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Bullish mode enabled due to positive outcomes of primary auctions

Stock-Brokers-In-Sri-Lanka

Ceylon Today | 18 Jan 2019

Weekly Yield Movement & Volume
The bond market opened in bullish sentiment, enabled by the positive mode on the back of primary bill and bond auction outcomes. During the week, a notable downward shift was witnessed in the secondary market yield curve, while overall market witnessed moderate volumes. During the first half of the week, the rupee was seen appreciating to Rs 181.90/10, following the US$ 400 million swap facility agreement with the Reserve Bank of India. The rupee was seen depreciating again to close the week at Rs 182.35/45. At the primary bill auction, both six-month and one-year bills were accepted at weighted averages of 9.87% and 10.75% respectively, while yields dipped by 7bps and 10bps.


Liquidity & CBSL Holdings

CBSL market liquidity remained negative throughout the week, recording the lowest liquidity for the week on 7 January amounting to Rs 113.6 billion. CBSL holdings remained stagnant during the beginning of the week at Rs 68.56 billion and thereafter closed the week at Rs 160.51 billion.


Foreign Interest

Foreign holding was recorded at Rs 154.2 billion, recording a drop of Rs 3.6 billion, continuing the foreign selling since August 2018. Foreign holding percentage for the week remained stable at 3.0%.


Maturities for next Week

The Government Securities Market has a Treasury bill maturity amounting to Rs 15.9 billion for the week ending 18 January.

 
Daily Summary
Thursday (10.01.19): The secondary market yield curve remained mostly unchanged for the third consecutive day as the market participants were seen remaining on the sideline adopting a wait-and-see approach ahead of bond auction to be held on [11.01.19]. On the back of mixed activities, two 2021 maturities [01.03.21] and [15.12.21] traded at 11.20-25% and at 11.30-33% levels respectively and foreign selling was witnessed on mid tenure, [15.03.25] at 11.75% while the overall market saw moderate volumes.
Friday (11.01.19): The secondary market yield curve shifted slightly downwards to close the week, amidst market witnessing high volumes. During the morning session, foreign buying interest saw [01.03.21] trading at 11.15% while foreign selling was witnessed on [01.06.26] at 11.80%. The large Rs 98.0 billion bond auction saw maturities closing at market rates, with [15.12.23] and [01.09.28] accepted at weighted averages of 11.58% and 11.73% respectively. Auction results led to renewed local buying interest in 2023 and 2028 maturities, reaching intraday lows of 11.45% and 11.65%.
Monday (14.01.19): Positive sentiment arising from the bond auction held on 11 January 2019 led to continued buying interest in short to mid tenure maturities from local counterparties leading to a downward shift in the short to belly end of the yield curve. With the buying interest, short to mid tenure maturities were seen reaching intraday lows with four 2021 maturities ([01.03.21], [01.05.21], [01.08.21] and [15.12.21]) trading at 11.00%, 11.05%, 11.05% and 11.03% respectively, while mid tenure maturities [15.03.23] traded at 11.35%,

[15.12.23] at 11.38%, [15.03.25] at 11.55% and [01.06.26] at 11.60%. CBSL announced primary bill auction offering Rs 10.0 billion and Rs 16.0 billion of six-month and one-year bills to be held on [16.01.19].
Wednesday (16.01.19): Secondary market yield curve shifted downwards amidst the buying interest emanating from both local and foreign counterparties, as the positive sentiment was seen continuing since the bond auction held on [11.01.19]. Foreign buying predominantly centered on four 2021 maturities ([01.05.21], [01.08.21], [15.10.21] and [15.12.21]) reaching intraday lows of 10.87%, 10.90%, 10.95% and 10.95% respectively while mid tenure maturities traded at daily lows with [15.12.23] at 11.25%, [15.03.25] at 11.50%, [01.06.26] at 11.50% and [01.09.28] at 11.55%, while the overall market saw high volumes. Yields of six-month and one-year dipped by 7bps and 10bps at the primary bill auction, to be accepted at weighted averages of 9.87% and 10.75% respectively while the three-month bill was not offered.

Dimantha Mathew, Head of Research at First Capital Holdings, Commenting on the Bond and the Equity Market Performance on Ada Derana – 13.01.2019

Stock Brokers in Sri Lanka

First Capital’s Dimantha Mathew Commenting on the Bond and the Equity Market Performance on Ada Derana

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’s Dimantha Mathew with the Market Review on Ada Derana

First Capital is an investment bank offering services as Stock Brokers in Sri Lanka. The Company acts as a conduit between retail and institutional clients and the secondary market of the Colombo Stock Exchange. First Capital’s best-in-class research team provide a series of actionable trade recommendations, daily and periodic market commentaries and publications for Stock Brokers in Sri Lanka.

