Tag Archives: head of research

INSIDE SRI LANKA: First Capital Sees Volatile Rates During 1H

Wire: Bloomberg First Word (BFW) Date: Jan 10 2017 8:40:25

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By Anusha Ondaatjie
(Bloomberg) — “Dangerously low” foreign reserves around $6b, foreign debt payments of over $4.7b, along with maturing rupee bonds and Sri Lanka Development Bonds may lead to volatile rate conditions, says Dimantha Mathew, head of research at First Capital.

* LKR477b of rupee bond mature during Jan–Jul 2017, $1.8b Sri Lanka Development Bond mature from Jan-Aug 2017, he wrote in e-mail Monday
* Rupee little changed at 149.90/dollar; USD/LKR’s MACD, signal line both above zero
* Yield on 11% govt bonds due August 2021 rose 1bp to 12.1% Jan. 9, data compiled by Bloomberg show, after government sold LKR55b of treasury bonds
* Central bank plans to auction LKR24b of treasury bills Tuesday
To contact the reporter on this story:
Anusha Ondaatjie in Colombo at anushao@bloomberg.net
To contact the editor responsible for this story:
Tan Hwee Ann at hatan@bloomberg.net

 

Sri Lankan shares end flat as policy uncertainty continues to weigh

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

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Sri Lankan shares were little changed on Monday after hitting a nine-month low last week as uncertainty over the government’s monetary and budget policies continued to weigh on the market.

But foreign investors were net buyers on Monday for a second session after five straight sessions of net-selling through Thursday.

They bought a net 152.7 million rupees ($1.02 million) worth of equities on Monday, the highest since Dec. 8. However, foreign investors have been net sellers to the tune of 817.03 million rupees so far this year.

The Colombo stock index ended 0.04 percent up at 6,155.52, slightly above the lowest since April hit on Thursday. Last week the index fell 0.64 percent and was down 9.7 percent for 2016, its second straight annual decline.   The day’s turnover was at 843.6 million rupees.

“Net foreign inflow is a good sign and it will help regain the lost confidence,” said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

Yields on treasury bill auctions rose 5-6 basis points at a weekly auction on Wednesday, a day after the central bank governor signalled reduced intervention to defend the currency.

Shares in Hemas Holdings Plc rose 1.9 percent, while Teejay Lanka Plc gained 3.69 percent and Ceylon Tobacco Company Plc added 0.33 percent.

($1 = 149.6000 Sri Lankan rupees)

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Amrutha Gayathri)

Sri Lankan shares rise on bargain hunting, snap 5-day losing streak

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

Sri Lankan shares edged higher on Friday, ending a five-day losing streak and recovering from a nine-month low hit in the prior session as investors picked up battered down shares.

People walk past an electronic board displaying various Asian countries' stock price index and world major index outside a brokerage in Tokyo, Japan, August 21, 2015.  REUTERS/Issei Kato/File Photo

Foreign investors turned net buyers on Friday after offloading shares for five straight sessions.

The bourse hit a nine-month low on Thursday as foreign investors sold close to one billion rupees worth of stocks in the first four sessions of 2017 amid worries over a weakening rupee and rising interest rates hurt sentiment.

Foreign investors bought a net 26.95 million rupees ($180,026.72) worth of equities on Friday. They have been net sellers to the tune of 969.69 million rupees so far this year.

The Colombo stock index ended 0.09 percent up at 6,153.02, edging up from its lowest close since April 4 hit on Thursday. It fell 0.64 percent for the week and was down 9.7 percent in 2016, its second straight annual decline.

The index has been trading in the oversold territory since Tuesday with the 14-day relative strength index breaking below 30, Thomson Reuters data showed. A level between 30 and 70 indicates the market is neutral.  The day’s turnover was at 273.7 million rupees.

“Market edged up in thin volumes despite continued selling pressure,” said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

Analysts said interest rate volatility and policy uncertainties are also hurting investor sentiment.

Yields on treasury bill auctions rose 5-6 basis points at a weekly auction on Wednesday, a day after the central bank governor signalled less intervention to defend the currency as market has braced for a depreciation.

Shares in Ceylon Tobacco Company Plc rose 1.17 percent while Colombo Cold Stores Plc rose 1.26 percent and Dialog Axiata Plc rose 0.95 percent.

Shares in biggest listed lender Commercial Bank of Ceylon Plc rose 0.42 percent while Conglomerate John Keells ended 0.43 percent up.  Talks of a high net worth foreign investor exiting from Keells has triggered panic selling, dealers said.

($1 = 149.7000 Sri Lankan rupees)

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Vyas Mohan)

Sri Lanka shares fall; foreign selling inches close to 1 bln rupees

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

Sri Lankan shares fell for a fifth straight session and ended at a nine-month low on Thursday as foreign investors continued to sell shares, offloading close to one billion rupees worth of stocks in the first four sessions of the new year.

Foreign investors sold a net 181.7 million rupees ($1.22 million) worth of equities on Thursday, extending the net outflow in the first four trading sessions of the year to 996.6 million rupees.

Worries over a weakening rupee, rising interest rates and continued foreign selling in index heavyweight John Keells Holdings Plc also weighed on the sentiment.

The Colombo stock index ended 0.09 percent down at 6,147.52, its lowest close since April 4. The bourse fell 9.7 percent in 2016, its second straight annual decline.

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The index has been trading in the oversold territory since Tuesday with 14-day relative strength index breaking below 30, Thomson Reuters data showed. A level between 30 and 70 indicates the market is neutral.

Conglomerate John Keells, which saw net foreign selling of 2.34 million shares that accounted for 62 percent of the day’s turnover of 802.4 million rupees, ended 0.14 percent lower.  Talks of a high net worth foreign investor exiting from Keells has triggered panic selling, dealers said.

“Foreign selling in Keells is still continuing and that has brought the market down,” said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.  Analysts said interest rate volatility and policy uncertainties are also hurting investor sentiment.

Yields on treasury bill auctions rose 5-6 basis points at a weekly auction on Wednesday, a day after the central bank governor signalled less intervention to defend the currency as market has braced for a depreciation.

Shares in Hemas Holdings Plc dropped 2.20 percent while biggest listed lender Commercial Bank of Ceylon Plc lost 0.77 percent.

($1 = 149.4000 Sri Lankan rupees)

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Vyas Mohan)

INSIDE SRI LANKA: First Capital Sees LKR Weakening Through 2017

Wire: Bloomberg First Word (BFW) Date: Dec 28 2016 9:32:12

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By Anusha Ondaatjie
(Bloomberg) — Reduced political, economic uncertainty and an external environment supportive of inflows are factors required to amend expected weakness, Dimantha Mathew, head of research at First Capital, writes in report.

* Says foreign reserves dangerously low
* Rupee down 0.1% to 149.65/dollar; USD/LKR’s MACD above zero and signal line
* Yield on 10.75% govt bonds due March 2021 fell 7bps to 12.08% on Dec. 27, data compiled by Bloomberg show, ahead of Wednesday’s govt sale of 11.5b rupees of treasury bills
* Sri Lankan interest rates to be volatile “within 150bps-200bps strip” over Jan.-July 2017: First Capital
* Recommends investing in shorter tenors of debt to counter risk in the system and prevent capital erosion

To contact the reporter on this story:
Anusha Ondaatjie in Colombo at anushao@bloomberg.net
To contact the editors responsible for this story:
Tan Hwee Ann at hatan@bloomberg.net Shikhar Balwani