Sri Lanka Equity Forum
Dear Reader,

Registration with the Sri Lanka Equity Forum would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
Sri Lanka Equity Forum

Discussion Forum for Stock Market Investors in Sri Lanka

සිංහල පරිවර්තනය
Submit Post
Submit Post

Latest topics

» ලංකාවට වැස්ස කෘතිම වැස්ස..is it required for Sri Lanka?
by Uaecoindubai Today at 12:03 pm

» What Sri Lanka can do to improve the credibility of Rupee
by Sstar Today at 11:30 am

» UBC - What is going on
by Soilconomy Today at 6:47 am

» UBC TO HIT 24 ??
by Soilconomy Today at 6:47 am

» UBC - Stake up by big invester
by Soilconomy Today at 6:46 am

» Sad situation of expressway !!!!
by Yahapalanaya Today at 4:12 am

» GOLDEN ERA
by soileconomy Yesterday at 9:14 pm

» Daily Stock Market Update
by Insights Equity Yesterday at 7:20 pm

» INSURANCE companies finally falling!
by nosf766 Yesterday at 2:00 pm

» Cinnamon Grand now Topless without Rohan Karr
by ChooBoy Yesterday at 1:47 pm

» MARKET CRASH - GUARANTEED
by Maharaja Yesterday at 1:47 pm

» Dusit Thani Sri Lanka project halted?
by ChooBoy Yesterday at 11:44 am

» Profitable Forex Copy (over 100% profit monthly)
by princess111 Yesterday at 6:02 am

» SEC Chief welcomes PM’s remark on EPF’s return to stock market
by kalu351 Yesterday at 2:16 am

» පැලවත්ත කිරි සමාගම කොටස් වෙළද පොළට,DRINK pelawaththa milk & help sri lanka
by Miss-Sangeetha Thu Mar 21, 2019 5:39 pm

» CSE is promoting Life Insurance companies whilst Stock Market is crashing.
by ChooBoy Thu Mar 21, 2019 12:35 pm

» Singapore rejects Sri Lankan leader’s allegation on trading scam suspect
by Yahapalanaya Thu Mar 21, 2019 8:18 am

» BALA.N potential
by Yahapalanaya Thu Mar 21, 2019 6:39 am

» Sri lanka tourism income reached 4.4 billion USD 2019
by Yahapalanaya Wed Mar 20, 2019 10:03 pm

» presidential election very soon ?
by Yahapalanaya Wed Mar 20, 2019 10:01 pm

» AEL.N0000 is the Next AAIC.N0000 -
by Trader321 Wed Mar 20, 2019 12:37 pm

» World Bank approves USD70Mn to Sri Lanka
by Sstar Wed Mar 20, 2019 11:13 am

» Sri Lanka shares end little changed; rupee rises
by Miss-Sangeetha Tue Mar 19, 2019 6:30 pm

» Diversification of Sri Lankan economy, must to garner more economic benefits
by ChooBoy Tue Mar 19, 2019 2:04 pm

» ALHP Right issue......!!!!1
by Miss-Sangeetha Tue Mar 19, 2019 11:47 am

» UBC.N0000- Donnt miss this
by Trader321 Tue Mar 19, 2019 10:13 am

» BFN - DEAL OVER - TO BE DE LISTED SOON AFTER THE PRIVATE PLACEMENT ඩීල් එක ඉවරයි @ 19-59 - කොටස් වෙළදපලෙනුත් ඉවත් කරගන්නා බවට ආරන්චි
by sanjulanka Mon Mar 18, 2019 7:03 am

» While waiting for the market to rebound, look for bargains if you can afford the risk. Try to be active at the right time to gain something
by Asoka Samarakone Sun Mar 17, 2019 3:18 pm

» ඉතා ඉක්මනින් සේවක අර්තසාදක අරමුදල නැවත කොටස් වෙළදපල ට
by mahasona2 Sun Mar 17, 2019 3:43 am

» Central Bank targeting early return of EPF to stock market
by mahasona2 Sun Mar 17, 2019 3:24 am

» Lofc delisting??
by Bdcdman Sat Mar 16, 2019 11:16 pm

» Weekly Stock Market Roundup
by Insights Equity Sat Mar 16, 2019 5:37 am

» Today is UBC.N0000 day.
by Trader321 Fri Mar 15, 2019 11:32 am

» HVA WILL THEY RECTIFY THE REGULATORS QUARIES BEFORE DEAD LINE?
by Bdcdman Fri Mar 15, 2019 11:11 am

» ALHP WILL MOVE UP from next MONDAY
by Miss-Sangeetha Fri Mar 15, 2019 10:52 am

» ALHP WILL MOVE UP SOON
by mahasona2 Thu Mar 14, 2019 11:05 pm

» CASH RICH REXP
by Yahapalanaya Thu Mar 14, 2019 6:09 pm

» ලාංකීය හෙදියකට ලක්ශ 9 ක් ගෙවන ඇමෙරිකාව
by Uaecoindubai Thu Mar 14, 2019 3:48 pm

» EAST INTERESTING DAYS AHEAD 25+
by karuna2 Thu Mar 14, 2019 11:43 am

» රජයේ පඩි දෙගුණයක් වුන හැටි
by Uaecoindubai Thu Mar 14, 2019 9:31 am

» UBC.N0000 Vs AEL.N0000 - What will be the best
by Trader321 Thu Mar 14, 2019 9:15 am

