Register Online

Sri Lankan stocks slip as political uncertainty continues; banks weigh

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

COLOMBO, April 26 (Reuters) – Sri Lankan shares edged down in dull trade on Thursday and settled near their lowest close in more than one week hit earlier in the week as continued political uncertainty dampened sentiment, stockbrokers said.

The market has been awaiting signs of political stability after President Maithripala Sirisena suspended parliament until May 8. A cabinet reshuffle was expected on Monday, but government sources said it had been delayed.

Fitch Rating agency on Thursday said that recent political developments in Sri Lanka have created some uncertainty over reform momentum and fiscal consolidation, and prolonged upheaval could undermine investor confidence ahead of large external debt maturities in 2019-22.

The Colombo stock index ended 0.18 percent weaker at 6,521.74. The index gained 0.88 percent last week.

“Market is down because of a fall in banking shares,” said Dimantha Mathew, head of research, First Capital Holdings.

“Most of the investors are still on the sideline due to the prevailing political uncertainty.”

Turnover stood at 390.2 million rupees ($2.47 million), around a third of this year’s daily average of 1.1 billion rupees.

Foreign investors bought shares worth a net 2.9 million rupees on Thursday, but they have been net sellers of 885.7 million rupees worth of equities so far this year.

Shares of Lanka ORIX Leasing Company Plc fell 3.1 percent while Chevron Lubricants Lanka Plc ended 4.6 percent weaker.

Biggest listed lender Commercial Bank of Ceylon closed 0.1 percent down and Carson Cumberbatch Plc lost 2.8 percent. ($1 = 157.7000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Vyas Mohan)

Dimantha Mathew, Head of Research at First Capital Holdings, with the Market Review on Ada Derana – 25.04.2018

 

 

 

 

 

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.

Sri Lanka’s Bid to Boost Value of Colombo Stock Exchange Set for Analysis in 2018 Report

First Capital signs third MoU with Oxford Business Group

 

Stock_Market_Sri_Lanka

Andrea Tsiachtsiri, Country Director, Oxford Business Group, Dilshan Wirasekara Director / CEO First Capital Holdings PLC, Nisansala Munasinghe Manager Branding and Marketing Services First Capital Holdings PLC

First Capital Holdings signs third MoU with Oxford Business Group Colombo, April 2018: A new report by the global research and consultancy firm Oxford Business Group (OBG) on Sri Lanka’s economy will highlight efforts under way to encourage the larger, state-owned banks to list on the Colombo Stock Exchange (CSE).
The Report: Sri Lanka 2018 will track the measures put in place to facilitate the listing of major lenders, which forms part of a broader, national bid to generate capital and boost the exchange’s value. OBG’s publication will also provide wide-ranging analysis of the other segments that are expected to play a key role in the development of Sri Lanka’s capital markets. These include companies producing building materials such as cement and commercial vehicle retailers, both of which look set to benefit from heightened construction activity, fuelled by a growing project pipeline.

 

In addition, the report will consider the positive impact that improved access to the EU market under the Generalised System of Preferences Plus is having on Sri Lanka’s exports, which bodes well for manufacturers and firms operating in related sectors, such as transport and logistics.
Investment Bank, First Capital Holdings PLC has signed a third memorandum of understanding (MoU) with OBG for its forthcoming publication. Under the MoU, the firm will once again share its experience of the local capital market help to produce the Capital Markets Chapter of The Report: Sri Lanka 2018, contributing in-depth analysis of both the Equity stock and Government Securities bond markets.
Dilshan Wirasekara Dilshan Wirasekera, Director and CEO of First Capital Holdings, said he looked forward to working with OBG’s team once again and documenting the latest developments changing in the investment landscape at the CSE against Sri Lanka’s changing rapidly economic economy evolving economy landscape.

 

“Forecasts point to a revival in private sector credit growth in the second part of 2018, which is expected to boost the performance of Sri Lanka’s banks, enabling them to benefit from robust levels of capitalisation and, in turn, better returns on equity,” he said. “With the country’s major infrastructure drive and other construction projects already helping to stimulate economic activity and attract greater inflows, the outlook for capital market expansion looks bright.”

 

Welcoming First Capital Holdings on board, Michael Todemann, OBG’s editorial manager in Sri Lanka, agreed that while private sector credit growth had eased last year, data suggested it was on track to reach a targeted 16% in 2018.
“A national drive under way to support smaller enterprises and encourage FDI is steering the country towards the next phase of its economic development, with new measures aimed at enhancing the business climate expected to provide a further boost,” he said. “The team at First Capital Holdings are known to be experts in their field, with an in-depth knowledge of the local and regional markets. I’m delighted that our readers will once again benefit from their analysis of market activity and potential opportunities at the CSE.”
The Report: Sri Lanka 2018 will mark the culmination of more than six months of field research by a team of analysts from Oxford Business Group. It will be a vital guide to the many facets of the country, including its macroeconomics, infrastructure, banking and other sectoral developments.

