In its efforts to facilitate knowledge-sharing about the investment market and encourage investor awareness, First Capital Holdings PLC held a special presentation on Unit Trust Investments, at the Management Club Professional Development Program last week. Here First Capital Holdings PLC Manager – Business Development and Corporate Planning Kosala Liyanagedara addressing the audience. The presentation encompassed various aspects of Unit Trust Investments and trends in the financial market.
Colombo, 26th August 2014:
An Investor Awareness Forum for regionally based corporative societies and entrepreneurs in Kandy and Kurunegala was organized by First Capital Holdings recently. The knowledge sharing session, which was held in Kandy, highlighted key developments and trends in the financial market while equipping investors with pivotal information pertaining to future investment decisions.
The audience was taken through the gamut of investment options available for potential investors and the process of creating, protecting and maximizing their money through secure investment instruments. A panel of speakers stressed the importance of taking a structured approach when analysing financial objectives and mapping out investment strategies and goals and expanded on the various types of Unit Trusts and its operating mechanisms.
Further, the benefits of having the expertise of a Fund Manager attuned to the current investment environment and its variables, while interacting regularly with the market, were drawn out. The audience was also taken through the intricacies of the stock market and its past and present economic fluctuations. Also speaking to the audience, Adrian Perera – CEO of Lanka Rating Agency, differentiated between Market Rating and Credit Rating and advised the audience on some rudimentary pitfalls to avoid when formulating investment decisions.
“This is a rare opportunity for us as awareness programmes of this nature are unusual in this part of the island. We gained a large amount of information about the workings of the stock exchange,” said Prabath Chandana from Sanasa – Polgahawela, a participant at the event, adding that it would benefit them greatly in all future financial decisions. The interactive forum encouraged participation and queries by the audience in order to demystify the workings of key investment tools and build awareness about the current market.
“It is imperative that investors are armed with accurate and clear knowledge to keep up with the dynamic nature of the financial market and we take a hands-on approach in making sure that they remain ahead of the curve. Building sustainable and mutually rewarding relationships is at the crux of all our activities,” said Dilshan Wirasekara, Deputy CEO of First Capital Holdings.
First Capital Holdings has previously held knowledge sharing sessions in Matara and has a network of branches spanning Matara, Negombo, Kandy and Kurunegala, for the convenience of its growing clientele. The company possesses over 30 years’ experience in financial services, is equipped with strong group research units and professionally qualified staff to extend their expertise and customize investment solutions in accordance with individual client’s and corporates’ needs. First Capital Holdings remains firmly committed to stringent corporate governance practices and combines innovation and efficiency to raise the bar for its level of service.
• First primary dealer to offer repo investment option beyond one year
First Capital Treasuries Ltd. has announced the launch of a long-term, fixed-return bond, becoming the first primary dealer in Sri Lanka to launch a repo investment option backed by Government securities with maturity beyond one year.
The First Capital Treasuries Platinum Bond will offer interest of 8.5%, 10% and 11% respectively on maturities of three, four and five years on a minimum investment of Rs. 1 million, translating to annual effective rates of 7.87%, 8.78% and 9.16%, the company said. Accordingly, investors will receive Rs. 1.255 million, Rs. 1.4 million and Rs. 1.55 million on bonds of Rs. 1 million at the end of three, four and five years respectively. The investment is backed by Sri Lanka Government securities (Treasury bills/bonds), which will make it a 100% risk free investment opportunity and the respective collaterals will be logged in a Central Depositary System (CDS) account opened under the name of the investor.
Premature withdrawals and loan facilities are also available with this product in order to facilitate any urgent cash requirements of the investor, the company said. “We expect this new debt security to attract retail and high net worth investors as well as corporate entities that have mandatory requirements to maintain long-term investments,” said Dilshan Wirasekara, Deputy CEO of First Capital Holdings. “Because the rate of return is fixed, investors will be insulated against the volatility of interest rates, making the Platinum Bond a risk-free investment opportunity.”
He said the product is easy to understand since accruals and returns are on a straight line basis, as opposed to the yield-to-maturity model of a Treasury bond based on coupon payments and duration. For First Capital Treasuries, the Platinum Bond represents a source of funding with minimal maturity mismatches and provides an opportunity to attract new clients and incremental business, Wirasekara added.
A fully-fledged Investment Bank, First Capital Holdings comprises First Capital Ltd., First Capital Treasuries Ltd., First Capital Markets Ltd., First Capital Asset Management Ltd. and First Capital Equities Ltd. First Capital Treasuries is a Central Bank licensed primary dealer and is considered the pioneer in the primary dealer industry. It is also the largest non-bank primary dealer operating in the market at present.
Of the other entities, First Capital Asset Management is an SEC licensed investment manager which also manages a dedicated fixed income unit trust; First Capital Equities is a licensed stockbroker and member of the Colombo Stock Exchange; First Capital Markets is a licensed margin provider; and First Capital Ltd. is a structuring and placement agent for debt and equity, and a provider of corporate finance and advisory services.
The Board of Directors of First Capital Holdings PLC comprises Deshamanya Lalith de Mel (Chairman), Manjula Mathews (Managing Director,)Nihara Rodrigo, EardleyPerera, Minette Perera, Dinesh Schaffter and Nishan Fernando.
“In the last couple of years, we have seen exceptional profit growth at First Capital,” a Company official said. “In 2010/11 although conditions were less conducive than those in the previous year in which a highly favourable bond trading environment resulted in exceptional profits by the Group’s primary dealer arm, the Company was able to sustain its momentum helped by strong performance in all areas.”
He went on to explain that reported profits were boosted by a one-off gain from the sale of an associate company – Kotmale Holdings PLC amounting to Rs. 180 million and a decision in the company’s favour by the Inland Revenue Board of Review resulting in a tax reversal of Rs. 444 million. He affirmed that First Capital was gearing up for measured and steady growth.
“First Capital Wealth Fund – a Unit Trust dedicated to investment in fixed income securities was launched and the company was granted a license to function as a Dealer on the Debt Exchange (DEX). Promotional campaigns and initiatives to further broad-base the services of the Group are on the cards,” he added.
The First Capital Group boasts of a rich pedigree in the Sri Lankan financial services arena with its lineage tracing 28 years. Having obtained its Primary Dealership license in 1992, when the Central Bank formed the Primary Dealership system, First Capital Treasuries has steadily grown to become a strong and resilient front runner with a loyal and widening customer base. With pioneer status in this area, aided by an unblemished reputation, First Capital Treasuries has developed strong bonds with its principal business partners which are commercial banks, other primary dealers and investors both big and small.
First Capital Asset Management Limited under license from the Securities and Exchange Commission, functions as an ‘Investment Manager’ and has mobilised a substantial quantum of funds under management on discretionary mandates. Upon being approved by the SEC to manage Unit Trusts, the company launched First Capital Wealth Fund in October 2010.
First Capital Markets is an SEC approved Margin lender for listed equity. It has, over the years, built up a strong client base. With the recent surge in the share market, this area has featured as a prominent contributor in the performance of the group.
First Capital Limited is actively involved in structuring and underwriting both short term and long term corporate paper and in generating placements on these and other secondary market debt instruments. The company has positioned itself as a debt market specialist by creating a ready marketplace for those seeking investments in debt securities and those vying to borrow from the debt capital markets.