The Bourse continued its upward momentum as the ASPI increased by 31.41 points (or 0.47%) to close at 6,671.98 points, while the S&P SL20 Index too increased by 48.53 points (or 1.28%) to close at 3,850.22 points.
Turnover and market capitalization
JKH was the highest contributor to the week’s turnover value, contributing LKR 0.18Bn or 9.01% of total turnover value. Teejay Lanka followed suit, accounting for 8.25% of turnover (value of LKR 0.17Bn) while DFCC Bank contributed LKR 0.13Bn to account for 6.41% of the week’s turnover. Total turnover value amounted to LKR 2.01Bn (cf. last week’s value of LKR 2.93Bn), while daily average turnover value amounted to LKR 0.67Bn (-8.47% W-o-W) compared to last week’s average of LKR 0.73Bn.
Market capitalization meanwhile, increased by 0.47% W-o-W (or LKR 13.86Bn) to LKR 2,940.78Bn cf. LKR 2,926.91Bn last week.
Liquidity (in value terms)
The Banking, Finance & Insurance Sector was the highest contributor to the week’s total turnover value, accounting for 32.06% (or LKR 0.64Bn) of market turnover. Sector turnover was driven primarily by the DFCC Bank, Sampath Bank, LB Finance, NDB & HNB which accounted for 69.69% of the sector’s total turnover. The Diversified Sector meanwhile accounted for 24.03% (or LKR 0.48Bn) of the total turnover value with turnover driven primarily by JKH and Hemas Holdings which accounted for 62.95% of the sector turnover.
The Manufacturing Sector was also amongst the top sectorial contributors, contributing 17.57% (or LKR 0.35Bn) to the market driven by Teejay Lanka which accounted for 46.98% of the sector turnover.
Liquidity (in volume terms)
The Power & Energy Sector dominated the market in terms of share volume, accounting for 24.08% (or 20.88Mn shares) of total volume, with a value contribution of LKR 0.08Bn.
The Banking, Finance & Insurance sector followed suit, adding 22.36% to total turnover volume as 19.39Mn shares were exchanged.
The sector’s volume accounted for LKR 0.64Bn of total market turnover value. The Diversified Sector meanwhile, contributed 19.21Mn shares (or 22.15%), amounting to LKR 0.48Bn.
Top gainers and losers
PC House was the week’s highest price gainer; increasing 100.00% W-o-W from LKR 0.10 to LKR 0.20.
Kalamazoo gained 55.03% W-o-W to close at LKR 1,250.00 while PC Pharma gained 50.00% W-o-W to close at LKR 0.30. Singer Industries (+25.00% W-o-W) and Serendib Engineering (+22.86% W-o-W) were also amongst the gainers.
Huejay was the week’s highest price loser, declining 19.31% W-o-W to close at LKR 42.20. SMB Leasing (-12.50% W-o-W), Adam Capital (-11.11% W-o-W) and Serendib Hotels [NV] (-10.95% W-o-W) were also amongst the top losers over the week.
Foreign investors closed the week in a net buying position with total net inflows amounting to LKR 0.21Bn relative to last week’s total net inflow of LKR 0.17Bn (17.97% W-o-W).
Total foreign purchases decreased by 18.79% W-o-W to LKR 0.74Bn from last week’s value of LKR 0.91Bn, while total foreign sales amounted to LKR 0.53Bn relative to LKR 0.74Bn recorded last week (-27.52% W-o-W).
In terms of volume, DFCC and Access Engineering led foreign purchases while Asia Asset and Adam Capital led foreign sales.
In terms of value, DFCC and Cargills led foreign purchases while HNB and JKH led foreign sales.
Point of view
Benchmark Price Index which rallied since late- March continued with its uptrend for the 7th consecutive week amid thin trading on account of the holiday season this week.
The Bourse gained 31 points since last Friday, hitting one year closing high to end at 6671.98 points - helped gaining a 7.1% Y-T-D. Average turnover levels meanwhile were hovering around LKR 0.67Bn during the holiday shortened week (9% decline W-o-W) as investors were relatively muted during this week. Large parcels in Teejay Lanka (22% of the total crossings), DFCC (18% of the total crossings), Hemas Holdings (16% of the total crossings) helped extend the HNI and Institutional contribution to turnover as total crossings accounted for 33% of total market turnover.
Foreign investors continued to remain net buyers for the 14th consecutive week as net inflows increased by 18% W-o-W to LKR 0.21Bn bringing the total net inflows for the year to LKR 16.21Bn.
Similar market momentum is likely in the week ahead and could to be influenced by the direction of Mar’17 corporate earnings.
May policy rates held steady
The Central Bank at its May policy meeting held policy rates steady citing a deceleration of both inflation and private sector credit and improved balance of payment.
(Repo: 7.25%, Reverse Repo: 8.75%). Despite NCPI edging up to 8.6% in March ’17 (cf.2.2% in Mar’16) which was largely due to drought and VAT impact, CBSL projects the inflation to remain in the desired mid-single digit levels by end of 2017 supported mainly by the Monitory policy adjustments which was followed since end 2015 (policy rates were increased by 125bps since Feb’16 to date while the SRR was increased to 7.5% from 6%).
Conversely CBSL also estimate the private sector credit to slow down by end of 2017 to the envisaged levels, as the credit levels showed signs of deceleration from its peak in July’16 of 28.5% Y-o-Y to 21.9% in Dec’16, and further declining to 20.4% in Mar’17 with the upward adjustment in rates.
The monetary authority also added that its policy stance was supported by projected inflows from both government securities market and CSE in addition to the 11th International Sovereign Bond issued worth US$ 1.5Bn. Further disbursement of the 3rd tranche under IMF Extended Fund Facility too is expected to support the BOP and reserve position of Sri Lanka.
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