Tag Archives: Investment banks in Sri Lanka

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

ICRA Lanka assigns [SL]A- rating with stable outlook to First Capital Holdings PLC

ICRA Lanka Limited, a wholly owned subsidiary of ICRA Ltd, a group company of Moody’s Investors Service has assigned the Issuer rating of [SL]A- (pronounced SL A minus) with a stable outlook to First Capital Holdings PLC (FCH or the company). ICRA Lanka has assigned the [SL]A- (pronounced SL A minus) rating to the LKR 500 Mn Senior Unsecured Redeemable Debenture programme of the company. ICRA Lanka has assigned the [SL]A2+ (pronounced SL A two plus) rating to the LKR 1,000 Mn Commercial Paper programme of FCH.

ICRA-lanka-rating

ICRA Lanka has taken a consolidated view of FCH and its subsidiaries due to their common brand and senior management team and, other operational and financial linkages between the group entities. The ratings factor in the FCH’s status as the holding company of First Capital Treasuries Limited (FCTL, a standalone Primary Dealer in Sri Lanka with Issuer Rating of [SL]A- with stable outlook). The ratings take note of the improvement in the business and financial performances of the other group entities, which are engaged in corporate debt structuring, corporate finance, asset management, stock broking and in extending margin trading facilities, over the recent past. ICRA Lanka however notes that FCH’s performance is largely dependent on performance of FCTL, as the contribution from the other entities presently is quite modest. FCTL accounted for about 80% of the total consolidated asset base of FCH and about 70% of its consolidated profit before tax for FY2015. Thus, FCH’s performance is expected to be susceptible to the risks inherent in the primary dealer business. The above mentioned risk however is likely to be moderated by the prudent internal control and processes, along with the adequate risk management systems put in place for FCTL. The FCH group has an established clientele of over 2500, which is expected to support the business growth of the other group entities. ICRA Lanka takes cognisance of the comfortable liquidity position of the FCH group given the highly liquid assets and the sanctioned credit facilities from banks with the group entities.
FCH, being a holding company derives its income from the dividends from the group entities and income from its investments, which includes interest income and profit from investments. During FY2015, income from investments accounted for about 60% of the total income of FCH (Standalone), while dividend income contributed to the rest vis a vis 84% of income from dividends in the previous financial year. The increase in the investment income in FY2015 could be attributed to the one-time gain of about Rs.233 Mn following the reclassification of its investment in Orient Finance PLC, which was subsequently sold in June 2015.The company’s standalone performance is largely linked to the dividend income from its principal subsidiary, FCTL and, investment income. The expected moderation in the performance of FCTL in FY2016 vis a vis FY2015, is likely to impact the overall performance of FCH. The company’s funding profile is characterised largely by short term funding, which accounted for close to 80% of the total standalone debt in March 2015, while the remaining was in the form of long term debentures. FCH’s asset profile (Standalone) largely consists of short term loans funding to its group entities. The company’s standalone gearing stood moderately high at about 3.4 times as in March 2015; however the FCH group access to the sanctioned bank lines and its liquid assets provides comfort from a liquidity perspective.
ICRA takes note of the improvement in the performance of the other subsidiaries in the group. First Capital Limited, which is 99.9% held by FCH, is involved in corporate debt structuring, corporate finance and advisory
services. FCL witnessed an improvement in the performance due to increase in the fee based income (increased to Rs 127 Mn in FY2015 as compared to 12 Mn in FY2014) arising from above mentioned services offered, however profitability continues to be driven by the dividend income from the principle subsidiary, FCTL, which accounted for close to 50% of the total income of about Rs.1.1 Bn, while the remaining was contributed by interest income on its investments. FCL is the step-down holding company for the other entities in the FCH group including FCTL; First Capital Asset Management Limited (FCAML) that is involved in portfolio management; First Capital Markets Limited (FCML) that is involved in providing margin trading facilities and First Capital Equities (Pvt) Limited (FCEL) which is engaged in stock broking activities. FCAML, FCML and FCEL together accounted for about 6% of the FCH consolidated income and about 2% of the consolidated profit before tax. ICRA Lanka takes note the improvement in the business volumes in the above mentioned entities during FY2015, which supported the financial performances. FCML and FECL reported profits for FY2015 vis a vis losses in the previous financial year, while the FCAML was profitable and its financial performance has remained largely range bound over the last few years.

