Sri Lankan shares end up on Commercial Credit stake sale

Reuters: Sri Lankan stocks closed at their highest level in six weeks on Tuesday, led by record gains in Commercial Credit and Finance Plc after Thailand's Group Lease PCL bought a 30 percent stake in the firm.

Motorcycle lessor Group Lease has acquired a 30 percent stake in Commercial Credit and Finance PLC (CCF) for $70 million, the company said on Monday, in its first major expansion outside Southeast Asia.

Shares of CCF touched a record high of 77 rupees during the session, before closing at 72.80 rupees.

"We saw strong interest in other financial shares as well after this deal," said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

The benchmark index of the Colombo Stock Exchange ended firmer by 0.26 percent, or 17.02 points, at 6,591.41, its highest close since Aug. 23.

"We are bullish on the outlook because the market interest rates have fallen in the last one month. Large investors are still waiting to see the budget. But we see some people are ready to take risk in medium-term and buying now," Mathew added.

Treasury bill yields have slipped between 48 basis points and 62 basis points in the last four weekly auctions through Wednesday, the central bank data showed.

Analysts said they expected the index to rise this week due to the fall in the return on fixed income assets.

Foreign investors bought a net 10 million rupees worth of shares on Tuesday. But they have been net sellers of 2.85 billion rupees worth of equities so far this year.

Turnover stood at 621.7 million rupees ($4.26 million), less than this year's daily average of 758.7 million rupees.

Ceylon Tobacco Company PLC climbed 2.3 percent. However, analysts said the company's shares are likely to fall on Wednesday after the government imposed a 20 percent tax on tobacco with effect from Tuesday.

($1 = 146.1000 Sri Lankan rupees) 

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

Colombo Stock Exchange Market Review – 04th Oct 2016

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Colombo Stock Exchange Trade Summary 04-Oct-2016

Colombo Bourse closed on opposites today with benchmark ASI extending gains for the sixth straight session to close at 6,591.41, up 17.02 index points or 0.3%. The blue-chip S&P SL 20 index edged lower to close at 3,641.94, with a drop of 10.66 points or 0.3%. Market breadth was mostly positive with gainers outweighing loser 73 to 63.

The diverse performance in the two indices was largely due to the hefty gains in Commercial Credit & Finance. The counter witnessed significant investor interest after the announcement of share purchase agreement between Group Lease Holdings and three existing shareholders, BG Investments, Creations Investment Sri Lanka and S.L. La France for a stake of 29.99% at a price of LKR 111.00. The substantial price premium drove the share price to a intra-day high of LKR 77.00 (+42%). The counter closed at LKR 72.80, with a gain of 35%.

Among the blue-chips, Ceylon Tobacco (LKR 878.00,+2.1%) and Cargills Ceylon (LKR 180.00,+2.9%) supported the index with gains while Lion Brewery (LKR 401.90,-5.9%), Commercial Bank (LKR 145.00,-1.4%) and John Keells Holdings (LKR 155.10,-0.6%) stood on the opposite side.

Market turnover fell to LKR 622mn after surpassing LKR 1bn for two consecutive days. Commercial Credit & Finance contributed LKR 143mn to the days’ turnover while other noteworthy contributions came from Tokyo Cement-voting (LKR 38mn) and John Keells Holdings (LKR 34mn). Negotiated deals in Browns Investments (20mn shares at LKR 1.40), Tokyo Cement- voting (0.5mn shares at LKR 59.50) and John Keells Holdings (0.1mn shares at LKR 156.00) represented 13% of the market turnover.

In addition to Commercial Credit & Finance, investor interest was seen in Lanka Century Investments, Sinhaputhra Finance – preference shares, Ceylon Grain Elevators and Vallibel One.

Foreign investors stood on buy side with a net foreign inflow of LKR 10mn. Foreign participation was 15%. Net foreign inflows were seen in Teejay Lanka (LKR 29mn), Commercial Bank (LKR 17mn) and Ceylon Grain Elevators (LKR 12mn). Net foreign outflow was mainly seen in Tokyo Cement (LKR 32mn).

Source: LSL

Fitch rates Combank debentures at ‘AA-(lka)’

Fitch Ratings Lanka has assigned Commercial Bank PLC’s (CB; AA(lka)/Stable) proposed Basel II-compliant subordinated debentures of up to LKR 7bn a final National Long-Term Rating of ‘AA-(lka)’.

The final rating is the same as the expected rating assigned on 3 August 2016, and follows the receipt of documents conforming to information already received.

The proposed issuance, which will have tenors of five and 10 years and carry fixed coupons, will be listed on the Colombo Stock Exchange. CB expects to use the proceeds to fund loan expansion, reduce asset and liability maturity mismatches, and increase its Tier II capital base.

The issue is rated one notch below CB’s National Long-Term Rating, to reflect the subordination to senior unsecured creditors.

Thai Group Lease to buy stake in Commercial Credit and Finance

Thai motorcycle lessor Group Lease PCL has acquired a 30 percent stake in Sri Lanka’s Commercial Credit and Finance PLC (CCF) for $70 million, the company said , in its first major expansion outside Southeast Asia.

