Thursday, February 28, 2013

Sri Lanka still the territory of frontier market specialists


Feb 28, 2013 (LBO) - Sri Lanka is still the territory of a small group of specialist investors being relatively unknown and with only a few companies of a sufficient size and liquidity, frontier market investors said.

 Brad West, a long time Asian frontier market investor who is now chief operating officer of CAL Partners, which was set up with Sri Lanka's Capital Alliance group says larger funds find it difficult to enter Sri Lanka.

 "The eligible investor looking at Sri Lanka's listed market today is a very tiny part of the global equity investor community," he told a forum of senior executives at the LBR-LBO Chief Financial Officers Forum in Colombo.

"He or she is a frontier specialist."

He said in a typical Asian emerging market fund about 10 percent may be allocated to frontier markets.

West said a frontier market fund would take a position of about million dollars in a fund, whereas in an emerging market fund it was about 10 million dollars. In a global fund the position would be larger.

West said foreign funds would not want to hold more than 9.9 percent of a company because owners of the fund would want board representation and if something went wrong the fund managers could be sued.

"He does not want to own more than three days worth of trades," West said. "So you work it all out and Holy Cow you can’t buy a lot of companies."

Lloyd Fisher, another emerging markets investor said Sri Lanka only had a few companies with over a billion US dollars in market cap, though a few had over 500 million US dollars.

Foreign investors did not want to buy into companies whose stock moved up sharply the moment they started to take a position, he said.

They also wanted liquidity to exit when they wanted. Very few companies in Sri Lanka fit the bill he said. Fisher said he had been investing in Sri Lanka for about a year.

"Foreign investors look for corporate governance, transparency, clear and understandable regulations," he said. "It sound clich├ęs it but it is not difficult to achieve."

They said conditions in Malaysia in the early 1990s and Singapore in the 1980s were somewhat similar to Sri Lanka.

Fisher said investors looked at transaction costs, including brokerage, custodial fees, and foreign exchange conversion costs.

West said frontier market investors had to be patient, and could not do quick trades because transactions costs could be up to 4 percent in a frontier market compared to half that in a more advanced market.

In Sri Lanka's last market boom, fired by low interest rates and margin credit many foreign investors made the right call and exited. They are now coming back.

West said when he first went to Malaysia there were hardly any foreigner and it was a 'fly-over' territory. He said Sri Lanka was somewhat in similar.

 "In a year or two from now you've got to land here," he said. "And guess what? It is a cleaner place. A safer place, the quality of life is higher. People are smart."

Other analysts however have said that Malaysia and Singapore have had the basics right including good monetary, fiscal policy and rule of law. In Sri Lanka however though a 30-year war ended concerns are rising and nationalism is on the rise.

But West said believed Sri Lanka could make it.
"Today people who come here are on the way to Dhaka, to Karachi. That is the frontier market routine," he said.

"We want to be in the route where you go to Singapore for a couple days, go you go KL. Then you come here, and finish your trip in Mumbai and go back to London and New York."

"That is where we want to be, and that is where we can be."

source - www.lbo.lk

COMBank first to cross Rs. 10 b net profit mark; Rs. 500 b in assets

Commercial Bank of Ceylon PLC has established yet another performance milestone, becoming the first private bank in Sri Lanka to surpass Rs. 10 billion in net profit, following a solid all-round 2012 performance that the bank dedicates primarily to its customers.

Profit before tax for the 12 months ending 31 December 2012 grew 30.26% to Rs. 14.311 billion, while profit after tax at Rs. 10.072 billion reflected a growth of 25.15%, Sri Lanka’s largest private bank said in a filing with the Colombo Stock Exchange.

 Commercial Bank Chairman Dinesh Weerakkody said the bank’s financial results reflect the significant role it now plays in the lives of millions of people and the national economy, as well as its commitment to the concept of ‘Banking on You’.

Commenting on the bank’s 2012 performance, Weerakkody said: “The bank’s stellar
 performance this year amply demonstrates the ‘value’ of long standing relationships that the bank has built over the years. Many Sri Lankans are stakeholders of the bank given the bank’s wide geographical spread and the large customer base cutting across every stratum of society.”

Commercial Bank’s Managing Director and CEO Ravi Dias noted: “Our aim has always been to focus on our fundamentals – strengthening the balance sheet, ensuring stability and maintaining a strong current and savings account base, which at current levels is probably the best in the industry.”

The bank’s total income for 2012 improved by 38.88% to Rs. 63.167 billion, with interest income increasing 37.72% to Rs. 51.838 billion and non-interest income, composed of foreign exchange and other income, growing by 47.62% to Rs. 9.729 billion.

 Interest income from loans and advances grew by 45.35% to Rs 41.711 billion. The bank’s total performing loans and advances increased by Rs. 48.824 billion or 17.94% over the 12 months. Interest income from other interest earning assets such as Treasury bills and bonds improved by 13.26% to Rs. 10.128 billion.

 With the bank’s deposits portfolio growing by Rs. 64.262 billion or 20.18%, interest expenses grew by 52.31% in the review period to Rs. 29.918 billion.

 Consequently, net interest income increased by 21.80% to Rs. 21.920 billion.

 The growth in non-interest income was attributable principally to increased foreign exchange income. A high volume of Treasury operations and translation gains generated foreign exchange income of Rs. 4.752 billion, an increase of 104.69%.

 Total loans and advances of the bank improved by 17.67% over the 12 months to Rs. 338.843 billion at 31 December 2012. This growth was carefully managed by the bank in keeping with the guidelines stipulated by the Central Bank of Sri Lanka, Commercial Bank’s Chief Financial Officer Nandika Buddhipala said.

 The bank’s total deposits stood at Rs. 382.723 billion at 31 December 2012.

 Total assets of the bank crossed the Rs. 500 billion milestone during the year to Rs. 510.75 billion, reflecting a growth of 15.79%. Commercial Bank is the first private bank in Sri Lanka to exceed Rs. 500 billion in assets.

 The provisioning policy adopted by the bank under which it made additional provisions over and above the minimum level required by the Central Bank resulted in net provisions for bad and doubtful debts increasing to Rs. 1.496 billion, Buddhipala disclosed. In addition to this the bank made a general provision of Rs. 228 million in the year reviewed.

 The bank’s gross non-performing loans ratio reduced marginally from 3.43% in 2011 to 3.37% in 2012, and its net NPL ratio also improved, from 2.08% to 1.84%.

 Its interest margin increased by 15 bps to 4.59% from 4.44% a year previously.

 Non-interest expenses increased by 17.03% to Rs. 13.858 billion, with staff cost, premises, equipment and establishment charges increasing due to expansion of the branch network and relocation of several branches.

 The bank opened 14 new delivery channels and installed 55 new ATMs in Sri Lanka during the review period to end the year with 227 service points and a network of 555 ATMs, which is the single largest ATM network owned by a bank in Sri Lanka. The bank’s Bangladesh operations comprised of 17 service points and 14 ATMs in the year under review.

 In other key performance indicators, the bank’s return on equity improved to 20.79% while return on assets improved to 3.01% before tax and 2.12% after tax.

 A 10-year subordinated loan of US$ 75 million obtained from the IFC in the first quarter of 2013 would further improve capital adequacy, creating more room for leverage, Buddhipala said.

 Taken as a Group, the Commercial Bank, its subsidiaries and associates reported a pre-tax profit of Rs. 14.332 billion at the end of 2012, representing a growth of 29.49%. Profit after tax for the period increased by 24.25% to Rs. 10.058 billion.

 Commercial Bank is the only Sri Lankan bank to be listed two years consecutively in the world’s Top 1,000 Banks. The bank has been adjudged ‘Best Bank in Sri Lanka’ for 14 consecutive years by ‘Global Finance’ Magazine, and has won multiple awards as the country’s best bank from ‘The Banker,’ ‘FinanceAsia,’ ‘Euromoney’ and ‘Trade Finance’ magazines.

source - www.ft.lk

Bourse recovers slightly, retailers still on sidelines

The Colombo bourse looked up yesterday, a day after a steep fall, on a turnover of Rs.623.1 million, down from the previous day’s Rs.714 million with both indices up – the All Share by a modest 4.99 points (0.09%) and S&P SL20 by a higher 8.61 points (0.27%) with 112 gainers ahead of 96 losers while 48 counters closed flat.

Foreign sales amounted to Rs. 205.6 million, resulting in a net outflow of Rs. 107.18 million.

As on the previous day block trades in HNB (900,000 shares), Dialog (4.4 million shares) and Commercial Bank (voting) (700,000 shares) contributed Rs.249 million to the day’s turnover with HNB seeing two crossings and Commercial Bank and Dialog one each.

