NDB Stock brokers in the special report say amidst gradual revival, two-year bull run on the cards; valuations attractive; corporate profit growth to bounce back in 2013 in a resilient economy

NDB Stockbrokers in a special research report that is likely to move investor sentiments for the better is upbeat of a revival in the currently-bearish stock market as well as a rebound in corporate earnings from next year onwards.

Boldly titled ‘Emerging Bull in the World of Bears,’ the NDBS stated: “In view of the stabilizing economic conditions, we remain positive on the profit growth prospects over the next two years.

While we estimate that currently, the overall Sri Lankan market is trading at a forward P/E of 11x, we expect it to increase to 15x with the improvement in sentiment over the next two years.”

Recalling that in its previous review released in May a forecast was made that the bull run would commence from the latter part of 2012, NDBS said since then the ASI has gained 6% (from 5,048 to 5,331).

In line with the positive factors, “we maintain our ASPI target of 9,000 by the end of 2014. However, the sentiment is likely to improve gradually and pick up steam by 2013H2 in view of the prevailing uncertainty in global economies and high domestic interest rates.”

Its latest report also predicted corporate profit growth to bounce back from 2013.

After two years of exceptional growth (of 75% and 25% respectively) in corporate profits, 2012 is seemingly a year of consolidation with profits remaining flat from the previous year up to September.

NDBS expects the trend to continue until the rest of the year and accordingly revised downwards its previous profit growth expectation of 10% for 2012. However sectors such as banking, hotel, telecommunication and food and beverage have recorded appreciable profit growth, it noted.

“We maintain our expectation that the profits would bounce back in 2013 and 2014, to record a growth of 20% and 15% respectively. This is in view of the improving economic stability resulting from the measures taken in 2012H1,” NDBS said.

Emphasizing on attractive valuations, the broking firm said Sri Lankan equities were attractively priced compared to regional emerging/frontier markets.

“While according to our estimates the Sri Lankan stocks are trading at a forward P/E of 11x, the regional markets are trading at a forward P/E of 12.8x. With the expected improvement in profitability and economic stability over the next two years, we maintain our expectation that the forward P/E would reach 15x with improving investor sentiment,” NDBS pointed out.

It implied that attractive valuations, as well as future upside in relation to regional peers, were key reasons for record net foreign inflow into Sri Lankan equities so far this year.

“The foreign investors have been bullish on Sri Lankan equities since early 2012, with net foreign inflows to the stock market reaching Rs. 33 billion up to October,” NDBS said.

As of last week, as reported by the Daily FT, the net inflow had crossed the Rs. 37 billion marks. This is in comparison to net foreign outflows of Rs. 26 billion and Rs. 19 billion in 2010 and 2011 respectively.

“This indicates that the value investors perceive upside potential in Sri Lankan equities in view of positive policy measures taken in 2012 and the prospects of impressive growth over the next few years,” NDBS said.

Noting that demand for equities was quietly accumulating whilst supply was slowing down, the broking firm said Initial Public Offerings (IPOs) and secondary equity issues (rights issues, etc.) by listed companies had slowed down in 2012 compared to 2010 and 2011.

As a result, NDBS said the investable funds within the economy have been accumulating and have been directed to short-term fixed income instruments to a large extent, in view of the relatively high-interest rates. In addition, with the increase in interest rates and triggering margin calls, the utilization of margin trading (leverage) would have reduced significantly over the last 12 months.

“We feel the equity selling pressure has been reducing substantially over the last 12 months. Simultaneously, the investable funds have been accumulating, which could flow into the equity market if the interest rates come down (including an increase in margin trading activity) or any other event occurs that could boost the sentiment of the equity market,” NDBS added.

Adopted from ft.lk 

The overall market interest rates may revise downward this year since the borrowing cost of commercial banks will decline due to the reduced policy rates, a report by Asha Phillip Securities Ltd said.

