Average daily turnover drops in April amid security concerns

Picture Courtesy: Getty Images/ Bloomberg

Sri Lanka, May 12 (Capital Leads) – In a month marked by a chain of bombings in the country on Easter Sunday and the ensuing security clampdown, the average monthly turnover of the Colombo Stock Exchange (CSE) for April declined nearly 10 percent from the month before. However, the market witnessed first full month of net foreign buying for the year as foreign investor interest picked up in the latter half of the month.

From the end of March, the broad market All Share Price Index (ASPI) and S&P SL20 Index fell by 1.42 percent and 4.07 percent respectively. Meanwhile, the Price-to-Earnings (PER) ratio of the market dropped even further to 8.6x from 8.7x reported in March.

Furthermore, the monthly turnover narrowed as much as 31 percent from the March 2019 to reach LKR7.8 bn (USD44.5 mn), as the number of shares transacted in April declined 14 percent from the previous month to stand at 230.3 mn shares. The average daily turnover for the month stood at LKR591.9 mn (USD3.4 mn), a decline of 9.1 percent from the month before.

Driven by increased foreign investor activity towards the end of of the month, the market in April witnessed net foreign buying for the first time of the year. Net foreign inflow for the month stood at LKR1.7 bn (USD9.7 mn), compared LKR1.2 bn of outflow (USD6.8 mn) in the month before. However, cumulatively, foreign investors sold shares worth a net LKR4.4 bn (USD25.0 mn) during the year, in contrast to only LKR0.9 bn (USD5.4 mn) of net outflow for the same period last year.

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