Tag Archive | "Colombo Stock Exchange"

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Sri Lankan shares fall about 10 pct in 2016; directions on rupee, rates awaited

Posted on 30 December 2016 by admin


Dec 30 Sri Lankan shares fell on Friday, posting a yearly decline of about 10 percent, in thin trade due to year-end holidays, while investors waited for directions from the central bank on the rupee and interest rates.

The central bank is most likely to keep its key interest rates steady at a monetary policy meeting later in the day, even as some economists expect further tightening to ease pressure on the rupee following a rate hike by the U.S. Federal Reserve earlier this month, a Reuters poll showed.

Speculation over possible depreciation of the rupee and rate hikes weighed on sentiment, stockbrokers said.

The Colombo stock index closed 0.28 percent lower at 6,228.26, declining 9.7 percent in 2016, its second straight yearly fall.

In terms of dollar value, market capitalisation fell 13 percent, making Sri Lanka a worse performer than emerging Asian markets like Malaysia, Thailand, Indonesia and Singapore.

Stockbrokers said factors like failure to attract foreign direct investments and lack of investor confidence due to a reversal in some budget policies weighed on the market this year.

"We are going with positive expectations, though it is going to be a challenging year for all," a stockbroker said asking not to be named.

"Politically the government has to prove its policies while the private sector will see some challenges amid possible volatile external environment."

ALSO IN BASIC MATERIALS

Foreign investors sold a net 6.4 million rupees of equities on Friday, but purchased a net 633.5 million rupees ($4.24 million) in 2016, compared with a net sell of 4.43 billion rupees last year.

Turnover stood at 202 million rupees, less than a third of this year's daily average of 737.2 million rupees. Last year's daily average was 1.06 billion rupees.

Large cap Ceylon Tobacco Co Plc fell 0.6 percent, while Lion Brewery (Ceylon) Plc lost 3 percent. ($1 = 149.4000 Sri Lankan rupees) (Reporting by Shihar Aneez; Editing by Subhranshu Sahu)

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Brokers seek permission to close shop temporarily

Posted on 06 January 2014 by admin

Courtesy: Daily Mirror – Monday, 06 January 2014 09:10

Several struggling stock brokers have written to the Colombo Stock Exchange (CSE) requesting permission to temporarily halt their operations mainly due to low activity levels in the bourse, Mirror Business learns. This was confirmed by Securities and Exchange Commission (SEC) Chairman Dr. Nalaka Godahewa during an inquiry.

“There is a proposal by several brokers requesting temporary deactivation of their operations. The CSE has forwarded it to us and we are considering it. We have not discussed it with the Commission yet, but at the secretariat level, we are looking at it positively,” Dr. Godahewa said.

He further said, it was not a “bad idea” as it has happened in many other markets as well.

“You allow those who are struggling to remain deactivate for a while. It will give more opportunities for others who will continue to operate in the market,” he noted.

Altogether 29 stock brokers currently operate in the CSE, and many are of the opinion that the number is too high for all to sustain their businesses.

A number of new broking licenses were issued just after the conclusion of an almost three decade war in 2009—at a time when the market was undergoing a re-rating.

In 2010 and 2011, the daily average turnover stood over a couple of billion with the arrival of new set of retail investors into the market, providing ample opportunities to brokerages to make money.

However, in 2012, with the market undergoing a painful correction, the euphoria died down and many new retail investors burnt their fingers.

The daily average turnover in 2012 plunged to Rs.883.6 million, creating a highly competitive environment for brokers to operate. The daily average turnover in 2013, according to latest CSE figures, stands even lower at Rs.828.4 million.

“I think there are far too many brokers in our market. But like the Central Bank who has told the finance companies to consolidate, we have not told brokers to do so. The industry has to decide on its own. We are not going to tell them how to do business,” Dr. Godahewa stressed..

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Robust foreign buying into listed Sri Lankan stocks to continue

Posted on 25 July 2013 by admin

The robust buying into listed Sri Lankan equities, now at over Rs. 16 billion a year to date, will continue says broking firm DNH Financial Ltd. It said, refuting the general opinion that foreign investors tend to exit the Bourse during a decline, that net foreign buying has accelerated on an YTD basis with foreign investors buying on weakness (see chart) when net foreign buying with the ASPI’s performance is juxtaposed.

“Given the medium to longer term investment horizon of most FIIs, we believe this trend is likely to continue going forward with foreign investors expected to continue to cherry pick quality stocks on price weakness,” DNH said. “Although we do admit that net foreign buying in emerging markets have declined significantly this year, mainly due to relatively stronger performances in selected developed markets (and fears that the Federal Reserve could start taping its bond-purchasing stimulus), foreign activity indicates signs of recovering, with most frontiers/EMs reporting positive foreign inflows on a MTD basis,” the broking firm added.

While the size of the market certainly has an impact with regard to absorbing foreign fund flows, comparing net foreign buying (NFP) with market capitalisation, DNH said it was encouraging to note the NFP/market cap ratio appears highest for Sri Lanka compared to other frontiers/EMs.

