Sri Lankan stocks at over six-week high on better policy hopes after vote

Jan 8 (Reuters) - The Sri Lankan index ended at a more than six-week high on Thursday, led by financials on hopes of new investor-friendly policies after the presidential election.

The main stock index rose 0.79 percent, or 59.08 points, to end at 7,497.60, its highest since Nov. 20.

"People are optimistic over new investor-friendly policies after the election," said a stockbroker asking not to be named. "Whether it is going to be the current president or the opposition candidate, investors see opportunities."

President Mahinda Rajapaksa's bid for a third term hung in the balance as Sri Lanka went to the polls on Thursday, with voters split between the "devil they know" and an upstart who has promised to root out corruption and political decay.

There were no reliable opinion polls ahead of the vote, but many believe opposition candidate Mithripala Sirisena will benefit from a popular yearning for change after a decade under Rajapaksa.

The economy has flourished in recent years, and many voters, especially ethnic Sinhalese Buddhists who represent 70 percent of the population - believe that sticking with Rajapaksa will keep living standards on an upward path.

The central bank said last week the economy would grow annually at 8 percent between 2015 and 2020 after achieving an estimated growth of 7.8 percent in 2014.

Thursday's turnover was 1.45 billion rupees ($11 million), more than last year's daily average of 1.42 billion rupees, stock exchange data showed.

Rupee forwards traded weaker on Thursday on importer dollar demand, while exporters stayed away hoping for further weakening of the currency, dealers said.

Four-day forwards, which were actively traded, closed slightly weaker at 132.80/90 per dollar compared with Wednesday's close of 132.75/85, dealers said.

"There was slight importer dollar demand, but the market was dull," a currency dealer said.

Dealers expect the fixed and controlled exchange rate regime to continue amid more foreign borrowing if Rajapaksa gets re-elected, while hoping for a flexible exchange rate with more foreign grants if Sirisena wins.

Rupee forwards were maintained around 132.00 in December as the central bank defended the currency through moral suasion.

The spot currency was not traded on Thursday.

Dealers said unusually high imports towards the end of 2014, amid lower interest rates and a stable exchange rate pressured the rupee.

($1 = 131.5000 Sri Lankan rupees) 

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

Sri Lankan stocks edge up to over 6-wk closing high before polls

Jan 7 (Reuters) - Sri Lankan stocks rose to a more than six-week closing high on Wednesday, as investors picked up beaten-down shares a day ahead of a tight presidential election.

The main stock index closed 0.25 percent, or 18.38 points, firmer at 7,438.52, its highest close since Nov. 20.

"The market took a cautious approach towards elections, though there won't be a major shift in policies whoever wins," said Reshan Kurukulasuriya, chief operating officer of Richard Pieris Securities (Pvt) Ltd.

President Mahinda Rajapaksa called early elections to be held on Jan. 8. Twenty-six lawmakers have quit his ruling United People's Freedom Alliance since the announcement, including former health minister Mithripala Sirisena, who is challenging Rajapaksa's bid for a third term. Two opposition legislators have joined the ruling party.

The gain in stocks was boosted by a 5.13 percent rise in Hemas Holdings Plc and a 0.78 percent gain in Sri Lanka Telecom Plc.

The day's turnover was 1.39 billion rupees ($10.6 million), slightly less than last year's daily average of 1.42 billion rupees, stock exchange data showed.

Foreign investors were net buyers of 81.3 million rupees worth of shares on Wednesday, but have been net sellers of 216.9 million so far this year, the data showed. They bought a net 22.07 billion rupees worth of stocks last year.

The index rose 23.4 percent in 2014, but has lost 3.5 percent since Nov. 19 when Rajapaksa announced the snap poll. 

($1 = 131.7500 Sri Lankan rupees) 

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

MBSL Midcap Index Year 2015 – Proven stock market index brand for 15 years

In a pioneering move, MBSL constructed a stock market index: the ‘MBSL Midcap Index’, which measures the aggregate price level and price movements of medium size companies listed on the Colombo Stock Exchange (CSE). The index which came into operation in the year 1999 is revised annually and looks at the middle range market capitalisation, liquidity and the profitability of the firms to be included in the MBSL Midcap Index. The MBSL Midcap Index has the base as 1,000 as at 31 December 1998 (which is the same base year for Milanka Index) whilst it has rose to 11,058.93 by 31 December 2014.  

Benefits of the MBSL Midcap Index
MBSL Midcap Index can be used as the benchmark index by individual and institutional investors who prefer growth but are prepared to with stand only conservative levels of volatility in their equity investments.It can be used as the benchmark index for the introduction of MBSL Midcap linked index funds.MBSL Midcap Index generate valuable signals for portfolio managers for switching from larger-cap more sensitive stocks to midcap less sensitive stocks with more growth potential in response to changing capital market conditions. The MBSL Midcap Index focus in profitability helps to screen stocks with better future prospects that will cross to higher market capitalisation in the coming year.


