Market in mixed mood – Softlogic Stockbrokers

On Aug 9, 2021

Both indices had a free-fall within the first half an hour of trading yesterday and recovered gradually to conclude the day on a mixed note. Thus, the All Share Price Index increased by 13.4 points (+0.2%) to close at 8,112.5whilst the S&P SL20 Index declined by 12.4 points (-0.4%)to close the day at 3,043.6. Expolanka Holdings, Browns Investments, Ambeon Capital, Commercial Leasing and Cargills Ceylon remained as the top positive contributors to the ASPI during the day. Further, the broader market’s total turnover stood at LKR 3,884.6 mn against the 12-month average daily turnover of LKR 3,328.8 mn, whilst the volume traded for the day was 140,290.9k against the 12-month average daily volume of 186,706.6k. Transportation, Capital Goods, Diversified Financials and Food & Beverage were the main sectors that contributed to the daily turnover.

The top traded counters for yesterday were Expolanka Holdings LKR 1,508.9mn (+7.0%), Browns Investments LKR 339.8mn (+3.0%), Tokyo Cement (Non-Voting) LKR 180.4mn (-10.8%), Ambeon Holdings LKR 131.3mn (+9.5%) and Royal Ceramics LKR 129.3mn (-1.5%). Foreigners were net buyers yesterday recording an inflow of LKR 25.1 mn during the day. Foreign purchases stood at LKR 45.2 mn which were approximately witnessed in Royal Ceramics, Lanka Walltile, Lanka Tiles and RIL Property whilst total foreign sales amounted to LKR 20.0mn, assumed to be seen in Chevron Lubricants, Tokyo Cement, Ceylon Grain Elevators and Melstacorp. Further, an off-board transaction was witnessed in Expolanka Holdings yesterday.

Meanwhile, Lanka Tiles reported its 1QFY22 earnings of LKR 617 Mn (+778% YoY), amidst the lower base seen in comparative 1Q’21 due to island-wide lockdowns. The faster growth in local tile sales (up +102% YoY), expanded GP margins of ~43% (cf. 24% in 1Q’21) and curtailed net finance costs (down -99% YoY) drove TILE YoY earnings. Lanka Walltiles also reported LKR 683 Mn (+733% YoY) for 1QFY22. Further, ICRA Lanka reaffirmed the issuer rating of People’s Merchant Finance PLC at[SL]B (Pronounced SL B); while revising the outlook to Stable from rating watch with developing implications.

On the economic front, Sri Lanka has raised the de facto 12-month policy rate which is below the overnight rate, through which large volumes of debt has been monetized by 05 bps to 5.33%, according to a central bank notice.