Sri Lankan shares post 1-yr closing high on continued foreign buying

Reuters: Sri Lankan shares rose to a one-year closing high on Friday, led by banking and diversified stocks, on continued foreign buying.

The Colombo stock index ended 0.58 percent stronger at 6,640.57, its highest close since May 2016. It added 0.5 percent for the week, its sixth straight weekly gain.

Foreign investors net bought shares worth 82.4 million rupees ($541,215), extending their year-to-date investment in equities to 16.61 billion rupees.

They bought a net 14.1 billion rupees in the last 30 sessions, and out of these, the bourse saw net foreign buying in 29.

"The market is up with continued foreign buying and active participation of local retail and high net-worth investors, which was lacking for some time," said Dimantha Mathew, head of research, First Capital Holdings PLC.



Analysts said the market would continue to be bullish amid mild profit-taking.

The IMF said on Wednesday its executive board is expected to consider a request from Sri Lanka to conclude the second review of a $1.5 billion loan, which could help the island nation to receive the third disbursement.

Shares of Commercial Bank of Ceylon Plc rose 0.3 percent, Dialog Axiata Plc climbed 1.7 percent, C T Holdings Plc gained 2.6 percent and Ceylinco Insurance Plc ended 2.19 percent firmer.

Conglomerate John Keells Holdings Plc rose 0.49 percent and Hatton National Bank Plc ended 0.48 percent firmer.

Turnover stood at 767.5 million rupees, less than this year's daily average of 899 million rupees. 

($1 = 152.2500 Sri Lankan rupees) 

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

Registration fee for private companies slashed by 73-pct

For the first time in Sri Lanka’s corporate history, heavy fees levied for registering a new Company, has been scrubbed by the government in a big way-reducing as much as by 73%.

And new companies born in Sri Lanka last year surged by 7 percent while the key state institution in charge of such new company registrations itself reporting an enormous revenue flow to it’s coffers in 2016.

““I am pleased to inform the House that as part of changes in fees, we have reduced the fee of registration of a Private Limited Company by as much as Rs 11000. In that we reduced this fee from Rs 15000.00 to 4000.00 to develop entrepreneurship in Sri Lanka. All fee changes are effective from January 1, 2017,” declared Minister of Industry and Commerce Rishad Bathiudeen on 4 May in Parliament.

Minister Bathiudeen was making a statement on the increase of Company registration fees by his Registrar of Companies (RoC) as a follow-up to the proposal made in 2016 Budget as well as reporting the performance of RoC under his Ministry to the Parliament on 4 May. The proposal made in Section 419 of 2016 Budget speech was to review fees and charges made by different government entities every three years by all the Chief Accounting Officers and Accounting Officers including Revenue Accounting Officers in public sector entities. The revision of company registration fees by RoC follows on this Budget proposal. The revised charges are effective from 1st January 2017.

“In 2016, the income of the Department of Registrar of Companies under my Ministry increased by a huge 182% to Rs 1.78 Billion from 2015’s Rs 632 million. Also 8289 new companies were registered in Sri Lanka in 2016. Registration of foreign companies in Sri Lanka also increased by 17% to 41 in 2016. Even new Registrations of Associations under Section 34 increased by 140% to 367 in 2016.”

The bulk of the new companies annually registered in Sri Lanka are such Private Limited Companies. For example, no less than 97% of 2016’s new 8289 company registrations were in this “Private Limited Company” category.

“Three types of changes are introduced by the Registrar of Companies which comes under the purview of Ministry of Industry and Commerce, in keeping with the proposal made in Sec. 419 of Budget 2016. The “three (03) changes” are the Fees for Societies, Fees Regulations to renewal and registration of Auditors and introducing a ‘new qualification’ to be registered as a Company Secretary in Sri Lanka” said Minister Bathiudeen.

Among the upward fee revisions were the fee for registration of a Public Limited Company under Form 1 increased from Rs. 15000.00 to Rs 20000.00, fee for registration of an unlimited company increased from Rs. 12500.00 to Rs 15000.00, Fee for registration of a company limited by Guarantee under Form 5 increased from Rs. 25000.00 to Rs 30000 and fee for registration of mortgages charges and debentures has been increased from Rs. 5000.00 to Rs 7500.

Speaking of revision to qualification to be a company secretary, Minister Bathiudeen stated: “The Qualifications to be registered as Company Secretaries were not amended and was not considered as a new qualification for past years. The Institute of Certified Management Accountants (CMAs) of Sri Lanka requested to consider their qualifications to be registered as “Company Secretaries” under the said Gazette Notice. Advisory commission on Company Law reviewed the said request and agreed to accept the said qualifications to be registered as Company Secretaries”.

The Amendment on Company Secretaries has been made by the Minister using Extra Ordinary Gazette Notices No. 1998/11 dated 20th December 2016 under the section 527 of the Companies Act No. 07 of 2007.”

(Media Release by Ministry of Industry & Commerce)

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Sri Lanka raises US$1.5bn for 10 years at 6.2-pct

ECONOMYNEXT - Sri Lanka has raised 1.5 billion US dollars at 6.2 percent from a 10-year sovereign bond, lower than the initial price guidance, after getting orders of more than 11 billion US dollars.

Bloomberg Newswires said US investors bought 58 percent of the issue, Europe 22 percent and Asia 20 percent.

Fund managers and asset managers bought 83 percent, banks 9 percent, insurance and pension funds 5 percent and others 3 percent.

The bond was launched Thursday with initial price guidance of 6.625 percent and narrowed to 6.25 percent later.

The unsecured bond was given an expected rating of B+ by Fitch in line with the country's credit rating.

The bond was managed by Citi, DB, HSBC, JP Morgan, Standard Chartered and China's CITIC CLSA Securities, ICBCI.