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News & Announcements

  • Stock Market Indicators
    Tuesday, 24 November 2015

    ASI: 7,010.0 (down 46 points, -0.65%), S&P SL20: 3,735.6 (down 47 points, -1.25%)

    Turnover: Rs.829mn (-6%)

    Exchange Rate 1US$ = Rs.142.90

    Market Capitalization: US$20.8bn

    Foreign Purchases: Rs.323mn (+8%)

    Foreign Sales: Rs.563mn (+57%)

    Commercial Bank of Ceylon - Voting (COMB-N – Rs.145.9) emerged as the top contributor to turnover with Rs.166mn (1.1mn shares), followed by John Keells Holdings (JKH-N – Rs.188.5) with Rs.132mn turnover (0.7mn shares) and Hatton National Bank - Voting (HNB-N – Rs.216.4) with Rs.101mn turnover (0.5mn shares)

  • Local Economy News
    Tuesday, 24 November 2015

    Sri Lanka’s 12-month Treasury bill yields reduced by 1bp to 6.92% at this week’s auction, while 6-month Treasury bill yields reduced by 10bps to 6.40%. Meanwhile 3-month Treasury bill yields were not offered at this week’s auction.

  • Stock Market Indicators
    Monday, 23 November 2015

    ASI: 7,055.8 (up 38 points, +0.55%), S&P SL20: 3,782.7 (up 9 points, +0.23%)

    Turnover: Rs.885mn (+98%)

    Exchange Rate 1US$ = Rs.142.55

    Market Capitalization: US$21.0bn

    Foreign Purchases: Rs.301mn (vs. Rs.118mn)

    Foreign Sales: Rs.360mn (vs. Rs.110mn)

    Access Engineering (AEL – Rs.23.9) emerged as the top contributor to turnover with Rs.186mn (7.7mn shares), followed by Bogala Graphite Lanka (BOGA – Rs.34.8) with Rs.157mn turnover (4.9mn shares) and Hatton National Bank - Voting (HNB-N – Rs.216.2) with Rs.53mn turnover (0.2mn shares)

  • CSE Announcement
    Monday, 23 November 2015

    The Colombo Stock Exchange (CSE) has approved in principle an application submitted by Commercial Credit and Finance (COCR) for the listing of its Rated, Guaranteed, Subordinated, Redeemable Debentures to raise Rs.2.0bn in total. The date of opening of the subscription list is 03 December 2015

  • Corporate Announcement
    Monday, 23 November 2015

    Dunamis Capital (CSEC) announced the application details of its Rated, Senior, Unsecured, Redeemable Debenture issue.

    It was announced that Alterna GK LLC acquired 4.9mn shares (10.33%) of Bogala Graphite Lanka (BOGA).

  • Stock Market Indicators
    Friday, 20 November 2015

    ASI: 7,017.4 (down 3 points, -0.04%), S&P SL20: 3,774.1 (down 7 points, -0.19%)

    Turnover: Rs.447mn (-19%)

    Exchange Rate 1US$ = Rs.142.55

    Market Capitalization: US$20.9bn

    Foreign Purchases: Rs.118mn (-13%)

    Foreign Sales: Rs.110mn (-33%)

    John Keells Holdings (JKH-N – Rs.186.0) emerged as the top contributor to turnover with Rs.66mn (0.4mn shares), followed by Hayleys (HAYL – Rs.320.0) with Rs.35mn turnover (0.1mn shares) and Dipped Products (DIPD – Rs.112.0) with Rs.30mn turnover (0.3mn shares)

  • Local Economy News
    Friday, 20 November 2015

    National Budget 2016 was presented to the parliament by Sri Lanka’s Finance Minister Ravi Karunanayake.

    Budget deficit to be 5.9% of GDP (-Rs.740bn) – Revenue Rs.2,047bn, Expenditure Rs.2,787bn

    Key proposals;

    Banks to be banned from providing leases from June 2016

    Stamp duty removed on local credit card purchases

    Tiles to be removed from the BOI negative list

    Liberalizing the lubricant market - remove lubricants from BOI negative list

    Corporate income tax to be reduced to 15%

    NBT increased to 4% from 2% - Rs.90bn to be raised

    Prices of 11 essential commodities to be reduced

    VAT to be removed from wholesale and retail trade


  • Corporate Announcement
    Friday, 20 November 2015

    Hemas Holdings (HHL) announced the opening of its first luxury property in partnership with Minor Hotel Group. Total cost of the project is ~US$50mn


    Access Engineering (AEL) announced the listing details of its Rated, Senior, Unsecured, Redeemable Debentures


    People’s Insurance Limited, a wholly owned subsidiary of People’s Leasing & Finance (PLC), has received in-principle approval for the listing of 200mn ordinary shares at Rs.15.0 per share


    Sampath Bank (SAMP) ) announced the listing details of its Rated, Unsecured, Subordinated, Redeemable debentures


