Colombo Stock Exchange Market Review – 31st Jan 2017

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Colombo Stock Exchange Trade Summary 31-Jan-2017

Colombo equities edged lower on Tuesday despite higher institutional activity. All Share index declined by 7.86 index points or 0.13% to end at 6,132.68 while 20-scrip S&P SL index shed 3.31 index points or 0.09% to close at 3,489.61.

Price depreciation in high caps namely, Carsons Cumberbatch (closed at LKR 164.10, -3.5%), Ceylon Cold Stores (closed at LKR 731.80, -1.0%) and Ceylon Tobacco (closed at LKR 812.30, -0.3%) impacted the index performance with thin volumes. Losers outweighed the gainers 69 to 47 while 93 stocks remained unchanged.

Daily market turnover reached LKR 1.6bn boosted by negotiated deals in selected high caps which accounted for 85% of the turnover. Asiri Hospital Holdings made the highest contribution of LKR 782mn underpinned by a single crossing of LKR 30.5mn shares which changed hands at LKR 25.50. Dunamis Capital (LKR 402mn), John Keells Holdings (LKR 317mn) and Commercial Bank (LKR 52mn) made notable contribution. 

Several negotiated deals were recorded in Dunamis Capital (16.1mn shares at LKR 25.00), John Keells Holdings (1.2mn shares at LKR 140.00) and Commercial Bank (0.3mn shares at LKR 145.00). 

High investor activity was seen in Teejay Lanka and stock fell to LKR 40.10 but closed at LKR 40.20. Access Engineering, John Keells Holdings and Lanka IOC were among heavily traded stocks.

Foreign investors were net sellers with a net foreign outflow of LKR 21mn. Net foreign outflow was seen in John Keells Holdings (LKR 91mn) while net foreign inflow was seen in Commercial Bank (LKR 52mn). Foreign participation for the day was LKR 66%. 

During the first month of the year, All Share index declined by 95.58 index points or 1.5% while S&P SL20 index lost 6.83 index points or 0.2%. Daily market turnover increased 50%MoM to LKR 648mn. Foreign investors were net sellers with a net foreign outflow of LKR 1.7bn. Foreign participation was 47% against 69% in December 2016. 

According to the data released by Department of Census and Statistics, the annual average inflation rate increased from 4.0% in December 2016 to 4.3% in January 2017. The year-on-year change was 5.5% in January against 4.5% recorded in December. 

Source: LSL

Sri Lankan shares fall on foreign selling amid political uncertainties

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Colombo Stock Exchange Trade Summary 31-Jan-2017

Colombo equities edged lower on Tuesday despite higher institutional activity. All Share index declined by 7.86 index points or 0.13% to end at 6,132.68 while 20-scrip S&P SL index shed 3.31 index points or 0.09% to close at 3,489.61.

Price depreciation in high caps namely, Carsons Cumberbatch (closed at LKR 164.10, -3.5%), Ceylon Cold Stores (closed at LKR 731.80, -1.0%) and Ceylon Tobacco (closed at LKR 812.30, -0.3%) impacted the index performance with thin volumes. Losers outweighed the gainers 69 to 47 while 93 stocks remained unchanged.

Daily market turnover reached LKR 1.6bn boosted by negotiated deals in selected high caps which accounted for 85% of the turnover. Asiri Hospital Holdings made the highest contribution of LKR 782mn underpinned by a single crossing of LKR 30.5mn shares which changed hands at LKR 25.50. Dunamis Capital (LKR 402mn), John Keells Holdings (LKR 317mn) and Commercial Bank (LKR 52mn) made notable contribution.

Several negotiated deals were recorded in Dunamis Capital (16.1mn shares at LKR 25.00), John Keells Holdings (1.2mn shares at LKR 140.00) and Commercial Bank (0.3mn shares at LKR 145.00).

High investor activity was seen in Teejay Lanka and stock fell to LKR 40.10 but closed at LKR 40.20. Access Engineering, John Keells Holdings and Lanka IOC were among heavily traded stocks.

Foreign investors were net sellers with a net foreign outflow of LKR 21mn. Net foreign outflow was seen in John Keells Holdings (LKR 91mn) while net foreign inflow was seen in Commercial Bank (LKR 52mn). Foreign participation for the day was LKR 66%.

During the first month of the year, All Share index declined by 95.58 index points or 1.5% while S&P SL20 index lost 6.83 index points or 0.2%. Daily market turnover increased 50%MoM to LKR 648mn. Foreign investors were net sellers with a net foreign outflow of LKR 1.7bn. Foreign participation was 47% against 69% in December 2016.

According to the data released by Department of Census and Statistics, the annual average inflation rate increased from 4.0% in December 2016 to 4.3% in January 2017. The year-on-year change was 5.5% in January against 4.5% recorded in December.
Source: LSL

Sri Lankan shares close slightly higher in dull trade

Reuters: Sri Lankan stocks ended marginally higher on Monday in lacklustre trading as bargain-hunting investors picked up battered shares, but political instability and a rise in interest rates capped gains, brokers said.

The Colombo stock index ended 0.1 percent higher at 6,140.54. It hit a near 10-month closing low on Wednesday, and lost 0.5 percent last week, its second straight weekly decline.

Biggest listed lender Commercial bank of Ceylon Plc rose 2.2 percent while Colombo Cold Stores Plc rose 1.3 percent.

"We saw some bargain-hunting, but there were no big trades," said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

Foreign investors net bought 5.95 million rupees ($39,614) worth of equities on Monday, but they have net sold 1.63 billion rupees worth shares so far this year.

Turnover stood at 179.3 million rupees, its lowest since Jan. 18.

($1 = 150.2000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal; Editing by Amrutha Gayathri)

Colombo Stock Exchange Market Review – 30th Jan 2017

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Colombo Stock Exchange Trade Summary 30-Jan-2017

Colombo equities closed mostly flat in thin trading on Monday. ASI added mere 2.84 index points (+0.1%) to close at 6,140.54 on a turnover of LKR 179mn. However, the blue-chip S&P SL 20 index gained 9.25 index points (+0.3%) to end the session at 3,492.92.

Lackluster sentiments were seen across the board with losers beating gainers 59 to 56 while 91 scripts remained unchanged. Among the blue-chips, Commercial Bank, Ceylon Cold Stores and Sri Lanka Telecom led the gainers while AIA Insurance, Hemas Holdings and Asiri Hospitals were among top losers.

Commercial Bank closed with gains subsequent to the announcement of second interim dividend of LKR 3.00 per share. Commercial Bank voting closed at LKR 145.10, +2.2% while non-voting share closed at LKR 116.90, +3.4%. Further, the positive quarterly reports in Ceylon Cold Stores (LKR 739.10, +1.3%), John Keells Hotels (LKR 11.00, +2.8%) led the shares higher amid thin volumes.

Teejay Lanka (LKR 40mn), Hemas Holdings (LKR 29mn) and Chevron Lubricants (LKR 10mn) contributed most to the turnover. The only crossing of the day was reported in Hemas Holdings which saw 0.3mn shares changing hands at LKR 102.00 per share.

Teejay Lanka continued to witness selling pressure amid the negative quarterly report and the share closed at LKR 40.90, -0.2%. Apart from Teejay Lanka, retail investor activity was mostly concentrated on Chevron Lubricants (LKR 165.40, +0.7%), John Keells Holdings (LKR 140.00) and Sampath Bank (LKR 264.50, +0.2%).

Foreign investors were net buyers with net foreign inflow of LKR 6mn. Top net inflows were seen in Seylan Bank – nonvoting (LKR 4mn), Chevron Lubricants (LKR 4mn) and Watawala Plantations (LKR 2mn) while top net outflow was seen in Teejay Lanka (LKR 9mn). Foreign participation accounted for 36% of the day’s activity.

Source: LSL

Sri Lankan shares end higher; investors pick diversified stocks

Reuters: Sri Lankan stocks ended firmer on Friday, moving further away from a near 10-month low, as investors picked up beaten down shares, including beverages and diversified counters.

Political instability and a rise in interest rates however capped gains, brokers said.

The Colombo stock index ended 0.12 percent higher at 6,137.70, further moving away from its lowest close since April 4 hit on Wednesday. The index however fell 0.52 percent on week, its second straight weekly fall.

Market heavyweight John Keells Holdings Plc rose 1.52 percent, a day after it posted a 32 percent rise in December-quarter profit.

Shares in Sri Lanka Telecom Plc rose 2.04 percent.

"There was a bit of bounceback because the market has fallen sharply and there is no specific reason as the situation has not changed for the market to move up," said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

Foreign investors net bought 7.28 million rupees (about $48,533) worth of equities on Friday, but they have net sold 1.64 billion rupees worth shares so far this year.

Turnover stood at 554.2 million rupees. 

