Sri Lanka stocks up 10.5-pct in 2020, share values gain Rs109bn

ECONOMYNEXT – Sri Lanka stocks ended 2020 rising 10.5 percent, with stock values gaining 109 billion rupees recovering from a steep downturn in May after a prolonged market closure during a Coronavirus lockdown.

The Colombo All Share Price Index gained 618 points to end at 6,748 points amid an exit of foreign investors while the S&P SL20 Index of the larger liquid stocks fell 10.5 percent.

Stock values rose 109 billion rupees to end the year at 2.96 trillion rupees, up from 2.85 trillion rupees, leaving investors 109 billion rupees richer.

Since the May downturns stocks values had gained around a trillion rupees, the Colombo Stock Exchange said.

Sri Lanka’s money markets have seen historically high levels of excess liquidity of around 20 percent of the monetary base and one year Treasury bill auction yield ended the year at 5.05 percent consumer inflation at 4.60 percent, making stock s attractive.

“Low interest rates that we saw in the market boost the market from the bottom, 58 -60 percent,” an analyst said.

“This is a very good year for the stock side because of the low interest rates people are moving to the stock asset class, and we don’t have a much asset class in Sri Lanka.”

“This gave a high return for the companies to rebound and they showed some good results in September.”

Key stocks that gained include export firms and import substitution firms benefiting from import controls and tax protection.

The market price to earnings ratio on historical earnings was slightly re-rated upwards to 11.2 percent from 10.83 times in 2019.

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On the last trading day stock gained 0.39 percent with the market pushed up by Browns Investments, Asiri Hospital holdings and Ceylon Cold Stores, CSE data showed.

The S&P SL20 index of more liquid stocks gained 0.42 percent or 11.04 points to close at 2,642.57.

The market turnover was 2.9 billion rupees with 109 stocks gaining and 78 falling.

Analyst said with the government imposing import restrictions in the 2019 the local business had shown a growth.

“Import restrictions boost some of the local companies in different sectors, such as tile, cement because they get advantage with import restrictions.”

Turnover value had increased to 3.7 billion rupees as at December 31,2020 from 5.6 billion rupees a year earlier.

Browns Investmentscontributed most to the ASPI gain, closing 20cents up at 4.30 rupees a share.

Asiri Hospital Holdings gained 1.30 rupees a share to close at 34.50 rupees and Ceylon Cold Stores closed 14.60 rupees up at 704.60 rupees a share.

In the banking sector Hatton National Bank gained 90 cents to close at 126.50 rupees, Sampath Bank closed 1.10 rupees up at 135.60 rupees a share, Commercial Bank of Ceylon gained 40 cents to close at 80.90 rupeeswhile DFCC Bank closed 40 cents down at 65.30 rupees.

In the hotel sector Eden Hotel Lanka closed 20 centsdown at 11.50 rupees a share, Aitken Spence Hotel holdings fell 70 cents to close at 32.30 rupees and John Keels Hotels closed 20 cents down at 11.00 rupees a share.

Distilleries Company closed flat at 20.50 rupees and Melstacorp Plcclosed 10 cents up at 52.00 rupees a sharewhile Sri Lanka telecom closed 30 cents down at 33.50 rupees a share.

John Keells Holdings close 30 cents down at 149.60 rupees andLOLC holdings closed 1.00 rupeesdown at 135.00 rupees ashare.

Expolanka Holdings gained 50 cents to close at 29.00 rupees while Ceylon Tobacco Company closed flat at 1,026.90 rupees a share.

Hayles Plc closed 4.00 rupees down at 414.50 rupees whileSoftlogic Holdings closed 40 cents up at 12.40 rupees.

Tokyo Cement Companygained1.70 rupees to close at 76.20 rupees while Piramal Glass Ceylon closed flat at 9.40 rupees a share.

Nestle Lankagained 16.60 rupees to close at 1,275.00 rupees a share and Dialog Axiata closed flat at 12.40 rupees.

Aitken Spence Plc closed 20 cents up at 57.80 rupees while Carson Cumberbatch closed 2.30 rupees down at 278.80 rupees.

Dipped products gained 2.20 rupees to close at 347.30 rupees a share while Haycarb fell 1.20 rupees to close at 568.60 rupees.

Lanka Ceramic closed 1.50 rupees at 138.00 rupees a share while Royala Ceramic Lanka fell 30 cents to close at 177.10 rupees a share.

The Capital goods industry was the most active, fell 0.06 percent. (Colombo/Dec31/2020)

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