    Dunamis Capital (CSEC) announced the application data of its Rated, Senior, Unsecured, Redeemable Debentures

Research Reports

Distilleries Co. of Sri Lanka

Distilleries Co. of Sri Lanka (DIST) 2Q16 Results Summary - 18 November 20152Q16 net profit of Rs.1,449mn (-22% YoY and –17% QoQ), below our expectations - the lowest quarterly net profit since 3Q13, attributable to below par performance in core beverage sector amid a sharp erosion in gross profit margin. 1H16 net profit -14% YoY to Rs.3,205mnOutlook Valuations § Group net profit forecasts revised down by -7% to Rs.7,618mn for FY16E (+3% YoY) and by -3% Rs.8,953mn for FY17E (+18% YoY), amid a downward revision to beverage sector gross profit margins. Nevertheless, the core beverage secto...


Hemas Holdings

HHL - 2Q16 Results Summary - 18 November 2015 2Q16 EPS of Rs.1.1 (+13% YoY on a recurring basis), in line with our expectations, core FMCG sector posted strong earnings growth amidst the improved consumer sentiment and higher disposable income. HHL reported a Net Profit (NP) of Rs.635mn for 2Q16 (+17% YoY on a recurring basis). Consequently, HHL reported a NP of Rs.1,050mn for 1H16 (+25% YoY) Outlook ValuationsFY16E group NP forecasts broadly maintained at Rs.2,279mn (+17% YoY). We have assumed that HHL will deploy the rights issue funds during 4Q16E. Due to lack of visibility on how the fu...


Nations Trust Bank

Nations Trust Bank (NTB) 3Q2015 Results Summary - 16 November§ 3Q2015 EPS of Rs.3.0 (-18% YoY and -11% QoQ), below our expectations, largely on account of marked to market losses on its Fixed Income Securities (FIS) portfolio§ Net Interest Spread contracted QoQ amid increased price competition within the banking and financial sector§ Uncertainty related to promoter dilution continues, amid likely participation of banks in ongoing sector consolidation initiatives. A near term acquisition/merger related to NTB may not materialise amid the flexible stance adopted by the Central Bank of Sri La...


Ceylon Tobacco Company

Ceylon Tobacco Company (CTC) 3Q2015 Results Summary - 12 November 2015All-time high quarterly net profit of Rs.3,292mn for 3Q2015 (+57% YoY and +9% QoQ), above our expectations, amid a robust growth in volumes, attributable to both rise in disposable income and higher consumer demand prior to the excise duty led price increase, which came into effect on 03 Oct 2015. Consequently, 1-3Q2015 net profit +33% YoY to Rs.8,801mnOutlook Valuations § CTC’s net profit forecasts revised up by +5% to`212 Rs.10,557mn for 2015E (+23% YoY), mainly on account of higher volume expectations and by +3% to Rs...


Nestle Lanka

Nestlé Lanka (NEST) 3Q2015 Results Summary - 09 November 20153Q2015 net profit of Rs.1,026mn (-6% YoY and -21% QoQ – off a high base), below our expectations, amid higher than anticipated Marketing, Selling and Distribution (MSD) expenses during the quarter, negating benefit from strong expansion of the GP margin to a record high. 1-3Q2015 net profit +10% YoY to Rs.3,484mnOutlook Valuations § Despite 3Q2015 earnings being below our expectations, due to record high MSD expenses, we broadly maintain our NEST net profit forecasts at Rs.4,587mn for 2015E (+21% YoY) and Rs.5,155mn for 2016E ...


Access Engineering

Access Engineering (AEL) 2Q16 Results Summary - 09 November 2015 2Q16 EPS of Rs.0.7 (+7% YoY), above our expectations, primarily due to improved construction segment margins and higher than anticipated earnings from Access Projects. Construction segment EBIT margin improvement largely due to the lower operating costs incurred during the quarterOutlook Valuations Bill on Super Gains Tax (SGT) was passed on 20 October 2015; AEL’s SGT liability is Rs.554mn (25% of AEL’s FY14 taxable profit). The company made the first of its three equal installment payments, Rs.185mn on 31 October. The second ...


John Keells Holdings

John Keells Holdings (JKH) 2Q16 Results Summary - 305 November 2015 2Q16 EPS of Rs.3.0 (+32% YoY), above our expectations, primarily boosted by exchange gains recorded in “Others” sector, amid the depreciation of LKR. Strong earnings also seen in the Transportation and Consumer Foods Retail (CF R) sectors, offsetting the subpar performance in Leisure and Financial Services sectorsOutlook Valuations JKH’s FY16E group recurring Net Profit (NP) forecast revised up by 5% to Rs.13,785mn (+6% YoY) amid the upward revisions for Others, CF R and Transportation sectors. Meanwhile FY17E group NP re...


