Sri Lankan shares rise; up 2.3 pct in 2017

Reuters: Sri Lankan shares rose for a sixth straight session in muted trade on Friday, ending 2017 with a modest 2.3 percent gain after two consecutive annual losses.

The Colombo Stock Index edged up 0.08 percent to 6,369.26, its highest since Dec. 8 and posting the first annual increase in three years after falling 9.7 percent in 2016.

Asiri Hospitals Plc rose 24.4 percent, while Carson Cumberbatch Plc ended 0.6 percent higher and conglomerate John Keells Holdings Plc gained 0.3 percent.

Turnover stood at 379.98 million rupees ($2.48 million), less than this year’s daily average of 915.3 million rupees and last year’s 737.2 million rupees.

Foreign investors net bought shares worth 143.4 million rupees on Friday, extending the 2017 net foreign inflow to 18.5 billion rupees. They net bought 633.5 million rupees worth equities in 2016.

“We expect the market to start the next year in a positive note as the central bank held the rates and gave a clear direction on where the interest rates are going to be,” said Hussain Gani, deputy CEO at Softlogic Stockbrokers.

“The first two months, the election fever will be there. Investors will look for policy direction after the elections and what policies to boost growth.”

Sri Lanka will hold a long-delayed local government election on Feb. 10.

The country’s central bank, which kept benchmark interest rates unchanged on Thursday, expects growth to come in below 4 percent this year, lower than its original 2017 growth forecast of 5.0 percent.

The $81 billion economy grew at an annual pace of 3.7 percent in the first nine months of 2017, which followed its most severe drought in 40 years in the first quarter and the worst flooding in 14 years in May. 

($1 = 153.4000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal; Editing by Biju Dwarakanath)

SLT to issue Rs. 5 bn debentures

Sri Lanka Telecom PLC (SLT), a blue-chip company and a dominant player in the Sri Lankan Telecom and Information Technology Enabled Services (ITES) space, announced today that the directors of the company have resolved to issue Rs. 5.0 billion listed debentures with a green shoe option for a further Rs. 2.0 billion, subject to regulatory approval.

SLT is a listed company on the Colombo Stock Exchange (CSE) and has positioned itself as the preferred digital lifestyle provider (DLP) in Sri Lanka, providing a wider range of services such as voice, data, internet, global connectivity, television, education and other related services to the nation.

Having maintained a fair growth rate despite the competitive and challenging market environment, the group reported a turnover of Rs. 74 billion during the year 2016 while owning Rs.143 billion total assets by the end of same year.

The company expects to invest proceeds of the debenture in its service expansions in the areas such as IPTV, FTTH, data centers, global connectivity and to improve the maturity profile of its long term debt.Sri Lanka Telecom PLC (SLT), a blue-chip company and a dominant player in the Sri Lankan Telecom and Information Technology Enabled Services (ITES) space, announced today that the directors of the company have resolved to issue Rs. 5.0 billion listed debentures with a green shoe option for a further Rs. 2.0 billion, subject to regulatory approval.

SLT is a listed company on the Colombo Stock Exchange (CSE) and has positioned itself as the preferred digital lifestyle provider (DLP) in Sri Lanka, providing a wider range of services such as voice, data, internet, global connectivity, television, education and other related services to the nation.

Having maintained a fair growth rate despite the competitive and challenging market environment, the group reported a turnover of Rs. 74 billion during the year 2016 while owning Rs.143 billion total assets by the end of same year.

The company expects to invest proceeds of the debenture in its service expansions in the areas such as IPTV, FTTH, data centers, global connectivity and to improve the maturity profile of its long term debt.
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Raigam Group looking at listing - Diversifying to the tourism sector

The diversified Raigam Group will look at a Colombo Stock Exchange listing soon, said its Chairman Dr. Ravi Liyanage.

He said that they have several companies and would look at one of them to be listed. “We also want to rest and give more administrative powers to new people who would get involved in the company.”

He said that Raigam Wayamba Salterns PLC (RWSL) is already listed and they were planning a rights issue. “However due to delays which I do not want to go into detail, we have now decided to fold up this.”

The Chairman recalled that over a decade ago salt was imported despite Sri Lanka being an island. “We requested the government for protection and tax for salt imports and when this guarantee was given, we invested in salterns and today we are proud to say Sri Lanka is self sufficient in salt. We are also happy that we were one of the pioneers to lead Sri Lanka towards self sufficiency in salt.”

He said that today over 10,000 are dependent on the industry as there are also several individuals who manufacture salt as a cottage industry.

Asked if they were looking at exports, he answered in the negative and said that they cannot compete with India. “Their labour is cheap and most importantly their climate is ideal to produce salt.”

He however said that today chlorine, chemicals to manufacture soap and HCL are being imported and since there will soon be a surplus of salt they will look at manufacturing these in Sri Lanka.

He also predicted that soon the country will move in to use of powered salt and move away from crystal salt like in European countries as it is more hygienic.

Raigam Group is the country’s second largest salt producer after the state among the seven major players. It was a pioneer to begin production of Pure Vacuum Dried (PVD) salt at their plant in Palavi in Puttalam.

CEO Ganaka Amarasinghe said that the company profits too are on the increase and their turnover was around Rs. 340 million.

Director Dr. Sampath Amaratunga said they will also look at diversifying to the tourism sector and try to introduce tourism near salterns which have unique scenic locations especially in the Eastern Province.
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Sunshine makes milestone deal to consolidate stake in its branded tea and plantations biz

• Invests Rs. 1.6 b to double stake in formerly tripartite-owned Estate Management Services to 60%

• Tata exits but will continue its collaborative partnership with Sunshine Holdings

• Pyramid Wilmar ups stake to 40%

Home-grown diversified conglomerate Sunshine Holdings PLC yesterday announced that it would be further consolidating its stake in Estate Management Services Ltd. (EMS), the holding company for Watawala Plantations PLC, Hatton Plantations PLC and Watawala Tea Ceylon Ltd. (WTCL) – two of Sri Lanka’s most profitable plantations and leading tea brands.

Previously managed under tripartite ownership between Sunshine Holdings PLC, Pyramid Wilmar, and Tata Global Beverages, with each party holding an equal share in EMS, Sunshine’s stake in EMS will increase up to 60% of its issued share capital, while Pyramid Wilmar will hold the remaining 40%.

Sunshine Holdings paid Rs. 1.6 billion for the additional stake of 6.769 million shares.

Despite the exit, Tata Global Beverages will continue its collaborative partnership with Sunshine Holdings, but with a revised strategy that places greater emphasis on international branding and marketing of TATA Tea which will continue to be sourced from Watawala Plantations.

“Our close partnership with Tata Global Beverages has resulted in numerous achievements, milestones and accolades for Watawala Plantations and WTCL over the past two decades. This long and fruitful relationship with Tata Global Beverages is underpinned by an unblemished legacy of trust, excellence, and innovation and moving forward, we will continue to draw on these strengths as we continue to adapt and grow,” Sunshine Holdings Group Managing DirectorVishGovindasamy said.

“We also see this moment as an opportunity to take more direct action aimed at reforming and rejuvenating less profitable sectors of our tea business while emulating and enhancing the examples, practices and techniques utilised in our best performing tea estates. In this regard, we look forward to exploring new opportunities for partnerships and synergies between Sunshine and Tata Global Beverages,” added Govindasamy.

Notably, Sunshine Holdings has an investment in Tata Communications Lanka Ltd., of which Govindasamy is the Chairman, who expressed that Sunshine would continue to seek out synergistic branding and marketing opportunities, particularly with regard to international markets, leveraging on the immense resources and global reach of Tata Global Beverages.

Sunshine Holdings PLC is a diversified conglomerate with interests in healthcare, plantations, FMCG, packaging and renewable energy. The Group with revenue exceeding $120 million is listed on the Colombo Stock Exchange.

Beginning with the healthcare business in 1967, the Group has built strong businesses over the last five decades, including partnering with the Tata Group in 1992 to form a joint venture in Plantations. Group companies include Sunshine Healthcare Lanka, Watawala Plantations PLC, Hatton Plantations PLC, Watawala Tea Ceylon Ltd. (WTCL) and Sunshine Energy.