MBSL Midcap Index which is in effect from 1 January 2014 and the criteria for selecting the 25 stocks of the index remained unchanged. They are:
Middle Range Market Capitalisation as at 30 November 2014.
Liquidity based on number of trades during the year.
Profitability within the last two years.
The range for market capitalisation for the year 2014 was Rs. 2.15 billion – Rs. 21.49 billion. With the stock market movements, this range has been adjusted for the change in the ASPI annually. Accordingly the range of market capitalisation for the year 2015 is Rs. 2.76 billion – Rs. 27.26 billion.Based on the above criteria the MBSL Midcap index 2015 includes the following stocks representing eight sectors.

www.ft.lk

NSB sets the record straight about $ 750 m intl. bond issue

Savings giant NSB yesterday set the record straight in relation to certain recent news items regarding its successful $ 750 million international bond issue.

Following is the full text of NSB’s statement:

NSB wishes to clarify its position on certain news items and on statements made at various forums on the international bond issue. In 2013 National Savings Bank entered into the international market to raise funds by issuing a USD bond under the ruling RegS/144A. A RegS/144A means that it complies with US regulations and that of the Asian and European regulations.

In terms of the relevant regulations only institutional investors are allowed to participate in subscribing for the issue with a minimum subscription value of $ 200,000.

The bond for $ 750 m with a five-year tenor was priced on 12 September 2013 at a coupon rate of 8.875%.

The issue was oversubscribed 2.5 times approximately, and 172 subscribers committed for $ 2.3 b. The allocation was made among 141 applicants with a good spread among investors.

The spread of the investor community to the NSB bond issue ranged from the US to Asia that covers all three time zones. Geographically US contributed 39%, Europe with 38% and Asia with the remaining 23%. The categorisation of investors ranged from fund/asset managers with 88%, banks with 10% and insurance companies and other institutions with 2% of the issue.

Therefore, we wish to emphasise to the general public that no individual investors were among the subscribers to NSB international bond.

NSB was rated on par with the sovereign by two rating agents, and the bond carried an international rating of BB-.

In the first week of September none of the bonds in the secondary market of Singapore Debt Exchange traded at par except of the Vietnamian’16 and Vietnamian’20. All others were trading at a discount. The average $ 100 bond was trading between prices of $ 78-99.

In the global market, certain bonds that carry identical issuer/issue ratings to that of NSB was trading at levels of 8.3% p.a., to 8.5% p.a. with comparable maturities.

When an issuer who is not known to the investors enters the international market for the first time, a debut issue is priced higher than that of a seasoned issuer.

The NSB bond being a non-sovereign issue would have had to pay a margin of 100 bp to 150 bp over a sovereign issue. Nevertheless, in reality the initial book building started at rates above 9.25% and NSB was able to drive the price down due to the strong demand shown by over 170 investors with a commitment of over $ 2.3 billion.

The issue price was finally set at 8.875% and not at 9% or above as has been stated at various forums. NSB wishes to highlight that the proceeds were never deployed at 7% or below the cost but always at a margin.

The NSB bond was trading near par immediately after the issue. If the pricing was way beyond the market rates, the post issue should have been traded at high premiums.
www.ft.lk

Sri Lankan bourse at over 6-week closing high; Commercial Bank leads

Jan 6 (Reuters) - Sri Lankan stocks hit more than six-week closing high on Tuesday, led by top lender Commercial Bank of Ceylon, as investors picked up beaten-down shares ahead of the presidential election later this week.

The main stock index closed 0.98 percent, or 71.75 points, higher at 7,420.14, its highest close since Nov. 20.

"Investors are not worried about the outcome of the elections," said Dimantha Mathew, manager of research at First Capital Equities (Pvt) Ltd.

"They (investors) think if the President Mahinda Rajapaksa wins, stability and continuity will be there and if the opposition wins, it will be a business-friendly government."

President Rajapaksa called early elections to be held on Jan. 8. Twenty six lawmakers have quit the ruling United People's Freedom Alliance since the election announcement, including former health minister Mithripala Sirisena, who is challenging Rajapaksa's bid for a third term. Two opposition legislators have joined the ruling party.

The central bank said the economy would grow annually at 8 percent in the six years between 2015 and 2020 after achieving an estimated growth of 7.8 percent in 2014.

The gain in the stock index was boosted by a 2.92 percent rise in Commercial Bank of Ceylon and a 6.15 percent jump in construction firm Access Engineering Plc.

