Sri Lankan shares down on foreign selling; block deals boost turnover

Reuters: Sri Lankan stocks ended lower for a second straight session on Friday as foreign investors sold shares in conglomerate John Keells Holdings Plc amid uncertainty after the U.S. Federal Reserve revived expectations it may raise interest rates by year-end.

Turnover, however, was boosted to a more than two-month high due to block deals in John Keells Holdings, Commercial Bank of Ceylon Plc, Distillers Sri Lanka Plc, Hatton National Bank Plc and Vidullanka Plc.

Foreign investors were net sellers of 257.5 million rupees ($1.83 million) worth of shares on Friday, extending the year-to-date net foreign outflow to 3.7 billion rupees.

The main stock index ended down 0.4 percent or 28.07 points weaker at 7,042.06, further moving away from its highest close since Oct. 12 hit on Wednesday.

The day's turnover was 1.93 billion rupees ($13.70 million), the highest since Aug. 26 and well above this year's daily average of 1.1 billion rupees.

Shares in conglomerate John Keells Holdings Plc fell 2.51 percent while Dialog Axiata Plc fell 0.88 percent and Commercial Bank of Ceylon fell 0.38 percent, leading the fall in the overall index.

"Market came off with the foreign selling and we have seen some margin calls being the month end and Friday," said Dimantha Mathew, a research manager at First Capital Equities (Pvt) Ltd.

"The foreign selling which started off with the potential rake hike in September is continuing."

Another analyst said foreign investors may come in at low prices after the budget.

Stockbrokers also said the market is waiting for some clear direction from the government.

Prime Minister Ranil Wickremesinghe is expected to announce the country's economic policy on Nov. 5, government sources said, outlining the government's economic priorities ahead of the 2016 budget scheduled for Nov. 20.

($1 = 140.8500 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Anupama Dwivedi)

Three foreign banks to open soon

Shirajiv Sirimane in London

Two Middle East banks and an Asian Bank will be opening in Sri Lanka soon,Finance Minister Ravi Karunanayake said.

Speaking at the Invest Sri Lanka Investor Forum in London, he said that this is in addition to a Japanese bank opening their offices in Sri Lanka next year. “Together with the Prime Minister we have reactivated global investors who did not have a good relationship with Sri Lanka last year,” he said.

He said that now investor confidence is building and this proves the international investor community is behind Sri Lanka,” the Minister told investors at the forum. Commenting further he said that the government will provide all assistance for foreign investment and land ownership laws too will be relaxed depending on the size of the investment.

The Minister said that exchange regulations too will be relaxed at the next budget and exchange rules will be made something of the past.

He said that the local private sector too should get a wake up call and look at opportunities. “We will provide several incentives from the budget specially for the agriculture and logistics sector whihc we think the private sector could capitalise on”.

Tokyo Mitsubishi Bank to set up office here
The Bank of Tokyo Mitsubishi UFG Ltd (BTMU) will be opening a new representative office in Sri Lanka by end of March 2016. 

BTMU is the largest Bank in Japan established on January 1st 2006 with the merger of Bank of Tokyo Mitsubishi Ltd and UFJ Bank Ltd., It has a strong client base among leading Japanese corporates. This development facilitates investment by Japanese companies into Sri Lanka,an official said. The Bank said there are more than 100 Japanese corporates that have been investing in Sri Lanka and more investments are expected.

In the establishment of the new representative office in Colombo the Bank Tokyo Mitsubishi partnered with the Board of Investment of Sri Lanka and signed an agreement on 18.08.2014 with the BOI.

 Under this Memorandum of Understanding the Bank said that it would promote Japanese investments in Sri Lanka and foster business partnerships between Sri Lankan and Japanese entrepreneurs.

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CSE’s Zurich forum draws strong interest from Swiss based investors

The first ever capital market investor forum held in Switzerland on Wednesday proved to be an outstanding success.

Titled ‘’Invest Sri Lanka’’ and organized by the Colombo Stock Exchange (CSE) in association with the Swiss Asian Chamber of Commerce (SACC), attracted a full house for the Breakfast Meeting at The Widder Hotel in Zurich.

The event saw the participation of major institutional investors surpassing the initial expectations of attendance and the interest in Sri Lanka was evident from the lively interaction, the participants had with the Sri Lankan delegation at the Question and Answer (Q&A) session, with topics ranging from opportunities in the stock market, foreign investor participation in future infrastructure developments, the ease of investing in the Sri Lankan stock market and the future economic potential of Sri Lanka.

Finance Minister Ravi Karunanayake, in his keynote address, called on Swiss investors present on the occasion to invest in the future investment destination that is Sri Lanka.

He said that since the change of the new government in January 2015, there is a strong national oriented government in place ushering in sustainable political stability for Sri Lanka.

Now that the process of political stabilization has taken place, the government is laying emphasis on the economic stabilization of the country. He stated that they have de-politicized the running of the administration through independent commissions appointed to look after the financial system, law and order, human rights etc.

The Minister invited the participants to visit Sri Lanka and see for themselves the positive reforms that are taking place in Sri Lanka.He assured the investors that investing in Sri Lanka would bring them better returns than investing in traditional European markets.

UN’s Permanent Representative in Geneva and Ambassador Ravinatha Aryasinha welcoming the participants said Sri Lanka and Switzerland have enjoyed a long relationship between the two countries and recalled that economic ties between the two countries go as far back as 19th century.

CSE Chairman Vajira Kulatilaka spoke about the potential of the stock market and emphasised that the time to invest is now, given that the market was relatively cheaper than most markets in the region.

He also cited how the CSE has significantly outperformed most regional markets. He cited Sri Lanka’s low market cap to GDP ratio against other markets as a growth opportunity. He further stated that the low co-relation with major global indices provided an excellent diversification opportunity for global institutional investors. Kulatilaka also spoke about the future developments of the capital market in relation to strengthening and improving the regulatory framework, addressing risk management, diversification of product range, governance, improvement of market infrastructure and institutional building.

Copal Amba Country Head, Chanakya Dissanayake in his presentation emphasized that the Sri Lankan stock market carries attractive valuations versus its peers specially in the context of Sri Lanka’s growth profile and stated that 2015 political reset augurs well for a robust investment climate in 2016.

Securities and Exchange Commission Director General Vajira Wijegunawardane outlined the measures that the SEC was taking to strengthen the regulatory framework of the capital market with the objective of creating an enabling environment for issuers to raise funds and instill adequate safeguards to protect investors and maintain professionalism in the industry.

A few of the investors present shared their investment experience in Sri Lanka which they described as a rewarding experience and expressed confidence of the future growth potential. (SS)

Sri Lanka a future investment destination - Finance Minister

Finance Minister Ravi Karunanayake called on Swiss investors to invest in the future investment destination that is Sri Lanka. He said that since the change of the new government in January 2015, there is a strong national oriented government in place ushering in sustainable political stability for Sri Lanka.

Karunanayake extended this invitation addressing the first capital market investor forum held in Switzerland on Wednesday.

This forum organized by Colombo Stock Exchange (CSE) in association with the Swiss Asian Chamber of Commerce (SACC), titled ‘’Invest Sri Lanka’’ attracted a full house for the Breakfast Meeting at The Widder Hotel in Zurich. The event saw the participation of major institutional investors surpassing the initial expectations of attendance and the interest in Sri Lanka was evident from the lively interaction, the participants had with the Sri Lankan delegation at the Question and Answer (Q&A) session, with topics ranging from opportunities in the stock market, foreign investor participation in future infrastructure developments, the ease of investing in the Sri Lankan stock market and the future economic potential of Sri Lanka. The Minister invited the participants to visit Sri Lanka and see for themselves the positive reforms that are taking place in Sri Lanka. He assured the investors that investing in Sri Lanka would bring them better returns than investing in traditional European markets.

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Fitch affirms HNB Assurance and HNB General Insurance ratings

Fitch Ratings Lanka has affirmed HNB Assurance’s National Insurer Financial Strength Rating and National Long-Term rating at ‘A(lka)’.

Fitch has also affirmed its subsidiary HNB General Insurance Ltd’s National Insurer Financial Strength Rating and National Long-Term rating at ‘A(lka)’. The outlook on the ratings is stable. The ratings reflect the Sri Lanka-based insurance group’s satisfactory capitalisation in terms of regulatory solvency ratio, its prudent policy towards investment and modest market share.

The ratings also reflect synergies that HNBA enjoys from using parent Hatton National Bank’s wider branch network, HNBA’s importance to the bank in providing bancassurance products and HNB’s 60% stake in the insurance group. HNBA was established in 2001 and operated as a composite insurer until end-2014. On January 1 2015, the company transferred its non-life business to its fully owned subsidiary, HNB GI, while retaining the life business. This was done to comply with a regulatory requirement for insurers to split their life and non-life businesses by 7 February 2015.
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