(Turnover LKR Bn) ASPI ACUITY STOCKBROKERS RESEARCH SRI LANKA EQUITIES ASPI drops 103 points to trade below 6300 levels.. Indices vs. Turnover (18 th Jun-22 nd Jun) 1Q 18 GDP growth falls to 3.2% Y-o-Y ASPI 1.63% S&P SL20 2.80% The Bourse ended Cont. P2 Foreign Investors Closed the Week in... Cont. P3 The ASPI extended its losing streak. Cont. P4 Economic Snapshot P5 6,350 6,320 6,290 6,260 6,230 6,200 1.50 1.20 0.90 0.60 0.30 0.00 ASPI S&P SL20 18-Jun 19-Jun 20-Jun 21-Jun 22-Jun 18-Jun 19-Jun 20-Jun 21-Jun 22-Jun 3,550 3,520 3,490 3,460 3,430 3,400 S&P SL20 KEY STATISTICS Week ending 22-June 14-June +/- ASPI 6,228.15 6,331.10-1.63% S&P SL20 3,428.00 3,526.93-2.80% Banking & Finance 16,420.45 16,899.50-2.83% Food & Beverage 24,026.31 24,217.77-0.79% Diversified 1,632.20 1,677.96-2.73% Hotel & Travel 2,741.09 2,753.86-0.46% Plantations 808.90 841.04-3.82% Manufacturing 3,058.05 3,096.11-1.23% Turnover (LKR Bn) 2.97 2.00 48.04% Foreign Buying (LKR Mn) 1,425.00 880.93 61.76% Foreign Selling (LKR Mn) 1,585.74 1,099.92 44.17% Daily Average Turnover (LKR Bn) 0.59 0.50 18.43% Daily Average Foreign Buying (LKR Mn) 285.00 220.23 29.41% Daily Average Foreign Selling (LKR Mn) 317.15 274.98 15.34% TOP 10 GAINERS TOP 10 LOSERS Code Opening Closing WoW % Change S M B LEASING [NV] SEMBX 0.2 0.3 50.0% PRINTCARE PLC CAREN 29.0 34.8 20.0% AMBEON CAPITAL TAP N 4.3 4.8 11.6% AMANA LIFE ATLLN 1.1 1.2 9.1% SERENDIB HOTELS [NV] SHOTX 13.6 14.8 8.8% SLT SLTLN 24.1 25.7 6.6% MADULSIMA MADUN 7.7 8.2 6.5% KINGSBURY SERVN 15.5 16.4 5.8% EDEN HOTEL LANKA EDENN 14.1 14.9 5.7% COLOMBO LAND CLNDN 18.1 19.1 5.5% Code Opening Closing WoW % Change ADAM CAPITAL PCHHN 0.6 0.4-33.3% TESS AGRO [NV] TESSX 0.7 0.5-28.6% MULLERS MULLN 0.9 0.7-22.2% HUEJAY HUEJN 40.5 31.6-22.0% E B CREASY EBCRN 1375.5 1122.3-18.4% FORT LAND CFLBN 19.4 16.0-17.5% MERC. SHIPPING MSL N 75.0 63.2-15.7% CFI CFI N 60.0 51.2-14.7% CENTRAL IND. CINDN 36.0 30.8-14.4% CIT CITN 71.2 61.7-13.3% 1
ACUITY STOCKBROKERS RESEARCH SRI LANKA EQUITIES Market Review Indices The Bourse ended the week on a negative note as the ASPI decreased by 102.95 points (or -1.63%) to close at 6,228.15 points, while the S&P SL20 Index also decreased by 98.93 points (or -2.80%) to close at 3,428.00 points. Turnover & Market Capitalization JKH was the highest contributor to the week s turnover value, contributing LK R0.92Bn or 30.88% of total turnover value. Hemas Holdings followed suit, accounting for 15.06% of turnover (value of LKR 0.45Bn) while Sampath Bank contributed LKR 0.17Bn to account for 5.67% of the week s turnover. Total turnover value amounted to LKR 2.97Bn (cf. last week s value of LKR 2.00Bn), while daily average turnover value amounted to LKR 0.59Bn (18.43% W-o-W) compared to last week s average of LKR 0.50Bn. Market capitalization meanwhile, decreased by 1.60% W-o-W (or LKR 47.23Bn) to LKR 2,909.41Bn cf. LKR 2,956.65Bn last week. Liquidity (in Value Terms) The Diversified sector was the highest contributor to the week s total turnover value, accounting for 49.34% (or LKR 1.46Bn) of market turnover. Sector turnover was driven primarily by JKH and Hemas Holdings which accounted for 93.11% of the sector s total