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MARKET UPDATE ON ADA DERANA ENGLISH NEWS – 2017.04.03

InvestmentBanksInSriLanka

First Capital Research Analyst Amanda Lokugamage with the market update – between 15.05  mins to 15.36 mins

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.

Quarterly Results Review

Quarterly Results Review / Sector Summary / Results update for All Companies – December 2016 Quarter prepared by First Capital Research

Content

Quarterly Reports –

Banking Sector and Capital Goods Sector drive earnings

Dec Quarter earnings up by 5%YoY for 278 Companies: December quarter earnings grew 10%YoY to LKR62.2Bn and 3%QoQ for the 278 companies reported but considering all companies of the previous year earnings growth is 5.3% YoY. Dec 2016 Quarter earnings were dominated by healthy performance in Banking Sector (+20%YoY) with higher margins while Capital Goods Sector (+14%YoY) was positively affected by earnings from diversified conglomerates. However, the earnings growth was partially offset by Energy Sector (-94%YoY). Utilities Sector (-102% YoY) also saw deteriorated performance due to adverse weather conditions. Food, Beverage and Tobacco Sector (-7% YoY, adjusted) was affected by lower volumes in tea and rubber plantations despite increased prices, having adjusted for one-off losses from DIST and non-operating gains from CARS Group.

Private sector credit growth boosted banking earnings: Banks Sector continued to remain as largest contributor to earnings by achieving a profit of LKR 15.2Bn (+20%YoY) primarily driven by stronger Net Interest Margins and higher than expected private sector credit growth despite the increased taxes (VAT). Big Banks led by COMB (+26%YoY), HNB (+14%YoY) and SAMP (+67%YoY), jointly represented 72% of the sector earnings. JKH (+32% YoY) and DOCK (+93% YoY) contributed to improved performance in the Capital Goods Sector which posted a net profit of LKR 12.7Bn (+14% YoY). JKH saw strong retail segment and higher finance income with rising interest rates while DOCK experienced better margins via ship repair activities.

Energy and Utilities adversely affect earnings: Market earnings were negatively affected by Energy Sector that recorded a net profit of LKR 72Mn (-94% YoY) driven by LIOC (-71% YoY) & LGL (-170% YoY) which saw a steep dip in margins due to increased oil gas prices in the global market. Utilities Sector posted a net loss of LKR 14Mn (-102% YoY) due to lack of rainfall affecting many hydro power plants including VLL (-111% YoY) and VPEL (-70% YoY).

One off events affect 4Q16 earnings: Market earnings were significantly affected by the losses of LKR 74Bn attributable to DIST during the quarter following share swap arrangement with MELS. In addition, 5 companies of the CARS Group (+377% YoY) – BUKI (+509% YoY), SHAL (+20,060% YoY), INDO (+21,649% YoY), SELI (-826%) and GOOD (+52,245% YoY) together recorded a total gain of LKR 12.6Bn attributable to disposal of plantation assets. After adjusting for these gains and losses the sector resulted in a profit of LKR 9.1Bn (-7% YoY, adjusted).

READ ALL REPORTS

Quarter: December 2016

This Review is prepared and issued by First Capital Equities (Pvt) Ltd. and is based on information available in the public domain, internally developed and other sources believed to be correct. Although all reasonable care has been taken to ensure that the contents of this document are accurate, First Capital Equities (Pvt) Ltd and its Directors and employees, are not responsible for its accuracy, usefulness and reliability and disclaim liability for any loss suffered by the use of information contained herein.

First Capital Equities (Pvt) Ltd may act as a Broker in the investments which are the subject of this document or any related investments and may have acted on or have used the information contained in this document, or the research or analysis on which it is based, before its publication.

Sri Lankan shares rise on foreign investor buying; turnover hits 1-mth high

FIRST CAPITAL’S SENIOR RESEARCH ANALYST, ATCHUTHAN SRIRANGAN, SPEAKS TO REUTERS

Tue Mar 28, 2017

Sri Lankan shares closed slightly stronger on Tuesday, recovering from a more than one-year closing low hit in the previous session, as foreign investors bought battered stocks while block deals pushed the day’s turnover to a one-month high.

The Colombo stock index closed 0.17 percent firmer at 5,985.08, closing below a key psychological level of 6,000.

It had closed at its lowest since March 15, 2016 on Monday as investors sold shares of lenders after the central bank tightened its monetary policy on Friday.

The central bank raised its benchmark interest rates by 25 basis points for the first time in eight months to contain high inflationary expectations and a possible acceleration of demand-side inflationary pressures.

“The market is up on continued foreign buying while block deals pushed the turnover up,” said Atchuthan Srirangan, a senior research analyst with First Capital Equities (Pvt) Ltd.