 

The publication will also contain contributions from leading representatives, including: President Maithripala Sirisena; Greg Hands, the UK’s minister of state for international trade; Changyong Rhee, director of Asia and Pacific Department for the IMF; and Qitao Liu, chairman, China Communications Construction Company. It will be available in print and online.

About Oxford Business Group

 

Oxford Business Group is a global research and consultancy company with a presence in over 30 countries, from Asia, Africa and the Middle East to the Americas. A distinctive and respected provider of on-the- ground intelligence on many of the world’s fastest growing markets, OBG has offices in London, Berlin, Dubai and Istanbul, and a network of local bureaus across the countries in which we operate.
The Report: Sri Lanka 2018 will be produced with Board of Investment and the Ceylon Chamber of Commerce. Contributions will also be made by First Capital Holdings, PwC, HSBC and John Wilson Partners.

Through its range of products, OBG offers comprehensive and accurate analysis of macroeconomic and sectoral developments, including banking, capital markets, tourism, energy, construction, transport, industry and ICT. OBG provides business intelligence to its subscribers through multiple platforms: Economic News and Views, OBG Business Barometer – CEO Survey, Roundtables and conferences, Global Platform – exclusive video interviews, The Report publications and its Consultancy division.

 

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.

Atchuthan Srirangan, Assistant Manager – Research at First Capital Holdings, with the Market Review on Ada Derana – 25.04.2018

Share_Market_Sri_Lanka

First Capital’s Atchuthan Srirangan 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 stocks gain on foreign buying

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

APRIL 25, 2018

COLOMBO, April 25 (Reuters) – Sri Lankan shares edged higher on Wednesday from their lowest close in more than one week as foreign buying provided some support to the market amid continued political uncertainty, stockbrokers said.

Foreign investors bought shares worth a net 315.9 million rupees ($2.0 million) on Wednesday, but they have been net sellers of 999.5 million rupees worth of equities so far this year.

The market has been awaiting signs of political stability after President Maithripala Sirisena suspended parliament until May 8. A cabinet reshuffle was expected on Monday, but government sources said it had been delayed.

The Colombo stock index ended 0.26 percent firmer at 6,533.63, edging up from its lowest close since April 16 hit on Tuesday. The index gained 0.88 percent last week.

“High level of foreign interest in banking shares such as Sampath Bank helped the index,” said Dimantha Mathew, head of research, First Capital Holdings.

“We have also seen some interest in blue chips after a while.”

Turnover stood at 845.4 million rupees, less than this year’s daily average of 1.1 billion rupees.

Shares of conglomerate John Keells Holdings Plc rose 1.9 percent, while Ceylon Cold Stores Plc ended 3.2 percent firmer.

Distilleries Company of Sri Lanka Plc closed 2.4 percent higher and Sampath Bank gained 1.3 percent. ($1 = 157.6000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Amrutha Gayathri)

Atchuthan Srirangan, Assistant Manager – research, First Capital Holdings PLC discussed Discussion regarding long-term beneficial of recently implemented Inland Revenue Bill in Sri Lanka.

Share_Market_Sri Lanka

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.

Atchuthan Srirangan, Assistant Manager – Research at First Capital Holdings, with the Market Review on Ada Derana – 22.04.2018

Share_Market_Sri Lanka

First Capital’s Atchuthan Srirangan 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 stocks end higher in light trade; banks, telcos lead

ATCHUTHAN SRIRANGAN, ASSISTANT  MANAGER – RESEARCH AT FIRST CAPITAL HOLDINGS PLC, SPEAKS TO REUTERS

April 23, 2018

COLOMBO, April 20 (Reuters) – Sri Lankan share index ended slightly firmer in a holiday-shortened trading session on Friday, hovering near a five-week closing high hit earlier in the week, as investors picked up banking and telecommunication shares.

Many market participants continued to stay away due to extended holidays after the Sinhala-Tamil New Year festival last weekend, brokers said.

The market was closed at 0630 GMT on Friday due to a half-a-day bank holiday.

The Colombo stock index ended 0.19 percent firmer at 6,540.97. The index gained 0.88 percent during the week.

“Blue-chip counters pushed the index higher in low trade as most investors are on the sidelines,” said Atchuthan Srirangan, assistant manager – research, First Capital Holdings PLC.

“Some crossings helped to boost the turnover.

Turnover stood at 418.5 million rupees ($2.68 million), less than half of this year’s daily average of 1.1 billion rupees.

Shares of Lanka ORIX Leasing Company Plc ended 1.5 percent firmer, while Union Bank Plc closed up 4.9 percent and Sri Lanka Telecom Plc ended up 1.8 percent.

The market has been waiting for some political stability after President Maithripala Sirisena suspended parliament until May 8, brokers said.

Foreign investors sold shares worth a net 5.3 million rupees on Friday, extending the year-to-date net foreign outflow to 1.28 billion rupees worth of equities.

The central bank unexpectedly cut its key lending rate by 25 basis points early this month, as policy makers sought to revitalise an economy growing at its weakest pace in 16 years and facing heightened political uncertainty.

