Tag Archives: Colombo Sri Lanka

Sri Lanka shares end 1 pct higher; foreign buying seen

FIRST CAPITAL’S HEAD OF RESEARCH, DIMANTHA MATHEW, SPEAKS TO REUTERS

Sri Lankan shares jumped more than 1 percent on Thursday as investors sought bargains in blue-chips and on buying by foreign investors.

The Colombo stock index ended up 1.09 percent at 6,309.04, its highest close since Nov. 18.

The index hit a near-eight-month low on Tuesday on concerns that the proposed hike in various taxes and fees would reduce disposable income and challenge consumption-led growth.

Foreign investors bought a net 45.4 million rupees ($306,860.43) worth of shares on Thursday, but have been net sellers of 1.59 billion rupees worth of shares so far this year.

Turnover stood at 1.18 billion rupees, more than this year’s daily average of 696.8 million rupees.

“Market is very bullish with continued foreign buying,” said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

“Early morning buying in John Keells boosted confidence levels and brought the buying in to the market. Excess liquidity in the banking system is also helping the market.”

The government aims to boost its 2017 tax revenue by 27 percent to 1.82 trillion rupees year-on-year and meet a commitment given to the International Monetary Fund in return for a $1.5 billion loan in May.

The market shrugged off the central bank’s monetary policy decision on Tuesday to keep rates unchanged. Brokers said investors are concerned about sustainability of rates.

Shares of biggest listed lender Commercial Bank of Ceylon Plc jumped 1.43 percent while Colombo Cold stores Plc rose 3.59 percent and conglomerate John Keells Holdings Plc rose 1.15 percent.

($1 = 147.9500 Sri Lankan rupees)

(Reporting by Ranga Sirilal; Editing by Sunil Nair)

Sri Lanka shares edge up; tax proposals weigh

FIRST CAPITAL’S HEAD OF RESEARCH, DIMANTHA MATHEW, SPEAKS TO REUTERS

 

Sri Lankan shares ended slightly higher on Wednesday as investors sought bargains in blue-chips but concerns over recent budget tax proposals weighed on sentiment.

The Colombo stock index ended up 0.15 percent at 6,241.10, ending three sessions of losses.  The index hit a near-eight-month low on Tuesday on concerns that the proposed hike in various taxes and fees would reduce disposable income and challenge consumption-led growth, analysts said.

“Market is up on bargain-hunting by foreigners but it’s not a major factor at the moment unless the trend is going to continue,” said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

“I feel its like a one-off thing. Investors are concerned over the current uncertainty and we could see volatility in the market with the current economic uncertainty.”

The government aims to boost its 2017 tax revenue by 27 percent to 1.82 trillion rupees year-on-year and meet a commitment given to the International Monetary Fund in return for a $1.5 billion loan in May.

The market shrugged off the central bank’s key monetary policy decision on Tuesday to keep rates unchanged. Brokers said investors are concerned about sustainability of rates.  Turnover stood at 579.6 million rupees ($3.89 million), much less than this year’s daily average of 694.6 million rupees.

Foreign investors bought a net 48.1 million rupees worth of shares on Wednesday, but have been net sellers of 1.64 billion rupees worth of shares so far this year.

Shares of conglomerate John Keells Holdings Plc jumped 2.63 percent while Dialog Axiata Plc rose 2.97 percent and Ceylon Tobacco Company Plc rose 0.47 percent.

($1 = 148.9000 Sri Lankan rupees)

(Reporting by Ranga Sirilal; Editing by Sunil Nair)

 

Unit Trust Solutions

First Capital Holdings PLC is a full-service investment bank with a 30-year history, which offers an array of investment solutions to its clients including services in capital markets advisory, fixed income, equities and wealth management.

The company’s wealth management suite serves individual and institutional investors through unit trusts, financial planning and discretionary portfolio management.

Currently, the company is focusing on promoting its unit trust products to the market, which offers a low-risk investment option. Unit trusts are well suited for both corporates and individuals, as it allows for capital to be invested and managed professionally. The unit trusts funds act as a pooling vehicle in which funds from multiple investors are accumulated, allowing for larger investment in certain instruments with negotiated terms.

First Capital unit trusts products cater to a large base of high-net-worth and institutional clientele including SME and mid-level corporates.

The funds are managed by professional fund managers, who ensure that risks are diversified over a multitude of assets, while the largest state bank, the Bank of Ceylon acts as an independent trustee. Investors are given further peace of mind through the stringent monitoring and regulatory control of the unit trust industry by the Securities Exchange Commission (SEC).

Globally, the unit trust sector asset  base exceeds that of the banking sector. According to the Central Bank of Sri Lanka the bank deposits at LKR 4.7 trillion as at year end 2014, is leaps ahead of industry assets under management LKR 133 billion. Considering the tax exemptions given to unit trusts investments and that retail investors are seeking higher-yield alternative investments away from conventional bank-deposits, the company sees potential for growth in this segment.

Striving to excel in its customer centricity, First Capital encourages potential investors to consider their risk appetite, objectives, and purpose for investing prior to getting involved, ensuring that customers choose the most fitting investment option. “We profile the client, looking at age, responsibilities and commitments, and help them understand what sort of risk they should be taking, to fulfil their goals in life,” explains CEO, Dilshan Wirasekara. The company conducts financial planning on behalf of its clients to help them assess where they stand in relation to achieving their goals.

First Capital has a range of unit trust products targeting varying investor requirements. For the passive investor, it provides a gilt-edged fund, which invests purely in government securities, while providing a money-market fund for moderate risk-takers giving a return of 7-8% per annum, giving a higher rate than short-term bank deposits.   For the more aggressive risk-takers who want high returns, the company offers an equity fund, maintained on ethical grounds.

The company’s flagship unit trust fund – First Capital Wealth Fund was the best-performing fund in its category in 2013 and 2014, and has outperformed the unit trust industry in terms of Annual Equivalent Rate (AER) for the five years ended December 2015.

First Capital even offers customised portfolio management for investors with larger funds, and provides investment advice covering many business sectors.

Wirasekara comments: “The Company differentiates itself by the ability to navigate varying market cycles in multiple asset classes. Its superior performance in unit trust is a result of the ability to identify advantageous trends coupled with exemplary risk management.”

First Capital’s asset management business is only one aspect of its total offering. “We are a fully-fledged investment bank, having many other business lines,” avers Wirasekara adding that “being a primary dealer, we have insights into the bond market and interest-rate direction.” As testimony, First Capital claims to have been the largest manager of debt issuance in the market last year, raising LKR 25 billion of debt.

The company enjoys an unparalleled advantage with its research-backed market insights and expertise, which enables its fund managers to make notable capital gains by capitalising on movement, through risk mitigation and locking-in long-term rates at high yields.

First Capital has extended its local footprint through branches in Colombo, Kandy, Matara and Kurunegala. The company is geared for its journey towards growth in unit trust investments and customer-centric wealth management.

 

Published in May 2016 on the LMD Magazine – Digest Segment on Wealth Management