Access Realties leases prime land in Sri Lankan capital for Rs1.1bn

ECONOMYNEXT – Sri Lanka’s Access Realties has got 114.56 perches of prime land in the capital Colombo for 1.1 billion rupees on a 99-year lease, the state information office said in a statement.

The Cabinet of ministers this week approved a proposal by Patali Champika Ranawaka, Minister of Megapolis and Western Development, to lease the land at Mudalige Mawatha, in Union Place, Colombo 2.

Access Realties is the commercial real estate development arm of the Access Engineering construction group.

Sri Lanka’s MTD Walkers reveals rating downgrade after regulator query

ECONOMYNEXT – Sri Lanka’s MTD Walkers said its rating had been downgraded to [SL]BB- with negative outlook from [SL]BB+ with negative outlook, by ICRA Lanka Ltd, a rating agency.

The stock exchange announcement came in response to a query by the Colombo Stock Exchange.

The downgrade by ICRA Lanka Limited, a subsidiary of ICRA Limited, which is part of Moody’s Investors Service, had been done in May this year.

MTD Walkers, which has been making losses, said it had “incorrectly assumed the availability of the rating online at the ICRA Lanka website would be considered as adequate disclosure of price sensitive information."

It assured the CSE that all future rating revisions are released in line with stock exchange rules.

Suzuki small cars dominate Sri Lanka August vehicle registrations

ECONOMYNEXT – Suzuki small cars continued to dominate new and pre-owned vehicle registrations in Sri Lanka in August as well as hybrids, an analysis by an equities research house shows.

In the brand-new segment, August recorded 890 units, marginally down from 904 units the previous month and 1,183 units 12 months ago, JB Securities, a Colombo-based brokerage said.

Small cars below 1,000 cc accounted for 93.4% of total volumes, it said.

“Maruti/Suzuki continued to be the market leader accounting for 465 units – 255 Wagon Rs, 150 Altos and 60 Celerio models,” the report said.

Financing’s share was 54.6%, slightly down from 55.2% the previous month.

“Preowned cars recorded 6,112 units in August, marginally down from 6,258 units in July but almost 200% up from 12 months ago,” JB Securities said.

Small cars accounted for 89.4% of total volumes – 5,466 units.

“Suzuki accounted for the bulk of small cars, recording 3,726 units,” JB Securities said.

The report said 650cc Suzuki models accounted for 3,486 units comprising mainly Wagon R followed by Spacia.

Next came Toyota with 1,493 units of which 1,000 cc models accounted for 1,020 units, mainly Vitz.

Financing’s share was 55.5% in line with the previous month.

Sri Lanka 3-month Treasuries yield rise 49bp at auction

ECONOMYNEXT - Sri Lanka' 3-month Treasury bill yields rose 49 basis points to 8.56 percent at Wednesday's auction up from 8.07 percent two weeks ago, data from the state debt office showed, giving support to the rupee.

The 12-month yield rose 46 basis points to 9.51 percent.

The debt office, which is a unit of the central bank offered 3.0 billion rupees of 3-month bills and accepted 1.8 billion rupees and accepted 3,302 billion rupees of bids.

Analysts say in the past the central bank had perpetuated balance of payments crises by intervening in Treasury bill auctions, buying bills held by banks with printed money by rejecting real bids to increase rupee reserves in banks and manipulating the yield curve downward up to 3-months or more.

But if the three month rates are market-determined it will support the rupee, long time watchers of Sri Lanka's unstable soft-peg say.

Last week an entire auction was rejected generating fears that money would be printed up to three months or more, keeping not only overnight rates down but further down the yield curve.

Any money printed into the banks by taking Treasury bills of banks, into the balance sheet of the central bank then end up as credit imports in the forex market, while loan-to-deposit ratios of lenders deteriorate.

However the central bank injected term money only up to 7 days and kept the overnight market short, by over 30 billion rupees, generating more support for the rupee. Overnight markets have been short for the past 7 days.

The faster the rupee pressure ends, the faster people can get back to normal work, and interest rates can normalize, analysts say.

Bond yield have risen in recent days amid liquidity shortages. The auction also narrowed the gap between bills and bonds.

Morisons de-listing deadlocked on Sri Lanka rule

ECONOMYNEXT - A proposed de-listing Sri Lanka's Morisons Plc, has hit a road block after minority shareholders opposed proposal for the parent to buy up remaining shares under existing rules which has also deadlocked other attempts to take firms private.

Sri Lanka has imposed tight minimum float rules - which critics have said is in some ways than the New York Stock Exchange - forcing many firms to go out of the stock exchange and de-list.

"…[T]he resolutions for the delisting of the Company from the Colombo Stock Exchange were not adopted by the shareholders of the company at the Extraordinary General Meeting…" the Morisons said in a stock exchange filing.

Under Sri Lanka's rules on de-listing minority shareholders present at the meeting have to approve a de-listing by a show of hands without regard to the stake of the controlling shareholder.

The rule has prevented several firms from de-listing, despite the offer of prices above market to take firms private.

Hemas Holdings Plc, the parent of Morisons, had offered 850 rupees for what is called an 'ordinary share' in Sri Lanka and 700 rupees for a non-voting share. In August Morisons ordinary shares traded at 625 rupees and non-voting shares at 531.70 rupees.

Under general principles accepted internationally ordinary shares are supposed to rank 'pari pasu' or equal.

Earlier a unit of AIA Insurance was also unable to de-list despite offering an above market price. Insurance firms were at one time encouraged to list for governance and transparency.

The coercive minimum float rule also created an extraordinary situation of forcing Property Development, a unit of state-run Bank of Ceylon to de-list and go back into state hands, at a time when calls are being made for state firms to be listed, partly to improve governance. Even in communist nations, small stakes of state firms are being listed.

However minority shareholders blocked the de-listing of Property Development as well, with the aid of the rule requiring a show of hands.

In a well-functioning market firms can be taken private voluntarily provided the controlling shareholders have large majority of shares.

There are fears that the inability to take firms private, like in well-functioning markets will eventually discourage owners of private firms from coming for listings in the first place.

Sri Lanka rupee recovers from record low; stocks down amid foreign outflows

Reuters: The Sri Lankan rupee recovered on Friday to close firmer on central bank intervention after the currency touched its record low hit in the previous session, while shares fell for a second straight session amid foreign outflows.

** The rupee touched its all-time low of 169.40 per dollar hit on Thursday on importer demand for the greenback and foreign selling in government securities, but intervention by the central bank helped the currency close firmer, market sources said.

** The rupee ended at 169.15/30 per dollar, compared with the previous close of 169.35/55.

** The rupee has weakened 4.7 percent so far this month against the dollar after a 1.2 percent drop in the previous month, and has declined 10.2 percent so far this year.

** The Colombo stock index fell 0.12 percent to 5,862.18. The index hit its lowest close since Dec. 18, 2013 on Tuesday.

** Data from the central bank showed foreign investors sold government securities worth a net 8.8 billion rupees ($52.19 million) in the week ended Sept. 19, the highest since the week to Dec. 6. Sri Lanka has suffered a net outflow of 62.3 billion rupees in securities so far this year.

** Stock market turnover was 663.1 million rupees ($3.92 million) on Friday, less than this year’s daily average of 787.8 million rupees.

** Foreign investors sold a net 58.1 million rupees worth of shares on Friday, extending the year-to-date net foreign outflow to 5.83 billion rupees worth of equities. 

($1 = 169.0000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)

Sri Lanka rupee hits record low; shares fall amid foreign outflows

Reuters: The Sri Lankan rupee hit a record low on Thursday as foreign investors exited government securities after the U.S. Federal Reserve raised interest rate for a third time this year, while shares fell in thin trade amid foreign outflows.

** The rupee hit a new low of 169.40 per dollar on importer demand for the greenback and as foreign banks bought the U.S. currency to facilitate foreign selling in government securities, but intervention by the central bank limited the fall, market sources said.

** The rupee ended at 169.35/55 per dollar, compared with the previous close of 169.00/20. The previous record low was 169.05 per dollar hit on Wednesday.

** The rupee has weakened 4.8 percent so far this month against the dollar after a 1.2 percent drop in the previous month, and has declined 10.2 percent so far this year.

** The Colombo stock index fell 0.31 percent to 5,869.31. The index hit its lowest close since Dec. 18, 2013 on Tuesday.

** Data from the central bank showed foreign investors sold government securities worth a net 8.8 billion rupees ($52.19 million) in the week ended Sept. 19, the highest since the week to Dec. 6. Sri Lanka has suffered a net outflow of 63.7 billion rupees in securities so far this year.

** Stock market turnover was 419.8 million rupees on Thursday, around half of this year’s daily average of 788.7 million rupees. 

** Foreign investors sold a net 110.5 million rupees worth of shares on Thursday, extending the year-to-date net foreign outflow to 5.77 billion rupees worth of equities. 

($1 = 169.1000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)

Sri Lankan shares recover from near 5-yr closing low on bargain- hunting

Reuters: Sri Lankan shares recovered from their lowest close in nearly five years hit in the previous session and ended about 1 percent higher on Wednesday as investors picked up battered stocks.

The benchmark index hit a near five-year low on Tuesday on foreign selling amid a weaker rupee and government plans to curb imports hurt investor sentiment.

The Colombo stock index rose 0.92 percent to 5,887.52, pulling away from its lowest close since Dec. 18, 2013 hit on Tuesday.