The acquisition comes a month after it bought a 71.9 percent stake in BG Microfinance Myanmar from the Sri Lankan finance firm to expand into Myanmar, adding to existing operations in the Southeast Asian countries of Cambodia, Laos and Indonesia.

With assets of $450 million, Group Lease is one of Thailand’s biggest three motorcycle lessors with a market share of 10 percent to 11 percent.

(Yahoo news)

www.dailynews.lk

Sri Lankan shares end at over 5-week closing high

Reuters: Sri Lankan stocks ended up for a fifth straight session to post a more-than-five-week closing high on Monday, led by conglomerate John Keells Holdings , as hopes over better macro-economic conditions helped boost sentiment.

The day's turnover was boosted by foreign institutional investors.

The benchmark index of the Colombo Stock Exchange finished up 0.61 percent, or 39.62 points, at 6,574.39, its highest close since Aug. 25.

"Investors are bullish given the better outlook for macroeconomic fundamentals," said Prashan Fernando, COO, Acuity Stockbrokers.

Sri Lanka's consumer prices rose 3.9 percent in September from a year earlier, at a slightly slower pace compared with the 4 percent in the previous month.

Stockbrokers said the market believes the central bank's tightening measures have begun to act, which leads to a possibility of lower rates in future. Central bank chief Indrajith Coomaraswamy's positive comments published in local newspapers over the weekend also helped boost sentiment, they added.

Last week, the central bank's decision to hold key monetary policy rates steady, after tightening policy three times since December, suggested that policy makers were keen to support a slowing economy, analysts said.

The gain also comes after treasury bill yields fell between 16 basis points and 33 basis points after the rate decision on Wednesday.

Analysts said they expected the stock index to rise this week due to the fall in the return on fixed income assets.

Foreign investors bought a net 84.8 million rupees worth of shares on Monday. But they have been net sellers of 2.86 billion rupees worth of equities so far this year.

Turnover stood at 1.32 billion rupees ($8.99 million), more than this year's daily average of 759.4 million rupees.

John Keells Holdings Plc climbed 1.3 percent, while the biggest-listed Lender Commercial Bank of Ceylon Plc rose 2.15 percent.

Shares in Lion Brewery PLC jumped 12.4 percent as market expects better earnings after its plant, hit by the floods in May, is ready to operate, stockbrokers said.

($1 = 146.2500 Sri Lankan rupees) 

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

Colombo Stock Exchange Market Review – 03rd Oct 2016

Colombo Stock Exchange Trade Summary 03-Oct-2016

Colombo Equities edged higher on Monday, continuing the positive momentum from last week. The ASI index gained 39.62 index points or 0.6% to close at 6,574.39 while the blue-chip S&P SL 20 index closed at 3,652.60 up 35.28 index points or 1.0%. 

The optimism was reflected in most share prices and the gainers outweighed the losers 78 to 65. Among the blue-chips, Lion Brewery (closed at LKR 427.00,+12.4%), John Keells Holdings (LKR 156.00,+1.3%), Commercial Bank (closed at LKR 147.10,+2.2%) and Hemas Holdings (closed at LKR 106.90,+2.7%) contributed most to the index gains.

Market turnover reached LKR 1.3bn supported by foreign investor activity in Hemas Holdings. The counter witnessed two crossings totaling to 7.4mn shares at LKR 107.00. Accordingly Hemas Holdings led the turnover list with LKR 803mn followed by John Keells Holdings (LKR 111mn) and Hatton National Bank (LKR 37mn).

Retail investor activity was mostly concentrated on Galadari Hotels which saw a gain of 12% in today’s trading session. Further, investor interest was seen in hotel sector stocks such as Citrus Kalpitiya and Anilana Hotels.

Foreign investors were net buyers with a net inflow of LKR 85mn. The foreign participation was 70%. The top net inflows were seen in John Keells Holdings (LKR 86mn), Commercial Bank (LKR 14mn) and Hatton National Bank – nonvoting (LKR 5mn) while top net outflow was seen in Lion Brewery (LKR 16mn).

Source: LSL

Ceylon Tea Services now Dilmah Ceylon Tea Co. PLC

Ceylon Tea Services PLC, the Merril J. Fernando company that has established its Dilmah brand in global tea markets earnings for itself the reputation of establishing a fully owned Ceylon tea brand, last week adopted a special resolution at it annual general meeting to rename itself as Dilmah Ceylon Tea Company PLC.

The company also decided to amend its articles by including the objective of "to carry on the business of the manufacture and export of value added tea."

Incorporated in 1981 the company, a subsidiary of MJF Teas (Pvt) Ltd., was later listed on the Colombo Stock Exchange and is among the highest dividend payers of companies quoted on the CSE.

CTS like other companies in the MJF group are strong supporters of environmental and social causes through the MJF Foundation devoting a share of its earnings to these activities.

www.island.lk