Two brokerages in hot water
View(s):Two stockbrokers have been suspended by the Colombo Stock Exchange (CSE) from buying shares for non-compliance with capital adequacy with a few more expected to be reined in, industry sources said. They are however allowed to sell shares.
The suspension was imposed on Nation Lanka and Navara Securities until they bridge the gap in their capital adequacy levels. Nation Lanka was suspended last year while the latest is Navara Securities. Analysts said it will be difficult for them to sustain their operations and that both are for sale. “They are in a tough situation,” a source told the Business Times. They added that there are some more firms that are dangerously close to going under. Only a handful is earning money.
Out of the 29 stockbrokers only the top five are profitable while the next 10 may be breaking even, but the rest are full of woes, market analyst say.
CSE has prohibited Navara Securities (NS) from any purchase of securities with effect from February 8 due to failure to comply with minimum capital adequacy requirements. Last March three stockbrokers were given the red light to comply with the stipulated requirements by a month and only one has complied, leaving these two to comply, the sources added.
(DEC)