Sri Lankan shares fall for 5th session on margin calls, political woes

(Reuters) - Sri Lankan shares fell for a fifth straight session on Friday and closed at their lowest in nearly eight months as investors sold their stocks to settle margin trading ahead of quarter-end, while political worries also weighed on sentiment.

The main stock index ended 0.71 percent, or 49.31 points, weaker at 6,873.52, its lowest close since Aug. 6 and further moving away from the key psychological support level of 7,000. It has lost 6.07 percent in the past 20 sessions.

"The market fell across the board due to margin calls and month-end settlement selling pressure," said Dimantha Mathew, research manager at First Capital Equities (Pvt) Ltd.

Analysts expect the next support level at 6,800.

Shares of the country's top mobile phone operator, Dialog Axiata Plc, fell 0.92 percent, while conglomerate John Keells Holdings Plc dropped 0.69 percent.

Shares of the country's biggest listed lender, Commercial Bank of Ceylon Plc, fell 0.71 percent.

The day's turnover was 447 million rupees ($8.28 million), less than half of this year's daily average of 1.21 billion rupees.

Foreign investors sold a net 91.5 million rupees worth of shares. But they have been net buyers of 3.12 billion rupees so far this year.

Analysts said concerns that the government's decision-making process would slow down, also weighed on sentiment after President Maithripala Sirisena formed a national government incorporating the main opposition party in a bid to push through reforms and preserve political stability.

($1 = 132.9000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)

Vallibel Finance debentures oversubscribed

Vallibel Finance PLC announced yesterday that applications for the debenture issue worth Rs. 750,000,000 (7.5 million) have been oversubscribed and closed. The company is on the works to issue further debentures.

Vallibel Finance planned to raise Rs.1 Billion via the issuance of a listed debenture. The company issued 7.5 million Rated, Guaranteed (Capital and two interest installments) Subordinated, Redeemable debentures at Rs.100 each with an option to issue a further 2.5 million debentures in the event of oversubscription.

Financial advisors and managers to the issue is Acuity Partners (Private) Limited. Vallibel Finance was rebranded in 2005 after their acquisition by Vallibel Group and was backed by the prestige of their parent holding group, Vallibel Finance PLC. Vallibel Finance has followed an aggressive expansion strategy in 2011 and in time, the company was ranked amongst the top 50 most respected entities in the country by LMD in its 2014 survey. (SP)
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Govt. probing previous regime's CB investments in EPF

By Ravi Ladduwahetty

Ceylon Finance Today: The Government is currently probing the transaction of the Central Bank's investments Employees Provident Fund in the Colombo Stock Exchange.
"All these transactions are heavy probe in a true spirit of transparency and good governance and we are determined to complete the findings within these 100 days," top official and political sources told Ceylon FT yesterday.

A cloud of controversy was looming over these transactions of the previous regime which also prompted the Auditor General also to comment on these transactions.
We are committed to transparency and we have given directions to the Central bank to give the maximum returns to the EPF members, whose lifetime earnings are in the fund, the sources said.

The probe also revolves round how the EPF Funds went into the shares which were making thumping losses and at present investments were being made into shares which were prone to risks, they said, adding that the investments were continued to be made into the stock market even under the present regime as well. "There has not been any directives to us not to invest EPF Funds in the CSE, Central Bank sources said

They said that investments were being made into the Treasury Bills and Treasury Bonds as well but brokers said that they were not given clear directives on what stocks to invest the EPF funds.

However, other sources said that it was conflict of interest for the Central Bank to invest EPF funds in banking stocks when the CB was expected to regulate the banks themselves!
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