Company Profile
Incorporated in the year 1992, FCH is a public limited company listed on the Colombo Stock Exchange. FCH is the holding company of the financial services arm of Dunamis Capital PLC, which holds 74.9% in FCH. The company is engaged in making investments and managing its subsidiaries i.e. First Capital Treasuries Limited (FCTL) which is an authorised primary Dealer, First Capital Limited (FCL) involved in structuring and placement of corporate debt and corporate financial advisory services, First Capital Asset Management Limited (FCAML) involved in unit trust and portfolio management, First Capital Markets Limited (FCML) involved in providing margin trading facilities and First Capital Equities (Pvt) Limited (FCEL) which is engaged in stock broking activities and First Capital Investments (Private) Limited, which is the holding entity of FCEL.
During FY2015, FCH reported a consolidated net profit of LKR.985 Mn on a total asset base of LKR 20,464 Mn as compared to a net profit of LKR 331 Mn on a total asset base of LKR 16,360 Mn in the previous fiscal.
The company reported a standalone net profit of LKR 436 Mn on a total asset base of LKR 3,437Mn as compared to LKR 471 Mn on a total asset base of LKR 2,376 Mn.
September 2015

First Capital powers National Conference of Chartered Accountants

First Capital Holdings PLC, a leading investment bank in Sri Lanka, recently came onboard to power the 36th National Conference of Chartered Accountants with a Gold sponsorship.

The conference, which will be held from November 4 to 6, 2015, is the flagship event of the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) and is one of the most sought-after events in the country’s corporate calendar, attended by high-profile business leaders and chartered accountants, including chairman, directors, CEOs, CFOs and partners.

This year’s conference will be held on the theme ‘Collaborate to Compete’ and is expected to attract about 1500 participants. The conference to be held at the BMICH, Colombo, will comprise of two days of technical sessions.

First Capital Holdings PLC Chief Executive Officer Dilshan Wirasekara said, “We at First Capital are delighted to sponsor a benchmark event such as the National Conference of Chartered Accountants. We believe this forum is held at the right moment as Sri Lanka’s capital market enters the next phase of growth, the theme of ‘Collaborate to Compete’ becomes significant to the industry.

In our commitment towards becoming the country’s leading investment bank we are constantly seeking to sharpen our competitive edge by collaborating with our investor base, regulatory authorities and governing bodies in offering innovative investment solutions,” Wirasekara said.

This is the first time First Capital Holdings PLC has been on-board as a Gold sponsor.

CA Sri Lanka President. Arjuna Herath said that over the years the conference has built a reputation as a business summit that focuses extensively and spurs insights into broad economic and business issues, apart from its core emphasis on finance-related topics.

“Every year we attract some of the leading companies in the country who come on-board as sponsors for this important corporate event and I take pleasure in welcoming First Capital Holdings PLC as a Gold sponsor this year,” Herath said.

Stock Watch – First Capital Holdings PLC

What happens when a news outlet teams up with an leading investment bank with over 3 decades of experience?
First Capital Holdings PLC together with NewsRadio brings you Stock Watch, a comprehensive recap of the day’s performance on the Colombo Stock Exchange. It’s accurate, up-to-date reporting backed up by unparalleled financial know-how.
Tune in to TNL Radio at 5.50pm every weekday for all this and more. The NewsRadio Stock Watch with First Capital Holdings PLC. A review you can rely on.

First Capital’s 9-month after tax profit tops Rs. 1 b mark

First Capital Holdings PLC has recorded a profit after tax of Rs. 1.09 b for the nine months ended 31 December 2014, indicating a stable growth trajectory. The company, which offers a range of investment banking products and services across the financial spectrum, saw an increase in profit after tax, in comparison to Rs. 262.9 m reported for the same period last year. Commenting on the Group’s performance over the period under review, First Capital Holdings PLC Chief Executive Officer Dilshan Wirasekara said: “Strategic decisions and concentrated growth initiatives have enabled us to capture areas of advancement and build on our business footprint.

We are both pleased and grateful that we have grown to gain the support and trust of our investor base.” Leveraging on favourable macro-economic conditions, a decline in secondary market interest rates and research-based decision making, First Capital Treasuries, the Group’s Primary Dealer Unit, cemented its position as a frontrunner in the Non-Banking Primary Dealer segment. First Capital Treasuries realised trading gains of Rs. 905 m during the period under review – driving an increase from Rs. 145 m reported during 2013/14. Funds under management saw a four-fold increase to Rs. 4.2 b, bearing testament to the unit’s progression during the period. The period under review concluded with the First Capital Wealth Fund establishing itself as the best performing fixed income Unit Trust fund in Sri Lanka. The Stock Broking and Margin Trading units also contributed positively towards the Group’s results during the period under review.

The Corporate Debt Unit mobilised Rs. 19 b in corporate debt securities, including the structuring and placement of Rs. 9.4 b listed debenture issues, earning a corresponding fee income of Rs. 112 m (2013/14 – Rs. 26 m). First Capital surpassed competitors to become the leading listed debenture manager as well as the leading intermediary in the secondary market for listed debentures via the DEX. First Capital Treasuries poised itself to take advantage of the dynamic financial environment by issuing a listed debenture of Rs. 500 m in January 2015, improving its long term capital base (Tier II).

