Register Online

Hiruni Perera, Senior Research Analyst at First Capital commenting on the bond market performance – 12.12.2019

Hiruni Perera, Senior Research Analyst  at First Capital commenting on the bond market performance.

“The secondary market yield curve remained broadly unchanged while overall market witnessed limited activity amidst thin volumes. At the primary bond auction held today, CBSL accepted LKR 15.0Bn of 15.09.24 at a weighted average of 9.87% and LKR 10.0Bn of 15.05.30 at a weighted average of 10.23%.”

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 Holdings PLC is an investment bank and is the pioneer non-bank affiliated Primary Dealer in Treasury Bills and Bonds in Sri Lanka. With a track record of over 25 years, the Company was the first licensed primary dealer appointed by the Central Bank, and is also the only listed and rated primary dealer in Treasury Bills and Bonds in Sri Lanka.
First Capital delivers the only source for fixed income research in the local financial services industry. The Company’s best-in-class research team provide dynamic reports including economic reviews and proprietary research, encompassing fundamental, quantitative and technical analysis.

Atchuthan Srirangan, Assistant Manager – Research at First Capital commenting on the bond and stock market performance – 10.12.2019

Atchuthan Srirangan, Assistant Manager – Research at First Capital commenting on the bond and stock market performance.

“The secondary market yield curve remained broadly unchanged while overall market witnessed mixed activities with low volumes ahead of the bond auction. Bourse ended in negative territory for the fifth straight session on the price losses made in JKH and DIST.”

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 Holdings PLC is an investment bank and is the pioneer non-bank affiliated Primary Dealer in Treasury Bills and Bonds in Sri Lanka. With a track record of over 25 years, the Company was the first licensed primary dealer appointed by the Central Bank, and is also the only listed and rated primary dealer in Treasury Bills and Bonds in Sri Lanka.
First Capital delivers the only source for fixed income research in the local financial services industry. The Company’s best-in-class research team provide dynamic reports including economic reviews and proprietary research, encompassing fundamental, quantitative and technical analysis.

Shares fall for 4th straight session; rupee steady

Reuters: Shares closed weaker for the fourth straight session on Monday, weighed down by foreign sell-offs and profit-taking in construction shares, while the rupee ended steady. 

The benchmark stock index closed down 0.75% at 6,103.63, its lowest since 26 November. The bourse fell 1% last week, but is up 1.61% for the year. 

The index touched its highest level since 25 June 2018 on 2 December, lifted by hopes of booming economic activity after the new government cut some key taxes. 

The rupee ended steady at 181.10/30 per dollar, Refinitiv data showed. It is up 0.8% so far this year.

Analysts said the tax reduction has already been factored in and the market was waiting to see the impact of the new policy. They said investors sold shares that rose on hopes the new Government will encourage an economic boom led by construction.

“We see a profit taking in construction sector shares, which jumped on construction boom hopes,” said Atchuthan Srirangan, assistant research manager at First Capital Holdings PLC. “There was no negative news and when investors see in values in shares, they will come again and buy.” 

The Government on 27 November reduced value-added tax to 8% from 15% effective 1 December, and abolished some other taxes as well in its attempt to boost economic growth that has fallen to a near two-decade low.

Singapore-based research firm Emerging Asia Economics in a note last week said the tax cut decision would provide a significant boost to the economy, but put increased strain on the country’s fragile public finances, with a possible loss of $ 2 billion in revenue.

Foreign investors were sellers on Monday in the equity market for the 28th session out of the last 31.

They sold a net Rs. 141 million ($783,333) worth of shares on Monday, extending the year-to-date foreign outflow to Rs. 11 billion, according to index data.

Equity market turnover was Rs. 435.5 million, less than this year’s daily average of about Rs. 726 million. Last year’s daily average was Rs. 834 million.

Foreign investors were net sellers of government securities on a net basis for the first week in seven, selling a net Rs. 4.2 billion worth of government securities in the week ended 4 December.

Total foreign outflows from government securities through 27 November stood at Rs. 47.9 billion, according to Central Bank data.

Atchuthan Srirangan, Assistant Manager – Research at First Capital commenting on the bond and stock market performance – 09.12.2019

Atchuthan Srirangan, Assistant Manager – Research at First Capital commenting on the bond and stock market performance.

“Commencing the week, the secondary market yield curve remained broadly unchanged while overall market witnessed thin volumes. Bourse ended the day in red thus persisting the negative sentiment for the fifth straight trading session, predominantly dragged down by the price losses in JKH and HHL.”

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 Holdings PLC is an investment bank and is the pioneer non-bank affiliated Primary Dealer in Treasury Bills and Bonds in Sri Lanka. With a track record of over 25 years, the Company was the first licensed primary dealer appointed by the Central Bank, and is also the only listed and rated primary dealer in Treasury Bills and Bonds in Sri Lanka.
First Capital delivers the only source for fixed income research in the local financial services industry. The Company’s best-in-class research team provide dynamic reports including economic reviews and proprietary research, encompassing fundamental, quantitative and technical analysis.

Construction sector shares to scale new highs

Upbeat on the hope of an impending construction boom, considerable demand for new buildings and infrastructure such as roads and highways saw the construction sector shares on a heavy stockmarket rally by retailers on the run up to the Presidential elections and immediately after President Gotabaya Rajapaksa’s win.

The excitement has now subsided to an extent owing to profit-taking but these stocks are in their radar – especially after Mr. Rajapaksa managed to convince India to extend a US$ 400 million line of credit to improve infrastructure and economy in the country.

Most local players continue to be largely optimistic about the future of the construction industry in Sri Lanka, in large part due to the government’s ambitious spending plans, a sector analyst commented. While the government has invested heavily in developing infrastructure since 2009 – after the war, much work remains to be done, particularly in the areas of road development, he said.

As per published statistics, more than 90 per cent of construction activity through 2012 was state-led. Now saddled with an economy where growth has slowed to a five-year slump of 1.6 per cent in the quarter ended June, and which has a debt level perched at 83 per cent of GDP, the new government is to restart abandoned projects with the same zeal pre-2015.

The Ministry of Transport and the Ministry of Higher Education and Highways in those days for example, have carried out a substantial amount of road and expressway development and refurbishment. The government in 2010 and 2014 built around 160 km of new expressways and 240 km of new roads, most of which fell under the umbrella of its 10-year National Road Master Plan, which was launched in 2007, another analyst said.

Sri Lanka still has some way to go in the infrastructure sector which augurs well for the construction industry and investors are set to witness a strong construction sector growth in 2020 with the expected stabilisation in the political and economic front with the cut in corporate taxes, VAT and NBT to boost its growth, analysts say.

The construction sector could restart energising the overall economic growth from 2020 due to the lower corporate tax rate of 14 per cent for the sector and ease in VAT and cancellation of NBT with continued input from private sector led infrastructure projects and lower interest rates steering the home builders market. As such, firms such as Access Engineering PLC’s order book will be augmented by revenue which could flow in through sub-contracting work from the Port City and Chinese-funded phases of the Central Expressway where Phase III will begin next year.

The JICA-funded Light Rail Transit Project Phase I and airport terminal expansion project is also in the pipeline for the company.

Along with the Ratnapura Expressway, Chinese-funded Polonnaruwa water supply project, expansion of Kadawatha Nittabuwa Road Project and construction of flyovers in Colombo and Kandy, the company will turn in better profits, analysts believe.

For real boost in the construction sector, there has to be a retail housing construction boom, some analysts opine. Initially in the first three months of next year, F&B related firms will do well as demand for those will augment and consumer demand for vehicles and housing will come next, Dimantha Mathew, Head of Research at First Capital told the Business Times. “This will happen quarter by quarter and we expect that construction sector boom will happen in about nine months’ time,” he added.

Weekly Yield Movement & Volume

First capital


The secondary market yield curve shifted slightly upwards on the belly end of the curve while short and long tenure maturities remained broadly unchanged. Activities were mainly centred on 2021, 2023, 2024, and 2027 maturities.
At  the  monetary  policy  announcement,  CBSL decided to maintain its policy rates at current levels of 7.00% (SDFR) and 8.00% (SLFR) respectively.
At the weekly Treasury Bill auction, the 6M Bill and benchmark 1-Yr saw yields declining by 7bps each to 7.60% and 8.22%, respectively, while the 3M Bill remained unchanged.


Meanwhile, in the forex market, the rupee depreciated to close the week at LKR 181.24 from LKR 180.94 held at the beginning of the week.


Liquidity & CBSL Holdings


Volatility  in  liquidity  was  witnessed  although  itv remained positive during the week. The highest excess liquidity for the week was recorded on 28th Nov amounting to LKR 46.0Bn. Meanwhile, CBSL holdings slightly declined to close at LKR 77.4Bn.


Foreign Interest


Foreign holding in Government Securities increased vby LKR 4.3Bn to record at LKR 120.8Bn while foreign holding percentage increased to 2.2%.
Maturities for next week
The  government  security  market  has  to  settle  a Treasury Bill maturity amounting to LKR  27.3Bn during the week ending 13 Dec 2019

Atchuthan Srirangan, Assistant Manager Research at First Capital commenting on the bond and stock market performance – 05.12.2019

Atchuthan Srirangan, Assistant Manager Research at First Capital commenting on the bond and stock market performance.

“The secondary bond market yield curve remained broadly unchanged while overall market witnessed moderate volumes during the day. Share market ended in red for the second consecutive trading session mainly dragged down by the price losses in JKH and MELS.

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 Holdings PLC is an investment bank and is the pioneer non-bank affiliated Primary Dealer in Treasury Bills and Bonds in Sri Lanka. With a track record of over 25 years, the Company was the first licensed primary dealer appointed by the Central Bank, and is also the only listed and rated primary dealer in Treasury Bills and Bonds in Sri Lanka.
First Capital delivers the only source for fixed income research in the local financial services industry. The Company’s best-in-class research team provide dynamic reports including economic reviews and proprietary research, encompassing fundamental, quantitative and technical analysis.

Participant of First Capital and Kelsey Homes attend the Annual Young Forum conducted for the Dunamis Capital Group.

Young Forums were conducted for the year 2019 giving a hearing to the young leaders consisting of the millennials to gather their views, thoughts and ideas to improve business practices and the corporate culture of the Dunamis Group.

Caption – Managing Director First Capital, Director / CEO First Capital and Head of HR seen engaging with the participants.

Dimantha Mathew, Head of Research at First Capital commenting on the bond and stock market performance – 04.12.2019

Dimantha Mathew, Head of Research at First Capital commenting on the bond and stock market performance.

“The secondary market yield curve remained broadly unchanged while overall market witnessed moderate volumes during the day. Bourse ended in red for the second consecutive trading session mainly dragged down by the price losses in JKH and MELS. Foreigners were net sellers amidst low foreign participation. “

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 Holdings PLC is an investment bank and is the pioneer non-bank affiliated Primary Dealer in Treasury Bills and Bonds in Sri Lanka. With a track record of over 25 years, the Company was the first licensed primary dealer appointed by the Central Bank, and is also the only listed and rated primary dealer in Treasury Bills and Bonds in Sri Lanka.
First Capital delivers the only source for fixed income research in the local financial services industry. The Company’s best-in-class research team provide dynamic reports including economic reviews and proprietary research, encompassing fundamental, quantitative and technical analysis.