Sri Lankan shares end slightly lower ahead of budget

Reuters: Sri Lankan shares ended marginally lower on Tuesday, down from a more than two-week closing high hit in the previous session, as investors turned cautious ahead of the national budget scheduled on Nov. 10.

Sri Lanka's 2017 budget plan will seek to boost revenue through a capital gain tax on properties, simplify tax collection and offer incentives to spur exports, though progress will depend on the coalition government agreeing on economic priorities, analysts say.

The benchmark index of the Colombo Stock Exchange ended 0.09 percent weaker, or down 5.91 points, at 6,439.06, slipping from its highest close since Oct. 21 hit on Monday.

Turnover stood at 161.7 million rupees ($1.10 million), less than a quarter of this year's daily average of 715.7 million.

Foreign investors bought beaten down stocks for a fifth straight session, picking up shares worth a net 12.3 million rupees. They have net sold 1.01 billion rupees worth of shares so far this year.

"It was a very lethargic day. Investors are waiting for the upcoming budget," said Yohan Samarakkody, head of research, SC Securities (Pvt) Ltd.

Shares in the biggest listed lender, Commercial Bank of Ceylon Plc, fell 0.86 percent, while Dialog Axiata Plc lost 1.74 percent.

Conglomerate John Keells Holdings Plc fell 0.59 percent. 

($1 = 147.6000 Sri Lankan rupees) 

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

Sri Lanka's Overseas Realty records Rs. 2.28B Q3 Profit

Overseas Realty (Ceylon) PLC recorded a group Profit after tax of Rs. 2,2 billion for the nine months ended September 30, 2016.

The Company recorded a revenue of Rs. 1,395 million from Property Leasing at the World Trade Center (WTC) Colombo and expects to maintain good occupancy levels during 2016. Revenue from Other Services was Rs 150 million which is an increase of 21% over the corresponding period of 2015. However, the revenue from apartment sales reduced from Rs. 805 million to Rs. 284 million due to the inability to recognize revenue of Havelock City Phase 3 sales during this period.

Phase 3 was launched in March 2016 and as at the quarter end around 28% of the Phase 3 units had been pre-sold. While construction of Havelock City Phase 3 is currently underway, pilling work for Phase 4 is scheduled to be completed by April 2017.

The Group Net Asset Value per Share as at September 30, 2016 stood at Rs. 33.20 and the earnings per share for the period stood at Rs. 2.48.

www.sundaytimes.lk

Sri Lanka's Seylan’s growth momentum continues

Seylan Bank continued its growth momentum by recording a profit-after-tax of Rs. 2,828 million, for the 9 months ended 30th September 2016. This is a 3.6 per cent increase over the Rs. 2,730 million reported for the corresponding period of 2015 and has been achieved despite rising interest rates.

Interest income grew by 33.7 per cent driven by the sustained credit growth achieved by the Bank. Interest expenses increased at a faster pace of 59.5 per cent during the year, thereby compressing margins.

Despite the drop in margins, the bank posted a 7.9 per cent growth in Net Interest income from Rs. 8,850 million to Rs. 9,552 million for the 9 months ended 30th September 2016 as a result of the strong balance sheet growth.

Net fee and commission income witnessed a 17.8 per cent robust growth from Rs. 1,869 million to Rs. 2,202 million during Q-3 2016 driven by fees from card acquisitions, trade finance and related fees.

Other operating income comprising net gains from trading, gains on financial instruments, gains on foreign exchange and other income decreased by 8.78 per cent from Rs. 1,230 million reported in 2015 to 1,122 million during Q-3 2016 mainly as a result of mark- to-market losses on Government Securities, due to the upward movement in interest rates.

Total expenses recorded a growth of 9.7 per cent from Rs. 6,515 million to Rs. 7,146 million in nine months ended 2016.

The bank reported a significant net credit growth of 15.01 per cent, with net advances growing from Rs. 193,104 million to Rs.222,083 million during Q-3 2016. The NPA ratio increased marginally to 5.12 per cent but is expected to improve by year end with strong remedial measures being implemented.

The bank’s CASA ratio (current and savings accounts) stood at 33.65 per cent amidst the industry-wide shift witnessed towards higher yielding Fixed Deposits in the backdrop of increasing interest rates.

Fixed deposits increased from 61.98 per cent by end of year 2015 to 64.64 per cent Q-3 2016 of the total deposit base. The overall deposit base recorded a growth of 11.65 per cent from Rs. 224,525 million by end of 2015 to Rs. 250,691 million in Q-3 2016.

www.sundaytimes.lk

Sri Lanka's Union Bank profits surge

Union Bank of Colombo PLC (Union) reported a post-tax profit for the 9-months ended September 2016 of Rs.262 million, a 125 per cent increase year on year (YoY).

The total operating income of the bank grew by 30 per cent YoY to Rs.2,685 million. Interest income grew by 66 per cent YoY to Rs.4,951 million .

Interest expense grew by 128 per cent YoY to Rs.3,301 million. Net Interest Income grew by 7 per cent YoY to Rs.1,651 million. The bank’s fee and commission income of Rs.239 million is an increase of 57 per cent over the comparative period with fee income from business lending, cards and trade transactions being the primary contributors of the said impressive growth.

Other income grew significantly by 104 per cent to Rs.846 million.

Net NPL ratio improved to 1.9 per cent from 2.7 per cent in December 2015 with a corresponding reduction in impairment charges from the comparative period.

Total Impairment charge for the period is Rs.38 million and reflected a 72 per cent reduction YoY. The bank’s total operating expenses increased by 31 per cent to Rs.2,226 million primarily due to investment spending on new branches, ATMs, staff and technology in line with the strategic plan.

