Colombo Stock Exchange Market Review – 16th Dec 2016

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Colombo Stock Exchange Trade Summary 16-Dec-2016

Colombo equities skidded to two-week low on Friday with sluggish investor participation amid concerns over economic front. ASI closed 16.92 points (0.3%) lower at 6,268.61 while S&P SL 20 index closed 7.94 points (0.3%) down at 3,521.67.

Premier blue-chips such as John Keells Holdings (LKR 147.10,-1.1%), LOLC (LKR 74.50,-4.5%) and Sri Lanka Telecom (LKR 33.60,-2.6%) led the losers in today’s session. Out of the 186 scripts traded today only 41 managed to increase in price while 64 closed with negative returns. Among the gainers were Hemas Holdings (LKR 100.00, +2%) and Lanka Hospitals (LKR 68.30,+2.9%)

Despite the weak sentiments in the broader market, institutional investor activity in Seylan Bank pushed the turnover to LKR 1.9bn. Foreign investors bought 13.2mn shares of Seylan Bank at LKR 100.00 in a single crossing and the trade accounted for 70% of the turnover. Further crossings were seen in Chevron Lubricants (1mn shares at LKR 161.00) and Commercial Bank (0.7mn shares at LKR 145.00) and the three negotiated deals accounted for 85% of the market activity. Accordingly, Seylan Bank (LKR 1.3bn) emerged as the top contributor to the turnover along with Commercial Bank (LKR 179mn) and Chevron Lubricants (LKR 176mn). 

Activity in the normal board was dominated by Sanasa Development Bank which saw its share price rising 6% to LKR 105.00 following the announcement of proposed LKR 3.3bn fund raising. As per the announcement, LKR 1.5bn will be raised by an issue of 10.4mn shares (at LKR 140.00) to FMO, SBI-FMO and IFC via a private placement while the balance will be raised through subordinated convertible term loans placed with the same investors.

Apart from Sanasa Development Bank, shares of Chevron Lubricants, John Keells Holdings and Pan Asia Bank saw relatively high level of trading.

Foreign investors were net buyers in today’s session with net inflow of LKR 1.4bn. Foreign participation was 57%. Top net inflows were seen in Seylan Bank (LKR 1.3bn), Hemas Holdings (LKR 24mn) and DFCC Bank (LKR 7mn) while top net outflow was seen in Chevron Lubricants (LKR 14mn).
Source: LSL

Sri Lankan shares hit more than 2-wk closing low led by banks

Reuters: Sri Lankan shares fell for a third straight session on Friday to close at their lowest in more than two weeks, as a dollar rally to a 14-year peak after an interest rate increase by the U.S. Federal Reserve earlier this week kept investors subdued.

The 25-basis-point rate increase could hike borrowing costs of foreign capital for Sri Lanka and force the coalition government to borrow locally at higher interest rates, which could also result in movement of money from equities, analysts said.

The Fed also signalled a faster pace of increases in 2017, partly as a result of changes anticipated under a Donald Trump presidency, with the U.S. central bank hinting at three rate hikes next year instead of the two foreseen as of September.

The Colombo stock index ended 0.27 percent weaker at 6,268.61, its lowest close since Nov. 30. The bourse fell 0.88 percent for the week, its second weekly fall.

A block deal in Seylan Bank Plc boosted turnover, with dealers saying state-owned Bank of Ceylon sold 13 million shares to a foreign investor.

"A sizeable crossing of Seylan Bank boosted the turnover. Other than the Seylan trade, there was nothing. The market is getting slower by the day with the holiday mood," said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

Shares of Seylan Bank Plc ended steady, while Lanka ORIX Leasing Company Plc fell 4.49 percent and conglomerate John Keells Holdings Plc lost 1.14 percent.

Sri Lanka Telecom Plc dropped 2.61 percent, while Commercial Leasing and Finance Plc fell 5.88 percent.

Turnover stood at 1.86 billion rupees ($12.51 million), well above this year's daily average of 753.4 million rupees.

Foreign investors bought a net 1.35 billion rupees worth of shares on Friday, extending the year-to-date net foreign inflow to 1.87 billion rupees worth of equities.

($1 = 148.6500 Sri Lankan rupees) 

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

Colombo Stock Exchange Market Review – 15th Dec 2016

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Colombo Stock Exchange Trade Summary 15-Dec-2016

Colombo equities edged lower for the third straight day in lackluster trading on Thursday. ASI slipped by 13.48 index points (-0.2%) to 6,285.53 while S&P SL20 index lost 11.01 index points (-0.3%) to 3,529.61.

