Sri Lankan stocks hit near 2-wk closing high

Reuters: Sri Lankan shares touched a near two-week closing high on Tuesday, as investors picked up banking and diversified stocks, with muted trading as investors went on holiday in the Christmas week.

Investors were also waiting for direction on interest rates when the central bank unveils its monetary policy later this week, analysts said.

The Colombo Stock Index ended 0.42 percent firmer at 6,350.30, its highest since Dec. 15.

“The overall uptrend is due to some window-dressing in some of the blue chip counters,” said Dimantha Mathew, head of research at First Capital Holdings.

“Overall investor interest is very low and it’s a very weak market with most of the broker community also on holiday.”

Shares in conglomerate John Keells Holdings Plc gained 1.1 percent, while Sri Lanka Telecom Plc ended 4.1 percent higher and Hatton National Bank Plc rose 0.2 percent.

Turnover stood at 153.8 million rupees ($1.01 million), below this year’s daily average of 923.2 million rupees.

Foreign investors net sold 4.1 million rupees worth of shares on Tuesday, but they have net bought 18.4 billion rupees worth equities so far this year.

The currency and stock markets were closed on Monday for Christmas. 

($1 = 152.6000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal; Editing by Biju Dwarakanath)

Retail demand to absorb entirety of LVL Energy Fund IPO

The recently oversubscribed IPO of LVL Energy Fund Ltd. had attracted 749 retail applications.

The value of their applications is Rs. 1.36 billion whilst the IPO was worth Rs. 1.2 billion offering 120 million shares at Rs. 10 each.

The IPO had drawn three applications worth Rs. 60 million with payment made by bank guarantees.

In total the IPO drew 752 applications requesting Rs. 1.42 billion shares.

The financial advisor and manager to the IPO was Acuity Partners.

The LVL Energy Fund IPO was the biggest in four years. LEF is a subsidiary of Lanka Ventures Plc and was incorporated in 2006 for the purpose of consolidating LVEN’s energy sector investments. LEF has invested jointly with reputed project developers to develop and operate power generation projects (installed capacity of operational projects amounts to 136.6 MW). LEF will be using IPO funds to retire some debt and retire some preference shares to be invested in three new hydropower projects.

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Trading of BASEL III compliant debentures limited to qualified investors

Trading of BASEL III compliant-debt securities issued by banks will be limited to qualified investors as recommended by the Securities and Exchange Commission.

The CSE said that the SEC has approved the amendments to the Automated Trading System Rules which facilitate the trading of BASEL III-compliant debt securities issued by commercial banks and specialised banks licensed by the Central Bank.

Those specified by the SEC as qualified investors are a commercial bank, specialised bank, a mutual fund, pension fund, employee provident fund or any other similar pooled fund, a venture capital fund or company and private equity company, a finance company licensed by the Central Bank, a company licensed by the Central Bank to carry out finance leasing business, a company licensed by the Insurance Board of Sri Lanka to carry on an insurance business, a corporate (listed or unlisted) which does not fall under the above categories and is incorporated under the Companies Act, an investment trust or investment company, a non-resident institutional investor and an individual with an investment of Rs. 5 million.

As per the amended ATS rules, any trade executed on BASEL III-compliant debt securities where the buyer is not a qualified investor will be cancelled by the CSE and the buying broker firm must pay the CSE a trade cancellation administration fee of Rs. 10,000 or 0.005% of the total value of the transaction, whichever is higher, subject to a maximum of Rs. 25,000.

CSE said broker firms are required to take necessary measures to restrict investors from placing orders for BASEL III-compliant debt securities using an internet trading facility. Only qualified investors should be allowed to place orders for BASEL III-compliant debt securities through the internet trading facility.

Broker firms are required to flag ‘Qualified Investors’ in their respective Broker Back Office System and Order Management System in order to restrict the order submission to BASEL III securities “qualified investors”.

Secondary trading should also be restricted to and between qualified investors.

The amended ATS rules to facilitate trading of BASEL III-compliant debt securities are available on the CSE website www.cse.lk.
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Two big investors apply for over half of Jetwing Symphony IPO

Family-owned Jetwing Sympony Ltd. has attracted 346 applications for its Rs. 750 million IPO.

From the responses, two applications with a payment made by bank guarantee had accounted for over half of the IPO value of Rs. 451.7 million. The balance 344 applications are, at a retail level, requesting Rs. 336.4 million shares. A total of 346 applications have requested Rs. 788.2 million shares.

Jetwing Symphony is the investment arm of the Jetwing leisure and travel group. The IPO of 10% stake was based on a formal book-building process with a price band ranging from Rs. 15-18.

The IPO funds will be utilised to complete Jetwing Symphony’s projects in the pipeline and settle debt payments.

Capital Alliance Partners is the manager to the issue.
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