Sri Lankan shares hit more than 6-mth closing high

Reuters - Sri Lankan shares hit a more than six-month closing high on Thursday as retail investors too joined a market rally led by heavy foreign buying over the last 20 sessions.

Foreign investors net bought 697.5 million rupees worth equities on Thursday, after buying a net 4.32 billion rupees ($28.42 million) worth of shares on Wednesday, the highest since May 9, 2014, exchange data showed.

Foreign investors have bought equities worth a net 10.42 billion in 20 straight sessions, taking the year-to-date net foreign inflow into equities to 12.9 billion rupees.

On Thursday, the Colombo stock index ended 0.9 percent firmer at 6,505.28, its highest close since Oct. 12.

The index has climbed 8.9 percent in the 15 sessions up to Thursday, having risen for 14 outs of 15 sessions so far.

"Foreigners are buying in large quantities and we saw some retail investors also buying stocks in a gradual manner," said Hussain Gani, deputy CEO at Softlogic Stockbrokers.

"The bullish run will prevail if the central bank can maintain the interest rate at the current level."

The central bank last month raised the key policy rates by 25 basis points.

Turnover stood at 1.44 billion rupees ($9.48 million), more than this year's daily average of 863.7 million rupees.

Large cap Nestle Lanka PLC jumped 3.8 percent, while top mobile phone operator Dialog Axiata closed 3.5 percent firmer.

($1 = 151.9500 Sri Lankan rupees) 

(Reporting by Shihar Aneez; Editing by Biju Dwarakanath)

Sri Lanka's Dialog Telecom, customers pay Rs317bn to state

ECONOMYNEXT - Sri Lanka's Dialog Telecom paid income taxes and levies of 31.7 billion rupees to the state, on net revenues of 86.7 billion rupees, data published by the firm said.

The firm itself paid 10.7 billion rupees in fees and levies to the government Dialog Chief Hans Wijayasuriya told shareholders in the annual report.

Dialog pays income taxes at a 2 percent of revenue under a long term deal with the Board of Investment concession, which can be a high rate of taxation in a low margin business or a low rate in a high margin business.

Telecom firms also pay frequency fees to the Telecom regulator.

The group reported 1.5 billion rupees of corporate tax and pre-tax profits of 10.5 billion rupees, up from 6.7 billion rupees a year earlier. The core telecom firm reported pre-tax profits of 11.9 billion rupees.

Turnover taxes of 21 billion rupees on revenues of 86.7 billion rupees indicates that telecom users pay around 24 percent in turnover taxes in a country with maximum 15 percent value added tax rate.

Sri Lanka's current administration ratecheted up taxes on telecom firms in what was called 'revenge taxes' undermining the country's standing as a safe destination for investment.

Sri Lanka's telecom sector became a tax cash cow for the government following de-regulation and privatization of the sector under then Telecom Minister Mangala Samaraweera.

Samaraweera broke a state monopoly in fixed services and licenses more mobile players. Telecom privatization ended 10-year waiting lists, as well as low call connection rates in a congested network.

Prices initially spiked amid tariff rebalancing involving slashing of global termination fees, and fell amid increased competition later.

Indra Silva sells 3.5% COMBank stake for Rs. 4.3 b; foreigners buy

* Foreign net inflow tops Rs. 12 b year-to-date with Rs. 10 b coming in the past 19 market days

High networth investor and Indra Traders Chairman Indra Silva yesterday sold 3.5% stake in Commercial Bank, the largest non-state entity, for Rs. 4.3 billion, with several institutional foreign investors collecting quantities.

Deals on 29.7 million shares of COMBank worth Rs. 4.3 billion were done at the Colombo stock market yesterday, boosting its turnover to Rs. 5.17 billion, the highest since 8 December and more than three times this year’s daily average of Rs. 863.7 million.

Net foreign buying yesterday was the highest since 9 May 2014, and boosted the year-to-date inflow to Rs. 12.22 billion. Of that nearly Rs. 10 billion had come within the past 19 consecutive market days. COMBank shares closed at Rs. 139.70, up Rs. 4.40 or 3.25%.

Prior to yesterday, Silva was the largest individual shareholder and second largest of COMBank with a 9.91% stake.

Analysts believe Silva sold partly to book profit as well as reinvest in the 1 for 10 Rights Issue of COMBank at Rs. 113.60 each (Voting share).

The XR date of COMBank shares is 22 May with the last date for acceptance and payments being 12 June. Silva will need only Rs. 940 million to fully subscribe for his quota of Rights. Overall positive sentiments yesterday boosted the All Share Index by 1%, helping to close at a level, the highest since 21 October. The market has risen in 13 sessions out of 14. The index has climbed 7.9% in the 14 sessions up to Wednesday.

“Renewed foreign buying interest is coming in. But still we do not see local investors except for a few retail investors,” Acuity Stockbrokers CEO Prashan Fernando was quoted as saying by Reuters.

NDB Equities said both ASPI and S&P SL20 closed in green due to price gains in counters such as John Keells Holdings, Commercial Bank and Sampath Bank.

It said crossings were witnessed in Commercial Bank, John Keells Holdings and Sanasa Development Bank, accounting for 84.5% of turnover.

Mixed interest was observed in Tokyo Cement Company nonvoting and Sampath Bank while retail interest was noted in Teejay Lanka.

Meanwhile, foreigners remained active, closing as net buyers mainly due to foreign purchases in Commercial Bank. Total foreign purchases accounted for 90.9% of turnover.

