Sri Lankan stocks decline sharply amid heavy foreign selling

Sri Lanka, Sep 21 (Insights Equity) –  Falling nearly one percent twice during the week, Sri Lankan shares lost over 100 points during the week, as it reached a two-and-a-half-year closing low by Friday.

ASPI sheds more than two percent; reaches more than 30-month closing low: ASPI posted the second consecutive weekly loss as it shed 126.36 points over the week to close at 5,904.9 points, 2.1 percent lower than the previous week and its lowest close since March 09, 2016. The index lost more than 50 points on Tuesday and Thursday posting two of the three sharpest declines year-to-date.

Meanwhile, S&P SL20 index, which tracks the largest and most liquid stocks, dropped 123.01 points during the week, to stand at 3,016.76 points on Friday, 3.92 percent weaker than the week before.

With no major deals, crossings make up only 32 percent of turnover: Recording a 19 percent W-o-W decline, number of shares transacted declined to 102.4 mn, as the crossings made up only 32 percent of this week’s turnover compared to 64 percent of the previous week when Janashakthi acquired 31 percent of Dunamis capital through two crossings.

Market turnover declines by 20 percent: The weekly turnover declined by 20 percent W-o-W to stand at LKR3.5 bn (USD20.8 mn), below the year-to-date average weekly turnover of LKR3.8 bn (USD22.3 mn).

Net foreign selling continues to the fourth consecutive week: Driven by heavy foreign selling in John Keells Holdings (JKH) and Sampath Bank on Thursday and Friday, weekly net foreign outflow increased by 32 percent from the week before to stand at net LKR743.1 mn (USD4.4 mn) to record the fourth consecutive week of net foreign outflows.

JKH leads the turnover generation; Sampath sheds nearly 10 percent:  Driven by foreign selling, JKH spearheaded the weekly turnover generation with a contribution of 29 percent as the stock slumped 3.1 percent during the week.

Meanwhile, Sampath Bank and Chevron Lubricants made up 11 percent each, as the former, driven by foreign selling, lost nearly 10 percent in value over the week, while the latter witnessed a decline of close to 7 percent on Monday as an industry report noted that the company was fast losing its market share to rivals.

Furthermore, diversified holdings led the sectoral contribution to the weekly turnover with 42 percent followed by stocks in the banks, finance and insurance sector which together made up 36 percent.

Graph - Weekly

Overview - WeeklyTables - Weekly

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