Sri Lanka shares end up; turnover surges on Textured Jersey block deal

Sri Lankan shares recovered on Friday from a 11-week low hit in the previous session led by market heavyweight John Keells Holdings while turnover hit a more-than-seven-week high due to a block deal in Textured Jersey Lanka.

Local investors were mostly on the sidelines due to political uncertainty ahead of parliamentary elections.

The main stock index ended up 0.35 percent at 7,007.05, recovering from its lowest close since April 15 hit on Thursday.

The day's turnover was 2.46 billion rupees ($18.43 million), its highest since May 14 and more than double this year's daily average of 1.08 billion rupees.

Textured Jersey Lanka accounted for over 77 percent of the day's turnover. The shares, however, ended 0.4 percent down.

John Keells Holdings gained 2.18 percent to 182.30 rupees, pushing up the overall index.

President Maithripala Sirisena dissolved parliament last week and scheduled elections for Aug. 17, in an effort to consolidate power and push through political reforms.

The market saw a net foreign outflow of 429.8 million rupees on Friday, after recording a net outflow of 4.6 billion rupees over the past 27 sessions.

However, foreign investors are net buyers of 1.34 billion rupees worth of shares so far this year. 

($1 = 133.5000 Sri Lankan rupees) 

(Reporting by Shihar Aneez; Editing by Sunil Nair)

Insurance Industry performs well in 2014

The insurance industry has recorded another successful year in 2014.

"Year 2014 was another positive year for the Sri Lankan insurance industry, which recorded growth in Gross Written Premium (GWP) of both Long Term and General Insurance business sectors along with the assets of insurance companies,"Insurance Board of Sri Lanka Director General, Damayanthi Fernando said.

The total Gross Written Premium (GWP) generated by insurance companies grew by 5.14% and total assets increased by 13.81% year on year.

The total GWP income for Long Term Insurance and General Insurance businesses in 2014 was Rs. 99,872 million compared to 2013 amounting to Rs. 94,987 million which re-ected a growth of 5.14%,the DG said.

The Long Term Insurance Business recorded premium income of Rs. 44,610 million (2013: Rs. 41,676 million) while the General Insurance Business recorded a premium income of Rs. 55,262 million during 2014 (2013: Rs. 53,311 million).

Thus, Long Term Insurance Business and General Insurance Business witnessed a growth of 7.04% and 3.66% respectively in GWP Income during 2014 when compared to 2013.

The total assets held by insurance companies amounted to Rs. 406,827 million as at December 31,2014 when compared to Rs. 357,465 million recorded as at the end of 2013, reflecting a growth of 13.81%.

The assets of Long Term Insurance Business amounted to Rs. 249,850 million (2013: Rs. 216,275 million), while the assets of General Insurance Business amounted to Rs. 163,834 million (2013: Rs. 148,410 million) indicating a growth rate of 15.52% and 10.39% respectively year on year in Government Securities.

At the end of 2014, the investment of total assets of Long Term Insurance Business in Government Debt Securities amounted to Rs. 111,600 million representing 44.67% (2013: Rs. 93,539 million; 43.25%), while such investment of the total assets of General Insurance Business amounted to Rs. 25,496 million representing 15.56% (2013: Rs. 28,163 million; 18.98%). Accordingly, the total investment of both Long Term Insurance Business and General Insurance Business in Govemment Debt Securities amounted to Rs. 137,096 million (2013: Rs. 121,702 million) as at December 31,2014.

Dispute Resolution and Investigations IBSL, under its overall objective of safeguarding the interests of policyholders, inquires into policyholders' grievances in connection with insurance claims pertaining to life and general insurance policies and matters relating to qualifications of agents.

In terms of Section 98 of the Regulation of Insurance Industry Act No. 43 of 2000, IBSL is empowered to investigate into and resolve disputes between insurers and claimants relating to the settlement of claims which are referred to IBSL by claimants. In 2014, 284 new matters were referred to the IBSL.

IBSL settled and closed a total of 230 complaints received in 2013 and 2014.

Out of the matters settled, 38 claims were honoured by insurers upon the intervention of IBSL.
www.dailynews.lk

India's CARE to buy Lanka Rating Agency

By Ishara Gamage

Ceylon Finance Today: Sri Lanka's troubled Lanka Ratings Agency Limited ('LRA') has begun negotiations for the sale of its majority stake in India's CARE Ratings, Securities and Exchange Commission of Sri Lanka (SEC) officials revealed to Ceylon FT yesterday.

"Both parties will meet our Commission hierarchies, soon. We are currently re-examining their Credit Rating Agency license," officials said.

When contacted by the Ceylon FT, LRA chairman Preethi Jayawardena said that he accepted their willingness to divest their majority stake to possible foreign parties but refused to reveal their names .

There are several interest parties, we are currently negotiating with them and a due diligence is on the cards, Jayawardena said.

Our aim was to develop a local rating agency. We recently hired two well experienced international rating experts to strengthen our analysts' team but, it is most unfortunate that the prevailing situation has arisen and that is why we have decided to sell to a foreign party, he said. According to the CARE Ratings web site, they commenced their operations in April 1993 and over nearly two decades, it has established itself as the second-largest credit rating agency in India. With the rating volume of debt as Rs. 68.08 lakh crore (as of March 31st, 2015), CARE Ratings has also emerged as the leading agency for covering many rating segments like that for banks, sub-sovereigns and IPO grading.

Lanka Ratings majority shareholding with ICON private ltd & Sampath, Commercial, NDB & HNB banks collectively had 30 % stake.

The Securities and Exchange Commission of Sri Lanka (SEC), at its meeting held on the 29th of June 2015, decided that due notice be given to members of the public that, registration of Lanka Rating Agency Limited (LRA) as a Market Intermediary under the category of 'Credit Rating Agency' lapsed on 30th June 2015.

The SEC noted that LRA has not as at date forwarded a duly completed and therefore valid application. But Lanka Ratings said that they already submitted that application.
LRA had more than 140 clients.
www.ceylontoday.lk

Lanka Rating Agency responds

With reference to the press notice regarding the lapse of the Credit Rating Agency Licence of LRA, the Board of Directors of LRA wish to inform the general public that LRA did make a valid application for the renewal of its registration as a Credit Rating Agency.

The said application was pending when the SEC decided that LRA had not made a valid application for the extension of its registration. LRA is in communication with the SEC to resolve the matter

Notwithstanding the above, LRA is concerned about the reputational loss to the company, its shareholders, its clientele and staff and hope that its discussions with the SEC will lead to a resolution of the underline issues and obtain the renewal of the licence as early as possible.

www.ft.lk

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SEC says Lanka Rating Agency’s registration lapses