CSE announces constituent changes to S&P Sri Lanka 20 Index

Colombo Stock Exchange (CSE) yesterday announced the changes in S&P Sri Lanka 20 index constituents made by S&P Dow Jones Indices at the 2014 annual index rebalance.

Effective from the December 22, 2014 (after the market close of December 19, 2014), Asian Hotels & Properties PLC (CSE Ticker: AHPL, Bloomberg Ticker: AHPL SL), C T Holdings PLC(CSE Ticker: CTHR, Bloomberg Ticker: CTHR SL) and Hayleys PLC(CSE Ticker: HAYL, Bloomberg Ticker: HAYL SL)will be removed from the S&P Sri Lanka 20 index as they no longer qualify for index inclusion.

Replacements will be Access Engineering PLC (CSE Ticker: AEL, Bloomberg Ticker: AEL SL), People’s Leasing & Finance PLC (CSE Ticker: PLC, Bloomberg Ticker: PLC SL) and Sri Lanka Telecom PLC (CSE Ticker: SLT, Bloomberg Ticker: SLTL SL).

The index includes the largest 20 stocks, by total market capitalisation, listed on the CSE that meet minimum size, liquidity and financial viability thresholds. The constituents are weighted by float-adjusted market capitalisation, subject to a single stock cap of 15%, which is employed to reduce single stock concentration.

The S&P Sri Lanka 20 has been designed in accordance with international practices and standards. All stocks are classified according to the Global Industry Classification Standard (GICS), which was co-developed by S&P Dow Jones Indices and MCSI and is widely used by market participants throughout the world.

CSE Chief Executive Officer Rajeeva Bandaranaike said: “The S & P Sri Lanka 20 index has gained wide acceptance by all stakeholders and enhanced the visibility of the Colombo Stock Exchange. This index is particularly designed to create index tracking funds; such as index funds and Exchange Traded Funds (ETFs). The S&P Sri Lanka 20 index is a more realistic measure as it uses a public float adjusted market capitalisation, to measure the size of the company; in line with global standards. I am confident that the S&P Sri Lanka 20 will further enhance the visibility of the CSE amongst the global investor community and will be a tool to create more tradable products.”

To be eligible for inclusion, a stock must have a minimum float-adjusted market capitalisation of Rs. 500 million, a six-month average daily value traded of Rs. 1 million, have been traded at least 10 days of each month for the three months prior to the rebalancing reference date, and have positive net income over the 12 months prior to the rebalancing reference date.

For information, including the complete methodology, please visit www.spindices.com.
www.ft.lk

Sri Lankan stocks slightly weaker; turnover at over 6-month low

Dec 15 (Reuters) - Sri Lankan stocks ended weaker for a third straight session on Monday, led by market heavyweight John Keells Holdings as investors remained cautious ahead of the Jan. 8 presidential poll next month.

The main stock index ended 0.08 percent, or 6.11 points lower, at 7,230.26, its lowest close since Dec. 9.

Turnover was 340.4 million rupees ($2.6 million), according to stock exchange data, the lowest since May 26 and well below this year's daily average of 1.42 billion rupees.

Analysts and stockbrokers expect trading to be sluggish due to political uncertainty ahead of the next month presidential polls and the index to fall through December-end.

"But the downside is limited because whoever wins in the election, the market will gain because of lower interest rates," said Danushka Samarasignhe, chief operating officer at Softlogic Stockbrokers.

"The market will be lacklustre until the end of this year and we expect it to gain in the first week of January because there will be some political certainty by then."

Foreign investors bought a net 60.9 million rupees worth of shares, extending their net buying so far this year to around 22 billion rupees, exchange data showed.

Shares in Keells fell 0.43 percent to 252 rupees.

Nineteen candidates, including President Mahinda Rajapaksa and former health minister Mithripala Sirisena, the consensus candidate of a united opposition, submitted their nominations on Monday.

So far 11 loyalists from Rajapaksa's United People's Freedom Alliance, including Sirisena, have defected after he announced snap elections last month, while two opposition legislators have joined the ruling party.

Speculation over more defections also weighed on sentiment, analysts said.

($1 = 131.1000 Sri Lankan rupees) 

(Reporting by Shihar Aneez; Editing by Prateek Chatterjee)

Russian rouble crisis Tea exporters voice grave concern

By Ravi Ladduwahetty

Ceylon Finance Today: Sri Lanka's tea exporters have voiced grave concern over their tea exports to Russia and the Combined Independent States following the devaluation of the Russian currency in the aftermath of the sanctions imposed by the United States on that country.

'This is a very serious situation which has prevailed for the last one year or so and we are hopeful that the government will step to mediate in this national crisis,' Chairman of the Tea Exporters' Association of Sri Lanka, Rohan Fernando told Ceylon FT yesterday.

This is a twin issue with the Russian supermarkets not willing to pay extra for the Ceylon Tea in the wake of the devaluation and on top of that, is the falling of the world tea prices as well. In fact, the Russian importers are asking for a price reduction and deferred payments as well which has aggravated the issue, he noted.

Fernando, who is the Chairman of the Colombo Stock Exchange – listed HVA Foods PLC said that the members of the association has asked for a meeting with the Governor of the Central Bank of Sri Lanka, Ajith Nivard Cabraal and Plantation Industries Minister, Mahinda Samarasinghe hoping that the government will intervene in the situation.

He also said that one of the solutions would be for the governments of Russia and the United States to negotiate a barter agreement between Sri Lanka where Sri Lanka imports petroleum from Russia in lieu of the tea. He also proposed that Sri Lanka signs up a deal with China, which would enable Sri Lanka to be paid in Chinese Remimbi for tea exports to Russia due to the excellent diplomatic relationships between Russia and China and also due to the excellent relationships that exist between Russia, China and Sri Lanka.

He also expressed his grave concern about the future of Sri Lanka's tea exports to Syria and Iran which are also facing US sanctions, which with China account for 60% of Sri Lanka's tea exports.
www.ceylontoday.lk

Sunshine Healthcare optimistic of 20% growth

By Charumini de Silva

Ceylon Finance Today: Despite the challenging factors in the market, Sunshine Healthcare Lanka Ltd., is optimistic of achieving a 15%-20% growth by the end of the year, a senior official said.

Sunshine Healthcare Lanka Ltd., Managing Director Shyam Sathasivam told Ceylon FT that it would be positive for the business if the firm can grow at about 15% -20% despite the challenging environment; hence pushing for 15% -20% was quite possible.

"In 2015, we would be concentrating more on investing in our current product portfolio and driving volumes, while making the product available all over the country. We find that wellness is a growing market, where people chose to buy products that help them to be healthier. Therefore, in that space we have launched a few products and we will continue to invest in that sector as we look for products in that space. The wellness market overall will grow significantly, because it is marketed to the consumer and would take a different approach.

The key areas that we intend to invest more are, non-communicable diseases (NCD), which includes products for cardiovascular, diabetes, chronic kidney failure, and products on pain management, dermatology, nutraceutical and so forth," he added.

Commenting on the new drug policy, Sathasivam said there was lack of clarity in terms of the new drug regulations, and since, pharmaceuticals were a regulated market across the world as it added value to the economy. The question according to Sathasivam was how it was being regulated, what could be learnt from across the world, and what the outcome would be. He stressed that in regulating business, clarity was vital, and that the key stakeholders were engaging with the authorities towards this end.

"The sooner the authorities are going to figure out where the new regulations would take the industry, the better for the stakeholders," he noted.
www.ceylontoday.lk

Taprobane Holdings CEO's family sells shares

By J. Kurukulasuriya

Ceylon Finance Today: There were a series of dealings by directors, in the shares of their own companies, this week up to Thursday 11 December. Disclosures are required under section 200 of the Companies Act 2007.

The largest of these was on 4 December, when a close family member of CEO Ruwan Sugathadasa of Taprobane Holdings PLC, namely Anuja Sugathadasa, sold 1,300,000 shares at Rs 4.70 each.

On 5 December, S. A. B. Ekanayake, S. Sirisena and S. G. Amarasuriya who are directors of Asia Siyake Commodities PLC, sold 52,500 ordinary shares through Lanka Commodity Brokers Ltd., of which they are directors at a price of Rs 3.40 each.

On 4 December, Swisstec Ceylon PLC., Managing Director, J. A. P. M. Jayasekera purchased 10,000 ordinary shares at Rs 36.50 each.

On 9 December the directors of Shalimar (Malay) PLC., disclosed a relevant interest in the purchase of 771 shares by Goodhope Asia Holdings Ltd., at a price of Rs 1,602 each.
www.ceylontoday.lk

12 % interest offer to senior citizens with restrictions

The recent budget offer of 12 per cent interest on deposits held by senior citizens, aged 60 years and over, in state banks is being restricted to a cap of Rs.1 million and strictly one account per person, bankers said.

The Central Bank (CB) has directed that applicants should make a declaration that they have one account that would be entitled to this above-market interest rate to prevent senior citizens from having multiple accounts and getting 12 per cent interest on all.

Several senior citizens said that the post-budget developments were very misleading as the proposal itself implied the 12 per cent interest rate was for any eligible person and no amount was stated. “Now they are imposing a limit, which means the first announcement was misleading,” one pensioner said.

Bankers said that no clear instructions have been issued as yet except for verbal directives on the Rs.1 million cap (limit) and one account per person. They said that based on past practice, senior citizens, who have several accounts that total less than Rs. 1 million, may be able to transfer them to one existing account or open a new, single account and apply for this interest rate on the cumulative amount.

Data shows that some 750,000 senior citizens hold accounts worth Rs. 750 billion in 33 banks.
www.srilankatimes.lk

DFCC-NDB merger on hold in view of polls

The merger between the National Development Bank (NDB) and Development Finance Corporation (DFCC) Bank has been temporarily halted till the conclusion of the January 8 presidential poll due to ‘procedural’ matters relating to the gazette notification, official sources said.

The two banks are being merged under this year’s budget with the banks jointly hiring a foreign consultancy firm to recommend a proper merger structure.

A bill paving the way for the merger was passed by parliament in October this year and the Finance Ministry was expected to issue the required gazette notification within two months of the bill being approved.
www.sundaytimes.lk