Sri Lankan stocks mark 6-wk closing high; Commercial Bank leads

COLOMBO Jan 2 (Reuters)) - Sri Lankan shares marked their six-week closing high on Friday, led by top lender Commercial Bank of Ceylon, amid low turnover as investors stayed on the sidelines due to political uncertainty before the presidential election next week.

The main stock index closed 0.68 percent, or 49.44 points, higher at 7,348.39, its highest since Nov. 21.

"Market is seeing more positive direction. Some bargain hunters took opportunities ahead of the election," said Reshan Kurukulasuriya, chief operating officer of Richard Pieris Securities (Pvt) Ltd.

The central bank said the economy would grow annually at 8 percent in the six years between 2015 and 2020 after achieving an estimated growth of 7.8 percent in 2014.

The gain in the stock index was boosted by a 2.28 percent rise in Commercial Bank of Ceylon and a 10.41 percent jump in Ceylon Brewery Plc.

Turnover was 742.9 million rupees ($5.66 million), half of last year's daily average of 1.42 billion rupees, stock exchange data showed.

Foreign investors were net sellers of 10.8 million rupees worth of shares, data showed. They bought a net 22.07 billion rupees worth stocks last year, a little less than the previous year's 22.88 billion inflow.

The stock index gained 23.4 percent in 2014 after rising 4.8 percent in the previous year. It has lost 3.5 percent since Nov. 19 when President Mahinda Rajapaksa announced his decision to hold a snap presidential election on Jan. 9.

Analysts said uncertainties in domestic politics have hurt sentiment. Twenty six lawmakers have quit the ruling United People's Freedom Alliance since the election announcement, including former health minister Mithripala Sirisena, who is challenging Rajapaksa's bid for a third term. Two opposition legislators have joined the ruling party. 

($1 = 131.3000 Sri Lankan rupees) 

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

Seven new insurance companies

The Insurance Board of Sri Lanka has granted licences to seven new insurance companies, to commence business operations from yesterday. These new companies were established by composite insurance companies to comply with the segregation requirement laid down in the Regulation of Insurance Industry (Amendment) Act, No. 3 of 2011. The law requires composite insurers to segregate the two classes of insurance businesses (Long Term and General) in to two separate companies by February 2015.

The new insurance companies to which licences have been granted are: AIA General Insurance Lanka, Amana Takaful Life Ltd, Asian Alliance General Insurance ,Cooplife Insurance, HNB General Insurance, Janashakthi General Insurance and Union Assurance General Ltd. 

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Muthoot Finance acquires Asia Asset Finance

Muthoot Finance Ltd. (MFL) has acquired 51% equity shares of Colombo-based Asia Asset Finance PLC (AAF), the company told the National Stock Exchange (NSE) Wednesday.

“Pursuant to open offer given by MFL for acquisition of shares of AAF in Colombo Stock Exchange, the company has acquired 56,059,084 shares at 1.60 LKR,” MFL Chief General Manager K.R. Bijimon informed the NSE. MFL said it had received the necessary approvals from Colombo Stock Exchange and Securities Exchange Commission in Sri Lanka for transferring the shares acquired via open offer to MFL’s account.

India’s largest gold financing company, MFL now holds 428,011,711 shares in AAF representing 51% of total equity shares.

“Pursuant to the present acquisition, AAF has become a subsidiary of MFL,” Bijimon said.
AAF offers leasing, mortgaging and short-term loans in Sri Lanka.
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Vidullanka acquires more shares

Vidullanka PLC has acquired 10,500,000 ordinary shares on December 22. Subsequent to this share transaction the shareholding of Vidullanka PLC now amounts 50,858,630 shares coming on to 10.172% voting rights of Panasian Power PLC.

A BOI approved company founded in 1997, Vidullanka constructs and operates hydroelectric power projects.

This company was also the first power company to be listed in the Colombo Stock Exchange (CSE). 

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Colombo Stock Exchange records stellar performance in 2014

The CSE is on an upward growth trajectory and has recorded positive growth in the past year, surpassing several previous records. In 2014 the S&P SL20 crossed the 4000 mark for the first time since its launch, market capitalization reached Rs 3 trillion closing the year on Rs 3, 104.9 Mn and the All Share Price Index (ASPI) crossed the 7500 mark and closed the year on 7, 298.95.

The daily average turnover increased by 71 percent over the previous year from Rs 828 Mn in 2013 to 1.415 Bn in 2014.

