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Amanda Lokugamage, Senior Research Analyst at First Capital Holdings, with the Market Review on Ada Derana – 18.02.2018

Investment in Sri Lanka

First Capital’s Amanda Lokugamage with the Market Review on Ada Derana

The comments on this report are provided by the Capital Markets Research Unit of First Capital Holdings PLC an investment bank in Sri Lanka.

The company operates in the capital markets of Sri Lanka in government securities – treasury bills and bonds, stock brokering and share market investments, asset management, private wealth management, retirement planning, personal financial planning, unit trust, margin trading, capital market research, trustee services, corporate finance advisory services including corporate debt structuring (debentures, trust certificates, commercial papers), valuations, restructuring, mergers and acquisitions, initial public offerings (IPOs) and project advisory.

The First Capital Group consists of First Capital Treasuries PLC, First Capital Limited, First Capital Markets Limited, First Capital Asset Management Limited and First Capital Equities (Private) Limited covering Colombo, Negombo, Matara, Kandy and Kurunegala.

Sri Lankan stocks end higher on retail buying

DIMANTHA MATHEW, HEAD OF RESEARCH AT FIRST CAPITAL HOLDINGS PLC, SPEAKS TO REUTERS

FEBRUARY 16, 2018 

COLOMBO, Feb 15 (Reuters) – Sri Lankan shares recovered on Thursday, following two straight sessions of losses, on retail buying after the central bank held key policy rates steady amid signs political uncertainty was easing, dealers said.

The central bank’s decision was widely expected, with policymakers emphasizing the need to support an economy that has been beset by production disruptions due to massive intermittent floods and prolonged drought last year.

The Colombo stock index ended 0.32 percent firmer at 6,553.21, hovering near its highest close since Nov. 8 hit on Friday.

The index gained 0.8 percent last week, its third straight weekly rise.

Shares in Melstacorp Ltd rose 2.8 percent, while Ceylinco Insurance Plc ended 6.7 percent higher and Aviva NDB Insurance Plc gained 25 percent.

“Today, there was retail and high net-worth interest on insurance sector and it was mainly retail driven,” said Dimantha Mathew, head of research at First Capital Holdings.

“Foreign investors were worried with the continued political uncertainty and delaying to see some settlement will create more uncertainty in the market,” he said, referring to a decision that could end the political instability.

Analysts, however, said they see some positive signs as both the ruling coalition parties are in talks to end the political impasse, with President Maithripala Sirisena expected to make a statement possibly on Friday.

The ruling coalition government of Sirisena’s center-left Sri Lanka Freedom Party and Prime Minister Ranil Wickremesinghe’s center-right United National Party suffered defeats in a local election over the weekend.

Since the results, both parties have locked horns on how best to continue in the government.

Investors are waiting for some stability and to see where coalition partners are headed, analysts said.

Turnover stood at 878.1 million rupees ($5.67 million), well below last year’s daily average of 915.3 million rupees.

Foreign investors sold a net 2.3 million rupees worth of shares on Thursday, but have been net buyers of 5.4 billion rupees worth of equities so far this year. ($1 = 154.8500 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)

Sri Lankan stocks fall on political uncertainty after local polls

DIMANTHA MATHEW, HEAD OF RESEARCH AT FIRST CAPITAL HOLDINGS PLC, SPEAKS TO REUTERS

FEBRUARY 14, 2018

COLOMBO, Feb 14 (Reuters) – Sri Lankan shares fell for a second straight session on Wednesday as political uncertainty after a defeat of the two ruling coalition parties in a local poll hurt investor sentiment.

The ruling coalition government of President Maithripala Sirisena’s centre-left Sri Lanka Freedom Party and Prime Minister Ranil Wickremesinghe’s centre-right United National Party suffered defeats in a local election over the weekend.

The results also raised concerns over the future of the unity government amid pressure from the opposition parties to dissolve the parliament.

The two ruling parties have set up a committee on Tuesday to examine the future of the unity government.

The Colombo stock index ended 0.16 percent lower at 6,532.26, further slipping from its highest close since Nov. 8 hit on Friday.