($1 = 150.0000 Sri Lankan rupees) 

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

Colombo Stock Exchange Market Review – 27th Jan 2017

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Colombo Stock Exchange Trade Summary 27-Jan-2017

Colombo equities concluded the week on a positive note amid the investor interest in John Keells Holdings which saw a strong third quarter (+32%YoY) and declared an interim dividend of LKR 2.00 per share.

All Share index bagged 7.65 index points or 0.12% to end at 6,137.70 while 20-scrip S&P SL index bagged 11.77 index points or 0.34% to close at 3,491.16.

Along with JKH (LKR 140.00, +1.5%), price gains in Dilmah Ceylon (LKR 675.00, +10.6%), Sri Lanka Telecom (LKR 35.00, +2.0%) and Ceylon Cold Stores (LKR 730.00, +0.6%) contributed positively to the index performance.

Daily market turnover was LKR 555mn. John Keells Holdings was the top contributor to the turnover with LKR 177mn followed by Teejay Lanka (LKR 117mn), Tokyo Cement (LKR 55mn) and Commercial Bank (LKR 54mn) respectively.

Negotiated deals were recorded in Teejay Lanka (1.8mn shares at LKR 41.00), Commercial Bank (0.4mn shares ay LKR 142.00) and Adam Investments (40mn shares at LKR 1.00). Aggregate value of crossings accounted for 30% of the turnover.

Gainers offset the losers 65 to 57 while 173 remained unchanged. High investor activity was seen in Teejay Lanka as stock dipped by 2.2% to LKR 41.00 due to earnings drop of 30%YoY in latest quarter results. Further John Keells Holdings, Melstacorp and Ceylon Grain Elevators were among the heavily traded counters.

Foreign investors were net buyers with a net foreign inflow of LKR 7mn. Net foreign inflows were seen in Tokyo Cement (LKR 49mn), Teejay Lanka (LKR 27mn), Hemas Holdings (LKR 7mn) while net foreign outflow was mainly seen in Commercial Bank (LKR 52mn). Foreign participation was 60%.
Source: LSL

Teejay ends Q3 with a revenue growth of 33-pct despite challenges

Press Release: The Teejay Group which recently consolidated its operations in Sri Lanka and the region under the single brand ‘Teejay,’ announced a strong revenue growth of 33 percent over the nine months ended 31st December 2016.

The Group recorded a revenue of 16.4 Billion compared to the Rs. 12.3 Billion during the corresponding period last year and announced a 66 percent growth in dividends to shareholders.

Chairman of Teejay, Bill Lam said that this was achieved through continually operating at optimal capacity, with a full order booking during the period; and that the growth in top line was a result of additional orders being canvassed to cater to the future growth stage of the Company.

Even though there were higher sales, the Gross Profit growth was only 27% percent with Rs. 2.4 Billion compared to that of last year’s Rs. 1.9 Billion, he added.

The Chairman further said that a combination of factors had affected the Group’s gross profit, including the acceptance of extra lower margin orders in preparation for growth; price competition, early investments towards future expansion, the product mix, and the overall impact of steep short term price hikes in raw material.

The Group’s profit before tax (PBT) is reported as Rs 1.6 Billion compared to the Rs. 1.4 Billion last year, an increase of 16 percent. This result has been diligently supported by solid Cost management and control across the entire group.

Another impacting factor was taxation, as Teejay Lanka’s tax holiday ended in September 2016; while both Teejay India and Teejay Prints are subject to tax. The tax bill grew by 281 percent, going up to Rs. 150 Million from Rs. 39 Million the previous year.

Despite this situation the Group reported an absolute profit after tax (PAT) of Rs. 1.5 Billion compared to the Rs. 1.3 Billion last year; showing an increase of 9 percent during the same period.

“The Teejay Group continues to keep a sharp eye on its cash flow disciplines and has carried through a strong balance sheet from the previous quarter with a cash balance of LKR 4 Billion. The consolidated Earnings per Share for the Group recorded SL Rs. 2.10 on a year on year basis showing a growth of 3 percent, although there was a 34 percent drop in growth during the quarter under review, due to the challenges discussed above” says Lam.

The Chairman said “ The Group is embarking on its final lap of the second half, setting the foundation for its long-term growth plans. The business is watchful of future market challenges, with a close eye on price fluctuations in the market and increasing changes in the product mix. Despite these short-term impacts which have been somewhat overcome now, our aspirations remain ambitious and aggressive, as we continue to explore new ways of further extending our footprint.”

On a quarterly basis the Group reported a revenue growth of 6.3 Billion compared to the Rs. 5.6 Billion recorded last quarter, showing a growth of 14 percent. However, Gross profits dropped by 15 percent for the third quarter, to Rs. 832 Million.

Apart from the above, a temporary countrywide stock outage in coal was also a contributory factor, with energy costs rising due to the coal plant not being able to function at maximum capacity, during some of the period under review.

This resulted in a further deterioration of PBT for the quarter, recording a 20 percent drop in operating profits. Since the impact of GP could not be adequately mitigated by the tighter overhead controls in place, the Group reported a net profit of Rs. 473 Million compared to Rs. 672 Million, during the same quarter last year.

However, CEO of Teejay, Sriyan de Silva Wijeyeratne says that despite minor setbacks, Teejay will forge ahead with new plans for expansion and growth. “Our aggressive enhancement in Divided with this interim Rs. 1.00 per share payment, is a clear indication of our confidence in the future potential we possess. We aspire to develop a culture of Service in Manufacturing, by creating bonds that matter.

We are already investing further in automation and technology, and innovation is at our core. We are preparing to embrace the future dynamics and trends in the textile industry, especially with the new demand for synthetics and digital prints and we are poised and ready to benefit from those changes. Our Expansion plans are moving according to plan, and the Company will benefit from added capacity in the near future.”, he stated.

“The prospects of GSP Plus in the near future would further augment the Group’s progress, as all our added capacity in India and Sri Lanka will become eligible for this benefit,” he added.

Sri Lanka's John Keells Holdings net up 32-pct

ECONOMYNEXT - Profits at Sri Lanka's John Keells Holdings rose 32 percent to 5,149 billion rupees in the December 2016 quarter from a year earlier, the firm said with bunkering sales growing.

The group reported earnings of 3.73 rupees per share for the quarter. In the nine months to December the group reported earnings of 8.24 rupees per share on total profits of 11.2 billion rupees, which grew 18 percent.

Profits at transportation almost doubled to 817 million rupees from 418 million helped by bunkering and container transhipment.

Tourism sector profits rose slightly from 1,088 million to 1,197 million. Occupancy was up in both Maldives and Sri Lanka, Chairman Susantha Ratnayake told shareholders.

Profits from property fell to 190 million from 541 million.

Profits from consumer foods rose to 908 million from 759, profits in financial services rose to 1,143 million from 972 million and information technology from 69 million to 152 million.

There was also steep rise in 'other' sector to 1,247 million from 544 with helped by an unspecified 'adjustment' of 1,131 million.

Sri Lankan shares end higher as investors pick large caps

Reuters: Sri Lankan stocks recovered from a near-10-month low to end slightly firmer on Thursday as investors bought large-cap shares while concerns over political instability and the rally in interest rates weighed on market sentiment.

The Colombo stock index ended up 0.05 percent at 6,130.05. In the previous session, it hit 6,127.08, its lowest since April 4.

Market heavyweight John Keells Holdings Plc rose 0.29 percent, before it posted a 32 percent rise in its December quarter profit to 5.1 billion rupees.

"We expect good results in December quarter, but the results are unlikely to move the market because of the uncertainty factor," said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

Yields on treasury bills rose 2-5 basis points at a weekly auction on Wednesday to a near five-month high after the central bank governor signalled reduced intervention to defend the rupee.

Rising market interest rates, which move in tandem with T-bill yields, have been a cause for concern, brokers said.

Foreign investors net bought 106.8 million rupees ($711,051.93) worth of equities on Thursday, but they have been net sellers of 1.65 billion rupees worth shares so far this year.

The day's turnover was 287.7 million rupees.

Investors are also concerned about possible political uncertainty as the main coalition partners in the government are contesting local polls separately, analysts said.

($1 = 150.2000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sherry Jacob-Phillips)

Colombo Stock Exchange Market Review – 26th Jan 2017

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Colombo Stock Exchange Trade Summary 26-Jan-2017

Colombo stock market snapped the three day losing streak on Thursday and closed in green despite thin volumes. Benchmark index edged up 2.97 index points (0.05%) to 6,130.05 while high cap constituent, S&P SL20 index gained 4.98 index points or 0.14% to close at 3,479.39.

Market breadth was neutral where out of 238 stocks, 61 advanced, 65 slipped while 112 remained unchanged. Index decline was led by telcos, Dialog Axiata (closed at LKR 10.70, -2.7%) and Sri Lanka Telecom (closed at LKR 34.30, -1.7%) along with Ceylon Guardian Investment (closed at LKR 100.40, -4.8%) and Seylan Bank (closed at LKR 96.00, -1.5%).

