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» Sri Lanka bad loans grow to 4.8-pct in June after soft-peg collapse
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyToday at 3:58 pm by The Invisible

» Banks, Finance & Insurance Sector Chart
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyToday at 3:51 pm by The Invisible

» HNB Update
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyToday at 3:39 pm by The Invisible

» Cricket, meet Capitalism
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyToday at 12:26 pm by nuwanmja

» SAMP.N0000 (SAMPATH BANK PLC)
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyToday at 5:19 am by NIRMALSG

» Thread for News on CSE and SL Economy
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyToday at 5:10 am by NIRMALSG

» Dividend Announcement
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyYesterday at 9:32 pm by nihal123

» Browns Investments update
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyYesterday at 7:45 pm by The Invisible

» LOFC Initiating Coverage - STRONG BUY - 29 03 17 - FC Research
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyYesterday at 1:03 pm by Fireandwater

» "පියසේනට දැං සනීපයි..."
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyYesterday at 10:47 am by Yin-Yang

» What's going to happen
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyYesterday at 6:26 am by serene

» TJL.N0000 (Textured Jersey Lanka PLC.)
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyThu Jul 18, 2019 11:50 am by serene

» CFVF - First Capital
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyThu Jul 18, 2019 7:43 am by serene

» විද්‍යාව මිස්ගේ පාඩම...
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyWed Jul 17, 2019 7:27 am by sanjulanka

» Trading Journal
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyTue Jul 16, 2019 11:50 pm by pathfinder

» වචන නම් අපේ ඒත් තනුව ?????????
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyTue Jul 16, 2019 8:08 pm by Rana

» Access Engineering AEL Technical Analysis
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyMon Jul 15, 2019 3:07 pm by NIRMALSG

» Tourism sector
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptySun Jul 14, 2019 8:57 am by NIRMALSG

» LFIN - LB Finance
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyThu Jul 11, 2019 11:27 am by Ethical Trader

» අපි නොදන්න චෙස් කිව්වලු !
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyTue Jul 09, 2019 6:25 pm by serene

» Stock Market to stay Bullish
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyMon Jul 08, 2019 7:51 am by කිත්සිරි ද සිල්වා

» Is an emoji a word or a gesture?
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyMon Jul 08, 2019 7:46 am by කිත්සිරි ද සිල්වා

»  Rajgama Heroes !
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyMon Jul 08, 2019 7:39 am by කිත්සිරි ද සිල්වා

» HHL.N0000 ( Hemas Holdings PLC)
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptySun Jul 07, 2019 12:25 pm by dhanurrox

» Checkmate, meatbags !
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptySun Jul 07, 2019 7:20 am by spw19721

» GLAS.N0000 (PIRAMAL GLASS CEYLON PLC)
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptySat Jul 06, 2019 8:13 am by කිත්සිරි ද සිල්වා

» සංචාරක පැමිණීම ක්‍රමයෙන් යහපත් වන ලකුණු
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyFri Jul 05, 2019 6:11 pm by serene

» Easter Sunday Attack and Sri Lanka
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyThu Jul 04, 2019 8:46 am by කිත්සිරි ද සිල්වා

» අනං මනං! #/+?.<>
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyWed Jul 03, 2019 10:07 pm by ruwan326

» First capital holdings
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyWed Jul 03, 2019 1:37 pm by serene

» What to Analyse
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyMon Jul 01, 2019 11:33 am by serene

» අනිසි ලෙස කොටස් මිල හැසිර වූ ආයෝජකයින් දෙදෙනෙකුට සුරැකුම්පත් කොමිසමෙන් නඩු
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyFri Jun 28, 2019 2:11 pm by Ethical Trader

» අද වෙන්දේසියේ දී බිල්පත් පොළිය පහළට.
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyFri Jun 28, 2019 7:46 am by serene

» AAIC.N0000
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyFri Jun 28, 2019 7:33 am by serene

» SERV - The Kingsbury
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyThu Jun 27, 2019 8:27 pm by ruwan326

» TPL.N0000 (TALAWAKALE PLANTATIONS )
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyWed Jun 26, 2019 2:22 pm by nuwanmja

