The Bourse closed on a mixed note this week as the ASPI decreased by 17.71 points (or 0.29%) to close at 6,119.99 points, while the S&P SL20 Index increased by 22.46 points (or 0.64%) to close at 3,506.13 points.
Turnover & market capitalization
Asiri was the highest contributor to the week’s turnover value, contributing LKR 0.79Bn or 22.68% of total turnover value.
Melstacorp followed suit, accounting for 18.84% of turnover (value of LKR 0.65Bn) while Dunamis Capital contributed LKR 0.40Bn to account for 11.60% of the week’s turnover.
Total turnover value amounted to LKR 3.46Bn (cf. last week’s value of LKR 2.40Bn), while daily average turnover value amounted to LKR 0.69Bn (+44.21% W-o-W) compared to last week’s average of LKR 0.48Bn.
Market capitalization meanwhile, decreased by 0.28% W-o-W (or LKR 7.44Bn) to LKR 2,698.07Bn cf. LKR 2,705.51Bn last week.
Liquidity (in value terms)
The Diversified Sector was the highest contributor to the week’s total turnover value, accounting for 51.49% (or LKR 1.78Bn) of market turnover.
Sector turnover was driven primarily by Melstacorp, Dunamis Capital, JKH & Hemas Holdings which accounted for 97.76% of the sector’s total turnover.
The Health Care Sector meanwhile accounted for 22.82% (or LKR 0.79Bn) of the total turnover value with turnover driven primarily by Asiri Hospitals which accounted for 99.37% sector turnover.
Banking, Finance & Insurance Sector was also amongst the top sectorial contributors, contributing 14.60% (or LKR 0.51Bn).
The sector turnover was driven by HNB, Sampath Bank & Commercial Bank which accounted to 80.07% of the sector turnover.
Liquidity (in volume terms)
The Diversified Sector dominated the market in terms of share volume, accounting for 38.73% (or 35.26Mn shares) of total volume, with a value contribution of LKR 1.78Bn.
Healthcare sector followed suit, adding 34.09% to total turnover volume as 31.03Mn shares were exchanged.
The sector’s volume accounted for LKR 0.79Bn of total market turnover value. The Banking, Finance & Insurance Sector meanwhile, contributed 9.70Mn shares (or 10.66%), amounting to LKR 0.51Bn.
Top gainers & losers
Cargo Boat was the week’s highest price gainer; increasing 12.01% W-o-W from LKR 84.10 to LKR 94.20.
Singhe Hospitals gained 11.11% W-o-W to close at LKR 2.00 while Samson International gained 9.77% W-o-W to close at LKR 98.90.
Maskeliya Plantations (+9.33% W-o-W) and Hapugastenne Plantations (+8.54% W-o-W) were also amongst the gainers.
Lee Hedges was the week’s highest price loser(due to subdivision of shares), declining 79.47% W-o-W to close at LKR 77.00. C T Land (-15.14% W-o-W), Kelani Cables (-15.83% W-o-W) and AIA Insurance (-14.38% W-o-W) also declined.
Foreign investors closed the week in a net buying position with total net inflows amounting to LKR 0.11Bn relative to last week’s total net outflow of LKR 0.29Bn (-138.11% W-o-W).
Total foreign purchases increased by 128.59% W-o-W to LKR 2.45Bn from last week’s value of LKR 1.07Bn, while total foreign sales amounted to LKR 2.34Bn relative to LKR 1.36Bn recorded last week +72.52% W-o-W).
In terms of volume, SMB Leasing[X] & Commercial Bank led foreign purchases while JKH & Teejay Lanka led foreign sales. In terms of value, Commercial Bank & Sampath Bank led foreign purchases while JKH & Teejay Lanka led foreign sales.
Point of view
Equities hit a 10-month low this week closing 20 points lower than a major support level (6135 points) against which the Broad-share index was consolidating over the last 3-weeks.
Skittish investor sentiment along with minimal retail activity dragged indices lower, but HNI and Institutional investors made a strong return this week as they accumulated mid-caps such as ASIR (39% of crossings), and blue-chips such as HHL (16% of crossings), HNB and JKH (10% of crossings) and COMB (4% of crossings).
Crossings over the week consequently amounted to ~58% of the week’s total turnover (cf. ~25% last week and ~67% the week prior) helping push daily average turnover levels 44.2% higher over the week (to LKR 0.69Bn).
Foreign investors meanwhile, reverted back to a net buying position, with inflows of LKR 108.6Mn helping pare down last week’s net outflows of LKR 285.0Mn.
Meanwhile, initial corporate earnings for the quarter ended Dec’16 has been mixed with ~ 59% of the 41 companies who have reported earnings thus far recording year-on-year growth in earnings.
With earnings releases gathering pace over the next few weeks, Markets are likely to cues from the overall direction of the earnings.
Equity markets in the week ahead are also likely to look to next week’s Monetary policy meeting (the 1st of the 8 meetings scheduled for the year) for future direction.
Cumulative 10 month B-o-P improves
The Balance-of-Payments (B-o-P) during the first 10 months of 2016 improved to a deficit of $273.6Mn relative to a deficit of $ 2.4Bn in the comparable period in 2015 (deficit of $1.5Bn for full year 2015*).
Import expenditure over the period remained largely flat (+0.2% Y-o-Y) as imports of consumer goods fell 9.2% Y-o-Y) led by declines in Vehicle imports (-42.8% Y-o-Y).
Imports of intermediate goods meanwhile, fell 1.3% Y-o-Y over the 10-month period led by declines in Fuel imports (-15.7% Y-o-Y).
However, fuel imports over the month of October rose 10.9% Y-o-Y with refined petroleum imports increasing 14.4% Y-o-Y due to higher thermal power generation over the latter half of 2016.
Imports of investment goods too, rose over the 10-month period (+13.2% Y-o-Y) with a notable increase in October (+52.2% Y-o-Y) due to the importation of a dredger vessel by CHEC Port City Colombo (Pvt) Ltd.
Exports over the 10-month period meanwhile, declined 2.6% Y-o-Y helping push the country’s trade deficit 3.7% Y-o-Y higher over the period.
Nevertheless, steady service and financial flows helped ease pressure on the overall B-o-P position over Jan-Oct with stronger tourism earnings (+14.6% Y-o-Y) and steady worker remittances ($5.9Bn) along with easing net outflows from G-Sec ($109.2Mn cf. $1.0Bn in 2015) and fund from ISB issuances and long-term loans helping financial flows.
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