Oxford Business Group, teams up with First Capital for Sri Lanka report

ECONOMYNEXT - Oxford Business Group, a UK based publishing firm said it had teamed up with First Capital Holdings, a Colombo-based investment bank to produce, a forthcoming country report on Sri Lanka.

First Capital Holdings will help produce the capital market chapter in The Report; Sri Lanka 2017, focussing on private equity and emerging opportunities for investors across the island.

The report will also cover macroeconomic, infrastructure, banking and sectoral developments.

Sri Lanka Tea Smallholder profits up in December quarter

ECONOMYNEXT – Sri Lanka’s Tea Smallholder Factories maintained profitability in the December 2016 quarter with net earnings of Rs26 million compared with a loss of half-a-million rupees the year before.

The company, which makes black tea from leaves bought from small farmers, returned to the black in the September 2016 quarter with a profit of Rs6.8 million compared with a loss of Rs12.8 million a year ago.

December quarter sales rose 31% to Rs587 million from the year before, a stock exchange filing said.

Tea Smallholder Factories, in which John Keells Holdings has a 37.62 percent stake, reported December quarter earnings per share of 86 cents compared with a loss of two cents the year before.

Most of the profits came from the southern Galle district where small farmers grow low grown teas followed by the hill country Nuwara Eliya district.

The other two main shareholders of the firm are Akbar Brothers Limited with 24.39 percent and Central Finance Company with 22.85 percent.

Sri Lanka 03-month Treasury Bill yield rises to 10.07-pct

ECONOMYNEXT – Three-month Sri Lankan treasury Bill yields rose 05 basis points to 9.03 percent at Wednesday’s auction from 8.98 percent last week, the central bank’s debt office said.

The 06-month bill yield rose 02 basis points to 10.07 percent from 10.05 percent last week, a statement said.

The one-year bill yield remained 10.37 percent at auction versus 10.37 percent last week

The debt office said it got bids worth Rs95 billion and accepted bids worth Rs27 billion.

Sri Lankan poultry firm December quarter net down five percent

ECONOMYNEXT - Ceylon Grain Elevators, a Sri Lankan poultry and feed milling group, said net profit for the December 2016 quarter fell nearly five percent to Rs369 million from a year ago.

The firm, part of Singapore’s Prima group, said in a stock exchange filing that December 2016 quarter sales fell three percent to Rs3.7 billion.

Finance costs fell 35% and the firm also benefitted from a sharply lower tax charge, accoding to interim results filed with the stock exchange.

A note accompanying the accounts said the company had to grapple with higher cost of raw materials but that its bottom line was strengthened by lower finance expenses through effective cash flow management.

Earnings per share for the quarter were Rs6.15 compared with Rs6.47 a year ago.

In the year to December 31, 2016, Ceylon Grain Elevators reported EPS of Rs21.45 against EPS of Rs15.72 a year ago. Net profit for 2016 was Rs1.3 billion.

Sri Lankan shares hit near 10-mth closing low; foreign selling boosts turnover

Reuters: Sri Lankan stocks fell for a third straight session on Wednesday to close at their lowest in nearly 10 months, dragged down by beverages and banking shares, as concerns over rising interest rates and ongoing political instability weighed on sentiment.

Selling by foreign investors in Nestle Lanka boosted turnover, traders said.

The Colombo stock index ended 0.12 percent lower at 6,127.08, its lowest close since April 4.

"Market is not moving up due to lack of confidence among the investors with rising interest rates," said Atchuthan Srirangan, a senior research analyst with First Capital Equities (Pvt) Ltd.

"Investors might stay away for a while till they see positive news which can move the market up."

Yields on treasury bills rose 2-5 basis points at a weekly auction on Wednesday to a near five-month high after the central bank governor signalled reduced intervention to defend the rupee.

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

Foreign investors net sold 385 million rupees ($2.56 million) worth of equities on Wednesday, extending the year to date net foreign outflow to 1.75 billion rupees worth shares.

Nestle Lanka, which accounted for around 62 percent of the day's turnover of 690 million rupees, fell 2.5 percent.

Market heavyweight John Keells Holdings slipped 0.6 percent.

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

($1 = 150.1500 Sri Lankan rupees) 

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

Colombo Stock Exchange Market Review – 25th Jan 2017

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Colombo Stock Exchange Trade Summary 25-Jan-2017

Colombo bourse extended losing streak for the third consecutive day led by foreign outflows. All Share index lost 7.33 index points or 0.12% to end at 6,127.08 while 20-scrip S&P SL index declined by 5.07 index points or 0.15% to close at 3,474.41.

Price depreciations in Nestle Lanka (closing at LKR 1,950.00, -2.5%), John Keells Holdings (closed at LKR 137.50, -0.6%) and Lanka Hospital (closed at LKR 62.20, -3.6%) dragged the index down.

Daily market turnover was LKR 690mn. Nestle Lanka topped the turnover list with LKR 427mn followed by Cargills (LKR 63mn), John Keells Holdings (LKR 40mn) and Central Finance (LKR 36mn) respectively. Single crossing was recorded in Cargills where 0.12mn shares change hands at LKR 200.00.

Losers outweighed the gainers 81 to 41, while 81 stocks remained unchanged. High investor activity was witnessed in John Keells Holdings, Teejay Lanka and Ceylon Grain Elevators.

Foreign investors were net sellers with a net foreign outflow of LKR 385mn. Foreign participation was 44%. Net foreign outflows were seen in Nestle Lanka (LKR 427mn), John Keells Holdings (LKR 34mn) and Teejay Lanka (LKR 7mn). Net foreign inflow was mainly seen in Cargills (LKR 62mn).

At the weekly treasury bill auction, three months treasury rate increased by 5bps to 9.03% while six month rate increased to 10.07% (+2bps). One year treasury yield remained at 10.37%. CBSL offered LKR 27.5bn worth Treasury bills and the auction was oversubscribed by 3.4 times with bids received amounting to LKR 94.7bn. It was decided to accept LKR 27.2bn worth of treasury bills.

Source: LSL