With Sri Lanka’s macroeconomic and corporate fundamentals expected to strengthen going forward, DNH expects the ratio to increase, further corroborating the foreign confidence in the Sri Lankan Bourse. (Ratio is negative for South Korea, Vietnam, Indonesia and India where net foreign buying has been negative on MTD basis).

Focusing on local investor sentiments, DNH said confidence appears sluggish. “With no structural problems evident in the Sri Lankan economy, it is very hard to ignore a bourse that consists of some of the most resilient and best performing companies in the region,” it added.

Supported by the Sri Lankan rupee’s depreciation, foreign investors have been net buyers on an YTD basis although local investor sentiment has been dented over the past few months largely due to the lack of available short term market opportunities.

“With a market cap to GDP at below 30%, well below that of global peers, we strongly urge domestic investors to avoid unrealistic short term expectations and focus on buying quality stocks on price weakness for medium to longer term sustainable returns,” DNH opined.

Commenting on market’s future trajectory, the broker said with 2Q2013 results trickling into the market, it expects the Bourse to inch upwards with the release of blue chip counters that are expected to report firm earnings growth.

“With several of these stocks currently trading on attractive valuations, we see little excuse for bottom up investors to enter the market and advise them to however, restrict their exposure to quality positions. While equity investors have been hit relatively hard over the past couple of months, which has taken attention away from blue chip heavyweight and middleweight counters, we believe the window to invest is now open for those willing to choose an alpha driven approach. In this respect, we wish to emphasise that stock selectivity will determine the winners from the losers,” DNH said.

“While the domestic structural story appears largely intact, our advice to investors is to build a portfolio of the most compelling companies in the ASPI that will not only benefit fully from the current macroeconomic conditions, but will also outperform on a sustainable basis in the medium to longer term,” DNH added.

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CSE: Stocks at over two-week high on foreign buying

Posted on 13 March 2013 by admin

Reuters: Shares edged up on Tuesday to a more than two-week high as foreign investors brought select blue chips like market heavyweight John Keells Holding. Local investors stayed on the sidelines after the Central Bank held rates steady, brokers said.

 

The main share index rose 0.48%, or 27.01 points, to 5,704.32, its highest since 22 February.
Foreign investors were net buyers of Rs. 320.98 million, extending year-to-date foreign inflows to Rs. 3.10 billion.


Shares in John Keells Holdings rose 1.19% to Rs. 237.50, their highest close since 13 October 2010. The biggest listed lender, Commercial Bank of Ceylon, rose 1.48% to a one-month high of Rs. 110.00.
“Foreigners see value in these select blue chips. But the interest rate is playing a major role in local investors’ decision making,” said a stockbroker on condition of anonymity.
The Central Bank last Friday left policy rates unchanged for a third straight month, saying inflation was expected to ease and reach more favourable levels by the end of the year.
The day’s turnover was Rs. 671.11 million ($ 5.30 million), well below this year’s daily average of Rs. 1.06 billion.
The rupee firmed to a one-month closing high of 126.18/28 to the dollar compared with Monday’s 126.45/55
.

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Colombo Stock Exchange records Net Foreign Inflow (NFI) of Rs.38 billion in 2012

Posted on 21 January 2013 by admin

 

The Colombo Stock Exchange (CSE) which recorded Rs 38 billion net foreign inflows (NFI’s) last year, is now expecting to double the figure this year by vigorous campaigning overseas.

“ In 2012 CSE recorded a Rs 38 billion foreign inflow, which was the highest ever recorded. This was 23 percent of the total investment. We intend to increase this to 30 percent plus this year, Head of Marketing Development Niroshan Wijesundera told Daily News Business.”

He said that as the CSE is one of the most attractive markets in the region it is not a difficult task to promote and attract foreign investors into the country.

Therefore, the CSE has taken initiatives to organize a series of road shows and investment forums overseas to reach the 30 percent plus target before the end of the market, Wijesundera said.

Since India is one of the fast growing economies in the region, the CSE will organize an investment forum in Mumbai on February 21 next month, which is expected to attract around 80 to 100 top fund managers in Mumbai and form other countries including Dubai, he said.

Wijesundera also said that around nine leading listed companies have confirmed their participation in the road show/investment forum. At the event they will highlight and showcase Sri Lanka’s growth potentials and also evaluate Sri Lanka’s equity market and its value proposition.

The purpose of the event was to attract foreign high network investors and top business corporates in Mumbai, Indian’s commercial capital and other investors in the region, he said.

At present nine local listed companies have confirmed their participation in the event.

Those companies are John Keels, Curson Cumberbatch, HNB Bank, NDB Bank, Hayleys DFCC Bank, Commercial Bank, Access International and Dialog. Bloomberg Date Services is organizing the event in Mumbai, he said.

The keynote speech will be delivered by the Minister of International Monetary Corporation and Deputy Minister Finance Dr Sarath Amunugama.

Courtesy: H.D.H. Senewiratne writing to the Ceylon Daily News – 21/01/2013

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