Tag Archives: Stock-brokering Sri Lanka

Sri Lankan shares fall to 3-1/2-month closing low, blue chips drag

FIRST CAPITAL’S HEAD OF RESEARCH DIMANTHA MATHEW SPEAKS TO REUTERS

August 8, 2017

COLOMBO, Aug 8 (Reuters) – Sri Lankan shares fell for an eighth straight session on Tuesday, posting their lowest close in nearly 3-1/2 months, with blue chips such as John Keells Holdings Plc leading the decline while selling by foreign investors also weighed on the market.

The Colombo stock index fell 0.66 percent, or 43.30 points, to 6,524.13, its lowest close since April 26. It fell 1.5 percent last week in its third straight weekly drop.

“The market continued to come down on blue chips in low turnover,” said Dimantha Mathew, head of research at First Capital Holdings.

“We find it mainly due to the negative sentiment after the earnings with the economic slowdown.”

Foreign investors, who have been net buyers of 26.5 billion rupees of equities so far this year, net sold shares worth 29.1 million rupees (about $189,886) on Tuesday.

Turnover stood at 350.4 million rupees, less than half of this year’s daily average of around 893.3 million rupees.

Shares of conglomerate John Keells dropped 2.8 percent, Nestle Lanka Plc dropped 1.6 percent, Caltex Lubricant Lanka Plc ended 3.6 percent weaker and Dialog Axiata Plc declined 0.9 percent.

Analysts, however, expect equities to gain due to a fall in the yields of government bonds.

Sri Lanka’s central bank held policy rates steady on Thursday, and said tightening measures taken in the past are helping cool inflation and credit growth. Short-term treasury-bond yields fell between 41 basis points (bps) and 55 bps at a weekly auction last week, while the yields on a 59-month bond dropped by 99 bps, while that on a 118-month bond fell by 78 bps.

Sri Lanka’s stock and foreign exchange markets were closed on Monday for a Buddhist religious holiday. ($1 = 153.2500 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)

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.<

Lanka Ceramic announces restructuring

Source: Daily FT, Wednesday, 9 August 2017

Share Market Investment in Sri Lanka

Lanka Ceramic PLC has announced a restructuring of operating assets of the company to give maximum value to shareholders and allow for capital to be raised at a reasonable cost to finance existing as well as future operations and to reflect the real net worth of the company based on growth potential.

The board is of the view that the number of shares of the company is not in line with the capital needed by a company of its size and operation hence has recommended that the number of shares in issue be reduced by 80% to facilitate raising fresh capital at a price more reflective of the intrinsic value of its own operation.

The proposed restructuring of operating assets (excluding 62% stake in Lanka Walltiles Plc) will eventually lead to rationalisation of the shareholder structure in the group companies which also includes Royal Ceramics Plc.

The board has resolved that the company offer to repurchase 24 million issued voting ordinary shares (80%) out of 30 million in issue in the proportion of four shares out of every five held at Rs. 190 per share. Such considerations will be in the form of cash or offer to transfer 1.4148 ordinary shares of Lanka Walltiles Plc in respect of the entitlement of the shareholders as per the proportion proposed and in respect of the offer for repurchase of shares over and above the entitlement of additional shares of shareholders who do not accept the offer, the settlement of consideration to be by way of transfer of shares of Lanka Walltiles Plc (LWL) and not for cash.

The move is subject to shareholder approval for a Special Resolution at an EGM being received. This is because the transfer by the company by way of a consideration of 62% stake in LWL is a disposition of more than half by value of the assets of the company and is a transaction having the effect of substantially altering the nature of business carried out by the company – in this instance managing and holding investments in subsidiary companies, which is a major transaction.

If in the event that shareholders holding more than 5% shares request for a cash consideration instead of shares of LWL as consideration, Lanka Ceramic Directors have the discretion to not proceed with the repurchase of shares.

The resolution to repurchase is to be effective subject to there being no changes in the current regulations prior to the completion of the repurchase that may have an adverse impact on the expected value to be received by shareholders, thereby varying the value as a result of which the varied value may not be considered the ‘fair value’.

The proposed restructuring is also subject to the approval of the Securities and Exchange Commission for the transfer of shares of LWL from the company to the shareholders accepting the offer.

Currently, Royal Ceramics holds 24 million shares of Lanka Ceramics which results in RCL obtaining 27,846,293 shares of LWL in consideration of the share repurchase by Lanka Ceramics. This move will result in RCL holding 51% stake of LWL, making RCL the parent of LWL. RCL will hold 4.8 million shares in Lanka Ceramics post-restructure, thereby continuing to hold an 80.3% stake in the entity.

