Tag Archives: Share market investment in Sri Lanka

Weekly Govt Securities Market Steep decline of 1-Yr T-bill to 9.18%

CEYLON TODAY | 17.05.2019

Treasury Bills and Bonds in Sri Lanka

By First Capital Research

Weekly Yield movement & Volume

The secondary market yield curve was seen once again recording a parallel shift downwards, on the back of heavy buying interest primarily centred on the short to mid tenor maturities. The shorter end of the curve witnessed a steep decline in the range of 7-15bps, while the benchmark 364-day bill was seen trading at an intraday low of 9.15 per cent. In the belly-end of the curve, maturities were seen dropping by 2-15bps, while the long tenors witnessed a dip in yields by 3bps.
At the primary bill auction held on 15 May, the three-month and six-month were accepted at a weighted average of 8.52 per cent and 8.88 per cent, respectively, while the benchmark one-year witnessed a steep dip by 26bps to record at 9.18 per cent following its previous week’s dip of 37bps. Post auction, on the back of buying interest one-year bill dipped further to close the day at 9.10 per cent.
Meanwhile, in the forex market, the rupee depreciated mid-week to Rs 176.74 from opening levels of Rs 174.90/10, thereafter, the rupee slightly appreciated to close the week at Rs 176.17.


Liquidity and CBSL Holdings

Market liquidity remained positive throughout the week to close the week at Rs 25.05 billion on the back of release of long-delayed payments by the Government. CBSL continued to drain out liquidity by way of repo auctions throughout the week at weighted averages ranging between 8.38 per cent and 8.59 per cent.


Foreign Interest

Foreign holding decreased by Rs 10.8 billion to record at Rs 143.7 billion. Foreign holding percentage dipped to 2.7 per cent from a previous level of 2.9 per cent.


Maturities for next Week

The Government Security Market has a Treasury bill maturity amounting to Rs 16.1 billion that needs to be settled week ending 24 May 2019.


Daily Summary

Thursday (09.05.19): In the secondary market, shorter end of the yield curve witnessed a steep downward shift with heavy demand, while the overall market witnessed moderate volumes. The one-year bill also recorded a notable dip to close at 9.15 per cent. During the morning hours of trading there was a slight increase in yields mainly centred on [15.03.24] maturity which traded at 10.62 per cent in the midst of profit taking. However, towards the latter part of the day, with buying interest it was seen trading at intra day’s low of 10.52 per cent. Furthermore, following maturities traded at their intra-day lows as [01.07.19] traded at 8.60 per cent, [15.12.20] at 9.60 per cent, [15.03.22] at 10.00 per cent, [15.07.23] at 10.40 per cent and [01.09.23] at 10.42 per cent. In the long end of the curve, [01.05.29] changed hands at 10.95 per cent.

 
Friday (10.05.19): Continuing positive sentiment drives secondary market yield curve downwards across the board reinforced with net surplus liquidity in the system including term repo, recording a high of Rs 89.24 billion. Buying interest was witnessed on the following maturities trading at intraday lows with the one-year trading at 9.15 per cent with considerable volumes, while [01.05.20] traded at 9.13 per cent. Foreign buying was seen on the 2021 maturities with [01.08.21] trading at intraday lows of 9.75 per cent and [15.10.21] at 9.80 per cent. Local buying interest was seen on [15.03.22], [15.03.23], [15.07.23], [15.03.24] trading at day’s low of 9.95 per cent, 10.25 per cent, 10.30 per cent, 10.40 per cent, respectively. In addition, [15.01.27] traded at 10.72 per cent with considerable volumes, as [15.06.27] traded at 10.80 per cent, while overall market witnessed high volumes.

