Shangri-La to build third hotel in SL

Shangri-La, Asia Pacific's leading luxury hotel chain, is looking at building a third hotel in Sri Lanka.

This was disclosed by Vice President of the group, Madhu Rao who met the Minister of Finance, Ravi Karunanayake yesterday.He had indicated that they are happy with the investment climate in Sri Lanka and would look at reinvesting in Sri Lanka.

"This would be by way of another hotel and other investments," a Finance Ministry official said. The first hotel in Hambantota would be opened end of this year while their second hotel US$ 500 million mixed development project at Galle Face would be ready by end 2017.(SS)

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Ceylinco General, Ceylinco Life post Rs. 27 bn premium income

The Colombo Stock Exchange included Ceylinco Insurance amongst the S & P Sri Lanka 20 index constituents at the annual index rebalance announced in December 2015. Ceylinco General Insurance Ltd and Ceylinco Life Insurance Ltd, announced excellent results for the year ended December 31,2015, recording yet another remarkable year.

Ceylinco Insurance joint Managing Director and Chief Executive Officer Ajith Gunawardena said during 2015, the company recorded a premium income of Rs.13.5 billion Rs.13,557 million), recording an impressive growth of 11.4 %, which signifies an increase of Rs.1.4 billion over the previous year. "Last year's performance was exceptional, and one of the best results recorded in the recent past,"he said.

Elaborating on the Life Insurance company's results, Joint Managing Director and Chief Executive Officer R Renganathan said Ceylinco Life Insurance Ltd achieved a premium income of Rs.13.4 billion (Rs.13,456 million), recording an impressive growth of 12.1%, or Rs.1.4 billion over 2014.Our performance represents a consolidation of our leadership in the life insurance industry for the 12th consecutive year."

The overall premium income of Ceylinco General and Ceylinco Life reached Rs.27 billion, indicating an increase of Rs.2.8 billion or an overall growth of 11.7% over the previous year.

Ceylinco General Insurance Managing Director Patrick Alwis said: "Ceylinco General Insurance paid claims amounting to Rs.6.4 billion during 2015, providing full settlement of all genuine claims in the quickest possible time, signifying an increase year on year of 14% in settled claims."

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Cargills profits surged to Rs 1.2 bn

Cargills Ceylon PLC, a CT Holdings Company, reported a turnover of Rs 18.0 billion for the third quarter ending on December 31, 2015.

Group Gross profit for the nine months ended was Rs 5.7 billion while Operating profit reached Rs 2.4 Billion. Net profit for the nine months was Rs 1.2 billion.

The Retail business saw a strong turnaround for the nine months ended backed by a positive consumption.

Environment reinforced by strong focus on enhancing service levels and driving efficiency across the value-chain. The Retail sector reports an Operating Profit of Rs 1.2 Billion on a gross turnover of Rs 41.4 billion for the nine months ended.

The FMCG Sector has continued a stable performance with gross turnover reaching Rs 12.9 billion for the nine months ended while Operating Profit was Rs 1.1 billion. The double-digit growth reported by our agriculture, dairy and livestock processing businesses indicates category growth driven by our strong portfolio of national brands.

The Restaurants business is consolidating its upward trend bolstered by enhanced consumer spend.

The sector recorded a top line of Rs 2.1 billion for the nine months under review while Operating Profit was Rs 104.1 million.

The performance of the Group for the nine months ended demonstrates the results of concerted efforts to enhance business efficiency and productivity.

This would be further strengthened in the year ahead while the investment strategy would be focused on consolidating the business potential of every sector in line with future growth opportunities.
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Sri Lankan stocks end weaker; turnover hits 23-mth low

Reuters: Sri Lankan shares edged down for the third straight session on Wednesday, with turnover slumping to a 23-month low, as investors stayed off risky assets on concerns over rising domestic interest rates.

Shares moved in line with regional peers which fell on worries over the health of global banks, particularly in Europe, pushing investors into safer assets such as the Japanese yen.

The main stock index ended 0.13 percent weaker at 6,364.40, its lowest close since Feb. 1.

"Nothing is happening at all. Local investors are on the sidelines and the foreign investors are exiting and not taking positions," said Yohan Samarakkody, head of research, SC Securities (Pvt) Ltd.

"Market is holding on due to the earnings cycle. But I don't think there will be enough strength for the market to hold on after the earnings season is over as there is no liquidity."

Foreign investors sold a net 16.2 million rupees worth shares on Wednesday, extending the year to date net foreign outflow to 210.9 million rupees ($1.47 million) worth of equities.

The key Sri Lankan stock index has fallen 7.7 percent this year through Wednesday as foreign investors, unnerved by global concerns over China's economy, cut their exposure.

Some investors are shifting to fixed interest rate-bearing assets due to a gradual rise in interest rates, analysts said.

Yields on t-bills rose between 8 and 17 basis points at a weekly auction on Wednesday with the 182-day and the 364-day t-bill yields rising to over two-year highs, signalling a further rise in market interest rates.

Turnover was 182.4 million rupees, the lowest since March 2014 and less than a quarter of this year's daily average of 770.9 million rupees.

Shares of the biggest listed lender Commercial Bank of Ceylon Plc fell 0.9 percent, while Cargills (Ceylon) Plc and Ceylon Tobacco Company Plc fell 1.95 percent and 0.51 percent, respectively. 

($1 = 143.90 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)

Tea exporters target US $ 5 b by 2020

The Tea Exporters Association (TEA), the private sector body dedicated to promote tea exports will conduct a workshop on 'Tea Strategy Development' in each stakeholder sector of the tea industry to achieve the revenue target of US $ 5 billion by 2020.

The workshop will be held on Tuesday, February 18 from 2.30-6.30 p.m. at the Export Development Board auditorium, Nawam Mawatha, Colombo 2.

Minister of Plantation Industries, Navin Dissanayake will inaugurate the session while the Chairman, Sri Lanka Tea Board, Chairperson, Export Development Board and senior officials in the relevant state organisations will also participate in the workshop.

The workshop will help stakeholders and policymakers to understand the future needs of the tea industry and map-out a plan to ensure its sustainability. It will also focus on four key areas of the tea sector such as new business models for plantation and manufacturing sectors, marketing of Ceylon Tea in today's context, current trends and prospects in the global tea market and implications of exchange rate fluctuation on the tea industry.

The panel of speakers include Dr. Indrajit Coomaraswamy, Mangala Boyagoda, Lasantha Abeywickrama, Roman Scott (Singapore), Roshan Rajadurai, Anil Cooke and Anil Alwis while Niraj de Mel will be the moderator. The event is open to all stakeholder members of the tea industry and for service providers such as banks, freight forwarders and logistics companies.www.sundayobserver.lk

Stockbrokers to go hi-tech

By Duruthu Edirimuni Chandrasekera

In three months the Colombo stockbrokers are set to have their systems integrated and hi-tech making it seamless for them to transact. This will lead to Delivery versus Payment, Central Counter- party along with risk management that will lead to new products being introduced such as short selling and derivatives, officials said. ”Short-selling for an example will form some level of mitigation from the downward slide that the Colombo Stock Exchange (CSE) is now experiencing which helps traders to profit in a down market or protect existing investments while securing risk management feactures,” Ravi Abeysuriya, President Colombo Stock Brokers Association (CSBA) told the Business times. He said that (share transaction) order management and broker back -office systems will be in place by April 31.

He added the infrastructure in Sri Lanka’s capital markets have been stagnant for the past decade and it’s time they’re uptodate. CSBA has proposed a mobile solution to the recording system that was incorporated into the stockbroker rules in August 2012 by the CSE which stipulates the brokering houses to use a telephone recording system to record clients’ order instructions and maintain these records for at least six years. “This is to be introduced to fill the gap in recording mobile phone calls (when clients give instructions on Mobil transactions).” Mr. Abeysuriya noted that the absence of a professionally managed non captive large institutional investor base in Sri Lanka is an enormous challenge. The main long term superannuation funds are largely captive and are saddled with conflict of interest.

He added that if the ‘indispensable’ State Owned Enterprise (SOE) reforms are brought about, it would lead to a mixed ownership structure and more transparency, management efficiency and reducing the dependence on taxpayers. “This would classify the CSE as a more developed and mature ‘emerging market’ that is widely tracked by foreign investors and considered to be active and liquid than a ‘frontier market’. CSE would be included in the MSCI Emerging market Index with the listing of a few SOEs and many large and successful companies.” Mr. Abeysuriya added that as a result, a significant amount of foreign investors that replicate the MSCI Emerging Market Index (tracked by investors managing about US$8 trillion in assets) would have invested in Sri Lanka.

“Several new products such as Real Estate Investment Trusts (REITS) and Exchange Traded Funds would have been listed in the CSE, providing retail investors wider flexibility and an avenue to gain entry into the real estate market with a small amount of capital and liquidity to exit. These would have led to increasing the depth and breadth of the market and increasing the market capitalisation of the CSE as a percentage of GDP at least to about 50 per cent.” The capital market in Sri Lanka is under -owned by domestic investors versus its emerging market peers. Only 6.5 per cent of the Rs. 3.1 trillion market capitalisation of the CSE is owned by institutional institutions such as EPF, ETF, Insurance Companies and Unit Trusts. “This needs to change,” Mr. Abeysuriya added. 

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Stockbrokers’ risk based capital adequacy ratio to be implemented

By Duruthu Edirimuni Chandrasekera

The Colombo Stock Exchange (CSE) is to implement a risk based Capital Adequacy Ratio (CAR), which would ensure that stockbrokers retain an appropriate level of liquid capital in relation to the total risks faced by them when trading in securities, officials said. The CAR will replace the present net capital requirement of Rs 25 million each for the 29 stockbroking houses in a move that will see the industry players consolidating, they said. “The SEC approved the CAR last Friday at their Commission meeting. We will make a presentation to the stockbrokers and the plan is to implement it before June,” a CSE official told the Business Times. He said a certain formula on the CAR will be implemented.

Industry analysts pointed out that this will push smaller players to join with their larger counterparts. They say that it’s a good move as the market is too small for 29 players and consolidation has to happen. Ravi Abeysuriya, President Colombo Stock Brokers Association (CSBA) told the Business times that the CSBA feels that there are too many stock broking licences. “The CSBA is very much for consolidation. The stock broking industry would have transitioned into universal broking and become more viable with the consolidation of the industry with increased trading volumes and broking fees which are market determined.”

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