Sri Lankan shares hit 13-wk closing low

Reuters: Sri Lankan shares fell for a fifth straight session on Wednesday to their lowest close in 13 weeks, led by losses in beverage and diversified stocks.

The Colombo stock index fell 0.29 percent to 6,585.53, its lowest close since May 3. The bourse fell 1.6 percent in July, but had risen about 6 percent this year as of July 31 close.

Shares of Lion Brewery Plc dropped 4.5 percent, while Ceylon Brewery Plc lost 9.43 percent. Cargils Ceylon Plc fell 2.2 percent and Nestle Lanka Plc fell 0.63 percent.

Turnover stood at 978.3 million rupees ($6.38 million), more than this year's daily average of around 893.3 million rupees.

Foreign investors were net buyers of shares worth 753.9 million rupees on Wednesday, extending their year-to-date net inflow to 26.3 billion rupees. 

($1 = 153.4500 Sri Lankan rupees) 

(Reporting by Ranga Sirilal; Editing by Vyas Mohan)

DFCC Group records Rs 3,616 mn PBT in 1H

The DFCC Group reported an excellent half year performance for 2017, with DFCC Bank leading the charge on the back of its strategic growth drive as a rapidly emerging full service commercial bank.

DFCC Group recorded profit before tax of RS 3,616 million in the first six months of 2017, a 68% growth over Rs 2,151 million in the comparable period in 2016.

The Group recorded a consolidated profit after tax (PAT) of Rs 2,944 million up 71% over the Rs 1,721 million recorded in the comparable period.

PAT for the quarter ended June, 30 2017 was Rs 1,571 million which reflects a growth of 14.4% over Rs 1,373 million reported in the first quarter of 2017.

The Chief Executive Officer of DFCC Bank, Arjun Fernando noted that this strong bottom line growth was achieved despite a challenging operating milieu. “DFCC Bank is always striving to ensure that our customers get the very best in service by working together as a team to listen and respond to their changing needs. Our people continue to be our biggest strength, and the Bank has embarked on many customer engagement initiatives.”

“We will continue to deliver services in the most cost effective and efficient way to provide the best possible value for our customers” he further stated.
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Sri Lanka's Insurance industry records 17.10% growth in 1Q

The insurance industry recorded a growth of 17.10%, in terms of Gross Written Premium (GWP), during the first quarter of year 2017 when compared to the same period in the year 2016.

The GWP for Long Term Insurance and General Insurance Businesses for the first quarter ending March 31, 2017 was Rs. 38,987 million compared to the first quarter of 2016 amounting to Rs. 33,293 million.

The GWP of Long Term Insurance Business amounted to Rs. 16,490 million (Q1, 2016: Rs. 14,729 million) while the GWP of General Insurance Business amounted to Rs. 22,498 million (Q1, 2016: Rs. 18,564 million) during the first quarter of 2017.

The claims incurred by insurance companies in both Long Term Insurance Business and General Insurance Business was Rs. 16,095 million (Q1, 2016: Rs. 14,438 million) showing an increase in total claims amount by 11.47% during the first quarter of 2017.

The Long Term Insurance claims, including maturity and death benefits, amounted to Rs. 6,135 million (Q1, 2016: Rs. 5,617 million).

The claims incurred in General Insurance Business, including Motor, Fire, Marine and other categories, amounted to Rs. 9,959 million (Q1, 2016: Rs. 8,821 million).

Hence, during first three months of 2017, there is an increase in claims incurred by 9.22% and 12.90% for Long Term Insurance and General Insurance Businesses respectively, when compared to same period in 2016.

The profit (before tax) of insurance companies in both Long Term Insurance Business and General Insurance Business has increased to Rs. 3,496 million (Q1, 2016: Rs. 2,713 million) showing a growth in profits by 28.83%.

The profit (before tax) of Long Term Insurance Business amounted to Rs. 1,738 million (Q1, 2016: Rs. 2,067 million) while the profit (before tax) of General Insurance Business amounted to Rs. 1,758 million (Q1, 2016: Rs. 646 million) during the first quarter of 2017.

Thus, profit (before tax) of Long Term Insurance Business has decreased by 15.93% and profit (before tax) of General Insurance Business has grown by 172.05%, when compared to the corresponding period of year 2016.

Insurers

Out of twenty eight (28) Insurance Companies (Insurers) in operation as at 31st March 2017, twelve (12) are engaged in Long Term (Life) Insurance Business, thirteen (13) companies are carrying out only General Insurance Business and three (03) are composite companies (dealing in both Long Term and General Insurance Businesses).

Sixty (60) insurance brokering companies, registered with the Board, mainly concentrate in General Insurance Business. Total Assets of insurance brokering companies have increased to Rs. 4,211 million as at the end of first quarter of 2017 when compared to Rs. 3,670 million recorded as at 31st March 2016, reflecting a growth of 14.73% year-on-year.

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Seylan Group shows strong 1H performance with 32% growth

Seylan Bank and its Group reported a strong growth momentum with its performance for the six months ended June 30, 2017.

The Seylan group recorded a net profit after tax of Rs. 2,310 Million for the period which is an increase of 32% compared to the prior year corresponding period.

Seylan Bank closed the first six months ending June 30, 2017, with a post-tax profit of Rs.1,805 million a growth of 2.87% compared to Rs.1,755 million over 1H 2016. The Bank was able to record a moderate growth in core banking activities for the first six months despite challenging business environment and prudential impairment provisions on legacy NPAs. The Bank will reach year-on-year growth of Profit After Tax over 21% if not for the impairment made on legacy NPAs that was made due to the delay experienced in settlement of dues by the Compensation Tribunal and another payment to be received as a secured creditor with the liquidation of entity concerned. Net interest income increased from Rs. 6,147 million to Rs. 7,265 million, an 18.19% increase for the six months ended June 30, 2017, resulting from selective growth in advances and effective pricing strategy.

Nevertheless, interest expenses increased at a faster pace of 53.26% during the period under review, thereby compressing margins.

Net fees and commission income grew across a spectrum of fee-based products and services by 23.83% for the period under review to Rs.1,773 million in 1H 2017.

Other operating income comprising net gains from trading, gains on financial instruments, gains on foreign exchange and other income increased by 46.08% from Rs. 611 million in 2016 to Rs.892 million during 1H 2017 mainly as a result of mark-to-market gains on Government Securities, due to the favorable movements in interest rates. Decrease in foreign trade transactions resulted in the Bank recording a substantial decrease in net exchange income of 20%.Total expenses increased from Rs.4,676 million to Rs.5,421 million during 1H 2017, mainly due to increase in investments made in employees, technology, upgrading and refurbishment of branches, etc.
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Australian purchases in stock market hits all-time high

Foreign inflows to the stock market originating from Australia indicate a figure of Rs. 626.4 million year-to-date, which is an all-time record for foreign purchases from Australia in a calendar year.

The Colombo Stock Exchange (CSE) in association with the Securities and Exchange Commission of Sri Lanka (SEC) hosted a series of Invest Sri Lanka Investor Forums to promote Sri Lankan capital market investment in Australia during March 2017. Rs 593.4 million, which attributes to 95% of the purchases this year, have been recorded since the Invest Sri Lanka forums.

Record inflows from Australia also place the country as the 10th ranked contributor in terms of overall net foreign flow in 2017, a noteworthy development considering the fact that an actual outflow of funds to Australia amounting to Rs 80.2 million was recorded in 2016.

A strong community of individuals with a Sri Lankan origin eager to look at new Sri Lankan investment opportunities and the celebration of 70 years of diplomatic ties between Sri Lanka and Australia presented the CSE with a unique opportunity to promote the capital market in Australia this year.

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SL’s vehicle population topped 6.8 mn in 2016

Sri Lanka has reached a 6.8 million motor vehicle population in 2016, an 8 per cent increase from 6.3 million registered in 2015 according to the latest edition of an annual report on the country’s vehicle market compiled by the Ceylon Chamber of Commerce.

During 2016, the country’s expenditure on motor vehicle imports declined by 32 per cent to Rs.194 billion compared to 2015 where Sri Lanka spent the highest ever expenditure for motor vehicle imports of Rs.288 billion.

This sharp drop was mainly driven by motor cars. The report further reports that, with this significant decline of motor vehicle imports, vehicle registrations declined by 26 per cent compared to 2015. More than half (54%) of the current vehicle population consists of Motor Bicycles followed by Three-Wheelers (16%) and Motor Cars (11%).

The report, prepared by the Economic Intelligence Unit of the Ceylon Chamber of Commerce, provides a detailed statistical analysis and industry overview of Sri Lanka’s Vehicle Market, featuring the latest information on registration; vehicle population; imports of vehicles by vehicle category and an overview on the global vehicle market and Global Hybrid and Electric Vehicle market.

To purchase a copy of the report, email Saumya Amarasiriwardane, Research Analyst, Economic Intelligence Unit of the Ceylon Chamber of Commerce at saumya@chamber.lk.
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