The Bourse continued to lose grounds further as the ASPI decreased by 74.74 points (or 1.14%) to close at 6,492.69 points, while the S&P SL20 Index decreased by 60.30 points (or 1.59%) to close at 3,724.21 points.
Turnover and market capitalization
JKH was the highest contributor to the week’s turnover value, contributing LKR 0.73Bn or 40.54% of total turnover value.
Chevron Lubricants followed suit, accounting for 9.85% of turnover (value of LKR 0.18Bn) while Tokyo Cement contributed LKR 0.12Bn to account for 6.52% of the week’s turnover.
Total turnover value amounted to LKR 1.80Bn (cf. last week’s value of LKR 3.49Bn), while daily average turnover value amounted to LKR 0.45Bn (-35.59% W-o-W) compared to last week’s average of LKR 0.70Bn.
Market capitalization meanwhile, decreased by 1.14% W-o-W (or LKR 33.90Bn) to LKR 2,944.80Bn cf. LKR 2,978.70Bn last week.
Liquidity (in value terms)
The Diversified Sector was the highest contributor to the week’s total turnover value, accounting for 45.14% (or LKR 0.81Bn) of market turnover.
Sector turnover was driven primarily by JKH & Hemas Holdings which accounted for 93.76% of the sector’s total turnover.
The Manufacturing Sector meanwhile accounted for 26.47% (or LKR 0.48Bn) of the total turnover value with turnover driven primarily by Chevron, Tokyo Cement and Piramal Glass which accounted for 77.81% of the sector turnover.
The Banking, Finance & Insurance Sector was also amongst the top sectorial contributors, contributing 15.00% (or LKR 0.27Bn) to the market driven by Sampath Bank, Commercial Bank & HNB which accounted for 49.28% of the sector turnover.
Liquidity (in volume terms)
The Manufacturing Sector dominated the market in terms of share volume, accounting for 28.58% (or 18.00Mn shares) of total volume, with a value contribution of LKR 0.48Bn.
The Diversified sector followed suit, adding 19.52% to total turnover volume as 12.29Mn shares were exchanged. The sector’s volume accounted for LKR 0.81Bn of total market turnover value. The Banking, Finance & Insurance Sector meanwhile, contributed 10.70Mn shares (or 16.99%), amounting to LKR 0.27Bn.
Top gainers and losers
Lanka Ceramic was the week’s highest price gainer; increasing 30.6% W-o-W from LKR 127.90 to LKR 167.00.
Madulsima gained 21.6% W-o-W to close at LKR 8.80 while Balangoda Plantations gained 20.0% W-o-W to close at LKR 21.60. Udapussellawa (+16.1% W-o-W) and SMB Leasing (+14.3% W-o-W) were also amongst the gainers.
PC House and PC Pharma were week’s highest price losers, declining 50.0% W-o-W to close at LKR 0.20 each. Adam Capital (-20.0% W-o-W) & Adam Investments (-20.0% 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 0.20Bn relative to last week’s total net inflow of LKR 0.88Bn (-77.35% W-o-W).
Total foreign purchases decreased by 52.95% W-o-W to LKR 0.93Bn from last week’s value of LKR 1.97Bn, while total foreign sales amounted to LKR 0.73Bn relative to LKR 1.10Bn recorded last week (-33.46% W-o-W).
In terms of volume, Piramal Glass & Tokyo Cement led foreign purchases while Beruwala Resorts & Chevron led foreign sales.
In terms of value, JKH and Tokyo Cement led foreign purchases while Chevron and Nestle led foreign sales.
Point of view
Negative sentiment continued to cloud domestic equities, with equity markets losing steam for the 4th consecutive week as the benchmark ASPI lost ~74 points WoW (cf. ~98 point decline the previous week and the ~3 point loss the week prior).
Institutional, HNI and Foreign interest which had been supporting Index gains over Q2’17 also waned this week, with crossings in three stocks (JKH, GLAS & NEST) accounting for just 30% of total market turnover. Heavy trading in JKH (crossings in JKH accounted for ~82% of total crossings and 25% of total market turnover) failed to stimulate markets and average turnover levels for the week consequently fell to LKR 0.45Bn, ~36% lower than last week’s average of LKR 0.70Bn.
Foreign inflows to the Bourse also slowed this week, with net foreign flows falling ~77% over the week to record a paltry LKR198Mn.
Compared to the 11.3% gain on the Index in Q2’17, markets have fallen ~3.8% in the first half of Q3’17, halving the YTD gain on the Index to 4.8% cf. the gain of 8.9% in the H1’17. Markets in the week ahead are likely to continue to take cues from the incoming corporate earnings releases while some pressure from profit taking is also likely.
IMF estimates gradual recovery in 2017 GDP
In its Country report released on Thursday, the IMF forecasted a gradual recovery in 2017 GDP (to 4.7%) citing continued momentum (since H2’16) in the Construction and Service sectors.
The Group noted that headline inflation levels are likely to remain over 5% while the current account deficit is expected to widen slightly to 2.5% (cf. 2.4% in 2016) amid drought-driven increases in oil and food imports, and higher capital goods imports1. The IMF noted though, that medium term growth is likely to reach 5.2%, in line with the country’s potential GDP.
The IMF highlighted however, that significant external and domestic downside risks exist, with further delays in revenue mobilization and SOE reforms, as well as pressures from the GoSL’s large gross financing needs remaining the main domestic risks1.
The possible resumption of capital outflows due to further strengthening of the USD, higher rates or a weaker external position meanwhile pose significant external downside risks. The Group further noted that risks to public debt sustainability continue to remain high with public debt expected to rise marginally to 85% of GDP in 2017 due to the continued large fiscal deficit and exchange rate depreciation.
0 comments: