Sri Lanka February tourist arrivals down 0.1-pct

The number of tourists visiting Sri Lanka down 0.1% in February 2017 from a year ago with strong gains seen from traditional markets like United Kingdom and new markets India maintaining their growth momentum.

Sri Lanka received 197,517 visitors in February and tourist arrivals in the first 2 months of the year have risen 6.4% from the year before, the tourist office said.

India remained the main market in February 2017.

Sri Lanka's Sampath Bank flags competition from telcos

ECONOMYNEXT - Sri Lanka's Sampath Bank Plc has drawn attention to the threat banking faces from competition from mobile phone companies which are offering payment and other transaction services.

“The year ahead is likely to present an uncertain operating environment,” Sampath Bank Managing Director Nanda Fernando told shareholders in the firm’s annual report.

“We are also likely to experience strong competitive pressures, not only from peers in the banking industry, but also from telcos that appear to be intruding into our territory.”

Nonetheless, Fernando said, Sampath Bank stands firm in its determination to maintain its growth momentum, both in terms of the top line as well as the bottom line.

Fernando said Sampath Bank was focusing in improving its digital online banking facilities to cater to changing technology and consumer trends.

“Additionally, cost management and the promotion of electronic delivery channels will continue to be absolute priorities in our medium term growth agenda,” he said.

Norway's Norges Bank fund invests US$65mn in Sri Lanka stocks

ECONOMYNEXT - Norges Bank Investment Management (NBIM), a sovereign wealth fund in Norway has invested 65 million US dollars in Sri Lanka stocks over the past two years, the Royal Norwegian Embassy said.

NBIM, which comes under the Norges Bank, the country's central bank, has started by investing 31 million dollars in 2016 and doubled it to 65 million dollars in 2016.

"It must also be noted that the Norwegian Central Bank is completely independent from the Norwegian Government, therefore, this fund is not used as an instrument of the Norwegian government’s foreign policy, or as a tool in foreign aid," the statement said.

"The only mandate for the Norwegian Central Bank is to safeguard and ensure further growth of the fund.

"Therefore, the investments in Sri Lanka from the Norwegian sovereign wealth fund is an indication of the investor confidence and the potential investment opportunities that are available in the market."

The Norwegian Government Pension Fund Global is a sovereign wealth fund, which manages oil and gas profits of the government, where real returns are used for budgetary spending.

It has 890 billion dollars in assets, (about 1.3 percent of world stocks) of which 16 percent is in Asia. Japan has 9 percent, China 2.7 percent and India 1 percent. About 0.6 percent is in Africa.

Europe and North America has 78 percent.

"However, this is likely to change as the Norwegian Central Bank has indicated that they will shift more of their investments toward emerging economies in the future," the statement said.

Sri Lanka Telecom December quarter loss turns to profit

(LBO) – Sri Lanka Telecom group, the island’s largest fixed line operator, said profits rose to 124 million rupees in the December quarter from 383 million rupee loss reported a year earlier.

The group’s interim accounts reported earnings of 0.07 rupees per share for the quarter against a loss of 0.21 rupees per share recorded a year ago.

In the 12 months to December, the group reported earnings of 2.65 rupees per share on total profits of 4.7 billion rupees.

The company’s stock was last traded at 33.60 rupees on Wednesday.

Sri Lanka Telecom revenues in the quarter were 18.1 billion rupees, up six percent from 2015, and operating costs rose three percent to 13.9 billion rupees.

During the year ended December 2016, the group has acquired assets at a cost of 31,069 million rupees excluding capitalized borrowing costs — as at 31 December 2015 it was 12,390 million rupees.

No dividend was declared by the company for the quarter ended 31 December 2016 though a dividend of 1,606 million rupees was paid 24 May 2016 for the financial year ended 31 December 2015.

Percentage of public holding as at 31 December 2016 is 5.52 percent and number of shareholders representing the public holding is 12,213.

Mobitel (Pvt) limited acquired 87.59 percent of shares of E-channeling through a voluntary offer for a total consideration of 641.85 million rupees.

The transaction of the acquisition was completed on 14 September 2016. E-channeling has been consolidated as a subsidiary for the financial year ended 31 December 2016.

The group is primarily involved in providing broad portfolio of telecommunication services across Sri Lanka.

The services provided by the group also include internet services, data services, domestic and international leased circuits, broadband, satellite uplink, maritime transmission, IPTV service and directory publishing service.

Sri Lankan shares edge up on foreign investor buying

Reuters: Sri Lankan shares closed marginally higher on Thursday after posting a near three-week closing low in the previous session, as foreign investors bought recently battered stocks while concerns about rising interest rates continued to hurt investor sentiment.

The Colombo stock index ended up 0.09 percent at 6,127.11, after closing at its lowest since Feb. 9 on Wednesday.

Foreign investors were net buyers of 292.6 million rupees ($1.94 million) worth of shares, extending the year-to-date net foreign inflow to 892.2 million rupees worth of equities.

Turnover was 783.9 million rupees, more than this year's daily average of 666.6 million rupees.

"Market continues to move sideways but today we have seen some institutional and foreign buying," said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

Sri Lanka Telecom Plc ended 3.87 percent higher after reporting a group net profit of 289 million rupees for the December quarter, compared with a net loss of 157 million rupees a year earlier.

Trans Asia Hotels Plc jumped 8.12 percent, while Commercial Leasing & Finance Plc rose 3.45 percent.

Yields on treasury bills have risen to a more than four-year high since October, while the central bank has kept key policy rates on hold. 

($1 = 151.1000 Sri Lankan rupees) 

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

Better capital allocation with integrated stock markets, Sri Lanka forum told

ECONOMYNEXT – The integration of South Asian stock markets was discussed at a forum in Sri Lanka whose regulator said more interconnected markets would ensure the region remains a growth hotspot with better allocation of capital and efficient sharing of risks.

The region should work towards developing a regulatory environment which encourages stock exchanges to embrace integration, said Thilak Karunaratne, chairman of the Securities and Exchange Commission of Sri Lanka.

“There is a need towards greater integration of markets where there are no barriers to the movement of capital and there is easy access to each other’s stock markets,” he told a forum of the South Asian Federation of Exchanges (SAFE) in Colombo.

“More recently, capital market integration has continued to accelerate, as new investing opportunities emerge,” he said.

“Unfortunately, South Asia is the most malintegrated region in the world as a result of highly restrictive national policies governing financial markets,” Karunaratne said.

Domestic markets can derive “substantial benefits” from regional integration including better allocation of capital, efficient sharing of risks, enhanced portfolio diversification and lower cost of capital, he said.

“On the other hand various barriers including regulatory, information, infrastructure and taxation pose serious challenges to integration,” Karunaratne said.

“A strong framework for prudential regulation is necessary to ensure that risks arising from integration are being assessed and managed well.

“Removal of controls on capital transactions within the region, harmonization of capital market infrastructure including regulations, taxation, accounting, trading systems and cross-listings of securities are necessary steps to move towards regional financial integration,” Karunaratne said.

Leaders from the other South Asian capital markets were united in their call at the forum for improved integration of regional markets, a statement by the Colombo Stock Exchange (CSE) said.

SAFE aims to foster collaboration and co-operation among its members in order to develop their respective capital markets.

Domestic exchanges have much to gain if they reinforce and improve effort towards integration, said Vajira Kulatilaka, Chairman of SAFE and CSE.

“The role and impact of an exchange today is well beyond what was defined at the inception of SAFE as an organization. This is even more so for emerging and developing countries, which many of us are a part of. It is therefore quite relevant that SAFE today looks at evolving as an organization,” he said.

Smaller exchanges in the region have the ability to benchmark more developed peers, while more developed ones have the privilege of shaping the future of fellow regional exchanges – a process that is brought into the table through affiliation, Kulatilaka said.

Shalini Gokhool, Manager of the Stock Exchange of Mauritius, said that since 2010 they had embarked on an internationalization strategy, trying to innovate in terms of products and getting more players to come to the market.

“Today we have created a flexible and enabling regulatory environment to list a variety of products ranging from global funds, depository receipts, and a number of specialist securities such as specialist debt securities, and exchange traded funds.”

Sri Lanka 03-month Treasury Bill yield rises to 9.38-pct at auction

ECONOMYNEXT – Sri Lankan Treasury Bill yields rose across the board at an auction Wednesday with the 03-month bill yield rising 06 basis points to 9.38 percent, the debt office of the Central Bank said.

The yield on the 06-month bill rose 08 basis points to 10.27 percent and the one-year bill yield rose 08 basis points to 10.66 percent, a statement said.

The debt office got Rs38.4 billion worth of bids and accepted bids worth Rs6.7 billion.