FINANCIAL CHRONICLE™
Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
FINANCIAL CHRONICLE™️
www.srilankachronicle.com


Join the forum, it's quick and easy

FINANCIAL CHRONICLE™
Dear Reader,

Registration with the Sri Lanka FINANCIAL CHRONICLE™️ would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
FINANCIAL CHRONICLE™️
www.srilankachronicle.com
FINANCIAL CHRONICLE™
Would you like to react to this message? Create an account in a few clicks or log in to continue.

Encyclopedia of Latest news, reviews, discussions and analysis of stock market and investment opportunities in Sri Lanka


Submit PostSubmit Post
ශ්‍රී ලංකා මූල්‍ය වංශකථාව - සිංහල
Submit Post



Latest topics

» Guardian Investment Trust (GUAR) could Sky Rocket
by Kipling Today at 8:59 am

» GLAS will be winner with Super Gain.
by invest thinker Today at 3:35 am

» PANASIAN POWER PLC (PAP.N0000)
by vijay singh Today at 2:26 am

» Maharaja's Advice
by madukp Today at 1:17 am

» Millennial Capital Youtube Channel
by MillennialC Yesterday at 11:54 pm

» Investor sentiment - will there ever be a recovery?
by xhunter Yesterday at 10:50 pm

» Everybody talks about huge selling. That means there are buyers in the market to buy these shares. Stock market for beginners
by Asoka Samarakone Yesterday at 9:17 pm

» Personal Loans in Sri Lanka from Hatton National Bank
by onenine87 Yesterday at 8:34 pm

» Daily Foreign Transactions
by Pradeep90 Yesterday at 6:51 pm

» Has the CSE reached the peak actually in January?
by FireandWater Yesterday at 6:10 pm

» WindForce Limited IPO
by ishanel2007 Yesterday at 5:44 pm

» Capital Savings Account with high interest rates from HNB Sri Lanka
by menasros Yesterday at 5:05 pm

» Regular Savings Account with benefits from HNB Sri Lanka
by menasros Yesterday at 4:36 pm

» Get Housing Loans |Hatton National Bank - Sri Lanka
by menasros Yesterday at 4:16 pm

» Blossom March
by samaritan Yesterday at 3:59 pm

» New committee to fast-track 289 projects
by judecroos Yesterday at 3:57 pm

» 'Cabraalnomics' vs 'Wijenomics'
by samaritan Yesterday at 3:52 pm

» AGSTAR PLC (AGST.N0000)
by Mr. X Yesterday at 11:15 am

» DIPD/HAYC/HAYL
by Wickyz Yesterday at 11:09 am

» ACL post share split trading and the future potential
by sheildskye Yesterday at 11:08 am

EXPERT CHRONICLE™

ECONOMIC CHRONICLE

GROSS DOMESTIC PRODUCT (GDP)


CHRONICLE™ YouTube

CHRONICLE™ NEWS PRODUCTS

FINANCIAL CHRONICLE™

Views & Reviews, Analysis, Evaluations, Discussions, Gossip and Hot Tips relating to Sri Lankan companies listed on the Colombo Stock Exchange (CSE)
Contribute




DAILY CHRONICLE™

Latest news and articles published in Newspapers, Websites, Blogs and other online news sites relating to business and investments in Sri Lanka
Contribute



ECONOMIC CHRONICLE™

This is a section that provide news, views, analysis, predications relating to Political and Socio-Economic factors and how such activities affect the Stock Market and other economic activity of the Country.

Contribute




EXPERT CHRONICLE™

This is an exclusive section for Expert Articles which will help member to share knowledge through comments and responses of the members. All members are allowed to reply and make comments to these articles.

Contribute


Submit Post


CHRONICLE™ YouTube

Youtube Videos and other visual presentations relating Stock market and other investment advise submitted by members or other contributors.

Contribute


Submit Post


කොළඔ කොටස් වෙළඳපොළේ වංශකථාව
කොළඔ කොටස් වෙළඳපොළේ ලැයිස්තුගත සමාගම් කොටස් ගැන තොරතුරු¸විශ්ලේෂණ¸සාකච්ඡා¸ කටකතා¸රසකතා යන සියල්ල අපේම සිංහලෙන් කතා කළ හැකි ‘කතා මණ්ඩපය’