Hiruni Perera, Senior Research Analyst, at First Capital Holdings PLC commenting on the equity market forecast on Ada Derana – 09.01.2019

Stock Market Sri Lanka

Hiruni Perera, Senior Research Analyst, at First Capital Holdings PLC commenting on the bond and the equity market performance on Ada Derana

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 is an investment bank offering services as Stock Brokers in Sri Lanka. The Company acts as a conduit between retail and institutional clients and the secondary market of the Colombo Stock Exchange. First Capital’s best-in-class research team provide a series of actionable trade recommendations, daily and periodic market commentaries and publications for Stock Brokers in Sri Lanka.

Sri Lanka GDP, CPI Outlook Lowered Through 2019

2019-01-11 06:00:00.6 GMT
By Cynthia Li

(Bloomberg) — Economists slashed Sri Lanka growth forecasts for this year after the economy grew at the slowest pace in five quarters, according to the latest quarterly survey conducted by Bloomberg News.

The biggest revisions were for the first and second quarters, both cut by 1.3 percentage points to 3.3 percent and 4 percent respectively. Growth in 2019 overall is expected to average 4 percent, down 0.3 percentage point from last quarter’s survey.

Economists lowered their first quarter inflation forecast by 1.7 percentage point, and also cut estimates for the rest of the year, bringing the annual average to 4.3 percent from 5 percent seen in the October survey. This matches with the central bank’s projection of average inflation to “remain below 5 percent in 2019 and stabilize in the range of 4-5 percent thereafter with appropriate policy adjustments.”

The Central Bank of Sri Lanka is working to implement a flexible inflation targeting framework this year to maintain price stability and drive economic growth.

Benchmark rates are expected to remain unchanged at least until the end of the first quarter of next year, the same poll shows. Some economists said that the economy will stabilize sooner than expected.

“With the slowness in economic growth, once the macro picture stabilizes, we expect two rate cuts during the year 2019 with 25 basis points each,” said Dimantha Mathew, head of research at First Capital Holdings in Colombo.

Weekly Government Securities Market -11-01-2019

Stock Brokers in Sri Lanka

By First Capital Research
Weekly Yield movement & Volume

The secondary market yield curve remained almost unchanged, while moderate volumes were seen during the week.
Despite the continuous depreciation witnessed in previous weeks, currency was seen stabilising around Rs 182.0 levels, closing at Rs 182.8 relative to Rs 182.9 at the beginning of the week.
Meanwhile, CBSL announced its plan for a US$ 400 million swap arrangement with the Reserve Bank of India, with a request for a further US$ 1.0 billion being under consideration, to maintain an adequate level of reserves and support the currency.
At the primary bill auction held on 9 January, yields of the six-month and one-year bills were accepted at 9.94% and 10.85% respectively, recording a continuous dip for the third consecutive week in both maturities.

Meanwhile, first bond auction of the year will be held on 11 January offering Rs 98.0 billion.


Liquidity & CBSL Holdings

CBSL market liquidity remained negative throughout the week, recording the lowest liquidity for the week on 04 January amounting to Rs 121.1 billion. CBSL holdings declined towards the latter part of the week and recorded at Rs 68.56 billion.


Foreign Interest

Foreign holding was recorded at Rs 157.8 billion, recording a drop of Rs 6.6 billion, continuing the foreign selling since August 2018. Foreign holding percentage for the week remained stable at 3.1%.


Maturities for next Week

The Government Securities Market has a Treasury Bill maturity amounting to Rs 18.7 billion to be settled and coupon payment amounting to Rs 12.9 billion for the week ending 18 January.


