Sri Lanka bourse turnover slumps to near 5-yr low; index snaps losing streak

(Reuters) - Sri Lankan shares edged up on Monday, ending a five-session falling streak, but turnover slumped to near a 5-year low as investors were cautious ahead of a U.N. resolution on the island nation's human rights record later this month.

The day's turnover fell to 2009 levels when the island nation was in the final days of a 26-year civil war with Tamil separatists. Turnover was 90.9 million rupees ($696,300), the lowest since April 30, 2009, less than a tenth of this year's daily average of about 921.3 million rupees.

Analysts said investor sentiment has been dented on concerns over the U.N. resolution, which could have an impact on the country's economy. Many potential buyers in risky assets are staying on the sidelines for want of clear direction.

"Now, foreign investors are also holding back because there is no liquidity in the market," Danushka Samarasinghe, head of TKS research, told Reuters.

The main stock index rose 0.3 percent, or 17.88 points to 5,914.11, edging up from its lowest close since Feb. 26 led by large caps.

Ceylon Tobacco Co Plc shares rose 1.83 percent to 1,120 rupees with just one share changing hands, while Ceylinco Insurance Plc rose 7.40 percent to 1449.90 rupees with just nine shares traded, Thomson Reuters data showed.

Foreign investors were sellers for the second straight session, with net selling of 4.89 million rupees worth of shares on Monday. But they have been net buyers of 220 million rupees worth of shares in the last nine sessions.

Net outflows so far in 2014 stand at 3.82 billion rupees. They were 22.88 billion rupees in 2013.

Earlier this month, Sri Lanka questioned the independence of the human rights office of the United Nations after the United States asked it to investigate violations by the Sri Lanka government related to the civil war. A vote on the resolution is scheduled for the last week of the session, starting on March 24.

($1 = 130.6050 Sri Lanka Rupees)

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Prateek Chatterjee)

Sri Lanka stocks up 0.3-pct,turnover five year low

Mar 17, 2014 (LBO) - Sri Lanka's stocks end 0.3 percent higher partly reversing the last week’s losses despite reporting a turnover of five-year low, brokers said.

The Colombo benchmark All Share Price Index closed 17.88 points higher at 5,914.11 up 0.30 percent. The S&P SL20 closed 6.31 points higher at 3,213.42, up 0.20 percent.

Turnover was 91.19 million rupees, the lowest turnover recorded since April 2009 with 80.9 million rupees.

60 stocks close positive against 76 negative.

Foreign investors bought 6.41 million rupees worth shares while selling 11.30 million rupees of shares.

Ceylon Grain Elevators closed 10 cents higher at 36.50 rupees attracting most number of trades during the day with poultry farm sector showing most trades.

Ceylon Tobacco Company closed 20.10 rupees higher at 1,120.00 rupees and Ceylinco Insurance closed 99.90 rupees higher at 1,449.90 rupees, contributing most to the index gain.

Carson Cumberbatch closed 9.70 rupees higher at 350.00 rupees and Commercial Leasing and Finance closed 20 cents higher at 4.00 rupees.

Distilleries closed 3.30 rupees lower at 199.50 rupees and John Keells Holdings closed 1.90 rupees lower at 218.10 rupees.

JKH’s W0022 warrants closed flat at 62.00 rupees and its W0023 warrants closed 20 cents higher at 64.90 rupees.

SLT closed 50 cents lower at 44.00 rupees and Bukit Darah closed 6.50 rupees higher at 551.10 rupees.

Nestle Lanka closed 17.20 rupees higher at 1,990.50 rupees.

Sri Lanka vehicle registrations drop sharply in February

Mar 17, 2014 (LBO) - Sri Lanka's vehicle registrations have dropped to 23,130 units in February 2014, the lowest since April 2010, with a sharp drop in commercial vehicles, an analysis by an equities research house shows.

February with 28 days is a 'short month' which usually results in low registrations, followed by a pick-up in March. This year registrations dropped 17 percent from January, compared to a 15 percent drop in February 2013 from a month earlier.

The first Lamborghini car, a Gallardo LP 550, was also registered in the month, a note to clients by JB Stockbrokers said.

Motor car registrations which have been buoyed by to tax slashed permits given to state workers and hybrid cars which are taxed lower, dropped to 1,481 units from 1958 in January but were still higher than the 1,063 units seen last February.

In pre-owned or reconditioned cars segment, smaller Toyota Aqua and Honda Fit models, dominated, followed by Toyota Prius, JB Stockbrokers said.

Motor cycle registrations which dropped to 13,659 units in February from 16,452 units in January were also up from a low of 12,008 last February.

Commercial vehicles categories were down sharply from a year earlier.

Three wheeler registrations were down to 5,257 from 6,639.

Pick-up trucks were down to 117 units from 173 a year earlier, mini-trucks were down to 730 units from 1,165, light trucks were down 211 from 414, medium trucks were down 152 from 189.

Heavy trucks with a payload above 5 tonnes were down to 83 from 157. Bus registrations fell to 94 from 115.

Hand tractor registrations were down to 410 from 685 and large tractor registrations were down to 93 from 231.

Despite lower interest rates, there is no resultant pick up lease volumes for new vehicles, and the drops seen cannot be fully explained by the February effect, JB Stockbrokers said in a note.

Sri Lanka is recovering from a balance of payments crisis triggered by loans taken from state-run banks by utilities to subsidize energy which ultimately were accommodated by central bank credit.

Interest rates were raised and the rupee floated to correct the problem, but vehicle taxes were also raised, which some critics said say is Mercantilist knee-jerk response.

The International Monetary Fund also urged the state not to engage in such measures.

In addition to an overall slowdown in economic activity it is not clear whether a consolidation process kicked off by the regulator in the finance company sector is also making firms more cautious about giving new loans.

Bourse is an unharmed investment platform: Broker

Notwithstanding the slowdown in global markets due to number of political and economic dilemmas around the world, the Sri Lankan Bourse remained attractive and continued to improve the foreign inflows and retail market activities last week.

First Capital Equities said investors who focused on investing in Government securities switched their interest to equities as a result of the continuous drop in Treasury Bill rates by 20, 30 and 10 bps respectively in maturity periods of three months, six months and one year.

“Moreover the 4Q2014/1Q2015 corporate results are expected to trigger healthy margins which are supported by the improvement in consumer spending as a result of the recent development in Sri Lankan economy. Hence, the Sri Lankan Bourse can be recognised as an unharmed investment platform for both local and foreign investors which will provide sustainable returns,” First Capital Equities said. With regard to the question of whether the volatility in global markets is impacting the Sri Lankan stock market, First Capital Equities said the Sri Lankan Bourse rallied at the start of 2014 with the ASPI rising above Asian and European market indices on the back of high volumes of foreign inflows.

This trend however reversed in the next month with foreign investors booking corporate profits earned in 4Q2013/3Q2014, resulting in higher foreign outflows in February.
In the wake of heightening political tensions in the Eurozone and a slowdown in China’s economic activity, raising concerns over the performance of global markets, European and Asian markets fell during the month of March.

“However on a positive note, the ASPI was successful in maintaining a steady path relative to other global markets in March 2014 mainly due to net foreign inflows returning to the market. Accordingly, on a month-to-date basis, the market received foreign inflows of Rs. 243.7 million in March, a significant improvement from the Rs. 5.1 billion outflow seen in the previous month but on track to reach the Rs. 1 billion net foreign inflow seen in January 2014,” First Capital Equities added.
www.ft.lk

Alumex announces basis of IPO allotment

Alumex Ltd. on Friday announced the basis of allotment for its initial public offering of 59.9 million Ordinary Voting Shares at Rs. 14 per share.

The Rs. 838 million worth IPO drew 840 applications requesting 69 million shares worth Rs. 966 million. There was heavy retail interest for the IPO.

