Tag Archives: Business News Sri Lanka

First Capital Wealth Fund announces dividend of Rs. 100 per unit for FY 2019/20

First Capital Asset Management Ltd., the managers of the First Capital Wealth Fund, has announced a dividend of Rs. 100 per unit for the year 2019/20.

The fund has delivered a return of 11.14% (Compounded Annual Growth Rate) since inception as at 5 October.                                                                                                                       
‘Astute assessment of market opportunities, leveraging on interest rate fluctuations and prudent management is attributed to the successful growth of the unit trust funds under our management,” said First Capital Asset Management Ltd. AGM – Asset Management Kavin Karunamoorthy.

“Utilising our expertise as a specialised knowledge and industry expert, in debt market services and prominent non-bank primary dealer in Sri Lanka, we are confident that the unit trusts managed by First Capital Asset Management Ltd. will continue to reap the rewards of timely, well-informed investments,” he added.

First Capital Asset Management, a subsidiary of First Capital Holdings PLC, is licensed and approved by the Securities and Exchange Commission of Sri Lanka (SEC) while Bank of Ceylon (BOC) acts as the trustee and custodian for the fund.

The company specialises in managing investments for high net-worth individuals, trusts and companies. First Capital Asset Management Ltd. is a subsidiary of First Capital Holdings PLC which offers investment solutions in fixed income, equities, wealth management and capital markets advisory.

 

Mid-year Outlook – 3rd Research Conference

First Capital presents “Mid-year Outlook – 3rd Research Conference” a follow-up to the hugely successful “Investment Strategy 2020 – 2nd Research Conference” held in February 2020, at the Oak Room, Cinnamon Grand.

The event is geared to provide participants of the investment community, an overview of our expectations on the economic front mainly on interest rates, AWPLR, exchange rate, bond expectations, GDP forecast etc.

Mid-year Outlook 2020 webinar will be held on Tuesday, 22nd September 2020 at 3.00 pm.

Presenters, Dimantha Mathew and Atchuthan Srirangan from our Research Team will take you through a recap of recommendations of Jan 2020 and post covid-19 revisions, in addition to discussing “Why W-Shaped Recovery?”.

Register today by clicking https://tiikm.zoom.us/webinar/register/WN_J5980arwT5GU3R4yJIPwLA

New Location – Negombo Branch

FIRST CAPITAL POSTS PAT OF LKR 1.46BN FOR THE FIRST QUARTER OF 20/21 ON THE BACK OF STRONG RESULTS FOR FY 19/20

 

Stock Brokers in Sri Lanka

Colombo 17 August 2020:   First Capital Holdings PLC (the Group) the only listed investment institution in Sri Lanka, continued its growth momentum into the first quarter of 2020 (Q1 2020) recording a Profit after Tax of  LKR 1.46Bn for the quarter ended 30th June 2020, compared to Rs. 581.96Mn in the corresponding period of the previous year.

The results are reported on the back of a robust performance for year 2019/20, where the Group posted a Consolidated Profit after Tax of  LKR 1.07Bn for the year.  First Capital, with an impressive history of over 35 years, currently has total assets of LKR 32.5Bn and Equity of LKR 4.9Bn.

“Reflecting on the past 3 months, what stands out most is the Group’s record-breaking performance, making it without a doubt, the best year to date”, commented Chairman, First Capital Holdings PLC, Nishan Fernando.

The Group’s Primary Dealer operations were positively impacted by the CBSL’s efforts to revive the economy through monetary policy easing measures to counter the COVID-19 pandemic impact, with the business reporting a Profit after Tax of LKR 1.36Bn for the quarter (2019/20 – LKR 562Mn).

The Corporate Finance division too recorded notable results, mobilising LKR 3Bn for its clients through structuring and placement of corporate debt securities, generating a fee income of LKR 25Mn for the quarter (2019/20 – LKR 31Mn).

The Wealth Management division of the Group delivered a strong performance reporting a fee income of LKR 17Mn for the quarter (2019/20 – LKR 11Mn) amidst challenges faced during the COVID-19 lockdown period. The division showed a growth in assets under management to end with LKR 27.9Bn as at 30th June 2020 (31st March 2020 – LKR 26.4Bn).

Despite the setback experienced in the first quarter of 2020, with the CSE remaining closed for 7 weeks, the Group’s Stock Brokering division recorded revenue of LKR 14Mn for the quarter (2019/20 – LKR 06Mn).

“Given that COVD-19 is still an ongoing situation, we expect the government would continue with its current accommodative monetary policy stance for the year 2020”, commented Director/Chief Executive Officer, First Capital Holdings PLC, Dilshan Wirasekara.

First Capital Holdings PLC is listed on the Colombo Stock Exchange and is rated [SL]A- with stable outlook by ICRA Lanka.

FIRST CAPITAL RECORDS PAT OF LKR1.07 BILLION IN 19/20 AMIDST CHALLENGING MARKET CONDITIONS

Colombo 12 August 2020:   First Capital Holdings PLC (the Group) the only listed investment institution  in Sri Lanka, recorded a Consolidated Profit after Tax of  LKR 1.07Bn for the year 2019/20, amidst negative headwinds that saw Sri Lanka, reporting subpar economic growth for the third consecutive year. The results show a significant growth compared to LKR 8Mn in the previous year.  First Capital, with an impressive history of over 35 years, has total assets of LKR 45.6Bn and Equity in excess of LKR 4Bn.

Stock Brokers in Sri Lanka

The Group recorded a Total Comprehensive Income of LKR 1.04Bn for the year, a significant increase from  Comprehensive Loss of LKR 20Mn recorded in 2018/19.

“Our ability to deliver impressive results even in tough times, is a testament to the Group’s robust operating model.  I am convinced that the ongoing emphasis placed on strengthening each of our core businesses and firming up their positions within their immediate operating domain, has been a critical success factor for the Group”, commented Chairman, First Capital Holdings PLC, Nishan Fernando.

The Group’s Primary Dealer contributed LKR 1.2Bn (2018/19 – LKR 96Mn) Profit after Tax for the year, claiming a substantial volume-based market share in both the primary auctions as well as in the secondary market during the financial year.

Capitalising on the potential in the listed and unlisted debt market, the Corporate Finance division mobilised LKR 42Bn for its clients through structuring and placement of corporate debt securities, generating a fee income of LKR 175Mn (2018/19 – LKR 69Mn).

The Wealth Management division of the Group, made remarkable progress to deliver its best financial results to date, reporting a fee income of LKR 64Mn (2018/19 – LKR 33Mn).  The division showed a significant growth in its assets under management to end with LKR 26.4Bn as at 31st  March 2020 (31st March 2019 – LKR 5.9Bn).

Furthermore, the Company’s benchmark unit trust, the First Capital Money Market Fund was the best-performing unit trust fund in the country in 2019/20.

The Group’s Stock Brokering unit also recorded revenue of LKR 71Mn for the year 2019/20 (2018/19 – LKR 53Mn).

“While the last 12 months have been challenging for many local businesses, several aspects of our immediate operating environment worked in our favour; we are looking ahead and focusing our efforts on improving efficiency across all businesses to deliver enhanced results to our valued stakeholders’, commented Director/Chief Executive Officer, First Capital Holdings PLC, Dilshan Wirasekara.

The Group’s [SL]A- credit rating was reaffirmed by ICRA Lanka Limited, reconfirming the stability of the Group.

First Capital Holdings PLC paid a total dividend of LKR 9 per share for 2019/20 totaling to LKR 911Mn.

How First Capital ensured a fast turnaround amidst COVID-19

The Company is seeing an encouraging turnaround, largely driven by a relentless commitment to its clients and consistently delivering market-beating returns

Mahesh Amarasinghe – Assistant General Manager – Debt Structuring & Placement. 

First Capital Holdings with over 35 years of expertise operating in the capital market of Sri Lanka has investment solutions for everyone; from retail mutual funds for ordinary folk to structured corporate, sovereign debt instruments and equity trading for sophisticated investors with larger appetites. The prolonged lockdown due to the COVID-19 pandemic has brought the economy to a standstill and eroded investor sentiment to new lows. First Capital, however, is already seeing an encouraging turnaround, largely due to two reasons: a relentless commitment to its clients and sharp investment decisions that consistently yield market-beating returns.

A senior executive at First Capital Mahesh Amarasinghe – Assistant General Manager – Debt Structuring & Placement, managing a portfolio that serves the interest of both the investors and the issuing corporates, discuss the efforts that lead to success. For instance, by deploying technology, processes were quickly in place to ensure staff across the group were fully operational during the lockdown executing complex transactions and providing corporate clients finance advisory services to tide the cashflow crunch. A new online platform was introduced which helped clients monitor their portfolios and carry out transactions. 

Read the full article here >>

 

‘Financial disintermediation, need of the hour’ – Daily News

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

These sentiments were expressed by First Capital Holdings PLC, Senior Manager – Corporate Finance, Mahesh Amarasinghe to the Daily News.