Daily market turnover was LKR 279mn. Negotiated deals in Watawala Plantations (2.0mn shares at LKR 23.50), Access Engineering (LKR 25.20) and Tokyo Cement (0.40mn shares at LKR 59.00) represented 39% of the turnover.

Hemas Holdings (LKR 53mn) and Watawala Plantations (LKR 50mn) contributed majority of the turnover. Further John Keells Holdings (LKR 47mn), Access Engineering (LKR 39mn) and Tokyo Cement (LKR 24mn) made notable contributions to the day’s activity.

John Keells Holdings, Watawala Plantations and Teejay Lanka were among highly traded counters. After the trading session, John Keells Holdings declared an interim dividend of LKR 2.00 per share.

Foreign investors stood on buy side with a net foreign inflow of LKR 107mn. Net foreign inflows were seen in Hemas Holdings (LKR 50mn), Access Engineering (LKR 38mn), Tokyo Cement (LKR 24mn) while net foreign outflow was mainly seen in Watawala Plantations (LKR 21mn). Foreign participation was 44%.
Source: LSL

Oxford Business Group, teams up with First Capital for Sri Lanka report

ECONOMYNEXT - Oxford Business Group, a UK based publishing firm said it had teamed up with First Capital Holdings, a Colombo-based investment bank to produce, a forthcoming country report on Sri Lanka.

First Capital Holdings will help produce the capital market chapter in The Report; Sri Lanka 2017, focussing on private equity and emerging opportunities for investors across the island.

The report will also cover macroeconomic, infrastructure, banking and sectoral developments.

Sri Lanka Tea Smallholder profits up in December quarter

ECONOMYNEXT – Sri Lanka’s Tea Smallholder Factories maintained profitability in the December 2016 quarter with net earnings of Rs26 million compared with a loss of half-a-million rupees the year before.

The company, which makes black tea from leaves bought from small farmers, returned to the black in the September 2016 quarter with a profit of Rs6.8 million compared with a loss of Rs12.8 million a year ago.

December quarter sales rose 31% to Rs587 million from the year before, a stock exchange filing said.

Tea Smallholder Factories, in which John Keells Holdings has a 37.62 percent stake, reported December quarter earnings per share of 86 cents compared with a loss of two cents the year before.

Most of the profits came from the southern Galle district where small farmers grow low grown teas followed by the hill country Nuwara Eliya district.

The other two main shareholders of the firm are Akbar Brothers Limited with 24.39 percent and Central Finance Company with 22.85 percent.

Sri Lanka 03-month Treasury Bill yield rises to 10.07-pct

ECONOMYNEXT – Three-month Sri Lankan treasury Bill yields rose 05 basis points to 9.03 percent at Wednesday’s auction from 8.98 percent last week, the central bank’s debt office said.

The 06-month bill yield rose 02 basis points to 10.07 percent from 10.05 percent last week, a statement said.

The one-year bill yield remained 10.37 percent at auction versus 10.37 percent last week

The debt office said it got bids worth Rs95 billion and accepted bids worth Rs27 billion.

Sri Lankan poultry firm December quarter net down five percent

ECONOMYNEXT - Ceylon Grain Elevators, a Sri Lankan poultry and feed milling group, said net profit for the December 2016 quarter fell nearly five percent to Rs369 million from a year ago.

The firm, part of Singapore’s Prima group, said in a stock exchange filing that December 2016 quarter sales fell three percent to Rs3.7 billion.

Finance costs fell 35% and the firm also benefitted from a sharply lower tax charge, accoding to interim results filed with the stock exchange.

A note accompanying the accounts said the company had to grapple with higher cost of raw materials but that its bottom line was strengthened by lower finance expenses through effective cash flow management.

Earnings per share for the quarter were Rs6.15 compared with Rs6.47 a year ago.

In the year to December 31, 2016, Ceylon Grain Elevators reported EPS of Rs21.45 against EPS of Rs15.72 a year ago. Net profit for 2016 was Rs1.3 billion.

Sri Lankan shares hit near 10-mth closing low; foreign selling boosts turnover

Reuters: Sri Lankan stocks fell for a third straight session on Wednesday to close at their lowest in nearly 10 months, dragged down by beverages and banking shares, as concerns over rising interest rates and ongoing political instability weighed on sentiment.

Selling by foreign investors in Nestle Lanka boosted turnover, traders said.

The Colombo stock index ended 0.12 percent lower at 6,127.08, its lowest close since April 4.

"Market is not moving up due to lack of confidence among the investors with rising interest rates," said Atchuthan Srirangan, a senior research analyst with First Capital Equities (Pvt) Ltd.

"Investors might stay away for a while till they see positive news which can move the market up."

Yields on treasury bills rose 2-5 basis points at a weekly auction on Wednesday to a near five-month high after the central bank governor signalled reduced intervention to defend the rupee.

Rising market interest rates, which move in tandem with t-bill yields, have been a cause for concern, brokers said.

Foreign investors net sold 385 million rupees ($2.56 million) worth of equities on Wednesday, extending the year to date net foreign outflow to 1.75 billion rupees worth shares.

Nestle Lanka, which accounted for around 62 percent of the day's turnover of 690 million rupees, fell 2.5 percent.

Market heavyweight John Keells Holdings slipped 0.6 percent.

Investors are also concerned about possible political uncertainty as the main coalition partners in the government are contesting local polls separately, analysts said.

($1 = 150.1500 Sri Lankan rupees) 

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

Colombo Stock Exchange Market Review – 25th Jan 2017

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Colombo Stock Exchange Trade Summary 25-Jan-2017

Colombo bourse extended losing streak for the third consecutive day led by foreign outflows. All Share index lost 7.33 index points or 0.12% to end at 6,127.08 while 20-scrip S&P SL index declined by 5.07 index points or 0.15% to close at 3,474.41.

Price depreciations in Nestle Lanka (closing at LKR 1,950.00, -2.5%), John Keells Holdings (closed at LKR 137.50, -0.6%) and Lanka Hospital (closed at LKR 62.20, -3.6%) dragged the index down.

Daily market turnover was LKR 690mn. Nestle Lanka topped the turnover list with LKR 427mn followed by Cargills (LKR 63mn), John Keells Holdings (LKR 40mn) and Central Finance (LKR 36mn) respectively. Single crossing was recorded in Cargills where 0.12mn shares change hands at LKR 200.00.

Losers outweighed the gainers 81 to 41, while 81 stocks remained unchanged. High investor activity was witnessed in John Keells Holdings, Teejay Lanka and Ceylon Grain Elevators.

Foreign investors were net sellers with a net foreign outflow of LKR 385mn. Foreign participation was 44%. Net foreign outflows were seen in Nestle Lanka (LKR 427mn), John Keells Holdings (LKR 34mn) and Teejay Lanka (LKR 7mn). Net foreign inflow was mainly seen in Cargills (LKR 62mn).

At the weekly treasury bill auction, three months treasury rate increased by 5bps to 9.03% while six month rate increased to 10.07% (+2bps). One year treasury yield remained at 10.37%. CBSL offered LKR 27.5bn worth Treasury bills and the auction was oversubscribed by 3.4 times with bids received amounting to LKR 94.7bn. It was decided to accept LKR 27.2bn worth of treasury bills.

Source: LSL

Sri Lankan shares hit near 10-mth closing low

Sri Lankan stocks closed at their lowest in nearly 10 months on Tuesday, dragged down by banking and telecom shares, as concerns over rising interest rates and ongoing political instability weighed on sentiment.

The Colombo stock index ended 0.45 percent lower at 6,134.41, its lowest close since April 4.

"Not much of activities as the current uncertainty is hurting investor sentiment despite the current (price) levels being attractive," said Reshan Kurukulasuriya, chief operating officer, Richard Pieris Securities (Pvt) Ltd.

Foreign investors net bought 8.06 million rupees (about $53,751) worth of equities on Tuesday, but they have net sold 1.37 billion rupees worth of shares so far this year.

Turnover stood at 207.5 million rupees, the highest since Jan 18.

Shares in mobile phone operator Dialog Axiata Plc fell 3.64 percent, while Ceylinco Insurance Plc lost 5 percent and market heavyweight John Keells Holdings slipped 0.86 percent.

Rising market interest rates, which move in tandem with t-bill yields, have been a cause for concern, brokers said.

Yields on treasury bills rose 1-16 basis points at a weekly auction last Wednesday to a four-month high after the central bank governor signalled reduced intervention to defend the rupee.

Investors are also concerned about possible political uncertainty as the main coalition partners in the government are contesting local polls separately, analysts said. 

($1 = 149.9500 Sri Lankan rupees) 

(Reporting by Ranga Sirilal; Editing by Biju Dwarakanath)

Sri Lankan shares end at near 2-week low

Reuters: Sri Lankan stocks closed at their lowest in nearly two weeks on Monday led by diversified shares as concerns about rising interest rates and the ongoing political stability weighed on sentiment.

The Colombo stock index ended 0.12 percent down at 6,162.05, its lowest close since Jan. 10.

The index hit a two-week high on Jan. 13 after the European Commission proposed increased market access for Sri Lanka as a reform incentive.

"The uncertainty is still there and investors are still in wait-and-see mode as they are worried over the current uncertainty and interest rate volatility," said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

Foreign investors net sold 22.3 million rupees ($148,518.15) worth of equities on Monday, extending the year-to-date net foreign outflow to 1.38 billion rupees.

Turnover stood at 661.8 million rupees.

Shares in fixed-line telephone operator Sri Lanka Telecom Plc fell 0.28 percent, while market heavyweight John Keells Holdings fell 0.92 percent.

Rising market interest rates, which move in tandem with t-bill yields, have been a cause for concern, brokers said.

Yields on treasury bills rose 1-16 basis points at a weekly auction on Wednesday to a four-month high after the central bank governor signalled reduced intervention to defend the rupee.

Investors are also concerned about possible political uncertainty as the main coalition partners in the government are contesting local polls separately, analysts said. 

($1 = 150.1500 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil Nair)

Colombo Stock Exchange Market Review – 23rd Jan 2017

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Colombo Stock Exchange Trade Summary 23-Jan-2017

Colombo bourse edged lower on week’s opening day led by foreign outflows. All Share index dipped 7.52 index points or 0.12% to end at 6,162.05 while S&P SL20 index lost 7.96 index points (-0.23%) to end at 3,500.44.

Price decline in premier blue-chip, John Keells Holdings (closed at LKR 139.50, -0.9%) along with its subsidiaries, Ceylon Cold Stores (closed at LKR 725.50, -2.1%) and Trans Asia Hotels (closed at LKR 80.00, -5.6%) adversely impacted the index performance. Losers offset the gainers 72 to 47 while 73 scripts remained unchanged.

Daily market turnover was LKR 662mn. Dialog Axiata topped the turnover with LKR 106mn followed by Melstacorp (LKR 94mn), Cargills (LKR 85mn) and John Keells Holdings (LKR 83mn) respectively.

Negotiated deals were recorded in John Keells Holdings (0.6mn shares at LKR 140.00), Access Engineering (2.9mn shares at LKR 26.50), Chevron Lubricants (LKR 0.3mn shares at LKR 165.00), Cargills (0.2mn shares at LKR 200.00) and Commercial Bank (0.2mn shares at LKR 142.00). Aggregate value of crossings accounted for 42% of the turnover.

High investor activity was seen in Teejay Lanka where stock declined to LKR 42.10 (-0.9%). John Keells Holdings, Chevron Lubricants and Cargills were among most traded stocks.

Foreign investors were net sellers with a net foreign outflow of LKR 22mn. Foreign participation for the day was 58%. Net foreign outflows were seen in John Keells Holdings (LKR 80mn), Seylan Bank (LKR 10mn), Tokyo Cement (LKR 3mn) while net foreign inflow was mainly seen in Cargills (LKR 49mn).
Source: LSL

Colombo Stock Exchange (CSE) - Institutional investors to reach the 300 mark

The number of institutional investors will reach the 300 mark this year with road shows and investor fora in the pipeline, a top official of the Colombo Stock Exchange (CSE) said last week.

Speaking on the sidelines of a workshop for journalists last week at the CSE, the official said the CSE is confident that the 300 mark can be achieved this year due to the good response received from the investor forum and road shows held last year across the country.

The CSE hold investor fora each year across selected districts to educate retail and institutional investors on the importance of investing in the CSE to create wealth and value for stakeholders.

The CSE will also open branches across the country to facilitate convenience and create an opportunity for potential investors to come into the capital market through the CSE.

The CSE opened a branch at Ambalantota last year, in its drive to create awareness among regional investors, schools and universities to broaden its outreach and expand the capital market. The CSE will set up the Multi Currency Board (MCB) during the second quarter this year to attract non residential investors to the Exchange.

Discussions are underway with Maldivian companies to list and trade in the MCB of the CSE according to CSE sources. He said the approval for the setting up of the MCB has been sought from the Central Bank and the Securities and Exchange Commission of Sri Lanka and added that the green light for the Board will be granted shortly The setting up of the MCB comes in the backdrop of the road-show held by the CSE, the Maldives Stock Exchange (MSE) with the Capital Market Development Authority of Maldives (CMDA) last year. Sources said the road-show was successful as many Maldivian companies showed interest in listing shares in the CSE.

The MCB which was initially intended to trade dollar denominated shares will trade in multiple currencies such as the Euro, Yuan, the Japanese Yen and the British Pound. There will be changes to the Automated Trading System (ATS) and foreign investors will have to comply with the listing rules set out by the CSE, sources said.

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Sri Lankan shares end higher on foreign buying

Reuters: Sri Lankan stocks closed higher on Friday led by financials, after hitting a more than one-week closing low in the previous session, on increased appetite for risky assets by foreign investors.

The Colombo stock index ended up 0.08 percent at 6,169.57, edging up from its lowest close since Jan. 10 hit on Thursday.

The index hit a two-week high on Jan.13 after the European Commission proposed increased market access for Sri Lanka as a reform incentive.

Foreign investors net bought 433.4 million rupees ($2.89 million) worth equities on Friday, the highest net inflow since Dec. 8, although they have net sold 1.35 billion rupees worth of shares so far this year.

Turnover stood at 731.3 million rupees.

Shares in biggest listed lender Commercial Bank of Ceylon Plc rose 1.50 percent, while market heavyweight John Keells Holdings rose 0.57 percent.

"We have seen a foreign inflow after a while and that boosted the turnover and the bulk of the trades were from the foreign trading. Rest of the market was silent," said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

"Because the sentiment is not that great, many investors are on a wait and see approach."

Rising market interest rates, which move in tandem with t-bill yields, have been a cause for concern, brokers said.

Yields on treasury bills rose 1-16 basis points at a weekly auction on Wednesday to a four-month high after the central bank governor signalled reduced intervention to defend the rupee currency.

Investors are also concerned about possible political uncertainty as the main coalition partners in government are contesting local polls separately, analysts said.

($1 = 149.8000 Sri Lankan rupees) 

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

Colombo Stock Exchange Market Review – 20th Jan 2017

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Colombo Stock Exchange Trade Summary 20-Jan-2017

Colombo equities snapped the four day losing streak supported by foreign inflows in the short trading session. All Share index gained 4.67 index points or 0.08% to end at 6,169.57 while high cap constituent, S&P SL20 index advanced by 15.79 index points or 0.45% to close at 3,508.40.

AIA Insurance (closed at LKR 349.00, +22.9%) spearheaded the index gains supported by the announcement of an interim dividend of LKR 48.00 per share. Along with AIA Insurance, Commercial Bank (closed at LKR 142.10, +1.5%), Hemas Holdings (closed at LKR 102.00, +2.0%) and John Keells Holdings (closed at LKR 140.80, +0.6%) contributed positively to the index performance.

Daily market turnover was LKR 731mn. Hefty crossings were seen in Chevron Lubricants and the counter was the top contributor to the turnover with LKR 497mn. 2.8mn shares of Chevron Lubricants changed hands in today’s session at LKR 165.00. Royal Ceramic (LKR 69mn), Ceylon Tobacco (LKR 51mn) and People’s Leasing & Finance (LKR 29mn) made noteworthy contribution to the turnover.

Several crossings were recorded in Royal Ceramic (0.5mn shares at LKR 125.00), People’s Leasing & Finance (1.6mn shares at LKR 17.00), Ceylon Tobacco (30,000 shares at LKR 815.00) and Hatton National Bank (0.09mn shares at LKR 228.00). Aggregate value of crossings contributed for 81% of the turnover.

Market breadth was neutral where out of 167 stocks traded, 46 advanced, 50 slipped while 71 remained unchanged. High investor activity was seen in Alumex, LOLC Finance and Teejay Lanka.

Foreign investors were net buyers with a net foreign inflow of LKR 433mn. Net foreign inflows were seen in Chevron Lubricants (LKR 371mn), Royal Ceramics (LKR 68mn), Cargills (LKR 5mn) while net foreign outflow was mainly seen in Colombo Land & Development (LKR 8mn). Foreign participation for the day was 38%.
Source:LSL

Sri Lanka Royal Ceramics invests nearly a billion rupees in expansion

ECONOMYNEXT – Sri Lankan tile and sanitary ware maker Royal Ceramics Plc (RCL) said it will invest nearly a billion rupees to upgrade one of its factories to produce bigger tiles and expand capacity.

A stock exchange filing said the board of directors had decided to proceed with the replacement of a kiln at its Eheliyagoda plant, together with the press and associated machinery and building.

The upgrade will be done at an estimated project cost of Rs978 million and be completed by June 2017, the company said.

After being commissioned, the new equipment will increase the plant’s capacity and capability of producing large format, cost-effective tiles, it said.

Sri Lanka's Hayleys commissions 10MW solar plant

ECONOMYNEXT - Sri Lanka's Hayleys Plc has commissioned a 10MegaWatt solar power plant that can generate up to 2.2 GigaWatt hours (millions of units) of energy for a year.

The plant was built by Hayleys with Winforce (Pvt) Ltd, a renewable energy firm, the statement said.

The solar farm is in Welikande in the Polonnaruwa District of North-Central Sri Lanka.

The power plant will have a 'solar tracking system' that will follow the movement of the sun, which the firm says will generate about 20 percent of energy than a plant using a 'fixed tilt' system.

"A plant of this magnitude reinstates the country's ambition of transforming itself to a green energy producer, and we at Hayleys take pride in doing our part towards this" said Hayleys Chairman Mohan Pandithage in a statement.

Sri Lanka's Hayleys Group has installed over 50 MegaWatts of wind, hydro and solar plants, the firm said.

Sri Lanka paid feed in tariffs as much as Rs25 a unit a 10 MegaWatt renewable energy plant connected to the grid without open tendering under a formula announced in 2012, which has drawn criticism for being expensive.

Sri Lanka Bairaha Farms to spend Rs239mn more on feed mill silos

ECONOMYNEXT – Sri Lankan poultry firm Bairaha Farms said it will have to spend an extra Rs239 million to complete a project to expand feed mill storage facilities.

Work on the project, originally estimated to cost Rs1.45 billion, by Fortune Agro Industries, a joint venture feed mill company, began in June 2016, it said in a stock exchange filing.

Work on the feed mill silos and installation of equipment was ongoing, it said.

An extra cost of Rs239 million needs to be incurred to complete the project, the company said.

This is to cover cost overruns on the feed mill on account of civil works, land development, additional machinery and other ancillary non-budgeted machinery and other costs of Rs114 million.

Another Rs125 million needs to be spent on account of silos for maize and soya meal storage facilities for the second stage of the project, totalling Rs239 million.

The extra cost will be met through contributions of Rs80 million each from Bairaha Farms and Farm’s Pride, a joint venture partner, and Rs79 million from Fortune Agro Industries, the joint venture feed mill company, or from Fortuna GP Farms Lanka.

Any further cost overruns or new capital expenditure will be borne by Fortune Agro Industries from internally generated funds, Bairaha Farms said.

Sri Lanka says Alibaba to invest in the country

ECONOMYNET - Sri Lanka's Finance Minister Ravi Karunanayake has invited Jack Ma, boss of Chinese internet portal Alibaba, to invest in the country, a statement said.

Alibaba had expressed his intention to invest in Sri Lanka, the finance ministry statement said, without elaborating.

Alibaba, which is a business-to-business and retail platform is the world's largest e-commerce company.

Sri Lanka sells US$458mn in fixed and floating rate bonds

ECONOMYNEXT - Sri Lanka has sold 458 million US dollars of fixed and floating rate dollar denominated bonds after calling offers to sell 225 million US dollars of bonds for settlement on January 23.

At least 233 million dollars of floating rate bonds are maturing on January 21.

The debt office sold 225 million US dollars of fixed rate bonds at an average rate of 4.2611 percent and 30 million dollars of floating rates bonds at 300 basis points above the London Interbank Offered Rate.

The 85 million dollars of floating rate bonds were sold for 335 basis points above Libor.

A 118 million dollar tranche of 3-year, 2-month bonds were sold at 375.55 basis points above Libor.

Sri Lanka bans Swarnamahal Financial Services related party transactions

ECONOMYNEXT – Sri Lanka’s markets regulator has prohibited Swarnamahal Financial Services (SFS) from related party transactions including the write-off of outstanding debt saying it was in ‘dire’ financial straits with negative net asset value of over a billion rupees.

The Securities and Exchange Commission said in a statement that SFS had “extensive” related party transactions without required checks and balances.

The firm was also guilty of “repeated non-compliance with mandatory corporate governance requirements” that affected the interests of investors negatively, it said.

SFS also had “significant issues relating to going concern status” and was unable to infuse capital despite Central Bank regulatory requirements, the SEC said.

In the interest of investors, the SEC said it banned SFS from entering into related party transactions including any write-off of outstanding or making of adjustments that will reduce the outstanding balances, except by way of recovering outstanding debt from related party transactions.

The prohibition is effective until SFS complies with corporate governance requirements of the Colombo stock exchange listing rules.

Sri Lanka Treasuries yields up at auction

ECONOMYNEXT – Yields on Sri Lankan treasury bills edged up across maturities at Wednesday’s auction, with the 06-month bill yield up 16 basis points to 10.05 percent, the debt office, a unit of the Central Bank, said.

The 03-month bill yield went up one basis point to 8.98 percent and the 01-year bill yield rose 06 basis points to 10.37 percent at the auction, a statement said.

The debt office got bids worth Rs86.7 billion and accepted bids worth Rs27.8 billion.

Colombo Stock Exchange Market Review – 19th Jan 2017

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Colombo Stock Exchange Trade Summary 19-Jan-2017

Colombo bourse extended its losing streak for the fourth straight day amid foreign outflows. All Share index concluded the day at 6,164.90, with a loss of 20.11 index points or 0.33% while S&P SL20 index edged lower by 4.66 index points or 0.13% to end at 3,492.61.

Price losses in high caps, John Keells Holdings (closed at LKR 140.00, -0.6%), Asiri Hospital Holdings (closed at LKR 26.00, -3.7%) and Sri Lanka Telecom (closed at LKR 35.40, -1.4%) drove the index to negative territory. However, gains in Dialog Axiata (closed at LKR 10.60, +1.0%) and Commercial Leasing & Finance (closed at LKR 3.30, +3.1%) helped to ease the pressure on the index.

Daily market turnover crossed LKR 1.5bn mark supported by hefty crossings in selected high caps. Aggregate value of crossings accounted for 72% of the turnover. Royal Ceramics contributed majority of the turnover with LKR 689mn underpinned by six crossings of 5.5mn shares at LKR 125.00. John Keells Holdings (LKR 458mn), Hemas Holdings (LKR 256mn) and Softlogic Holdings (LKR 26mn) made notable contributions backed by negotiated deals.

Off-the-floor dealings were recorded in John Keells Holdings (1.0mn shares at LKR 140.00), Hemas Holdings (2.5mn shares at LKR 102.00) and Softlogic Holdings (LKR 2.0mn shares at LKR 13.00).

Losers outweighed the gainers 89 to 44, while 70 stocks remained unchanged. Relatively high investor activity was seen in John Keells Holdings, Melstacorp and First Capital Holdings. On its XD date, stock of First Capital Holdings lost 9.3% of its value in thin trade to close at LKR 25.40.

According to the interim results of LB Finance, company net earnings increased by 9%YoY in 3QFY17. However, share price fell 0.7% to close at LKR 120.10.

Foreign investors stood on sell side with a net foreign outflow of LKR 156mn. Foreign investor participation for the day was 43%. Net foreign outflows were seen in John Keells Holdings (LKR 148mn), Seylan Bank (9mn), Chevron Lubricants (LKR 7mn) while net foreign inflow was mainly seen in People’s Leasing & Finance (LKR 6mn ).
Source: LSL

Sri Lankan shares hit more than 1-wk closing low

Reuters: Sri Lankan stocks hit a more than one-week closing low on Thursday, falling for a fourth straight session, as uncertainty over foreign investments and rising yields on short-term government securities hurt investor sentiment.

Block deals however boosted turnover to a three-week high.

The Colombo stock index ended down 0.33 percent at 6,164.90, its lowest close since Jan. 10.

The index hit a two-week high on Friday, after the European Commission proposed increased market access for Sri Lanka as a reform incentive.

"The market is desperate for positive news," said Hussain Gani, deputy CEO at Softlogic Stockbrokers.

Rising market interest rates, which move in tandem with t-bill yields, are also cause for concern, other stockbrokers said.

Yields on treasury bills rose 1-16 basis points at a weekly auction on Wednesday to a four-month high after the central bank governor signalled reduced intervention to defend the rupee currency.

Investors are also concerned over possible political uncertainty as the main coalition partners in government are contesting local polls separately, analysts said.

Delay in foreign investments after a debt and balance of payments crisis last year is also weighing on sentiment, they said.

Turnover stood at 1.55 billion rupees ($10.35 million) on Thursday, its highest since Dec. 29.

Foreign investors sold a net 156.3 million rupees worth of equities on Thursday, extending the year-to-date net foreign outflow to 1.79 billion rupees worth of shares.

Market heavyweight John Keells Holdings fell 0.64 percent, while top fixed line phone operator Sri Lanka Telecom lost 1.4 percent.

($1 = 149.7000 Sri Lankan rupees) 

(Reporting by Shihar Aneez; Editing by Biju Dwarakanath)

Sri Lankan shares little changed; rising rates weigh

Reuters: Sri Lankan stocks closed slightly weaker on Wednesday, falling for a third straight session, as investor sentiment took a hit on uncertainty over foreign investments and rising yields on short-term government securities.

Yields on treasury bill auctions rose 1-16 basis points at a weekly auction on Wednesday to a four-month high after the central bank governor signalled reduced intervention to defend the rupee currency.

The Colombo stock index ended down 0.02 percent at 6,185.01, stepping away from its highest close since Dec. 30, hit on Friday, when it gained after the European Commission proposed increased market access for Sri Lanka as a reform incentive.

"There is no positive news and the market is going through a stalemate situation," said Reshan Kurukulasuriya, chief operating officer, Richard Pieris Securities (Pvt) Ltd.

"The interest rates are rising and uncertainty is hurting the market."

Investors are concerned over possible political uncertainty as the main coalition partners in government are contesting local polls, likely mid-year, separately, analysts said.

They are also concerned over delays in foreign investments as the economy is still in the recovery process after facing debt and balance of payments crisis last year.

Turnover stood at 171.4 million Sri Lankan rupees ($1.14 million) on Wednesday, lowest since Dec 27.

Foreign investors sold a net 70.6 million rupees worth of equities on Wednesday extending the year-to-date net foreign outflow to 1.63 billion rupees worth of shares.

Shares in Lanka Hospitals Corporation Plc fell 3.66 percent, while Aitken Spence Hotel Holdings Plc dropped 3.04 percent and Nations Trust Bank Plc slid 2.28 percent.

($1 = 150.1000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sherry

Colombo Stock Exchange Market Review – 18th Jan 2017

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Colombo Stock Exchange Trade Summary 18-Jan-2017

Colombo bourse closed on a mixed note on Wednesday in another lackluster trading session. ASI closed at 6,185.01 slightly down by 1.51 points (-0.02%) while S&P SL 20 index closed 5.93 points (+0.3%) higher at 3,497.27.

Gains in Asiri Hospital Holdings (closed at LKR 27.00, +3.9%), Ceylon Cold Stores (closed at LKR 750.00, +1.0%) and Cargills (Ceylon) (closed at LKR 190.00, +1.1%) supported S&P SL 20 index to close higher while the drop in prices in Dialog Axiata (closed at LKR 10.50, -0.9%) and Lanka Hospital (closed at LKR 65.80, +3.7%) dragged down the broader market. Out of the 183 scripts traded today, there were 69 gainers, 46 losers while 68 remained unchanged.

Turnover hit a 3-week low of LKR 171mn. The largest contribution to the turnover came from First Capital Holdings where the counter contributed LKR 65mn (38% of the total turnover) supported by a single crossing of 2.2mn shares at LKR 28.00. Other notable contributions were made by Seylan Bank (LKR 15mn), Chevron Lubricants (LKR 13mn) and Melstacorp (LKR 11mn).

Market activity was mostly concentrated on First Capital Holdings which closed unchanged at LKR 28.00 prior to its XD date. Further retail investor activity was seen Melstacorp (LKR 65.50, +0.5%), Access Engineering (LKR 25.90, +0.8%) and Hayleys Fabric (LKR 16.50, -0.6%).

Foreign investors were net sellers with a net outflow of LKR 71mn. Top net outflows were seen in First Capital Holdings (LKR 60mn), Chevron Lubricants (LKR 9mn), Commercial Bank (LKR 4mn) while top net inflow was mainly seen in Cargills (LKR 3mn). Foreign investor activity accounted for 29% of the day’s turnover.

Meanwhile, at Treasury bill auction today, rates advanced across the board. Three month yield advanced to 8.98% (+1bps) and six month yield increased by 16bps to 10.05% while one year Treasury bill rate advanced by 6bps to 10.37%. CBSL offered LKR 28bn worth Treasury bills and the auction was oversubscribed by 3.1 times with bids received amounting to LKR 86.7bn. It was decided to accept LKR 27.8bn worth of treasury bills.
Source: LSL

Colombo Stock Exchange Market Review – 17th Jan 2017

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Colombo Stock Exchange Trade Summary 17-Jan-2017

Colombo equities extended losses on Tuesday with both indices closing in negative territory. All Share Index closed at 6,186.52 with a drop of 15.13 points (-0.2%) while S&P SL 20 index closed 17.45 points (-0.5%) lower at 3,491.34.

Index performance was affected by the drop in prices in blue-chips such as Melstacorp (LKR 65.20, -2.7%), Commercial Leasing (LKR 3.20, -5.9%) and Carsons Cumberbatch (LKR 175.00, -2.8%) amid thin volumes. Market breadth was negative with losers outweighing gainers 77 to 53.

Market turnover reached LKR 511mn supported by activities in John Keells Holdings and Seylan Bank which contributed 77% of the turnover. John Keells Holdings made the biggest contribution with LKR 299mn while Seylan Bank recorded a turnover of LKR 95mn backed by a single crossing of 1mn shares at LKR 94.00. Accordingly, negotiated deals accounted for 18% of the turnover. Further, a notable contribution came from Chevron Lubricants (LKR 29mn) while none of the other counters managed to surpass LKR 10mn in turnover.

First Capital Holdings (LKR 28.00, +1.5%), John Keells Holdings (LKR 141.00, 0%) and Lanka IOC (LKR 32.00, +1.3%) were among the mostly traded stocks in today’s session.

Foreign investors were net buyers of LKR 60mn worth of shares. Foreign participation was 43%. Top net inflows were seen John Keells Holdings (LKR 78mn), Dialog Axiata (LKR 5mn) and People’s Leasing (LKR 10mn) while top net outflow was seen in Chevron Lubricants (LKR 27mn).
Source: LSL

Sri Lankan shares end lower; heavyweights down

Reuters: Sri Lankan stocks closed lower on Tuesday for a second straight session as investor sentiment took a hit on political uncertainty and as yields on short-term bonds rose.

The Colombo stock index ended 0.24 percent weaker at 6,186.52, stepping away from its highest close since Dec. 30 hit on Friday, when it gained after the European Commission proposed increased market access for Sri Lanka as a reform incentive.

"Rising interest rates and political uncertainty are really hurting the market," said Reshan Kurukulasuriya, chief operating officer, Richard Pieris Securities (Pvt) Ltd.

"Market is stagnant with no major investment coming into the country."

Investors are concerned over possible political uncertainty as the main coalition partners in government are contesting local polls, likely mid-year, separately, analysts said.

Yields on treasury bill auctions rose 9-19 basis points at a weekly auction last week to a four-month high after the central bank governor signalled reduced intervention to defend the rupee currency.

Turnover stood at 510.7 million rupees ($3.41 million) on Tuesday, with foreign investors buying a net 60.4 million rupees worth of equities. They have net sold 1.56 billion rupees worth of shares so far this year.

Shares in Commercial Leasing and Finance Plc fell 5.88 percent, while Carson Cumberbatch Plc lost 2.78 percent and Sri Lanka Telecom Plc slipped 1.37 percent.

Shares in biggest listed lender Commercial Bank of Ceylon Plc fell 0.29 percent. 

($1 = 149.6500 Sri Lankan rupees) 

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

Sri Lankan shares end lower on rising rates

Reuters: Sri Lankan stocks closed lower on Monday as investors sold financials after rising yields in short-term government securities hit sentiment, brokers said.

The Colombo stock index ended 0.26 percent weaker at 6,201.65, slipping from its highest close since Dec. 30 hit on Friday.

Shares gained on Friday after the European Commission said that it had proposed increased market access or Generalised Scheme of Preferences Plus (GSP+) for Sri Lanka as a reform incentive.

"Positive sentiment on the GSP-plus is short-lived. The rising rates are hitting the market," said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

Yields on treasury bill auctions rose 9-19 basis points at a weekly auction last week to a four-month high, after the central bank governor signalled reduced intervention to defend the rupee currency.

The day's turnover stood at 911.9 million rupees ($6.09 million).

Foreign investors net bought 78.7 million rupees worth of equities on Monday, but they have net sold 1.62 billion rupees worth of shares so far this year.

Shares in biggest listed lender Commercial Bank of Ceylon Plc fell 1.41 percent, while Asiri Hospitals Plc fell 2.59 percent. 

