The Bourse ended the week on a positive note as the ASPI increased by 281.76 points (or 5.18%) to close at 5,720.67 points, while the S&P SL20 Index also increased by 153.16 points (or 6.49%) to close at 2,512.40 points.
Turnover & Market Capitalization
Expolanka was the highest contributor to the week’s turnover value, contributing LKR 1.46Bn or 9.12% of the total turnover value. JKH followed suit, accounting for 9.09% of turnover (value of LKR 1.45Bn) while HNB contributed LKR 0.85Bn to account for 5.32% of the week’s turnover. Total turnover value amounted to LKR 15.98Bn (cf. last week’s value of LKR 9.45Bn), while daily average turnover value amounted to LKR 3.20Bn (69.05% W-o-W) compared to last week’s average of LKR 1.89Bn. Market capitalization meanwhile, increased by 7.71% W-o-W (or LKR 177.86Mn) to LKR 2,486.27Bn cf. LKR 2,308.41Bn last week.
Liquidity (in Value Terms)
The Banks Industry Group was the highest contributor to the week’s total turnover value, accounting for 22.31% (or LKR 3.56Bn) of market turnover. Industry Group’s turnover was driven primarily by HNB, Commercial & Sampath Bank which accounted for 66.12% of the sector’s total turnover.
The Capital Goods Industry Group meanwhile accounted for 21.05% (or LKR 3.36Bn) of the total turnover value, with turnover driven primarily by JKH & Hemas Holdings which accounted for 60.11% of the sector turnover. The Food, Beverage & Tobacco Industry Group was also amongst the top sectorial contributors, contributing 15.14% (or LKR 2.42Bn) to the total turnover, with turnover driven primarily by Melstacorp accounting for 29.02% of the total turnover.
Liquidity (in Volume Terms)
The Food Beverage & Tobacco Industry Group dominated the market in terms of share volume, accounting for 25.76% (or 201.19Mn shares) of total volume, with a value contribution of LKR 2.42Bn. The Transportation Industry Group followed suit, adding 20.62% to total turnover volume as 161.02Mn shares were exchanged. The Industry Group’s volume accounted for LKR 1.46Bn of total market turnover value. The Capital Goods Industry Group meanwhile, contributed 89.75Mn shares (or 11.49%), amounting to LKR 3.36Bn.
Top Gainers & Losers
Expolanka was the week’s highest price gainer; increasing 42.0% W-o-W from LKR6.90 to LKR9.80 while Renuka Agri(+32.3% W-o-W), Hayleys Fabric (+31.5% W-o-W) and HNB Finance(+31.5% W-o-W) were also amongst the top gainers.
Blue Diamonds[NV] was the week’s highest price loser; declining 33.3% W-o-W to close at LKR0.20. Kelsey Dev. (-14.7% W-o-W), Blue Diamonds (-14.3% W-o-W) and Arpico (-6.9% 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 2.08Bn relative to last week’s total net outflow of LKR 1.96Bn (-5.90% W-o-W). Total foreign purchases increased by 117.1% W-o-W to LKR 0.96Bn from last week’s value of LKR 0.35Bn, while total foreign sales amounted to LKR 3.04Bn relative to LKR 2.31Bn recorded last week (31.40% W-o-W). In terms of volume, Sampath Bank & Hayleys Fabric led foreign purchases while JKH & Melstacorp led foreign sales.
In terms of value, Sampath Bank & HNB led foreign purchases while JKH & Cold Stores led foreign sales.
Dividend Announcements
Company DPS (Rs.) Type XD Date TOKYO CEMENT(V & NV) 1.50 First & Final 23-10-2020. 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 jumped by a further ~282 points or 5.2% W-o-W (cf. last week’s gains of 2.4%) to surpass the key psychological mark of 5,500 index points. Gains on the index were further supported by strong retail-driven momentum and positive reinforcement of Sri Lanka’s capital markets by the GoSL. Investors shrugged off weaker earnings releases from Distilleries (+14% W-o-W) and its parent, Melstacorp (+19% W-o-W), for the Jun’20 quarter as positive gains in both counters collectively contributed 39.1 points to this week’s rally. Market sentiments were further buoyed by a recovery in Sri Lanka’s Purchasing Managers’ Indices for manufacturing and service activities in Aug’20 and the narrowing trade deficit in Jul’20 while the Asian Development Bank (ADB) revised up its GDP forecast for Sri Lanka. Despite being the third-worst performance in South Asia, ADB anticipates Sri Lanka’s GDP to contract by 5.5% in 2020 cf. a previous estimate of 6.1%. Consequently, the ASPI rose by ~282 points or 5.2% W-o-W to hit a 7-month high and its highest weekly gain since May’20 at its close on Friday. The 5.2% W-o-W gain on the index has helped pare down the YTD loss on the Index to 6.3% cf. 11.0% last week. Meanwhile, activity levels on the Colombo Bourse also continued to improve this week on the back of strong retail investor participation as average daily turnover for the week increased significantly to Rs. 3.2Bn cf. Rs. 1.9Bn last week.
However, local HNI and institutional participation remained relatively on the side-lines as crossings for the week accounted for 14% of total market turnover cf. 28% last week. Buying interest was mainly visible in JKH (51% of total crossings) and select Banking sector stocks (HNB, SAMP, DFCC, & COMB accounted for 38% of total crossings for the week). Despite the overall positive momentum, the foreign sell-off from domestic equities continued at a steady pace this week led by foreign selling in JKH. Consequently, foreigners were net sellers this week with a net foreign outflow of Rs. 2.1Bn (cf. net outflow of Rs. 2.0Bn last week). Markets in the week ahead are likely to look for cues from economic and political developments. Sources: CBSL
