MARKET

Markets loses ground with both indices recording week-on-week losses

Markets lost ground last week with both indices recording week-on-week losses. The ASPI closed the week at 6,307.43 points, down 2.41% (or 155.63 points) while the S&P SL 20 index declined 2.63% (or 95.85 points) to close at 3,550.47 points.

Commercial Bank dominated this week’s turnover value amid significant foreign interest as the counter accounted for 17.69% (or Rs 0.86bn) of total market turnover. Chevron followed suit accounting for 9.84% (or Rs 0.48bn) of total turnover value while HNB contributed Rs 0.37bn (or 7.61%) to total market turnover. Total turnover value for the week amounted to Rs 4.86bn declining 10.78% W-o-W from last week’s total of Rs 5.44bn. The daily average turnover value was consequently lower, declining to Rs 0.97bn (cf. Rs 1.09bn last week). Market capitalization too declined W-o-W (2.41%), amounting to Rs 2,422.13bn relative to Rs 2,481.84bn recorded last week.

On a sectoral basis, the highest contribution to weekly turnover value stemmed from the Banking and Finance sector which contributed 34.87% (or Rs 1.69bn), amid interest in Commercial Bank and HNB, which accounted for 72.57% of the sector’s total turnover. The Manufacturing sector followed suit, adding Rs 770.49mn (or 15.87%) to the total market turnover, helped by Chevron, which accounted for 61.99% of the sector’s turnover. The Beverage, Food & Tobacco sector meanwhile, accounted for 15.04% (or Rs 730.09mn) of market turnover value.

In terms of volume, the Banking and Finance sector recorded the highest number of shares being traded (30.70%) as 39.34mn shares changed hands over the week. The Manufacturing sector contributed 12.62% (or 16.17mn shares) to the market, while the Diversified sector was also among the top contributors as 15.11mn shares (or 11.79%) were traded over the week.

Swadeshi was the highest price gainer during the week despite just 3 of its shares trading over the week. The counter closed at Rs 7,555.00 to represent a 51.09% gain from last week’s close of Rs 5,000.30.

Abans Electricals gained 18.54% W-o-W to close at Rs 149.00 while Kelani Cables closed at Rs 84.00, gaining 12.00% over the week. Also amongst the week’s top price gainers were Kelsey Developments (up 11.43% W-o-W) and Kelani Tyres (up 9.45% W-o-W).

The top price loser for the week was PC Pharma which lost 22.22% to close at Rs 4.20 relative to last week?s close of Rs 5.40.

Multi Finance meanwhile, declined 17.14% W-o-W to close at Rs 23.20 while Ceylon Printers lost 16.62% W-o-W to close the week at Rs 1,500

Markets fell over 100 points this week as selling pressure on index heavy-weight JKH dragged the broader Indices lower.

Overall, markets lacked direction as low retail participation and profit taking strained activity levels and weighed down turnover levels. Persistent foreign buying nevertheless, helped prop markets to an extent. Net foreign inflows to the bourse pushed Y-T-D net foreign inflows over Rs 15.0bn as significant interest in Commercial Bank and HNB helped foreign purchases increase 137.19% W-o-W. Sluggish sentiment however, is likely to prevail in the week ahead.

The Central Bank (CB) held June policy rates unchanged today, maintaining the policy corridor between 7.00% (Repurchase Rate) and 9.00% (Reverse Repo Rate).

The Monetary Authority added that last month’s 50bps policy rate cut has continued to take effect with the relevant financial institutions making the anticipated adjustments gradually. The CB added that other monetary and external sector developments also deem its policy stance as appropriate.

Broad money growth moderated further in April (15.2% vs 15.6% in March) and is expected to make a compositional shift over the remainder of 2013 as public sector borrowing eases and the current lower rates provide private sector credit growth a boost.

On the external front meanwhile, the balance of payments (BOP) has continued to be in surplus thus far with the CB absorbing approx. USD 580mn amid increased earnings from trade in services, workers’ remittances and investment inflows.

The Monetary Authority added that although headline inflation in May rose to 7.3% from 6.4% in April due to electricity price hikes, inflation levels are likely to remain at single digit levels as supply-side constraints ease and demand-side pressures remain muted.