Tag Archives: Investment Bank Sri Lanka

Dimantha Mathew, Head of Research at First Capital Holdings, with the Market Review on Ada Derana – 21.01.2018

Share Market Investment in Sri Lanka

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.

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.

Banking sector to have a steady phase up to 2020

The Island | 4 -1-2018

By First Capital Research

First Capital Research expects the banking sector to have a steady phase during 2018E-20E with stable credit growth, improving GDP growth supporting lower Non Performing loans and lower interest rate volatility leading to stable net interest margins.

“We expect our banking sector universe to provide 25% average return over 1-Year period exceeding the expected market return,” FC Research said.

FC Research said with average sector return at 25 percent, current interest rates make valuations attractive on expected return despite comparatively cheap frontier market valuations.

“We recommend a strong buy on COMB.N, COMB.X, HNB.N, HNB.X, NDB and NTB, BUY on SEYB.X and HOLD on SAMP and SEYB.N.”

According to First Capital, credit growth is expected to stabilize at 16 percent to 18 percent.

“We expect private sector credit growth to slow down to remain stable at c.16% during 2018E gradually increasing to c.18% through 2019E-2020E on improving GDP growth,” FC Research said.

“It will be backed by progressing external sector performance levels and lower impairment due to better credit quality resultant to more business related credit compared to consumer credit.”

FC Research expects the banking sector interest spreads to stabilize in 2017E and thereon backed by the implementation of Inflation Targeting Framework, improved government revenue streams and increased foreign inflows into government securities market.

The introduction of Liability Management Bill will stabilize the interest rate and rate of inflation while the flexible exchange rate policy further supports it.

“Core and Total Capital Adequacy ratios were maintained at 12.2% and 15% where the regulatory minimums were 5% and 10% respectively,” FC Research said.

“Larger banks in the sector have already taken necessary steps to raise capital thus meeting the BASEL III capital requirement.”

FC Research said this move ensures more stability and paves way for the industry to be more resilient and better poised for future growth. -FC Research

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.

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.

First Capital’s A- rating was reaffirmed by ICRA Lanka

The issuer rating of SL[A-] with stable outlook was reaffirmed for First Capital Holdings PLC (FC) by ICRA Lanka Limited, subsidiary of ICRA Limited, a group company of Moody’s Investors Service.

ICRA Lanka also reaffirmed the issuer rating [SL]A- with stable outlook for First Capital’s standalone primary dealer First Capital Treasuries PLC (FCT).

The rating report noted potential improvement in the business and financial performances of FCH’s other business entities, which are engaged in corporate debt structuring, corporate finance, asset management, stock broking, extending margin trading facilities and trustee services.

FCH, being a holding company derives its income from the dividends from the group entities and income from its investments, which includes interest income and profit from investments. Total standalone income for FY2016 was adversely affected (LKR 350 Mn total income in FY2016 vis a vis LKR 590 Mn in FY2015) due to non-availability of dividend income (LKR 212 Mn in FY2015), which is linked to performance of the principal subsidiary, FCT. The expected improvement in the performance of FCT in FY2017 vis a vis FY2016, is likely to support the overall performance of FCH.