The report which projected the economic prospects for 2013 said that downward interest rates will stimulate the stock market activities as a shift in investments from fixed income securities to high yielding investments will be witnessed. “Inflation is also expected to fluctuate within current levels amidst volatility in food prices which would result in the real interest rate falling further. Therefore, investors will search stock market investments with relatively sound earnings outlook of most of the listed companies,” it said.

According to the report, the banking and finance sector is expected to grow at a faster pace in 2013 against the growth levels recorded in 2012 supported more with the liberalized credit ceiling coupled with the expected growth in asset quality. “Moreover, the reduced interest rates will provide a hefty cushion on the bottom lines of companies with relatively high gearing via reducing interest cost, driving to record an upsurge in earnings.”

The report predicted that given the pick-up in consumption levels in the economy together with the growth in tourism industry, a fresh round of demand for food and beverages will happen, enabling the food and beverage sector to experience a prospective year. Further, the government’s plan on promoting a “Sports Economy” concept will also intensify the growth prospects of the sector, it added. It also said that rebounding of construction activities amidst relaxed interest rates and increased accessibility to credit will create opportunities for construction companies, generating opportunities for local construction material manufacturing sector such as cement and cables with the support granted by the Budget 2013 via offering tariff differentials at the point of custom.

The report was skeptical on the tea plantation sector saying that a wage revision is knocking the door. “Tea plantation companies may face another round of challenge with the upcoming wage revision in mid-2013, eroding their cost factors. Rubber and palm oil driven companies may operate with minimum hit against this move due to relatively low level of labour requirement compared to tea sector.”

The Colombo Stock Exchange (CSE) is currently in the process of amending regulations pertaining to the listing of debt securities, according to CSE’s Assistant General Manager of Regulatory Affairs, Renuke Wijayawardhane.

“We are currently in the process of revising some of the Listing Rules. However, nothing has been finalised at the moment and we are still at the discussion stage,” Wijayawardhane said.

Amendments to the current regulatory framework follows a spate of new listings of corporate debt, mainly debentures, on the CSE by listed and unlisted companies, seeking to capitalise on generous concessions granted in Budget 2013.

Proposals in question include the exemption of the withholding tax on interest income earned by investing in bonds and debentures listed with the CSE.

Speaking to Mirror Business about potential barriers to the establishment of a vibrant corporate debt market in Sri Lanka, Wealth Lanka Management (Pvt.) Ltd Chairman Mangala Boyagoda highlighted lack of information and regulation on unlisted companies as a potential challenge.

“Recent steps taken to promote the creation of a corporate debt market are very positive. However, statistics on unlisted companies are lacking. So, it’s very difficult to get a clear understanding of the depth of the Sri Lankan corporate debt market,” he said.

Boyagoda also called for more stringent regulation of unlisted companies, which expect to list debt securities.

“Unlisted companies issuing listed debentures must be regulated, so there is control over who is allowed to list debentures and at what amount. Investors have had their fingers burned in similar situations before, so proper regulation will be important to establish confidence,” he noted.

Policy consistency with regards to tax concessions was highlighted as a further area of concern. “Removal of the withholding tax and other tax concessions will help grow the corporate debt market. However, there are concerns about their impact on government revenue.”

“Now that they’ve implemented it, there has to be some consistency to allow the market to adjust but with current revenue levels, I have concerns about the sustainability of tax concessions,” Boyagoda said. Meanwhile, Heraymila Securities Limited CEO Ravi Abeysuriya called for streamlining of listing procedure and a greater focus on educating investors about the corporate debt market.

“There is a lot of change that will be required if the corporate debt market is to grow. Even now people are only buying debentures and then holding on to them so they’re not really being traded.” “More will have to be done to educate investors the approvals process, which is geared only towards equity, needs to be simplified,” Abeysuriya stated.

High networth and highly networked investor Dilith Jayaweera yesterday joined the bandwagon of those who are blaming the Treasury for current economic ills claiming that investors were getting frustrated due to inconsistent policies all-round.