Contribute

Twitter Feeds
POPULAR COMPANIES
A

ABANS ELECTRICALS PLC

ACCESS ENGINEERING PLC Hot

ACL CABLES PLC

ACL PLASTICS PLC

ACME PRINTING & PACKAGING PLC

AGSTAR PLC

AITKEN SPENCE HOTEL HOLDINGS PLC

AITKEN SPENCE PLC

ANILANA HOTELS AND PROPERTIES PLC

ARPICO INSURANCE PLC

ASIA ASSET FINANCE PLC

ASIA CAPITAL PLC

B

BAIRAHA FARMS PLC

BALANGODA PLANTATIONS PLC

BIMPUTH FINANCE PLC

BLUE DIAMONDS JEWELLERY WORLDWIDE PLC

B P P L HOLDINGS PLC

BROWNS BEACH HOTELS PLC

BROWNS INVESTMENTS PLC

C

CARGO BOAT DEVELOPMENT COMPANY PLC

CENTRAL INDUSTRIES PLC

CEYLON COLD STORES PLC

CEYLON GRAIN ELEVATORS PLC Hot

CEYLON TEA BROKERS PLC

CEYLON TOBACCO COMPANY PLC

CHEVRON LUBRICANTS LANKA PLC

COLOMBO FORT LAND & BUILDING PLC

COMMERCIAL BANK OF CEYLON PLC

CITRUS LEISURE PLC Hot

COMMERCIAL CREDIT AND FINANCE PLC

D

DANKOTUWA PORCELAIN PLC

DFCC BANK PLC

DIALOG AXIATA PLC

DIALOG FINANCE PLC

DIPPED PRODUCTS PLC

DISTILLERIES COMPANY OF SRI LANKA PLC

DUNAMIS CAPITAL PLC

E

EAST WEST PROPERTIES PLC Hot

EASTERN MERCHANTS PLC

EXPOLANKA HOLDINGS PLC

E-CHANNELLING PLC

F

FIRST CAPITAL HOLDINGS PLC

G

GALADARI HOTELS (LANKA) PLC

GUARDIAN CAPITAL PARTNERS PLC

H

HATTON NATIONAL BANK PLC

HAYLEYS PLC

HAYLEYS FABRIC PLC

HAYLEYS FIBRE PLC Hot

HEMAS HOLDINGS PLC

HIKKADUWA BEACH RESORT PLC

HNB ASSURANCE PLC

HVA FOODS PLC

J

JANASHAKTHI INSURANCE COMPANY PLC

JOHN KEELLS HOLDINGS PLC Hot

JOHN KEELLS HOTELS PLC

L

LANKA ASHOK LEYLAND PLC

LANKA IOC PLC

LANKEM CEYLON PLC

LANKEM DEVELOPMENTS PLC

LAUGFS GAS PLC

LAUGFS POWER LIMITED

LOLC FINANCE PLC

LOLC HOLDINGS PLC

LUCKY LANKA MILK PROCESSING COMPANY PLC

M

MELSTACORP PLC

N

NATIONAL DEVELOPMENT BANK PLC

NATION LANKA FINANCE PLC

NESTLE LANKA PLC

O

ORIENT FINANCE PLC

OVERSEAS REALTY (CEYLON) PLC

P

PANASIAN POWER PLC

PEOPLE'S LEASING & FINANCE PLC

PIRAMAL GLASS CEYLON PLC

PRIME FINANCE PLC

R

RAIGAM WAYAMBA SALTERNS PLC

RENUKA AGRI FOODS PLC

RENUKA CAPITAL PLC

RENUKA HOLDINGS PLC

RICHARD PIERIS AND COMPANY PLC

RICHARD PIERIS EXPORTS PLC Hot

ROYAL CERAMICS PLC

S

SAMPATH BANK PLC

SEYLAN BANK PLC

SIERRA CABLES PLC

SINGHE HOSPITALS PLC Hot

SMB LEASING PLC

SOFTLOGIC HOLDINGS PLC

SOFTLOGIC LIFE INSURANCE PLC

SRI LANKA TELECOM PLC

SWISSTEK (CEYLON) PLC Hot

T

TEEJAY LANKA PLC

TESS AGRO PLC

THREE ACRE FARMS PLC

TOKYO CEMENT COMPANY (LANKA) PLC Hot

U

UNION BANK OF COLOMBO PLC

V

VALLIBEL FINANCE PLC

VALLIBEL ONE PLC Hot

VALLIBEL POWER ERATHNA PLC

W

WASKADUWA BEACH RESORT PLC


You are not connected. Please login or register

FINANCIAL CHRONICLE™ » FINANCIAL CHRONICLE™ » Longer wait for market for relaxed credit rule

Longer wait for market for relaxed credit rule

Go down  Message [Page 1 of 1]

mission


Manager - Equity Analytics
Manager - Equity Analytics
Published : 12:51 am August 11, 2011

SEC Commissioners deliberate broker proposals, but defer approval pending further scrutiny of more facts to make an informed final decision; to meet again next week

The anxious Colombo stock market will have to wait a little longer for relaxed credit rule as Commissioners of the SEC who met yesterday deferred a final decision for want of more facts and further study, the Daily FT learns.
The much-awaited SEC Commissioners’ meeting took place yesterday and proposals from the Colombo Stock Brokers Association (CSBA) were part of an exhaustive agenda.

The deliberations by the Securities and Exchange Commission, which took a long time, did consider the pros and cons for relaxed credit rules, but given their critical nature the Commissioners had wanted more time to make an informed final decision.

Officials at the SEC Secretariat weren’t available for comment following the late evening meeting, but sources close to the Commissioners said a fresh meeting was likely next week to assess new facts and information sought to make a final decision.

The move by the SEC Commissioners may cause a damper to investor sentiments when market opens today after it bounced back yesterday in anticipation of positive decision leading up to regulatory support.
Following an emergency meeting, the CSBA via written representations on 26 July suggested three proposals for the consideration of the SEC.

One is that all brokers be allowed to lend their net capital, which is in excess of Rs. 35 million (minimum net capital requirement) leveraging zero times. The other option is that all brokers be allowed to lend two times the net capital, which is in excess of Rs. 35 million (leveraging one time).

Under both options, the compulsory force selling on Trade + 5 (market days) or T+5 rule has to be removed. The basis for this includes (under first option) broking firms being able to gradually force sell when they are fully utilising their excess funds and can do same when reaching one time leverage.

CSBA has argued that for the first option, brokers in any case can take their excess funds out of the company in the form of dividends or do anything they wish to do with it. With regard to the second option, CSBA has said it would be safe considering the fact that broking firms are able to leverage 10 times up to 2010 whilst presently finance companies are allowed to leverage 10 times and leasing companies allowed seven times leveraging.

Another proposal is that brokers be allowed to transfer excess net capital in the broking company to the wholly-owned margin trading company licensed and regulated by the SEC without deducting from the net capital.
CSBA had emphasised that most broking firms presently have proper systems and procedures in place to monitor debtors.

The Daily FT on Friday reported that following the new credit rules introduced last year, the estimated outstanding credit within broking industry had declined to Rs. 2 billion from Rs. 8 billion originally as per analysts. Given the deferment last night, analysts speculated that perhaps the SEC Commissioners had wanted specific data and breakdown of actual debtor positions to make a proper judgement.

Though CSBA did make written submissions, there has been market talk to the effect that a few broking firms weren’t overly keen on relaxed credit rules and that CSBA was divided on the whole issue. However, there had been majority consensus that brokers should have freedom to extend credit to clients subject to a more relaxed criterion since much of debt issue had been resolved and greater discipline and risk systems and procedures were in place.
Analysts said that when all macro indicators and developments point to a favourable environment for equities investments, the Colombo stock market has been struggling. A key reason for this is said to be some of the regulations being considered “too rigid”.

CSBA in its case for a review of existing rules had told the SEC that the ASI had declined by 16.8% since its mid-February 2011 peak and the MPI had plunged by 24.3% from October 2010.

“Each market day has become a T+5 force selling day for all stock broking firms, which has amounted to a large number of clients’ shares being forced sold daily to the buying quotations, which in turn is moving lower and lower and thereby precipitating a continuous drop in the market prices,” CSBA had pointed out.

“The main reasons for the market drop in our opinion are these on voluntary sales, which result in prices going down, cascading margin calls and more forced selling,” it added.

According to CSBA, local individual investor contribution to market turnover rose from 22% in 2008 to 44% in 2010 and large number of local individual investors with share portfolios of less than Rs. 1 million who were unable to obtain margin trading facilities have been force sold or have left the equity market.

To add to this problem, from 1 January 2010 to date, there has been a net foreign outflow of Rs. 34.6 million and from 1 January 2011, IPOs, Rights Issues and private placements have absorbed over Rs. 50 billion.
“These are the natural mechanisms by which an expensive market becomes an inexpensive market, thereby eliminating the need for any regulatory restrictions,” CSBA argued.

http://www.ft.lk/2011/08/11/longer-wait-for-market-for-relaxed-credit-rule/

Aamiable


Vice President - Equity Analytics
Vice President - Equity Analytics
article says...


"there had been majority consensus that brokers should have freedom to extend credit to clients subject to a more relaxed criterion since much of debt issue had been resolved and greater discipline and risk systems and procedures were in place.”

“SEC Commissioners deliberate broker proposals, but defer approval pending further scrutiny of more facts to make an informed final decision; to meet again next week”


There investors can expect a favorable decision, obviously, SEC need greeter discipline to see a sustainable growth in CSE.. ..... Smile


maddu

maddu
Manager - Equity Analytics
Manager - Equity Analytics
cheers cheers cheers cheers cheers

Soundchips


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
good for the market. they may observe for a for a steady uptrend. if there is no need for forced selling. if the investors pay back. they might grant.

all countries Japan, USA, china, Australia provide credit for investments. No country grants credit for games. Commission monitoring might grant credit for further attraction of investments. Commission is to see investments come back to the market.,. they may observe for a steady growth on investments for a week . hope there are good indicators...

Soundchips


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
according to this news item there is no longer waiting period...


http://print.dailymirror.lk/business/127-local/52787-bourse-anxious-on-broker-credit-announcement.html

waiting for an announcement today,,,

abp1970


Manager - Equity Analytics
Manager - Equity Analytics
good news of course

Soundchips


Senior Manager - Equity Analytics
Senior Manager - Equity Analytics

Two news items

http://print.dailymirror.lk/business/127-local/52787-bourse-anxious-on-broker-credit-announcement.html

this is dailymirror !

Sponsored content


Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum