Sri Lankan equities reversed last week’s losses as buying interest in mid-cap stocks pushed the benchmark index back into positive territory this week despite the rising number of COVID-19 cases and the IMF estimating that Sri Lanka’s economy could contract by 4.7% this year. Consequently, the Bourse ended the week on a positive note as the ASPI increased by 147.07 points (or 2.54%) to close at 5,945.79 points, while the S&P SL20 Index increased by 21.93 points (or 0.93%) to close at 2,370.43 points.
EXPO was the largest contributor to this week’s index gain as the ongoing rally in the stock led to a gain of 28.1% W-o-W. Meanwhile, buying interest in DIPD and its parent, HAYL, also collectively contributed 20.1% to the index gain this week. This week’s ~147 point gain, helped pare down the YTD loss on the index to -2.7% cf. -5.1% last week.
Total turnover value amounted to rose to LKR21.4 Bn (cf. last week’s value of LKR 16.5Bn), while daily average turnover value amounted to LKR 4.3Bn (compared to last week’s average of LKR 3.3Bn). Strong retail-driven momentum in select mid-cap stocks including EXPO, TKYO and GLAS subsequently pushed turnover levels to its highest on record since Jan’20. Better than expected earnings from GLAS’s Sep’20 earnings release propelled the stock to record the third-highest turnover on the Colombo Bourse for the week.
Meanwhile, select construction material-related stocks also contributed to this week’s turnover amid a circular by the Finance Ministry with amended procurement guidelines aimed at supporting local industries including the local construction and construction-related manufacturers1.
Meanwhile, local HNI and institutional investor participation remained relatively muted this week as crossings for the week accounted for a mere 5% of total market turnover (cf. 18% last week), dominated by buying interest in Energy sector stocks PAP and VPEL which accounted for 68% of total crossings this week.
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