The index gained 0.8 percent last week, its third straight weekly rise.

Shares in Bukit Dhara Plc fell 7.6 percent while Hemas Holdings Plc fell 0.3 percent and Hatton National Bank Plc ended 1.6 percent weaker. Biggest listed lender, Commercial bank of Ceylon Plc, lost 1.8 percent.

“The market is negative with the continued political uncertainty,” said Dimantha Mathew, head of research at First Capital Holdings.

“Delay in settlement is creating more uncertainty,” he said, referring to a decision that could end the political instability.

Investors are waiting for some stability and to see the direction in which both the coalition partners are headed.

Turnover stood at 654.7 million rupees ($4.22 million), well below last year’s daily average of 915.3 million rupees.

Foreign investors, however, bought a net 97.2 million rupees worth of shares on Wednesday, extending the year-to-date net foreign inflow to 5.4 billion rupees worth of equities.

Analysts also said the investors were waiting to see the central bank’s key policy rate announcement on Thursday, which is widely expected to remain unchanged.

Sri Lanka seen holding policy interest rates steady

ECONOMYNEXT| 14.02.2018

Sri Lanka’s central bank is likely to keep its key policy interest rates unchanged when it announces its monetary policy stance tomorrow owing to favourable macroeconomic conditions, a brokerage said.
The central bank is expected o keep its Statutory Reserve Ratio (SRR) unchanged at 7.50% with inflation and private sector credit growth under control, First Capital said in a research note.

First Capital Research said it believes the inflation rate will moderate and foreign reserves will be maintained above Rs7.0 billion levels, equivalent to four months of imports.

Although private sector credit growth picked up by Rs61.6 billion in November 2017, after slowing down in October, First Capital said it believes overall credit is likely to continue to remain under check.

It forecast the February 2018 Colombo Consumer Price Index headline inflation to be at 5.1%.

“We believe inflation will be under control over the next 2-3 months while there could be some upward pressure towards 2Q2018.”

GDP growth below expectations: FCR Pre-policy analysis

Ceylon Today | 2018-02-14

Share Market Investment in Sri Lanka

First Capital Research (FCR) recently issued its Pre-policy analysis for 2018, which stated GDP growth for 3Q 2017 was lower than expected, growing by 3.3% YoY in the quarter.

Overall agricultural activities reported negative growth, mainly due to unfavourable weather conditions (severe drought and heavy rainfall) that prevailed during the last two years in many districts of the country.
During the third quarter of 2017, ‘Services activities’ continued to expand further by 4.3%, while ‘Industrial Activities’ recorded a marginal growth rate of 1.9%.

Credit Growth Increases
FCR upgraded private sector credit growth for 2017 from 14% to 16% in August 2017 amidst a likely increase towards the end of the year.

The private sector credit figure decelerated to Rs 41 billion in October 2017, prior to pickup by Rs 61.6 billion in November 2017. FCR believes overall credit is likely to continue to remain under check.

Inflation continues to slow down
CCPI-based headline inflation decelerated on a YoY basis to 5.8% in January 2018 (below the FCR estimate of 6.7%) from 7.1% in December 2017. NCPI-based inflation accelerated on a YoY basis to 7.7% in December 2017 from 7.5% in November 2017.
However, Core inflation remained under check, decelerating to 3.5% in January 2018 from 4.3% in December 2017.
FCR forecast February 2018’s CCPI headline inflation to be at 5.1%. They expect inflation to come under control over the next 2-3 months, while there could be some upward pressure towards 2Q 2018.

Official Reserves remain above US$ 7 billion
Sri Lanka’s forex reserves assets decreased by US$ 286 million to US$ 7.67 billion in January 2018, which was equivalent to about 4.5 months of imports, from Rs 7.96 billion in December 2017. The Central Bank of Sri Lanka (CBSL) had net-purchased US$ 191 million from currency markets so far during 2018.
First Capital Research expects foreign reserves to maintain at US$ 7.0 billion, which is equivalent to 4 months import bill value.
CBSL Holdings brought down to zero

Year-To-Date, CBSL increased its holding in Government Securities marginally from Rs 2.55 billion in January 2018 to Rs 4.92 billion as at 12 February 2018. However, on 3 January 2018, CBSL holdings were seen increasing to Rs 120.05 billion, prior to settling at Rs 4.23 billion the following day.

