Banking sector led SL’s stock market surges in 2025: Almas Equities Research

Sri Lanka’s stock market rally in 2025 was driven largely by heavyweight counters rather than broad-based gains, with banking stocks emerging as the single biggest force behind the benchmark index’s advance, highlighted Almas Equities Research.

The Colombo Stock Exchange’s All Share Price Index (ASPI) rose 6,679.70 points during 2025, extending its upward momentum. However, Almas Equities noted that “not all stocks were pulling equal weight” beneath the headline performance.

The research house said index contributions often diverged from simple price changes because the ASPI is calculated using float-adjusted market capitalisation weighting, with a 5 percent free-float cap applied.

“In practical terms, a modest price increase in a large, heavily weighted counter can move the ASPI more than a sharp rally in a small-cap stock,” Almas Equities said.

This, it added, explained why investors often saw sessions where “the market closed higher despite most stocks declining,” or where “a handful of large counters saved the index.”

Sector-level contributor analysis for 2025 showed that banks were the main driver of the ASPI’s rise, adding 1,670.5 points over the year.

With large float-adjusted market capitalisations, banking counters generated consistent positive contributions throughout the year, Alma Equities Research said. Banking and non-bank financial institutions together accounted for just over one-third of the ASPI’s total sector contribution in 2025.

“Even on days when broader market breadth appeared weak, gains in selected counters were sufficient to keep the ASPI in positive territory,” Almas Equities Research noted.

Among individual stocks, Commercial Bank was the single largest positive contributor, adding 369.79 points to the ASPI in 2025. The stock gained 38.7 percent over the year, with its heavy index weighting amplifying its impact.

In contrast, LOLC Holdings was the top negative contributor, weighing on the index by 58.43 points as its share price declined 14.38 percent during the year.

The divergence underscored, Almas Equities said, that “index direction does not always reflect the experience of the average share price movement.”

Almas Equities stressed that reviewing ASPI contributors provided deeper insight than tracking index closes alone, helping investors distinguish between broad-based rallies and narrow, heavyweight-led moves.

“It reveals which stocks truly drove market performance,” the report said, while also allowing investors to assess whether gains were structurally healthy or concentrated in a few dominant counters.