CFVF - First Capital

I bumped the thread at right time for members to enter when it trading at 25 also gave a fair warning when it pass 40.

ET- I don't recommend CFVF as a LT investment.It's a cyclical share,better to ride the waves rather than holding long.

Agree with you totally. Now that Treasury Bond business is under complete surveillance (& free of crooks) by concerned authorities after the CB bond scam, CFVF will be able to thrive in that area. Hence, their performance cant be bad in the future. Who knows whether the intended buyer is connected to famous Bondmen?

slstock wrote:

Ethical Trader wrote:Thanks for the detailed comment.I was contemplating in adding some more to my portfolio at current prices as the last interim dividend of Rs:4/= was almost 10% at the current price level. I will do so if the price comes down a little bit more  than now.

ET, if you are keeping this long term for dividends, just remember  the time
when it went below Rs 20 and paid no dividends. They can pay dividends
when they earn good profit only right ?  After that .. ?

Thanks Path.

pathfinder wrote:I bumped the thread at right time for members to enter when it trading at 25 also gave a fair warning when it pass 40.

ET- I don't recommend CFVF as a LT investment.It's a cyclical share,better to ride the waves rather than holding long.

Hopefully there will be another dividend by January

Anyone of you are looking @ CFVF? If you refer to the equity, bond & forex update thread of me you can find some positives there that will have on CFVF. The latest reduction of rates now has given more opportunities for them to increase profits. At the moment we are seeing a good demand after a long time.

CFVF has reached 44/- with better than average trading volumes. Anyone who has this share better to hold for another few more days.

The Invisible wrote:CFVF has reached 44/- with better than average trading volumes. Anyone who has this share better to hold for another few more days.

From 'Swing trading' perspective, I would buy below 40/- and sell above 50/-
and hold in between.

Swing range will vary with the central bank interest rate announcements: Lower the higher, higher the lower.

Since no one has posted I would like to produce below facts for your information.

CFVF has achieved its latest 52week high of 56.70 on 17th September last year. In that quarter they have made 213mn profits. Below are the opening and closing TBill rates for that quarter.

91 day TBill 8.24 and 7.62
182 day TBill 8.49 and 7.75
364 day TBill 8.70 and 8.41

TBill rates as of 19th June are as follows
91 day 6.30
182 day 6.30
364 day 6.62

All are significantly lower than the once seen in 2019.

At the beginning of the year the following were the rates for above TBills.
91 day - 7.50
182 day - 8.13
364 day - 8.52

So the reduction in this year so far is far greater than the reduction saw in Q3 last year where CFVF ran ti its 52 weeks high.

I think better you do ur math now for the results of Q1 & Q2 2020.

Traders and Investors have different mind sets; usually very opposite ones.
In fact, in my view, they should have different mindsets to perform in the market.

Investors look at the business performance and make decisions.
Traders look at the market price movements and make decisions.
That will make both perform and happy.

If you try to do the other way around; i.e.
Investors making decisions based on market movement and traders making decisions based on company business performances, usually, both will face disasters.

Usually traders should not be rational and; should not think that market price would behave proportional to the quarterly profits.
But investors might.

HUNTER wrote:Traders and Investors have different mind sets; usually very opposite ones.
In fact, in my view, they should have different mindsets to perform in the market.

Investors look at the business performance and make decisions.
Traders look at the market price movements and make decisions.
That will make both perform and happy.

If you try to do the other way around; i.e.
Investors making decisions based on market movement and traders making decisions based on company business performances, usually, both will face disasters.

Usually traders should not be rational and; should not think that market price would behave proportional to the quarterly profits.
But investors might.

We can get a hint of the expected profit for Q1 & Q2 2020 based on the behavior of the market interest rates. And the stock price reaction reflects what that profit figure will be. Investors estimate this profit number and derive the future share price while traders look at the market momentum created by profit speculation and set their trading strategies.

The Invisible wrote:

HUNTER wrote:Traders and Investors have different mind sets; usually very opposite ones.
In fact, in my view, they should have different mindsets to perform in the market.

Investors look at the business performance and make decisions.
Traders look at the market price movements and make decisions.
That will make both perform and happy.

If you try to do the other way around; i.e.
Investors making decisions based on market movement and traders making decisions based on company business performances, usually, both will face disasters.

Usually traders should not be rational and; should not think that market price would behave proportional to the quarterly profits.
But investors might.

We can get a hint of the expected profit for Q1 & Q2 2020 based on the behavior of the market interest rates. And the stock price reaction reflects what that profit figure will be. Investors estimate this profit number and derive the future share price while traders look at the market momentum created by profit speculation and set their trading strategies.

That's a very reasonable and rational explanation of why and how the share prices move. 'Expected profits' is one of the most significant reasons behind the price movement of an associated share.

However, based on my experience, Investors, speculators and traders need to look at the whole scenario from different angles.

In my view, it's relatively OK for an investor or a speculator to calculate the expected market price based on expected future profits. In fact, I have personally done it for many years.

However, when it comes to a trader, he should not be too obsessed with company profits to make decision on his target levels. The market momentum will almost always, shoot the price well above the reasonable fair value in a bull run. Hence, holding on to a calculated fair value will be very counter productive for a trader, since he might miss the 'overshoot'.

(To be) Successful trader should not be too focused on any specific, razor sharp execution of a single trade; rather he should reap the advantages of a probabilistic and statistical advantage of a long term strategy.

First Capital records PAT of Rs. 1.07bn in 19/20 amidst challenging market conditions

First Capital Holdings PLC (the Group) the only listed investment bank in Sri Lanka, recorded a Consolidated Profit after Tax of LKR 1.07Bn for the year 2019/20, amidst negative headwinds that saw Sri Lanka, reporting subpar economic growth for the third consecutive year. The results show a significant growth compared to LKR 8Mn in the previous year. First Capital, with an impressive history of over 35 years, has total assets of LKR 45.6Bn and Equity in excess of LKR 4Bn.

The Group recorded a Total Comprehensive Income of LKR 1.04Bn for the year, a significant increase from Comprehensive Loss of LKR 20Mn recorded in 2018/19.

“Our ability to deliver impressive results even in tough times, is a testament to the Group’s robust operating model. I am 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”, commented Chairman, First Capital Holdings PLC, Nishan Fernando.

The Group’s Primary Dealer contributed LKR 1.2Bn (2018/19 – LKR 96Mn) Profit after Tax for the year, claiming a substantial volume-based market share in both the primary auctions as well as in the secondary market during the financial year.

Capitalising on the potential in the listed and unlisted debt market, the Corporate Finance division mobilised LKR 42Bn for its clients through structuring and placement of corporate debt securities, generating a fee income of LKR 175Mn (2018/19 – LKR 69Mn).

The Wealth Management division of the Group, made remarkable progress to deliver its best financial results to date, reporting a fee income of LKR 64Mn (2018/19 – LKR 33Mn). The division showed a significant growth in its assets under management to end with LKR 26.4Bn as at 31st March 2020 (31st March 2019 – LKR 5.9Bn).

Furthermore, the Company’s benchmark unit trust, the First Capital Money Market Fund was the best-performing unit trust fund in the country in 2019/20.

The Group’s Stock Brokering unit also recorded revenue of LKR 71Mn for the year 2019/20 (2018/19 – LKR 53Mn).

“While the last 12 months have been challenging for many local businesses, several aspects of our immediate operating environment worked in our favour; we are looking ahead and focusing our efforts on improving efficiency across all businesses to deliver enhanced results to our valued stakeholders’, commented Director/Chief Executive Officer, First Capital Holdings PLC, Dilshan Wirasekara.

The Group’s [SL]A- credit rating was reaffirmed by ICRA Lanka Limited, reconfirming the stability of the Group. First Capital Holdings PLC paid a total dividend of LKR 9 per share for 2019/20 totaling to LKR 911Mn.

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CFVF is Fantastic. Q1 2020 EPS Rs.13.65. The highest in recent years. Rs. 63.00, the price today is also the highest in the last 10 years. Dividends 2019 Aug. Rs. 4.00 and 2020 May Rs.5.00 for the financial year 2019/2020. Hope higher dividend in 2020/2021 financial year.

Rates of the auction today

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