Fed Rate Hike Expectations
Economists said the Fed will still pencil in three hikes for 2018 (March 2018, June 2018 and December 2018), but moved forward one of those projected moves to March 2018 from June 2018.

Expected Monetary Policy Stance
First Capital Research believes inflation rate to moderate, foreign reserve position to be maintained above Rs 7.0 billion levels, improve in credit growth and likely increase in GDP growth in 2018. Consideration of above favourable macroeconomic environment current monetary policy is appropriate and no change is required.
FCR expects the CBSL to keep Statutory Reserve Ratio (SRR) unchanged at 7.50%.

Amanda Lokugamage, Senior Research Analyst at First Capital Holdings, with the Market Review on Ada Derana – 11.02.2018

Invest in Sri Lanka

First Capital’s Amanda Lokugamage with the Market Review on Ada Derana

The comments on this report are provided by the Capital Markets Research Unit of First Capital Holdings PLC an investment bank in Sri Lanka.

The company operates in the capital markets of Sri Lanka in government securities – treasury bills and bonds, stock brokering and share market investments, asset management, private wealth management, retirement planning, personal financial planning, unit trust, margin trading, capital market research, trustee services, corporate finance advisory services including corporate debt structuring (debentures, trust certificates, commercial papers), valuations, restructuring, mergers and acquisitions, initial public offerings (IPOs) and project advisory.

The First Capital Group consists of First Capital Treasuries PLC, First Capital Limited, First Capital Markets Limited, First Capital Asset Management Limited and First Capital Equities (Private) Limited covering Colombo, Negombo, Matara, Kandy and Kurunegala.

Sri Lankan stocks rise to 3-mth high on foreign buying

DIMANTHA MATHEW, HEAD OF RESEARCH AT FIRST CAPITAL HOLDINGS PLC, SPEAKS TO REUTERS

FEBRUARY 8, 2018

COLOMBO, Feb 8 (Reuters) – Sri Lankan shares rose to their highest close in three months on Thursday as foreign investors picked up blue chip stocks such as conglomerate John Keells Holdings Plc.

The Colombo stock index ended 0.55 percent firmer at 6,542.90, its highest close since Nov. 10, 2017.

Shares in Carson Cumberbatch Plc rose 6.9 percent, while conglomerate John Keells Holdings Plc ended 0.5 percent higher.

Ceylon Beverage Holdings Plc jumped 14.1 percent and Nestle Lanka Plc firmed 2 percent.

“Foreign interest in blue chips like John Keells pushed the market up,” said Dimantha Mathew, head of research at First Capital Holdings.

Sri Lanka will hold a long-delayed local government election on Feb. 10 amid worries about the future of the country’s coalition government.

The market turnover was 1.3 billion rupees ($8.43 million), more than last year’s daily average of 915.3 million rupees.

Foreign investors bought a net 392.8 million rupees worth of shares on Thursday, extending the year-to-date net foreign inflow to 4.9 billion rupees worth of equities.

$1 = 154.3000 Sri Lankan rupees Reporting by Ranga Sirilal and Shihar Aneez; Editing by Amrutha Gayathri

First Capital is an investment bank providing a full range of financial advisory and services. The Company’s research deliver heightened perspective in fundamental research aiding Share Market Investment in Sri Lanka. The Company’s best-in-class research team provide dynamic reports including economic reviews and proprietary research, encompassing fundamental, quantitative and technical analysis. With fundamental research coverage of 62 listed securities (reflecting approximately 65% market capitalization) across 15 sectors in Share Market Investment in Sri Lanka.

