ComBank in world's top 1000 banks

Commercial Bank of Ceylon has been ranked among the Top 1000 Banks of the World for a fourth successive year in 2014, becoming the only Sri Lankan bank to achieve this feat.

This ranking published annually by 'The Banker' magazine of the UK, is an important endorsement of the consistent growth and key performance indicators achieved by Sri Lanka's largest private bank.

The Top 1000 World Banks ranking is compiled from a database of over 5,000 of the world's biggest banks and is acknowledged by the global financial community as the definitive guide to bank rankings and analysis.

Begun in 1970, the ranking is widely used all year round by senior bankers, corporate treasurers, corporate financiers, the professional services community and many others in their day to day decisions relating to banking. "Making the Top 1000 list is a noteworthy achievement by itself, but staying there for four years in a row despite the challenging conditions we operate in, reflects well on the strength and stability of the Bank," said Jegan Durairatnam, Chief Operating Officer of Commercial Bank.
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BOC to float Rs. 8 b debenture, Fitch rates ‘AA (EXP)’

Fitch Ratings Lanka has assigned Bank of Ceylon’s (BOC; BB-/Stable) proposed subordinated debentures of up to Rs. 8 b an expected National Long-Term Rating of ‘AA(lka)(EXP)’.

The debentures, which have tenors of five and eight years and carry fixed and floating coupons, are to be listed on the Colombo Stock Exchange. BOC expects to use the proceeds to strengthen the bank’s regulatory Tier 2 capital base and reduce asset and liability maturity mismatches.

The final rating is subject to the receipt of final documentation conforming to information already received.

BOC’s National Long-Term Rating reflects the Government of Sri Lanka’s (BB-/Stable) high propensity but moderate ability to provide support to the bank under extraordinary situations. The State’s high propensity stems from BOC’s high systemic importance as the largest bank in Sri Lanka, its quasi-sovereign status, its role as a key lender to the Government and full Government ownership. The State’s moderate ability to provide support is reflected in the sovereign rating.

The proposed debentures are rated one notch below BOC’s National Long-Term Rating to reflect their subordination to senior unsecured creditors and gone-concern loss-absorption quality in the event of liquidation, in line with Fitch’s criteria for rating such securities.

Any change in Sri Lanka’s sovereign rating or the perception of State support to BOC could result in a change in BOC’s National Long-Term rating and issue ratings. Visible demonstration of preferential support for BOC in the form of an explicit guarantee will be instrumental to an upgrade of its National Long-Term Rating.

A full list of BOC’s ratings
Long-Term Foreign Currency IDR: ‘BB-’; Outlook Stable
Long-Term Local Currency IDR: ‘BB-’; Outlook Stable
Short-Term Foreign Currency IDR: ‘B’
Viability Rating: ‘b+’
Support Rating:’3’
Support Rating Floor: ‘BB-’
US dollar senior unsecured notes: ‘BB-’
National Long-Term Rating: ‘AA+(lka)’; Outlook Stable
Outstanding Sri Lanka rupee-denominated subordinated debentures: ‘AA(lka)’
Proposed Sri Lanka rupee-denominated subordinated debentures: ‘AA(lka)(EXP)’
www.ft.lk

George Steuart Finance ends FY 14 with strong final quarter

George Steuart Finance PLC said yesterday it has recorded an excellent fourth quarter in the company’s bottom line by posting a profit of Rs. 26 million in the final quarter of FY 2013/14 to close the year at a profit after tax of Rs. 6.9 million.

The company also expanded its deposit base by 52% over the last year to reach Rs. 1.065 billion by focusing heavily on retail deposits and also the launch of the savings product in 2013.

Under the new leadership of veteran banker Eastman Narangoda, in January 2014 the company altered its strategic focus onto its core competencies to gain significant advantages despite being a small player in a crowded and competitive market. During the last year the company also adopted stringent and meticulous risk mitigation and provisioning policies to increase its resilience to any market changes.

Commenting on the performance of the company, CEO Uditha Ranaweera said: “I am confident that this growth momentum will continue with the launch of new hybrid products and also due to measures implemented to differentiate the company’s product portfolio to cater to niche markets while maintaining liquidity and offering stability to its deposit holders. Growing a healthy un-concentrated deposit base is an essential element of growth and expansion.”

In the process of wealth creation, George Steuart Finance PLC has pledged to be committed to meet the expectations of all its stakeholders while exploring seamless opportunities offering handsome returns.

