Sri Lankan shares rise; up 2.3 pct in 2017

Reuters: Sri Lankan shares rose for a sixth straight session in muted trade on Friday, ending 2017 with a modest 2.3 percent gain after two consecutive annual losses.

The Colombo Stock Index edged up 0.08 percent to 6,369.26, its highest since Dec. 8 and posting the first annual increase in three years after falling 9.7 percent in 2016.

Asiri Hospitals Plc rose 24.4 percent, while Carson Cumberbatch Plc ended 0.6 percent higher and conglomerate John Keells Holdings Plc gained 0.3 percent.

Turnover stood at 379.98 million rupees ($2.48 million), less than this year’s daily average of 915.3 million rupees and last year’s 737.2 million rupees.

Foreign investors net bought shares worth 143.4 million rupees on Friday, extending the 2017 net foreign inflow to 18.5 billion rupees. They net bought 633.5 million rupees worth equities in 2016.

“We expect the market to start the next year in a positive note as the central bank held the rates and gave a clear direction on where the interest rates are going to be,” said Hussain Gani, deputy CEO at Softlogic Stockbrokers.

“The first two months, the election fever will be there. Investors will look for policy direction after the elections and what policies to boost growth.”

Sri Lanka will hold a long-delayed local government election on Feb. 10.

The country’s central bank, which kept benchmark interest rates unchanged on Thursday, expects growth to come in below 4 percent this year, lower than its original 2017 growth forecast of 5.0 percent.

The $81 billion economy grew at an annual pace of 3.7 percent in the first nine months of 2017, which followed its most severe drought in 40 years in the first quarter and the worst flooding in 14 years in May. 

($1 = 153.4000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal; Editing by Biju Dwarakanath)

SLT to issue Rs. 5 bn debentures

Sri Lanka Telecom PLC (SLT), a blue-chip company and a dominant player in the Sri Lankan Telecom and Information Technology Enabled Services (ITES) space, announced today that the directors of the company have resolved to issue Rs. 5.0 billion listed debentures with a green shoe option for a further Rs. 2.0 billion, subject to regulatory approval.

SLT is a listed company on the Colombo Stock Exchange (CSE) and has positioned itself as the preferred digital lifestyle provider (DLP) in Sri Lanka, providing a wider range of services such as voice, data, internet, global connectivity, television, education and other related services to the nation.

Having maintained a fair growth rate despite the competitive and challenging market environment, the group reported a turnover of Rs. 74 billion during the year 2016 while owning Rs.143 billion total assets by the end of same year.

The company expects to invest proceeds of the debenture in its service expansions in the areas such as IPTV, FTTH, data centers, global connectivity and to improve the maturity profile of its long term debt.Sri Lanka Telecom PLC (SLT), a blue-chip company and a dominant player in the Sri Lankan Telecom and Information Technology Enabled Services (ITES) space, announced today that the directors of the company have resolved to issue Rs. 5.0 billion listed debentures with a green shoe option for a further Rs. 2.0 billion, subject to regulatory approval.

SLT is a listed company on the Colombo Stock Exchange (CSE) and has positioned itself as the preferred digital lifestyle provider (DLP) in Sri Lanka, providing a wider range of services such as voice, data, internet, global connectivity, television, education and other related services to the nation.

Having maintained a fair growth rate despite the competitive and challenging market environment, the group reported a turnover of Rs. 74 billion during the year 2016 while owning Rs.143 billion total assets by the end of same year.

The company expects to invest proceeds of the debenture in its service expansions in the areas such as IPTV, FTTH, data centers, global connectivity and to improve the maturity profile of its long term debt.
www.dailynews.lk

Raigam Group looking at listing - Diversifying to the tourism sector

The diversified Raigam Group will look at a Colombo Stock Exchange listing soon, said its Chairman Dr. Ravi Liyanage.

He said that they have several companies and would look at one of them to be listed. “We also want to rest and give more administrative powers to new people who would get involved in the company.”

He said that Raigam Wayamba Salterns PLC (RWSL) is already listed and they were planning a rights issue. “However due to delays which I do not want to go into detail, we have now decided to fold up this.”

The Chairman recalled that over a decade ago salt was imported despite Sri Lanka being an island. “We requested the government for protection and tax for salt imports and when this guarantee was given, we invested in salterns and today we are proud to say Sri Lanka is self sufficient in salt. We are also happy that we were one of the pioneers to lead Sri Lanka towards self sufficiency in salt.”

He said that today over 10,000 are dependent on the industry as there are also several individuals who manufacture salt as a cottage industry.

Asked if they were looking at exports, he answered in the negative and said that they cannot compete with India. “Their labour is cheap and most importantly their climate is ideal to produce salt.”

He however said that today chlorine, chemicals to manufacture soap and HCL are being imported and since there will soon be a surplus of salt they will look at manufacturing these in Sri Lanka.

He also predicted that soon the country will move in to use of powered salt and move away from crystal salt like in European countries as it is more hygienic.

Raigam Group is the country’s second largest salt producer after the state among the seven major players. It was a pioneer to begin production of Pure Vacuum Dried (PVD) salt at their plant in Palavi in Puttalam.

CEO Ganaka Amarasinghe said that the company profits too are on the increase and their turnover was around Rs. 340 million.

Director Dr. Sampath Amaratunga said they will also look at diversifying to the tourism sector and try to introduce tourism near salterns which have unique scenic locations especially in the Eastern Province.
www.dailynews.lk

Sunshine makes milestone deal to consolidate stake in its branded tea and plantations biz

• Invests Rs. 1.6 b to double stake in formerly tripartite-owned Estate Management Services to 60%

• Tata exits but will continue its collaborative partnership with Sunshine Holdings

• Pyramid Wilmar ups stake to 40%

Home-grown diversified conglomerate Sunshine Holdings PLC yesterday announced that it would be further consolidating its stake in Estate Management Services Ltd. (EMS), the holding company for Watawala Plantations PLC, Hatton Plantations PLC and Watawala Tea Ceylon Ltd. (WTCL) – two of Sri Lanka’s most profitable plantations and leading tea brands.

Previously managed under tripartite ownership between Sunshine Holdings PLC, Pyramid Wilmar, and Tata Global Beverages, with each party holding an equal share in EMS, Sunshine’s stake in EMS will increase up to 60% of its issued share capital, while Pyramid Wilmar will hold the remaining 40%.

Sunshine Holdings paid Rs. 1.6 billion for the additional stake of 6.769 million shares.

Despite the exit, Tata Global Beverages will continue its collaborative partnership with Sunshine Holdings, but with a revised strategy that places greater emphasis on international branding and marketing of TATA Tea which will continue to be sourced from Watawala Plantations.

“Our close partnership with Tata Global Beverages has resulted in numerous achievements, milestones and accolades for Watawala Plantations and WTCL over the past two decades. This long and fruitful relationship with Tata Global Beverages is underpinned by an unblemished legacy of trust, excellence, and innovation and moving forward, we will continue to draw on these strengths as we continue to adapt and grow,” Sunshine Holdings Group Managing DirectorVishGovindasamy said.

“We also see this moment as an opportunity to take more direct action aimed at reforming and rejuvenating less profitable sectors of our tea business while emulating and enhancing the examples, practices and techniques utilised in our best performing tea estates. In this regard, we look forward to exploring new opportunities for partnerships and synergies between Sunshine and Tata Global Beverages,” added Govindasamy.

Notably, Sunshine Holdings has an investment in Tata Communications Lanka Ltd., of which Govindasamy is the Chairman, who expressed that Sunshine would continue to seek out synergistic branding and marketing opportunities, particularly with regard to international markets, leveraging on the immense resources and global reach of Tata Global Beverages.

Sunshine Holdings PLC is a diversified conglomerate with interests in healthcare, plantations, FMCG, packaging and renewable energy. The Group with revenue exceeding $120 million is listed on the Colombo Stock Exchange.

Beginning with the healthcare business in 1967, the Group has built strong businesses over the last five decades, including partnering with the Tata Group in 1992 to form a joint venture in Plantations. Group companies include Sunshine Healthcare Lanka, Watawala Plantations PLC, Hatton Plantations PLC, Watawala Tea Ceylon Ltd. (WTCL) and Sunshine Energy.

www.ft.lk

Foreign investors buy US$570mn dollars of Sri Lanka stocks, bonds

ECONOMYNEXT - Sri Lanka's government bond and stock markets have seen 572 million US dollars flow in up to December 26, 2017, the central bank said.

Foreign investors had bought 452.1 million US dollars of government bonds and 120.1 million US dollars of stocks.

In 2015 Sri Lanka experienced capital flight as the central bank printed money to worsen a credit bubble leading to a currency collapse.

Sri Lanka is expecting to end the year with foreign reserves of 7.8 billion dollars, central bank officials said.

Sri Lanka plans sovereign bond in early 2018

ECONOMYNEXT - Sri Lanka would like to go to international market with a sovereign bond in early 2018 before the US Federal Reserve does more rake hikes, Central Bank Governor Indrajit Coomaraswamy said.

Coomaraswamy said the exact date of the bond sale will depend on market conditions but he felt that going to the market on May or June was too late.

He said the US Fed was expected to make three 25 basis point hikes next year, and it was best t go to market as early as possible.

US tax cuts and planned infrastructure spending boom may also push the Fed to tighten faster, amid stronger economic growth in the US, Coomaraswamy said.

Coomaraswamy declined to reveal a size of the bond sale, but the minimum sovereign size is 500 million dollars. Sri Lanka has raised volumes ranging from a billion to 1.5 billion US dollars in the past.

Sri Lanka's last sovereign bond sold at 620 basis points above the US Treasuries yield was now trading at a narrower 550 basis point risk premium showing increased investor confidence, Coomaraswamy said.

