Forex, regulatory controls delay overseas Sri Lankan hydropower investment

ECONOMYNEXT – An investment by a Sri Lankan firm to buy a minihydro power plant in Uganda has been delayed by foreign exchange controls and approval by the overseas electricity regulator.

Sri Lanka’s Vidullanka Plc said in a stock exchange filing that there is a delay in getting approval from the Exchange Control Department of Sri Lanka’s Central Bank and the Electricity Regulatory Authority of Uganda.

Vidullanka planned to issue new shares to Timex Garments (Pvt) Ltd. in a private placement to partly fund the acquisition of the Timex Bukinda Hydro (U) Ltd.

Timex Bukinda Hydro has got all approvals except a power purchase agreement for the 6.5MW Bukinda small hydro power plant.

But Vidullanka Plc said the proceedings of the proposed private placement of shares to Timex Garments to buy Timex Bukinda Hydro (Uganda) Ltd. will be delayed since regulatory approvals were pending.

Retail investors get full allotment in Sri Lanka’s RIL Property IPO

ECONOMYNEXT – Sri Lankan retail investors who applied for up to 12,500 or 100,000 rupees worth of shares in the share issue by RIL Property Limited (RIL) have been given full allotments, a stock exchange filing said.

It said 692 retail investors had applied for a total of 1.6 million shares in the initial public offer of RIL Property, the owner and operator of commercial office space in the Sri Lankan capital Colombo.

RIL Property offered 120 million ordinary voting shares in the IPO to raise 960 million rupees, with the issue being oversubscribed on opening day itself.

NDB Capital Holdings Limited (NCAP), the cornerstone investor in the IPO, which had committed to subscribe for up to 25 million shares worth 200 million rupees, had been allotted a minimum of 15 million shares.

Applications for up to 15 million shares, for which there were 114, will also be given 100 percent of the shares applied for, the statement said.

There were two applications for over 15 million shares who would be given the minimum 15 million shares plus 23 percent of the shares applied for above the minimum.

Tougher Sri Lanka stock exchange rules on qualified audit opinions

ECONOMYNEXT – Among proposed changes to the Sri Lankan stock exchange’s listing rules are tougher disclosure requirements on qualified audit opinions in company financial statements.

The proposed changes, on which public comments are invited, cover modified audit opinion and emphasis of matter on going concern, according to the Colombo Stock Exchange.

At present CSE listing rules do not contain any rules on action to be taken by the CSE in the event the audit opinion in the annual report is found to be a “modified audit opinion” or contains an “emphasis of matter on going concern”.

A modified audit opinion in the annual report would be a non-compliance with Rule 7.5 (a) of the CSE Listing Rules.

The CSE proposes a new rule on the Independent Auditor’s Report on the audited financial statements of listed firms which contains a qualified audit opinion.

Under the new rule, the listed firm must give to the CSE for public release an ‘impact report’ containing a detailed description on the impact of the audit qualification to the financial statements.

The impact report shall at a minimum contain cumulative impact on profit or loss, net assets, total assets, turnover/total income, earnings per share and any other financial item(s) which may be impacted due to qualified audit opinion, the CSE said.

Where the listed firm is a parent entity, the audit opinion must cover the financial statements of the group.

Listed companies will also be required make an announcement to the market via the CSE on the qualified audit opinion, stating remedial action adopted or proposed to resolve the matters set out in the qualified opinion.

Sri Lanka 03-month Treasury Bill yield at 9.73-pct

ECONOMYNEXT – Yields on Sri Lankan Treasury Bills edged up at Wednesday’s auction with the 03-month bill yield up one basis point to 9.73%, the public debt department of the Central Bank said.

The 06-month bill yield rose 02 basis points to 10.79% and the 01-year bill yield went up 02 basis points to 11.11%, a statement said.

The public debt department got bids worth Rs73 billion and accepted bids worth Rs21 billion.

Sri Lankan shares rise on foreign buying; blue chips gain

Reuters: Sri Lankan shares rose on Tuesday as foreign investors bought blue chips, with the market seeing overseas fund inflows for 18 consecutive sessions.

Foreign investors net bought shares worth 172.8 million rupees on Tuesday. They have bought equities worth a net 5.4 billion rupees ($35.57 million) in 18 straight sessions, taking the year-to-date net foreign inflow into equities to 7.9 billion rupees.

The Colombo stock index ended 0.5 percent firmer at 6,382.37 after falling on Monday for the first time in 12 sessions on profit taking.

The index had climbed 7.2 percent over 11 sessions up to Wednesday. The market was closed for Sri Lanka's traditional new year holidays on Thursday and Friday.

"Foreign buying is very strong at the moment which is a very good sign. Foreigners are bullish," said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

"We expect short-term profit taking, but the market will gain after some strong inflows from sovereign bond (as it will lend support to the rupee)."

Sri Lankan authorities are in the process of raising up to $1.5 billion through sovereign bonds in the near future.

Turnover stood at 836.1 million rupees, more than this year's daily average of 775.6 million rupees.

Shares in top mobile phone operator Dialog Axiata gained 2.7 percent, while conglomerate John Keells Holdings Plc rose 1.1 percent.

($1 = 151.8000 Sri Lankan rupees) 

(Reporting by Shihar Aneez; Editing by Vyas Mohan)

Sri Lankan shares snap 11-session winning streak on profit-taking

Reuters: Sri Lankan shares fell on Monday from a five-month closing high to snap an 11-session winning streak as investors took profits in blue chips that had gained in a rally driven by foreign-buying.

The Colombo stock index ended down 0.8 percent at 6,351.26, slipping from its highest close since Nov. 15 hit in the previous session.

The index had climbed 7.2 percent over 11 gaining sessions up to Wednesday. The market was closed for Sri Lanka's traditional new year holidays on Thursday and Friday.

"It is a healthy profit-taking after the recent gains," said Hussain Gani, deputy CEO at Softlogic Stockbrokers. "We expect the market to stabilise at these level with foreign interest in select counters."

The market has seen fund inflows for 17 straight sessions through Monday, with foreign investors buying a net 5.23 billion rupees ($34.5 million) worth of equities in the period.

They net-bought shares worth 7.1 million rupees on Monday, raising the year-to-date net foreign inflow into equities to 7.71 billion rupees.

Turnover was dull on the first day of trading after the long holiday, and stood at 365.1 million rupees, less than half of this year's daily average of 774.8 million rupees.

Shares of Ceylon Tobacco Company plc lost 4.8 percent, while conglomerate John Keells Holdings Plc fell 1.3 percent. 

($1 = 151.8000 Sri Lankan rupees) 

(Reporting by Shihar Aneez; Editing by Amrutha Gayathri)

Sri Lanka stock exchange invites public comments on new rules

ECONOMYNEXT – Sri Lanka’s stock exchange has called for public comments on changes to its listing rules aimed at strengthening the enforcement action applicable for non-compliance.

The Colombo Stock Exchange said several continuous listing requirements are being revised.

These cover corporate governance, timelines for submission of interim financial statements and annual reports, submission of audited financial statements containing modified audit opinions and emphasis of matters of ongoing concern, related party transactions, and minimum public holding requirements.

“By further strengthening the enforcement action relating to Listing Rules, the CSE intends to establish a framework to monitor compliance by Listed Companies with the CSE Listing Rules, and to enhance the quality and timeliness of disclosure of information,” it said.

The CSE invited the views of the public and the stakeholders of the CSE, including listed companies, on the proposed amendments to the listing rules by 28th April 2017.