Sri Lanka shares edge up; tax proposals weigh

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

 

Sri Lankan shares ended slightly higher on Wednesday as investors sought bargains in blue-chips but concerns over recent budget tax proposals weighed on sentiment.

The Colombo stock index ended up 0.15 percent at 6,241.10, ending three sessions of losses.  The index hit a near-eight-month low on Tuesday on concerns that the proposed hike in various taxes and fees would reduce disposable income and challenge consumption-led growth, analysts said.

“Market is up on bargain-hunting by foreigners but it’s not a major factor at the moment unless the trend is going to continue,” said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

“I feel its like a one-off thing. Investors are concerned over the current uncertainty and we could see volatility in the market with the current economic uncertainty.”

The government aims to boost its 2017 tax revenue by 27 percent to 1.82 trillion rupees year-on-year and meet a commitment given to the International Monetary Fund in return for a $1.5 billion loan in May.

The market shrugged off the central bank’s key monetary policy decision on Tuesday to keep rates unchanged. Brokers said investors are concerned about sustainability of rates.  Turnover stood at 579.6 million rupees ($3.89 million), much less than this year’s daily average of 694.6 million rupees.

Foreign investors bought a net 48.1 million rupees worth of shares on Wednesday, but have been net sellers of 1.64 billion rupees worth of shares so far this year.

Shares of conglomerate John Keells Holdings Plc jumped 2.63 percent while Dialog Axiata Plc rose 2.97 percent and Ceylon Tobacco Company Plc rose 0.47 percent.

($1 = 148.9000 Sri Lankan rupees)

(Reporting by Ranga Sirilal; Editing by Sunil Nair)

 

Sri Lanka shares hit near 8-mth low on foreign fund outflow

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

 

Sri Lankan shares fell on Tuesday for the third straight session to end at a near eight-month low as foreign investors trimmed their exposure to the island nation’s risky assets amid concerns over budget tax proposals.

The Colombo stock index ended 0.11 percent down at 6,231.87, its lowest close since April 7. The bourse lost 1.17 percent last week, marking its third straight weekly fall.

A proposed hike in various taxes and fees would reduce disposable income and challenge consumption-led growth, analysts said.

“Investors are concerned over the current uncertainty and they are worried over the sustainability of the rates given the current economic uncertainty,” said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

The government aims to boost its 2017 tax revenue by 27 percent to 1.82 trillion rupees year-on-year and meet a commitment given to the International Monetary Fund in return for a $1.5 billion loan in May.  The market shrugged off the central bank’s key monetary policy decision on Tuesday to keep rates unchanged. Brokers said investors are concerned about the sustainability of the rates.

At the post-monetary policy media briefing, central bank Governor Indrajith Coomaraswamy said aggressive monetary policy tightening by the U.S. Federal Reserve will have an impact on the foreign outflow.  Turnover was 1.01 billion rupees ($6.78 million), more than this year’s daily average of 695.1 million rupees.

Foreign investors sold a net 295.8 million rupees worth of shares on Tuesday, extending the year-to-date net foreign selling to 1.68 billion rupees.

Shares of Dialog Axiata Plc fell 0.98 percent while Asiri Hospitals Plc fell 0.77 percent.

($1 = 149.0000 Sri Lankan rupees)

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

 

Sri Lanka shares end little changed; turnover slumps

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

reuters

Sri Lankan shares ended little changed on Friday, hovering near eight-month lows, while turnover slumped as investors kept to the sidelines on concerns over recent tax proposals.

The Colombo stock index ended 0.02 percent down at 6,252.12, and lost 1.17 percent during the week, marking its third straight weekly fall.  The bourse hit its lowest close since April 7 on Wednesday on caution over the budget tax proposals, including revisions in corporate and withholding taxes.

The government aims to boost its 2017 tax revenue by 27 percent to 1.82 trillion rupees year-on-year, and meet a commitment given to the International Monetary Fund in return for a $1.5 billion loan in May.

“Investors area worried and staying on the sideline with the uncertainty haunting the markets,” said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

Analysts said the increase in various taxes and fees would reduce disposable income and challenge consumption-led growth.  Turnover was 110.5 million rupees ($745,614.04), the lowest since March 17, 2014 and well below this year’s daily average of 695.1 million rupees.

Foreign investors bought a net 19.6 million rupees worth of shares on Friday, but have been net sellers of 1.25 billion rupees worth of shares so far this year.