Fitch and Standard and Poor's have also lifted a negative outlook on Sri Lanka's rating, he said.

With slowing domestic credit and the central bank ending money printing, Sri Lanka is now collecting forex reserves.

On a net basis Sri Lanka has withdrawn cash from markets (sterilized forex purchases) in 2017, Coomaraswamy said.

Sri Lanka sells 3 and 8 year bonds

ECONOMYNEXT - Sri Lanka has sold 30 billion rupees of 3 and 8 year bonds, the debt office said, amid falling interest rates and slowing credit and improving budgets in the economy.

The debt office sold 8.0 billion rupees of 2 year 11 month bonds maturing on 15 December 2020 at a weighted average yield net of tax of 9.55 percent.

On 01 November 2017, 2-year bonds were auctioned at 9.92 percent.

It also sold 22 billion rupees of 8 year 5 month bonds maturing on 01 June 2026 at a yield of 10.06 percent.

On 01 November 2017 8-year bonds were sold at 10.33 percent.

Sri Lanka is now emerging from a balance of payments crisis and the credit cycle is slowing with an improving budget deficit and slower private credit, allowing the central bank to collect forex reserves.

Sri Lanka's LAUGFS Gas to spin-off non-core units

ECONOMYNEXT - Sri Lanka's LAUGFS Gas group said it is spinning off three units in non-core sectors and listing them on the Colombo Stock Exchange.

LAUGFS Lesiure Ltd, a hotel firm LAUGFS Power Ltd and LAUGFS Eco Sri (Pvt) Ltd, will be separated and share will be issued to existing shareholders of the parent in the same proportion, the firm said in a stock exchange filing.

The units will also be listed on the stock exchange through an introduction.

LAUGFS Gas will retain LAUGFS Maritime Services (Pvt) Ltd, LAUGFS Terminals Ltd, SLOGAL Energy DMCC, LAUGFS Gas (Bangladesh) Ltd and LAUGFS Property Developers (Pvt) Ltd, which owns the headquarters buildings.

The firm said the Board of Directors approved the proposal on December 28 and shareholder and court approval will be sought under Sri Lanka's Companies Act.

Sri Lanka's LCI buys MillenniumIT ESP from London Stock Exchange

ECONOMYNEXT - Sri Lanka's based Lanka Century Investments said it is buying100 percent control of MillenniumIT' enterprise solutions business, from London Stock Exchange group.

The firm said it paid 392.40 rupees for 2.75 million shares.

London Stock Exchange will continue to own the securities trading and sofware development divisions of MIT.

MillenniumIT ESP provides IT services to Sri Lankan public and private companies, LCI said.

LCI is controlled by Navitas Holdings, Galle Face Hotel group Hrdramani group and Taprobane Holdings.

Sri Lankan stocks gain for fifth session in muted trading

Reuters: Sri Lankan shares inched higher on Thursday in their fifth straight gaining session to a fresh three-week closing high as the central bank held key policy rates steady, with trading muted by the holidays after Christmas.

Sri Lanka’s central bank kept its benchmark interest rates unchanged before the market opened, saying inflation and private sector credit growth have cooled to a manageable level as policy makers focus on supporting a slowing economy.

The Colombo Stock Index ended 0.08 percent firmer at 6,364.34, its highest since Dec. 8.

“Unchanged rates is a positive sign for the market. It will help the market to start the new year on a positive note,” said Hussain Gani, Deputy CEO at Softlogic Stockbrokers.

Shares in Sri Lanka Telecom Plc rose 3.2 percent, while Chevron Lubricants Lanka Plc ended 3.2 percent higher and Melstacorp Ltd gained 0.9 percent.

Turnover stood at 221 million rupees ($1.44 million), less than a quarter of this year’s daily average of 920.5 million rupees.

Foreign investors bought shares net worth 98.2 million rupees on Thursday extending the year-to-date net foreign inflow to 18.3 billion rupees in equities. 

($1 = 153.1000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal; Editing by Amrutha Gayathri)

CIFL saga hots up; depositors point at Central Bank cover up

By Chandeepa Wettasinghe

The depositors of the failed Central Investment and Finance PLC (CIFL) yesterday alleged that the move by the Central Bank to close down CIFL and its group companies is to cover up the irregular and possibly illegal conduct of the Central Bank officials regulating these companies.

Nishantha Attanayake, a Director at City Finance Corporation Limited—a CIFL group subsidiary— told a press conference yesterday that the Central Bank officials want to cover up all the illegal activities of former CIFL Chairman Deepthi Perera and said if a forensic audit is conducted, a number of Central Bank officials will be in trouble.

Perera went into hiding in Cambodia for two years after it was alleged that he defrauded the CIFL depositors and mismanaged the company. He was arrested upon return to Sri Lanka and bailed out in 2015 and the legal proceedings are ongoing.

Former Additional Auditor General A.H.M.L. Ambanwala, who was also at the press conference, said that after looking through some of the accounts of CIFL he was presented with, he feels a comprehensive audit is required and that he would extend his expertise if required.

“From recent discussions, what became clear to me was that there was a weakness in the Central Bank’s regulatory and monitoring roles. Deposits are made in finance companies based on the fact that they are monitored and audited by the Central Bank. That duty has not been carried out,” he said.

CIFL Depositors’ Association President Wijeya Gunawardana added that the reputation of the Monetary Board of Sri Lanka, which governs the Central Bank, is now in question and the confidence placed in the Central Bank has now been shattered.

“We’re evaluating what to do, whether to take to the roads or to the courts. We will tell every Sri Lankan to take their money out of finance companies and put them in a state bank. We will create a situation where the entire financial industry will collapse,” Gunawardana said.

He also said from 2009-2013, persons with questionable reputation were appointed to the boards of the CIFL group companies, giving scant regard to fit and proper requirements for such posts, for which the Central Bank bears the responsibility of enforcing.

Gunawardana alleged that senior officials in the Central Bank and the judiciary had conspired to dismiss legal action taken by the depositors in the Court of Appeals against the Central Bank for not managing the situation since taking CIFL into its custody since 2013.

The Central Bank officials had also sabotaged the efforts to take up the issue at the Supreme Court, he alleged.

These allegations against the Central Bank come at a time when the top management of a controversial primary dealer has confessed at a Presidential Commission for conducting insider trading in collusion with the Central Bank officials at treasury bond auctions.

Most of the depositors at the CIFL group companies have not received their deposits back, while some have had their deposits converted to shares and many are not receiving their due interest.

While CIFL was in troubled waters, the then Central Bank Governor Ajith Nivard Cabraal in 2014 had visited Singapore with the Colombo Stock Exchange officials during a roadshow to attract investors to Sri Lanka and had attempted to woo Singaporean investors into Sri Lanka’s financial sector, which was undergoing consolidation forced upon by the government.

It was then that One Asia Investment Partners Pte Ltd (OAIP)—which is currently not allowed to manage funds in Singapore since the Monetary Authority of Singapore revoked OAIP’s Capital Markets Services Licence this April for ineffective management—decided to invest Rs.198 million in the CIFL subsidiary, City Finance, through a local subsidiary set up by OAIP.

However, with the change of government in January 2015, the current government decided to discontinue the policy of forcing the sector to consolidate and the Central Bank had then decided not to honour the agreement the Central Bank had signed with OAIP, which included the Central Bank investing equal amounts of capital that OAIP invested in City Finance, according to OAIP Local Representative Dakshitha Bogollagama.

Bogollagama has currently filed legal action against the Central Bank for not honouring the agreement and this legal action had resulted in City Finance’s licence not being revoked by the Central Bank at the same time as CIFL.

According to depositors and company officials, CIFL has received offers from German, Swiss and Australian investors to bail out the company and repay the depositors.

“But the Central Bank was not that keen to accept investors. They didn’t treat the investors properly,” Gunawardana said.

He added that these three investors are ready, even today, to invest in CIFL if the Central Bank is willing to reverse its decision to cancel CIFL’s licence.

However, the Central Bank, at the time of revoking CIFL’s licence, said that it has “extended the deadline given to a potential investor on several occasions to prove the availability of funds which has not been fulfilled as yet”.

The Central Bank, after considering the plight of small depositors in CIFL, had also offered to expand the Sri Lanka Deposit Insurance and Liquidity Support Scheme limit of Rs.300,000 to Rs.600,000 in order to ensure that 2,501 out of the 4,092 CIFL depositors would be repaid their deposit values.

Gunawardana however said that all depositors are of equal standing in the CIFL Depositors’ Association regardless of the money deposited and that the association expects justice to be given to all the depositors.

www.dailymirror.lk

Central Bank seen keeping policy rates steady to support growth

Reuters: Sri Lanka’s Central Bank is expected to keep its key interest rates unchanged this week, a Reuters poll showed, as policymakers focus on supporting the slowing South Asian economy while remaining vigilant to still high inflationary pressures.

All 11 economists in the survey predicted the Central Bank would keep its standing deposit facility rate (SDFR) and standing lending facility rate (SLFR) unchanged at 7.25 percent and 8.75 percent, respectively.

They also forecast the statutory reserve ratio (SRR) to stay at 7.50 percent.

The International Monetary Fund (IMF) earlier this month urged Sri Lanka to maintain a tightening bias on monetary policy until clear signs emerge that inflationary pressures and credit growth are moderating.

“The Central Bank will see through the high inflation and maintain the policy rates as growth is the priority now,” Softlogic Stockbrokers Research Head Danushka Samarasinghe said.

“Without any changes in the policy rates, the market rates are adjusting. We see the market rates coming down with foreign money starting to come in.”

Central Bank Governor Indrajit Coomaraswamy has said the monetary authority does not see a need for a rate rise due to lower core inflation but it is cautiously monitoring the numbers.

The Central Bank has said it wants to curb credit growth to 15 percent by end this year. Annual private sector credit growth slowed to 17.5 percent in September from May’s 18.9 percent and well off a near four-year high of 28.5 percent hit in July 2016.

Consumer inflation was up 7.6 percent in November from a year earlier, slowing from a record high of 7.8 percent hit in the previous month.

Since the Central Bank’s last rate hike in March this year, treasury bill rates have fallen between 188-206 basis points, mainly driven by foreign buying of T-bonds, which is good for the economy but may also add to inflationary pressures.

The previous rate increases have dragged on the US $ 81 billion economy, which grew at an annual pace of 3.7 percent in the first nine months of 2017, slowing from 4.0 percent growth in the same period in the previous year.

The Central Bank has tightened monetary policy four times since December 2015 through March this year to fend off pressure on the fragile rupee and curb stubbornly high credit growth that stoked inflation.

FC Research forecasts no change in policy rates

FC Research, the research arm of First Capital Holdings PLC, yesterday ruled out a change in policy rates at the monetary policy review that will be announced this morning.


“FC Research believes that despite inflation remains high, GDP growth and credit growth are below our expectation.

Consideration of the above macroeconomic environment, the current monetary policy is appropriate and no change is required,” FC Research said in a brief note. According to FC Research, there is 90 percent bias towards the Central Bank keeping the policy rates unchanged and a 10 percent bias towards cutting the rates by 25 basis points.

FC Research in August upgraded private sector credit growth for 2117 to 16 percent from 14 percent amid a possible pickup towards the year end.

The private credit figure decelerated to Rs.50 billion in September 2017.

Sri Lanka’s GDP grew 3.3 percent in 3Q17, impacted by the poor performance of the agriculture sector due to unfavourable weather conditions.

Meanwhile, FC Research forecasts December headline inflation to be at 7.2 percent.

“We believe inflation will be under control over the next two to three months while there could be some upward pressure towards 2Q2018.”

www.dailymirror.lk

Sri Lanka's Treasuries yields drop

ECONOMYNEXT - Sri Lanka's Treasuries yields dropped at Wednesday's auction with the 6-month yield falling 10 basis points to 8.30 percent, data from the state debt office showed.

The 12-month yield fell 02 basis points to 8.90 percent.

The debt office sold 4.0 billion rupees of 6-month bills after offering 4.0 billion rupees and 8.5 billion rupees of 12-month bills after offering 8.5 billion rupees, raising a total of 12.3 billion rupees.

Selling the exact amount of bills offered is the most transparent way to conduct and auction, but it is not always done in Sri Lanka.

Sri Lankan stocks hit 3-wk closing high in holiday-thinned trading

Reuters: Sri Lankan shares touched a near three-week closing high on Wednesday as investors waited for clues from the central bank’s monetary policy review later in the week, with trading muted by the holidays after Christmas.

Sri Lanka’s central bank is expected to keep its key interest rates unchanged this week, a Reuters poll showed, as policymakers focus on supporting the slowing South Asian economy while remaining vigilant to still high inflationary pressures.

The Colombo Stock Index ended 0.14 percent firmer at 6,359.06, its highest since Dec. 8.

“Trading blue chip counters moved up slightly helping the index to end positive but the market is very dull as most of the brokers and investors are on holiday,” said Dimantha Mathew, head of research at First Capital Holdings.

Shares in Peoples Leasing Plc rose 0.6 percent, while Overseas Realty Plc ended 2.9 percent higher and Hemas Holdings Plc gained 0.8 percent.

Turnover stood at 263.3 million rupees ($1.73 million), just above a quarter of this year’s daily average of 920.5 million rupees.

Foreign investors sold 130.1 million rupees net worth of shares on Wednesday, but they have bought 18.2 billion rupees net worth equities so far this year. 

($1 = 152.6000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal; Editing by Amrutha Gayathri)

LOLC Finance goes for Rs. 5.88 b Rights to merge with group microcredit arm

LOLC Finance has received approval from the Central Bank to acquire 100% of LOLC Micro Credit Ltd., and to merge the two entities as part of consolidation with a move to enhance capital via a Rs. 5.88 b Rights Issue.

Post-merger, LOLC’s finance directors expect significant growth in assets as the synergies are expected to unlock new market opportunities. LOMC is 80%-owned by Lanka Orix Leasing Company Plc and 20% by FMO (Nederlandse Financierings - Maatschappij Voor Ontwikkerlingslanden NV). LOLC is the controlling shareholder of LOFC.

The increase in the asset base immediate upon the merger and the subsequent expected business growth in the merged entity will require additional capital to comply with the capital adequacy requirements stipulated by the Central Bank. For this the LOLC finance directors have approved a Rs. 5.88 billion Rights Issue on the basis of one for two at Rs. 4.20 each involving the issuance of 1.4 billion shares.

The current stated capital of LOLC Finance is Rs. 2 billion represented by 2.8 billion shares. Post-Rights, the stated capital will increase to Rs. 7.88 billion represented by 4.2 billion shares.

Funds raised via Rights Issue will be used to raise additional capital to ensure compliance with the Central Bank Risk Weighted Capital Adequacy Ratio and enhance the Tier 1 Capital base of the company and meet future business growth.

The Rights is subject to regulatory and shareholder approvals.

Net asset per share of LOLC Finance was Rs. 4.21 as of 30 September 2017. It had assets worth Rs. 134.85 billion, up from Rs. 122.6 billion as at 31 March 2017. Liabilities were Rs. 123 billion, up from Rs. 111.6 billion.

In the six months ended 30 September 2017, the total income of LOLC Finance was Rs. 

5.28 billion, up by 23% from a year earlier. After-tax profit was Rs. 620.6 million, down by 13%.

The public shareholding of LOLC Finance is 9.88%, held by 2,615 shareholders.
www.ft.lk

Sri Lankan stocks hit near 2-wk closing high

Reuters: Sri Lankan shares touched a near two-week closing high on Tuesday, as investors picked up banking and diversified stocks, with muted trading as investors went on holiday in the Christmas week.

Investors were also waiting for direction on interest rates when the central bank unveils its monetary policy later this week, analysts said.

The Colombo Stock Index ended 0.42 percent firmer at 6,350.30, its highest since Dec. 15.

“The overall uptrend is due to some window-dressing in some of the blue chip counters,” said Dimantha Mathew, head of research at First Capital Holdings.

“Overall investor interest is very low and it’s a very weak market with most of the broker community also on holiday.”

Shares in conglomerate John Keells Holdings Plc gained 1.1 percent, while Sri Lanka Telecom Plc ended 4.1 percent higher and Hatton National Bank Plc rose 0.2 percent.

Turnover stood at 153.8 million rupees ($1.01 million), below this year’s daily average of 923.2 million rupees.

Foreign investors net sold 4.1 million rupees worth of shares on Tuesday, but they have net bought 18.4 billion rupees worth equities so far this year.

The currency and stock markets were closed on Monday for Christmas. 

($1 = 152.6000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal; Editing by Biju Dwarakanath)

Retail demand to absorb entirety of LVL Energy Fund IPO

The recently oversubscribed IPO of LVL Energy Fund Ltd. had attracted 749 retail applications.

The value of their applications is Rs. 1.36 billion whilst the IPO was worth Rs. 1.2 billion offering 120 million shares at Rs. 10 each.

The IPO had drawn three applications worth Rs. 60 million with payment made by bank guarantees.

In total the IPO drew 752 applications requesting Rs. 1.42 billion shares.

The financial advisor and manager to the IPO was Acuity Partners.

The LVL Energy Fund IPO was the biggest in four years. LEF is a subsidiary of Lanka Ventures Plc and was incorporated in 2006 for the purpose of consolidating LVEN’s energy sector investments. LEF has invested jointly with reputed project developers to develop and operate power generation projects (installed capacity of operational projects amounts to 136.6 MW). LEF will be using IPO funds to retire some debt and retire some preference shares to be invested in three new hydropower projects.

www.ft.lk

Trading of BASEL III compliant debentures limited to qualified investors

Trading of BASEL III compliant-debt securities issued by banks will be limited to qualified investors as recommended by the Securities and Exchange Commission.

The CSE said that the SEC has approved the amendments to the Automated Trading System Rules which facilitate the trading of BASEL III-compliant debt securities issued by commercial banks and specialised banks licensed by the Central Bank.

Those specified by the SEC as qualified investors are a commercial bank, specialised bank, a mutual fund, pension fund, employee provident fund or any other similar pooled fund, a venture capital fund or company and private equity company, a finance company licensed by the Central Bank, a company licensed by the Central Bank to carry out finance leasing business, a company licensed by the Insurance Board of Sri Lanka to carry on an insurance business, a corporate (listed or unlisted) which does not fall under the above categories and is incorporated under the Companies Act, an investment trust or investment company, a non-resident institutional investor and an individual with an investment of Rs. 5 million.

As per the amended ATS rules, any trade executed on BASEL III-compliant debt securities where the buyer is not a qualified investor will be cancelled by the CSE and the buying broker firm must pay the CSE a trade cancellation administration fee of Rs. 10,000 or 0.005% of the total value of the transaction, whichever is higher, subject to a maximum of Rs. 25,000.

CSE said broker firms are required to take necessary measures to restrict investors from placing orders for BASEL III-compliant debt securities using an internet trading facility. Only qualified investors should be allowed to place orders for BASEL III-compliant debt securities through the internet trading facility.

Broker firms are required to flag ‘Qualified Investors’ in their respective Broker Back Office System and Order Management System in order to restrict the order submission to BASEL III securities “qualified investors”.

Secondary trading should also be restricted to and between qualified investors.

The amended ATS rules to facilitate trading of BASEL III-compliant debt securities are available on the CSE website www.cse.lk.
www.ft.lk

Two big investors apply for over half of Jetwing Symphony IPO

Family-owned Jetwing Sympony Ltd. has attracted 346 applications for its Rs. 750 million IPO.

From the responses, two applications with a payment made by bank guarantee had accounted for over half of the IPO value of Rs. 451.7 million. The balance 344 applications are, at a retail level, requesting Rs. 336.4 million shares. A total of 346 applications have requested Rs. 788.2 million shares.

Jetwing Symphony is the investment arm of the Jetwing leisure and travel group. The IPO of 10% stake was based on a formal book-building process with a price band ranging from Rs. 15-18.

The IPO funds will be utilised to complete Jetwing Symphony’s projects in the pipeline and settle debt payments.

Capital Alliance Partners is the manager to the issue.
www.ft.lk

Fitch affirms 9 Sri Lankan banks: Revises DFCC outlook to Stable

LBO - Fitch Ratings has revised the Outlook on DFCC Bank Plc (DFCC) to Stable from Negative.

It has also affirmed the Long-Term Issuer Default Ratings (IDR) of the following Sri Lanka-based banks:

– National Savings Bank (NSB) at ‘B+’; Outlook Stable

– Bank of Ceylon (BOC) at ‘B+’; Outlook Stable

– DFCC at ‘B+’; Outlook revised to Stable from Negative

Fitch has also affirmed the National Long-Term Ratings of the following banks:

– NSB at ‘AAA(lka)’; Outlook Stable

– BOC at ‘AA+(lka)’; Outlook Stable

– DFCC at ‘AA-(lka)’; Outlook revised to Stable from Negative

– People’s Bank (Sri Lanka) (People’s Bank) at ‘AA+(lka)’; Outlook Stable

– Commercial Bank of Ceylon Plc (CB) at ‘AA(lka)’; Outlook Stable

– Hatton National Bank Plc (HNB) at ‘AA-(lka)’; Outlook Stable

– National Development Bank Plc (NDB) at ‘A+(lka); Outlook Stable

– Sampath Bank Plc (Sampath) at ‘A+(lka)’; Outlook Negative

– Seylan Bank Plc (Seylan) at ‘A-(lka)’; Outlook Stable

The rating action follows Fitch’s periodic review of the large bank peer group. Fitch has maintained the negative outlook on Sri Lanka’s banking sector as it expects challenging operating conditions to persist into 2018.

The sector outlook is sensitive to trends in the operating environment. Bank credit profiles should broadly remain intact, but there could be modest pressure on the ratings of some banks if sufficient loss-absorption buffers are not maintained.

Capitalisation remains a key issue facing the sector. There was some capital-raising among banks in 2017 and Fitch expects this to continue into 2018. Sri Lankan banks are required to phase in higher capital buffers to meet Basel III regulations that come into effect on 1 January 2019.

In addition, Fitch believes there could be a significant impact on banks’ capitalisation through the adoption of Sri Lanka Financial Reporting Standards (SLFRS) 9 in 2018, although the effect of this on regulatory capital ratios could be spread out.

Sampath debenture issue successful despite lack of tax break from Apr. 1

A total of 68 subscribers have contributed over Rs. 9.73 billion to make the Sampath Bank’s recent debenture issue a resounding success, the bank said in a stock exchange filing last week.

The comfortable over-subscription of the Rs. 4 billion debenture issue, with an option of raising a further Rs. 2 billion if over-subscribed, closed on the opening day despite the previous tax-free status on interest earned on these instruments to corporate subscribers not being available from April 1, 2018.

The debentures of five-year tenure with a par value of Rs. 100 each are listed, rated unsecured, subordinated and redeemable with a non-viability conversion to shares that may be imposed by the Central Bank.

www.island.lk

Colombo bourse down for seventh week running, turnover too slumps

Markets continued to record week-on-week losses for the seventh consecutive week as dull sentiment dominated ahead of the holiday weekend, Acuity Stockbrokers said in their Stock Market Weekly.

"The broad-share price Index fell to an eight-month low of 6,321.36 points on Wednesday, before recovering marginally higher by 2.4 points to close above the Index’s previous low of 6,305.54 in mid-April," the report said..

Turnover levels too declined significantly, falling ~51% W-o-W to average Rs. 0.35 daily. This contrasts to the daily average turnover levels of Rs. 0.71Bn the previous week and the year-to-date average of Rs. 0.93Bn. Lower high netr worth investor and institutional participation contributed to the low daily turnover levels, with just 40% of crossings recorded over the week, Acuity noted.

Crossings were concentrated on just three stocks - Hemas, HNB and DFCC with DFCC accounting for the dominant share of the week’s crossings (85%).

The report said that the Colombo Bourse also managed to find some support from last week’s recovery in foreign appetite for domestic equities. Although notably lower than this year’s average weekly net foreign inflows of Rs.0.36Bn, net foreign inflows last week totaled Rs. 0.05Bn, up from the net outflow of Rs. 0.07Bn recorded the previous week.

The report said that markets in the holiday-shortened week ahead are likely to retain the current dull sentiment although some cues over market direction are likely to stem from next week’s monetary policy meeting on Thursday.

www.island.lk

NTB summons EGM for shareholder approval for unusual rights issue

Strategy to protect JKH and Central Finance interest while protecting minority

The Nations Trust Bank PLC (NTB) has summoned an Extraordinary General Meeting on Jan. 12 to seek shareholder approval for an unusual rights issue under which approx. 40.1 million new convertible non-voting shares are being issued in the proportion of four new non-voting shares for every 23 voting shares held at a price of Rs. 80 per share.

"This is the first time any company is issuing non-voting shares against already held voting shares," an analyst said. "The exercise is intended to enable JKH and Central Finance (CF) to subscribe to the issue despite the constraints imposed on these two dominant shareholders of NTB under terms of the Banking Act."

Both JKH and Central Finance are hamstrung by the problem of holding the maximum permitted stake of the bank in terms of the voting shares they already hold. But this restriction does not apply to non-voting shares.

Minority shareholders’ interests have been protected by making the new non-voting shares convertible to voting shares down the road without cost.

In a circular to shareholders, NTB has explained the arrangement and said that JKH and CF owning approx. 64.9% of the bank have committed to subscribe for their rights. An under-subscription by the minority shareholders has been described as an "unlikely event" although the NTB share has been recently trading at around the Rs. 80 level at which the rights shares have been priced.

The NTB share which closed on Friday at Rs. 78 for a small quantity of 588 shares had traded between a low of Rs. 78 and a high of Rs. 87 between Sept. to Nov. this year closing at Rs. 80, Rs. 83 and Rs. 80 in these three months. As at Dec. 12, the last trading day before the circular was printed, the closing price was Rs. 80.

Analysts noted that recent rights issues by other commercial banks, like the Commercial Bank of Ceylon, HNB and Sampath priced their rights at a substantial discount to the prevailing market price and shareholders had an instant capital gain on their new shares.

"This is not the case with NTB," an analyst said. "Big shareholders of Sampath had to forego a proportion of their rights (of voting shares) due to limits specified by the Banking Act. As a result, small shareholders applying for additional shares over and above their entitlements got as many as 9,000 shares enabling a tidy profit."

NTB plans to infuse approx. Rs. 3.2 billion with the rights issue and a further Rs. 3.5 billion by the issue of listed, rated, unsecured, subordinated, redeemable five-year debentures with a "non-viability conversion" to ordinary voting shares "solely if instructed by the Central Bank of Sri Lanka."

A second meeting immediately following that seeking approval for the rights issue will also seek shareholder approval for the debenture issue. Both these capital raising exercises have been undertaken to strengthen Tier 2 capital of the bank to comply with BASEL III requirements.

NTB has a solid dividend paying track record having paid dividends of Rs. 2.10 per share during the last three financial years. The bank has made a profit of Rs. 2.745 billion in the first six months of the current financial year and the net asset value of the NTB share was Rs. 80.94 (group Rs. 85.42) as at Sept. 30, 2017.

www.island.lk

Sri Lankan stocks end flat near 8-mth low; turnover hits 1- year low

Reuters: Sri Lankan shares ended flat on Friday for a second straight session, while trading was muted with turnover hitting its lowest level in a year ahead of Christmas holidays.

The Colombo Stock Index ended 0.22 points firmer at 6,323.74, edging up from its lowest close since April 11 recorded on Wednesday.

The bourse fell 0.5 percent during the week, its seventh straight weekly fall.

“Very low turnover .... the turnover hit a 12-month low as most of the investors are on vacation, especially the high net worth investors,” said Dimantha Mathew, head of research at First Capital Holdings,

Shares in Ceylinco Insurance Plc gained 7.1 percent up while those in Ceylon Tobacco Company Plc ended 0.5 percent up.

Hemas Holdings Plc fell 2.2 percent while the biggest listed lender Commercial Bank of Ceylon Plc ended 0.6 percent weaker.

Turnover stood at 115.1 million rupees ($752,779.59), the lowest since Dec. 27, 2016 and was well below this year’s daily average of 926.5 million rupees.

Foreign investors net bought 10.3 million rupees worth of shares on Friday, extending their year-to-date equity purchases to 18.4 billion rupees.

Both the currency and stock markets will remain closed on Monday for a holiday and normal trading will resume on Tuesday. 

($1 = 152.9000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal; Editing by Vyas Mohan)

Sri Lankan stocks end steady near 8-month low in lean trade

Reuters: Sri Lankan shares ended steady on Thursday, near an eight-month low hit in the previous session, as losses in oil palm and telecommunications offset gains in banking and diversified stocks.

