Colombo Stock Exchange Market Review – 3rd Feb 2017

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Colombo Stock Exchange Trade Summary 03-Feb-2017

Colombo stock market concluded the week on mixed note despite the foreign inflows. All Share index lost 19.57 index points (-0.32%) to end at 6,119.99 while 20-scrip S&P SL index edged higher by 1.78 index points or 0.05% to close at 3,506.13. 

Price gains in Melstacorp (LKR 67.90, +2.9%) and Hatton National Bank (LKR 227.00, +1.2%) moved the index up but losses in Sri Lanka Telecom (LKR 34.10, -3.7%) and Lank Orix Leasing & Company (LKR 65.10, -6.3%) shed the index gains. 

Daily market turnover was LKR 409mn. Negotiated deals were recorded in Hatton National Bank (0.7mn shares at LKR 227.00) and Commercial Bank (0.2mn shares at LKR 145.00). Aggregate value of crossings accounted for 45% of the turnover. 

Accordingly, Hatton National Bank (LKR 163mn) was the top contributor to the turnover followed by Melstacorp (LKR 75mn), Sampath Bank (LKR 47mn) and Commercial Bank (LKR 29mn). 

Subsequent to the scrip dividend announcement, Sampath Bank attracted high investor preference where stock price increased to LKR 267.00, +0.8%. Meanwhile, Teejay Lanka continued to decrease as share closed with a loss of 2.3% at LKR 38.90. Ceylon Grain Elevators, Hayleys Fabric and Melstacorp were among heavily traded counters. 

Foreign investors stood on buy side with a net foreign inflow of LKR 90mn. Net foreign inflows were seen in Commercial Bank (LKR 29mn), Sampath Bank (LKR 29mn), Melstacorp (LKR 17mn) while net foreign outflow was mainly seen in Seylan Bank (LKR 5mn). Foreign participation was 66%.

Source: LSL

Sri Lankan shares hit 10-mth low ahead of cbank policy review

Reuters: Sri Lankan shares fell to a 10-month low on Friday, dragged down by banking and beverage stocks, as investors awaited cues from the central bank's monetary policy review due early next week.

Sri Lankan stocks, which have been declining since October, have been hurt by political uncertainty arising from a decision by the ruling coalition parties to contest local polls separately, and on worries over a rise in market interest rates with yields on 91-day treasury bills hitting near four-year highs this week.

Sri Lanka's central bank could raise its key policy rates in coming months if it skips a chance to tighten next week, a Reuters poll showed, underlining renewed pressure on the rupee after the Federal Reserve's rate hike last month.

The Colombo stock index ended 0.3 percent lower at 6,119.99, while turnover was 409.5 million rupees ($2.72 million), well below this year's daily average of 635.2 million rupees.

"No big trades taking place as local investors are staying away and waiting for triggers," said a stock broker asking not to be named.

"Investors are waiting to see the interest rate direction from the policy announcement next week."

Foreign investors, who have been net sellers of 1.53 billion rupees worth of shares so far this year, net bought 89.8 million rupees worth of equities on Friday.

Shares of Lanka ORIX Leasing Company Plc fell 6.3 percent, while Cargills (Ceylon) Plc fell 2.5 percent and Dialog Axiata Plc fell 0.9 percent.

($1 = 150.3000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal; Editing by Amrutha Gayathri)

Senkadagala Finance to raise capital with Rs579mn rights issue

(LBO) – Sri Lanka’s finance sector player, Senkadagala Finance, is to raise 579 million rupees by way of a rights issue, the company said in a stock exchange filing.

The company has obtained Central Bank approval in compliance with Finance Companies Direction.

Subject to exchange and shareholder approval, the company is to issue 7,247,506 ordinary shares at 80 rupees each in the ratio of one share for every nine shares held.

The company said these proceeds will be utilized to maintain capital adequacy requirements in terms of the Finance Companies (Risk weighted capital adequacy ratio) Direction no 02 of 2006.

The current stated capital of the company is 1,008,062,200 rupees.

Senkadagala Finance which established in 1968 provides financial accommodation in the form of finance leases, hire purchase and loans.

It also provides real estate finance, trade finance, money market investment and accepts term deposits, Certificates of Deposit and savings accounts, which are operated by debit card at cash machines of nominated banks.

Sri Lanka tourism arrivals up 13-pct in January 2017, despite airport closure

ECONOMYNEXT - Sri Lanka's tourist arrivals rose 12.9 percent to 219,360 in January 2017 from a year earlier, despite a partial closure of the main airport with renewed momentum from China and the UK.

"This performance has laid to rest fears that the partial airport closure will have an adverse impact on tourism," tourism minister John Amaratunga said in a statement.

"I'm very happy that our efforts to streamline operations so as to minimize the impact of the closure have paid off."

Sri Lanka's main airport in Katunayake is closed until 4.00 pm for runway repairs until April.

Arrivals from Western Europe rose 13.8 percent to 72,500 with UK arrivals up 19.8 percent to 16,253, arrivals from France up 8 percent to 10,666 and Netherlands up 39 percent to 4,457.

German arrivals fell 2.3 percent to 12,471.

East Asian arrivals rose 25 percent to 48,775 with China up 21.8 percent to 31,803 and Japan up 28 percent to 3,134. Indonesia rose 142 percent to 4,529.

South Asia rose 2.4 percent to 41,470 with India up 7.9 percent to 31,173. Maldives fell 18 percent to 5,662.

Eastern Europe rose 16.7 percent to 26,540 with Russia up 23 percent to 10,337 and Ukraine up 24.5 percent to 5,806.

Chevron Sri Lanka unit December net down 03-pct to Rs693mn

ECONOMYNEXT - Chevron Lubricants Lanka’s December 2016 quarter net profit fell three percent to Rs693 million from a year ago, with sales flat at Rs2.9 billion.

Interim accounts filed with the stock exchange showed a sharp rise in distribution costs and administrative expenses, and a fall in finance income.

The company had earlier been helped by lower base oil prices and increased consumption owing to a surge in vehicle imports. Vehicle imports have now declined.

Earnings per share for the quarter fell to Rs2.89 from Rs2.99 the year before. The share was last traded at Rs164.

Chevron Lubricants Lanka’s business in the December 2016 quarter was much lower than that of the previous quarter, with net profit down a steep 31 percent from the September 2016 quarter and sales down 9.4 percent.

In the year to 31 December 2016, EPS rose to Rs14.51 from Rs12.88 a year ago.

Annual net profit rose 13 percent to Rs3.5 billion, while sales grew 5 percent to Rs12 billion.
(Updated - with comparison with previous quarter)

Sri Lanka’s Cargills Ceylon December net up 38-pct

ECONOMYNEXT – Sri Lanka’s Cargills Ceylon said December 2016 quarter net profit rose 37.5% to Rs637 million from a year ago with all business sectors doing well and despite a higher effective tax rate.

Sales of the firm, part of the CT Holdings group, rose 22% to Rs22 billion, according to interim results filed with the stock exchange.

Quarterly earnings per share were Rs2.84. The Cargills Ceylon share was last traded at Rs195.

EPS for the nine months to 31 December 2016 were Rs8.64 with net profit up 60% to Rs1.9 billion and sales up 22% to Rs64 billion.

“The business environment remains positive for all segments of the Group,” a statement said.

“Despite the increase in the effective tax rate applied the Group achieved a 38.5% growth in the bottom line for the quarter at Rs673 million.

“The performance of the most critical 3rd quarter holds the Group in good stead as it gears to further deliver on its vision of sustainable socio-economic growth to the benefit of all stakeholders in the value chain,” the statement said.

Sri Lanka’s Expolanka December net down 20-pct

ECONOMYNEXT - Sri Lanka’s Expolanka Holdings said December 2016 quarter net profit fell 20% to Rs274 million from a year ago owing to a write down in passive investments and lower exchange gains with logistics suffering from reduced demand and lower margins.

Group sales went up 21% to Rs17.2 billion in the December 2016 quarter, according to interim results filed with the stock exchange.

Expolanka's December quarter earnings per share were 14 cents, down from 18 cents the year before. The share was last traded Rs5.70.

For the nine months ended 31st December, EPS fell to 36 cents from 49 cents a year ago with net profit down 27% to Rs699 million while sales went up 15% to Rs48.3 billion.

Expolanka Holdings chief executive Hanif Yusoof said quarterly pre-tax profits dipped by 23% in comparison to the corresponding period in the previous financial year

This was “primarily due to a decline in other income including a write down in passive investments and a drop in exchange gains in FY 15/16,” Yusoof said in a note accompanying the accounts.

But the operating results (earnings before interest and tax) increased by 2% in comparison to previous year, he noted.

“The performance of the core sector logistics recorded a healthy quarterly growth of 24% in revenue at Rs14.8 billion against a backdrop of reduced demand and increased pressure on margins,” Yusoof said.

“Our Air and Ocean freight recorded double digit volume growth backed by new customer acquisitions,” he said.

“The core markets in India, Bangladesh and Sri Lanka recorded noteworthy performances fuelled by volume growth in the US and Europe trade lanes. As anticipated though, margins took a dip in the US trade lane when compared to the high level in the previous year.”

Far East businesses in Vietnam and Hong Kong recorded “notable performances” contributing to the overall growth, Yusoof said.

“However, our operations in Middle East & Africa performed below expectations due to market challenges and higher buying rates leading to a dip in margins.”

The group’s ventures business sector recorded a revenue of Rs1.1 billion during the quarter but the write down in passive investments affected profitability, Yusoof said.

“Efforts are being made to exit from these passive investments with value realization to the shareholders,” he said.

“The perishable segment had to encounter vulnerability partly due to volatile climatic conditions which prevailed during the year,” Yusoof also said. “The group is evaluating several proposals to achieve margin improvements.”

Sri Lanka’s Keells Food December net profit down 21-pct

COLOMBO (EconomyNext) – Sri Lanka's Keells Food Products said December 2016 quarter net profit fell 21 percent to Rs77 million from a year ago.

Sales of the firm, a unit of John Keells Holdings group, fell 5 percent to Rs796 million, according to interim results filed with the stock exchange.

Keells Food, which makes processed meats, said December quarter earnings per share fell to Rs3.03 from Rs3.85 a year ago. The share was last traded at Rs152.50.

In the nine months to 31 December 2016, Keells Food EPS fell to Rs8.90 from Rs10.36 the year before, with sales flat at Rs2.3 billion.

Sri Lanka's Alumex December net up 5-pct to Rs191mn

ECONOMYNEXT - Sri Lanka's Alumex Plc, an aluminium extrusions firm, said December 2016 net profit rose 5 percent to Rs191 million from a year ago.

Sales of the Hayleys group unit rose 20 percen to Rs1.3 billion, according to interim accounts filed with the stock exchange.

Alumex reported quarterly earnings per share of 64 cents. EPS for the nine months to 31 December 2016 were Rs1.64, with net profit up 30 percent to Rs491 million and sales up 15 percent to Rs3.2 billion.

The firm, whose stock was last traded at Rs20.80, is estimated to have a dominant market share exceeding 40 percent, down from over 50 percent claimed at the time of its public offer.