Tag Archives: Fixed income bonds in Sri Lanka

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)

 

Sri Lanka shares hit near 8-mth low on foreign fund outflow

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

 

Sri Lankan shares fell on Tuesday for the third straight session to end at a near eight-month low as foreign investors trimmed their exposure to the island nation’s risky assets amid concerns over budget tax proposals.

The Colombo stock index ended 0.11 percent down at 6,231.87, its lowest close since April 7. The bourse lost 1.17 percent last week, marking its third straight weekly fall.

A proposed hike in various taxes and fees would reduce disposable income and challenge consumption-led growth, analysts said.

“Investors are concerned over the current uncertainty and they are worried over the sustainability of the rates given the current economic uncertainty,” said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

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 the sustainability of the rates.

At the post-monetary policy media briefing, central bank Governor Indrajith Coomaraswamy said aggressive monetary policy tightening by the U.S. Federal Reserve will have an impact on the foreign outflow.  Turnover was 1.01 billion rupees ($6.78 million), more than this year’s daily average of 695.1 million rupees.

Foreign investors sold a net 295.8 million rupees worth of shares on Tuesday, extending the year-to-date net foreign selling to 1.68 billion rupees.

Shares of Dialog Axiata Plc fell 0.98 percent while Asiri Hospitals Plc fell 0.77 percent.

($1 = 149.0000 Sri Lankan rupees)

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

 

Sri Lanka shares end little changed; turnover slumps

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

reuters

Sri Lankan shares ended little changed on Friday, hovering near eight-month lows, while turnover slumped as investors kept to the sidelines on concerns over recent tax proposals.

The Colombo stock index ended 0.02 percent down at 6,252.12, and lost 1.17 percent during the week, marking its third straight weekly fall.  The bourse hit its lowest close since April 7 on Wednesday on caution over the budget tax proposals, including revisions in corporate and withholding taxes.

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.

“Investors area worried and staying on the sideline with the uncertainty haunting the markets,” said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

Analysts said the increase in various taxes and fees would reduce disposable income and challenge consumption-led growth.  Turnover was 110.5 million rupees ($745,614.04), the lowest since March 17, 2014 and well below this year’s daily average of 695.1 million rupees.

Foreign investors bought a net 19.6 million rupees worth of shares on Friday, but have been net sellers of 1.25 billion rupees worth of shares so far this year.

Shares of Ceylon Cold Store Plc fell 7.35 percent while conglomerate John Keells Holdings Plc fell 0.89 percent and Dialog Axiata Plc fell 1.92 percent.

($1 = 148.2000 Sri Lankan rupees)

(Reporting by Ranga Sirilal; Editing by Sunil Nair)

 

 

 

Sri Lanka shares end 8-day losing streak

stock

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

Sri Lankan shares snapped an eight-day falling streak to end slightly higher on Thursday, but concerns over recent tax proposals continued to weigh on sentiment.

The bourse hit its lowest close since April 7 on Wednesday on caution over the budget tax proposals, including revisions in corporate and withholding taxes.

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 benchmark index of the Colombo Stock Exchange ended up 0.17 percent at 6,253.28. The bourse has fallen 2.77 percent over the past eight sessions through Wednesday after the budget was presented on Nov. 10.

The index was in oversold territory, with the 14-day relative strength index at 19.845 versus Wednesday’s 15.978, Thomson Reuters data showed. A level between 30 and 70 indicates the market is neutral.

“Bargain-hunting was there but no big level of buying interest was seen… as investors are cautious due to rising interest rates,” said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

Foreign investors sold a net 5.6 million rupees ($37,800) worth of shares on Thursday, extending the year-to-date net foreign outflow to 1.27 billion rupees. Analysts said the increase in various taxes and fees would reduce disposable income and challenge consumption-led growth.

Turnover was 516.9 million rupees, less than this year’s daily average of 698.6 million rupees.

Shares of Ceylon Cold Store Plc jumped 14.54 percent while conglomerate John Keells Holdings Plc rose 0.55 percent and Lanka ORIX leasing Plc fell 1.86 percent.

($1 = 148.2000 Sri Lankan rupees)

(Reporting by Ranga Sirilal; Editing by Sunil Nair)

 

Sri Lanka shares fall for 8th session; tax proposals weigh

First Capital’s Head of Research, Dimantha Mathew, speaks to Reuters

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Sri Lankan shares extended falls to an eighth session on Wednesday, posting their lowest close since April 7, as investor sentiment was hit by budget tax proposals, including revisions in corporate and withholding taxes.

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 benchmark index of the Colombo Stock Exchange ended down 0.21 percent at 6,242.68. It has fallen 2.77 percent over the past eight sessions after the budget was presented on Nov. 10.  The index was in oversold territory, with the 14-day relative strength index at 15.978 versus Tuesday’s 16.929, Thomson Reuters data showed. A level between 30 and 70 indicates the market is neutral.

“Market is down in low trade as investors are on wait-and-see mode,” said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

Foreign investors sold a net 100.7 million rupees ($678,571.43) worth of shares on Wednesday, extending the year-to-date net foreign outflow to 1.27 billion rupees.

Analysts said the increase in various taxes and fees would reduce disposable income and challenge consumption-led growth.  Turnover was 284.9 million rupees, well below this year’s daily average of 698.6 million rupees.

Shares of Lion Brewery Plc fell 6.81 percent, while Hemas Holdings Plc declined 5.00 percent and Ceylon Tobacco Company Plc fell 1.24.

($1 = 148.4000 Sri Lankan rupees)

(Reporting by Ranga Sirilal; Editing by Sunil Nair)

 

Sri Lankan shares fall for 6th session; tax proposals weigh on mkt

First Capital’s Head of Research, Dimantha Mathew, speaks to Reuters

reuters

Sri Lankan shares fell for a sixth straight session on Monday, posting their lowest close in four and a half months, in thin volume as investor sentiment was hit by budget tax proposals, including revisions in corporate and withholding taxes.

The government aims to boost its 2017 tax revenue by 27 percent to 1.82 trillion rupees ($12.36 billion) year-on-year, and meet a commitment given to the International Monetary Fund in return for a $1.5 billion loan in May.

The benchmark index of the Colombo Stock Exchange ended down 0.8 percent, or 50.85 points, at 6,275.26, its lowest close since July 5. It has declined 2.27 percent over the past six sessions after the budget was presented on Nov. 10.

The index was in oversold territory, with the 14-day relative strength index at 18.405 versus Friday’s 23.399, Thomson Reuters data showed. A level between 30 and 70 indicates the market is neutral.

“Confidence levels are very low and selling pressure is starting to increase with continued foreign selling,” said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.  “No catalyst at the moment to reverse the trend amid global worries.”

Analysts said some of the budget proposals were still unclear, and there were concerns that some of them could be reversed like last year.

The market shrugged off a move by the Securities and Exchange Commission to change the minimum floating rule to raise market liquidity.

Foreign investors sold a net 47.98 million rupees ($324,298.75) of shares on Monday, extending the year-to-date net foreign outflow of 1.16 billion rupee of shares.

 

Analysts said the increase in various taxes and fees would reduce the disposable income of people and challenge the consumption-led growth.

Turnover was 395.4 million rupees, well below this year’s daily average of 700.8 million rupees.  Shares of conglomerate John Keells Holdings Plc fell 1.16 percent, while Asiri Hospital Holdings Plc dropped 5.54 percent.

Shares of Sampath Bank Plc fell 1.88 percent, while Sri Lanka Telecom Plc dropped 1.41 percent.

($1 = 147.9500 Sri Lankan rupees)

(Reporting by Ranga Sirilal; Editing by Subhranshu Sahu)

 

Sri Lankan shares fall for fifth straight session; tax proposals weigh

First Capital’s Head of Research, Dimantha Mathew, speaks to Reuters

Sri Lankan shares ended for a fifth straight session of declines on Friday, and reached their lowest closing level in more than four months, in thin volume as investor sentiment was hit by budget tax proposals.

The government aims to boost its 2017 tax revenue by 27 percent to 1.82 trillion rupees ($12.36 billion) year-on-year, including revisions in corporate and withholding taxes and meet a commitment given to the International Monetary Fund in return for a $1.5 billion loan in May.

The benchmark index of the Colombo Stock Exchange ended down 0.29 percent at 6,326.11, its lowest close since July 7. It declined 1.5 percent in the last five sessions after the budget was presented on Nov. 10.  The index was in the oversold territory, with the 14-day relative strength index at 23.399 versus Thursday’s 25.714, Thomson Reuters data showed. A level between 30 and 70 indicates the market is neutral.

“Investors are worried with the rising interest rates after the T-bill yields rose this week. There isn’t a lot of selling pressure and investors are awaiting cautiously,” said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

Analysts said some of the budget proposals are still unclear, and there are concerns that some of them could be reversed, like what occurred last year.

The market shrugged off a move by Sri Lanka’s Securities and Exchange Commission (SEC) to change its minimum floating rule to raise market liquidity. Foreign investors sold a net 31.95 million rupees worth of shares on Friday extending the year-to-date net foreign outflow of 1.11 billion rupee worth of shares.

Analysts said the increase in various taxes and fees would reduce the disposable income of people and challenge the consumption-led growth.

Turnover was 272.7 million rupees ($1.84 million), well around a third of this year’s daily average of 702.2 million rupees. Shares of Sri Lanka Telecom Plc dropped 3.79 percent, while Hatton National Bank Plc slid 1.59 percent.

($1 = 147.8500 Sri Lankan rupees)

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sherry Jacob-Phillips)

Read More

Monthly Economic Watch – Aug 2016

 

Content Briefing

  • Inflation
  • External Sector
  • Monetary Policy Review
  • Tourist Arrivals
  • Treasury Bills & Bonds
  • Global News

Read the full report here

 

 

Source: First Capital Research

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