Peoples Leasing

People's Leasing Finance (PLC) 2Q16 Results Summary - 23 October 2015PLC reported a record high quarterly net profit of Rs.1,240mn for 2Q16 (+14% YoY and +12% QoQ), above our expectations, largely due to steep decline in impairment provisions. Meanwhile, 1H16 earnings grew +25% YoY amid continuous reduction in provisions and favorable asset growthOutlook Valuations: Quarterly Net Interest Spread (NIS) contracted for the second consecutive quarterImpairment charges for loans and receivables witnessed a steep decline in 2Q16 reporting record low levelsPLC increased its holding in PMB from 1...


Chevron Lubricants

Chevron Lubricants Lanka (LLUB) 3Q2015 Results Summary - 04 November 20153Q2015 Net Profit (NP) of Rs.835mn (+11% YoY and +5% QoQ), broadly in line with expectations. Earnings growth driven by record high Gross Profit (GP) margin on the back of continued soft base oil prices – LKR depreciation did not affect LLUB during 3Q2015 due to existing inventory. Continued promotional activities resulted in an estimated +7% volume growth QoQ, with volumes remaining flat YoY. 1-3Q2015 NP up +8% YoY to Rs.2,375mnOutlook Valuations: LLUB’s 2015E NP broadly maintained at Rs.3,076mn (+12% YoY). 2016E net ...


Textured Jersey

Textured Jersey Lanka (TJL) 2Q16 Results Summary - 30 October 2015(TJL - Rs.29.9)TJL reported a net profit of Rs.468mn for 2Q16 (+66% YoY and vs. Rs.206mn in 1Q16) above our expectations, amid higher than anticipated margin expansion and high revenue growth. Meanwhile, 1H16 net profit rose +51% YoY Rs.675mn. In US$ terms 2Q16 net profit was reported at US$3.5mn (+62% YoY and vs. US$1.5mn in 1Q16), while 1H16 net profit was US$5.0mn (+47% YoY) Outlook Valuations: TJL’s net profit forecasts revised up by 3% and 2% to Rs.1,757mn for FY16E (+32% YoY) and Rs.2,016mn for FY17E (+15% YoY), amid ...


Piramal Glass

Piramal GlassCompany Brief - 30 October 2015 § Sole manufacturer of glass containers in Sri Lanka, with 97% market share§ Energy intensive industry, with furnace oil and electricity prices being key drivers of profit§ Relinement of production facility likely in FY17E – demand may be partly met by lower margin imports§ Near term results could provide short term trading opportunities amidst likely strong YoY growth in earnings, but much of positives may have been priced into recent share price gain, with share trading on 14.5x FY17E earnings


Central Finance

Central Finance Company Brief - 20 October 2015 § Leading player in cyclical vehicle financing market which faces frequent regulatory changes§ Historically trading at lower valuations due to over conservative business model§ Inefficient capital allocation evidenced through low leverage§ CFIN’s interest spreads to be negatively impacted by rise in interest rates


Aitken Spence

Aitken Spence - 1Q16 Results Summary - 27 August 2015 1Q16 net profit of Rs.420mn (-19% YoY on a recurring basis), in line with our expectations. Decline in earnings attributable to lack of contribution from Ace Power Embilipitya (APE), under the Strategic Investments Sector, on account of non-renewal of the Power Purchase Agreement (PPA) which expired in April 2015. Quarterly earnings driven by Aitken Spence Hotel Holdings (AHUN), under the Tourism Sector. Cargo Logistics and Services Sectors continued to contribute positively Outlook Valuations: SPEN’s group recurring net profit forecasts...


National Development Bank

National Development Bank (NDB) 2Q2015 Results Summary - 24 August 2015§ NDB reported an EPS of Rs.3.5 for 2Q2015 (-32% YoY and -34% QoQ), below our expectations, due to higher operating expenses, shrinking spreads, less than par credit growth and increased loan loss impairment. Consequently, NDB’s NP fell -29% YoY to Rs.1,444mn in 1H2015§ Net Interest Spreads down YoY and QoQ owing to relatively faster decline in asset yields. Loan book growth was at a mediocre 3% QoQ, whilst deposits rose 5% during the same period. Cost to income ratio rose to a decade high of 57.4% during the quarter on ...


Hatton National Bank

Hatton National Bank (HNB) 2Q2015 Results Summary - 20 August 2015 § 2Q2015 recurring EPS of Rs.5.9 (+44% YoY, +25% QoQ), in line with our expectations. Quarterly growth was driven by relatively higher growth in net interest income and non-interest income§ Net Interest Spreads recovered QoQ amid HNB’s advances rising 5% QoQ on account of growth in high yield leasing and SME facilities Outlook Valuations § HNB’s 2015E and 2016E forecasts maintained at Rs.10,178mn (+16% YoY) and Rs.12,283mn (+21% YoY) respectively. Spreads are expected to continue to recover in 2H2015E due to further growt...


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