Sri Lankan shares fall ahead of policy rate decision

Reuters: Sri Lankan shares fell on Monday to snap a two-session winning streak ahead of the central bank's monetary policy decision later in the day and as investors worried over volatile global markets and rising returns on risk-free assets.

Six out of 11 analysts surveyed by Thomson Reuters expected the Central Bank of Sri Lanka to keep key policy rates steady, while the rest predicted a hike.

The central bank is scheduled to announce its monetary policy rate decision at 1400 GMT on Monday.

The main stock index ended 0.43 percent, or 27.41 points, lower at 6,354.83, after posting its highest close since Jan. 14 hit on Friday.

"The trend is a declining one and not necessarily on the local, but the global events also," said Danushka Samarasinghe, research head at Softlogic Stockbrokers in Colombo.

The index has fallen 7.83 percent so far this year as foreign investors, unnerved by global concerns over China's economy, have cut their exposure.

Foreign investors were net sellers of 10.5 million rupees ($72,967.34) worth of equities on Monday, extending the year-to-date net foreign outflow to 2.28 billion rupees.

The yield on one-year t-bills rose 32 basis points to a more than two-year high of 7.80 percent at a weekly auction on Wednesday. Analysts expect market interest rates to rise in tandem.

Turnover was 374.1 million rupees on Monday, well below this years daily average of 821.7 million rupees.

Shares of Lanka ORIX Leasing Company Plc fell 1.91 percent, conglomerate John Keells Holdings Plc dropped 0.70 percent and Commercial Bank of Ceylon Plc, the country's biggest listed lender, declined 0.77 percent. 

($1 = 143.9000 Sri Lankan rupees) 

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

Hirdaramani opens Rs.450 mn factory in Puthukkudiyiruppu

Hirdaramani Group opened their latest addition to the North, the Hirdaramani Clothing Puthukkudiyiruppu with an investment of Rs.450 million.

The new factory which employs over 1000 employees was opened by President Maithripala Sirisena yesterday.

"We have around 1,050 employees from this region working for us. It was when we opened our first factory in Vavuniya that we realised the dearth of employment opportunities for the youth in the North. Thus it has been our mission to push away into regions away from the Western Province so as to develop these areas. We may expand this company as we have in Vavuniya but it will all be in good time," Director, Hirdaramani Group, Janak Hirdaramani told Daily News Business. He also said that this endeavour while creating direct employment, to also create indirect job opportunities for the community in Mullaitivu such as occupation in terms of shops and transport. Through providing community members with a variety of job opportunities, the factory has been instrumental in supporting the recovery and development of Mullaitivu which is the largest and the most war-torn area in the north.

President Maithripala Sirisena was the Chief Guest of the opening of Hirdaramani factory.

Following the opening of its new factory, the Hirdaramani Group has become the only large-scale regular employer in the area, providing employees with stable incomes, a positive working environment, free meals and custom-made training programmes that strengthen their skill sets. Currently employing over 500 sewing machine operators (SMOs), the factory utilizes over 320 machines that deliver a monthly capacity of over 150,000 garments.
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Sharp reduction in vehicle registration in Dec

Vehicle registration momentum has come down in December with the reinstatement of the LTV rule and higher incidents of duty on vehicles, according to a JB Securities Report.

Total motor car registrations recorded 7,177 units in December down

from 10,084 units in November but significantly up from 4,311 units recorded 12 months ago.

Brand new car registrations recorded 5,015 units in December down from the record set in November of 6,732 units but significantly up from 1,939 units recorded 12 months ago. Small cars (< 1,000 cc) accounted for 95% of volumes. Maruti accounted for 3,882 units (mainly Alto) followed by Micro with 522 units (Panda), Tata with 215 units (Nano Twist and Indica) and Hyudai with 191 units (Eon). Financing share in small cars is a high 75%. The 70% LTV rule is applicable to approvals not disbursements, thus the high finance share in December may be due to the spill over of November leasing approvals.

Meanwhile pre-owned car registrations recorded 2,162 units in December significantly down from 3,352 units in November and down from 2,372 units recorded 12 months ago.

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Sri Lankan shares rise to over 1-week high; financials lead

Reuters: Sri Lankan share index rose for a second straight session on Friday, as retail investors bought financial stocks, but brokers said the rally will be short lived due to volatile global markets and rising returns in risk free assets.

The gains helped the index recover further lost ground from its lowest close in more than 20 months hit on Wednesday.

The main stock index ended 0.51 percent or 32.53 points up at 6,382.24, its highest close since Jan. 14.

It had lost 4.5 percent in a four-session losing streak through Wednesday as some investors sold their holdings to settle margin calls, while others switched to treasury bills amid rising debt yields.

"We saw a bit of recovery today also. But I don't think it'll sustain. We are at a stage where the market is trying to consolidate, but it is difficult," said Yohan Samarakkody, head of research, SC Securities (Pvt) Ltd.

Sri Lankan stocks have fallen over 7 percent so far this year as foreign investors, unnerved by global concerns over China's economy, have cut their exposure.

Foreign investors were net sellers of 157.7 million rupees ($1.1 million) worth of equities on Friday extending the year-to-date net foreign outflow to 2.27 billion rupees.

The yield on one-year t-bills rose 32 basis points to a more than two-year high of 7.80 percent at a weekly auction on Wednesday. Analysts expect market interest rates to rise in tandem.

Some market analysts expect a rate hike in the central bank's January monetary policy rate decision scheduled at 1400 GMT on Monday.

Shares in Commercial Bank of Ceylon Plc, the country's biggest listed lender, rose 2.36 percent, while conglomerate John Keells Holdings Plc rose 0.83 percent. ($1 = 143.9000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Anand Basu)

Sri Lankan shares recover from over 20-mth closing low

Reuters: Sri Lankan shares rose more than 1.4 percent on Thursday led by heavyweight stocks, recovering some ground from its lowest close in more than 20 months in the previous session.

The market had fallen for the four previous sessions as some investors sold their holdings to settle margin calls and others switched to treasury bills amid rising debt yields, brokers said.

The main stock index closed up 88.53 points at 6,349.71.

"It was push-up on large cap shares after margin calls," said Danushka Samarasinghe, research head at Softlogic Stockbrokers in Colombo. "(But) I don't think this momentum is sustainable."

Sri Lankan stocks have fallen nearly 10 percent this year as foreign investors, unnerved by global concerns over China's economy, have cut their exposure.

The yield on one-year T-bills rose 32 basis points to a more than two-year high of 7.80 percent at a weekly auction on Wednesday. Analysts expect market interest rates to rise in tandem.

On Thursday the 14-day relative strength index rose to 24.173, still in oversold territory, versus Wednesday's 12.070, Thomson Reuters data showed. A level between 30 and 70 indicates the market is neutral.

Foreign investors were net buyers of 251.2 million rupees ($1.75 million) of equities on Thursday. They have been net sellers of 2.11 billion rupees so far this year.

Stockbrokers said some foreign funds have started selling blue-chips, including market heavyweight John Keells Holdings and lender Commercial Bank of Ceylon.

On Thursday, conglomerate John Keells rose 0.32 percent and Commercial Bank of Ceylon gained 1.20 percent.

Daily turnover was 986.9 million rupees, the highest since Jan. 12, and more than this year's average of 870.8 million.

Shares in Lanka ORIX Leasing Company Plc rose 8.45 percent while Ceylon Cold Store Plc rose 6.55 percent.

($1 = 143.9500 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; editing by John Stonestreet)

Sri Lanka 12-month gilt yield sharply up

ECONOMYNEXT - Sri Lanka's 12-month Treasuries yields rose 32 basis points to 7.80 percent at Wednesday's auction in one of the steepest one day gains seen in recent years, data from the state debt office showed.

The 6-month yield rose 13 basis points to 7.19 percent.

The cut-off rate in the 12-month bills are estimated to be around 8.0 percent.

The debt office sold 12 billion rupees in 6-month bills and 3.7 billion rupees in 12-month bills totalling 15.7 billion rupees. Three-month bills were not offered.

The central bank especially around June last year had bought large volumes of Treasury bills with printed money, injecting unsustainable demand into the economy and generating balance of payment pressure.

There are fears that despite the rate rise more money may be printed this week as well, negating any benefit of a rise in rates to the exchange rate.

The debt office offered 24 billion rupees of bills for auction this week. There are an estimated 32 billion rupees of bills maturing.

Since the first week of December 6-month yields have risen 89 basis points and 12-month auction yields have risen 94 basis points.

Analysts call Sri Lanka's standard practice of printing money until the exchange rate collapses and then allowing rates to move up as the 'rawulath ne kendath ne' strategy.

In 2015 the budget deteriorated with steep hike in state salaries and subsidies. The deficit in the 2016 budget is also high.

Sri Lankan shares fall for 4th session to over 20-mth closing low

Reuters: Sri Lankan shares fell for a fourth straight session on Wednesday to their lowest close in more than 20 months due to rising yields and as investors sold their holdings to settle margin trading, brokers said.

The main stock index erased early gains and closed 0.35 percent, or 22.06 points, weaker at 6,261.18, its lowest close since May 7, 2014.

The stock market had shed about 9.2 percent this year through Wednesday's close due to foreign outflows, triggered by global concerns over China's economy and rising market interest rates locally.

The yield on one-year t-bills rose 32 basis points to a more than two-year high of 7.80 percent at the weekly auction on Wednesday. Analysts expect market interest rates to rise in tandem with t-bill yields.

"The market could not sustain the morning buying interest. But the good sign is that the selling did not come in a big way," said Dimantha Mathew, research manager at First Capital Equities (Pvt) Ltd.

"It looks like the prices are attractive at these levels. So, it may consolidate at these levels."

The bourse dipped further into an over sold territory with the 14-day relative strength index at 12.070 points versus Tuesday's 12.533, Thomson Reuters data showed. A level between 30 and 70 indicates the market is neutral.

Foreign investors were net sellers of 11.33 million rupees ($78,707.88) worth of equities, extending the year-to-date net foreign outflow to 2.36 billion rupees.

Stockbrokers said some foreign funds have already started selling blue-chips, including market heavyweight John Keells Holdings and lender Commercial Bank of Ceylon .

Turnover was 606.95 million rupees, the lowest since Jan. 8, and lower than this year's daily average of 861.2 million rupees.

John Keells shares fell 0.50 percent and Commercial Bank of Ceylon dropped 0.85 percent. 

($1 = 143.9500 Sri Lankan rupees) 

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