He said that there had been an unprecedented degree of policy inconsistency of late thereby preventing a conducive and cohesive environment which is key. This he blamed on Treasury and claimed has increasingly frustrated investors both existing and prospective.

Dilith’s outburst is surprising as he has been a champion of positivism and can do attitude especially after the Government and forces defeated terrorism that plagued the country for near 30 years.

He also qualifies to be in the top 10 league of individual as well as emerging corporate investors in post-war Sri Lanka for his investments and acquisitions both within and outside the Colombo stock market.

The private sector and the Opposition have increasingly faulted not only the Treasury but also the Central Bank for mismanaging the economy. Drawing references from the famous book “Confessions of an Economic Hit Man” by John Perkins, some even have adduced that certain officials could be having an outside agenda.

Adopted from DailyFT

As Daily FT has been emphasising the redeeming feature of Colombo Bourse is the continued foreign investor interest.

On Friday net foreign buying topped Rs. 600 million bringing the year to date total to Rs. 1.76 billion, a record level for the past three years.
Friday’s inflow was on account of Rs. 1 billion investment by Goldman Sachs funds in to Commercial Bank. Bulk of the selling from the 10.6 million shares in total was SBI Venture Holding whilst Captains had shed some stake as well. Commercial Bank saw its foreign holding increase by 8 million shares last week.
What…
Interest by Goldman Sachs funds is midst premier blue chips JKH continuously being favoured by foreign investors. Recently a JP Morgan fund bought into Expolanka Holdings whilst in recent weeks among other stocks which had elicited non-national interests were CTC, Tokyo Cement, Softlogic Holdings, DIMO, Aitken Spence, and Chevron Lubricants.
Asia Wealth Management last week said the current exchange rate is very much attractive to potential foreign investors to enter the market. “We observed foreigners being positively responding to this stimulus, and a continuation of this would lead fresh capital flowing to the market. But we strongly believe that stability in the economic policies is vital to retain investor’s confidence,” Asia added.

Adopted from ft.lk 

IMF (International Monetary Fund) bullish on Sri Lanka

International Monetary Fund (IMF) Sri Lanka Resident Representative Dr. Koshy Mathai reiterated the fund’s stance on the recent policy reversals of the Central Bank regarding the exchange rate and interest rates and the government’s decision to increase domestic fuel prices, saying the policy moves were encouraging and could help the economy.

Addressing a special forum convened by HSBC Sri Lanka yesterday morning, Dr. Mathai said that Sri Lanka’s economy was in strong position compared with many other economies in the world. "Right now there is not much to worry about and I have a lot of optimism. We remain bullish on Sri Lanka’s economic growth prospects. Inflation is low, the debt to GDP ratio is declining, and the government is committed to brining down the fiscal deficit."

The debt to GDP ratio which was over 108 percent several years ago had declined to 78 percent last year. The deficit which was at 9.9 percent of GDP in 2009 is expected to be brought down to 6.8 percent in 2011.

"The economy is at very credible position but it does not stand out compared to most other economies which have done much more, but nevertheless, the debt stock favours Sri Lanka, where the growth rate outstrips interest rates, so debt to GDP would eventually drop," Dr. Mathai said.

Dr. Mathai said the economy did face a problem on the external sector front which became manifest six to nine months ago. The Central Bank had sold nearly US$ 3 billion since July 2011 to keep the exchange rate stable in the face of severe import demand and also printed more than Rs. 300 billion to keep rupee interest rates stable. The IMF had not been too happy with these policy decisions and had delayed payment of a US$ 400 million tranche under the US$ 2.6 billion standby facility arrangement. However, early February 2012, the Central Bank made a U-turn, floating the exchange rate and curbing credit growth, which was extremely high and fuelling import demand, by increasing interest rates and slapping a ceiling on commercial bank credit growth.

