Sri Lankan shares mark 4-wk closing high on foreign buying

Reuters: Sri Lankan shares gained for a fourth straight session on Tuesday to mark a four-week closing high on foreign buying in blue-chips.

Foreign investors bought a net 129.9 million rupees ($848,188) worth of shares on Tuesday, extending the year-to-date net foreign inflow to 17.1 billion rupees.

The Colombo stock index ended up 0.29 percent at 6,428.07, its highest close since Aug. 18.

“Foreign investors were active today, helping to push the turnover above one billion. Foreign interest were buying blue-chips and that helped boost local investor confidence,” said Hussain Gani, deputy CEO of Softlogic Stockbrokers.

Shares of Ceylon Cold Stores Plc rose 1.5 percent, while Trans Asia Hotel Plc ended 6.7 percent firmer and conglomerate John Keells Holdings Plc gained 0.2 percent.

Turnover stood at 1.6 billion rupees, well above this year’s daily average of around 922.4 million rupees.

Recent block deals also helped boost sentiment, traders said.

Last Wednesday, after market hours, diversified conglomerate Hayleys Plc said it had agreed to purchase 61.73 percent of Singer Sri Lanka Plc for 10.9 billion rupees from Retail Holdings (Sri Lanka) BV a subsidiary of Retail Holdings NV.

Hayleys in a corporate disclosure said on Friday that Hayleys Plc and its subsidiaries purchased 231.9 million shares or 61.73 percent of Singer Sri Lanka Plc at a price of 47 rupees per share.

Last week, top mobile phone operator Dialog Axiata Plc said it acquired 80.34 percent of Colombo Trust Finance Plc for 1.072 billion rupees ($7 million). 

($1 = 153.1500 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil Nair)

Mercantile Investments and Finance records PAT of Rs 202 mn for 2016-17

Mercantile Investments and Finance has recorded a steady pre-tax profit of Rs 314 million and a post- tax profit of Rs 202 million for the financial year ending March 31, 2017.

However both pre and post-tax profits reported a notable decline of 61% and 60% respectively, when compared with the previous year mainly on account of recording impairment charges.

Further, as witnessed across the finance industry, the continued upward movement in interest rates and its resulting re-pricing effect impacted the cost of funding and core business margins which pegged back profitability levels against what was envisaged, Mercantile Investments and Finance Chairman Saro Weerasuriya told shareholders in company’s Annual Report for the financial year 2016/17.

“We experienced steady growth in our lending volumes which resulted in the loan book growing buoyantly by 14% year-on-year. In contrast, the deposit base grew moderately increasing by 8% year-on-year.

In the backdrop of rising market interest rates, we were conservative in the mobilisation of deposits that were deemed relatively more costly than other sources of funding available, and hence, we were able to access less costly sources of funding through borrowings on the strength of our brand.”
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