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Construction industry outlook positive – CT CLSA Securities

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CT CLSA Securities monthly Report says that the Construction industry outlook is positive, mainly due to the gradual recovery in the economy, the easing off of import restrictions, and the reduction in interest rates and material costs.

Recovery has been reported on the suspended government projects at a modest scale. “However, there are delays in commencement of many private-sector construction projects due to downward rigidity of the market borrowing rates.” Most firms have remained muted; however, the gradual decrease in raw material costs has provided breathing space for ongoing projects. With regard to new orders, the report says that tendering opportunities are mostly limited to foreign-funded projects, while private clients are still waiting for further reductions in cost. Report also adds that delivery time for projects broadly remained stable during the month.

Meanwhile the report commenting on another sector says that Credit to the private sector remained relatively stable in July 2023, growing by +0.2% to reach Rs.7,093 billion (vs. Rs.7,080bn in June 2023).

The Colombo Bourse closed negative in August, with the benchmark All Share Price Index (ASPI) declining 2.4% MoM to 11,114 points (a decrease of 273 index points MoM). Meanwhile, the more liquid S&P SL20 index declined -5.4% MoM to 3,131 points (a decrease of 179 index points). Average daily turnover decreased to Rs.3, 280 mn in August 2023 (vs. Rs. 3,655mn in July 2023). Top contributors to monthly turnover were John Keells Holdings (JKH, Rs.7, 568 mn, 41mn shares), Capital Alliance (CALT, Rs.3, 234 mn, 45mn shares), and National Development Bank (NDB, Rs.2,595mn, 32 mn shares).

The post Construction industry outlook positive – CT CLSA Securities appeared first on DailyNews.

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