Sri Lankan shares steady near 22-month low; Keells boosts turnover

Reuters: Sri Lankan shares ended steady on Friday, hovering near their 22-month closing low that hit in the previous session, while last-minute trading in conglomerate John Keells Holding Plc boosted the turnover, brokers said.

The bourse hit a 22-month low on Thursday as investors shunned risky assets, and an interest rate hike last week continued to dampen sentiment.

Sri Lanka's benchmark share index closed up 0.02 percent, or 1.34 points, at 6,203.98, little changed from its lowest close since April 29, 2014, that hit the previous session.

It has fallen 10 percent this year, as of Thursday's close.

The index remained in the oversold territory for the fourth day, with the 14-day Relative Strength Index at 28.203, Thomson Reuters data showed.

A level between 70 and 30 indicates the market is neutral.

On Wednesday, 182-day and 364-day t-bill yields rose 50 to 55 basis points at a weekly auction to over two-year high, after the central bank raised key policy rates by 50 basis points from record lows.

"The market is very weak. There is not much happening, except for the John Keells trading, which took place in the latter part of the session. The market will continue its declining trend with the selling pressure due to high interest rates," said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

Turnover was 803.5 million rupees ($5.59 million) on Friday, more than this year's daily average of 716.3 million rupees.

John Keells Holdings Plc, which accounted for 80.3 percent of the day's turnover, ended down 0.13 percent.

Foreign investors were net buyers for the first time in six sessions; they bought 29.2 million rupees worth of shares.

Shares in Sri Lanka Telecom Plc rose 3.2 percent, while Lanka ORIX Leasing Company Plc climbed up 3.6 percent.

($1 = 143.8000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sherry Jacob-Phillips)

Sri Lankan shares fall for 3rd day as investors shun risky assets

Reuters: Sri Lankan shares fell for a third straight session on Thursday to a 22-month closing low, as investors shunned risky assets and an interest rate hike last week continued to dampen sentiment.

Local shares also tracked losses in Asian shares as crude oil prices seesawed and Chinese shares dived, rekindling anxiety about the impact of high market volatility on the global economy on the eve of a G20 meeting in Shanghai.

Sri Lanka's benchmark share index closed 0.24 percent, or 15 points, weaker at 6,202.64, its lowest close since April 29, 2014. It has fallen over 10 percent this year through Thursday.

The index remained in the oversold territory for the third day, with the 14-day Relative Strength Index at 27.923, Thomson Reuters data showed. A level between 70 and 30 indicates the market is neutral.

On Wednesday, 182-day and 364-day t-bill yields rose 50-55 basis points at a weekly auction to more-than two-year highs, signalling a further rise in market interest rates.

"We expect the declining trend to continue with selling pressure due to high interest rates," said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

The central bank raised key policy interest rates by 50 basis points on Friday from a record low, to prevent demand-driven inflationary pressure.

Turnover was 559.3 million rupees ($3.89 million) on Thursday, well below this year's daily average of 713.8 million rupees.

Foreign investors sold a net 192.5 million rupees worth of shares, extending the net foreign outflow to 1.66 billion rupees worth equities so far this year.

Shares in Sri Lanka Telecom Plc fell 6.09 percent, while Trans Asia Hotel Plc dropped 7.06 percent. 

($1 = 143.9500 Sri Lankan rupees) 

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

SEC reconsiders minimum public float rule: CSE

(LBO) – Sri Lanka’s securities regulator is reconsidering the minimum public float rule as the intention of introducing such rule was not met, ‎a senior official at the CSE said.

Chief Executive Officer at the Colombo Stock Exchange Rajeeva Bandaranaike said the intention of introducing the minimum holding rule was to encourage the public float.

“The intention was good, but companies really did not choose to divest. Instead some companies choose to demote themselves to Diri Savi board and some others choose to de-list,” Bandaranaike said.

Few companies have already de-listed and several others have transferred to the secondary Diri Savi Board following the introduction of new rules.

“The regulator is looking at it right now and there is a strong possibility that they reconsider the rule. Right now most of the companies have been given extension of one year.”

Bandaranaike was speaking at the capital market conference 2016 organized by UTO Edu Consult.

The securities watchdog brought in the new rules that are applicable to all public listed entities which have their equity listed on the CSE effective from 01 January 2014.

As per the minimum public holding rules, there are two ways to get listed on the main board of the Colombo Stock Exchange.

One option is that a listed entity on the main board should maintain a minimum public holding of 20 percent of its total listed ordinary voting shares in the hands of a minimum of 750 public shareholders.

Second option is that a market capitalization of 5 billion rupees of its public holding in the hands of a minimum of 500 public shareholders while maintaining a minimum public holding of 10 percent.

To list on the secondary DiriSavi Board, a company should maintain a minimum public holding of 10 percent of its total listed shares in the hands of a minimum of 200 public shareholders.

FC Capital Market App launched

First Capital Holdings PLC (FC) a full service investment bank with30 years of experience recently launched the "FC Capital Market App', providing up to date information on the Sri Lankan capital market freefor Android and IOS smart mobile users.

The FC Capital Market App gives investors and market enthusiasts detailed insights into government securities, stock market, debentures and research.

The users can create a personalised watch list to keep track of chosen securities and eliminating the need to access multiple information sources.

"The app enables investors the convenience to follow the performance of their investment portfolio and is available free for downloading onto smart mobile and tablet devises for any interested user and does not require a client account with First Capital" Dilshan Wirasekara, Chief Executive Officer of First Capital Holdings PLC, stated.

The FC Capital Market App can be downloaded on App Store, Google Play and through the Company's website.http://www.firstcapital.lk/mobile-app/

About First Capital :

First Capital Holdings PLC, an Investment Bank listed on the Colombo Stock Exchange, is the holding company of the First Capital Group offering a full range of products and services, through subsidiaries operating in Debt & Equity markets including First Capital Treasuries Limited, a Primary Dealer licensed by the Central Bank of Sri Lanka, First Capital Asset Management Limited, an Investment Manager licensed by the Securities and Exchange Commission of Sri Lanka which also manages several dedicated fixed income Unit Trusts, First Capital Equities Private Limited a licensed Stockbroker and Member of the Colombo Stock Exchange, First Capital Markets Limited a licensed Margin Provider and First Capital Limited, a structuring and placement agent for debt and equity, and provider of corporate finance and advisory services.

For nearly 30 years, the First Capital Group has been a leading non-bank financial institution in Sri Lanka. A pioneer Primary Dealer in government securities, First Capital has steadily grown to become a leader in this field, buoyed by a loyal and continuously growing customer base. The company operates in Colombo and several major cities in Sri Lanka.

www.dailynews.lk

CSE fully geared to enhance investor confidence - Chairman

By Zahida Rizvi


Colombo Stock exchange's daily average turnover equity and equity market capitalization to GDP for 2015 stands at Rs 1.06 billion and Rs 2.9 Trillion respectively, CSE Chairman Vajira Kulathilake said.

Speaking at the Capital Market Conference held yesterday at the Ramada Hotel he said CSE performance in terms of corporate debt had raised the largest volume of capital accounting to Rs 81 billion in 2015. "On the other hand corporate debt has been recorded as Rs 4.5 billion for 2015", he said. He added that the key factors CSE focuses to achieve better performance is by having a better approach to risk management, new products, attracting new listings and attracting investors governance. Kulathilake said that risk management is backed by adapting to schemes such as the Broker Back Office (BBO), Introduction of Central Counter Party institution (CCP )and Capital Adequacy Ratio (CAR).

"Broker Back Office (BBO) is an Order Management Systems (OMS) which will facilitate seamless trading, clearing and settlement of securities".

"CCP is an entity that will take up the risk of transactions in the market in the event of a clearing and settlement failure" "Capital requirement applicable to a Broker Firm which compares the total

risks faced by the Broker Firm with the liquid capital it holds", he said.

The CSE Chairman said that one of the new products introduced into the CSE is a real estate investment trust (REIT). The trust is categorized into two segments. "Rental REITs which is invested in income generating real estate properties and development REITs are invested for development of constructions".

Kulathilake further added that new listings are encouraged in to the CSE to further enhance its performance by enabling issuer relations, SOE listings and adding in alternative markets such as SME, Board Dollar Denominated Board and BOI Board.

