Monday 6 March 2017

Sri Lanka SEC approves All or None blocks in trading of stocks

(LBO) – Sri Lanka’s securities regulator has approved the Automated Trading System rules and corresponding amendments to the Central Depository Systems rules developed by the CSE to facilitate trading of All or None (AON) blocks.

AON is an instruction used on a buy or sell order that instructs the broker to fill the order completely or not at all. If there are not enough shares available to fill the order completely, the order is canceled when the market closes.

An AON order is considered a duration order because the investor provides instructions to the trader about how the order must be filled, which impacts how long the order remains active.

The SEC said in a statement that the ATS is designed to match buy and sell orders placed by stock broker firms of the CSE.

Accordingly, several mechanisms can be used to transact securities including the Normal Order Book, Crossings and the AON facility.

The AON order facility is designed to facilitate the sale or purchase of a large quantity of securities. The minimum number of securities required for an AON Block shall be at least 10 percent of the number of securities issued.

“In the wake of the Government’s programme to restructure SOEs, the AON can be a medium through which strategic stakes in Government owned entities can be transacted in a transparent manner in a competitive environment,” the SEC said.

“The AON method will assist in the disposal of such assets at the optimum price.”

The SEC said the AON method has many advantages over using the Normal Order Book and Crossings mechanism.

“Transactions using the AON method will be open for bidding for 3 market days whereas there is no such requirement either in the Normal Order Book or the Crossings mechanism,”

“Further, transactions using the AON method will have a lower systemic risk since clearing and settlement of transactions will take place on a defacto delivery vs payment basis.”

Another facility provided in the AON method is the facility for a consortium of buyers to bid for the parcel collectively which will help improve liquidity.

Sri Lankan shares edge up; beverage, telecoms lead

Reuters: Sri Lankan shares closed slightly firmer on Monday, after posting a more than three-week closing low in the previous session, with beverage and telecom stocks driving the gains.

However, investor sentiment continued to remain low amid concerns about rising interest rates.

The Colombo stock index ended up 0.26 percent at 6,117.19, after posting its lowest close since Feb. 9 on Friday. It shed 0.6 percent last week in its second straight weekly decline.

Foreign investors were net buyers of shares worth 384.7 million rupees ($2.55 million) on Monday, extending the year-to-date net foreign inflow to 1.35 billion rupees worth of equities.

Turnover was 711.9 million rupees, more than this year's daily average of 680.1 million rupees.

"Some crossings boosted the turnover. The good sign is we are seeing continued foreign buying these days," said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

"Local investors are on the sidelines, mainly because of the high interest rates and economic uncertainty."

Shares in Ceylon Cold Stores Plc jumped 6.12 percent, Lion brewery (Ceylon) Plc rose 6.27 percent, Ceylon Tobacco Company Plc gained 0.71 percent, and Sri Lanka Telecom Plc climbed 2.41 percent.

Yields on treasury bills have risen to a more than four-year high since October, while the central bank has kept key policy rates on hold. 

($1 = 151.0000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)