Sri Lankan equities experienced a volatile trading week as the benchmark index continued to seesaw between positive and negative territory as the week progressed.
The rising number of COVID-19 cases, expanding areas under curfew outweighed positive earnings releases during the week.
Consequently, the Bourse ended the week on a negative note as the ASPI decreased by 42.35 points (or -0.73% W-o-W) to close at 5,726.59 points, while the S&P SL 20 Index also decreased by 15.68 points (or -0. 68% W-o-W) to close at 2,282.20 points.
The benchmark index dipped ~99.6 points on Monday after the GoSL declared lockdowns in several parts in Colombo on Sunday while once again falling ~80.1 points on Wednesday amid the decision to impose a curfew in the entire Western province over the long weekend. However, positive earnings releases for the September quarter in select stocks helped trim earlier losses as the ASPI gained ~126.4 points on Thursday.
Turnover & Market Capitalization
Total turnover value amounted to rose to LKR5.0Bn (cf. last week’s value of LKR 12.1Bn), while daily average turnover value amounted to LKR 1.3Bn (compared to last week’s average of LKR 2.4Bn). Total turnover for the week continued to decrease significantly (-48.2% W-o-W) with investors remaining cautious over the impact of a second wave on Sri Lanka’s already fragile economy amid the possibility of further lockdown measures.
Meanwhile, local HNI and institutional investors continued to remain largely on the side-lines as crossings for the week accounted for a mere 4% of total market turnover (cf. 8% last week) with investor interest mainly focused on JKH (77% of total crossings) and TJL.
Dividend Announcements
Company DPS (Rs.) Dividend Type Date (XD); CHEVRON LUBRICANTS 3.50 Third Interim 10/11/2020, RESUS ENERGY PLC 21.43:1 Script To be notified.
Key Economic Indicators September; Prime Lending Rate-6.42% Ave. Wtd. Deposit Rates-6.44% Ave. Wtd. Fixed Dep. Rates-7.9% CCPI Inflation Y-o-Y % (Base 2013)-4%.
Net Foreign Position
The sell-off on domestic equities increased this week amid a visit from the U.S. Secretary of State which drew Sri Lanka into the tensions between the U.S. and China. Consequently, foreign investors were net sellers this week with total net outflow amounting to LKR0.84Bn relative to last week’s total net outflow of LKR0.51Bn (-63.8% W-o-W).
Total foreign purchases decreased by 78.7% W-o-W to LKR 0.20Bn from last week’s value of LKR 0.92Bn, while total foreign sales amounted to LKR 1.03 Bn relative to LKR 1.43 Bn recorded last week (-27.6% W-o-W).
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