Sri Lankan stocks plunge as global trade tensions rise
Sri Lanka, Aug 17 (Insights Equity) – Sri Lankan stock market dipped by more than 1 percent from the previous week’s close, amid worries over country’s economic growth and a strengthening US dollar reversing capital flows from frontier markets.
The All Share Price Index (ASPI) shed more than 90 points over the week to reach 6051.10 on Friday, as it declined close to 1.5 percent, its steepest decline since the week ending June 22, 2018, while more liquid S&P SL20 index dropped more than 78 points to stand at 3,238.25, 2.4 percent lower than the previous week’s close.
Weekly turnover dipped to LKR2.2 bn (USD13.9 mn) well below the year-to-date average weekly turnover of LKR3.9 bn (USD24.6 mn) amid concerns over the country’s economic growth as the Central Bank governor doubted that the economy was unlikely to grow more than 4 percent this year, falling short of an earlier estimate of 5 percent.
Meanwhile, foreign investors sold shares worth a net LKR679.7 mn (USD4.2 mn), nearly six times the average weekly outflow of LKR117.8 mn (USD0.7 mn) amid escalating trade tensions between the US and Turkey as investors shifted funds from emerging markets to developed markets.
Contributing nearly 52 percent of weekly turnover, John Keells Holdings spearheaded the weekly turnover generation as foreign investors continued to sell the blue-chip stock plunging it close to 5 percent over the week. Hence, Diversified sector made the highest turnover contribution of 53 percent followed by Banks, Finance and Insurance which made up a share of 19 percent.
Off-market negotiated trades accounted for nearly 40 percent of weekly turnover while the volume of shares transacted for the week stood at 67.4 mn shares, well below the average weekly volume of 125.4 mn.
Reporting by: Dulan Lokuwithana