Tag Archives: First Capital Equities

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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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

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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)

 

 

Sri Lankan shares rise on gains in blue chips, foreign buying

First Capital’s Head of Research, Dimantha Mathew, speaks to Reuters Tuesday Nov 03, 2016

Nov 3 Sri Lankan shares closed Thursday at a near-two week high, helped by gains in blue chips and as foreign investors picked up beaten down stocks.

The benchmark index of the Colombo Stock Exchange ended 0.2 percent higher, or 13.05 points, at 6,442.09, its second straight session of gains.  Turnover stood at 217.7 million rupees ($1.47 million), less than a third of this year’s daily average of 721.1 million.

Foreign investors were net buyers for a second straight session, picking up stocks worth 61.5 million rupees. They have net sold 1.3 billion rupees worth of shares so far this year.  “Suddenly, foreign buying has come into the market after the index fell to near 6,400. It’s like the psychological barrier of 6,400 levels has worked,” said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

Shares in Nestle Lanka Plc jumped 4.47 percent while conglomerate John Keells Holdings Plc gained 1.27 percent and the biggest listed lender, Commercial Bank of Ceylon Plc, rose 0.67 percent.

($1 = 147.7000 Sri Lankan rupees)

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

 

Sri Lankan shares fall from near 2-wk high ahead of budget

First Capital’s Head of Research, Dimantha Mathew, speaks to Reuters Friday November 04, 2016

Sri Lankan shares fell on Friday from a near two-week high hit in the previous session as investors waited for cues from the national budget scheduled on Nov. 10.

The benchmark index of the Colombo Stock Exchange ended 0.11 percent weaker, or 6.92 points, at 6,435.17, slipping from its highest close since Oct. 21 hit on Thursday.

Turnover stood at 275.7 million rupees ($1.86 million), less than half of this year’s daily average of 718.9 million.

However, foreign investors bought beaten down stocks for a third straight session, picking up shares worth a net 90.6 million rupees. They have net sold 1.21 billion rupees worth of shares so far this year.

“The momentum was short lived,” said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd. “Investors turned to wait-and-see approach again. They are awaiting direction from the budget.”

Shares in Nestle Lanka Plc fell 2.37 percent while Ceylon Tea Services Plc fell 9.20 percent.

Conglomerate John Keells Holdings Plc fell 0.39 percent. The company on Friday reported an 8 percent rise in second quarter net profit.

($1 = 147.9500 Sri Lankan rupees)

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

 

Sri Lankan shares edge up in dull trade ahead of govt budget

First Capital’s Head of Research, Dimantha Mathew, speaks to Reuters Thursday Oct 27, 2016

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Sri Lankan shares ended slightly firmer on Thursday, hovering near a 12-week closing low hit earlier in the week, in thin trade as investors awaited cues from the government budget and five-year plan as well as corporate earnings.

Prime Minister Ranil Wickremesinghe issued an economic policy statement in the parliament, giving some details of the government’s future economic policies, during market hours on Thursday. Dealers said the market was assessing the prime minister’s statement.

The benchmark index of the Colombo Stock Exchange ended 0.06 percent, or 3.61 points, firmer at 6,438.50. On Monday, the index had closed at its lowest level since August 1.

Thursday’s turnover was 204.7 million rupees ($1.38 million), less than a third of this year’s daily average of around 731.3 million rupees.

“Overall market is volatile and will move side ways until the budget,” said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd. “Uncertainty is there and investors are on wait-and-see mode.”

Foreign investors sold a net 18.4 million rupees worth of equities on Thursday. The net foreign inflow for the past eleven sessions through Tuesday was 1.23 billion rupees.

They have sold a net 1.81 billion rupees worth of shares this year.

Sri Lanka’s quarterly earnings season started two weeks ago, but most locally listed firms report in late October or early November. The national budget is scheduled to be presented on November 10.

Shares in Bukit Darah Company Plc jumped 3.72 percent while Dialog Axiata Plc rose 0.87 percent and Hatton National Bank Plc gained 0.75 percent.

 

($1 = 147.9000 Sri Lankan rupees)

 

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

Sri Lankan Shares Recover from 12-wk Low in Dull Trading

First Capital’s Head of Research, Dimantha Mathew, speaks to Reuters Tuesday Oct 25, 2016

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Sri Lankan shares edged up on Tuesday from a 12-week closing low hit in the previous session, but trading volume slumped to a more than 2-1/2-year low as investors awaited cues from the government budget and five-year plan as well as corporate earnings.

Sri Lanka’s quarterly earnings season started two weeks ago, but most of the firms listed locally reports in late October or early November. The national budget is scheduled to be presented on Nov. 10.

The benchmark index of the Colombo Stock Exchange ended 0.29 percent or 18.63 points higher at 6,436.97, edging up from Monday’s close of 6,418.34, its lowest since Aug. 1. The index fell 0.54 percent last week, its second straight weekly loss.

Tuesday’s turnover was 135.9 million rupees ($921,355.93), its lowest since March 17, 2014 and lower than a fifth of this year’s daily average of around 736.2 million rupees.

“It was a very dull day. It’s a waiting game now and nothing is happening,” said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

“The equity market is dead and all are waiting for the government’s five-year plan and the budget.”

Stockbrokers said the market was also digesting political concerns over the resignation of the head of Sri Lanka’s anti-corruption body on Oct. 17, a few days after President Maithripala Sirisena implied that the agency was favouring the rival party of his prime minister.

This is likely to delay one of the promises of Sirisena’s coalition government, eliminating corruption, and could hurt business confidence, analysts said.

Foreign investors bought a net 17.6 million rupees worth of equities on Tuesday, in the eleventh straight session of net foreign inflows and bringing the total net inflows to 1.23 billion rupees over that period.

They have sold a net 1.74 billion rupees worth of shares this year.

Shares in Ceylon Tobacco Company rose 2 percent, while Carson Cumberbatch Plc rose 1.65 percent.

($1 = 147.5000 Sri Lankan rupees)

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

Sri Lankan Shares hit 12-wk low as Investors Eye Budget, 5-yr plan

First Capital’s Head of Research, Dimantha Mathew, speaks to Reuters Monday Oct 24, 2016

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Sri Lankan shares closed Monday at their lowest in 12 weeks in lean trade as investors awaited cues from the central government budget and the five-year plan ahead of corporate results.

Sri Lanka’s quarterly earnings season started two weeks back, but the bulk of locally listed firms will not report until late October or early November.

The national budget is scheduled to be presented on November 10.

The benchmark index of the Colombo Stock Exchange ended 0.45 percent or 29.19 points lower at 6,418.34, its lowest close since August 1. The index had fallen 0.54 percent last week, its second straight weekly loss.

“There is no improvement in the economic conditions and the uncertainty prevails, which is deterring the investors from taking long term position,” said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

“Market is waiting for the government’s five-year plan and the budget. We see investors have switched to wait-and-see mode. Not many of them are looking at long term until some certainty comes into place.”

Turnover stood at 301.3 million rupees ($2.05 million), less than half of this year’s daily average of around 740 million rupees.

Stockbrokers said the stock market was also digesting political concerns over the resignation of the head of Sri Lanka’s anti-corruption body on October 17, a few days after President Maithripala Sirisena implied that the agency was favouring the rival party of his prime minister.

This is likely to delay one of the promises of Sirisena’s coalition government, eliminating corruption, and could hurt business confidence, analysts said.

Foreign investors bought a net 62.5 million rupees worth equities on Monday, extending the net foreign inflow for the past nine days to 1.21 billion rupees worth of shares.

They have sold a net 1.76 billion rupees worth of shares so far this year.

Shares in Ceylon Tobacco Company fell 2 percent after media reports suggested there could be a further hike in cigarette prices, while Commercial Leasing and Finance Plc lost 5.3 percent.

($1 = 146.9000 Sri Lankan rupees)

(Reporting by Shihar Aneez; Editing by Vyas Mohan)

Sri Lankan Shares Edge up on Foreign Buying, Turnover Hits Near 3-wk High

First Capital’s Head of Research, Dimantha Mathew, speaks to Reuters Fri Oct 21, 2016

Sri Lankan shares ended slightly firmer on Friday, edging up from their lowest close in 1 month hit in the previous session, as foreign investors bought risk assets ahead of a flurry of corporate results and next month’s national budget. Sri Lanka’s quarterly earnings season started last week but the bulk of locally listed firms will not report until late October or early November. The national budget is scheduled to be presented on Nov. 10.

The benchmark index of the Colombo Stock Exchange ended 0.08 percent or 5.17 points firmer at 6,447.53, up from its lowest close since Sept. 20 hit on Thursday. The index fell 0.54 percent on the week, its second straight weekly loss. Turnover stood at 1.15 billion rupees ($7.81 million), the highest since Oct. 3 and more than this year’s daily average of around 741.5 million rupees.

“Today the market was a bit positive with some foreign inflows. Even though the quantity was low the foreign interest was there,” said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

People walk past an electronic board displaying various Asian countries' stock price index and world major index outside a brokerage in Tokyo, Japan, August 21, 2015.  REUTERS/Issei Kato/File Photo
REUTERS/Issei Kato/File Photo

Stockbrokers said the stock market was also digesting political concerns over the resignation of the head of Sri Lanka’s anti-corruption body on Monday, a few days after President Maithripala Sirisena implied that the agency was favouring the rival party of his prime minister.

This is likely to delay one of the promises of Sirisena’s coalition government to eliminate corruption and could hurt business confidence, analysts said. Foreign investors bought a net 233.8 million rupees worth equities on Friday, extending the net foreign inflow for the past nine days to 1.15 billion rupees worth of shares. They have sold a net 1.82 billion rupees worth of shares so far this year.

Shares in Sri Lanka Telecom Plc rose 2.77 percent, while top conglomerate John Keells Holdings Plc ended steady.

($1 = 147.2000 Sri Lankan rupees)

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)

Sri Lankan Shares Close at 1-month Low in Thin trade

First Capital’s Senior Research Analyst, Atchuthan Srirangan, speaks to Reuters Thu Oct 20, 2016

Sri Lankan shares ended slightly weaker on Thursday, posting their lowest close in a month, as investors awaited next month’s national budget and a flurry of corporate results. The benchmark index of the Colombo Stock Exchange ended 0.03 percent or 2.03 points lower at 6,442.36, its lowest close since Sept. 20, in thin trading.

“Investors are waiting to see the outcome of the budget and quarterly results,” said Atchuthan Srirangan, a senior research analyst with First Capital Equities (Pvt) Ltd. “Market will move sideways until the budget,” he said.

Stockbrokers said the market was digesting political concerns over the resignation of the head of Sri Lanka’s anti-corruption body on Monday, a few days after President Maithripala Sirisena implied that the agency was favouring the rival party of his prime minister. This is likely to delay one of the promises of Sirisena’s coalition government to eliminate corruption and could hurt business confidence, analysts said.

Turnover stood at 365.03 million rupees ($2.50 million), well below this year’s daily average of around 739.4 million rupees. Foreign investors, who have sold a net 2.06 billion rupees worth of shares so far this year, bought a net 39.1 million rupees worth equities on Thursday.

Top conglomerate John Keells Holdings Plc ended 0.66 percent weaker while Cargills (Ceylon) Plc fell 4.61 percent. Sri Lanka’s quarterly earnings season started last week but the bulk of locally listed firms will not report until late October or early November.

($1 = 145.9000 Sri Lankan rupees)

(Reporting by Ranga Sirilal; Editing by Amrutha Gayathri)