Sri Lanka bourse hits 3-wk closing low on large-cap fall; foreigners exit

COLOMBO, Feb 7 (Reuters) - Sri Lankan shares fell for a fourth straight session on Friday to end at a three-week closing low on falls in large-cap shares while foreign investors dumped risky assets as part of a selloff in emerging markets. 

The main stock index fell 0.43 percent, or 26.78 points, to 6,141.72, its lowest close since Jan. 17. 

Foreign investors sold a net 460 million rupees ($3.52 million) worth of shares on Friday, extending the foreign outflow to 3.42 billion rupees in the last two sessions. 

The bourse has seen 2.03 billion rupees of foreign outflow so far in 2014, after enjoying a net inflow of 22.88 billion last year. 

"The good news is that local funds and high net worth investors are buying. That means local confidence is building up," said a stockbroker. 

"We have to wait and see whether the foreign selling will continue." 

Shares in Nestle Lanka PLC fell 3.23 percent to 2,100 rupees, while market heavyweight Ceylon Tobacco Company PLC fell 1.00 percent to 1,252.40 rupees. 

Shares in top-listed lender Commercial Bank of Ceylon PLC fell 2.36 percent to 120.10 rupees. 

Foreign investors sold a net 166,880 shares of conglomerate John Keells Holdings PLC and 47.5 million shares in top mobile phone operator Dialog Axiata PLC, which gained 0.17 percent and 3.3 percent respectively. 

Analysts said investors have been waiting for directions from December-quarter earnings and an upcoming UNHRC session in March where Sri Lanka is facing a US-sponsored resolution for alleged human rights violations. 

Some stockbrokers said investors will shrug off political risks from renewed pressure by the United States to bring a fresh resolution against Sri Lanka at the UNHRC meeting in March, because the market had been expecting the worst. 

Stockbrokers said local investors are active in the market after interest rates on treasury bills eased to multi-year lows, making fixed-income assets unattractive. 

The index has risen 3.87 percent so far this year, following a 4.8 percent gain in 2013. It fell in the previous two years. 

The day's turnover was 1.28 billion rupees, well above last year's daily average of about 828.4 million rupees. 

($1 = 130.6500 Sri Lanka rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil Nair)

Sri Lanka shares close down 0.4-pct

Feb 07, 2014 (LBO) – Sri Lanka shares end 0.43 percent down Friday with tobacco and beverage stocks losing ground amid strong foreign selling, brokers said.

The Colombo benchmark All Share Price Index closed 26.78 points lower at 6,141.72, down 0.43 percent. The S&P SL20 closed 0.09 points lower at 3,381.20, down 0.09 percent.

Turnover was 1.28 billion rupees, down from 3.74 billion rupees a day earlier, with stocks of 120 firms closing in the red against 57 gainers.

Dialog ended 30 cents higher at 9.40 rupees with 414.00 million rupees of off market transactions contributing to 32 percent of the turnover.

The aggregate value of all off market deals accounted for 48 percent of the daily market turnover.

JKH’s W0022 warrants closed 4.80 rupees lower at 66.30 rupees and its W0023 warrants closed 5.00 rupees lower at 69.70 rupees, attracting most number of trades during the day.

Foreigners bought 175.28 million rupees worth shares while selling 635.56 million rupees of shares.

Nestle Lanka ended 70.00 rupees lower at 2,100.00 rupees and Ceylon Tobacco Company closed 12.60 rupees lower at 1,252.40 rupees, contributing most to the index drop.

Ceylon Tobacco Company on Friday declared 8.55 rupees of final dividend per share for the last year.

Commercial Bank closed 2.90 rupees lower at 120.10 rupees and Commercial Leasing and Finance closed 30 cents lower at 4.00 rupees.

Distilleries closed 2.60 rupees lower at 212.40 rupees and JKH closed 40 cents higher at 229.40 rupees.

