Turnover and market capitalization
Commercial Bank was the highest contributor to the week’s turnover value, contributing LKR1.15Bn or 26.64% of total turnover value.
JKH followed suit, accounting for 9.53% of turnover (value of LKR0.41Bn) while Janashakthi contributed LKR0.32Bn to account for 7.49% of the week’s turnover.
Total turnover value amounted to LKR4.33Bn (cf. last week’s value of LKR2.87Bn), while daily average turnover value amounted to LKR0.87Bn (+20.78% W-o-W) compared to last week’s average of LKR 0.72Bn. Market capitalization meanwhile, increased by 0.29% W-o-W (or LKR 8.57Bn) to LKR 3,013.50 Bn cf. LKR 3,004.93 Bn last week.
Liquidity (in value terms)
The Banking, Finance & Insurance Sector was the highest contributor to the week’s total turnover value, accounting for 53.70% (or LKR 2.32Bn) of market turnover.
Sector turnover was driven primarily by Commercial Bank, Janashakthi Insurance, HNB & Sampath Bank which accounted for 76.68% of the sector’s total turnover.
The Diversified Sector meanwhile accounted for 17.90% (or LKR 0.77Bn) of the total turnover value with turnover driven primarily by JKH, Softlogic Holdings & Vallibel One which accounted for 83.52% of the sector turnover.
The Power & Energy Sector was also amongst the top sectorial contributors, contributing 6.95% (or LKR 0.30Bn) to the market driven by Resus Energy which accounted for 92.61% of the sector turnover.
Liquidity (in volume terms)
The Banks, Finance & Insurance sector dominated the market in terms of share volume, accounting for 55.27% (or 104.60Mn shares) of total volume, with a value contribution of LKR 2.32Bn.
The Diversified Sector followed suit, adding 9.85% to total turnover volume as 18.64Mn shares were exchanged.
The sector’s volume accounted for LKR0.77Bn of total market turnover value. The Telecom Sector meanwhile, contributed 14.22Mn shares (or 7.51%), amounting to LKR0.19Bn.
Top gainers and losers
York Arcade was the week’s highest price gainer; increasing 821.4% W-o-W from LKR 14.00 to LKR 129.00. Swarnamahal Finance gained 37.5% W-o-W to close at LKR2.20.Tal Lanka (+19.9% W-o-W) and Trade Finance (+18.3% W-o-W) were also amongst the gainers.
PC Pharma was the week’s highest price loser, declining 50.0% W-o-W to close at LKR0.10 while Adam Investments (-33.3% W-o-W), SMB Leasing [NV] (-33.3% W-o-W), Blue Diamonds [NV](-20.0% 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 0.91Bn relative to last week’s total net inflow of LKR 0.49Bn (+84.0% W-o-W).
Total foreign purchases increased by 80.5% W-o-W to LKR 1.90Bn from last week’s value of LKR 1.05Bn, while total foreign sales amounted to LKR 0.99Bn relative to LKR 0.56Bn recorded last week (-77.38% W-o-W).
In terms of volume Commercial Bank & Softlogic Holdings led foreign purchases while Distilleries & Raigam Salterns led foreign sales.
In terms of value Commercial Bank & Softlogic Holdings led foreign purchases while Distilleries & HNB led foreign sales.
Point of view
Political uncertainty over the future of the coalition government continued to cloud investor sentiment this week, with equity markets moving sideways as the benchmark ASPI moved up just 4 points to consolidate at the 6570 level.
Turnover levels however, improved 21% W-o-W to Rs. 0.87Bn, back in line with the YTD average of Rs. 0.86Bn and in contrast to the Rs.0.72Bn recorded last week.
Turnover levels were aided largely by the return of the Institutional and HNI investors who accounted for 32% of market activity this week, cf. the previous 3-weeks when they accounted for just 25% of market activity.
Positive macro-data in the form of lower national inflation levels in January and a stronger external position in December along with relatively robust corporate earnings stoked investor appetite for risky assets.
Of the 85% of corporates who have reported earnings thus far (total earnings of Rs. 65Bn cf. Rs. 75Bn for all companies in Dec’16), 51% have recorded Y-o-Y gains in earnings.
Meanwhile, after a slight dip in their appetite for risky domestic assets in the immediate aftermath of the LG polls last week, foreign investors returned quite strongly back to equity markets this week, pumping in a net of Rs.908Mn (+84% WoW) to the Colombo bourse cf. last week when net foreign inflows declined 32% Wow to Rs. 493Mn.
Markets in the week ahead are likely to look for cues from the conclusion of the corporate earnings season.
Sri Lanka records second highest BoP surplus in 2017
Sri Lanka’s Balance-of-Payments (B-o-P) position in 2017 recorded a surplus for the 1st time in 2 years amid consistent improvements in the country’s external sector throughout the year.
Relative to the deficit of $0.5Bn in 2016 and deficit of $1.5Bn in 2015, the B-o-P surplus in 2017 was $2.1Bn, the country’s 2nd highest surplus since 2009 when it recorded an overall balance of $2.7Bn.
The surplus position was driven primarily by consistent financial flows over the year as robust financial flows to debt ($1.7Bn cf. $1.2Bn in 2016) and equity markets ($279Mn cf. $19Mn in 2016) along with higher FDI’s ($766Mn cf. $397Mn), receipt of the IMF EFF tranches ($419Mn) and proceeds from ISB issuances ($1.5Bn) aided overall capital inflows.
Earnings from exports over December meanwhile surpassed $1Bn mark for the 5th consecutive time this year, helping the cumulative export earnings for 2017 hit a historically high value of $11.4Bn.
Despite the stronger export performance however, the cumulative trade deficit for 2017 rose to $9.6Bn (cf. $8.9Bn in 2016), reflecting higher import expenditure due to weather-related factors.
Import expenditure in 2017 rose to a historical high of $21Bn largely due to the drought-induced need for fuel and rice imports. Nevertheless, the marginal improvement in tourist earnings ($3.6Bn cf. $3.5Bn in 2016) and largely steady workers’ remittances ($7.2Bn) helped curb the trade deficit to an extent.
0 comments: