Tag Archives: The Business Times Sri Lanka

Monetary Policy Review – Monthly Economic Watch – May 2017

Policy rates unchanged
Private sector credit growth decelerated gradually to 21.0% in February 2017 and 20.4% in March 2017. The Earlier tightening of monetary policy by central bank and resultant increase in interest rates impacted the credit growth.
Combined impact of the decline in export earning and increased expenditure on imports as a result of the drought conditions expanded Trade deficit to USD 1.7Bn till February 2017.
Gross official reserves dipped to USD 5.1Bn by end April 2017 from USD 6.0Bn by end 2016. Both the government securities market and the Colombo Stock Exchange experienced foreign inflows in recent months.

Accordingly policy rates were increased,

  • Standing Deposit Facility Rate – 7.25%
  • Standing Lending Facility Rate – 8.75%
  • Statutory Reserve Ratio (SRR) – 7.50%
Read the full report –

https://www.firstcapital.lk/wp-content/uploads/2015/06/Monthly-Economic-Watch-May-2017.pdf

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 fall for third straight session; John Keells down

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

Sri Lankan shares fell for a third straight session on Thursday, posting their lowest close in a month, dragged down by diversified stocks such as John Keells Holdings Plc as investor sentiment continued to remain low on concerns about rising interest rates.

The Colombo stock index ended down 0.1 percent at 6,088.80, its lowest since Feb. 6. It shed 0.6 percent last week in its second straight weekly decline.

Foreign investors were net buyers for the seventh straight session on Thursday, purchasing shares worth 63.6 million rupees ($420,495.87), and extending the year-to-date net foreign inflow to 1.95 billion rupees worth of equities.

Turnover was 875.6 million rupees, more than this year’s daily average turnover of 689.7 million rupees.

“The market is mainly down because of John Keells. It is slowly coming down with rising rates and economic uncertainty,” said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

“Foreigners seem to be the only buyers at the moment.”

Traders said there were concerns after the International Monetary Fund urged Sri Lanka’s central bank to be ready to tighten monetary policy if credit growth or inflation does not abate.

Shares of John Keells Holdings fell 1.06 percent while Commercial Bank of Ceylon Plc, the country’s biggest listed lender, declined 1.29 percent and Carson Cumberbatch Plc dropped 2.91 percent.

Sri Lanka Telecom Plc dropped 1.41 percent and Hatton National Bank Plc ended 1.16 percent weaker.

Yields on treasury bills have risen to a more than four-year high since October, while the central bank has kept key policy rates on hold.

($1 = 151.2500 Sri Lankan rupees)

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)

Sri Lankan shares ease; interest rate concerns weigh

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

Sri Lankan shares ended slightly weaker on Tuesday, with financial and manufacturing stocks dragging down the index as investor sentiment continued to remain low on concerns about rising interest rates.

The Colombo stock index ended down 0.15 percent at 6,108.11, On Friday the bourse hit its lowest close since Feb. 9. It shed 0.6 percent last week in its second straight weekly decline.

Foreign investors were net buyers of shares worth 379.6 million rupees ($2.51 million) on Tuesday, extending the year-to-date net foreign inflow to 1.73 billion rupees worth of equities.

Turnover was 539 million rupees, less than this year’s daily average of 676.9 million rupees.

“Retail and institutional segment is on silent (mode) with the high interest rates and economic uncertainty,” said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

The International Monetary Fund on Tuesday urged Sri Lanka’s central bank to rebuild international reserves, while maintaining exchange rate flexibility, and to be ready to tighten monetary policy if credit growth or inflation do not abate.

Shares in Ceylon Cold Stores Plc fell 2.51 percent while Commercial Leasing & Finance Plc lost 6.67 percent.

Yields on treasury bills have risen to a more-than-four-year high since October, while the central bank has kept key policy rates on hold.

 

($1 = 151.1500 Sri Lankan rupees)

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil Nair)

 

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 edge up; beverage, telecoms lead

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

Sri Lankan shares closed slightly firmer on Monday, after posting a more than three-week closing low in the previous session, with beverage and telecom stocks driving the gains.

However, investor sentiment continued to remain low amid concerns about rising interest rates.

The Colombo stock index ended up 0.26 percent at 6,117.19, after posting its lowest close since Feb. 9 on Friday. It shed 0.6 percent last week in its second straight weekly decline.

Foreign investors were net buyers of shares worth 384.7 million rupees ($2.55 million) on Monday, extending the year-to-date net foreign inflow to 1.35 billion rupees worth of equities.

Turnover was 711.9 million rupees, more than this year’s daily average of 680.1 million rupees.

“Some crossings boosted the turnover. The good sign is we are seeing continued foreign buying these days,” said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

“Local investors are on the sidelines, mainly because of the high interest rates and economic uncertainty.”

Shares in Ceylon Cold Stores Plc jumped 6.12 percent, Lion brewery (Ceylon) Plc rose 6.27 percent, Ceylon Tobacco Company Plc gained 0.71 percent, and Sri Lanka Telecom Plc climbed 2.41 percent.