Sri Lanka is too dependent on banks and financial institutions and it is of much importance to acknowledge the importance of the capital market. Banks and financial institutions are limiting both corporate and investors. What we need is a financial disintermediation, which would permit investors to access the capital market directly for cheaper funding.

Bringing down interest rates should be a priority, since Sri Lanka has probably one of the highest real interest rates in the world.

“For a business operating in Sri Lanka, the cost of capital is significantly higher than any where else in the world. We as an organization, have been advocating for better access to capital and we suggest that that banks and finance companies be incentivized to lend for investment, rather than consumption, because when interest rates are brought down, people use credit for consumption purposes and not contribute to the growth of the economy.

On the other hand, financial disintermediation means that Issuers or Borrowers – the companies that are seeking funds to grow should look beyond traditional sources of funds such as banking and financial institutions and find opportunities to directly access investors to directly get involved and lend to projects.

“This is what a vibrant capital market could do to grow business.”

“This is where Corporate Finance has a significant role to play as a full service investment bank operating in both debt and equity markets. We understand the changing economic and industry trends and provide both Issuers and Investors with new opportunities for businesses at attractive rates.

He commenting that the problem is that most lending entities too have traditional mind-sets on how they approach lending.

“For example, despite the prevalence and growth of IT, digital, and data-related companies, many banks are still reluctant to lend to them, as they have less understanding about the business, how it runs and how it could make profits.”

“In addition, we as Sri Lankans, have very little financial literacy so it makes life harder for entities looking for funding to pitch their proposals in an attractive manner.”

“Our teams are able to study and understand the financial position of corporates and structure customized solutions that are on their terms such as what rates they would wish to borrow at, if they are fixed or floating, matching cash flow and growth requirements of companies.”

On the other hand, investors are finding it difficult to place their funds due to caps on interest rates. “Traditionally, Sri Lankans are used to a financial landscape where people make deposits to banks and banks keep a margin and lend to businesses they perceive to be risk-free, but not really contributing to the economy.”

He said that the teams at First Capital would advise a client how the investor looks at the company and we advise on how to improve.

“When we see liquidity decreasing, our advise is to get the funding now, as we see trends of lack of liquidity in the market, while and these are part of the services we offer.”

Corporate Finance creates a more robust capital market structure that actually provide investors the opportunity of going directly into businesses and earn higher interest rates in addition to the security that is behind this type of instrument. “If you put a Fixed Deposit it’s just between you and the bank of the institution, whereas this would have a trustee, regulator if listed, a security to back the funds.”

We are a sponsor for SMEs to list them in the Empower Board. Specific license.

He also opined that listing or unlisted debt, there is a cost benefit to the issuer. So we advise them accordingly. Although unlisted costs less, sometimes it is better for a company’s brand or name if they are a listed with a publicized IPO.”

“IPOs are an ideal way for an investor who had not invested in this type of product earlier, because it is highly regulated with the CSE and SEC monitoring, a rating agency and a trustee and many other participants securing the process.”

Also for someone subscribing to a debt IPO, there is a set exit mechanism, because they could trade it on the secondary market.

“However, with the previously offered tax benefits no longer applicable, there is a significant benefit for corporates to do an unlisted issue, but to do so, there must be qualified investors who are experienced and understand the risks of the product.”

He said that they would look into it and would judge as to how these projects must be structured for the company to make the best of it. “Or we also would offer finding investment opportunities for investors who are looking for opportunities in the Securities Market for private placements or public offerings.”

Amarasinghe and his team recently closed a Rs. 5 billion Debenture for LOLC in a market where the company is over exposed.

Amarasinghe counts over 18 years of significant experience in Treasury and Securities Management through business operations and expertise gained as a Primary Dealer in and a Secondary Dealer of a range of fixed income securities.

He has extensive exposure in front and back-office operations and in customer relations in financial services.

See full article >>

MARKET UPDATE ON ADA DERANA ENGLISH NEWS – 2017.07.16

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First Capital’s Head of Research Dimantha Mathew with the market update – between 17.00 mins to 17.37 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.

MARKET UPDATE ON ADA DERANA ENGLISH NEWS – 2017.07.09

Investment in Sri Lanka

First Capital’s Head of Research Dimantha Mathew with the market update – between 15.20 mins to 15.56 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.