"The ASPI ended marginally higher amid subdued activity levels, with block trades on COMB, DIAL, and HNB accounting for around 40% of market turnover," John Keells Stockbrokers said.HNB contributed Rs.133.2 million to turnover with the crossings in two parcels at a price of Rs.148 while Dialog contributed Rs.40.04 million with a single crossing at Rs.9.10 while Commercial Bank contributed Rs.76 million with a crossing at Rs.108.50.

``Activity was muted with limited retail participation,’’ a broker said. There was some retail activity in Access and even pricier banking shares, he noted.

On the trading floor Commercial Bank topped the turnover league closing Rs.1.50 up at Rs.109 on nearly 0.5 million shares done between Rs.107.50 and Rs.109.50 contributing Rs.50.1 million to turnover.

Sampath followed closing Rs.6 up at Rs.233 on nearly 0.2 million shares done between Rs.227 and Rs.233.50 generating a turnover of Rs.45.2 million. Access Engineering closed 10 cents up at Rs.20.60 on nearly 1.2 million shares done between Rs. 20.50 and Rs.21 contributing Rs.24.3 million to the day’s business volume while Kegalla closed Rs.4.40 up at Rs.112 on over 0.2 million shares done between Rs.108 and Rs.112 contributing Rs.23.3 million to turnover.

JKH was down Rs.3 to Rs.233 on 93,859 shares traded between Rs.233 and Rs.236.10 generating Rs.22.1 million turnover while HNB closed 10 cents up at Rs.148 on over 0.1 million shares done between Rs.146 and Rs.148 generating a turnover of Rs.21.2 million.

Other most traded blue chips included Chevron up Rs.2.50 to Rs.215.50 on 95,465 shares contributing Rs.20.7 million turnover and NDB closing flat at Rs.145 on 70,118 shares contributing Rs.10.2 million to turnover.

source - www.island.lk

Tuesday, February 26, 2013

Market falls on dull local investor sentiment despite net foreign inflows

*Stock Market Review for the week ending 22nd February 2013:

Stocks hit a seven-week low towards the middle of the week, and profit taking was confined to stocks such as Sampath Bank which had rallied significantly in prior weeks.

Trading for the week commenced on a negative note as both indices remained in red throughout the day owing to negative sentiments. Both the ASPI and S&P SL20 lost 56 and 25 points respectively to close at 5,775 and 3,249. A turnover of Rs. 870Mn was recorded on the back of crossings witnessed in John Keells Holdings, Hatton National Bank and Carsons. The top contributors for the day were John Keells Holdings with Rs. 358Mn, Asiri Surgical with Rs. 146Mn and Hatton National Bank with Rs. 49Mn. The share price of John Keells Holdings and Asiri Surgical closed flat at Rs. 230.10 and Rs. 9.00 respectively while Hatton National Bank lost Rs. 0.90 to close at Rs. 148.00. However on a positive note, net foreign buying stood at Rs. 426.2Mn.

The market continued to lose steam on Tuesday, with both the indices continuing to fall as local investor sentiment remained negative. The ASPI lost 37 points to close at 5,737 while the S&P SL20 lost 11 points to close at 3,239. An improved turnover of Rs. 1.5Bn was recorded as foreigners stepped up buying and continued to remain bullish on blue-chips. The top contributors list was headed by Hatton National Bank with Rs. 799Mn followed by Commercial Bank with Rs. 281Mn and John Keells Holdings with Rs. 198Mn. The share price of Hatton National Bank lost Rs. 0.90 to close at Rs. 147.10 while Commercial Bank gained Rs. 1.10 to close at Rs. 108.60. John Keells Holdings climbed to Rs. 231.00, up Rs 0.90. Foreign buying of Rs. 1.2Bn was recorded against sales of Rs. 898Mn resulting in a net inflow of Rs. 301Mn.

The market fell further on Wednesday as the ASPI closed 7 points lower at 5,731 and the S&P SL20 closed 14 points lower at 3,225. A turnover of Rs. 763Mn was recorded on the back of continued foreign interest in Hatton National Bank which incidentally was the day’s top contributor with Rs. 311Mn. The other top contributors were Ceylon Tobacco and John Keells Holdings contributing Rs. 189Mn and Rs. 69Mn respectively. The share price of Hatton National Bank closed flat at Rs. 147.00 while Ceylon Tobacco increased by Rs. 2.80 to close at Rs. 817.50. John Keells Holdings gained Rs. 1.80 to close at Rs. 231.00. A net foreign outflow of Rs. 224Mn was recorded.

The market fell for the fourth straight session when the ASPI lost 4 points to close at 5,726 while the S&P SL20 also dropped by 12 points to end at 3,213. A modest turnover of Rs. 484Mn was recorded with foreigners continuing to be bullish on John Keells Holdings. Sampath Bank, which saw a lot of interest in the past few days, saw its value drop by Rs. 7.40 to Rs. 227.00. The top contributors list was headed by John Keells Holdings contributing Rs. 328Mn. The other top contributors for the day were Commercial Bank and Dialog Axiata contributing Rs. 19Mn and Rs. 16Mn respectively. The share price of John Keells Holdings gained Rs. 2.40 to close at Rs. 235.20 while Commercial Bank lost Rs. 1.00 to close at Rs. 107.00. Dialog Axiata closed flat at Rs. 9.10. Net foreign buying stood at Rs. 297Mn.

The market picked up on Friday with the ASPI gaining 10 points to close at 5,736 and the S&P SL20 gaining 11 points to close at 3,223. A dull turnover of Rs. 300Mn was recorded with a crossing in John Keells Holdings aiding to prop up turnover. The top traded counters for the day were John Keells Holdings with Rs. 97Mn, Tokyo Cement (Non-voting) with Rs. 22Mn and Access Engineering with Rs. 21Mn. John Keells Holdings ended the week reaching a 52 week high of Rs. 236.90, up Rs. 1.50. Access Engineering closed flat at Rs. 20.50 while Tokyo Cement (Non-voting) gained Rs. 0.20 to close at Rs. 18.00. Foreign buying interest continued with a net inflow of Rs. 95Mn being recorded.

(Innovest Investments (Pvt) Ltd – an Investment Management Company licensed by the Securities & Exchange Commission of Sri Lanka)

source - www.island.lk

Friday, February 22, 2013

Market Snapshot - 22 02 2013

 (click to  enlarge )

source - CAL Research

Sri Lanka bourse up from 7-week low; turnover at 8-week low

Feb 22 (Reuters) - Sri Lankan stocks recovered from a seven-week low on Friday on foreign buying in heavyweight John Keells Holdings but turnover slumped to a near eight-week low as domestic investors stayed away after some worrying International Monetary Fund comment.

The main share index ended 0.17 percent or 9.50 points firmer to 5,735.61, from its lowest since Jan. 2.

Turnover was 300.09 million rupees ($2.36 million), the lowest since Dec. 31 and well below this year's daily average of 1.06 billion rupees.

"Foreign buying in Keells pushed the market up but many investors are on the sidelines awaiting direction on interest rates and the rupee," said a stockbroker who declined to be identified.

The IMF said last week the economy faced high inflation and lower tax revenue risks, prompting speculation the government may turn to expensive commercial borrowing to bridge a budget gap.
Shares in John Keells Holdings rose 0.64 percent to 236.50 rupees.

Foreign investors bought a net 94.2 million rupees worth of shares, most of them in Keells, but they have been net sellers of 744.36 million rupees worth of rupees this year.

The rupee ended weaker at 127.30/45 to the dollar from Thursday's close of 127.15/20, on light importer dollar demand, dealers said. ($1 = 127.1000 Sri Lanka rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editng by Robert Birsel)

source - www.reuters.com

Weekly Foreign Holding and Block Trade Update

                                                        
                                                (click image to enlarge)

source - CAL Research

United Motors Lanka to investment Rs 100 mn in automobile assembly plant

Launches Mitsubishi Mirage in Sri Lanka:

M F Jabir

United Motors Lanka PLC(UML) would invest Rs 100 million in an automobile assembly plant in Ranala, said Chanaka Yatawara, UML’s Chief Executive Officer. It would deliver about 200 vehicles a month and they expect the facility to be ready for operations by June 2013. The facility would be on a two acre land.

He said the number of employment opportunities there would depend on the easily they could get approval to produce vehicles.

When inquired about moving in to locations in the Southern and Northern parts of the country he said it depended on the project and they were always open to opportunities. “But the opportunities to go to those places must make sense. If there are proper guidelines of running the business, if those thins are there we are certainly in, because we are able to raise the funds. So if there are special concessions going into those areas certainly yes.

