The Bourse ended the week on a negative note as the ASPI decreased by 9.45 points (or -0.18%) to close at 5,311.42 points, while the S&P SL20 Index also decreased by 38.81 points (or -1.64%) to close at 2,321.57 points.
JKH was the highest contributor to the week’s turnover value, contributing LKR 0.82Bn or 15.38% of the total turnover value.
DFCC Bank followed suit, accounting for 11.68% of turnover (value of LKR 0.62Bn) while HNB contributed LKR 0.46Bn to account for 8.61% of the week’s turnover.
The total turnover value amounted to LKR 5.30Bn (cf. last week’s value of LKR 8.72Bn), while the daily average turnover value amounted to LKR 1.32Bn (-24.02% W-o-W) compared to last week’s average of LKR 1.74Bn. Market capitalization meanwhile, decreased by 0.18% W-o-W (or LKR 4.11Mn) to LKR 2,308.41Bn cf. LKR 2,312.51Bn last week.
Liquidity (in Value Terms)
The Banks Industry Group was the highest contributor to the week’s total turnover value, accounting for 29.96% (or LKR 1.59Bn) of market turnover. Industry Group’s turnover was driven primarily by DFCC Bank, HNB & Commercial Bank which accounted for 82.99% of the sector’s total turnover.
The Capital Goods Industry Group meanwhile accounted for 29.38% (or LKR 1.56Bn) of the total turnover value, with turnover driven primarily by JKH, Royal Ceramic, Central Industries & ACL which accounted for 82.91% of the sector turnover.
The Food, Beverage & Tobacco Industry Group was also amongst the top sectorial contributors, contributing 10.97% (or LKR 0.58Bn) to the total turnover, with turnover driven primarily by Browns Investments accounting for 43.36% of the total turnover.
Liquidity (in Volume Terms)
The Food Beverage & Tobacco Industry Group dominated the market in terms of share volume, accounting for 35.18% (or 119.47Mn shares) of total volume, with a value contribution of LKR 0.58Bn.
The Utilities Industry Group followed suit, adding 16.79% to total turnover volume as 57.04Mn shares were exchanged.
The Industry Group’s volume accounted for LKR 0.29Bn of total market turnover value.
The Transportation Industry Group meanwhile, contributed 39.13Mn shares (or 11.52%), amounting to LKR 0.23Bn.
Top Gainers & Losers
Tess Agro was the week’s highest price gainer; increasing 25.0% W-o-W from LKR0.40 to LKR0.50 while Softlogic Life (+16.4% W-o-W), Expolanka (+15.1% W-o-W), and Dolphin Hotels (+14.4% W-o-W) were also amongst the top gainers.
Bimputh Finance was the week’s highest price loser; declining 15.8% W-o-W to close at LKR10.10. Nation Lanka (-12.5% W-o-W), Horana Plantations (-11.8% W-o-W), and Asia Capital (-11.1% W-o-W) were also amongst the top losers over the week.
Foreign investors closed the week in a net selling position with total net outflow amounting to LKR 1.32Bn relative to last week’s total net outflow of LKR 2.37Bn (+44.39% W-o-W). Total foreign purchases increased by 234.55% W-o-W to LKR 0.32Bn from last week’s value of LKR 0.10Bn, while total foreign sales amounted to LKR 1.64Bn relative to LKR 2.47Bn recorded last week (-33.53% W-o-W). In terms of volume, Teejay Lanka & RIL property led foreign purchases while Dialog Axiata & DFCC Bank led foreign sales.
In terms of value, Teejay Lanka & LMF led foreign purchases while JKH & DFCC Bank led foreign sales.
Dividend Announcements
Company DPS (Rs.) Type XD Date MAHAWELI COCONUT 1.50 Final 29-09-2020 SIERRA CABLES 0.20 Interim 11-09-2020 ABANS ELECTRICALS 1.50 Final 24-09-2020 LANKA MILK FOODS 2.50 First & Final 02-10-2020 LEE HEDGES 1.00 Final 09-10-2020
Key Economic Indicators July: Prime Lending Rate of 7.79%, Ave. Wtd. Deposit Rates 7.16%, Ave. Wtd. Fixed Dep. Rates 8.69%, CCPI Inflation Y-o-Y % (Base 2013) 4.2%.
Point of View
Domestic equities were relatively subdued this week amid Parliamentary approval for the proposed 20th Amendment as the broad share index slipped a paltry ~9 points or -0.2% W-o-W to close at 5,311.42 on Friday. Markets opened the week on a positive note to gain ~39 points between Monday and Wednesday, supported by buying interest in JKH and CARS.
At its close on Monday, the ASPI recorded a gain of ~205 points (4.0% M-o-M) over August amid strong retail-driven momentum over-optimism of a stable Government following the conclusion of the General elections.
However, the positive momentum in domestic equities was short-lived as selling pressure returned to the market amid Parliamentary approval of the 20th amendment and data released on private sector credit growth. Private sector credit growth slowed from 4.3% Y-o-Y in Jun’20 to 4.2% Y-o-Y in Jul’20 even after the CBSL slashed benchmark lending rates by 250bps since the beginning of the year.
Consequently, the index shed ~49 points between Thursday and Friday while losses in select Food, Beverage & Tobacco sector stocks (CARS, CTC, & LION) also weighed on the index.
Activity levels on the Colombo Bourse meanwhile continued to decline over the holiday-shortened as average daily turnover for the week fell from Rs. 1.7Bn last week to Rs. 1.3Bn this week as heavy local retail and institutional buying eased-off amid some profit-taking towards the end of the week. Crossings for the week accounted for 23% of total market turnover (cf. 24% last week) with buying interest in index heavyweight JKH, HNB, and Vidullanka collectively accounted for 86% of total crossings for the week while local HNI and institutional interest was also visible in Dialog, Central Industries, Melstacorp, and Commercial Bank.
Meanwhile, foreigners were net sellers this week albeit at a slower pace with a net foreign outflow of Rs. 1.3Bn (cf. net outflow of Rs. 2.4Bn last week). Consequently, foreign investors have sold off Rs. ~33Bn so far this year. Markets in the week ahead are likely to look for cues from economic and political developments.
