Tag Archives: Share market investment in Sri Lanka

Sri Lankan stocks reaching bottom of cycle

ECONOMY NEXT | 17.04.2019

Stock Brokers in Sri Lanka

Sri Lanka’s stock market is heading towards the bottom of a cycle, with opportunities for buying and potential recovery in the coming quarters, a research house said.

“With the recent stock market plunge, we believe that we inaccurately assessed the market to be at the depression stage during the December 2018 period,” the research arm of First Capital, an investment bank, said.

“Considering the reactions of the market participants it was evident that the ASPI was at the latter part of the “Anger” stage in the psychological cycle.”

“The positive developments experienced in the recent past, the upcoming election season, liquidity improvement and the possible rate cut are considered to be a number of possible trigger points for an upside in the market,” it said.

The investment bank said that the power struggle in parliament has died down following the passing of the budget in March and April, while the upcoming election season may boost economic activity and renew consumer demand.

“Thereby, we believe the ASPI (All Share Price Index) is likely to be entering the depression stage in the current market cycle with a considerable number of positive expectations over the next few quarters.”

First Capital said it has increased its portfolio to 80 percent equity holdings in April, from 60 percent in December, as the ASPI is expected to return to 6,000 levels in the next quarters.

In the 3 months from December 26 to April 02, the ASPI had dipped 7 percent with panic selling on the back of weak earnings, it said.

The ASPI closed around 5,591.83 on Wednesday.

First Capital Research said with a stabilizing rupee and a reform program with the International Monetary Fund back on track, foreign inflows to equity markets are expected to accelerate, amidst strong valuations.

Index-heavy stocks are attractive, it said.

“As we gradually turn bullish on stocks, we recommend investors to accelerate accumulation into blue chip counters which are trading at heavy discounts.”

“For investors who are already into equities, we believe this is an opportune period to increase exposure and average the existing portfolios.”

First Capital is an investment bank providing a full range of financial advisory and services. The Company’s research delivers a heightened perspective in fundamental research aiding Share Market Investment in Sri Lanka. The Company’s best-in-class research team provide dynamic reports including economic reviews and proprietary research, encompassing fundamental, quantitative and technical analysis. With fundamental research coverage of 62 listed securities (reflecting approximately 65% market capitalization) across 15 sectors in Share Market Investment in Sri Lanka.

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.

Atchuthan Srirangan, Assistant Manager – Research, at First Capital on the Bond and equity Market performance – 16.04.2019

Treasury Bills and Bonds in Sri Lanka

Atchuthan Srirangan, Assistant Manager – Research, at First Capital on the bond and equity market performance – 16.04.2019

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.

First Capital Holdings PLC is an investment bank and is the pioneer non-bank affiliated Primary Dealer in Treasury Bills and Bonds in Sri Lanka. With a track record of over 25 years, the Company was the first licensed primary dealer appointed by the Central Bank and is also the only listed and rated primary dealer in Treasury Bills and Bonds in Sri Lanka
First Capital delivers the only source for fixed income research in the local financial services industry. The Company’s best-in-class research team provide dynamic reports including economic reviews and proprietary research, encompassing fundamental, quantitative and technical analysis.

1-Yr T-bill records at single-digit 9.99 per cent

CEYLON TODAY | 12.04.2019

Treasury Bills and Bonds in Sri Lanka

Accelerate equity accumulation to 80 per cent exposure

CEYLON TODAY | 11.04.2019

Investment in Sri Lanka

In our last update on 26 December 2018, equity exposure was increased to 60 per cent (from 50 per cent) despite the risk associated in the economy and the weak outlook in the 1Q2019. During the three months (26 December – 2 April) the ASPI dipped by seven per cent, with panic selling among all fronts on the back of weak earnings.

However, the market has recovered over 130 points in the last six days, signaling a bottoming-out effect. We recommend increasing equity exposure upto 80 per cent reducing cash allocation from 40 per cent to 20 per cent, on the backdrop of the positive developments on the liquidity, external sector, possible rate cut and potential foreign inflows.

As we gradually turn BULLISH on stocks, we recommend investors to accelerate accumulation into blue chip counters, which are trading at heavy discounts. For investors who are already into equities, we believe this is an opportune period to increase exposure and average the existing portfolios. On a broader note, we expect market returns to be positive over the next few quarters, with the ASPI edging back towards the 6,000 mark with some resistance towards 5,800.