Daily Summary

Thursday (03.01.19): Secondary market yield curve remained broadly unchanged, while the overall market witnessed thin volumes with limited activity levels. Amidst profit taking, limited activity was witnessed on short-tenure maturities [01.03.21] and [01.05.21] trading at 11.30%, [15.12.21] at 11.35-11.40% levels, while long-tenure maturities [01.08.26] at 11.62-11.67% levels and [15.06.27] at 11.70%.
Friday (04.01.19): On the back of buying interest, short and belly end of the yield curve shifted slightly downwards while the overall market witnessed thin volumes. The one-year bill traded at the day’s lowest of 10.74% amidst the buying interest stemmed predominantly from the foreign counterparties, while three 2021 maturities, [01.03.21], [01.08.21] and [15.12.21] traded at intraday low of 11.22%, 11.25% and 11.28% respectively. Mid-tenure maturities were seen reaching day’s lowest, with [15.05.23] trading at 11.30%, [15.05.25] at 11.63% and [01.08.26] at 11.59%.
Monday (07.01.19): The secondary market yield curve remained broadly unchanged while the overall market witnessed thin volumes. Limited activities were witnessed on short- to mid-tenure maturities with [01.05.20] trading at 11.00%, three 2021 maturities ([01.03.21], [01.05.21] and [15.12.21]) trading between 11.17-11.27% range and [01.10.22] at 11.35%.
Out of the mid-tenors, the three 2023 maturities ([15.05.23], [15.07.23] and [01.09.23]) traded at 11.45%, 11.47% and 11.58% respectively, while [15.03.25] changed hands at 11.67% and [01.08.26] at 11.60%. CBSL has offered Rs 8.0 billion of the six-month and Rs 12 billion of the one-year bills at Wednesday’s primary bill auction.
Tuesday (08.01.19): The secondary market yield curve remained broadly steady, with mixed activities on the short end and belly end of the curve. With the selling interest stemming from foreign counterparties, mid-tenure maturities [01.08.24], [15.03.25] and [01.08.26] traded at day’s high of 11.60%, 11.75-11.80% levels and 11.60-64% levels while ahead of the bill auction.
Buying interest from local counterparties were witnessed on short-tenure maturities [01.05.20] at 10.90-85%, [01.03.21] at 11.25-20% and [15.12.21] at 11.30%, while the overall market saw moderate volumes. CBSL announced bond auction on 11 January, offering Rs 48 billion of new series of [15.12.2023] maturity and Rs 50 billion of [01.09.2028] maturity.
Wednesday (09.01.19): The secondary market yield curve continued to remain broadly steady as market participants were seen remaining on the sideline, adopting a wait-and-see approach ahead of the primary bond auction on 11 January. Limited activity was witnessed on short- to mid-tenure maturities while the overall market witnessed thin volumes.
Short-tenure maturities [01.05.20] traded at 10.90% and three 2021 maturities ([01.03.21], [01.08.21] and [15.12.21]) traded at 11.25%, 11.28% and 11.33% respectively, while mid-tenure maturities 15.07.23 traded at 11.50% and foreign selling was witnessed on [15.03.25] at 11.75%. At the primary bill auction, yields of the six-month and one-year dipped by 1bps and 14bps to be accepted at weighted averages of 9.94% and 10.85% respectively.

Nisansala Kuruppumudali, Research Analyst at First Capital Holdings PLC, commenting on the bond and the equity market performance on Ada Derana – 07.01.2019

Stock Brokers in Sri Lanka

First Capital’s Nisansala Kuruppumudali commenting on the bond and the equity market performance on Ada Derana

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 is an investment bank providing a full range of financial advisory and services. The Company’s research deliver heightened perspective in fundamental research aiding Share Market Investment in Sri Lanka. The Company’s best-in-class research team provide dynamic reports including economic reviews and proprietary research, encompassing fundamental, quantitative and technical analysis. With fundamental research coverage of 62 listed securities (reflecting approximately 65% market capitalization) across 15 sectors in Share Market Investment in Sri Lanka.

Hiruni Perera, Senior Research Analyst, at First Capital Holdings PLC commenting on the equity market forecast on Ada Derana – 06.01.2019

Stock Market Sri Lanka

Hiruni Perera, Senior Research Analyst, at First Capital Holdings PLC commenting on the bond and the equity market performance on Ada Derana

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 is an investment bank offering services as Stock Brokers in Sri Lanka. The Company acts as a conduit between retail and institutional clients and the secondary market of the Colombo Stock Exchange. First Capital’s best-in-class research team provide a series of actionable trade recommendations, daily and periodic market commentaries and publications for Stock Brokers in Sri Lanka.

Atchuthan Srirangan, Assistant Manager – Research at First Capital Holdings PLC commenting on the bond and the equity market performance on Ada Derana – 04.01.2019

Stock Brokers in Sri Lanka

First Capital’s Atchuthan Srirangan at First Capital Holdings PLC commenting on the bond and the equity market performance on Ada Derana

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 is an investment bank offering services as Stock Brokers in Sri Lanka. The Company acts as a conduit between retail and institutional clients and the secondary market of the Colombo Stock Exchange. First Capital’s best-in-class research team provide a series of actionable trade recommendations, daily and periodic market commentaries and publications for Stock Brokers in Sri Lanka

First Capital is an investment bank offering services as Stock Brokers in Sri Lanka. The Company acts as a conduit between retail and institutional clients and the secondary market of the Colombo Stock Exchange. First Capital’s best-in-class research team provide a series of actionable trade recommendations, daily and periodic market commentaries and publications for Stock Brokers in Sri Lanka.

