Sri Lanka stock brokers should maintain Rs100mn equity: SEC

(LBO) – Sri Lanka’s stock brokers and debt dealers trading on the Colombo Stock Exchange should have minimum shareholder funds of 100 million rupees from next year, the Securities and Exchange Commission said in a statement.

“All stock brokers or dealers trading in equity or debt securities are required to maintain minimum shareholder fund requirement of 100 million rupees or 50 percent of it’s stated capital,” it said.

“The primary dealers regulated by the Central Bank who deal in debt on the exchange are exempt.”

The rules will come into effect from January 01, 2018.

SEC introduces new fee structure for Colombo share transactions

(LBO) – Sri Lanka’s securities regulator has introduced a new fee structure for all share transactions following a request from the CSE to review the transaction fees applicable to CSE and CDS.

SEC said in a statement that the CSE proposed adopting a step-up fee structure rather than the present flat fee structure when consolidating transactions for the purpose of computing fees.

CSE has also proposed to increase the threshold for the two-band fee structure from the present 50 million rupees to 100 million rupees.

“The basis for the request was that levying fees on a ‘flat’ basis is not equitable since transaction fees payable on a marginally lower turnover is higher than fees payable for a marginally higher-value transaction,” the SEC said.

Accordingly, the Securities and Exchange Commission at a meeting held on 10th January 2017 has approved the proposal of new fee structure put forth by the CSE which appears below.

All licensed stock brokers and stock dealers trading in equity securities have been directed to comply with the new fee structure when paying the CSE and CDS fees in respect of all share transactions.

“New directive will be effective from March 01, 2017.”

Sri Lanka's Access Engineering net up 15-pct in Dec

ECONOMYNEXT - Sri Lanka's Access Engineering Plc, a construction group, said profits in the December quarter 2016 rose 15 percent from a year earlier to Rs629.95 million, despite a higher tax bill.

The group reported earnings of 0.63 cents per share for the quarter. In the nine months to December, Access reported earnings of Rs1.87 per share on total profits of Rs1.87 billion, marginally up from Rs1.82 billion.

Access said revenues rose 24 percent to Rs5.29 billion in the December quarter and cost of sales also rose 24 percent to Rs5.29 billion, while the group grew gross profits 32 percent to Rs1.36 billion.

But the income tax bill rose sharply to Rs279 million from Rs96.4 million, which the firm said was due to deferred taxation.

Access has invested Rs2.2 billion in Hotel 10, a leisure project in Colombo, after the balance sheet date.

Sri Lankan shares hit 10-mth closing low ahead of cbank rate review

Reuters: Sri Lankan shares fell on Monday to an over 10-month closing low, dragged down by beverage and banking stocks, as investors awaited cues from the central bank's monetary policy review on Tuesday.

The Colombo stock index ended 0.8 percent lower at 6,068.31, it's lowest close since March 30, 2016.

Margin calls are expected in the coming days, said an analyst, as the bourse fell below the psychological 6,140-level and the index fell sharply to end only marginally higher than the lower band of the neutral territory.

The index, which had risen from an oversold region, has been trading in the neutral territory since Jan. 10, with the 14-day relative strength index dropping to 30.474 on Monday, Thomson Reuters data showed. A level between 30 and 70 indicates the market is neutral.

Sri Lankan stocks, which have been declining since October, have been hurt by political uncertainty arising from a decision by the ruling coalition parties to contest local polls separately, and on worries over a rise in market interest rates with yields on 91-day treasury bills hitting near four-year highs last week.

Sri Lanka's central bank could raise its key policy rates in coming months if it skips a chance to tighten next week, a Reuters poll showed, underlining renewed pressure on the rupee after the Federal Reserve's rate hike last month.

Monday's market turnover was 393.8 million rupees ($2.62 million), well below this year's daily average of 625.5 million rupees.

"Market seen in negative note ahead of the central bank rate announcement as many investors expect a rate hike," said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

"We may see some margin calls coming in as the index fell below the psychological barrier."

Foreign investors, who have been net sellers of 1.29 billion rupees worth of shares so far this year, net bought 241.3 million rupees worth of equities on Monday.

Shares of Nestle Lanka Plc fell 2.4 percent while Dialog Axiata Plc fell 2.8 percent and Hatton National Bank Plc fell 0.9 percent.

($1 = 150.2500 Sri Lankan rupees) 

(Reporting by Ranga Sirilal; Editing by Amrutha Gayathri)

Colombo Stock Exchange Market Review – 6th Feb 2017

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Colombo Stock Exchange Trade Summary 06-Feb-2017

Colombo equities extended losses on negative sentiments on Monday ahead of the first monetary policy meeting of the year. Fears of further rise in interest rates kept the activity levels down and ASI shed 0.8% (-51.68 index points) to close at 6,068.31 marking the biggest intra-day loss of this year so far. Blue-chip S&P SL 20 index lost 1.1% (-39.81 index points) to close at 3,466.32.

Drop in prices in Melstacorp (LKR 65.00, -4.3%), Nestle (LKR 1,950.10, -2.4%) and Dialog Axiata (LKR 10.40, -2.8%) contributed most to the index decline.

Market activity remained muted and the turnover reached LKR 394mn largely driven by the activity in John Keells Holdings (LKR 84mn), Teejay Lanka (LKR 74mn) and Expolanka Holdings (LKR 57mn). Crossings were seen in Teejay Lanka (1mn shares at LKR 38.00 per share) and Expolanka Holdings (5mn shares at LKR 5.70 per share). Crossings accounted for 24% of the turnover.

Market activity was mostly concentrated on Teejay Lanka and John Keells Holdings. Teejay Lanka continued to witness selling pressure and closed at LKR 37.50, down 3.6% on its XD. John Keells Holdings gained 0.5% to close at LKR 141.90, also on its XD. Further activity was seen in Access Engineering which closed at LKR 24.50 down 0.8% despite the earnings growth of 16%YoY in December quarter.

Foreign investors were net buyers of LKR 241mn worth of shares. Top net inflows were seen in John Keells Holdings (LKR 78mn), Expolanka Holdings (LKR 55mn), Royal Ceramics (LKR 47mn) while top net outflow was seen in Seylan Bank (LKR 0.7mn). Foreign investor activity accounted for 47% of the turnover.
Source: LSL