The Bourse ended on a mixed note this week as the ASPI decreased by 1.47 points (or 0.02%) to close at 6,324.10 points, while the S&P SL20 Index increased by 33.26 points (or 0.94%) to close at 3,555.02 points.
Turnover and market capitalization
Commercial Credit was the highest contributor to the week’s turnover value, contributing LKR 10.80 Bn or 72.06% of total turnover value.
JKH followed suit, accounting for 8.23% of turnover (value of LKR 1.23 Bn) while Dialog contributed LKR 0.73 Bn to account for 4.88% of the week’s turnover.
Total turnover value amounted to LKR 14.98 Bn (cf. last week’s value of LKR 4.10 Bn), while daily average turnover value amounted to LKR 3.00 Bn (+265.02% W-o-W) compared to last week’s average of LKR 0.82 Bn.
Market capitalization meanwhile, marginally increased by 0.002% W-o-W (or LKR 0.06 Bn) to LKR 2,698.77 Bn cf. LKR 2,698.71 Bn last week.
Liquidity (in value terms)
The Banking, Finance & Insurance Sector was the highest contributor to the week’s total turnover value, accounting for 77.17% (or LKR 11.56 Bn) of market turnover.
Sector turnover was driven primarily by Commercial Credit, Commercial Bank and DFCC Bank which accounted for 98.26% of the sector’s total turnover.
The Diversified Sector meanwhile accounted for 11.42% (or LKR 1.71 Bn) of the total turnover value with turnover driven primarily by JKH, Aitken Spence & Hemas Holdings which accounted for 92.57% sector turnover.
Telecom Sector was also amongst the top sectorial contributors, contributing 4.88% (or LKR 0.73 Bn).
The sector turnover was Dialog which accounted to 99.94% of the sector turnover.
Liquidity (in volume terms)
The Banking, Finance & Insurance sector dominated the market in terms of share volume, accounting for 48.91% (or 108.63 Mn shares) of total volume, with a value contribution of LKR 11.56 Bn.
Telecom sector followed suit, adding 31.34% to total turnover volume as 69.62 Mn shares were exchanged.
The sector’s volume accounted for LKR 0.73 Bn of total market turnover value.
The Diversified Sector meanwhile, contributed 19.14 Mn shares (or 8.62%), amounting to LKR 1.71 Bn.
Top gainers & losers
SMB Leasing [NV] was the week’s highest price gainer; increasing 33.3% W-o-W from LKR 0.30 to LKR 0.40. Kelsey gained 29.02% W-o-W to close at LKR 52.90 while Hapugastenne gained 21.52% W-o-W to close at LKR 19.20. Renuka Foods[NV] (+20.86% W-o-W) and Merc Inv. (+17.29% W-o-W) were also amongst the gainers.
Blue Diamonds was the week’s highest price loser, declining 11.11% W-o-W to close at LKR 1.60, City Housing (-8.75% W-o-W), Softlogic Life (-7.77% W-o-W) and Tess Agro[NV] (-7.69%) also declined.
Foreign investors closed the week in a net buying position with total net inflows amounting to LKR 2.87 Bn relative to last week’s total net outflow of LKR 0.59 Bn(586% W-o-W).
Total foreign purchases increased by 538.31% W-o-W to LKR 13.37 Bn from last week’s value of LKR 2.10 Bn, while total foreign sales amounted to LKR 10.52 Bn relative to LKR 2.69 Bn recorded last week (+291.52% W-o-W).
In terms of volume, Commercial Credit & JKH led foreign purchases, while Aitken Spence & DFCC Bank led foreign sales. In terms of value, Commercial Credit & JKH led foreign purchases while Aitken Spence & DFCC Bank led foreign sales.
Point of view
Market turnover hit a 41/2 year high this week, as strategic buying in Commercial Credit and Finance by foreign investors boosted overall investor sentiment.
Singapore-based Group Lease Holdings acquired a 29.99% stake in Commercial Credit & Finance Plc (COCR) on Thursday, helping account for ~71% of total market turnover for the week and driving market momentum.
While Thursday’s trade in COCR accounted for LKR.10Bn, the remaining LKR1.04Bn of transactions on the trading floor, helped boost turnover levels which have been averaging ~LKR0.4Bn through most of November.
The trade also helped revert the YTD net foreign position in equities into a net buying one, with inflows to the bourse rising to LKR 1.33Bn relative to last week when the YTD net outflows from the equities was LKR1.53Bn.
Despite the general recovery in activity though, the broad-share index closed largely flat over the week as profit taking curbed last week’s market rally.
Nevertheless, buying interest in index heavy-weights remained, with counters such as JKH, ASIR, COMB, HNB, HHL, LION, DIAL, SLT, NEST and CARG remaining top contributors to the Index.
Market momentum is likely to slow in the holiday shortened week ahead and amid the US Fed’s policy decision next week where rates are widely expected to be increased by 25Bps.
Cabinet approves H’tota Port equity swap
Sri Lanka’s cabinet approved on Wednesday a proposal to lease 80% of the Hambantota port to China Merchants Port Holdings Company on a 99 year lease for a value of $1.12Bn.
The remaining 20% stake is to be retained by the GoSL via the Sri Lanka Ports Authority. China Merchants Port Holdings Company is expected pay 10% of the total $1.12Bn within a month of signing the agreement while the remaining 90% is expected to be paid within the six months of the signing 1.
The GoSL also approved a five-year economic and infrastructure development project plan in the North-Western Province and which spans agriculture, tourism, human resources development, investment promotion and industrial development, and rural infrastructure development 2.
Business confidence however, fell over November, with the LMD-Nielsen Business Confidence Index (BCI) indicating its steepest drop since Oct’15 (144 in November’16 vs. 165 in October’16).
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