Sri Lankan stocks make healthy gains backed by local investor interest

Sri Lanka, Aug 31 (Insights Equity) –Sri Lankan stocks recorded the highest gain in more than a month despite slipping to a 17-month low on Tuesday as local investors became net buyers amid expectations that the country’s largest pension fund would soon re-enter the stock market.

ASPI records the lowest close in more than a year: The All Share Price Index (ASPI) edged up by 0.46 percent, gaining nearly 28 points over the week to reach 6080.26 points by Friday’s close despite declining to 6,010.23 on Tuesday, its lowest close since March 22, 2017.

ASPI gains as EPF plans to re-enter the stock market: ASPI gained 34 points on Wednesday, its highest gain since August 09, 2018, following the country’s Central Bank Governor’s remarks, that the Employees’ Provident Fund (EPF), the largest pension fund of the country, would soon re-engage in the investments in local stock market.

S&P SL20 climbs 0.5 percent: Meanwhile, more liquid S&P SL20 index gained more than 16 points during the week to stand at 3,229.21 points, 0.5 percent higher than the previous week’s close.

Weekly turnover improves by 41 percent: The weekly turnover improved by 41 percent from the previous week to stand at LKR2.7 bn (USD16.9 mn), well-below the year-to-date average weekly turnover of LKR3.8 bn (USD23.8 mn) as 103.3 mn shares transacted during the week, 79 percent improvement from the week earlier.

Y-T-D net foreign outflow expands: Meanwhile, foreign investors became net sellers as they sold shares worth a net LKR770.6 mn (USD4.8 mn) during the week, well-above the average weekly foreign outflow of LKR125.1 mn (USD0.8 mn), expanding the year-to-date net foreign outflow to LKR4.3 bn (USD26.4 mn).

Banking sector leads turnover generation: John Keells Holdings and Sampath Bank spearheaded the weekly turnover generation, contributing 35 percent and 10 percent respectively, while banks, finance & insurance stocks dominated the sector-wise contribution with 43 percent to the weekly turnover.

Market Alert:

Dialog ends as the week as third worst-performing stock amid regulatory concerns

Notably, Dialog Axiata shed more than 10 percent in value during the week, closing the week at LKR12.0 as the third-worst performing stock, as government removed floor rates for voice calls in the previous week in order to improve industry-wide competition.

The move follows the plans by government to re-introduce telecommunication tower levy to boost its fiscal revenue.

Graph - WeeklyOverview - WeeklyTables - Weekly

Reporting by: Dulan Lokuwithana
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