Sri Lankan shares steady at near 3-month low

Reuters: Sri Lankan shares closed steady on Thursday, after three straight losing sessions, as gains led by financials were offset by losses in mid-cap stocks.

The Colombo Stock Index firmed 0.03 percent at 6,382.95, hovering around a near three-month closing low hit in the previous session.

Sampath Bank and Commercial Bank of Ceylon gained 1.3 percent and 0.2 percent, respectively, while shares in Asian Hotels and Properties Plc fell 6.7 percent.

“We see a typical year-end market. Foreign investor interest continues,” said Hussain Gani, deputy CEO at Softlogic Stockbrokers.

Foreign trade accounted for 56 percent of the day’s turnover worth 986 million rupees ($6.43 million), higher than this year’s daily average of 944.4 million rupees.

Foreign investors, who have been net buyers of 18.57 billion rupees worth of shares so far this year, were net sellers of equities worth 37.5 million rupees on Thursday.

Worries over a delay in local council polls and a lack of clarity over the budget and two other key policy measures weighed on sentiment, analysts said.

The Election Commission said on Monday that the council polls would be held before Feb. 17, amid concerns over political stability as coalition partners in President Maithripala Sirisena’s government had decided to contest separately in the council polls.

Investors are also seeking more clarity on new taxes imposed in the 2018 budget presented last month, analysts said, adding there could be some amendments before the final budget vote scheduled for Dec. 9. 

($1 = 153.3500 Sri Lankan rupees) 

(Reporting by Shihar Aneez and Ranga Sirilal; Editing by Amrutha Gayathri)

Sri Lanka tourist arrivals edges up in November

LBO - Sri Lanka tourist arrivals rose 0.2 percent to 167,511 in November from a year earlier amid subdued growth in the main Indian and Chinese markets.

Arrivals in the first eleven months of the year were up 2.5 percent to 1.87 million arrivals, data from the state Tourism Development Authority showed.

Indian visitors were up 6.9 percent to 32,243 in November while total Indian visitors for the first 11 months were up 5.7 percent to 336,840.

Chinese visitors were up 3.5 percent to 19,237 in November while total Chinese visitors for the first 11 months were down 1.0 percent to 249,718.

Middle Eastern markets also showed a decline of 30.4 percent in the month of November while visitors from Australasia were up 22.8 percent to 7,613 in the month.

Arrivals from UK rose 2.2 percent while arrivals from Germany dropped 11.5 percent in the month of November.

Sri Lanka Treasuries yields fall again

ECONOMYNEXT – Sri Lankan Treasury Bill yields fell across maturities at an auction Wednesday with the 03-month bill yield down 23 basis points to 7.97 percent from 8.20 percent at the last auction.

The public debt department of the central bank said the 06-month Treasury Bill yield fell 12 basis points to 8.76 percent at from 8.88 percent at the last auction.

The 01-year bill yield fell 10 basis points to 9.34 percent from 9.44 percent at the last auction.

The statement said the public debt department got bids worth Rs79.8 billion and accepted bids worth Rs17 billion.

Sri Lankan shares hit near 3-month closing low

Reuters: Sri Lankan shares extended falls into a third session on Wednesday and closed at their lowest in nearly three months, dragged down by healthcare and diversified conglomerates.

The Colombo Stock Index ended down 0.15 percent at 6,380.91, its lowest close since Sept. 13. It fell 0.03 percent last week, recording its fourth straight weekly drop, but has gained about 2.5 percent so far this year.

Shares in Asiri Hospitals Plc fell 3.9 percent, while conglomerate John Keells Holdings Plc ended 0.3 percent weaker.

“The market slipped a bit with foreign selling,” said Hussain Gani, deputy CEO at Softlogic Stockbrokers.

“Local (investor) participation was very much silent and we will expect this trend to continue with the year-end holidays.”

Foreign buying accounted for 70 percent of the day’s turnover, which was 1.2 billion rupees ($7.83 million), compared with this year’s daily average of 944.4 million rupees.

Foreign investors, who have been net buyers of 18.6 billion rupees worth of shares so far this year, were net sellers of equities worth 152.3 million rupees.

