Sri Lankan shares end steady near 5-week closing high

Reuters: Sri Lankan shares ended flat on Thursday, near a more than five-week closing high hit in the previous session, as gains in beverage and construction shares were offset by losses in bank stocks.

The Colombo stock index ended 0.02 percent lower at 6,451.55, edging down from its highest close since Aug. 14 hit on Wednesday.

“The interest in blue chips is continuing with buying momentum and positive sentiment, even though the market ended flat,” said Dimantha Mathew, head of research at First Capital Holdings.

“Unlike dull periods, we now see block trades and there are continuous enquiries specially from foreigners.”

Shares of biggest listed lender Commercial Bank of Ceylon Plc ended 0.6 percent weaker, while Hemas Holdings Plc fell 0.8 percent.

Shares in Ceylon Tobacco Company Plc rose 0.5 percent and Access Engineering Plc rose 3.2 percent.

Foreign investors bought a net 54.1 million rupees ($354,289) worth of shares, extending the year-to-date net foreign inflow to 17.7 billion rupees.

Turnover stood at 541.4 million rupees, less than this year’s daily average of around 924 million rupees. 

($1 = 152.7000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Vyas Mohan)

Sri Lanka 01-year Treasuries yield falls to 9.10-pct

ECONOMYNEXT – Sri Lankan treasury bill yields fell at an auction Wednesday, the public debt department of the Central Bank said.

It said in a statement that the 06-month Treasury Bill yield fell 11 basis points to 8.94 percent from 9.05 percent last week.

The one-year Treasury Bill yield fell 10 basis points to 9.10 percent at the auction from 9.20 percent last week. The 03-month bill was not offered.

The public debt department got Rs65 billion worth of bids and accepted bids of Rs22 billion.

Singer Sri Lanka rating unaffected by shareholder change - Fitch

Fitch Ratings says Hayleys PLC’s acquisition of a controlling stake in Singer (Sri Lanka) PLC (Singer, A-(lka)/Stable) is neutral for Singer’s rating.

This is because Hayleys’ balance sheet will be stretched significantly following the completion of the Singer acquisition despite Hayleys’ stronger business risk profile as the purchase is likely to be largely funded by debt and existing cash.

In Fitch’s view, this is likely to limit Hayleys’ ability to provide extraordinary support to Singer if required, especially given the size of Singer’s own balance sheet and its significant debt.

On September 15, Hayleys purchased a 61.73% stake in Singer from its main shareholder Retail Holdings (Sri Lanka) BV for Rs 10.9 billion.

Retail Holdings will retain a stake of 9.47% for the time being while Hayleys will make a mandatory offer as required by local regulations to purchase the remaining 28.8% of Singer.

Fitch estimates that following Hayleys’ acquisition of the 61.73% of Singer, Hayleys’ consolidated lease-adjusted debt net of cash/operating EBITDAR of 3.9x as at end-March 2017 (FY17) will increase to 5.8x, all else remaining equal.

Hayleys’ leverage could increase further depending on the use of more debt to fund the remaining stake in Singer following the completion of the mandatory offer. Fitch estimates that Hayleys’ financial flexibility will be stretched even further at the stand-alone company level through which a bulk of the investment in Singer will be made.

With the acquisition, Singer, the biggest consumer-durable retailer in the country, will become Hayleys’ largest subsidiary, contributing an estimated 23% of the Hayleys group’s post-acquisition pro-forma consolidated EBITDA.

Hayleys’ other significant operating segments include transportation and logistics, purification and agriculture, whose contribution to Hayleys’ post-acquisition pro-forma consolidated EBITDA will drop to approximately 13%, 11% and 10%, respectively, according to Fitch’s estimates, with all else being equal.
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Fitch affirms Alliance Finance at BB+(lka); withdraws ratings

Fitch Ratings on Tuesday affirmed Alliance Finance Company PLC’s (AFC) National Long-Term Rating and the ratings on its outstanding senior unsecured debentures at ‘BB+(lka)’.

The Outlook on the National Long-Term Rating is Stable. Fitch has also affirmed AFC’s outstanding subordinated debentures at ‘BB(lka)’.

At the same time, Fitch has withdrawn all the ratings of AFC because they have been taken private.
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