» EFP TO start again invest in Stocks
by mahasona2 Thu Mar 14, 2019 1:10 am

» Second reading of budget passed by 119 Votes - Shows this Government is Confident
by Maharaja Wed Mar 13, 2019 11:27 pm

» Fall of stocks - Big Players are behindThis is the time to buy and collect stocks
by mahasona2 Wed Mar 13, 2019 9:49 pm

» Government salary hike almost double..
by Uaecoindubai Wed Mar 13, 2019 9:32 pm

» COLOMBO STOCKS 5 1/2 LOW
by soileconomy Wed Mar 13, 2019 7:19 pm

» UBC.N0000 ? Expert ideas please ?
by Trader321 Wed Mar 13, 2019 2:31 pm

» UBC.N000- keep eye, something is happening
by Trader321 Wed Mar 13, 2019 2:22 pm

You are not connected. Please login or register

Sri Lanka Equity Forum » Stock Market Talk » NDB Securities expects FMCG sector to continue to grow, albeit at a slower pace

NDB Securities expects FMCG sector to continue to grow, albeit at a slower pace

Go down  Message [Page 1 of 1]

ONTHEMONEY


Manager - Equity Analytics
Manager - Equity Analytics
NDB Securities Ltd. (NDBS), a top brokerage firm in Sri Lanka, released update on the Fast Moving Consumer Goods (FMCG) sector recently.

NDBS Head of Research Sidath Kalyanaratne commenting on the publication said: “We are a research house that conduct studies on 11 important sectors in the country. In addition, we have a separate coverage on the macro economy. During the last year, we have released eight sector reports along with the counters that are listed in the Colombo Stock Exchange (CSE). Further, we have been prompt in conducting earnings updates on the key counters that are in our coverage universe. Moreover, we have been proactive to find ways to improve information asymmetry amongst the investment community. Our reports have been positively accepted by the country’s High Networth Individuals, fund managers, retail investors and the general public alike. Their trust shown on our efforts was reflected by the gold award we won for the best stock brokering research team at the CFA Sri Lanka Capital Markets awards 2016.”


He further stated: “Beverage, Food and Tobacco (FBT) is the second largest sector in the CSE in terms of market capitalisation. Hence, it’s important to have a comprehensive study on the sector along with timely updates that may enable investing public to have a better understanding on the sector dynamics. The latest publication would be an update on our FMCG sector initiation report released in June 2016.”

Sri Lanka is a consumption heavy economy with consumption as a % of GDP continues to hover around 75% of GDP among which private spending dominates with an 88.7% share in 2015. Expenditure on FB&T (Food and non-alcoholic beverages (F&B), alcoholic beverages and tobacco) recorded a five-year CAGR of 6.6% during 2011-2016. In 2015 expenditure on FB&T recorded a significant YoY growth of 17.8% in comparison to 5.6% YoY growth recorded in 2014, mainly due to one off salary increase that took place in Jan 2015 for the public sector employees (17.6% of the total workforce) and single digit lower inflation that was prevailed during the year. However, in 2016 expenditure on FB&T slowed to 5.8% amidst increase in taxation, currency depreciation, and uptick in inflation as well as increasing interest rate environment seen during the year.

Sector Analyst Raguram Raamakrishnan stated the expected per capita income growth in the country continues to be the key demand driver for the sector whilst population growth, reduction in income disparity and demand from the tourism sector are expected to be supplementary drivers. However, he expects a slight slowdown in spending on FB&T in the short term, despite the sector’s reputation as a staple industry, mainly due to tightening monetary policy as well as increase in inflation. Hence, NDBS research estimates a five-year CAGR (2017 – 2021) of 8.1% for FB&T.



He added: “In F&B segment NDSB research continues to be optimistic on the demand dynamics of dairy products such as fresh milk, yoghurt and ice-cream as well as meat products such as chicken. Supply dynamics for dairy products are expected to improve with Government of Sri Lanka (GoSL) initiatives to promote local production. Currently, 77.0% of the diary segment in the country are dominated by imports compared to 80.0% in 2012. On the poultry segment, despite escalation in the feed cost (which contributes to an estimated 70% of the total cost) and regulation on controlled selling prices of whole chicken, we remain optimistic on the segment.

Commenting on the alcohol sector, he said: “NDBS Research is moderately optimistic on hard liquor mainly due to rise in per capita income coupled with growth in tourist arrivals. However, threat from illicit products remains a concern for the industry. Beer could be a potential longer term option amongst drinkers as it has been perceived as a less harmful alternative for hard liquor. However, recent excise duty hike made taxes on beer higher than hard liquor based on pure alcohol content and has impacted beer sales growth whilst slowing down the conversion from hard liquor to beer. Hence, we remain pessimistic on beer product.”

While commenting on tobacco segment he tend to be pessimistic mainly due to GoSL plans to restrict the growth of cigarettes. In the fourth quarter in 2016, the per cigarette price increased by 43% to Rs. 50. In addition to excise hike and VAT introduction, the industry also impacted by the exponential growth in the beedi market and illicit products. He remains optimistic on retail trade (especially on modern trade) due to increasing spending power amongst households, increase in retail penetration as well as due to increasing interest from foreign retail sector investors (direct and indirect) to enter into the country.

The detailed FMCG report (released in June 2016) and the sector update can be freely downloaded from NDB Securities website www.ndbs.lk.



http://www.ft.lk/article/627009/NDB-Securities-expects-FMCG-sector-to-continue-to-grow--albeit-at-a-slower-pace

Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum