Market Report

Foreign investors net buyers

The four day trading week ended in the green with the ASPI gaining 0.06% (3.05 points) and the MPI gaining 0.04% (2.09 points).

The ASPI closed at 5423.25 points and the MPI closed at 4893.67 points.

Commercial Bank of Ceylon Plc generated the highest turnover value this week adding Rs. 904.66 million (or 22.68% of total market turnover) to the market.

JKH and Central Finance Company Plc together contributed 16.72% of the market’s total turnover value. Weekly turnover value averaged Rs. 997.37 million relative to Rs 858.70 million recorded last week, representing a W-o-W gain of 16.15%.

Market capitalization too expanded over the week, gaining 0.16% from last week’s value of Rs 2012.87 billion to end the week at Rs 2016.03 billion.

The Banking and Finance sector contributed 45.47% (Rs 1.81 billion) to the week’s turnover in value driven primarily by trading in Commercial Bank and Central Finance Company Plc. The Diversified sector added Rs 636.46 million or 15.95% while the Hotels and Travel sector contributed Rs 519.53 million (13.02%) backed by Fortress Resorts and Sigiriya Village.

The highest contributor to total market turnover volume this week was the Manufacturing sector, accounting for 34.74% (58.68 million shares), as 48.36 million shares of Piramal Glass changed hands. The Banking and Finance sector followed suit, contributing 34.64% to the market as 58.53 million shares changed hands, while 21.62 million shares (12.80%) were traded in the Hotels and Travel sector.

Shalimar Plc recorded a price gain of 35.56% to close the week at Rs 1219.90, relative to last week’s closing price of Rs 899.90.

Equity One Plc trailed behind, closing at Rs 33.60 to represent a 26.79% week-on-week gain, while Ceylon Tobacco Company Plc gained 16.29% to close at Rs 599.00.

Also amongst the top price gainers’ was Huejay and Colombo Fort Investments which gained 13.65% and 12.70%, respectively over the week. The week’s top price losers included Softlogic Capital Ltd which lost 50.00% to close at Rs 8.10 from last week’s close of Rs 16.20.

Serendib Land Plc declined 38.43% to close at Rs 1477.80 while Elpitiya Plantations Plc closed at Rs 13.90, down 24.86% from its previous close of Rs 18.50.

Point of view

Foreign activity dominated markets with foreign investors remaining net buyers for the fifth consecutive week.

Average turnover levels - bolstered by large crossings - were higher at Rs 1.0 billion, up from last week’s average of Rs 0.9 billion.

Markets nevertheless were mixed with the main all-share index dropping 15.7 points mid-week but closing the week 24.6 points stronger.

Markets in the week ahead are likely to remain moderately sluggish in the holiday-shortened week ahead. The IMF on Wednesday released the seventh tranche of its Stand-By-Agreement facility helping boost the country’s gross official reserves to US $ 6.1 billion, the equivalent of 3.6 months of imports.

The Sri Lankan Rupee meanwhile continued to gather strength, closing the week at an average of 125.45 against the US $ relative to its low of 130.41 in Mid-March.

The Central Bank meanwhile increased policy rates (Repo rate up 25 bps to 7.75%, Reverse Repo up 75 bps to 9.75%) for the second time since February, citing the need to anchor inflation expectations and level credit growth.

Acuity Market Research