ACUITY STOCKBROKERS RESEARCH | SRI LANKA EQUITIES
Weekly Market Review 19 Jun 2020
ASPI Hits 3-Month High… CBSL Introduces New th th Relief Measures… Indices vs. Turnover (15 Jun – 19 Jun)
5,250 ASPI 2,500 S&P SL20
ASPI ^ 1.54% | S&P SL20 ^ 4.94% 5,150 2,400 S&P SL20
5,050 2,300 ASPI 4,950 2,200 The Bourse ended the week… Cont. P2 4,850 2,100 4,750 2,000 Foreign investors closed the week... Cont. P3 15-Jun 16-Jun 17-Jun 18-Jun 19-Jun 2.50 2.00 Domestic equities rallied ….… Cont. P4 1.50
1.00 LKR Bn) LKR
(Turnover 0.50 0.00 Economic Snapshot………… P5 15-Jun 16-Jun 17-Jun 18-Jun 19-Jun
KEY STATISTICS
Week ending 19-June 12-June +/- ASPI 4,990.42 4,914.83 1.54% S&P SL20 2,156.53 2,054.96 4.94%
Banks 513.82 488.41 5.20%
Capital Goods 664.09 654.69 1.44% Food, Beverage & Tobacco 722.51 725.27 -0.38% Consumer Durables & Apparel 729.40 724.20 0.72% Materials 553.45 541.23 2.26% Diversified Financials 740.07 734.84 0.71% Turnover (LKR Bn) 7.08 7.68 -7.89% Foreign Buying (LKR Mn) 704.66 1,157.49 -39.12% Foreign Selling (LKR Mn) 3,351.25 4,404.36 -23.91% Daily Average Turnover (LKR Bn) 1.42 1.54 -7.89% Daily Average Foreign Buying (LKR Mn) 140.93 231.50 -39.12% Daily Average Foreign Selling (LKR Mn) 670.25 880.87 -23.91%
TOP 10 GAINERS TOP 10 LOSERS
Opening Closing WoW % Opening Closing WoW % Company Code Company Code Price Price Change Price Price Change KELSEY KDL N 22.0 27.5 25.0% BLUE DIAMONDS[NV] BLUEX 0.3 0.2 -33.3% FIRST CAPITAL CFVFN 34.0 41.3 21.5% TESS AGRO TESSN 0.5 0.4 -20.0% MAHAWELI REACH MRH N 11.6 14.0 20.7% SAMSON INTERNAT. SIL N 87.9 72.9 -17.1% ORIENT FINANCE ORINN 8.6 10.2 18.6% BLUE DIAMONDS BLUEN 0.6 0.5 -16.7% YORK ARCADE YORKN 56.0 65.2 16.4% SINHAPUTHRA FIN SFL N 7.0 6.0 -14.3% LIGHTHOUSE HOTEL LHL N 25.5 29.5 15.7% NATION LANKA CSF N 0.7 0.6 -14.3% JANASHAKTHI INS. JINSN 24.0 27.6 15.0% CARGO BOAT CABON 40.0 36.6 -8.5% ANILANA HOTELS ALHPN 0.7 0.8 14.3% ASIA CAPITAL ACAPN 5.9 5.4 -8.5% BERUWALA RESORTS BERUN 0.7 0.8 14.3% EASTERN MERCHANT EMERN 3.7 3.4 -8.1% CEYLINCO INS.[NV] CINSX 769.8 879.3 14.2% PEOPLE'S MERCH PMB N 8.9 8.2 -7.9%
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ACUITY STOCKBROKERS RESEARCH | SRI LANKA EQUITIES
Weekly Market Review 19 Jun 2020
Market Review
Indices | Liquidity (in Volume Terms) | The Bourse ended the week on a positive note as the The Banks Industry Group dominated the market in ASPI increased by 75.59 points (or 1.54%) to close at terms of share volume, accounting for 27.38% (or 4,990.42 points, while the S&P SL20 Index also 56.64Mn shares) of total volume, with a value increased by 101.57 points (or 4.94%) to close at contribution of LKR 3.61Bn. The Consumer Services 2,156.53 points. Industry Group followed suit, adding 22.76% to total turnover volume as 47.09Mn shares were exchanged. Turnover & Market Capitalization | The Industry Group’s volume accounted for LKR 0.20Bn Commercial Bank was the highest contributor to the of total market turnover value. The Diversified week’s turnover value, contributing LKR 1.43Bn or Financials Industry Group meanwhile, contributed 20.26% of total turnover value. LOLC Holdings followed 21.95Mn shares (or 10.61%), amounting to LKR 1.42Bn. suit, accounting for 18.45% of turnover (value of LKR 1.31Bn) while HNB[NV] contributed LKR 0.67Bn to Top Gainers & Losers | account for 9.54% of the week’s turnover. Total Kelsey Dev. was the week’s highest price gainer; turnover value amounted to LKR 7.08Bn (cf. last week’s increasing 25.0% W-o-W from LKR22.00 to LKR27.50 value of LKR 7.68), while daily average turnover value while First Capital (+21.5% W-o-W), Mahaweli Reach amounted to LKR 1.42Bn (-7.89% W-o-W) compared to (+20.7% W-o-W) and Orient Finance (+18.6% W-o-W) last week’s average of LKR 1.54Bn. Market capitalization were also amongst the top gainers. meanwhile, increased by 1.42% W-o-W (or LKR 32.54Mn) to LKR 2,330.36Bn cf. LKR 2,297.82Bn last Blue Diamonds [NV] was the week’s highest price loser; week. declining 33.3% W-o-W to close at LKR0.20. Tess Agro (-20.0% W-o-W), Samsung International (-17.1% Liquidity (in Value Terms) | W-o-W) and Blue Diamonds (-16.7% W-o-W) were also The Banks Industry Group was the highest contributor amongst the top losers over the week. to the week’s total turnover value, accounting for
50.95% (or LKR 3.61Bn) of market turnover. Industry TOP 10 TURNOVERS Group’s turnover was driven primarily by Commercial Bank,HNB,Sampath Bank & Nations Trust which Opening Closing Value Company Code accounted for 71.23% of the sector’s total turnover. The Price Price (Rs. Mn) Diversified Financials Industry Group meanwhile COMMERCIAL BANK COMBN 68.8 71.0 1,433.6 accounted for 20.10% (or LKR 1.42Bn) of the total L O L C HOLDINGS LOLCN 119.9 123.3 1,306.1 turnover value, with turnover driven primarily by LOLC HNB[NV] HNB X 75.3 81.9 674.9 Holdings which accounted for 91.84% of the sector HNB HNB N 99.9 108.5 632.1 SAMPATH SAMPN 109.3 119.2 396.1 turnover. The Capital Goods Industry Group was also JKH JKH N 114.9 117.0 359.7 amongst the top sectorial contributors, contributing HEMAS HOLDINGS HHL N 59.5 61.0 271.7 12.10% (or LKR 0.86Bn) to the total turnover, with CITRUS WASKADUWA CITWN 4.5 4.4 179.8 turnover driven primarily by JKH & Hemas Holdings CEYLON TOBACCO CTC N 950.1 970.0 169.2 accounting for 73.14% of the total turnover. NATIONS TRUST NTB N 60.5 62.0 106.8
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ACUITY STOCKBROKERS RESEARCH | SRI LANKA EQUITIES
Weekly Market Review 19 Jun 2020
Market Review (Cont’d)
Net Foreign Sales (12 Jun-19 Jun) Net Foreign Purchases (12 Jun-19 Jun) VALLIBEL FINANCE JKH Volume Change ('000s) Volume Change ('000s) PANASIAN POWER SAMPATH RENUKA FOODS[X] NATIONS TRUST SIERRA CABL DIALOG NAT. DEV. BANK ASIA SIYAKA BROWNS INVSTMNTS HEMAS HOLDINGS CARGILLS HNB SWISSTEK COMMERCIAL BANK RICHARD PIERIS L O L C HOLDINGS
TEEJAY LANKA* HNB[X]
0 15 30 45 60 75 (7,500) (6,000) (4,500) (3,000) (1,500) - *Volume change of Teejay Lanka(0.24Mn shares) from 12th June – 19th June not displayed.
Foreign investors closed the week in a net selling position, with the total net outflow amounting to LKR 2.65Bn relative to a net outflow of LKR 3.25Bn recorded last week. Total foreign purchases decreased to LKR 0.70Bn from a value of LKR 1.16Bn last week, while total foreign sales amounted to LKR 3.35Bn relative to LKR 4.40Bn recorded last week. In terms of volume, Teejay Lanka & Richard Pieris led foreign purchases while HNB[X] & LOLC Holdings led foreign sales. In terms of value, Cargills & Teejay Lanka led foreign purchases while LOLC Holdings & HNB[X] led foreign sales.