Most notably foreign purchases have been the highest in history, a record
Rs 105,812. 5 Mn as at 31st December 2014. Continuing its strategy of attracting high net-worth foreign investors to the market, the CSE in association with the Securities and Exchange Commission of Sri Lanka held Investor Forums in Singapore, London and New York. There is widespread interest among overseas institutional investors as indicated through the Capital Market Conference held in October; which showcased the multifarious sectors of the capital market to over 80 International Institutional Fund Managers and over 250 local industry participants .

The primary market remained active during 2014 with over Rs 77. 7 Billion being raised through equity and debt IPO's, rights issues, and private placements.

During the course of 2014, there have been five Equity IPO's, one Equity Introduction and 20 Debt IPO's. The five equity IPO's raised a total of Rs 2,693.8 Million, the highest since 2011.

The market is also performing positively in comparison to global markets; being within the top six best performing markets internationally and within the top five best performing markets in the region, with the ASPI showing a year to date growth of 23.4%.

The technological infrastructure of the CSE has undergone numerous advancements in 2014; with the replacement of the 19 year old legacy Central Depository System (CDS) with a new generation Central Depository System in November 2014 - laying the platform for future enhancements relating to post trade Clearing and Settlement services and moving to a Delivery Versus Payment" (DVP) system of settlement and a Central Counter Party (CCP) System.

Investors are now able to access and monitor their investments in the stock market, easily and cost effectively as a result of a range of new services introduced by the CSE. Investors can subscribe for SMS alerts for secondary market transactions and CDS monthly statements are also available on email. Meanwhile the CSE mobile phone apps, available both on android and iOS, provides live market data.

Furthermore the CSE online properties have made the foray into social media with active Facebook, Twitter and LinkedIn pages providing users with timely information.
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Adam Investments increases stake in PCH Holdings to 53.51%

Adam Investments Ltd has increased its stake in PCH Holdings PLC to 53.51%, following the latter's mandatory offer.

Prior to the mandatory offer, Adam Investments had 108,248,291 ordinary shares of PCH Holdings PLC amounting to around 42.96% of the equity.

Following Adam Investment's acquisition of 20 million shares in PCH Holdings PLC it will hold 53.51% of the shares of PCH Holdings PLC. These shares were purchased on the trading floor of the Colombo Stock Exchange between 21 July and 26 December 2014, for which acceptance has been received as of 26 December, and where a total of 4,935,285 shares have been completed and a further 1,661,697 have been completed and with the approval of the Colombo Stock Exchange for the transfer of the shares accepted to Adam Investments.
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CSE looking at a Champagne Year! Based on low interest, low inflation regime

By Ravi Ladduwahetty

Ceylon Finance Today: The Colombo Stock Exchange is expected to perform even better in 2015 than it did in 2014 based on the prevailing low inflation and low interest regime, a frontline stock broker said.

"The Colombo bourse performed well till the announcement of the 8 January Presidential elections where the All Share Price Index was up 29% based on the low interest and low inflation regime, which by itself was good," Chairman of the Colombo Stock Brokers' Association, Dihan Dedigama told Ceylon FT yesterday.

Dedigama, who is also CEO of Softlogic Stockbrokers (Pvt) Ltd, said that the market sought a correction with the announcement of the Presidential polls and declined to 21%, but remained one of the best performing markets in the region. "The Colombo Stock Exchange would be looking for direction after the Presidential polls ends," he said.

He also said that foreigners were accumulating stocks which was a positive sign and added that there would be continued growth in the market.

Meanwhile, Colombo Stock Exchange Manager Market Development, Niroshan Wijesundera told Ceylon FT yesterday that the overall performance of the market for 2014 was much better than for 2013.

The All Share Price Index had gained 23.4% in 2014 over the 4.8% in 2013 while the Standard and Poor Index had gained up to 25.3% over the 5.8 % in 2013.

The Market Capitalization had also increased to Rs. 3.1 Trillion from the Rs. 2.4 trillion a year ago. The Average daily turnover had also risen 70% to Rs. 1415 million from the Rs. 828.4 million, a year ago.

The Capital raised also increased to Rs. 2.6 billion through equity in 2014 from the Rs. 494 million in 2013 which was the highest ever since the Rs. 1.7 billion in 2012. The highest ever foreign inflow was also reported in 2014 which was Rs. 105 billion, he said.

He also said that the highlights for 2014 were that there were 5 Initial Public Offerings, one introduction and 19 Debt IPOs. He added that the Colombo Stock Exchange was the sixth best performing bourse in Asia after Shanghai, the National Stock Exchange (New Delhi), Bombay and Karachi and sixth in the overall World Equity Index as per Bloomberg.
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