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Response to Unusual Trading Activity Enquiry

This is a letter I wrote in response to a unusual trading activity enquiry which had made no allowance for the scale of my market activity. The SEC and CSE are religiously opposed to a world of small stakeholders in large corporations. They show disdain for shareholder voting, rights, and participation within the exchange.
From: Dinesh Perera
Sent: Friday, March 3, 2017 6:38 PM
Please find below my personal response.
Dear Ms Nilupa Perera,
I am writing this as a response to your later dated 1st March 2017. On the 28th of February I bought shares in over a hundred companies. I did this so as to be a recipient of all correspondence sent from a company to the shareholder. To my knowledge this correspondence is not freely available on the Stock Exchange website. I am of the view that this correspondence will give me a legally obtained informational edge over other market players. This information would be useful for example in a merger between two companies.
Let me go on to address the concerns in your letter. By choosing to buy over a hundred stocks I will invariably buy some at a higher price and others at a lower price than the price at market close on the previous day. In my experience of Atrad choosing to stack orders before the market opens is the most time efficient way of completing this task. All my purchases were at the lowest ask price and I only traded in stocks that had ask prices. The day to day fluctuation of prices is a common phenomenon in the market. I believe the true concern here in terms of Market surveillance is that a large number of stocks fall under a stock price of 2 LKR. The share market should not consider these low value stocks with the same sensitivity as higher value shares as the smallest possible change of 10 cents triggers significant percentage changes in the value of the stock. At least consider a minimum value when reporting the top market gainers and losers of the day. I hope to hear from you soon. It is my opinion that the information as provided in your letter paints a dishonest perspective of my trading actions. The letter through the omission of my entire trading activity could be used to suggest that I aimed to distort prices or the value of the ASI which is not true and hopefully not possible when dealing with as many stocks with under 850 LKR.
Kind Regards
Dinesh Perera

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Unsent Statement on CB Governor

7th March 2018
On Banking Concentration
Under Indrajit Commaraswamy we are to see a major consolidation of the non-banking financial institutions in the country. We are currently also seeing a huge recapitalization of the banking industry. I have many issues with the current Central Banker but feel that on an overall balance he is doing a good job. His actions or inaction in the foreign exchange market is the correct policy for an export led growth model. His purchase of dollars from the FX market creates non-debt fueling reserves for the country. Further his movements on inflation targeting, increased risk profiling (more than just on-site examination), and policy stability are encouraging. He is old and as such is incredibly slow in terms of implementation. He also doesn’t have the political will or might to fight against corruption. His interventions on PABC are laughable especially when considering DFCC and BOC involvement. For instance, the recent fraud involving Indra Silva, the BOC, and shares in Janashakthi insurance are a matter which he is ill suited to tackle.
With regards to the financial sector I do not think consolidation is the current requirement. The NBFI sector is small and further concentrated in the hands of a few firms. Even if we assume the worst of the sector it does not pose a significant risk to the financial system. The sub sector however does boost competition with regards to rates and keeps the larger banks honest with regards to lending to underprivileged communities. Having watched most Central Bank videos I do not see the need for him to address the sector with as much focus.
By his own words there are huge failings with regards to the control of the state banks. State banks have on their balance sheet most of the subsidy the government provides in the form of electricity and petrol. Politically driven lending as seen with Perpetual is rife and a cause for serious concern with the large concentration of finance under state control. BOC, People’s Bank, and NSB are poorly run banks which are inept to handle even basic banking tasks like the opening and closing of accounts. Internal controls are poor. Staffing is politicized. These institutions are ill suited for innovation and/or the provision of financial instruments in line with the global economy.
There are also huge failings with regards to primary dealers. The failings of Entrust and Perpetual Treasuries are notable. Even after the failing of Entrust there is little mention in any of his public statements with regards to improved control over the primary dealers. First Capital has recently been put on a rating watch by ICRA Lanka and the sale of Janashakthi’s general insurance business is not a sign of strength. Further the expansion of Orient Finance is worrisome as in between 2010 and 2017 their loan portfolio has grown over 7 times with a lot of financing obtained from Banks. There have been notably aggressive financial institutions in the same period that the Central Bank should reign in.
Financial sector stability is driven by the practices of the institutions that manage the most amount of assets. The Central Bank has been wholly inactive in the regulation of these institutions. The EPF, BOC, People’s Bank, and NSB are mostly run by political interests. The Central Bank may feel that it has achieved something with regards to its actions on Perpetual Treasuries, but this is a small victory that was only really achieved due to the political value of getting convictions. The Central Bank has yet to outline reform with regards to the EPF. In most major economies individuals are given the choice to allocate their own retirement funds. This would be a huge boom to the unit trust industry and further does not require the winding up of the EPF. The Central Bank has also to answer how it is that Perpetual was able to obtain financing for its scheme.
There is also no excuse for the fear psychosis that the Central Bank is trying to create with regards to debt repayment. Most of the debt is held by the EPF and the State Banks. All institutions under state control and who would quite happily reinvest their funds into government securities. Core inflation has been negligible and headline inflation has been driven by supply side shocks. There is room for the Central Bank to print money to reduce the governments financing costs. The current real return on fixed instruments offered by the government is ridiculous and an affront to anyone who must work for a living while paying taxes.
The Central Bank’s Basel compliance is also not particularly well received. The banks will be less profitable due to it in the long run. To my knowledge we are the most secure country in terms of banking sector in South Asia. We do not need to see improved stability in this regard. The government however should continue to act to improve its financial rating. With regards to the Central Banks dream of reducing the number of financial institutions there is a simple fix. There is huge room for institutions wholly owned by the state to merge. Lankaputhra, Sri Lanka Savings Bank, and other smaller banks can be merged. There is also huge room for institutions with common ownership to merge. LOLC and Vallibel alone can account for a major reduction in the number of standalone institutions. Please, Mr Commaraswamy, do not make speculators and corrupt regulators rich by forcefully merging smaller institutions. It will tarnish your reputation and legacy.