Carson Cumberbatch ended 4.50 rupees higher at 346.70 rupees and Sri Lanka Telecom ended 40 cents higher at 38.10 rupees.

Cargills Ceylon closed 60 cents lower at 149.00 rupees and Bukit Darah ended 50 cents lower at 610.00 rupees.

Sri Lanka's Janashakthi in travel insurance

Feb 07, 2014 (LBO) - Sri Lanka's Janashakthi Insurance said it has launched a worldwide travel insurance product which was also available for subscribers of Dialog Telekom.

"Today''s holiday and business travelers face a wide range of risks when they are traveling overseas, either by themselves or with their families.

"Overseas travelers need to carefully consider risk to their health & safety," Rajitha Samaranayake, senior brand manager non-motor insurance at Janashakthi Insurance said in a statement.

The product provides medical expenses up to 100,000 dollars for hospitalization personal accident coverage of 50,000 US dollars, and also covers the cost of lost baggage, missed flights, cash and loss of passports.

Worldwide travel insurance covering hospitalization of up to 50,000 US dollars and 25,000 for accidental death and disability is also provided for subscribers of Dialog Telekom, for 175 rupees a day.

SCB Asia CEO bullish on Sri Lanka

• Hong Kong-based Jaspal Singh Bindra sees huge positives in post-war progressive Sri Lanka

• Says growth reflected in the bank’s business; new corporate biz includes sole financial advisor role for biggest private sector project Waterfront by JKH

• Global giant is providing rating advisory service; working with Govt. and Moody’s to improve sovereign rating

By Nisthar Cassim
Standard Chartered Bank said yesterday it was bullish on Sri Lanka and the country’s future upside, encouraging it to expand business with new solutions as well as commit more support.

Optimism as well as confidence is coming from none other than Standard Chartered Bank’s CEO for Asia as well as Group Executive Director Jaspal Singh Bindra, who made a whistle-stop yet packed tour to Sri Lanka yesterday.

He met Economic Development Minister Basil Rajapaksa, Central Bank Governor Nivard Cabraal and select corporate clients, while he also addressed the bank’s Sri Lankan team. He also visited the Colombo Port.

“We are seeing huge positives in Sri Lanka, which has been progressive post-war. I was heartened by the fact that all officials and our clients are bullish and on a reforms and expansion mode. As far as we are concerned, we are happy as well. We have grown our business with special support to the infrastructure and tourism sector along with introduction of new world class solutions,” said Baspal in an exclusive interview with the Daily FT.

“Corporates are very bullish and they are talking about expansion plans. This is further validated by our financing to some of those projects. Actually having spoken to some of our clients we realised that they have bigger plans than what we are financing. So that is very positive,” the Hong Kong-based Jaspal added, along with SCB’s Chief Executive Officer of India & South Asia Operations Sunil Kaushal and Sri Lanka CEO Anirvan Ghosh Dastidar.

SCB is the sole financial advisor to JKH’s Waterfront project, the largest private sector investment, as well as supporting the Shangri-La project. In addition SCB is also involved in SriLankan Airlines’ bond and syndication financing project.

SCB is offering sovereign rating advisory services and is working with the Government and Moody’s to improve Sri Lanka’s sovereign rating. SCB was also part of the recent successful sovereign bond exercise, which was oversubscribed by three times.

“Given SCB’s own bullishness on the future and expanded role in recent years, we will continue to increase our investment as well as solutions,” the Asian CEO said.

For SCB 2013 was the best in Sri Lanka, whilst overall South Asia was one of the better performing regions for the Group, despite challenges. SCB, which is the largest foreign bank in India, Bangladesh and Nepal, and a leader in Sri Lanka, is “cautiously optimistic” about the region’s overall prospects for 2014.

Focusing on Sri Lanka’s financial sector, the SCB Asia CEO, who is completing 30 years in banking this year, welcomed the Central Bank’s Road Map for 2014 and beyond in principle and the proposed consolidation within the sector as a step in the right direction to ensure efficiency and stability.