turnover. The Banking, Finance & Insurance sector meanwhile accounted for 25.03% (or LKR 0.74Bn) of the total turnover value, with turnover driven primarily by Sampath Bank, Commercial Bank, NDB and HNB which accounted for 58.95% of the sector turnover. The Manufacturing sector was also amongst the top sectorial contributors, contributing 11.54% (or LKR 0.34Bn) to the market driven by Lanka Walltile and Piramal Glass which accounted for 60.45% of the sector turnover. Liquidity (in Volume Terms) The Banking, Finance & Insurance sector dominated the market in terms of share volume, accounting for 28.43% (or 26.30Mn shares) of total volume, with a value contribution of LKR 0.74Bn. The Manufacturing sector followed suit, adding 23.22% to total turnover volume as 21.48Mn shares were exchanged. The sector s volume accounted for LKR0.34Bn of total market turnover value. The Diversified sector meanwhile, contributed 20.85Mn shares (or 22.54%), amounting to LKR1.46Bn. Top Gainers & Losers SMB Leasing [NV] was the week s highest price gainer; increasing 50.0% W-o-W from LKR0.20 to LKR0.30. Printcare gained 20.0% W-o-W to close at LKR34.80. Ambeon Capital (+11.6% W-o-W) and Amana Life (+9.1% W-o-W) were also amongst the top gainers. Adam Capital was the week s highest price loser; declining 33.3% W-o-W to close at LKR0.40 while Tess Agro [NV] (-28.6% W-o-W), Mullers (-22.2% W-o-W) and Huejay (-22.0% W-o-W) were also amongst the top losers over the week. TOP 10 TURNOVERS Code Opening Closing Value (Rs. Mn) JKH JKH N 156.0 150.0 915.83 HEMAS HOLDINGS HHL N 114.0 113.5 446.78 SAMPATH SAMPN 313.6 305.1 168.06 LANKA WALLTILE LWL N 89.0 88.5 150.79 DIALOG DIALN 14.1 14.3 146.11 COMMERCIAL BANK COMBN 128.0 123.2 128.62 NAT. DEV. BANK NDB N 135.2 124.0 82.71 NESTLE NESTN 1720.0 1720.0 64.59 HNB HNB N 241.1 233.0 58.23 PIRAMAL GLASS GLASN 4.8 4.8 56.07 2
LKR. Mn LKR. Mn ACUITY STOCKBROKERS RESEARCH SRI LANKA EQUITIES Market Review (Cont d) TOKYO CEMENT[X] DISTILLERIES CENTRAL IND. S M B LEASING CHEVRON HEMAS HOLDINGS MERCHANT BANK RICHARD PIERIS Net Foreign Purchases (14 Jun-22 Jun) TEEJAY LANKA DIALOG* Volume Change ('000s) - 110 220 330 440 550 Net Foreign Sales (14 Jun-22 Jun) Volume Change ('000s) (1,000) (800) (600) (400) (200) - *Volume change of Dialog (9.92Mn shares), Piramal Glass (10.85Mn shares) and JKH(1.50Mn Shares) from 14 th Jun 22 nd Jun not displayed. ACCESS ENG SL TOKYO CEMENT MARAWILA RESORTS COMMERCIAL BANK [X] MELSTACORP FIRST CAPITAL COMMERCIAL BANK BROWNS CAPITAL JKH* PIRAMAL GLASS* Foreign investors closed the week in a net selling position with total net outflow amounting to LKR 0.16Bn relative to last week s total net outflow of LKR 0.22Bn (26.6% W-o-W). Total foreign purchases increased by 61.8% W-o-W to LKR 1.42Bn from last week s value of LKR 0.88Bn, while total foreign sales amounted to LKR 1.59Bn relative to LKR 1.10Bn recorded last week (44.17% W-o-W). In terms of volume Dialog & Teejay Lanka led foreign purchases while Piramal Glass & JKH led foreign sales. In terms of value Dialog & Hemas Holdings led foreign purchases while JKH & Commercial Bank led foreign sales. Net Foreign Purchases (By Transaction Value) Foreign Holding (%) Net