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MARKET UPDATE ON ADA DERANA ENGLISH NEWS – 27.08.2017

Stock-Brokers in Sri Lanka

First Capital’s Head of Research Dimantha Mathew with the market update – between 29.23 mins to 29.55 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.

Sri Lanka shares recover after govt drops plan to tax trading profits

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

AUGUST 25, 2017

COLOMBO, Aug 25 (Reuters) – Sri Lankan shares ended firmer on Friday, recovering from an over four-month closing low hit in the previous session as investors bought battered shares following the government’s decision to drop a proposed tax on profits from share trading.

Junior finance minister on Thursday said that Sri Lanka will not go ahead with a proposed tax on profits from share trading that was planned as part of a major tax reform bill.

The bill is expected to be presented in the parliament on August 30.

The Colombo stock index ended 0.42 percent or 26.83 points higher at 6,409.37, edging up from its lowest close since April 18 hit on Thursday.

The index is still down 0.42 percent during the week recording its sixth weekly fall.

It shed 4.3 percent since July 27 through Thursday and has fallen in 18 out of 20 sessions on lacklustre corporate earnings in the June quarter and speculation that the new reform bill may impose a tax on stock trading.

“With the minister’s statement, some positive sentiment has come in to the market,” said Dimantha Mathew, head of research at First Capital Holdings.

“We expect the statement to clear the doubts over the tax and this sentiment to continue for next two to three weeks.”

Foreign investors bought shares worth a net 47.8 million rupees ($312,622.63) on Friday, extending their year-to-date net inflows to 28 billion rupees.

Turnover was 613 million rupees, less than this year’s daily average of around 859.2 million rupees.

Shares of conglomerate John Keells Holdings Plc jumped 2.1 percent, while Lanka Orix Leasing Plc ended 3.4 percent firmer, Hatton National Bank Plc ended 1.3 percent up and Melstacorp Ldt rose 1.7 percent. ($1 = 152.9000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Vyas Mohan)

 

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 for third straight day; blue chips drag

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

AUGUST 23, 2017

COLOMBO, Aug 23 (Reuters) – Sri Lankan shares fell for the third straight session on Wednesday, hitting their lowest close in more than four months, as investors sold heavyweights amid continuing uncertainty over a proposed tax reform bill.

The Colombo stock index fell 0.19 percent, or 12.05 points, to 6,383.27, its lowest close since April 18.

The index shed 4.3 percent since July 27 through Wednesday and has fallen in 17 out of 19 sessions due to lacklustre corporate earnings in the June quarter and speculation that the new tax reform bill might impose a tax on stock trading.

“Things are very slow. Even foreign side is slow as everybody is waiting for the tax bill to settle things,” said Dimantha Mathew, head of research at First Capital Holdings.

Junior Finance Minister Eran Wickramaratne said on Thursday concerns over tax on share trading would be addressed before the proposed bill is passed. The bill is expected to be presented in the parliament on Friday.

Foreign investors bought shares worth a net 114.6 million rupees ($749,509.48) on Wednesday, extending the year-to-date net foreign inflow to 27.9 billion rupees worth of shares.

Turnover was 808.2 million rupees, less than this year’s daily average of around 863.3 million rupees.

Shares of conglomerate John Keells Holdings Plc fell 0.9 percent, while both Melstacorp Ltd and Cargills (Ceylon) Plc lost 1.7 percent.

$1 = 152.9000 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 end weaker in thin trade; tax proposal weighs

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

AUGUST 21, 2017

COLOMBO, Aug 21 (Reuters) – Sri Lankan shares ended weaker on Monday, lingering near a four-month low, in their lowest turnover in nearly a month, as investors awaited direction on a new tax reform bill after a string of disappointing June-quarter corporate results.

The Colombo stock index fell 0.24 percent, or 15.75 points, to 6,420.53, hovering near its lowest close since April 18 hit on Thursday.

The index shed 3.7 percent since July 27 through Monday and fell in 15 out of 17 sessions due to lacklustre corporate earnings in the June quarter and speculation that the new tax reform bill might impose a tax on stock trading.

“Investors are staying away awaiting for clarity on the tax on share trading,” said Dimantha Mathew, head of research at First Capital Holdings.