The Colombo Stock Index ended 0.03 percent firmer at 6,323.52, edging up from its lowest close since April 11 touched on Wednesday. Trading was muted ahead of the holiday season, with turnover hitting a 10-month low.

“The dull sentiment is continuing with the year-end holidays coming in,” said Atchuthan Srirangan, senior research analyst at First Capital Holdings PLC.

“Most of the investors and brokers are already on holiday and trading is taking place on very low volumes. We expect low turnover to continue for the next few days.”

Shares in Ceylinco Insurance Plc ended 2.9 percent up while those in Melstacorp Plc rose 1.9 percent.

Sri Lanka Telecom Plc fell 1.4 percent while Hatton NationAl Bank Plc ended 0.7 percent weaker.

Turnover stood at 134.7 million rupees ($880,967.95), the lowest since Feb. 1 and well below this year’s daily average of 933.3 million rupees.

Foreign investors net sold 79.6 million rupees worth of shares on Wednesday. They have net bought 18.3 billion rupees worth of equities so far this year. 

($1 = 152.9000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal; Editing by Vyas Mohan)

SLT invests Rs 2.4 bn for data centre

Sri Lanka Telecom’s data centre infrastructure has been undergoing a major transformation with state-of-the-art Tier 3 Data Centre constructed in Pitipana inter-connecting multiple data centres located in SLT headquarters and welikada.

Investment for phase 1 of the data centre project is Rs 2.4 billion.

With this new development, SLT is able to offer broader portfolio of robust co-location and Data hosting facilities at very competitive price packages.

Even in the midst of the industry’s shift, SLT continued to strengthen the data centres as integral components of its overall IT infrastructure strategy and data centres are already accommodating user expectations with advanced IT systems and service level uptime or availability coupled with new service offering opportunities for their valued Enterprise & SME customers.

The Company expect to facilitate more CEOs, CIOs, CTOs and IT experts who are looking to fulfill the IT anytime, anywhere model by delivering the necessary performance, uptime and level of fault tolerance with redundancy. The new data Centre of SLT located in newly proposed Tech city area will have a capacity of - 500 racks with a provision to increase the capacity. Customers will be able to hire racks as and when they are required to manage their CAPEX and OPEX effectively. The rental payment expected from the customers will be far less in comparison to the amount they will be required to spend in order to have their own data centres. SLT intends to provide expert knowledge and bear all costs associated with space, protection, disaster management etc.
www.dailynew.lk

Raigam cuts SL’s wheat imports with launch of rice flour noodles

The country can save Rs 925 million annually by reducing the import of wheat flour due to the introduction of rice flour noodles to the country.

This opinion was expressed by Dr Ravi Liyanage, Chairman, Raigam Group of Companies, at the launch of the Raigam Devini Batha Bundi Full instant rice noodles to the Sri Lankan market on Tuesday, in Colombo.He said to construct the manufacturing plant to make noodles out of 100% rice grown in Sri Lanka, the group had invested over Rs 300 million. Situated in Homagama, this facility has a capacity of 5,000 MT per annum.

The Kingdom of Raigam earlier had fired the first salvo to save the country from importing salt from overseas by taking the initiative to re-awaken the salt industry in Sri Lanka.

With Raigam taking steps to start saltern construction and table salt refineries in the country the country managed to reduce its salt import to less than 7,000 MT in 2011. Dr Liyanage said Sri Lanka will be able to export the excess salt in the near future.

It was also disclosed that the Wayamba Salterns PLC has recorded a revenue of Rs. 723.4 million in 2017.

Commenting on the unprecedented financial growth achieved during this financial year, Raigam Wayamba Salterns, Chairman, Liyanage said in comparision to the revenue of Rs. 414.6 million recorded in 2016, this was the highest ever financial performances recorded by the Group.

Dr. Liyanage also mention about the severe slat shortage in the country in 2016 and said although many salt businesses came to a standstill, Raigam managed to service the market due to prudent stock management practices of the company.

Earlier this year the company issued 80 million shares at an affordable price of Rs 2.50 per share for anyone like school teachers or university students to become shareholders of the company by investing Rs. 2,500 the minimum subscription.

www.dailynews.lk

Fitch rates BOC’s Basel III Sub-Debt ‘AA(lka)’

Fitch Ratings has assigned Bank of Ceylon’s (BOC, AA+(lka)/Stable) proposed Sri Lankan rupee-denominated Basel III-compliant subordinated unsecured debentures a final National Long-Term Rating of ‘AA(lka)’.

The debentures, totalling up to Rs 8 billion are to have maturities of five and eight years and carry fixed- and floating-rate coupons. The bank plans to use the proceeds to support its loan book expansion and to strengthen its Tier II capital base. The debentures are to be listed on the Colombo Stock Exchange.

The debentures are to qualify as Basel III compliant regulatory Tier II capital for the bank and include a non-viability trigger upon the occurrence of a trigger event, as determined by the Monetary Board of Sri Lanka.

The final terms indicate that the notes are subject to temporary or permanent write-down as determined by the Monetary Board of Sri Lanka and can be partially or fully written down upon the occurrence of a trigger event. There are no equity conversion provisions in the terms. The final rating follows the receipt of documents conforming to information already received and is in line with the expected rating assigned on October 26, 2017.
www.dailynews.lk

Nations Trust Bank in rights issue

Nations Trust Bank (NTB) is to undertake a rights issue of 40,105,614 ordinary non-voting convertible shares in the proportion of four shares for every 23 held as on January 12, 2018, subject to approval by the CSE and shareholders, the bank said in a stock exchange filing. The rational to issue non-voting shares with a conversion option, as opposed to another class/type of security is, in its efforts to raise capital to meet regulatory requirements, to augment the anticipated balance sheet growth, NTB said.

Non-voting shares would give the bank the ability to source full subscription from all shareholders for the rights issue despite the restrictions placed by the Central Bank on shareholders carrying voting rights, the bank said.
www.dailynews.lk

Sampath Bank in mega quest to raise Rs. 20 b via Rights, Debt

* Fresh capital-boosting move comes hot on the heels of oversubscribed Rs. 6 b debenture issue

Sampath Bank yesterday announced an unprecedented move to raise a mammoth Rs. 20 billion to boost its capital via equity and debt issues, hot on the heels of raking in Rs. 6 billion via debentures last week.

The third largest private bank and one of the industry’s best performing so far this year, Sampath Bank announced a three for 13 Rights Issue at Rs. 250 each. The move will involve the issuance of 50.13 million shares and raise Rs. 12.5 billion. Additionally, the bank also announced an issue of 50 million five-year Listed, Rated, Unsecured, Subordinated, Redeemable, Basel III Compliant Convertible Debentures with an option to issue up to a further 25 million convertible debentures in the event of an oversubscription at a consideration of Rs. 100 each.

The combined issues will raise a maximum of Rs. 20 billion aimed at boosting the capital of the bank to comply with the stringer Basel III requirements.

The announcement of a fresh round of fundraising comes soon after it raised Rs. 6 billion last week via a Basel III compliant, Tier II, rated, unsecured, subordinated, redeemable, five-year debenture issue, which was oversubscribed on Friday.

Funds raised via the debenture were to be used to support its loan book expansion and to strengthen its Tier II capital base.

Pending yesterday’s announcements, the trading of Sampath Bank shares was suspended but thereafter the stock closed at Rs. 315, down by Rs. 16.20 or 5%.

The net asset value per share as of 30 September 2017 was Rs. 287 at the Bank level and Rs. 317 at the Group level, up from Rs. 239 and Rs. 267 from 31 December 2016.

Continuing its robust growth momentum, Sampath Bank achieved Rs. 8.5 billion in Profit After Tax (PAT) within the first three quarters of 2017, up by 26.2% from a year earlier. Profit Before Tax (PBT) too grew by 32% YoY to reach Rs. 11.8 billion for the nine months ended 30 September 2017.

The Group, which comprises the bank and four fully-owned subsidiary companies, also posted a growth in PAT and PBT of 26.5% and 32.4% respectively for the nine months ended 30 September 2017.

Sampath Bank’s total asset base grew by 14.3% (annualised 19%) during the period under review to reach Rs. 752.8 billion as at 30 September 2017.

In comparison, the total asset position as at 31 December 2016 stood at Rs. 658.5 billion. Gross loans and receivables grew by 17.2% (annualised 23%) to hit Rs. 549.2 billion as at 30 September 2017, growing by Rs. 80.7 billion for the nine-month period. The total deposit base too increased by Rs. 95.4 billion for the same period, to reach Rs. 611.6 billion as at the reporting date, a growth of 18.5% (annualised 25%).

However, at 34.1%, the CASA ratio as at 30 September showed a decline compared to the 38.4% registered on 31 December 2016. The decline can be attributed to the higher growth recorded in the fixed deposit base.

Post third quarter results, the bank said its Common Equity Tier I Capital, Tier I Capital and Total Capital Adequacy ratios as at 30 September 2017,which stood at 8.46%, 8.46% and 11.85% respectively, have been computed based on Basel III requirements for the first time. All three ratios stood well above the minimum regulatory requirement of 6.25%, 7.75% and 11.75% respectively.

Vallibel One Plc, controlled by business leader Dhammika Perera, owns 15% stake in Sampath Bank followed by Ishara Silva (10%), the Employees Provident Fund (10%) and Rosewood Ltd. (5%).

www.ft.lk

Sri Lankan stocks fall for 4th straight session

Reuters: Sri Lankan shares fell for a fourth straight session on Wednesday, as investors offloaded stocks of beverages and oil palm companies, while a block deal pushed up turnover.

The Colombo Stock Index ended 0.06 percent weaker at 6,321.36, its lowest close since April 11. The index was down 0.4 percent last week, its sixth consecutive weekly decline.

