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Weekly Government Securities Market – 18-01-2018

Weekly Yield movement & Volume

Bond market activity was very dull following last Wednesday’s (10th) bill auction which saw yield falling in a short tenor due to high demand. Today (17th Jan) primary bill auction saw yields of 182 days maturity dipping 9bps while 364 days maturity increased by 5bps.

Liquidity & CBSL Holdings

Market liquidity saw an enormous decline over past week while CBSL Holdings remained volatile over the past week but remained around the LKR 20-30B mark.

Foreign Interest

Foreigners remained net foreign seller for a 2nd consecutive week sold a further LKR 799M from foreign holding. However, with the overall outstanding Government Securities stock decreasing overall foreign holding percentage remained at 6.5% as at 10th Jan 2018.

Maturities for next Week

The Government securities market has Treasury Bill maturities on LKR22.4Bn which needs to be settled on 26th Jan 2018.

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 Holdings, with the Market Review on Ada Derana – 14.01.2018

First Capital’s Dimantha Mathew with the Market Review on Ada Derana

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.

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.

Sri Lankan shares extend declines, foreign buying curbs fall

DIMANTHA MATHEW, HEAD OF RESEARCH AT FIRST CAPITAL HOLDINGS PLC, SPEAKS TO REUTERS

JANUARY 18, 2018

COLOMBO, Jan 17 (Reuters) – Sri Lankan shares ended down for a sixth consecutive session on Wednesday, hitting their lowest close in more than two weeks, as retail investors sold blue chips, but foreign buying in the island nation’s risky assets capped further decline.

The Colombo Stock Index ended 0.13 percent weaker at 6,439.34, its lowest close since Jan. 2. It has shed 1.6 percent in the past six sessions.

“Things were a bit slower and the trend is continuing,” said Dimantha Mathew, head of research, First Capital Holdings.

“Market is coming towards a correction rather than profit-taking as the latter lasted far more than expected. However, foreigners are still on the buying side.”

Foreign investors bought shares worth net 146.2 million rupees ($949,968) on Wednesday, extending the net foreign inflow so far this year to 3 billion rupees.

They had net bought 18.5 billion rupees worth equities in 2017 and 633.5 million rupees in 2016.

Turnover stood at 491.1 million rupees on Wednesday, less than last year’s daily average of 915.3 million rupees.

Shares in Hemas Holdings Plc ended 1.8 percent lower, Sri Lanka Telecom Plc closed 1.4 percent down, and Overseas Realty Plc closed 2.9 percent lower.

$1 = 153.9000 Sri Lankan rupees Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sherry Jacob-Phillips

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.

Sri Lankan shares extend fall to 2-week closing low

DIMANTHA MATHEW, HEAD OF RESEARCH AT FIRST CAPITAL HOLDINGS PLC, SPEAKS TO REUTERS

JANUARY 18, 2018

COLOMBO, Jan 16 (Reuters) – Sri Lankan shares fell for a fifth straight session on Tuesday and closed at their lowest in two weeks, as local retail investors booked profits in blue chips ahead of a long-delayed local election next month.

The Colombo Stock Index ended 0.4 percent weaker at 6,447.61, its lowest close since Jan. 2. It has shed 1.4 percent in the past five sessions.

“The market is coming down on profit-taking by local retailers in blue chips before the next rally after the election,” said Dimantha Mathew, head of research, First Capital Holdings.

“The good sign is that foreign buying continues, it looks like foreign investors are returning back to the Sri Lankan market.”

Foreign investors bought shares worth net 539.3 million rupees ($3.51 million) on Tuesday, extending the net foreign inflow so far this year to 2.87 billion rupees.

They had net bought 18.5 billion rupees worth equities in 2017 and 633.5 million rupees in 2016.

Turnover stood at 884.6 million rupees on Tuesday, less than last year’s daily average of 915.3 million rupees.

Shares in Hatton National Bank Plc fell 1.2 percent, Commercial Bank of Ceylon Plc dropped 1.1 percent, and Nestle Lanka Plc slipped 1.1 percent.

Sri Lanka’s stock, bond, and foreign exchange markets were closed on Monday for a holiday. ($1 = 153.8500 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)

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.

Sri Lankan shares fall on profit-taking; foreign buying continues

DIMANTHA MATHEW, HEAD OF RESEARCH AT FIRST CAPITAL HOLDINGS PLC, SPEAKS TO REUTERS

JANUARY 12, 2018

COLOMBO, Jan 11 (Reuters) – Sri Lankan shares ended marginally weaker on Thursday as recent gainers witnessed profit-booking, while foreign buying in the island nation’s risky assets curbed losses.

The Colombo Stock Index ended 0.1 percent lower at 6,49502.96.

Turnover stood at 531.9 million rupees ($3.46 million) on Thursday, less than last year’s daily average of 915.3 million rupees.

