Sri Lankan shares hit 1-week closing low on profit-taking

Sri Lankan shares closed at a one-week low on Wednesday, falling for a third straight session on profit-taking, as investors waited for cues on short-term interest rates from a weekly auction of government securities, stock brokers said.

The main stock index ended 0.8 percent lower, or down 58.36 points, at 7,240.39, its lowest close since Aug. 26.

"The market is very dull as local participation is very low," said Dimantha Mathew, a research manager at First Capital Equities (Pvt) Ltd.

Results of the weekly t-bill auction after markets closed showed yields of short-term government securities rose between 20 and 26 basis points, with benchmark 91-day t-bill yields hitting a more-than five-month high of 6.79 percent.

The country's central bank kept key interest rates steady at record lows on Monday, with inflation seen lower in the next few months.

Foreign investors sold a net 36 million rupees ($267,658) worth of shares on Wednesday, extending the year to date net foreign outflow to 3.48 billion rupees.

Turnover stood at 661.5 million rupees, less than this year's daily average of 1.16 billion rupees.

Shares in conglomerate John Keells Holdings fell 1.44 percent, while Ceylon Cold Stores Plc fell 5.08 percent, dragging down the overall index.

($1 = 134.5000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)

Swarnamahal to raise money to ward off negative impact

The declining global gold prices has had a severe negative impact to the bottom line of Swarnamahal Financial Services,Chairman Jeevaka Edirisinghe said.

“Though the Financial Year 2014/15 has not been a profitable year the company was able to significantly bring down the net loss of Rs. 1,245 million suffered as a result of the continued drop in Gold prices in the world market during the previous financial year 2013/14 to a net loss of Rs. 258 million as at end of 2014/15.

Given the loss in 2013/14 and 2014/15, the Company’s Net Asset position deteriorated to a negative of Rs. 1,065 million as at March 31,2015. “Taking this into consideration the Board has decided to raise capital to address the net liability position of the company.”
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Life Insurance policies to surge to Rs 50 b

Shirajiv Sirimane (shirajivs@gmail.com)

Insurance Board of Sri Lanka (IBSL) estimates that value of Lift insurance polices is likely to increase to Rs.50 billion by end of 2015. This was at Rs. 43 billion in 2014.

IBSL Director General Damayanthi Fernando speaking at the Life Insurance Month launch from September 1 to 30 organized by Insurance Association of Sri Lanka (IASL) said 92% of these are being channelled by insurance advisers. “We have also seen a sharp 11% increase of them and we estimate that currently there are over 43,000 insurance advisers.” The life insurance market is highly under-penetrated with the total life insurance premium to Gross Domestic Product ratio standing at only 0.46% in 2014. According to statistics 12.6% Sri Lankan’s are protected with life insurance. Among the working class this is at 29.6%.

“With the ever-changing socio-economic landscape and shifting demographics in our country, we encourage the industry to pursue such forward-thinking programmes which will educate and create a greater awareness about Life insurance among the general public.”

IASL President Dirk Pereira said that Life Insurance Month launch from September 1 to 30 is a joint initiative by all Insurance companies to woo more policy holders. “This is a significant initiative which brings together all life insurance companies to address a national need. The campaign will also address issues which will have a long term positive impact not only for the industry, but for the country as a whole.”

He said that they are targeting around 75, 000 new policy holders from this initiative.

IASL Marketing and Sales Forum Chairman Samitha Hemachandra said the coming together of life insurance advisors from all companies for the common cause of improving awareness in the market regarding the value of life insurance is a noteworthy development for the industry.
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