Sri Lankan shares end higher on foreign buying

Reuters: Sri Lankan stocks closed higher on Friday led by financials, after hitting a more than one-week closing low in the previous session, on increased appetite for risky assets by foreign investors.

The Colombo stock index ended up 0.08 percent at 6,169.57, edging up from its lowest close since Jan. 10 hit on Thursday.

The index hit a two-week high on Jan.13 after the European Commission proposed increased market access for Sri Lanka as a reform incentive.

Foreign investors net bought 433.4 million rupees ($2.89 million) worth equities on Friday, the highest net inflow since Dec. 8, although they have net sold 1.35 billion rupees worth of shares so far this year.

Turnover stood at 731.3 million rupees.

Shares in biggest listed lender Commercial Bank of Ceylon Plc rose 1.50 percent, while market heavyweight John Keells Holdings rose 0.57 percent.

"We have seen a foreign inflow after a while and that boosted the turnover and the bulk of the trades were from the foreign trading. Rest of the market was silent," said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

"Because the sentiment is not that great, many investors are on a wait and see approach."

Rising market interest rates, which move in tandem with t-bill yields, have been a cause for concern, brokers said.

Yields on treasury bills rose 1-16 basis points at a weekly auction on Wednesday to a four-month high after the central bank governor signalled reduced intervention to defend the rupee currency.

Investors are also concerned about possible political uncertainty as the main coalition partners in government are contesting local polls separately, analysts said.

($1 = 149.8000 Sri Lankan rupees) 

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

Colombo Stock Exchange Market Review – 20th Jan 2017

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Colombo Stock Exchange Trade Summary 20-Jan-2017

Colombo equities snapped the four day losing streak supported by foreign inflows in the short trading session. All Share index gained 4.67 index points or 0.08% to end at 6,169.57 while high cap constituent, S&P SL20 index advanced by 15.79 index points or 0.45% to close at 3,508.40.

AIA Insurance (closed at LKR 349.00, +22.9%) spearheaded the index gains supported by the announcement of an interim dividend of LKR 48.00 per share. Along with AIA Insurance, Commercial Bank (closed at LKR 142.10, +1.5%), Hemas Holdings (closed at LKR 102.00, +2.0%) and John Keells Holdings (closed at LKR 140.80, +0.6%) contributed positively to the index performance.

Daily market turnover was LKR 731mn. Hefty crossings were seen in Chevron Lubricants and the counter was the top contributor to the turnover with LKR 497mn. 2.8mn shares of Chevron Lubricants changed hands in today’s session at LKR 165.00. Royal Ceramic (LKR 69mn), Ceylon Tobacco (LKR 51mn) and People’s Leasing & Finance (LKR 29mn) made noteworthy contribution to the turnover.

Several crossings were recorded in Royal Ceramic (0.5mn shares at LKR 125.00), People’s Leasing & Finance (1.6mn shares at LKR 17.00), Ceylon Tobacco (30,000 shares at LKR 815.00) and Hatton National Bank (0.09mn shares at LKR 228.00). Aggregate value of crossings contributed for 81% of the turnover.

Market breadth was neutral where out of 167 stocks traded, 46 advanced, 50 slipped while 71 remained unchanged. High investor activity was seen in Alumex, LOLC Finance and Teejay Lanka.

Foreign investors were net buyers with a net foreign inflow of LKR 433mn. Net foreign inflows were seen in Chevron Lubricants (LKR 371mn), Royal Ceramics (LKR 68mn), Cargills (LKR 5mn) while net foreign outflow was mainly seen in Colombo Land & Development (LKR 8mn). Foreign participation for the day was 38%.
Source:LSL

Sri Lanka Royal Ceramics invests nearly a billion rupees in expansion

ECONOMYNEXT – Sri Lankan tile and sanitary ware maker Royal Ceramics Plc (RCL) said it will invest nearly a billion rupees to upgrade one of its factories to produce bigger tiles and expand capacity.

A stock exchange filing said the board of directors had decided to proceed with the replacement of a kiln at its Eheliyagoda plant, together with the press and associated machinery and building.

The upgrade will be done at an estimated project cost of Rs978 million and be completed by June 2017, the company said.

After being commissioned, the new equipment will increase the plant’s capacity and capability of producing large format, cost-effective tiles, it said.

Sri Lanka's Hayleys commissions 10MW solar plant

ECONOMYNEXT - Sri Lanka's Hayleys Plc has commissioned a 10MegaWatt solar power plant that can generate up to 2.2 GigaWatt hours (millions of units) of energy for a year.

The plant was built by Hayleys with Winforce (Pvt) Ltd, a renewable energy firm, the statement said.