Shares of Ceylon Cold Store Plc fell 7.35 percent while conglomerate John Keells Holdings Plc fell 0.89 percent and Dialog Axiata Plc fell 1.92 percent.

($1 = 148.2000 Sri Lankan rupees)

(Reporting by Ranga Sirilal; Editing by Sunil Nair)

 

 

 

Sri Lanka shares end 8-day losing streak

stock

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

Sri Lankan shares snapped an eight-day falling streak to end slightly higher on Thursday, but concerns over recent tax proposals continued to weigh on sentiment.

The bourse hit its lowest close since April 7 on Wednesday on caution over the budget tax proposals, including revisions in corporate and withholding taxes.

The government aims to boost its 2017 tax revenue by 27 percent to 1.82 trillion rupees year-on-year, and meet a commitment given to the International Monetary Fund in return for a $1.5 billion loan in May.  The benchmark index of the Colombo Stock Exchange ended up 0.17 percent at 6,253.28. The bourse has fallen 2.77 percent over the past eight sessions through Wednesday after the budget was presented on Nov. 10.

The index was in oversold territory, with the 14-day relative strength index at 19.845 versus Wednesday’s 15.978, Thomson Reuters data showed. A level between 30 and 70 indicates the market is neutral.

“Bargain-hunting was there but no big level of buying interest was seen… as investors are cautious due to rising interest rates,” said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

Foreign investors sold a net 5.6 million rupees ($37,800) worth of shares on Thursday, extending the year-to-date net foreign outflow to 1.27 billion rupees. Analysts said the increase in various taxes and fees would reduce disposable income and challenge consumption-led growth.

Turnover was 516.9 million rupees, less than this year’s daily average of 698.6 million rupees.

Shares of Ceylon Cold Store Plc jumped 14.54 percent while conglomerate John Keells Holdings Plc rose 0.55 percent and Lanka ORIX leasing Plc fell 1.86 percent.

($1 = 148.2000 Sri Lankan rupees)

(Reporting by Ranga Sirilal; Editing by Sunil Nair)

 

Sri Lanka shares fall for 8th session; tax proposals weigh

First Capital’s Head of Research, Dimantha Mathew, speaks to Reuters

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Sri Lankan shares extended falls to an eighth session on Wednesday, posting their lowest close since April 7, as investor sentiment was hit by budget tax proposals, including revisions in corporate and withholding taxes.

The government aims to boost its 2017 tax revenue by 27 percent to 1.82 trillion rupees year-on-year, and meet a commitment given to the International Monetary Fund in return for a $1.5 billion loan in May.

The benchmark index of the Colombo Stock Exchange ended down 0.21 percent at 6,242.68. It has fallen 2.77 percent over the past eight sessions after the budget was presented on Nov. 10.  The index was in oversold territory, with the 14-day relative strength index at 15.978 versus Tuesday’s 16.929, Thomson Reuters data showed. A level between 30 and 70 indicates the market is neutral.

“Market is down in low trade as investors are on wait-and-see mode,” said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

Foreign investors sold a net 100.7 million rupees ($678,571.43) worth of shares on Wednesday, extending the year-to-date net foreign outflow to 1.27 billion rupees.

Analysts said the increase in various taxes and fees would reduce disposable income and challenge consumption-led growth.  Turnover was 284.9 million rupees, well below this year’s daily average of 698.6 million rupees.

Shares of Lion Brewery Plc fell 6.81 percent, while Hemas Holdings Plc declined 5.00 percent and Ceylon Tobacco Company Plc fell 1.24.

($1 = 148.4000 Sri Lankan rupees)

(Reporting by Ranga Sirilal; Editing by Sunil Nair)

 

Sri Lankan shares fall for 6th session; tax proposals weigh on mkt

First Capital’s Head of Research, Dimantha Mathew, speaks to Reuters

reuters

Sri Lankan shares fell for a sixth straight session on Monday, posting their lowest close in four and a half months, in thin volume as investor sentiment was hit by budget tax proposals, including revisions in corporate and withholding taxes.

The government aims to boost its 2017 tax revenue by 27 percent to 1.82 trillion rupees ($12.36 billion) year-on-year, and meet a commitment given to the International Monetary Fund in return for a $1.5 billion loan in May.

The benchmark index of the Colombo Stock Exchange ended down 0.8 percent, or 50.85 points, at 6,275.26, its lowest close since July 5. It has declined 2.27 percent over the past six sessions after the budget was presented on Nov. 10.

The index was in oversold territory, with the 14-day relative strength index at 18.405 versus Friday’s 23.399, Thomson Reuters data showed. A level between 30 and 70 indicates the market is neutral.

“Confidence levels are very low and selling pressure is starting to increase with continued foreign selling,” said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.  “No catalyst at the moment to reverse the trend amid global worries.”

Analysts said some of the budget proposals were still unclear, and there were concerns that some of them could be reversed like last year.

The market shrugged off a move by the Securities and Exchange Commission to change the minimum floating rule to raise market liquidity.

Foreign investors sold a net 47.98 million rupees ($324,298.75) of shares on Monday, extending the year-to-date net foreign outflow of 1.16 billion rupee of shares.

 

Analysts said the increase in various taxes and fees would reduce the disposable income of people and challenge the consumption-led growth.

Turnover was 395.4 million rupees, well below this year’s daily average of 700.8 million rupees.  Shares of conglomerate John Keells Holdings Plc fell 1.16 percent, while Asiri Hospital Holdings Plc dropped 5.54 percent.

Shares of Sampath Bank Plc fell 1.88 percent, while Sri Lanka Telecom Plc dropped 1.41 percent.

($1 = 147.9500 Sri Lankan rupees)

(Reporting by Ranga Sirilal; Editing by Subhranshu Sahu)

 

Sri Lankan shares fall for fifth straight session; tax proposals weigh

First Capital’s Head of Research, Dimantha Mathew, speaks to Reuters

Sri Lankan shares ended for a fifth straight session of declines on Friday, and reached their lowest closing level in more than four months, in thin volume as investor sentiment was hit by budget tax proposals.

The government aims to boost its 2017 tax revenue by 27 percent to 1.82 trillion rupees ($12.36 billion) year-on-year, including revisions in corporate and withholding taxes and meet a commitment given to the International Monetary Fund in return for a $1.5 billion loan in May.

The benchmark index of the Colombo Stock Exchange ended down 0.29 percent at 6,326.11, its lowest close since July 7. It declined 1.5 percent in the last five sessions after the budget was presented on Nov. 10.  The index was in the oversold territory, with the 14-day relative strength index at 23.399 versus Thursday’s 25.714, Thomson Reuters data showed. A level between 30 and 70 indicates the market is neutral.

“Investors are worried with the rising interest rates after the T-bill yields rose this week. There isn’t a lot of selling pressure and investors are awaiting cautiously,” said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

Analysts said some of the budget proposals are still unclear, and there are concerns that some of them could be reversed, like what occurred last year.

The market shrugged off a move by Sri Lanka’s Securities and Exchange Commission (SEC) to change its minimum floating rule to raise market liquidity. Foreign investors sold a net 31.95 million rupees worth of shares on Friday extending the year-to-date net foreign outflow of 1.11 billion rupee worth of shares.

Analysts said the increase in various taxes and fees would reduce the disposable income of people and challenge the consumption-led growth.

Turnover was 272.7 million rupees ($1.84 million), well around a third of this year’s daily average of 702.2 million rupees. Shares of Sri Lanka Telecom Plc dropped 3.79 percent, while Hatton National Bank Plc slid 1.59 percent.

($1 = 147.8500 Sri Lankan rupees)

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

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First Capital Holdings PLC reports Rs. 406Mn consolidated PAT for the first half of 2016/2017

First Capital Holdings PLC, reported significant growth in the first half of 2016/17 recording a consolidated turnover of Rs. 1.78Bn.  The investment bank’s consolidated profit after tax increased to Rs. 406Mn compared to Rs. 4Mn in the corresponding period of the previous year.

dilshan-wirasekara-ceo-first-capital-holdings-plc-2016

The group’s primary dealer arm, First Capital Treasuries PLC, was the leading contributor towards the financial results for the period under review.  The company reported a profit after tax of Rs. 371Mn for the 1st half of 2016/17 (2015/16 – loss after tax of Rs. 97Mn).

First Capital Treasuries, is the pioneer non-bank Primary Dealer appointed by Central Bank and is listed on the Colombo Stock Exchange.  Further, the company’s credit rating was reaffirmed by ICRA Lanka at “A-” with a stable outlook in September 2016.

