All posts by Nisansala Munasinghe

First Capital records highest ever PAT of Rs. 1.96 billion in 17/18

Nishan Fernando: Chairman First Capital

Colombo 30 May 2018:  First Capital Holdings PLC (The Group) the only listed investment bank in Sri Lanka, recorded its highest ever Consolidated Profit after Tax of Rs 1,960Mn for the year 2017/18, marking a milestone in the investment bank’s history.

The results show a significant growth compared to Rs. 232Mn in 2016/17. First Capital, with its impressive 35 year history, has total assets of Rs.35Bn and Equity in excess of Rs. 3.5Bn.

Dilshan Wirasekara: Director/CEO – First Capital

The Group recorded a total comprehensive income of Rs 1,866Mn for the year, a healthy increase from Rs. 238Mn recorded in 2016/17.  First Capital’s performance includes recognition of a deferred tax asset amounting to Rs. 897Mn (2017/18) in accordance to LKAS 12.

The Group’s primary dealer contributed Rs. 1,668Mn Profit after Tax (including recognition of a deferred tax asset of Rs. 845Mn) for the year, bolstered by opportunities derived through secondary market activities, the business displayed an impressive performance.

The corporate finance division, mobilized Rs. 24Bn through the structuring and placement of corporate debt securities. Increasing its contribution to the Group’s profitability, the business reported a total fee income of Rs. 80Mn for the year.

The asset management division, increased its assets under management by Rs. 2.1Bn in 2017/18, demonstrating a positive impact to the Group’s bottom line, with a total fee income of Rs. 38Mn.

The Group’s stock brokering unit, recorded an income of Rs. 78Mn for the financial year.

First Capital also made investments to enhance its regional presence through the expansion of its branch network to Negombo; in addition to fully-fledged branches operating in Matara, Kandy and Kurunegala.

The credit rating of SL [A-] with a stable outlook for First Capital Holdings PLC and First Capital Treasuries PLC were re-affirmed by ICRA Lanka Limited.

In March 2018, First Capital Holdings PLC declared a dividend payment of Rs. 2/- per share totaling Rs. 202.5Mn for 2017/18.

First Capital is an investment bank offering independent advice and transaction execution relating to capital raising and other strategic needs including mergers and acquisitions for investment in Sri Lanka. The Company’s industry leading transactions are reflective of the ingenuity in enabling the most opportune financing processes for our clients. First Capital’s services for investment in Sri Lanka include a total service for public offers of corporate debt, acting in the capacity of managers/ financial advisors and placement agents, in addition to due diligence, pre-offer preparation, offer management, distribution strategy and after-market advisory services, initial public offerings, secondary offerings such as rights issues, corporate actions including mandatory and voluntary offers, private placements and at-market placements of listed securities.

 

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First Capital Research : Top Equity Recommendations 2018

Equity Portfolio Performance 2014-2017

As at 31st Dec 2017 at 2018, First Capital Research Top Recommendations have achieved a Capital Gain of 6.4% (Excluding Dividends) compared to the market performance of 2.3%.

Following are our current and previous top recommendations and their performances for 2014, 2015, 2016 & 2017 for your reference.

 

Top Recommendations for 2018

Brief Equity Outlook

Market earnings: The current tight monetary policy has slowed down the economy significantly reducing earnings growth for most companies. The situation is expected to ease off towards 2H2018. Therefore the companies are likely to have a better earnings performance in 2018E/19E compared to the weak performance we are experiencing in CY17/FY18E. We believe overall market earnings are likely to grow by a modest 5%-7% during 2018E/FY19E supported by a recovery in economic performance in the 2H2018. Earnings Growth is likely to accelerate to 10%-12% towards CY19E/FY20E backed by further improvement in economic health of the country and also easing of the monetary policy with more stability in the system.

Market Returns: Market returns are likely to be slow but positive in the 1H2018 due to attractive valuations prevailing in the economy and is likely to improve in the 2H2018 supported by expectations of a better economic outlook and earnings performance. Thereby, we expect overall market returns are likely to be 10%-12% approximately 50% above the expected earnings performance as some counters are likely to re-rate with an expected better earnings outlook in the future. In terms of the ASPI index it is only likely to reach 7000 (+10% or +650 points) towards end of 2018. Market returns are likely to accelerate towards the 2019 to about 15% with the actual earnings performance and renewed investor confidence. Index is likely reach 8000 level (+15% or +1000 points) towards 2019. These targets however are highly dependent on the current stable outlook and reform agenda continuing during 2018 as well.

Key Sectors: We believe the key sectors that are likely to outperform the market and expected provide high returns are the Banking Sector, Building Materials Sector and Apparel Sector while the energy sector also may turnaround depending on the implementation of the pricing formulas by the Government which is also a condition of the IMF.

 

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.

The Budget’s impact on Entrepreneurship – 24×7 Derana

“The government is proposing to ignite entrepreneurship through facilitation and support of all types of services ….and this is significantly reflected through out the budget under the concept of ‘Enterprise Sri Lanka’.”

First Capital’s Head of Research Dimantha Mathew discussing the budget’s impact on Entrepreneurship at Derana 24×7.

Watch full interview >>

First Capital is an investment bank offering independent advice and transaction execution relating to capital raising and other strategic needs including mergers and acquisitions for investment in Sri Lanka. The Company’s industry leading transactions are reflective of the ingenuity in enabling the most opportune financing processes for our clients. First Capital’s services for investment in Sri Lanka include a total service for public offers of corporate debt, acting in the capacity of managers/ financial advisors and placement agents, in addition to due diligence, pre-offer preparation, offer management, distribution strategy and after-market advisory services, initial public offerings, secondary offerings such as rights issues, corporate actions including mandatory and voluntary offers, private placements and at-market placements of listed securities.

Sri Lanka – Budget 2018 Review

The Budget for 2018 focused promoting entrepreneurship and proposing structural changes to convert the economy to a more outward looking policy framework while also taking an active stance in promoting green environment and also providing an enabling environment for Public Private Partnerships. Government plans on a sustained path of fiscal consolidation as it aims for the first time to achieve a revenue surplus and to reduce budget deficit to 4.8% of GDP for 2018 while the Debt to GDP ratio is expected to improve to 77.5%.

Read Full Report >>

  • With Government’s revenue enhancement strategies on track, budget has proposed large number of low interest and interest free credit schemes for a range of small and micro industries and startups supported by establishing incubators with a vision to enhance entrepreneurship while para tariff removal for 1200 goods and supporting infrastructure including creation of EXIM windows are proposed accelerate growth in tradable sector.
  • The budget has a special focus on creating green environment with tax concessions on electric vehicles and solar panels, implementation of a carbon tax and concessions for manufacture of degradable products while PPPs are promoted by establishing a single agency and creating regulating framework for PPPs.
  • Measures relating to Capital Market Development, budget proposes improving legal and policy framework of the capital market, improve liquidity via listing of non-strategic enterprises and allowing state to raise equity and debt from the capital markets.

First Capital is an investment bank offering independent advice and transaction execution relating to capital raising and other strategic needs including mergers and acquisitions for investment in Sri Lanka. The Company’s industry leading transactions are reflective of the ingenuity in enabling the most opportune financing processes for our clients. First Capital’s services for investment in Sri Lanka include a total service for public offers of corporate debt, acting in the capacity of managers/ financial advisors and placement agents, in addition to due diligence, pre-offer preparation, offer management, distribution strategy and after-market advisory services, initial public offerings, secondary offerings such as rights issues, corporate actions including mandatory and voluntary offers, private placements and at-market placements of listed securities.

First Capital sponsor Ninth Hole at Rotary Metro Charity Par 3 Golf Classic

The Rotary Metro Charity Par 3 Golf Classic organized by the Royal Colombo Golf Club in partnership with the Rotary Club of Colombo Metropolitan is scheduled to be held tomorrow 28th October 2017.

As the exclusive sponsor of the Ninth Hole and Hut First Capital has planned some exciting give-aways for the golfers who are expected to tee-off from the Ninth.

The First Capital Hole-in-One challenge, will be the highlight at this hole, where the  first to land a Hole-in-One on the Ninth at the Rotary Metro Par 3 Golf Classic – 2017 tomorrow and win a complimentary return ticket to Bali, Indonesia.

First Capital Holdings PLC is an investment bank providing best-spoke Private Wealth Management in Sri Lanka. With our expertise in a comprehensive range of financial instruments, market access and insights on investment trends, we provide our clients with clear guidance to achieve their investment goals. First Capital offer Private Wealth Management in Sri Lanka on systematic financial planning and investment solutions tailored to fit return requirements, risk tolerance, liquidity preferences, tax position and other relative factors.

 

Nishan de Mel joins First Capital Board

Published on Daily FT | 2017-10-17

Dr. Nishan de Mel has been appointed as an Independent Non-Executive Director of First Capital Holdings Plc.

He is an economist with extensive academic policy and private sector experience currently serving as Executive Director and Head of Research at Verite Research Ltd. Dr. de Mel has held several governing, teaching and research positions internationally, including as a Lecturer in Economics at Oxford University.

He also served as a Member of the Presidential Task Force on Health Sector Reform, the Presidential Committee on Tobacco, Alcohol and Dangerous Drug Regulation, the National Steering Committee on Social Security and as Executive Director of the International Centre for Ethnic Studies and the Board of the Sri Lanka Foundation. Dr. de Mel sits on multiple private sector boards and consults regularly as a strategist for some of the region’s largest firms.

With the appointment the Board of Directors of First Capital Holdings Plc comprises N. Fernando (Chairman), D. Schaffter (Managing Director), D.G. Wirasekara (CEO/Director), A.D.E.I. Perera, M.D.A. Perera, Chandana L de Silva and N.C. de Mel.

First Capital is an investment bank offering independent advice and transaction execution relating to capital raising and other strategic needs including mergers and acquisitions for investment in Sri Lanka. The Company’s industry leading transactions are reflective of the ingenuity in enabling the most opportune financing processes for our clients. First Capital’s services for investment in Sri Lanka include a total service for public offers of corporate debt, acting in the capacity of managers/ financial advisors and placement agents, in addition to due diligence, pre-offer preparation, offer management, distribution strategy and after-market advisory services, initial public offerings, secondary offerings such as rights issues, corporate actions including mandatory and voluntary offers, private placements and at-market placements of listed securities.

4th Asia Pacific Choir Games and Grand Prix of Nations

The Asia Pacific Choir Games and Grand Prix of Nations is preparing to take over Colombo from Saturday, 21st October to Saturday, 28th October 2017 with over 3,500 international and local participants. The weeklong festival of choral competitions, friendship concerts and gala celebration concerts will be the harbinger of good tidings for the future of musical education and cultural tourism into Sri Lanka.

The country will welcome participants and jurors from 17 nations around the world, and this would be a unique experience for Sri Lankans to witness the music, song and dance cultures of other countries.

First Capital Holdings PLC has joined in support of this spectacular festival as Silver Sponsor. The sponsorship is part of First Capital’s ongoing commitment to support high-impact events of national importance.

First Capital Holdings PLC is pleased to have partnered with the hosts of this event The Colombo Cultural Hub Trust in collaboration with the Sri Lanka Tourism Promotion Bureau, INTERKULTUR and Dilmah.

First Capital is an investment bank offering independent advice and transaction execution relating to capital raising and other strategic needs including mergers and acquisitions for investment in Sri Lanka. The Company’s industry leading transactions are reflective of the ingenuity in enabling the most opportune financing processes for our clients. First Capital’s services for investment in Sri Lanka include a total service for public offers of corporate debt, acting in the capacity of managers/ financial advisors and placement agents, in addition to due diligence, pre-offer preparation, offer management, distribution strategy and after-market advisory services, initial public offerings, secondary offerings such as rights issues, corporate actions including mandatory and voluntary offers, private placements and at-market placements of listed securities.

First Capital’s A- rating reaffirmed by ICRA Lanka

The issuer rating of SL[A-] with stable outlook was reaffirmed for First Capital Holdings PLC (First Capital) by ICRA Lanka Limited, a subsidiary of ICRA Limited, a group company of Moody’s Investors Service.  ICRA Lanka also reaffirmed the issuer rating [SL]A- with stable outlook for First Capital’s standalone primary dealer First Capital Treasuries PLC.  

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Investment banks in Sri Lanka, Investment banking in Sri Lanka, Investment companies in Sri Lanka, Share market Investment in Sri Lanka

First Capital Holdings PLC is the holding company for other entities in the financial services space, engaged in making investments and managing its subsidiaries i.e. First Capital Treasuries PLC an authorised Primary Dealer in Government Securities, First Capital Limited involved in structuring and placement of corporate debt and corporate finance advisory services and investments, First Capital Asset Management Limited involved in unit trust and portfolio management; First Capital Markets Limited involved in providing margin trading facilities and dealing and broking of listed debts, First Capital Trustee Services (Pvt) Limited a trustee services provider for corporate debt securities and First Capital Equities (Pvt) Limited engaged in stock broking activities.

However, First Capital Treasuries accounts for 70% of the consolidated assets and 80% of the consolidated net trading income of First Capital for FY2017. The ratings take note of First Capital’s efforts to expand the business and financial performances of the other subsidiaries, which are engaged in corporate debt structuring, corporate finance, asset management, stock broking, extending margin trading facilities and trustee services; however their scale of operations continues to remain moderate. First Capital’s borrowings are largely short term in nature and are used for investment and lending to group entities. The rating factors the First Capital group’s established relationships with banks and financial institutions, providing access to funding. Further, ICRA Lanka expects timely funding support from First Capital Treasuries, considering the liquid nature of its assets.

First Capital, 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. For the FY2017 stand-alone income from investment activities improved (LKR 774 Mn total income in FY2017 vis-a-vis LKR 336 Mn in FY2016), while the share of profit from Subsidiaries increased steeply (LKR 194 Mn in FY2017 vis-à-vis 14 Mn in FY2016).

First Capital is an investment bank offering independent advice and transaction execution relating to capital raising and other strategic needs including mergers and acquisitions for investment in Sri Lanka. The Company’s industry leading transactions are reflective of the ingenuity in enabling the most opportune financing processes for our clients. First Capital’s services for investment in Sri Lanka include a total service for public offers of corporate debt, acting in the capacity of managers/ financial advisors and placement agents, in addition to due diligence, pre-offer preparation, offer management, distribution strategy and after-market advisory services, initial public offerings, secondary offerings such as rights issues, corporate actions including mandatory and voluntary offers, private placements and at-market placements of listed securities.

First Capital records Rs. 231 Mn PAT 2016/17

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Director / Group CEO, Dilshan Wirasekara

Colombo 19th June 2017: First Capital Holdings PLC, a full service investment bank providing a diverse range of advisory services and financial products through its subsidiaries, (First Capital Group) reported a consolidated profit after tax of Rs. 231Mn for the year 2016/17 compared to Rs. 47Mn in the previous year.

The Group’s primary dealer arm, First Capital Treasuries PLC, was the main contributor towards the financial results recording a profit after tax of Rs. 343Mn for the year 2016/17 (2015/16 – Rs. 11Mn) attributed to net interest income and fair valuation gains on government securities. First Capital Treasuries, is the pioneer non-bank Primary Dealer appointed by Central Bank in 1982 and is listed on the Colombo Stock Exchange. Further, the company’s credit rating was reaffirmed by ICRA Lanka as A- with stable outlook.

The capital markets advisory of the Group, First Capital Limited, which specialises in structuring and placement of corporate debt securities, successfully mobilised Rs. 12.4Bn through structuring and placement of corporate debt securities. Despite the above performance First Capital Limited was negatively affected as a result of higher funding cost and fair valuation losses on trading securities.

The performance of the Group’s subsidiaries were further impacted due to damped investor sentiments as a result of the proposed changes to taxation via the budget proposal – 2017.

“Despite the setback experienced in the preceding quarters, the Group is optimistic in its outlook and have planned several calculated improvements to its operations” said Director / Group CEO, Dilshan Wirasekara.

 

First Capital Holdings PLC (the Company or First Capital) is a full service investment bank providing a diverse range of advisory services and financial products.

We currently serve an array of companies, institutions, government agencies, high net worth individuals and retail clients both international and local, who seek truly objective advice, innovative solutions and execution expertise. We operate throughout Sri Lanka via offices in Colombo, Kandy, Matara and Kurunegala. Our global outreach continues to expand through institutional trading and investment product placement.

As a company listed on the Colombo Stock Exchange (CSE) since 1994 (Ticker: CFVF), we exemplify requisite financial transparency and governance standards.

Reflecting credit fundamentals including a robust capital structure, liquidity, risk controls and earnings profile, we are rated A- by ICRA Lanka Limited.

Monetary Policy Review – Monthly Economic Watch – May 2017

Policy rates unchanged
Private sector credit growth decelerated gradually to 21.0% in February 2017 and 20.4% in March 2017. The Earlier tightening of monetary policy by central bank and resultant increase in interest rates impacted the credit growth.
Combined impact of the decline in export earning and increased expenditure on imports as a result of the drought conditions expanded Trade deficit to USD 1.7Bn till February 2017.
Gross official reserves dipped to USD 5.1Bn by end April 2017 from USD 6.0Bn by end 2016. Both the government securities market and the Colombo Stock Exchange experienced foreign inflows in recent months.

Accordingly policy rates were increased,

  • Standing Deposit Facility Rate – 7.25%
  • Standing Lending Facility Rate – 8.75%
  • Statutory Reserve Ratio (SRR) – 7.50%
Read the full report –

https://www.firstcapital.lk/wp-content/uploads/2015/06/Monthly-Economic-Watch-May-2017.pdf

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.