The basis of allocation is as follows:

Public Category
Retail Individual Investor Category: 100% of shares applied
Unit Trust Investor Category: 100% of shares applied
Non-retail Investor Category: 100% of shares applied

Non Public
Applications up to and inclusive of 2.0 m shares: 100% of shares applied
Applications above 2.0 m shares and up to and inclusive of 5.0 m shares: 2.0 m shares plus 20% of shares applied over and above 2.0 m shares
Applications above 5.0 m shares and up to and inclusive of 10.0 m shares: 2.5 m shares plus 34% of shares applied over and above 2.5 m shares
Applications above 10.0 m shares and up to and inclusive of 15.0 m shares: 6.0 m shares plus 40% of shares applied over and above 6.0 m shares
Applications over 15.0 m shares: 10.0 m shares plus 47.196% of the shares applied over and above 10.0 m shares.
http://www.ft.lk/

Financial sector consolidation a blessing?

- Randstad SL CEO says Fortune 500 companies will drive local eco system forward

By Hiyal Biyagamage

Ceylon FT: The much hyped topic of consolidation process aimed at reducing by half the number of finance companies in Sri Lanka can be viewed as a blessing in disguise, an HR expert from India told Ceylon FT.

Randstad India and Sri Lanka Chief Executive Officer, Moorthy K. Uppaluri said that if a situation arises where consolidation results in job redundancy; individuals and organizations should be thoughtful in terms of planning the next step and looking at translatability, not the skills. He suggested that the job surplus could be transferred into other industries of the country where the demand is high.

"One could look at the consolidation process as a disguised blessing. Say that you are a front officer in a bank and in the consolidation process; you lose your bank job. Imagine that the country's hospitality sector is red hot and screams for more talent. Is not there a chance with all your experience as a front officer that you could join the hospitality sector as a front officer?

There is some change in your left pocket and the right pocket is empty so you need to shift some change into your right pocket from the left pocket. So from one industry where there is a surplus of talent or a redundancy of talent that is created because of consolidation; one needs to map their skills and should look at how we can streamline those jobs which are becoming redundant and talents into some of the demands. It is always mapping supply to the demand and the willingness of these individuals to pick up new skills."

"I guess every problem comes with an opportunity. Half glass full and half glass empty you might say.

It is very difficult for the consolidation scenarios that some skills and talents will be redundant and it is very important for both individuals and organizations to be thoughtful in terms of planning the next step and looking at translatability, not the skills," opined Moorthy. When asked about the impact which can be created for the country's economy by establishing Fortune 500 companies, Moorthy said their financial strength would accelerate the local economy.

"It would help Sri Lanka in a big way. These companies bring in global learning, processes, commitment and technology and with their financial strength and global experience; they can help accelerate the growth of the local economy in a big way. May it be a global IT player or a telecom giant; their experience and strength will be very valuable," Moorthy said.

When questioned whether he was suggesting that more Fortune 500 companies should be in the country, Moorthy said, "Not only. They can come here and they should help carry the local eco system with them. It is not just bringing foreign companies to Sri Lanka. The local eco system is very important and it has to be vibrant. But I think these big companies can infuse the foreign investments that are coming in and it will boost the economy. When they rely on the local eco system for their supply purposes; it comes up gradually. So it is just not Fortune 500 companies coming to Sri Lanka and making money and selling their services, but they will help the local economy to grow."
www.ceylontoday.lk

Stock exchange gets new COO

Renuke Wijayawardhane has been appointed Chief Operations Officer (COO) of the Colombo Stock Exchange, with effect from March 1, 2014.

Under the new strategic direction of the CSE Wijayawardhane will oversee the operations of the Trading and Market Surveillance Division, Listings and Corporate Affairs Division, Broker Supervision Division and Central Depository Systems (Pvt.) Ltd. (CDS), which is a fully-owned subsidiary of the CSE. He was formerly the Assistant General Manager of Regulatory Affairs.

Wijayawardhane is an Attorney-at-Law with an LL.B (Hon.) degree from the University of Colombo and counts over 20 years' experience at the CSE in a variety of operational areas.

The CSE intends on embarking on a comprehensive and aggressive market expansion strategy which will enhance broker capabilities and provide a robust listing environment. Wijayawardhane will direct these extensions within the scope of his new role.
www.ceylontoday.lk