Worries over a delay in local council polls and a lack of clarity over the budget and two other key policy measures weighed on sentiment, said analysts.

Meanwhile, the Election Commission said on Monday that the council polls would be held before Feb. 17.

Investors are concerned about political stability as coalition partners in President Maithripala Sirisena government had decided to contest separately in the council polls.

Finance Minister Mangala Samaraweera imposed new taxes on motor vehicles, telecoms, banks and liquor in the 2018 budget presented last month, with a final budget vote scheduled for Dec. 9.

Analysts said market participants were seeking more clarity on those taxes and that there could be some amendments before the final vote.

The government also released gazette notifications on the Inland Revenue Act and the Exchange Control Act, with investors waiting for clarification on the new legislation. 

($1 = 153.2500 Sri Lankan rupees) 

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

Sri Lanka’s LB Finance debenture issue oversubscribed

LBO - Sri Lanka’s LB Finance 3 billion rupee debenture issue was oversubscribed, Monday.

The subscription list of the issue was opened on 4 December, the company said in a stock exchange filling.

Capital Alliance functioned as mangers to the issue.

LB Finance, is non banking financial company and also functions in the micro-finance sector in the island.

People’s Leasing completes acquiring 51-pct of Bangladeshi finance firm

LBO - People’s Leasing & Finance has completed the acquisition of 51 percent stake of the Bangladeshi finance firm, Alliance Leasing and Finance Company.

People’s Leasing has acquired 51,000,000 ordinary shares of Bangladeshi firm, which carries on the finance business under the Financial Institution Act, 1993 of Bangladesh.

People’s Leasing earlier said in a stock exchange filing that as the majority shareholder of the Bangladesh firm, People’s Leasing will have an entitlement to nominate a majority of the directors of Alliance Leasing and Finance.

On 15 May 2016, People’s Leasing entered into an agreement with Alliance Leasing and Finance for the acquisition of 51,000,000 ordinary shares, being 51 percent of the total issued capital of Alliance Leasing and Finance.

Sri Lanka doubles tax payer bailout of CIFL depositors

ECONOMYNEXT – Sri Lanka’s central bank has doubled the compensation payable to depositors of Central Investments and Finance PLC (CIFL), which failed owing to fraud, with no investor being found yet to pump in Rs. 3 billion to revive the finance company.

The central bank’s Department of Supervision of Non-Bank Financial Institutions said every effort will be made to take legal actions against those responsible for frauds and misuse of depositors’ funds of failed finance companies.

CIFL was confronted with severe liquidity crisis since 2013 due to mismanagement and other irregular transactions carried out by the management of that company, a statement said.

“It has also been observed that the directors and senior management of these companies have fraudulently inflated the value of the assets and the examination of the documents relating to such assets has revealed that those are either fictitious or entangled with encumbrances.”

CIFL has not been in operation since 2014 and the central bank last month decided to issue a notice of cancellation of its licence.

The total deposit liability of the company is about Rs. 3.5 billion and the number of depositors is 4,092.

Of those, 2,501 depositors are with deposits less than Rs. 600,000/-.

Under present regulations, the maximum amount that can be paid under Sri Lanka Deposit Insurance and Liquidity Support Scheme is Rs. 300,000.

“However, the Monetary Board having considered the plight of the small depositors has decided to double the compensation from Rs. 300,000/- to Rs. 600,000/-,” the central bank said.

“Accordingly, in the case of CIFL, 61% of the depositors will be fully settled with their deposits.”

The Central Bank also said it has extended the deadline given to a potential investor on several occasions to prove the availability of funds to revive CIFL “which has not been fulfilled as yet.”


The central bank has had discussions with local and foreign institutions and individuals who expressed their interest in investing and reviving the company.

It said any revival plan needs at least Rs. 3 billion investments and at least 30-40% of the deposits should be repaid immediately as they had not been paid interest or the capital of their deposits for the last 4 year period.

It also said that with regard to the Standard Credit Finance Ltd and City Finance Corporation Ltd, the Monetary Board has not issued notices of cancellation as there are legal issues to be resolved.