“Today is also a very dull day. But a block deal pushed the turnover,” said Atchuthan Srirangan, senior research analyst at First Capital Holdings PLC.

“The dull sentiment will continue with the holidays ahead.”

Sampath Bank Plc, which announced a rights issue to increase its tier 1 capital to comply with Basel III requirements, dropped 1.4 percent. Nestle Lanka Plc fell 2 percent.

Turnover stood at 897.3 million rupees ($5.86 million), less than this year’s daily average of 933.3 million rupees.

Foreign investors net sold 79.6 million rupees worth of shares on Wednesday, but they have net bought 18.3 billion rupees worth of equities so far this year. 

($1 = 153.0000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal; Editing by Biju Dwarakanath)

Sri Lanka buys aviation fuel from LIOC to meet rising demand

ECONOMYNEXT – Sri Lanka’s state-owned refiner Ceylon petroleum Corporation has bought 14,000 metric tonnes of aviation fuel from the local unit of Indian Oil Corporation to maintain stocks owing to a hike in demand.

The Ministry of Petroleum Resource Development said in a statement the fuel, bought from Lanka IOC, was being unloaded and had met the required quality standards.

The tanker which brought the stock of fuel had berthed on December 10.

The first sample drawn to test the fuel did not meet the required quality levels, apparently because of rust, the statement said.

But a second sample drawn on December 17 met the standard as the rust had settled in the hold, it said.

Nathan Sivagananathan on Sri Lanka’s Dunamis Capital Board

ECONOMYNEXT – Sri Lanka’s Dunamis Capital, which has interests in financial services and real estate, has announced the appointment of Nathan Sivagananathan as a director of its board with effect from 18th December 2017.

Sivagananathanis is an entrepreneur and Chief Growth Officer and a member of the board of a leading apparel company, a statement said.

He holds a BSc. in Engineering Management from the University of Hertfordshire, UK and has completed the Advanced Management Program at Harvard University, USA.

Sivagananathan an active angel investor in the island, trying to uplift startups and take them global.

Sri Lanka 03-month Treasury Bill yield falls to 7.69-pct

ECONOMYNEXT – Sri Lankan Treasury Bills yields fell across maturities at an auction Wednesday with the 03-month bill yield falling 28 basis points to 7.69 percent from the previous auction.

The central bank’s public debt department said the 06-month bill yield fell 08 basis points to 8.40 percent at the auction from 8.48 percent last week.

The 01-year bill yield fell 12 basis points to 8.92 percent from 9.04 percent last week, it said.

The public debt department got bids worth Rs36.4 billion and accepted bids worth Rs14.5 billion.

Sri Lankan stocks hit over 8-mth closing low; lenders fall

Reuters: Sri Lankan shares fell for a third straight session on Tuesday to their lowest close in more than eight months as investors offloaded banking and diversified stocks.

The Colombo Stock Index ended 0.33 percent weaker at 6,325.46, its lowest close since April 11. The index was down 0.4 percent last week, its sixth consecutive weekly decline.

“Today we are seeing some selling in Sampath Bank after it announced a second rights issue for the year on top of the debenture issue,” said Atchuthan Srirangan, senior research analyst at First Capital Holdings PLC.

“With holidays ahead, we think this dull period will continue.”

Samapath Bank Plc, in a filing to the Colombo stock exchange, said it will issue 50.1 million new shares. The bank will issue three shares for every thirteen existing shares held, to increase its tier 1 capital to comply with Basel III requirements.

The bank added it would also issue 50 million five-year debentures at an issue price of 100 rupees apiece.

Sampath Bank Plc fell 4.9 percent while conglomerate John Keells Holdings Plc ended 0.7 percent lower and biggest listed lender Commercial Bank of Ceylon Plc lost 1.2 percent.

Turnover was 357.6 million rupees ($2.34 million), well below this year’s daily average of 933.4 million rupees.

Foreign investors were net buyers of 26.7 million rupees worth of shares on Tuesday, extending their year-to-date net equity purchases to 18.4 billion rupees.

Plantation stocks came under pressure after the Russian agricultural safety watchdog said on Thursday that the country will place temporary restrictions on imports of all agricultural products from Sri Lanka, including tea, from Dec. 18.

Analysts said the Russian restrictions on tea could pose a threat to long-term tea prices and it could impact the earnings of plantation companies. 

($1 = 153.0500 Sri Lankan rupees) 

(Reporting by Ranga Sirilal; Editing by Vyas Mohan)

Listed firms earnings dip 2% to Rs. 60 b in Sept.

Earnings of listed companies in the September quarter have declined marginally by 2% to Rs. 60.1 billion largely owing to a weaker performance by diversified financials and energy sector firms.

Analysing interim financials reported by 275 companies, First Capital Research revealed that September quarter earnings marginally dipped 2% YoY to Rs. 60.1 billion (Sep 2016 - Rs. 61.6 billion) driven by the adverse performance of the Energy (-108%YoY), Diversified Financials (-18%YoY) and Consumer Services (-54%YoY) sectors.

“The dip in earnings diminished the effect of positive earnings growth in the Food, Beverage and Tobacco (+9%YoY) and Banks (+6%YoY) sectors and one-off gains in the Food, Staples and Retailing (+178%YoY) sector,” First Capital said. It said the primary source of decline in September earnings was the Energy Sector (-108%YoY) which saw a loss of Rs. 137 million (September 2016 = Rs. 1,731 million), driven by LIOC (-112%YoY) and LGL (-85%YoY) attributable to higher oils prices and LP Gas prices that drove costs while the selling price remained fixed.

The Diversified Financials sector (-18%YoY) also almost equally contributed to an earnings dip where profits declined to Rs. 8.3 billion (September 2016 = Rs. 10.1 billion) driven by LOLC (-23%YoY).

Most finance companies in the sector saw higher net impairment losses as the effects of floods spilled over to the September quarter.

Consumer Services sector (-54%YoY) earnings dipped to Rs. 744 million (Sep 2016 = Rs. 1,613 million) driven by KHL (-71%YoY) which saw several hotels closing for refurbishment.

The negative effect was partially diluted by the positive earnings growth in the Food, Beverage and Tobacco sector (+9%YoY) to Rs. 12.5 billion (September 2016 - Rs. 11.5 billion) driven by BUKI (+788%YoY) and CARS (+2,419%YoY) which saw a dramatic increase in its gross margins while also being supported by plantation companies amidst higher tea prices.
The Banks sector (+6%YoY) reported earnings of Rs. 15.5 billion (Sep 2016 = Rs. 14.6 billion) driven by COMB (+11%YoY) which saw a healthy growth in net interest income.

However, First Capital Research said the largest positive effect on earnings came from the Food and Staples Retailing sector (+178%YoY) which recorded earnings of Rs. 2.7 billion (September 2016 = Rs. 960 million) driven by CARG (+189%YoY) which included a one-off non-operating gain of Rs. 1,012 million from the sale of its properties in Colombo 2. Having adjusted this one-off gain, the sector’s earnings dipped 33%YoY to Rs. 645 million while the quarter’s overall earnings dipped 6% to Rs. 58 billion.www.ft.lk

Sri Lankan stocks hit over 8-month closing low

Reuters: Sri Lankan shares fell for a second straight session on Monday to hit their lowest close in more than eight months as investors offloaded plantation and telecom stocks.

The Colombo Stock Index ended 0.09 percent weaker at 6,346.70, its lowest close since April 11. It lost 0.4 percent last week, its sixth consecutive weekly decline.

“It’s yet another dull day and we don’t have any positive news to boost the market,” said Atchuthan Srirangan, senior research analyst at First Capital Holdings PLC.

Plantation stocks came under pressure after the Russian agricultural safety watchdog said on Thursday that the country will place temporary restrictions on imports of all agricultural products from Sri Lanka, including tea, from Dec. 18.

Analysts said the Russian restrictions on tea could pose a threat to long-term tea prices and it could impact the earnings of plantation companies.

Turnover was 233 million rupees ($1.52 million), the lowest since Sept.25, and well below this year’s daily average of 935.9 million rupees.

Foreign investors were net buyers of 71.8 million rupees worth of shares on Monday, extending their year-to-date net equity purchases to 18.4 billion rupees.

Shares of Hemas Holdings Plc ended 1.2 percent lower, while Hatton National Bank Plc fell 0.4 percent and Sri Lanka Telecom Plc lost 1.4 percent. 

($1 = 153.1500 Sri Lankan rupees) 

(Reporting by Ranga Sirilal; Editing by Vyas Mohan)

Carsons sell 500,000 Lion between Rs. 540 & Rs. 550

Carson Cumberbatch PLC, the controlling shareholder of Lion Brewery Ceylon PLC, last week sold off 500,000 shares of Lion at prices between Rs. 540 and Rs. 550, the Colombo Stock Exchange was notified in terms of its listing rules.

Carsons sources indicated that the parent held strategic stakes in its various subsidiaries with shares outside the strategic limit held in its trading portfolio.

"Such shares may be bought and sold within the fund manager’s discretion when the price is considered right," they said. "That in no way affects the strategic stakes."

www.island.lk

Shares at 8-month closing low on political & policy uncertainty - US Fed’s third rate increase affects foreigners

Equities continued to lose steam last week, falling ~23 points week-on-week to hit an eight-month low of 6,352.1 points as concerns over domestic political and policy uncertainty dominated sentiment and the US Fed raised interest rates for the third time this year, Acuity Stockbrokers said in their Share Market Weekly.

Since the first reading of Budget 2018 in early November, the broad-share price Index has fallen ~215 points (-3.3%) with consecutive losses in the six weeks since the budget, the report noted. Average daily turnover levels also fell 24% week-on-week as low market participation, particularly by institutional and high net worth investors dragged the average daily turnover for the week down to Rs.0.71Bn (cf. Rs.0.93Bn last week), it said.

