AMW Capital Leasing & Finance surpasses Rs. 1 b in Fixed Deposits

AMWCL, having commenced Fixed Deposit mobilisation in the latter part of 2013, announced the achievement of Rs. 1 billion in public deposits within a short period of time. This reflects the public trust and confidence in the company and the people behind it.

AMWCL is the only finance company owned by Associated Motorways Ltd., popularly known as AMW, which is a fully-owned subsidiary of the Al-Futtaim Group, UAE.

As the only finance company within the AMW Group, AMW Capital Leasing & Finance PLC commenced operations as a specialised leasing company in 2006 to enhance and add value to automobile operations of the group. Subsequently the company obtained license in 2009 from the Monetary Board of the Central Bank of Sri Lanka to conduct finance business which included deposit mobilisation.

Elaborating on the occasion of surpassing the Rs. 1 billion mark, the company’s Director/CEO Brandon Morris said: “We are very pleased to have achieved this milestone with the trust and confidence of our customers within this short period of time.”

AMWCL is a listed entity in the Colombo stock exchange with a current asset base of Rs. 8.6 billion and an NPL ratio of 2.64%, reflecting the very high asset quality of the company. Further, the company has been assigned a credit rating of BB-(lka) Stable Outlook by Fitch Ratings Lanka Ltd.

“Strategies are in place to double this amount by the end of 2015,” added Brandon, on the company’s future plans. The company has a network of 17 branches islandwide, offering financial products from fixed deposits to leasing, hire purchase, auto loans, working capital loans, micro finance and Islamic finance.
www.ft.lk

Acting arrangement for the Governor of the Central Bank during his leave in Sri Lanka is legal

In an article published in the newspaper “Daily FT” on March 23, 2015, Mr. W.A. Wijewardena, a former Deputy Governor of the Central Bank, has stated that the law does not provide for an acting arrangement for the Governor when the Governor is in Sri Lanka. As such, the forced leave of the Governor is not recognized by law and all decisions made in the bank without him being present are subject to challenge in courts of law. The Central Bank wishes to state that the contents of the above statement are grossly incorrect and clarify the relevant legal position as follows. 

1. In terms of Section 24 of the Monetary Law Act, in the event of temporary absence from duty of the Governor or of the temporary inability of the Governor to perform his functions and duties, the Deputy Governor designated as senior by the Monetary Board shall act as the Chief Executive Officer of the Central Bank and shall have authority to execute the powers and perform the functions and duties of the Governor under the Act. Therefore, whether the Governor is in Sri Lanka or abroad does not become a relevant concern when the provisions of Section 24 of the Act are invoked. The law in this regard is very clear and straight forward. Communications Department 24 March 2015 

2. The designation of the Senior Deputy Governor was made by the Monetary Board at its meeting held on 17.03.2015 and, therefore, the relevant decision-making process in the Central Bank is legal. 

3. The Governor’s leave at present is not a form of forced leave. As announced in the Parliament on 17.03.2015 , the Governor went on leave to facilitate the inquiry on the issuance of Treasury Bond under the reference subject after informing the Monetary Board of taking such leave at its meeting held on 17.03.2015. Prior to that, the Governor informed it to the media as well. 

4. Only certain decisions made in the bank require the Governor’s approval in terms of relevant legal provisions and internal procedures. The rest of decisions are taken by other authorized officials in the bank. In Sri Lankan legal system, any decision taken by an administrative authority is subject to judicial review and this applies to the Central Bank, too, irrespective of the issue raised in the statement under reference.

-CBSL

Odel PLC acquires 99.99 per cent of Softlogic Brands (Pvt) Limited

Odel PLC acquired 99.99 per cent of Softlogic Brands (Private) Limited for Rs. 599,995,200 from Softlogic Retail (Private) Limited and Dai-Nishi Securities (Private) Limited which are subsidiaries of Softlogic Holdings PLC.