The Banks, Finance and Insurance sector was the top contributor to the market turnover (due to Commercial Bank and Sampath Bank) whilst the sector index gained 1.48%. The share price of Sampath Bank increased by Rs. 9.60 (3.69%) to close at Rs. 269.90. The Telecommunications sector was the second highest contributor to the market turnover (due to Dialog Axiata) whilst the sector index increased by 1.33%. The share price of Dialog Axiata gained Rs. 0.10 (0.87%) to close at Rs. 11.60.

John Keells Holdings and Tokyo Cement Company nonvoting were also included amongst the top turnover contributors. The share price of John Keells Holdings moved up by Rs. 3.00 (1.98%) to close at Rs. 154.70. The share price of Tokyo Cement Company nonvoting recorded a gain of Rs. 0.90 (1.53%) to close at Rs. 59.90.

SC Securities said Vallibel One gained by 7.56% to Rs. 18.50 and LOLC by 4% to Rs. 76.80. “Out of the 222 counters traded, 27 companies declined while 145 companies closed higher,” it added.

Continuing its trailblazing performance, Commercial Bank in 2016 reported profit before income tax of Rs. 20.051 billion, marking the end of a spectacular year in which it made history as the first private bank in Sri Lanka to surpass a trillion rupees in assets. Loan book and deposits both grew by more than Rs. 100 billion in 2016.

Commercial Bank will be raising Rs. 10 billion via its Rights Issue to boost its Tier 1 Capital and facilitate future business growth of the bank.
www.ft.lk

Sri Lanka foreign reserves fall to 7-year low in March

Click here to read the Full Report                                                                                                                                                     (LBO) – Sri Lanka’s external reserves have fallen to a 6.9 year low after country’s reserves dropped almost 9 percent to 5.12 billion US dollars in March 2017, a research note showed. Central Bank has purchased 192.23 million dollars of foreign exchange from commercial banks at market rates in March while selling just 13 million dollars in the month.
Foreign currency reserves dipped 11 percent to 4.16 billion US dollars and reserves in Gold were 0.89 billion US dollars.

Central Bank’s Treasury bill holdings were up from 211.32 billion rupees in February to 233.32 billion rupees in March.

First Capital said in a research note that the sudden increase in the market liquidity towards the latter part of the month and renewed foreign and local buying interest resulted in yields dipping by 10-25bps specifically in the 2 year to 15 year bonds.

“Amidst the increasing activity, some selling pressure was observed during the last week of the month creating an overall net foreign outflow of 0.42 billion rupees in March 2017.”

“In spite of mid-long tenure yields dipping, a jump in the short tenure was observed.”

During the year up to 12 April 2017, Sri Lanka rupee has depreciated against the US dollar by 1.2 percent.

First Capital Holdings further highlighted that the money market continued to stay in deficit due to heavy foreign debt repayments.

Sri Lankan shares up 1 pct as foreign buying hits near 3-yr high

Reuters: Sri Lankan shares rose more than one percent to end at a six-month high on Wednesday as foreign investors increased the pace of stock purchases, with the net single-day inflow hitting its highest in nearly three years.

Foreign investors net bought shares worth 4.32 billion rupees ($28.42 million), led by buying in top lender Commercial bank of Ceylon on Wednesday, the highest since May 9, 2014, exchange data showed.

Commercial bank of Ceylon jumped 3.2 percent and accounted for about 84 percent of the day's turnover.

Overseas investors have bought equities worth a net 9.72 billion in 19 straight sessions, taking the year-to-date net foreign inflow into equities to 12.22 billion rupees.

The Colombo stock index ended 1.01 percent firmer at 6,446.80, its highest close since Oct. 21. The market his risen in 13 sessions out of 14.

The index has climbed 7.9 percent in the 14 sessions up to Wednesday.

"Renewed foreign buying interest is coming in. But still, we do not see local investors, except for a few retail investors," said Prashan Fernando, CEO at Acuity Stockbrokers.

Sri Lanka is in the process of raising up to $1.5 billion through sovereign bonds in the near future.

Turnover stood at 5.17 billion rupees ($34.01 million), the highest since Dec. 8 and more than three times this year's daily average of 863.7 million rupees.

Conglomerate John Keells Holdings Plc rose 1.1 percent, while private listed lender Sampath bank posted 3.7 percent growth on the day.

($1 = 152.0000 Sri Lankan rupees) 

(Reporting by Shihar Aneez; Editing by Vyas Mohan)

Sri Lanka Resus Energy buys firm with hydropower plant license

ECONOMYNEXT – Resus Energy, a Sri Lankan renewable energy company that owns and operates hydro power plants, said it bought a firm with approval for a small hydro power plant in Kegalle district for 20.3 million rupees.

A stock exchange filing said Resus Energy, formerly Hemas Power, had bought 45,005 voting shares, being the total issued capital of JB Power (Pvt) Ltd.

JB Power has approvals to develop a 700 kilowatt hydropower plant in the Kegalle district.

Resus Energy operates three hydropower plants with a capacity of 7MW.

Sri Lankan brewer invests in restaurants subsidiary

ECONOMYNEXT - Ceylon Beverage Holdings Ltd., a Sri Lankan brewer, said it invested more money in Pubs ‘N Places (Private) Ltd. (PNP), a fully owned subsidiary that owns and franchises out restaurants.

A stock exchange filing said Ceylon Beverage Holdings subscribed to 26 million shares in Pubs ‘N Places (Private) Ltd. at 10 rupees each, worth 261.9 million rupees, by capitalising part of the current account it has with its parent to infuse further share capital into PNP.

Ceylon Beverage Holdings is part of the Carson group that has a controlling stake in Lion Brewery (Ceylon) PLC, another Carson group firm.