Results, helped by monetary policy easing, achieved against negative headwinds
First Capital Holdings PLC (FCH), a Janashakthi company, reported its best ever performance in the year ended Mar. 31, 2020 with its profit after tax topping the billion rupee mark, up from Rs. 8 million the previous year.
The company’s chairman, Mr. Nishan Fernando, said in a statement in the company’s recently published annual report that the record breaking performance was without doubt the best year to date, with the group’s impressive performance achieved against some obviously negative headwinds that saw the country posting what he called “sub-par economic growth” for the third consecutive year.
“Our ability to deliver consistent results even in tough times, is a testament to the group’s robust operating model,” Fernando said. “I am also convinced that the ongoing emphasis placed on strengthening each of our core businesses and firming up their positions within their immediate operating domain, has been a critical success factor for the group.
FCH is a full service investment bank providing a diverse range of advisory services and financial products. Its specialties include Capital Market Advisory, Wealth Management, Fixed Income and Equities serving an array of companies, institutions, government agencies, high net worth individuals and retail clients.
The superior performance enabled the company to pay its shareholders a total dividend of nine rupees per share for the year under review comprising a first interim of four rupees per share in Aug. 1919 and a second interim of five rupees per share in in June 2020 with a total dividend payout of Rs. 911.2 million.
Fernando said the outstanding performance was supported by a demonstrable improvement across all key metrics with revenue up to Rs. 5.22 billion from Rs. 4.17 billion a year earlier.
Operational highlights included channeling Rs. 336 billion worth of government securities to the public; assets under management reaching Rs. 26.4 billion; Rs. 42 billion raised through corporate debt structuring and placement; and Rs. 7.2 billion raised for listed debt IPOs.
He said he was particularly pleased with the performance of their primary dealer operation – First Capital Treasuries PLC, as a result of the Central Bank’s monetary policy easing in the latter part of 2019.
Focusing mainly on the unlisted debt market, their Corporate Advisory Unit leveraged on the opportunity to re-enter the listed debenture space after three years raising approx Rs. 7.25 billion by way of listed debentures.
Their wealth management unit had also made remarkable progress to deliver the best financial results to date. The wealth management clientele had shown a degree of maturity during the year for which he credited their efforts to raise market awareness.
He expected the Covid-19 pandemic will continue to dictate the country’s medium term economic outlook. Based on the assumption that at the very least, the existing monetary policy easing measures will remain in effect, he expected their group “to benefit from a highly conducive environment.”
The company’s Director/CEO Dilshan Fernando said that a continuation of the current monetary policy slant at least for the forthcoming financial year will benefit their group with the low interest rates offering strong growth potential. He also saw the opportunity to expand their corporate advisory services as businesses restructure in the post-Covid era.
“Also, as the equity market bottoms out, there is likely to be renewed interest in investing, especially from foreign investors over the coming months,” he said. “This will no doubt boost the prospects of our stock broking arm.”
The Janashakthi Groups owns over 75% of First Captal.
The company’s directors are Messrs. Nishan Fernando (Chairman – Independent non-executive) Dinesh Schaffter (MD) Dilshan Wirasekera (Director/CEO) Prakash Schaffter and Ramesh Schaffter (Non-independent, non-executive), Eardley Perera, Minette Perera, Chandana de Silva and Nishan de Mel (Independent non-executive directors).
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Unlimited music streaming platform in Sri Lanka
SLT-Mobitel, the nation’s ICT and Telecommunications Service Provider recently partnered with Spotify, to mark their launch in Sri Lanka. Spotify is a paid premium music streaming app which allows subscribers to listen to music to their hearts content. Both, SLT-Mobitel Post-Paid and Pre-Paid customers will now be able to enjoy Spotify by activating a monthly recurring subscription or one-time subscription plan and access unlimited music streaming and downloading facilities.
The subscription charges will get added to the user’s customary billing, where payment will be deducted in real time. Starting from the payment date, the user will be able to access Spotify and download their favourite songs, for the next 30 days. Users who sign up for their first monthly subscription will receive an additional one month, courtesy of Spotify. The one-month subscription plan is not applicable with one-time subscription plans. SLT-Mobitel data rates, depending on the user’s respective broadband charges, will apply.
Spotify also has some exciting features that will provide SLT-Mobitel customers with the opportunity to listen to ad-free music, access millions of uninterrupted music under one platform, play any song they like, anywhere they go, and also be able to enjoy their music offline.
SLT-Mobitel customers can select their preferred premium package under four categories; Individual, Duo, Family, Student. Each category has recurring and non-recurring plans. After one month of free streaming, the package will activate once the offer period terminates. While both, the Individual and Student premiums are limited to one account user, the Duo package offers two accounts and the Family premium is accessible through six accounts. To view Spotify plans, users can log on to https://spoti.fi/3aLWvce
Sri Lanka using ‘sovereign power’ over economy: CB Governor
by Sanath Nanayakkare
Anyone conversant with the elements of a political economy would know that Sri Lanka is using its ‘sovereign power’ to manage the different dynamics of the economy in a sustainable manner, Professor W. D Lakshman Governor of the Central Bank said on Wednesday.
“Some critics are saying that we adopt a so-called modern monetary theory. That’s not the case. In fact, Sri Lanka is using its sovereign power in a number of economic aspects to honour its external debt repayment commitments as well as to reduce its debt burden in the medium term as well as achieve resilient growth in the medium to long term, he said.
“We make policy decisions to boost our gross foreign reserves, meet our external debt servicing, to facilitate monetary expansion, to boost our GDP growth, to strengthen our current account balance and manage our domestic and external economic variables in a sustainable manner. This is not a modern monetary theory. This is an age-old tool used by central banks around the world when the circumstances demand it, he said.
“Certain trade-offs will be necessary when dealing with an economy which has a big fiscal gap to bridge. There are efforts to push Sri Lanka towards the IMF again which would in turn have influence on our policymaking. We have taken policy measures to stabilize the economy and we have adequate reserve levels to meet our debt repayments. Meanwhile, we are in negotiations with overseas central banks and multilateral agencies to further boost our reserve level and it would materialise within a matter of weeks,” he noted.
“One of the tools the Central Bank has introduced is in respect of repatriation of export proceeds into Sri Lanka and conversion of such proceeds into Sri Lankan rupees in order to strengthen the foreign exchange situation of the country,” he said.
The Governor made these remarks while delivering the keynote speech at a webinar organised by the Veemansa Initiative led by its Managing Director Luxman Siriwardene – the former Executive Director of Pathfinder Foundation.
The webinar revolved round the topic ‘External debt situation in Sri Lanka: Are we heading for a resolution or crisis?’
Professor Sirimal Abeyratne, Prof. Sumanasiri Liyanage, Dr. Nishan de Mel and Dr. Ravi Liyanage were the other speakers on the panel.
CSE on the rebound; indices close positive
By Hiran H.Senewiratne
CSE produced signs of a rebound yesterday with both indices closing positive, though turnover remained low. Central Bank Governor W.D Lakshman’s recent statement on managing foreign reserves gave some boost to the market yesterday, stock market analysts said.
The index experienced a zigzag movement within the early hours of trading; thereafter, it recorded a slight up-trend as it reached its intraday high of 7,439. Later, the market witnessed a down-trend at mid-day, followed by a sideways movement and closed at 7,372, gaining 43 points during the month of February, market sources said.
It is said the banking sector dominated turnover with a contribution of considerable parcel trades in Sampath Bank, Commercial Bank and HNB.
Further, the Commercial Bank’s impressive quarterly results during the recent turbulent period also built investor confidence. Commercial Bank was able to register a18 percent net interest income when other banks were reporting a decline. Its share price increased by Rs. 3 or 3.5 percent. On the previous day, its shares started trading at Rs. 85 and at the end of the day they moved up to Rs. 88. Due to the positive growth results, the bank announced a Rs. 4.40 dividend per share, plus a Rs. 2 script divergent for every share.
Further, Sampath Bank shares also appreciated in both crossing and retail. In crossings its shares appreciated by Rs. 1.At the end of the day they moved up to Rs. 154.50. In the retail market, its shares moved up by Rs. 2 or 1.3 percent. Previously, its shares fetched Rs. 154 and at the end of yesterday they moved up to Rs. 156.
Amid those developments, both indices moved upwards. The All Share Price Index went up by 104.48 points and S and P SL20 rose by 67.78 points. Turnover stood at Rs. 3 billion with four crossings. Those crossings were reported in Sampath Bank, where 3.9 million shares crossed for Rs. 602.2 million, its share price being Rs. 154.50, HNB 375,000 shares crossed for Rs. 39.4 million, its shares traded at Rs. 105, Pan Asia Power 9.5 million shares crossed for Rs. 33.2 million, its shares traded at Rs. 3.50 and Access Engineering 1.2 million shares crossed for Rs. 28.2 million; its shares traded at Rs. 24.
In the retail market top five companies that mainly contributed to the turnover were, Expolanka Rs. 450 million (10 million shares traded), JKH Rs. 205 million (1.3 million shares traded), Browns Investments Rs. 199 million (34.9 million shares traded), Sampath Bank Rs. 191 million (1.2 million shares traded) and Dipped Products Rs. 137.7 million (2.8 million shares traded). During the day 101 million share volumes changed hands in 18046 transactions.
During the day, Expolanka, the biggest contributor to the turnover, saw its share price appreciating by Rs. 6.20 or 15 percent. Its share price quoted on the previous day was Rs. 41 and at the end of trading yesterday it moved up to Rs. 47.
Sri Lanka’s rupee quoted wider at 193.50/195.50 levels to the US dollar in the spot next market on Thursday while bond yields remained unchanged, dealers said. The rupee last closed in the spot market at 194.50/195.00 to the dollar on Wednesday.