Sri Lankan shares edge up on foreign investor buying

Reuters: Sri Lankan shares closed marginally higher on Thursday after posting a near three-week closing low in the previous session, as foreign investors bought recently battered stocks while concerns about rising interest rates continued to hurt investor sentiment.

The Colombo stock index ended up 0.09 percent at 6,127.11, after closing at its lowest since Feb. 9 on Wednesday.

Foreign investors were net buyers of 292.6 million rupees ($1.94 million) worth of shares, extending the year-to-date net foreign inflow to 892.2 million rupees worth of equities.

Turnover was 783.9 million rupees, more than this year's daily average of 666.6 million rupees.

"Market continues to move sideways but today we have seen some institutional and foreign buying," said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

Sri Lanka Telecom Plc ended 3.87 percent higher after reporting a group net profit of 289 million rupees for the December quarter, compared with a net loss of 157 million rupees a year earlier.

Trans Asia Hotels Plc jumped 8.12 percent, while Commercial Leasing & Finance Plc rose 3.45 percent.

Yields on treasury bills have risen to a more than four-year high since October, while the central bank has kept key policy rates on hold. 

($1 = 151.1000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)

Better capital allocation with integrated stock markets, Sri Lanka forum told

ECONOMYNEXT – The integration of South Asian stock markets was discussed at a forum in Sri Lanka whose regulator said more interconnected markets would ensure the region remains a growth hotspot with better allocation of capital and efficient sharing of risks.

The region should work towards developing a regulatory environment which encourages stock exchanges to embrace integration, said Thilak Karunaratne, chairman of the Securities and Exchange Commission of Sri Lanka.

“There is a need towards greater integration of markets where there are no barriers to the movement of capital and there is easy access to each other’s stock markets,” he told a forum of the South Asian Federation of Exchanges (SAFE) in Colombo.

“More recently, capital market integration has continued to accelerate, as new investing opportunities emerge,” he said.

“Unfortunately, South Asia is the most malintegrated region in the world as a result of highly restrictive national policies governing financial markets,” Karunaratne said.

Domestic markets can derive “substantial benefits” from regional integration including better allocation of capital, efficient sharing of risks, enhanced portfolio diversification and lower cost of capital, he said.

“On the other hand various barriers including regulatory, information, infrastructure and taxation pose serious challenges to integration,” Karunaratne said.

“A strong framework for prudential regulation is necessary to ensure that risks arising from integration are being assessed and managed well.

“Removal of controls on capital transactions within the region, harmonization of capital market infrastructure including regulations, taxation, accounting, trading systems and cross-listings of securities are necessary steps to move towards regional financial integration,” Karunaratne said.

Leaders from the other South Asian capital markets were united in their call at the forum for improved integration of regional markets, a statement by the Colombo Stock Exchange (CSE) said.

SAFE aims to foster collaboration and co-operation among its members in order to develop their respective capital markets.

Domestic exchanges have much to gain if they reinforce and improve effort towards integration, said Vajira Kulatilaka, Chairman of SAFE and CSE.

“The role and impact of an exchange today is well beyond what was defined at the inception of SAFE as an organization. This is even more so for emerging and developing countries, which many of us are a part of. It is therefore quite relevant that SAFE today looks at evolving as an organization,” he said.

Smaller exchanges in the region have the ability to benchmark more developed peers, while more developed ones have the privilege of shaping the future of fellow regional exchanges – a process that is brought into the table through affiliation, Kulatilaka said.

Shalini Gokhool, Manager of the Stock Exchange of Mauritius, said that since 2010 they had embarked on an internationalization strategy, trying to innovate in terms of products and getting more players to come to the market.

“Today we have created a flexible and enabling regulatory environment to list a variety of products ranging from global funds, depository receipts, and a number of specialist securities such as specialist debt securities, and exchange traded funds.”

Sri Lanka 03-month Treasury Bill yield rises to 9.38-pct at auction

ECONOMYNEXT – Sri Lankan Treasury Bill yields rose across the board at an auction Wednesday with the 03-month bill yield rising 06 basis points to 9.38 percent, the debt office of the Central Bank said.

The yield on the 06-month bill rose 08 basis points to 10.27 percent and the one-year bill yield rose 08 basis points to 10.66 percent, a statement said.

The debt office got Rs38.4 billion worth of bids and accepted bids worth Rs6.7 billion.