Net Foreign Purchases (By Transaction Value) Net Foreign Sales (By Transaction Value)
Foreign Holding (%) Value* Foreign Holding (%) Value* Company Net Change Company Net Change 19/06/20 12/06/20 (LKR. Mn) 19/06/20 12/06/20 (LKR. Mn) CARGILLS 7.49% 7.47% 50,040 9.12 L O L C HOLDINGS 0.50% 1.94% (6,871,409) (847.24) TEEJAY LANKA 47.36% 47.33% 240,258 7.09 HNB[X.0000] 36.06% 42.86% (6,909,817) (565.91) NAT. DEV. BANK 14.94% 14.93% 35,219 2.62 HNB 27.30% 28.32% (4,150,446) (450.32) SWISSTEK 2.49% 2.27% 61,000 2.21 COMMERCIAL BANK 18.72% 19.37% (6,204,502) (440.52) RICHARD PIERIS 74.32% 74.32% 67,580 0.66 HEMAS HOLDINGS 25.51% 26.15% (3,858,686) (235.38) HUNTERS 88.95% 88.93% 1,076 0.42 SAMPATH 16.02% 16.39% (1,395,023) (166.29) VALLIBEL FINANCE 3.98% 3.97% 5,042 0.29 JKH 45.23% 45.30% (862,271) (100.89) LANKA WALLTILE 0.56% 0.55% 4,790 0.24 NATIONS TRUST 22.08% 22.71% (1,552,928) (96.28) DIMO 1.02% 1.01% 800 0.21 ROYAL CERAMIC 4.44% 4.90% (514,552) (33.39) BROWNS INVSTMNTS 1.33% 1.33% 50,000 0.15 DIALOG 93.61% 93.64% (2,308,430) (25.85) Note: *Value based on closing price and not on actual traded price Please note that the foreign shares data displayed above include private transfers done outside of the market.
Foreign Purchases Vs. Sales Week Ending Net Position of Foreign Holdings 1,250 Foreign Purchases 250 Foreign Sales
1,000 -550
750 -1,350 LKR. Mn LKR. 500 -2,150Mn LKR.
250 -2,950
0 -3,750 15-Jun 16-Jun 17-Jun 18-Jun 19-Jun 29-May 04-Jun 12-Jun 19-Jun
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ACUITY STOCKBROKERS RESEARCH | SRI LANKA EQUITIES
Weekly Market Review 19 Jun 2020
Announcements for the Week
Dividend Announcements
No dividends announcements for the weeek Point of View CBSL Introduces New Relief Measures
Domestic equities rallied for a second consecutive week as the The Monetary Board of the CBSL, on Tuesday , introduced fresh broad share index hit a 3-month high to close just shy of the 5,000 measures aimed at accelerating credit flows to the Sri Lankan mark amid positive developments during the week. The CBSL, on economy while decreasing costs of funding for Licensed
Tuesday, announced fresh measures including new credit Commercial Banks (LCBs). The Monetary Board consequenlty schemes at concessionary rates and a reduction in the Statutory decided to reduce the Statutory Reserve Ratio (SRR) applicable on
Reserve Ratio aimed at providing additional relief to businesses all rupee deposit liabilities of LCBs by 200bps to 2% (from 4% affected by the Covid-19 pandemic while also reduc ing the cost of previously) , injecting Rs. 115Bn of additional liquidity to domestic funding for the banking sector. Meanwhile, data released on Sri money market. This cut in the SRR follows a previous reduction of
Lanka’s Purchasing Manager’s Index indicated a notable bounce 100bps in Mar’20, bringing the total SRR reduction to 300bps for back in May’20 from an all-time low in Apr’20. Consequently, the the year . The recent reduction follows a series of monetary broad share gained for 4-straght sessions since Tuesday to record measures implemented by the CBSL earlier this year including the a weekly gain of ~76 points or 1.5% W-o-W at its close on Friday. reduction of policy rates by 150bps and a cut in the Bank rate by Buying interest in select Banking sector stocks boosted gains on 550bps. In addition, the CBSL also introduced new credit schemes