He said," Turnover is doubled by increasing foreign investor turnover through foreign Investor Forums"."Additionally, increasing domestic investor turnover by targeting retail investors and institutional investors". "Governance in the CSE is kept intact through demutualization and amendments to the SEC Act to include new provisions", he said.

www.dailynews.lk

ComBank posts Rs 11.9 bn net profit for 2015

Commercial Bank of Ceylon PLC has recorded profit before tax of Rs 17.144 billion for the 12 months ended December 31, 2015, a year in which it strengthened its positions in Sri Lanka and Bangladesh.

The bank has attained solid growth across all business lines to improve pre-tax profit by a healthy 8.94% over the preceding year and achieve net profit of Rs 11.903 billion for 2015, a growth of 6.47% despite lower margins, reduced capital gains and higher tax commitments. Profit before Financial VAT and Nation Building Tax (NBT) was up 8.73% to Rs 20.033 billion.

Gross income increased by 7.03% to Rs 77.868 billion, and net interest income grew by a robust 11.47% to Rs 30.346 billion, the Bank reported in a filing with the Colombo Stock Exchange (CSE).

One of the many performance highlights of the year under review was the strong growth of the Bank's loan book, which increased by Rs 102.684 billion or 25.33% to Rs 508.115 billion. This was the first time that the Bank's loan book achieved a net growth of more than Rs 100 billion in a year.

Total assets grew by a noteworthy Rs 84.195 billion or 10.58% over the 12 months to Rs 879.805 billion at December 31, 2015. Deposits from customers increased by Rs 94.740 billion at an average of Rs 7.9 billion a month to Rs 624.102 billion at the end of 2015, reflecting Year-on-Year growth of 17.90%.

"We are pleased with these results because they reflect the ability of the Bank to grow in changing conditions, while continuing to enlarge its footprint in Sri Lanka and overseas, and consolidating its position as a catalyst in the socioeconomic progress of our country," Commercial Bank Chairman Dharma Dheerasinghe said.

The Bank's Managing Director and CEO Jegan Durairatnam said 2015 was noteworthy because a strong foundation for future growth had been set with the licenses secured to operate in Myanmar, Maldives and Italy.

"These achievements are perhaps the most significant for the year as they expand our horizons, presenting new opportunities for growth and further strengthening our position in our home market," he said.
www.dailynews.lk

DFCC posts healthy growth

The DFCC Bank has posted a healthy balance sheet for the nine months for the New Financial Year ending December 31.

The performance reported is for nine months from April 2015 to December 2015 as against that of the previous full year. Net profit after tax as at December 31,2015 was Rs1,642 million (Group) and Rs 1,068 million (Bank) while that for FYE March 2015 was Rs 4,439 million and Rs 3,240 million respectively.

CEO Arjun Fernando said:"While 2015 was a transformative year for DFCC, the amalgamation with Vardhana has laid the foundation for the Bank to take on the competition.We are therefore confident of resuming our normal growth trajectory in 2016 and beyond."

However, there were several exceptional items in both periods which distort the comparison. FYE 31 March 2015 included substantial one-off capital gains and impairment reversals, while the period ended 31 December 2015 entailed significant non-recurrent expenses incurred during the amalgamation for items such as systems integration and data migration.

The change of the financial year meant that the Bank incurred an additional taxation charge based on the full year, even though results were for nine months. Also, substantial dividend income, which accrues in the first quarter of the calendar year, could not be included.

Meanwhile, total assets grew by 17% to LKR 247,109 million as at 31 December 2015 from LKR 210,610 million as at 31 March 2015. This included a robust credit portfolio growth of 18% to LKR 171,111 million from LKR 144,896 million. At the same time credit quality was not compromised.

The ratio of impaired loans to total loans for 31 December 2015 was 5.1% compared to 6.1% for 31 March 2015, indicating a credit quality improvement. Close monitoring drove down the Bank's ratio of impaired loans to total loans as well as its regulatory non-performing loan ratio, with the latter improving to 3.7% as at 31 December 2015 from 4.3% as at 31 March 2015.

Its balance sheet strength is demonstrated by a Group Tier 1 Capital Adequacy Ratio of 15.4% and a total Capital Adequacy Ratio of 15.3% making DFCC Bank one of the highest capitalised banks in the industry.
www.dailynews.lk