The group’s stockbroking arm, First Capital Equities, became a fully owned subsidiary in November 2014. Reaffirming the group’s commitment to its client base and long-term strategic priorities, Wirasekara concluded: “Our results confirm that our development initiatives and decision making have been a success. We hope to make the most of our current position by strengthening the company in order to attain our vision of becoming Sri Lanka’s leading investment bank. We are ideally placed to sharpen our competitive edge further and deliver consistent value for our clients.” For nearly 30 years, First Capital Holdings PLC has been a leading investment bank operating in Colombo, Matara and Kandy. The company offers a full range of investment banking products and services. First Capital Holdings PLC has a credit rating of A-.

First Capital Holdings honours stakeholders

First Capital Holdings PLC recently hosted an evening of cocktails to celebrate the ongoing success of its partnerships and fete its stakeholders. Speaking at the reception, Executive Chairperson Manjula Mathews reflected on the company’s sustained growth and thanked those present for their continued support.

“We have achieved considerable progress over the past year thanks to the shared vision of all our stakeholders and propelled by a combination of teamwork, favourable market conditions and financial experience. We are sincerely grateful to our clients and other partners for their unstinting support as we progress on our journey towards becoming Sri Lanka’s leading investment bank.”

Elaborating on the company’s way forward, Mathews noted that the group plans to consolidate and build on the growth momentum of the past year by offering innovative and profitable investment banking solutions. Held at Cinnamon Grand, the reception brought together over 400 guests for a memorable evening of fellowship and entertainment and served as an occasion for the company to show its appreciation towards its regulators, collaborators, clients and members of the media.

The exclusive event provided an opportunity for the group’s senior management to engage and interact with all stakeholders and reaffirm the company’s commitment to strengthen and build on the trust and confidence placed in First Capital. During the first half of the financial year 2014/15, First Capital Holdings PLC reported profit after tax of Rs.868 million and received an upgrade in its national long-term and short-term corporate credit rating to A- /P2.

The company achieved several milestones such as the launch of a ‘Platinum Bond’ – the first-ever long-term repo investment product, pioneering the first ever microfinance-backed securitization and the introduction of three new unit trusts including a gilt-edged and money market unit trust. The First Capital Wealth Fund was lauded as the best performing fixed income unit trust over the past 12 months, with returns of over 25 percent. The corporate structuring arm of the company is accredited with the management of a landmark AAA-rated debenture, while First Capital Treasuries is currently the market leader in its niche, among standalone primary dealers.

Keenly attuned to the market and strengthened with a strong group research unit, First Capital Holdings PLC has recently added finance advisory services to its range of services in order to cater to the diverse needs of its clientele and provide superior investment banking solutions. First Capital Holdings PLC comprises of First Capital Treasuries Limited, First Capital Asset Management Limited, First Capital Equities (Private) Limited, First Capital Markets Limited and First Capital Limited. The company has a network of branches in Colombo, Matara, Negombo, Kandy and Kurunegala and is equipped with nearly three decades of experience in financial services.

First Capital Holdings appoints new CEO

First Capital Holdings Plc has appointment of Dilshan Wirasekara as its Chief Executive Officer. An experienced financial services professional, Wirasekara previously held the role of Deputy CEO at First Capital Holdings PLC and brings 18 years of experience in financial services, spanning both debt and equity related businesses.

ceo

Since joining the company in late 2013, Dilshan has managed the integration of the five subsidiary business units, enabling the First Capital Group to provide a wide range of non-banking financial solutions, leading the company to achieving a sound and sustainable business performance. Dilshan will continue to oversee operations across the subsidiary businesses of the Group and will play a critical role in strengthening the company’s Corporate Advisory Services, while emphasising broader investment banking services.

Speaking about the appointment, Managing Director of First Capital Holdings PLC, Manjula Mathews said: “Dilshan Wirasekara has shown tremendous leadership and professionalism during his tenure with the company and we are pleased that he will be heading the First Capital Group as CEO. He possesses invaluable experience, enthusiasm and a keen understanding of the financial market. Dilshan’s appointment marks a momentous occasion in the group’s journey as it amplifies its efforts in attaining its vision of becoming Sri Lanka’s leading investment bank”.

“This is a significant time in the development of the company and it is a privilege to step into this role. I am excited about meeting the challenges and opportunities of the coming years and am looking forward to leveraging our resources and leadership capabilities to drive the next stage of First Capital’s growth,” said Wirasekara.