He said however the process must be defined. Yatawara said from the last five to six months they channel vehicles through the Hambantota port.

He said there were no delays in getting vehicles out of the port and that was an advantage. And since it was possible to use the Expressway vehicles could be transported on car carriers. He said last year the company done very well profit wise.

He said they understood the challenges the country faced and the reasons for the macro economic policy changes. He however noted that sufficient time should be given to plan their business in the future.

United Motors Lanka PLC launched the Mitsubishi Mirage, a stylish five-door hatchback with superior fuel efficiency and Eco-friendliness recently.

source - www.dailynews.lk

Delmege Forsyth to list in CSE

H.D.H Senewiratne

Delmege Forsyth and Company Limited will go for listing in the Colombo Stock Exchange (CSE) in the future to raise funds for the company to expand its operation, its Group Managing Director Channa de Silva said.

"The company's presence in all key sectors positions Delmege as a rapidly growing conglomerate in the country, expanding its business in this important and crucial year," de Silva said at a function where the company was appointed as the exclusive distributor of "Berri" by Lion Australia Ltd.

He said the company is a conglomerate with a rich history of over 150 years and renowned name in the food and beverage sector in addition to its presence in other sectors such as medical equipment, pharmaceutical, shipping and freight forwarding, interior and lifestyle products, along with insurance, travel and export sectors. He said the company's passion is to do everything differently and exclusively to achieve the top market position in all sectors of business the company is involved in.

Therefore, the company always kept confidence on human resource and recruited top persons in excels in different field to be great company in the country. Australian High Commissioner Robyn Mudie said at the function that trade and investment with Sir Lanka is growing significantly and amounts to 339 million Australian dollars. Sri Lanka "Berri" consists of an outstanding range of 100 percent natural fruit juice with a great variety of several flavors, she said.

The Group CEO Nuwan Wimalana said that the company is currently dealing with more than 40,000 retails shops in the country and planning to increase number of retail outlets to 80,000 outlets before the end of this year. The history of Delmege Forsyth & Co. Ltd goes back to the year 1850, when Alexander Reid established as a merchant in Pedlar Street Galle. In 1865, the brothers Delmege, (Sam and Toby) arrived in Ceylon and went into partnership with James Reid who succeeded Alexander, setting up offices in Colombo and Galle.

source - www.dailynews.lk

65% of net foreign inflows in 2012 from first-time investors: CSE Chief

In a major attestation that Sri Lanka is a newfound attractive destination, 65% of the net inflow to the Colombo stock market last year was from first-time foreign investors.

After two years of heavy flight of cash, the Colombo Bourse saw net inflow of Rs. 39 billion or over $ 300 million last year. CSE Chairman Krishan Balendra revealed at the Invest Sri Lanka forum in Mumbai yesterday that 65% of the net inflow was from first-time investors to emphasise the growing attractiveness of the valuations of companies listed on the Colombo Bourse.

“Several new funds have registered and been active last year and this trend is continuing in 2013 as well, though there has been a slight outflow year-to-date due to a big fund taking positions,” Balendra told the forum attended by over 150 representatives from managers of offshore funds in Mumbai and India-based funds.

 Balendra also said the CSE was trading at low P/E compared to most regional peers whilst the market had an earnings growth forecast of 37% over the next two years. “Most growth sectors in the market are trading at deep discounts and this provides attractive investment opportunities,” he said.

 The CSE Chief also said low market capitalisation to GDP at CSE compared to most regional peers and the low-debt-to-equity ratio compared with other markets around the world were among other factors which investors needed to consider.

 It was also pointed out that CSE indices had little correlation to global indices, hence Sri Lanka’s equity market though small was a good diversification opportunity for Indian investors and fund managers.

 Balendra also highlighted opportunities in the unit trust industry with Budget 2013 allowing direct foreign investments and said measures to improve liquidity and listings were progressing.

 CSE Director Vajira Kulatunga spoke on the vast opportunities in Government debt market for investors who are focusing on low risk but attractive returns. “The big bang in Government debt market will happen this year as the Central Bank is working to implement a transparent government securities trading platform,” he said in his presentation, which also focused on the corporate debt market.

source - www.ft.lk

JKH Continues to move up

Bourse edges down further on low turnover
The Colombo bourse lost more ground on a low turnover of Rs.484.4 million, down from the previous day’s Rs.763.5 million, with both indices down – the All Share by 4.43 points (0.08%) and S&P SL20 by 12.29 points (0.38%) with 127 losers comfortably ahead of 79 gainers while 106 counters closed flat.

Foreign purchases amounted to Rs. 358.64 million, with selling at Rs. 62.07 million, a net inflow of Rs. 296.56 came in to the market.

"The ASPI ended marginally lower amid mediocre activity levels dominated by trades on JKH, which accounted for over 65% of market turnover inclusive of a block trade," John Keells Stockbrokers said.

Turnover was dominated by two crossings of 500,000 JKH at Rs.235, up Rs.4.80 from the previous close, in deals worth Rs. 117.5 million.

JKH closed at Rs.235.20 on the trading floor gaining Rs.2.40 from the previous close on nearly 0.9 million shares done between Rs.233 and Rs.235.30 contributing Rs.210.1 million to turnover. There were two blocks of 100,000 shares each among the JKH trades at Rs.235.

Brokers said that retail participation was poor with several banking stocks being among the most traded counters though, with the exception of Commercial Bank, on thin volumes.

Commercial Bank where nearly 0.2 million shares were done between Rs.105.20 and Rs.107.60, closing a rupee down at Rs. 107, contributed Rs.19 million to turnover.

Other banking stocks that showed some volume included NDB down 10 cents to Rs.150.10 on 82,252 shares, HNB (voting) closing flat at Rs.147 on 61,928 shares, Sampath down Rs.7.40 to Rs.227 on 34,777 shares trading between Rs.226.50 and Rs.235 and DFCC up Rs.1.60 to Rs.125 on 27,588 shares.

Dialog closed flat at Rs.9.10 on over 1.7 million shares traded between Rs.9 and Rs.9.20.

Overseas Realty announced a first and final dividend of 30 cents per share for 2012 following shareholder approval at an AGM on May 16. The share will trade XD from May 17 with payment on May 28.

source - www.island.lk

Thursday, February 21, 2013

Sri Lanka textile mill boosts revenue, profits


Feb 20, 2013 (LBO) - Sri Lanka's Kuruwita Textiles said boosted revenues 31 percent in the December 2012 quarter from a year earlier and profits rose 20 percent to 15.9 million rupees, despite narrower margins interim accounts showed.

 The firm reported earnings of 64 cents per share for the quarter. In the nine months to December the firm reported losses of 3.84 rupees per share on total losses of 95 million rupees, which fell from 276 million rupees a year earlier.

 Revenues rose 36 percent to 2.34 billion rupees, cost of sales rose at a faster 42 percent and gross profits fell 15 percent to 2.1 billion rupees, according to interim accounts filed with the Colombo Stock Exchange.

Interest expenses rose to 45 million rupees in the quarter from 27 million rupees a year earlier.

Chairman Aslam Omar said the gross profit margin fell to 6 percent in the quarter from 10 percent a year earlier.

"This reduction is primarily due to the aggressive marketing strategy followed by the company during the period which resulted in top line growth," Omar told shareholders.

"The management of the company are actively taking steps to arrest this trend and believe that this will be reversed going forward."

He said the company was working on new customers and strengthening existing relationships and was also working on improving productivity.

source - www.lbo.lk

Results Update - Dec Quarter - 2012



                                         (click image to enlarge)

source - CAL Research

Invest Sri Lanka forum kicks off today in Mumbai

Invest Sri Lanka, a groundbreaking investor forum, will be held today at the Four Seasons Hotel in Mumbai as part of a major push to woo Indian interests in to the capital market.

Organised by the Colombo Stock Exchange (CSE) in partnership with Bloomberg, the forum comprises a formal session involving top speakers and separate business meetings by Lankan companies and broking community. Over 100 fund managers based in Mumbai have registered their participation.

 Apart from showcasing the vast potential in investing in the overall capital markets in post-war Sri Lanka, nine companies will also promote portfolio investment into their listed equities and debt.

 The-S&P SL 20 Index constituent nine companies are John Keells Holdings, Hayleys, Carson Cumberbatch, Dialog, Commercial Bank, HNB, DFCC, NDB and Access Engineering.  These companies will be represented at Chairman, CEO or senior management executive level during the forum.

 Around 20 Sri Lankan broking firms will be participating as well.

