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Yesterday at 7:28 pm by The Alchemist

» හවුල් ආණ්ඩුව තවදුරටත් පවතින බව පාර්ලිමේන්තුවට දන්වයි
Yesterday at 5:17 pm by Ethical Trader

» Dividend Announcement
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» ජීවිතය පටන් ගන්නේ 60න්
Yesterday at 3:14 pm by lanka

» EAP ගනුදෙනුවේ සැඟවුණු ගැනුම්කරු හෙළිවෙයි
Yesterday at 2:39 pm by lanka

» මිලියන 4,000 ක අකිලගේ ටැබ් කොන්ත්‍රාත්තුව අබාන්ස්ට
Tue Feb 20, 2018 7:55 pm by nihal123

» Dhananath Fernando wins $ 10,000 for Sri Lanka in Think Tank Shark Tank in Asia
Mon Feb 19, 2018 11:35 am by Ethical Trader

» උදයංග වීරතුංග රැගෙන ඒමට පොලිස් නිලධාරීහු ඩුබායි වෙත
Mon Feb 19, 2018 8:24 am by soileconomy

» ධම්මික පෙරේරා කෝටි 16 ක කාරයක් ගෙනෙයි
Sat Feb 17, 2018 9:31 pm by soileconomy

» ආර්ථික අර්බුදය ඉක්මවා ගිය දේශපාලන අර්බුදය හමුවේ 'රුපියල'
Fri Feb 16, 2018 7:00 pm by Ethical Trader

» SAMP.N0000 (SAMPATH BANK PLC)
Fri Feb 16, 2018 2:18 pm by Ethical Trader

» APLA.N0000 (ACL PLASTICS PLC)
Fri Feb 16, 2018 11:12 am by pjrngroup

» විගණකාධිපතිගේ 2016 වාර්තාව මෙන්න
Tue Feb 13, 2018 12:31 pm by Ethical Trader

» JINS.N0000 ( Janashakthi Insurance PLC)
Fri Feb 09, 2018 11:12 am by The Invisible

» Boost for foreign investment in Govt. securities
Thu Feb 08, 2018 12:45 pm by Ethical Trader

» අනිලානා පුද්ගලික නිකුතුවට කොටස්කරුවන්ගේ සහාය පතයි
Thu Feb 08, 2018 9:28 am by The Invisible

» CCS.N0000 ( Ceylon Cold Stores)
Wed Feb 07, 2018 7:39 pm by Ethical Trader

» ලෝක ආර්ථිකය කඩා වැටෙද්දී එහි බලපෑම කොළඹට දැනුන හැටි
Tue Feb 06, 2018 11:13 pm by nihal123

» තෙල් මිලේ වැඩිවීමෙන් ගුවන් ටිකට් මිල නගී
Tue Feb 06, 2018 11:04 pm by Ethical Trader

» ජනාධිපති පරීක්ෂණ කොමිෂන් සභාවෙන් ලද, සිංහල භාෂාමය වාර්තා තිස් හතර (34)
Tue Feb 06, 2018 11:04 pm by Ethical Trader

» විල්පත්තු "වන විනාශය": පෙත්සම සලකා බැලීමට අධිකරණයේ අවසර
Mon Feb 05, 2018 9:10 pm by nihal123

» බැඳුම්කරය: ඇලෝසියස් සහ පළිසේන අත්අඩංගුවට
Mon Feb 05, 2018 9:08 pm by nihal123

» Laughter the Best Medicine
Sat Feb 03, 2018 10:04 pm by pjrngroup

» TPL.N0000 (TALAWAKALE PLANTATIONS )
Sat Feb 03, 2018 1:02 pm by bear

» ජනශක්ති ගනුදෙනුව තීන්දුයි. වටිනාකම රුපියල් බිලියන 16 යි
Fri Feb 02, 2018 7:57 pm by nihal123

» කොළඹ කොටස් අසාමූහිකරණ පනත පාර්ලිමේන්තුවට
Fri Feb 02, 2018 5:42 pm by Ethical Trader

