The Bourse ended on a negative note this week as the ASPI decreased by 65.71 points (or -1.01%) to close at 6,443.75 points, while the S&P SL20 Index also decreased by 56.29 points (or -1.53%) to close at 3,623.64 points.
Turnover and marketcapitalization
Sanasa Dev. Bank was the highest contributor to the week’s turnover value, contributing LKR0.68Bn or 18.77% of total turnover value.
Union Assurance followed suit, accounting for 14.24% of turnover (value of LKR0.52Bn) while JKH contributed LKR0.35Bn to account for 9.55% of the week’s turnover.
Total turnover value amounted to LKR3.64Bn (cf. last week’s value of LKR6.25Bn), while daily average turnover value amounted to LKR0.73Bn (-41.68% W-o-W) compared to last week’s average of LKR 1.25Bn.
Market capitalization meanwhile, decreased by 1.04% W-o-W (or LKR 31.66Bn) to LKR 3,007.64Bn cf. LKR 3,039.29Bn last week.
Liquidity(in value terms)
The Banking, Finance & Insurance Sector was the highest contributor to the week’s total turnover value, accounting for 53.96% (or LKR 1.97Bn) of market turnover.
Sector turnover was driven primarily by Sanasa Dev.Bank, Union Assurance, Commercial Bank, Sampath Bank & HNB[NV] which accounted for 88.53% of the sector’s total turnover.
The Diversified Sector meanwhile accounted for 14.31% (or LKR 0.52Bn) of the total turnover value with turnover driven primarily by JKH which accounted for 66.72% of the sector turnover. The Beverage, Food & Tobacco Sector was also amongst the top sectorial contributors, contributing 12.51% (or LKR 0.46Bn) to the market driven by Nestle & Keells Food which accounted for 74.70% of the sector turnover.
Liquidity(in volume terms) 
The Diversified sector dominated the market in terms of share volume, accounting for 29.57% (or 35.65Mn shares) of total volume, with a value contribution of LKR 0.52Bn.
The Land & Property Sector followed suit, adding 24.98% to total turnover volume as 30.12Mn shares were exchanged.
The sector’s volume accounted for LKR0.26Bn of total market turnover value. The Banking, Finance & Insurance Sector meanwhile, contributed 29.20Mn shares (or 24.22%), amounting to LKR1.97Bn.
Top gainers and losers
Ceylon Printers was the week’s highest price gainer; increasing 37.2% W-o-W from LKR58.10 to LKR 79.70. Morisons[NV] gained 21.0% W-o-W to close at LKR509.60.
Morisons (+16.9% W-o-W) and Lighthouse Hotel (+13.9% W-o-W) were also amongst the gainers.
PC Pharma was the week’s highest price loser, declining 50.0% W-o-W to close at LKR0.10 while CT Land (-39.5% W-o-W), Adam Investments (-33.3% W-o-W), Adam Capital (-28.6% 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 0.11Bn relative to last week’s total net inflow of LKR 1.01Bn (-88.97% W-o-W).
Total foreign purchases decreased by 58.72% W-o-W to LKR 1.22Bn from last week’s value of LKR 2.95Bn, while total foreign sales amounted to LKR 1.11Bn relative to LKR 1.93Bn recorded last week (-42.84% W-o-W).
In terms of volume Softlogic Holdings & Serendib Engineering led foreign purchases while Tokyo Cement & Asiri Hospitals led foreign sales.
In terms of value Serendib Engineering & Commercial Bank[NV] led foreign purchases while Tokyo Cement & Nestle Lanka led foreign sales.
Point of view
The Sri Lankan equity market rout continued yet again this week, with the benchmark ASPI recording its highest weekly loss since late-Nov’17 as ongoing political uncertainty was aggravated by growth concerns as the Sri Lankan economy recorded its lowest growth rate in 16-years.
The broad-share price Index lost ~66 points (-1% W-o-W), to record its highest weekly loss since late Nov’17 when the market lost 70 points.
Since the rise of communal tensions in early-March, the ASPI has lost 113 index points or 1.7%, paring down the 2.3% gain (between Jan to immediately prior to the communal riots) down to just 0.5%.
Declines on the Index on the back of these domestic political headwinds have been aggravated by rising global geopolitical tensions, resulting in the benchmark index falling below the key 6500 level for the first time in 2-months.
Activity levels on the Colombo Bourse reflected the general sluggishness in sentiment, and daily average turnover levels fell ~42% W-o-W to Rs. 0.73Bn.
Market activity however was dominated by Local Institutional and HNI investors who accounted for ~67% of the week’s market turnover, as retailers opted to remain on the sidelines yet again this week.
Foreign investor appetite for risky domestic assets meanwhile also took a dip this week, as net foreign flows to the CSE fell 89% W-o-W to Rs. 0.1Bn (cf. Rs. 1.0Bn last week).
Markets in the week ahead are likely to move in line with developments on the political and economic front.
FY 2017 GDP falls tomulti-year low of 3.1%
Sri Lanka’s GDP growth fell to a 16-year low in 2017, as growth fell to 3.1% Y-o-Y amid a sharper slowdown in H2’17. H2’17 GDP growth slowed to 3.2% Y-o-Y compared to H1’17 when growth was 3.9% Y-o-Y and H2’16 when growth was 5.1% Y-o-Y.
Slower growth was evident through all three sectors (Agriculture, Industry & Services) with the drought-driven slowdown in the Agriculture sector (-0.8% Y-o-Y) only partially offset by the slower growth in Industry (3.9% Y-o-Y in 2017 cf. 5.8% in 2016) and Services (3.2% Y-o-Y in 2017 cf. 4.7% Y-o-Y in 2016).
Industry sector growth remained low as Y-o-Y improvements in the F&B (+1.5% Y-o-Y cf -0.2% in 2016) and Garment (+5.7% Y-o-Y cf. 1.8% Y-o-Y in 2016) industries failed to offset slower growth in the sector’s largest contributing industry, Construction (3.1% Y-o-Y cf. 8.3% Y-o-Y in 2016).
Services sector growth was also lower despite a recovery in the Wholesale and Retail industry ( 3.8% Y-o-Y cf. 2.5% Y-o-Y in 2016) as growth in the other major industries within the sector (Transport (0.9% Y-o-Y cf.5.5% in 2016), Financial Services (9.4% Y-o-Y cf. 12.3% in 2016) and Real Estate (4.7% Y-o-Y cf. 6.3% Y-o-Y) remained sluggish.
National inflation levels in Feb’18 meanwhile slowed to a 22-month low of 3.2% Y-o-Y (5.4% in Jan’18 and 7.3% in Dec’16) supported both by the base effect (a high base prevailed in Feb’17) and favourable supply conditions.
NCPI Core inflation, which reflects the underlying inflation in the economy, meanwhile continued its downtrend since Sep’17 to fall to 2.0% (cf. 2.1% in Jan’18).
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