Sri Lankan stocks end lower on profit-taking

Dec 2 (Reuters) - Sri Lankan stocks ended weaker on Tuesday as retail investors booked profits as political uncertainty weighed ahead of the Jan.8 snap presidential polls in which President Mahinda Rajapaksa is seeking re-election for a third term.

The main stock index ended 0.62 percent or 45.10 points lower at 7,230.58, hovering near its lowest since Sept. 5, hit on Thursday.

"Clients are booking profits and trying to buy at lower levels as they were expecting a correction after the market topped the 7,000-level," said a stockbroker on condition of anonymity.

Nine loyalists from Rajapaksa's United People's Freedom Alliance, including Health Minister Mithripala Sirisena, have defected since the president announced the snap poll on Nov. 20. Sirisena is contesting against Rajapaksa as the consensus candidate of a united opposition.

Speculation that more loyalists would defect in the coming days and likely violence ahead of polling also weighed on sentiment, analysts said.

Turnover stood at 1 billion rupees ($7.63 million) on Tuesday, exchange data showed, less than this year's daily average of 1.44 billion rupees. Foreign investors bought a net 361.6 million rupees worth stocks, extending purchases during the year to 20.89 billion rupees, exchange data showed.

Shares in Nestle Lanka Plc fell 2.31 percent, leading the fall, while Good Hope Plc fell 18.51 percent. 

(1 US dollar = 131.1000 Sri Lankan rupee) 

(Reporting by Ranga Sirilal; Editing by Biju Dwarakanath)

Sri Lanka stocks close down 0.6-pct

Dec 02, 2014 (LBO) - Sri Lanka's stocks closed 0.62 percent lower with telco, beverages and oil palm stocks losing ground amid net foreign selling, brokers said.

The Colombo benchmark All Share Price Index closed 45.10 points lower at 7,230.58, down 0.62 percent.

The S&P SL20 closed 15.54 points lower at 4,025.13, down 0.38 percent.

Turnover was 1.00 billion rupees, up from 983.57 million rupees a day earlier with 72 stocks closed positive against 113 negative.

Access Engineering closed flat at 38.00 rupees with six off market transactions of 249.50 million rupees contributing 25 percent of the turnover.

The aggregate value of all off-the-floor deals represented 30 percent of the daily turnover.

Lanka Cement closed 50 cents higher at 5.00 rupees, attracting most number of trades during the day.

Foreign investors bought 444.71 million rupees worth shares while selling 919.32 million rupees worth shares.

Nestle Lanka closed 49.80 rupees lower at 2,110.00 rupees and Good Hope closed 369.90 rupees lower at 1,629.00 rupees, contributing most to the index drop.

Dialog Axiata closed 30 cents lower at 12.80 rupees and Sri Lanka Telecom closed 1.20 rupees lower at 47.30 rupees.

Lanka Orix Leasing Company closed 3.50 rupees lower at 91.00 rupees.

Renuka Holdings has raised 1.03 billion rupees from a rights issue which oversubscribed on Tuesday, the company said in a stock exchange filing.

CSE’s demutualization next year: Regulator

By Anushika Kamburugamuwa

Dec 02, 2014 (LBO) – A proposal to demutualize the Colombo Stock Exchange (CSE) is ready and would be submitted to the government with the recommendation of Securities and Exchange Commission, a senior Sri Lankan regulator said today.

“Demutualization proposal is ready with the CSE and the SEC has to look at its proposal and make our recommendation to the Minister of Finance,” Nalaka Godahewa, the Chairman of Securities and Exchange Commission told LBO.

“If everything is okay Demutualization proposal will also come into play next year.”

Godahewa said the demutualization bill was ready but it had to be passed by the Parliament.

A demutualization of a stock exchange involves the conversion of an exchange from a Not-for-profit member owned organization to a For-profit shareholder owned Corporation.

The London Stock Exchange, Toronto Stock Exchange, Australian Stock Exchange and New York Stock Exchange are other stock exchanges that have already been demutualized.

“Demutualization is extremely important,"Godahewa said.

“It means taking the ownership of the Colombo Stock Exchange out of the broker community and make it a profit oriented orgernization owned by public,"

“So basically we are broad basing the ownership of the Colombo Stock Exchange,"

“People can invest in this and make money and we expect this to be more independent. That’s the global trend.”

Godahewa said independence is important to grow a business.

“When you take the direct stakeholders out of ownership it becomes more independent,"Godahewa said.

"The independence is required for the growth of the business,"

"We are little late. Other countries have already done that.”

Currently, 292 companies are listed on the CSE with a market capitalization of just over 3090.93 billion rupees up to December. There are 18 member firms that have stock brokering licenses.

