Keells foreign deals boost stock market turnover to 1-year high
COLOMBO: Sri Lanka’s stock market gained marginally on Monday under a new index calculation method while the turnover hit a near one-year high due to foreign-to-foreign deal in John Keells Holdings, brokers said.
The Colombo Stock Exchange’s new compilation method to calculate All-Share Price Index (ASPI) based on in public float-adjusted Market Capitalization as opposed to total market capitalization — went into effect on Monday.
The move is expected to reduce the volatility in the index.
The day’s turnover was 18.4 billion rupees, the highest since February 1, 2021 and more than twice of this year’s average of 7.6 billion rupees.
Firstcapital Market Research in a note said the turnover was generated by crossings in John Keells Holdings.
Two crossings in JKH – 214,000 shares at 161 rupees a share generating 34.4 million rupees and 79,949,778 shares at 161 rupees generating 12.8 billion rupees, boost the turnover.
Dealers said both buyer and seller were foreigners.
The main All Share Price Index (ASPI) closed 0.09 percent or 12.50 points higher on Friday to close at 13,384.11 points.
“Bourse ended in the green zone with a marginal gain amidst moderate retail participation,” FirstCapital market research said.
Analysts said investors are worried about possible currency depreciation, the government’s ability to avert a sovereign debt default, and fuel shortages hitting factory manufacturing and thus hitting future earnings.Foreign investors, who are highly worried about possible sharp depreciation or devaluation in the currency, sold a net of 43 million rupees, extending the foreign selling of 2.3 billion rupees so far this year.
In 2021, the Sri Lanka stock market suffered a net foreign outflow of 50 billion rupees.
Along with raising the policy rates by 50 basis points, the central bank last week also announced moves to increase dollar liquidity through mandating registered tourist hotels to charge foreigners only in foreign currency and extending the incentive scheme for remittances.
An analyst said the rate hike will not the impact the market, as fixed deposit rates are still below 10 percent coupled with the negative interest rates.
Despite expected better earrings in the December quarter, lingering currency depreciation concerns had weighed on the foreign investor sentiment.
Listed firms have started to release corporate earnings from this week.
On Monday Hayleys, Dimo and Expolanka Holdings helped to push the index up.
Hayleys Plc gained 4.31 percent to close at 145.25 rupees a share and Diesel and Motor (DIMO) Engineering Plc gained 19.20 percent to close at 1,414.25 rupees a share.
Expolanka, the market heavyweight which has export and freight businesses, closed 1.21 percent higher at 395.75 rupees a share.
(Colombo/Jan24/2022)