Sri Lanka January tea export earnings slump to six-year low

ECONOMYNEXT – Sri Lanka’s tea exports in January 2016 fell to their lowest level in US dollar terms in six years because of the commodity price slump, brokers said.

Ceylon tea exports fell one percent to 24.1 million kilos in January 2016 from a year ago with earnings down four percent to 14.3 billion rupees, according to data analysed by Asia Siyaka Commodities.

“The US dollar value of exports has dropped sharply by 12 percent year-on-year 2015,” they said.

“Earnings at 99.4 million dollars is the lowest since 2010 when a much lower quantity of 21 million kilos was exported and value of 90 million dollars was achieved.”

Sri Lanka’s tea exports earnings in January 2015 were 113 million dollars.

Asia Siyaka Commodities said the approximate FOB (free on board) value per kilo in January 2016 fell to 4.12 dollars from 4.64 dollars last year and 5.37 dollars in 2014.

Sri Lanka's Janashakthi Insurance Dec net up 37-pct

ECONOMYNEXT - Profits at Sri Lank's Janashakthi Insurance Plc in the December 2015 quarter rose 37 percent from a year earlier to 662 million rupees with assets also growing with the acquisition of another general insurance.

The group reported earnings of 1.68 rupees for the quarter. In the year to December the group reported earnings of 2.45 rupees on total profits of 965 million rupees, down from 1,061 million.

Gross written premium rose 27 percent to 3.1 billion rupees, with net premium up 34 percent to 2.7 billion rupees. Claims rose 35 percent to 1.5 billion rupees.

Investment income rose 38 percent to 467 million rupees.

Group gross asset grew from 20 billion rupees to 31 billion rupees during the year. Net assets grew from 5.2 billion rupees to 8.3 billion rupees.

The firm raised 3.6 billion rupees from a rights issue to acquire the general insurance unit of AIA Insurance in Sri Lanka.

"With the amalgamation now complete, we are working on unveiling a host innovative insurance solutions," Prakash Schaffter, Managing Director, Janashakthi Insurance said in a statement.

The firm had also sold lease rights to land in Staples Street in Colombo to Sanken Construction for 1.93 billion rupees. A 50 percent advance of 965 million had been received in December 23, and the firm expects to book profits in the first quarter of 2016 after regulatory approvals.

Sri Lanka feed mill profits soar amid strong demand for chicken

ECONOMYNEXT - Strong demand for chicken and eggs and farmers shifting from self-mixed to feed helped boost profits 300 percent to 387 million rupees in the December 2015 quarter from a year earlier, Ceylon Grain Elevators, a poultry and feed milling group said.

The group, a unit of Singapore based Prima, said earnings were 6.47 rupees for the quarter. In the year to December earnings were 15.72 rupees per share on total profits of 1,178 million rupees, up from 71 million rupees.

In December revenues rose 21 percent to 3.8 billion rupees and costs rose at a slower 11 percent to 3.2 billion rupees, allowing gross profits to go up 142 percent to 598 million rupees.

"During the quarter under review, the Group was able to post the outstanding results consequent to the increased demand for chicken meat and eggs," the firm told shareholders in a statement.

"Shortage of local raw materials compelled the farmers to move from self-mixing to compound feed also led to an increase in the demand for feed. The Group continued to maintain its market share in all segments during the year 2015."

Sri Lanka taxes imported raw material like maize to keep prices high, making chicken, usually a cheap source of protein, expensive to the poor and children of the poor, in Sri Lanka due to nationalist ideology of self-sufficiency, critics have said.

As a result raw material may run out for chicken farmers causing 'shortages', unlike in countries with free trade.

Chicken meat is also price-controlled by the rulers in Sri Lanka after keeping maize prices up.

As a result there is wide fluctuations and demand in poultry products from year to year.

Sri Lanka saw a strong demand for chicken meat and eggs in 2015, after excess production and low demand in 2014, Three Acre Farms, a CGE unit said.

During the year under review, the Group performance improved significantly with higher demand and stable market prices for Broiler, Layer and Parent Stock Day Old Chicks.

"The glut in Broiler Chicken and Broiler Day Old Chicks in year 2014 caused farmers to curtail their production which limited supply into year 2015," TAFL told shareholders.

"The Group was able to leverage on this with better pricing supported by the increased purchasing power of the consumers."

Sri Lankan shares steady near 22-month low; Keells boosts turnover

Reuters: Sri Lankan shares ended steady on Friday, hovering near their 22-month closing low that hit in the previous session, while last-minute trading in conglomerate John Keells Holding Plc boosted the turnover, brokers said.

The bourse hit a 22-month low on Thursday as investors shunned risky assets, and an interest rate hike last week continued to dampen sentiment.

Sri Lanka's benchmark share index closed up 0.02 percent, or 1.34 points, at 6,203.98, little changed from its lowest close since April 29, 2014, that hit the previous session.

It has fallen 10 percent this year, as of Thursday's close.

The index remained in the oversold territory for the fourth day, with the 14-day Relative Strength Index at 28.203, Thomson Reuters data showed.

A level between 70 and 30 indicates the market is neutral.

On Wednesday, 182-day and 364-day t-bill yields rose 50 to 55 basis points at a weekly auction to over two-year high, after the central bank raised key policy rates by 50 basis points from record lows.

"The market is very weak. There is not much happening, except for the John Keells trading, which took place in the latter part of the session. The market will continue its declining trend with the selling pressure due to high interest rates," said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

Turnover was 803.5 million rupees ($5.59 million) on Friday, more than this year's daily average of 716.3 million rupees.

John Keells Holdings Plc, which accounted for 80.3 percent of the day's turnover, ended down 0.13 percent.

Foreign investors were net buyers for the first time in six sessions; they bought 29.2 million rupees worth of shares.

Shares in Sri Lanka Telecom Plc rose 3.2 percent, while Lanka ORIX Leasing Company Plc climbed up 3.6 percent.

($1 = 143.8000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sherry Jacob-Phillips)

Sri Lankan shares fall for 3rd day as investors shun risky assets

Reuters: Sri Lankan shares fell for a third straight session on Thursday to a 22-month closing low, as investors shunned risky assets and an interest rate hike last week continued to dampen sentiment.

Local shares also tracked losses in Asian shares as crude oil prices seesawed and Chinese shares dived, rekindling anxiety about the impact of high market volatility on the global economy on the eve of a G20 meeting in Shanghai.

Sri Lanka's benchmark share index closed 0.24 percent, or 15 points, weaker at 6,202.64, its lowest close since April 29, 2014. It has fallen over 10 percent this year through Thursday.

The index remained in the oversold territory for the third day, with the 14-day Relative Strength Index at 27.923, Thomson Reuters data showed. A level between 70 and 30 indicates the market is neutral.

On Wednesday, 182-day and 364-day t-bill yields rose 50-55 basis points at a weekly auction to more-than two-year highs, signalling a further rise in market interest rates.

"We expect the declining trend to continue with selling pressure due to high interest rates," said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

The central bank raised key policy interest rates by 50 basis points on Friday from a record low, to prevent demand-driven inflationary pressure.

Turnover was 559.3 million rupees ($3.89 million) on Thursday, well below this year's daily average of 713.8 million rupees.

Foreign investors sold a net 192.5 million rupees worth of shares, extending the net foreign outflow to 1.66 billion rupees worth equities so far this year.

Shares in Sri Lanka Telecom Plc fell 6.09 percent, while Trans Asia Hotel Plc dropped 7.06 percent. 

($1 = 143.9500 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)

SEC reconsiders minimum public float rule: CSE

(LBO) – Sri Lanka’s securities regulator is reconsidering the minimum public float rule as the intention of introducing such rule was not met, ‎a senior official at the CSE said.

Chief Executive Officer at the Colombo Stock Exchange Rajeeva Bandaranaike said the intention of introducing the minimum holding rule was to encourage the public float.

“The intention was good, but companies really did not choose to divest. Instead some companies choose to demote themselves to Diri Savi board and some others choose to de-list,” Bandaranaike said.

Few companies have already de-listed and several others have transferred to the secondary Diri Savi Board following the introduction of new rules.

“The regulator is looking at it right now and there is a strong possibility that they reconsider the rule. Right now most of the companies have been given extension of one year.”

Bandaranaike was speaking at the capital market conference 2016 organized by UTO Edu Consult.

The securities watchdog brought in the new rules that are applicable to all public listed entities which have their equity listed on the CSE effective from 01 January 2014.

As per the minimum public holding rules, there are two ways to get listed on the main board of the Colombo Stock Exchange.

One option is that a listed entity on the main board should maintain a minimum public holding of 20 percent of its total listed ordinary voting shares in the hands of a minimum of 750 public shareholders.

Second option is that a market capitalization of 5 billion rupees of its public holding in the hands of a minimum of 500 public shareholders while maintaining a minimum public holding of 10 percent.

To list on the secondary DiriSavi Board, a company should maintain a minimum public holding of 10 percent of its total listed shares in the hands of a minimum of 200 public shareholders.

FC Capital Market App launched

First Capital Holdings PLC (FC) a full service investment bank with30 years of experience recently launched the "FC Capital Market App', providing up to date information on the Sri Lankan capital market freefor Android and IOS smart mobile users.

The FC Capital Market App gives investors and market enthusiasts detailed insights into government securities, stock market, debentures and research.

The users can create a personalised watch list to keep track of chosen securities and eliminating the need to access multiple information sources.

"The app enables investors the convenience to follow the performance of their investment portfolio and is available free for downloading onto smart mobile and tablet devises for any interested user and does not require a client account with First Capital" Dilshan Wirasekara, Chief Executive Officer of First Capital Holdings PLC, stated.

The FC Capital Market App can be downloaded on App Store, Google Play and through the Company's website.http://www.firstcapital.lk/mobile-app/

About First Capital :

First Capital Holdings PLC, an Investment Bank listed on the Colombo Stock Exchange, is the holding company of the First Capital Group offering a full range of products and services, through subsidiaries operating in Debt & Equity markets including First Capital Treasuries Limited, a Primary Dealer licensed by the Central Bank of Sri Lanka, First Capital Asset Management Limited, an Investment Manager licensed by the Securities and Exchange Commission of Sri Lanka which also manages several dedicated fixed income Unit Trusts, First Capital Equities Private Limited a licensed Stockbroker and Member of the Colombo Stock Exchange, First Capital Markets Limited a licensed Margin Provider and First Capital Limited, a structuring and placement agent for debt and equity, and provider of corporate finance and advisory services.

For nearly 30 years, the First Capital Group has been a leading non-bank financial institution in Sri Lanka. A pioneer Primary Dealer in government securities, First Capital has steadily grown to become a leader in this field, buoyed by a loyal and continuously growing customer base. The company operates in Colombo and several major cities in Sri Lanka.

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