Change Value* 22/06/18 14/06/18 (LKR. Mn) DIALOG 94.44% 94.32% 9,921,898 141.88 HEMAS HOLDINGS 31.17% 31.13% 237,609 26.97 SAMPATH 22.92% 22.89% 72,711 22.18 CHEVRON 20.96% 20.87% 216,002 16.42 TEEJAY LANKA 45.27% 45.20% 510,308 15.72 CARGILLS 6.66% 6.64% 60,417 12.08 CENTRAL IND. 4.04% 3.08% 189,232 5.83 RICHARD PIERIS 73.83% 73.81% 436,283 5.10 COLD STORES 10.89% 10.89% 3,744 3.71 BAIRAHA FARMS 3.85% 3.71% 21,504 2.58 Net Foreign Sales (By Transaction Value) Foreign Holding (%) Value* Net Change 22/06/18 14/06/18 (LKR. Mn) JKH 57.90% 58.01% (1,498,007) (224.70) COMMERCIAL BANK 34.26% 34.36% (887,860) (109.38) PIRAMAL GLASS 62.88% 64.02% (10,846,939) (52.07) FIRST CAPITAL 0.27% 0.62% (346,320) (10.25) HNB 35.90% 35.91% (27,409) (6.39) MELSTACORP 26.30% 26.31% (112,510) (5.97) COMMERCIAL BANK[X.0000] 25.22% 25.30% (54,085) (5.19) BROWNS CAPITAL 0.71% 0.78% (982,862) (3.93) NAT. DEV. BANK 14.45% 14.46% (18,966) (2.35) CEYLON TOBACCO 97.52% 97.52% (1,787) (1.99) 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. 900 Foreign Purchases Vs. Sales Foreign Purchases Foreign Sales 650 Week Ending Net Position of Foreign Holdings 720 220 540-210 360-640 180-1,070 0 18-Jun 19-Jun 20-Jun 21-Jun 22-Jun -1,500 01-Jun 08-Jun 14-Jun 22-Jun 3
ACUITY STOCKBROKERS RESEARCH SRI LANKA EQUITIES Announcements for the Week Dividend Announcements No dividend announcements for the week. Point of View The ASPI extended its losing streak for the 5th consecutive week to push past the key psychological mark of 6,300 points to end at 6,228.15. The main share index recorded the highest weekly loss for the year during the week as ASPI lost 103 points (1.63%) as Heavy weight JKH dropped 4.0% to end at Rs.150. The YTD loss on the Benchmark price Index by end-week was 2.2%, highlighting the ~313 point (4.8%) dip since late April when the ASPI began to drop. Notably, ASPI had ended a week in a positive note only once since late April. More Liquid S&P20 SL index also dropped 99 points (2.80%) during the week and consequently YTD loss on the index widened further to 3.9%. Activity levels in the market improved during the week as Turnover increased 48% to Rs.3.0Bn. Activity levels during this week were mainly driven by the HNIs and Local institutional investors as crossings accounted for 44% of the week s Turnover. JKH accounted for ~50% of the crossings while Hemas & Lanka Walltiles accounted for 31% and 11% respectively. The activity helped push average turnover value to Rs.0.6Bn cf. Rs.0.5Bn last week. Foreign investors continued to withdraw funds from Sri Lankan equities during the week however, at a slower pace as net foreign outflows during this week amounted to Rs.161Mn cf. Rs.219Mn last week. Despite this week s foreign equity sell-off, foreign appetite for relatively undervalued Sri Lankan equities has remained positive thus far in Q2 18 with total net inflows in Q2 18 totaling to ~Rs1.5Bn (cf. outflow of Rs.2.6Bn in Q1 18). Markets in the week ahead are likely to look for cues from further economic and political developments. 