles, telecoms, banks and liquor in a bid to boost revenues in its 2018 budget outlined on Thursday, as the budget deficit for the current year slipped to 5.2 percent of the gross domestic product.

Samaraweera imposed taxes on telecom towers and text messages, and introduced a debt repayment levy of 20 cents per 1,000 rupee bank transaction with effect from April 1 next year.

The turnover on Wednesday was 928.6 million rupees, less than this year’s average of around 954.4 million rupees.

Shares in John Keells, which accounted for 82.8 percent of the day’s turnover, ended 2.5 percent down.

($1 = 153.7500 Sri Lankan rupees) 

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