Sri Lanka stocks hit all time high

ECONOMYNEXT – Sri Lanka stocks closed up 2.4 percent on January 16, reaching an all time high, of 7922.66 points topping a previous high of 7811.8 points reached on February 14, 2011, the Colombo Stock Exchange said.

The S&P SL20 index of most liquid stocks also topped 3000 points, to close at 3,003.3 points exceeding the previous high on December 04, 2019.

The Colombo Stock Market is one of the best performing in the world coming behind Venezuela which is up 30.77 percent so far in 2021 according to markets tracked by Bloomberg, and Hanoi Stock Exchange which rose 5.04 percent to close up 13.48 percent for the year.

In US dollar terms Hanoi is up 13.62 percent and Sri Lanka 12.62 percent.

Top contributors were LOLC Holdings, Commercial Leasing and Finance and LOLC Finance.

Stocks gained in early trade and faltered before ending at a new high, brokers said.

“The sentiment is somewhat that the market is in need of a correction but with the current interest rate environment and a strong rebound in earnings expected in 2021, the current market valuation is largely justified, “Naveed Majeed, Vice President, Asia Securities Private Limited told EconomyNext.

“In terms of a correction, we might see this coming at different levels, even today the market took a dip at a point and then picked up, so we will see slight adjustments, but I don’t think we will see a drastic market drop mainly because of the earnings season around the corner.

“There is also the case of “where to invest?” if money is pulled out of the market at this point, so we see continued asset allocation towards equity markets in the low-interest-rate environment”

“The current Trailing 12-month market P/E multiple seem elevated, but this is only due to abnormal COVID impacted earnings of 2020. With strong earnings recovery expected in 2021, the current forward multiples are justified at this point.”

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A 2011 surge ended as a correction came from the balance of payments with low interest rates and excess liquidity ending in a rate hike and a float of the rupee in early 2012.

Sri Lanka’s private credit is still weak and the firms have higher business volumes now especially in rupee terms.

The market turnover was 12.2 billion rupees with 137 stocks gaining and 73 falling.

LOLC Holdings contributed most to the ASPI gain, closing 38.50 rupees up at 265.25 rupees a share.

Commercial Leasing and Finance gained 2.10 rupees to close at 10.80 rupees a share and LOLC Finance gained 1.30 rupees to close at 9.40 rupees a share also contributing to the ASPI gain.

In the banking sector Hatton National Bank closed 6.00 rupees up at 112.00, Sampath Bank 5.50 rupees up at 146.75 rupees a share, Commercial Bank of Ceylon gained 4.40 rupees to close at 88.70 rupees and DFCC Bank closed 2.20 rupees up at 67.90 rupees.

Expolanka Holdings gained 40 cents to close at 53.80 rupees and Access Engineering gained 4.90 rupees to close at 29.90 rupees while Browns Investments, an affiliate of LOLC Holdings closed 20 cents down at 7.30 rupees a share.

In the hotel sector Eden Hotel Lanka closed 40 cents up at 13.80 rupees a share, Sigiriya Village hotel closed 50 cents up at 35.00 rupees, Aitken Spence Hotel Holdings gained 1.90 rupees to close at 34.90 rupees and John Keells Hotels closed 60 cents up at 11.00 rupees a share.

Sri Lanka Telecom closed 1.40 rupees down at 41.20 rupees while Melstacorp Plc closed 50 cents up at 63.20 rupees.

John Keells Holdings closed 1.25 rupees up at 161.25 rupees a share and Richard Pieris Company closed 40 cents up at 15.90 rupees.

Ceylon Tobacco Company gained 10.00 rupees to close at 1,124.25 rupees while Ceylon Cold stores closed 15.00 rupees up at 710.50 rupees a share while Distilleries Company fell 50 cents to close at 23.80 rupees.

Hayles Plc closed 7.00 rupees up at 498.25 rupees while Hemas Holdings closed 1.00 rupee down at 95.60 rupees.

Tokyo Cement Company gained 3.00 rupees to close at 86.30 rupees while Cargills Ceylon closed 6.75 rupees down at 218.75 rupees a share.

Nestle Lanka closed 5.50 rupees down at 1,303.75 rupees and Dialog Axiata closed 30 cents down at 12.60 rupees.

Aitken Spence Plc closed 5.40 rupees up at 70.10 rupees while Carson Cumberbatch closed 4.50 rupees down at 300.75 rupees.

Dipped products gained 27.50 rupees to close at 428.75 rupees a share and Haycarb gained 50 cents to close at 758.25 rupees.

Lanka Ceramic closed 10.00 rupees down at 154.00 rupees a share while Royal Ceramic Lanka gained 14.50 rupees to close at 217.25 rupees a share.

Sri Lanka recorded a net foreign sales of 178 million rupees today.

The Capital Goods industry was the most active, gaining 5.4 per cent and the Materials Industry which was also active gained 3.5 per cent today. (Colombo/January 18/2021 – Update II)

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