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News & Announcements

  • Stock Market Indicators:
    Monday, 01 September 2014

    ASI: 7,030.89 (down 3 points, -0.05%), S&P SL20: 3,877.39 (up 5 points, +0.13%)

    Turnover: Rs.1,042mn (-8%) 

    Exchange Rate 1US$ = Rs.130.15

    Market Capitalization: US$22.7bn

    Foreign Purchases: Rs.103mn (-38%)

    Foreign Sales: Rs.68mn (+6%)

    Seylan Bank Voting (SEYB-N – Rs.84.0) emerged as the top contributor to turnover with Rs.410mn (5.1mn shares), followed by Union Bank of Colombo (UBC – Rs.21.0) with Rs.64mn turnover (3mn shares) and John Keells Holdings (JKH-N – Rs.249.50) with Rs.61mn turnover (0.2mn shares)

  • Corporate Announcements:
    Monday, 01 September 2014

    Colombo Stock Exchange (CSE) announced that Rs.5.0bn debentures of DFCC Bank (DFCC) will be listed on 02 September 2014 on the Debt Securities Main Board of the CSE.

    Debenture description is as follows:

    DFCC/BC/18/08/17A8.5 - Three year Fixed Rate Debentures (8.5%) payable annually

    DFCC/BC/18/08/17B8.33 - Three year Fixed Rate Debentures (8.33%) payable semi-annually

    DFCC/BC/18/08/17C8.24 - Three year Fixed Rate Debentures (8.24%) payable quarterly


    CSE announced the details pertaining to the first tranche of the private placement of shares, carried out by Nation Lanka Finance (CSF). Rs.8.3mn was raised through the placement whilst 1.2mn shares were allotted and listed at Rs.6.85 per share. Shares were listed on the CSE on 01 September 2014


    Commercial Bank of Ceylon (COMB) announced that it purchased the entirety of shares of Indra Finance Ltd represented by 21.6mn ordinary shares for a purchase consideration of Rs.870mn.

    Laugfs Gas (LGL) announced that in order to venture into the business of international shipping, Logistics & Maritime Services, LGL has incorporated a fully owned subsidiary, Laugfs Maritime Services (Pvt) Ltd (LMS) as a BOI approved project. LMS will own, operate, hire and charter various types and sizes of ships including LPG vessel sand other type of vessel ssthat can carry various energy products. Furthermore, LGL stated that a Memorandum of Agreement is signed to purchase Liquid Petroleum Gas (LPG) Vessel, ‘Gas Puffer’ and to be re-named as ‘Gas Challenger’. The intial investment for the purchase is ~US$6.9mn.


    Renuka Shaw Wallace (COCO) announced that its Board of Directors resolved to change the company name from ‘Renuka Shaw Wallace’ to ‘Renuka Agri Foods’.

  • Dividend announcements:
    Monday, 01 September 2014

    Abans Electricals (ABAN) 
    – Final Dividend of Rs.2.50 per share – XD: 01/10/2014 – PD: 10/10/2014 (Notification of Dates)


    ACL Cables (ACL) – Interim Dividend of Re.1.00 per share – XD: 11/09/2014 – PD: 22/09/2014


    Mackwoods Energy (MEL) –     First & Final Dividend of Rs.0.10 per share – XD: 01/10/2014 – PD: 10/10/2014 (Notification of Dates)

  • Stock Market Indicators:
    Friday, 29 August 2014

    ASI: 7,034.09 (up 42 points, +0.61%), S&P SL20: 3,872.51 (up 26 points, +0.69%)

    Turnover: Rs.1,137mn (+28%) 

    Exchange Rate 1US$ = Rs.130.10

    Market Capitalization: US$22.7bn

    Foreign Purchases: Rs.166mn (+10%)

    Foreign Sales: Rs.64mn (+33%)

    Commercial Bank of Ceylon (COMB-N – Rs.148.0) emerged as the top contributor to turnover with Rs.118mn (0.8mn shares), followed by Seylan Bank non-voting (SEYB-X – Rs.49.2) with Rs.116mn turnover (2.3mn shares) and Access Engineering (AEL – Rs.27.0) with Rs.114mn turnover (4.2mn shares)

  • Corporate Announcements:
    Friday, 29 August 2014

    Softlogic Finance (CRL) announced the basis of allotment of its oversubscribed issue of 14.0mn Rated, Redeemable Guaranteed Debentures as follows:

    Investors with preferential allotment (7.0mn Debentures; 50% of the issue) – On a preferential basis

