Jan 052014
 
Brokers seek permission to close shop temporarily
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.

Jan 052014
 
Brokers seek permission to close shop temporarily
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..

The trading floor of the Colombo Stock Exchange

Jul 012013
 
SEC to hold ‘Investment Day’ to educate public
The Securities and Exchange Commission of Sri Lanka (SEC) in its endeavour to develop an efficient and effective capital market has organized “Investment Day 2013” at the Sri Lanka Exhibition and Convention Centre on July 6 (from 9.00 a.m. to 5.00 p.m.) under the auspices of Economic Development Minister Basil Rajapaksa.

The aim of this event is to provide knowledge and guidance on investing in the capital market and thereby create a shareholding democracy in the country. The SEC is of the view that the investing public should have the basic knowledge to invest in the capital market and is therefore committed to impart knowledge and awareness to existing and potential investors.

Over the last 12 months, the Colombo Stock Exchange has recorded a growth of 30 percent whilst the annual average return of the stock market over the last five years has been 46%. Over the last few months the stock market has grown significantly as a result of a decline in market interest rates. Many people are keen to invest in the market but lack proper knowledge to do so. “Investment Day 2013” will serve as a good platform for investors to obtain knowledge on investing in the capital market. Furthermore, less sophisticated investors will have the ability to pursue options of investing in unit trusts.

With the intention of developing the capital market the SEC formulated a Capital Market Master Plan in November last year. This Plan comprises of 10 key strategies and two of them are aimed at developing the unit trust industry and enhancing investor education. “Investment Day 2013” is expected to foster greater investor awareness on the investment opportunities available in the capital market. The event will assist potential investors to open accounts to transact in shares and unit trusts and will feature prominent professionals from the securities industry, who will address the gathering on a wide spectrum of topics throughout the day, ranging from benefits of investing in the stock market, risks associated with investing in the market and how to mitigate them and investing in the debt market in all three languages. The lectures will be conducted in an easy to understand manner to enable first time investors to derive the full benefit of the “Investment Day 2013” and be informed investors.

One of the main attributes of the event would be that participants will be able to meet the entire capital market including the Colombo Stock Exchange, Stock Broking firms, Investment Managers, Margin Providers, Listed Companies and Unit Trust Management Companies under one roof. These institutions will exhibit more than 60 stalls at the Investment Day. Investors will also be able to witness the launch of two books on investing in the capital market and obtain research reports and free brochures on investing in shares and unit trusts. Furthermore, they will get the opportunity to watch video documentaries in all three languages on investing in the capital market and win opportunities to invest in the stock market free of cost. Entrance to the Investment Day 2013 will be free-of-charge.

May 092013
 
Dialog first quarter profits at Rs.1.6bn
Sri Lanka’s leading mobile services provider, Dialog Axiata PLC has posted a net profit of Rs.1.59 billion for the first quarter of FY13 against a net loss of Rs.531 million in the same quarter of the previous year, helped by reduced financial costs and tax refunds, the interim financial accounts released to the Colombo Stock Exchange showed.

Dialog, a unit of Malaysia’s Axiata group, saw its revenue rising to Rs.15.2 billion during the quarter under consideration against Rs.12.8 billion the group recorded in the corresponding quarter of the previous year, thus boosting the gross profit by over Rs.1.2 billion Year-on-Year.

The group also has been able to keep its costs at moderate levels vis-à-vis the revenue increase and the earnings per share for the three months stood at 20 cents against a loss per share of 0.07 cents in 1Q12.

The group has been able to reduce its finance cost originating from US dollar loans to Rs.210 million during the quarter against Rs.2.3 billion finance cost the group reported in 1Q12.

Dialog also received a tax refund under Telecommunication Development Charge Fund amounting to Rs.1.24 billion against zero refunds in the same quarter of the previous year.

May 022013
 
Export earnings, import expenditure, trade gap down in February
Sri Lanka’s export income fell 2.9 percent Year-on-Year (YoY) to US $ 797.5 million in February with both agricultural and industrial exports slowing down, the data released by the Central Bank showed.

The import expenditure fell even steeper by 9.3 percent YoY to US $ 1.43 billion with money spent on all three major import categories—consumer, intermediate and investment goods declining..

The trade gap narrowed 16.3 percent YoY to US $ 635.7 million in February and the trade gap narrowed 20.3 percent YoY in the first two months of 2013.

Export ear nings from agriculture exports fell 5.9 percent YoY to US $ 174.5 million. Earnings from tea exports and rubber exports fell 1.6 percent and 12.1 percent to US $ 103.4 million and US $ 66.1 million respectively.

However, earnings from textile and garment exports rose 8.8 percent to US $ 371.6 million.

Meanwhile, the import expenditure on fuel imports fell 17.2 percent YoY to US $ 17.2 percent while consumer goods imports fell 16.9 percent YoY to US $ 208.7 million.

Expenditure on textile and textile articles during February rose 18.3 percent YoY to US $ 355.6 million.

Expenditure on the import of machinery and equipment and building materials rose 3.1 percent and 4 percent YoY to US $ 166.5 million and US $ 104.6 million, respectively.

However, the import expenditure on transport equipment fell 28.2 percent to US $ 84.2 million.

During February, Sri Lanka received US $ 490 million as workers’ remittances, up by 4.2 percent and Colombo Stock Exchange received US $ 8.2 million in portfolio investment against US $ 16.3 million in February 2012.

Earnings from tourism during the month rose 20.7 percent YoY to US $ 102.6 million while inflows to the government– T-bills and bonds and long term loans– rose 31.3 percent to US $ 699.4 million.

The gross official reserves during February weakened slightly to US $ 6, 670 million from US $ 6,855 million in January.

In terms of months of imports, gross official reserves were equivalent to 4.3 months of imports.

May 022013
 
Seylan 1Q net up 26% to Rs.510mn
Seylan Bank PLC has posted a net profit of Rs.509.5 million, up by 26 percent Year-on-Year, for the first quarter of the financial year 2013, the interim financial accounts released to the Colombo Stock Exchange showed.

The earnings per share for the quarter improved to Rs.1.51 from 1.20. The net interest income during the quarter grew 6.07 percent YoY to Rs. 2.16 billion while net fee and commission income rose 20 percent YoY to Rs. 460 million.

The bank grew its deposits base from Rs.146.7 billion to Rs.150.1 billion during the quarter and its net advances portfolio from Rs.124.7 billion to Rs.125.9 billion during the 3 months under review, despite fierce competition for deposits and a high interest rate environment.

The bank was also able to improve its asset quality through focused, sustained and effective recovery efforts. This enabled the bank to reduce its gross NPA by a further Rs.421 million during 1Q13.

Seylan’s total Capital Adequacy ratio stands at 14.08 percent at the end of the quarter under review.

The recent debenture issue of Rs.2 billion has not been included in the total capital adequacy computation for 1Q13, since Central Bank approval was obtained in April 2013.

Once these funds are included, Seylan’s total capital adequacy would exceed 15.5 percent, making it one of the highest on the local banking industry.

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