Three Sri Lankan firms listed in Forbes ‘Best Under A Billion’

Three Sri Lankan companies have made it to the 2016 Forbes Asia’s 200 ‘Best Under A Billion’ list, up from just one last year. The three companies are Regnis (Lanka) Plc, Royal Ceramics Lanka Plc and Textured Jersey Lanka Plc.

Regnis (Lanka) Plc, one of the four publicly listed subsidiary firms of the Singer Sri Lanka group, manufactures and markets refrigerators and washing machines while Royal Ceramics Lanka Plc, a subsidiary of Vallibel One Plc is a leading manufacturer of homogenous porcelain tiles, ceramic tiles and sanitaryware in Sri Lanka.

Textured Jersey Lanka Plc, a member of the Brandix group specializes in the manufacture of high quality, weft-knitted and dyed stretch fabrics and is a major supplier to apparel manufacturers throughout Asia and end-chain retailers.

The ‘Best Under A Billion’ list honours 200 leading public companies in the Asia Pacific region with annual revenue between US$5mil and US$1bn, have positive net income and have been publicly traded for at least a year.

Forbes said from a universe of 17,000 companies, the candidates were screened on sales growth and earnings growth in the past 12 months and over three years, and for the strongest five-year return on equity.

Companies from mainland China, Hong Kong and Taiwan account for 65% of this year’s Forbes Asia’s ‘Best Under A Billion’ list, a record high for the list of the top 200 publicly traded companies in the Asia-Pacific region. Of the 200 companies, 116 are new on this year’s list.

A total of 98 companies from China and Hong Kong made it to this year’s list, up from 84 the previous year.

The full list can be found at http://www.forbes.com/asia200/list/ and in the latest issue of Forbes Asia.

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PM says Hilton, Lanka Hospitals and Hyatt up for sale, SriLankan for investment colloboration

Prime Minister Ranil Wickremesinghe announced the sale of "non-strategic ventures such as the Colombo Hilton, Lanka Hospitals, the Hyatt Regency Hotel – amongst others – will herald investment opportunities" in a keynote speech at the Third South Asian Diaspora Convention in Singapore recently. He also said that "Sri Lanka Airlines with its diverse network of routes is a mature airline and is up for investment collaboration."
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Sri Lankan shares rise as investors pick blue chips; rupee steady

Reuters: Sri Lankan shares rose on Friday, hovering near a seven-week high hit earlier this week, as investors bought blue chips expecting better profits after hopes rose that a recent rate increase by the central bank would help improve the island nation's macroeconomic outlook.

The benchmark Colombo stock index was 0.7 percent higher at 6,523.78 at 0640 GMT, near its highest since June 14 hit on Wednesday. Turnover stood at 664.8 million rupees ($4.57 million).

"Market is up on renewed buying interest after yesterday's consolidation," said Atchuthan Srirangan, a senior research analyst at First Capital Equities (Pvt) Ltd.

On Thursday, the bourse ended lower on profit-taking, snapping five days of gains.

"The good thing is there is not much of selling pressure in the market. We will see market gaining with some consolidation in between," Srirangan said.

Shares have risen on hopes economic fundamentals would improve after the central bank last week raised its main interest rates by 50 basis points each in a surprise move aimed at curbing stubbornly high credit growth that is adding to concerns about inflationary pressures.

Stockbrokers said the market is waiting for an economic policy announcement from Prime Minister Ranil Wickremesinghe, scheduled later this month.

The Sri Lankan rupee, meanwhile, was steady as mild importer dollar demand was offset by selling of the greenback by foreign investors to buy bonds and stocks.

The spot rupee, which traded for the second straight session on Friday, was at 145.60/68 per dollar at 0648 GMT, a dealer said.

The spot rupee is usually managed tightly by the central bank, and market participants use the forward market levels for guidance on the currency.

One-week rupee forwards were at 145.75/85 per dollar, up from Thursday's close of 145.80/88.

Foreign investors have net bought 64.5 billion rupees ($443.30 million) worth of government securities from April 29 to July 27, after the IMF agreed to a $1.5-billion bailout package, central bank data showed. 

($1 = 145.6000 Sri Lankan rupees) 

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

Sri Lanka's Senkadagala Finance bonds rated 'BBB+(lka)'

ECONOMYNEXT - Fitch Ratings said Rs3.0 billion of senior debt of Sri Lanka's Senkakadagala Finance has been given a final rating of 'BBB+(lka)'.

The non-bank lender sold two and four year bonds with fixed and floating options.

The full statement is reproduced below:

Fitch Assigns Senkadagala Finance's Senior Debt Final 'BBB+(lka) '

Fitch Ratings-Colombo-04 August 2016: Fitch Ratings has assigned Senkadagala Finance PLC's (SFC: BBB+(lka)/Stable) issue of senior unsecured redeemable debentures of up to LKR3bn a final National Long-Term Rating of 'BBB+(lka) '.

The final rating is the same as the expected rating assigned on 13 June 2016, and follows the receipt of documents conforming to information already received. The amount has been increased to LKR3bn from LKR2bn.