Sri Lankan stocks slip as investors sell select blue chips

ATCHUTHAN SRIRANGAN, ASSISTANT  MANAGER – RESEARCH AT FIRST CAPITAL HOLDINGS PLC, SPEAKS TO REUTERS

April 20, 2018

COLOMBO, April 19 (Reuters) – Sri Lankan share index slipped on Thursday from a five-week closing high hit the previous day, snapping a six-session winning streak, as investors offloaded select blue-chip stocks in low volumes.

Many market participants stayed away due to extended holidays after the Sinhala-Tamil New Year festival last weekend, brokers said.

The Colombo stock index ended 0.36 percent weaker at 6,528.57, slipping from its highest close since March 13 hit on Wednesday. The index gained 0.44 percent last week.

“Market came down on blue-chip selling in low volumes,” said Atchuthan Srirangan, assistant manager – research, First Capital Holdings PLC.

“Just 159 shares of Ceylon Tobacco Co (CTC) were traded. The small volume of selling in CTC dragged the market down,” he added.

Turnover stood at 269.8 million rupees ($1.73 million), less than a quarter of this year’s daily average of 1.11 billion rupees.

Shares of Ceylon Tobacco ended 2.5 percent weaker, while Lanka ORIX Leasing Company Plc closed 2.2 percent down and Melstacorp Ltd closed 1.00 percent lower.

The market has been waiting for some political stability after President Maithripala Sirisena suspended parliament until May 8, brokers said.

Foreign investors bought shares worth a net 57.1 million rupees on Thursday, but they have net sold 1.27 billion rupees worth of equities so far this year.

The central bank unexpectedly cut its key lending rate by 25 basis points early this month, as policy makers sought to revitalise an economy growing at its weakest pace in 16 years and facing heightened political uncertainty.

Weak link between CSE and global market trends hinders earnings growth: analysts

Daily Mirror | 18.04.2018

The weak link between Colombo Stock Exchange (CSE) and global market trends is keeping earnings growth of CSE indices below growth rates of competing markets.
A latest regional World Bank report indicated the correlation between global trends and stock market developments in Pakistan and Sri Lanka are weaker compared to other regional peers such as India and Bangladesh.
CSE’s main indices only recorded single digit growths in 2017 against the double digital growths across the global markets.

 

CSE’s S&P SL Index comprising of top 20 blue-chip companies only recorded a gain of 4.93 percent in 2017 while All Share Price Index (ASPI) gained in 2.39 percent, which were well below the performance of global markets such as India’s BSE Sensex, which gained 29.58 percent and the NSE Nifty that recorded a gain of 30.28 percent.

 

Similarly, Hong Kong’s HIS gained 41 percent, United States’ DOW 30.28 percent, Philippine’s Pcomp 27.15 percent and Brazil’s IBOV 28.6 percent in 2017.

 

Speaking to Mirror Business, First Capital Holdings’ Head of Research, Dimantha Mathew said CSE needs to plug itself into global markets in order to achieve high growth in earnings as Sri Lanka’s capital market is small compared to most of the global markets.

 

He added that being connected to global trends is a factor which foreign investors view positively despite increased volatility.
Stock market analysts opine that lack of political will in capital market reforms, inactivity of institutional investors and the absence of external sector listed companies in CSE were major factors for the weak link.

 
Candor Group Director, Ravi Abeysuriya said the prime reason for the weak link was due to the inactivity of institutional players in the market, which includes both state and private institutional investors.
According to both Mathew and Abeysuriya, the state institutions which make up the majority of institutional investors in the CSE have been virtually non-existent over the last 3-4 years, which had adversely impacted the market sentiment and the confidence of private institutional investors.

 
“There has been a significant slowdown of trading activities of local institutions—mainly government related institutions. EPF, Sri Lanka Insurance and NSB were virtually non-existent in the market, that’s why the activity died off in the market in terms of trading,” said Mathew.

 

Abeysuriya emphasized that Sri Lanka’s failure to attract local investors to the market was influenced by political issues and lack of political will to drive capital market reforms.
“Never-ending investigation on stock market manipulations and other complaints have been dragging on for years without a judgment and are adversely impacting the investor confidence and sentiment” Abeysuriya said.

 

Mathew said CSE remains to be an attractive market for foreign investors due to cheap valuations which are at the 10-11 times of P/E ratio at the moment. However, he added that low valuations are holding off the large export-oriented companies such as Brandix and MAS from entering into stock market.
He said that Sri Lanka’s record high foreign inflows to the CSE last year was due to “extremely low” valuations and positive sentiment of global investors on the South Asian region.

 

Mathew noted that Sri Lanka’s recent successful sovereign bond issue of US $2.5 billion will positively impact the foreign investor participation in the CSE in coming months. However, he raised concerns over the delay in government’s reform agenda, which is likely to impact the foreign investor sentiment.

 

Meanwhile, Abeysuriya noted that the delays over implementing the proposed new Securities Exchange Act could result in the country losing US $250 million loan committed by ADB to implement the Capital Market Development Programme (CMDP) in Sri Lanka.