Sri Lanka 03-month Treasury Bill yield rises to 9.57-pct

ECONOMYNEXT – Yields on Sri Lankan Treasury Bills rose across the board at an auction on Wednesday, with the 03-month bill yield up 10 basis points to 9.57 percent, the public debt department of the Central Bank said.

The 06-months bill yield rose 07 basis points to 10.46 percent and the one-year bill yield rose 08 basis points to 10.82 percent, a statement said.

The public debt department got bids worth 39.4 billion rupees and accepted bids worth 4 billion rupees.

Sri Lankan shares fall to 1-yr closing low, breaching key barrier

Reuters: Sri Lankan shares fell on Wednesday to a more than one-year closing low, breaching a key psychological barrier of 6,000, as expectations of an interest rate hike continued to drag down the market ahead of the central bank's policy review.

The Colombo stock index closed down 0.7 percent at 5,996.65, its lowest close since March 15, 2016.

"The market came down mainly on margin calls," said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

"Investors are expecting a rate hike, so local investors are on the sidelines and only foreign investors are active."

Sri Lanka's central bank could raise its key policy rates in the coming months if it skips a chance to tighten at its second monetary policy review of the year on Friday, a Reuters poll showed, two weeks after the International Monetary Fund called for further tightening.

Turnover was boosted by foreign-buying in conglomerate John Keells Holdings PLC and stood at 1.05 billion rupees ($6.9 million), well above this year's daily average of 672 million rupees.

The index has lost 1.8 percent since March 7, when the IMF called for monetary policy tightening if credit growth or inflation do not abate.

The bourse dipped into oversold territory on Wednesday, with the 14-day relative strength index at 26.758 points versus Tuesday's 34.145, Thomson Reuters data showed. A level between 30 and 70 indicates the market is neutral.

Foreign investors net bought shares worth 414.6 million rupees, raising the year-to-date net foreign inflow to 3.07 billion rupees in equities.

The treasury bill rates have risen between 33 to 77 basis points since July 28, when the central bank last raised the key interest rates.

Shares in John Keells fell 2.1 percent, while Asiri Hospitals Plc dropped 3.8 percent and biggest listed lender Commercial Bank of Ceylon Plc fell 0.9 percent.

($1 = 151.5000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Amrutha Gayathri)

Sri Lankan shares end flat as investors await cbank rate review

Reuters: Sri Lankan shares were little changed on Tuesday in lacklustre trade, hovering near a one-year closing low hit last week, as investors stayed on the sidelines ahead of the central bank's policy review.

The Colombo stock index ended flat at 6,041.59, near its lowest close since March 16, 2016 hit on Thursday.

Turnover stood at 283.3 million rupees ($1.9 million), less than half of this year's daily average of 665 million rupees.

The index has lost 1.2 percent since March 7, when the International Monetary Fund called for monetary policy tightening if credit growth or inflation did not abate.

The central bank's second monetary policy review of the year is due on Friday.

"The market is closely watching for the monetary policy rate announcement and sovereign bonds," said Jaliya Wijeratne, who heads First Capital Equities.

"Local investors are just waiting for some direction, but foreign investors are buying counters."

Foreign investors net bought shares worth 160.8 million rupees, raising the year-to-date net foreign inflow to 2.66 billion rupees in equities.

Shares in Commercial Leasing and Finance Plc rose 8 percent, while Lanka ORIX Leasing Company Plc gained 2.3 percent and Dialog Axiata Plc rose 0.9 percent. 

($1 = 151.5000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Amrutha Gayathri)

Sri Lankan shares edge down on rate hike concerns ahead of review

Reuters: Sri Lankan shares edged down on Monday, hovering near a one-year closing low hit last week, as expectations of a rate hike continued to weigh on sentiment.

The Colombo stock index fell 0.1 percent to finish at 6,041.17, near its lowest close since March 16, 2016 hit on Thursday. The bourse fell 0.6 percent last week, posting its fourth straight weekly decline.

The index has lost 1.2 percent since March 7, when the International Monetary Fund called for monetary policy tightening if credit growth or inflation did not abate.

The central bank's second monetary policy review of the year is due on March 24.

"Retailers and institutional investors are on the sidelines; investors are awaiting the outcome of the monetary policy announcement," said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

Foreign investors net sold shares worth 3.74 million Sri Lankan rupees ($260,296), the first net outflow in 14 sessions. Foreign investors were net buyers of 2.49 billion rupees worth of equities so far this year.

Turnover stood at 439.4 million rupees, less than this year's daily average of 672.2 million rupees.

Access Engineering Plc lost 2 percent following a local media report that the government stopped some development projects in which the company was involved.

Dialog Axiata Plc fell 0.9 percent and conglomerate John Keells Holdings Plc edged down 0.1 percent. 

($1 = 151.7500 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Amrutha Gayathri)

SEC releases Capital Market Strategy 2020

By Duruthu Edirimuni Chandrasekera

The Securities and Exchange Commission of Sri Lanka (SEC) has released its ‘Capital Market Strategy 2020’, a comprehensive transformative plan for Sri Lanka’s capital market, which has been sanctioned by the Cabinet, SEC officials said.

They said that this was done with the intention of providing strategic clarity to market participants and the general public. This plan has components in strengthening regulatory and governance environment, creating an enabling environment for capital formation, increasing accountability and market oversight, deepening liquidity and broad-basing market participation, raising the standards and competencies of capital market participants, developing infrastructure and enabling new products, managing and mitigating systemic risk and building domestic capabilities.