Foreign investors net bought shares worth 23.9 million rupees on Thursday, extending the net foreign inflow in this year to 2.24 billion rupees.

They had net bought 18.5 billion rupees worth equities in 2017 and 633.5 million rupees in 2016.

“There was bit of profit-taking in stocks which gained last few days. Activity has come down as investors are waiting to see the direction,” said Dimantha Mathew, head of research, First Capital Holdings.

The bourse hit a near two-month high on Monday as declining interest rates and expectations of higher economic growth boosted investor appetite for risky assets.

Shares in Sri Lanka Telecom Plc ended 2.4 percent weaker while conglomerate John Keells Holdings Plc ended 0.9 percent down.

Access Engineering Company Plc, which on Wednesday said its net profit for the financial year 2017/18 will see a rise of more than 10 percent, ended 0.9 percent higher.

Treasury bill rates fell between March and December last year, mainly driven by foreign buying in Treasury bonds, resulting in a decline in interest rates.

The country’s 2018 economic growth trajectory is likely to help boost market sentiment, analysts said.

Sri Lanka’s economic growth in 2018 is forecast at 5-5.5 percent, against an anticipated four-year low of less than 4 percent last year, central bank governor Indrajit Coomaraswamy said last week. ($1 = 153.7000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Vyas Mohan)

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.

Weekly Government Securities Market Weekly Yield movement & Volume – 11/01/2018

Ceylon Today | 2018-01-11

Bond market activity remained relatively high during the past week, following the last Bill auction held on 3 January 2018, but showed some slowdown in the upward movement in yields on Wednesday (10), where the market witnessed steep buying interest, specifically in the short to mid tenures, on expectations of a dip in rates in the bill auction.

Liquidity & CBSL Holdings

Market liquidity reminded volatile over the last week remained around Rs 13-57 billion, while CBSL Holdings registered low throughout the week. However, a sudden increase in CBSL holdings was witnessed, coupled with increases in market liquidly on 3 January 2018, which could be linked to Government loan settlement during that week.

Foreign Interest

Foreigners remained net sellers for the first time after 16 consecutive weeks of foreign buying in Government securities. However, the overall outstanding Government securities foreign holding percentage dipped to 6.5% as at 3 January 2018.

Maturities for next week

The Government securities market has Treasury Bill maturities on Rs 21 billion, which needs to be settled on 19 Jan 2018. Further, the Government also needs to settle Rs 3.8 billion of Treasury Bond interest falling due on 15 Jan 2018, which will be settled on 12 Jan 2018, the last working day for settlement.

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.

 

 

Sri Lankan shares end down on profit-taking

DIMANTHA MATHEW, HEAD OF RESEARCH AT FIRST CAPITAL HOLDINGS PLC, SPEAKS TO REUTERS

JANUARY 11, 2018

COLOMBO, Jan 10 (Reuters) – Sri Lankan shares ended weaker on Wednesday as investors sold blue chips such as Ceylon Tobacco Co, but foreign investors’ appetite for risky assets limited the downslide.

The Colombo Stock Index ended 0.4 percent weaker at 6,502.96.

Turnover stood at 376 million rupees ($2.45 million) on Wednesday, well below last year’s daily average of 915.3 million rupees.

Foreign investors, which accounted for more than 65 percent of the day’s buying, net bought shares worth 18.2 million rupees on Wednesday, extending the net foreign inflow in this year to 2.23 billion rupees.

They had net bought 18.5 billion rupees worth equities in 2017 and 633.5 million rupees in 2016.

“Market is consolidating with some profit-taking,” said Dimantha Mathew, head of research, First Capital Holdings.

“We don’t see a big run at the moment. It won’t come down drastically but the market will consolidate at these levels before the next move.”

Analysts expect the market to settle at 6,600 levels.

Ceylon Tobacco Company Plc ended 3.3 percent down, while Hatton National Bank Plc closed 0.8 percent lower.

Treasury bill rates fell between March and December last year, mainly driven by foreign buying in treasury bonds, resulting in a decline in interest rates.

The country’s 2018 economic growth trajectory is likely to help boost market sentiment, analysts said.

Sri Lanka’s economic growth in 2018 is forecast at 5-5.5 percent, against an anticipated four-year low of less than 4 percent last year, central bank governor Indrajit Coomaraswamy said last week.

$1 = 153.7500 Sri Lankan rupees Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sherry Jacob-Phillips

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.

Sri Lankan shares slip from near 7-week high on profit-taking

ATCHUTHAN SRIRANGAN, SENIOR RESEARCH ANALYST AT FIRST CAPITAL HOLDINGS PLC, SPEAKS TO REUTERS

COLOMBO, Jan 9 (Reuters) – Sri Lankan shares ended lower on Tuesday, slipping from a near seven-week high hit in the previous session, as investors booked profits in blue chip stocks, while foreign traders continued buying the island nation’s risky assets.

The Colombo Stock Index ended 0.2 percent weaker at 6,527.14. The bourse rose 2.3 percent last week, in its second straight weekly gain.

Turnover stood at 546.8 million rupees ($3.56 million) on Tuesday, less than last year’s daily average of 915.3 million rupees.

Foreign investors net bought shares worth 205.5 million rupees on Tuesday, extending the net foreign inflow in this year to 2.2 billion rupees.

They had net bought 18.5 billion rupees worth equities in 2017 and 633.5 million rupees in 2016.

“It’s a small pullback due to some kind of profit-taking,” said Atchuthan Srirangan, senior research analyst, First Capital Holdings PLC.

“There was selling in John Keells. Investors will wait to see whether the selling will continue or will the market absorb the pressure.”

Analysts expect the market to settle at 6,600 levels.

Shares in leading fixed line telephone operator Sri Lanka Telecom Plc ended 4.8 percent down, while conglomerate John Keells Holdings Plc closed 0.7 percent lower.

Treasury bill rates fell 188 basis points to 216 basis points between March and end-December 2017, mainly driven by foreign buying in treasury bonds, resulting in declining market interest rates.

The country’s 2018 economic growth trajectory is likely to help boost market sentiment, analysts said.

Sri Lanka’s economic growth in 2018 is forecast at 5-5.5 percent, against an anticipated four-year low of less than 4 percent last year, central bank governor Indrajit Coomaraswamy said on Wednesday.

The central bank kept its benchmark interest rates unchanged in December, saying inflation and private sector credit growth have cooled to manageable levels as policy makers focus on supporting a slowing economy.

$1 = 153.7000 Sri Lankan rupees Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sherry Jacob-Phillips

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.

Sri Lankan shares climb to near 7-week high; Keells leads

DIMANTHA MATHEW, HEAD OF RESEARCH AT FIRST CAPITAL HOLDINGS PLC, SPEAKS TO REUTERS

JANUARY 9, 2018

COLOMBO, Jan 8 (Reuters) – Sri Lankan shares rose on Monday to a near seven-week high as blue chip shares such as John Keells Holdings Plc gained, while foreign investors continued to buy the island nation’s risky assets.

The Colombo Stock Index ended 0.4 percent firmer at 6,540.51, its highest close since Nov. 10.

The bourse rose 2.3 percent last week, in its second straight weekly gain.

Foreign buying accounted for 61.2 percent of the day’s turnover of 1.7 billion rupees.

Foreign investors net bought shares worth 33.9 million Sri Lankan rupees ($220,559.53) on Monday, extending the net foreign inflow in this year to 2.0 billion rupees.

They had net bought 18.5 billion rupees worth equities in 2017 and 633.5 million rupees in 2016.

“The buying interest is continuing as investors are quite bullish,” said Dimantha Mathew, head of research at First Capital Holdings.

“There was a lot of foreign trading and investors are buying blue chip shares like John Keells. We expect the market to settle at 6,600 levels and there could be some profit-taking at those levels.”

Shares in conglomerate John Keells Holdings Plc rose 3.1 percent, Nestle Lanka Plc gained 3.5 percent and Lion Brewery Plc climbed 4.6 percent.

Analysts said the positive trend will continue due to declining market interest rates.

Treasury bill rates fell 188 basis points to 216 basis points between March and end-December 2017, mainly driven by foreign buying in treasury bonds, resulting in declining market interest rates.

The country’s 2018 economic growth trajectory is likely to help boost market sentiment, analysts said.

Sri Lanka’s economic growth in 2018 is forecast at 5-5.5 percent, against an anticipated four-year low of less than 4 percent last year, central bank Governor Indrajit Coomaraswamy said on Wednesday.

The central bank kept its benchmark interest rates unchanged last week, saying inflation and private sector credit growth have cooled to manageable levels as policy makers focus on supporting a slowing economy. ($1 = 153.7000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Vyas Mohan)

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.

Sri Lankan bank net interest margins seen stabilizing

Economy Next – 05.01.2018

By First Capital Research

Sri Lanka’s listed banks are expected to have a steady phase of growth during the 2018-20 period with net interest margins stabilising, stockbrokers First Capital said in a research report.

It attributed the forecast to stable credit growth, improving economic growth supporting lower non performing loans and lower interest rate volatility leading to stable NIMs.

“We expect the banking sector interest spreads to stabilize in 2017E and thereon,” it said.

The trend would be backed by the implementation of an inflation targeting framework by the central bank, improved government revenue streams and increased foreign inflows into government securities market, First Capital said.

The introduction of a Liability Management Bill is expected to reduce volatility and stabilize the interest rate and rate of inflation while the flexible exchange rate policy further supports it.

Improved government revenue and increased foreign inflows are expected to stabilize interest rates, the report on the banking sector said.

“The stable interest rate regime is expected to result in more stabilized interest margins in the banking sector.”

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.