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.<

MARKET UPDATE ON ADA DERANA ENGLISH NEWS – 2017.08.06

Stock-Brokers-In-Sri-Lanka

First Capital’s Head of Research Dimantha Mathew with the market update – between 18.55 mins to 19.28 mins

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 Lankan shares end lower; post 3rd straight weekly fall

FIRST CAPITAL’S HEAD OF RESEARCH DIMANTHA MATHEW SPEAKS TO REUTERS

August 4, 2017

COLOMBO, Aug 4 (Reuters) – Sri Lankan shares fell for a seventh straight session on Friday to their lowest closing level in more than 13 weeks, led by manufacturing and telecommunication stocks.

The Colombo stock index edged down 0.06 percent to 6,567.43, its lowest close since May 3. The bourse fell 1.48 percent for the week, its third straight weekly fall.

The index slipped 1.6 percent in July, but has risen about 6 percent this year as of close of trade on July 31.

Shares of conglomerate John Keells Holdings Plc dropped 0.6 percent, while Dialog Axiata Plc slipped 0.9 percent and Chevron Lubricants Lanka Plc fell 2.03 percent.

“There were lower market activities, as investors are waiting to see the direction of the market,” said Dimantha Mathew, head of research at First Capital Holdings.

Foreign investors net bought shares worth 80.6 million rupees (about $525,424) on Friday, extending their year-to-date net inflow to 26.5 billion rupees.

Turnover stood at 405.1 million rupees ($2.64 million), less than half this year’s daily average of around 893.3 million rupees.

Analysts however expect equities to gain due to a fall in the yields of government bonds.

Sri Lanka’s central bank held policy rates steady on Thursday, and said tightening measures taken in the past are helping cool inflation and credit growth. Short-term treasury-bond yields fell between 41 basis points (bps) and 55 bps at a weekly auction on Wednesday.

In last week’s auction, the weighted average yield on a 59-month bond dropped by 99 bps, while that on an 118-month bond fell by 78 bps.

Sri Lanka’s stock and foreign exchange markets will remain closed on Monday for a Buddhist religious holiday. ($1 = 153.4000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)

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.<

CB to keep policy rates unchanged

Published on Ceylon Today | 2017-08-02

The Central Bank (CB) will keep its key policy interest rates unchanged with slower credit growth and improved economic conditions, economists and analysts predicted yesterday.

“Sri Lanka’s economic health was almost back to normal but the prevailing drought may hurt the economy further”, they said. Speaking to Ceylon FT, Finance Ministry Secretary, Dr. R.H.S Samarathunga confirmed that the prevailing drought might impact on agriculture sector output.

GDP growth for 1Q 2017 was slower than expected, growing only 3.8%YoY in the 1Q2017 with the agriculture sector decreasing 3.2%YoY with the drought. Meanwhile, releasing the pre monetary policy statement, First capital (FC) stockbroker Research expects the Central Bank of Sri Lanka (CBSL) to keep the Statutory Reserve Ratio (SRR) unchanged at 7.50%.

FC Research expects growth in private credit to descend to around 18% to 20% from the current level of over 20%. In April and May, private sector credit slowed down steeply than expected levels. During the last one month, CBSL brought down its holding in Government Securities from Rs 214 billion to below Rs135 billion as at 28 July.

The Colombo Consumer Price Index (CCPI) based headline inflation, declined on a YOY basis to 4.8% in July 2017 from 6.1% in June 2017 and CCPI based core inflation also decelerated to 4.9% in July 2017 from 5.1% in June 2017.

FC Research forecasted July 2017 CCPI headline inflation to be at 5.8% and CCPI core inflation at 5.3%. July inflation witnessed a steep decline below expectation, due to the reduction of prices in certain laboratory tests dipping health care expenses and drop in vegetable and sea fish prices thus reducing food prices. NCPI based inflation also decelerated on a YOY basis to 6.3% in June 2017 from 7.1% in May 2017.

FC Research believes that inflation will be under control over the next two months, while there could be some upward pressure towards September and beyond with the floods in May 2017 affecting the supply in the current growing season and VAT increases not applying to the same period last year. “As a result there could be possible supply side shortages towards September and beyond,” they said.