Turnover was 2.1 billion Sri Lankan rupees ($15.98 million), well above last year's daily average of 1.42 billion rupees, stock exchange data showed.

Foreign investors were net sellers of 287.4 million rupees worth of shares on Tuesday, data showed. They bought a net 22.07 billion rupees worth stocks last year, a little less than the previous year's 22.88 billion inflow.

The stock index gained 23.4 percent in 2014 after rising 4.8 percent in the previous year. It has lost 3.5 percent since Nov. 19 when Rajapaksa announced his decision to hold a snap poll. 

($1 = 131.4000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Anand Basu)

Sri Lanka's tourist arrivals rose 16.1 percent in December

Statistics released by Sri Lanka Tourism Development Authority (SLTDA) Tuesday showed that Sri Lanka had met its tourist arrival target of 1.5 million for the year 2014.

According to SLTDA figures, Sri Lanka's tourist arrivals rose 16.1 percent in December last year compared to the same period in 2013 with the arrival of 178,672 tourists compared to the 153,918 arrived in December 2013.

For the year a total of 1,527,153 tourists arrived in the island recording a 19.8 percent increase from the 1,274,593 came during 2013.

Most of the tourist arrivals were from Western Europe with 479,007 tourists visiting in 2014 recording a 13.8 percent increase over corresponding 2013 figures. For the month of December 55,877 tourists arrived in the island, 13.9% more than in December 2013.

Arrivals from North America rose by 10.7 percent with 72,653 visitors last year while arrivals from Eastern Europe increased 22.6 percent with the arrival of 154,153 tourists. 

Arrivals from Eastern Europe rose 6.3 percent for the last month.

Tourist arrivals from Middle East declined in December by 24.3 percent to but for the year arrivals increased by 10.5 percent to 88,991.

Last year 280,511 East Asians arrived in the island, an increase of 53.2 percent. Number of Chinese tourists arriving in the island rose by an impressive 136.1 percent to reach 128,166. In December alone tourists arrivals from China increased by 120.4 percent with 10,400 Chinese tourists visiting the island.

Arrivals from South Asia, the other region from where most of the tourists come, increased by 13.4 percent to record 370,299, while arrivals from India increased 16.3 percent to 242,734 in 2014.

In the past year, 57,940 Australians arrived in the country, a 6.8 percent increase from the previous year.

SL to maintain 8% growth in 2015

Vishmi Wijeratne vishmiwijeratne.wishwonder@gmail.com

Sri Lanka Central Bank Governor Ajith Nivard Cabraal said presenting the road map for 2015, that the estimated per capita income for the recent year as US$ 3,654, thus the governor believes that during year at hand the per capita income maybe increased up US$ 4,000. He further said that they hope to achieve a goal of US$ 7,500 per capita income by the year 2020.

The governor also said that 2015 may be the possible year for 8% economic growth rate. His comment can be commended with the reported 7.8% Economic growth rate experienced in the country during the year 2014. Sri Lanka has maintained a steady growth rate compared to the other South Asian regions which are bordering at 6% or below.

The road map states that, the economy grew by 7.7% during the first three quarters of 2014 and is expected to record a growth of 7.8% during the year.

Road ahead was further explained as the successful trajectory that will take the country further into an optimistic future, with Forbes Magazine claiming Sri Lanka as one of the top ten coolest places to visit in 2015.

The governor said that year 2014 has shown tourism industry can surpass the goals allocated for it; when it recorded 2.3 million tourist arrivals than the expected 1.9 million tourist arrivals.

The service sector is reported to have grown by 6.4 % during the first three quarters of 2014. Among the sectors that have improved in the past year the following were improved. The wholesale and retail trade has improved by 7.7 %, hotels and restaurants by 18.9%, transport and communication by 7.4% and banking, insurance and real estate by 6.0%. The contribution of the service sector thus surpasses others by owning up to 57% of the GDP growth.

The export sector showed a 10 percent growth reaching up to US$ 11.5 billion. The Textile and Garment, Tea and Coconut industries were mainly responsible to the growth in exports.

The countries imports too have increased by 7.8 percent to US$ 19.4 billion in the last year. Furthermore the country’s trade deficit was increased by 4.7% to US$ 8 Billion, which is a significant growth compare to 2013 -US$ 7.6 Billion. The road map states that the foreign reserves though remaining in its comfortable position is peaking at US$ 9 million.

The Governor also said that due to the continued fiscal consolidation the budget deficit has been reduced to 5.2 % and public debt to 75% of the GDP. Thus the year 2014 has concluded with the stabilization of the debt markets according to the road map 2015.

The annual average inflation according to the Governor is one of the lowest recorded; it was recorded as 3.3%. The target laid for the year 2015 is a 2-5 % flexible inflation framework.
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