Sri Lanka shares up sixth straight session; near 5-month high

COLOMBO, Jan 16 (Reuters) - Sri Lankan stocks rose for a sixth straight session to a near five-month high on Thursday, led by market heavyweight John Keells Holdings PLC, as falling interest rates helped retail investor sentiment and foreign investors bought risky assets on a net basis. 

The main stock index gained 0.83 percent, or 50.59 points, to end at 6,166.98, its highest close since Aug. 19. It has gained 3.73 percent in the last six sessions and is in an overbought market. 

Shares in conglomerate John Keells Holdings rose 3.98 percent to 240.20 rupees. Analysts said the central bank's interest rate cut on Jan. 2 and the recent fall in T-bill yields had boosted sentiment and helped sustain gains. 

The yield on 91-day T-bills fell at a weekly auction on Monday to its lowest since January 2007, the date the central bank made data available. 

Yields on 182-day and 364-day T-bills are at their lowest since Oct. 15, 2010. The index has risen 4.30 percent so far this year after a 4.8 percent gain in 2013. It fell in 2012 and 2011. 

The day's turnover was 1.87 billion rupees ($14.31 million), surpassing last year's daily average of about 828.4 million rupees. 

Foreign investors were net buyers of 552.9 million rupees worth of shares on Thursday, extending the year-to-date net inflow to 719.1 million rupees. 

Offshore investors bought a net 22.88 billion rupees worth of stocks last year. 

($1 = 130.7000 Sri Lanka rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil Nair)

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Sri Lanka stocks up 0.8-pct

Jan 16, 2014 (LBO) – Sri Lanka stocks end on a strong note Thursday recording a gradual increase in the intra day trading amid strong foreign buying, brokers said.

The Colombo benchmark All Share Price Index closed 50.59 points higher at 6,166.98, up 0.83 percent. The S&P SL20 closed 38.98 points higher at 3,427.05, up 1.15 percent.

Turnover was 1.86 billion rupees, up from 1.37 billion rupees last Monday, with stocks of 62 firms closing in the red against 139 gainers.

HNB closed 2.90 rupees higher at 157.00 rupees with six off market transactions of 504.21 million rupees contributing to 27 percent of the total turnover today.

The Finance Company closed 1.00 rupee higher at 14.70 rupees, attracting most number of trades during the day.

Foreigners bought 917 million rupees worth shares while selling 364 million rupees of shares.

JKH closed 9.20 rupees higher at 240.20 rupees and Aitken Spence closed 4.30 rupees higher at 106.50 rupees, contributing most to the index gain.

JKH’s W0022 warrants closed 1.20 rupees higher at 85.10 rupees and its W0023 warrants closed 10 cents higher at 90.10 rupees.

Nestle Lanka ended 25.00 rupees higher at 2,140.10 rupees and Carson Cumberbatch ended 2.70 rupees higher at 354.20 rupees.

Ceylon Tobacco Company closed 6.00 rupees lower at 1,220.30 rupees and Cargills Ceylon closed 1.50 rupees lower at 146.50 rupees.


Distilleries ended 1.50 rupees higher at 203.00 rupees and Bukit Darah closed 2.10 rupees higher at 620.00 rupees.

Commercial Leasing and Finance ended 20 cents lower at 3.90 rupees and Lanka Orix Leasing Company closed 40 cents lower at 72.00 rupees.

DFCC gained 1.30 rupees to 151.40 rupees and NDB closed 1.10 rupees higher at 185.90 rupees.

Commercial Bank dropped 10 cents to 126.60 rupees and People’s Leasing and Finance closed 50 cents higher at 14.50 rupees.

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Sri Lanka shares near 5-month high on large caps, foreign buying

COLOMBO, Jan 13 (Reuters) - Sri Lankan stocks rose for a fifth straight session to a near five-month high on Monday, led by shares of large caps such as Ceylon Tobacco Company Plc , as falling interest rates helped retail investor sentiment and foreign investors bought risky assets on a net basis. 

The main stock index gained 0.55 percent, or 33.25 points, to end at 6,116.39, its highest close since Aug. 21. It gained 2.88 percent in the last five straight sessions, in an overbought market. "With the interest rates, retail investors are pushed to buy shares. 

The confidence is building up, but there is a long way to go," said a stockbroker on condition of anonymity. Shares in Ceylon Tobacco Company Plc rose 3.05 percent to 1,226.30 rupees. 

Analysts said the central bank's interest rate cut on Jan. 2 and the recent fall in T-bill yields had boosted sentiment and helped sustain the gains. 

The yield on 91-day T-bills fell at a weekly auction on Monday to its lowest since January 2007, the date the central bank made data available. 

Yields on 182-day and 364-day T-bills are at their lowest since Oct. 15, 2010. 

Stockbroker First Capital Equities in a note advised investors to refrain from taking speculative positions and to focus on high quality cash-rich companies with strong balance sheets that have underperformed and have the potential to gain their intrinsic values. 

The index has risen 3.44 percent so far this year after a 4.8 percent gain in 2013. It fell in 2012 and 2011. 

The day's turnover was 1.38 billion rupees ($10.56 million), surpassing last year's daily average of about 828.4 million rupees. 

Both the stock and foreign exchange markets will remain closed for public holidays on Tuesday and Wednesday. Normal trading will resume on Thursday. 

Foreign investors were net buyers of 68.4 million rupees worth of shares on Monday, extending the year-to-date net inflow to 166.2 million rupees. 

Offshore investors bought a net 22.88 billion rupees worth of stocks last year. 

($1 = 130.7000 Sri Lanka rupees) 

 (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Anupama Dwivedi)

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Sri Lanka stocks close up 0.55-pct

Jan 13, 2014 (LBO) – Sri Lanka stocks plunge 0.55 percent for the fifth consecutive day with tobacco and insurance firms gaining amid net foreign buying, brokers said.

The Colombo benchmark All Share Price Index closed 33.25 points higher at 6,116.39, up 0.55 percent. The S&P SL20 closed 9.48 points higher at 3,393.99, up 0.28 percent.

Turnover was 1.37 billion rupees, down from 1.38 billion rupees last Friday, with stocks of 68 firms closing in the red against 127 gainers.

HNB closed 90 cents lower at 154.10 rupees with four off market transactions of 346.75 million rupees contributing to 25 percent of the total turnover today.

Aitken Spence closed 4.00 rupees lower at 102.20 rupees with market transactions of 154.57 million rupees contributing to 11 percent of the turnover.

The Finance Company closed 1.00 rupee higher at 13.70 rupees, attracting most number of trades during the day.

Foreigners bought 358 million rupees worth shares while selling 289 million rupees of shares.

Ceylon Tobacco Company closed 36.30 rupees higher at 1,226.30 rupees and Ceylinco Insurance closed 133.30 rupees higher at 1,339.80 rupees, contributing most to the index gain.

Hemas Holdings closed 1.80 rupees higher at 37.50 rupees and Lanka Orix Leasing Company closed 90 cents higher at 72.40 rupees.

DFCC dropped 50 cents at 150.10 rupees and NDB closed 4.30 rupees higher at 184.80 rupees.

Commercial Bank closed 40 cents higher at 126.70 rupees and Commercial Leasing and Finance ended 10 cents lower at 4.10 rupees.

Cargills Ceylon closed flat at 148.00 rupees and JKH fall 80 cents at 231.00 rupees.

JKH’s W0022 warrants closed 1.10 rupees lower at 83.90 rupees and its W0023 warrants closed flat at 90.00 rupees.

Carson Cumberbatch ended 3.50 rupees lower at 351.50 rupees and Nestle Lanka dropped 11.70 rupees at 2,115.10 rupees.

Distilleries ended 1.50 rupees higher at 201.50 rupees and Bukit Darah closed 2.10 rupees lower at 617.90 rupees.

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DFCC, NDB shares in sharp rise over pending merger

Share prices of both DFCC Bank and NDB last week gained sharply ahead of the pending merger over which the two institutions issued a preliminary statement on Friday saying talks will begin shortly.

Though the joint announcement came after the market was closed and timeline for merger proposal was announced on 2 January by the Central Bank via its 2014 Road Map, the gain in share price last week was significant. Whereas in the week ended 3 January, DFCC Bank share dipped by Rs. 1.50 and NDB just managed to be up by 10 cents, last week both counters rose nearly to their 52-week high.

DFCC gained by Rs. 15.60 (11.5%) to close at Rs. 150.60, whilst intra-week highest was Rs. 151, a few rupees short of its 52-week highest of Rs. 153. NDB rose by Rs. 15.70 (9.5%) to close at Rs. 180.50 whilst peaking to an intra-week highest of Rs. 182, just 50 cents short of its 52-week highest.

Most analysts linked the sharp rise to the pending merger though it is likely to take a longer time whilst others noted, post unveiling of the 2014 Road Map, sentiments have been positive on banking and finance sector stocks due to consolidation and other measures announced.

Analysts said that some investors were taking early positions on the two entities since a merger could involve a share swap. Both entities have nearly 18,000 shareholders. 

Combined staff strength is around 2,800 and as per Central Bank indications there will be no retrenchment despite a merger.

Internally and confidentially, both DFCC and NDB in the past had explored various options of acquisitions outside but none made any headway. DFCC was the pioneering

Development Finance Institution in the country and has a commercial bank as a 99% owned subsidiary. NDB which was a development finance institution originally changed its charter to become a commercial bank.

Issuing a preliminary joint statement on the merger between DFCC Bank and National Development Bank PLC (NDB), the two entities on Friday said talks will commence shortly.

“The Boards of Directors of DFCC Bank (DFCC) and National Development Bank PLC (NDB) wish to announce that they, in pursuance of the policies announced by the Government encouraging the consolidation of certain banking businesses, are about to commence preliminary discussions with a view to achieving such consolidation,” the statement signed by DFCC Bank CEO Arjun Fernando and NDB CEO Rajendra Theagarajah said.

“The Boards of DFCC and NDB wish to emphasise there have been no definite decisions on any aspect of such consolidation and that final decisions would be dependent, amongst others, on arrangements being agreed keeping paramount the interests of customers, employees (which in the case of DFCC include those of DFCC Vardhana Bank PLC) and other stakeholders of the banks. Moreover, consolidation of the two entities will be dependent on regulatory approvals and possibly, the passage of facilitative legislation,” it said.

“In conclusion, the Boards of Directors of DFCC and NDB assure its shareholders, its employees, the regulatory authorities and the investing public, that they will keep them informed of the progress in connection with the proposed transaction as and when necessary,” the joint statement added.

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CSE to replace Central Depository System

By Duruthu Edirimuni Chandrasekera

The Colombo Stock Exchange (CSE) will replace its Central Depository System (CDS) after nearly two decades, officials said.

“After 18 years we'll be replacing the CDS and introducing the new system in June,” Rajeeva Bandaranaike, the new CSE CEO told the Business Times. He said the new CDS will encompass better support from the vender, Millennium IT. “The new CDS will have better features enabling us to give a better service to its customers,” he said.

The new CDS will also have enhancements to enable the Repo Facility on corporate debt in a bid to encourage and entice trading of debentures on the secondary market. Last year saw the CSE handle a record number of debentures at a total worth of Rs. 65 billion, but they were hardly traded. Mr. Bandaranaike added that the CSE, in an attempt to popularize debentures, plans to cut the transaction cost. “We’re trying to introduce a cap. Also now primary dealers can trade in debentures.”

He added that the Central Counterparty (CCP) which is between counterparties to financial contracts traded in one or more markets (becoming the buyer to every seller and the seller to every buyer) is now being fast tracked in a bid to demutualise (the process through which a member-owned company becomes shareholder-owned) the CSE.

“A CCP has the potential to reduce significantly risks to market participants by imposing more robust risk controls on all participants and to enhance the liquidity of the markets it serves, because it tends to reduce risks to participants and, in many cases, because it facilitates anonymous trading.”

He said that the CSE is discussing a request by several brokers requesting temporary deactivation of their operations. Some 29 stock brokers operate in the CSE and the industry says that this number is too high for all to sustain their businesses in such a small market, but according to Mr. Bandaranaike the issue really lies with low turnover levels in the CSE.

“We need to look at it in the perspective of larger market capitalisation, more firms in the CSE, what new products to introduce and broadening the depth and breadth of the market,” he said.

He added that the moment the CCP and a clearing house are incorporated, the CSE will introduce stock borrowing and lending and derivative products such as an index future.
http://www.sundaytimes.lk/140112/business-times/cse-to-replace-central-depository-system-79125.html

Sri Lanka stocks rise to near 5-month high on banks; foreigners sell

COLOMBO, Jan 10 (Reuters) - Sri Lankan stocks rose for a fourth straight session to hit a near five-month high on Friday, led by financials on hopes of consolidation in the sector, while foreign investors sold risky assets on a net basis in an overbought market. 

The main stock index gained 0.23 percent, or 13.80 points, to end at 6,083.14, its highest close since Aug. 22. It has gained 2.32 percent in the last four sessions, with the index in an overbought region. 

"Investors believe banks and financial shares will gain following the central bank's direction for mergers," a stockbroker said on condition of anonymity. 

Shares in DFCC Bank PLC rose 6.06 percent to 150.60 rupees, while National Development Bank PLC gained 4.34 percent to 180.50 rupees. 

In its financial and monetary policy announcement for 2014, the central bank revealed plans to merge banks and non-banking financial firms to strengthen financial stability. 

Analysts said the central bank's interest rate cut last week and the recent fall in T-bill yields had boosted sentiment and helped sustain the gain. 

The CSE index gained 4.8 percent in 2013 after losses in the previous two years, giving a return of 2.18 percent in dollar terms. 

Many investors locked their funds in risk-free debentures instead of risky assets last year due to a sluggish bourse and falling interest rates. 

The day's turnover was 1.38 billion rupees ($10.6 million), surpassing last year's daily average of about 828.4 million rupees. 

Foreign investors were net sellers for the first time in six sessions, selling 72.04 million rupees worth of shares on Friday. 

But they have net bought 97.8 million rupees of shares so far this year. Offshore investors bought a net 22.88 billion rupees worth of stocks last year. 

($1 = 130.7000 Sri Lanka rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Prateek Chatterjee)

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