The downtrend persisted with both indices recorded a W-o-W loss. The ASPI decreased 61.45 points W-o-W (or -0.86%) to close at 7061.28 points while the S&P SL20 Index lost 1.25% W-o-W (or 49.67 points) to close at 3914.01 points.
Turnover & Market Capitalization
John Keells Holdings was the highest contributor to the week’s turnover value with a contribution of LKR 853.53mn that accounted for 22.56% of total turnover value. Sampath Bank followed suit accounting for 14.52% of turnover (value of LKR 549.43mn) while Access Engineering contributed LKR 159.18mn to account for 4.21% of the week’s turnover. Total turnover value for the week amounted to LKR 3.78bn relative to last week’s value of LKR 2.92bn. Daily average turnover value over the week consequently amounted to LKR 756.57mn (+3.64% W-o-W) compared to last week’s average of LKR 729.99mn. Market capitalization meanwhile, decreased 0.86% W-o-W (or LKR 26.06bn) to LKR 2,999.80bn relative to last week’s value of LKR 3,025.87bn.
Liquidity (in Value Terms)
The Banking & Finance sector was the highest contributor to the week’s total turnover value, accounting for 38.51% (or LKR 1.46bn) of market turnover. Sector turnover was driven primarily by Sampath Bank, National Development Bank, Peoples Leasing, Commercial Bank, and Hatton National Bank, which cumulatively accounted for 66.49% of the sector’s total turnover value.
The second highest sectoral contribution stemmed from the Diversified sector, which contributed 26.64% (or LKR 1.01bn). Sector turnover was driven primarily by John Keells Holdings and Hemas Holdings, which accounted for 91.40%. The Manufacturing was also amongst the top sectoral contributors to the market, accounting for 9.45% (or LKR 357.35mn) of the week’s total turnover value.
Liquidity (in Volume Terms)
The Banking & Finance sector dominated the market in terms of share volume too, accounting for 22.32% (or 24.32mn shares) of total volume, with a value contribution of LKR 1.46bn. The Diversified sector followed suit adding 16.09% to the week’s total turnover volume as 17.54mn shares were exchanged.
The sector’s volume accounted for LKR 1.01bn of total market turnover value. The Manufacturing sector meanwhile, contributed 14.76mn shares (or 13.54%), amounting to LKR 357.35mn changed hands.
Week’s Top Gainers & Losers
City Housing was the week’s highest price gainer, increasing 29.46% W-o-W from LKR 12.90 to LKR 16.70. Office Equipment gained 21.17% W-o-W to close at LKR 1999.30 while Blue Diamond [NV] gained 20.00% W-o-W to close at LKR 0.60. On’ally Holdings and Access Engineering were also amongst the week’s top price gainers with W-o-W gains of 19.93% & 13.21% W-o-W, respectively. Radiant Gems was the week’s highest price loser as the stock declined 17.95% W-o-W to close at LKR 36.10, relative to LKR 44.00 last week. Printcare closed at LKR 35.60, representing a W-o-W decline of 17.21%, while Durdans declined 16.97% W-o-W to close at LKR. 90.50.
Foreign investors closed the week in a net selling position with daily average net foreign outflows amounting to LKR 0.17bn relative to last week’s average net selling position of LKR 0.02bn (+984.90% W-o-W). Daily average foreign purchases declined 48.89% W-o-W to LKR 0.11bn from last week’s value of LKR 0.21bn, while daily average foreign sales amounted to LKR 0.27bn relative to LKR 0.22bn recorded last week (+23.38% W-o-W). In terms of volume, Laugfs Gas and Access Engineering led foreign purchases, while Peoples Leasing and JKH led foreign sales. In terms of value, Laugfs Gas and Sampath Bank led foreign purchases while JKH and NDB led foreign sales.
Point of View
Political uncertainty continued to weigh down markets, with the benchmark index falling below the 7100 mark for the first time in 7-weeks.
The ASPI lost 61.45 points over the week as investors remained watchful over a probable dissolution of parliament while protracted negotiations over the 20th amendment to the constitution and proposed no-confidence motions against the Prime-Minister and Finance minister weakened sentiment.
The weekly decline in the market however, was comparatively slower than that of last week (ASPI fell 97.6 points last week) while average daily volumes picked up marginally to LKR 0.8Bn (cf. LKR 0.7Bn last week) as large deals on JKH on Friday helped offset tepid activity at the start of the week. Friday’s total crossings contributed 22.5% to market turnover, extending the week’s HNI and institutional participation via crossings to 30.6%. Net foreign selling (particularly within the Banking & Finance and Diversified counters) meanwhile dominated this week’s foreign activity, contributing to the heavy net foreign selling in the first two weeks of June.
Following 5 consecutive months of net foreign buying, foreign outflows in the first two week of June have been LKR 0.90bn. Market sentiment is the week ahead is likely to be largely contingent on political developments in the week
World Bank Bullish on South Asian Growth Prospects
In its mid-year evaluation of the global economy, the World Bank (WB) highlighted that despite some softness at the start of the year, global growth remains broadly on track to reach a targeted 2.8% Y-o-Y in 2015.
The Bank also highlighted that the strengthening recovery in high-income countries is expected help ease the broad-based slowdown in developing economies.
Currency depreciation (on the back of a stronger USD) coupled with the thus-far limited impact of lower oil prices on oil-importing countries and sharp activity declines in oil-exporting countries are attributed to the declines in developing economies.
Growth in South Asia however, grew at its fastest pace in 3-years as lower commodity prices have been a major benefit to the region. Regional growth is expected to remain steady at 7% in 2015, and rise to 7.5% by 2017, as it shadows the ongoing recovery in India and the largely stable growth in the rest of the region.
Sri Lanka’s economic growth meanwhile, is estimated to slow down to 6.9% in 2015E (down 60bps from its original estimate of 7.5%) and to decelerate to its potential growth rate as the investment-led growth model which has fuelled much of the country’s post-war growth is re-assessed.
The Group also added that the country’s post-war fiscal consolidation efforts have deteriorated, underscoring the possibility of short-term fiscal targets being over-shot.
Courtesy:daily News 15 June 2015