    Other investors

    Type A – Applications up to and inclusive of 100,000 Debentures – 100% allotment

    – Applications over 100,000 Debentures – minimum allotment of 100,000 debentures plus 6.49% of the debentures applied            

    Type B – 100% allotment


    Ceylon Hotel Corporation (CHOT) announced that it has entered into an agreement with Zinc Hospitality Lanka (Pvt) Ltd on 28 August 2014. CHOT has incorporated a Joint Venture Company called Ceylon Holidays Holdings (Pvt) Ltd, a fully owned subsidiary of CHOT. Zinc Hospitality Lanka (Pvt) Ltd will invest Rs.250mn for 50% equity of the said Joint Venture Company


    The Colombo Stock Exchange (CSE) has approved in principle an application submitted by Bank of Ceylon (BOC) for the listing of its debentures, to raise Rs.4.0bn. BOC offered 40.0mn Rated, Redeemable Debentures at an issue price of Rs.100.00 per debenture.

    The date of opening of the subscription list is 16 September 2014.

  • Stock Market Indicators:
    Thursday, 28 August 2014

    ASI: 6,991.8 (up 7 points, +0.1%),  S&P SL20: 3,845.9 (up 3 points, +0.1%)

    Turnover: Rs.887mn (+20%) 

    Exchange Rate 1US$ = Rs.130.15

    Market Capitalization: US$22.5bn

    Foreign Purchases: Rs.151mn (vs. Rs.56mn)

    Foreign Sales: Rs.48mn (-17%)

    Distilleries Company of Sri Lanka (DIST – Rs.210.0) emerged as the top contributor to turnover with Rs.64mn (0.3mn shares), followed by Lanka IOC (LIOC – 42.3) with Rs.58mn turnover (1.4mn shares) and Blue Diamonds Jewellery Worldwide – Voting (BLUE-N – Rs.3.6) with Rs.52mn turnover (14.2mn shares).

  • Corporate Announcements:
    Thursday, 28 August 2014

    It was announced that
     Board of Directors of MTD Walkers (KAPI) has approved the acquisition of 100% equity stake in Wincon Development Ceylon Pvt Ltd for a total purchase consideration of Rs.2.2bn (Rs.4.01 per share)


    HDFC Bank (HDFC) announced that Lanka Rating Agency Ltd upgraded the long and short term financial institution ratings of HDFC to BBB+ and P2 from BBB and P3 with a long term “stable” outlook. Concurrently, long term issue ratings of Rs.2.0bn secured senior listed debenture (2013/2018) has been upgraded to BBB+ from BBB


    It was announced that Senkadagala Finance (SFCL) entered into a Share Purchase Agreement with Newest Capital Ltd on 25 August 2014 to acquire 100% of the fully paid issued share capital of Newest Capital Ltd for a sum of Rs.300mn.  Accordingly, Newest Capital Ltd is a fully owned subsidiary of SFCL from such date.

    The transaction complies with the Master Plan of Consolidation of the Financial Sector 2014, initiated by the Central Bank of Sri Lanka (CBSL) and has their approval.

  • Dividend Announcement:
    Thursday, 28 August 2014

    Arpico Finance Company (ARPI)
     – First & Final Dividend of Rs.2.5 per share – XD: 30/09/2014 – PD: 09/10/2014


    Finlays Colombo (JFIN) – First Interim Dividend of Re.1.0 per share – XD: 09/09/2014 – PD: 18/09/2014


    Lee Hedges (SHAW) – First & Final Dividend of Rs.23.0 per share – XD: 29/09/2014 – PD: 07/10/2014


    Renuka Shaw Wallace (COCO) – First & Final Dividend of Rs.0.3 per share (Voting & Non-Voting) – XD: 25/09/2014 – PD: 03/10/2014


    Renuka Holdings (RHL) – First & Final Dividend of Rs.0.7 per share (Voting & Non-Voting) – XD: 25/09/2014 – PD: 03/10/2014


    Abans Electricals (ABAN) – Final Dividend of Rs.2.5 per share – Dates to be notified


    Gestetner of Ceylon (GEST) – First & Final Dividend of Rs.5.0 per share – XD: 01/10/2014 – PD: 09/10/2014

Research Reports

Textured Jersey

TJL Rs.19.30 - 1Q15 Results Summary - 28 August 2014TJL reported a net profit of Rs.164mn for 1Q15 (-32% YoY and -53% QoQ) the lowest quarterly earnings since 2Q13, below our expectations, largely due to decline in sales volumes to the US and GP margin contractionOutlook ValuationsDue to higher than anticipated margin contraction and volume decline in 1Q15, TJL’s FY15E net profit forecast revised down by 7% to US$10.4mn (+17% YoY). Meanwhile, as a result of revisited GP margin assumptions FY16E net profit forecast is also revised down by 3% to US$12.3mn (+19% YoY) GP margin forecast revised...