1Q 18 GDP growth falls to 3.2% Y-o-Y. GDP growth in the 1st quarter of 2018 fell to 3.2% Y-o-Y (cf. 3.8% Y-o-Y in Q1 17 and 3.5% in 4Q 18) due to a slowdown in the growth of the Industrial Sector despite recovery of the Agricultural sector and marginal improvement of Service Sector during the period. Over this quarter, the Agricultural sector which declined consecutively over several quarters till 3Q 17 continued the growth momentum created in 4Q 17. Agricultural sector recorded the highest growth among all sectors (4.8% Y- o-y) as Growing of Rice recovered with a notable 56.6% Y-o-Y growth over the period (cf. 49.6% decline last year due to adverse weather conditions). Meanwhile 'Growing of Cereals', 'Growing of Vegetables', Growing of Tea recorded 40.2%, 22.3%, and 10.6% respectively. Service sector activities which account for ~57% of overall GDP meanwhile improved marginally from 4.3% Y-o-Y in 1Q 17 to 4.4% Y-o-Y in Q1 18. Growth in the sector was driven by the Financial service activities, Wholesale and retail trade, Telecommunication, Other personal service activities, and Real estate activities, including Ownership of dwelling. The second largest contributor, the Industrial sector, slowed down in 1Q 18 (0.9% Y-o-Y growth cf. 3.7% in 1Q 17) as Manufacture of coke and refined petroleum products contracted 38.8% Y-o-Y whilst the Construction sector (7.4% of GDP) declined 4.9% Y-o-Y. The CBSL projects GDP growth to recover in 2018 to 5.0% on the back of modest recovery in Agriculture sector and continued positive momentum in Services and Industrial sectors. Earlier in April 18, CBSL also eased policy rates by 25bps and held it unchanged in its 3rd Monetary Policy Review in May 18. 4
Exports /Imports (USD Mn) Total Arrivals T- Bill (6M ) Rate (%) Rs. Per kilo(unweighted) Rs /USD CCPI ACUITY STOCKBROKERS RESEARCH SRI LANKA EQUITIES Economic Snapshot Weekly Market Review 14 June 2018 Oct 17 Nov 17 Dec 17 Jan 18 Feb 18 Mar 18 Apr 18 May 18 Interest Rates Prime Lending Rate 11.30 11.40 11.33 11.29 11.27 11.10 11.27 11.34 Ave. Wtd. Deposit Rates 9.22 9.19 9.07 9.08 9.05 9.00 8.98 8.91 Ave. Wtd. Fixed Dep. Rates 11.72 11.69 11.48 11.54 11.45 11.41 11.38 11.23 CCPI Inflation Y-o-Y % 7.8 7.6 7.1 5.8 4.5 4.2 3.8 4.0 (Base 2013) 2012 2013 2014 2015 2016 2017 1Q 18 GDP Growth (Base 2010) 9.1% 3.4% 4.9% 4.8% 4.4% 3.1% 3.2% Source Central Bank Exchange Rate, Rs. vs. US$ 155.0 149.0 143.0 137.0 131.0 125.0 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 Jun-18 Inflation (CCPI-N) YoY% 10.0 8.0 6.0 4.0 2.0 0.0 May-15 Dec-15 Jul-16 Feb-17 Sep-17 Apr-18 6 Month T-Bill Yield Tea s 13 700 11 9 7 5 3 Feb-15 Nov-15 Aug-16 May-17 Feb-18 620 540 460 380 300 Jun-15 Mar-16 Dec-16 Sep-17 Jun-18 Source: Sri Lanka Tea Board Export & Trade Balance Trends in Tourist Arrivals 2000 1600 1200 800 400 0-1400 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 Exports (LHS) Imports (LHS) Trade Balance (RHS) 600 200-200 -600-1000 Trade Balance (USD Mn) 250,000 200,000 150,000 100,000 50,000 80% 64% 48% 32% 16% 0% 0-16% May-15 Feb-16 Nov-16 Aug-17 May-18 Source: Sri Lanka Tourism Development Authority Y-o-Y Growth 5
