Market indices ended the week on a mixed note as the ASPI decreased 32.22 points (or -0.51%) to close at 6250.78 points while the S&P SL20 Index increased 0.20 points (or +0.01%) to close at 3265.14 points.
Turnover & market capitalization
Textured Jersey Lanka was the highest contributor to the week’s turnover value, contributing LKR 1.13bn or 33.66% of total turnover value.
John Keells Holdings followed suit, accounting for 13.93% of turnover (value of LKR 0.47bn) while Sampath Bank contributed LKR 0.31bn to account for 9.29% of the week’s turnover.
Total turnover value amounted to LKR 3.37bn (cf. last week’s value of LKR 1.73bn), while daily average turnover value amounted to LKR 0.67bn (+95.26% W-o-W) compared to last week’s average of LKR 0.35bn.
Market capitalization meanwhile, decreased 0.43% W-o-W (or LKR 11.53bn) to LKR 2671.28bn cf. LKR 2682.81bn last week.
Liquidity (in value terms)
The Manufacturing Sector was the highest contributor to the week’s total turnover value, accounting for 39.79% (or LKR 1.34bn) of market turnover.
Sector turnover was driven primarily by Textured Jersey & Tokyo Cement which accounted for 90.40% of the sector’s total turnover.
The Banks, Finance & Insurance sector meanwhile accounted for 29.16% (or LKR 0.98bn) of the week’s total turnover value with turnover driven primarily by Sampath Bank, Commercial Bank of Ceylon, Hatton National Bank, Hatton National Bank (NV), Peoples Leasing & Finance & DFCC Bank which accounted for 82.25% sector turnover.
The Diversified sector was also amongst the top sectoral contributors, contributing 16.39% (or LKR 0.55bn). The Sector was John Keells Holding which accounted of 84.98% sector turnover.
Liquidity (in volume terms)
The Manufacturing sector dominated the market in terms of share volume, accounting for 37.12% (or 44.40mn shares) of total volume, with a value contribution of LKR 1.34bn.
The Banks, Finance & Insurance sector followed suit, adding 26.39% to total turnover volume as 31.57mn shares were exchanged.
The sector’s volume accounted for LKR 0.98bn of total market turnover value. The Diversified sector meanwhile, contributed 13.10mn shares (or 10.95%), amounting to LKR 0.55bn.
Top gainers & losers
AIA Insurance was the week’s highest price gainer, increasing 15.45% W-o-W from LKR 290.00 to LKR 334.80. Ceylon Printers gained 14.98% W-o-W to close at LKR 1863.40 while Agalawatte Plantations gained 12.78% W-o-W to close at LKR 20.30. Citrus Hikkaduwa (+11.94% W-o-W) and Lanka Milk Foods (+10.76% Wo-W) were also amongst the gainers.
Royal Palms Hotel was the week’s highest price loser, declining 19.31% W-o-W to close at LKR 23.40. Tea Smallholders closed at LKR 23.10 representing a W-o-W decline of 17.50%, while Hapugastenne Planation’s (-16.75% W-o-W) and Nation Lanka Finance (-14.29% Wo-W) also declined.
Foreign investors closed the week in a net selling position with daily average net outflows amounting to LKR 1.20bn relative to last week’s daily average net inflow of LKR 0.02bn (-1539.02% W-o-W).
Daily average foreign purchases increased 23.63% Wo-W to LKR 0.17bn from last week’s value of LKR 0.14bn, while daily average foreign sales amounted to LKR 0.41bn relative to LKR 0.12bn recorded last week (+233.30% W-o-W). In terms of volume, Asia Asset & John Keells Holdings led foreign purchases, while Textured Jersey Lanka & Peoples Leasing & Finance led foreign sales.
In terms of value, John Keells Holdings & Hatton National Bank [NV] led foreign purchases while Textured Jersey Lanka and Sampath Bank led foreign sales.
Point of view
Volatility pre-dominated over the week with the benchmark ASPI slipping to a 22-month low as institutional interest failed to offset tepid retail activity.
The Index fell to 6208.89 points on Thursday amid consecutive daily declines as investor confidence – particularly among retailers – failed to gather pace.
A sharp increase in volumes on Friday however, helped pushed the ASPI 41.89 points higher but indices nevertheless closed the week 32.22 points down. Institutional buying propped market turnover this week as large parcels on Friday boosted turnover value to LKR 1.56bn helping push the week’s cumulative turnover value to LKR 3.37bn (cf. LKR 1.72Bn last week and LKR 4.84Bn the previous week).
Banking and Manufacturing counters in particular garnered notable HNI interest, generating 45.1% of weekly turnover value. Average turnover levels (LKR 0.67bn) as a result were broadly in line with the Y-T-D daily average of LKR 0.69bn.
Foreign equity sales meanwhile, reached LKR 2.06bn on the back of sales in TJL, SAMP and COMB. This month’s net foreign inflows consequently declined to LKR 1.37bn while the Y-T-D net foreign outflow position increased to LKR 1.49bn.
Market activity in the holiday-shortened week ahead is likely to remain muted and dominated by high net-worth and institutional investors.
CB raises March policy rates by 50 Bps
Total quarterly market earnings of approximately 77% of the market have amounted to LKR 41.06bn relative to LKR 55.98bn reported by all companies in December 2014. Quarterly earnings thus far have been positive with more than half of the reported companies reporting a Y-o-Y growth in Dec’15 earnings.
The Manufacturing sector, as anticipated, has recorded a significant Y-o-Y growth in quarterly earnings with 83% of the reported counters (81% has reported so far) recording Y-o-Y gains.
Total sector earnings for the Dec’15 quarter has consequently increased 42.8% Y-o-Y to LKR 5.63bn (cf. LKR 3.94bn in Dec’14). Apart from the Manufacturing sector, most of the counters in the Healthcare, Chemicals & Pharmaceuticals and Finance sectors too have reported Y-o-Y gains.
The Central Bank meanwhile, increased March policy rates by 50 bps, the first rate hike since April 2012 (Repo: 6.50%, Reverse Repo: 8.00%). The Monetary Authority cited the need to level credit growth and anchor inflation expectations.
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