Sri Lankan stocks edge higher as financials gain

Reuters: Sri Lankan shares ended marginally firmer, led by financials, though gains were muted as investors looked for fresh cues from political and economic fronts, brokers said.

The Colombo stock index ended 0.08 percent higher at 6,523.88, recovering from its lowest since April 24 hit in the previous session. The index lost 0.15 percent last week.

“There is no sentiment booster for the market. The turnover was very low and investors are keen to see some positive factors in political and economical fronts,” said Prashan Fernando, CEO at Acuity Stockbrokers.

Top lender Commercial Bank of Ceylon closed 0.3 percent firmer while Sampath Bank ended 0.4 percent higher.

Analysts said depreciation of the rupee also weighed on the sentiment as it is likely to dent the profits of some listed firms that rely heavily on imports.

The Sri Lankan rupee hit a fresh low on Wednesday on importer demand for the U.S. currency, dealers said, but recovered after the central bank intervened in the market.

Fitch Ratings said on Thursday that recent political developments in Sri Lanka have created some uncertainty over reform momentum and fiscal consolidation, and prolonged upheaval could undermine investor confidence ahead of large external debt maturities in 2019-22.

Turnover stood at 463.2 million rupees ($2.94 million), less than half of this year’s daily average of 1.05 billion rupees.

Foreign investors bought a net 46.3 million rupees worth of equities on Thursday, but the market has seen a net foreign outflow to 622.7 million rupees worth of equities so far this year.

($1 = 157.8000 Sri Lankan rupees) 

(Reporting by Shihar Aneez; Editing by Vyas Mohan)

Pan Asia Bank posts Rs 498 mn PBT in 1Q

LBO - Pan Asia Banking Corporation PLC reported Rs 498 million in profit before tax for the quarter ended in March 31, 2018 (1Q’18) powered by a steady growth in new loans and improvement in overall margins which was resulted by prudent asset – liability pricing amidst rising market interest rates.

This enabled the bank to increase its net interest income by 11.0 % to Rs.1.34 billion for the quarter from Rs.1.21 billion recorded in the same period last year.

Meanwhile the core banking performance was aptly supported by the non-fund based incomes such as fee incomes and trading gains. The bank managed to increase its net fee and commission income by a modest 8.0 % to Rs.368.12 million from the same period in 2017.

Meanwhile the net trading gains rose sharply to Rs. 199.58 million during the quarter from Rs.69.83 million in the same period a year ago as the bank sold its short term investments in the trading portfolio realizing a sizable capital gain.

As a result of these fund and non-fund based incomes, the bank increased its total operating income by 17 % on year to Rs.1.99 billion.

Pan Asia Bank’s Director/ Chief Executive Officer Nimal Tillekeratne said although the bank witnessed a temporary slowdown in the bottom-line during its first quarter, the bank is now on a path of steadfast growth with built in resilience across all areas of operations which will reflect positively in the financial results in the coming quarters.

Sri Lanka sells 12-month treasuries at 9.61-pct

ECONOMYEXT - SrI Lanka has sold 28 billion rupees of 12-month Treasury bills at a weighted average yield of 9.61 percent, slightly higher than 9.59 percent last week, the state debt office said.

The debt office offered 4.0 billion rupees of 3-month bills, 5.0 billion rupees of 6-month bill and 19 billion rupees of 12-month bills.

However it accepted the entire quantity from 12-month bills after getting orders for 55 billion rupees of bills.

The date of settlement is May 04.

At the last auction the central bank mopped up about 19 billion rupees of printed money by selling down its Treasury bill stock by close to 19 billion rupees, helping support the rupee.

The rupee fell in the last two weeks of April after the central bank printed tens of billions of rupees to enforce a rate cut on top of seasonal cash demands.

On Wednesday it mopped up 10 billion rupees of cash overnight.

People's Insurance March 2018 net profit edges lower

ECONOMYNEXT – Sri Lanka’s People’s Insurance said net profit fell 2 percent from a year ago to 211.2 million rupees in the March 2018 quarter, with claims and operating expenses growing faster than premium income, interim accounts showed.

The insurance company, whose parent is People's Leasing and Finance, reported earnings of 1.06 rupees per share in the quarter, according to interim accounts filed with the Colombo Stock Exchange.

The stock was trading 50 cents higher at 24 rupees in early trading Wednesday.

Gross written premium rose 19 percent to 1.2 billion rupees in the quarter, with motor insurance accounting for 90 percent. Net earned premium grew 11 percent to 1.09 billion rupees.

Net claims increased 10 percent to 742.8 million rupees.

Other revenue which includes fee income and interest and dividend income grew 15 percent to 181.4 million rupees.

Operating and administrative expenses rose 43 percent to 190.5 million rupees. Underwriting and acquisition costs rose 9 percent to 104 million rupees.

Sri Lanka's Seylan Bank March 2018 net up 21.6-pct

ECONOMYNEXT - Profits at Sri Lanka's Seylan Bank increased 21.6 percent in the March 2018 quarter to 1.05 billion rupees from a year earlier despite shrinking interest margins and increasing loan-loss provisioning, interim accounts showed.

The bank reported earnings of 2.88 rupees per share in the quarter, according to interim accounts filed with the Colombo Stock Exchange. The stock last traded at 85 rupees.

Interest income grew 13 percent to 11.4 billion rupees, interest expenses grew at a slower 10.8 percent to 7.2 billion rupees, resulting in net interest income increasing 17.2 percent from a year earlier to 4.2 billion rupees in the March 2018 quarter.

Interest margins have shrunk to 4.13 percent, down from 4.24 percent the previous quarter.

Net fee and commission income grew 14.6 percent from a year earlier to 995.4 million rupees.

Trading income rose 344.6 percent to 89.9 million rupees in the quarter and gains from financial investments were 33.4 million rupees compared to a 4 million rupees loss the previous year.

Provisions for loan losses increased 57 percent to 542.4 million rupees.

Seylan Bank's deposit base grew 1.24 percent from the previous December 2017 quarter to 310.9 billion rupees in the March 2018 quarter.

The bank's loan book grew 3 percent from the previous quarter to 289.3 million rupees.

Sri Lanka DFCC March 2018 net down 15-pct

ECONOMYNEXT - Profits at Sri Lanka's DFCC Bank fell 15 percent from a year earlier to 1.07 billion rupees in the March 2018 quarter, on increased provisioning for bad loans, interim accounts showed.

The bank reported earnings of 4.05 rupees per share in the quarter. The stock closed at 117 rupees last Friday.

Interest income grew 26 percent to 9.1 billion rupees, interest expenses grew at a slower 24 percent to 5.8 billion rupees resulting in net interest income growing 29 percent to 3.3 billion rupees.

The bank made 567.6 million rupees in loan loss provisions in the quarter, up 229 percent from a year earlier.

"The bank’s NPL ratio increased to 3.12 percent as at March 2018 from 2.77 percent recorded in December 2017 as a result of adverse environmental conditions in the operating environment. The industry NPL ratio also recorded an upward trend," DFCC Bank told shareholders.

Net fee and commission income grew 27 percent to 434.4 million rupees.

DFCC Bank's deposit base grew 4 percent from the previous quarter to 200.5 billion rupees, and its loan book expanded at the same rate to 222.6 billion rupees.