Sri Lankan shares ease; interest rate concerns weigh

Reuters: Sri Lankan shares ended slightly weaker on Tuesday, with financial and manufacturing stocks dragging down the index as investor sentiment continued to remain low on concerns about rising interest rates.

The Colombo stock index ended down 0.15 percent at 6,108.11, On Friday the bourse hit its lowest close since Feb. 9. It shed 0.6 percent last week in its second straight weekly decline.

Foreign investors were net buyers of shares worth 379.6 million rupees ($2.51 million) on Tuesday, extending the year-to-date net foreign inflow to 1.73 billion rupees worth of equities.

Turnover was 539 million rupees, less than this year's daily average of 676.9 million rupees.

"Retail and institutional segment is on silent (mode) with the high interest rates and economic uncertainty," said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

The International Monetary Fund on Tuesday urged Sri Lanka's central bank to rebuild international reserves, while maintaining exchange rate flexibility, and to be ready to tighten monetary policy if credit growth or inflation do not abate.

Shares in Ceylon Cold Stores Plc fell 2.51 percent while Commercial Leasing & Finance Plc lost 6.67 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 = 151.1500 Sri Lankan rupees) 

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

Central Finance completes Isuru Leasing amalgamation

Central Finance Company PLC said its amalgamation with Isuru Leasing Company Limited has been completed and as such the latter ceased to exist as a corporate entity with effect from February 28, 2017. 

Central Finance signed a share sale and purchase agreement to buy a majority stake in Isuru Leasing as part of the Central Bank-initiated financial sector consolidation plan during the previous government. 

Accordingly, in November 2014, Central Finance purchased a 90.1 percent stake in Isuru Leasing for a consideration of Rs.310.4 million. Isuru is a Kandy-based relatively small finance/leasing company.

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Sri Lanka Commercial Bank to raise Tier l capital with rights issue

(LBO) – Sri Lanka’s Commercial Bank has decided to raise 10 billion rupees through a rights issue of voting and non voting shares, the company said in a stock exchange filing.

Subject to stock exchange and shareholder approval, the bank is to issue 84,515,987 ordinary voting shares at 113.60 rupees each in the ratio of one share for every ten shares held.

The bank will also issue 5,811,601 ordinary non voting shares at 90.80 rupees each in the same ratio.

It is expected to raise 9.6 billion rupees through ordinary voting shares and 527 million rupees through non voting shares after making adjustment for 2 rupees scrip dividend which is yet to be approved.

AGM of the bank is scheduled to be held on 30 March 2017 and an extraordinary meeting will also be held after the AGM to obtain shareholder approval for the rights issue.

The bank said the objective of the issue is to increase the Tier l capital of the bank in order to accommodate and facilitate future business growth of the Bank.

The current stated capital of Commercial Bank of Ceylon is 25 billion rupees.