The Bourse continued to lose ground further as the ASPI decreased marginally by 1.84 points (or -0.03%) to close at 6,411.84 points, while the S&P SL20 Index also decreased by 8.14 points (or -0.22%) to close at 3,724.96 points.
Turnover and market capitalization
Commercial Bank was the highest contributor to the week’s turnover value, contributing LKR0.42Bn or 22.85% of total turnover value.
JKH followed suit, accounting for 14.45% of turnover (value of LKR0.26Bn) while Dialog Axiata contributed LKR0.19Bn to account for 10.62% of the week’s turnover. Total turnover value amounted to LKR1.83Bn (cf. last week’s value of LKR4.69Bn), while daily average turnover value amounted to LKR0.46Bn (-51.21% W-o-W) compared to last week’s average of LKR 0.94Bn.
Market capitalization meanwhile, decreased by 0.03% W-o-W (or LKR 0.84Bn) to LKR2,922.66Bn cf. LKR2,923.50Bn last week.
Liquidity (in value terms)
The Banking, Finance & Insurance Sector was the highest contributor to the week’s total turnover value, accounting for 38.65% (or LKR 0.71Bn) of market turnover.
Sector turnover was driven primarily by Commercial Bank, Sampath Bank, HNB & NDB which accounted for 86.72% of the sector’s total turnover.
The Diversified Sector meanwhile accounted for 18.40% (or LKR 0.34Bn) of the total turnover value with turnover driven primarily by JKH which accounted for 78.53% of the sector turnover.
The Beverage, Food & Tobacco Sector was also amongst the top sectorial contributors, contributing 14.12% (or LKR 0.26Bn) to the market driven by Cargills and Cold Stores which accounted for 84.21% of the sector turnover.
Liquidity (in volume terms)
The Diversified sector dominated the market in terms of share volume, accounting for 36.47% (or 23.87Mn shares) of total volume, with a value contribution of LKR 0.34Bn.
The Telecom sector followed suit, adding 22.06% to total turnover volume as 14.44Mn shares were exchanged.
The sector’s volume accounted for LKR0.19Bn of total market turnover value. The Banking, Finance & Insurance Sector meanwhile, contributed 9.19Mn shares (or 14.04%), amounting to LKR0.71Bn.
Top gainers and losers
Paragon was the week’s highest price gainer; increasing 24.7% W-o-W from LKR53.80 to LKR67.10. CIT gained 22.5% W-o-W to close at LKR88.30. Hunas Falls (+12.1% W-o-W) and Lanka Aluminium (+11.3% W-o-W) were also amongst the gainers.
SMB Leasing[NV] was the week’s highest price loser, declining 33.3% W-o-W to close at LKR0.20 while CIC (-14.2% Y-o-Y), Merc Shipping (-14.0% W-o-W) & Adam Capital(-12.5% W-o-W) were also amongst the top losers over the week.
Foreign investors closed the week in a net selling position with total net outflows amounting to LKR 0.14Bn relative to last week’s total net outflow of LKR 1.21Bn (-88.3% W-o-W).
Total foreign purchases decreased by 57.7% W-o-W to LKR 0.84Bn from last week’s value of LKR 1.99Bn, while total foreign sales amounted to LKR 0.98Bn relative to LKR 3.20Bn recorded last week (-69.27% W-o-W).
In terms of volume, Dialog Axiata & JKH led foreign purchases while Commercial Bank & Chevron led foreign sales. In terms of value JKH & Sampath Bank led foreign purchases while Commercial Bank & Chevron led foreign sales.
Point of view
Equities closed flat this week as investors adopted a watchful stance in the absence of any major economic/market developments and as concerns over delays in LG polls and the lack of clarity over certain policy measures weighed down sentiment.
The broadshare ASPI closed the week largely unchanged at 6411.8 points (6413.6 points last week) as an 11.9 point loss on Tuesday was mostly offset by a 10.1 point gain over the rest of the week.
Dull activity however, pushed turnover levels to a 3-month low, and daily average turnover levels fell to a paltry LKR0.46Bn this week, the lowest since August when it hit a low of LKR0.45Bn. Low HNI and Institutional participation also contributed to the general sluggishness, with crossings for the week accounting for just 31% of total market turnover cf. last week’s 36%. Markets over the month of November have fallen 3.1%, wiping off the 2.8% gain in October and the 0.7% gain in the Index in September.
Flat earnings performance over the September quarter along with policy uncertainty post the national budget have contributed the Index’s weaker performance in November.
Corporate earnings of 95% of the market totaled LKR60Bn in the Sept’17 quarter, unchanged from the LKR60.2Bn recorded in the Sept’16 quarter. Markets in the week ahead are likely to remain largely unchanged as they continue to consolidate at the current levels.
Exports surpass $1 bn for third consecutive month
Exports in September surpassed the $1Bn mark for the 3rd consecutive month, driven by i) stronger textiles/garment exports and, ii) the re-export of petroleum products which rose both due to higher price and volume.
Export gains were minimized however by higher imports, which grew at double digit levels for the third consecutive month on the back of higher fuel imports (for thermal power generation) and base metals (for cement & construction).
The trade deficit consequently widened in September 2017 to $656Mn (cf. $610Mn in Sept’16) and pushed up the cumulative trade deficit during the first nine months of 2017 to $6840Mn from $6125Mn in Sept’16.
Performance in other major inflows to the current account meanwhile remained lower in Sep’17 as lower tourist earnings (-2.3% Y-o-Y) on the back of lower tourist arrivals and declining worker remittances (-16.7% Y-o-Y) on the back of slow growth and geo-political instability in the Middle-East dampened inflows.
Financial flows to Sri Lanka however, continued to remain strong over Sept, with foreign investments in G-secs continuing strongly for the 7th consecutive month and helping offset the impact of the net outflow from the CSE on the back of a one-off transaction in secondary markets.
Gross official reserves at end-Sept consequently increased to $7.3Bn (ie: 4.2 months of imports), helping the LKR stabilize and record a relatively modest depreciation of 2.5% YTD against the USD.
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