Sri Lanka bourse turnover slumps to near 5-yr low; index snaps losing streak

(Reuters) - Sri Lankan shares edged up on Monday, ending a five-session falling streak, but turnover slumped to near a 5-year low as investors were cautious ahead of a U.N. resolution on the island nation's human rights record later this month.

The day's turnover fell to 2009 levels when the island nation was in the final days of a 26-year civil war with Tamil separatists. Turnover was 90.9 million rupees ($696,300), the lowest since April 30, 2009, less than a tenth of this year's daily average of about 921.3 million rupees.

Analysts said investor sentiment has been dented on concerns over the U.N. resolution, which could have an impact on the country's economy. Many potential buyers in risky assets are staying on the sidelines for want of clear direction.

"Now, foreign investors are also holding back because there is no liquidity in the market," Danushka Samarasinghe, head of TKS research, told Reuters.

The main stock index rose 0.3 percent, or 17.88 points to 5,914.11, edging up from its lowest close since Feb. 26 led by large caps.

Ceylon Tobacco Co Plc shares rose 1.83 percent to 1,120 rupees with just one share changing hands, while Ceylinco Insurance Plc rose 7.40 percent to 1449.90 rupees with just nine shares traded, Thomson Reuters data showed.

Foreign investors were sellers for the second straight session, with net selling of 4.89 million rupees worth of shares on Monday. But they have been net buyers of 220 million rupees worth of shares in the last nine sessions.

Net outflows so far in 2014 stand at 3.82 billion rupees. They were 22.88 billion rupees in 2013.

Earlier this month, Sri Lanka questioned the independence of the human rights office of the United Nations after the United States asked it to investigate violations by the Sri Lanka government related to the civil war. A vote on the resolution is scheduled for the last week of the session, starting on March 24.

($1 = 130.6050 Sri Lanka Rupees)

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

Sri Lanka stocks up 0.3-pct,turnover five year low

Mar 17, 2014 (LBO) - Sri Lanka's stocks end 0.3 percent higher partly reversing the last week’s losses despite reporting a turnover of five-year low, brokers said.

The Colombo benchmark All Share Price Index closed 17.88 points higher at 5,914.11 up 0.30 percent. The S&P SL20 closed 6.31 points higher at 3,213.42, up 0.20 percent.

Turnover was 91.19 million rupees, the lowest turnover recorded since April 2009 with 80.9 million rupees.

60 stocks close positive against 76 negative.

Foreign investors bought 6.41 million rupees worth shares while selling 11.30 million rupees of shares.

Ceylon Grain Elevators closed 10 cents higher at 36.50 rupees attracting most number of trades during the day with poultry farm sector showing most trades.

Ceylon Tobacco Company closed 20.10 rupees higher at 1,120.00 rupees and Ceylinco Insurance closed 99.90 rupees higher at 1,449.90 rupees, contributing most to the index gain.

Carson Cumberbatch closed 9.70 rupees higher at 350.00 rupees and Commercial Leasing and Finance closed 20 cents higher at 4.00 rupees.

Distilleries closed 3.30 rupees lower at 199.50 rupees and John Keells Holdings closed 1.90 rupees lower at 218.10 rupees.

JKH’s W0022 warrants closed flat at 62.00 rupees and its W0023 warrants closed 20 cents higher at 64.90 rupees.

SLT closed 50 cents lower at 44.00 rupees and Bukit Darah closed 6.50 rupees higher at 551.10 rupees.

Nestle Lanka closed 17.20 rupees higher at 1,990.50 rupees.

Sri Lanka vehicle registrations drop sharply in February

Mar 17, 2014 (LBO) - Sri Lanka's vehicle registrations have dropped to 23,130 units in February 2014, the lowest since April 2010, with a sharp drop in commercial vehicles, an analysis by an equities research house shows.

February with 28 days is a 'short month' which usually results in low registrations, followed by a pick-up in March. This year registrations dropped 17 percent from January, compared to a 15 percent drop in February 2013 from a month earlier.

The first Lamborghini car, a Gallardo LP 550, was also registered in the month, a note to clients by JB Stockbrokers said.

Motor car registrations which have been buoyed by to tax slashed permits given to state workers and hybrid cars which are taxed lower, dropped to 1,481 units from 1958 in January but were still higher than the 1,063 units seen last February.

In pre-owned or reconditioned cars segment, smaller Toyota Aqua and Honda Fit models, dominated, followed by Toyota Prius, JB Stockbrokers said.

Motor cycle registrations which dropped to 13,659 units in February from 16,452 units in January were also up from a low of 12,008 last February.

Commercial vehicles categories were down sharply from a year earlier.

Three wheeler registrations were down to 5,257 from 6,639.

Pick-up trucks were down to 117 units from 173 a year earlier, mini-trucks were down to 730 units from 1,165, light trucks were down 211 from 414, medium trucks were down 152 from 189.

Heavy trucks with a payload above 5 tonnes were down to 83 from 157. Bus registrations fell to 94 from 115.

Hand tractor registrations were down to 410 from 685 and large tractor registrations were down to 93 from 231.

Despite lower interest rates, there is no resultant pick up lease volumes for new vehicles, and the drops seen cannot be fully explained by the February effect, JB Stockbrokers said in a note.

Sri Lanka is recovering from a balance of payments crisis triggered by loans taken from state-run banks by utilities to subsidize energy which ultimately were accommodated by central bank credit.

Interest rates were raised and the rupee floated to correct the problem, but vehicle taxes were also raised, which some critics said say is Mercantilist knee-jerk response.

The International Monetary Fund also urged the state not to engage in such measures.

In addition to an overall slowdown in economic activity it is not clear whether a consolidation process kicked off by the regulator in the finance company sector is also making firms more cautious about giving new loans.

Bourse is an unharmed investment platform: Broker

Notwithstanding the slowdown in global markets due to number of political and economic dilemmas around the world, the Sri Lankan Bourse remained attractive and continued to improve the foreign inflows and retail market activities last week.

First Capital Equities said investors who focused on investing in Government securities switched their interest to equities as a result of the continuous drop in Treasury Bill rates by 20, 30 and 10 bps respectively in maturity periods of three months, six months and one year.

“Moreover the 4Q2014/1Q2015 corporate results are expected to trigger healthy margins which are supported by the improvement in consumer spending as a result of the recent development in Sri Lankan economy. Hence, the Sri Lankan Bourse can be recognised as an unharmed investment platform for both local and foreign investors which will provide sustainable returns,” First Capital Equities said. With regard to the question of whether the volatility in global markets is impacting the Sri Lankan stock market, First Capital Equities said the Sri Lankan Bourse rallied at the start of 2014 with the ASPI rising above Asian and European market indices on the back of high volumes of foreign inflows.

This trend however reversed in the next month with foreign investors booking corporate profits earned in 4Q2013/3Q2014, resulting in higher foreign outflows in February.
In the wake of heightening political tensions in the Eurozone and a slowdown in China’s economic activity, raising concerns over the performance of global markets, European and Asian markets fell during the month of March.

“However on a positive note, the ASPI was successful in maintaining a steady path relative to other global markets in March 2014 mainly due to net foreign inflows returning to the market. Accordingly, on a month-to-date basis, the market received foreign inflows of Rs. 243.7 million in March, a significant improvement from the Rs. 5.1 billion outflow seen in the previous month but on track to reach the Rs. 1 billion net foreign inflow seen in January 2014,” First Capital Equities added.
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