The Capital Markets Advisory of the Group, First Capital Limited, which specialises in structuring and placement of corporate debt securities, successfully mobilised Rs. 6.8bn through listed debentures, asset backed securitisations and other corporate debt securities.

Research driven investment recommendations published by First Capital Equities (Private) Limited  the Group’s stockbroker business have collectively outperformed the broad market index ASPI and the liquid counter index S&P SL20 in the past 2 years.

“We are pleased with our performance to date and expect to navigate the unsettled market conditions with caution during the second half of the financial year.  The Group will continue to build on the current growth momentum across all its subsidiary businesses while expanding on research and equity advisory services” said Dilshan Wirasekara, CEO of First Capital Holdings PLC.

Company information –

First Capital Holdings PLC (First Capital Group) is an investment bank comprising of First Capital Treasuries PLC, First Capital Limited, First Capital Asset Management Limited, First Capital Equities (Private) Limited, First Capital Markets Limited and First Capital Trustee Services (Private) Limited.  The company’s Board of Directors comprises of Ms. Manjula Mathews – Executive Chairperson, Dinesh Schaffter – Managing Director, Eardley Perera, Ms. Minette Perera, Nishan Fernando and Chandana de Silva as Independent Directors.

The company is listed on the Colombo Stock Exchange and is rated “A-” with a stable outlook by ICRA Lanka.

Sri Lankan shares hit 2-week closing low; budget proposals weigh

First Capital’s Head of Research, Dimantha Mathew, speaks to Reuters

Sri Lankan shares on Tuesday hit a two-week closing low in thin trade as investor sentiment was dented by last week’s budget proposals that were announced to revise corporate and withholding taxes and boost revenue.  The government aims to boost its 2017 tax revenue by 27 percent to 1.82 trillion rupees ($12.36 billion) year on year, to meet a commitment given to the International Monetary Fund in return for a $1.5 billion loan in May.

The benchmark index of the Colombo Stock Exchange ended down 0.15 percent at 6,406.16, hitting its lowest close since Nov. 1. Foreign investors were net sellers for the first time in nine sessions; they sold a net 125.4 million rupees worth of shares on Tuesday. They have net sold 1.01 billion rupees worth of shares so far this year.

“Things are very slow as investors are awaiting direction and more clarity on the taxes imposed by the budget,” said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

“Increases in various taxes, including the withholding tax and corporate tax, have impacted the capital markets.”

Analysts said the increase in various taxes and fees will reduce the disposable income of the people and challenge the consumption-led growth.

Turnover was 470.3 million rupees, less than this year’s daily average of 707.3 million rupees. Shares of conglomerate John Keels Holdings Plc fell 1.34 percent while Dialog Axiata Plc dropped 1.79 percent.

($1 = 147.3000 Sri Lankan rupees)

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

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Sri Lankan rupee weaker as regional currencies drop

First Capital’s Head of Research, Dimantha Mathew, speaks to Reuters Tuesday Nov 11, 2016

lankan-rupee

Nov 11 The Sri Lankan rupee edged down on Friday, in line with a selloff in emerging market currencies, as investors feared higher U.S. interest rates under incoming President Donald Trump will spark capital outflows from those markets.

The weakness in the rupee followed Sri Lanka’s budget proposals on Thursday to revise corporate and withholding taxes to boost revenue and cut the 2017 fiscal deficit to 4.6 percent of GDP from this year’s 5.4 percent.

However, currency dealers said it was too early to see the real impact of the national budget, but a high-tax regime could put some pressure on the currency and support high interest rates.  Rupee forwards were active, with spot-next forwards trading at 148.00/10 per dollar at 0706 GMT, compared with Thursday’s close of 147.85/95.

One-week forwards were at 148.20/30 per dollar, weaker from Thursday’s close of 148.00/10. “Dollar demand is building up,” a currency dealer said requesting anonymity. “Globally the dollar is strengthening.”

Foreign outflows also weighed on the currency sentiment, as foreign investors net sold 24.5 billion rupees ($165.6 million) worth of government securities in the three weeks ended Nov. 2, data from the central bank showed.  Sri Lankan shares were marginally higher, with the benchmark Colombo stock index up 0.08 percent at 6,426.10 as of 0709 GMT. Turnover stood at 83.3 million rupees ($564,745.76).

“Overall (the budget) looks positive… but investors are awaiting clarity on proposals,” said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

($1 = 147.5000 Sri Lankan rupees)

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