ASPI trading at 6,391.03, up 8.72 points or 0.14 percent with gains in some Banks and Finance sector stocks, brokers said. Gains were seen on Commercial bank, Seylan bank and Commercial Leasing. Active trading was also seen in Ceylon Tobacco and Dialog Axaita. Turnover is at 150 million rupees.up
Tuesday, April 19, 2016
Sri Lanka *market update* ASPI trading up at 0.1-pct, Banking & finance sector up
Monday, April 18, 2016
Central Bank sees monetary policy stance as appropriate
Apr 18, 2016 (LBO) – Sri Lanka’s Central Bank, in response to an opinion column, states that its monetary policy stance holding interest rates unchanged on March 29 was appropriate.
WA Wijewardena, a former deputy governor, in an article in the Daily FT alleged that the Monetary Board should have tightened monetary policy “based on the logical economic choice which the Board would have made to lift the economy out of the prevailing foreign exchange crisis.”
But the Central Bank’s response is that it has tightened monetary policy, first by raising the Statutory Reserve Requirement (SRR) in January 2016, followed by increasing the main policy interest rates by 50 basis points in February 2016.
This was in addition to the “imposition of a loan to value (LTV) ratio on motor vehicle related credit facilities, the allowing of the exchange rate to depreciate, and the changes introduced to vehicle import duties,” during the last quarter, the statement said.
“The decision of the CBSL in March 2016 to maintain the monetary policy stance unchanged after two consecutive months of tightening is a logical step in allowing sufficient time for the market to respond to monetary policy actions while allowing room for the already increased market interest rates to stabilise.”
Crucially, the Central Bank believes interest rate tightening alone would be insufficient to address external sector pressures.
“In the midst of the balance of payments crisis in 2000/01, the CBSL unsuccessfully attempted to prevent the exchange rate from depreciating by raising policy interest rates. Specifically, the Reverse Repurchase rate of the CBSL was increased from 13.48 percent in June 2000 to 23 percent by January 2001.”
“In addition to the free-fall WA has discussed in his article, the end result was the disastrous growth outcome in 2001, where the country registered its only negative annual real GDP growth rate since independence.”
The CBSL is of the view that a blend of policy measures, including fiscal and monetary policy measures, is more appropriate, rather than solely relying on interest rates to correct the imbalances in the external sector.
In the meantime, the CBSL will continue to emphasise the need to implement necessary structural reforms to strengthen the fiscal and external sectors on a sustainable basis, it said.
This month, Sri Lanka may announce a support facility from the IMF after a decline in foreign reserves due to debt service payments and the supply of foreign exchange to cover foreign investor sales of government bonds.
A key factor is leading the market rather than following it, and the Central Bank’s decision to increase policy interest rates by 50 basis points in February 2016 surprised the market, the statement added.
Sri Lanka among Asia's top 10 FDI hotspots: US think tank
Apr 18, 2016 (LBO) – IHS Global Insight, a United States-based think tank, has listed Sri Lanka as one of the top 10 foreign direct investment (FDI) destinations in Asia.
The other Southeast Asian countries projected to be the FDI hot spots in the region, are China, India, Bangladesh, Indonesia, Vietnam, Myanmar, Malaysia, The Philippines and Thailand.
“Over the next decade, Asia Pacific is forecast to be the fastest growing region of the global economy and the region that offers the biggest potential gains for foreign direct investment,” IHS said in a release.
“A key source of strength for Asia Pacific is the rapidly growing size of the economic region, which now accounts for around one-third of world GDP, generating strong intra-regional trade and investment flows.”
Amongst the South Asian economies, Sri Lanka and Bangladesh are expected to show rapid growth over the next decade, it said.
According to the think tank, the new Sri Lankan government has embarked on sweeping economic reforms, with its first budget containing considerable economic liberalization measures.
The Sri Lankan economy is projected to grow at an average annual pace of 5.6 percent a year over 2016-2020 while key growth industries are expected to include logistics, tourism, agricultural products, IT-BPO industries and construction.
Sri Lanka *market update* ASPI close at 0.3-pct
ASPI closed at 6,382.31, down 19.01 points or 0.30 percent with losses in some finance and banking sector stocks like Commercial Leasing Company and Lanka Orix Leasing and DFCC Bank,brokers said. Turnover was 674 million rupees.Top contributory counters towards the day’s turnover were John Keells Holdings (Voting) LKR 153.9mn (USD 1,063.2k, +0.8%), Hatton National Bank (Voting) LKR 105.9mn (USD 731.2k, -0.2%), LB Finance LKR 83.4mn (USD 576.1k, -0.6%) Tess Agro (Voting) LKR 63.2 (USD 436.3k, +6.3%), Namal Acuity Value Fund LKR 60.0mn (USD 414.7k, -3.3%). · Foreign purchases amounted to LKR 48.1mn (USD 332.1k), whilst foreign sales amounted to LKR 269.5mn (USD 1,862.0k). This resulted in a net foreign outflow of LKR 221.5mn being recorded at the end of the day’s trading. · Market capitalization stood at LKR 2,719.5bn. YTD performance of the ASPI is -7.4%. (updated)
Asian stocks kicked-off the week on a bearish note, as failed Doha meeting to reach an oil output freeze deal combined weighed heavily on the market’s. Negotiations in Doha over the first global oil deal failed to reach an agreement on Sunday. The Japanese benchmark Nikkei dropped 3.03 percent to 16,342 points, while USD/JPY sinks -0.78 percent to 107.90. The Australian markets – The benchmark S&P/ASX 200 index drops -0.25% to 5,144. The Chinese equities also followed suit and kept losses, with the benchmark Shanghai Composite index dropping 1.39 percent, the CSI300 index slides -1.15 percent, while Hong Kong’s Hang Seng lost 0.92 percemt to trade around 21,140 levels. Apr 18, 2016 08.30 a.m
Brent crude futures tumbled about 4.6 percent to 41.10 US dollars while U.S. crude slid about 5.2 percent to 38.26 US dollars. Apr 18, 2016 08.30 a.m
PIRAMAL GLASS - DIVIDEND ANNOUNCEMENT
PIRAMAL GLASS CEYLON PLC
Company ID: - GLAS
Date of Announcement: - 18.Apr.2016
Rate of Dividend: - Rs. 0.35 per share /First & Final Dividend
Financial Year: - 2015/2016
Shareholder Approval: - Required
AGM: - 30.Jun.2016
XD: - 01.Jul.2016
Payment: - 12.Jul.2016
Share Transfer Book Open
Tuesday, April 12, 2016
Three member committee to streamline Chinese projects in Sri Lanka
Apr 12, 2016 (LBO) – Sri Lanka’s Prime Minister Ranil Wickremesinghe has pledged to China to appoint a three-member high powered committee to streamline and expedite Chinese projects and investments in Sri Lanka.
Special Assignments Minister Dr. Sarath Amunugama, Development Strategies and International Trade Minister Malik Samarawickrama and Economic Affairs Ministry Consultant R.Paskaralingam will be appointed to the committee.
Prime Minister Ranil Wickremesinghe met Chinese President Xi Jinping and premier Li Keqiang last week.
During the discussions Chinese President has said that Chinese government only considers policies and people of Sri Lanka when supporting and not political parties or individuals.
Sri Lanka's Hilton gets new board
Apr 12, 2016 (LBO) – Krishantha Cooray has been appointed Chairman and Non Executive Director of Hotel Developers Lanka (Hilton Hotel), a statement said.
Following Non-Executive Directors too have been appointed: Athula Senanayake, Tehani S. Mathew, Dinouk Colombage, Sonali Liyanamana, Dhanushka R. Samarasinghe and M.Shezmin Manzoor, according to a filing to the Stock Exchange.
Sri Lanka economy adjusting, may receive USD1-1.25 bln from IMF: CB
Highlights from press conference:
* GDP grew 4.8 pct in 2015, vs 4.9 pct 2014
* Sri Lanka may receive around USD 1-1.25 billion IMF support: Governor
* USD500 mln renminbi bonds may be issued in coming months: Governor
* Worker remittances fell 0.5 pct to USD6.9 bln in 2015
* Official reserves at USD6.2 bln end of March
Apr 12, 2016 (LBO) – Sri Lanka’s Central Bank said the economy grew at 4.8 percent in 2015 versus 4.9 percent in 2014, with growth this year expected in the range of 5-5.5 percent.
Governor Arjuna Mahendran said monetary adjustments to the economy last year were having a positive impact. He was speaking at a press conference on the state of the economy.
“Imports are showing signs of plateauing,” he said, referring to monetary policy efforts to discourage imports.
Commenting on discussions with the IMF, Mahendran said he was hopeful around 1 billion to 1.25 billion dollars support may be on the cards.
The IMF said on Monday Sri Lanka had made significant progress towards concluding an IMF facility, and further discussions would be held on the sidelines of Spring Meetings in Washington D.C. this week.
“We hope we can conclude this in the next two weeks,” said Mahendran.
In terms of interest rates, the IMF has suggested that further credit tightening would support the economy, but Mahendran said that might not be necessary.
“I would say that that is not necessary if the economy continues to achieve a soft landing, if the economy goes according to plan. The Central Bank however reserves the right to increase rates,” he said.
Sri Lanka has sought IMF support to tide over an outflow of foreign investments from the bond market due to external factors as well as irresponsible government finances.
Mahendran said Sri Lanka needs to raise around 2.5 billion dollars for its government funding requirement this year, and would look at Chinese renminbi bonds as well as dollar bonds in coming months.
The renminbi bonds would initially target venture capital investors, and this was the beginning in establishing a long term benchmark for the island, he said.
Commenting on the rupee, Mahendran said pressure on the currency was easing.
“If you look at the real effective exchange, rupee at 150 was not on the cards. I think the rupee is settling.”
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