COVID, constitutional issues send stock market down by 4%; turnover up

• Plantation stocks lose flavour; retailers switch to healthcare companies

The Colombo stock market suffered one of its biggest falls in recent months of over 4% yesterday, as investors turned bearish over the spike in COVID-19 cases as well as concerns over the proposed 20th Amendment debate which began in Parliament. 

Acuity Stockbrokers said the Bourse ended on a negative note as the ASPI decreased by 4.21% or 249.56 points to close at 5,684.67 points, while the S&P SL20 Index also decreased by 4.19% or 99.96 points to close at 2,287.6.

The biggest contributors to the fall were JKH (10%), Carson’s (9.5%), Expolanka (9%), LOLC (8%) and Commercial Bank (7%).

Turnover increased by 43.8% to Rs. 3.2 billion as against Tuesday, thereby maintaining the streak of over Rs. 1 billion turnover at CSE for the 32nd consecutive day.

Plantation stocks which were sought after by retailers lost their taste and five of them figured in the top 10 losers percentage wise. They were Madulsima, Kotagala, Udapusselawal, Bogawantalawa and Malwatte (Non-Voting). 

Volume wise the food, beverage and tobacco sector dominated with 49 million shares traded whilst turnover was Rs. 400 million – fourth highest.

In a sign of the times, retailers shifted focus on healthcare stocks which propelled four of those to figure in the top 10 gainers percentage wise in a falling market. They were Durdans, Nawaloka, Singhe and Asiri. The sector saw Rs. 94.3 million turnover with 11 million shares changing hands via 2,000 trades.

Foreign investors remained net sellers with Rs. 166.3 million, up from Rs. 129.6 million on Tuesday.

First Capital said the lockdown of selected areas in the country due to the continuation of the COVID-19 wave hindered investor sentiment, resulting in the market falling back to a two-week low. 

“Index experienced a downtrend since the beginning of the session, predominantly due to the selling-pressure in the transportation sector as it recorded its intraday low of 5,668 before closing at 5,685, losing a massive 250 points,” it added. 

Asia Securities said “Panic selling by retail investors amidst reports of increasing COVID-19 cases and further containment measures caused the indices to decline, closing in the red.”

“HNIs and institutions were seen collecting later in the day on cheaper valuations that presented itself as the fundamental stories of companies remained unchanged despite the resurgence of COVID-19,” it added.

NDB Securities said the ASPI closed in red as a result of price losses in counters such as John Keells Holdings, Carson Cumberbatch and Expolanka Holdings.

It said high net worth and institutional investor participation was noted in John Keells Holdings and Cargills. Mixed interest was observed in Expolanka Holdings, Tokyo Cement Company voting and non-voting, whilst retail interest was noted in Hatton National Bank, Browns Investments and Melstacorp.  The Capital Goods sector was the top contributor to the market turnover (due to John Keells Holdings), whilst the sector index lost 4.85%. The share price of John Keells Holdings lost Rs 3.4 (2.5%) to close at Rs 132.6. 

The Materials sector was the second highest contributor to the market turnover (due to Tokyo Cement Company voting and non-voting), whilst the sector index decreased by 7.16%. The share price of Tokyo Cement Company non-voting moved down by Rs 4.8 (8.68%) to close at Rs 50.5, while the share price of Tokyo Cement Company declined by Rs 5.8 (8.94%) to close at Rs 59.1.

Expolanka Holdings and Cargills were also included amongst the top turnover contributors. The share price of Expolanka Holdings decreased by Rs 2 (10.42%) to close at Rs 17.2, while the share price of Cargills closed flat at Rs 190.