“The developmental objectives focus on the several constraints characterising our market, its small size and scarcity of liquidity, limited diversification in product offering from an investor’s perspective, and in listing platforms from an issuer’s. Additionally, we consider the efficiency and commercial orientation of market institutions, market infrastructure and technology gaps, and community capacity building extending to both the institution and industry,” an official told the Business Times.

The amendment of the SEC Act is among the key initiatives geared towards strengthening the domestic regulatory and governance environment. This Act’s enhancement of the regulatory framework includes the strengthening of the governance standards of the SEC, providing for the establishment of a clearing house acting as a central counterparty (CCP), regulating demutualised exchanges, recognising new categories of market intermediaries, introducing a wide range of enforcement tools to deal with market misconduct, enhancing the accountability of all capital market participants, and encouraging early reporting to the SEC on possible market malpractice through provisions for whistleblower protection.

Rules applicable to all regulatees of the SEC are currently undergoing review and revision with a view to creating a more robust regulatory environment for all and instilling greater discipline market-wide, the SEC said in a statement.

Deepening liquidity

The SEC seeks to actively engage provident funds and pension funds in diversifying their portfolios and increasing asset allocation to capital market investments, it has said noting that increased participation by such long-term institutional investors can improve market stability and sustainability, as a result of their holding power and ability to act in a counter-cyclical manner.

At present, with the broad-basing of market participation in mind, minimum public holding thresholds apply to listed companies upon initial listing, and enforced thereafter on a continuous basis, the official said noting that SEC would drive requisite policy formulation for the introduction of short-selling, securities borrowing and lending, and other new products in order to deepen liquidity.

To increase portfolio choice of investors, the SEC is developing a sequencing framework for the introduction of new products ranging from Real Estate Investment Trusts (REITs) and Exchange Traded Funds (ETFs) to Financial Derivatives. The SEC would enable the introduction of a multi-asset offering for investors by spearheading policy formulation in order to facilitate related rule making by the CSE, the statement added.

Over the medium to long term, far-reaching reforms proposed as part of the Capital Market Strategy 2020 would support the proposition to Morgan Stanley Capital International (MSCI) to reclassify Sri Lanka as an emerging market, providing for broader visibility as an attractive portfolio investment destination, it further said.
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Sri Lankan shares recover from 1-yr low on foreign bargain-hunting

Reuters: Sri Lankan shares edged up on Friday from a one-year closing low hit in the previous session and after eight straight sessions of losses as foreign investors bought battered stocks.

The Colombo stock index gained 0.3 percent to finish at 6,047.84, edging up from its lowest close since March 16, 2016 hit on Thursday.

But the bourse fell 0.6 percent during the week, posting its fourth straight weekly decline, due to concerns that the central bank would raise interest rates next week.

The index had lost 1.5 percent over the eight sessions through Thursday since the International Monetary Fund urged Sri Lanka's central bank last week to be ready to tighten monetary policy if credit growth or inflation does not abate.

The central bank's second monetary policy review of the year is due on March 24.

"Foreigners are buying some blue chips that are at very discounted prices," said Atchuthan Srirangan, a senior research analyst with First Capital Equities.

"But retailers and institutional investors are not active."

Foreign investors net bought shares worth 39.5 million rupees ($260,296.54) in the 13th straight session of net-buying, raising the year-to-date net foreign inflow to 2.5 billion rupees in equities.

Turnover stood at 1.17 billion rupees, well over this year's daily average of 676.7 million rupees.

Shares of Sri Lanka Telecom Plc gained 3.3 percent, while Dialog Axiata Plc rose 1.8 percent and conglomerate John Keells Holdings Plc edged up 0.1 percent. 

($1 = 151.7500 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Amrutha Gayathri)

Sri Lankan shares hit 1-yr closing low on rate hike concerns

Reuters: Sri Lankan shares hit a one-year closing low on Thursday, falling for an eighth straight session, as concerns the central bank would raise rates next week weighed on sentiment after the International Monetary Fund urged it to tighten monetary policy.

The Colombo stock index closed 0.06 percent lower at 6,028.57, its lowest close since March 16, 2016.

The index has lost 1.45 percent over the last eight sessions since the IMF urged Sri Lanka's central bank last week to be ready to tighten monetary policy if credit growth or inflation does not abate.

The central bank's second monetary policy review of the year is due on March 24.

"It is a very dull day. Investors are on the sidelines because of the uncertainty and waiting to see the monetary policy decision next week," said Atchuthan Srirangan, a senior research analyst with First Capital Equities (Pvt) Ltd.

Turnover stood at 272.1 million rupees ($1.79 million), about a third of this year's daily average of 667 million rupees.

The bourse slipped further into oversold territory on Thursday, with the 14-day relative strength index at 28.159 points versus Wednesday's 28.701, Thomson Reuters data showed. A level between 30 and 70 indicates the market is neutral.

Shares of Sri Lanka Telecom Plc closed down 2.65 percent. Teejay Lanka Plc fell 1.67 percent.

Foreign investors net bought shares worth 103.2 million rupees in the 12th straight session of net-buying, raising the year-to-date net foreign inflow to 2.46 billion rupees into equities. 

($1 = 151.7500 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)