"Crossings for the week accounted for just 36% of total market turnover, lower than the previous week’s crossings of 46% and reflecting the lower participation levels by high net worth and Institutional players. Crossings remained largely centered around mid-cap counters such as Teejay Lanka (28% of total crossings), Amana Bank (15% of total crossings) and LOLC (12% of crossings) while larger-cap blue chips such as JKH and COMB played a less dominant role as they cumulatively accounted for just 10% of total crossings," Acuity reported.

"Despite the lower daily average turnover levels, the year-to-date average remained at Rs. 0.94Bn, higher than the 2016 average of Rs.0.73Bn and reflecting relatively stronger equity market performance from earlier in the year."

Foreign investors however retreated to a net selling position last week, recording net sales of Rs. 0.07Bn as the US Fed raised rates for the third time this year in a widely anticipated move. The move along with the expectation of three hikes in 2018 represents the continuation of the US Fed’s monetary policy normalization which could in turn impact the performance of Emerging and Frontier market equities, Acuity said.

Markets in the week ahead are likely to remain dull ahead of the Christmas holidays, the brokerage anticipated.
www.island.lk

IPOs and listed debenture issues take off despite CSE depression

Despite the Colombo Stock Exchange plunging to an eight month closing low on Friday, two Initial Public Offerings (IPOs) by LVL Energy Fund Ltd. (LEF) and Jetwing Symphony Ltd. closed over-subscribed on their opening day while a listed debenture issue by the Sampath Bank was similarly over-subscribed.

"This is a positive signal in the context of the falling market," a stock analyst said. "Both LEF and Jetwing Symphony will be listed on the CSE when the share allotments are completed in the next few days."

LEF sought Rs. 1.2 billion equity funds by the issue of 120 million new shares at 10-rupees each while Jetwing Symphony raised Rs. 753 million through a ‘book building’ process through which bids for the shares were invited at Rs. 15, Rs. 16, Rs. 17 and Rs. 18.

With the majority of the bids at the 15-rupee price, this was determined as the strike price and investors bidding higher would have the difference between Rs. 15 and their bid price refunded.

Well informed sources said that the application for Rs. 600 million of shares from the IPO has made by the Amaleans of MAS assuring the success of the IPO.

Jetwing Symphony owns five operational hotels with part of the IPO Funds earmarked for the boutique Jetwing Kandy Gallery now on the drawing boards.

The Sampath listed debenture issue raised six billion rupees with an offer of rupees four billion initially with an option for a further two billion in the event of an oversubscription.

www.island.lk

Dialog, Richard Pieris in S&P Sri Lanka 20 Index

ECONOMYNEXT – The Colombo Stock Exchange (CSE) has included Dialog Axiata and Richard Pieris and Company in the S&P Sri Lanka 20 index, which tracks the top 20 largest and most liquid stocks, in its latest revision.

They replace Hayleys and Melstacorp in the semiannual rebalancing of the index, the CSE said in a statement.

The S&P SL 20 index includes the 20 largest companies by total market capitalization listed on the CSE that meet minimum size, liquidity and financial viability thresholds.

The constituents are weighted by float-adjusted market capitalization, subject to a single stock cap of 15%, which is employed to reduce single stock concentration.

The CSE said the S&P SL 20 index has been designed in accordance with international practices and standards.

Effective from 18 December 2017 the stocks in the S&P Sri Lanka 20 in alphabetical order are as follows.

Access Engineering PLC AEL.N0000
Aitken Spence PLC SPEN.N0000
Ceylon Cold Stores PLC CCS.N0000
Ceylon Tobacco Company PLC CTC.N0000
Chevron Lubricants Lanka PLC LLUB.N0000
Commercial Bank of Ceylon PLC COMB.N0000
Commercial Bank of Ceylon PLC Non-Voting COMB.X0000
DFCC Bank PLC DFCC.N0000
Dialog Axiata PLC DIAL.N0000
Hatton National Bank PLC HNB.N0000
Hatton National Bank PLC Non-Voting HNB.X0000
Hemas Holdings PLC HHL.N0000
John Keells Holdings PLC JKH.N0000
Lanka Orix Leasing Company PLC LOLC.N0000
National Development Bank PLC NDB.N0000
Nestle Lanka PLC NEST.N0000
People's Leasing & Finance PLC PLC.N0000
Richard Pieris & Company PLC RICH.N0000
Sampath Bank PLC SAMP.N0000
Seylan Bank PLC SEYB.N0000
Seylan Bank PLC Non-Voting SEYB.X0000
Teejay Lanka PLC TJL.N0000
Tokyo Cement Company (Lanka) PLC TKYO.N0000
Tokyo Cement Company (Lanka) PLC Non-Voting TKYO.X0000

Sri Lankan stocks slip to 8-month closing low

Reuters: Sri Lankan shares slipped to their lowest close in eight months on Friday as investors offloaded telecom and plantation stocks.

The Colombo Stock Index ended 0.08 percent weaker at 6,352.10, its lowest close since April 17. It dropped 0.4 percent this week, in its sixth consecutive weekly decline.

“The downtrend is continuing with the selling in blue chips,” said Dimantha Mathew, head of research at First Capital Holdings, adding that was a bit of a worrying sign for the market.

Plantation stocks came under pressure after the Russian agricultural safety watchdog said on Thursday that the country will place temporary restrictions on imports of all agricultural products from Sri Lanka, including tea, from Dec. 18.

“The Russian restrictions on tea could pose a threat to long-term tea prices and it could impact the earnings of plantation companies,” said Mathew.

Turnover was 345.4 million rupees ($2.25 million), the lowest since Dec.9, and well below this year’s daily average of 938.9 million rupees.

Foreign investors were net buyers of 180.1 million rupees worth of shares on Friday, extending the year-to-date net foreign inflow to 18.3 billion rupees worth of shares.

Shares of Sri Lanka Telecom Plc fell 1.5 percent, Hemas Holdings Plc ended 0.9 percent weaker and Asian Hotels and Properties Plc ended down 2 percent. 

($1 = 153.2000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal; Editing by Subhranshu Sahu)

Jetwing Symphony IPO oversubscribed

Jetwing Symphony Ltd’s Initial Public Offering worth Rs. 750 million has been oversubscribed, prompting the closure of its official opening day.

Registrars to the issue SSP Corporate Services said there were applications for over 50.2 million shares at Rs. 15 each by 4.30 p.m. yesterday and the IPO was closed following oversubscription. Capital Alliance Partners was the Manager to the issue.

Jetwing Symphony is the investment arm of the Jetwing leisure and travel group. The IPO of 10% stake was based on a formal book-building process with a price band ranging from Rs. 15-18.

The IPO funds will be utilised to complete Jetwing Symphony’s projects in the pipeline and settle debt payments. As per the valuation report, intrinsic value per share of JSL ranges from Rs. 13.21-17.51 based on Sum-Of-The-Part (SOTP) valuation.
www.ft.lk

Investors snap up biggest IPO in 4 years by LVL Energy Fund

Investors have snapped up the biggest Initial Public Offering in four years by LVL Energy Fund Ltd. (LEF), with the Rs. 1.2 billion issue oversubscribed and closed on its official opening day yesterday.

The issue offered 120 million shares at Rs. 10 each. A spokesman for financial advisor and manager to the IPO, Acuity Partners, said by 4.30 p.m. yesterday the LEF IPO had drawn 744 applications requesting for shares worth Rs. 1.46 billion, prompting its closure. The last biggest IPO was worth Rs. 1.6 billion by Amana Bank in December 2013 and that too was handled by Acuity Partners.

LEF is a subsidiary of Lanka Ventures Plc and was incorporated in 2006 for the purpose of consolidating LVEN’s energy sector investments. LEF has invested jointly with reputed project developers to develop and operate power generation projects (installed capacity of operational projects amounts to 136.6MW). LEF will be using IPO funds to retire some debt, retire some preference shares and to be invested in three new hydropower projects.
www.ft.lk

‘Corporate governance key priority of regulators’ - SEC Chairman

Corporate governance has become a key priority on the agenda of capital market regulators and is considered an important factor in strengthening capital markets, said Securities and Exchange Commission (SEC) Chairman Thilak Karunaratne.

“Implementing sound corporate governance practices that comprise clear and transparent disclosures, encourage accountability and ethical leadership create value for companies, facilitate access to capital and enhances investor confidence.”

He was speaking at the CA Sri Lanka “Code of Best Practice on Corporate Governance 2017.”

“I believe that while a lot has been done in the area of corporate governance, Sri Lanka needs to ensure a responsive regulatory framework and cannot afford to fall behind. Furthermore, good market conduct is driven by good behavior and not by rules and regulations alone.”

Corporate governance codes and frameworks were triggered as a result of corporate scandals that adversely affected capital markets across the globe, he recalled.

He said that it is sad to note that the current regime in the USA is trying to roll back these regulations brought in after the last financial crisis by directing a review of the Dodd-Frank Act.

He disclosed that the ASIC website indicates that Australia does not have a general corporate governance code that all companies must comply with. However, listed companies must benchmark their corporate governance practices against the Australian Securities Exchange Corporate Governance Council’s Principles and Recommendations.

“This means that listed companies are not obliged to adopt the ASX Principles, but are encouraged to do so. This is to create a level of flexibility for listed companies to adopt alternative practices more suited to their circumstances.”

Commentating on the Sri Lankan aspect, he said that the corporate governance code was initially developed by the Institute of Chartered Accountants of Sri Lanka (ICASL) in 1997. Thereafter, it has been revised in 2003, 2008 and most recently in 2013.