The solar farm is in Welikande in the Polonnaruwa District of North-Central Sri Lanka.

The power plant will have a 'solar tracking system' that will follow the movement of the sun, which the firm says will generate about 20 percent of energy than a plant using a 'fixed tilt' system.

"A plant of this magnitude reinstates the country's ambition of transforming itself to a green energy producer, and we at Hayleys take pride in doing our part towards this" said Hayleys Chairman Mohan Pandithage in a statement.

Sri Lanka's Hayleys Group has installed over 50 MegaWatts of wind, hydro and solar plants, the firm said.

Sri Lanka paid feed in tariffs as much as Rs25 a unit a 10 MegaWatt renewable energy plant connected to the grid without open tendering under a formula announced in 2012, which has drawn criticism for being expensive.

Sri Lanka Bairaha Farms to spend Rs239mn more on feed mill silos

ECONOMYNEXT – Sri Lankan poultry firm Bairaha Farms said it will have to spend an extra Rs239 million to complete a project to expand feed mill storage facilities.

Work on the project, originally estimated to cost Rs1.45 billion, by Fortune Agro Industries, a joint venture feed mill company, began in June 2016, it said in a stock exchange filing.

Work on the feed mill silos and installation of equipment was ongoing, it said.

An extra cost of Rs239 million needs to be incurred to complete the project, the company said.

This is to cover cost overruns on the feed mill on account of civil works, land development, additional machinery and other ancillary non-budgeted machinery and other costs of Rs114 million.

Another Rs125 million needs to be spent on account of silos for maize and soya meal storage facilities for the second stage of the project, totalling Rs239 million.

The extra cost will be met through contributions of Rs80 million each from Bairaha Farms and Farm’s Pride, a joint venture partner, and Rs79 million from Fortune Agro Industries, the joint venture feed mill company, or from Fortuna GP Farms Lanka.

Any further cost overruns or new capital expenditure will be borne by Fortune Agro Industries from internally generated funds, Bairaha Farms said.

Sri Lanka says Alibaba to invest in the country

ECONOMYNET - Sri Lanka's Finance Minister Ravi Karunanayake has invited Jack Ma, boss of Chinese internet portal Alibaba, to invest in the country, a statement said.

Alibaba had expressed his intention to invest in Sri Lanka, the finance ministry statement said, without elaborating.

Alibaba, which is a business-to-business and retail platform is the world's largest e-commerce company.

Sri Lanka sells US$458mn in fixed and floating rate bonds

ECONOMYNEXT - Sri Lanka has sold 458 million US dollars of fixed and floating rate dollar denominated bonds after calling offers to sell 225 million US dollars of bonds for settlement on January 23.

At least 233 million dollars of floating rate bonds are maturing on January 21.

The debt office sold 225 million US dollars of fixed rate bonds at an average rate of 4.2611 percent and 30 million dollars of floating rates bonds at 300 basis points above the London Interbank Offered Rate.

The 85 million dollars of floating rate bonds were sold for 335 basis points above Libor.

A 118 million dollar tranche of 3-year, 2-month bonds were sold at 375.55 basis points above Libor.

Sri Lanka bans Swarnamahal Financial Services related party transactions

ECONOMYNEXT – Sri Lanka’s markets regulator has prohibited Swarnamahal Financial Services (SFS) from related party transactions including the write-off of outstanding debt saying it was in ‘dire’ financial straits with negative net asset value of over a billion rupees.

The Securities and Exchange Commission said in a statement that SFS had “extensive” related party transactions without required checks and balances.

The firm was also guilty of “repeated non-compliance with mandatory corporate governance requirements” that affected the interests of investors negatively, it said.

SFS also had “significant issues relating to going concern status” and was unable to infuse capital despite Central Bank regulatory requirements, the SEC said.

In the interest of investors, the SEC said it banned SFS from entering into related party transactions including any write-off of outstanding or making of adjustments that will reduce the outstanding balances, except by way of recovering outstanding debt from related party transactions.

The prohibition is effective until SFS complies with corporate governance requirements of the Colombo stock exchange listing rules.

Sri Lanka Treasuries yields up at auction

ECONOMYNEXT – Yields on Sri Lankan treasury bills edged up across maturities at Wednesday’s auction, with the 06-month bill yield up 16 basis points to 10.05 percent, the debt office, a unit of the Central Bank, said.

The 03-month bill yield went up one basis point to 8.98 percent and the 01-year bill yield rose 06 basis points to 10.37 percent at the auction, a statement said.

The debt office got bids worth Rs86.7 billion and accepted bids worth Rs27.8 billion.