Sri Lankan stocks end weaker on low turnover

Dec 4 (Reuters) - Sri Lankan stocks ended weaker on Thursday, erasing early gains as investors sold select shares and on caution due to political uncertainty ahead of the Jan. 8 presidential poll, analysts said.

The main stock index fell 0.27 percent, or 19.63 points, to close at 7,254.80.

Nine loyalists from President Mahinda Rajapaksa's United People's Freedom Alliance, including Health Minister Mithripala Sirisena, have defected since he announced a snap poll on Nov. 20. Sirisena is contesting against Rajapaksa as the consensus candidate of a united opposition.

Speculation that more could defect in the coming days and likely violence ahead of polling also weighed on sentiment, analysts said.

"People are in a wait-and-see approach. They may be waiting until nominations are filed next week to see the trend," said Dimantha Mathew, manager - research, First Capital Equities (pvt) Ltd.

Turnover stood at 865.5 million rupees ($6.6 million) on Thursday, exchange data showed, well below this year's daily average of 1.44 billion rupees.

Foreign investors net bought 665.2 million rupees worth of shares on Thursday, extending purchases during the year to 21.56 billion rupees, exchange data showed.

Analysts expect volatility to continue and the overall index to be flat until the elections on Jan. 8.

Carson Cumberbatch Plc led the fall, ended 4.54 percent weaker, while Ceylinco Insurance Plc fell 8.09 percent.

Lanka IOC Plc fell 3.84 percent.

($1 = 131.0000 Sri Lankan rupee) 

(Reporting by Ranga Sirilal; Editing by Prateek Chatterjee)

Sri Lanka’s HNB debenture issue oversubscribed

Dec 04, 2014 (LBO) – Sri Lanka’s Hatton National Bank (HNB) Plc.’s said the offer of 30,000,000, senior unsecured, redeemable, rated debenture oversubscribed Thursday and is closing on the same day.

The Bank offered the debt with an option to issue up to a maximum of 40,000,000 of the said debenture in the event of an over-subscription of the initial issue.

“We wish to inform you that we have received applications for over three billion rupees for the above debenture issue by Hatton National bank Plc and accordingly the initial issues has been oversubscribed.” the bank said in a stock exchange filling.

The issue closed at 4.30 pm today as per the prospects and the basis of allotment will be notified to the CSE in due course, the bank said.

Softlogic confirms Rs 3.5B odel mall

By Charumini de Silva

Ceylon Finance Today: Softlogic Holdings confirmed an investment of Rs 3.5 billion to put up its latest shopping mall adjoining the Odel flagship Store capitalizing on the booming retail sector.

"The new shopping mall will be constructed on a 300-perch land at Alexandra Place, Colombo 7 and the project is scheduled to be completed within the next three years, Softlogic Group Chairman/ Managing Director Ashok Pathirage told Ceylon FT yesterday.

The fast tracked retail expansion strategy pursued by the group made the company a keyplayer in the retail industry.

The retail arm of the Softlogic Group was confident that with the country's economy thriving at a rapid pace, they could play a keyrole in making Sri Lanka a retail hotspot in the region, Pathirage said He said the landscape of the country's retail market would see a dramatic change within the next two to three years as it had huge potential to grow.


"The high-end consumer segment is expanding in a remarkable manner. With the introduction of global fashion icons such as Levis, Nike, Giordano, Mango, Mothercare, French Connection, Splash, Tommy Hilfiger, Charles & Keith and Dockers, we saw an upward trend in our sales, which was a draw back in the retail industry some years ago. 

However, with our multi-brand, multi-channel strategy allows us to stay ahead of evolving consumer preferences by giving the consumers a choice of diverse brands, products and special offers," Pathirage added. He further said that they wish to facilitate original brands for Sri Lankans and for tourists, so that international brands were available to people locally. This would also enable tourists to do more shopping with familiar brands in the country without limiting their holiday experience to a hotel stay," he said.

