Sri Lankan stocks end flat near 4-week low; lenders gain

Reuters: Sri Lankan shares ended little changed on Wednesday, at a near four-week low, as losses in shares of beverage companies outweighed gains in bank stocks even as many investors continued to stay on the sidelines looking for fresh cues.

President Maithripala Sirisena’s appeal to his own coalition government and the opposition in parliament on Tuesday to end a power struggle failed to cheer investors as weakness in the rupee continued to weigh.

The Sri Lankan rupee hit a fresh low last week on importer demand for the U.S. currency, dealers said.

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 Colombo stock index ended 0.03 percent weaker at 6,483.65, its lowest since April 12. The index lost 0.37 percent last week, its second straight weekly fall.

“Market is searching for directions,” said Dimantha Mathew, head of research, First Capital Holdings.

“After a long time, we saw the turnover crossing 1 billion rupees thanks to a block deal. We also saw some buying interest in banking sector which is a good sign for the market.”

Shares of Nestle Lanka Plc fell 2.2 percent, while conglomerate John Keells Holdings Plc ended 0.3 percent down and Distilleries Company of Sri Lanka Plc closed 0.5 percent lower.

Union Assurance Plc, which accounted for 24 percent of the day’s turn over, closed 2.6 percent higher.

Fitch Ratings has said 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 1.2 billion rupees ($7.60 million), its highest since April 4 and more than this year’s daily average of 1.03 billion rupees.

Foreign investors bought a net 86.8 million rupees worth of equities on Wednesday, but the market has seen a net foreign outflow to 400.2 million rupees worth of equities so far this year. 

($1 = 157.8500 Sri Lankan rupees) 

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

Sri Lanka tourist arrivals up 12.6-pct in April

ECONOMYNEXT - Sri Lanka's tourist arrivals rose 12-6 percent from a year ago to 180,426 in April 2018, with strong growth from India, UK and triple digit growth from Australia and the US, despite Chinese arrivals falling, data from the state tourism promotion office showed.

Arrivals in the first four month rose 16.1 percent to 888,353.

Tourists from India, the largest generating market, went up 13.4 percent to 26,323, though visitors from China fell 11.9 percent to 17,462.

UK visitors soared 46.1 percent to 26,063.

Visitors from Australia, where SriLankan Airlines is flying direct rose 107 percent to 14,023 while US tourist also rose 102.3 percent to 8,673.

Japanese visitors fell 11.9 percent to 17,462.

Nestlé Sri Lanka unit March net up 9.4-pct

ECONOMYNEXT - Profits at Nestlé's Sri Lanka unit increased 9.4 percent from a year earlier to 943.7 million rupees in the March 2018 quarter, on flat expenses growth, interim results showed.

Listed Nestlé Lanka Plc reported earnings of 17.57 rupees in the March 2018 quarter, financial statements filed with the Colombo stock exchange showed.

The stock closed unchanged at 1,750 rupees on Tuesday.

Revenue grew 2.5 percent from a year earlier to 9.6 billion rupees in the quarter as cost of sales grew a slower 0.7 percent to 6 billion rupees, expanding gross profits by 5.5 percent to 3.6 billion rupees.

Marketing, selling and distribution expenses grew 1.3 percent to 1.7 billion rupees and other operating costs fell 19.2 percent to 14.5 million rupees.

Administrative expenses grew 5.2 percent to 595.9 million rupees.

Net finance costs increased 108 percent to 10.1 million rupees while tax expenses rose 20 percent to 306 million rupees.

Sri Lanka's Teejay Lanka March 2018 quarter earnings up 3-pct

ECONOMYNXT - Sri Lanka's Teejay Lanka, a fabric maker, says profits grew 3 percent from a year earlier to 508.4 million rupees in the March 2018 quarter helped by capacity expansion and cost controls muting the impact of rising cotton prices.

The company reported earnings of 72 cents a share in the quarter, according to interim statements filed with the Colombo Stock Exchange. Earnings were 2.27 rupees a share for the 12-months to end March 2018 on revenues of 24.7 billion rupees, up 12 percent from a year earlier.

Teejay closed 50 cents lower to 28.90 rupees on Tuesday.

"The strong performance during the fourth quarter was achieved predominantly by capacity expansion, higher efficiencies, exciting innovations and the Group’s growing product portfolio," Bill Lam, Teejay Lanka Chairman told shareholders.

Revenue in the March quarter grew 13 percent from a year earlier to 6.55 billion rupees, cost of selling increasing at the same rate to 5.8 billion rupees resulted in gross profits increasing 11 percent to 731.8 million rupees.

Administrative expenses fell 15 percent to 293.6 million rupees and net finance income declined 41 percent to 15 million rupees.

Distribution costs rose 4 percent to 35 million rupees.

"The Group has positioned itself during the year to yield the benefits of GSP through its capacity expansion which is currently at optimal operating capacity and will be able to meet an ever-challenging global space," Lam said.

"Strategies have been initiated to keep pursuing new opportunities from leveraging our regional footing, providing flexible and better solutions and to broaden our customer portfolio".

The company has production facilities in India and Sri Lanka.

Sri Lanka 01-yr Treasury Bill yield rises to 9.65-pct

ECONOMYNEXT – The yield on Sri Lanka’s 01-year Treasury Bills went up 04 basis points to 9.65 percent at Wednesday’s auction from 9.61 percent at the last auction, according to data from the public debt department of the Central Bank.

The yield on 03-month bills, offered after a gap of two weeks, edged up one basis point to 8.11 percent at the auction.

The central bank rejected bids for 06-month bills.

The public debt department accepted only Rs1.6 billion in 03-month bills despite offering Rs6 billion and getting bids of Rs9.8 billion.

But it accepted Rs21 billion in 01-year bills, more than the Rs16 billion offered, after getting bids of Rs42 billion.

Sri Lanka IOC unit losses fall in March 2018 quarter

ECONOMYNEXT - Losses at Indian Oil Corporation's Sri Lanka unit, Lanka IOC Plc, contracted 84 percent from a year earlier to 103.4 million rupees in the March 2018 quarter, helped by other income and a fall in administration expenses, interim accounts showed.

The company reported a loss of 17 cents a share in the quarter, interim financial statements filed with the Colombo Stock Exchange showed. The stock was trading 40 cents higher at 33.40 rupees in early trading Wednesday.

Lanka IOC reported a loss of 1.40 rupees a share for the 12 months to end March 2018 on revenues increasing 12.7 percent from a year earlier to 91.3 billion rupees. The company proposed a 65 cents final dividend for the year.

IOC raised retail prices on March 23 as oil prices rose, while state run CPC held price down. The firm also sells lubricants.

The stock has moved up in recent weeks in the expectations of a price formula.

The company said revenues grew 17 percent to 23.8 billion rupees and costs of sales grew at a slower 16 percent to 23.7 billion rupees, giving gross profits of 52.4 million rupees for the March quarter against a loss of 89.5 million a year earlier.

Profits were helped by other operating income which rose 40-fold to 236.7 million rupees, up from 8 million rupees a year earlier.

Administrative expenses plunged 95 percent to 12.9 million rupees down from 269 million rupees a year earlier.

The company told shareholders that there was a contingent liability of 1.4 billion rupees as at end-March 2018 on account of a dispute with the Inland Revenue Department's assessment of Lanka IOC's Nation Building Tax liabilities for each year since 2012.