CB successfully raises $ 650 m; global investor appetite swells to $ 2b

The Central Bank on behalf of the Government successfully launched and priced a US$ 650 million 10-year International Sovereign Bond (Issue) at a yield of 6.125% per annum.

It said the Issue represents the eighth US Dollar benchmark offering in the international bond markets by Sri Lanka since 2007.

Citigroup Global Markets Inc., Deutsche Bank, The Hongkong and Shanghai Banking Corporation Limited and Standard Chartered Bank acted as Joint Lead Managers/Bookrunners on the transaction.

Fitch Ratings, Moody's Investors Service and Standard and Poor’s have rated the Issue at 'BB-', ‘B1’ and ‘B+' respectively.

The Issue was announced during the Asia morning on May 28, 2015 with an initial price guidance of 6.375% per annum. The order books grew steadily, allowing Sri Lanka to price the Issue at a yield of 6.125% or a spread of 397.7 bps vs the 10-year US Treasury.

The compression in yield of 25 basis points reflects the continued confidence that the international investors have placed in the sovereign bond issuance of Sri Lanka.

"The final order books stood at US$ 2 billion, an oversubscription ratio of 3.08 times, from 173 accounts," the Central Bank said.

Distribution was very well diversified, with Asia taking 23%, Europe 27% and the US at 50%. Global Fund Managers were the largest investors in the transaction, representing 79%, with Banks, Pension Funds/Insurance and Private Banks taking 9%, 7% and 5% respectively.

Central Bank said with this transaction, this Issue represents the first Sovereign Bond Issue for Sri Lanka in the international capital markets in 2015, post the change in government.

"This Issue also succeeded in achieving a ten-year cost of funds which is inside the current Sri Lanka US$ secondary levels and at tighter spread vs the US Treasury compared to the last ten-year Sri Lanka US$ in 2012. This achievement is all the more impressive, given the recent volatility in US Treasury yields and anticipated Fed rate hike later this year," the Central Bank added.
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Sri Lankan shares fall to near 3-week low

May 29 Sri Lankan shares ended near a three-week low on Friday led by large-caps and foreign selling in blue-chips while investors cautiously bought the island nation's risky assets due to political uncertainty ahead of a parliament poll.

The main stock index ended 0.49 percent weaker at 7,220.29, near its lowest close since May 11.

Foreign investors sold a net 188.4 million rupees ($1.41 million) worth of shares on Friday, extending foreign outflows to 1.49 billion in the last four sessions. But the bourse has seen net inflows of 4.45 billion rupees in equities so far this year.

Turnover was 1.26 billion rupees, higher than this year's daily average of about 1.14 billion rupees.

Political uncertainty due to the Ranil Wickremesinghe-led government not having a majority has been a drag on the market, though the trend reversed after the central bank cut key monetary policy rates to record lows on April 15.

The index has gained 4.6 percent since the rate cut.

Large-cap Ceylon Tobacco Company fell 3.3 percent while market heavyweight John Keells Holdings and top lender Commercial bank of Ceylon lost 2.5 percent and 0.8 percent respectively on foreign selling.

President Maithripala Sirisena's government has said it would dissolve parliament once some crucial reform bills are passed. But it has not scheduled the date for the election.

Analysts say investors hope a new stable government after the election coupled with strong economic measures would boost confidence. 

($1 = 133.9000 Sri Lankan rupees) 

(Reporting by Shihar Aneez; Editing by Sunil Nair)

Sri Lankan shares end steady despite foreign selling

May 28 Sri Lankan shares ended steady near a two-week low on Thursday as local buying offset foreign selling in blue-chips.

Stockbrokers, however, said that most investors have been cautiously optimistic in a lower interest rate environment as concerns about political stability and the timing of a parliamentary election weigh on sentiment.

The main stock index ended a tad firmer, up 0.03 percent to 7,255.71, and near its lowest close since May 14 hit in the previous session.

Foreign investors sold a net 451.3 million rupees ($3.4 million) worth of shares on Thursday, extending foreign outflows to 1.13 billion in the last three sessions. But the bourse has seen net inflows of 4.63 billion rupees in equities so far this year.

Turnover was 1.38 billion rupees, beating this year's daily average of about 1.14 billion rupees.

Among the gainers, Distilleries Company of Sri Lanka Plc rose 2.87 percent, while Bukit Darah Plc added 1.2 percent.

Political uncertainty due to the Ranil Wickremesinghe-led government not having a majority has been a drag on the market, though the trend reversed after the central bank cut key monetary policy rates to record lows on April 15.