 
Monday (13.05.19): The secondary market yield curve remained mostly unchanged with mixed activities, while the overall market witnessed high volumes for the day. In the short end of the curve, [15.12.20] traded in the range of 9.75 per cent-9.85 per cent levels, [15.03.22] at 9.90 per cent and [15.03.23] at 10.30 per cent. Mid tenor [15.03.24] witnessed high volumes trading at 10.40-10.47 per cent levels, while on the back of foreign buying, [01.08.24] traded at 10.46 per cent. Furthermore, in the midst of buying interest, the following maturities were seen trading at their intra-day lows: [01.06.26] at 10.67 per cent, [01.08.26] at 10.65 per cent, [15.06.27] at 10.75 per cent. In the long end of the curve, [01.05.29] changed hands at 10.86 per cent.

 
Tuesday (14.05.19): With the prevailing tensed situation mixed activity was witnessed in the secondary market with a slight upward shift in the yield curve amidst high volumes. Selling pressure was witnessed during the early hours of trading on the following maturities trading at their intraday high with [01.03.21], [01.05.21], [01.08.21] and [15.12.21] trading at 9.85 per cent, 9.88 per cent, 9.92 per cent and 10.00 per cent, while [01.05.21], [01.08.21] and [15.12.21] traded at 9.85 per cent, 9.88 per cent, 9.92 per cent and 10.00 per cent, and [15.03.23] and [15.07.23] traded at day’s high of 10.50 per cent and 10.48 per cent, respectively, In addition, [15.01.27], [15.06.27], [01.05.29] all traded at 10.80 per cent, while [01.05.29] traded at 10.92 per cent. During the latter session of trading, foreign buying was seen primarily centred on [15.03.24] at 10.50 per cent, while the one-year T-bill traded at day’s high of 9.25 per cent.

 
Wednesday (15.05.19): Selected mid to long tenure maturities were seen reaching intraday low amidst the buying interest, with [15.03.23] reaching 10.35 per cent, foreign buying led [15.03.24] to the day’s lowest of 10.41 per cent and [15.01.27] traded at 10.73 per cent, while the overall yield curve shifted slightly downwards, with overall market witnessing moderate volumes. At the primary bill auction, yield of three-month crawled to 8.52 per cent, six-month yield dipped to 8.88 per cent and one-year yield dipped to 9.18 per cent, recording a near eight-month low since September 2018. Post auction, on the back of buying interest, the one-year bill dipped further to close the day at 9.10 per cent, while three short term 2021 maturities ([01.03.21], [01.08.21] and [15.10.21]) traded at 9.65 per cent, 9.75 per cent and 9.85 per cent, respectively.

Sri Lanka’s 2019 growth to hit 18-year low after Easter bombings: Reuters poll

10.05.2019 | Reuters

COLOMBO (Reuters) – Sri Lanka’s economic growth is expected to slump to a near two-decade low this year, a Reuters poll showed, as tourism, foreign investment and overall business activity eased sharply in the wake of the devastating Easter Sunday bombings.

Security in Sri Lanka has been ramped up since the April 21 attacks by Islamic militants, who killed over 250 people including 42 foreign nationals in churches and hotels across the country. Tourism, which accounts for 5 percent of the country’s gross domestic product, has suffered as travelers from around the globe canceled hotel and flight bookings fearing more attacks.

Islamic State has claimed responsibility for the attacks.

The poll of 10 analysts predicted that the full-year median economic growth could slide to 2.5 percent, its lowest since 2001, when the Indian Ocean island’s growth contracted after Tamil Tiger rebels attacked the country’s main airport.

That compares with gross domestic product growth of 3.2 percent in 2018, the weakest in 17 years as a weeks-long political crisis and past policy tightenings sapped business confidence and cooled investment.

Some of the analysts in the poll are forecasting a contraction in the second quarter.

Many analysts said their revised growth figures were only a preliminary estimate as they are yet to incorporate all of the latest available data in their economic models.

“We expect the second-quarter growth to be either zero or negative,” said Dimantha Mathew, research head, First Capital Holdings.

“Consumer goods and retail sectors will be considerably hit. “This is going to have a big impact on the tourism sector and that will have an impact on the balance-of-payments.”

The central bank has estimated about 4 percent growth for this year, but it hasn’t given any official estimate following the attacks.

Central bank officials were not immediately available for comments.

In its last monetary policy review on April 8, the central bank said it is likely to cut rates in the next meeting scheduled for later this month to boost the growth.

“If there is a rate cut, then there could be foreign outflows from government securities,” Mathew said.

Government finances were shaky even before the bombings, and the island nation has a heavy external debt repayment schedule between 2019 and 2022.

The International Monetary Fund (IMF) reached an agreement with Sri Lanka in March to extend a $1.5 billion loan facility for an extra year. Meanwhile, Prime Minister Ranil Wickremesinghe’s government has boosted state spending in a 2019 budget to support the economy and woo voters before two key elections.

A presidential vote is expected later this year followed by a general election in 2020.

 

First Capital is an investment bank offering independent advice and transaction execution relating to capital raising and other strategic needs including mergers and acquisitions for investment in Sri Lanka. The Company’s industry leading transactions are reflective of the ingenuity in enabling the most opportune financing processes for our clients. First Capital’s services for investment in Sri Lanka include a total service for public offers of corporate debt, acting in the capacity of managers/ financial advisors and placement agents, in addition to due diligence, pre-offer preparation, offer management, distribution strategy and after-market advisory services, initial public offerings, secondary offerings such as rights issues, corporate actions including mandatory and voluntary offers, private placements and at-market placements of listed securities.

Atchuthan Srirangan, Assistant Manager – Research, at First Capital on the Bond and equity Market performance – 09.05.2019

Treasury Bills and Bonds in Sri Lanka

Atchuthan Srirangan, Assistant Manager – Research, at First Capital on the bond and equity market performance – 09.05.2019

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 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 Lanka stocks close 0.39-pct lower, selling in banks, JKH

ECONOMY NEXT | 09.05.2019

Sri Lanka’s stocks closed 0.39 percent lower on Thursday, with selling interest on John Keells Holdings (JKH) and banks.

The benchmark All Share Price Index (ASPI) closed 20.77 points lower at 5,352.20. The ASPI had reached an intra-day high of 5374.68 in the first half hour of trading, before moving towards an intra-day low of 5,349.04 just before closing.

The more liquid stocks on the S&P SL20 Index closed 0.64 percent or 16.34 points lower at 2,535.82.

Market turnover was 228.8 million rupees, with 36 stocks gaining and 70 falling.

Foreign participation was low, with net inflows of 30.8 million rupees to the market.

Hatton National Bank contributed most to the ASPI fall, closing 3.90 rupees lower at 160.10 rupees a share.

Of the 17 banking stock, 12 fell, while 4 were flat, and one gained.

JKH closed 1 rupee lower at 137 rupees a share, also pulling the ASPI down.

Market participants are continuing to sell stocks to buy at a discount later, as corporate earnings are likely to take a hit in the June quarter after the Easter bombings, said Atchuthan Srirangan, Assistant Manager Research at First Capital, an investment bank.

Piramal Glass Ceylon, Sampath Bank and Commercial Bank accounted for 62 percent of daily turnover.

Piramal Glass Ceylon gained 10 cents to close at 3.30 rupees a share.

Sampath Bank closed 1.20 rupees lower at 149.30 rupees a share, followed by Commercial Bank, which closed 80 cents lower at 90 rupees a share.

First Capital is an investment bank providing a full range of financial advisory and services. The Company’s research delivers a 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.

 

Expolanka sees steady growth

CEYLON TODAY | 08.05.2019

Investment Bank in Sri Lanka

A global presence in all major apparel sourcing regions for USA provides a strategic benefit for Expolanka Holdings (EXPO) due to the prevailing trade tensions between USA and China, First Capital Research (FCR) stated the firm in an equity analytical report.