 Central Bank Governor Nivard Cabraal will make the keynote address whilst there will be presentations by SEC Chairman Dr. Nalaka Godahewa, CSE Chairman Krishan Balendra, CSE Director Vajira Kulathilaka on Government and Corporate Debt followed by a Question and Answer Session. Prasad Kariyawasam, High Commissioner of Sri Lanka to India, Afghanistan and Bhutan will also speak. The nine companies will also make short presentations.

 Mumbai was selected as venue for the fresh initiative by the CSE given the large presence of foreign funds as well as high net worth Indian investors.

 Mumbai is also the financial and investment capital of India. Bloomberg has a growing presence in Mumbai and is expected to draw a good mix of institutional and individual investors.

 According to Securities and Exchange Board of India (SEBI) data, India last year attracted $ 24.4 billion net foreign investments into its equities, marking it the second best year after having lured $ 29 billion in 2010. As of January, the number of registered Foreign Institutional Investors (FIIs) in India stood at 1,760 and the total number of sub-accounts was 6,357.

 The CSE last year attracted a record Rs. 39 billion in net foreign inflows after two years of outflows whilst so far this year, the net outflow is Rs. 1 billion. As opposed to negative returns during the past two years, the Colombo Bourse is up over 3%.

source - www.ft.lk

NDB’s first-ever Investor Forum draws striking response from market experts

NDB conducted its first-ever Investor Forum on Monday, amidst more than 100 participants representing the investment community of Sri Lanka. Leading stockbrokers, financial analysts, venture capitalists and investment advisors were among the distinguished addressees at the well-attended event.

Speaking at the event, Chief Executive Officer of NDB Russell de Mel said: “It is with great pride that I assert 2012 as a year of phenomenal growth and performance for the NDB group. Strategic divestments within the group as well as the unique structure that allow strategic integration along with the brilliant capabilities of our human capital were the key contributors to this success. We reckoned it was our obligation to share in-depth, the story behind NDB’s stellar performance with the market experts and investment advocates that galvanise the growth of the Sri Lankan capital markets.

 We could not have found a more opportune moment to address the potential investors in the country as our nation itself is at the brink of an era of achievement and exponential growth.”

 “As a truly universal banking conglomerate committed for national development, we have fixed our goals towards positively influencing the emerging economic upsurge. Fortified by a strong capital base and synergised strengths of its unique group structure, NDB is well poised to take on the growth opportunities of the new Sri Lanka. The NDB group is set for enhanced service offerings, across expanded markets and territories with enlightened products and service propositions that would promise seamless growth to our clients, partners, and other stakeholders.

  We have set aspiring goals for the future and are confident in delivering on our ambitions” de Mel further observed.

 NDB is one of the fastest growing banks in the country, with NDB Group having regional operations in Maldives and Bangladesh. The Bank offers a wide range of commercial banking services through its growing island-wide branch network, catering to an increasing customer base from all walks of life. Through the combined synergies of the diverse constituents of the NDB group, its customers have access to a full range of banking and financial services, including project finance, corporate banking, SME lending, retail banking, investment banking, stock brokering, wealth management, and insurance solutions, making NDB a truly universal bank.

source - www.ft.lk

Rs 600 mn expansion to Liberty Plaza

Colombo Land and Development Company PLC which completed Sri Lanka’s first ever international standard shopping mall Liberty Plaza in 1982 laid foundation on February 14, for an Rs 600 million expansion to the shopping mall under the patronage of Lakshman Yapa Abeywardena, Minister of Investment Promotions.

The minister also declared opened the new specialty multi cuisine restaurant at Liberty Plaza named “Seasons” which will be a first restaurant of its kind, all under one roof serving cuisines like North/South Indian, Sri Lankan, Western and Oriental.

UDA Chairman Nimal Perera commending the efforts of the Management of Colombo Land said it has proven to be the most dynamic associate company of the UDA.

Currently Colombo Land was performing beyond expectations of the UDA proving that a true private/public partnership can deliver an effective solution to solve urban development issues in and upwardly mobile society.

Nimal Perera said that when the children were performing it is the father who takes pride in the achievements. Hence UDA is extremely happy and proud of the strategic and proactive approach CLDC was taking in those efforts.

CLDC was set up in early 80s as public private partnership between a Singaporean property development company, Clarissa private limited and UDA for the purpose of undertaking infrastructure development projects. After completing Liberty Plaza in 1982 it also built the peoples park shopping complex in Pettah. Being a public listed company, 73% CLDC shares were currently held by Sri Lankan institutes and individuals. UDA was one of the largest institutional shareholders with 17.5%.

While the Liberty Plaza expansion and the adjacent new Liberty Arcade shopping mall will create more retail space along the Duplication Road, the next major project of the CLDC will be the Liberty Square in Pettah.

The UDA Chairman said that this joint project of UDA and CLDC will help modernization of Pettah and will result in a major transformation of the City’s outlook.

He said there were several infrastructure development projects that have been undertaken by CLDC. These developments were adding great value to the Urban Development efforts of UDA spearheaded by Gotabhaya Rajapaksa, the Secretary of Defense.

Ng Eng Ghee brought in a substantial foreign investment to the country to successfully complete the first ever international standards shopping mall in Liberty Plaza.

CLDC being a partner company of UDA is confident that it will able to meet all the set targets and add capacity to the city to become an efficient partner to make the Government's vision of making Sri Lanka the Wonder of Asia.

This event was also graced by Namal Rajapaksa MP, Nimal Perera, Chairman UDA and Nihal Fernando, Director General UDA.

source - www.dailynews.lk

Stocks, rupee fall further on economy concerns

Reuters: Stocks and the rupee fell further on Wednesday, both hitting a seven-week low, on concerns over the health of the economy after the International Monetary Fund warned of slower growth.

The main share index fell 0.12 per cent, or 6.94 points, to end at 5,730.54, its lowest since 3 January.
 The IMF said last week the economy faced high inflation and lower tax revenue risks, prompting speculation the Government may turn to expensive commercial borrowing to bridge the budget gap, which would drive interest rate higher.  

“Foreign selling and interest rates are worrying them,” said a stockbroker.

 The day’s turnover was Rs. 763.5 million ($ 6.02 million), less than this year’s daily average of Rs. 1.11 billion.

 Foreign investors were net sellers of Rs. 223.97 million worth of shares on Wednesday, extending the net foreign outflow so far this year to Rs. 838.56 million.

 The rupee ended weaker at 127.35/45 to the dollar, its lowest since 3 January, from Tuesday’s close of 127.20/30, dealers said.

 Yields in T-bills were steady at a weekly auction on Wednesday at their near one-year low, after falling in the past 10 straight sessions.

source - www.ft.lk

Wednesday, February 20, 2013

The Colombo stock market has seen Rs. 35 billion in value wiped off so far this week and year-to-date return has shrunk to below 2%, with local investors either selling out or on the sidelines owing to negative developments.

The Colombo stock market has seen Rs. 35 billion in value wiped off so far this week and year-to-date return has shrunk to below 2%, with local investors either selling out or on the sidelines owing to negative developments.

 On Monday market capitalisation was down by Rs. 21 billion whilst yesterday the dip was lesser at Rs. 14 billion.

Despite the year-to-date net outflow of Rs. 1 billion as of early this week, there was net foreign inflow of over Rs. 300 million yesterday.

 This was emphasised by NDB Stockbrokers which headlined its market report ‘Foreign accumulation continues as market loses ground’. It said the market remained in the negative territory despite continuing to witness continuing foreign activity.

 Hatton National Bank saw foreign transfers as well as some local interest while Commercial Bank and John Keells Holdings experienced foreign buying, boosting turnover levels. Meanwhile, Sampath Bank saw accumulation while some retail activity was seen in Free Lanka Capital Holdings and Panasian Power.

“Yesterday indices closed lower with many blue chips losing ground whilst John Keells Holdings managing to hold steady. Large deals on banking counters Hatton National Bank and Commercial Bank helped to boost turnover on day dominated by blue chips,” said Lanka Securities, adding “A period of stock picking is upon us as we can expect a slight bearish trend in the near term.”

ASI lost 37.11 points or 0.64%, slimming its year-to-date gain to 1.67%, and the S&P SL20 index lost 10.71 points or 0.33%. Turnover was a respectable Rs. 1.52 billion.

 Top contributors to turnover were Hatton National Bank with Rs. 799.5 million, Commercial Bank with Rs. 281 million, and John Keells Holdings with Rs. 197.6 million. Most active counters for the day were Central Investments & Finance, Sampath Bank and John Keells Holdings.

