The Bourse ended in the positive territory this week as the ASPI increased by 64.70 points (or 1.05%) to close at 6,217.72 points, while the S&P SL20 Index also increased by 62.15 points (or 1.80%) to close at 3,524.40 points.
Turnover & market capitalization
JKH was the highest contributor to the week’s turnover value, contributing LKR 1.17Bn or 41.52% of total turnover value.
Chevron followed suit, accounting for 16.71% of turnover (value of LKR 0.47Bn) while Melstacorp contributed LKR 0.15Bn to account for 5.25% of the week’s turnover.
Total turnover value amounted to LKR 2.82Bn (cf. last week’s value of LKR 2.68Bn), while daily average turnover value amounted to LKR 0.71Bn(+31.66% W-o-W) compared to last week’s average of LKR 0.54Bn.
Market capitalization meanwhile, increased by 1.05% W-o-W (or LKR 28.52Bn) to LKR 2,740.77Bn cf. LKR 2,712.25Bn last week.
Liquidity (in value terms)
The Diversified Sector was the highest contributor to the week’s total turnover value, accounting for 51.56% (or LKR 1.46Bn) of market turnover.
Sector turnover was driven primarily by JKH, Melstacorp & Dunamis Capital which accounted for 96.45% of the sector’s total turnover.
The Manufacturing Sector meanwhile accounted for 22.33% (or LKR 0.63Bn) of the total turnover value with turnover driven primarily by Chevron, Teejay Lanka & Tokyo Cement which accounted for 88.68% sector turnover.
Banking, Finance & Insurance Sector was also amongst the top sectorial contributors, contributing 9.94% (or LKR 0.28Bn).
The sector turnover was driven by Commercial Bank which accounted to 50.43% of the sector turnover.
Liquidity (in volume terms)
The Land and Property sector dominated the market in terms of share volume, accounting for 82.83% (or 311.03Mn shares) of total volume, with a value contribution of LKR 0.05Bn.
Diversified sector followed suit, adding 7.33% to total turnover volume as 27.51Mn shares were exchanged.
The sector’s volume accounted for LKR 1.46Bn of total market turnover value.
The Manufacturing Sector meanwhile, contributed 8.79Mn shares (or 2.34%), amounting to LKR 0.63Bn.
Top gainers & losers
Blue Diamond[X] was the week’s highest price gainer; increasing 25.00% W-o-W from LKR 0.40 to LKR 0.50. Melstacorp gained 18.21% W-o-W to close at LKR 68.80 while Kegalle Plantations gained 17.39% W-o-W to close at LKR 56.70. Colombo Land (+16.73% W-o-W) and Tess Agro (+16.67% W-o-W) were also amongst the gainers.
PDL was the week’s highest price loser, declining 17.42% W-o-W to close at LKR 82.50, Citrus Hikkaduwa (-13.18% W-o-W), Madulsima Plantations (-12.33% W-o-W) and Office Equipment (-9.75% W-o-W) also declined.
Foreign investors closed the week in a net selling position with total net outflows amounting to LKR 0.73Bn relative to last week’s total net outflow of LKR 0.97Bn (+24.75% W-o-W).
Total foreign purchases increased by 83.57% W-o-W to LKR 1.10Bn from last week’s value of LKR 0.60Bn, while total foreign sales amounted to LKR 1.83Bn relative to LKR 1.57Bn recorded last week (+16.66% W-o-W).
In terms of volume, Marawila Resorts & Kegalle Plantations led foreign purchases while John Keells Holdings & Dunamis Capital led foreign sales.
In terms of value, HNB[X] & Sampath Bank Holdings led foreign purchases while John Keells Holdings & Lanka Hospitals led foreign sales.
Point of view
Shares edged up to an approx. 2-week high with the announcement of the European Commission’s proposal to remove significant import duties on Sri Lankan products and restore GSP Plus (Generalized Scheme of Preferences Plus) trade access to Europe’s export market.
The All-Share Price Index took a turn from its losing streak on Wednesday with the announcement, as it rose ~65 points W-o-W, helping wipe off some of last week’s ~75 point W-o-W loss and pushing above a key-support level of 6152 points.
Gains were led by MELS, SLT, CLC, JKH, LLUB, HHL and CTC which together contributed ~ 45 points to the Index.
The daily average turnover of the holiday shortened week consequently increased by 32% W-o-W to end at LKR 0.71Bn, ~16% higher than 2017 daily average turnover of LKR 0.61Bn and marginally lower than 2016’s full year daily average of LKR 0.73Bn.
Crossings over the week accounted for ~28% of total market turnover, amid strong interest in blue-chips such as LLUB (51% of crossings), JKH (15% of crossings) and NEST (13% of crossings).
Foreign flows into the Bourse meanwhile turned negative this week (LKR 0.73Bn ) bringing the total net outflows for the year to LKR 1.7 Bn.
Markets in the week ahead are likely to retain the current positive momentum.
Short-term bill rates rise, trade deficit narrows
T-Bill rates across all maturities rose yet again for the fourth consecutive week this week, with the sharpest increase recording in 3M Bill.
Rates on the 3M Bill rose by 19bps (cf. 6 bps last week) while rates on the 6M bill rose 10bps (cf. 16bps last week) and the 12M bill rose 9bps (cf.5bps last week) as CBSL continued to mop up the excess liquidity in the market .
Yields on the 91-day and 182-day bills have consequently increased 42bps and 50bps since October 2016 to date compared to the steep increase of ~230bps (91 Day) and ~290bps (182- day) since January 2016 to Oct 2016.
On the External front meanwhile, Sri Lanka’s trade deficit narrowed -12.0% Y-o-Y in Sep’16 with the increase in export earnings (5.7% Y-o-Y) for the second consecutive month coupled with decline in import earnings (-2.5% Y-o-Y).
Export earnings improved despite decline in earnings in apparel sector (highest contributor to export earnings (~43%) aided mainly by improved earnings from tea (8% Y-o-Y), rubber (15.3% Y-o-Y) & transport equipment (486% Y-o-Y).
Lower import expenditure was supported mainly by lower oil import bill (22.1% Y-o-Y), non food consumer goods (16.9% Y-o-Y) & lower importation of vehicles (51.9% Y-o-Y).
Service inflows meanwhile were driven primarily by earnings from Tourism (+3.6% Y-o-Y) although worker’s remittances declined 1.1% Y-o-Y.
The country’s B-o-P consequently recorded a surplus of USD 243.1mn between Jan-Sep 2016 (cf. deficit of USD 2,316.5mn in Jan-Sep’15) though gross official reserves declined marginally to 4.1 months of imports in Sep ‘16 from 4.2 months in Aug’16.
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