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Stock Brokers in Sri Lanka

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First Capital is an investment bank offering independent advice and transaction execution relating to capital raising and other strategic needs including mergers and acquisitions for investment in Sri Lanka. The Company’s industry leading transactions are reflective of the ingenuity in enabling the most opportune financing processes for our clients. First Capital’s services for investment in Sri Lanka include a total service for public offers of corporate debt, acting in the capacity of managers/ financial advisors and placement agents, in addition to due diligence, pre-offer preparation, offer management, distribution strategy and after-market advisory services, initial public offerings, secondary offerings such as rights issues, corporate actions including mandatory and voluntary offers, private placements and at-market placements of listed securities.

Weekly Government Securities Market – 08-02-2018

Ceylon Today | 2018-02-08

Weekly Yield movement & Volume

Overall yield curve remained almost unchanged however there was a slight upward shift during the latter part of the week with moderate volumes. At the Treasury Bill auction held on 07 Feb, 6M Bill and 1-yr Bill saw its yields increasing by 4bps while the yield of the 3M Bill increased by 6bps.

Liquidity & CBSL Holdings

Market liquidity had an upward trend at the beginning of the week followed by a declining phase during the latter part of the week. The highest volatility was recorded on 30 Jan amounting to LKR 13.1Bn and a slight drop was witnessed on 2nd Feb and continued on an upward trend thereon.

Foreign Interest

Amidst continued foreign buying interest, foreign holding increased by LKR 1.99Bn to record at LKR 330.1Bn. With the overall government, securities increased with foreign buying interest the overall foreign holding percentage remained at 6.7%.

Maturities for next Week

The Government securities market has Treasury Bill maturity amounting to LKR 18.232Bn which needs to be settled on 16 February 2018.

First Capital Holdings PLC is an investment bank and is the pioneer non-bank affiliated Primary Dealer in Treasury Bills and Bonds in Sri Lanka. With a track record of over 25 years, the Company was the first licensed primary dealer appointed by the Central Bank, and is also the only listed and rated primary dealer in Treasury Bills and Bonds in Sri Lanka
First Capital delivers the only source for fixed income research in the local financial services industry. The Company’s best-in-class research team provide dynamic reports including economic reviews and proprietary research, encompassing fundamental, quantitative and technical analysis. 

Sri Lankan stocks end marginally lower ahead of polls

DIMANTHA MATHEW, HEAD OF RESEARCH AT FIRST CAPITAL HOLDINGS PLC, SPEAKS TO REUTERS

FEBRUARY 8, 2018

COLOMBO, Feb 7 (Reuters) – Sri Lankan shares ended lower for a second straight session on Wednesday as investors sold blue-chip stocks such as John Keells Holdings Plc ahead of the local government polls over the weekend.

The Colombo stock index ended 0.08 percent weaker at 6,507.25, slipping further from its highest close since Jan. 9 hit on Friday.

Shares in conglomerate John Keells Holdings Plc slipped 0.6 percent, while Colombo Cold Stores Plc edged down 1.9 percent and Sri Lanka Telecom Plc lost 1.7 percent.

“There is no real direction as investors are on a wait-and-watch mode ahead of the elections,” said Dimantha Mathew, head of research at First Capital Holdings.

“Turnover is boosted by some foreign buying.”

Sri Lanka will hold the long-delayed local government election on Feb. 10 amid worries about the future of the country’s coalition government.

The market turnover was 968.3 million rupees ($6.27 million), more than last year’s daily average of 915.3 million rupees.

Foreign investors bought a net 124.4 million rupees worth of shares on Wednesday, extending the year-to-date net foreign inflow to 4.5 billion rupees worth of equities. ($1 = 154.5000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Vyas Mohan)

First Capital is an investment bank providing a full range of financial advisory and services. The Company’s research deliver heightened perspective in fundamental research aiding Share Market Investment in Sri Lanka. The Company’s best-in-class research team provide dynamic reports including economic reviews and proprietary research, encompassing fundamental, quantitative and technical analysis. With fundamental research coverage of 62 listed securities (reflecting approximately 65% market capitalization) across 15 sectors in Share Market Investment in Sri Lanka