Softlogic Brands has the largest international and branded apparel and accessory portfolio in Sri Lanka and retailing 20 brands through its 41,000 sq. ft. prime retail space in Colombo.
www.adaderana.lk

Sri Lankan shares mark near 7-month low closing level

(Reuters) - Sri Lankan shares fell for a second straight session on Tuesday and closed at their lowest in nearly seven months, led by banks amid political uncertainty while investors waited for cues on interest rates.

The main stock index ended 0.63 percent, or 44.37 points, weaker at 6,997.93, its lowest closing level since Aug. 28 and below the key psychological support level of 7,000. It had lost 4.37 percent in the past 17 sessions.

"This is due to political uncertainty after the formation of national government," a stockbroker said on condition of anonymity.

Analysts said the government's decision-making process would slow down after President Maithripala Sirisena formed a national government incorporating the main opposition party in a bid to push through reforms and preserve political stability.

They said the market was awaiting clarity on interest rates after yields on t-bills fell between 31 and 44 basis points at a weekly auction on Wednesday, after having spiked by 112-124 basis points at the two previous weekly auctions.

The central bank said on Wednesday the low-interest rate environment was expected to continue benefiting from lower inflation while keeping policy rates steady.

Shares of the country's biggest listed lender, Commercial Bank of Ceylon Plc, fell 2.31 percent, while Ceylon Theatres Plc dropped 7.14 percent. Conglomerate John Keells Holdings Plc fell 0.72 percent.

The day's turnover was 394.1 million rupees ($2.96 million), well below this year's daily average of 1.21 billion rupees.

Foreign investors were net sellers for the second straight session. They sold of 15.42 million rupees worth of shares, but have been net buyers of 3.33 billion rupees so far this year. 

($1 = 133.1000 Sri Lankan rupees) 

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

Sri Lankan shares slip in thin trade; political woes weigh

(Reuters) - Sri Lankan shares ended a tad weaker on Monday in thin volume led by select shares such as Access Engineering Plc, while investors awaited cues on interest rates.

The main stock index ended 0.17 percent, or 12.28 points, weaker at 7,042.3, hovering near its lowest close since Feb. 2 hit on Wednesday. It had lost 3.74 percent in the last 13 sessions through Wednesday.

"It seems like people are staying out of the market," said Dimantha Mathew, research manager at First Capital Equities (Pvt) Ltd.

Infrastructure firm Access Engineering was down 5.56 percent, a day after it fell 10 percent after the new government cancelled an $85 million airport runway project awarded by the previous government.

Analysts expect the market to be in the red until the political situation stabilises even after Sri Lankan President Maithripala Sirisena formed a national government on Sunday.

Sirisena, incorporating the main opposition party, has formed a national government in a bid to push through reforms and preserve political stability.

Analysts said the market was awaiting clarity on interest rates after yields on t-bills fell between 31 and 44 basis points at a weekly auction on Wednesday, after having spiked to 112-124 basis points the two previous weekly auctions.

The central bank on Wednesday said the low-interest rate environment is expected to continue benefiting from lower inflation while keeping policy rates steady.

The day's turnover stood at 395.1 million rupees ($2.97 million), well below this year's daily average of 1.22 billion rupees.

Foreign investors were net sellers of 8.02 million rupees worth of shares, but have been net buyers of 3.35 billion rupees worth of shares so far this year.

($1 = 132.9000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil Nair)

CSE signs consultancy agreement with BTA Consulting, UK to set up a Clearing House

The Colombo Stock Exchange (CSE) signed an agreement with BTA Consulting (BTA) of the United Kingdom to provide Consultancy and Project Management services to set up a Clearing House which will act as a Central Counterparty (CCP) for settlement of securities, including shares, corporate debt, Government Securities and any other financial market instruments transacted in Sri Lanka.

This is a joint initiative between the Central Bank of Sri Lanka (CBSL), the Securities and Exchange Commission of Sri Lanka (SEC) and the Colombo Stock Exchange (CSE). The project was launched in January 2015. The Clearing House is expected to be set up within a two year period.

The CCP will also enable the CSE to move to a Delivery Vs. Payment (DVP) settlement system, thus significantly minimizing the risk of settlement failure and counterparty risk in the secondary market for shares.

Presently for equities the delivery of shares occur immediately upon the execution of the transaction while fund settlement takes place three (3) market days after the transaction date (T+3), thus exposing the seller to a three (3) day settlement risk, while for Government securities the process is bi-laterally agreed. Although some interim measures have been introduced to reduce settlement risk, the globally accepted mechanism for minimizing settlement risk is through a CCP-DVP system where the securities and funds are exchanged simultaneously, finally with full irrevocability on the settlement day.

BTA consulting is a UK based consultancy firm specializing in capital market related assignments globally having specialists with exposure to most capital markets including Bursa Malaysia, the Stock Exchange of Thailand, Wien Bourse (Vienna Stock Exchange),the Swiss Exchange and many other European, Middle Easternand Asian markets. The consultants from BTA Consulting will work with a project team of specialists from CBSL, SEC and CSE.

A Steering Committee consisting of the Governor of the CBSL, the Chairman of the SEC, the Chairman of the CSE, the Deputy Director General of the SEC and the Chief Executive Officer of the CSE will have the overall oversight of the project.
A Working Group consisting of the Chief Operating Officer of the CSE,Director Capital Market Development of the SEC and the Superintendent Public Debt CBSL, will be responsible for the implementation of the project.

The Project Team of seven specialists from the CSE will be headed by Head of IT Project Management of the CSE under the purview of the Assistant General Manager Enterprise Risk Management of the CSE.

In preparation for the CCP, two preliminary phases have already been initiated by the CSE. In November 2014 the CSE launched a new generation Millennium Central Securities Depository (CSD) provided by the London Stock Exchange Group (LSEG)replacing the 19 year old legacy system which will be compatible with a DVP environment for securities settlement.

The second phase is the commissioning of new Broker Back Office (BBO) and Order Management Systems (OMS) for stock brokers. The OMS will contain a Risk Management System which will be a pre-requisite for the market to move to a CCP-DVP system.

Stock Brokers are expected to select and enter into agreements with one of the four (4) shortlisted vendors offering such systems. It is expected that the systems will be in place within 2015.

The CSE is also working in parallel with Primary Dealers, CBSL, SEC and Millennium IT (MIT), the CSE’s Trading System supplier to facilitate secondary trading of Government Securities through the CSE’s Automated Trading System (ATS). Presently the modalities and systems modifications in this regard are being designed by CBSL, Primary Dealers, CSE and MIT.

The CCP will usher in a new era for securities trading in Sri Lanka said Mr. Vajira Kulatilaka, Chairman of the CSE adding that he believes that the introduction of the CCP with DVP will be a ‘game changer’ for our securities market as this was one of the key criteria for re-classification of our market as an emerging market.

The CEO of the CSE Mr. Rajeeva Bandaranaike appreciated the support extended by CBSL, SEC, Stock Brokers and Primary Dealers for supporting the measures that are being taken to mitigate the settlement risk in the securities market. He further stated that the CCP and DVP system of settlement will facilitate plans to diversify the CSE’s product range.
www.adaderana.lk 

Sri Lanka's Colombo Stock Exchange get two directors

COLOMBO (EconomyNext) - Lal Nanayakkara, a senior accountant and Anton Godfrey, who head a company with an international presence have been appointed directors of the Colombo Stock Exchange.

Nanayakkara was a former President of the Institute of Chartered Accountants of Sri Lanka in 1997 and has been board member of the Securities and Exchange Commission.

Anton Godfrey is the founder and chairman of AGXA an AG International Company, which has a Australia, Singapore, India and Sri Lanka, principal network span over Europe and North America, the Colombo Stock Exchange said.

Godfrey holds an MBA from the University Of Leicester UK, Chartered Marketer and a Fellow of The Chartered Institute of Marketing UK and the Australian Institute of Management.

Vajira Kulatilaka (Chairman)
M R Prelis –Elected
Dakshitha Thalgodapitiya – Appointed
Jeewa Niriella – Appointed
Ray Abeywardena – Elected
Asanga Seneviratne– Elected
Aravinda Perera– Elected
Lal Nanayakkara – Appointed
Anton Godfrey– Appointed