Tag Archives: retirement planning sri lanka

Sri Lankan stocks end marginally lower; foreign buying caps fall

FIRST CAPITAL’S JALIYA WIJERATNE SPEAKS TO REUTERS

Tue Jun 27, 2017

Sri Lankan shares closed slightly lower on Tuesday as banking shares fell, but foreign buying capped losses while local investors waited for more clarity on a new tax bill.

The Colombo stock index ended 0.18 percent weaker at 6,703.18, its lowest close since June 19. The bourse fell 0.05 percent last week.

Foreign investors net bought 395.4 million rupees worth of shares, extending their year-to-date net inflow to 21.5 billion rupees worth of equities.

“Foreign investors are buying select shares. But local investors are still waiting for some direction, especially on new inland revenue act,” said Jaliya Wijeratne, CEO, First Capital Equities (Pvt) Ltd.

In a disclosure to the bourse, Lanka Securities (Pvt) Limited said its client Ube Singapore Holdings Pte. Ltd bought 10.69 million shares in Tokyo Cement Company (Lanka) at 72 rupees each.

Subsequent to this transaction, the client has acquired 10 percent of the Tokyo Cement, it added. Shares in Tokyo Cement rose 5.7 percent.

The IMF, which has long urged Sri Lanka to boost tax revenue through modernisation and simplification of its fiscal system, has urged the government to submit to parliament a new Inland Revenue Act.

Turnover was 1.7 billion rupees ($11.10 million), nearly two times this year’s daily average.

Shares of Hatton National Bank Plc fell 1.92 percent while Ceylon Theatres Plc lost 5.63 percent and Nestle Lanka Plc closed 1.18 percent lower.

The markets were closed on Monday for Id-Ul-Fitr or the Ramzan Festival Day. ($1 = 153.2000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Vyas Mohan)

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 slip from 17-mth high ahead of cbank rate review

FIRST CAPITAL’S JALIYA WIJERATNE SPEAKS TO REUTERS

Thu Jun 22, 2017

Sri Lankan shares fell on Thursday in low turnover, retreating from a 17-month closing high, as investors awaited the central bank’s monetary policy review.

The central bank is expected to keep its key policy rates steady at more than three-year highs, a Reuters poll showed. The policy announcement is due on Friday at 0200 GMT.

Investors are worried of a possible rate hike, said Jaliya Wijeratne, CEO, First Capital Equities (Pvt) Ltd.

“Only a few counters traded today. Buyers want top blue chip John Keells Holdings, but sellers were not ready to sell at the price buyers wanted.”

Keells, outperforming the overall index, ended 0.7 percent firmer.

The Colombo stock index fell 0.3 percent to 6,714.73, slipping from its highest close since Jan. 7, 2016 hit in the previous session.

Turnover was 495.5 million rupees ($3.2 million), about half of this year’s daily average of 905.7 million rupees.

Foreign investors sold a net 14.6 million rupees ($95,362) worth of shares on Thursday, but they have been net buyers of 20.86 billion rupees of equities so far this year.

Shares of Ceylinco Insurance Plc lost 6.7 percent, while Hemas Holdings Plc ended 2.3 percent weaker, and BRAC Lanka Finance Plc fell 15.5 percent. ($1 = 153.1000 Sri Lankan rupees) (Reporting by Shihar Aneez and Ranga Sirilal; Editing by Amrutha Gayathri)

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 banks lead in March quarter profits

Jun 28, 2017 09:58 AM

ECONOMYNEXT – Sri Lanka’s banking sector remained the largest contributor to earnings of firms listed on the Colombo stock exchange in the March 2017 quarter, helped by interest rates spreads, First Capital Equities said in a research report.

Earnings were up by 7.1% in the quarter to Rs 65.5 billion from a year ago and 0.2% from the previous quarter, for 278 companies analysed by the brokerage, excluding a large one-off gain made by the LOLC group.

March quarter earnings grew 16.1% from a year ago to Rs 75.9 billion, including the one-off gain from LOLC amounting to about Rs 10.4 billion.

Earnings were dominated by healthy performance in the banks sector (+21%YoY) and diversified financial sector (+194%YoY) with higher margins and one-off gains from LOLC Group, the report said.

The interest rates spreads boosted the banking and diversified financials earnings, First Capital Equities said.

The banks sector made a profit of Rs 14.36 billion, up 21% from a year ago, and the diversified financial sector Rs 17.42 billion, up 194% from the year before, primarily led by expansion in margins and one-off gains from LOLC Group.