 Lanka Securities said cash map yesterday was 34.75%. Foreign participation was 68.76% of total market turnover whilst net foreign buying was Rs. 301.1 million.

 Foreign purchases were Rs. 1,195.92 million as against sales of Rs. 894.81 million.

 Softlogic Stockbrokers said HNB saw a volume of 5.4 million shares transacting, of which 5.28 million traded via four off the market trades at a uniform price of Rs. 147. The counter traded at a low of Rs. 147 and a high of Rs. 148 before ending the day at Rs. 147, losing 0.68% or Re. 1 over Monday’s closing.

 COMB saw two million shares changing hands at Rs. 109 each through a crossing generating a turnover of Rs. 218 million. The counter ended the day at Rs. 108.60 rising by 1.02%.

 JKH, SAMP and DIST witnessed price appreciations towards the end of the trading session.

 DNH Financial said heading towards the rest of the week, it expects any selling pressure to fizzle out over the next couple of days.

“We reiterate the need for investors to go bottom-fishing concentrating on fundamentally-strong stocks that have strong and sustainable business models and are likely to continue to report healthy earnings growth on the back of the robust domestic consumption cycle shrugging off the high interest rate environment,” it added.

source - -www.ft.lk

RCL sells 51% stake in Asia Siyake to Lanka Commodity Brokers for Rs. 371 m

Royal Ceramics Plc (RCL) has decided to sell its 51% stake in Asia Siyaka Commodities Ltd., to Lanka Commodity Brokers for Rs. 371 million, above Rs. 34 million from its original purchase price early last year.

  The sale of the stake will be on a staggered basis between March 5 and end June as the SEC had imposed some limitations given the fact that Asiya Siyaka got listed via an introduction late last year.


RCL bought the Asia Siyaka stake amounting to 132.6 million shares in April last year for Rs. 337.6 million. The venture also has a whole owned warehousing facility. Asia bought 100% stake of Produce Brokers Ltd., in October for Rs. 7.1 million.

 Despite the purchase originally with perceived synergies given RCL’s connections with plantations-rich Hayleys Plc, the new acquisition hadn’t benefitted as envisaged. The exit will benefit RCL considerably going forward apart from commodity broking not being part of its core business.

 As at 31 December 2012, for nine moths Asia’s revenue was Rs. 237.7 million whilst net profit was Rs. 56.8 million. Administrative expenses amounted to Rs. 184 million and bottom line had been helped by finance income of Rs. 79 million.

 Tea broking industry analysts said acquisition of Asia Siyaka will consolidate Lanka Commodities’ position to be a leading contender.

 Set up in July 2003, Lanka Commodity Brokers has been regarded as the most aggressive with its weekly quantities increasing continuously. As per its web site, the Company approximately has 23.5% share of the weekly Main Sale High and Medium grown quantities and approximately 17% share of total weekly Low Grown catalogues, ahead of some established Brokers. On average, it offers approximately 1800-2200 lots per week, comprising of nearly 1.2 million kgs/week.

 The principal activities of the Company are tea, rubber and sundry produce broking and providing financial accommodation for the produce suppliers in respect of the above services.

 Lanka Commodity’s main shareholders include some of the leading names in plantation industry. They comprise Neptune Holdings (17.71%), Chadstone Ltd., (17.71%), Almar Trading (14.74%), Sunshine Holdings (14.71%), Meezan Securities (15%), ESOP – Shares held on Trust by ESJAY Associates                (16.55%), and  S.Sirisena (8.37%).

 The Directors of the Company are: Dr. Anura Ekanayake, Mustha Ahamed, Ihtisham Meezan Mohideen, Sarath Sirisena, Amanda Weerasinghe, Mohamed Malik Waffa and Senaka Amarasuriya.

source - www.ft.lk

Mobitel rings high profit growth

Mobitel has delivered a commendable performance in 2012, successfully overcoming the challenges encountered.

 The Company has recorded a Profit Before Tax (normalised to exclude exchange loss) of Rs. 2.98 billion and Profit After Tax of 2.43 billion, reflecting a growth of 34% and 38% YoY respectively. It was the highest-ever normalised profits recorded.

The Company recorded a growth in key profitability indicators EBITDA and EBIT which increased by 21% and 20% respectively compared to 2011. In absolute terms EBITDA reached Rs. 8.28 billion while EBIT was recorded at Rs. 3.24 billion. The company EBITDA margin improved from 31% to 33% which further endorses the operational efficiency of the organisation.

 Mobitel Group also recorded an impressive revenue growth of 13% in 2012 despite intensified competition in the mobile telephony sector.

 In absolute terms, Mobitel recorded revenue of Rs. 24.93 billion in 2012 compared to Rs. 22.08 billion in 2011, an increase of Rs. 2.85 billion. This growth was realised mainly due to the increase in Mobitel’s subscriber base by 14%, which is a remarkable achievement, considering the fact that the voice market has reached 100% penetration by 4Q 2012 according to the Telecom Regulatory Commission of Sri Lanka (TRCSL).

 The growth in Mobitel’s subscriber base can be attributed to various factors including Mobitel’s continuous commitment and investments made towards scaling and upgrading its network infrastructure. Completion of the stage VI project in mid-2012 led to significant enhancements in network coverage and capacity that has translated into better customer experience. An innovative product suite, comprehensive service offering and extensive reach to the furthest corners of the island also contributed towards significant growth in subscribers and revenue.

 Prudent cost management initiatives coupled with measures to enhance productivity contributed to help negate the adverse impact of increased operational expenditure.

source - www.ft.lk

Tuesday, February 19, 2013

MTD Walkers does it again



Eurotrade inc. of Greece the Charterers of the m/v. blue angel, the fully laden condition bulk carrier sailing from east coast of India to South Africa, wanted to perform complete underwater cleaning as well as propeller polishing so as to increase its performance called in the open sea of Colombo recently.

Due to previous fantastic references they contacted Kiran Atapattu of Colombo Engineering an MTD walkers company and awarded the contract to carryout complete polishing of the marine growth located in the underwater section of the vessel.

An initial underwater camera inspection carried out revealed extensive marine growth on the vessel which required immediate cleaning. A team of expert divers were mobilized on three boats taking with them sophisticated state of the art ship polishing machinery where the complete underwater operation was completed within 48 hours enabling the fully laden vessel to sail-off to its destination to South Africa without delay.

source - www.dailynews.lk

Kerry Packer Jr. in town for mega gaming venture

Billionaire gaming mogul James Packer, son of the famous Kerry Packer, is in town to explore prospects for a mega gaming venture in Sri Lanka.

 The Daily FT learns Packer Jr. had arrived yesterday and held meetings with Economic Development Minister Basil Rajapaksa and Treasury Secretary Dr. P.B. Jayasundera.

Opportunities explored include a US$ 350 million gaming venture down D.R. Wijewardena Mawatha, which the Government is keen to develop as an entertainment centre.

 Rated as the third richest Australia by Forbes magazine with an estimated wealth of $ 6 billion, Packer Jr. inherited control of the family company, Consolidated Press Holdings Limited, which controls investments in Crown Limited, Consolidated Media Holdings and other companies.

 He severed the family’s deep ties to the media sector when he sold pay-TV company Consolidated Media Holdings to Newscorp., pocketing $ 1 billion. That leaves him to focus on casino empire Crown Ltd. In Forbes Australia’s richest list, James reaped the biggest gain in wealth on the list, $ 1.5 billion.

 Crown Ltd. has over 13,000 employees and wholly owns and operates two integrated resorts: Crown Entertainment Complex in Melbourne (Crown Melbourne), Australia’s largest casino and Burswood Entertainment Complex in Perth (Burswood).

Crown Melbourne operates 2,500 gaming machines and 350 table games.
  It also commands over 1,600 hotel rooms. Melco Crown also has two properties, City of Dreams and Altira Macau.

 Burswood operates 1,750 gaming machines and 170 table games and the InterContinental Perth Burswood hotel comprises 405 guest rooms. Holiday Inn Burswood hotel comprises 291 guest rooms.

 In 2011, Packer’s ASX-listed Crown Limited acquired a 100% interest in the prestigious Aspinall’s Club in London, developed through a joint venture between Crown and Packer’s family friend, Damian Aspinall, the son of John Aspinall.

 Together with Damian Aspinall, Packer is creating a group of casino complexes in Great Britain called Aspers. He already has a stake in casinos in London’s West End, Swansea, and Newcastle.

source - www.ft.lk

Monday, February 18, 2013

Sri Lanka stocks at 1-month low on Dialog after earnings

Feb 18 (Reuters) - Sri Lankan stocks fell to a one-month low on Monday, dragged by top mobile phone operator, Dialog Axiata, after it reported a 30 percent fall in its December quarter profit.

