The Bourse reversed the negative trend & ended on a positive note this week as the ASPI increased by 33.03 points (or +0.51%) to close at 6,476.78 points, while the S&P SL20 Index also increased by 26.46 points (or 0.73%) to close at 3,650.10 points.
Turnover and market capitalization
LOLC was the highest contributor to the week’s turnover value, contributing LKR12.85Bn or 66.3% of total turnover value.
Bukit Darah followed suit, accounting for 8.97% of turnover (value of LKR1.74Bn) while Carsons contributed LKR0.83Bn to account for 4.28% of the week’s turnover.
Total turnover value amounted to LKR19.39Bn (cf. last week’s value of LKR3.64Bn), while daily average turnover value amounted to LKR4.85Bn (+564.96% W-o-W) compared to last week’s average of LKR 0.73Bn.
Market capitalization meanwhile, increased by 0.83% W-o-W (or LKR 25.07Bn) to LKR 3,032.71 Bn cf. LKR 3,007.64Bn last week.
Liquidity (in value terms)
The Banking, Finance & Insurance Sector was the highest contributor to the week’s total turnover value, accounting for 71.98% (or LKR 13.95Bn) of market turnover.
Sector turnover was driven primarily by LOLC, Sampath Bank & Commercial Bank which accounted for 97.38% of the sector’s total turnover.
The Diversified Sector meanwhile accounted for 13.87% (or LKR 2.69Bn) of the total turnover value with turnover driven primarily by Carsons, Aitken Spence, JKH, Hemas Holdings & Richard Pieris which accounted for 90.37% of the sector turnover.
The Oil Palms Sector was also amongst the top sectorial contributors, contributing 8.97% (or LKR 1.74Bn) to the market driven by Bukit Darah which accounted for 99.99% of the sector turnover.
Liquidity (in volume terms)
The Banking, Finance & Insurance Sector dominated the market in terms of share volume, accounting for 61.65% (or 220.21Mn shares) of total volume, with a value contribution of LKR 13.95Bn.
The Diversified Sector followed suit, adding 20.26% to total turnover volume as 72.35Mn shares were exchanged.
The sector’s volume accounted for LKR2.69Bn of total market turnover value. The Land & Property Sector meanwhile, contributed 26.36Mn shares (or 7.38%), amounting to LKR0.30Bn.
Top gainers and losers
Nuwara Eliya was the week’s highest price gainer; increasing 22.4% W-o-W from LKR1100.00 to LKR 1346.80. Bimputh Finance gained 19.6% W-o-W to close at LKR44.50. Asiri Hospitals(+19.6% W-o-W) and Hunters (+16.5% W-o-W) were also amongst the gainers.
Colombo Trust was the week’s highest price loser, declining 31.5% W-o-W to close at LKR25.00 while Blue Diamonds [NV] (-25.0% W-o-W), Office Equipment (-21.4% W-o-W), Kelsey Developments (-15.4% 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 9.87Bn relative to last week’s total net inflow of LKR 0.11Bn (-8918.58% W-o-W).
Total foreign purchases increased by 285.02% W-o-W to LKR 4.69Bn from last week’s value of LKR 1.22Bn, while total foreign sales amounted to LKR 14.55Bn relative to LKR 1.11Bn recorded last week (+1216.76% W-o-W).
In terms of volume Richard Pieris & Bukit Darah led foreign purchases while LOLC & Aitken Spence led foreign sales.
In terms of value Bukit Darah & Carsons led foreign purchases while LOLC & Aitken Spence led foreign sales.
Point of view
Equity markets received a boost this week as LOLC Holdings (Pvt) Ltd.’s purchase of a 29.97% stake in its own subsidiary, Lanka Orix Leasing Company (LOLC Plc) pushed markets away from its 8-week low and to its highest weekly turnover in 6-years.
Weekly market turnover hit a 6 year high of Rs.19.4Bn (+432% W-o-W) as LOLC Holdings purchased a 29.97% stake in LOLC Plc from ORIX Corporation of Japan for a value of Rs.12.8Bn.
The transaction, which helped push turnover levels to 6-year highs, is the highest since Mar’2012 when Khazanah Nasional bought an 8.85% stake in JKH for 14.5Bn, and surpasses both Singaporean company Group Lease Holding’s Rs.10.9Bn acquisition of 29.99% stake in Commercial Credit & Finance Plc in December 2016, and Hayley’s Rs.10.5Bn acquisition of Singer Sri Lanka in Sep’2017.
Although the transaction led to a net foreign outflow of Rs.9.9Bn and dragged the YTD net outflow on the CSE to Rs.2.5Bn (cf. YTD net inflow Rs.7.4Bn on 23rd March), the activity in the market helped the ASPI post a slight recovery after 4 consecutive weeks of W-o-W declines.
The broad-share price Index consequently gained ~33 points (+0.51% W-o-W) despite hitting an eight week low of 6440.2 on Wednesday.
The Index’s ~37 point gain on Thursday (following the LOLC transaction) helped the ASPI end on positive note (on a W-o-W basis) for first time since the rise of communal tensions in early-March.
Markets in the week ahead are likely to look for cues from the results of the upcoming no-faith motion against PM due mid next week and the CBSL’s 2nd monetary policy meeting for the year.
LKR records highest appreciation for 2018 YTD
The CBSL this week called for proposals to raise upto $1Bn, adding that the Foreign Currency Term Financing Facility (FTFF) could be denominated in USD, Yen or Euro or any combination of these currencies.
The FTFF is aimed at helping finance the country’s bunched up external debt repayments beyond 2019 which are estimated at $3.6Bn per annum between 2019/20224.
The CBSL added that rates on the 3 year maturity FTFF could be fixed or floating at a USD, JPY or Euro 6 Month LIBOR.
The LKR meanwhile appreciated against the USD for the 1st time in 3-weeks as exporter dollar sales and inward remittances outweighed seasonal importer demand for the US currency.
Worker remittances are typically higher during the traditional new year period while this year’s seasonal importer demand has reduced somewhat providing greater support for the LKR.
The LKR consequently strengthened 0.3% W-o-W against the USD following 3-consecutive weeks of weekly depreciation in the range of 0.1-0.3%.
The LKR appreciation this week was the highest appreciation again the USD so far this year, as the previous instances of LKR appreciation ranged between 0.07% W-o-W (in late-Jan) and 0.1% W-o-W (in early march).
The LKR has lost ~1.5% of its value against the USD so far this year in line with the LKR depreciation in the comparable period last year (1.4% in Jan-Mar’17) but notably higher than the depreciation of 0.4% in Jan-Mar’16.
With the approach of the traditional New Year in mid-April, currency dealers expect the LKR to remain under pressure on the back of continued importer demand for dollars.
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