Bear run persists at Colombo bourse

The Colombo stock market continued its bear run as investor sentiment remained besieged but volume of shares traded improved sharply whilst turnover picked up too.

Both indices declined by over 0.4% whilst turnover was Rs. 1.95 billion higher in comparison to Rs. 1.3 billion on Wednesday. Share volume traded was 196.3 million as against 72 million on Wednesday.

Asia Securities said the indices moved downwards on Thursday (12) due to price losses in VONE (-4.3%), BIL (-1.5%), LIOC (-2.3%), LOFC (-4.1%), LOLC (-1.7%), and RICH (-2.2%). However, SCAP (+4.8%), SPEN (+1.2%), CFVF (+1.2%), DIAL (+1.1%), and SAMP (+2.6%) saw price gains in an otherwise negative session. 

Turnover was led by SCAP (Rs. 586 million) and AAIC (Rs. 193 million) which continued to witness retail collection while a sizeable contribution came in from Amana Bank (Rs. 327 million) due to a large crossing executed (Rs. 322 million) during the session. The breadth of the market was negative with 51 price gainers and 122 decliners. 

Foreigners recorded a net inflow of Rs. 10.7 million. Net foreign buying topped in MELS at Rs. 32.1 million and selling topped in JKH at Rs. 29.2 million.

First Capital said the bourse reverted to the red zone on the back of negative sentiment raised among investors on the possible delay in the debt restructuring talks which could postpone the IMF bailout for the country to 2Q2023, as highlighted by Standard Chartered Research. 

Although the index gained marginally in the beginning, selling pressure emerged on the index heavyweights mainly on LIOC amidst the delay in price revisions which may impact the margins. An off-board transaction of Amana Bank accounted for 17% of the market turnover with stake change of 4.1% totalling to 111 million shares at Rs. 2.90 each.

NDB Securities said high net worth and institutional investor participation was noted in Amana Bank and Melstacorp. Mixed interest was observed in Softlogic Capital, Softlogic Life Insurance and John Keells Holdings whilst retail interest was noted in Browns Investments, LOLC Finance and SMB Leasing (voting and nonvoting). 

The insurance sector was the top contributor to the market turnover (due to Softlogic Life Insurance) whilst the sector index lost 0.22%. The share price of Softlogic Life Insurance moved down by 25 cents to close at Rs. 113.25.

The banking sector was the second highest contributor to the market turnover (due to Amana Bank) whilst the sector index increased by 0.91%. The share price of Amana Bank closed flat at Rs. 3.

Softlogic Capital, John Keells Holdings and Expolanka Holdings were also included amongst the top turnover contributors. The share price of Softlogic Capital increased by 80 cents (4.82%) to close at Rs. 17.40. The share price of John Keells Holdings recorded a loss of 25 cents to close at Rs. 135.75. The share price of Expolanka Holdings appreciated by Rs. 1.25 (0.73%) to close at Rs. 171.75.