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Monday June 3rd, 2024

Sri Lanka listed company profits up 11-pct, market re-rated down: data

ECONOMYNEXT – Profits at Sri Lanka’s publicly traded companies rose 11 percent to Rs225 billion in the 12 months ending September 2016 from a year earlier, while quarterly earnings were up 24 percent to Rs59.4 billion, a research report said.

But the market had steadily re-rated down in terms of price-to-earnings multiples and price-to-book values over the past 18 months.

CAL Partners, a Colombo-based advisory firm, said the top contributors to profits in the September quarter was Ceylon Tobacco (7.5 percent), Hatton National Bank (6.8 percent), John Keells Holdings (6.3 percent), Commercial Bank (6.2 percent) and Dialog Axiata (4.8 percent).

Net interest income was higher at banks, despite rising rates in the quarter, CAL Partners said.

Valibel One, lost Rs3.0 billion in the quarter, down from a profit of Rs836 million last year.

Profits in the telecom, power and energy, oil palms grew, while services, stores and supplies, chemical and pharmaceuticals had fallen, the report said.

In the 12-months ending September 2016, John Keells Holdings brought 6.5 percent of the profits, HNB 6.3 percent, Commercial Bank 6.1 percent, Ceylon Tobacco 5.5 percent and Lanka Orix Leasing Company 4.1 percent.

The 12-month trailing earnings had grown 2.1 percent in the same period last year.

Sri Lanka engaged in a ‘Keynesian stimulus’ in the first quarter of 2015, expanding state spending and financing the budget deficit through printed money, generating a balance of payments crisis and currency collapse.

The market was trading at a price-to-earnings multiple of 13.7 times, trailing 12 months in the first quarter of 2015, followed by 13.4 times in the second quarter 13.5 times in the third quarter and 13.4 times in the fourth quarter.

The price-to-earnings multiple (the period in years it takes for a theoretical buyer of a company to recover his investment at historical profits) is a reflection of forward expectations.

When investors expect earnings to be stagnant or fall, they will pay a lower price for stock.

The rupee started to collapse in the third quarter and corrective measures to stop money printing were put in place from the third quarter, analysts say.

In the first quarter of 2015, price-to-earnings multiples fell to 12.9 times, in the second quarter it fell to 12.7 times. In the current quarter, it was down to 12.2 times.

The price-to-book value had fallen from 1.55 times in the first quarter of 2015 to 1.41 times in the third quarter of 2016. (Colombo/Nov21/2016)

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Water levels rising in Sri Lanka Kalu, Nilwala river basins: Irrigation Department

Sri Lanka Navy assisting in rescue operations (Pic courtesy SL Navy)

ECONOMYNEXT – Sri Lanka’s Irrigation Department has issued warnings that water levels in the Kalu and Nilwala river basins are rising and major flooding is possible due to the continuous rain. People living in close proximity are advised to take precautions.

“There is a high possibility of slowly increasing prevailing flood lowline areas of Kiriella, Millaniya, Ingiriya, Horana, Dodangoda, Bulathsinhala, Palinda Nuwara and Madurawala D/S divisions of Ratnapura and Kalutara Districts, up to next 48 hours,” it said issuing a warning.

“In addition, flood situation prevailing at upstream lowline areas of Ratnapura district will further be prevailing with a slight decrease.

“The residents and vehicle drivers running through those area are requested to pay high attention in this regard.

“Disaster Management Authorities are requested to take adequate precautions in this regard.”

The island is in the midst of south western monsoon.

DMC reported that 11,864 people belonging to 3,727 families have been affected due to the weather in Rathnapura, Kegalle, Kilinochchi, Jaffna, Mullaitivu, Kalutara, Gampaha, Colombo, Galle, Matara, Hambantota, Puttalam, Kurunegala, Kandy, Nuwara Eliya, Anuradhapura, Polonnaruwa, Badulla, Moneragala, and Trincomalee districts.

Meanwhile, the Meteorology Department stated that showers are expected on most parts of the island today.(Colombo/June3/2024)

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UNP gen secy defends call for postponing Sri Lanka poll, claims opposition silent

The UNP party headquarters in Pitakotte/EconomyNext

ECONOMYNEXT — United National Party (UNP) General Secretary Palitha Range Bandara has defended his call for postponing Sri Lanka’s presidential election by two years, claiming that his proposal was not undemocratic nor unconstitutional.

Speaking to reporters at the UNP headquarters Monday June 03 morning, Bandara also claimed that neither opposition leader Sajith Premadasa nor National People’s Power (NPP) leader Anura Kumara Dissanayake have spoken against his proposal.

“I have made no statement that’s undemocratic. My statement was in line with provisions of the constitution,” the former UNP parliamentarian said.

He quoted Section 86 of Chapter XIII of the constitution which says: “The President may, subject to the provisions of Article 85, submit to the People by Referendum any matter which in the opinion of the President is of national importance.”

Sections 87.1, 87.2 also elaborates on the matter and describes the parliament’s role, said Bandara.

“I spoke of a referendum and parliament’s duty. Neither of this is antidemocratic or unconstitutional. As per the constitution, priority should be given to ensuring people’s right to life,” he said.

“Some parties may be against what I proposed. They may criticse me. But what I ask them is to come to one position as political parties and make a statement on whether they’re ready to continue the ongoing economic programme,” he added.

Bandara claimed that, though thee has been much criticism of his proposal for a postponement of the presidential election, President Wickremesinghe’s rivals Premadasa and Dissanayake have yet to remark on the matter.

“I suggested that [Premadasa] make this proposal in parliament and for [Dissanayake] to second it. But I don’t see that either Premadasa nor Dissanayake is opposed to it. To date, I have not seen nor heard either of them utter a word against this. I believe they have no objection to my proposal which was made for the betterment of the country,” he said. (Colombo/Jun03/2024)

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300 of 100,000 trees in Colombo considered high risk: state minister

ECONOMYNEXT – Trees in Sri Lanka’s capital Colombo are being monitored by the municipal council, Army and Civil Defense Force as the severe weather conditions continue, State Minister for Defense Premitha Bandara Tennakoon said.

“Within the Colombo Municipal Council city limits, there are 100,000 trees. Of these, around 300 are considered high risk,” Tennakoon told reporters at a media conference to raise awareness about the current disaster management situation.

Not all trees required to be cut down he said. “We can trim some of the branches and retain them.”

The problem was that buildings in the vicinity of the tree had cut branches on one side, causing it to become unbalanced, the minister said.

New laws would be brought in so provincial/municipal institutions could strengthen enforcement of building codes.

“We don’t have a single institution that can issue a warning about a tree. Not one to tell us what trees can or cannot be planted near a road.

“Trees should be suitable for the area. Some trees have roots that spread and damage roads, buildings. When the roots can’t go deep, they tend to topple over.

“Now Environment Day is coming up, and anyone can go plant a tree by the road. We have to take a decision about this. We have to enforce laws strongly in future.” (Colombo/June3/2024)

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