“Retail investors are still on the sidelines as they want to see a clear picture.”

Foreign investors net bought shares worth 401.2 million rupees ($2.64 million) on Tuesday, raising the year-to-date net foreign inflow to 4.29 billion rupees in equities.

Turnover stood at 2.32 billion rupees ($15.29 million), the highest since Feb. 28 and well above this year’s daily average of 716.1 million rupees.

As of Monday’s close, the index had lost 2.18 percent since March 7 when the IMF called for monetary policy tightening if credit growth or inflation do not abate.

The stock index moved to “neutral” territory from “oversold”, with the 14-day relative strength index rising to 30.957 versus Monday’s 27.488, Thomson Reuters data showed. A level between 30 and 70 indicates the market is neutral.

Shares of Dialog Axiata Plc rose 2.70 percent, while Sri Lanka Telecom Plc climbed 1.55 percent.

($1 = 151.8000 Sri Lankan rupees)

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)

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 shares slump to one-year low as banks fall

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

Mon Mar 27, 2017

Sri Lankan shares fell to a more than one-year closing low on Monday in dull trade as investors sold shares of lenders after the central bank tightened monetary policy in the previous session, dealers said.

On Friday, the central bank raised its benchmark interest rates by 25 basis points for the first time in eight months to contain high inflationary expectations and a possible acceleration of demand side inflationary pressures.

The Colombo stock index closed 0.36 percent weaker at 5,974.94, its lowest close since March 15, 2016. The index broke below a key psychological barrier of 6,000 on Wednesday.

“Margins (calls) are still affecting the market. Buying interest still hasn’t come back into the market,” said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

“Investors took the rate hike as a positive as it will give some kind of stability in the economy and the hike was less than what they expected. But investors are still waiting for the market to bottom out to get in.”

Turnover stood at 429 million rupees ($12.7 million), less than this year’s daily average of 688.4 million rupees.

The index had lost 2.18 percent since March 7 after the IMF called for monetary policy tightening if credit growth or inflation do not abate.

The bourse fell to “oversold” territory from “neutral”, with the 14-day relative strength index dropping to 27.488 points versus Friday’s 30.480, Thomson Reuters data showed. A level between 30 and 70 indicates the market is neutral.

Foreign investors net bought shares worth 76.3 million rupees on Monday, raising the year-to-date net foreign inflow to 3.89 billion rupees in equities.

Shares in Melstacorp Plc fell 3.06 percent while the biggest listed lender Commercial Bank of Ceylon Plc fell 1.59 percent.

($1 = 151.4000 Sri Lankan rupees)

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Vyas Mohan)

Sri Lankan shares fall to 1-yr closing low, rate review in focus

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

Thu Mar 23, 2017

Sri Lankan shares fell for a second straight session on Thursday to a more than one-year closing low as expectations of an interest rate hike continued to drag down the market ahead of the central bank’s monetary policy review.

The Colombo stock index closed down 0.3 percent at 5,979.85, its lowest close since March 15, 2016. The index breached a key psychological barrier of 6,000 in the previous session.

“There are no buyers as most of the local investors are on the sidelines awaiting the outcome of the policy review,” said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

Sri Lanka’s central bank could raise its key policy rates in the coming months if it skips a chance to tighten at its second monetary policy review of the year on Friday, a Reuters poll showed, two weeks after the International Monetary Fund called for further tightening.

Analysts said investors expected a rate hike.

Turnover stood at 616.4 million rupees ($4.1 million), less than this year’s daily average of 671 million rupees.

The index has lost 2.1 percent since March 7, when the IMF called for monetary policy tightening if credit growth or inflation do not abate.

The bourse dipped further into oversold territory on Thursday, with the 14-day relative strength index at 24.614 points versus Wednesday’s 26.758, Thomson Reuters data showed. A level between 30 and 70 indicates the market is neutral.

Foreign investors net bought shares worth 194 million rupees, raising the year-to-date net foreign inflow to 3.26 billion rupees in equities.

The treasury bill rates have risen between 33 to 77 basis points since July 28, when the central bank last raised the key interest rates.

Shares in Asian Hotel Properties Plc fell 2.9 percent, while Lanka ORIX Leasing Company Plc fell 0.8 percent and Sri Lanka Telecom Plc 0.9 percent.

($1 = 151.5000 Sri Lankan rupees)

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Amrutha Gayathri)

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 shares fall to 1-yr closing low, breaching key barrier

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

Wed Mar 22, 2017

Sri Lankan shares fell on Wednesday to a more than one-year closing low, breaching a key psychological barrier of 6,000, as expectations of an interest rate hike continued to drag down the market ahead of the central bank’s policy review.

The Colombo stock index closed down 0.7 percent at 5,996.65, its lowest close since March 15, 2016.

“The market came down mainly on margin calls,” said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

“Investors are expecting a rate hike, so local investors are on the sidelines and only foreign investors are active.”

Sri Lanka’s central bank could raise its key policy rates in the coming months if it skips a chance to tighten at its second monetary policy review of the year on Friday, a Reuters poll showed, two weeks after the International Monetary Fund called for further tightening.

Turnover was boosted by foreign-buying in conglomerate John Keells Holdings PLC and stood at 1.05 billion rupees ($6.9 million), well above this year’s daily average of 672 million rupees.

The index has lost 1.8 percent since March 7, when the IMF called for monetary policy tightening if credit growth or inflation do not abate.

The bourse dipped into oversold territory on Wednesday, with the 14-day relative strength index at 26.758 points versus Tuesday’s 34.145, Thomson Reuters data showed. A level between 30 and 70 indicates the market is neutral.

Foreign investors net bought shares worth 414.6 million rupees, raising the year-to-date net foreign inflow to 3.07 billion rupees in equities.

The treasury bill rates have risen between 33 to 77 basis points since July 28, when the central bank last raised the key interest rates.

Shares in John Keells fell 2.1 percent, while Asiri Hospitals Plc dropped 3.8 percent and biggest listed lender Commercial Bank of Ceylon Plc fell 0.9 percent.

($1 = 151.5000 Sri Lankan rupees)

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Amrutha Gayathri)

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.

RICHARD PIERIS’ STARS, CASH COWS, QUESTION MARKS AND DOGS

FIRST CAPITAL EQUITIES, A STOCKBROKER, PUTS THE LISTED GROUP OF COMPANIES THROUGH THE BOSTON CONSULTING GROUP’S GROWTH-SHARE MATRIX

Sri Lankan shares end flat as investors await cbank rate review

FIRST CAPITAL’S JALIYA WIJERATNE SPEAKS TO REUTERS

Tue Mar 21, 2017

Sri Lankan shares were little changed on Tuesday in lacklustre trade, hovering near a one-year closing low hit last week, as investors stayed on the sidelines ahead of the central bank’s policy review.

The Colombo stock index ended flat at 6,041.59, near its lowest close since March 16, 2016 hit on Thursday.

Turnover stood at 283.3 million rupees ($1.9 million), less than half of this year’s daily average of 665 million rupees.

The index has lost 1.2 percent since March 7, when the International Monetary Fund called for monetary policy tightening if credit growth or inflation did not abate.

The central bank’s second monetary policy review of the year is due on Friday.

“The market is closely watching for the monetary policy rate announcement and sovereign bonds,” said Jaliya Wijeratne, who heads First Capital Equities.

“Local investors are just waiting for some direction, but foreign investors are buying counters.”

Foreign investors net bought shares worth 160.8 million rupees, raising the year-to-date net foreign inflow to 2.66 billion rupees in equities.

Shares in Commercial Leasing and Finance Plc rose 8 percent, while Lanka ORIX Leasing Company Plc gained 2.3 percent and Dialog Axiata Plc rose 0.9 percent.

($1 = 151.5000 Sri Lankan rupees)

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Amrutha Gayathri)

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 shares edge down on rate hike concerns ahead of review

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

Mon, Mar 20, 2017

Sri Lankan shares edged down on Monday, hovering near a one-year closing low hit last week, as expectations of a rate hike continued to weigh on sentiment.

The Colombo stock index fell 0.1 percent to finish at 6,041.17, near its lowest close since March 16, 2016 hit on Thursday. The bourse fell 0.6 percent last week, posting its fourth straight weekly decline.

The index has lost 1.2 percent since March 7, when the International Monetary Fund called for monetary policy tightening if credit growth or inflation did not abate.

The central bank’s second monetary policy review of the year is due on March 24.

“Retailers and institutional investors are on the sidelines; investors are awaiting the outcome of the monetary policy announcement,” said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

Foreign investors net sold shares worth 3.74 million Sri Lankan rupees ($260,296), the first net outflow in 14 sessions. Foreign investors were net buyers of 2.49 billion rupees worth of equities so far this year.

Turnover stood at 439.4 million rupees, less than this year’s daily average of 672.2 million rupees.

Access Engineering Plc lost 2 percent following a local media report that the government stopped some development projects in which the company was involved.

Dialog Axiata Plc fell 0.9 percent and conglomerate John Keells Holdings Plc edged down 0.1 percent.

($1 = 151.7500 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Amrutha Gayathri)

MARKET UPDATE ON ADA DERANA ENGLISH NEWS – 2017.03.20

 

 

 

 

FC Head of Research Dimantha Mathew with the market update – between 20.23 mins to 20.57 mins

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.