The Bourse Weekly Performance (Week ended May 09, 2014)

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Colombo equities started a fresh week on Monday on positive note where both indices closed with marginal gains. All Share Price index marginally gained 0.99 points (+0.02%) to end at 6,249.43 while S&P SL 20 index gained 5.88 points (+0.17%) to end at 3,441.69. Daily market turnover was LKR 1.25bn. Expolanka (LKR 271mn) emerged as the top contributor to the market turnover underpinned by the crossing of 5mn shares at LKR 10.50 per share. Aitken Spence (LKR 156mn) and Commercial Bank (LKR 94mn) made next best contributions to the turnover.

Meanwhile shares of ACME printing & packaging, Textured Jersey and Expolanka were traded heavily. Foreign investors were net buyers with a net inflow of LKR 153mn. Foreign participation was 31%.

Colombo bourse snapped the five day winning streak on Tuesday, posting negative returns on both indices. ASI declined by 23.30 index points or 0.37% to end at 6,226.13 and simultaneously 20-scrip S&P SL index dropped by 17.57 index points or 0.51% to close at 3,424.12. Daily market turnover reached to LKR 1.3bn with the support of several crossings recorded in Seylan Bank non-voting, Expolanka and Lanka IOC.

Colombo stock market managed to regain lost ground on Wednesday as both indices witnessed positive returns. Benchmark All share price index advanced by 26.47 points (+0.43%) to close at 6,252.60 while 20-script S&P SL advanced by 9.83 points (+0.29%) to close at 3,433.95. Daily market turnover was LKR 1.0bn. John Keells Holdings (LKR 175mn) emerged as the top contributor to the market turnover followed by Royal Ceramic (LKR 154mn) and Seylan Bank (LKR 135mn). Further shares of Grain Elevators, Softlogic Holdings and

Three Acre Farms attracted heavy investor interest during the day. Foreign investors were net buyers with a net inflow of LKR 270mn. Foreign participation was 27%.

On Thursday Colombo bourse managed to maintain the momentum gained on Wednesday where both indices witnessed positive returns. Benchmark index gained 23.13 points (+0.37%) to end at 6,275.73 while 20-scrip S&P SL index gained 12.81 index points or 0.37% to close at 3,446.76.

Daily market turnover reached LKR 935mn with the backing of several crossings recorded in Distilleries, Royal Ceramic Lanka, Aitken Spence Hotels, Commercial Bank, John Keells Holdings and Lanka IOC. Distilleries topped the turnover list with LKR 193mn followed by Lanka IOC (LKR 117mn) and Commercial Bank (LKR 102mn) respectively. Moreover Lanka IOC, Acme Printing & Packaging and Softlogic Holdings attracted heavy investor participation. Foreign investors were net buyers with a net inflow of LKR 138mn. Foreign participation was 32%.

Colombo shares concluded weekly operations on Friday recording a 23-month high turnover of LKR 7.15bn. Approx. 586mn shares of Expolanka changed hands at LKR 10.70 per share at the beginning of today’s trading session which also resulted to a 29-month high daily volume of 630mn shares. The crossing was 88% of the daily market turnover.

According to the announcement made to CSE principle shareholders of Expolanka have disposed a total of 30% of the issued share capital to S.G Holdings Limited which is a holding company for the Sagawa Group, a leading freight & logistic company in Japan. The company further announced that S.G Holding will make a mandatory offer.

Both benchmark indices managed to retain the positive momentum as All share Price Index gained 9.14 points (+0.15%) to close at 6,284.87 and S&P SL 20 index gained 10.50 points (+0.30%) to close at 3,457.26. Price appreciation in counters such as Bukit Darah (closed at LKR 650.10, +3.2%), Asian Hotels & Properties (closed at LKR 68.50, +1.9%) and Ceylinco Insurance (closed at LKR 1,350.00, +3.5%) contributed positively to the index performance. Gainers surpass the losers 141 to 58, while 66 equities remained unchanged. Cash map marginally improved to 55% from 54%.

Expolanka (LKR 6.5bn) emerged as the top contributor to the market turnover followed by John Keells Holdings (LKR 78mn) and Lanka IOC (LKR 77mn). Moreover, several negotiated deals were recorded in John Keells Holdings (0.2mn shares at LKR 235.00 per share) and Tokyo Cement (0.8mn shares at LKR 40.00 per share).

Meanwhile shares of Expolanka, Merchant Bank of Sri Lanka and Lanka IOC traded heavily during today’s trading session.

Foreign investors were further continued to be net buyers for the fifth consecutive day with net inflow of LKR 6.28bn. Foreign participation was 46% for the session. Foreign inflows were seen in Expolanka (LKR 5.9bn), John Keells Holdings (LKR 76mn) and Commercial Bank (LKR 21mn) while foreign outflow was mainly seen in Merchant Bank of Sri Lanka (LKR 7.5mn). Additionally, year to date (YTD) foreign outflows were decreased to LKR 527mn from LKR 6.8bn with the major foreign inflow recorded in Expolanka today.

Dipped Products declared a Final dividend of LKR 3.00 per share (closed at LKR 97.00, +2%) and Ceylon Hospitals (non-voting share closed at LKR 78.00, +0.8%) declared an interim dividend of LKR 2.00 per share yesterday and closed with higher returns in today’s trading session.

Further, Malwatte Plantation (First & Final dividend), Ceylon Tobacco (First Interim) and Alumex (Final dividend) declared dividends of LKR 0.10, LKR 10.80 and LKR 0.25 per share respectively.
Moreover, Kotagala Plantations made an announcement to CSE informing that they obtained the approval to raise LKR 1.0bn through 10mn rated, secured, redeemable debentures. The debentures will open for the subscription on 22nd May 2014.
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From AQUITY

The market maintained last week’s positive momentum with both indices ending with W-o-W gains.

