Sri Lankan shares make healthy gains amid heavy local buying

Sri Lanka, Aug 29 (Insights Equity) – Sri Lankan stocks made the highest gain in nearly three weeks as local investor participation reached its highest in more than three weeks amid expectations that the country’s largest pension fund would soon re-enter the stock market.

The All Share Price Index (ASPI) gained 34 points, wiping off the decline made yesterday, as it recorded its highest gain since August 09, 2018, to close the day at 6,044.67, 0.57 percent higher than the previous session. Meanwhile S&P SL20, where largest and most liquid stocks are included, edged up nearly 28 points to reach 3,225.18, gaining 0.88 percent, its highest gain since July 17, 2018.

Furthermore, foreign investors became net sellers for the second straight session, as they sold shares worth a net LKR590.2 mn (USD3.7 mn); thus, year-to-date net foreign outflow extended to LKR4.1 bn (USD25.3 mn).

Hence, net purchases by local investors reached its highest since August 07, 2018 as the country’s Central Bank Governor yesterday declared that the Employees’ Provident Fund (EPF), the largest pension fund of the country, would soon re-engage in the investments in local stock market.

With an asset base of LKR1,665 bn (USD10.4 bn), EPF exited the trading activities in the market amid investigations into its involvement in the controversial bond trades in 2015, according to Governor.

Meanwhile, 19.8 mn of shares changed hands today as the market turnover stood at LKR1.1 bn (USD7.0 mn), its highest since August 07, 2018 and well above the year-to-date average daily turnover of LKR817.1 mn (USD5.1 mn). With five crossings, off-market negotiated trades accounted for 43 percent of the daily turnover.

John Keells Holdings witnessed three crossings of 3.0 mn shares valued at LKR140.0 per share, leading the daily turnover generation with a contribution of 61 percent, far ahead of Asian Hotels & Properties and Sampath Bank which contributed 8 percent and 7 percent respectively.

Sector-wise, the diversified sector made the highest contribution of 63 percent to the day’s turnover, followed by the Banks, Finance & Insurance stocks which collectively made up 23 percent.

Furthermore, SMB Leasing (Non-voting) and Tess Agro were amongst the top gainers in the market, while Singer Finance and Adam Investments were two of the most actively traded stocks for the day.

Market Alert – Local:

Odel acquires Cotton Collection for LKR300 mn

In a corporate disclosure today, Odel PLC announced the acquisition of 100 percent stake in the Sri Lankan fashion retailer, Cotton Collection (Private) Limited for LKR300 mn (USD 1.9 mn). Odel gained 5.8 percent to close the session at LKR25.4, while Softlogic Holdings PLC, which effectively owns 98 percent stake in Odel, gained 5.3 percent to close at LKR21.7

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Reporting by: Dulan Lokuwithana
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