ACUITY Stockbrokers (Pvt) Ltd., ( Reg: No-P.V.3310) ACUITY House, No. 53, Dharmapala Mw, Colombo 03, Sri Lanka. TEL : (+94) 112 206 206 FAX : (+94) 112 206 298 Research Research Team Team Chethana Ellepola Chethana chethana@acuitystockbrokers.com Ellepola (+94) +94 112 112 206 206 256 256 chethana@acuitystockbrokers.com Anjula Nawarathna Sugirthan anjula@acuitystockbrokers.com Alagesan, CFA (+94) 112 206 255 sugirthan@acuitystockbrokers.com Aethra de Silva Sahrah aethra@acuitystockbrokers.com Surajdeen (+94) 112 206 253 Sahrah@acuitystockbrokers.com Samalka Athuraliya Maxtina samalka@acuitystockbrokers.com Fernando (+94) 112 206253 251 maxtina@acuitystockbrokers.com Anouk Weerasinghe anouk@acuitystockbrokers.com +94 112 206 254 Sales Team Prashan Fernando (+94) 112 206 222 prashan@acuitystockbrokers.com Arjuna Dasanayake (+94) 112 206 235 arjuna@acuitystockbrokers.com Kapila Pathirage (+94) 112 206 227/228 kapila.p@acuitystockbrokers.com Naren Godamunne (+94) 112 206 225 naren@acuitystockbrokers.com Chathura Siyambalapitiya (+94) 112 206 232 chathura.s@acuitystockbrokers.com Dhammika Wanniarachchi (+94) 112 206 229 dhammika.w@acuitystockbrokers.com Kumar Dias Desinghe (+94) 814 474 443 Dhammika Wanniarachchi Susil dhammika.w@acuitystockbrokers.com Fernando (+94) 112206206 229 234 susil@acuitystockbrokers.com Auburn Thehani Senn Weerasinghe (+94) thehani.w@acuitystockbrokers.com 112 206 239 auburn@acuitystockbrokers.com +94 112206 224 S. Vasanthakumar (+94) 112 206 250/251 vasantha.k@acuitystockbrokers.com Kandy Branch Prasanna Semasinghe (+94) Kumar 814 Dias 474 443 Desinghe +94 814 474 443 Thehani Weerasinghe (+94) Prasanna 112 206 Semasinghe 224 thehani.w@acuitystockbrokers.com +94 814 474 443 Warana Sumanasena (+94) 112206 231 warana@acuitystockbrokers.com Dinuk Subasinghe (+94) 112206 237 dinuk@acuitystockbrokers.com Danuksha Koralage (+94) 112206 233 danuksha@acuitystockbrokers.com Nishanthi Ratnayake (+94) 112206 248 nishanthi@acuitystockbrokers.com Disclaimer: Distributed in Sri Lanka and abroad by Acuity Stockbrokers (Private) Limited (ASB) and its authorized representatives. ASB is fully owned by Acuity Partners (Pvt) Ltd (APL) and APL is a joint venture of DFCC Bank and Hatton National Bank PLC. The Information contained herein has been compiled from sources that ASB ( The Research Institution ) believes to be reliable but None of the Research Institution holds itself responsible for its completeness or accuracy. It is not an offer to sell or a solicitation of an offer to buy any securities. The Research Institution and its affiliates and its officers and employees may or may not have a position in or with respect to the securities mentioned herein. The Research Institution and its affiliates may from time to time have consulting relationship with any company, which is being reported upon. This may involve the Research Institution providing significant corporate finance services or acting as the company s official or sponsoring broker. All opinions and estimates included in this report constitute judgment as of this date of the Research Institution and are subject to change or amendment without notice. The Research Institution has the copyright for this report and the views herein cannot be reproduced and/or distributed in any form without the explicit (written or otherwise) permission from Research Institution.