Bearish local sentiment at bourse continues; foreigners step up buying

The Colombo stock market remained bearish for the second consecutive day with investor sentiment dampened by poor corporate earnings. 

The active S&P SL20 dipped by 0.6% and the benchmark ASPI by 0.2%. Turnover was Rs. 2.5 billion involving 88.2 million shares.

Foreigners continued to be net buyers with a net inflow of Rs. 205 million.

Asia Securities said following a sharp gap-down, the ASPI reached an intra-day low of 10,912 (-182 points) mainly due to LIOC (-10.4%), while price losses in front-liners MELS (-1.7%), COMBN (-1.1%), GLAS (-1.2%), DIAL (-1.8%), LOFC (-1.7%), SLTL (-1.9%), RCL (-2.8%), and AAIC (-2.0%) also weighed on the index in the first half of the session. 

Nevertheless, the index reversed course and reclaimed the 11,000 mark in mid-day trading on the back of price gains in plantation sector stocks KOTA (+5.3%), BALA (+5.3%), AGAL (+5.9%), KVAL (+3.6%), WATA (+1.5%), TPL (+9.7%), and MASK (+5.8%) while FCT (+1.5%), SUN (+1.0%), TKYOX (+1.4%), and CFVF (+1.6%) supported the ASPI’s recovery. 

LIOC ended as the biggest laggard on the ASPI (-19 points), followed by COMBN (-8 points), and MELS (-6 points). The breadth of the market turned positive with 105 price gainers and 91 decliners.

Turnover was driven by JKH (Rs. 363 m), LIOC (Rs. 337 m), and SERV (Rs. 161 m). 

Foreigners continued as net buyers with a net inflow of Rs. 205 m led by SPEN (Rs. 47 m), COMBN (Rs. 43 m), NDB (Rs. 42 m), and JKH (Rs. 33 m). Foreign selling topped in CINS.X at Rs. 6.4 m.

First Capital said the market displayed mixed sentiments as it witnessed an intense spree of profit taking during the morning hours which resulted in the index to drop to an intraday low of 10,910. However, towards the latter part of the day buying interest emerged with active investor participation from the Consumer Services and Food, Beverage and Tobacco sectors which resulted in the index to halt at 11,069 losing 24 points. The extended profit taking on LIOC resulted in the index to further budge lower whilst the Banking sector also experienced slight selling pressure during the day. Treasury counters displayed improved interest with the expectation of treasury yields to descend during tomorrow’s T-Bill auction. 

NDB Securities said high net worth and institutional investor participation remained subdued for the day. Mixed interest was observed in John Keells Holdings, Lanka IOC, and Commercial Bank whilst retail interest was noted in The Kingsbury, Browns Investments, and Kotagala Plantations. 

The Capital Goods sector was the top contributor to the market turnover (due to John Keells Holdings) whilst the sector index gained 0.20%. The share price of John Keells Holdings increased by Rs. 1.25 to Rs. 159.

The Banking sector was the second highest contributor to the market turnover (due to Commercial Bank and Sampath Bank) whilst the sector index decreased by 0.22%. The share price of Commercial Bank recorded a loss of one Rupee to Rs. 88.80. The share price of Sampath Bank declined by 10 cents to Rs. 74.90.

Lanka IOC and The Kingsbury were also included among the top turnover contributors. The share price of Lanka IOC lost Rs. 14.50 (10.38%) to Rs. 125.25. The share price of The Kingsbury moved up by 40 cents to Rs. 10.80.

Separately People’s Leasing & Finance announced its interim dividend of 70 cents per share.