ASPI, S&P SL record marginal gains

Markets closed the week on a positive note with both indices recording marginal gains. The ASPI gained 38.70 points (0.68%) to close at 5691.39 points while the S&P SL 20 Index closed the week at 3222.74 points, gaining 15.89 points (0.50%).

Turnover value for the week was led by Asian Alliance Insurance, which accounted for 27.11% (or LKR 1.83bn) of total market turnover value amid significant foreign interest in the counter. HNB was the second highest contributor with a value of LKR 812.79mn, representing 12.06% of the week's total market turnover while JKH accounted for 10.15% (or LKR 684.33mn). Daily average turnover value for the week was at LKR 1.35bn, an increase of 56.73% from last week's daily average of LKR 860.38mn. Total turnover value for the week amounted to LKR 6.74bn, up from last week's four-day aggregate of LKR 3.44bn. Market Capitalization too increased W-o-W (LKR 15.34bn) to LKR 2187.05bn from last week's market capitalization of LKR 2171.70bn.

The Banking and Finance sector was the highest contributor to the week's turnover value, accounting for 61.28% (or LKR 4.13bn), helped by Asian Alliance Insurance and HNB, both of which accounted for 63.92% of total sector turnover. The Beverage, Food & Tobacco sector trailed behind contributing 14.98% (or LKR 1.01bn) to the market. The Diversified sector meanwhile accounted for 11.95% (LKR 805.88mn) of total market turnover aided by JKH which accounted for 84.92% (684.33mn) of sector turnover.

The Banking and Finance sector dominated weekly turnover volume yet again this week, accounting for 34.96% (or 61.81mn shares) of the market's total share volume. The Services sector trailed behind as it contributed 33.59mn shares to represent a 19.00% of total market turnover volume. The Diversified sector meanwhile accounted for 10.97% (or 19.40mn) of weekly turnover volume.

Foreign investors recorded a net buying position this week as net inflows amounted to LKR 3.72bn relative to net outflows of LKR 91.28mn recorded last week. Consequently, daily average net inflows for the week amounted to LKR 654.83mn relative to last week's daily average net outflow of LKR 22.82mn. Daily average foreign purchases grew 116.29% W-o-W to LKR 930.05mn from LKR 430.01mn recorded last week, while daily average foreign sales amounted to LKR 275.23mn, relative to LKR 452.83mn (39.22% W-o-W decline) last week. In terms of volume, Asian Alliance Insurance and Commercial Bank led foreign purchases, while HNB and Softlogic Holdings led foreign sales. In terms of value, Asian Alliance Insurance and JKH led foreign purchases, while HNB and Softlogic Holdings led foreign sales.

Miramar Beach Hotel Plc was the highest price gainer for the week, closing at LKR 89.80 to represent a 28.29% gain from last week's close of LKR 70.00. Asiri Central Hospitals Plc gained 20.84% W-o-W to close at LKR 260.30 while Arpico Finance Company Plc closed at LKR 97.60, as it gained 20.49% W-o-W. Also amongst the week's top price gainers were Office Equipment Plc (up 15.00% W-o-W) and Singalanka Standard Chemical Plc (up 14.22% W-o-W).

The top price loser for the week was PC Pharma Plc which lost 16.00% to close at LKR 8.40 relative to last week's close of LKR 10.00. Samson International Plc meanwhile declined 14.38% W-o-W to close at LKR 76.20 while Beruwela Walkinn Plc lost 13.86% W-o-W to close the week at LKR 60.30.

Point of View

Renewed buying interest by both local and foreign investors buoyed markets this week, helping push the indices into positive territory. Despite commencing the week on a flat note, the ASPI gained 36.97 points on Wednesday helping close the week in the green. The late rally was supported by increased buying interest in selected blue chips, particularly Banking & Finance counters.

Turnover was driven mainly by a number of off-market crossings and a strategic sale (LKR 1.8bn) in Asian Alliance Insurance to two European funds.

The transaction boosted turnover to a 4-week high of LKR 2.54bn, helping the week's daily average turnover gain 56.73% W-o-W. Foreign investor activity consequently improved further this week bringing Y-T-D net foreign inflows to LKR 2.50bn.

Quarterly earnings for the near-concluded earnings season have been strong with total earnings of 97% of the market hitting LKR 65.61bn, a Y-o-Y increase of 54.13%. Earnings for the cumulative 12 months to December meanwhile have also grown, recording a 16.80% increase from 2011 to LKR 196.49bn.