There is great potential to make Sri Lanka as a shopping destination, but still we are losing out a large number of shopping travellers to countries like Dubai," he explained.
Pathirage said the country would develop, and the private sector would take the leadership, irrespective of the imminent political landscape.
www.ceylontoday.lk

Capital Alliance records strong performance in 1H

Capital Alliance Ltd. (CALT), the leading primary dealer in government securities, recorded a profit after tax (PAT) of Rs. 555.87 million for the first half of the FY 2014/2015 ending 30 September 2014.

Strong partnerships with clients combined with an in-depth understanding of their needs, helped CALT to consistently add value to all client investments in H1 of 2014. CALT’s strong performance was also a result of the aggressive trading strategy the company adopted, which was supported by favourable market conditions created by the Central Bank of Sri Lanka.

More relaxed monetary policies combined with lower inflation rates and greater liquidity in the market helped the company perform at its optimum.

With an increase in profitability of Rs. 557.03 million from H1 of the previous financial year, CALT has matured into a highly innovative and strategic force in Sri Lanka’s trading arena. The company concentrated heavily on continuous staff training in H1 of 2014, developing a team of dynamic market leaders who are well-equipped to meet the challenges of an ever-changing trading climate.

Additionally, a variety of clients from a cross-section of industries joined CALT’s prestigious client portfolio, enabling the business to grow exponentially in a short period of time.

The company reported a net interest income of Rs. 79.28 million, a 4.52 % increase from the same period of the previous year.

CALT also recoded total capital gains of Rs. 633.31 million, a drastic increase from the loss of 29.76 million made in the previous first half of the year. CALT recorded impressive growth in income from operating activities which was reported at Rs. 712.45 million.

Following the momentum of growth, the company’s total assets were valued at Rs. 7.99 billion, an 18% increase from H1 of the previous year. The total shareholder’s fund for the company grew by 101 % to Rs. 1.4 billion and the earnings per share were recorded at Rs. 37.06 and investment in Government instruments was noted at Rs. 7.80 billion.

Commenting on the company’s financial performance, CALT Chief Executive Officer Gihan Hemachandra stated: “Our team has performed exceptionally well once again in the first half of this financial year, using aggressive strategies, research and well-calculated decisions to secure success in the dealing room. At CALT, our employees are our main asset and our clients are our main priority. We invested heavily this year in ensuring that our team was up-to-date with the latest technology, knowledge and expertise in the trading sphere.

“This level of training helps our team to perform at its very best and also enables us to deliver a world-class service and high returns to our clients. Our core strength is dealing in government bonds and in H1 of 2014. We used these skills to diversify our business into new areas such as corporate debt. By doing this we were able to enhance our trading opportunities and penetrate new markets. We identified new market opportunities in a timely manner and were able to secure high investment returns for our clients. Looking to the future, CALT will focus on further exploring other segments and alternative markets as well.”

CALT has gradually evolved into a multi-faceted organisation offering a sophisticated selection of structured government debt-based instruments including treasury bills, treasury bonds, repurchase agreements and reverse purchase agreements, corporate debt, leverage bond trading and interest rate swaps.

CALT is Sri Lanka’s first registered corporate debt dealer in the primary dealer category and is one of six non-bank licensed primary dealers in the country.
www.ft.lk

Sri Lanka 182-day T-Bill yield at 5.84 pct at auction

Fitch Rates Seylan Bank's Senior Debentures Final 'A-(lka)'

(The following statement was released by the rating agency) 

COLOMBO/TAIPEI, December 03 (Fitch) Fitch Ratings Lanka has assigned Seylan Bank PLC's (Seylan; A-(lka)/Stable) proposed senior debentures of up to LKR6bn a final National Long-Term Rating of 'A-(lka)'. The assignment of the final rating follows the receipt of final documents that conform to information previously received. The final rating is at the same level as the expected rating assigned on 4 November 2014. The debentures, which are to have tenors of four, five and six years and carry fixed coupons, are to be listed on the Colombo Stock Exchange. Seylan expects to use the proceeds to strengthen its funding mix and to reduce asset and liability maturity mismatches. 

KEY RATING DRIVERS 

The proposed debentures are rated at the same level as Seylan's National Long-Term Rating in accordance with Fitch's criteria as they constitute unsecured senior obligations of the bank. Seylan's rating reflects Fitch's view that the Sri Lankan state (BB-/Stable) would provide extraordinary support to the bank, in case of need, because the regulator has identified Seylan as a one of six systemically important domestic banks. 

RATING SENSITIVITIES 

The rating on the debentures will move in tandem with Seylan's National Long-Term Ratings. 

A full list of Seylan's ratings follows: 

National Long-Term Rating: 'A-(lka)'; 

Stable Outlook Outstanding Sri Lanka rupee-denominated senior unsecured debentures: 'A-(lka)' 

Outstanding Sri Lanka rupee-denominated subordinated debentures: 'BBB+(lka)' 

Proposed Sri Lanka rupee-denominated senior unsecured debentures: 'A-(lka)' 

For more details on Seylan's ratings, see "Fitch Affirms Seylan Bank at 'A-(lka)'; Outlook Stable" dated 1 October 2014, available at www.fitchratings.com. 

Contacts: 

Primary Analyst Rukshana Thalgodapitiya Vice President +94 1 1254 1900 Fitch Ratings Lanka Limited Level 15-04, East Tower, World Trade Center Colombo 01, Sri Lanka Secondary Analyst Kanishka de Silva Analyst +94 1 1254 1900 Committee Chairperson Jonathan Lee Senior Director +886 2 8175 7601 Media Relations: Bindu Menon, Mumbai, Tel: +91 22 4000 1727, Email: bindu.menon@fitchratings.com. 

Note to editors: 

Fitch's National ratings provide a relative measure of creditworthiness for rated entities in countries with relatively low international sovereign ratings and where there is demand for such ratings. The best risk within a country is rated 'AAA' and other credits are rated only relative to this risk. National ratings are designed for use mainly by local investors in local markets and are signified by the addition of an identifier for the country concerned, such as 'AAA(lka)' for National ratings in Sri Lanka. Specific letter grades are not therefore internationally comparable. Additional information is available at www.fitchratings.com. Applicable criteria, "Global Financial Institutions Rating Criteria", dated 31 January 2014, "National Scale Ratings Criteria", dated 30 October 2013, "Assessing and Rating Bank Subordinated and Hybrid Securities" dated 31 January 2014, and "Evaluating Corporate Governance", dated 12 December 2012 are available at www.fitchratings.com. Applicable Criteria and Related Research: Global Financial Institutions Rating Criteria here National Scale Ratings Criteria here Assessing and Rating Bank Subordinated and Hybrid Securities Criteria here Evaluating Corporate Governance here Additional Disclosure Solicitation Status here 

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

Sri Lanka's November tourist arrivals up 9.42 pct yr/yr

Dec 04, 2014 (LBO) - Sri Lanka's tourist arrivals rose 9.4 percent to 119,727 in November 2014 from a year earlier, driven by China and India, data from the state tourism promotion office showed.

In the eleven months of 2014 arrivals were up 20.3 percent to 1,348,481.

South Asian visitors were down 0.3 percent to 31,135 compared to the same month last year with arrivals from India, Sri Lanka top market, down 0.2 percent to 19,762.

Visitors from Maldives were up 8.5 percent to 8,329 and Pakistan was down 26.9 percent to 1,819.

East Asian visitors were up 47.6 percent to 21,398 with arrivals from China up 125.3 percent to 10,878.

In the eleven months to Novemebr, visitors from China were up 137.6 percent to 117,766.compared to 128,172 from Britain up 4.9 percent.

Malaysian visitors were down 8.8 percent to 2,018, Japanese were up 299.0 percent to 2,518 and Indonesia was down 34.6 percent to 573 compared to the same month last year.

Visitors from Western Europe were up 12.8 percent 35,915 in the month with UK up 11.0 percent to 10,730 and Germany up 17.3 percent to 9,049.

Eastern European arrivals were down 4.9 percent to 15,850 with Russia down 3.9 percent to 7,282, Ukraine also was down 42.6 percent to 2,654.


Middle Eastern visitors were down 10.5 percent to 4,327 with arrivals from Saudi Arabis up 48.0 percent to 1,328 and UAE down 21.6 percent to 359 but Oman was up 17 percent to 571.

Sri Lanka targets 1.5 million tourist arrivals for the year 2014 with the key focus of achieving 2.5 million of tourists in the end of 2016.