($1 = 149.7500 Sri Lankan rupees) 

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

Colombo Stock Exchange Market Review – 16th Jan 2017

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Colombo Stock Exchange Trade Summary 16-Jan-2017

Colombo Bourse closed lower on Monday after consecutive days of gains despite high volumes. ASI lost 16.07 index points or 0.3% to close at 6,201.65 while S&P SL 20 index declined 15.61 index points or 0.4% to 3,508.79.

Among blue-chips, Melstacorp (closed at 67.00, -2.6%), Commercial Bank (closed at LKR 140.00, -1.4%), John Keells Holdings (closed at LKR 141.00, -0.6%) led losers while Carson Cumberbatch (closed at LKR 180.00, +3.5%) and Hemas Holdings (closed at LKR 101.00, +1.0%) managed to gain ground. Overall sentiments remained bearish with losers outweighing gainers 77 to 42 while 68 scripts remained unchanged.

Market turnover was LKR 912mn. Nearly 56% of the turnover came from Summit Finance as a result of the change in major shareholding as announced earlier. Accordingly, Sarvodya Development Finance Ltd sold aprox 17mn shares of Summit Finance in a single crossing to Prime Lands (Pvt) Ltd at LKR 30.00 per share. Apart from Summit Finance (LKR 511mn), Royal Ceramics (LKR 88mn), Commercial Bank-nonvoting (LKR 57mn) and Seylan Bank (LKR 46mn) made notable contributions to the turnover.

Negotiated deals accounted for 80% of the market activity and the crossings were seen Overseas Realty (1.9mn shares at LKR 20.00), Commercial Bank – nonvoting (0.5mn shares at LKR 113.50), Hatton National Bank – nonvoting (0.2mn shares at LKR 190.00) and Royal Ceramics (0.7mn shares at LKR 125.00).

Overseas Realty was heavily traded on its renunciation date along with National Development Bank (LKR 151.90, -0.1%) and Melstacorp.

Foreign investors were net buyers in today’s session with a net inflow of LKR 79mn. Top net inflows were seen in Royal Ceramics (LKR 88mn), Seylan Bank non-voting (LKR 7mn), Hemas Holdings (LKR 5mn) while top net outflow was recorded in John Keells Holdings (LKR 16mn). Foreign investor activity accounted for 23% of the turnover.

Source: LSL

SL Insurance will grow its footprint

By Suresh Perera

Expressing optimism of "taking off in a bigger way in 2017", Jt. Managing Director of Sri Lanka Insurance (SLI), T. M. R. Bangsa Jayah, pledged to push ahead with ambitious plans to grow the national footprint of the state-owned giant in the competitive insurance industry as a key stakeholder in the collective drive towards economic prosperity.

With 18% growth in 2015, SLI "ploughed back its profits to society" by contributing Rs. 11 billion to government coffers during that year, a feat no other institution has been able to achieve, he asserted.

"We are positive of breaking new ground through innovative concepts to grow our 22% market share in the insurance industry", he said in an interview with The Sunday Island at SLI’s Vauxhall Street head office in Colombo last week.

After the change of government, Bangsa Jayah, a retired senior police officer, was appointed in February 2015 as Jt. MD of SLI, the country’s biggest government-owned insurance company with a Life Fund of a staggering Rs. 90.5 billion.

Established in 1962 by the then Trade Minister, T. B. Illangaratne, SLI is now a major shareholder of Lanka Hospitals, Litro Gas, LG terminal, Grand Hyatt Colombo, Colombo Dockyard and Ceylon Asset Management.

Bangsa Jayah said that SLI will be celebrating its 55th anniversary on January 20 with a pirith chanting ceremony followed by an alms- giving. The President, Prime Minister and a host of Cabinet Ministers are expected to participate in the ceremony.

Describing the government’s ambitious initiative to provide free health insurance cover to the country’s 2.4 million student population as a "giant step since C. W. W. Kannangara’s historic free education policy", he noted that the novel scheme will be implemented through SLI in collaboration with the Education Ministry with Rs. 2.7 billion in Treasury funding per annum.

Asked whether students will have to pay a premium under the proposed scheme, the Jt. MD replied, "No, it’s absolutely free of charge with the Treasury absorbing the total expenditure for its implementation".

Q: Will students of private schools also be entitled to the insurance cover?

It will cover the whole student population without any discrimination. Parents of all students who attend private schools are not affluent. Sometimes it is a matter of not having a choice and they find it difficult to meet the financial commitments. Private schools will be regulated.

On the modalities of the proposed health insurance policy, he explained that each student will be entitled to a cover of Rs. 1,000 per day for hospitalization either in a government or private medical facility. They will be given an insurance identity card. In the event of the death or permanent disability of the child’s father or mother, a payment will be made to continue the student’s education.

On an average, 160,000 parents within the 25-45 age group die each year. However, no payment will be made under the insurance policy in the event of the death of a student as the objective is to protect the child.

Q: The FCID and the Bribery Commission are probing some alleged irregularities at SLI during the previous regime?

We opened all our books to them and statements are being recorded from some persons. As far as I am aware, a group of individuals is suspected of being involved. The investigation is being done in a professional manner.

Bangsa Jayah stressed that that the HR (Human Resources) structure should be developed to benefit the economy, as done in many other countries. At SLI, 80% of the employees are women. There are other institutions which have a ratio of 85% women in their workforce. Many men are content with driving a three-wheeler. As a government, there should be a cohesive plan to draw them into the mainstream to enhance productivity.

The Finance Minister is mulling the prospect of issuing a computerized ID card at the birth of a child so that the cost borne by the state at every turn can be calculated. It will be akin to a social security benefits card and whether it is free education, medical care or whatever other government service, the cost incurred per individual can then be determined, he noted.

"The idea is not to recover the dues from these citizens but to maintain a record of the cost factor borne by the state per person", he said.

Citing the example of Singapore, Bangsa Jayah said that if a citizen wanted to take up a job overseas, the total cost borne by the government on that individual since his/her birth has to be reimbursed. "We don’t take back even a rupee, and even monies earned by many of these Sri Lankans are deposited in banks in those countries".

"Without any natural resources, Singapore’s way forward was achieving a 95% success rate in education and development of human resources. With a good free education system, why cannot we reach up to this level? Sri Lankans overseas are known to be hard working. They give their best", he emphasized.

Q: Is SLI looking at opening more branches overseas?

We are focusing on Italy where there are 5,000 Sri Lankans. There is scope because insurance is very costly there and we could team up with a local (Italian) collaborator to venture into the market. We closed down our Maldives branch due to poor management and the US$ 250,000 deposit is yet to be recovered.

The Seychelles branch was also wound up because it was a white elephant. An evaluation showed that this branch had been set up in a country with an eighty thousand population and a few vehicles. In this case also, we have to recover the US$ 250,000 deposit.

SLI was in a bad way at one time due to poor management. Even houses were rented and utility bills were also paid from this account. The company was turned around thanks to the expertise of Harry Jayewardena. However, it reverted to the government on a Supreme Court order and we have achieved growth by maintaining the momentum.

Q: What is the position of Grant Hyatt Colombo in which SLI has a big stake?

This hotel project is now in its final stage of completion. It will be ready for operation by February-March 2018. The proposed super luxury complex will comprise 566 keys, including 72 service apartments on 44 floors.

Q: You said SLI maintains a 22% market share?

Yes, in the General segment we are the leaders, but on Life Insurance, one of our competitors enjoy the lion’s share. Other insurance companies share the balance 78% of the market. Foreign insurance companies are taking our money out of the country. SLI is a national asset which belongs to the people of this country. People should be conscious of this factor when they think of insurance.

Q: Is there a ceiling on repatriation of funds by these foreign insurance companies?

I am not sure.

Bangsa Jayah said that SLI signed a tripartite agreement with IBSL (Insurance Board of Sri Lanka) and FEBSL (Foreign Employment Bureau of Sri Lanka) to offer a comprehensive insurance cover to housemaids leaving for employment in Kuwait, where complaints of abuse and harassment are relatively high. On average, 1,000 to 1,200 Sri Lankan women leave to work in this country per month.

This insurance scheme launched as a pilot project in collaboration with the Triple ‘A’ rated Gulf Insurance Company (GIC) is a ‘first’ for Sri Lankan housemaids because it also covers death, permanent disability, hospitalization, repatriation, legal fees in case of a court case and the air ticket. There is no cost to the insured as the employers pay the premium and the commission is shared as management fees between SLI and SLFEB on a 50% basis, he said.

He noted that this scheme will be extended this year to cover other Gulf countries as well. It was initially set in motion in Kuwait because the incidence of abuse of housemaids is high. Some employers retain the passports of housemaids, beat and chase them out. In desperation, they seek refuse at the Sri Lankan Embassy where there were complaints that some of them were later ‘sold’.

The Jt. MD said that around 20,000 migrant workers leave for the Middle East per month. Apart from travel insurance schemes, they don’t have the benefit of a comprehensive policy, which the SLI is now offering to housemaids leaving for Kuwait.

"We should concentrate on sending trained nurses who have a ready market overseas on a starting monthly salary of Rs. 250,000. A private nurses training school will be established on 50-acre land belonging to the JEDB in Kandy. With an intake of 250-300 students, a three-year graduation program is being worked out in collaboration with King’s University of London", Bangsa Jayah noted.

Unlike countries like India, Thailand and Philippines, Sri Lanka has no graduation scheme for nurses. This is a mandatory prerequisite to send qualified nurses overseas for a higher remuneration. They should possess a certificate from a recognized international university to secure these jobs in the global market, he explained.

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Sri Lanka’s Central Bank to sell USD225mn development bonds

(LBO) – The Central Bank will issue 225 million US dollar development bonds with a tenor of 1 year, 2 years, and 3 years and 2 months to local and foreign investors.

The Debt Department said the subscription will be at a floating rate of 6 month LIBOR for USD plus a margin through competitive bidding, or at a fixed rate to be determined through competitive bidding.

Minimum investment is 10,000 US dollars with additional investments in multiples of 10,000 US dollars.

The issue will be open for subscription from 16 to 19 January and has a date of settlement of 23 January 2017.

Development bonds are to be issued by the Public Debt Department of Central Bank and exempted from income tax paid in Sri Lanka.

Selected licensed commercial banks and primary dealers are designated agents to purchase bonds while the paying agent is the Bank of Ceylon.

Foreigners, non resident or dual citizen Sri Lankans, NRFC/RFC account holders, authorized dealers in foreign exchange, primary dealers in government securities, BOI specified companies and specified insurance companies are among eligible investors.

Sri Lanka’s cabinet on Tuesday approved a proposal to borrow 1.5 billion US dollars from the issuances of development bonds this year.

Borrowings from domestic sources are estimated to be at 1,129 billion rupees and foreign sources are estimated to be 450 billion rupees.

It is expected to raise 225 billion rupees during 2017, through development bond issues within the total gross borrowing limit of 1,579 billion rupees approved by Parliament through the appropriation act 2016.

The government said these gross borrowings are to be utilized for the repayment of loans amounting to 800 billion rupees and 779 billion rupees to finance development projects and other expenses in 2017.

DCSL likely to be re-listed at CSE following '180 degree share swap'

By Hiran H.Senewiratne

Distilleries Company of Sri Lanka (DCSL) is likely to be re-listed in the Colombo Stock Exchange. It was formally a listed company. DCSL was de-listed at the CSE because Melstacorp Limited, its subsidiary, bought all its shares.

Against the backdrop of the current situation, stocks in Melstacorp, have been active in the market, market sources said.

This was Sri Lanka’s first 180 degree share swap. Melstacorp, which is a 100 percent owned subsidiary of DCSL PLC will become the holding company, while DCSL PLC will become a subsidiary of Melstacorp Limited.

Distilleries Company of Sri Lanka PLC (DCSL) announced a reorganization of the shares and stated capital of DCSL and its fully owned subsidiary Melstacorp Limited (Melstacorp) in a Colombo Stock Exchange announcement.

Under these circumstances, within a short space of time, Melstacorp stocks are in demand in the market. Melstacorp became the second highest contributor to the day's turnover of Rs 108 million with a trading of 1.6 million shares. The market recorded a turnover of Rs 520 million with two major crossings. Those were, Chevron Lubricant crossed 250,000 shares for Rs 40.3 million and Tokyo Cement 390,000 shares for Rs 23 million.

The companies that heavily contributed to the turnover were, Commercial Bank Rs 121 million, with a trading of 857,000 shares and the third highest contributor was Chevron Lubricants Lanka Plc of Rs 41.3 million for 26,000 stocks. With these market developments the All Share Price Index went up by 34 points and S and P SL-20 went up by 21 points. 17,.2 million shares changed hands in 4083 trading transitions, sources said.

The reason for the market to pick up was the European Council's decision on reinstating the GSP plus to Sri Lanka, the EU being a huge export/import market in the world, which accounts for 16.5 percent of world trade, market sources said.

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Colombo Stock Exchange Market Review – 13th Jan 2017

(Click here)

Colombo Stock Exchange Trade Summary 13-Jan-2017

Investors remained optimistic with the revised outlook by Fitch ratings and EU’s proposal to restore GSP+ status. All Share index touched 6,223 mark but closed at 6,217.72, with a gain of 33.18 index points (+0.5%). 20-scrip S&P SL index advanced by 21.33 index points or 0.61% to end at 3,524.40.

Melstacrop (closed at LKR 68.80, +5.7%) spearheaded the gains along with Sri Lanka Telecom (closed at LKR 36.50, +2.0%) and Singer Sri Lanka (closed at LKR 130.00, +4.0%).

Daily market turnover was LKR 520mn. Majority of the turnover was contributed by Commercial Bank (LKR 122mn) and Melstacrop (LKR 109mn). Chevron Lubricants (LKR 82mn) and Tokyo Cement (LKR 37mn) made noteworthy contribution underpinned by negotiated deals where 0.25mn shares of Chevron Lubricants changed hands at LKR 161.50 while 0.39mn shares of Tokyo Cement changed hands at LKR 59.00. Accordingly, negotiated deals accounted for 12% of the turnover.

Market breadth was positive where out of 203 stocks traded, 98 advanced, 31 slipped and 74 remained unchanged. High investor activity was seen in two textile manufacturers, Hayleys Fabric (LKR 17.00, +3.0%) and Teejay Lanka (LKR 44.40, +0.5%). Melstacorp, Hayleys Fibre and Overseas Realty were among heavily traded counters.

Foreign investors were net buyers with a net foreign inflow of LKR 3mn. Net foreign inflows were seen in Melstacorp (LKR 26mn), Kegalle Plantations (LKR 8mn), Commercial Bank (LKR 2mn) while net foreign outflow was mainly seen in Tokyo Cement (LKR 32mn). Foreign participation for the day was 48%.
Source: LSL

Sri Lankan shares end at 2-wk high on proposed EU trade concession

Reuters: Sri Lankan stocks ended at their highest level in two weeks on Friday, led by beverage and manufacturing shares, as sentiment improved after a European Union executive proposed that the bloc reinstates a trade concession to Sri Lanka.

The European Commission on Wednesday said in a statement that it has proposed increased market access or Generalised Scheme of Preferences Plus (GSP+) for Sri Lanka as a reform incentive. Markets were closed on Thursday on account of a religious holiday.

The Colombo stock index ended 0.54 percent firmer at 6,217.72, its highest close since Dec. 30.

"The regain of GSP plus boosted the market. Investors were positive over the news, but we wont think it will last long because of the rising market interest rates," said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

The 6-7 percent concession earlier offered by the GSP Plus had brought substantial benefits to the garment industry, Sri Lanka's second-biggest foreign exchange earner after remittances.

Sri Lanka lost the EU concession in 2010 after then-president Mahinda Rajapaksa rejected demands from the international community to address human rights abuses allegedly committed during a 2009 offensive to crush a Tamil insurgency.

The day's turnover stood at 519.9 million rupees ($3.47 million).

Foreign investors were net buyers of 2.6 million rupees worth of equities on Friday, but they have been net sellers of 1.7 billion rupees worth of shares so far this year.

Shares in Sri Lanka Telecom Plc rose 2 percent while Carson Cumberbatch Plc rose 1.8 percent. 

($1 = 149.6500 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Vyas Mohan)

Nestlé breaks ground for Rs 5 bn modern Pannala factory

Nestlé Lanka opens broke ground for its state-of-the-art factory in Pannala, Kurunegala yesterday with a total investment of more than Rs. 5 billion.

Nestlé Lanka reached another milestone by laying the foundation stone of a new manufacturing facility at its factory in Pannala, Kurunegala, as a commitment to strengthen the local dairy and coconut industries.

Through this new investment, the company plans to expand its production capacity for its popular dairy and coconut based products, providing local consumers with more goods that cater to local tastes and nutritional needs.President, Maithripala Sirisena was the chief guest.

To recognize the efforts made by Nestlé’s dairy and coconut farmers, a farmer felicitation was held in parallel to the foundation laying ceremony in the presence of over 200 Nestlé farmers.

Nestlé Lanka has made significant investments to support and develop Sri Lanka’s rural economy, especially in the dairy and coconut sectors.

As Sri Lanka’s largest private sector collector of fresh milk, collecting one third of the total commercially available fresh milk, and one of the world’s largest exporters of coconut milk powder, Nestlé supports the livelihood of close to 27,000 local farmers and their families.

Its payment to local farmers for procuring these raw materials came to Rs. 6 billion in 2016 alone.
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