The bank remains well capitalised with a strong core capital adequacy ratio of 23 per cent and a total capital adequacy ratio of 22 per cent.

Source: www.sundaytimes.lk

Colombo Stock Exchange Market Review – 07th Nov 2016

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Colombo Stock Exchange Trade Summary 07-Nov-2016

Colombo bourse edged up at the start of the budget week with moderate investor activity. All Share index touched 6,458 mark in the morning hours but closed at 6,444.97, with a gain of 9.80 index points or 0.15%. 20-scrip S&P SL index bagged 11.35 index points or 0.31% to end at 3,619.90.

High caps in consumer staples sector namely, Ceylon Cold Stores (closed at LKR 705.20, +6.1%) and Nestle Lanka (closed at LKR 2,099.50, +2.4%) pushed the index higher. However losses in Sri Lanka Telecom (closed at LKR 35.80, -2.2%) and Ceylon Tobacco (closed at LKR 845.50, -0.5%) impacted the index gains.

Daily market turnover was LKR 406mn. John Keells Holdings top the turnover list with LKR 265mn underpinned by two crossings amounting to 0.82mn shares at LKR 152.00. High investor activity was witnessed in the stock and the counter accounted for 65% of the total turnover. Investor preference was supported by positive earnings for the 2nd quarter.

Sampath Bank (LKR 16mn), Dialog Axiata (LKR 10mn) and Commercial Credit & Finance (LKR 10mn) were among top contributors to the turnover.

Market breadth was equally divided where 63 slipped, 60 advanced while 75 remained unchanged. Commercial Credit & Finance, Ceylon Cold Stores and DFCC Bank were among most traded counters.

Meanwhile, Keells Food Products advanced to LKR 163.00 (+2.4%) backed by interim dividend of LKR 5.75 per share. Further, Aitken Spence second quarter profits increased by 50%YoY but the positive sentiment was not reflected in the share price as the counter closed with a slight increase of 0.1% to LKR 69.90.

Foreign investors continued to remain on buy side for the fourth consecutive session with a net foreign inflow of LKR 189mn. Net foreign inflows were seen John Keells Holdings (LKR 178mn), Dialog Axiata (LKR 8mn) and Commercial Bank (LKR 3mn). Net foreign outflow was mainly seen in Ceylon Cold Stores (LKR 3mn).
Source: LSL

Sri Lanka Ceylon Cold Stores Sept net up 49-pct

ECONOMYNEXT – Ceylon Cold Stores, a unit of Sri Lanka's John Keells Holdings, which owns the Elephant House beverage and ice cream brands, said September 2016 quarter net profit rose 49% to just over a billion rupees from a year ago.

Sales grew 33% to Rs10.9 billion during the quarter, interim accounts filed with the stock exchange showed.

Net finance income more than doubled to Rs59 million.

Earnings per share of Ceylon Cold Stores rose to Rs11.05 in the September 2016 quarter from Rs7.43 a year ago.

The bulk of the profits came from the firm’s manufacturing sector although profits from the retail segment, which generates the bulk of sales, grew at a faster pace.

In May this year, Ceylon Cold Stores announced it started a Rs3billion factory to expand capacity.

Sri Lanka October tea prices reach record levels

(LBO) – Sri Lankan tea prices at the Colombo auctions were at an new monthly high in October 2016 as volumes fell but demand picked up.

“Auction averages reached record levels in the backdrop of a sharp decline in availability,” Forbes & Walker Tea brokers said in their October report.

“Auction average for the month of October totaled Rs.550.92 vis-à-vis Rs.390.13 of October 2015 showing a substantial gain of Rs.160.79 thus establishing the highest ever average for a calendar month.”


Full statement is below

Highest ever monthly average – Up Rs.160.79 YOY
Monthly averages of all three elevations achieve record levels

Auction average for the month of October totalled Rs.550.92 vis-à-vis Rs.390.13 of October 2015 showing a substantial gain of Rs.160.79 thus establishing the highest ever average for a calendar month. It is also relevant to note that this is the second consecutive month where this feat was achieved the previous best being September 2016 when the average realized Rs.512.03.It is also commendable that all three elevations too have recorded the highest averages for a calendar month .

High Growns totalling Rs.523.88 have shown a gain of Rs.117.02 vis-à-vis Rs.406.86 of October 2015.Similarly Mediums averaging Rs.487.34 have shown a gain of Rs.131.69 vis-à-vis Rs.355.65 of October 2015. Low Growns with a substantial gain of Rs.179.95 have recorded an average of Rs.572.15 for October 2016 vis-à-vis Rs.392.20 of October 2015.These levels are significantly higher than the corresponding month of 2015 even in USD terms. Further these levels show a fairly significant gain over 2014 levels in LKS/USD terms.

January – October 2016 cumulative auction average totalled Rs.450.84 vis-à-vis Rs.400.04 of January – October 2015 showing a gain of Rs.50.80. High Growns totalling Rs.433.37 have shown a gain of Rs.47.69 vis-à-vis Rs.385.68 of January-October 2015 whilst Medium Growns totalling Rs.406.73 show a gain of Rs.45.18 vis-à-vis Rs.361.55 of January-October 2015. Similarly Low Growns totalling Rs.467.76 for the period of January-October 2016 show a gain of Rs.53.49 Vis-à-vis Rs.414.27 of January-October 2015. Here again these averages show a growth in USD terms although not as significant as the gain achieved for the month. It is also relevant that with the exception of the High Grown average, all other elevational averages have been lower when compared to 2014 cumulative averages.