First Capital Holdings Conducts Investor Awareness Forum in Kandy

Colombo, 26th August 2014:

An Investor Awareness Forum for regionally based corporative societies and entrepreneurs in Kandy and Kurunegala was organized by First Capital Holdings recently. The knowledge sharing session, which was held in Kandy, highlighted key developments and trends in the financial market while equipping investors with pivotal information pertaining to future investment decisions.

The audience was taken through the gamut of investment options available for potential investors and the process of creating, protecting and maximizing their money through secure investment instruments. A panel of speakers stressed the importance of taking a structured approach when analysing financial objectives and mapping out investment strategies and goals and expanded on the various types of Unit Trusts and its operating mechanisms.
Further, the benefits of having the expertise of a Fund Manager attuned to the current investment environment and its variables, while interacting regularly with the market, were drawn out. The audience was also taken through the intricacies of the stock market and its past and present economic fluctuations. Also speaking to the audience, Adrian Perera – CEO of Lanka Rating Agency, differentiated between Market Rating and Credit Rating and advised the audience on some rudimentary pitfalls to avoid when formulating investment decisions.

“This is a rare opportunity for us as awareness programmes of this nature are unusual in this part of the island. We gained a large amount of information about the workings of the stock exchange,” said Prabath Chandana from Sanasa – Polgahawela, a participant at the event, adding that it would benefit them greatly in all future financial decisions. The interactive forum encouraged participation and queries by the audience in order to demystify the workings of key investment tools and build awareness about the current market.
“It is imperative that investors are armed with accurate and clear knowledge to keep up with the dynamic nature of the financial market and we take a hands-on approach in making sure that they remain ahead of the curve. Building sustainable and mutually rewarding relationships is at the crux of all our activities,” said Dilshan Wirasekara, Deputy CEO of First Capital Holdings.

First Capital Holdings has previously held knowledge sharing sessions in Matara and has a network of branches spanning Matara, Negombo, Kandy and Kurunegala, for the convenience of its growing clientele. The company possesses over 30 years’ experience in financial services, is equipped with strong group research units and professionally qualified staff to extend their expertise and customize investment solutions in accordance with individual client’s and corporates’ needs. First Capital Holdings remains firmly committed to stringent corporate governance practices and combines innovation and efficiency to raise the bar for its level of service.

First Capital Holdings posts healthy profits

Colombo, 13 May, First Capital Holdings PLC has posted a healthy profit after tax for the financial year 2010/2011 of Rs. 990,260,000 compared to Rs. 682,244,000 for the previous financial year. Profits for the quarter ended 31 March 2011 were Rs. 81,299,000 an improvement on Rs. 41,264,000 for the same period the previous year. Earnings per share were Rs. 10.03 whilst Net Assets Per Share stood at Rs. 15.04.

“In the last couple of years, we have seen exceptional profit growth at First Capital,” a Company official said. “In 2010/11 although conditions were less conducive than those in the previous year in which a highly favourable bond trading environment resulted in exceptional profits by the Group’s primary dealer arm, the Company was able to sustain its momentum helped by strong performance in all areas.”

He went on to explain that reported profits were boosted by a one-off gain from the sale of an associate company – Kotmale Holdings PLC amounting to Rs. 180 million and a decision in the company’s favour by the Inland Revenue Board of Review resulting in a tax reversal of Rs. 444 million. He affirmed that First Capital was gearing up for measured and steady growth.

“First Capital Wealth Fund – a Unit Trust dedicated to investment in fixed income securities was launched and the company was granted a license to function as a Dealer on the Debt Exchange (DEX). Promotional campaigns and initiatives to further broad-base the services of the Group are on the cards,” he added.

The First Capital Group boasts of a rich pedigree in the Sri Lankan financial services arena with its lineage tracing 28 years. Having obtained its Primary Dealership license in 1992, when the Central Bank formed the Primary Dealership system, First Capital Treasuries has steadily grown to become a strong and resilient front runner with a loyal and widening customer base. With pioneer status in this area, aided by an unblemished reputation, First Capital Treasuries has developed strong bonds with its principal business partners which are commercial banks, other primary dealers and investors both big and small.

First Capital Asset Management Limited under license from the Securities and Exchange Commission, functions as an ‘Investment Manager’ and has mobilised a substantial quantum of funds under management on discretionary mandates. Upon being approved by the SEC to manage Unit Trusts, the company launched First Capital Wealth Fund in October 2010.

First Capital Markets is an SEC approved Margin lender for listed equity. It has, over the years, built up a strong client base. With the recent surge in the share market, this area has featured as a prominent contributor in the performance of the group.

First Capital Limited is actively involved in structuring and underwriting both short term and long term corporate paper and in generating placements on these and other secondary market debt instruments. The company has positioned itself as a debt market specialist by creating a ready marketplace for those seeking investments in debt securities and those vying to borrow from the debt capital markets.