Sri Lankan shares edge up as investors buy battered blue chips

Reuters: Sri Lankan shares closed slightly higher on Thursday, snapping two straight sessions of falls, as investors picked up battered blue chips while net foreign buying also boosted sentiment.

Investors await clarity on interest rates from the central bank's first monetary policy in 2017 scheduled on Tuesday.

The Colombo stock index ended up 0.15 percent at 6,139.56, while turnover was 1.09 billion rupees ($7.26 million), higher than this year's daily average of 645 million rupees.

"People are looking at cheap stocks and collecting," said Reshan Kurukulasuriya, chief operating officer, Richard Pieris Securities (Pvt) Ltd. "Investors collect stocks at these levels when they see a stock is attractive."

Foreign investors, who have been net sellers of 1.62 billion rupees worth of shares so far this year, net bought 27.1 million rupees worth of equities on Thursday.

Shares of Nestle Lanka Plc rose 2.48 percent, Commercial Bank of Ceylon Plc, the country's biggest listed lender, climbed 1.82 percent, and conglomerate John Keells Holdings Plc gained 0.43 percent.

Sri Lankan shares have been on a declining trend recently due to 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 this week. 

($1 = 150.2000 Sri Lankan rupees) 

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

Colombo Stock Exchange Market Review – 1st Feb 2017

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Colombo Stock Exchange Trade Summary 01-Feb-2017

Colombo stock market closed on mixed results with thin market activity. All Share index edged lower by 2.61 index points (-0.04%) to end at 6,130.07 while high cap constituent, S&P SL20 index gained 1.30 index points or 0.04% to close at 3,490.91.

Market breadth was neutral where out of 190 stocks, 64 declined, 57 advanced while 79 remained unchanged. Price decline in Commercial Bank (closed at LKR 143.10, -1.3%) and Dialog Axiata (closed at LKR 10.60, -0.9%) drove the index down but price appreciation in Hatton National Bank (closed at LKR 226.90, +1.0%) eased the pressure.

Daily market turnover was LKR 132mn. John Keells Holdings (LKR 32mn) and Hatton National Bank (LKR 21mn) were top contributors to turnover underpinned by negotiated deals. 0.2mn shares of John Keells Holdings changed hands at LKR 140.00 and 0.1mn shares of Hatton National Bank were transacted at LKR 227.00.

High investor activity was witnessed in Swarnamahal Financial Services and counter advanced to LKR 1.20 (+33.3%) subsequent to positive earnings report. Colombo Land, John Keells Holdings and Union Bank were among heavily traded counters.

Foreign investors were net buyers with a net foreign inflow of LKR 7mn. Net foreign inflows were seen in Hatton National Bank (LKR 20mn) and Ceylon Cold Stores (LKR 5mn) while net foreign outflow was mainly seen in John Keells Holdings (LKR 27mn). Foreign participation was 31%.

Meanwhile at the Treasury bill auction today, three month yield increased by 5bps to 9.08% and one year yield increased to 10.42% (+5bps). However, six month treasury rate declined by 2bps to 10.05%. CBSL offered LKR 28bn worth Treasury bills and the auction was oversubscribed by 2.4 times with bids received amounting to LKR 67.7bn. It was decided to accept LKR 27.1bn worth of treasury bills.

Source: LSL

Sri Lankan shares edge down on political worries

Reuters: Sri Lankan shares slipped in thin trading on Wednesday and closed near a 10-month low hit last week on political worries and fears over further interest rate hikes, brokers said.

Investors turned cautious after the ruling coalition parties decided to contest local polls separately, while a rise in treasury bill yields last week also affected risk appetite, analysts said.

Yields on 91-day treasury bills rates rose 5 basis points at a weekly auction on Wednesday to a near four-year high, a month after the central bank governor signalled reduced intervention to defend the rupee.

Rising interest rates, which move in tandem with T-bill yields, have been a cause for concern, brokers said.