Sri Lanka’s Stock Exchange launches new generation depository system

Dec 02, 2014 (LBO) – The Colombo Stock Exchange (CSE) today launched a new generation depository system with an investment of 150 million rupees for its fully owned subsidiary, the Central Depository System (Pvt.) Ltd. and an upgrade to the Automated Trading System (ATS).

“We were behind the world standards due to the 30 years of war,” Vajira Kulatilaka, Chairman of the Colombo Stock Exchange said.

“There were lot to catch up. This is one of such initiatives that we have taken so far to match and upgrade our systems to global standards.”

He was speaking at the inauguration ceremony held today at Colombo.

The new system lays the platform for future enhancements relating to post trade clearing and settlement services and moving to a Delivery Verses Payment (DVP) system of settlement and a Central Counter Party (CCP) system.

“The Securities and Exchange Commission of Sri Lanka intends to develop the CSE as one of the most technologically advanced stock exchanges in the world, comprising of proper risk management systems and an effective Central Counter Party (CCP),” Nalaka Godahewa, Chairman of Securities and Exchange Commission said.

“The upgraded CDS system will be able to offer more efficient depository services to market participants and investors and lead to broadbase the investor base and increase share ownership among the populace of Sri Lanka.”

Vehicle imports up 34%, registrations up 10%

Ceylon Finance Today: Despite a vehicle import growth of 34% during the first nine months of this year, new registrations rose 10% according to Department of Customs and the Department of Motor Traffic.

During the first three quarters of this year 314,635 vehicles were imported to Sri Lanka, up 34% compared to 234,548 imported in the same period last year.

During the period there were 269,550 new vehicle registrations, up 10% compared to 244,361 registered in the same period in 2013.

Customs data shows that there were drops in three-wheeler, goods transport, tractors and other land vehicles imports during the first nine months of this year.

However, two-wheeler imports rose 80% to 206,981 in 2014 from the 115,249 reported in 2013, followed by a 70% growth in bus imports to 1,891 in 2014 from 1,114 units in 2013.
Motor car imports rose 24% during the first nine months to 24,715 in 2014 from 19,865 in the same period last year.

Data from the Department of Motor Traffic revealed that there were drops in new registration of three wheeler, goods transport, tractors and other land vehicles during the first three quarters.

However, registration of buses increased 51% to 2031 units in the first nine months of this year from 1,341 in 2013, followed by two wheeler registrations of 160,848 in 2014, up 30% from 124,091 in 2013.

Motor car registrations during the period rose 22% to 24,982 in 2014 from 20,450 reported in the same period last year.

Sri Lanka early this year witnessed its first Lamborghini registration after the government allowed imports of super cars.
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Manipulation pushes up CSE Falls under Rs 1B mark after five weeks

By Paneetha Ameresekere

Ceylon Finance Today: The bourse made steep gains yesterday on low volumes, Colombo Stock Exchange (CSE) data showed.

Therefore, market sources attributed these pyrrhic gains to possible manipulation because certain high value stocks saw a steep increase in their share prices (SPs) on lackadaisical performances.

"The reality is that the current political uncertainty is dogging the bourse," market sources told Ceylon FT. It expects bloodshed in the run-up to the polls, they said.

Meanwhile, the benchmark ASPI increased by 1.70% to 7,275.68 points and the more sensitive S&P SL 20 Index went up by 1.75% to 4,040.67 points on a Rs 983.57 million turnover yesterday, the first time it went under the Rs 1 billion mark after a five week lapse – which was on 27 October, with a Rs 986.5 million turnover.

In related developments, the market's 4th largest capitalized stock Nestlé saw its SP gain by 2.36% to Rs 2,159.80 a share on a parlous share volume (SV) ..of 996. Nestlé's contribution to the day's turnover was a low Rs 2.2 million. In related developments, the market's 6th largest stock Carsons saw its SP gain by 2.13% to Rs 450 a share on one share. 

Carsons' contribution to the day's turnover was Rs 450. And the market's 29th largest stock Hayleys saw its SP gain by 3.66% to Rs 359.90 also on a single share. Hayleys' contribution to the day's turnover was a parsimonious Rs 359.90. These three stocks are also captured by the S&P.

Single biggest contributor to turnover was the market's 18th largest stock Access with
Rs 241.3 million, while its SP increased by 2.98% to Rs 38 a share on a 6.3 million SV.

Nevertheless, the bourse enjoyed a Rs 83.8 million net foreign inflow (NFI), taking NFIs in the year to date to Rs 20.5 billion (US$ 155.4 million). NFIs were led by Access (Rs 200.7 million).

However, according to available statistics, in the three-month period from September 2014, Rs 41,597.29 million (US$ 315.61 million) worth of foreign investments have also exited from the Treasury (T) bond and T bill market, that is, more than double the NFIs into the CSE — where, part of the investments were due to those which exited from the T bill and T bond market, being transferred to the bourse.

These foreign exits are causing pressure on the exchange rate to depreciate.
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