Sri Lankan bourse down on profit-taking; ends 5-day winning streak

(Reuters) - Sri Lankan shares fell on Tuesday, snapping a five-session winning streak as investors booked profits in large-caps, dealers said.

The day's turnover was high with foreigners buying into risky assets as the lower interest rate regime helped maintain the bullish sentiment.

The main stock index fell 0.37 percent, or 23.30 points, to 6,226.13, slipping from its highest close since Jan. 29 hit in the previous session. The index has gained 1.32 percent in the last five sessions through Monday.

The day's turnover was 1.3 billion rupees ($9.95 million), well above this year's daily average of 968.8 million rupees.

Offshore investors were net buyers of 46.7 million rupees worth of stocks on Tuesday, but have been net sellers of 7.21 billion rupees so far this year.

Shares in Ceylon Tobacco Company PLC fell 1.54 percent to 1,083.00 rupees, while Nestle Lanka PLC fell 1.96 percent to 1,941.10 rupees.

The market gained 4.28 percent in April as some retail investors started buying risky assets across the board as the central bank kept policy rates steady at multi-year lows for the third straight month. 

($1 = 130.6100 Sri Lanka rupees) 

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

Sri Lanka shares end down 0.4-pct

May 06, 2014 (LBO) - Sri Lanka's shares end 0.37 percent lower Tuesday with index heavy stocks losing ground, brokers said.

The Colombo benchmark All Share Price Index closed 23.30 points lower at 6,226.13 down 0.37 percent. The S&P SL20 closed 17.57 points lower at 3,424.12, down 0.51 percent.

Turnover was 1.30 billion rupees, up from 1.25 billion rupees a day earlier with 76 stocks close positive against 118 negative.

Seylan Bank non-voting closed 30 cents higher at 40.30 rupees with off market transactions of 479.93 million rupees contributing 37 percent of the turnover.

Expolanka Holdings closed 10 cents lower at 10.30 rupees with an off market transaction of 172.02 million rupees contributing 13 percent of the turnover while trading heavily on the market.

All off market deals accounted for 55 percent of the daily turnover.

HVA Foods closed 10 cents higher at 10.00 rupees and Laugfs Gas closed 40 cents higher at 37.40 rupees, attracting most number of trades.

Foreign investors bought 326.32 million rupees worth shares while selling 279.65 million rupees worth shares.

Ceylon Tobacco Company closed 16.90 rupees lower at 1,083.00 rupees and Nestle Lanka closed 38.90 rupees lower at 1,941.10 rupees, contributing most to the index drop.

Cargills Ceylon closed 4.20 rupees lower at 140.80 rupees and John Keells Holdings closed 90 cents lower at 234.10 rupees.

JKH’s W0022 warrants closed 1.20 rupees lower at 64.10 rupees and its W0023 warrants closed 3.00 rupees lower at 68.90 rupees.

Commercial Bank closed 1.00 rupee lower at 126.50 rupees and LOLC closed 2.10 rupees higher at 80.00 rupees.

Dialog Axiata closed 10 cents higher at 9.50 rupees and Sri Lanka Telecom closed 30 cents higher at 48.00 rupees.

Colombo Dockyard closed 6.70 rupees higher at 196.70 rupees.

Historic Sri Lanka listed oil palm firms to go private after interventionist rule

May 06, 2014 (LBO) - Sri Lanka listed palm oil plantations in East Asia that date back to the British Colonial period are on track to be de-listed following an interventionist rule requiring a minimum 'public float'.

Shalimar (Malay), Selinsing, Good Hope and Indo Malay, were companies set up in then Ceylon to raise capital to start plantations in Malaysia at a time when plantations stock was traded in Colombo and it was a fledgling financial centre in Asia.

The firms are part of Sri Lanka's Carson Cumberbatch group, itself a British Colonial-era firm that served the plantations sector.

Sri Lanka introduced a 25 percent minimum public float rule for main board companies in last December.

The oil palm firms have been on a private path for some time.

Chairman H Selvanathan said the parent company had earlier made a voluntary offer to buy out minority shareholders and continued to pick up shares after that.

"..[T]he majority shareholder does not have any intention of diluting its holding nor does the Company intend to issue further shares in order to conform to the said Rule, and as such the Company is considering the option of de-listing from the Colombo Stock Exchange which would be done in consultation with the Regulator and required shareholder approval," he said in the annual reports of the companies.

Sri Lanka's Securities and Exchange Commission brought the rules following pressure interventionists who wanted to force companies to maintain what is called a 'minimum public float'.

Critics say the collective-punishment style rules were originally pushed by European interventionists as a solution to tackle collusive market behavior in illiquid companies, though it is not known which percentage of a company actually discourages such behavior.

Stock manipulations usually happen during credit bubbles, when low interest rates persist and worsen when rates are kept down through state interventions.

There is also quicker price discovery in liquid shares.

Regulators around the world have picked various percentages ranging from 10 to 25 percent as the so-called minimum public float, where non public shareholders are the key promoters of a firm.

Further underlining the subjective nature of such percentages, India brought rules in 2010 where state companies have 10 percent floor, compared to 25 percent for others.

There are also quantity rules, where larger firms are allowed to have lower 'public floats'. Sri Lanka's tiny bourse has a minimum quantity rule of 5 billion rupees, about half that of the New York stock exchange.

Countries like the US and UK, also have smaller stock exchanges that firms can move to when they fall beneath the minimum public float but Sri Lanka has only one stock exchange.

It however has a lower limit of 10 percent for its second board.

The negative outcome of such rules are that well-managed firm that give steady dividends are pushed out of the market despite the availability of investors who are prepared to hold on to illiquid shares out of free choice.

Tourist arrivals up 27.6%

By Mario Andree

Ceylon FT: Tourist arrivals in the first four months of this year increased 27.6% to 534,132 up from 418,456 a year earlier as arrivals in April reached 112,631, up 39.5% from 80,737 recorded in 2013, data released by the Sri Lanka Tourism Development Authority showed.

After successfully surpassing last year’s 1.2 million tourist arrivals goal, thanks to a data revision, the government and the hospitality industry hopes to welcome more than 1.5 million this year.

Aiming at increasing the country’s GDP to US$ 100 billion with a per capita income of US$ 4,000, the government hopes the income generated through the tourism industry would reach US$ 2.7 billion by 2016 with 2.5 million arrivals to the country. Last year, Sri Lanka earned 1.7 billion, up 35% from 1.3 in 2012 with more than 1.27 million arrivals.India continued to lead tourist arrivals to Sri Lanka with 71,346 arrivals recorded during the first four months of this year followed by 51,415 visitors from the United Kingdom and 41,101 from Germany.

Regionally, Western Europe lead tourist arrivals followed by South Asia and East Asia.
Overall tourist arrivals for the four months from North America increased 13.7% to 23,954 from 21,062 with arrivals in April up 25.0% to 5,514 from 33,204, while arrivals from Latin America and the Caribbean increased 38.6% to 1,390 from 1,003 with arrivals in April up 20.6% to 281 from 233.

Arrivals from Western Europe, which continues to be the largest market for Sri Lanka, increased 18.5% to 181,129 from 152,914 with arrivals in April up 47.9% to 37,369 from 25,259, while arrivals from Eastern Europe increased 51.1% to 77,265 from 51,129 with arrivals in April up 24.8% to 10,844 from 8,687.

Tourist arrivals from Africa increased 75.1% to 3,576 from 2,042 supported by a 145% growth in April to 1,083 from 442, while arrivals from the Middle East increased 16.9% to 23,692 from 20,275 with arrivals in April up 24.8% to 5,302 from 4,248.

Arrivals from East Asia, the third largest market, increased 54.7% to 91,055 from 58,870 with arrivals in April up 61.4% to 18,416 from 11,409, while arrivals from South Asia increased 20.0% to 112,232 from 93,547 with arrivals in April up 28.0% to 27,954 from 21,837.

Arrivals from Australasia increased 12.6% to 19,839 from 17,614 with arrivals in April up 39.3% to 5,868 from 4,211.

Deputy Minister of Investment Promotions Faizer Mustpha, who last week highlighted that potential investors have raised concerns over the contrivances pertaining to the three projects which were alleged to include casinos, said that the country was aiming to increase the number of hotel rooms by 35,000 by 2016 and some constructions were taking place.

Refusing to divulge any further details he said that there were several hospitality projects in the pipeline which were awaiting negotiation and approvals.
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