The Bourse ended the week on a positive note as the ASPI increased by 133.80 points (or 2.80 percent) to close at 4,914.83 points, while the S&P SL20 Index also increased by 100.39 points (or 5.14 percent) to close at 2,054.96 points.
LOLC Holdings was the highest contributor to the week’s turnover value, contributing LKR 1.41Bn or 18.35 percent of the total turnover value. Commercial Bank followed suit, accounting for 13.23 percent of turnover (value of LKR 1.02Bn) while HNB contributed LKR 0.98Bn to account for 12.73 percent of the week’s turnover. Total turnover value amounted to LKR 7.68Bn (cf. last week’s value of LKR 3.83), while the daily average turnover value amounted to LKR 1.54Bn (+60.33 percent W-o-W) compared to last week’s average of LKR 0.96Bn. Market capitalization meanwhile, increased by 2.80 percent W-o-W (or LKR 62.56Mn) to LKR 2,297.82Bn cf. LKR 2,235.26Bn last week.
Liquidity (in Value Terms)
The Banks Industry Group was the highest contributor to the week’s total turnover value, accounting for 45.62 percent (or LKR 3.51Bn) of market turnover. Industry Group’s turnover was driven primarily by Commercial Bank, HNB, Sampath Bank, Nations Trust & Commercial Bank[NV] which accounted for 92.39 percent of the sector’s total turnover. The Diversified Financials Industry Group meanwhile accounted for 19.49 percent (or LKR 1.50Bn) of the total turnover value, with turnover driven primarily by LOLC Holdings which accounted for 94.14 percent of the sector turnover. The Capital Goods Industry Group was also amongst the top sectorial contributors, contributing 15.57 percent (or LKR 1.20Bn) to the total turnover, with turnover driven primarily by ACL & JKH accounting for 54.75 percent of the total turnover.
Liquidity (in Volume Terms)
The Transportation Industry Group dominated the market in terms of share volume, accounting for 25.38 percent (or 62.13Mn shares) of total volume, with a value contribution of LKR 0.18Bn. The Banks Industry Group followed suit, adding 19.58 percent to total turnover volume as 47.92Mn shares were exchanged. The Industry Group’s volume accounted for LKR 3.51Bn of total market turnover value. The Capital Goods Industry Group meanwhile, contributed 37.69Mn shares (or 15.40 percent), amounting to LKR 1.20Bn.
Top Gainers & Losers
Blue Diamonds [NV] was the week’s highest price gainer; increasing 50.0 percent W-o-W from LKR0.20 to LKR0.30 while Tess Agro [NV](+33.3 percent W-o-W), SMB Leasing(+33.3 percent W-o-W) and Browns Beach(+33.3 percent W-o-W) were also amongst the top gainers.
Trade Finance was the week’s highest price loser; declining 18.9 percent W-o-W to close at LKR38.60. Singer Industries (-14.8 percent W-o-W), Carsons (-11.8 percent W-o-W), and CFI (-11.3 percent W-o-W) were also amongst the top losers over the week.
Foreign investors closed the week in a net selling position, with the total net outflow amounting to LKR 3.25Bn relative to a net outflow of LKR 0.27Bn recorded last week. Total foreign purchases decreased to LKR 1.16Bn from a value of LKR 1.28Bn last week, while total foreign sales amounted to LKR 4.40Bn relative to LKR 1.56Bn recorded last week. In terms of volume, Aitken Spence & Serendib Hotels[X] led foreign purchases while LOLC Holdings & ACL led foreign sales. In terms of value, Aitken Spence & Royal Ceramic led foreign purchases while LOLC Holdings & HNB led foreign sales.
Dividend Announcements
Company DPS (Rs.) Type XD Date; VALLIBEL POWER 0.40 Final 19/06/2020, NESTLE LANKA 17.50 Final 22/07/2020.
Key Economic Indicators April 2020; Prime Lending Rate- 9.38 percent, Ave. Wtd. Deposit Rates- 7.77 percent, Ave. Wtd. Fixed Dep. Rates- 9.51 percent, CCPI Inflation Y-o-Y percent (Base 2013)- 5.2 percent.
Point of View
Sri Lankan equity markets rebounded from last’s week ~66 point index decline as renewed buying interest in heavyweights supported gains on the index this week amid a final decision to hold Parliamentary elections on the 5th of August. Investors shrugged off a downgrade in Sri Lanka’s growth estimates by the World Bank as buying interest in heavyweights CTC and JKH during the beginning of the week (Monday & Tuesday) led the benchmark index to gain ~132 points over the 2 trading days.
Gains on the index earlier in the week were in line with EM/FM optimism over increasing economic activity and expectations of more stimulus measures from governments and central banks worldwide. However, contrary to domestic equities, sentiments in EM/FM peers turned south following the cautious commentary on economic recovery by the U.S. Fed on Wednesday and growing fears of a resurgence in Covid-19 cases as the number of patients continued to rise in India and Latin America.
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