“Market bounced back with buying in heavyweights like John Keells which came down over the last few days,” said Hussain Gani, deputy CEO, Softlogic Stockbrokers.

“We have seen some investors picking up value shares. But most of the investors are still waiting to see if the rupee is stabilising and the economic impact of rupee’s fall.”

Prime Minister Ranil Wickramasinghe said on Monday the government would take measures to impose taxes to curb imports by $500 million to $1 billion to face the currency crisis.

Sri Lanka’s finance minister urged its people to buy local products and shun unnecessary imports in order to reduce the trade deficit and help stabilise a rupee currency that revisited its all-time low on Wednesday.

The rupee has weakened 4.6 percent so far this month after a 1.2 percent drop last month, and has declined 10 percent so far this year.

Analysts said the acceleration in the rupee’s depreciation was creating panic among investors.

Turnover was 318.5 million rupees ($1.89 million), less than half of this year’s daily average of 790.8 million rupees.

Foreign investors sold a net 49.6 million rupees worth of shares on Wednesday, extending the year-to-date net foreign outflow to 5.7 billion rupees worth of equities.

Analysts said the recent fuel price hike also hurt investor confidence as it could hit corporate earnings. Fuel retailers raised gasoline and diesel prices earlier this month for a third time in four months due to higher global oil prices and a weaker rupee.

Investors are awaiting cues from the national budget in November.

Shares of conglomerate John Keells Holdings Plc rose 3.8 percent while Sri Lanka Telecom Plc jumped 6.5 percent and Commercial Leasing and Finance Company Plc closed 8.0 percent firmer. 

($1 = 168.8000 Sri Lankan rupees) 

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

Sri Lanka shares fall to near 5-year closing low on foreign selling

Reuters: Sri Lankan shares fell over 1 percent on Tuesday to their lowest close in nearly five years, as foreign investor selling, a weaker rupee and government plans to curb imports hurt investor sentiment.

Prime Minister Ranil Wickramasinghe said on Monday the government would take measures to impose taxes to curb imports by $500 million to $1 billion to face the currency crisis.

The rupee hit a record low for an eighth straight session on Friday despite the central bank’s intervention. It fell to an all-time low of 169.00 per dollar on Friday, weighed down by importer demand for the scarce U.S. currency.

The rupee has weakened 4.5 percent so far this month after a 1.2 percent drop last month, and has declined 9.97 percent so far this year.

Analysts said the acceleration in the rupee’s depreciation was creating panic among investors.

The Colombo stock index declined 1.21 percent to 5,833.58 on Tuesday, its lowest close since Dec. 18, 2013. This was also the sharpest single-day drop since late November 2017.

“It’s another disastrous day, lots of exits happened. It’s mainly because of panic selling, that’s why the market came down sharply in lower turnover,” said Dimantha Mathew, head of research at broker First Capital Holdings.

Turnover was 297.6 million rupees ($1.77 million), the lowest since Sept. 6, and less than half of this year’s daily average of 793.5 million rupees.

Foreign investors sold a net 60.9 million rupees worth of shares on Tuesday, extending the year-to-date net foreign outflow to 5.6 billion rupees worth of equities.

Analysts said the recent fuel price hike also hurt investor confidence as it could hit corporate earnings. Fuel retailers raised gasoline and diesel prices earlier this month for a third time in four months due to higher global oil prices and a weaker rupee.

Investors are awaiting cues from the national budget in November.

Shares of Ceylon Tobacco Company Plc fell 1.5 percent, Hemas Holdings Plc lost 4.3 percent, Sri Lanka Telecom Plc ended 5.7 percent down and conglomerate John Keells Holdings Plc closed 1.1 percent lower. 

($1 = 168.5500 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)

Sri Lanka shares hit over 30-month closing low on rupee woes

Reuters Sri Lankan shares dropped to their lowest close in more than 30 months on Friday as foreign investors sold banking stocks, while a weaker rupee dented investor sentiment as well.

The Colombo stock index ended 0.29 percent weaker at 5,904.90, its lowest close since March 9, 2016. It lost 2.1 percent this week, its second straight weekly drop.

“Today, the market came down on foreign selling in banking shares,” said Dimantha Mathew, head of research at broker First Capital Holdings, adding that the acceleration in the rupee’s depreciation was creating panic among investors.

The rupee hit a record low for an eighth straight session despite the central bank’s intervention. It fell to an all-time low of 169.00 per dollar, weighed down by importer demand for the scarce U.S. currency.

The rupee has weakened 4.5 percent so far this month after a 1.2 percent drop last month, and has declined 9.9 percent so far this year.

Analysts said they expected a minor support for the stock market at 5,900 levels and a stronger support at 5,800 levels.

Turnover was 977.7 million rupees ($5.80 million) on Friday, more than this year’s daily average of 796.3 million rupees.

Foreign investors sold a net 359.9 million rupees worth of shares, extending the year-to-date net foreign outflow to 5.6 billion rupees worth of equities.

Analysts said the fuel price hike also hurt investor confidence as it could hit corporate earnings. Fuel retailers raised gasoline and diesel prices in September for a third time in four months due to higher global oil prices and a weaker rupee.

Investors are awaiting cues from the national budget in November.

Shares of Sampath Bank Plc ended 2.5 percent weaker, Good Hope Plc fell 23 percent, Ceylon Tea Services Plc closed down 8 percent, and Commercial Bank of Ceylon Plc declined 1 percent. 

($1 = 168.6000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)

Sri Lanka shares hit 30-month low on weak rupee, foreign selling

Reuters: Sri Lankan shares dropped to their lowest close in 30 months on Thursday as foreign investors sold market heavyweight John Keells Holdings, while a weak rupee dented sentiment.

The Colombo stock index ended 0.88 percent weaker at 5,922.18, its lowest close since March 9, 2016. It lost 1.4 percent last week, its first weekly drop in four.

“Uncertainty in the rupee currency is having an impact on the local investor sentiment. It has created a significant negative sentiment,” said Dimantha Mathew, head of research at broker First Capital Holdings.

“We saw a bit of foreign selling pressure also. Big caps started to fall again and with that the overall market saw a significant decline.”

Analyst said they expect a minor support at 5,900 levels, while stronger support at 5,800 levels.

Turnover was 547.6 million rupees ($3.25 million) on Thursday, less than this year’s daily average of 795.3 million rupees.

Foreign investors sold a net 137 million rupees worth of shares extending the year-to-date net foreign outflow to 5.2 billion rupees worth of equities.

Earlier in the session, the Sri Lankan rupee dropped 0.6 percent and hit an all-time low of 168.15 per dollar, pulled down by importer demand for scarce U.S. currency, market sources said.

Analysts said the fuel price hike also hurt investor confidence as it could hit corporate earnings. Fuel retailers raised gasoline and diesel prices in September for a third time in four months due to higher global oil prices and a weaker rupee.

Investors are awaiting cues from the national budget in November.

Shares of Conglomerate John Keells Holdings Plc, which touched its 30-month close during the trade, ended 3.4 percent weaker, Nestle Lanka Plc closed down 2.8 percent, Sampath Bank Plc ended 2.2 percent weaker, and Melstacorp Ltd closed 2.7 percent down.

($1 = 168.6000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez, Editing by Sherry Jacob-Phillips)

Sri Lanka shares snap losing streak to end slightly firmer

Reuters: Sri Lankan shares ended marginally higher on Wednesday, edging up from their 30-month closing low hit in the previous session, as investors picked up battered shares, while sentiment was weighed down by weak rupee and continued foreign selling.

The Colombo stock index ended 0.06 percent firmer at 5,974.75, edging up from its lowest close since March 15, 2016 hit on Tuesday. It lost 1.4 percent last week, its first weekly drop in four.

“Strong buying came to the market after the sharp drop. Bargain hunting and value buying were witnessed,” said Hussain Gani, deputy CEO, Softlogic Stockbrokers.

Turnover was 657.2 million rupees ($3.94 million) on Wednesday, less than this year’s daily average of 796.7 million rupees.

Foreign investors sold a net 207.8 million rupees worth of shares extending the year-to-date net foreign outflow to 5.1 billion rupees worth of equities.

Earlier in the session, the Sri Lankan rupee dropped 0.6 percent and hit an all-time low of 166.95 per dollar, pulled down by importer demand for scarce U.S. currency, market sources said.

Analysts said the fuel price hike also hurt investor confidence as it could hit corporate earnings. Fuel retailers raised gasoline and diesel prices in September for a third time in four months due to higher global oil prices and a weaker rupee.

Investors are awaiting cues from the national budget in November.

Shares of Conglomerate John Keells Holdings Plc ended 1.2 percent higher, a day after they hit a 30-month low, Commercial Leasing and Finance Co Plc ended 7.4 percent firmer, and Melstacorp Ltd closed 2.8 percent higher.

($1 = 166.7000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez, Editing by Sherry Jacob-Phillips)

Sri Lanka shares end at 30-month low on foreign selling, weak rupee

Reuters: Sri Lankan shares breached the 6,000-point psychological barrier and hit a 30-month closing low on Tuesday, weighed down by a weak rupee and heavy foreign selling in market heavyweight John Keells Holdings.

The Colombo stock index ended 0.95 percent weaker at 5,971.21, its lowest close since March 15, 2016. It lost 1.4 percent last week, its first weekly drop in four.

Earlier in the session, the Sri Lankan rupee fell 0.5 percent and hit an all-time low of 166.00 per dollar, dented by higher dollar demand from importers amid reluctant greenback sales by exporters, market sources said.

The sliding rupee and political uncertainty weighed on sentiment, said Preshan Fernando, CEO, Acuity Stockbrokers.

“Foreign selling in Keells dragged the market,” he said.

Conglomerate John Keells Holdings Plc ended 2 percent down at 131.90 rupees after hitting a 30-month low earlier in the trade.

Foreigners sold a net 2.1 million shares in Keells, data from the bourse showed.

Turnover was 881.2 million rupees ($5.32 million) on Tuesday, more than this year’s daily average of 797.5 million rupees.

Foreign investors sold a net 200.7 million rupees worth of shares extending the year-to-date net foreign outflow to 4.8 billion rupees worth of equities.

Analysts said the fuel price hike also hurt investor confidence as it could hit corporate earnings. Fuel retailers raised gasoline and diesel prices for a third time in four months this month due to higher global oil prices and a weaker rupee.

Investors are awaiting cues from the national budget in November.

Shares of Distilleries Co of Sri Lanka Plc ended 4 percent lower, Sampath Bank Plc closed 3.7 percent weaker and Nestle Lanka Plc ended down 2.8 percent.

Leading mobile phone operator Dialog Axiata Plc ended 2.4 percent lower and the biggest listed lender Commercial Bank of Ceylon Plc closed 2.5 percent weaker.

($1 = 165.7000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez, Editing by Sherry Jacob-Phillips)

Sri Lanka shares slip to near 3-week closing low in dull trade

Reuters: Sri Lankan shares fell slightly to a near three-week closing low on Monday as investors sold manufacturing and banking stocks in dull trade, and the rupee hit a fresh low in its record-setting spree.

The Colombo stock index ended 0.05 percent weaker at 6,028.49, its lowest close since Aug. 28. It lost 1.4 percent last week, its first weekly drop in four.

Turnover was 440.4 million rupees ($2.67 million) on Monday, less than this year’s daily average of 797.1 million rupees.

Foreign investors, who have been net sellers of 4.6 billion rupees worth of shares so far this year, bought a net 162.4 million rupees worth of equities on Monday.

Trading was dull as investors waited to see the direction of economy, said Atchuthan Srirangan, assistant manager - research, First Capital Holdings Plc.

“Rupee depreciation is good for export-oriented companies, but manufacturing and other companies will feel the pain and also the overall economy, it will impact negatively. So, investors are waiting to see the direction and real impact,” he said.

Analysts said the fuel price hike also hurt investor confidence as it could hit corporate earnings.

Fuel retailers raised gasoline and diesel prices for a third time in four months last Tuesday due to higher global oil prices and a weaker rupee.

Investors are also awaiting cues from the national budget which the government is set to unveil in November.

Shares of Distilleries Company of Sri Lanka Plc fell 1.7 percent, Lion Brewery (Ceylon) Plc ended 2.3 percent down, Chevron Lubricants Lanka Plc closed 6.6 percent weaker and Hatton National Bank Plc lost 1.1 percent. 

($1 = 164.8000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)

Janashakthi acquires 31% stake of Dunamis Capital for Rs. 1.4 bn

In one of the largest related party deals in the Colombo Stock Exchange, Janashakthi PLC, the investment arm of Sri Lanka’s Schaffter family controlled businesses yesterday bought 31.14 percent stake in Dunamis Capital PLC, another firm controlled by the same family for Rs.1.4 billion as the group is bringing its different businesses under one umbrella.

Janashakthi PLC bought a total of 38.3 million shares of Dunamis Capital from Next Ventures Limited and Dinesh Schaffter who held 19.2 million and 19.05 million shares respectively at Rs.36.60 a share.

It appears that the deal has gone at a substantial premium to the trading price of the Dunamis share.

Dunamis Capital share ended at Rs.35.10 at yesterday’s close which was Rs.16.60 or 89.73 percent higher.

With the acquisition of shares, Janashakthi PLC now holds 50.6 million shares or 41.14 percent stake in Dunamis Capital.

Even after the yesterday’s deal, Dinesh Schaffter still has 26.25 percent stake in Dunamis Capital being the second largest shareholder in the company after Janashakthi PLC.

Hinting on possible mergers and acquisitions in the future, Janashakthi PLC Chief Executive Officer, Ramesh Schaffter said the deal would become a good springboard for a range of other strategic alliances in the future.

“The transaction will function as a launch pad for a range of strategic partnerships in future, which the company is confident it will attract, given its current structure and growth prospects”, he said in a statement issued after the deal.

In a separate disclosure, Janashakthi PLC said the company would make a mandatory offer to purchase the remaining shares of the company as yesterday’s acquisition of shares breached the single shareholder limit of 29.9 percent one party could hold without offering to buy the remaining shares.

Janashakthi PLC said they are looking at absolute control over Dunamis Capital with over 90 percent stake in the latter after the end of the mandatory offer period.
They expect Dinesh Schaffter and Manjula Mathews who together controls another 47.85 percent in Dunamis Capital will accept the mandatory offer.

Dunamis Capital controls its two subsidiaries, First Capital PLC, a fully fledged investment bank and Kelsey Developments PLC, a property developer.

After the mandatory offer, Dunamis Capital will become a subsidiary of Janashakthi PLC and the First Capital and Kelsey Development will become sub-subsidiaries.

For the quarter ended in June 30, 2018, Dunamis Capital reported a net loss of Rs.201.1 million compared to the net profit of Rs.163.7 million in the same period in 2017.

Yesterday’s deal plus the sale of the general insurance arm of the Janashakthi Insurance in a blockbuster deal in February this year mark the attempts by the Schaffter family to build a leading financial services conglomerate under the umbrella of Janashakthi PLC consisting of insurance, investment banking, asset management, stock brokering and non-banking finance companies.

In February 2018 Janashakthi Insurance sold its fully owned general insurance subsidiary, Janashakthi General Insurance Limited to the local unit of the German insurer, Allianz S.E. for a mammoth Rs.16.4 billion with a gain of Rs.7.08 billion to the group.
www.dailymirror.lk

Sri Lanka shares mark over-2-wk closing low on foreign selling

Reuters: Sri Lankan shares fell to a more-than-two-week closing low on Friday as investors sold beverage and banking shares, even as foreign investors continued to trim their equity exposure for a third straight day.

Analysts said foreign investors sold a net 340.7 million rupees worth of equities on Friday, extending the year-to-date net foreign outflow to 4.8 billion rupees worth of shares.

Sentiment was also weighed down by the local currency hitting a fresh low for the third straight session.

The Colombo stock index ended 0.49 percent weaker at 6,031.26, its lowest close since Aug. 28. It lost 1.4 percent this week, falling for the fist time in four weeks.

The day’s turnover was 786.1 million rupees ($4.81 million), less than this year’s daily average of 799.1 million rupees.

“Market is down dominated by foreign selling, fear of rupee depreciation and also fuelled by the Nomura report,” said Reshan Kurukulasuriya, chief operating officer, Richard Pieris Securities (Pvt) Ltd.

Japanese bank Nomura Holdings ranked Sri Lanka among seven emerging market economies that were at risk of an exchange rate crisis. However, the Central Bank in a statement said Nomura Holdings has made a serious computational error with regard to Sri Lanka’s external vulnerability and its short-term external debt is nowhere near the $160 billion figure that Nomura analysts quoted.

Nomura later corrected the figure to $7.5 billion, but said its analysts have used the same figure to calculate the country’s Damocles score for the analysis and thus it is unchanged.

Investors have been raising concerns over consistency in the government’s policy after it changed some budget policies announced last year.

Analysts said the fuel price increase also hurt investor confidence as it could hurt earnings of companies.

Sri Lankan fuel retailers raised gasoline and diesel prices for a third time in four months on Tuesday due to higher global oil prices and a weaker rupee.

Investors are also awaiting cues from the national budget which the government is set to unveil in November.

Shares of market heavy weight Ceylon Tobacco Company Plc fell 5.7 percent while top mobile phone operator Dialog Axiata ended 1.6 percent weaker, Sampath Bank Plc closed 1.8 percent down and biggest listed lender Commercial Bank of Ceylon Plc lost 0.9 percent. 

($1 = 163.6000 Sri Lankan rupees) 

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

Sri Lankan shares end flat; Dunamis Capital nearly doubles in heavy trade

Reuters: Sri Lankan shares closed flat near a two-week closing low on Thursday in heavy trading led by Dunamis Capital Plc which nearly doubled in value, even as foreign investors continued to trim their equity exposure for a second straight day.

The Colombo stock index edged 0.03 percent higher to 6,060.68, settling near its lowest close since August 29. It had risen 0.6 percent last week in its third straight weekly gain.

Shares of investment company Dunamis Capital, up 90 percent, accounted for 85 percent of the day’s turnover of 1.69 billion rupees ($10.38 million), more than double this year’s daily average of 800 million rupees.

The company, in a disclosure to the bourse said insurance firm Janashckthi Plc purchased a 31.14 percent stake or 38.3 million shares in it at 36.60 rupees apiece.

“Investors are waiting for some kind of trigger. If the government can maintain policy consistency, we will be able to see positive sentiment,” said Prashan Fernando, CEO at Acuity Stockbrokers, adding that the day’s turnover got a boost from heavy activity in Dunamis Capital.

Investors have been raising concerns over consistency in the government’s policy after it changed some budget policies announced last year.

Analysts said foreign investors, who sold a net 41.9 million rupees worth of shares on Thursday, have been a worried lot after Nomura Holdings on Monday ranked Sri Lanka among seven emerging market economies that were at risk of an exchange rate crisis.

“The increase in fuel prices also weighed on the market,” traders said.

Sri Lankan fuel retailers raised gasoline and diesel prices for a third time in four months on Tuesday due to higher global oil prices and a weaker rupee.

Meanwhile, investors are also awaiting cues from the national budget which the government is set to unveil in November.

Shares of top mobile phone operator Dialog Axiata rose 1.6 percent while Asiri Hospital Holdings gained 2.2 percent.

($1 = 162.7500 Sri Lankan rupees) 

(Reporting by Shihar Aneez; Editing by Vyas Mohan)

Sri Lanka's 01-yr Treasury yield rises to 9.05-pct

ECONOMYNEXT - Sri Lanka's Treasury Bill yields recovered at an auction Wednesday with the 12-month bill yield up 08 percentage points to 9.05 percent, data from the state debt office showed.

The debt office, a unit of the central bank, accepted 12.5 billion rupees of 12-month bills, the same amount offered, having received bids worth 21 billion rupees.

The 3-month bill yield rose 07 basis points to 8.07 percent, with 4.0 billion rupees of bills, sold, the same amount offered.

Six-month bills were not offered.

Sri Lanka sells 4-year dollar bonds for 5.75-pct

ECONOMYNEXT - Sri Lanka has sold 77.85 million dollars of dollar denominated 'Sri Lanka Development Bonds' styled securities by auction, the state debt office said.

The debt office sold 54.4 million dollars of 1 year 9 month bonds for a fixed rate of 5.0 percent, after getting bids of 55.9 million dollars.

The debt office also sold 25.46 million dollars of 3-year 8-month bonds for 5.75 percent.

The settlement date is September 17, 2018. (Colombo/Sept11/2018)

Millennium to invest Rs5bn in Sri Lanka affordable housing, luxury apartment

ECONOMYNEXT - Sri Lanka's Millennium Housing Developers Plc, a publicly traded company said it was investing 5 billion rupees to develop luxury apartments and affordable housing to meet growing demand, despite fears of a bubble.

Sri Lanka's land and apartment prices started to rise rapidly from 2015, with the central bank printing money but interest rates have since risen, slowing the market.

However chronic currency depreciation from inconsistent central bank policy is killing consumer demand and purchasing power, which may be hitting a small recovery, critics say.

Millennium Housing said concerns have been raised about a property bubble bursting in 2020 -2022 by some.

"With demand for luxury apartments and condominiums going up and supply at times overtaking demand, the bubble certainly seems like a possibility," the firm said.

"However, supply of affordable housing is estimated to be below demand as yet."

There was a demand for housing from people migrating from rural to urban areas, particularly to Greater Colombo townships.

"This shift in the urban landscape is predominantly influenced by location and convenience factors related to employment and business proximities," Chairman HarshithDharmadasa said.

"At the higher end of the spectrum, investments by Sri Lankans who are living abroad are notable and will continue to surge if and when greater political stability is evident."

Dharmadasa noted that people were seen favouring smaller apartments.

"The propensity of demand for vertical properties offered by apartment complexes is particularly favoured due to the availability of multiple facilities and the perception of household security," he said.

Millennium Housing Development reported revenues of 1.7 billion rupees in the year to end March 2018, up 31 percent from a year ago. Profits grew 25 percent to 185.5 million rupees.

Earlier this year, Millennium completed its 64-unit The Heights – Edmonton and launched three new projects to be completed in two years.

Millennium Housing Development began as a developer of housing estates under its 'Millennium City' brand. It has developed 3,000 houses with a combined floor area of three million square feet across ten housing estate projects.

The company now has plans to build up to 400 houses at three new locations over the next two years.

Over the next few years, real estate growth is expected to be driven by increased demand for affordable residential and retail property by wealthy residents, and local and international corporates, the company said.

Nearly 55 percent of all tenants spend more than 30 percent of their income on housing, and about 30 percent of tenants paid more than half their income on rent.

High rents were affecting the incomes of every income group in Colombo.

"The demand for affordable housing is illustrated by the response to new housing lotteries," the firm said.

"Since 2015, our advertisements for apartments have attracted roughly 100 applications per housing unit," it said.

A key reason for Sri Lanka's unaffordable housing is excessively high cost of building materials kept high import duties to give profits to so-called oligarchs who have close connection to politicians and are opposing free trade for the poor. Steel for house building in particular is heavily taxed.

Sri Lankan companies facing higher borrowing costs: Moody’s

Higher interest rates have begun to pressure borrowers. (ICR - Interest Coverage Ratio)

ECONOMYNEXT – Sri Lankan companies face higher borrowing costs owing to a rise in benchmark interest rates, rating agency Moody's Investors Service said.

Banking sector asset risks will increase after excessive credit expansion in the last two years and a rise in borrowing costs, Moody’s said in a new report on Sri Lankan banks.

“Nonperforming loan (NPL) ratios have risen, and corporates are facing higher borrowing costs due to a rise in benchmark interest rates.”

Moody’s said corporates’ debt serviceability will be weakened by higher interest rates.

“Higher interest rates will hurt corporates’ repayment ability.”

Around 40% of corporates will have debt interest coverage ratios of less than 2 under a stressed scenario, the rating agency said, noting that higher interest rates have begun to pressure borrowers.

Sri Lanka's tourism arrivals up 4.9-pct in August

ECONOMYNEXT - Sri Lanka's tourist arrivals rose 4.9 percent from a year earlier to 200,359 in August 2018, helped by strong arrivals from Australia and UK, data from the state tourism promotion office showed.

During the eight months to August arrivals were up 12.5 percent to 1.582 million.

Visitors from Australia soared 38.3 percent to 8,239 with arrivals up to August reaching 79,113. Visitors from Australia had grown steeply since direct flights were launched to the country by state-run SriLankan Airlines.

UK visitors grew 7.8 percent to 23,643 with the total up to August reaching 173,478.

Dutch arrivals were up 8.5 percent to 5,697.

Arrivals from India, the largest market rose 2.9 percent to 31,220 with the total rising to 269,484.

Visitors from China grew by a marginal 0.2 percent to 26,558 with the total reaching 190,312.

Saudi Arabian tourists fell 25 percent to 6,517.

Further Sri Lanka interest rate cuts unlikely: Moody’s

ECONOMYNEXT – Sri Lanka’s central bank is unlikely to cut interest rates further to avoid triggering withdrawal of funds by foreign investors given rising rates in other economies, rating agency Moody's Investors Service said.

Credit expansion has decelerated following the previous monetary tightening cycle, Moody’s said in a new report on Sri Lankan banks.

“Following benign inflation, the central bank cut the standing lending facility rate by 25 basis points to 8.50% in April 2018,” said the report which maintained a negative outlook on the banking sector.

“However we do not expect further rate cuts, as rising external interest rates may threaten capital outflows.”

The Sri Lankan economy remains weak and asset quality is deteriorating, Moody's said in its report.

The government’s heavy debt burden and reliance on external borrowing will constrain public investment and elevates the risk of capital outflows, it said.

“The government’s debt affordability continues to be weak, and interest repayments eroded 40% of government revenue in 2017.”

Sri Lanka banking outlook negative, NPLs rise, but capital stable: Moody's

ECONOMYNEXT - Non-performing loans in Sri Lanka's banks rose to 3.0 percent of assets in March 2018 from 2.7 percent a year earlier, though the economy is expected to grow 4.1 percent in 2018 from 3.7 percent last year, Moody's Investors Service, a rating agency said.

"Credit growth was very high over the last two years, with the credit multiplier (credit growth/GDP growth) peaking at more than 2.5 times," Tengfu Li, a Moody's Analyst said in a statement.

"As loans disbursed over this period begin to mature, asset quality will deteriorate, and higher borrowing costs due to tighter monetary policy implemented earlier will add to the debt burden of corporates."

Sri Lanka's central bank printed money and released liquidity of over 500 billion rupees over 2015 and 2016 to drive credit to unsustainable levels and boost credit, and the economy slowed after the currency fell and rates were raised.

The rupee has continued to depreciate steadily including in 2017 when most other Asian currencies appreciated, killing real wages and domestic demand.

Moody's said higher interest rates may reduce the repayment ability of companies.

But with loan growth slowing internal capital generation would be enough to cover credit growth. Capital had also been raised to comply with Basel III standard.

The impact of higher loan loss provisions from a new accounting standard would be limited and banks capital ratios would be stable, the rating agency said.



Moody's assesses the operating environment as stable; asset risk as deteriorating; capital as stable; profitability and efficiency as stable; funding and liquidity as stable; and government support as deteriorating.

Moody's notes that capital has strengthened as the banks successfully raised capital and reduced cash dividends to comply with their Basel III requirements.

A high debt burden and contingent liabilities relating to state-owned enterprises will continue to limit the government's capacity to support the banks.

Sri Lanka's 01-yr Treasury yield down to 8.97-pct

ECONOMYNEXT - Sri Lanka's Treasury Bill yields eased further at an auction Wednesday with the 12-month bill yield down two percentage points to 8.97 percent, data from the state debt office showed.

The debt office, a unit of the central bank, accepted 07 billion rupees of 12-month bills, the same amount offered, having received bids worth 21 billion rupees.

The 3-month bill yield fell 03 basis points to 8.00 percent, with 4.0 billion rupees of bills, sold, the same amount offered.

Six-month bills were not offered.

Sri Lanka’s Cargills says supermarket, bank synergies yielding results

ECONOMYNEXT – Sri Lanka’s Cargills group has said its strategy of making its supermarket and banking businesses work together is yielding results with customer transactions growing between the two.

The group added 38 Cargills Food City supermarkets to its network last year, increasing its store count to 353 outlets and strengthening its position as the largest supermarket chain in the country.

Cargills Bank, started in 2014 has expanded its branch network to 17 but also has got regulatory approval to operate banking counters at all its Food City supermarkets islandwide, helping it keep costs low.

“Cargills Bank reported a commendable performance during the year, with robust growth in both lending and deposit portfolios,” group chairman Louis Page told shareholders in the latest annual report.

During the year, the bank launched a number of consumer products including both a debit and credit card.

“Synergies with Cargills Food City are now showing tangible results with transactions growth and encouraging consumer response to the added convenience of the service,” Page said.

The report said that in line with the focus of the group to use the synergies within the Cargills Group, transactions by Cargills Bank customers within ‘Cargills Food City’ reached Rs.4 billion in value in 2017.

Net finance costs of the sector rose 124% to Rs.283 million in 2017 amidst heavy investment in expansion of the ‘Cargills Food City‘ supermarket chain, the report said.

Cargills Bank saw total asset growth of 55% to Rs.32.5 billion in 2017 and deposit growth doubled to Rs.18.8 billion.

PVC pipe maker to focus on projects after Sri Lanka retail market losses

ECONOMYNEXT - Sierra Industries (Pvt) Ltd, a unit of publicly traded Sierra Cables Plc, which makes water pipes, says it is focusing on larger projects, after making losses in the retail market.

"As a strategic move, the company is now focusing on the institutional and project market instead of the competitive retail market," shareholders were told in the annual report.

"The company is in the process of the initialising the preliminary engagement work for the supply of PVC pipes and fittings to upcoming major projects."

Sierra Industries which manufactures uPVC (unplasticized Poly Vinyl Chloride) pipes, had won a 5.5 million dollar order to supply a foreign contractor in the Attanagalla Water Supply Project.

"While production has commenced, the delivery will take place only during the next financial year," Managing Director Shamindra Panditha told shareholders.

"The directors are of the view that the company would be able to generate sufficient revenue in the ensuing financial years, where by accumulated losses could be reduced gradually,” the annual report said, referring to the Attanagalla project.

Sierra Industries accounts said it is facing serious loss of capital and the auditors KPMG had also raised a going concern a with assets falling below liabilities.

Sierra Industries had accumulated losses of 276.2 million rupees up to end-March 2018. The firm started production in the 2013/2014 financial year.

As part of a restructuring process, a 119.6 million rupees owed to the parent had been converted to equity, while some payables had been converted to a loan term loan.

Sri Lankan shares fall to 2-week low on foreign selling

Reuters: Sri Lankan shares fell for a third straight session on Wednesday and marked a two-week closing low as foreign investors sold blue-chips after a research report said the country was facing risk of an exchange rate crisis.

Analysts said investors were worried after Japanese bank Nomura Holdings ranked Sri Lanka among seven emerging market economies that were at risk of an exchange rate crisis.

However, the Central Bank in a statement said that Nomura Holdings has made a serious computational error with regard to Sri Lanka’s external vulnerability and its short-term external debt is nowhere near the $160 billion figure that Nomura analysts quoted.

Nomura later corrected the figure to $7.5 billion, but said its analysts have used the same figure to calculate the country’s Damocles score for the analysis and thus it is unchanged.

The Colombo stock index ended 0.59 percent weaker at 6,059.00, its lowest close since Aug. 29. It had risen 0.6 percent last week in its third straight weekly gain.

“Investors were worried over the Nomura ranking, but they corrected external debt figure and accepted it was wrong. We expect people to build confidence back,” said Hussain Gani, deputy CEO at Softlogic Stockbrokers.

Analysts also said the increase in fuel prices also weighed on the market.

Sri Lankan fuel retailers raised gasoline and diesel prices for a third time in four months on Tuesday due to higher global oil prices and a weaker rupee, a finance ministry official said.

Turnover stood at 967.8 million rupees ($5.96 million), more than this year’s daily average of 793.9 million rupees.

Meanwhile, investors are also awaiting cues from the national budget which the government is set to unveil in November.

Shares of Ceylon Tobacco Company Plc fell 1.8 percent, while Distilleries Company of Sri Lanka ended 2.2 percent weaker. Conglomerate John Keells Holdings Plc closed 0.8 percent down and Sampath Bank Plc lost 1.8 percent. 

($1 = 162.3500 Sri Lankan rupees) 

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

Sri Lankan shares end flat in lacklustre trade

Reuters: Sri Lankan shares closed flat on Tuesday, near a more than one-week closing low, with beverage and manufacturing shares witnessing mild selling, a day after fuel prices were hiked for the third time in four months.

Sri Lankan fuel retailers raised gasoline and diesel prices for a third time in four months on Tuesday due to higher global oil prices and a weaker rupee, a finance ministry official said.

Turnover was 337.3 million rupees ($2.08 million), less than half of this year’s daily average of 792.8 million rupees.

The Colombo stock index ended 0.02 percent weaker at 6,095.23, its lowest close since Sept. 3. It had risen 0.6 percent last week in its third straight weekly gain.

“The market came down marginally today, but the good sign is we see some net foreign buying,” said Hussain Gani, deputy CEO at Softlogic Stockbrokers.

Analysts said investors also waited for cues from the national budget which the government is set to unveil in November.

Foreign investors bought a net 74.7 million rupees of shares on Tuesday, but they have been net sellers of 4.4 billion rupees worth of shares so far this year.

Shares of conglomerate John Keells Holdings Plc fell 0.2 percent while Lanka ORIX leasing Plc lost 2.2 percent.

($1 = 162.2500 Sri Lankan rupees) 

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

Sri Lankan shares slip to 1-week closing low on foreign selling

Reuters: Sri Lankan shares fell to one-week closing low on Monday as foreign investors sold blue chips such as conglomerate John Keells Holdings Plc.

The Colombo stock index ended 0.35 percent weaker at 6,096.54, its lowest close since Sept. 3. It rose 0.6 percent last week in its third straight weekly gain.

Turnover was 615.9 million rupees ($3.79 million), less than this year’s daily average of 795.6 million rupees.

“Today also, foreign selling was there and it impacted the market. Foreigners are exiting with the dollar strengthening,” said Atchuthan Srirangan, assistant manager - research, First Capital Holdings Plc.

“Local investors are worried over continued foreign selling on the back of dollar strengthening globally and they are on the sidelines.”

Analysts said investors also waited for cues from the national budget which the government is set to unveil in November.

Foreign investors sold a net 112.1 million rupees of shares on Monday, extending the year-to-date net foreign outflow to 4.4 billion rupees worth of shares.

Shares of Distillers Company of Sri Lanka Plc fell 3.1 percent, while conglomerate John Keells Holdings ended 0.7 percent down and AIA Insurance Lanka Plc lost 4.4 percent. 

($1 = 162.3000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)

Sri Lankan shares climb on foreign buying, post 3rd week of gains

Reuters: Sri Lankan shares ended slightly firmer on Friday, boosted by foreign buying, and posted their third straight week of gains.

The Colombo stock index ended 0.09 percent firmer at 6,117.89. The bourse rose 0.6 percent during the week.

The day’s turnover was 274 million rupees ($1.69 million), about a third of this year’s daily average of 796.7 million rupees.

“Investors are awaiting the national budget,” said Atchuthan Srirangan, assistant manager - research, First Capital Holdings Plc.

The government is set to unveil its 2019 national budget in November.

Foreign investors bought a net 29.4 million rupees of shares on Friday, recording the first session of net foreign buying in nine. But they have been net sellers of 4.3 billion rupees worth of shares so far this year.

Shares of AIA Insurance Lanka Plc rose 4.8 percent, Sri Lanka Telecom Plc climbed 3.2 percent and Asiri Hospitals Plc closed 3.9 percent higher.

($1 = 161.9000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Amrutha Gayathri)

Sri Lankan shares end weaker; turnover slumps to near 5-month low

Reuters: Sri Lankan shares ended weaker on Thursday and turnover slumped to a near five-month low as investors stayed on the sidelines in the absence of fresh triggers.

The day’s turnover was 119.5 million rupees ($740,397), the lowest since April 16 and about an eighth of this year’s daily average of 800 million rupees.

The Colombo stock index ended 0.13 percent weaker at 6,112.32.

“It’s a dull day. We saw some retail activities and it was a quiet day,” said Hussain Gani, deputy CEO at Softlogic Stockbrokers.

Foreign investors sold a net 10.1 million rupees of shares on Thursday, extending the net outflow so far this year to 4.3 billion rupees worth of shares.

Ceylon Cold Stores Plc shares fell 3.6 percent, while Dialog Axiata Plc ended 0.8 percent lower. 

($1 = 161.4000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Amrutha Gayathri)

Sri Lankan shares slip from over 3-wk high on foreign selling

Reuters: Sri Lankan shares ended slightly weaker on Wednesday, snapping a five-session winning streak, on foreign selling.

However, the day’s turnover was 365.5 million rupees ($2.25 million), much lower than this year’s daily average of 804.1 million rupees.

The Colombo stock index ended 0.13 percent weaker at 6,120.29, slipping from its highest close since Aug.13.

“Foreign selling in Keells brought the index down. But we see some positive signs of local buying,” said Hussain Gani, deputy CEO at Softlogic Stockbrokers.

Foreign investors sold a net 46.9 million rupees of shares on Wednesday, extending the net outflow so far this year to 4.3 billion rupees worth of shares.

John Keells Holdings fell 0.4 percent, while large cap Ceylon Tobacco Co ended 1.8 percent weaker. 

($1 = 162.1000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Amrutha Gayathri)

Sri Lankan shares hit over 3-week closing high in lean trade

Reuters: Sri Lankan shares rose for a fifth straight session on Tuesday and marked their highest close in more than three weeks, led by gains in banking and beverage stocks.

However, trading volume was low as investors stayed on the sidelines for want of fresh triggers. The day’s turnover stood at 181.9 million Sri Lankan rupees ($1.12 million), the lowest since August 3 and less than a fifth of this year’s daily average.

The Colombo stock index ended 0.6 percent higher at 6,128, its highest close since Aug.13. It had gained 0.4 percent last week, its second straight weekly gain.

The index, however, was down 1.1 percent in August, having hit its lowest close since March 2017 on last Tuesday. The bourse is down 3.8 percent so far this year.

“Most investors are awaiting proper direction on economy and taxes,” said Dimantha Mathew, head of research at broker First Capital Holdings.

“The main concern is that foreign selling is still continuing and we don’t think this uptrend can continue for long.”

Foreign investors sold a net 31.3 million rupees of shares on Tuesday, extending their net outflow so far this year to 4.2 billion rupees worth of shares.

AIA Insurance Lanka Plc jumped 82 percent, with around 1,700 shares changing hand, due to a share buyback, dealers said.

Ceylon Tobacco Company Plc shares closed 2.5 percent firmer while Dialog Axiata Plc gained 0.8 percent and Hemas Holdings Plc ended 0.5 percent higher.

Sri Lankan companies posted an average 4 percent earnings growth in the June quarter from a year earlier, helped by financials, beverages, telecommunications and power and energy sectors, CT CLSA Securities (PVT) Ltd said in a research note.

($1 = 161.8500 Sri Lankan rupees) 

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

Melstacorp records Rs 6.25 bn PAT for 2017/18

Melstacorp Plc has recorded profit after tax of Rs. 6.25 billion for the financial year 2017/18. Group turnover reached Rs. 110 billion.

Company’s Chairman and Managing Director D. H. S. Jayawardena said the Group contributed Rs. 69 billion in taxes during the financial year for 2017/18.

“The beverage sector is the highest contributor to both the top line and the bottom line of the Group. Our main subsidiary DCSL PLC’s profitability dropped in the first three quarters managed to recover and record a net profit after tax of Rs. 4.35 billion,” Jayawardena told the shareholders in the company’s annual report for 2017/18.

Periceyl (Private) Limited, the second liquor company of the Group saw its profitability shrinking when compared with last year. The reduction of beer prices and a simultaneous increase in the hard alcoholic beverage prices have resulted in more consumers shifting to beer and other cheaper beverages, according to the annual report.

“The chairman said, the beverage sector of the group was subject to a severe challenge through higher increases in taxation in the last two years. A few years ago the Value Added Tax (VAT) on liquor was removed by adding a corresponding sum to excise duty,” he said.

“In the pursuing year VAT was re-introduced for liquor without a corresponding adjustment in the excise duty. Reintroduction of VAT together with a huge increase in duty on imports of main ingredient, ethanol and higher excise duty on hard alcoholic beverages resulted in a substantial increase in consumer prices.”

“As a result there was a notable decline in volumes. For the year under review the beverage sector revenue reached Rs. 97 billion and the net profit for the year was Rs. 4.7 billion,” he said.

Commenting on plantation sector performance he said that year 2017 was a better year for the tea industry with an increase in production and auction averages reached all-time high levels. However, despite the ascent witnessed in 2017, the Industry continued to be plagued with geo-political tension in the tea importing countries, policy decisions which affected the production of tea and temperature variability due to climatic changes.

The ban of glyphosate (which was recently eased) that is used for weed control, and curtail of tea imports by Russia, the largest importer from Sri Lanka too, caused much uncertainty towards Industry growth.

The negative impact of a drought and floods in the first and second quarters of the year coupled with high cost of fertilizer were drawbacks in reaching the production levels of the preceding years.

The reluctance to undertake the required level of annual replanting by most of the smallholder farmers and the plantation companies due to the non-affordability of the required inputs, and uncertainty in recovering investments is also a major contributory factor for the declining trend in the production volumes.

“In analyzing the global supply scenario, a deficit in production was evident from a few key producer countries mainly of CTC teas and this global shortage in production was a key factor for the prices to sustain at these levels coupled with strengthening of oil prices which favoured some key importing countries of Sri Lankan Teas.”

www.dailynews.lk

Lankem (LCEY) continues to bleed, loses over Rs400mn for the June quarter

LBO – Lankem Ceylon (LCEY) reported another rough quarter, continuing its multiyear losses. For the quarter ended June 2018, the company reported a loss of Rs417mn. The loss is troublesome for a company whose equity is down to Rs1.137bn,

This large quarterly loss comes after losses for the year ended March 31, 2018 of over Rs500mn, and losses for the year ended March 31, 2017 of close to Rs800mn.

Revenue was flat year over year in the just reported quarter.

LCEY went on a debt fuelled acquisition spree several years ago making investments that have yet to realise material value. Analysts say continuation of losses at the company could put the firm in significant financial distress.

The stock is trading at Rs29 per share leaving the company with a market cap of close to Rs1bn. The share is trading at just a fraction of its all time high of Rs590.

Sri Lanka's Melstacorp to enter healthcare, manage hospitals

ECONOMYNEXT - Sri Lanka's listed conglomerate Melstacorp Plc, the parent company of listed liquor producer Distilleries Company, said it was entering the healthcare industry, initially setting up diagnostic infrastructure and managing select hospitals.

"The company will be entering the healthcare industry shortly through subsidiaries incorporated to undertake such activities," the goup said in a stock exchange filing Tuesday.

The group has incorporated Melsta Health Private Limited for the purpose.

"This would involve management of hospitals, operating diagnostic centres and involvement in related healthcare institutions as and when the opportunity arises," it said.

The investment was not disclosed as Melstacorp said the investment did not amount to a major transaction.

Melstacorp was trading at 50 rupees a share Tuesday.

Melstacorp is the parent company of Distilleries Company of Sri Lanka and other businesses ranging from insurance, plantations, financial services and telecommunications.

According to latest financial results, profits fell 30.8 percent from a year earlier to 789.3 million rupees in the June 2018 quarter on rising finance costs from a surge in borrowings and losses in telecommunications and lower profits from financial services, with earnings amounting to 68 cents a share.

Revenue grew 102 percent to 20.8 billion rupees, cost of sales increased 75 percent to 13.3 billion rupees leading to a 178 percent increase in gross profits of 7.5 billion rupees.

Net finance cost surged 941 percent to 413 million rupees as borrowings increased to 26.7 billion rupees at end June 2018, from 3.6 billion rupees a year earlier.

The group's beverages segment which includes listed Distilleries saw revenue decline 10 percent from a year earlier to 20.8 billion rupees in the June 2018 quarter, but profits grew 31 percent to 1.7 billion rupees.

Sri Lanka finances to improve; political uncertainty weighs: Fitch

ECONOMYNEXT – Sri Lanka recent fiscal reforms and automatic pricing of fuel will improve state finances and debt, but political uncertainty has heightened following recent regional polls, Fitch, a rating agency said.

"Sri Lanka’s rating balances an improving policy framework, which supports macroeconomic stability and rising government revenues, against a challenging external debt servicing outlook and high government debt," Fitch Ratings said Monday in its Asia Pacific Sovereign Credit Overview for the third quarter of 2018.

Fitch forecasts Sri Lanka will grow 3.8 percent in 2018 and 4.5 percent in 2019. Government debt at 77.6 percent of GDP is expected to fall to 75.9 percent in 2019.

"Progress has been made on critical fiscal reforms, including approval of an automatic fuel price mechanism effective May 2018.

"The authorities have also taken steps to introduce an automatic electricity pricing mechanism and establish a committee to develop a detailed restructuring plan for Sri Lankan Airlines," Fitch said.

Deteriorating policy coherence and credibility could lead to a loss of investor confidence, or a derailment of the IMF-supported programme that leads to external funding stress, the ratings agency has warned.

"Political uncertainty increased following the ruling coalition's heavy losses during the local elections in February, followed by a vote of no-confidence against the prime minister in April and temporary suspension of parliament in May," Fitch said.

"The risk of political uncertainty disrupting policy continuity, however, is mitigated by the election schedule, in which presidential elections are not due until end-2019, with parliamentary elections to follow."

Fitch Ratings statement on Sri Lanka is as follows:

High Refinancing Risks; Improving Framework: Sri Lanka’s rating balances an improving policy framework, which supports macroeconomic stability and rising government revenues, against a challenging external debt servicing outlook and high government debt. The rating is supported by higher per-capita income levels and stronger governance standards than the ‘B’ category median.

-Key Developments-

IMF Programme Progress; High Debt: The IMF completed its fourth review under a three-year extended fund facility in place since June 2016. Progress has been made on critical fiscal reforms, including approval of an automatic fuel price mechanism effective May 2018. The authorities have also taken steps to introduce an automatic electricity pricing mechanism and establish a committee to develop a detailed restructuring plan for Sri Lankan Airlines.

Nevertheless, Sri Lanka’s government debt remains high at around 77% of GDP, far above the ‘B’ median of 66.6%.

High Near-Term External Refinancing Risks: The sovereign’s projected debt service payments are significant, at USD15 billion in 2019-2022, from a bunching of sovereign bond redemptions, while its foreign-exchange reserves stood at only USD9.3 billion at end-June. The scale of external refinancing over the next few years creates a potential vulnerability for the sovereign particularly as US interest rates are on the rise.

Political uncertainty has increased: Political uncertainty increased following the ruling coalition's heavy losses during the local elections in February, followed by a vote of no-confidence against the prime minister in April and temporary suspension of parliament in May. The risk of political uncertainty disrupting policy continuity, however, is mitigated by the election schedule, in which presidential elections are not due until end-2019, with parliamentary elections to follow.

-Positive Sensitivities-

Further improvement in external finances supported by higher non-debt-creating inflows or a reduction in external sovereign refinancing risks from improved liability management.
Continued improvement in public finances underpinned by a credible medium-term fiscal strategy.

-Negative Sensitivities-

Reversal of fiscal improvements that leads to a failure to stabilise government debt ratios.

Deterioration in policy coherence and credibility, leading to loss of investor confidence, or a derailment of the IMF-supported programme that leads to external funding stress.

HPL Properties buys Tangalle Bay Hotel in Sri Lanka

ECONOMYNEXT - Singapore-based HPL Properties Limited said it had bought 94.7 percent stake in Tangalle Bay Hotels (Pvt) Ltd of Sri Lanka for 385 million rupees.

The purchase was made through West Asia Investment (Pvt) Ltd, which is owned by HPL Properties (West Asia) Pte Ltd, the firm said.

Tangalle Bay Hotel was controlled by Sri Lanka based investor Nimal Perera.

Sri Lanka's East West group, has said HPL Group is also in talks to buy full control of Weligama Bay Hotel.

Sri Lanka car registration up in July, tax not yet hit

ECONOMYNEXT - Sri Lanka's motor car registrations grew 137 percent to 7,193 units in July 2018 despite a hike in taxes, as there was a large stock of smaller vehicles in the country, with total vehicle registrations up 7.47 percent to 42,043, an equities research house said.

Sri Lanka suddenly hiked taxes of a category of small hybrids, which people were buying because other cars were too expensive, due to problems with monetary management of the central bank.

Analysts have called for the reform of Sri Lanka's unstable soft-peg and permanent currency depreciation maintained by inconsistent policy which is disrupting business, peoples' lives and their aspirations.

"The impact of the recent increase in minimum duty rates will only be reflected in registrations towards the end of the year for there are large stocks of unregistered cars in the market and many more on the water that will not be taxed at the higher rates," JB Stockbrokers said in a note to clients.

The government allowed cars already ordered to come at the old tax in a bid not to disrupt the lives of citizens who had already planned and found funding for the vehicles, in an improvement from the casual disregard shown in earlier years.

Instead of fixing the unstable peg, Sri Lanka has started to rely more on disruptive administration measures such as credit controls using loan to ratio values, second guessing people's decisions and regressing to planning style measures, analysts have said.

In addition to small car owners, potential three wheeler owners were most badly hit.

While ordinary people are suffering state workers are getting tax slashed cars and the ruling class itself it is getting tax free cars.

Motor cycle registrations fell 6.2 percent to 28,662 units in July from a year earlier. Three wheelers were also down 6.3 percent to 1,675 units.

Suv and crossovers registrations were up 19.2 percent to 533 units in July.

Sri Lanka’s Singhe Hospitals facing serious loss of capital

ECONOMYNEXT- Sri Lankan healthcare provider Singhe Hospitals Plc which has experienced 18 straight quarters of losses since debuting in the Colombo Stock Exchange in March 2015, is losing capital and will convert some debt to equity, according to the company.

A Colombo Stock Exchange filing said that Singhe Hospitals ‘is facing a situation of serious loss of capital’, after net assets fell below half of the stated capital.

Singhe Hospitals said this was due to changes in the new income tax laws, which has resulted in the company incurring an additional deferred tax liability of 9.5 million rupees at the end of the fourth quarter of 2018.

The director board will hold an extraordinary general meeting of shareholders on 13 September 2018 to take action.

The company’s Chairman A. M Weerasinghe, the main shareholder with a 77 percent stake, has lent 50.7 million rupees to the hospital.

Singhe Hospitals said that it will convert the debt, along with the 15.5 million rupees of interest on the loan, into equity with a private placement of 66.2 million rupees, subject to shareholder and regulatory approval.

At the end of the first quarter of 2019, the company, which operates the only private hospital in the Sabaragamuwa Province, had accumulated 543.6 million rupees in losses.

It had a stated capital of 848.2 million rupees and a reserve of 119.4 million rupees.

Higher administrative costs have pushed the hospital into the red over the years.

Stockbroker Bartleet Religare Securities had advised not to purchase Singhe Hospital shares at the time of its initial public offering. The 250 million rupee IPO received slow response. It was later oversubscribed with high net worth individual T. Senthilverl purchasing shares.

Singhe Hospitals said that it is hoping the laboratory network it expanded will improve the financial position of the company.

In the June quarter Singhe Hospitals posted a 2.4 million net loss, which is the closest it has got to making profits since going public.

Sri Lanka’s EFL takes over SG Holdings operation in Malaysia

ECONOMYNEXT - Expolanka Freight (EFL), a global freight-forwarding company headquartered in Sri Lanka and part of the Expolanka group, said it is expanding to Malaysia, by taking over operations of its Japanese parent.

“Malaysia is a natural addition to EFL’s global portfolio, largely to drive the intra-Asia growth, and to complement our USA expansion,” EFL chief executive S. Senthilnathan said.

“Being a prominent economy in the region, we believe, it will be an important part of EFL’s footprint, to cement our place as a sought-after freight forwarder in the South East Asia region.”

The company is taking over an existing operation managed by its parent company SG Holdings Global and will officially open for business in Kuala Lampur on 1 September 2018, a statement said.

The office in the regional hub of Malaysia will be its 18th overseas operation.

With Asia contributing significantly to the logistics industry’s growth, growth in trade and domestic demand is seen driving the growth of the transportation and logistics industry.

SG Holdings Global said in a statement the move is part of its strategy for further expansion.

“This will be in line with our group’s goal, as we build on EFL’s extensive global network and expertise to further expand our reach,” it said.

EFL is a member of Expolanka PLC, which has interests in logistics, leisure and investments, with over 60 offices and 2000 staff around the world.

Sri Lanka Access Engineering says real estate strategy seeing results

ECONOMYNEXT - Sri Lanka's Access Engineering says a transition from construction into a real estate firm is seeing early results with apartment and office pre-sales on track to bring more profits, Chairman Sumal Perera has said.

"In the long term, especially following 2020, our real estate projects of Capital Heights and Marina Square Colombo will contribute extensively to our bottom line," Perera told shareholders in the annual report.

"We are also hoping to extend Access Tower II by adding a new wing dubbed Tower III,"

"Our drive is to position ourselves as a key player in the real estate sector, and maintain leadership."

When Access Engineering listed in 2012, the construction business contributed 95 percent to group revenue, but was down to 58 percent in 2017/18.

Property and real estate contributes just 1.9 percent to group revenue. The balance comes from automobile sales (31.35 percent) and construction material sales (9.88 percent).

There were concerns that the real estate market is overheated, but may have cooled since then.

The construction industry has a lot more room to grow with the development of the Colombo Port City project, Perera said.

"Our short to medium-term strategy remains the same with the main focus being on our core business lines of engineering and construction," he said.

--Diversification—

Access Engineering established itself specialising in infrastructure projects building roads, bridges and water and drainage systems, and Sumal Perera says he'll be disappointed if Access Engineering remained a construction company 10 years from now.

Access Engineering is diversifying into real estate, building high-rises for rent income to bring a steady revenue stream and also to increase the group's net asset base.

(Read about Access Engineering's real estate and other diversification strategies here: https://echelon.lk/home/access-to-real-estate-company-from-construction/).

Capital Heights comprising 242 luxury apartments will be completed in 2020 with 40 percent of the apartments already sold. Access Engineering holds a 50 percent stake in the project.

Marina Square is a mixed development project comprising 1,068 condominium apartment units and around 150,000 square feet of commercial space, has recorded presales of 25 percent.

Marina Square is owned by Harbour Village Private Limited a joint venture between Access Engineering, China Harbour Engineering and Musthafa's Singapore and will overlook the Colombo Port.

Access Engineering holds over 60 percent of Harbour Village.

Access Tower 2, built and owned by Access Engineering commenced operations early 2018.

"The A-Grade, office tower of 200,000 square feet of rentable office space was preleased three months prior to opening," Perera said.

The 30-storey Access Tower 2 was built at a cost of 5.3 billion rupees and has parking facilities for 300 vehicles.

Access also owns 21 acres of land though subsidiaries within the IT zone in Malabe which is proposing to build a private university Horizon Knowledge City offering tech, science, law, engineering and paramedical degrees.

Access Engineering is building 608 housing units for government employees at Borella for the Urban Development Authority costing 4.9 billion rupees.

The company completed 941 low-cost housing units comprising two bed rooms, living area and kitchen, toilet and balcony for 3.3 billion rupees, which also for the UDA.

--Real estate earnings boost--

Access Engineering saw profits fall 39 percent from a year earlier to 364.9 million rupees in the June 2018 quarter on falling margins from construction, despite improving earnings from condominium sales and rent.

Earnings were 36 cents a share in the June quarter, latest interim accounts filed with the Colombo Stock Exchange showed. The Share last traded at 15.10 rupees.

Revenue grew 10 percent from a year earlier to 5.8 billion rupees.

Real estate saw revenue increase 312 percent to 196 million rupees, with profits increasing 179 percent to 183 million rupees.

This segment which comprises rents from high-rise buildings owned by the group and apartment sales made the highest contribution to group earnings.

The construction segment reported revenue growth of 5 percent from a year earlier to 3 billion rupees, but profits fell a sharp 82 percent to 86 million rupees.

Construction material sales grew 89 percent to 894 million rupees and profits increased 106 percent to 72 million rupees.

Automobile sales increased 11 percent to 2 billion rupees but profits fell 68 percent to 41.2 million rupees.

Sri Lanka's Odel acquires Cotton Collection for Rs300Mn

ECONOMYNEXT - Sri Lanka's listed fashion retailer Odel said it has acquired a 100 percent stake in Cotton Collection for 300 million rupees to diversify its product portfolio anticipating a fashion-retail boom.

"The decision to enter into this transaction is in line with the company's strategy of expanding the product portfolio and retail foot print," the company said in a stock exchange filing on Wednesday.

The acquisition will give the group 'significant' flexibility in terms of brand positioning utilizing product portfolios of both Odel and Cotton Collection, Odel said.

It is also expected to create synergies of back-office processes and human resource functionality.

The 100 percent stake in Cotton Collection was bought from founder Niloufer Esufally Anverally.

Cotton Collection has 15,000 square feet of retail space across five outlets and employs 200 people.

"Cotton Collection comprises of a home-bred design team that curates bohemian, free-spirited collections that has carved out a niche market share over the years," a statement from the company said.

--Fashion retail boom--

"Fashion, and the interest therein, is only growing," Ashok Pathirage, Odel's Chairman said in a statement announcing the acquisition.

The addition of new malls in the city is expected "open out more retail space to the market and tremendously upgrade the retail shopping and lifestyle experience of the consumer," he said.

The Colombo City Centre Mall opens in September, while The Shangri-La Mall is slated to open in 2019.

Odel is investing 8.3 billion rupees on a mixed development project including a 645,000 square feet mall in Colombo.

"We feel we are well positioned as a group to tap into the immense growth potential that retail would offer and thereby further consolidate our presence in this segment," he said.

Odel's June quarter profits fell 50.6 percent from a year earlier to 21 million rupees on lower consumer spending and high finance costs on loans taken out for the mixed development project.

Earnings per share in the quarter amounted to 8 cents. Odel opened trading Wednesday 50 cents higher at 24.50 rupees.

Sri Lanka's RIL Property seeks further diversification

ECONOMYNEXT- Sri Lankan commercial real estate developer RIL Property Plc will be further diversifying its investments, a senior official said.

“The company will continue to pursue new market opportunities to stimulate growth, which may not necessarily be focused on the realty business,” Chief Executive Hiroshini Fernando said in the annual report.

The report said that a subsidiary, United Motors Lanka Plc (UML) will also diversify into non-core segments.

This will be a continuation of the strategy RIL has adopted over the past three years.

“We have already brought under our wing a world-famous food chain and a premier automobile marketeer, and envision a future of many more additions of premier businesses to our product portfolio,” Fernando said.

RIL Property, which was founded in 2009 and operates two Grade ‘A’ commercial spaces, acquired the franchise of Singapore-based bakery chain BreadTalk in 2015.

The company acquired a 30 percent stake in automobile dealer UML from a related party for 2.4 billion rupees in late 2017 and bought another 21 percent shares through a mandatory offer for 1.7 billion rupees.

The established vehicle dealership was mainly acquired for the land it owns adjacent to RIL’s flagship PARKLAND property on Park Street.

Meanwhile, the BreadTalk franchise narrowed its net losses to 18.9 million rupees in 2018 from 34.6 million rupees a year earlier.

Revenue from the franchise increased to 402.4 million rupees in 2018 from 367.4 million rupees a year earlier with two more outlets being added in 2018 using some of the money raised in RIL’s initial public offering in 2017. This brought the total number of BreadTalk outlets to nine.

However, the centralised production facility for BreadTalk can accommodate 16 outlets, and the under-utilisation of the facility has contributed to the loss in the segment.

BreadTalk’s financials also improved as it developed new bakery items ‘to cater to a wide range of tastes and pocket’ Chairman Sunil Wijesinha said.

Many corporates in Sri Lanka have been following a diversification strategy to mitigate risks from one segment, but some have failed and had to divest or seperate their non-core operations.

Singer says Hayleys seeking investors to sell down stake at right price

ECONOMYNEXT - Singer Sri Lanka Plc, a unit of Hayleys Plc said its parent was in discussions with the parent on selling down its stake to comply with minimum float rules but it may take time.

"The Management of the company is in discussions with the Parent Company on seeking possible remedial action to achieve the said minimum holding threshold," Singer said in a stock exchange filing.

"However it is understood that seeking investors at a mutually agreed price is a time based mater under current market condition."

The firm said its public holding percentage was 7.72 percent and the number of shareholders was 2,615.

Sri Lanka is recovering from a currency collapse in 2015 and 2016, which killed domestic demand, but a recovery in domestic demand had been hit by continued currency depreciation.

Some analysts have said the regulators' liquidity requirements may be too tight, especially for large companies, considering the rules in other countries such the New York Stock Exchange.

Sri Lanka's LMF to invest Rs2bn in new dairy farm

ECONOMYNEXT - Lanka Milk Foods, a unit of Sri Lanka's Melstacorp Plc, said it will invest 2 billion rupees to set up a dairy farm with 2000 milch cows at Ambewele, Nuwara Eliya to meet a growing demand for fresh dairy products.

The company has incorporated United Dairies Lanka which will set up four new barns to house 2,000 milch cows and two modern milking parlours for an estimated investment of 2 billion rupees, it said in a statement filed with the stock exchange.

"The purpose of the new company is to increase the quantity of good quality milk to be utilized in the production of fresh dairy products of our company and focus on developing marketing strategies to meet the ever-increasing demand for these products," Lanka Milk Foods said.

The new plant is likely to double capacity of the group.

Lanka Milk Foods already has 2,100 heads of cattle of Ayrshire and Friesian breeds grazing in 1,500 acres of land in Ambewela, 6,000m above sea-level.

The milk yield is around 16,000 litres a day.

Lanka Milk Foods, controlled by businessmen Harry Jayawardena through Milford Exports and listed Melstacorp Plc, was trading 90 cents lower at 159 rupees.

The company reported a 236.8 million rupee loss in the June 2018 quarter, compared to a profit of 1.4 billion rupees a year earlier, according to latest results filed with the stock exchange largely due to finance costs increasing 164 percent from a year earlier to 42.9 million rupees.

Gross profits were up 13 percent to 206.8 million rupees on revenues growing 10 percent to 1.3 billion rupees and cost of sales falling 10.5 percent to 1.1 billion rupees.
Operating expenses grew 5 percent to 210.9 million rupees.

Sri Lankan shares climb to highest close in nearly 3 weeks

Reuters: Sri Lankan shares rose for the fourth straight session on Monday to their highest close in nearly three weeks, led by gains in banking and beverage stocks.

The Colombo stock index ended 0.18 percent higher at 6,091.45. It rose 0.4 percent last week, marking the second straight weekly gain.

The index, however, lost 1.1 percent in August, having hit its lowest close since March 2017 on Aug. 28. The bourse is down 4.4 percent so far this year.

The day’s turnover was at 404.2 million rupees ($2.5 million), nearly half of this year’s daily average of 810.7 million rupees.

Foreign investors sold a net 5 million rupees of shares on Monday, extending the net foreign selling so far this year to 4.2 billion rupees worth of shares.

Ceylon Tobacco Company Plc shares ended 0.2 percent higher, while Dialog Axiata Plc closed 1.7 percent firmer. Lanka ORIX Leasing Company Plc gained 3.5 percent and Hatton National Bank Plc ended 1.3 percent higher.

Sri Lankan companies posted a 4 percent total earnings growth in the June quarter from a year earlier, helped by financials, beverage shares, telecommunications and power and energy sectors, CT CLSA Securities (PVT) Ltd said in a research note. 

($1 = 161.5000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Amrutha Gayathri)