C T SMITH STOCKBROKERS (PVT) LIMITED

Tourist arrivals to Sri Lanka rose 9% YoY to 69,591 persons in April 2012, resulting in cumulative arrivals rising 18% YoY to 330,116 persons. Although arrivals from the key Western Europe segment rose 8% YoY to 25,018 persons in April 2012, arrivals from the UK fell 11% YoY to 8,019 persons. Meanwhile, arrivals from South Asia rose 5% YoY to 20,532 persons with arrivals from India rising 5% YoY to 15,432 persons in April 2012.

The Lanka Hospitals Corporation (LHCL) announced that the Board of Directors of the company granted approval for the incorporation of its fully owned subsidiary,  for the purposes of expanding its laboratory business. Super Religare Laboratories (SRL), a subsidiary of Fortis Healthcare Limited, will partner LHCL in establishing a new network of laboratories across the country. Fortis Healthcare International, a subsidiary of Fortis Healthcare Limited, is the second largest shareholder of LHCL. It is expected that the company will invest a sum of Rs.831mn over two years in the new company.

The Lanka Hospitals Corporation (LHCL) – Final Dividend of Rs.0.50 per share – XD: 02/07/2012 – PD: 10/07/2012

Hunas Falls Hotels (HUNA) – First and Final Dividend of Rs.0.50 per share – XD: 26/06/2012 – PD: 04/07/2012

SMB Leasing (SEMB) reported a net profit of Rs.7mn for 1Q2012 (down 74% YoY)

The Colombo Stock Exchange (CSE) announced that 732.9mn ordinary voting shares of Taprobane Holdings Ltd (TAP) would be listed on the Diri Savi Board of the CSE on 17 May 2012, and would be classified under the Diversified Sector.

Dialog Axiata (DIAL) announced that the amalgamation of its newly acquired subsidiary, Suntel Ltd with DIAL has been completed w.e.f 15 May 2012. Consequently, Suntel Ltd will cease to exist as a corporate entity, while its assets, liabilities and operations in their entirety will be subsumed by Dialog Broadband Networks (Pvt) Ltd.

Merchant Bank of Sri Lanka (MBSL) issued a statement regarding its position on the disposal of shares in its subsidiary, MBSL Savings Bank (MBSLSB), which it acquired for a total investment of Rs.250mn in 2009. MBSL stated that with the unanimous decision of the Board, 12.8mn voting shares of MBSLSB were disposed at Rs.2.00 per share on 02 September 2010, generating a profit of Rs.26mn to MBSL. Similarly, the unanimous consensus of the Board was reached for the disposal of the balance 68% voting shares at Rs.3.75 per share, and the entire 100mn non-voting shares at Rs.2.35 per share, being the best possible price negotiated by the committee appointed by the Board, based on the valuation obtained from PriceWaterhouse Coopers for the purpose of the merger, and the sale prices were far in excess of the valuation. The transaction is expected to generate a profit of Rs.325mn to MBSL. MBSL further stated that if it continued holding onto MBSLSB without considering the disposal at this stage, MBSL would have been required to invest Rs.1.3bn to meet the adequacy requirements of MBSLSB, in accordance with the requirements of the Central Bank of Sri Lanka (CBSL). MBSL had also obtained formal approval from the Bank Supervision Department and Non Bank Supervision Division of the CBSL, which is the direct regulator of MBSL, and details of this transaction were informed to the CSE in October 2011.

Sri Lanka’s 3-month Treasury Bill yield fell 20bps to 11.99%. Meanwhile, the 6-month and 12-month T-Bill yields rose 10bps and 9bps to 12.40 and 12.58% respectively at this week’s auction.

Ceylinco Insurance (CINS) reported a net profit of Rs.221mn for 1Q2012 (down 23% YoY).

Lion Brewery (LION) reported a net profit of Rs.187mn for 4Q12 (up 41% YoY), resulting in a net profit of Rs.1,262mn for FY12 (up 52% YoY).

Kelani Cables (KCAB) reported a net profit of Rs.108mn for 4Q12 (up 85% YoY), resulting in a net profit of Rs.284mn for FY12 (up 112% YoY)

Keells Food Products (KFP) – First and Final Dividend of Rs.2.00 per share – XD : 25/05/2012 – PD : 06/06/2012