The Bourse closed on a negative note as the ASPI decreased by 31.80 points (or 0.47%) to close at 6,697.86 points, while the S&P SL20 Index decreased by 16.09 points (or 0.42%) to close at 3,828.59 points.
JKH was the highest contributor to the week’s turnover value, contributing LKR 1.42Bn or 26.67% of total turnover value.
Commercial Bank followed suit, accounting for 26.31% of turnover (value of LKR 1.40Bn) while Sampath Bank contributed LKR 0.58Bn to account for 10.92% of the week’s turnover.
Total turnover value amounted to LKR 5.33Bn (cf. last week’s value of LKR 4.64Bn), while daily average turnover value amounted to LKR 1.07Bn (+14.96% W-o-W) compared to last week’s average of LKR 0.93Bn.
Liquidity (in value terms)
The Banking, Finance & Insurance Sector was the highest contributor to the week’s total turnover value, accounting for 45.77% (or LKR 2.44Bn) of market turnover.
Sector turnover was driven primarily by the Commercial Bank, Sampath Bank, HNB & Union Bank which accounted for 89.97% of the sector’s total turnover.
The Diversified Sector meanwhile accounted for 29.36% (or LKR 1.57Bn) of the total turnover value with turnover driven primarily by JKH which accounted for 90.83% of the sector turnover.
The Manufacturing Sector was also amongst the top sectorial contributors, contributing 13.58% (or LKR 0.72Bn) to the market driven by Chevron Lubricants & Teejay Lanka which accounted for 75.76% of the sector turnover.
Liquidity (in volume terms)
The Diversified Sector dominated the market in terms of share volume, accounting for 31.80% (or 37.18Mn shares) of total volume, with a value contribution of LKR 1.57Bn.
The Banking, Finance & Insurance sector followed suit, adding 30.55% to total turnover volume as 35.72Mn shares were exchanged.
The sector’s volume accounted for LKR 2.44Bn of total market turnover value. The Manufacturing Sector meanwhile, contributed 11.71Mn shares (or 10.02%), amounting to LKR 0.72Bn.
Top gainers & losers
SMB Leasing [NV] was the week’s highest price gainer; increasing 33.33% W-o-W from LKR 0.30 to LKR 0.40.
Harischandra gained 20.18% W-o-W to close at LKR 2,782.60 while Nuwara Eliya Hotel gained 41.69% W-o-W to close at LKR 1,661.80. People’s Merchant (+41.57% W-o-W) and Adam Capital (+12.50% W-o-W) were also amongst the gainers.
Brac Lanka finance was the week’s highest price loser, declining 25.74% W-o-W to close at LKR 65.20. Paragon (-21.59% W-o-W), Blue Diamonds (-16.67% W-o-W) & Adam Investments (-14.29% 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 1.39Bn relative to last week’s total net inflow of LKR 1.20Bn (+15.30% W-o-W).
Total foreign purchases decreased by 3.08% W-o-W to LKR 2.20Bn from last week’s value of LKR 2.27Bn, while total foreign sales amounted to LKR 0.82Bn relative to LKR 1.07Bn recorded last week (-23.74% W-o-W).
In terms of volume, JKH & Dialog led foreign purchases while Marawila Resorts & Union Bank led foreign sales.
In terms of value, JKH and Sampath Bank led foreign purchases while Chevron and HNB led foreign sales.
Point of view
Equity markets came off its 15M high, ending an 8 week market rally this week with some profit taking by investors.
The bench mark price index that gained a cumulative ~734 points since late March lost 32 points this week to close ~2 points below 6700 to end at 6697.86 points.
Strategic transaction however in Commercial Bank & foreign buying interest in JKH – which accounted for ~47% of total turnover – boosted average turnover value to LKR 1.07Bn this week, ~15% higher than last week’s average turnover of LKR 0.93Bn and ~14% higher than the year’s average turnover levels (LKR 0.90Bn).
Apart from COMB & JKH, large deals in SAMP, LLUB too contributed to market turnover with crossings accounting for ~65% of total turnover.
Net foreign purchases increased this week amid buying interest in JKH and SAMP and continued to remain net buyers for the 17th consecutive week.
Net inflows to the Bourse subsequently increased by 15.3% W-o-W to LKR 1.39Bn bringing the total net inflows for the year to LKR18.8Bn.
In the week ahead similar market momentum is likely and could to be influenced by the rest of the Mar’17 corporate earnings.
(Approximately 40% of corporates have reported earnings thus far and ~57% of these companies have recorded a Y-o-Y growth).
NCPI declines to 8.4%
Y-o-Y in April 2017
Official inflation figures released indicated a 20 bps decline in the NCPI for April 2017.
Inflation for the month consequently amounted to 8.4% Y-o-Y (cf. +8.6% Y-o-Y in Mar’17) while on a M-o-M basis, the NCPI increased 1.3% (cf.-0.3% in Mar’17).
The Y-o-Y marginal decline was led primarily by reduced prices in the non-Food category, lowering Non- Food inflation to 5.9% in April 2017 from 6.7% in the previous month.
Despite the decline in non-food items, prices of Food items however, increased from 11.2% Y-o-Y in March 2017 to 11.8% Y-o-Y.
Key contributors to the decrease in the Non-Food group include ‘Alcoholic Beverages, Tobacco & Narcotics’ (-8.1% Y-o-Y) and ‘Clothing & Footwear’ (-0.2% Y-o-Y), while sub-categories ‘Housing, Water Electricity & Other Fuels ‘and ‘Transport’ too recorded price decreases in April 2017 (-0.1% Y-o-Y and -2.0% Y-o-Y respectively).
On the external front meanwhile, CBSL data indicated, that trade deficit between Jan-Feb’17 widened by 35.4% largely due to decline in industrial exports (-6.5% Y-o-Y) and higher expenditure on intermediate goods (crude oil and refined petroleum) (+25.3% Y-o-Y).
Conversely tourism receipts declined marginally (-0.1% Y-o-Y) and remittances increased moderately (2.6% Y-o-Y) while gross official reserves by end-Feb stood at USD 5.6 Bn cf. USD 5.5Bn in Jan.
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