Furthermore, the company also followed robust provisioning and cleaned up its portfolios while concentrating on better quality products with an appropriate mix in an effort to maintain its high yield on advances. Paramount emphasis was placed on developing systems and structures while complying with all regulatory requirements. Industry best practices were adopted in order to minimise both foreseen and unforeseen risks.
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Sri Lanka stocks hit over 13-month high on financials, foreign buying

(Reuters) - Sri Lankan stocks hit their highest level in more than 13 months on Thursday, helped by foreign buying in top lender Commercial Bank of Ceylon , while talks of a U.S.-based fund acquiring a stake in conglomerate Hemas Holdings boosted sentiment.

The main stock index ended higher 0.54 percent, or 34.76 points, at 6,467.28, its highest level since May 23, 2013.

Dealers said a U.S.-based fund bought a 6.5 percent stake in Hemas Holdings on Wednesday.

"Foreign buying is strong and we see now others are also coming to the market to buy big quantities," a stockbroker said on condition of anonymity.

Analysts said foreigners have been buying risky assets because they see values in them, while falling yield in fixed assets is gradually prompting local investors to shift their funds to equities.

Foreign investors were net buyers for an eighth straight session on Thursday, buying 265.9 million rupees of stocks during the day and extending foreign inflows this year to 9.2 billion rupees.

Turnover was 1.51 billion rupees ($11.59 million), more than this year's daily average of around 1 billion rupees.

Shares of Commercial Bank of Ceylon jumped 3.41 percent to 148.60 rupees, while Hemas Holdings rose 1.1 percent to 46 rupees.

Brokers said investors are bullish about the market after they witnessed large state funds actively traded shares on Wednesday.

Analysts said foreign buying could continue due to lower inflation after government data showed annual inflation eased to 2.8 percent in June, its lowest since February 2012, down from 3.2 percent a month earlier.

Yields on treasury bills edged down further at a weekly auction on Wednesday.

However, analysts said investors are concerned over the recent ethnic violence and possible implications of a government spokesman saying Sri Lanka bought Iranian crude via third parties.

The market has been on a rising trend since late February due to continued foreign buying and lower interest rates. ($1 = 130.2300 Sri Lankan Rupees) (Reporting by Shihar Aneez; Editing by Subhranshu Sahu)

Sri Lanka stocks close up 0.5-pct

July 03, 2014 (LBO) - Sri Lanka's shares closed 0.54 percent higher on Thursday amid strong domestic participation, brokers said.

The Colombo benchmark All Share Price Index closed 34.76 points higher at 6,467.28, up 0.54 percent. The S&P SL20 closed 30.48 points higher at 3,608.42, up 0.85 percent.

Turnover was 1.51 billion rupees, down from 2.43 billion rupees a day earlier with 106 stocks closed positive against 82 negative.

HNB closed 2.90 rupees higher at 161.90 rupees with three off-market transactions of 177.18 million rupees changing hands at 160.00 rupees per share contributing 12 percent of the daily turnover.

The aggregate value of all off-the-floor deals represented 37 percent of the turnover.

The Finance non-voting closed 50 cents higher at 9.30 rupees and The Finance closed 4.50 rupees higher at 22.70 rupees, attracting most number of trades during the day.

Foreign investors bought 344.71 million rupees worth shares while selling 78.78 million rupees worth shares.

Ceylon Tobacco Company closed 23.70 rupees higher at 1,100.00 rupees and Commercial Bank closed 4.90 rupees higher at 148.60 rupees, contributing most to the index gain.

Lanka Orix Finance closed 40 cents higher at 3.70 rupees and Ceylinco Insurance closed 5.00 rupees higher at 1,325.00 rupees.

Sri Lanka Telecom closed 1.20 rupees higher at 48.70 rupees and Dialog Axiata closed flat at 10.50 rupees.

Hemas Holdings closed 50 cents higher at 46.00 rupees and John Keells Holdings closed 3.20 rupees lower at 222.90 rupees.

JKH’s W0022 warrants closed 1.90 rupees lower at 61.00 rupees and its W0023 warrants closed 2.10 rupees lower at 71.10 rupees.

Franklin Templeton buys into Hemas, EPF sells

By Paneetha Ameresekere and Ravi Ladduwahetty

Ceylon FT: Franklin Templeton Fund, a large US based foreign fund, bought a 4.75% stake in blue chip Hemas Holdings for Rs 1.5 billion from the Employees' Provident Fund (EPF) yesterday (2), sources told Ceylon FT.

This seemingly is Mark Mobius managed Templeton's, first entry to the local equities market this year, having had previously invested in Com Bank last year, market sources said.

"The market is bullish, because foreigners are once more entering the market," market analysts said. Retailers are also starting to come in.

With a low interest regime in operation and banks swamped with liquidity, indications are that interest rates will further come down. This has given a boost to the bourse, they said.

With net foreign inflows (NFIs) led by Hemas, complemented by an overall contribution of Rs 1.6 billion to the day's turnover by this blue chip company, pivoted full turnover at the bourse to Rs 2.4 billion yesterday, data showed.

Hemas closed the day at Rs 45.50 a share, up 3.17% over its previous day's close. 

NFIs recorded yesterday were Rs 1.66 billion, taking NFIs in the year to date to Rs 8.9 billion.

With 167 gainers as opposed to 51 losers, the benchmark ASPI increased its value by 0.89% yesterday over Tuesday to end the day at 6,432.52 points; while the S&P SL 20 Index gained by 0.97% to close the day at 3,577.94 points.

Among the other major contributors to yesterday's turnover was PCH Holdings ranked 243rd in terms of market capitalization (Rs 192.1 million). PCH Holdings closed at Rs 2.10 a share, up 16.67% over its previous day's close.

Chevron, ranked 15th in terms of market capitalization (Rs 71.4 million). Chevron closed the day at Rs 304 a share, up 1.33% over its previous day's close, and JKH, number one in terms of market capitalization (Rs 50.4 million) closed at Rs 226.10 a share, up 1.71% over its previous day's close.

Templeton has been investing in the Sri Lanka Stock Market for the last two decades and they have been very active in the 1990s. Of late, they have been investing very heavily in fixed income securities and government securities at times when interest rates were high.

Meanwhile, the Colombo Stock Exchange has performed exceptionally in the past two days, showing significant signs of the market continuing on a positive trajectory, sources said.
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Tourist arrivals up 24.6% in H1

Arrivals from Muslim nations down in June
By Mario Andree

Ceylon FT: Tourist arrivals for the first half of this year surged 24.6% to 727,353 from 583,573 in the same period last year. Arrivals for June were up 14.3% to 103,175 from 90,279 in the same month last year. Arrivals from the Middle East fell 12% in June amid religious tensions in the country.

The government and the industry anticipates more than 1.5 million arrivals this year, however, data released by the Sri Lanka Tourism Development Authority showed that the first six months' arrivals had not reached half this year's set goal.

Data showed that during the month of June tourist arrivals from several markets had declined. As a result of religious tension in the country arrivals from Muslim nations including the Middle East, Maldives and Pakistan declined, while tourists from Denmark, Netherlands, Norway, one of Sri Lanka Tourism Promotion Bureau's focus markets, and arrivals from Ukraine, Poland, Philippines and Singapore fell.

Western Europe led tourist arrivals to Sri Lanka, followed by South Asia and East Asia. Country-wise India was the top market for the country, followed by United Kingdom and China.

Overall tourist arrivals for the six months highlighted that travellers from North America increased 12.2% to 35,588 in 2014 from 31,721 in 2013. In June arrivals from North America was up 11.7% to 6,889 from 6,169, while arrivals in June from Latin America and the Caribbean increased 59.6% to 2,057 from 1,289, and 193 arrivals, up 30.4% from 148 respectively.

Arrivals from Western Europe were up 17% to 223,810 from 191,311 while arrivals in June were up 8.9% to 23,205, from 21,313, while arrivals from Eastern Europe increased 44.8% to 86,580 from 59,796. The arrivals for June were up 17.5% to 4,309 from 3,667.

Arrivals from Africa increased 83.3% to 5,455 from 2,976 for the first six months while arrivals for June were 812, up 62.4% from 500. Arrivals from the Middle East rose 9.5% to 38,603 from 35,241 for the first six months, while the figure for June was 9,895, down 12% from 11,245.

Arrivals from East Asia increased 50.3% to 130,867 from 87,058 for the six months while arrivals for June were 22,000, up 42.9% from 15,390. Arrivals from South Asia increased 18.3% to 176,323 from 149,056, while arrivals for June were 30,950, up 13.3% from 27,317.

Arrivals for the six months this year from Australasia increased 11.7% to 28,070 from 25,125 in 2013 while arrivals for June were 4,922, up 8.7% from 4,530 in 2013.
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