Amanda Lokugamage, Senior Research Analyst, at First Capital on the bond and equity market performance – 10.04.2019

Treasury Bills and Bonds in Sri Lanka

Amanda Lokugamage, Senior Research Analyst, at First Capital on the bond and equity market performance – 10.04.2019

First Capital is an investment bank providing a full range of financial advisory and services. The Company’s research deliver heightened perspective in fundamental research aiding Share Market Investment in Sri Lanka. The Company’s best-in-class research team provide dynamic reports including economic reviews and proprietary research, encompassing fundamental, quantitative and technical analysis. With fundamental research coverage of 62 listed securities (reflecting approximately 65% market capitalization) across 15 sectors in Share Market Investment in Sri Lanka.

First Capital Holdings PLC is an investment bank and is the pioneer non-bank affiliated Primary Dealer in Treasury Bills and Bonds in Sri Lanka. With a track record of over 25 years, the Company was the first licensed primary dealer appointed by the Central Bank, and is also the only listed and rated primary dealer in Treasury Bills and Bonds in Sri Lanka
First Capital delivers the only source for fixed income research in the local financial services industry. The Company’s best-in-class research team provide dynamic reports including economic reviews and proprietary research, encompassing fundamental, quantitative and technical analysis.

Dimantha Mathew, Head of Research, at First Capital on the bond and equity market performance – 09.04.2019

Treasury Bills and Bonds in Sri Lanka

Dimantha Mathew, Head of Research, at First Capital on the bond and equity market performance – 04.04.2019

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.

First Capital Holdings PLC is an investment bank and is the pioneer non-bank affiliated Primary Dealer in Treasury Bills and Bonds in Sri Lanka. With a track record of over 25 years, the Company was the first licensed primary dealer appointed by the Central Bank, and is also the only listed and rated primary dealer in Treasury Bills and Bonds in Sri Lanka
First Capital delivers the only source for fixed income research in the local financial services industry. The Company’s best-in-class research team provide dynamic reports including economic reviews and proprietary research, encompassing fundamental, quantitative and technical analysis.

Amanda Lokugamage, Senior Research Analyst, at First Capital on the bond and equity market performance – 08.04.2019

Treasury Bills and Bonds in Sri Lanka

Amanda Lokugamage, Senior Research Analyst, at First Capital on the bond and equity market performance – 08.04.2019

First Capital is an investment bank providing a full range of financial advisory and services. The Company’s research deliver heightened perspective in fundamental research aiding Share Market Investment in Sri Lanka. The Company’s best-in-class research team provide dynamic reports including economic reviews and proprietary research, encompassing fundamental, quantitative and technical analysis. With fundamental research coverage of 62 listed securities (reflecting approximately 65% market capitalization) across 15 sectors in Share Market Investment in Sri Lanka.

First Capital Holdings PLC is an investment bank and is the pioneer non-bank affiliated Primary Dealer in Treasury Bills and Bonds in Sri Lanka. With a track record of over 25 years, the Company was the first licensed primary dealer appointed by the Central Bank, and is also the only listed and rated primary dealer in Treasury Bills and Bonds in Sri Lanka
First Capital delivers the only source for fixed income research in the local financial services industry. The Company’s best-in-class research team provide dynamic reports including economic reviews and proprietary research, encompassing fundamental, quantitative and technical analysis.

Hiruni Perera, Senior Research Analyst, at First Capital on the bond and equity market forecast – 07.04.2019

Treasury Bills and Bonds in Sri Lanka

Hiruni Perera, Senior Research Analyst, at First Capital on the bond and equity market forecast – 07.04.2019

First Capital is an investment bank providing a full range of financial advisory and services. The Company’s research deliver heightened perspective in fundamental research aiding Share Market Investment in Sri Lanka. The Company’s best-in-class research team provide dynamic reports including economic reviews and proprietary research, encompassing fundamental, quantitative and technical analysis. With fundamental research coverage of 62 listed securities (reflecting approximately 65% market capitalization) across 15 sectors in Share Market Investment in Sri Lanka.

First Capital Holdings PLC is an investment bank and is the pioneer non-bank affiliated Primary Dealer in Treasury Bills and Bonds in Sri Lanka. With a track record of over 25 years, the Company was the first licensed primary dealer appointed by the Central Bank, and is also the only listed and rated primary dealer in Treasury Bills and Bonds in Sri Lanka
First Capital delivers the only source for fixed income research in the local financial services industry. The Company’s best-in-class research team provide dynamic reports including economic reviews and proprietary research, encompassing fundamental, quantitative and technical analysis.

Government and Central Bank push banks to cut rates and lend more to SMEs

DAILY MIRROR | 05.04.2019

The government and Central Bank in lockstep are pushing the banks to cut rates and deploy more funds as loans to the micro, small and medium enterprise (MSME) sector as the authorities attempt to reinvigorate the economy, which has lost its momentum. In a hurriedly called meeting with the bank chieftains held yesterday, at the Temple Trees, Economic Reforms and Public Distribution Minister Harsha de Silva was said to have urged the banks to accelerate lending to the economy, specially to the MSMEs, Mirror Business learns.

The closed door meeting was attended by Central Bank Governor Dr. Indrajit Coomaraswamy, Finance State Minister Eran Wickramaratne, several other lawmakers and some key bureaucrats.

The banking sector officials attending the meeting, including chief executive officers, chief financial officers and other key representatives, said to have pointed out that the current political logjam and the already poor economic outlook prevented them from taking any new risks. Sri Lankan banks recorded extremely high loan impairments and a significant increase in non-performing loans (NPLs) in 2018.

Sri Lanka’s economy lost momentum since 2016 due to a combination of bad fiscal and monetary policies. The growth slowed to 3.2 percent last year, well below the economy’s potential, following the tight policies implemented since mid-2016.

The data for January showed a de-growth in private sector credit to the tune of Rs.4.2 billion and the Monetary Board in February slashed the Statutory Reserve Ratio by 100 basis points to release liquidity to the market.

The weak data would have certainly troubled the policymakers who have been taking every measure to accelerate growth, as the country is facing some crucial elections in a few months’ time, where the stakes for the ruling party remain high.

Analysts and economists blame the weak ‘animal spirits’ in the economy for the current impasse as consumers and businesses lack confidence in the system.
The consistently weak data could force the Monetary Board to relax the monetary policy next week at its second meeting for the year, to prop up the sluggish economy.

First Capital Research in a report this week said a probability of a rate cut has gone up by 40 percent after the weak fourth quarter GDP growth, which came in at a shockingly low of 1.8 percent.

They see a 50 percent chance for a cut in the Standing Lending Facility Rate by at least 25 basis points.

The fiscal policy has offered little to support the economy so far.

But the recent budget proposed multiple money deploying programmes ranging from providing funds to the newly married for housing and concessionary funding for entrepreneurs and MSMEs.

Meanwhile, the government’s flagship Enterprise Sri Lanka concessionary loan programme has already disbursed about Rs.79 billion across various sectors in little under one year since its launch, to help assist those who want state support to start a business.

First Capital Holdings PLC is an investment bank and is the pioneer non-bank affiliated Primary Dealer in Treasury Bills and Bonds in Sri Lanka. With a track record of over 25 years, the Company was the first licensed primary dealer appointed by the Central Bank, and is also the only listed and rated primary dealer in Treasury Bills and Bonds in Sri Lanka
First Capital delivers the only source for fixed income research in the local financial services industry. The Company’s best-in-class research team provide dynamic reports including economic reviews and proprietary research, encompassing fundamental, quantitative and technical analysis.

Yields continue to plunge due to positive sentiment

CEYLON TODAY | 05.04.2019

Investment bank in Sri Lanka

By First Capital Research

Weekly Yield movement and Volume

On the back of continuous foreign interest in Government Securities, coupled with positive liquidity, the secondary market witnessed a downtrend across the yield curve amidst renewed buying interest from market participants. Positive sentiment was further fuelled on the back of the Treasury bill auction outcome. At the primary bill auction, the one-year T-bill was accepted at a weighted average of 10.15 per cent (i.e.  pre-26 October levels),  while post-bill auction,  the  one year further  dipped  to  9.95-10.05 per cent levels. In the forex market, the LKR was seen continuously appreciating, with the USD/LKR rate closing at Rs 174.6 against previous week closing levels of Rs 176.2, up by 0.9 per cent WoW. Furthermore, market liquidity turned positive to record at Rs 16.6 billion after nearly six months.

Liquidity and CBSL Holdings

CBSL   market   liquidity   turned   positive   on 3 March 2019 after a lapse of nearly six months. Prior to liquidity turning positive, the liquidity deficit was widening from 26 March 2019 to 2 April 2019. Meanwhile, CBSL holdings remained broadly steady at Rs 177.6 billion.

Foreign Interest

Foreign holding increased by Rs 1.6 billion to record at Rs 167.9 billion. However, foreign holding percentage remained stable at 3.1 per cent.

Maturities for next Week

The Government Securities Market has a Treasury bill maturity, amounting to Rs 25  billion that needs to be settled on the week ending 12 April 2019.