OBG outlines reforms for growth

Published on Daily FT on  Tuesday, 20 June 2017

– By Charumini de Silva

 InvestmentInSriLanka
From left: Oxford Business Group Country Director Andrea Tsiachtsiri, Oxford Business Group Editor-in-Chief Oliver Cornock, BOI Chairman Upul Jayasuriya, Ceylon Chamber of Commerce Chairman Samantha Ranatunga, First Capital CEO Dilshan Wirasekara and Standard Chartered Commercial Banking Head Dushan Casie Chetty with the report – Pic by Ruwan Walpola

Sri Lanka needs to concentrate on a much-needed modernisation drive and structural reforms to improve growth, experts said yesterday, as the country attempts to break out of its low-middle income status.

Sri Lanka’s plans to boost economic growth, which places tourism development high on the agenda, towards a new era of optimism buoyed by strong growth, low unemployment and rising incomes were mapped out in a report by the Oxford Business Group.

Titled ‘The Report: Sri Lanka 2017’, it also highlighted Sri Lanka’s plans to capitalise on high levels of investor confidence and a $ 1.5 billion program with the International Monetary Fund (IMF) to implement a much-needed modernisation drive and structural reforms.

Speaking at the launch event, OBG Editor-in-Chief Oliver Cornock said the report this year has outlined that the reforms needed to help Sri Lanka reach its long-term goal of securing sustainable and inclusive economic growth were taking shape.

“The post-war years have brought impressive economic expansion and investor interest; pockets of poverty and inequalities remain an issue,” he added.

He said the finding suggests that Sri Lanka’s new administration is already moving to align its economic policy and address these weaknesses, while embarking on an infrastructural overhaul that will sit well with investors eyeing the country’s many opportunities.

Considering the global economic outlook, Cornock pointed out that growth in emerging markets is still very strong, adding that Sri Lanka is well located among huge growing engines like India and China.

OBG Managing Editor for Asia Paulius Kuncinas in a statement agreed that there was a tangible sense of optimism in Sri Lanka, with new trade deals in the pipeline and a shift in the economic landscape towards service-led industries.

“Sometimes overlooked, Sri Lanka has a fascinating story to tell, which most recently includes 15 years of continuous growth,” he said.

“With ambitious plans that include transforming the country into an international transport hub and driving new growth in the greater Colombo region, the Government’s bid to take Sri Lanka’s development to the next level looks to be well on track,” Kuncinas pointed out.

OBG analyses the part that improved transport infrastructure, including upgrades to ports and roads together with Customs reforms, will play in supporting Sri Lanka to strengthen trade and international relations, while building on its strategic location in the Indian Ocean.

It also explores the Government’s plans for developing the tourism sector further, while highlighting the activity already underway, which includes a raft of new hotel openings.

In addition, OBG looks in detail at the country’s fast-developing telecommunication and IT industry, which is being driven forward by rising demand for a wider range of services from a growing and increasingly tech savvy population. Other areas of Sri Lanka’s economy examined agricultural industry, which is earmarked for modernisation as a part of a national drive to boost both production and exports.

In addition to the launch event of the report, there was a discussion where experts shared their insights on the building blocks expected to drive growth across key sectors of the economy.

First Capital CEO Dilshan Wirasekara called for policy consistency as it had deterred the confidence and momentum of the economy with many investors waiting to see changes come into the system.

“No matter what policy, we need consistency. The latest example was the Budget 2017 which brought in a significant number of tax changes to the capital market which was implemented. This creates a ‘wait-and-see’ phase for foreign investors,” he added.

He said if the proposed Inland Revenue Act and Foreign Exchange Management Act would be put into place, it would help the building blocks which are critical to take Sri Lanka to the next level.

In addition, he said the implementation of the Central Counter Party (CCP) system at the Colombo Stock Exchange by the end of the year as well as digitalising the processes of financial services would bolster the investment climate in the country.

However, he said it was unfortunate that Sri Lanka was too dependent on banks and financial institutions, which “rip-off people.”

“It is important to acknowledge the importance of the capital market. The banks and financial institutes are ripping off the consumers. What we need is a financial disintermediation, which would allow investors to access the capital market directly for cheaper funding,” Wirasekara stressed.

Agreeing with Wirasekara, BOI Chairman Upul Jayasuriya also highlighted the need for regulations that allow investors to tap into private equity, which will also make their businesses more viable.

“We need to encourage private equity to come into the country,” he added.

He said that there are a number of factories that close down every month in the zones as the companies are unable to pay their bank loans.

“While attracting new investments to the country, it is also our duty to retain existing investors in the 12 zones we have at present. There are a number of companies closing down their factories every month as they are unable to repay bank loans.”

Noting that 15 new licensed zones will be launched under the BOI, Jayasuriya asserted that the Government has outlined special allowances in the Northern and Eastern provinces.