to support businesses affected by the pandemic. The CBSL stated the index this week as SAMP, HNB, COMB and NDB collectively contributed ~30% (or 22 points) to the total index gain while it would provide funding to LCBs at a concessionary rate of 1.0% DIAL contributed 16% this week. Activity levels on the Colombo against the pledge of broad spectrum collateral, on conditions that
Bourse fell marginally however with average daily turnover levels the LCB would in turn lend to domestic businesses at 4.0%. In amounting to Rs. 1.42Bn (cf. Rs. 1.54Bn last week) amid lower addition to the already disbursed Rs. 27.5Bn under the refinance
scheme announced in Mar’20, this scheme and the existing local HNI and institutional participation for the week as crossings contributed 22% to total turnover (cf. last week’s 24%). Interest refinance scheme is expected to provide a total of Rs. 150Bn to remained concentrated mainly on COMB and LOLC Holdings businesses affected by the COVID-19 pandemic. In addition, the which accounted for 70% of total crossings for the week while CBSL decided to introduce a new dedicated credit scheme to the select Banks and Capital Goods stocks also received renewed construction sector which would enable businesses to borrow at a investor interest. The foreign sell-off on domestic equities concessionary rate from LCBs using guarantees issued by the meanwhile continued for the 3rd consecutive week, as investors Government equal to the amount due on contracts undertaken in moved to safe haven currencies amid concerns of a second the past. Meanwhile, ADB projects that Sri Lanka’s GDP could pandemic wave. Consequently, foreign investors were net sellers contract by 6.1% in 2020 relative to a 2.2% growth forecasted in this week with a net foreign outflow of Rs. 2.6Bn (cf. Rs. 3.2Bn last Apr’2020. week), pushing the YTD outflow from the Colombo Bourse to Rs. 18.3Bn. Markets in the week ahead are likely to take cues from Sources: CBSL further economic and political developments.
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ACUITY STOCKBROKERS RESEARCH | SRI LANKA EQUITIES
Weekly Market Review 19 Jun 2020
Economic Snapshot
Oct’19 Nov’19 Dec’19 Jan’20 Feb’20 Mar’20 Apr’20 May’20 Interest Rates Prime Lending Rate 10.42 10.21 10.00 9.68 9.51 9.35 9.38 9.28 Ave. Wtd. Deposit Rates 8.37 8.27 8.20 8.14 8.06 7.90 7.77 7.57 Ave. Wtd. Fixed Dep. Rates 10.27 10.14 10.05 9.97 9.83 9.65 9.51 9.26 CCPI Inflation Y-o-Y % (Base 2013) 5.4 4.4 4.8 5.7 6.2 5.4 5.2 5.2
2013 2014 2015 2016 2017 2018 2019 GDP Growth (Base 2010) 3.4% 5.0% 5.0% 4.5% 3.6% 3.3% 2.3% Source Central Bank
Exchange Rate, Rs. vs. US$ Inflation (CCPI-N) YoY%
10.0 220.0
8.0 200.0
180.0 6.0 CCPI
Rs /USD Rs 160.0 4.0
140.0 2.0
120.0 0.0 Jun-15 Jun-16 Jun-17 Jun-18 Jun-19 Jun-20 Nov-16 Jul-17 Mar-18 Nov-18 Jul-19 Mar-20
Source: Central Bank Source: Central Bank
6 Month T-Bill Yield Tea Prices
12 760
11 700
10 640 580 9
Bill (6M ) Rate (%) Rate ) (6M Bill 520 - T 8
Rs. Per kilo(Average ) kilo(AveragePer Rs. 460
7 400 Jan-17 Oct-17 Jul-18 Apr-19 Jan-20 Apr-17 Jan-18 Oct-18 Jul-19 Apr-20
Source: Central Bank Source: Sri Lanka Tea Board
Export & Trade Balance Trends in Tourist Arrivals
2000 600 Trade Balance (USD Mn 300,000 70%
1600 200
240,000 40% Y
-
o - 1200 -200 180,000 10% Y Growth
800 -600 120,000 -20% Total Arrivals Total
400 -1000 ) 60,000 -50% Exports /Imports (USD Mn) (USD /Imports Exports 0 -1400 0 -80% Aug-15 Aug-16 Aug-17 Aug-18 Aug-19 Mar-17 Dec-17 Sep-18 Jun-19 Mar-20 Exports (LHS) Imports (LHS) Trade Balance (RHS) Source: Central Bank Source: Sri Lanka Tourism Development Authority
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