» BBC කණ්ඩායමක් තාලිබාන් පාලන කලාපයකට ඇතුල් වෙති
Thu Feb 01, 2018 5:05 pm by Ethical Trader

» වර්ෂ 152 කට පසු දර්ශනය වන 'සුපිරි නීල රුහිරු සඳ'
Thu Feb 01, 2018 4:58 pm by Ethical Trader

» ලංකා බැංකුවට අයත් ජනශක්ති හිමිකම විකුණයි
Thu Feb 01, 2018 4:54 pm by Ethical Trader

» අයවැය ක්‍රියාත්මක කිරීමේ දී පාර්ලිමේන්තුවේ අධීක්ෂණය දුර්වලයි
Thu Feb 01, 2018 4:52 pm by Ethical Trader

» ජනපති හා ADB අධ්‍යක්ෂ මණ්ඩල සාමාජිකයින් අතර හමුවක්
Thu Feb 01, 2018 4:51 pm by Ethical Trader

» තවත් කොටස් තැරැව්කාර සමාගමක් වසා දමයි
Thu Feb 01, 2018 4:50 pm by Ethical Trader

» ජනපතිගේ රැලිය ආවරණය කිරීමට ගිය මාධ්‍යවේදීන්ට "තර්ජන"
Wed Jan 31, 2018 6:59 pm by soileconomy

» Bank of Ceylon divests stake in Janashakthi Insurance
Tue Jan 30, 2018 3:58 pm by TraderCSE

» වෛද්‍ය වර්ජනය: රජයේ වෛද්‍ය නිලධාරීන්ගේ සංගමයේ ඉල්ලීම් මොනවාද?
Mon Jan 29, 2018 6:36 pm by Ethical Trader

» නිවුන් අලි උපත්: මේ කරුණු දැන සිටියාද?
Mon Jan 29, 2018 12:14 pm by Ethical Trader

» Perpetual Treasuries
Mon Jan 29, 2018 7:43 am by Danidu

» කලා කෘතියක් ඉල්ලූ ජනාධිපති ට්‍රම්ප් වෙත 'රන් වැසිකිලියක්' - වාර්තා
Sat Jan 27, 2018 6:37 pm by Ethical Trader

» TJL.N0000 (Textured Jersey Lanka PLC.)
Fri Jan 26, 2018 6:32 pm by Ethical Trader

» සේවා ස්ථානයේ අරියාදු සහ අඩන්තේට්ටම් : 'බුලි' වුණොත් මොකද කරන්නේ?
Thu Jan 25, 2018 5:02 pm by Ethical Trader

» RULES ON ALL OR NONE (AON) BLOCKS
Thu Jan 25, 2018 4:55 pm by Ethical Trader

» Time is of essence in dealing with dengue:Expert, Recent deaths could be due to patients "coming in late" for treatment
Thu Jan 25, 2018 2:08 pm by AjithR

» නියම බුදු දහම
Thu Jan 25, 2018 12:42 pm by Ethical Trader

» "දූෂණය" ගැන මහින්ද රාජපක්ෂට නඩු පවරන්න - ජනාධිපති කොමිසම
Wed Jan 24, 2018 7:04 pm by Ethical Trader

» හිඟයක් වැළැක්වීමට ලේ දන් දෙන්න: ජනතාව වෙත ඉල්ලීමක්
Tue Jan 23, 2018 7:12 pm by Ethical Trader

» බලාගෙනයි, 'ගුවනින් අසූචි'!
Tue Jan 23, 2018 7:10 pm by Ethical Trader

» සිව් හෙලයේ ඉතිහාසය නිවැරදි කිරීම
Tue Jan 23, 2018 11:51 am by Ethical Trader

» ප්‍රගීත් එක්නැලිගොඩ: "ෆයිල් අතුරුදහන්වීම" ගැන සන්ධ්‍යා හමුදාපතිට කිවූ දේ
Thu Jan 18, 2018 12:13 pm by Ethical Trader

» China offers best chance for SL development: CB
Thu Jan 18, 2018 9:27 am by කිත්සිරි ද සිල්වා