The existing code is on a voluntary basis and could be used by any business entity. But the level of governance and degree of accountability expected from public listed companies are much higher. Therefore, the ‘one size fits all’ approach on above requires re-visiting.

Based on the approach adopted by other jurisdictions, the SEC Sri Lanka has started to pursue an initiative to ensure enforceability relating to governance is enhanced and grant oversight by absorbing the voluntary governance requirements into mandatory listing rules.

He also commended Chartered Accountants of Sri Lanka for their commitment towards upholding good corporate governance and business ethics.
www.dailynews.lk

Moody’s affirms long-term ratings of 3 banks

Moody’s Investors Service has affirmed the long-term ratings of three banks, Bank of Ceylon, Hatton National Bank Ltd and Sampath Bank PLC in Sri Lanka, B1 negative.

The rating actions follow the affirmation of Sri Lanka’s B1 sovereign rating.

The baseline credit assessments (BCAs) and Adjusted BCAs of the three banks were affirmed at b1. The counter party risk assessments (CRAs) of the three banks were affirmed at Ba3 (cr)/NP (cr).

The outlook on the ratings of the three banks, where applicable, are maintained at negative.

Operating conditions for Sri Lanka’s banks have weakened because of the high loan growth over the last two years, driven by a loosening of underwriting standards. As a result, Moody’s has changed Sri Lanka’s Macro Profile to “Weak +” from “Moderate -”, and considered the new Macro Profile in the affirmation of the three Sri Lankan banks.

The affirmation of the three banks ratings and the maintained negative outlooks follow Moody’s affirmation of Sri Lanka’s B1 sovereign rating with a negative outlook on December 12, 2017.

The ratings and outlooks of banks typically follow the ratings and outlooks of their respective governments if the banks’ ratings are positioned at the same level as the sovereign rating, which is the case for Bank of Ceylon, Hatton National Bank Ltd and Sampath Bank PLC.

Typically, such linkages between the sovereign credit profile and the credit metrics of the domestic banks are driven by the banks’ large investments in sovereign bonds, as well as by common drivers of the underlying operating conditions, Moody’s say.

The key factor driving the negative outlook on Sri Lanka’s sovereign rating is Moody’s view that persistently high government liquidity and external vulnerability risks continue to pressure Sri Lanka’s credit profile.

Specifically, measures to build reserves and smooth the profile of external payments may be insufficient to stem imminent government liquidity and balance of payments pressures starting in 2019, when large international debt repayments come due and Sri Lanka’s three-year International Monetary Fund (IMF)

Meanwhile Moody’s has also changed the Macro Profile for Sri Lanka to “Weak +” from “Moderate -”, reflecting Moody’s view that operating conditions have weakened for Sri Lankan banks. In particular, Moody’s has adjusted downwards the credit conditions score by one notch to reflect rapid credit growth in Sri Lanka over the last three years to end June 2017, growing at a compounded annual growth rate (CAGR) of 21%.

Because Sri Lanka is an underpenetrated banking market, strong credit growth in itself is not necessarily a cause for concern. However, the current episode of strong credit growth has come against a backdrop of moderating economic growth.

The lowering of Sri Lanka’s Macro Profile to “Weak +” from “Moderate -” has no impact on the BCAs of the three Sri Lankan banks.

www.dailynews.lk

S&P upgrades DFCC Bank’s rating outlook to Stable - Ratings affirmed at B/B

S&P Global Ratings has revised its credit rating outlook for DFCC Bank from negative to stable, while affirming ‘B’ long-term and ‘B’ short-term issuer credit ratings on the bank. In its assessment of DFCC’s business position, the Bank is projected to maintain its satisfactory market position and business stability over the next 12-18 months.

The stable rating reflects the rating agency’s confidence in the financial institution’s ability to navigate operating conditions in Sri Lanka and maintain its financial profile in the coming months. At the same time, it has affirmed its ‘B’ long-term and ‘B’ short-term issuer credit ratings on DFCC Bank while affirming its senior unsecured debt ratings on the bank.

Further, the rating agency noted that an improvement in the bank’s risk position balances a decline in the bank’s risk-adjusted capital under its new updated methodology. It anticipates bank’s loan growth to be 14%-18% while profitability is likely to remain stable, with healthy net interest margins and fee income balancing credit costs.

DFCC’s credit costs are expected to increase somewhat in the next 12-18 months due to sluggishness in economy in the past 18 months and elevated interest rates.

However, S&P expects losses to remain well within its normalized loss expectations. The bank’s loan growth has been lower than the industry average and the proportion of granular retail assets has increased in the past few years.

Commenting on the latest rating, Lakshman Silva – CEO, DFCC Bank, said, “We are pleased that S&P has recognised that DFCC Bank’s fundamentals keep improving with the deposit base increasing, loan to deposit ratio moving in the right direction and NP ratio within industry average.”

“The upward revision of the rating outlook fully justifies the decision of the Board taken last year to sacrifice short term profitability in exchange for long term stability.”

www.dailynews.lk

Sri Lankan stocks little changed near 8-month closing low

Reuters: Sri Lankan shares closed little changed on Thursday, hovering near their lowest close in eight months hit in the previous session, as gains in plantation and beverage stocks offset falls in palm oil and diversified shares.

The Colombo Stock Index ended 0.07 percent higher at 6,357.04. It had posted its lowest close since April 17 on Wednesday.

“Foreign selling continued,” said Dimantha Mathew, head of research at First Capital Holdings, adding that was a bit of a worrying sign for the market.

Turnover was 1.2 billion rupees ($7.84 million), its highest since Nov.23, and more than this year’s daily average of 941.5 million rupees.

Foreign investors, who have been net buyers of 18.1 billion rupees worth of shares so far this year, sold equities worth net 332.9 million rupees on Thursday.

Shares of Commercial Bank of Ceylon Plc, the country’s biggest listed lender, ended 1.4 percent firmer, while Carson Cumberbatch Plc rose 1.6 percent.

Conglomerate John Keells Holdings Plc fell 0.6 percent, while Hemas Holdings Plc ended 1.7 percent weaker. 

($1 = 153.1000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal; Editing by Subhranshu Sahu)

Sri Lankan stocks hit near 8-month closing low as banks fall

Reuters: Sri Lankan shares fell on Wednesday to their lowest close in nearly eight months as investors sold banking and diversified shares.

The Colombo Stock Index fell 0.12 percent to 6,352.77, its lowest close since April 17. The index lost 0.6 percent last week in its fifth consecutive weekly drop, but is still up 2 percent so far this year.

“The market is down on retail selling. Investors who see value are collecting while retailers are selling,” said Reshan Kurukulasuriya, chief operating officer of Richard Pieris Securities (Pvt) Ltd.

“There was some foreign selling too.”

Turnover was 682.8 million rupees ($4.46 million), less than this year’s daily average of 940 million rupees.

Foreign investors, net buyers of 18.5 billion rupees worth of shares so far this year, sold equities worth net 63.9 million rupees on Wednesday.

Shares of biggest listed lender Commercial Bank of Ceylon Plc ended 2.7 percent weaker, while Ceylinco Insurance Plc fell 5.42 percent and Sampath Bank Plc ended 1.3 percent lower. Conglomerate John Keells Holdings Plc fell 0.1 percent.

($1 = 153.1000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal)

Sri Lanka 01-year Treasury Bill yield falls to 9.04-pct

ECONOMYNEXT – Sri Lankan Treasury Bill yields fell further at an auction Wednesday with the 01-year bill yield falling 30 basis points to 9.04 percent from 9.34 percent at the last auction.

The public debt department of the central bank said the 06-month Treasury Bill yield fell 28 basis points to 8.48 percent from 8.76 percent at the last auction. The 03-month bill was not sold.

The statement said the public debt department got bids worth Rs72 billion and accepted bids worth Rs17 billion.

Sri Lankan stocks steady near 8-mth closing low; lenders gain

Reuters: Sri Lankan shares ended steady on Tuesday after hitting their lowest close in nearly eight months in the previous session, as gains in lenders offset losses in shares of diversified companies.

The Colombo Stock Index rose 0.05 percent to 6,360.36, up from its lowest close since April 17 hit on Monday. The index lost 0.6 percent last week in its fifth consecutive weekly drop, but is still up 2 percent so far this year.

“Foreign buying pushed the turnover levels. It’s positive on the overall market that the foreigners are willing to pay a premium and get valued stocks,” said Hussain Gani, Deputy CEO at Softlogic Stockbrokers.

Turnover was 999.8 million Sri Lankan rupees ($6.53 million), more than this year’s daily average of 941 million rupees.

Foreign investors bought a net 164.5 million rupees worth of shares, extending the year-to-date net foreign inflow to 18.3 billion rupees worth of equities.

Shares of biggest listed lender Commercial Bank of Ceylon Plc ended 2.9 percent higher, while conglomerate John Keells fell 0.8 percent.

Worries over a delay in local council polls and a lack of clarity over the budget and two other key policy measures weighed on sentiment, analysts said.

The Election Commission said on Dec. 4 that the council polls would be held before Feb. 17, amid concerns over political stability as coalition partners in President Maithripala Sirisena’s government had decided to contest separately in the council polls. 

($1 = 153.0000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal; Editing by Vyas Mohan)

CSE approves Sampath Bank’s Rs6bn Basel III compliant debt issue

LBO - Colombo Stock Exchange has approved in principle an application for listing the Basel III compliant debt securities of Sampath Bank.

Sampath Bank said it is expected to raise 6 billion rupees by the issue of 60 million debentures at 100 rupees each.

The allotment and secondary trading of this 5 year debenture is limited to qualified investors, Sampath Bank further said.

Subscription list will be open on 15th December 2017. Sampath Bank’s Corporate Finance Department is managing the issue.