Stock market records highest weekly gain since 2010

• ASPI up 361 points or 8% amid heavy local buying interest
• Market capitalisation soars by Rs. 177.5 b

The Colombo stock market ended Friday achieving its highest weekly gain since 2010 due to the All Share Price Index (ASPI) rising 8% or 361 points whilst the more active S&P SL 20 index shot up by 16%. 

Acuity Stockbrokers said total turnover value amounted to Rs. 8.05 billion, though marginally lower from Rs. 9.6 billion in the previous week. Market capitalisation increased by 8.59% W-o-W (or Rs. 177.54 billion) to Rs. 2,244.08 trillion. 

HNB was the highest contributor to the week’s turnover value, contributing Rs. 2.09 billion or 25.94% of total turnover value. Commercial Bank followed suit, accounting for 20.61% of turnover (value of Rs. 1.66 billion) while JKH contributed Rs. 1.19 billion to account for 14.79% of the week’s turnover. 

Acuity said Sri Lankan equities reversed the previous week's losses as the benchmark index surged with investors looking to positive signs of reopening the economy from the coronavirus lockdown, and picking up undervalued stocks. This was after the benchmark index shed nearly 24% (until 15 May) since the onset of the pandemic on 24 February. 

“Heavy buying interest buoyed by renewed retail investor participation consequently led the ASPI to gain 361 points or 8% W-o-W to close at 4,799.89 points,” Acuity added. Index heavyweight JKH contributed 19% to this week’s gains as the blue-chip stock rose 30% W-o-W while Banking sector stocks COMB, HNB and Sampath Bank contributed 13%, supported by their positive earnings releases for the March quarter.

Foreign investors closed the week in a net selling position, with the total net outflow amounting to Rs. 3.40 billion relative to a net outflow of Rs. 3.51 billion a week earlier.

Acuity said heavy foreign selling was recorded across several key banking stocks ahead of weaker earnings anticipated in the upcoming quarters due to the strain of the COVID-19 pandemic on the sector. Consequently, the YTD outflow reached Rs. 12.1 billion last week.

In terms of volume, Richard Pieris & Access Engineering led foreign purchases last week while Expolanka and HNB led foreign sales. In terms of value, Lion Brewery and Richard Pieris led foreign purchases while HNB and Sampath Bank led foreign sales.

“Markets in the week ahead are likely to take cues from economic impact of the pandemic and continuing earnings releases while monitoring developments regarding the COVID-19 outbreak in Sri Lanka,” Acuity Stockbrokers added.