Strategy Report 2014

Sri Lanka Strategy Report - August 2014Market Outlook Increased local interest in equities in record low interest rate environmentImproving macro outlook and lower interest rates in particular to translate into stronger corporate earnings from 2H2014EGDP growth strengthening to ~7.5%, inflation soft at ~5% and currency stabilizing with modest ~2% depreciation vs. US$The upgrade of Qatar and UAE from frontier to emerging status in June 2014 has also increased the concentration of the flow of foreign cash into fewer countriesAmongst frontier markets, whilst Sri Lanka rates low in scale and liqu...


Monthly Report - July 2014

Sri Lanka Monthly Report - July 2014July 2014 Market Performance: The Colombo Bourse closed higher for the fifth consecutive month in July 2014, with the benchmark All Share Price Index (ASPI) rising 6.8% MoM to 6,814 points while the more liquid S P SL20 index rose 7.6% MoM to 3,773 pointsAverage daily turnover rose 68% MoM to Rs.1,560mn in July 2014Foreigners were net buyers for the third consecutive month, with a net foreign inflow of Rs.4,725mn in July 2014 (up 26% MoM), resulting in YTD net foreign inflow of Rs.10,974mnSector Performance: Highest Performing: Motors (+19.5%), Chemicals ...


Ceylon Tobacco Company

CTC – Rs.1,135.00 - 2Q2014 RESULTS SUMMARY - 06 August 2014 1Q2014 EPS of Rs.10.8 (+39% YoY, but -20% QoQ), broadly in line with our expectations; sharp YoY rise is off a relatively low base, supported by revenue growth, despite the 3.6% YoY drop in volumes, and a decline in other opex. CTC’s first quarter earnings are generally its lowest, partly due its relatively conservative accounting approach of allotting other opex 2Q2014 net profit of Rs.2,511mn (-11% YoY; off a relatively high base; 2Q2013 net profit hit a record high of Rs.2,823mn), below our expectations, largely due to higher than...


National Development Bank

NDB – Rs.215.80 - 2Q2014 Results Summary - 5 August 2014National Development Bank (NDB) reported a net profit (NP) of Rs.843mn in 2Q2014 (up 6% YoY, however down 29% QoQ), broadly in line with our expectations, for our FY2014E NP forecast of Rs.3,674mn (+39% YoY). Consequently, NDB’s 1H2014 NP rose 56% YoY to Rs.2,034mn § NDB’s loan book grew 6% QoQ (2014YTD up 12%) to Rs.153bn while its deposit base grew 3% QoQ (2014YTD up 8%) to Rs.139bn as at 30 June 2014§ Non-Interest Income (Non II) fell 5% YoY (down 24% QoQ) to Rs.1,036mn in 2Q2014 largely due to a decline in net fees and commission i...


Chevron Lubricants

LLUB – Rs.314.00 - 2Q2014 Results Summary - 30 July 2014 2Q2014 EPS of Rs.5.6 (+20% YoY off a low base however down -12% QoQ), slightly below our expectations, amidst ~6% YoY decline in 1H2014 sales volumes subsequent to the 12% upward product price revision implemented w.e.f. from 27 January 2014. Gross Profit margin reached a record high of 42.7% during 2Q2014 Outlook Valuations: LLUB’s net profit forecast revised down marginally to Rs.2,782mn for 2014E (+10% YoY) and to Rs.3,080mn for 2015E (+11% YoY), due to higher than expected volume declinePE multiples of 13.5X 2014E and 12.2X 2015E,...


National Development Bank

NDB – Rs.212.00 - 1Q2014 Results Summary - 28 July 2014National Development Bank (NDB) reported a net profit of Rs.1,191mn in 1Q2014 (up 135% YoY and up 167% QoQ on account of to low base effect), above our expectations, due to higher business volumes and a lower effective tax rate § NDB’s loan book grew 6% QoQ (sector up ~3% QoQ) to Rs.145bn while its deposit base grew 4% QoQ (sector up ~3% QoQ) to Rs.135bn as at 31 March 2014 § Total loan loss impairment rose 435% YoY (down 88% QoQ) to Rs.126mn in 1Q2014 (albeit relatively low vs. Rs.1.26bn in 2013). Impairment rose l...