»  බැඳුම්කර වාර්තාව
Wed Jan 17, 2018 6:58 pm by කිත්සිරි ද සිල්වා

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Only Sri Lanka’s top five stockbrokers profitable

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Only Sri Lanka’s top five stockbrokers profitable

Post by Backstage on Mon Nov 27, 2017 10:22 am


Only Sri Lanka’s top five stockbrokers profitable

Out of the 29 stockbrokers operating at the Colombo Stock Exchange (CSE), only the top five are profitable, the next 10 may be breaking even while the rest are full of woes, market analyst say.

Some stockbrokers are closing their outstation branches in a move to cut costs and manage bottom-lines and some who boasted over 25 branches have cut this number by four fold to end up at just five, they say.

While the broking companies are faced with several serious issues with strapped cash flows, some firms are shedding staff. The Securities and Exchange Commission (SEC)’s new rules in capital adequacy which direct the implementation of a risk based Capital Adequacy Requirement (CAR) of 1.2 times the risk requirement of stock brokers subject to a minimum liquid capital requirement of Rs. 35 million is also curtailing their operation, they said.

Broking firms have cost cuts on many items since the crisis in the CSE nearly three years ago, but to no avail. It’s hard to rally in profits and some new firms are selling their licenses.

At least three firms are in the market for sale, according to analysts. Some others who are chugging along had hinted at reintroducing margin credit, but the SEC is firm on not doing so. Margin credit is to extend credit facilities to clients in broking firms through margin providers registered with the SEC.

“In the wrong hands margin credit will be disaster and it’ll be a repeat of the 2011-2013 era,” a SEC official said.

They said that some run their branches on CSE premises which are subsidised by the CSE. “Branches at Matara, Kandy, Kurunegala, Negombo and Jaffna are highly subsidised. They pay a minimal rent only and no utilities,” a CSE official said. But this isn’t enough, many in the industry say.

“There should be a stronger pull to attract retailers, otherwise many firms in the trade will sink,” a CEO at a broking firm added.

The CSE insists that the market continues to trade at a discount compared to regional peers and offers further opportunities for investors – with a market price to earnings (P/E) recorded at 10.99 as of the end of October. “The market has also continued to attract foreign investment throughout 2017 with Rs. 98 billion in foreign buying contributing to a net foreign inflow of Rs. 19.6 billion year-to-date, a figure that is substantial compared to foreign activity in 2015/16. 2017 also recorded an all-time high for foreign investor buying recorded in the first half of a calendar year,” the CSE said in a statement earlier this month.

While acknowledging all this, brokers reiterate their issue lies with the retailers. To be fair by them, the CSE tries hard.

“The CSE through its market development activities has embarked on an awareness drive in 2017, reaching out to multiple investor segments around the country and in international markets. Such efforts have seen the CSE work with the SEC on ‘Invest Sri Lanka’ investor forums in the US, Australia and New Zealand in 2017 and an island-wide local retail investor focused Investor Forum campaign to create awareness on stock market investment. The CSE branch network has also conducted over 500 educational programmes so far in 2017. In addition, CSE and the Colombo Stock Brokers Association is also presently conducting a series of events presenting investment research on companies featured on the S&P SL 20 Index, to an exclusive audience of Local Institutional Investors,” the CSE statement said.

It added that the Benchmark All Share Price Index (ASPI) has made a 2.78 per cent gain in October alone and a 6.31 per cent gain year-to-date, while the S&P SL 20 index, which features the CSE’s 20 largest and most liquid stocks has also improved consistently, making a 5.74 per cent gain in October and a 11.50 per cent gain since the start of 2017. “The positive growth of the indices mark a reversal of the declining trend recorded in 2015 and 2016, during which the ASPI recorded a decline of 5.54 per cent and 9.66 per cent, respectively. The performance of the market has also resulted in an improved involvement among investors, where the Daily Average Turnover is recorded at Rs. 943 million year-to-date, which is a 28 per cent increase from Rs. 737 million in 2016.”
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