The Colombo stock index ended 0.04 percent down at 6,130.07, near its 10-month closing low hit last week. Turnover fell to 132.4 million rupees ($11 million), the lowest since Dec. 27.

"The market is cheap, but trading was very thin as investors are waiting for more stable promising horizon," said Reshan Kurukulasuriya, chief operating officer, Richard Pieris Securities (Pvt) Ltd.

Foreign investors, who have been net sellers of 1.65 billion rupees worth of shares so far this year, net bought 6.5 million rupees worth of equities on Wednesday.

Shares of Commercial Bank of Ceylon Plc, the country's biggest listed lender, fell 1.31 percent while Pan Asia Bank Corp Plc tumbled 8.38 percent. 

($1 = 150.1000 Sri Lankan rupees) 

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

Sri Lanka revises CPI base year, composition

Jan 31 (Reuters) - Sri Lanka has revised the base year and the composition of market basket of the Colombo Consumer Price Index (CCPI) with effect from January to reflect changes in the market, the statistics office said on Tuesday.

The Department of Census and Statistics revised the base year to 2013 from the previous 2006/7 introduced in 2008, while increasing the non-food composition to 72 percent of the market basket from the earlier 59 percent, official data showed.

"Obsolete expenditure pattern and inappropriate price changes could lead to misleading signals in policy simulation and decision making," the statistics office said in a statement.

Under the new basket, the government has included alcoholic beverages, tobacco and narcotics along with restaurants and hotels, which were not included in the previous basket.

The new basket has also more than doubled the total consumption expenditure, data showed.

Under the new index, the annual inflation rose 5.5 percent in January, accelerating from the last month's 4.5 percent, while the 12-month moving average rose 4.3 percent this month from 4.0 month recorded in December.

Sri Lanka 03-month T-Bill yield rises to 9.08 pct

ECONOMYNEXT – The yield on three-month Sri Lankan Treasury Bills rose to 9.08 percent at an auction Wednesday, up 05 basis points from the last sale, the debt office of the Central Bank said.

The 06-month bill yield fell 02 basis points to 10.05 percent and the 01-year bill yield rose 05 basis points to 10.42 percent at the auction, a statement said.

The debt office got bids worth Rs68 billion and accepted bids worth Rs27 billion.

Sri Lanka’s Dipped Products returns to profit in Dec quarter

ECONOMYNEXT – Sri Lanka’s non-medical rubber gloves maker Dipped Products said it returned to profit in the December 2016 quarter with earnings of Rs107 million compared with a loss of Rs79 million the year before.

Group sales rose 23 percent to Rs6.2 billion from a year ago, according to interm results filed with the stock exchange.

December quarter earnings per share were Rs1.78. Dipped Products, a Hayleys group unit, last traded at Rs78.

For the nine months to 31 December 2016, EPS were Rs1.42, with net profit up 13 percent to Rs85 million and sales up 11 percent to Rs18 billion.

The Hand Protection sector reported a pre-tax profit of Rs598 million, up 30 percent from the year before, a statement said.

The group’s plantation sector made a loss of nearly Rs357 million due to lower crop, mainly arising from adverse weather conditions and restrictions on weedicides, it said.

Dipped Products claims a 5 percent share of the global market for non-medical rubber gloves.

Sri Lanka’s Trans Asia Hotels December quarter net Rs202mn

ECONOMYNEXT – Sri Lanka’s Trans Asia Hotels said December 2016 quarter net profit shot up 147% to Rs202 million from a year ago when its Cinnamon Lakeside hotel had been partly closed for refurbishment. .

Sales rose 27% to Rs894 million in the period, according to interim accounts filed with the stock exchange.

The main activity of Trans Asia Hotels is operating the five-star Cinnamon Lakeside Hotel which was partially closed more than half the year for refurbishment in 2015, reducing revenue and profits.

The share was last traded at Rs78. Net profit for the nine months ending December 2016 was Rs461 million, up from Rs12 million the year before, with earnings per share rising to Rs2.30 from six cents.

The firm also derives rental income from the investment property adjoining the hotel.