"We are extremely happy these policy decisions were taken. It is a step in the right direction. But most importantly, we are encouraged by the fact that the Central Bank and the government implemented a comprehensive mix of policies with a commitment to remain flexible. And this is important because no single policy will bare the full burden of the necessary adjustments that would have to be made, and also if the external account does improve then the rupee would be allowed to appreciate, if it does not, then the rupee would be depreciated a little bit more and perhaps interest rates would also be further tightened," Dr. Mathai said, adding that no one could predict if and when things would improve.

But he did say that authorities shored up the foundation for strong, more sustainable, growth.

The Colombo Stock Brokers Association (CSBA) on Tuesday highlighted to the Colombo Stock Exchange what was an exhaustive list of woes following the introduction of Automated Trading Version 7, with the CSE passing the buck to solutions provider MillenniumIT.

The meeting, first since the introduction of the new version a fortnight ago, was convened by CSE to iron out various concerns from both investor and broker sides. Whilst CSE officials had assured some issues could be rectified by late March, it had informed brokers to take up grievances with MIT, which is now owned by world famous London Stock Exchange.

Sources claimed that a more responsible move would have been for the CSE to accept the CSBA’s written submissions and take it up directly with MIT than passing the buck.

Though trialled many times via mock sessions and improved with stakeholder inputs, the ATS Version 7 since introduction had been blamed for causing confusion among brokers and investors, especially those doing online trading. This had led to low turnover on some days, in addition to causing frictions between brokers and investors.

Others said the new version is far superior and since introduction needs extra time for all to become familiar with.

Customisation of the ticker is limited. In the existing version, individual users can customize their screens: ticker rows, history rows, ticker mode, etc.

The ticker does not indicate the intra-day change in price but the change between the current and the last traded price.

The ticker does not indicate the intra-day change.

The instruments have to be added to the ticker on a daily basis.

There is a huge delay in the ticker.

Order book

Order book depth displays only 10 price points. This is not adequate. Order book (market depth) cannot be viewed by double clicking as in the previous version.

When you have many company codes opened in the order book where you are looking for prices, the prices do not pop up quickly. There is a delay of about two to three seconds.

There is no quick order book watch.

Whenever stock is changed in the order entry window, default buy window appears.

The order books don’t indicate the buying or selling volumes during the pre-open.

Cannot add VWAP (Volume Weighted Average price) on order book.

Order placement

Drop down list gets removed if the computer restarts or a user gets disconnected and logs in again.

The buy/sell windows take a long time to generate.

The orders should appear in a sequential order according to the type of order (normal order or custodian order).

The order entry panel should have a clear screen command button.

Orders placed for the same client cannot be viewed in the order placement tab unless a share is indicated (this facility was available in the previous version).

Once done amending an order, you cannot place a new order using the same Buy / Sell window (as was done in the previous version) but need to close that window and open a fresh window even though it is for the same client and retype all details including CDS account number which is very time consuming.

Order entry panel should be more user-friendly (space for the client ID field can be reduced and included for the display of the client name which the current given length is not sufficient).

When balance inquiry page is opened from the order placing screen, the client ID in order placing screen (buy or sell window) should automatically moved to client ID field in balance inquiry screen.

When amending an order (qty) the disclosed quantity does not get adjusted automatically.

When a GTC order is entered number of days by default is set for one day, whereas in the older system it was for five days.

Order blotter

The blotter should be able to generate the client’s name (this was there in previous version).

Order count not available in order blotter/my trader.

Orders cannot be filtered by customers. More enhancements are required.

Market watch

Statistics: The previous version was far more effective and should be migrated to this system.

Stock code search option is not functioning.

Blink updates: These are not available in this system although it is a very useful feature.

Instruments list is not available in the market watch when the market is in pre-open status.

Block Trades and Normal trades should be incorporated together. This can cause misjudgement as the volumes will be separate for one stock under the block and normal trade. E.g. calculating the average price for a stock.

The turnover of a share on the market watch does not include the value of block trades.

No column for average price.

Details and summery of executed transactions for the day cannot be viewed in the manager terminal or other terminals.

Announcements window

This window should popup only when there is a new announcement to be displayed.

General

Market status is not displayed on the screen. The user cannot therefore see if the market is open, closed, halted, etc.

If odd lots are allowed to trade on the same system, the minimum charges should be waived off.

Profiles do not open the way it has been saved.

When you add fields to the “recent transactions” on the order entry panel, it doesn’t appear when you re-log to the system though you have saved the profile.

When you re-size the fields in the market watch and save, it doesn’t open in the manner saved.

ATS crashes several times a day

The individual turnover and executed order amount must be indicated in the main screen of each trader login.

Odd lot minimum charge of Rs. 5 for CDS fees should be removed.

Transaction text file (ats2_ttr.txt) sent by CSE at end of the day does not include contract numbers of cancelled contracts for the day.

Value in “order_id” column of transaction text file (ats2_ttr.txt) is invalid; all the recodes carry the value “0000”.

from DailyFT

ඔන්න ඔයාලට අවස්ථාවක් තිබෙනවා කොටස් වෙළඳපළ ගැන කොටස් වෙළඳපළ ආයෝජනය ගැන කණෙන්ම අහල දැනගන්න.

බස් රේඩියෝවේ (දන්නෙ නැති අයට: බස් රේඩියෝව කියන්නෙ සිංහල බ්ලොග්කරුවන් කණ්ඩායමක් විසින කරගෙන යනු ලබන අන්තර්ජාල ගුවන්විදුලි වැඩසටහනක්.) අද රාත්‍රී "බස් මැගසින්" වැඩසටහනෙන් මම එනවා ඔබත් එක්ක මේ ගැන කතා කරන්න.

ඔබත් කැමති නම් එන්න, සවන්දෙන්න බස් රේඩියෝ මැගසින් එකට.

ඉතින් පොඩ්ඩක් අහගන්නකො මොනව ගැනද අපි කතා කරන්නෙ කියල.

ඉතින් ඔයාලටත් කොටස් වෙළඳපළ ගැන තිබෙන ගැටළු වලට උත්තර හොයාගන්න මේක හොඳ අවස්ථාවක් වෙයි කියල හිතනවා. අසන්නන්ගේ ප්‍රශ්න වලටත් ඉඩක් ලබා දෙන්න තමා ඉන්නෙ, නමුත් වෙලාව පිළිබඳ ප්‍රශ්නය තමා තිබෙන්නෙ. බලමුකො අපි.

කොටස් වෙළඳපළ ආයෝජනය ගැන සෙමිනා එකක් තියෙනව කියල තිබුන ලිපියක් DailyNews E-Newspaper එකේ. 

ඒක තිබෙන්නෙ නම් අනිද්ද, ඒ කියන්නෙ 22වෙනිදා. දැන් නම් පරක්කු වැඩිද දන්නෙත් නෑ. නමුත් ඕනෙ අය ඉන්නව නම් ටිකක් හොයල බැලුව නම් හරි. 

මේ පහත තිබෙන්නෙ, පුවත්පතින් උපුටා ගන්නා ලද ලිපියයි.

In a sign of further tough action to instill greater discipline, the Securities and Exchange Commission (SEC) this week suspended an estimated 12 brokers from extending further credit to clients due to lack of capacity.

The SEC action follows revelation that these brokers liquid asset less obligations as at 22 August was negative and they are unable to cover the value of the debtors over T+3 days on the same date. Given the precarious situation, SEC has directed the relevant brokers with effect from today (15 September) to provide the liquid asset statement daily to the regulator until the position is maintained at zero leverage.

This is in compliance with the SEC directive issued in mid-August easing credit rules.

SEC has also warned that failure on the part of brokers concerned to implement the fresh directive will leave the regulator with no other option than to take disciplinary action without further notice.

Irked by the SEC action a furious Colombo Stock Brokers’ Association met at emergency session yesterday over the matter.

