Saturday 14 July 2018

ASPI positive for first time since late May says Acuity

Sri Lankan equities reversed seven consecutive weeks of negative returns last week, helping the ASPI end on a positive note for the first time since late-May this year, Acuity Srtockbrokers said in their Share Market Weekly.

It noted that despite temporarily falling below the key 6,100 level, the benchmark Index gained ~29 points or 0.48% over the week (cf. -86 point loss the previous week) and similar to that week when the Index breached the 6,100-mark to hit a 15-month low of 6044.03, the ASPI lost ~31 points on Monday to drag the index once again below this key 6100-mark.

However, the ASPI rebounded notably over the latter half of last week and its ~61 point gain between Wednesday and Friday more than offset the losses recorded earlier in the week and helped push the Index safely above the 6,100-mark for the second consecutive week, the report said.

"The stronger performance on the Index was mainly attributable to the return of d.lkInstitutional and high net worth investors and crossings accounted for 46% of weekly turnover (cf. just 36% a week earlier) with Jetwing Symphony and HNB accounting for 53% of the bulk parcels," Acuity said.

"Despite the Index’s stronger performance, overall activity levels on the Bourse remained dull, with turnover decreasing 31% W-o-W to Rs.2.0Bn. Daily turnover levels subsequently hit a 12-week low on both Monday (Rs.155Mn) and Tuesday (Rs143Mn) cf. the previous low of Rs.102Mn recorded in Mid-April amid the traditional New-Year holidays."

The foreign equity sell-off on equities meanwhile, continued once again last week with net outflows from the CSE amounting to Rs.221Mn cf. Rs.900Mn a week earlier. Net foreign outflows from the CSE widened further to Rs.2.8Bn, reflecting the heightened risk-aversion for Emerging and Frontier Market assets since Feb., 2018.

Acuity expected markets in the week ahead likely to look for cues both from domestic political & economic developments.
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