Big banks led by Sampath, whose earnings grew 30%, Commercial Bank of Ceylon, whose profits rose 17% and HNB with a 16% YoY growth in profit, jointly represented 70% of the sector earnings.

The Food Beverages & Tobacco Sector grew 28%YoY and Capital Goods Sector 42% YoY which was positively affected by healthy consumer spending, First Capital Equities said.

“Improved consumer demand, increased volumes and commodity price volatility led to a boost in profitability in Food, Beverage & Tobacco and Staple Food Sectors by 28% year-on-year,” First Capital Equities said.

“However, the earnings growth was partially offset by Telecommunication Sector, which fell 32% YoY, mainly owing to foreign exchange losses, and Real Estate Sector which dropped 59% YoY, mainly because of RIL reported a lower profit than the previous year when earnings were boosted by a fair value adjustment.

(COLOMBO, June 28, 2017)

Sri Lankan stocks end steady; cbank rate move, foreign buying boost sentiment

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

Fri Jun 23, 2017

Sri Lankan shares closed little changed on Friday, but sentiment was positive as the central bank kept key policy rates steady and as foreign investors bought diversified shares such as Hemas Holdings Plc and John Keells Holdings.

The banking regulator said the current monetary policy, which was in line with forecasts, was appropriate as it expected the economy to recover in the second half of the year.

The Colombo stock index ended 0.01 percent firmer at 6,715.33, but fell 0.05 percent on week.

“Unchanged policy rates could be one reason for the positive and healthy atmosphere that was there today,” said Dimantha Mathew, head of research, First Capital Holdings PLC.

“It was a very active day with all retail, high networth institutional and foreign investors trading in the market.”

Turnover was 2.7 billion rupees ($17.64 million), nearly three times this year’s daily average of 921.1 million rupees.

Foreign investors net bought 257.7 million rupees ($1.68 million) worth of shares, extending the year to date net foreign inflow to 21.1 billion rupees worth of equities.

Shares of conglomerate John Keells ended 1.2 percent firmer, while Ceylinco Insurance Plc rose 6.7 percent and Hemas Holdings closed up 1.9 percent.

The markets will be closed on Monday for Id-Ul-Fitr or the Ramzan Festival Day. Normal trading will resume on Tuesday. ($1 = 153.1000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)

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.<

Central Bank expected to keep key rates unchanged: First Capital

Author LBO
Posted on | Economy, Featured, Forex, Policy

June 21, 2017 (LBO) – The Central Bank of Sri Lanka is expected to keep key interest rates unchanged in its monthly monetary policy announcement on Friday, with slower first quarter growth and a deceleration in inflation contributing to the decision, First Capital Research said in a pre-policy research note.

GDP growth for the first quarter was slower than expected, growing 3.8 percent year-on-year, with the agriculture sector decreasing 3.2 percent year-on-year due to drought.

“We believe inflation will be under control over the next 2-3 months while there could be some upward pressure towards September and beyond with the floods in May 2017 affecting the supply in the current growing season. As a result there could be possible supply side shortages towards September and beyond.”

CCPI based headline inflation, decelerated on a YOY basis to 6.0% in May 2017 from 6.9% in April 2017, and CCPI based core inflation also decelerated to 5.2% in May 2017 from 6.8% in April 2017.

Sri Lanka’s forex reserves rose to USD 6.8Bn in May 2017 from USD 5.0Bn in April, helped by a 1.5 billion dollar sovereign bond sale, 450 million dollar syndicated loan and dollar purchases by the central bank.

“Foreign Reserves are now at comfortable levels,” the note said.

Commenting on private sector credit growth, FC Research expects that the growth in private credit to descend towards around 18% to 20% from the current level of over 20%.

“In spite of a high private sector credit figure in March 2017 we believe the usual credit slowness in the month of April will keep overall credit under check.”

During the last one-and half months the central bank also bought down its holding in Government Securities from LKR 300Bn to below LKR200Bn as at 19th June 2017.

First Capital Research said there was a 85 percent probability rates would remain unchanged, and a 15 percent probability of a 25 basis point rate hike.

The Press Release on Monetary Policy Review is expected on Friday, 23 June at 7.30 am.