The debentures will have tenors of two to four years and carry fixed and floating coupons. The debentures are to be listed on the Colombo Stock Exchange and the company plans to use the proceeds to fund loan growth, diversify its funding mix and reduce structural maturity mismatches.

KEY RATING DRIVERS

The proposed debentures are rated at the same level as SFC's National Long-Term Rating as they will constitute direct, unconditional, unsecured and unsubordinated obligations of SFC.

SFC's rating reflects the satisfactory credit profile that it has maintained through economic cycles, its relatively strong franchise amongst finance companies in Sri Lanka and access to longer-term institutional funding. These are counterbalanced by its deposit franchise and capitalisation, which are weaker than higher-rated peers.

RATING SENSITIVITIES

The rating on the proposed debentures will move in tandem with SFC's National Long-Term Rating.

SFC's rating could be downgraded if asset quality weakens, leading to a significant decline in capitalisation or excessive asset encumbrance. An upgrade of SFC's rating is contingent upon maintenance of stronger capitalisation and a more robust deposit franchise that would allow the company to expand in a better controlled manner.

Sri Lanka tea estate seeks 'Golden Shareholder' nod for dairy move

ECONOMYNEXT - Sri Lanka's Watawala Plantations Plc said it is awaiting approval from the government to sub-lease land for a diary venture.

Watawala Dairy Limited, incorporated on December 01, 2015, expects to build a dairy farm on 1,051 acres of land known as Lonach Estate.

"The transfer of assets and liabilities to Watawala Dairy Limited has not been completed pending approval from the Golden Shareholder," the firm said in a stock exchange filing.

Watawala, a privatized plantation, has land on a long-lease, and the government as the 'Golden Shareholder' has to approve changes, including diversification and sub-leases.

Watawala has already moved into palm oil.

In Sri Lanka, palm oil is taxed at import as part of moves to boost profits for rent-seeking farmers and on nationalist autarkist philosophy, making food especially for the poor more expensive.

Dairy products are also taxed at high levels.

Colombo Stock Exchange offers online services through CDS e-connect

(LBO) – The Colombo Stock Exchange has launched CDS e-connect, a portal with an array of online services to Central Depository System account holders.

The CDS will match depositories from around the world in offering electronic services to account holders, a statement said. Many peer depositories in the Asian region currently provide similar facilities.

“Technology forms a vital component of the transformation process of capital markets around the world and it is important that the Sri Lankan capital market embraces the value technology offers to all stakeholders,” Renuke Wijayawardhane, chief operating officer of the CSE said.

“e-connect is yet another step in our effort to improve the infrastructure of the CDS,”

With CDS e-connect, account holders can access resources online (www.cdseconnect.lk) including transaction details, portfolio reports and past monthly statements.

For institutions such as margin providers, the ability to manage multiple user accounts through a single user ID is another key feature of this facility.

The technology for the e-connect service is provided by Millennium Information Technologies (MIT) who are a part of the London Stock Exchange Group. MIT are also the providers of the CDS system.

Nalin Fonseka, Head of CDS stated that this new online facility offers value and many technological benefits.

“It aims at bridging the gap between the CDS and account holders. e-connect will take accessing of CDS account transaction details to a new level because of the accessibility through personal computers, Tablet PCs or Mobile devices,” he said.

“Especially from the perspective of the foreign investors, this would provide a platform for them to verify both their account information and portfolio information, which simplifies the process to a large extent.”

The introduction of e-connect comes at the back of a number of other value added services and improvements to the technology provided by the CDS, including the launch of SMS alerts and eStatements.

List of services offered through CDS e-connect

• Alerts and notifications on:-

                            - Corporate actions due for the next market day
                            - Transactions/changes of portfolio

• Access to view all accounts registered under the client via a single user ID
• Access to view account balances
• Access to view transaction history for the past 6 months
• Access to view master file data available in the CDS system
• Access to view current monthly statement
• Access to view monthly statements for up to 6 months
• Request for additional monthly statements.

SBI Group to acquire 25% stake in First Guardian Equities

The SBI Group is to acquire a strategic 25% stake in First Guardian Equities through an investment via a private placement.

The MOU was signed by the Representative Director, President and CEO of SBI Holdings Yoshitaka Kitao and Managing Director and CEO of First Guardian Equities Rohan Goonewardene.

The SBI Group will be offered two representatives on the Board of First Guardian Equities. This transaction is due to be concluded shortly after obtaining the required regulatory approvals.

First Guardian Equities is a licensed trading member of the Colombo Stock Exchange and regulated by the Securities and Exchange Commission of Sri Lanka (SEC). It is the only stock brokerage in Sri Lanka with an international ISO 9001:2008 systems standardisation certification. Currently the Company is also in the process of obtaining a credit rating from a foremost international credit rating agency.

Managing Director Rohan Goonewardene said the involvement of First Guardian, with a world class entity such as the SBI Group, will soon enable its customers to experience an enhanced level of service options and excellence. Goonewardene was confident that this tie-up will not only bring mutual benefit to both institutions but will also be a tremendous boost and a vote of confidence to the country’s capital markets.

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