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Foreign investors buy US$570mn dollars of Sri Lanka stocks, bonds

ECONOMYNEXT - Sri Lanka's government bond and stock markets have seen 572 million US dollars flow in up to December 26, 2017, the central bank said.

Foreign investors had bought 452.1 million US dollars of government bonds and 120.1 million US dollars of stocks.

In 2015 Sri Lanka experienced capital flight as the central bank printed money to worsen a credit bubble leading to a currency collapse.

Sri Lanka is expecting to end the year with foreign reserves of 7.8 billion dollars, central bank officials said.

Sri Lanka plans sovereign bond in early 2018

ECONOMYNEXT - Sri Lanka would like to go to international market with a sovereign bond in early 2018 before the US Federal Reserve does more rake hikes, Central Bank Governor Indrajit Coomaraswamy said.

Coomaraswamy said the exact date of the bond sale will depend on market conditions but he felt that going to the market on May or June was too late.

He said the US Fed was expected to make three 25 basis point hikes next year, and it was best t go to market as early as possible.

US tax cuts and planned infrastructure spending boom may also push the Fed to tighten faster, amid stronger economic growth in the US, Coomaraswamy said.

Coomaraswamy declined to reveal a size of the bond sale, but the minimum sovereign size is 500 million dollars. Sri Lanka has raised volumes ranging from a billion to 1.5 billion US dollars in the past.

Sri Lanka's last sovereign bond sold at 620 basis points above the US Treasuries yield was now trading at a narrower 550 basis point risk premium showing increased investor confidence, Coomaraswamy said.

Fitch and Standard and Poor's have also lifted a negative outlook on Sri Lanka's rating, he said.

With slowing domestic credit and the central bank ending money printing, Sri Lanka is now collecting forex reserves.

On a net basis Sri Lanka has withdrawn cash from markets (sterilized forex purchases) in 2017, Coomaraswamy said.

Sri Lanka sells 3 and 8 year bonds

ECONOMYNEXT - Sri Lanka has sold 30 billion rupees of 3 and 8 year bonds, the debt office said, amid falling interest rates and slowing credit and improving budgets in the economy.

The debt office sold 8.0 billion rupees of 2 year 11 month bonds maturing on 15 December 2020 at a weighted average yield net of tax of 9.55 percent.

On 01 November 2017, 2-year bonds were auctioned at 9.92 percent.

It also sold 22 billion rupees of 8 year 5 month bonds maturing on 01 June 2026 at a yield of 10.06 percent.

On 01 November 2017 8-year bonds were sold at 10.33 percent.

Sri Lanka is now emerging from a balance of payments crisis and the credit cycle is slowing with an improving budget deficit and slower private credit, allowing the central bank to collect forex reserves.

Sri Lanka's LAUGFS Gas to spin-off non-core units

ECONOMYNEXT - Sri Lanka's LAUGFS Gas group said it is spinning off three units in non-core sectors and listing them on the Colombo Stock Exchange.

LAUGFS Lesiure Ltd, a hotel firm LAUGFS Power Ltd and LAUGFS Eco Sri (Pvt) Ltd, will be separated and share will be issued to existing shareholders of the parent in the same proportion, the firm said in a stock exchange filing.

The units will also be listed on the stock exchange through an introduction.

LAUGFS Gas will retain LAUGFS Maritime Services (Pvt) Ltd, LAUGFS Terminals Ltd, SLOGAL Energy DMCC, LAUGFS Gas (Bangladesh) Ltd and LAUGFS Property Developers (Pvt) Ltd, which owns the headquarters buildings.

The firm said the Board of Directors approved the proposal on December 28 and shareholder and court approval will be sought under Sri Lanka's Companies Act.

Sri Lanka's LCI buys MillenniumIT ESP from London Stock Exchange

ECONOMYNEXT - Sri Lanka's based Lanka Century Investments said it is buying100 percent control of MillenniumIT' enterprise solutions business, from London Stock Exchange group.

The firm said it paid 392.40 rupees for 2.75 million shares.

London Stock Exchange will continue to own the securities trading and sofware development divisions of MIT.

MillenniumIT ESP provides IT services to Sri Lankan public and private companies, LCI said.

LCI is controlled by Navitas Holdings, Galle Face Hotel group Hrdramani group and Taprobane Holdings.