Yields on treasury bills have risen to a more than four-year high since October, while the central bank has kept key policy rates on hold.

($1 = 151.0000 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.

Sri Lankan shares close at over 3-week low; turnover up on block deals

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

Sri Lankan shares on Friday hit their lowest close in more than three weeks, as investors sold telecom shares and on concerns over rising interest rates.

The Colombo stock index ended down 0.42 percent at 6,101.51, its lowest close since Feb. 9. The bourse dropped 0.6 percent on the week, in its second straight weekly decline.

Foreign investors were net buyers of 70.8 million Sri Lankan rupees ($468,563.86) worth of shares, extending the year-to-date net foreign inflow to 963.03 million rupees worth of equities.

Turnover was 1.21 billion rupees, the highest since Feb. 28 and nearly double this year’s daily average of 679.4 million rupees.

“Even today the crossings pushed the turnover. The foreign inflow is continuing, which is a good thing,” said Dimantha Mathew, head of research, First Capital Equities (Pvt) Ltd.

“Foreign participation is high and local investors are completely staying out of the market.”

Conglomerate John Keells Holdings Plc, which accounted for 72.5 percent of the day’s turnover on block trade, ended steady.

Sri Lanka Telecom Plc slid 5.44 percent, while Dialog Axiata Plc declined 3.48 percent.

Yields on treasury bills have risen to a more-than-four-year high since October, while the central bank has kept key policy rates on hold.

($1 = 151.1000 Sri Lankan rupees)

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sherry Jacob-Phillips)

 

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 edge up on foreign investor buying

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

Sri Lankan shares closed marginally higher on Thursday after posting a near three-week closing low in the previous session, as foreign investors bought recently battered stocks while concerns about rising interest rates continued to hurt investor sentiment.

The Colombo stock index ended up 0.09 percent at 6,127.11, after closing at its lowest since Feb. 9 on Wednesday.

Foreign investors were net buyers of 292.6 million rupees ($1.94 million) worth of shares, extending the year-to-date net foreign inflow to 892.2 million rupees worth of equities.

Turnover was 783.9 million rupees, more than this year’s daily average of 666.6 million rupees.

“Market continues to move sideways but today we have seen some institutional and foreign buying,” said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

Sri Lanka Telecom Plc ended 3.87 percent higher after reporting a group net profit of 289 million rupees for the December quarter, compared with a net loss of 157 million rupees a year earlier.

Trans Asia Hotels Plc jumped 8.12 percent, while Commercial Leasing & Finance Plc rose 3.45 percent.

Yields on treasury bills have risen to a more than four-year high since October, while the central bank has kept key policy rates on hold.

($1 = 151.1000 Sri Lankan rupees)

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)

Sri Lankan shares hit 2-1/2-week closing low; block deals boost turnover

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

Sri Lankan shares fell on Monday to hit their lowest close in more than two weeks as investors were worried over rising interest rates, but foreign buying and block deals in Expolanka Holdings boosted the turnover.

Foreign investors net bought 716.2 million rupees worth of equities on Monday, reversing the year-to-date net foreign outflow to an inflow of 580.7 million rupees worth of equities so far this year.

The Colombo stock index ended down 0.24 percent at 6,122.04, its lowest close since Feb. 9.

“Selling pressure on John Keells brought the market down,” said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

“Investor sentiment is negative due to the rising interest rates and most of the investors are on a wait-and-see approach,” he added.

Shares in conglomerate John Keells Holdings Plc slid 1.20 percent, while Hatton National Bank Plc slipped 2.04 percent.

Expolanka Holdings Plc, which accounted almost half the day’s turnover, climbed 1.72 percent on foreign buying.

Turnover stood at 1.35 billion rupees ($8.90 million), well more than this year’s daily average of 625.2 million rupees.

Yields on treasury bills have risen to a more-than-four-year high since October, while the central bank has kept key policy rates on hold.

($1 = 151.7500 Sri Lankan rupees)

(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sherry Jacob-Phillips)

 

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 edge up as investors pick up bank stocks

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

Sri Lankan shares rose slightly on Wednesday from a more than one-week closing low hit in the previous session as investors bought banking shares, but concerns over rising interest rates weighed on sentiment.

Yields on treasury bills rose 3-10 basis points at a weekly auction on Tuesday. They have risen 44-73 basis points since Oct. 7 to more than four-year highs, while the central bank has kept key policy rates on hold.

The Colombo stock index ended 0.04 percent firmer at 6,129.69, snapping a four-session losing streak and edging up from its lowest close since Feb. 9 hit on Tuesday.

“Some crossings in blue chips boosted the turnover. Other than that, there was nothing and the market was very dull as investors are still on the sidelines,” said Dimantha Mathew, head of research at First Capital Equities (Pvt) Ltd.

“Selling pressure is there, but there are no buyers.”

Shares in Lanka ORIX Leasing Company Plc rose 4.18 percent, while Nestle Lanka Plc, which posted a 42 percent rise in profit for the quarter ended Dec. 31, climbed 2.02 percent.

Turnover stood at 482.7 million rupees ($3.19 million), well below this year’s daily average of 612.5 million rupees.

Foreign investors net bought 37.8 million rupees worth of equities on Wednesday, but they have net sold 215 million rupees worth shares so far this year.

 

($1 = 151.1000 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.

MARKET UPDATE ON ADA DERANA ENGLISH NEWS – 2017.02.20

FC Head of Research Dimantha Mathew with the market update – between 16.40 mins to 17.13 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.

US bond rate increase good for CSE; not so much for local bonds

FIRST CAPITAL’S  SENIOR RESEARCH ANALYST ATCHUTHAN SRIRANGAN, SPEAKS TO THE SUNDAY TIMES

Foreigners rally in cash at CSE

Despite being one of the poorest performing markets in the region, Sri Lanka’s stock market which has been in the doldrums has attracted a lot of foreign buying interest since of late.

This heavy investor participation stems mainly from the rate increase in the US bond market. While the rates going up is seeing foreign funds shifting back to the US from frontier markets such as Sri Lanka, a small component of their corresponding funds which invest in stock markets  are being ploughed into the Colombo Stock Exchange (CSE), analysts say.

There has been continuous foreign selling in local bonds and as at January 1, 2017 it was US$ 2 million.  The new regime under Donald Trump is trying to strengthen the US Dollar and luring back  funds  to the US.

Atchuthan Srirangan, Senior Research Analyst First Capital Equities noted that on the back of all this, this month’s foreign inflow at CSE was Rs. 600 million as at February 8. Mr. Srirangan said that in the year to date the total foreign participation so far is more than 50 per cent of CSE’s turnover, while for the same period last year it’s 38 per cent.

But why put cash in the CSE? 

That’s due to most shares at the CSE trading at 4x their price to Earnings Ratio (PER) which has made these bargain counters for foreign investors. Foreign fund managers say that CSE is a good investment this year owing to superior earnings projections, low valuations and the potential for better earnings.

From January 1 to 8 February, foreigners bought Rs. 7.67 billion and sold Rs. 8.63 billion. While the net outflow is Rs. 1.026 billion, analysts note that some foreign selling was done to foreigners themselves.

Analysts say that a considerable foreign play was done by Norway’s $830 billion sovereign wealth fund, locally managed by Lynear Wealth Management. The fund has been increasing its focus on emerging countries but only has about 4 per cent of its assets managed externally.   Negotiated deals were recorded in many counters early this month – mostly blue chips and mid-caps bought by foreign funds — Hatton National Bank (0.7 million shares at Rs. 227) and Commercial Bank (0.2 million shares at RS. 145). The aggregate value of crossings accounted for 45 per cent of the turnover. Subsequent to its scrip dividend announcement, Sampath Bank attracted high investor preference where stock price increased to Rs. 267 up by 0.8 per cent.

On February 2, foreign investors stood on the ‘buy’ side with a net foreign inflow of Rs. 90 million. Net foreign inflows were seen in Commercial Bank at Rs. 29 million, Sampath at Rs. 29 million, Melstacorp at Rs. 17 million while net foreign outflows was mainly seen in Seylan Bank (Rs. 5 million). Foreign participation was 66 per cent.

Hemas Holdings saw 2.8 million shares crossed at Rs. 104 on February 2. Its main buyer in 3Q17 was Morgan Stanley and Co: International PLC. But Franklin Templeton Investment Funds had reduced its position in Hemas during the same period.

Overseas Realty Rights Issue saw a 24 per cent acquisition by Jilansu Tao Shing Pee Education Foundation on February 3. Foreign investors were net buyers with a new foreign inflow of Rs. 27 million on this day and net foreign inflows were mainly seen in Sampath Bank Rs. 35 million, Melstacorp Rs. 13 million and Tokyo Cement non-voting Rs. 12 million. That following Monday foreign investor activity accounted for 47 per cent of the turnover.

The day after foreign investors stood on the ‘buy’ side with a net foreign inflow of Rs. 111 million. Net foreign inflows were seen in John Keells Holdings (JKH) Rs. 51 million, Hemas Holdings Rs. 30 million, and Nestle Rs. 28 million while net foreign outflow was mainly seen in National Development Bank Rs. 4 million. Foreign participation was 52 per cent that day. On February 8 foreign investors were net buyers with a net foreign inflow of Rs. 152 million. Net foreign inflows were seen in JKH (Rs. 103 million), Sampath Bank (Rs. 49 million) and Melstacorp (Rs. 10 million). Net foreign outflow was mainly seen in Hatton National Bank (Rs. 17 million). Foreign participation was 33 per cent.

On February 13, foreign investors were net buyers with a net foreign inflow of Rs. 333.33 million foreign participation was 61 per cent. Let’s hope this trend co continues.

 

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.