Concerns of capital flight amid Fed rate hike affected the investor sentiments to a certain extent and foreign favorite blue-chips such as John Keells Holdings (LKR 148.80, -2.0%) and Dialog Axiata (LKR 10.50, -1.9%) declined in today’s trading session.

However, Chevron Lubricants managed to held ground at LKR 161.30 (+0.4%) supported by the interim dividend announcement of LKR 3.50 per share. Chevron Lubricants have declared LKR 18.00 in dividends (per share) so far, pushing the stock further up in the high dividend yield list with a yield of 11%.

Market turnover fell to a three-week low of LKR 362mn. Commercial Bank (LKR 71mn) led the turnover list along with LOLC (LKR 47mn) and Dialog Axiata (LKR 44mn). The only crossing of the day was recorded in Hatton National Bank-nonvoting (0.2mn shares at LKR 190.00) and it accounted for mere 11% of the total turnover.

Apart from Chevron Lubricants, the investor interest was seen in John Keells Holdings, Commercial Credit (LKR 58.60, +1.0%) and Access Engineering (LKR 24.90, -0.4%).

As announced by S&P Dow Jones Indices, Ceylinco Insurance will be replaced by Teejay Lanka in the S&P SL 20 index with effect from 19th December 2016.

Foreign investors were net buyers with net foreign inflow of LKR 45mn. Top net inflows were seen in Commercial Bank (LKR 29mn), Access Engineering (LKR 12mn) and Hatton National Bank (LKR 8mn) while top net outflow was seen in Chevron Lubricants (LKR 7mn). Foreign participation accounted for 38% of the market activity.

According to the Department of Census & Statistics, Sri Lanka’s economy has grown by 4.1% in the third quarter of 2016. This is a significant improvement from the 2.6% reported in the second quarter. The growth was mainly driven by the Services (+4.7%) and Industry (+6.8%) sectors while the Agriculture segment contracted by 1.9%. Among the sub sectors, notable growth was seen in construction (+14.4%) and Financial & insurance activities (+12.8%). Accordingly the economy growth in first nine months of 2016 is at 4.0%.

Source: LSL

Sri Lankan shares hit more than 2-wk closing low; Fed rate hike weighs

Reuters: Sri Lankan shares fell in line with regional bourses to close at their lowest in more than two weeks on Thursday, as a 25-basis-point interest rate increase by the U.S. Federal Reserve and hints of more to come next year kept investors on tenterhooks.

The Fed signalled a faster pace of increases in 2017 as central bankers adapted to incoming President Donald Trump's promises of tax cuts, spending and deregulation. Partly as a result of the changes anticipated under Trump, the Fed sees three rate hikes next year instead of the two foreseen as of September.

The Colombo stock index ended 0.21 percent weaker at 6,285.53, its lowest close since Nov. 30.

"Market was on a very slow downtrend," said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

"Bond and equity markets have adjusted for the Fed rate hike. We have seen outflows in the last three months. But going forward, we may go into a period of economic and political uncertainty because of a large number of bonds maturing in the first half on 2017 and local elections, plus a referendum coming up next year."

The rate hike could increase borrowing costs of foreign capital for Sri Lanka and force the coalition government to borrow locally at higher interest rates, which could also see some outward movement of money from equities, analysts said.

The government is considering a change in the country's constitution next year which requires a referendum.

The two main parties in the coalition government are expected to contest separately in the upcoming local government election, which the administration of President Maithripala Sirisena has postponed since mid-2015 citing delays in a new electoral process.

Foreign investors bought a net 44.7 million rupees ($301,213) worth of shares on Thursday, with the year-to-date net foreign inflow in shares declining to 514.7 million rupees.

Turnover was 361.8 million rupees, less than half this year's daily average of 749 million rupees.

Shares of John Keells Holdings Plc fell 2 percent, while top mobile phone operator Dialog Axiata lost 1.9 percent.

($1 = 148.4000 Sri Lankan rupees) 

(Reporting by Shihar Aneez; Editing by Biju Dwarakanath)

Sri Lanka rejects bids for 03-month Treasury Bills

ECONOMYNEXT – Sri Lanka’s central bank rejected bids for 03-month Treasury Bills at Wednesday’s auction.

The yield on the one-year bill edged up one basis point to 10.11 percent at the auction while that on the 06-month bill remained unchanged at 9.56 percent, a statement said.

The debt office of the central bank got bids worth Rs41 billion and accepted only bids worth Rs6 billion.

Central Bank approves Richard Pieris, Chilaw Finance amalgamation

(LBO) – Sri Lanka’s Central Bank has granted approval for the amalgamation of Clilaw Finance with Richard Pieris Finance, by taking over all the assets and liabilities of Clilaw Finance.

Following the approval granted by the Central Bank on 05th December, the Board of Directors of Richard Pieris Finance has approved the amalgamation proposal on 09th December 2016.

Richard Pieris Finance is in control of the shareholding and the management of Chilaw Finance and as per the proposal, the shares of Clilaw Finance will not be converted into shares of Richard Pieris Finance.

Remaining shareholders who still holds 9.99 percent of Clilaw Finance will be paid 22.50 rupees per share and thereafter all the shares of Clilaw Finance is to be cancelled.

Under the 2014 financial sector consolidation plan, Richard Pieris Finance acquired 81.77 percent of Clilaw Finance at 26.50 per share on the trading floor in 2014.

After the obligatory mandatory offer, the shareholding of Richard Pieris Finance increased to 90.09 percent.

It is the intention of Richard Pieris Finance to acquire 100 percent of Clilaw Finance subject to necessary regulatory and shareholder approvals.

The amalgamation process is to be completed by 31st March 2017 in compliance with the financial sector consolidation plan.

Colombo Stock Exchange Market Review – 14th Dec 2016

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Colombo Stock Exchange Trade Summary 14-Dec-2016

Colombo Bourse opened the holiday shortened week on a negative note with both indices closing in red for the second straight day. ASI closed 25.09 index points (-0.4%) lower at 6,299.01 while S&P SL 20 index lost 14.40 index points (-0.4%) to close at 3,540.62.

Premier blue-chip, John Keells Holdings (closed at LKR 151.90, -1.4%) drove the index down along with Sri Lanka Telecom (closed at LKR 33.90, -3.1%) and Asiri Hospital Holdings (closed at LKR 26.80, -5.0%). However, gains in Nestle Lanka (closed at LKR 2,050.10, +1.0%) & Ceylon Tobacco (closed at LKR 865.00, +0.5%) managed to ease the index losses.

Despite the negative sentiments, the foreign activity pushed the turnover to LKR 1.1bn. Crossings in selected blue-chips accounted for 76% of the total turnover.

Negotiated deals were recorded in Chevron Lubricants (3.0mn shares at LKR 158.50), Commercial Bank (1.0mn shares at LKR 145.00), Nestle Lanka (0.05mn shares at LKR 2,050.00), Ceylon Cold Stores (0.09mn shares at LKR 742.00), Richard Pieris (7.9mn shares at LKR 8.00), Access Engineering (1mn shares at LKR 25.00) and Ceylon Grain Elevators (0.3mn shares at LKR 82.00) respectively.

Accordingly, Chevron Lubricants emerged as the top contributor to the turnover with LKR 481mn followed by Commercial Bank (LKR 188mn), Richard Pieris (LKR 111mn) and Nestle Lanka (LKR 110mn) respectively. 

Market breadth was negative where out of 192 stocks traded, 89 slipped, 29 advanced while 74 stocks remained unchanged. High investor activity was seen in Lanka IOC, Commercial Credit & Finance, John Keells Holdings and Chevron Lubricants. Chilaw Finance advanced to LKR 21.80, subsequent to the announcement on amalgamation with Richard Pieris Finance Limited.

Foreign investors were net sellers with a net foreign outflow of LKR 556mn. Foreign participation was 56%. Net foreign outflows were seen in Chevron Lubricants (LKR 480mn), Richard Pieris (LKR 104mn), Teejay Lanka (LKR 9mn) while net foreign inflow was mainly seen in Access Engineering (LKR 25mn).

At the weekly treasury bill auction, one year treasury rate increased by one basis point to 10.11% while six month rate remained at 9.56%. However, three month bills were rejected by the Central Bank. CBSL offered LKR 24bn worth of bills and auction was oversubscribed by 1.7 times. CBSL accepted LKR 6.2bn worth of treasury bills.
Source: LSL