“Very interestingly, the foreign interest also slowed down on shares.”

Junior Finance Minister Eran Wickramaratne said on Thursday the concerns over tax on trading stocks would be addressed before the proposed bill is passed in the parliament. The bill is expected to be presented in the parliament on Friday.

Foreign investors turned net sellers for the first time in nine sessions. They sold shares worth a net 36.2 million rupees ($236,447) on Monday. But they have been net buyers of shares worth 27.7 billion rupees so far this year.

Turnover was 322.6 million rupees, its lowest since July 26, and less than half of this year’s daily average of around 866.5 million rupees.

Shares of conglomerate John Keells Holdings Plc fell 0.6 percent, while Bukit Darah Plc lost 3.8 percent and Dialog Axiata Plc ended 0.9 percent weaker. ($1 = 153.1000 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.<

SEYLAN BANK SHARES TO RETURN NEARLY 48% BY 2018: FC RESEARCH

AS INTEREST RATES RISE, THE LISTED BANK’S EARNINGS COULD GROW FIVE TIMES FASTER OVER THE NEXT TWO YEARS COMPARED TO 2016 BY ADJUSTING LENDING INTEREST RATES FASTER THAN DEPOSITS
August 21, 2017

Listed Seylan Bank’s voting and non-voting shares will return up to 48% by the end of 2018 as rising interest rates accelerate the bank’s annual profit growth rate by more than five times over the next two years, according to forecasts by FC Research, a unit of First Capital Equities, a stockbroker firm.

Seylan’s voting shares will gain 34% in the 18 months to end-2018, and deliver a dividend yield of 9% for a total return of 44% (27% annualised). Non-voting shares will gain 34%, but with a higher dividend yield of 14%, with the forecast return at 48% (30% annualised), FC Research predicts.

Typical of most banks, “Seylan Bank is benefitting from rising interest rates by re-pricing its loans at a faster rate than deposits,” FC Research says. Net interest income (NII), the difference between interest income earned from borrowers and interest paid to depositors—which is the equivalent of the gross revenue of a business—increased 12% in 2016 to Rs13 billion. FC Research forecasts NII will grow 16.5% annually over the next two years to Rs20.5 billion in 2018. Profits, which grew at 4% to Rs4 billion in 2016, will improve 22% each year over the next two years to Rs6 billion.

Return on average equity will increase to 16.6% in 2018 from 14.6% two years ago.

However, when deposit interest rates are eventually adjusted, margins will begin to tighten. Seylan Bank’s net interest margin, which will peak at 5.53% in 2017, will decline to 5.19% the following year. Bad loan provisioning—which is not a write-off, but a prudential measure—will also eat into profits, as borrowers struggle to service their loans as interest rates rise. In 2016, Seylan Bank made statutory provisioning for bad loans amounting to Rs954 million. Over the following two years, the bank is forecast to provide Rs2.9 billion in bad loan provisions.

The bank’s loan book growth will slow from 22% to 15%. However, FC Research believes Seylan Bank’s ability to lend to construction companies and large firms will drive lending growth and profitability beyond 2018.

Stock Brokers In Sri Lanka

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 4-mth closing low; blue chips drag

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

August 16, 2017

COLOMBO, Aug 16 (Reuters) – Sri Lankan shares fell for a fourth consecutive session on Wednesday, posting their lowest close in four months, as local investor sentiment remained muted following a string of disappointing June-quarter corporate results.

However, the decline was limited as foreign investors bought into equities.

The Colombo stock index fell 0.36 percent, or 23.50 points, to 6,417.41, its lowest close since April 18.

It declined in 13 of the last 14 sessions, while yields on short-term government securities also fell over the past two weeks.

“The market came down on blue chips. The main reason for the market to come down is the poor quarterly earnings,” said Atchuthan Srirangan, a senior research analyst at First Capital Holdings PLC.

Foreign investors bought shares worth a net 98.3 million rupees (about $641,854) on Wednesday, extending the year-to-date net inflow to 27.6 billion rupees.

Turnover was 780.3 million rupees, less than this year’s daily average of around 875.3 million rupees.

