Sri Lankan stocks end steady near 8-month low in lean trade

Reuters: Sri Lankan shares ended steady on Thursday, near an eight-month low hit in the previous session, as losses in oil palm and telecommunications offset gains in banking and diversified stocks.

The Colombo Stock Index ended 0.03 percent firmer at 6,323.52, edging up from its lowest close since April 11 touched on Wednesday. Trading was muted ahead of the holiday season, with turnover hitting a 10-month low.

“The dull sentiment is continuing with the year-end holidays coming in,” said Atchuthan Srirangan, senior research analyst at First Capital Holdings PLC.

“Most of the investors and brokers are already on holiday and trading is taking place on very low volumes. We expect low turnover to continue for the next few days.”

Shares in Ceylinco Insurance Plc ended 2.9 percent up while those in Melstacorp Plc rose 1.9 percent.

Sri Lanka Telecom Plc fell 1.4 percent while Hatton NationAl Bank Plc ended 0.7 percent weaker.

Turnover stood at 134.7 million rupees ($880,967.95), the lowest since Feb. 1 and well below this year’s daily average of 933.3 million rupees.

Foreign investors net sold 79.6 million rupees worth of shares on Wednesday. They have net bought 18.3 billion rupees worth of equities so far this year. 

($1 = 152.9000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal; Editing by Vyas Mohan)

SLT invests Rs 2.4 bn for data centre

Sri Lanka Telecom’s data centre infrastructure has been undergoing a major transformation with state-of-the-art Tier 3 Data Centre constructed in Pitipana inter-connecting multiple data centres located in SLT headquarters and welikada.

Investment for phase 1 of the data centre project is Rs 2.4 billion.

With this new development, SLT is able to offer broader portfolio of robust co-location and Data hosting facilities at very competitive price packages.

Even in the midst of the industry’s shift, SLT continued to strengthen the data centres as integral components of its overall IT infrastructure strategy and data centres are already accommodating user expectations with advanced IT systems and service level uptime or availability coupled with new service offering opportunities for their valued Enterprise & SME customers.

The Company expect to facilitate more CEOs, CIOs, CTOs and IT experts who are looking to fulfill the IT anytime, anywhere model by delivering the necessary performance, uptime and level of fault tolerance with redundancy. The new data Centre of SLT located in newly proposed Tech city area will have a capacity of - 500 racks with a provision to increase the capacity. Customers will be able to hire racks as and when they are required to manage their CAPEX and OPEX effectively. The rental payment expected from the customers will be far less in comparison to the amount they will be required to spend in order to have their own data centres. SLT intends to provide expert knowledge and bear all costs associated with space, protection, disaster management etc.
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Raigam cuts SL’s wheat imports with launch of rice flour noodles

The country can save Rs 925 million annually by reducing the import of wheat flour due to the introduction of rice flour noodles to the country.

This opinion was expressed by Dr Ravi Liyanage, Chairman, Raigam Group of Companies, at the launch of the Raigam Devini Batha Bundi Full instant rice noodles to the Sri Lankan market on Tuesday, in Colombo.He said to construct the manufacturing plant to make noodles out of 100% rice grown in Sri Lanka, the group had invested over Rs 300 million. Situated in Homagama, this facility has a capacity of 5,000 MT per annum.

The Kingdom of Raigam earlier had fired the first salvo to save the country from importing salt from overseas by taking the initiative to re-awaken the salt industry in Sri Lanka.

With Raigam taking steps to start saltern construction and table salt refineries in the country the country managed to reduce its salt import to less than 7,000 MT in 2011. Dr Liyanage said Sri Lanka will be able to export the excess salt in the near future.

It was also disclosed that the Wayamba Salterns PLC has recorded a revenue of Rs. 723.4 million in 2017.

Commenting on the unprecedented financial growth achieved during this financial year, Raigam Wayamba Salterns, Chairman, Liyanage said in comparision to the revenue of Rs. 414.6 million recorded in 2016, this was the highest ever financial performances recorded by the Group.

Dr. Liyanage also mention about the severe slat shortage in the country in 2016 and said although many salt businesses came to a standstill, Raigam managed to service the market due to prudent stock management practices of the company.

Earlier this year the company issued 80 million shares at an affordable price of Rs 2.50 per share for anyone like school teachers or university students to become shareholders of the company by investing Rs. 2,500 the minimum subscription.

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Fitch rates BOC’s Basel III Sub-Debt ‘AA(lka)’

Fitch Ratings has assigned Bank of Ceylon’s (BOC, AA+(lka)/Stable) proposed Sri Lankan rupee-denominated Basel III-compliant subordinated unsecured debentures a final National Long-Term Rating of ‘AA(lka)’.

The debentures, totalling up to Rs 8 billion are to have maturities of five and eight years and carry fixed- and floating-rate coupons. The bank plans to use the proceeds to support its loan book expansion and to strengthen its Tier II capital base. The debentures are to be listed on the Colombo Stock Exchange.

The debentures are to qualify as Basel III compliant regulatory Tier II capital for the bank and include a non-viability trigger upon the occurrence of a trigger event, as determined by the Monetary Board of Sri Lanka.

The final terms indicate that the notes are subject to temporary or permanent write-down as determined by the Monetary Board of Sri Lanka and can be partially or fully written down upon the occurrence of a trigger event. There are no equity conversion provisions in the terms. The final rating follows the receipt of documents conforming to information already received and is in line with the expected rating assigned on October 26, 2017.
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Nations Trust Bank in rights issue

Nations Trust Bank (NTB) is to undertake a rights issue of 40,105,614 ordinary non-voting convertible shares in the proportion of four shares for every 23 held as on January 12, 2018, subject to approval by the CSE and shareholders, the bank said in a stock exchange filing. The rational to issue non-voting shares with a conversion option, as opposed to another class/type of security is, in its efforts to raise capital to meet regulatory requirements, to augment the anticipated balance sheet growth, NTB said.

Non-voting shares would give the bank the ability to source full subscription from all shareholders for the rights issue despite the restrictions placed by the Central Bank on shareholders carrying voting rights, the bank said.
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Sampath Bank in mega quest to raise Rs. 20 b via Rights, Debt

* Fresh capital-boosting move comes hot on the heels of oversubscribed Rs. 6 b debenture issue

Sampath Bank yesterday announced an unprecedented move to raise a mammoth Rs. 20 billion to boost its capital via equity and debt issues, hot on the heels of raking in Rs. 6 billion via debentures last week.

The third largest private bank and one of the industry’s best performing so far this year, Sampath Bank announced a three for 13 Rights Issue at Rs. 250 each. The move will involve the issuance of 50.13 million shares and raise Rs. 12.5 billion. Additionally, the bank also announced an issue of 50 million five-year Listed, Rated, Unsecured, Subordinated, Redeemable, Basel III Compliant Convertible Debentures with an option to issue up to a further 25 million convertible debentures in the event of an oversubscription at a consideration of Rs. 100 each.

The combined issues will raise a maximum of Rs. 20 billion aimed at boosting the capital of the bank to comply with the stringer Basel III requirements.

The announcement of a fresh round of fundraising comes soon after it raised Rs. 6 billion last week via a Basel III compliant, Tier II, rated, unsecured, subordinated, redeemable, five-year debenture issue, which was oversubscribed on Friday.

Funds raised via the debenture were to be used to support its loan book expansion and to strengthen its Tier II capital base.

Pending yesterday’s announcements, the trading of Sampath Bank shares was suspended but thereafter the stock closed at Rs. 315, down by Rs. 16.20 or 5%.

The net asset value per share as of 30 September 2017 was Rs. 287 at the Bank level and Rs. 317 at the Group level, up from Rs. 239 and Rs. 267 from 31 December 2016.

Continuing its robust growth momentum, Sampath Bank achieved Rs. 8.5 billion in Profit After Tax (PAT) within the first three quarters of 2017, up by 26.2% from a year earlier. Profit Before Tax (PBT) too grew by 32% YoY to reach Rs. 11.8 billion for the nine months ended 30 September 2017.

The Group, which comprises the bank and four fully-owned subsidiary companies, also posted a growth in PAT and PBT of 26.5% and 32.4% respectively for the nine months ended 30 September 2017.

Sampath Bank’s total asset base grew by 14.3% (annualised 19%) during the period under review to reach Rs. 752.8 billion as at 30 September 2017.

In comparison, the total asset position as at 31 December 2016 stood at Rs. 658.5 billion. Gross loans and receivables grew by 17.2% (annualised 23%) to hit Rs. 549.2 billion as at 30 September 2017, growing by Rs. 80.7 billion for the nine-month period. The total deposit base too increased by Rs. 95.4 billion for the same period, to reach Rs. 611.6 billion as at the reporting date, a growth of 18.5% (annualised 25%).

However, at 34.1%, the CASA ratio as at 30 September showed a decline compared to the 38.4% registered on 31 December 2016. The decline can be attributed to the higher growth recorded in the fixed deposit base.

Post third quarter results, the bank said its Common Equity Tier I Capital, Tier I Capital and Total Capital Adequacy ratios as at 30 September 2017,which stood at 8.46%, 8.46% and 11.85% respectively, have been computed based on Basel III requirements for the first time. All three ratios stood well above the minimum regulatory requirement of 6.25%, 7.75% and 11.75% respectively.

Vallibel One Plc, controlled by business leader Dhammika Perera, owns 15% stake in Sampath Bank followed by Ishara Silva (10%), the Employees Provident Fund (10%) and Rosewood Ltd. (5%).

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