The Bourse Weekly Performance (Week Ended 08th January 2021)

Week-ended 08th January 2021 Week-ended 31st December 2020

All Share Price Index 7,119.53 6,774.22 S&P SL20 Index 2704.87 2638.1 Total Turnover for the week (LKR) 33,624,288,990 8,131,421,734 Total Net Foreign Inflow/ (Outflow) (LKR) (964,659,305) (302,249,166) Market Capitalization 3,112,202,355,705 2,960,648,056,916 Market PER 11.84 11.25 Market PBV 1.18 1.13

The Colombo Bourse ended on a positive note this week, with the ASPI gaining 5.1% WoW to close at 7,120 index points and S&P SL 20 gaining 2.5% WoW to close at 2,705 index points. The week’s turnover showed a significant increase over the last week by rising to LKR 33.6 bn as opposed to last week’s LKR. 8.1 bn. Crossings were witnessed in Alumex, Amana Takaful, Kelani Cables, Fabric, Softlogic Capital, , , Browns Investments, Ambeon Holdings, Hayleys, , BPPL Holdings, Commercial Bank, , Sierra Cables, Cargills, Lee Hedges and , which collectively accounted for 11% of the total turnover. Browns Investments, Ceylon Tobacco, , LOLC Holdings, LOLC Finance, Browns and SLT recorded as some of the top gainers. Meanwhile, foreigners continued to close the week as net sellers with a net capital outflow of LKR 965 mn.

As the New Year dawned upon us, the Bourse passed the important 7000 index level. This was due to positive investor sentiment which stimulated high levels of domestic participation. As such, the market gathered momentum but minor pullbacks were witnessed during the week. Accordingly, we recommend investors to adopt an active investment strategy taking advantage of any price weakness and focusing on fundamentally robust stocks with strong EPS growth prospects.

Exchange Rates (Week ended 08th January 2021)

In the Forex market, USD/LKR closing rates on the more active 01 month forward contracts were seen depreciating during the early part of the week to 191.50/192.50 against its previous weeks closing level of Rs.188.50/189.50 before bouncing back to close the week at Rs.190.50/192.00 on spot next contacts. The more demanded spot contracts traded at levels of Rs.188.25 to Rs.189.00 during the week.

The daily USD/LKR average traded volume for the first four days of the week stood at US $ 61.90 million.

The Government securities Market (Week ended 08th January 2021)

The secondary bond market gained a bullish momentum during the week ending 08th January as yields were seen decreasing further with sizeable volumes changing hands and activity increasing.

The yields of the more liquid maturities of 2022’s (i.e. 15.11.22 & 15.12.22), 2023’s (i.e. 15.01.23 & 01.10.23), 15.09.24, 01.05.25, 01.02.26 and 15.08.27 were seen decreasing to weekly lows of 5.52%, 5.53% each, 5.86%, 6.30%, 6.53%, 6.69% and 7.15% respectively against its previous weeks closing level of 5.58/63, 5.60/65, 5.65/70, 5.90/95, 6.35/40, 6.50/70, 6.65/75 and 7.10/20. In addition maturities of 01.10.22, 15.12.24 and 15.12.23 changed hands at levels of 5.50% to 5.60%, 6.38% to 6.39% and 5.90% to 6.03% as well.

This downward trend was well supported by the outcome of the weekly T-Bills action where the total offered amount was fully subscribed for the first time in 11 weeks. On the short dated bonds and bills, 01.05.21, 01.08.21, 15.12.21, February, April, June, July, August, September and October 2021 changed hands at levels 4.70%, 4.69%, 4.75% to 4.80%, 5.00%, 4.53% to 4.68%, 4.74%, 4.75%, 4.80%, 4.75% and 4.89% respectively.

The First Treasury bond auctions for the year 2021 due today, will have in total an amount of Rs.100 billion on offer, consisting of Rs.40 billion each of a 01.12.2024 maturity and a new 15.01.2026 maturity and a further Rs.20 billion of a 01.05.2028 maturity. Stipulated cut off rates were published as 6.39%, 6.73% and 7.44% respectively. The weighted average yields at the bond auctions conducted on 11th December 2020 for the maturities of 01.10.2023, 01.03.2026 and 01.01.2032 were recorded at 5.99%, 6.79% and 7.84% respectively.

The daily secondary market Treasury bond/bill transacted volumes for the first four trading days of the week averaged Rs.11.18 billion.

In the money market, weighted average rates on overnight call money and repos remained mostly unchanged to average 4.54% and 4.56% respectively for the week as the total outstanding market liquidity remained high. The CBSL’s holding of Gov. Security’s was registered at Rs.731.25 billion.

(References: Central Bank of , Bloomberg E-Bond trading platform, Money broking companies)

Courtesy – Asset Trust Management (Pvt) Ltd, WealthTrust Securities Ltd