Shares of market heavyweight John Keells Holdings fell 0.5 percent, Carson Cumberbatch Plc dropped 3.2 percent, Melstacorp Plc ended 0.8 percent weaker and Ceylon Cold Stores declined 0.8 percent.

Pan Asia Banking Corp (PABC), which had its primary dealer status suspended by the central bank on Tuesday for six months, fell 2.4 percent. ($1 = 153.1500 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 post steepest drop in 5 mths despite foreign buying

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

August 15, 2017

COLOMBO, Aug 15 (Reuters) – Sri Lankan shares posted their worst decline in nearly five months on Tuesday, as local investor sentiment remained muted, after a string of disappointing June-quarter corporate results.

However, foreign investors bought the island nation’s risky assets, with offshore buying accounting for more than 80 percent of the session’s turnover.

The Colombo stock index fell 0.69 percent, or 44.85 points, to 6,440.91, its lowest close since April 18. The index posted its steepest percentage fall since March 22.

“It was mainly on poor quarterly earnings. The retail segment is hit hard after the last-quarter floods. Banks are hit by non-performing loans and some companies are hit by rise in global commodity prices,” said Atchuthan Srirangan, a senior research analyst at First Capital Holdings PLC.

“Local investors are waiting, but foreign investors are buying heavily because they see Sri Lankan bourse is under-valued compared to some other regional peers.”

Foreign investors bought shares net worth 788.5 million rupees ($5.15 million) on Tuesday, extending the year-to-date net inflow to 27.6 billion rupees.

This accounted for about 82 percent of the day’s turnover, which came in at 1.12 billion rupees, higher than this year’s daily average of around 875.9 million rupees.

The stock market has posted losses in 12 out of the last 13 sessions, while yields on short-term government securities also fell over the past two weeks.

Sri Lanka’s Supreme Court said early this month that a major tax reform proposed by the government cannot be passed into law in its current form, unless it is approved by more than a two-third majority vote in parliament and gets the greenlight from a nationwide referendum.

Shares in the market heavyweight John Keells Holdings fell 2.5 percent, while Ceylon Cold Stores fell 4.1 percent.

Shares in Pan Asia Banking Corp (PABC), which had its primary dealer status suspended by the central bank on Tuesday for six months, fell 0.7 percent.

$1 = 153.1500 Sri Lankan rupees Reporting by 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.<

First Capital Fixed Income Recommendation – August 2017

  • Economic Health Score

  • Recommendation

  • Recap of Dec 2016 Economic Wrap

Read the full report – First Capital Fixed Income Recommendation August 2017

 

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 proving services to invest in Sri Lanka through fixed income securities such as investments 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.

MARKET UPDATE ON ADA DERANA ENGLISH NEWS – 13.08.2017

Stock-Brokers in Sri Lanka

First Capital’s Head of Research Dimantha Mathew with the market update – between 19.22 mins to 19.59 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.

Monthly Economic Watch – August 2017

Monetary Policy Review – Aug 2017

Policy rates unchanged

  • The recovery of the agriculture related activities and the positive performance of the industry and services related activities together with the reinstatement of GSP+ facility are expected to contribute to economic growth. Headline inflation moderated at a faster pace to 4.8% in Jul 2017.
  • Private sector credit growth further decelerated to 18.6% in June 2017 compared to 18.9% in May 2017 owing to high nominal and real interest rates prevailed in the market.
  • Despite improved export performance, a sustained increase in import expenditure resulted in a trade deficit of USD 4.2Bn till May 2017
  • Gross official reserves dipped to USD 6.7Bn in July from USD 7.0Bn in Jun 2017. Sri Lanka received the third tranche of the IMF-Extended Fund Facility (EFF) amounting to USD 167.2Mn. Both the government securities market and the Colombo Stock Exchange experienced noticeable foreign inflows.
  • Accordingly policy rates were decided to be maintained at,
    • Standing Deposit Facility Rate – 7.25%
    • Standing Lending Facility Rate – 8.75%
    • Statutory Reserve Ratio (SRR) – 7.50%

Read the full report here: Monthly Economic Watch – August 2017

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 proving services to invest in Sri Lanka through fixed income securities such as investments 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.