 

POLL: Sri Lanka cbank seen keeping rates steady as growth slows

    * Thirteen out of 14 analysts predict steady rates
    * Full-year growth expected to slow on adverse weather
    * Tight fiscal, monetary policies also weigh on growth
    * Policy announcement due on Friday, June 23 at 0200 GMT

    COLOMBO, June 21 Sri Lanka's central bank is
expected to keep its key interest rates steady at more than
three-year highs at a policy meeting on Friday, a Reuters poll
showed, to boost faltering growth hit by adverse weather.
    Thirteen out of 14 economists surveyed predicted the central
bank would keep its standing deposit facility rate (SDFR) and
standing lending facility rate (SLFR) unchanged at 7.25 percent
and 8.75 percent, respectively.
    The lone outlier expected a 25-basis-point hike in both
rates.
    All 14 economists predicted the statutory reserve ratio
(SRR) to stay at 7.50 percent.
    "With the slower-than-expected first-quarter growth, the
central bank would keep the rates steady," said Dimantha Mathew,
head of research, First Capital Holdings PLC.
    "With improvement in the reserves, inflation under control,
and slowing private sector credit growth, they (the central
bank) might see the current conditions to be appropriate to hold
the rates steady."
    The $81 billion economy grew 3.8 percent in the quarter
ended March 2017 from a year earlier, slowing from the 5.3
percent growth in the previous quarter and marking its weakest
period since the second quarter last year.             
    The full-year growth is expected to be hit by extreme
weather, after the island nation faced its worst drought in 40
years in the first quarter and heavy rains resulting in floods
last month, the country's worst in 14 years.
    Sri Lanka's 2017 growth rate is likely to be significantly
lower than the official forecast, private economists have said.
            
    The central bank tightened monetary policy four times since
December 2015 through March this year to fend off pressure on
the fragile rupee and curb stubbornly high credit growth that
had pushed up inflation.
    Analysts said previous policy tightening cooled inflation
and private sector credit growth in the last two months. 
    Private sector credit grew 20.4 percent in March from a year
earlier, up from February's 21 percent. It has eased from a near
four-year high of 28.5 percent hit in July.
    Consumer prices rose 6.0 percent in May from a year earlier,
slowing from the previous month's 6.9 percent.               
    Policy tightening also dragged on the economy, which grew at
a slower 4.4 percent annual pace in 2016 compared with the 4.8
percent growth a year earlier. 
    The Sri Lankan rupee          fell 3.9 percent in 2016 and
has eased around 2.3 percent so far this year, pressured by
dollar demand from importers and withdrawal of foreign investors
from government securities in the first three months.
    The central bank has quit defending the rupee after it
missed an end-December reserve target set by the International
Monetary Fund for a $1.5 billion loan. 
    
Following are poll forecasts for rates on Friday: 
                    SDFR         SLFR        SRR
                  (in pct)    (in pct)     (in pct)    
Median              7.25         8.75       7.50
Average             7.27         8.77       7.50  
Minimum             7.25         8.75       7.50
Maximum             7.50         9.00       7.50   
Rates in May        7.25         8.75       7.50
No. of economists     14           14         14

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

Pre-Policy Analysis – 20th June 2017

Investment-in-Sri-Lanka

By First Capital’s Dimantha Mathew & Atchuthan Srirangan

 

Read the full report here: Pre-Policy Analysis – 20th June 2017

 

 

Sri Lankan shares hit near 1-wk closing low; Keells down 3 pct

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

Mon Jun 19, 2017

Sri Lankan shares hit a near one-week closing low in tepid trade on Monday, as selling in diversified and banking shares offset foreign inflow into equities.

The Colombo stock index ended down 0.52 percent at 6,684.02, its weakest since June 14.

Foreign investors net bought 26.7 million rupees ($174,396) worth of shares, extending the year-to-date net foreign inflow to 20.74 billion rupees.

Turnover was 846.3 million rupees ($5.53 million), less than this year’s daily average of 899.4 million rupees.

“Market came down on selling in Keells,” said Dimantha Mathew, head of research, First Capital Holdings PLC.

Shares of conglomerate John Keells Holdings Plc fell 3.03 percent, while the country’s biggest listed lender, Commercial Bank of Ceylon Plc, ended 1.43 percent lower.

“Investors are (also) worried about growth numbers,” he said.

Sri Lanka’s economy grew 3.8 percent in the first quarter, slowing from the previous quarter’s 5.3 percent, the state-run Census and Statistics Department said last week.

($1 = 153.1000 Sri Lankan rupees) ($1 = 153.1000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)

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.

MARKET UPDATE ON ADA DERANA ENGLISH NEWS – 2017.06.18

InvestmentInSriLanka

First Capital’s Atchuthan Srirangan with the market update – between 22.32 mins to 22.56 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.