The main share index fell 0.95 percent, or 55.67 points, to end at 5,774.59, its lowest since January 15 as concerns over the broader economy also weighed.

The International Monetary Fund warned last week of slower growth, high inflation and lower tax revenue risks, prompting speculation the government may turn to expensive commercial borrowing to bridge the budget gap, which would drive interest rate higher.

Shares of Dialog Axiata fell 4.21 percent to 9.10 rupees.

The day's turnover was 869.84 million rupees ($6.87 million), lower than this year's daily average of 1.11 billion rupees.

Foreign investors were net buyers of 43.6 million rupees worth of shares on Monday, but they have been net sellers of 915.7 million rupees so far this year.

The rupee ended weaker at 126.90/95 to the dollar from Friday's close of 126.65/80 due to importer dollar demand, dealers said. ($1 = 126.7000 Sri Lanka rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sanjeev Miglani)

source - www.reuters.com

Weekly Foreign Holding and Block Trade Update


                                               (click image to enlarge)

source - CAL Research

Colombo all set to woo fund managers in Mumbai

■Over 100 signed up to attend CSE-Bloomberg organised road show on Thursday

■Widespread interests from Sri Lanka’s corporates and capital markets


The stage is being set for Sri Lanka to woo interests from Mumbai-based fund managers at a first of its kind capital market investment road show later this week in the financial hub of India.

 Over 100 fund managers have so far registered for the event to be held on 21 February at the Four Seasons Hotel in Mumbai under an initiative of the Colombo Stock Exchange in partnership with Bloomberg.

 The investor forum comprises a formal session involving top speakers and separate business meetings by Lankan companies and broking community.

 Apart from showcasing the vast potential in investing in the overall capital markets in post-war Sri Lanka, nine companies will also promote portfolio investment into their listed equities and debt. The-S&P SL 20 Index constituent nine companies are John Keells Holdings, Hayleys, Carson Cumberbatch, Dialog, Commercial Bank, HNB, DFCC, NDB and Access Engineering.  These companies will be represented at Chairman, CEO or senior management executive level during the forum. Around 20 Sri Lankan broking firms will be participating as well.

 Central Bank Governor Nivard Cabraal, Securities and Exchange Commission Chairman Dr. Nalaka Godahewa, Colombo Stock Exchange Chairman Krishan Balendra and CSE Board member Vajira Kulatilaka will make presentations in the morning sessions.

 Brokers said confirmation of 100 fund managers and investment advisors for the forum confirms the keen interest emanating from Mumbai and this augurs well for Sri Lanka.

 Mumbai was selected as venue for the fresh initiative by the CSE given the large presence of foreign funds as well as high net worth Indian investors. Mumbai is also the financial and investment capital of India.

 Bloomberg has a growing presence in Mumbai and is expected to draw a good mix of institutional and individual investors.

 According to Securities and Exchange Board of India (SEBI) data, India last year attracted $ 24.4 billion net foreign investments into its equities, marking it the second best year after having lured $ 29 billion in 2010. As of January, the number of registered Foreign Institutional Investors (FIIs) in India stood at 1,760 and the total number of sub-accounts was 6,357.

 The CSE last year attracted a record Rs. 39 billion in net foreign inflows after two years of outflows whilst so far this year, the net outflow is Rs. 1 billion. As opposed to negative returns during the past two years, the Colombo Bourse is up over 3%.

source - www.ft.lk

Sunday, February 17, 2013

NATIONAL DEVELOPMENT BANK - Technical Summery

NATIONAL DEVELOPMENT BANK | NDBN

Rs. 150.10 | PER 2.8x

#  National Development Bank Plc reports growth in Net Interest Income (NII) and Profit Attributable to Equity Holders for FY 2012

#  NII in FY 2012 amounted to Rs. 5.85bn relative to Rs. 4.77bn recorded in the same period last year, representing a growth of 23% (Y-o-Y).

# Profit attributable to equity holders for FY 2012 increased 227% (Y-o-Y) to Rs. 8.84bn from Rs. 2.71bn last year. This was mainly due to the capital gain of Rs. 5.9bn booked in through the divesture of 41.56% in Aviva NDB Holdings and a 5% of Aviva NDB insurance.

# NII in Q4 2012 amounted to Rs. 1.64bn, up 23% (Y-o-Y) from Rs. 1.33bn in Q4 2011.

# Profit attributable to equity holders in Q4 2012 increased 581% (Y-o-Y) to Rs. 6.80bn compared to Rs. 998.63mn in Q4 2011. This too was due to the divesture mentioned above.

Indicator                                    NDBN                             Sector

Price (at 13/02/13)                       150.10                                 n.a

P/BV (x)                                         1.0x                                  1.8x

Trailing PER (x)                           2.8x                                 11.3x

Book Value per Share (Rs)        151.81

source - acuity research

Corporate Earnings Snapshot - Dec Quarter 2012


                                                  (click image to enlarge)

source - acuity research

Weekly Foreign Holding Update - 15 02 2013




                                                (click image to enlarge)

source - CAL Research

NDB reports Rs 8.8 bln gain by divesting insurance arm

The financial year 2012 proved to be a year of record performance for NDB as it reported a 37 per cent and 45 per cent increase in profit before tax (PBT) and profit after tax (PAT) respectively, with its asset base recording an increase of 17 percent over December 31, 2011.

“These growth levels resulted in a PBT of Rs. 4.6 billion and PAT of Rs. 3 billion,” the bank said in a statement, adding that the share of profits available for shareholders at a group level increased by 227 per cent to Rs 8.8 billion due to the capital gains of Rs 6 billion generated as a result of the divestment of the investment in AVIVA NDB Insurance PLC to American International Assurance (AIA) Company Limited of Hong Kong during the fourth quarter of 2012.

The Net Interest Income of the bank increased by 26 per cent over the last year with other income from fees, commission and forex income increasing by 22 per cent to Rs. 2.3 billion. On the operating expenses side, gross administrative expenses increased with a controlled growth of 16 per cent over last year. Provisions for loan losses for the period were reported at Rs. 94 million for the year compared to the reversal of Rs 326 million in 2011, due to provision recoveries/releases of Rs 426 million in 2011.

“The asset base of the bank grew to Rs. 162 billion as at December 31, 2012 from Rs. 138 billion as at year end 2011 indicating continued acceleration of development financing activities by the bank.

Advances (gross) of the bank were at Rs. 119.2 billion with an increase of 18 is expected to provide more clarity to the debt capital market participants over 2011, mainly on account of growth in the SMEs, agriculture and the service sectors. The deposit base of the Bank increased by 31 per cent, with a 10 per cent and 60 per cent increase reported in current and saving deposits respectively, improving the CASA percentage substantially,” the statement said.
source - www.sundaytimes.lk

Sunday Business News Articles

The Sunday Island


The Nation


The Sunday Times


Lakbima News


Sunday Observer


Sunday Leader

Stock market ends on the up

Reuters: Stocks edged up on Friday, rising off a one-week low with help from Dialog Axiata, but turnover slumped to a seven-week low as investors stayed away, discouraged after an IMF warning on the country’s macroeconomic indicators.

The International Monetary Fund warned this week of slower growth, high inflation and lower tax revenue risks.

The main share index edged up 0.09%, or 4.97 points, to end at 5,830.26, up from its lowest level since 7 February.

“Most investors are waiting for direction with liquidity dried up and high interest rates,” a stockbroker said on condition of anonymity.

 Even though yields in T-bills fell for the 10th straight week at an auction on Wednesday, with the 364-day T-bill rate down to a near one-year low of 11.10%, lending rates have been more than 14.3%, Central Bank data showed.

 The Central Bank said on Tuesday authorities had decided not to pursue a new loan from the IMF, which had said it may not be in a position to consider any direct or indirect budget support for Sri Lanka.

 Analysts and stockbrokers said there was a possibility interest rates would reverse the declining trend if the government resorts to expensive commercial borrowing to bridge the budget gap, after the expected IMF loan did not materialise.

 Shares in Dialog Axiata rose 2.15% to Rs. 9.50.

 The day’s turnover was Rs. 351.14 million ($ 2.77 million), the lowest since 31 December, and well below this year’s daily average of Rs. 1.12 billion.

 Foreign investors were net sellers of Rs. 30 million worth of shares on Friday extending the net foreign outflow so far this year to Rs. 959.33 million this year.

