Sri Lankan stocks fall to 1-week low as political woes weigh

Reuters: Sri Lankan shares fell on Wednesday to their lowest in one week as political uncertainty hurt sentiment ahead of a no-confidence vote against Prime Minister Ranil Wickremesinghe, brokers said.

The prime minister faces the vote at around 1600 GMT that could go down to the wire and lead to political instability in the island nation, even if the government manages to scrape a win.

Meanwhile, Sri Lanka’s central bank unexpectedly cut its key lending rate by 25 basis points on Wednesday, as policy makers sought to revitalise an economy growing at its weakest pace in 16 years and facing heightened political uncertainty.

The Colombo stock index ended 0.22 percent down at 6,444.41, its lowest close since March 28.

The index climbed 0.51 percent last week, its first weekly gain in five, but dropped 1.14 percent last month.

“Market is down due to weak buying interest from the local investors as they are waiting for direction after the no-confidence motion,” said Dimantha Mathew, head of research, First Capital Holdings.

“The biggest deterrent is the political uncertainty. The rate cut did not have an impact today.”

The turnover stood at 1.2 billion rupees ($7.7 million), same as this year’s daily average of around 1.2 billion rupees.

Foreign investors sold shares worth net 152.9 million rupees on Wednesday, extending the year-to-date net foreign outflow to 1.29 billion rupees worth equities.

Shares in Distillers Sri Lanka Plc fell 16.7 percent and Ceylon Cold Stores Plc ended 2.1 percent down. 

($1 = 155.8500 Sri Lankan rupees) 

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

Sri Lankan stocks end higher on illiquid shares; no-confidence vote weighs

Reuters: Sri Lankan share index ended firmer on Tuesday, edging up from its nine-week closing low hit last week, as investors picked up illiquid shares of Distilleries Company of Sri Lanka Plc, but political woes over a no-confidence motion against the prime minister weighed on sentiment, brokers said.

The Colombo stock index ended 0.13 percent firmer at 6,458.33, edging up from its lowest close since Jan. 23 hit on Wednesday.

The index climbed 0.51 percent last week, its first weekly gain in five, but dropped 1.14 percent last month.

“The overall investor sentiment was on a wait-and-watch mode ahead of the no-confidence motion. There were some activities on illiquid distilleries, which moved the market up today,” said Dimantha Mathew, head of research, First Capital Holdings.

The turnover stood at 530.1 million rupees ($3.40 million), less than this year’s daily average of around 1.2 billion rupees.

Foreign investors sold shares worth net 128.2 million rupees on Tuesday, extending the year-to-date net foreign outflow to 1.14 billion rupees worth equities.

Political uncertainty and worries over a slowing economy weighed on sentiment, brokers said.

Prime Minister Ranil Wickremesinghe is facing a no-confidence motion, which will be debated on Wednesday before voting, with analysts saying support from many political parties will be needed for Wickremesinghe to clear the vote.

Cautious investors await the outcome of the rate announcement, said analysts.

Sri Lanka’s central bank is expected to keep key interest rates unchanged on Wednesday after a rate review, but economists in a Reuters poll are not ruling out the possibility of a rate cut to help bolster economic growth that has slipped to a 16-year low.

Shares in conglomerate John Keells Holdings Plc ended 0.25 percent higher, while Overseas Realty Ceylon Plc ended 6.1 percent up and Distillers Sri Lanka Plc closed 5 percent higher.

Sri Lanka’s economy grew by 3.1 percent in 2017, the slowest in 16 years and well below the 4.5 percent seen in 2016, revised government data released showed last week.

($1 = 155.7500 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez, Editing by Sherry Jacob-Phillips)

Sri Lankan stocks end weaker on political woes

Reuters: Sri Lankan share index ended weaker on Monday, hovering near its nine-week closing low hit last week, as political woes over a no-confidence motion against the prime minister weighed on sentiment, although foreign buying boosted the turnover, brokers said.

The turnover stood at 2.3 billion rupees ($14.82 million), well above this year’s daily average of around 1.2 billion rupees.

The Colombo stock index ended 0.42 percent weaker at 6,449.90, near its lowest closing since Jan. 23 hit on Wednesday. The markets were closed on Friday for a holiday.

The index rose 0.51 percent last week, its first weekly gain in five, but dropped 1.14 percent last month.

“Local investors are on the sidelines ahead of the no-confidence motion, but foreign buying boosted the turnover,” said Dimantha Mathew, head of research, First Capital Holdings.

Foreign investors bought a net 1.6 billion rupees worth of shares on Monday, but they have net sold 1 billion rupees worth equities so far this year.

Political uncertainty and worries over a slowing economy weighed on sentiment, brokers said.

Prime Minister Ranil Wickremesinghe is facing a no-confidence motion, which will be debated on April 4 before voting, with analysts saying support from many political parties will be needed for Wickremesinghe to clear the vote.

Cautious investors await the outcome of the rate announcement, said analysts.

Sri Lanka’s central bank is expected to keep key interest rates unchanged on Wednesday after a rate review, but economists in a Reuters poll are not ruling out the possibility of a rate cut to help bolster economic growth that has slipped to a 16-year low.

Shares in Asiri Hospitals Plc ended down 9.1 percent, while LAUGFS Gas Plc closed 22 percent down, Commercial Bank of Ceylon Plc ended 1.9 percent down and Dialog Axiata Plc closed 0.7 percent weaker.

Sri Lanka’s economy grew by 3.1 percent in 2017, the slowest in 16 years and well below the 4.5 percent seen in 2016, revised government data released showed last week.