Earlier in the day, some analysts blamed yesterday’s dip in the market over what they alleged as “market throttling” move by the SEC. Both ASI and MPI dipped by over 0.5% sharply than Tuesday whilst turnover was a below average Rs. 1.6 billion. They opined the market will fall further.

Brokers are venting purely because at present 80% of the market’s activity is driven by credit but SEC action was anti-market. Some brokers allege that day trades were also being stifled by the SEC action.

However those who support tougher action claimed that soon after the easing of credit rules brokers who hadn’t topped up their net capital were turning more reckless unfolding a fresh system risk in the market.

SEC’s selection of items under liabilities to determine the net liquid capital was originally opposed by the brokers who had wanted a review which was turned down by the SEC saying some recommendations contravened Sri Lank Accounting Standards.

Adopted from DailyFT

The Securities and Exchange Commission of Sri Lanka (SEC) at its 286th Meeting held on 7 September 2011, has decided to revise the IPO allocation to retail investors especially with regard to larger issues.

In a statement it said the following directive in respect of share allotments to the retail investor for an initial public offering of a particular share class, the value of which is Rs. 3 billion and above in order to further facilitate the fair allotment of shares to the Retail Individual Investor Category in large scale initial public offerings.

The Colombo Stock Exchange (CSE) has been directed to ensure that entities that make an initial listing application of a particular share class, the value of which is Rs. 3 billion and above to the CSE, adopts the following guidelines stated herein with regard to the minimum allotment of such shares to the retail individual investor category on the closure of its initial public offering:

1. Forty percentum (40%) of the offered shares of a particular share class or shares to the maximum value of Rupees One billion five hundred million (Rs.1,500,000,000) of the offered shares of that share class, whichever is lower, to be initially made available for allotment to the Retail Individual Investor Category.

Retail Individual Investor in this instance shall mean an individual investor who subscribes up to a value of Rs. 200,000 in a particular share class in respect of an initial public offering, the value of which is Rupees Three billion (Rs. 3,000,000,000) or above.

2. In determining the basis of allotment within the Retail Individual Investor Category, the smaller subscribers shall be given priority.

3. The percentage of allocation of shares of a particular share class to the Unit Trust Investor Category and the allotment of undersubscribed shares of that share class in the Unit Trust Investor Category to the Retail Individual Investor Category and vice versa shall remain as per SEC directive dated 10 March 2011. (SEC/LEG/11/03/36)

The CSE is further directed to amend the CSE listing Rules incorporating the aforesaid guidelines for all IPOs of a particular share class the value of which is Rupees Three billion (Rs. 3,000,000,000) or above.

The above said directive shall be effective from 14 September 2011.

In respect of share allotments in initial public offerings of a particular share class, the value of which is below Rupees Three billion (Rs. 3,000,000,000), the guidelines set out in SEC directive dated 10 March 2011 (SEC/LEG/11/03/36) shall apply.

SEC said this directive will be subject to review by the Commission periodically.

Stock brokers are now appealing to the Securities and Exchange Commission (SEC) to remove or review the T+5 Rule or five days deadline and the SEC has so far not given any response following repeated appeals from brokers and investors, stock market sources said.

"At present stock brokering firms have to go through difficult tasks due to forced –selling of more than 1000 client or a day because of the T + 5 Rule of the Securities and Exchange Commission (SEC)," leading stock brokering firm said.

However, when the Island Financial Review attempted to get SEC’s view on the matter there were no authorised persons to comment on the topic, its sources said.

The SEC is considering the removal of the five days deadline or T+5 Rule in the future with the constant request from stockbrokers and other investors to the SEC, official attached to Lanka Securities Ltd sources told The Business Review .

On 29 December 2010 the SEC issued a directive which mandated r stock brokering companies to force-sell by the T+ 5 ( transactions plus five days) , securities of buyers, which are in default of settlement by the T+3 Rule.

