Market liquidity: Crossings dominate 61.5% of August turnover

While the Colombo Stock Exchange’s All Share Price Index (ASPI) demonstrated a broad-based recovery in August, with both key indices moving upwards, crossings made up 61.5% of the Rs 68.4 billion monthly turnover indicating thinner liquidity within the market, SenFin Securities’ Monthly Equity Report for August said.

“Activity was concentrated, 95 crossings accounted for 61.5% of August turnover, and three counters alone made up Rs 29.4 billion of that,” the report said.

Referring to the trading activity on 6 and 24 August, of which the latter saw crossings worth Rs 16.85 billion, the highest single-day turnover recorded since July, the report noted: “Two block-driven sessions dominate: 6 August (Rs 12,235 million) and 24 August (Rs 16,852 million) together account for 42% of the month, so headline turnover is far from evenly spread.”

The report further noted that the record highs of net foreign selling reported in August, which accounted for 19.3% of the total market’s monthly turnover, was fully absorbed by domestic buyer activity. “A net Rs 19.46 billion outflow was fully absorbed by domestic buyers, who were net purchasers of the same amount.”

In terms of the two key indices, ASPI closed at 21,338.69, up by 1.03% in August, yet 6.67% below its year-to-date (YTD) value. The S&P SL20 ended August at 6,009.68, a 1.17% monthly gain, narrowing the YTD deficit to 2.85%. This was indicative of blue chips outperforming the broad market on a YTD basis, while selling pressure was concentrated in mid and small caps.

Among top gaining sectors, Food & Staples Retailing (+9.3%) led, followed by Telecommunications (+4.7%), while Energy declined by 3.1% and Software & Services by 2.3%.

Source: The Morning