The ASPI gained 0.58% (or 36.43 points) to close at 6284.87 points. The S&P SL 20 Index closed at 3457.26 points up 21.45 points (or 0.62%).

S G Holdings Pte. Ltd’s purchase of a 30.0% stake in Expolanka on Friday helped the counter hit turnover worth LKR 6.98bn, and the stock consequently accounted for 60.00% of the week’s total market turnover.

Seylan Bank [NV] was the second highest contributor to the week’s turnover value accounting for 5.28% (or LKR 613.51mn). JKH followed suit, contributing LKR 380.97mn and accounting for 3.28% of turnover value. The daily average market turnover value amounted to LKR 2.33bn, up 162.61% compared to last week’s daily average of LKR 885.70mn.

Total turnover for the week summed up to LKR 11.63bn relative to last week’s four day total of LKR 3.54bn.

Market capitalization too increased 0.58% (or LKR 15.27bn) to LKR 2631.90bn relative to last week’s value of LKR 2616.63bn.

Liquidity (in Value Terms)
On a sectoral level, the Diversified sector was the highest contributor to the week’s total turnover value, accounting for 68.17% (or LKR 7.93bn) of the market. The sector was helped primarily by Expolanka which contributed 88.02% to total sector turnover. The Banking & Finance sector meanwhile, contributed LKR 1.66bn to account for 14.31% of total market turnover. The sector was aided mainly by Seylan Bank (V&NV), and Commercial Bank which cumulatively contributed 63.38% to total sector turnover. The Manufacturing sector was the third largest contributor to the week’s total turnover value, contributing 6.10% (or LKR 709.94mn), backed mainly Royal Ceramics which contributed 43.74% (or LKR 310.53mn) to sector turnover.

Week’s Top Gainers & Losers
Morisons was the week’s highest gainer as the stock gained 33.82% to close at LKR 299.90, compared to the last week’s close of LKR 224.10. Miramar gained 28.91% W-o-W to close at LKR 54.40.

Acme meanwhile, gained 25.53% W-o-W to close at LKR 11.80.SMB Leasing (NV) and Indo Malay were also amongst the week’s top price gainers with W-o-W gains of 25.00 % and 17.50%, respectively.

Tangerine Beach Hotels was the week’s highest price loser as the stock declined 10.93% W-o-W to close at

LKR 65.20, relative to LKR 73.20 last week. Equity Two recorded a W-o-W price decline of 10.34% to close at LKR 33.80 while Asia Asset closed at LKR 1.80, representing a W-o-W decline of 10.00%.

Foreign investors closed the week in a net buying position of LKR 6.89bn, relative to last week’s net selling position of LKR 0.17bn; daily average net inflows consequently amounted to LKR 1.38bn relative to average net outflows of

LKR0.04bn recorded last week. Daily average foreign purchases amounted to LKR 1.60bn, relative to last week’s value of LKR 0.18bn (+786.34% W-o-W), while daily average foreign sales declined 0.66% W-o-W to LKR 0.221bn relative to LKR 0.223bn recorded last week.

In terms of volume meanwhile, Expolanka and Textured Jersey led foreign purchases, while Lanka IOC and Aitken Spence led foreign sales. In terms of value though, Expolanka and JKH led foreign purchases while Aitken Spence and Lanka IOC led foreign sales.

Point of View
Significant foreign inflows dominated markets this week, helping turnover hit a 23-month high. Japanese logistics group Sagawa Group (via its holding company S G Holding) acquired a 30% stake in Expo-Lanka, triggering a mandatory offer on the company and dominating the day’s turnover. The transaction, which accounted for approx. 88% of Friday’s turnover, helped push the ASPI to an 11-month high of 6284.87.

The significant foreign inflows stemming from the transaction boosted net foreign inflows to LKR 6.89bn, helping narrow the Y-T-D net outflow position to LKR 0.60bn (cf. a net outflow of LKR 6.88bn excluding the transaction). Markets in the week ahead are likely to retain the positive momentum as institutional and retail investors generate sustained buying interest.

International Reserve Position Rises
Sri Lanka’s external sector strengthened yet again in February helping improve the country’s international reserve position. Gross official reserves at end-February rose to 5.5 months of imports cf. 5.3 months in January. Notably, the reserves in February grew despite foreign debt service payments of USD 272Mn and IMF-SBA payments of USD 77Mn.

The Balance-of-Payments for the first 2-months of the year totaled USD 805.7Mn cf. the 2013 full year total of USD 985Mn.

The country’s capital account was helped by inflows into Government securities and SLDBs and supported by FDI inflows and loans to Banking & Finance institutions. The trade deficit meanwhile, narrowed for 16th consecutive month as export earnings grew 5.4% Y-o-Y, while import expenditure declined 6.2% Y-o-Y.

Export earnings were driven by a strong growth in Agricultural products – particularly tea – while declines in transport equipment and building materials contributed to the overall decline in imports expenditure.

Liquidity (in Volume Terms)
The Diversified sector dominated the market in terms of share volume too, accounting for 83.83% (or 694.70mn shares) of total volume, with a value contribution of LKR 7.93bn.

The Banking & Finance followed suit as 48.36mn shares (or 5.84 %), amounting to LKR 1.66bn changed hands.

The Manufacturing sector meanwhile, contributed 3.47% to the week’s total turnover volume as 28.79mn shares changed hands. The sector’s volume accounted for LKR 709.94mn of total market turnover value.
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