Tag Archives: Corporate finance advisory services in Sri Lanka

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 >>

First Capital records Rs. 231 Mn PAT 2016/17

Investment banks in Sri Lanka, Investment banking in Sri Lanka, Investment companies in Sri Lanka, Share market investment in Sri Lanka, Investment in Sri Lanka, Stock brokers in Sri Lanka, Corporate debt structuring in Sri Lanka, Fixed income securities in Sri Lanka, Fixed income bonds in Sri Lanka, Investment bank in Sri Lanka, Margin trading in Sri Lanka, Wealth management in Sri Lanka
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.

Sri Lankan shares close at one-month low; telcoms lead

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

Sri Lankan shares on Friday hit their lowest close in more than a month, dragged down by telecom stocks, while investor sentiment continued to remain low on concerns about rising interest rates.

The Colombo stock index ended down 0.06 percent at 6,084.99, its lowest since Feb. 6. It shed 0.27 percent during the week, posting its third straight weekly decline.

Foreign investors were net buyers for the eighth straight session on Friday, purchasing shares worth 174.96 million rupees ($1.16 million), and extending the year-to-date net foreign inflow to 2.12 billion rupees worth of equities.

Turnover was 711 million rupees, more than this year’s daily average turnover of 690.1 million rupees.

“Foreigners are the only people active in the market these days as not a lot of activities are taking place,” said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

“The market is slowly coming down with rising rates and economic uncertainty.”

Traders said there were concerns after the International Monetary Fund urged Sri Lanka’s central bank to be ready to tighten monetary policy if credit growth or inflation does not abate.

Shares of Dialog Axiata Plc dropped 0.89 percent, while Commercial Leasing and Fiance Plc plunged 10.71 percent and conglomerate John Keells Holdings dropped 0.14 percent.

Yields on treasury bills have risen to a more-than-four-year high since October, while the central bank has kept the key policy rates on hold.

($1 = 151.2500 Sri Lankan rupees)

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sherry Jacob-Phillips)

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 session; John Keells down

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

Sri Lankan shares fell for a third straight session on Thursday, posting their lowest close in a month, dragged down by diversified stocks such as John Keells Holdings Plc as investor sentiment continued to remain low on concerns about rising interest rates.

The Colombo stock index ended down 0.1 percent at 6,088.80, its lowest since Feb. 6. It shed 0.6 percent last week in its second straight weekly decline.

Foreign investors were net buyers for the seventh straight session on Thursday, purchasing shares worth 63.6 million rupees ($420,495.87), and extending the year-to-date net foreign inflow to 1.95 billion rupees worth of equities.

Turnover was 875.6 million rupees, more than this year’s daily average turnover of 689.7 million rupees.

“The market is mainly down because of John Keells. It is slowly coming down with rising rates and economic uncertainty,” said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

“Foreigners seem to be the only buyers at the moment.”

Traders said there were concerns after the International Monetary Fund urged Sri Lanka’s central bank to be ready to tighten monetary policy if credit growth or inflation does not abate.

Shares of John Keells Holdings fell 1.06 percent while Commercial Bank of Ceylon Plc, the country’s biggest listed lender, declined 1.29 percent and Carson Cumberbatch Plc dropped 2.91 percent.

Sri Lanka Telecom Plc dropped 1.41 percent and Hatton National Bank Plc ended 1.16 percent weaker.

Yields on treasury bills have risen to a more than four-year high since October, while the central bank has kept key policy rates on hold.

($1 = 151.2500 Sri Lankan rupees)

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)

Sri Lankan shares ease; interest rate concerns weigh

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

Sri Lankan shares ended slightly weaker on Tuesday, with financial and manufacturing stocks dragging down the index as investor sentiment continued to remain low on concerns about rising interest rates.

The Colombo stock index ended down 0.15 percent at 6,108.11, On Friday the bourse hit its lowest close since Feb. 9. It shed 0.6 percent last week in its second straight weekly decline.

Foreign investors were net buyers of shares worth 379.6 million rupees ($2.51 million) on Tuesday, extending the year-to-date net foreign inflow to 1.73 billion rupees worth of equities.

Turnover was 539 million rupees, less than this year’s daily average of 676.9 million rupees.

“Retail and institutional segment is on silent (mode) with the high interest rates and economic uncertainty,” said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

The International Monetary Fund on Tuesday urged Sri Lanka’s central bank to rebuild international reserves, while maintaining exchange rate flexibility, and to be ready to tighten monetary policy if credit growth or inflation do not abate.

Shares in Ceylon Cold Stores Plc fell 2.51 percent while Commercial Leasing & Finance Plc lost 6.67 percent.

Yields on treasury bills have risen to a more-than-four-year high since October, while the central bank has kept key policy rates on hold.

 

($1 = 151.1500 Sri Lankan rupees)

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil Nair)

 

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 edge up; beverage, telecoms lead

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

Sri Lankan shares closed slightly firmer on Monday, after posting a more than three-week closing low in the previous session, with beverage and telecom stocks driving the gains.

However, investor sentiment continued to remain low amid concerns about rising interest rates.

The Colombo stock index ended up 0.26 percent at 6,117.19, after posting its lowest close since Feb. 9 on Friday. It shed 0.6 percent last week in its second straight weekly decline.

Foreign investors were net buyers of shares worth 384.7 million rupees ($2.55 million) on Monday, extending the year-to-date net foreign inflow to 1.35 billion rupees worth of equities.

Turnover was 711.9 million rupees, more than this year’s daily average of 680.1 million rupees.

“Some crossings boosted the turnover. The good sign is we are seeing continued foreign buying these days,” said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

“Local investors are on the sidelines, mainly because of the high interest rates and economic uncertainty.”

Shares in Ceylon Cold Stores Plc jumped 6.12 percent, Lion brewery (Ceylon) Plc rose 6.27 percent, Ceylon Tobacco Company Plc gained 0.71 percent, and Sri Lanka Telecom Plc climbed 2.41 percent.

Yields on treasury bills have risen to a more than four-year high since October, while the central bank has kept key policy rates on hold.

($1 = 151.0000 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 close at over 3-week low; turnover up on block deals

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

Sri Lankan shares on Friday hit their lowest close in more than three weeks, as investors sold telecom shares and on concerns over rising interest rates.

The Colombo stock index ended down 0.42 percent at 6,101.51, its lowest close since Feb. 9. The bourse dropped 0.6 percent on the week, in its second straight weekly decline.

Foreign investors were net buyers of 70.8 million Sri Lankan rupees ($468,563.86) worth of shares, extending the year-to-date net foreign inflow to 963.03 million rupees worth of equities.

Turnover was 1.21 billion rupees, the highest since Feb. 28 and nearly double this year’s daily average of 679.4 million rupees.

“Even today the crossings pushed the turnover. The foreign inflow is continuing, which is a good thing,” said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

“Foreign participation is high and local investors are completely staying out of the market.”

Conglomerate John Keells Holdings Plc, which accounted for 72.5 percent of the day’s turnover on block trade, ended steady.

Sri Lanka Telecom Plc slid 5.44 percent, while Dialog Axiata Plc declined 3.48 percent.

Yields on treasury bills have risen to a more-than-four-year high since October, while the central bank has kept key policy rates on hold.

($1 = 151.1000 Sri Lankan rupees)

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sherry Jacob-Phillips)

 

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 edge up on foreign investor buying

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

Sri Lankan shares closed marginally higher on Thursday after posting a near three-week closing low in the previous session, as foreign investors bought recently battered stocks while concerns about rising interest rates continued to hurt investor sentiment.

The Colombo stock index ended up 0.09 percent at 6,127.11, after closing at its lowest since Feb. 9 on Wednesday.

Foreign investors were net buyers of 292.6 million rupees ($1.94 million) worth of shares, extending the year-to-date net foreign inflow to 892.2 million rupees worth of equities.

Turnover was 783.9 million rupees, more than this year’s daily average of 666.6 million rupees.

“Market continues to move sideways but today we have seen some institutional and foreign buying,” said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

Sri Lanka Telecom Plc ended 3.87 percent higher after reporting a group net profit of 289 million rupees for the December quarter, compared with a net loss of 157 million rupees a year earlier.

Trans Asia Hotels Plc jumped 8.12 percent, while Commercial Leasing & Finance Plc rose 3.45 percent.

Yields on treasury bills have risen to a more than four-year high since October, while the central bank has kept key policy rates on hold.

($1 = 151.1000 Sri Lankan rupees)

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)