Acuity Stockbrokers Research Weekly Market Review :

CSE to upgrade its trading system today

The ASPI closed the week at 5422.33 points, down 0.49% (26.72 points) from its previous week?s close. The MPI too recorded a week-on-week decline of 0.34% (16.39 points) to close at 4847.86 points.

Counters that dominated turnover value for the week were Aitken Spence Plc, JKH and Commercial Bank Plc, which collectively accounted for 59.18% of total turnover value.

Aitken Spence Plc alone contributed 43.98% of the week?s total turnover value as EPF sold a 5% stake in the company to a foreign buyer. Weekly turnover value nevertheless recorded a dip of 70.27% to LKR 5.42bn compared to LKR 18.22bn recorded last week, averaging LKR 1.08bn. Market Capitalization meanwhile declined 0.48% to LKR 1988.30bn relative to last week?s value of LKR 1997.99bn. The Diversified sector accounted for 66.76% of the market?s weekly turnover value, representing a value of LKR 3.62bn. The Banking and Finance sector, backed by Commercial Bank Plc, contributed 14.97% of the week?s turnover, (amounting to LKR 810.49mn) while the Manufacturing sector contributed LKR 264.86mn or 4.89% to total market turnover value.

Turnover volume for the week was also led by the Diversified sector which contributed 39.90mn shares or 28.76% to total market volume. This was followed closely by the Banking and Finance sector which accounted for 24.73% (or 34.30mn shares) of the market?s share volume. The Manufacturing sector meanwhile contributed 21.52% to total market volume as 29.85mn shares changed hands over the week.

Industrial Asphalts (Ceylon) Plc recorded the highest price gain (17.14%) over the week, closing at LKR 410.00 relative to its previous close of LKR 350.00. Kegalle Plantations Plc closed at LKR 103.10, up 12.68% from last week?s close, while CDB[NV] gained 12.47% to close at LKR 51.40.

Hayleys Exports Plc and Namunukula Plantations Plc were also amongst the top price gainers, recording gains of 12.14% and 11.67%, respectively. This week?s top price loser was HDFC which declined 21.52% to close at LKR 70.40 from to last week?s close of LKR 89.70. Coco Lanka Plc [NV] trailed behind, closing at LKR 33.00, down 19.32% from last week. Sigiriya Village Hotels Plc meanwhile, declined 19.05% to close at LKR 68.00.

Aitken Spence Plc led the volume list this week, accounting for 14.97% or 20.76mn shares of the week?s aggregate share volume. Blue Diamonds and Blue Diamonds [NV] were also among the top contributors, adding 9.50% and 8.03%, respectively.

Foreign investors remained net buyers yet again this week, recording a net buying position of LKR 2.39bn relative to last week?s net buying position of LKR 14.93bn. Total inflows of amounted to LKR 3.33bn, with Aitken Spence accounting for a majority (LKR 2.40bn) of the week?s total inflow. Total foreign sales meanwhile increased significantly by over 100% to LKR 937.31mn from last week?s LKR 283.06mn.

Markets slumped over the week as net foreign inflows which bolstered volumes last week and on Monday dwindled over the week. By Friday however, markets retracted some of its mid-week losses, with the Index picking up 72 points and volumes hovering just under LKR 1.0bn. Retail interest in the market should revive next week as the CSE upgrades its trading system on Monday.

The Government's recent sales of large blue-chip stakes to foreign investors failed to ease pressure on the LKR, with the LKR hitting a new low against the USD on the back of seasonal importer demand. The Central Bank however hastened to reassure markets, stating that it expects further FX inflows to the country in addition to the recent inflows via equities, capital raising by private commercial banks and investment in SLDBs and Treasuries.

The CB added that these increasing FX inflows, along with a deceleration of import demand should stabilize the LKR in the coming weeks.