Therefore, as stated in the report, FCR expects EXPO’s top line to grow above the industry average at a Compound Annual Growth Rate (CAGR) of 17 per cent for the next two financial years, driven by volumes in the medium-term with the global presence in all the major apparel sourcing regions for USA, alongside further expansion into USA (North American trade lane; a critical growth driver) and key markets in Asia.
“EXPO earnings are likely to grow at a CAGR of c.17 per cent FY19-21E with earnings growing by 77 per cent in FY19E and 43 per cent in FY20E. Post-restructuring, the group is now beginning to show a turnaround in the overall business, reporting consistent net profit growth and more focus on the core logistic business driving revenue,” it stated.
EXPO has a global presence in all major apparel sourcing regions for USA, which would provide a strategic benefit due to the prevailing trade tensions between USA and China.
The Global Apparel industry is growing at a five-year CAGR of c.6.9 per cent, while the global logistic industry is expected to grow at a five-year CAGR of c.7.2 per cent, further supporting EXPO’s organic volume growth.
EXPO has completed its restructuring process by generating Rs 2.5 billion in benefits through divesting non-core investment sector. The funds have been re-invested in the freight forwarding business and warehousing facilities. Following the divestments, with the heavy focus on logistics, EXPO plans to take on the challenge of diversifying into new verticals within the logistics sphere with a view to maintain volume growth.
EXPO has initiated plans to cater to pharmaceutical and tech companies, as the need for air exports has grown much more significant. Such Investments would focus on moving into an array of fast-growing verticals such as pharmaceuticals, electronics, retail and e-commerce business to drive volume growth.

First Capital is an investment bank providing a full range of financial advisory and services. The Company’s research delivers a 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 on the Bond and equity Market performance – 07.05.2019

Treasury Bills and Bonds in Sri Lanka

Atchuthan Srirangan, Assistant Manager – Research, at First Capital on the bond and equity market performance – 07.05.2019

First Capital is an investment bank providing a full range of financial advisory and services. The Company’s research delivers a 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.

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 on the bond and equity market performance – 06.05.2019

Treasury Bills and Bonds in Sri Lanka

Dimantha Mathew, Head of Research, at First Capital on the bond and equity market performance – 06.05.2019

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 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 on the bond and equity market forecast – 05.05.2019

Treasury Bills and Bonds in Sri Lanka

Dimantha Mathew, Head of Research, at First Capital on the bond and equity market forecast – 05.05.2019

First Capital is an investment bank providing a full range of financial advisory and services. The Company’s research delivers a 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.

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.

 

First Capital’s Dimantha Mathew on the impact of the Easter Sunday Attack to the Share market – 24.04.2019

Investment in Sri Lanka

Dimantha Mathew, Head of Research, at First Capital on the impact of the Easter Sunday attack on the Share market

First Capital is an investment bank providing a full range of financial advisory and services. The Company’s research delivers a 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.

Foreigners see value in Colombo stocks

SUNDAY TIMES | 29.04.2019

Colombo shares saw foreigners on a buying spree on two days this week, despite the bad sentiment after Easter Sunday attacks with analysts saying that foreign buyers see the value in purchasing blue chips at this time.

Wednesday and Thursday foreigners were net buyers. Wednesday saw Rs. 1.3 billion net buying followed by Thursday’s Rs. 286 million trading centred around John Keells Holdings (JKH) and Commercial Bank. JKH on Wednesday added 88 per cent of the total trading on the Colombo Stock Exchange (CSE). On Thursday it was Commercial Bank and JKH which saw 87 per cent total trading turnover with both indices gaining. Friday saw less than 2 per cent foreign participation with locals buying Sampath Bank shares. On Friday foreigners were net sellers at Rs. 4.48 million. Analysts said foreign buying will continue to the next week. “Foreigners see that CSE valuations are really attractive now and they are on a buying spree,” Atchuthan Srirangan, Assistant Manager Research Fixed Income and Equity, First Capital holdings told the Business Times.

The CSE was closed on Monday after a curfew was imposed in the country on Sunday, following the attacks. Tuesday, when it reopened, was however the worst day for the CSE since February 16, 2012, when the petrol price increase happened. The All Share Index was up by 0.25 per cent to close at 5, 437.06 with S & P gaining by 0.37 per cent to close at 2, 600.76 on a Rs. 162.8 million turnover.

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 is an investment bank providing a full range of financial advisory and services. The Company’s research delivers a 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.