He commended the Central Bank for its contribution to improving macro-economic fundamentals via prudent monetary policy, including keeping inflation at single digit level for several years.

Jaspal, who has been with SCB since 1998, feels Sri Lanka has great potential in tourism, leisure and entertainment, the knowledge economy including IT/BPO, higher education, and shipping and logistics, as well as manufacturing with the ongoing policy support and private sector investment.

He noted that given the unprecedented opportunities in Sri Lanka and the future upside, the country’s challenges include any downturn in the global economy. “As of now indications are that the global economy will improve and if that momentum stays in the next few years that will make a huge positive difference to Sri Lanka.”

Jaspal acknowledged that even with a conflict Sri Lanka was resilient to have posted an average economic growth of over 5%. “In the recent post-war phase the growth has been high at over 7%. The next few years are crucial for Sri Lanka’s takeoff as capacities are being enhanced and investments are flowing in,” he added.

www.ft.lk

2014 turning point for Lanka’s equity market: Michael Preiss

• 2014 could lead the way for next 5 years to potentially be one of the best periods for capital market since independence

• Interest rate below 8%, Price Earnings ratio standing at 11, average country growth rate being 7% a “powerful” combination

• Stresses that risk of not being in the market and investing is higher than risk of short-term volatility
• 
  

By Shabiya Ali Ahlam
A top expert from the United Kingdom expressed confidence in 2014 being a vibrant year for the nation’s equity market and urged locals to participate if they wish to benefit from this growth story.

Visiting Director and Economic Advisor of Ceylon Asset Management Michael Preiss noted that when the “compelling” evaluation of the country’s growth is coupled with the fast-paced economic development, 2014 will not only be a turning point for the local equity market but will also mark the start of a very positive period for the nation.

“2014 is a turning point for Sri Lanka. It could lead the way for the next five years to potentially be one of the best periods since independence. With the civil war over and the nation having passed the adjustment period, the road is now free for the capital market to progress,” Preiss told the Daily FT in an interview.

From a market development point of view, he noted the Colombo Stock Exchange (CSE) is putting a lot of emphasis on new product development to bring more depth and liquidity to the market.

Preiss, who has over 17 years of experience in global financial markets of New York, London, Paris, Hong Kong, Dubai and Singapore and is a Board Member of the American Academy of Financial Management (AAFM), said this potential was an element that many foreign investors would positively evaluate and conclude as good development since when looking at the Debt to GDP ratio, Sri Lanka stands out from other emerging nations.

When questioned on the importance of increased participation in the equity market, Preiss said: “In an economy that is fundamentally growing, the risk of not being in the market and investing is higher than the risk of short-term volatility. This is why there has to be indexation. Over time it is always better to be in an economy that is growing in the equity market than in cash.”

Highlighting the factors that make investments attractive for 2014, he said the interest rate being around 8% and the Price Earnings ratio standing at 11, along with the country growing at an average rate of 7%, is a “powerful” combination.

However, Preiss opined that despite the fall in cost of money which could lead to market expansion, locals might miss the opportunity of investing in the equity market because in addition to the interest rates, PE ratio and the economic growth combination not being clear, investors would perceive that the stock market performance in the last two years would reflect in 2014 as well.

“The majority fail to appreciate that in the last two years there were very interesting and important changes. One is that the CSE is developing the market by conducting road shows amongst many other initiatives. They are doing all the right things while also attempting to revalue the market at the same time,” asserted Preiss.

To increase participation, he stressed on the need to provide more investment options and for the Government to focus greatly on investor education.

www.ft.lk

Sri Lankan shares fall to over 2-wk closing low on foreign selling

COLOMBO, Feb 6 (Reuters) - Sri Lankan shares fell on Thursday to a more than two-week closing low as foreign investors sold the most equities in over two years. 

The main stock index fell 0.12 percent, or 7.13 points, to 6,168.50, its lowest closing level since Jan. 21. 

Foreign investors sold net 2.96 billion rupees worth of shares, the highest since Sept. 7, 2011 and reversing the year-to-date foreign inflow to a net 1.57 billion rupees outflow. 

"The market is down on foreign selling as a part of sell-off in emerging markets and it was absorbed by local investors. But how sustainable it will be is the question," said a stockbroker. 

Foreign investors bought 22.88 billion rupees worth of stocks last year. Shares of conglomerate John Keells Holdings PLC fell 1.38 percent to 229.00 rupees, while top mobile phone operator Dialog Axiata fell 1.09 percent to 9.10 rupees. 

Foreign investors sold net 9.8 million and 10 million shares in Keells and Dialog, respectively. 

They also sold 5.6 million shares in top listed lender Commercial Bank of Ceylon PLC, which rose 2.16 percent to 123.00 rupees. Keells said in a disclosure to the exchange after market hours that it had divested its 24.6 percent stake in unlisted Central Hospitals Limited for 1.59 billion rupees with a capital gain of 662 million rupees.

Analysts said investors have been waiting for directions from December-quarter earnings and an upcoming UNHRC session in March where Sri Lanka is facing a US-sponsored resolution for alleged human rights violations. 

Some stockbrokers said investors will shrug off political risks from renewed pressure by the United States to bring a fresh resolution against Sri Lanka at the UNHRC meeting in March, because the market had been expecting the worst. 

Stockbrokers said retail and institutional investors were active in the market after interest rates on treasury bills eased at a weekly auction on Wednesday to multi-year lows, making fixed-income assets unattractive. 

The index has risen 4.32 percent so far this year, following a 4.8 percent gain in 2013. It fell in the previous two years. 

The day's turnover was 3.75 billion rupees, well above last year's daily average of about 828.4 million rupees. 

($1 = 130.6350 Sri Lanka rupees) 

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

Commercial Bank to pump up investment banking business

Commercial Bank of Ceylon has signalled its intentions to sharpen its focus on the sphere of investment banking, with the relaunch and renaming of its Corporate Finance Unit as ‘Commercial Bank Investment Banking’ to reflect the broader dimensions of the unit.

Commercial Bank Investment Banking will leverage t he status of Commercial Bank as the largest private bank in the country to offer potential issuers of listed securities in equity and debt forms, a comprehensive geographical reach for distribution of informational and documentary material such as prospectuses and application forms, to a large proportion of the potential investing public, Commercial Bank Assistant General Manager Corporate and Investment Banking Naveen Sooriyarachchi said.

“The extensive and broad customer relationships forged by the bank over its long history facilitate successful marketing of equity and debt issues. These strengths enable Commercial Bank Investment Banking to synthesise investment and commercial banking activities of the bank and function as managers and bankers to the issue of securities offerings,” he said.

One of the biggest strengths of Commercial Bank Investment Banking, Sooriyarachchi explained, is the fact that it is supported by the immense investment capability of Commercial Bank.

“Besides structuring debt issues for our clients, we have the financial strength to invest substantially in such instruments, as is proven by our investments in debentures in the concluded financial year,” he pointed out.

Commercial Bank Investment Banking has a dedicated team of experienced officers and is seeking to create some new innovations in the market in order to carve out a distinctive niche for itself, he disclosed.

“As a start, we have transitioned from the Corporate Finance Unit to Commercial Bank Investment Banking, the name change reflecting and indicating the greater scope of what we are trying to achieve,” Sooriyarachchi added.

Commercial Bank Investment Banking is now fully geared to offer a wide spectrum of fund-based and fee-based services, including financial instrument structures such as securitisations, project loans, syndicated term loans and margin trading, along with securities such as custodian services and escrow services and structuring and management of equity and debt issues.
http://www.dailymirror.lk/business/other/42726-commercial-bank-to-pump-up-investment-banking-business-.html