Sri Lanka stock index at fresh all time high as earnings beat expectations

ECONOMYNEXT – Sri Lanka stock index hit a new record peak on Friday (05) with posting its highest single day gain in seven weeks as investor sentiment was bullish on the island nation’s risky assets with earnings from some listed firms outperformed the market expectation, brokers said.

Brokers said the ASPI recorded 220 points gain, its highest since September 21,2021.

The Colombo benchmark All Share Price Index (ASPI) closed at 2.11 percent or 220.19 points up at 10,632.21, its fresh all-time closing high.

ASPI opened trading with an 80-point gap and continued its record-setting momentum to reach a fresh all-time with an intra-day high of 10,689.25.

The S&P SL20 index of more liquid stocks, however, fell 0.45 percent or 16.33 points to close at 3,640.27, signaling that some lower-floated companies are pushing the index, which is not healthy for the market, a broker said.

“S&P SL 20 index remained in negative territory reaching a three-week low, dragged by price declines in Expolanka, Vallibal one and Commercial bank.” another broker said.

“As the top contributor to the ASPI, Commercial Leasing and Finance (CLC) accounted for nearly 90 percent of the index’s gain with a 195-point contribution on the back of a sharp 19.2 percent gain”

Brokers said despite being the first company on the exchange to record 500 billion rupees in market capitalization, CLC maintains a thin public float of just 0.25 percent of its shares outstanding.

The day’s turnover was 5.6 billion rupees, well above this year’s average daily turnover of over 4 billion rupees.

“Turnover remained strong supported by High Networth individual and retail buying in CLC, LOLC Finance and Expolanka Holdings.” Broker said.

Foreign investors, however, sold a net of 82 million rupees’ worth of shares, extending the net foreign inflow to 46.1 billion rupees so far this year. Brokers had expected foreign investors to exit after Moody’s Investor Service downgraded Sri Lanka’s sovereign credit rating last week to near default category.

Apart from CLC, LOLC Development Finance contributed 43 points, followed by LOLC Holding contributing 26 points, LOLC Finance contributing 24 points.

Commercial Leasing and Finance closed 19.15 percent up at 84.90 rupees a share.

LOLC Development Finance gained 16.24 percent to close at 576.25 rupees a share and LOLC Finance gained 19.42 percent to close at 12.30 rupees.

Expolanka Holdings fell 2.46 percent to close at 199 rupees and

The bourse saw 53 stocks gaining against 135 falling on Friday.

On a weekly basis, the indices closed mixed as the ASPI ended higher for a third straight week gaining 469.28 points or 4.62 percent, driven by CLC which contributed around 565 points to the index during the week while some other stocks dragged the overall index. The S&P SL20 closed 73.32 points or 1.98 percent lower. Turnover averaged 4.96 billion rupees, declining from 5.6 billion rupees last week. (Colombo/Nov 05/2021)

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