John Keells Holdings

JKH-N – Rs.238.70 - Results Summary 1Q15 - 25 July 2014 JKH’s 1Q15 EPS of Rs.2.2 (+17% YoY), in line with our expectations. YoY growth led by strong performance in the leisure and consumer, food retail sectors coupled with above par performance in others sector, comprising a capital gain of Rs.389mn from disposal of shares and high interest income earned from JKH’s significant cash pile, compensating for decline in earnings of transportation sector Outlook Valuations: JKH net profit (NP) forecasts maintained at Rs.12,679mn for FY15E (+8% YoY on a recurring basis) ...


Commercial Bank of Ceylon

Commercial Bank of Ceylon acquires Indra Finance LtdCommercial Bank of Ceylon (COMB) announced on 16 July 2014, its decision to invest Rs.870mn in Indra Finance Limited (IFL: a Licensed Finance Company [LFC]) and to acquire the entirety of the issued and fully paid share capital of IFL, subject to relevant statutory and regulatory approvals followed by a due diligence. Whilst this will be the first LFC acquired by a Licensed Commercial Bank (LCB), post Central Bank of Sri Lanka’s (CBSL’s) announcement on financial sector mergers early this year, we expect COMB to benefit fro...


Aitken Spence

SPEN – Rs.109.00 - 4Q14 Results Summary - 21 July 2014 Aitken Spence (SPEN) recurring 4Q14 net profit of Rs.1,428mn (+18% YoY), below our expectations amid below par performance in key sectors, tourism and strategic investments. Earnings adjusted for an impairment provision of ~Rs.400mn in the strategic investments sector for the remaining assets of the non-operational power plants, and excluding ~Rs.391mn insurance income under the tourism sector for property partly damaged by a fire in July 2013 in the Maldives and adjusting for the estimated foregone profit from the damag...


Aitken Spence Hotel Holdings

AHUN – Rs.79.00 - 7 July 2014 - 4Q14 Results Summary Quarterly Highlights: § 4Q14 reported EPS of Rs.3.6 (+29% YoY), supported by higher than anticipated other income which includes insurance proceeds of Rs.370mn received during the quarter for water villas of Adaaran Hudhurunfushi which were partly damaged by a fire in 2Q14. Adjusting for same and AHUN’s foregone profit from damaged villas, 4Q14 recurring NP was Rs.907mn (-5% YoY) and Rs.2,026mn for FY14 (+13% YoY), below our expectations for a NP of Rs.2,121mn (+19% YoY) Sri Lanka segment: Revenue of Rs.1,321mn in 4Q14...


Monthly Report - June 2014

Sri Lanka Monthly Report - June 2014June 2014 Market Performance: The Colombo Bourse closed higher for the fourth consecutive month in June 2014, with the benchmark ASPI rising 1.8% MoM to 6,379 points the more liquid S P SL20 index rose 1.5% MoM to 3,508 pointsAverage daily turnover declined 25% MoM to Rs.926mn in June 2014Foreigners were net buyers for the second consecutive month, with a net foreign inflow of Rs.3,753mn in June 2014 (down 61% MoM), resulting in YTD net foreign inflow of Rs.6,249mnSector Performance: Highest Performing: Oil Palms (+6.8%), Land Property (+6.1%)Lowest perf...


Textured Jersey

TJL Rs.19.10 - 4Q14 Results Summary - 19 May 2014 § TJL reported a 4Q14 EPS of Rs.0.54 (+9% YoY and +17% QoQ), in line with our expectations, amidst expansion in profit margins particularly at the GP level due to enhancement of product mix Quarterly Highlights Quarterly revenue driven by strong Europe order book despite the slowdown in US volumes GP margin expanded to 12.4%, amidst introduction of higher margin products and reduced requirement for low margin third party outsourcing Strong balance sheet with net cash position of US$15.8mn as at 31 Ma...


Monthly Report - May 2014

Sri Lanka Monthly Report - May 2014May 2014 Market Performance: The Colombo Bourse rose marginally in May 2014, with the benchmark All Share Price Index (ASPI) rising 0.6% MoM to 6,263 points and the more liquid S P SL20 index rising 1.1% MoM to 3,455 points Average daily turnover rose 12% MoM to Rs.1,240mn in May 2014 Foreigners were net buyers for the month, following three months of continuous net foreign selling, with a net foreign inflow of Rs.9,690mn in May 2014 (vs. a net foreign outflow of -Rs.346mn in the previous month) Secto...


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