Tag Archives: Stock Market

Sri Lankan stocks hit near 2-wk closing high

DIMANTHA MATHEW, HEAD OF RESEARCH AT FIRST CAPITAL HOLDINGS PLC, SPEAKS TO REUTERS

DECEMBER 27, 2017

COLOMBO, Dec 26 (Reuters) – Sri Lankan shares touched a near two-week closing high on Tuesday, as investors picked up banking and diversified stocks, with muted trading as investors went on holiday in the Christmas week.

Investors were also waiting for direction on interest rates when the central bank unveils its monetary policy later this week, analysts said.

The Colombo Stock Index ended 0.42 percent firmer at 6,350.30, its highest since Dec. 15.

“The overall uptrend is due to some window-dressing in some of the blue chip counters,” said Dimantha Mathew, head of research at First Capital Holdings.

“Overall investor interest is very low and it’s a very weak market with most of the broker community also on holiday.”

Shares in conglomerate John Keells Holdings Plc gained 1.1 percent, while Sri Lanka Telecom Plc ended 4.1 percent higher and Hatton National Bank Plc rose 0.2 percent.

Turnover stood at 153.8 million rupees ($1.01 million), below this year’s daily average of 923.2 million rupees.

Foreign investors net sold 4.1 million rupees worth of shares on Tuesday, but they have net bought 18.4 billion rupees worth equities so far this year.

The currency and stock markets were closed on Monday for Christmas. ($1 = 152.6000 Sri Lankan rupees) (Reporting by Ranga Sirilal; 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.

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

The Report Sri Lanka 2016: Signaling Opportunities Emerging for Global Investors

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In a pursuit of much desired international investor attention to Sri Lanka, ‘The Report: Sri Lanka 2016,’ the first independently produced economic analysis of the Sri Lankan economy providing a vital guide to many facets of the country, including its macroeconomics, infrastructure, banking, capital markets and other sectoral developments was launched on 01st August 2016.

The Publication was developed by global publishing, research and consultancy firm Oxford Business Group (OBG) in association with the Board of Investments Sri Lanka (BOI).

Capital Markets Partner for The Report Sri Lanka 2016, First Capital Holdings PLC shared valuable insights and expertise to support the landmark publication, set to position Sri Lanka as a recognised high growth frontier market.

First Capital’s research unit was the key entity contributing an unbiased and comprehensive review to the Capital Markets Analysis presenting case studies on six top counters traded at the Colombo Stock Exchange.

“We are pleased to have supported the OBG team in producing what I’m sure will be received as a valuable research tool for those keen to learn more about what Sri Lanka has to offer” said Dilshan Wirasekara, Group CEO of First Capital Holdings PLC. “We believe the publication would play a pivotal part in bringing the international investment community up to date on Sri Lanka’s post-war economic development”.

“The heightened activity that has been a hallmark of the Colombo Stock Exchange reflects the changing face of Sri Lanka’s economy, while also signaling the opportunities that are emerging for investors across the sectors,” he said.

OBG’s Senior Country Director, Brooke Butler, said she was delighted to have First Capital Holdings PLC on board for its first report on Sri Lanka. “As a longstanding industry player, First Capital Holdings PLC has an in-depth understanding of Sri Lanka’s markets and how they are evolving,” she said. “The team’s input has given our coverage of this important emerging economy an edge.”

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About First Capital Holdings PLC

First Capital Holdings PLC is a full service investment bank providing a diverse range of advisory services and financial products. Our integrated business platform comprises four specialised areas – Capital Markets Advisory, Wealth Management, Fixed Income and Equities.

As a company listed on the Colombo Stock Exchange (CSE) since 1994 (Ticker: CFVF), we exemplify requisite financial transparency and governance standards.

Reflecting credit fundamentals including a robust capital structure, liquidity, risk controls and an earnings profile, we are rated A- by ICRA Lanka.

We operate throughout Sri Lanka via offices in Colombo, Kandy, Matara and Kurunegala. Our global outreach continues to expand through institutional trading and investment product placement.

About Oxford Business Group

Oxford Business Group (OBG) is a global publishing, research and consultancy firm, which publishes economic intelligence on 37 markets across Asia, the Middle East, Africa and The Americas. Through its range of print and online products, OBG offers comprehensive and accurate analysis of macroeconomic and sectoral developments, including banking, capital markets, insurance, energy, transport, industry and telecoms. The Report: Sri Lanka 2016 was produced in partnership with First Capital Holdings and Board of Investment (BOI) Sri Lanka.

The critically acclaimed economic and business reports have become the leading source of business intelligence on developing countries in the regions they cover. OBG’s online economic briefings provide up-to-date in-depth analysis on the issues that matter for tens of thousands of subscribers worldwide. OBG’s consultancy arm offers tailor-made market intelligence and advice to firms currently operating in these markets and those looking to enter them.

Sri Lanka Investment

Interested in the Stock Market? – Basic Terms You Should Know – Part 02

A knowledge investor is a wise investor. Awareness is the key to making positive gains through the Colombo Stock Exchange (CSE) – Stock Market in Sri Lanka, by making the correct choices, intelligent observations and by doing your investment homework. There are many reports and resources freely available to help evaluate your investment decisions.

First Capital believes that an educated investor contributes to develop the market, this article is the second part of a series covering the key terms that an investor needs to be familiar with before investing in shares.

Stock Broker – Is a regulated professional agent associated to a licensed Stock Brokering Firm that executes trades to buy and sell stocks and other securities on behalf of an investor.

A regulated commission or fee is charged by the Stock Broker for each buy or sell transaction made on behalf of the client.

With effect from 15 April 2016 transaction cost applicable for transactions upto Rs. 50 Mn for both equity securities is 1.12% divided as follows;

Brokerage Fees – 0.640%
CSE Fees – 0.084%
CDS Fees – 0.024%
SEC Cess – 0.072%
Share Transaction Levy – 0.300%

Central Depository System (CDS) – functions as a specialist market intermediary and clearing house, holding the securities of publicly listed companies such as shares, to smoothly transfer ownership between buying and selling investors.

As of 2011 securities of all listed companies have been converted from physical certificates to dematerialized form or electronic paperless format. As such an investor buying and selling shares will not be given a physical share certificate, instead an equivalent number of securities in electronic form will be credited in the CDS account registered under the investors name through a Stockbroker.

When an investor trades using his CDS account, he is given a ‘bought or sold note’ at the end of the day indicating details of the transaction as a confirmation. This is not a share certificate.

In Sri Lanka the CDS is licensed by the Securities and Exchange Commission of Sri Lanka (SEC).

CDS Account – is a paperless account maintained for an investor by the CDS in order to facilitate trading through the CSE. Investors are required to open a CDS account through a preferred Stock Broker.

There are specific account opening forms for individuals (resident and non-resident) and corporates (local and foreign). In addition to the account opening forms an investor is  required to provide the following documentation.

  • Copy of National Identity Card or a copy of a valid Passport as proof of identity.
  • Three (3) months utility bills or any other accepted document with address as proof of residence.

Once the completed application along with the above documents are submitted, the newly registered CDS Account Number is sent to the investor via post.

Securities and Exchange Commission of Sri Lanka (SEC) – is the regulator of the capital market appointed by the Government to proactively promote, develop and maintain a capital market that is fair, efficient, orderly and transparent.

The SEC was established to achieve the following objectives;

  • The creation and maintenance of a market to issue and trade securities in an orderly and fair manner.
  • Protecting the interest of the investors
  • Operation of a Compensation Fund to protect investors from financial loss arising as a result of any licensed stock broker or licensed stock dealer being found incapable of meeting his contractual obligations
  • The regulation of the securities market and to ensure that professional standards are maintained in such market.

Over the years the duties, functions and the powers of the SEC has expanded and it is currently bestowed with the following responsibilities;

To grant licenses for the operation of a stock exchange, stock brokers or unit trust managers, and to ensuring its proper conduct. To grant a certificate of registration to carry on business as a market intermediary and to ensure the proper conduct of such business. To give general or specific directions to all entities under its governance, periodically.

To grant compensation to any investor who suffers pecuniary loss arising as a result of any licensed stock broker or licensed stock dealer being found incapable of meeting his contractual obligations.

To regulate the listing and issuing of securities in the licensed stock exchange, and holds the authority to suspend the listing or trading of securities for the protection of investors.

To conduct investigations into any alleged violation or contravention of the provisions of the SEC Act or any rule or regulation made there under. Advising the government of developments in the securities market, while implementing the policies and programmes of the Government with respect to the market. In addition to a multitude of regulatory and governance undertakings listed out at www.sec.gov.lk.

(Sources: www.investopedia.com / www.cse.lk / www.sec.gov.lk)

Interested in the Stock Market? – Basic Terms You Should Know – Part 01

A knowledge investor is a wise investor. Awareness is the key to making positive gains through the Colombo Stock Exchange (CSE) – Stock Market in Sri Lanka, by making the correct choices, intelligent observations and by doing your investment homework. There are many reports and resources freely available to help evaluate your investment decisions.

First Capital believes that an educated investor contributes to develop the market, this article series covers the key terms that an investor needs to be familiar with before investing in shares.

Shares – are a proportionate piece of ownership of a PLC company that are issued to the public as a means of raising capital. An investor who buys a share of a company is therefore entitled to a quantity of its assets and earnings but will be the last to be settled on liquidation of the company. Shares of some companies are subcategorized as Voting and Non-Voting Shares.

Investors (shareholders) can freely buy and sell shares on the CSE through a licensed Stock Broker.

Earnings for shareholders come from the growth in share price (capital gains) and dividend payments (share of the company’s profits) both of which are subject to the performance of the company and market conditions.

Publicly Listed Companies (PLC) – Companies incorporated under the Companies Act or any other statutory corporation, incorporated or established under the laws of Sri Lanka or established under the laws of any other state (subject to Exchange Control approval) are eligible to seek a listing on the CSE to raise Debt or Equity.

Companies interested to be admitted to the official list of the CSE and to secure a listing of their securities are required to comply with the relevant provisions of the above act and the Securities & Exchange Commission Act and the Listing Rules of the CSE. This process of obtaining a listing is facilitated through an investment bank.

Additionally, the CSE regularly monitors listed companies as part of ongoing listing requirements to ensure the company abides by its listing rules (corporate governance, disclosures, financial reporting, transparency etc.). CSE also facilitates the trading (buying and selling) of the publicly held shares of the company.

As at 29 March 2016 CSE has 294 listed companies representing 20 business sectors.

Market Indices – The All Share Price Index (ASPI) and the S&P SL20 (Standard & Poor’s Sri Lanka 20) are the two main price indices used by the CSE.

The ASPI is a market capitalization weighted index where the weight of any listed company is taken as the number of shares listed in the market, while the S&P SL20 gives a measurement of the value of 20 selected stocks.

The ASPI indicates the price fluctuations of all the listed companies and covers all the traded companies during a market day.

Where,

Base values are established with average market value on year 1985. Hence, the base year becomes 1985.

This weighting system allows the price movements of larger companies to have a greater impact on the index. Such a weighting system was adopted on the assumption that the general economic situation has a greater influence on larger companies than on smaller ones.

The indices are calculated on an on-going basis during the trading session by computing the prices of stocks, with the closing values published at the end of each trading day. In addition to the above the CSE also calculates Sector Price Indices and Total Returns Indices.

Investors and financial managers use market indices as a tool to describe the market, and to compare the return on investments.

Market Capitalization – is the total Rupee (LKR) value of a company’s listed shares and is calculated on a daily basis by multiplying the current market price of one share by the total number of shares listed.

In calculating the sum of all companies listed on the CSE the market capitalization of the exchange is derived, this total market capitalization is utilized to indicate the relative size of the exchange.

The investor community and financial managers Market capitalization is used by the investment community in ranking the size of companies, as opposed to sales or total asset figures.

As at 29 March 2016 the Market Capitalization of 294 listed companies on the CSE stood at Rs. 2,591,06 Bn.

Boards – Listed companies are separated to either the Main Board or Diri Savi Board (for Equity) operated by the CSE based on listing criteria.

The Main Board consists of companies with a stated capital of not less than Rupees Five Hundred Million (Rs.500, 000,000/-) at the time of listing, net profit after tax for three (3) consecutive years immediately preceding the date of application, positive net assets as per the consolidated audited financial statements for the last two (2) financial years immediately preceding the date of application, and, a minimum public holding of 25% of the total number of shares for which the listing is sought which shall be in the hands of a minimum number of 1,000 public shareholders holding not less than 100 shares each.

The Diri Savi Board companies necessitate a stated capital of not less than Rupees Hundred Million (Rs.100, 000,000/-) at the time of listing, positive net assets as per the consolidated audited financial statements for the financial year immediately preceding the date of application, a minimum public holding of 10% of the total number of shares for which the listing is sought which shall be in the hands of a minimum number of 100 public shareholders holding not less than 100 shares each, and, an operating history of at least one (1) year immediately preceding the date of application.

Diri Savi Board companies are entitled to graduate to a Main Board listing, once such companies meet the Main Board listing criteria.

(source : www.investopedia.com / www.cse.lk)