The index has gained 5.2 percent since the rate cut.

Analysts say a new stable government after the election coupled with strong economic measures would boost confidence.

($1 = 133.9000 Sri Lankan rupees) (Reporting by Shihar Aneez; Editing by Prateek Chatterjee)

Sri Lanka Treasuries yields edge lower at auction

COLOMBO (EconomyNext) - Sri Lanka's Treasury bill yields eased across maturities at Wednesday's auction with the 12-month yield falling 02 basis points to 6.29 percent, data from the state debt office showed.

The 03-month yield fell 01 basis points to 6.07 percent and the 6-month yield also fell 01 basis point to 6.18 percent.

The debt office sold 10.1 billion rupees of 3-month bills, 13.4 billion rupees of 6-month bills and 4.3 billion rupees of 12-month bills totalling 27.9 billion rupees.

The debt office, which is a unit of the Central Bank offered 21 billion rupees of bills for sale.

MTD Walkers posts impressive profit increase

MTD Walkers PLC for the year ended March 31, 2015 posted Rs. 1.148 billion profit after tax on a revenue of Rs.14.014 billion, up from Rs. 10.092 billion last year.

This is its sixth consecutive year of 39.1% compound annual revenue growth, ending the year posting a 91.0% growth in profit after tax.

“As we head into a new financial year, we are confident that our interest in the fields of infrastructure related diversification and continued focus on our core areas will yield us strong growth across our businesses as we look to maintain and build on our industry leading position,” MTD Walkers Executive Deputy Chairman Jehan Amaratunga said.

MTD Walkers recently acquired Wincon Development Ceylon (Private) Limited, a property development company registered with the Board of Investment of Sri Lanka, for the purpose of residential property development for both public and private sector.

“Acquiring this through the Rs. 2.4 billion rights issue completed in Q4 2015 has completely restructured our balance sheet and we are now ready to support our planned diversification strategy in property development and marine engineering,” Amaratunga said.

“Despite the market remaining competitive and challenging, the company continued to deliver consistent growth and an increase in profit after tax from 6.0% in 2014 to 8.2% in 2015. To ensure our long-term sustainable success we invested in effective management, cost control measures, innovative engineering and building capabilities of our people,” MTD Walkers Group Chief Financial Officer Viraj De Silva said .
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Central Finance Rs 3 b debenture oversubscribed

The issue of Central Finance Company's 30,000,000 Rated Secured Redeemable Debentures for the value of Rs 3 billion has been oversubscribed.

Therefore, the issue was closed at 4.30 p.m. yesterday as per the Prospectus. The basis of allotment will be notified to the CSE in the due course.
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Dealers report increase in car sales in past twelve months

Carmudi launched its white paper on ‘The Booming Automotive Industry in Emerging Markets’ yesterday.

The Carmudi study found that 70% of car dealers in Sri Lanka reported an increase in car sales over the past twelve months due to the changing economic climate, while 20% of car dealers surveyed reported a decrease.

The findings in this report are the result of Carmudi’s surveys conducted online with both car buyers and car dealers, and in-depth interviews with industry influencers throughout Sri Lanka.

New motor vehicle registrations in 2011 jumped 46% higher than the previous 12 months. Import duties were revised in 2012 to regulate the rising motor vehicle imports, presenting a

The motor industry in Sri Lanka has witnessed a number of changes in recent years. Prices fell sharply in 2010 due to cutback of duty charges, which resulted in a surge of vehicle imports.

New motor vehicle registrations in 2011 jumped 46% higher than the previous 12 months. Import duties were revised in 2012 to regulate the rising motor vehicle imports, presenting a major impact on the volume of imports.

Global automotive sales for 2015 are expected to reach close to $89M, a 2.4% growth from 2014. Emerging markets’ share of global sales will rise from 50% in 2012 to 60% by 2020, while their share of global profits is also set to rise by 10%. When it comes to new cars, purchase intent is strongest in Asia, where 65% of respondents say they will buy new cars in the next two years, compared with 7% who plan to buy used cars.

The President of Sri Lanka’s Vehicle Importers Association stated to the media that reductions up to Rs. 300,000 for the prices of vehicles with 1000cc or less engine capacities are in the plans.

These plans were later executed in hopes of reviving the sluggish attitude of the overall motor sector and to allow all motor sector players a positive impact.

Car dealers in Sri Lanka have reported that over 30% of car buyers mentioned turning to the Internet and 10% of car buyers are turning to dealer sites when researching for cars. Car dealers also reported that 60% of car buyers are still using offline media such as newspaper classifieds as a source of information when searching for a car.
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