Sri Lankan shares snap 3-day rally; volumes thin due to holidays

(Reuters) - Sri Lankan shares ended slightly weaker on Monday, snapping a three-day winning streak, in dull trade as many investors and brokers have still not returned from their holidays, dealers said.

The index ended 0.44 percent, or 30.63 points, weaker at 6,917.51 on Monday. The market was closed on Friday for a public holiday. It has gained 2.44 percent in the past three sessions through Thursday.

"Nothing much is happening in the market. Many have either gone on leave or are on the wait and see approach," said Dimantha Mathew, research manager at First Capital Equities (Pvt) Ltd.

"We will see this trend continuing for this week and the next week with the holidays."

The day's turnover was 361.3 million rupees ($2.72 million), its lowest since March 19 and well below this year's daily average of 1.15 billion rupees.

The market will be closed on April 13 and April 14 for traditional Sinhala-Tamil new year holiday.

The main stock index had lost 6.6 percent last month, its biggest monthly drop since October 2012 as investors offloaded their holdings to settle margin trading amid concerns about political stability and a rise in interest rates.

Analysts expect trading to stay thin through mid-April ahead of New Year holiday and amid political uncertainty.

Shares in Lion Brewery Plc fell 3.70 percent, while leading fixed line telephone operator Sri Lanka Telecom Plc declined 2.08 percent. 

($1 = 132.9000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Anand Basu)

Five firms miss split deadline

By Arthur Wamanan

Five registered composite insurance companies in Sri Lanka are yet to segregate their long-term and general insurance business in line with the segregation requirement laid down in the Regulation of Insurance Industry (Amendment) Act No. 3 of 2011, despite a lapse of over a month after the stipulated deadline for companies to do so, the Insurance Board of Sri Lanka (IBSL) confirmed last week.

All insurance companies were required to segregate their long-term and general insurance arms as two different entities by February this year. However, the IBSL stated that only seven insurance companies had adhered to the requirement so far.

According to the IBSL, 29 insurance agencies have been registered in Sri Lanka as of now, out of which five companies are composite insurance companies. On January 1 this year, the IBSL granted new licenses to the seven new companies that were segregated. The companies include, AIA General Insurance Lanka Ltd., Amana Takaful Life Ltd., Asian Alliance General Insurance Ltd., Cooplife Insurance Ltd., HNB General Insurance Ltd., Janashakthi General Insurance Ltd., and Union Assurance General Ltd.

However, the segregation process of the remaining companies is being carried out without a revised deadline. Chairperson, IBSL, Indrani Sugathadasa told The Nation that a fresh deadline has not been stipulated but added that the segregation process was ongoing nevertheless. According to the IBSL, the delay in segregating is due to external factors and issues faced by the respective companies that were beyond their control.

Sugathadasa said that the IBSL was working closely with the remaining companies, namely Ceylinco Insurance PLC, LOLC Insurance Company Ltd., MBSL Insurance Company Ltd., Seemasahitha Sanasa Rakshana Samagama, and Sri Lanka Insurance Corporation Ltd.

All composite insurance companies registered in the country are required to segregate their long-term and general insurance businesses into two separate companies according to the provisions of the Regulation of Insurance Industry (Amendment) Act No. 03 of 2011. In doing so, companies will be required to comply with all relevant laws, including the requirements stated in the Companies Act No. 07 of 2007, according to rules set by the Insurance Board of Sri Lanka (IBSL).

Certain insurance companies had earlier stated that the segregation would shrink the asset base of these firms thereby discouraging firms to stay in the field. However, Sugathadasa stated all companies had agreed to segregate the businesses after deliberations and discussions with the consultancy group appointed for the process through which a set of segregation guidelines were drafted.

“The deadline for segregation was 11th February 2015. This company had during the year
under review, taken decisive steps regarding the process of segregation and we would have completed this process well before the due date had it not been for factors beyond the control of this company,” Ceylinco Insurance Plc Chairman J.G.P. Perera told shareholders at the release of the 2014 Annual Report. 

Attempts to contact LOLC and Seemasahitha Sanasa Rakshana Samagama for comments on the delay proved futile.

Despite the impending split of composite insurers into life and non-life companies, Fitch Ratings says its outlook for the insurance sector in Sri Lanka is stable This is, based on the view that most insurers will maintain stable financial fundamentals in 2015, supported by moderate sector growth. Fitch views the split of composites positively due to greater transparency and policyholder protection it will promote but recognises that some insurers may face operational uncertainties. It adds that post-split ownership structures and capital will have a bearing on the credit profiles of the individual life and non-life companies

www.nation.lk

Sri Lanka tourist arrivals up 18-pct in March 2015

COLOMBO (EconomyNext) – Sri Lanka's tourist arrivals rose 18 percent from a year earlier to 157,051 in March 2015, with Western European arrivals recovering after a lull during election in the island and China performing strongly, official data showed.

Total arrivals were up 13.6 percent from a year earlier to 478,838 in the first three months of the year.

Arrivals from China which surged in February to 27,425 during the Chinese New Year becoming the top generating market during the month, continued to grow strongly up 81 percent to 13,975.

In the first three months of 2015, Chinese arrivals were up 84 percent to 53,135 only second to India with 64,781.

Indian arrivals during March grew 16.6 percent from a year earlier to 21,838.

Growth in the Western European market which slowed to 11 percent in the peak winter season month of January amid Presidential elections in Sri Lanka recovered to grow 27.4 percent to 57,094 in March.

Arrivals from UK, traditionally Sri Lanka's second largest generating market after India, grew 36.9 percent to 16,191 in March, just ahead of China, but total arrivals during the at 44,813 placed it at third place.

German visitors rose 22.9 percent to 15,294 with the quarterly total up 17.5 percent to 38,725.

Russian arrivals fell 20.6 percent to 7,106 and visitors from Ukraine fell 54.6 percent to1,502 due to continued economic woes in the countries.

Visitors from Japan fell 10.7 percent to 3,393 and from Malaysia 23.3 percent to 1,765.