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York Holdings Share Consolidation

This was the final email I sent to Mrs Nilupa Perera, Head of Trading,Market Surveillance & Corporate Affairs, on this matter. I would have held more shares in order to benefit from the consolidation but sadly I had not read the corporate disclosure. Her response was to reiterate the corporate disclosure.


From: Dinesh Perera [mailto:perera_d94@yahoo.com]
Sent: Tuesday, March 06, 2018 2:30 PM
To: CDSeStatement Feedback; Nilupa Perera
Cc: Investor Complaints
Subject: Re: RE: CDS eStatements
Dear Mrs Nilupa Perera,
I write to you on the instruction of your head of legal Renu Ranatunge. As described in the email the most recent correspondence sent by the CDS is as below;

Please note that the York.N000 has been DirWithdrw-ALL- 452669 with no action or approval on my part. According to the corporate correspondence my share has been vested with a trustee over which the directors have complete control. It is unclear if I even have a proportional stake in the trustee. I do not see how the CDS and the CSE can stand by and do nothing. I am due some form of compensation or approval for the consolidation should not go through. The company has conflated the approval for a share repurchase with approval for a consolidation. This sees most minority shareholders lose minor stakes. It is petty theft.
As stated in my earlier correspondence I would also like to see online retail access to the corporate debt market. The infrastructure is already in place and it just requires regulatory approval to become functional. I would also like to see reform with regards to corporate correspondence. I believe most corporate secretaries and shareholders would prefer to handle most of their affairs through the medium of email.
Kind Regards
Dinesh Perera

 York Holdings Corporate Disclosure 11th October

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My First of many 3rd Class Essays at Uni

Lecturer: Essay Question-“Offering Work Life Balance Programs will result in positive outcomes for organizations and for employees.” Critically evaluate this statement using theory and evidence from the research literature.
Dinesh (Thinking to himself): I shall not be put to the task of writing a truism.
Dinesh: The statements only failing is in its choice of words. Appropriate Work-Life Balance Programs will result in positive outcomes for society through better firm and employee function.
 
AssessedEssay