Sri Lankan stocks slips from near 3-yr high on technical correction

Aug 5 (Reuters) - Sri Lankan stocks slipped on Tuesday from a near-three-year closing high in the previous session led by large-cap shares such as Ceylon Tobacco Company Plc and on technical correction in some over-valued shares, analysts said.

The main stock index ended 0.1 percent, or 6.73 points, weaker at 6,815.42, slipping from its highest close since September 20, 2011 hit on Monday. It rose 6.82 percent in July and is up 15.27 percent so far this year.

"Drop in CTC led the decline in the market. CTC's lower-than-expected results and some correction in over-valued shares brought the market down," said a stockbroker asking not to be named.

The bourse hit a near-three-year high on Monday on expectation of strong corporate earnings and interest rates falling further with continued buying by foreign investors.

Hopes of strong corporate earnings, declining interest rates and continued buying by foreign investors have helped boost interest in risky assets in the $21.97 billion-worth stock market.

Turnover was 1.57 billion rupees ($12.06 million), more than this year's daily average of about 1.09 billion rupees.

Foreign investors were net buyers of 107.1 million rupees worth of shares on Tuesday, extending the year-to-date net foreign inflow to 11.04 billion rupees.

The index has been in the overbought region since July 3, as local investors moved funds from fixed income to riskier assets because of low interest rates and foreign buying.

Losses were led by large-cap share Ceylon Tobacco Company Plc which fell 1.04 percent to 1,137.20 rupees a day after the company reported a 11 percent fall in June quarterly earnings.

Shares in Carson Cumberbatch Plc fell 1.08 percent to 460 rupees while top conglomerate John Keells Holdings Plc fell 0.04 percent to 236.90 rupees.

Shares in biggest listed lender Commercial Bank of Ceylon Plc fell 0.98 percent to 141.50 rupees.

Capital Alliance Finance Plc in a discloser to the bourse said its controlling shareholder Capital Alliance Holdings Limited divested 68.43 percent of its issued capital to Cargills Bank at prices ranging from 15.40 rupees to 15.50 rupees.

Lower interest rates have prompted local investors to buy shares and move away from unattractive fixed assets, analysts said. Yields on treasury bills edged down further by 7-10 basis points at a weekly auction on Wednesday.

The International Monetary Fund urged Sri Lanka on Wednesday to keep key interest rates on hold for the near term and said a cautious approach is warranted. ($1 = 130.1800 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil Nair)

Sri Lanka stocks close down 0.1-pct

Aug 05, 2014 (LBO) - Sri Lanka's stocks closed 0.10 percent lower with Ceylon Tobacco Company losing ground despite net foreign buying, brokers said.

The Colombo benchmark All Share Price Index closed 6.73 points lower at 6,815.42, down 0.10 percent. The S&P SL20 closed 17.30 points lower at 3,743.03, down 0.46 percent.

Turnover was 1.57 billion rupees, down from 2.29 billion rupees a day earlier with 106 stocks closed positive against 95 negative.

Capital Alliance Finance closed 30 cents higher at 15.50 rupees with three off-market transactions of 410.66 million rupees changing hands at 15.50 rupees per share contributing 26 percent of the daily turnover.

Capital Alliance Holdings has divested its 68.43 percent stake of Capital Alliance Finance to Cargills Bank at a price ranging from 15.40 rupees to 15.50 rupees per share on Tuesday, Capital Alliance Finance said in a stock exchange filing.

The aggregate value of all off-the-floor deals represented 43 percent of the turnover.

Chilaw Finance closed 1.30 rupees higher at 24.00 rupees, attracting most number of trades during the day.

Foreign investors bought 369.30 million rupees worth shares while selling 262.17 million rupees worth shares.

Ceylon Tobacco Company closed 11.90 rupees lower at 1,137.20 rupees, contributing most to the index drop.

Lion Brewery Ceylon closed 17.70 rupees lower at 608.40 rupees and Carson Cumberbatch closed 5.00 rupees lower at 460.00 rupees.

Dialog Axiata closed 10 cents lower at 10.80 rupees and Sri Lanka Telecom closed 80 cents higher at 56.70 rupees.

Sri Lanka tourist arrivals up 25-pct in July

Sri Lanka's tourist arrivals rose 25.2 percent to 133,971 in July 2014 from a year earlier.

Source:http://www.sltda.lk/statistics

HNB to acquire 51% of Prime Grameen for Rs 660M

By Mario Andree

Ceylon FT: Hatton National Bank PLC has decided to acquire 51% stake in Prime Grameen Micro Finance Limited, a subsidiary of Prime Lands, for Rs 660 million, and announced that the microfinance company proposed earlier would not take shape, subject to completion of the deal.

Hatton National Bank yesterday told the Colombo Stock Exchange that the directors of the bank agreed to acquire 51% stake in Prime Grameen Micro Finance Limited for Rs 660 million, subject to obtaining regulatory clearance, completion of a detailed due diligence and entering into a shareholder agreement setting out the rights of HNB as the major shareholder.

According to the stock exchange filing the deal is expected to be completed on or before 30 September this year.

Prime Grameen is a full-fledged finance company registered and licensed in 2000 to accept public deposits by the Central Bank of Sri Lanka, was subsequently acquired by Prime Lands, a real estate business firm.

"Over the recent past Prime Grameen has recorded growth with an annual loan growth of 24%, deposit growth of 33% and a return on equity of over 50% for the financial year 2013/14 while maintaining a high quality asset portfolio with a NPA level of below 1%," HNB said in a statement.

The Hatton National Bank told shareholders that the microfinance company announced by the bank last year would not take shape, and the bank would go ahead with its microfinance business through Prime Grameen.
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