Sri Lanka car registrations up in March, Wagon-R leads

ECONOMYNEXT - Sri Lanka's vehicle purchases rose 6.5 percent in March 2018 from a year earlier, with car registration up 107 percent to 5,968 units with Suzuki Wagon-R becoming the market leader after a tax change, an analysis of vehicle registry data shows.

In March 2,380 Wagon-Rs were registered up from only 626 a year earlier, JB Securities, a Colombo-based equities brokerage said.

Indian-made Maruti vehicles were market leaders before Mercantilist crackdown on car imports after the central bank triggered a balance of payments crisis by printing money in 2015 and 2016. A recent tax change made Wagon-Rs more affordable.

"Maruti Alto recorded 17 units in the month, as a point of reference in Sep 2015 there were 7,556 units registered – another case of how government policy can tilt the playing field so precipitously," JP Securities said in a note to clients.

"Under the unit method of duty the taxes on a 660 cc hybrid engine found on most Japanese small cars is LKR 825,000, on an 800cc Alto it is LKR 1.4 million although the landed price of the former is probably 50% less."

Sri Lanka's politicians and bureaucrats, who get tax free and tax slashed cars also cracked down on three wheeler's raising taxes and squeezing credit in the wake of the money printing bout, denying mobility to lower income segments in another vicious intervention, freedom advocates say.

Three wheeler registrations were down 54 percent to 1,525 units in March 2018.

Before the crackdown by Sri Lanka's rulers, people imported between 6,000 to 10,000 three-wheeler units a months. In rural areas the three-wheeler is a the only public transport available.

They were also used by craftsmen like carpenters and masons as personal transport, and small business owners until the crackdown.

Sri Lankan shares hit 5-week closing high in thin trade

Reuters: Sri Lankan shares hit a five-week closing high in thin trade on Tuesday, rising for a fifth straight session, as many market participants stayed away due to extended holidays after the Sinhala-Tamil New Year festival over the weekend, brokers said.

The Colombo stock index ended 0.74 percent higher at 6,544.25, its highest close since March 13. The index gained 0.44 percent last week.

Shares of Distilleries Company of Sri Lanka Plc rose 10.2 percent, while Melstacorp Ltd ended 1 percent higher. Ceylinco Insurance Plc rose 5.2 percent, while fixed line telephone operator Sri Lanka Telecom Plc closed 2.2 percent firmer.

Turnover stood at 315.4 million rupees ($2.02 million), less than this year’s daily average of 1.13 billion rupees.

“Market is up on low volumes. Lack of investors in the market resulted in the low volumes, most investors are on holidays and not active still,” said Dimantha Mathew, head of research, First Capital Holdings.

The market was waiting for some political stability after President Maithripala Sirisena suspended parliament until May 8, brokers said.

Foreign investors bought shares worth a net 9.5 million rupees on Tuesday, but they have net sold 1.36 billion rupees worth of equities so far this year.

The central bank unexpectedly cut its key lending rate by 25 basis points last week, as policy makers sought to revitalise an economy growing at its weakest pace in 16 years and facing heightened political uncertainty. 

($1 = 156.2000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal; Editing by Biju Dwarakanath)