» Life After Google
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyTue Jun 25, 2019 5:28 pm by කිත්සිරි ද සිල්වා

» S&P ශ්‍රී ලංකා 20 දර්ශකයේ වෙනසක්. CTC, NTB, රිචඩ් පීරිස් සහ ටෝක්යෝ සිමෙන්ති ඉවතට
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyTue Jun 25, 2019 6:37 am by nihal123

» Future of Tea Industry
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyMon Jun 24, 2019 6:54 pm by hammurabi

» Cricket !
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyMon Jun 24, 2019 2:22 pm by කිත්සිරි ද සිල්වා

» DIPD.N0000 (Dipped Products)
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyMon Jun 24, 2019 11:40 am by Ethical Trader

» DOCK.N0000 (COLOMBO DOCKYARD PLC)
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptySun Jun 23, 2019 9:14 pm by hammurabi

» මිල සූත්‍රය වැරදුණාද, වැරැද්දුවාද?
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyFri Jun 21, 2019 5:25 pm by Ethical Trader

» Happy Father's Day !
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyMon Jun 17, 2019 8:58 pm by spw19721

» DPL.N0000 (Dankotuwa Porcelain PLC)
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptySun Jun 16, 2019 7:12 am by NIRMALSG

» Re: Financial reports Q1-2019
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyFri Jun 14, 2019 8:57 pm by dhanurrox

» SEYB.N0000 ( SEYLAN BANK PLC )
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyThu Jun 13, 2019 8:11 pm by ruwan326

» NTB.N0000 (NATIONS TRUST BANK PLC)
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyThu Jun 13, 2019 8:08 pm by ruwan326

» PABC.N0000 (Pan Asia Banking Corporation PLC)
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyThu Jun 13, 2019 8:06 pm by ruwan326

» NDB.N0000 (NATIONAL DEVELOPMENT BANK PLC)
SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research EmptyThu Jun 13, 2019 7:58 pm by ruwan326

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SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research

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SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research Empty SRI LANKA FINANCE SECTOR - HOLD - Mar 2017 - FC Research

Post by CSE.SAS on Tue Apr 11, 2017 7:18 pm

FC Research expects finance sector to face moderately tough conditions to operate with thinning margins and new LTV regulations leading to slower and previous but moderate credit growth. Despite slow economic conditions rise in NPLs are likely to be slow amidst price appreciation in vehicle prices as bulk of the lending is attached to vehicles. We believe the larger finance companies have an advantage with lower cost of funding and large conversion levels from leases to loans which improves re-pricing abilities at times of rising interest rates. Sector Recommendation: HOLD

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Margins to dip but Credit Growth to remain moderate: With rising interest rates and bulk of the lending attached to leases finance sector is likely to experience a dip in margins while credit growth is expected to remain moderate around 16-18% despite deceleration from 2016. New LTV regulations also likely support the slower credit in 2017E.

Upbeat second-hand market vehicle prices to support Lower NPL provisions: Despite rise interest rates and slower economic conditions FC Research expects NPL provisions of finance companies to continue to stay on the back significant price appreciations in the second hand vehicle market. Higher vehicle prices are likely to deter related borrowers from default while even if defaulted higher vehicles prices ensures finance companies of eliminating losses and recovering bad debts.

Selected larger finance companies to perform: Finance companies with better rating and larger asset base tend to have a lower cost of funding while some finance companies have already converted significant portions from loans to leases enabling them to re-price part of the assets in line with interest rates. These two conditions being satisfied enables selected finance companies specifically identified as PLC, CFIN, LFIN, COCR and LOFC to perform better in tough environment. We expect the selected companies to provide an average total return on equal weightage of c.51% during a 12 month period.

*Disclosure:

First Capital Group and its affiliates does not hold any shares in PLC, CFIN, LFIN, COCR, and LOFC. Neither First Capital Group nor its affiliates have traded in the shares of PLC, CFIN, LFIN, COCR, and LOFC in the three trading days prior to this document, and will not trade in the shares of PLC, CFIN, LFIN, COCR, and LOFC for three trading days following the issue of this document

CSE.SAS

Posts : 263
Join date : 2014-02-23

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