Sri Lanka stocks up but turnover at a decade low

Economy Next – 04.01.2019

ECONOMYNEXT – Sri Lanka’s stocks closed 0.1 percent up but turnover was 64 million rupees, the lowest since 64 million rupees hit in November 2009, brokers said.

The Colombo All Share Index closed up 9.18 points at 6077.66 while the S&P SL20 index closed at 3105.75 points up 14.23 percent.

Foreign investors were net buyers of 0.6 million rupees.

“Most investors are taking a wait and see approach,” said Atchuthan Srirangan, Assistant Manager Research at First Capital, a Colombo-based investment house.

“Some investors are not selling because they may think prices are too low, and buyers also think they can buy later after things settle.”

Many brokers are also on holiday, brokers said.

Sri Lanka banking system has also been hit by liquidity shortages since September due to the defence of a soft-pegged exchange rate regime.

Though the liquidity shortages have helped keep inflation at bay they also tend to depress asset prices and business activity.

Weekly Government Securities Market – 04-01-2019

By First Capital Research
Weekly Yield movement & Volume

The secondary market yield curve was relatively stable; however during the latter part of the week, the yield curve was seen shifting slightly downwards across the board due to buying interest seen in the market.

Continued depreciation in currency was witnessed, recording the lowest on 28 December at Rs 183.00. However, it has currently settled at Rs 182.85.

At the primary bill auction held on 2 January, yields of the six-month and one-year bills were accepted at 9.95% and 10.99% respectively, slightly below previous levels. The one-year bill recorded a steep dip, falling below the psychological level of 11% for the first time in seven weeks (excluding the cancelled bill auction last week (26.12.18)).


Liquidity & CBSL Holdings

CBSL market liquidity remained negative throughout the week, while widening the liquidity gap and recording the lowest liquidity for the week on 31 December, amounting to Rs 148.4 billion. CBSL holdings kept fluctuating through the week, recording the highest on 26 December amounting to Rs 272.8 billion.


Foreign Interest

Foreign holding was recorded at Rs 164.5 billion, recording a drop of Rs 10.9 billion. Overall Government Securities marginally increased by Rs 202.1 billion, while foreign holding percentage for the week declined to 3.1% from its previous level of 3.5%.


Maturities for next Week

The Government Securities Market has a Treasury bill maturity amounting to Rs 19.5 billion to be settled on the week ending 11 January.


Daily Summary

Thursday (27.12.18): In the midst of continuous foreign selling, short tenor maturity [15.12.21] changed hands at intraday high of 11.60% levels, while mid tenor maturities [15.05.23] traded at 11.70% levels and [01.08.25] traded at intraday high of 11.85% levels. The overall market witnessed moderate volumes as market participants remained on the sidelines.
Friday (28.12.18): The secondary market yield curve remained broadly steady, while the overall market witnessed moderate volumes. On the back of buying interest that stemmed from local counterparties, mid to long tenure maturities, reached intraday lows with mid tenure maturities [15.12.21] trading at 11.51%, two 2023 maturities [15.05.23] and [15.07.23] at 11.65% and 11.68% respectively, while long tenure maturities, [01.08.26] traded at 11.77% and [15.06.27] at 11.78%.
Monday (31.12.18): The overall yield curve closed for the year, remaining unchanged at previous week’s closing levels, while the market witnessed thin volumes as market participants were seen remaining on the sideline. Limited activity was witnessed on [15.12.21] at 11.55%, [15.07.23] at 11.70% and [15.06.27] at 11.80%.
Wednesday (02.01.19): The market witnessed continued buying interest, with the yield curve witnessed a downward shift across all maturities amidst moderate volumes. Following maturities traded at their intraday lows; [01.05.20] at 11.00%, [01.03.21] at 11.25%, [01.08.21] at 11.33%, [15.12.21] at 11.25%, [15.05.23] at 11.55%, [15.03.25] at 11.58%, [01.08.26] at 11.55% and [15.06.27] at 11.62%. At the primary bill auction held on 02 January 2019, the six-month and one-year bills were accepted at 9.95% and 10.99% respectively, while the three-month was not offered.