($1 = 155.2000 Sri Lankan rupees) 

(Reporting by Ranga Sirilal and Shihar Aneez, Editing by Sherry Jacob-Phillips)

USD160 Mn Havelock City Commercial Development to Commence Construction

Havelock City- the premier integrated mixed-use development project in Sri Lanka conducted the Ground Breaking of its Commercial Development, the developers said in a news release.

"The on-time completion of the piling works paved the way to commence the construction of the Super Structure which will be completed by 2021. The construction contract was awarded to China Harbour Engineering Company Ltd. which has its global foot print in over 100 countries.

"Havelock City, the brain child of Mr. S P Tao is developed by Mireka Capital Land a fully own subsidiary of Overseas Realty (Ceylon) PLC, the owner, developer and manager of the iconic World Trade Centre Colombo.

"The Havelock City Commercial Development was designed by the globally renowned Palmer & Turner Group Singapore. It comprises a 50 storeyed Office Tower and a Shopping Mall built to International Standards which will be an iconic landmark in the vicinity," it said.

"The Office Tower housing Grade A premium office space is designed to be a LEED GOLD certified building and is built to the highest standards that enables efficient space planning through column free wide floor plates and a smart functioning infrastructure. The overall design, built quality and facilities will enable businesses an unparalleled competitive advantage.

"The Shopping Mall is developed as a community level shopping mall serving the lifestyle needs of the catchment. A miniature heaven for the ardent shopaholic, the mega mall comprises six floors of both local and international fashion brands, dining and entertainment experiences amidst a state-of-the-art multiplex cinema; a welcoming treat to anyone who craves an undivided shopping experience

"Additionally, the two basement levels of parking with ample space to park over 800 vehicles complements the convenience and vibrancy offered by the Havelock City Commercial development," it added.

The Commercial development of Havelock city will be the visual anchor of the Havelock City Residencies which comprises eight magnificently designed apartment towers in 18 acres of prime land in Colombo, the release said.

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Harry group cross 50% threshold in Aitken Spence

Melstacorp PLC together with related parties (Milford Exports, Stassen Exports and Ms. DST Jayawardena) now have a controlling 51.04% of the Aitken Spence conglomerate, Melstacorp Managing Director Amitha Gooneratne said in a Stock Exchange filing on Mar. 26 announcing the acquisition of approx. 8.13 million Aitken Spence shares by Melstacorp.

Gooneratne listed the shares held by Melstacorp and related parties as – Melstacorp approx. 47.17%, Milford Exports approx. 1.064%, Stassen Exports approx 0.799 and Ms. Jayawardena as 0.0068% (27,839 shares.)

They collectively hold approx 199.09 million shares in Spence (49.038% approx).

The filing explained that "as this purchase is made after a completion of one year cycle and also as the company together with the aforementioned connected parties has crossed the 50% threshold, the restriction on purchase without triggering a mandatory offer as per SEC Rule No. 31.1 will not apply to this purchase or any future purchase of Aitkent Spence PLC shares by this company (Melstacorp).

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Melstacorp get SEC nod for off-floor transfer of DCSL shares to its shareholders

Melstacorp PLC, the holding company of Distilleries Company of Sri Lanka (DCSL), last week announced in a Stock Exchange filing that the Securities and Exchange Commission of Sri Lanka has approved the off-floor transfer of DCSL shares declared as a "dividend in specie" (a dividend other than in cash) to the shareholders of Melstacorp on the already announced ex-dividend date.

In an earlier filing on Mar. 27, Melstacorp announced that DCSL had, "due to a deviation with regard to the previous approval obtained from the SEC," had made an additional submission to the SEC regarding its off-floor transfer application.

In February this year, Melstacorp announced the interim dividend in specie of DCSL shares to its shareholders under which every 27 shares of Melstacorp will qualify to receive eight DCSL shares.

Since August 2016, DCSL shares have not been traded on the Colombo Stock Exchange at the request of the company to facilitate a share swap between Melstacorp and DCSL under which Melstacorp, previously a fully owned subsidiary of DCSL, became the holding company of DCSL.

In its March 27 filing, Melstacorp said it expected that the suspension of trading of DCSL shares will be lifted once the SEC approves the off-floor transaction.

Accordingly, DCSL had given an undertaking to the SEC that it will comply with the requirements of SEC’s Nov. 17, 2016, directive within a time frame agreed with the SEC.

The filing said that the failure to comply with the regulatory requirements would result in the suspension of the trading of DCSL shares on the CSE.

Under the Aug. 2016 arrangement, described as the country’s first 180 degree share swap, Melstacorp which was a fully owned subsidiary of DCSL, became DCSL’s holding company.

Under this arrangement, holders of each DCSL share were allotted four Melstacorp shares in exchange. They were also told that they will enjoy preferential allotment of DCSL shares once the arrangements are completed and DCSL will once again trade on the CSE.

For many years the cash rich DCSL, conscious of the fact that it was a player in the controversial liquor industry, has been diversifying into various other business segments.

Melstacorp is now the holding company of DCSL and these businesses.

It is expected that the DCSL shares being issued as a non-cash dividend to Melstacorp shareholders, will be uploaded to their Central Depository System (CDS) accounts shortly and DCSL will once again be on the CSE trading boards after a long absence.

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Sri Lanka to bring transitional provisions on new income tax law

ECONOMYNEXT - Sri Lanka will bring changes to a new income tax law effective this year to tide over practical difficulties encountered and also introduce transitional provisions in the change-over from the old act.

Finance Minister Mangala Samaraweera had proposed transitional provisions covering unexpired tax holidays and capital allowances which have to be issued as regulations, the state information office said.

Some directions of the new act also had to be changed to take into account practical difficulties encountered, the cabinet was told.

The cabinet had approved the proposals.