Sri Lanka’s forex reserves rose to USD 6.95 billion in June 2017 from USD 6.74 billion in May, helped by foreign inflow into both the Bond & Equity market and continuous dollar purchases by CBSL. (IG)

 

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.<

Fixed Income Portfolio Recommendation: New Recommendation – 31st Jul 2017

  • Recommend to SELL all mid tenors (4y, 5y, 6y, 8y) as the securities fall sharply below our lower band of 11%.
  • We already remain on a SELL on all longer tenors (10y, 15y, 20y, 30y) securities as at 18th Jul 2017.
  • Portfolio exposure: REDUCE
  •  Capacity Utilization to be reduced to 60%

 We believe the bond market is ignoring the future risk beyond Dec 2017 where Government Borrowing Requirement again starts to increase while 4Q2017 may experience possible inflationary pressure due to supply side shortages from the floods

Read the full report here: Fixed Income Portfolio Recommendation

 

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 proving services to invest in Sri Lanka through fixed income securities such as investments 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.

Pre-Policy Analysis – 01st Aug 2017

  • FC Research expect that the growth in private credit to descend towards around 18% to 20% from the current level of over 20%. In April and May private sector credit slow down steeply than expected level.
  • We believe inflation will be under control over the next 2 months while there could be some upward pressure towards September and beyond with the floods in May 2017 affecting the supply in the current growing season and VAT increase not applying to same period in the last year. As a result there could be possible supply side shortages towards September and beyond.
  • Foreign Reserves are now at comfortable levels.
  • FC Research believes that considering the current economic conditions with slower than expected private sector credit level and the considerable improvement in the Economic Health the current monetary policy is appropriate and no change is required

Read the full report here: Pre-Policy Analysis

 

 

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 proving services to invest in Sri Lanka through fixed income securities such as investments 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 Lankan shares hit 6-week closing low

FIRST CAPITAL’S HEAD OF RESEARCH DIMANTHA MATHEW SPEAKS TO REUTERS

JULY 25, 2017

COLOMBO, July 25 (Reuters) – Sri Lankan shares closed marginally weaker for a seventh straight session on Tuesday, but analysts expect sentiment to turn positive following cabinet approval for a Chinese-built port.

The Colombo stock index fell 0.03 percent to 6,662.34, marking its lowest close since June 13, and its tenth fall in 11 sessions.

Sri Lanka’s cabinet cleared a revised agreement for its Chinese-built southern port of Hambantota on Tuesday which will bring in around 1 billion dollar investment, after terms of the first pact sparked widespread public anger in the island nation.

“With the cabinet approval granted for the port deal and exchange control bill presented to parliament today, we might see some positive sentiment returning to the market,” said Dimantha Mathew, head of research, First Capital Holdings

Sri Lanka parliament on Tuesday debated a new exchange control bill.

Foreign investors bought shares worth a net 47.2 million rupees ($307,592.05) on Tuesday, extending the year-to-date net foreign inflow to 25 billion rupees.

Turnover was 359.8 million rupees, well below this year’s daily average of around 903 million rupees.

Shares of Ceylon Tobacco Company Plc fell 0.9 percent. ($1 = 153.4500 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Vyas Mohan)

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 Lankan shares post near 6-week closing low

FIRST CAPITAL’S HEAD OF RESEARCH DIMANTHA MATHEW SPEAKS TO REUTERS

JULY 24, 2017

COLOMBO, July 24 (Reuters) – Sri Lankan shares fell for the sixth straight session on Monday to post a near six-week closing low, but brokers said the slide is slowing down.

The Colombo stock index fell just 0.08 percent to 6,664.12, but it marked the lowest close since June 13, and its ninth fall in 10 sessions.

“The market came down over the last few days due to profit taking, but it looks like the profit taking has come to an end and the market is consolidating at these levels,” said Dimantha Mathew, head of research, First Capital Holdings.

Foreign investors bought shares worth a net 195.5 million rupees ($1.27 million) on Monday, extending the year-to-date net foreign inflow to 25 billion rupees.

Turnover was 502.6 million rupees, less than this year’s daily average of around 907 million rupees.

Shares of Hemas Holdings Plc fell 1.8 percent while Ceylon Cold Stores Plc closed 1.14 percent weaker. ($1=153.45 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; editing by Neil Fullick)

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.<

MARKET UPDATE ON ADA DERANA ENGLISH NEWS – 2017.07.23

Stock Brokers in Sri Lanka

First Capital’s Head of Research Dimantha Mathew with the market update – between 19.53 mins to 20.20 mins

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.