The Bourse ended on a positive note this week as the ASPI increased by 57.05 points (or +0.88%) to close at 6,540.97 points, while the S&P SL20 Index also increased by 2.25 points (or +0.06%) to close at 3,679.23 points.
Ceylinco Insurance was the highest contributor to the week’s turnover value, contributing LKR0.28Bn or 21.86% of total turnover value. Union Bank followed suit, accounting for 6.90% of turnover (value of LKR0.09Bn) while Amana Takaful contributed LKR0.08Bn to account for 5.9% of the week’s turnover. Total turnover value amounted to LKR1.29Bn (cf. last week’s value of LKR2.09Bn), while daily average turnover value amounted to LKR0.26Bn (-50.44% W-o- W) compared to last week’s average of LKR 0.52Bn. Market capitalization meanwhile, increased by 0.61% W-o-W (or LKR 18.54Bn) to LKR 3,053.82Bn cf. LKR 3,035.28Bn last week.
The Banking, Finance & Insurance Sector was the highest contributor to the week’s total turnover value, accounting for 53.72% (or LKR 0.70Bn) of market turnover. Sector turnover was driven primarily by Ceylinco Insurance, Union Bank, Amana Takaful, Ceylinco Insurance [NV] & Sampath Bank which accounted for 79.01% of the sector’s total turnover. The Diversified Sector meanwhile accounted for 13.88% (or LKR 0.18Bn) of the total turnover value with turnover driven primarily by JKH, Aitken Spence & Softlogic Holdings which accounted for 69.32% of the sector turnover.
The Manufacturing Sector was also amongst the top sectorial contributors, contributing 8.76% (or LKR 0.11Bn) to the market driven by Teejay Lanka which accounted for 32.91% of the sector turnover.
The Banks, Finance & Insurance Sector dominated the market in terms of share volume, accounting for 74.14% (or 98.18Mn shares) of total volume, with a value contribution of LKR 0.70 Bn.
The Diversified Sector followed suit, adding 6.14% to total turnover volume as 8.13Mn shares were exchanged. The sector’s volume accounted for LKR0.18Bn of total market turnover value. The Power & Energy Sector meanwhile, contributed 6.18Mn shares (or 4.67%), amounting to LKR0.04Bn.
Hunters was the week’s highest price gainer; increasing 20.4% W-o-W from LKR410.20 to LKR 493.70. Hunnas Falls gained 19.2% W-o-W to close at LKR95.00. Union Bank(+15.4% W-o-W) and Distilleries (+14.5% W-o-W) were also amongst the gainers.
SMB Leasing was the week’s highest price loser, declining 16.7% W-o-W to close at LKR0.50 while John Keells Plc(-11.2% W-o-W), Amana Takaful(-11.1 W-o-W), Lankem Ceylon(-10.3% W-o-W) were also amongst the top losers over the week.
Point of View
Foreign investors closed the week in a net buying position with total net inflows amounting to LKR 0.08Bn relative to last week’s total net outflow of LKR 0.47Bn (+116.6% W-o-W). Total foreign purchases decreased by 75.7% W-o-W to LKR 0.19Bn from last week’s value of LKR 0.79Bn, while total foreign sales amounted to LKR 0.12Bn relative to LKR 1.26Bn recorded last week (-90.82% W-o-W). In terms of volume Aitken Spence & Softlogic holdings led foreign purchases while Dialog & Marawila Resorts led foreign sales. In terms of value Cold Stores & Aitken Spence led foreign purchases while Dialog & Chevron led foreign sales.
Equity markets continued last week’s positive momentum, surpassing the 6500 mark for the first time since Mid-March despite the Index hitting an 11-week low last week. Although activity levels remained largely dull due to traditional New Year holidays, the benchmark Index hit a 5-week high of 6551.83 on Wednesday and ended the week at 6540.97 to record an 57 point gain W-o-W.
Tepid activity levels continued throughout most of the week with turnover at the start of the week hitting a 5-year low of 0.10Bn as Local institutional and HNI stayed away from the market which was largely retail driven.
The average daily turnover consequently declined by 50% W-o-W to Rs.0.26Bn cf. year to date daily average Rs.1.1Bn. Meanwhile, Local Institutional and HNI participation accounted for just ~39% (of total market turnover) during the week cf. 49% year to date average.
Foreign investors recorded a net foreign inflow of Rs.0.1Bn cf. a net foreign outflow of Rs.0.5Bn of last week, while year to date net foreign outflow amounted to Rs.1.3Bn (including LOLC’s transaction for Rs.12.8Bn).
Despite this week’s overall sluggishness, investor confidence (as gauged through the movement of market indices) over the start of Q2’18 has begun to show a gradual improvement with the ASPI returning 1% (or 64 points) and the S&P 20 Index returning 0.9% ( 32 points) since 29th March. Markets in the week ahead are likely to be active as investors return to markets post the Traditional New Year holidays, but political instability and delayed policy reforms will continue to remain major investor concerns.
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