Daily Stock Market Update (27.08.2018)

Sri Lankan Shares edge down despite continuing net foreign inflow

Sri Lanka, Aug 27 (Insights Equity) – Sri Lankan stocks closed marginally lower on Monday while net foreign inflow to the market continued for the third straight session. However, market turnover improved by nearly 18 percent from the level seen on Friday as volume of shares transacted reached its highest in more than two weeks.

The All Share Price Index (ASPI) declined by 9 points to close the day at 6,044.25, a 0.14 percent lower than the previous session, while more liquid S&P SL20 gained nearly 2 points to reach 3,214.75, a marginal increase of 0.06 percent.

Meanwhile, foreign investors remained net buyers for the third consecutive session despite net foreign inflow tapering off to LKR20.6 mn (USD 0.1 mn), 36 percent lower than last Friday; thus year-to-date net foreign outflow further contracted to LKR3.5 bn (USD21.6 mn).

Furthermore, no crossings were recorded for the second consecutive day and market turnover stood at LKR246.2 mn (USD1.5 mn), well below the year-to-date average daily turnover of LKR817.9 mn (USD5.1 mn) as 20.0 mn of shares changed hands, its highest since August 08, 2018.

Sampath bank was the leading turnover generator with a 25 percent of contribution to the day’s turnover, followed by Lion Brewery and Asian Hotels and Properties with each contributing 11 percent to the turnover as latter socks declined 3 percent and 5 percent in value respectively.

Sector-wise, the banks, finance and insurance sector made the highest contribution of 52 percent to the turnover, followed by hotels and travels stocks which made a contribution of 18 percent.

Furthermore, S M B Leasing and Eden Hotel Lanka were amongst the top gainers in the market, while Singer Finance and Asia Asset Finance were two of the most actively traded stocks for the day.

Market Alert – Local:

Lanka Cement Resumes Trading….

Lanka Cement PLC was trading at LKR2.60 per share at the close of the day as the stock resumed trading following an almost five-month long suspension on its trading due to non-compliance of stock exchange listing rules over the failure of the company to submit interim financial statements.

While contributing nearly 1 percent to the total shares transacted for the day, the stock gained 24 percent in value recording the second strongest price gain at the close of the session.

Economic Alert – Local:

Sri Lanka’s trade deficit widens in June 2018…. 

According to latest data on external sector released by the Central Bank of Sri Lanka, the country’s trade deficit widened significantly during the first half of year 2018, in comparison to the same period in 2017 as growth of imports continued to outpace that of exports.

Despite the fifth tranche of Extended Fund Facility from International Monetary Fund and final two tranches of lease rent from Hambanthota Port divestiture strengthening the financial account, foreign investment outflow from government securities market and Colombo Stock Exchange (CSE) exerted pressure on the overall Balance of Payments (BoP) account.

Meanwhile, LKR had depreciated by 3.4 percent against USD by end June 2018 and by 5 percent during the year up to August 27, 2018 and gross official reserves stood at USD 9.3 bn as at end June 2018.

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Reporting by: Dulan Lokuwithana
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