Therefore, from 7 January 2011 each market day became a T +5 force- selling day, which put every stock brokering company and local investors through a difficult situation whether the market goes up or down, stock brokers said.

With this new rule individual investors are going be affected with this rule because if one passes the five days dead line his/her shares will come under forced sell. This really put individual investors who do business in the Colombo Stock Market under tremendous pressure  

A large number of local individual investors have increased significantly, which accounted for 44 per cent of the total stock market turnover, while foreign institutional buyers account only for15 percent of the total market turnover.

The newly-appointed Chairman of the Colombo Stock Exchange (CSE) Krishan Balendra  yesterday described his new task as a challenging and an exciting one amidst a critical juncture of the capital market in post-war rebounding Sri Lanka.

“I am excited about the challenges that come with the role of being Chairman of the CSE when the capital market has seen exponential growth with the end of the war. But I am confident and optimistic about making the Colombo bourse more dynamic and bringing it on par with international standards,” said Krishan, who at the age of 38 is the youngest to occupy the post of CSE Chairman.

He was unanimously appointed on Tuesday evening by the newly-elected Board of the CSE following the Annual General Meeting. Representing John Keells Stock Brokers on the CSE Board since March 2008, Krishan is also the senior most member on it. President and member of the Group Executive Committee of JKH, Krishan is responsible for JKH Group’s retail sector, corporate finance and strategy function as well as stock broking operations.

Krishan said that the end of the conflict and the resultant rebound in the economy had given a new fillip to the capital market.

Increased level of activity and higher number of listings with more in the pipeline along with renewed foreign interest have made it critical and challenging times for the capital market.

“The previous Chairman (Nihal Fonseka) had implemented several initiatives and we will take those forward as well in consultation with and support from all stakeholders to bring the CSE on par with international standards by swiftly introducing Central Counterparty (CCP) as well as Delivery Versus Payment (DVP) mechanisms,” said Krishan, adding that increasing listings would be another priority.

“There are several new initiatives which need to be implemented. The new Board will give direction to the CSE management team led by the CEO in this regard,” he added.

With gains of 125% in 2009 and 96% in 2010 along with near 7% year to date, the Colombo bourse has been regarded as the world’s most consistent best performing market. CSE at present has 255 listed companies.

The new Chairman as well as the Board begins a fresh three-year term amidst high volatility in the market of late with majority of retailers chasing after penny and junk stocks. Lack of high liquidity, limited investment options within the bourse as well as corporate governance issues are some of the other major challenges the new team at CSE faces, apart from the elusive demutualisation exercise.

Some claimed that since the introduction of automated trading in early 2000, the CSE hadn’t continued with its innovation and dynamism, whereas other bourses in the region which were lagging behind had progressed much rapidly. However, those supportive of the CSE maintained that it remained robust, hence was able to facilitate and be the platform for an unprecedented rebound in stock market activity post-war.

Following Tuesday’s AGM, the new CSE Board comprises Krishan Balendra (Chairman), Nihal Fonseka, M.R. Prelis, Dr. Saman Kelegama and Vajira Kulatilaka (all elected members) and Ashroff Omar, Dhakshitha T. W. Thalgodapitiya, Prof. Laksiri Fernando and Hiran M.C. de Alwis, who are Government appointed members.

Fonseka served for five years as Chairman of CSE with a first term of three years beginning 2006 followed by two more on request from the Board. The years 2009 and 2010 were the best years of CSE in its history.

In addition to being President and member of the Group Executive Committee of JKH, Krishan is also a Director of Union Assurance and Nations Trust Bank. He started his career in investment banking at UBS Warburg Hong Kong and was at Aitken Spence and Co Plc. in corporate finance prior to joining JKH. He holds an LLB (University of London) and an MBA (INSEAD).

Registrars to the issue P W Corporate Secretarial said the offer will close in the afternoon.Softlogic Holdings is issuing 139 million ordinary shares at 29 rupees each to raise funds mainly to repay debt taken for investments and for increased working capital.