ECONOMYNEXT – Sri Lanka stocks soared over two percent Monday reaching year banks leading the fray despite weaker earnings expected, with the overall market re-rated up around one multiple since May, brokers said.
Colombo’s All Share Price index (ASPI) closed 2.08 percent higher gaining 122 points to close 5,995 points based on provisions stock exchange data.
The S&P SL20 index of more liquid stocks closed 4.78 percent up of 139.79 points.
The market turnover was 1.6 billion rupees with 115 stocks gaining and 52 stocks declining.
Stock reached had reached a 7 month high based on CSE provisional data. On January 08, the All Share Index had closed at 5.992 points down from 6,022 point on January 07.
Stocks have been rising in recent days on election fever and falling interest rates. After deposit rates were cut by the state, dividend yields of some companies were higher than interest rates, analysts say.
The market price to earnings multiple was 9.4 times on July 29, with up from 8.37 times at the end of May indicating a steep re-rating of stocks.
Though many stocks are fundamentally strong, loss making companies are also beginning are to go up, brokers said.
Two crossings in Commercial Bank of Ceylon with 2.52 million shares valued at 109.02 rupees a share (275 million rupees) and three crossings in Aitken Spence with 500,000 shares priced at 44.50 rupees a share made up almost 33 percent of today’s turnover.
Retail activity was strong with a total of 16,036 trades done. Number of high trades mainly centered on Access Engineering (1,107 trades), Sampath Bank (893 trades) and Non-voting shares of Tokyo Cement (612 trades).
Hatton National Bank closed 14.10 rupees up at 184.00 rupees a share contributing most to the rise of the ASPI.
Sri Lanka Telecom closed 2.90 rupees up at 30.00 rupees a share and Commercial Bank of Ceylon closed 3.60 rupees up at 113.00 rupees a share, also pushing the ASPI up.
Serendib Engineering, whose revenues fell to 34 million rupees in the March quarter from 72 million rupees a year earlier losing 8.2 million rupees gained 1.39 percent. (COLOMBO, 29 July, 2019)