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Insurance, real estate drive December 2017 earnings up

Share Market Sri Lanka

  • Results of 279 listed companies higher by 19% to Rs. 86 b

December quarter earnings of 279 listed companies have spiked 19% year-on-year to Rs. 86 billion, turning around from a dip of 2% year-on-year in September 2017, according to First Capital Research.

It said the main drivers of earnings were Insurance (219%YoY) and Real Estate (255%YoY) overcoming the negative effect of Food, Beverage and Tobacco (-37%YoY) and Capital Goods (-21%YoY). The Insurance sector saw a phenomenal earnings growth of 219%YoY to Rs. 17.6 billion (20% of total December 2017 earnings) driven by CTCE (+2199%YoY) and CINS (+102%YoY).
CTCE profits were up as change in contractual liability increased to Rs. 5.8 billion while CINS profits increased given the absence of the decline in the insurance fund of Rs. 1.7 billion in December 2016.

The Real Estate sector saw a profit growth of 255% YoY to Rs. 6.3 billion (7% of total December 2017 earnings) driven by RIL (3874%YoY) and CLND (4843%YoY).

First Capital Research said RIL’s profits were boosted due to one-off gains of Rs. 1 billion and profits of Rs. 1.5 billion of equity accounted investee arising from its acquisition of 30% stake in UML while CLND’s profits were up given the fair value gains on its land property in Pettah.
The Food, Beverage and Tobacco sector saw earnings dipping by 37% YoY to Rs. 11.7 billion (14% of total December 2017 earnings) driven by GOOD (-100%YoY) and BUKI (-97%YoY) given the absence of profits from the disposal of plantation assets in December 2016.
The Capital Goods sector’s earnings declined by 21% YoY to Rs. 9.9 billion driven by JKH (-13%YoY) and KAPI (-3201%YoY).
JKH’s earnings were affected by a higher cost of sales which eroded gross margins while KAPI saw higher finance cost (+29%YoY) coupled with declining gross margins due to a higher cost of sales.

Sri Lankan stocks edge up as financials lead


APRIL 2, 2018

COLOMBO, March 29 (Reuters) – Sri Lankan shares ended firmer on Thursday led by financials, edging up from a nine-week closing low hit in the previous session, with block deals boosting turnover on the last trading day of the current fiscal year.

The Colombo stock index ended 0.57 points firmer at 6,476.78, edging up from its lowest closing level since Jan. 23 hit on Wednesday. The markets will be closed on Friday for a holiday.

The index rose 0.51 percent on week, its first weekly gain in five, but has fallen 1.14 percent this month.

“A number of crossings went through today and that helped to push the turnover. Being the last day of the financial year, we saw some window-dressing in some stocks,” said Dimantha Mathew, head of research at First Capital Holdings.

Shares in Sofltogic Holdings Plc rose 10.3 percent, while the biggest listed lender Commercial Bank of Ceylon Plc ended 1.9 percent.

Ceylinco Insurance Plc climbed 7.4 percent, while Dialog Axiata Plc inched up 0.7 percent.

Turnover stood at 3.5 billion rupees ($22.49 million), well above this year’s daily average of around 1.2 billion rupees.

Foreign investors bought a net 2.7 billion rupees worth of shares on Thursday, but they have net sold 2.6 billion rupees worth equities so far this year.

Political uncertainty and worries over a slowing economy weighed on sentiment, brokers said.

Sri Lanka’s economy grew by 3.1 percent in 2017, the slowest pace in 16 years and well below the 4.5 percent seen in 2016, revised government data released showed last week.

Prime Minister Ranil Wickremesinghe is facing a no-confidence motion, which will be debated on April 4 before voting, with analysts saying support from many political parties will be needed for Wickremesinghe to clear the vote. ($1 = 155.6000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)