Sri Lanka's Treasuries yields drop

ECONOMYNEXT - Sri Lanka's Treasuries yields dropped at Wednesday's auction with the 6-month yield falling 10 basis points to 8.30 percent, data from the state debt office showed.

The 12-month yield fell 02 basis points to 8.90 percent.

The debt office sold 4.0 billion rupees of 6-month bills after offering 4.0 billion rupees and 8.5 billion rupees of 12-month bills after offering 8.5 billion rupees, raising a total of 12.3 billion rupees.

Selling the exact amount of bills offered is the most transparent way to conduct and auction, but it is not always done in Sri Lanka.

Sri Lankan stocks hit 3-wk closing high in holiday-thinned trading

Reuters: Sri Lankan shares touched a near three-week closing high on Wednesday as investors waited for clues from the central bank’s monetary policy review later in the week, with trading muted by the holidays after Christmas.

Sri Lanka’s central bank is expected to keep its key interest rates unchanged this week, a Reuters poll showed, as policymakers focus on supporting the slowing South Asian economy while remaining vigilant to still high inflationary pressures.

The Colombo Stock Index ended 0.14 percent firmer at 6,359.06, its highest since Dec. 8.

“Trading blue chip counters moved up slightly helping the index to end positive but the market is very dull as most of the brokers and investors are on holiday,” said Dimantha Mathew, head of research at First Capital Holdings.

Shares in Peoples Leasing Plc rose 0.6 percent, while Overseas Realty Plc ended 2.9 percent higher and Hemas Holdings Plc gained 0.8 percent.

Turnover stood at 263.3 million rupees ($1.73 million), just above a quarter of this year’s daily average of 920.5 million rupees.

Foreign investors sold 130.1 million rupees net worth of shares on Wednesday, but they have bought 18.2 billion rupees net worth equities so far this year. 

($1 = 152.6000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal; Editing by Amrutha Gayathri)

LOLC Finance goes for Rs. 5.88 b Rights to merge with group microcredit arm

LOLC Finance has received approval from the Central Bank to acquire 100% of LOLC Micro Credit Ltd., and to merge the two entities as part of consolidation with a move to enhance capital via a Rs. 5.88 b Rights Issue.

Post-merger, LOLC’s finance directors expect significant growth in assets as the synergies are expected to unlock new market opportunities. LOMC is 80%-owned by Lanka Orix Leasing Company Plc and 20% by FMO (Nederlandse Financierings - Maatschappij Voor Ontwikkerlingslanden NV). LOLC is the controlling shareholder of LOFC.

The increase in the asset base immediate upon the merger and the subsequent expected business growth in the merged entity will require additional capital to comply with the capital adequacy requirements stipulated by the Central Bank. For this the LOLC finance directors have approved a Rs. 5.88 billion Rights Issue on the basis of one for two at Rs. 4.20 each involving the issuance of 1.4 billion shares.

The current stated capital of LOLC Finance is Rs. 2 billion represented by 2.8 billion shares. Post-Rights, the stated capital will increase to Rs. 7.88 billion represented by 4.2 billion shares.

Funds raised via Rights Issue will be used to raise additional capital to ensure compliance with the Central Bank Risk Weighted Capital Adequacy Ratio and enhance the Tier 1 Capital base of the company and meet future business growth.

The Rights is subject to regulatory and shareholder approvals.

Net asset per share of LOLC Finance was Rs. 4.21 as of 30 September 2017. It had assets worth Rs. 134.85 billion, up from Rs. 122.6 billion as at 31 March 2017. Liabilities were Rs. 123 billion, up from Rs. 111.6 billion.

In the six months ended 30 September 2017, the total income of LOLC Finance was Rs. 

5.28 billion, up by 23% from a year earlier. After-tax profit was Rs. 620.6 million, down by 13%.

The public shareholding of LOLC Finance is 9.88%, held by 2,615 shareholders.
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