 The rupee ended weaker at 126.65/80 to the dollar from Thursday’s close of 126.50/60 due to importer dollar demand, dealers said.

source - www.ft.lk

Friday, February 15, 2013

NDB Bank Performance

The NDB Group reported a net profit growth of 45 percent to Rs. 3 billion for the financial year ended December 31, 2012 with its asset base increasing 17 percent year-on-year. Profits before tax grew 37 percent to Rs. 4.6 billion. However, a capital gain of Rs. 6 billion gave shareholders a profit of Rs. 8.8 billion.

"These growth levels resulted in a PBT of Rs. 4.6 billion and PAT of Rs. 3 billion. However, it is noteworthy to mention that the share of profits available for shareholders at a group level increased significantly by 227 percent to Rs 8.8 billion due to the capital gains of Rs. 6 billion generated as a result of the divestment of the investment in Aviva NDB Insurance PLC to American International Assurance (AIA) Company Limited of Hong Kong during the fourth quarter of 2012," the group said in a statement yesterday (14).

The Net Interest Income of the Bank increased by 26% over the last year with other income from fees, commission and forex income increasing by 22% to Rs. 2.3 billion. On the operating expenses side, gross administrative expenses increased with a controlled growth of 16% over last year. Provisions for loan losses for the period were reported at Rs. 94 million for the year compared to the reversal of Rs 326 million in 2011, due to provision recoveries/releases of Rs 426 mn in 2011.

The asset base of the Bank grew to Rs. 162 billion as at December 31, 2012 from Rs. 138 billion as at year end 2011 indicating continued acceleration of development financing activities by the Bank. Advances (gross) of the Bank was Rs. 119.2 billion with an increase of 18% over 2011, mainly on account of growth in the SMEs, agriculture and the service sectors. The deposit base of the Bank increased by 31%, with a 10% and 60% increase reported in current and saving deposits respectively, improving the CASA percentage substantially.

The Bank also achieved a 21% return on equity and reported improved Earnings Per Share (EPS) from Rs 12.25 in 2011 to Rs 17.74. However, the Group EPS for 2012 is significantly higher at Rs 53.82 due to the capital gain of Rs 6 billion earned by the NDB Group from divesting NDB Group’s holding in AVIVA NDB Insurance PLC to AIA.

The balance sheet growth of the NDB group of 21% from the previous financial year points to a sound financial position and the shareholders’ equity base increasing by Rs 8 billion to Rs 25 billion. This significant surplus in shareholder funds within the NDB group will result in the Bank having ample opportunities in moving forward to benefit from development opportunities in the country and in the region.

During 2012 the Bank expanded its distribution network by opening nine branches. NDB continued to remain focused on driving the SME business segment and opened four more dedicated SME Centres in Kandy, Anuradhapura Matara and Kalutara. NDB’s SME Centres aim to provide a one-stop-shop for the diverse needs of entrepreneurs. They are equipped to provide 360 degree solutions ranging from financial expertise on SME Banking services, industry expertise for those who intend to start up new business ventures to investment and capital management advice along with a gamut of customized credit facilities. The Bank also conducted SME workshops in several regions including Minuwangoda, Homagama, Hambantota, Wennappuwa, Anuradhapura, Rajagiriya, Kiribathgoda and Matara in a bid to educate, empower and enrich the business knowledge of entrepreneurs in these areas.

To further establish its nationwide savings drive, NDB introduced a novel savings concept named the ‘Real Saver’ in the 3rd quarter of 2012. ‘NDB Real Saver’ is a rewarding savings account that doubles the interest rate applicable on the account balance, if a committed monthly deposit is maintained with minimum withdrawals, thereby encouraging account holders to save continuously. The launch of Real Saver account reiterates NDB’s commitment to inculcate a savings habit in people, which was first initiated through the nationwide ‘Ithiri karana Maga’ savings drive in 2011.

Meanwhile, NDB Capital Holdings PLC the investment arm of NDB Group marked a landmark in the history in debt markets in the country, with the launch of a family of fixed income indices for the Sri Lankan market, which would measure the performance of government securities of selected maturities. The pioneering initiative by NDB Capital Holdings PLC together with CRISIL Limited India is expected to provide more clarity to the debt capital market participants and propagate government securities as an attractive investment opportunity.

Following a strategic rearrangement of investments within the Group, NDB entered into a Share Sale and Purchase Agreement with AIA Group Limited (AIA), headquartered in Hong Kong, whereby NDB Group agreed to sell its shareholding in the AVIVA NDB Holdings Lanka (Private) Limited (AVIVA NDB Holdings or ANI) to AIA. Through the transaction which reached finality in December 2012, NDB group earned a net receipt of US$59 million. With the aim of continuing to provide all financial services under one roof, NDB also entered into an exclusive Bancassurance agreement with AIA for a period of 20 years. Pursuant to this transaction, NDB entered into a second transaction to purchase the balance of the shareholding of NDB AVIVA Wealth Management PLC from AIA. NDB Capital Holdings PLC which now owns 100% of the Wealth Management arm of the group will be able to harness the strengths of its portfolio, thus consolidating its position as the market leader in Wealth Management in Sri Lanka. Concurrently, a fund management agreement is also in place to manage AIA’s insurance funds exclusively for a period of 20 years.

Commenting on the Bank’s performance, Russell De Mel, CEO of NDB said: "Fortified by a capital base which is way above the ordinary, guided by an inclusive long term business strategy and driven by the intergrated expertise of the group companies, NDB stands poised for exceptional growth. We will focus on delivering optimum financial solutions to our diverse clientele with intent care and profound customer service. NDB will continue with the unique positioning to be the one-stop-shop for all financial

and advisory requirements of our customers. We thank our customers for their continued support and our staff for their commitment and contribution to the Bank’s success."

Following the release of the Bank results, Chairman, Hemaka Amarasuriya said, "The excellent financial performance in 2012 has erased any doubts about the efficacy and value of our transformation programme and our investments in infrastructure, systems and marketing. We delivered on our commitment to shareholders by achieving higher profits and strengthening our capital position, whilst making great strides in our journey towards realising our aspiration as the bank of choice in Sri Lanka. With our strong capital base and improved asset quality, we are assured of sustained growth in years ahead and will be entering an exciting growth period in the Bank’s history".

source - www.island.lk

NDB Group records phenomenal results

Financial year 2012 proved to be a year of record performance for NDB as it reported a 37% and 45% increase in Profit Before Tax (PBT) and Profit After Tax (PAT) respectively, with its asset base recording an increase of 17% over 31 December 2011.

These growth levels resulted in a PBT of Rs. 4.6 billion and PAT of Rs. 3 billion. However, it is noteworthy to mention that the share of profits available for shareholders at a group level increased significantly by 227% to Rs. 8.8 billion due to the capital gains of Rs. 6 billion generated as a result of the divestment of the investment in AVIVA NDB Insurance PLC to American International Assurance (AIA) Company Limited of Hong Kong during the fourth quarter of 2012.

 The net interest income of the bank increased by 26% over the last year with other income from fees, commission and forex income increasing by 22% to Rs. 2.3 billion. On the operating expenses side, gross administrative expenses increased with a controlled growth of 16% over last year. Provisions for loan losses for the period were reported at Rs. 94 million for the year compared to the reversal of Rs. 326 million in 2011, due to provision recoveries/releases of Rs. 426 m in 2011.

 The asset base of the bank grew to Rs. 162 billion as at 31 December 2012 from Rs. 138 billion as at year end 2011 indicating continued acceleration of development financing activities by the bank. Advances (gross) of the bank was Rs. 119.2 billion with an increase of 18% over 2011, mainly on account of growth in the SMEs, agriculture and the service sectors. The deposit base of the bank increased by 31%, with a 10% and 60% increase reported in current and saving deposits respectively, improving the CASA percentage substantially.

 The bank also achieved a 21% return on equity and reported improved Earnings Per Share (EPS) from Rs. 12.25 in 2011 to Rs. 17.74. However, the Group EPS for 2012 is significantly higher at Rs. 53.82 due to the capital gain of Rs. 6 billion earned by the NDB Group from divesting NDB Group’s holding in AVIVA NDB Insurance PLC to AIA.

 The balance sheet growth of the NDB group of 21% from the previous financial year points to a sound financial position and the shareholders’ equity base increasing by Rs. 8 billion to Rs. 25 billion. This significant surplus in shareholder funds within the NDB group will result in the bank having ample opportunities in moving forward to benefit from development opportunities in the country and in the region.

 During 2012 the bank expanded its distribution network by opening nine branches. NDB continued to remain focused on driving the SME business segment and opened four more dedicated SME centres in Kandy, Anuradhapura Matara and Kalutara.

 NDB’s SME Centres aim to provide a one-stop-shop for the diverse needs of entrepreneurs. They are equipped to provide 360 degree solutions ranging from financial expertise on SME Banking services, industry expertise for those who intend to start up new business ventures to investment and capital management advice along with a gamut of customised credit facilities.

 The bank also conducted SME workshops in several regions including Minuwangoda, Homagama, Hambantota, Wennappuwa, Anuradhapura, Rajagiriya, Kiribathgoda and Matara in a bid to educate, empower and enrich the business knowledge of entrepreneurs in these areas.

 To further establish its nationwide savings drive, NDB introduced a novel savings concept named the ‘Real Saver’ in the third quarter of 2012. ‘NDB Real Saver’ is a rewarding savings account that doubles the interest rate applicable on the account balance, if a committed monthly deposit is maintained with minimum withdrawals, thereby encouraging account holders to save continuously.

The launch of Real Saver account reiterates NDB’s commitment to inculcate a savings habit in people, which was first initiated through the nationwide ‘Ithiri Karana Maga’ savings drive in 2011.

 Meanwhile, NDB Capital Holdings PLC the investment arm of NDB Group marked a landmark in the history in debt markets in the country, with the launch of a family of fixed income indices for the Sri Lankan market, which would measure the performance of government securities of selected maturities. The pioneering initiative by NDB Capital Holdings Plc together with CRISIL Limited India is expected to provide more clarity to the debt capital market participants and propagate government securities as an attractive investment opportunity.

 Following a strategic rearrangement of investments within the Group, NDB entered into a Share Sale and Purchase Agreement with AIA Group Limited (AIA), headquartered in Hong Kong, whereby NDB Group agreed to sell its shareholding in the AVIVA NDB Holdings Lanka (Private) Limited (AVIVA NDB Holdings or ANI) to AIA.

 Through the transaction which reached finality in December 2012, NDB group earned a net receipt of US$ 59 million. With the aim of continuing to provide all financial services under one roof, NDB also entered into an exclusive bancassurance agreement with AIA for a period of 20 years.

 Pursuant to this transaction, NDB entered into a second transaction to purchase the balance of the shareholding of NDB AVIVA Wealth Management PLC from AIA. NDB Capital Holdings PLC which now owns 100% of the wealth management arm of the group will be able to harness the strengths of its portfolio, thus consolidating its position as the market leader in Wealth Management in Sri Lanka. Concurrently, a fund management agreement is also in place to manage AIA’s insurance funds exclusively for a period of 20 years.

 The bank also received noteworthy local and global acclaims during year 2012. The World Finance magazine, UK named NDB as the ‘Best Commercial Bank in Sri Lanka,’ while Euromoney magazine acclaimed NDB Investment Bank as the ‘Best Investment Bank’ in the country.

 NDB’s Annual Report 2011 was placed high amongst the global ranks at the LACP Vision Awards 2012, while CMO – Asia awarded NDB for Brand Excellence in Banking, Financial Services and Insurance. The HR practices of the bank were recognised with a Silver Award at the HRM Awards 2012.

 NDB’s exemplary corporate citizenship was duly recognised by NDB being named one of the ‘Top 10 Best Corporate Citizens’ of the country at the Best Corporate Citizens Awards 2012 organised by the Chamber of Commerce of Sri Lanka.

 Commenting on the bank’s performance, Russell De Mel, CEO of NDB, said: “Fortified by a capital base which is way above the ordinary, guided by an inclusive long term business strategy and driven by the integrated expertise of the group companies, NDB stands poised for exceptional growth. We will focus on delivering optimum financial solutions to our diverse clientele with intent care and profound customer service. NDB will continue with the unique positioning to be the one-stop-shop for all financial and advisory requirements of our customers. We thank our customers for their continued support and our staff for their commitment and contribution to the bank’s success.”

Following the release of the bank results, Chairman Hemaka Amarasuriya said: “The excellent financial performance in 2012 has erased any doubts about the efficacy and value of our transformation program and our investments in infrastructure, systems and marketing. We delivered on our commitment to shareholders by achieving higher profits and strengthening our capital position, whilst making great strides in our journey towards realising our aspiration as the bank of choice in Sri Lanka. With our strong capital base and improved asset quality, we are assured of sustained growth in years ahead and will be entering an exciting growth period in the bank’s history.”

source - www.ft.lk

Aitken Spence ups post-tax profit by 18% to Rs. 3.1 b

Blue chip conglomerate Aitken Spence PLC has reported Rs. 3.1 billion profit before tax in the nine months of 2013 financial year, up 18% from a year earlier amidst challenging macroeconomic conditions.

 Profit attributable to shareholders rose by 24% to Rs 2.1 billion.

The diversified group’s nine-month revenue rose by 30% to Rs. 27.8 billion while earnings per share increased by 24% to Rs. 5.11.

“Our satisfactory results for the nine-month period has been mainly driven by our tourism and strategic investments sectors. Our resorts in the Maldives performed exceptionally well with better occupancies. We are keen to strengthen our leisure portfolio in Sri Lanka and overseas. However, we would like to reiterate the need for a robust destination marketing strategy for Sri Lanka to overcome some of the key challenges we are presently facing in tourism and to achieve the industry’s full potential for the country,” Aitken Spence Deputy Chairman and Managing Director J.M.S. Brito said.

“Since many of our companies generate revenues in foreign currency, during the current year, we did not get the benefit of the currency depreciation compared to the previous year. This is reflected in the reduction in the other operating income during the period,” he added.

“The full operation of our 100 MW power plant in Embilipitiya, which was shut down in the first quarter of the last financial year, strengthened the performance of the strategic investments sector when compared with the previous year,” Brito said.

“Given the demanding global environment at present, we believe the company would find it challenging to match the outstanding fourth quarter performance it achieved during the previous year,” he added.

 The interim financial statements of the company and its controlled entities for the nine months ended 31 December 2012 were audited by the company’s external auditors since it is the first financial year following the adoption of IFRS requirements.

 The restated financial position of the company and its controlled entities as at 31 March 2011 and 31 March 2012 respectively based on Sri Lanka Accounting Standards effective from 1 January 2012 have also been audited by external auditors.

 Aitken Spence is among Sri Lanka’s leading and most respected corporate entities with operations in South Asia, the Middle East and Africa. Listed on the Colombo Stock Exchange since 1983, it is an industry leader in hotels, travel, maritime services, logistics, power generation and printing. The diversified group has a significant presence in plantations, financial services, insurance, information technology and apparel.

 During the last quarter under review Aitken Spence was recognised as the ‘Best Corporate Citizen 2012’ by the Ceylon Chamber of Commerce (CCC). Aitken Spence also received two sector awards for ‘Environment’ and ‘Economic Contribution and Governance,’ as well as the category award for ‘Financial Performance’.

Aitken Spence’s premier beach property in Sri Lanka, Heritance Ahungalla was presented with the Gold Award at the National Green Awards conducted by the Central Environmental Authority, during the last quarter under review. Heritance Ahungalla has successfully taken over the baton from Heritance Kandalama, which was received the same distinction during the previous year.

source - www.ft.lk

Indices dip, foreign inflow at Bourse

Reuters: Stocks fell for a third straight session on Thursday to a one-week low and turnover also fell a day after the International Monetary Fund warned of slower growth, high inflation, and lower tax revenue risks.

The main share index fell 0.03%, or 1.73 points, to end at 5,825.29, its lowest since 7 February.
“Investors are worried about the IMF statement,” a stockbroker said on condition of anonymity. “The market is down on low liquidity. Investors are staying away awaiting for direction with high interest rates.”

Even though yields in T-bills fell for the 10th straight week at an auction on Wednesday, with the 364-day T-bill rate down to a near one-year low of 11.10%, lending rates have been more than 14.3%, Central Bank data showed.

 The Central Bank said on Tuesday authorities had decided not to pursue a new loan from the IMF, which had said it may not be in a position to consider any direct or indirect budget support for Sri Lanka.

 Analysts and stockbrokers said there was a possibility interest rates would reverse the declining trend if the government resorts to expensive commercial borrowing to bridge the budget gap, after the expected IMF loan did not materialise.

 The day’s turnover was Rs. 470.99 million ($ 3.72 million), the lowest since 5 February, and less than this year’s daily average of Rs. 1.15 billion.

 Foreign investors were net buyers of Rs. 170 million worth of shares on Thursday, but they have been net sellers of Rs. 929.31 million this year.

 The rupee ended weaker at 126.50/60 to the dollar from Wednesday’s close of 126.40/60 due to importer dollar demand, dealers said.

source - www.ft.lk