The Bourse ended the week on a positive note as the ASPI increased by 90.81 points (or 1.41%) to close at 6,529.05 points, while the S&P SL20 Index also increased by 109.46 points (or 2.97%) to close at 3,797.43 points.
Turnover and market capitalization
Commercial Bank was the highest contributer to the week’s turnover value, contributing LKR 2.02Bn or 38.38% of total turnover value.
Sampath bank followed suit, accounting for 8.23% of turnover (value of LKR 0.43Bn) while Nestle contributed LKR 0.41Bn to account for 7.82% of the week’s turnover.
Total turnover value amounted to LKR 5.26Bn (cf. last week’s value of LKR 3.65Bn), while daily average turnover value amounted to LKR 1.32Bn (+1.42% W-o-W) compared to last week’s average of LKR 0.73Bn.
Market capitalization meanwhile, increased by 1.42% W-o-W (or LKR 41.34Bn) to LKR 2,961.04Bn cf. LKR 2,919.70Bn last week.
Liquidity (in value terms)
The Banking, Finance & Insurance Sector was the highest contributor to the week’s total turnover value, accounting for 56.68% (or LKR 2.98Bn) of market turnover. Sector turnover was driven primarily by Commercial Bank, Sampath Bank & HNB which accounted for 87.58% of the sector’s total turnover.
The Manufacturing Sector meanwhile accounted for 10.95% (or LKR 0.58Bn) of the total turnover value with turnover driven primarily by Tokyo Cement which accounted for 47.02% of the sector turnover.
The Plantations Sector was also amongst the top sectorial contributors, contributing 10.46% (or LKR 0.55Bn) to the market driven by Elpitiya, Malwatte & Balangoda Plantations which accounted for 68.85% of the sector turnover.
Liquidity (in volume terms)
The Banking, Finance & Insurance Sector dominated the market in terms of share volume, accounting for 32.45% (or 45.06Mn shares) of total volume, with a value contribution of LKR 2.98Bn.
The Plantations sector followed suit, adding 18.27% to total turnover volume as 25.38Mn shares were exchanged.
The sector’s volume accounted for LKR 0.55Bn of total market turnover value.
The Manufacturing Sector meanwhile, contributed 23.41Mn shares (or 16.86%), amounting to LKR 0.58Bn.
Top gainers and losers
Balangoda Plantations was the week’s highest price gainer; increasing 27.5% W-o-W from LKR 30.50 to LKR 38.90.
ACME gained 25.5% W-o-W to close at LKR 6.90 while Serendib Engineering Group gained 22.0% W-o-W to close at LKR 9.10. City Housing (+21.9% W-o-W) and Lanka Cement(+21.2% W-o-W) were also amongst the gainers.
SMB Leasing was the week’s highest price losers, declining 12.5% W-o-W to close at LKR 0.70 while Kelsey Developments (-11.5% Y-o-Y), Ceylon Printers (-11.3% W-o-W) & Amana Takaful(-11.1% 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 1.85Bn relative to last week’s total net inflow of LKR 0.27Bn (+580.7% W-o-W).
Total foreign purchases increased by 107.3% W-o-W to LKR 3.10Bn from last week’s value of LKR 1.50Bn, while total foreign sales amounted to LKR 1.25Bn relative to LKR 1.22Bn recorded last week (+2.03% W-o-W).
In terms of volume, Commercial Bank & Access Engineering led foreign purchases while Elpitiya Plantations and Malwatte Plantations led foreign sales.
In terms of value, Commercial Bank and HNB led foreign purchases while Sampath Bank and Elpitiya Plantations led foreign sales.
Point of view
Markets surged ~91 points this week (+1.4% gain W-o-W), helping the main share price index push past the key 6500-level for the first time since early August.
The ASPI which has been bottoming out from its low of 6361.03 points in early Sept., hit a 2-month high of 6529.05 on Friday, spurred by a renewed interest in Banking & Finance stocks.
Wednesday’s strategic trade in Commercial Bank boosted the overall Banking & Finance sector, with the Banks & Finance sector index increasing 3.6% amid major counters such as COMB, HNB, LOLC and SAMP contributing ~49 Index points to the ASPI’s overall gain of 91 points.
Crossings over the week consequently amounted to a little over 50% of total market turnover, with COMB’s trades of ~12Mn shares accounting for ~67% of the week’s crossings.
Retail interest meanwhile, was driven by active trading in some lower-priced plantation stocks. The general recovery in activity helped push daily average turnover levels to a 3-week high with average turnover hitting LKR 1.32Bn cf. LKR 0.73Bn last week and LKR 0.89Bn the week prior.
Net foreign flows to the Bourse meanwhile remained positive for the 3rd consecutive week since the outflow in mid-September amid the strategic transaction in Singer Sri Lanka.
Foreign interest in domestic equities has remained consistently positive since Feb’2017, tracking the general trend in global appetite for risky assets.
Emerging and Frontier market equities have been experiencing record gains this year, with the MSCI EM gaining 28% and the MSCI FM index gaining 20% YTD.
Foreign flows to Sri Lankan equities have tracked this general trend, helping the Index record a YTD gain of 5.4% and wipe off losses from early in the year.
Markets in the week ahead are likely to retain the current positive momentum.
IMF forecasts GDP growth of <4.5% in 2017
In its recently concluded mission visit, the IMF commented on its findings on the progress of Sri Lanka’s economic reform program, adding that all quantitative performance targets through June 2017 have been met.
The IMF also commended the GoSL’s move to pass the ‘landmark’ Inland Revenue Act (IRA), adding that the focus should now shift to the smooth implementation of the IRA through supporting regulations and manuals, efficient tax administration, and greater awareness and preparedness of taxpayers through media outreach and information dissemination1.
The IMF cautioned though that progress in implementing structural reforms (particularly in SOBEs and public financial management) has been mixed, noting that accelerating implementation on this front is important as the significant financial obligations of SOBEs pose fiscal risks that need to be addressed by enhancing oversight of performance indicators, developing SOBE-specific reform strategies, and fuel and electricity pricing reform1.
In terms of growth meanwhile, the IMF projects GDP growth to remain below 4.5% in 2017 but expects a rebound in 2018 as agricultural production normalizes (from the impact of the drought and floods) and infrastructure projects pick up.
0 comments: